§ First, then, a brief description of how the Exchequer came out last year. Hon. Members have the figures before them in the first three tables of the Blue Paper, so that I need pick out only the salient points.
§ REVENUE
§ Last year's revenue was well above my expectations at £5,630 million, which is £305 million more than the estimate. This was due to a rise in tax receipts resulting in the main from the expanding economic 33 activity during the year, which was reflected in higher incomes, in increased purchases of dutiable goods and in higher Stock Exchange values. Thus, Inland Revenue duties, at £3,010 million, produced £154 million more than the estimate, Customs and Excise duties, at £2,282 million, produced £132 million more, while motor vehicle duties at £108 million also showed a slight increase. Non-tax revenue came out very much as I had estimated.
§ EXPENDITURE
§ Above-the-line expenditure was very close to expectations, being £5,244 million, £21 million above the Budget estimate. Consolidated Fund services showed a rise of £14 million over the estimate, owing to the rise in interest rates towards the end of the year. Supply expenditure, at £4,502 million, showed an increase of £7 million over the Budget estimate; an increase in civil expenditure of £33 million was very nearly offset by a shortfall of £26 million on defence. The result above the line was a surplus very much better than I budgeted for—£386 million instead of £102 million.
§ BELOW THE LINE
§ Below-the-line receipts, at £386 million, were £4 million more than the estimate. Total payments at £1,086 million were £119 million less than I had estimated. About half of this difference was accounted for by two items. First, advances to nationalised industries, including the National Coal Board, were £47 million less than the estimate. Secondly, claims for the release of postwar credits, under our new arrangements, were lighter than expected. It was, of course, difficult to be at all sure how many claims we might receive from persons in the categories listed in the regulations approved last year. In the event, we paid out £25 million less than I had estimated.
§ SUMMARY OF OUTTURN
§ So, over the year, the Exchequer as a whole has done a good deal better than I expected, partly because of reduced outgoings, but mainly because of increased revenue—in itself a striking testimony to the success of our policy of expansion. So, while I had at the 34 beginning of the year to face the prospect of borrowing for the Budget no less than £721 million, in the event the amount I had to borrow for this purpose was £314 million. This was a welcome transformation from the outlook as it was a year ago. Any burden of remorse I may feel for the inaccuracy of my marksmanship is, I own, somewhat lightened by consideration of the benefit which has accrued to the public purse.
§ DEBT OPERATIONS
§ An important source to which Chancellors look for help in financing the Exchequer is, of course, National Savings. I am glad to say that they had another outstandingly successful year. Net receipts from National Savings Certificates, Defence Bonds and Premium Savings Bonds were £252 million. Deposits in the Post Office Savings Bank and the ordinary departments of the Trustee Savings Banks rose by £87 million. It was particularly encouraging to see a rise in deposits at the Post Office Savings Bank; this is only the second year since the war that this has happened.
§ In all, £339 million of new money was lent to the Exchequer in these ways during the year, while the total amount remaining invested in National Savings —that is, bringing in accrued interest on National Savings Certificates and deposits in the Special Investment Departments of the Trustee Savings Banks—rose during the year by nearly £400 million. I remember saying last October that it looked as if we were in for an annus mirabilis for National Savings; and, so it has proved. The National Savings Movement must have overheard my "humble hope for more" expressed on that occasion.
§ I should like once again to thank Lord Mackintosh and all those loyal workers all over the country who devote so much time to this most worthwhile form of voluntary public service. I hope that this splendid result of their efforts will be a reward and an encouragement to them.
§ Their success has been all the more welcome in view of the difficult conditions we had to face in the gilt-edged market last year. Unlike the previous year, we had no long periods of sustained demand for gilt-edged stocks, and we were only occasionally able to sell on 35 any scale. Moreover, during the year no less than £950 million of Government stock matured for redemption, and in the course of our operations there was a certain amount of what the Americans call "attrition"; in other words, some holders of Government maturing stock did not take other Government securities in place of their holdings, and had to be repaid in cash. The market also needed a good deal of help from the authorities to absorb the heavy sales of securities by the banks throughout the year. The upshot of all this was that over the year as a whole we paid out more to the gilt-edged market than we were able to take in by new issues and official sales.
§ As a result of these and all the other transactions of the Exchequer, there has been a substantial rise in the amount of Treasury bills in the market. Some of the additional bills were taken up by the clearing banks, but far more by others; much of this probably resulted from the rise in overseas holdings of sterling.