HC Deb 17 April 1961 vol 638 cc791-3
Mr. Lloyd

I begin with an account of the results to the Exchequer of the financial year 1960–61.

On the revenue side, the out-turn, at £5,934 million, was £46 million below the Budget estimate. Inland Revenue receipts were £3,212 million, £61 million below estimate. Customs and Excise duties, at £2,390 million, fell short of the estimate by £19 million. Motor duties yielded £126 million, £13 million more than the estimate. Other revenue at £206 million produced an extra £21 million, mainly from the sale of surplus stocks of raw materials and a special debt repayment by France.

Expenditure above-the-line came out in total at £5,787 million, or £111 million more than the estimate. Consolidated Fund services, at £798 million, showed an increase of £29 million, of which £21 million was for debt interest, reflecting the higher levels of interest rates during the year. Supply expenditure was £82 million above the estimate, at £4,989 million.

As a result of these changes on both sides of the account, the surplus above-the-line, at £147 million, was £157 million less than the estimate of £304 million. Below-the-line, receipts, at £428 million, were £4 million less than estimated, but payments at £969 million were £85 million lower, so that net payments below-the-line at £541 million ware £81 million below the estimate.

Thus, the result commonly termed the overall deficit was £394 million, or £76 million more than my predecessor estimated.

The borrowing problem set by this overall deficit was substantially increased by the need to finance both the rise in the gold and foreign currency reserves and our other external transactions. Over the year our total requirement, after employing receipts from extra-budgetary funds, was £560 million. One hundred and fifteen million pounds of this came from the increase in the note circulation, £300 million was raised by borrowing from the public, and a further £145 million was provided by Treasury bills held by the Bank of England against the Special Deposits called from the banks.

I have been greatly encouraged by the achievement of the National Savings Movement, an achievement helped, I am certain, by the improvements introduced by my predecessor a year ago. Net receipts to the Exchequer from National Savings of all forms have amounted to £275 million during the year. This is the third year running in which we have had outstanding results from National Savings. During those three years the amount remaining invested, including accrued interest, has grown by almost £1,000 million, or 15 per cent. I am not yet so used to these large figures that I regard these results as a matter of course, and I should like to send to Lord Mackintosh, and through him to the whole National Savings Movement, my grateful thanks. [HON. MEMBERS: "Hear, hear. "] What is important is not only the total achieved, but the fact that the habit of saving is being taught.

The success of National Savings and a rise in holdings of Tax Reserve Certificates left me with practically no need to borrow on the market, that is, by Treasury bills and gilt-edged securities. At the same time, there was a revival of demand for gilt-edged securities. My predecessor last year regretted the fact that he was down on balance over gilt-edged; that is to say, more was paid out to investors than was borrowed from them. This year, there has been a distinct change. The figures for 1960 have been published and analysed in Part Two of the Economic Survey. Those for the financial year 1960–61 will be published in July, but in the meantime—I can say this now—they will show that over the financial year as a whole we were able to make large sales of securities and bring about a substantial reduction in market Treasury bills.