HC Deb 15 April 1958 vol 586 cc42-3

Expenditure above the line was originally estimated at a total of £4,827 million. It turned out to be £4,920 million, or £93 million higher. This increase was spread pretty well over the whole field of expenditure. The cost of the Consolidated Fund services was £782 million, £25 million higher than the estimate. This was due, in the main, to increased debt charges arising from higher interest rates, offset in part by the postponement of the payment of interest on the North American loans.

Defence expenditure exceeded the estimate of £1,420 million by £10 million, as a result of increased prices, which to this extent could not be offset by economies elsewhere. Civil expenditure, at £2,708 million, was £58 million above the Budget estimate. The main increase was in the cost of agricultural subsidies, due to the fall in market prices, particularly of cereals, pigmeat, eggs, and milk for processing and to the additional cost of awards following the 1957 Annual Review. Increases in the cost of running the social services and other parts of the civil administration were largely offset by savings on other items.

We have had a good deal of discussion in recent months about Government expenditure and I will not now enlarge upon it, but it is perhaps worth recalling that, while it is true that Government expenditure has risen year by year, it has risen more slowly than the value of the gross national product. Government expenditure, as defined in the national income estimates, has fallen, as a percentage of the gross national product, from 29 per cent. in 1951 to 25 per cent. in 1957, a good deal of which was during the period when my right hon. Friend the Lord Privy Seal was at the Treasury.

To sum up the result above the line, there was a surplus of £423 million compared with an estimated surplus of £462 million and an actual surplus in the previous year of £290 million. So the estimates made by my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) last year have proved to be very close to the mark.

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