§ I shall be coming later to the detail of the Exchequer prospects for the new financial year. But I wish to say something now about the expenditure side of the account. One of the problems which has to be faced by the Committee is the continuing growth in public expenditure. Last year, my predecessor had to deal with an increase in the Estimates for Supply services over those of the preceding year of £322 million, or 7.2 per cent. This year, the Supply Estimates are £280 million, or 5.7 per cent. above what was provided for in last year's Financial Statement—and this after crediting the proceeds of £50 million this financial year from the increased health stamp and charges. The expansion is spread over the whole field with varying rates of increase. About one-third of the total increase of £280 million is caused by increased rates of pay.
§ Most people no longer hold the view imputed to the nineteenth century that all public expenditure is bad and all private expenditure good. Nowadays, all political parties are committed to a high and rising level of expenditure on education, public health, and numerous other public services. But although this is accepted, public expenditure must not be allowed to outrun the prospective growth of our resources. It should not take too much of our resources from other forms of economic activity where growth is most likely to come. We must, therefore, see that we get the priorities as nearly right as we can, both within the public sector and between the public and the private sectors.
§ This calls for new methods. We need increasingly to look at all public expenditure together instead of piecemeal, and to look at it for a period of years in relation to prospective resources. I have recently set in hand a study of the whole problem of public expenditure in relation to the prospective future growth of our resources for a period of five years ahead. If we look back for a decade, 794 it will be found that, for a time after 1951, total public expenditure—and in this I include the whole of the public sector, central and local government, above-and below-the-line, the National Insurance funds, and the capital expenditures of nationalised industries—rose more slowly than the gross national product. This was largely due to a reduction in the proportion taken by defence. But the process was reversed three years ago, and the share of our total product taken for public purposes is rising again, and rising appreciably. The object of carrying out the study which I have just mentioned is to see how we can best keep public expenditure in future years in proper relationship to the growth of our national product.
§ I am one of those who believe that there are savings to be made by so-called administrative economies. I believe that if those, at all levels, who are charged with the spending of public money would bring to the task the same prudence they apply to their own financial affairs, the results would be worth while. Mr. Gladstone has been laughed at for his devotion to cheeseparing and to candle ends when he dealt, a hundred years ago, with an expenditure of £69 million. Today, with an expenditure of over £5,000 million on Supply, I cannot believe that there is not a good deal to be saved by more frugal administration. But, of course, the big money is involved not in administration, but in the basic decisions of policy which are taken by the Government and by Parliament.
§ For these reasons I have, as Chancellor of the Exchequer, been glad of the increasing concern in the problems of public expenditure which, I know, is felt by my right hon. and hon. Friends behind me, but not, I think, by them alone. In this connection, I would draw particular attention to the work of the Plowden Committee, which has already provided my predecessor and myself with a number of valuable interim Reports. Later this year I will report to Parliament on the whole range of the Plowden Committee's work.