§ Coming to civil expenditure, I will just mention agriculture and food. There are always a good many questions about what the agricultural policy costs us, so I have analysed it as follows: the total cost of the production grants and subsidies paid by the Government is estimated at £323 million. Of this sum production grants, which go direct to farmers to help meet their bills for fertilisers, lime, and so on, account for £54 million. The agricultural price guarantees, together with a small amount for the related trading services, amount to £163 million. To this, £29 million must be added for the net cost of the price guarantee on milk for the ordinary consumer. The last three figures I have given add up to £246 million, and this—for the Committee's interest—is the measure of the cost of supporting our home agriculture. The rest of the £323 million is made up by the bread subsidy of no less than £41 million and the welfare subsidies, which include children's milk, and so forth, at £36 million.
§ Last year, in discussing this field of expenditure, I said that our task was to reconcile two needs—the need to secure a greater measure of financial control, and the need to preserve the stability of the farming industry, in the interests of farmers and workers, and of national security. Both needs were very much in my mind during the recent Annual Review.49
§ The stability of the industry, and, in particular, its ability to finance improvements and adjustments in methods of production, were threatened for two reasons. First, there had been a marked increase in the costs of farming. Secondly, the farmers and farm workers have been struggling manfully under the stress of exceptionally severe and difficult weather over the last 12 months. I think that the Committee would wish me to give a special word of praise to the spirit in which the farm workers apply themselves to their varied tasks all the year round. It was not in vain, therefore, that my right hon. Friend the Minister of Agriculture made his case for increased Exchequer assistance.
§ Moreover, I wanted to adjust the price guarantees to help our balance of payments. Thus, we increased the ploughing and fertiliser grants, and the guaranteed prices for barley and oats, so as to reduce our imports of feedingstuffs by encouraging the growth of more of these crops at home. Together with coal, to which I referred earlier, the cost of imported feedingstuffs has been a major factor weighing down our balance of payments. We were also obliged to avoid the danger of a Gadarene herd of expensive pigs rushing us into bankruptcy, so we reduced pig prices.
§ The other large bloc of civil expenditure to which I want to refer is concerned with the social services. At the beginning of 1954–55, quite apart from the Exchequer contributions to the National Insurance Funds, these were expected to cost £1,260 million. They have, in fact, cost £1,278 million; and for 1955–56 it is expected that they will cost £1,315 million. Let us examine some of the other details. Comparing the original Budget estimate for last year with my present estimates for 1955–56, the Health Service shows an increase of £32 million; education, including grants to universities, an increase of £25 million; and war pensions, following the recent rise in the rates, an increase of £8 million.
§ The Exchequer contributions to the National Insurance Funds are also, as the Committee well knows, a growing and inescapable commitment, and in the coming year, as a result of the action taken by Parliament last December, they will demand £100 million compared with £78 million for last year. The increased cost of the items I have just mentioned 50 amounts to no less than £87 million. This is more than the whole of this year's increase in Civil Supply, and is striking evidence of the fact that, in this field of social services a growing burden on the Exchequer is to be reckoned with.
§ Much of the increase in expenditure is contractual, while the remainder represents what I am convinced is a worthwhile investment in the future well-being of the country. Investment in human health, wider opportunity and increased technical skill means something more than "investing in success." It means the assurance of a happily working and socially responsible democracy.
§ But if we are to carry this burden, which I have specially mentioned to the Committee today, we must not only maintain the increase in the national income, but also be constantly watchful that all our existing services are administered as economically as possible. We must, at the same time, examine with a critical eye all the many additional claims which are constantly being made on the Exchequer for new services, so that the basic social needs of our people come first.