HC Deb 09 April 1957 vol 568 cc976-8

I expect the net total of expenditure below the line to be a little less than the actual total last year. I estimate the needs of local authorities' borrowing in the coming year as £100 million. The National Coal Board will need to make a larger call on the Exchequer in order to continue its investment programme, with net advances of £45 million, compared with £26 million last year. Issues to the other nationalised industries may amount to some £290 million, against which repayments of £14 million may be expected; and £50 million is likely to be required for the British Transport Commission under the Transport (Railway Finances) Act. The total net expenditure below the line is put at £587 million. Overall, therefore, remembering that on the existing basis of taxation we have an estimated surplus above the line of £560 million, the deficit—that is, the net expenditure we need to meet by borrowing—will be £27 million next year compared with £331 million in 1956–57.

These figures are much better than at one time I thought they would be. At any rate, they could be a good deal worse. I would emphasise that the improvement in the budgetary position which the figures indicate has not been achieved just by luck. They are the outcome of considerable efforts by my two predecessors and recently by myself, with the co-operation and support of our colleagues, to keep the level of Government expenditure under control.

The Defence White Paper sets out the effect upon expenditure this year of the review of defence policy which we have been conducting. After taking account of £63 million of German support costs and American aid we are providing £1,420 million for the defence programme. This is £79 million less than the original estimate and £105 million less than the actual expenditure of last year. On the civil side, we are providing for expenditure of £2,650 million—that is, £189 million above the Budget estimate of last year. This figure takes credit for the £20 million which we expect to save this year by the new National Health Service contribution, but also provides for an additional £10 million on account of the agricultural price guarantees.

During recent months we have clipped and cut expenditure over a wide field, but we still spend at a high level. There was a time when it was a principal preoccupation of Parliament to refuse supply, or, at best, to grant it very grudgingly to the Executive. In recent times that trend has changed. Modern assemblies, urged on by their electors, tend, on the whole, to be far more pressing in their demands to spend money than to save it. After all the debates which have taken place, there must be very few forms of Government expenditure which do not have powerful advocates in one quarter or another.

The figures speak for themselves. Even after the changes we are making, the cost of the social services, at £1,677 million, will be £124 million more than the estimates of a year ago. Among them, education, at £445 million, will be £63 million more and the National Health Service, at £529 million, will be £28 million more. Exchequer grants to local revenues, at £105 million, will cost £21 million more.

If expenditure upon this scale is to be supportable, and, certainly, if there is to be any expansion of the social services, several things are necessary. The Government must be free to continue to study ways and means of reducing costs without impairing the essential services themselves. Parliament must recognise that checks and limits must be placed on the growth of even the most useful forms of spending. Indeed, public pressure for economy in all fields is the greatest help a Chancellor can have. The country as a whole must recognise that the surest way to provide against the need for further distasteful economies is to increase the total of the national product out of which these services have to be provided. Put simply, if we want to retain our social service State we must earn it by our own efforts.