§ We can now sum up. To meet the overriding needs of the balance of payments, and in the light of the probable trend of production, we have adjusted the defence programme, reduced our civil expenditure and have taken a series of steps to bring about a major decline in investment at home. It follows that even if we attain the same increase in production as last year no more than the same amount of resources as last year can be spared for the ordinary civil consumer at home. I judge that these changes in the distribution of our resources are both necessary and sufficient. It has been argued that we should make more severe and general cuts in consumption either instead of or in addition to the other cuts we are making. The account I have given of the external conditions facing us, 1284 especially in the sterling area, will explain why I have rejected this conclusion. The savings in resources which I have described are those which will contribute most effectively to increasing our exports.
§ Many industries producing consumer goods are already faced with a slack demand at home. They now face further very severe cuts in their exports to the sterling area. They will have to increase substantially their exports to the non-sterling world—in difficult selling conditions—if they are to keep up their production and employment. To add to the difficulties of these industries by depressing home demand even further would result not in still higher exports, but in a further reduction of activity and employment, which we would all deplore. That is why I have come to the decision which I have just stated.
§ I now come to the crucial question for the general strategy of the Budget itself. If the home consumer is to have no more of our resources than last year, we must see to it that his purchasing power as a whole is no more than sufficient for this purpose. An important element in this is the general level of taxation. This brings me to the prospect for Government expenditure and revenue in the coming year.