HC Deb 06 April 1948 vol 449 cc46-7

Turning to the actual working out of the plan for this year, I shall only have time today to deal with our internal position on very broad lines. There are three claims upon our available national resources—public consumption expenditure; capital development, both public and private; and private or personal consumption. The first of these includes the expenditure of Government Departments and of municipalities and thus comprises all those national activities which we have decided to undertake in common because we regard them as of importance. In 1938, public current expenditure on goods and services absorbed only about 16 per cent. of the net national income. In 1948, on the basis of the provisional estimates in the Survey, that figure will be 22 per cent. I will revert later to the main items of that expenditure.

The second claim on national resources is for the maintenance and improvement of our capital equipment. The Survey gives a forecast of £1,800 million gross capital development in this country. That is the figure resulting from the review of investment programmes carried out last autumn. It is by no means an excessive amount when we bear in mind the great arrears of replacement and maintenance during the war period. It is, indeed, quite obvious that if we could afford it and had the necessary materials, we ought to make even greater provision to develop to the full our export and import-saving potentialities, especially in the way of new inventions and processes which will give us competitive advantages in the future. The fact that we are, I hope temporarily, unable to embark on more extensive schemes should not stop the preparation and planning of such schemes for future execution. Indeed, it may be an opportunity when engineers, architects and other professional persons are less heavily engaged on current work, to get ahead with those plans for the future.

When the two claims on national income that I have mentioned have been met, the remainder is available for personal consumption, and if inflationary pressure is to be avoided, personal consumption must be limited to this amount. Sufficient purchasing power must be with-held by taxation and by voluntary saving, to offset the purchasing power created by public expenditure and capital investment. The voluntary saving we need is private saving—that is, abstention from spending. In our situation today, the amount saved is more important than the particular security or institution in which the savings may be held; but money saved should be invested safely and kept unspent until it is wise to use it. I ask the National Savings Movement to take abstention from spending as its central theme for 1948, and I know that I can rely on their doing their utmost to increase private savings in that way.