§ I now turn to the Exchequer prospects for 1962–63.
§ Here, the figures are complicated by the surcharge and I want to be very careful not to cause any misunderstanding. The figures which I shall give are on the assumption that taxation continues for the full year at its present rates; in other words, for the full year at the rates laid down in my last Budget plus the 10 per cent. regulator. This is not the statutory position because, as the Committee knows, the surcharge is due to expire at the end of August. I am simply giving the Committee the effect, over the financial year as a whole, of rates of taxation as they now are; in 970 other words, with the 10 per cent. surcharge in force.
§ On this basis, total revenue in 1962–63 would be £6,807 million, or £162 million more than the actual receipts last year. To break down that figure, I expect Inland Revenue duties to produce £3,720 million, £75 million more than last year's outturn. Customs and Excise receipts, on the basis I have explained, would be £2,731 million, which is £136 million more than last year. Motor duties are put at £150 million, an increase of £9 million on last year's receipts. Other revenue at £206 million shows a decrease of £58 million on last year's receipts which included the special debt repayment of £60 million from Germany.
§ On the expenditure side, Consolidated Fund services are expected to require £753 million, a decrease of £62 million on last year's estimate. The net provision for interest on the National Debt after taking into account additional interest receipts on Exchequer lending below the line shows a fall of £60 million.
§ Supply expenditure for this year will be £5,611 million. I dealt with this in my statement on the Vote on Account on 27th February. The Committee will remember the three main points. First, on a comparable basis the 1962–63 Estimates as published exceed last year's Budget estimates by £384 million. Secondly, I emphasised that seven-eighths of this increase is accounted for by six large items—defence, agricultural support, the B.T.C. deficit, the National Health Service, roads and general and rate deficiency grants to local authorities, predominantly for education. Thirdly, I said that there had been some drastic pruning, especially of administrative costs: more than one-quarter of the civil Votes have been reduced below last year's level, and these include the administrative Votes of six large Departments of State.
§ Nevertheless, I say frankly to the Committee I see no diminution in the public pressures to put additional burdens upon the Exchequer. But if we do not keep down these demands to what can be safely met out of increases in the gross national product, we have no hope of preventing an intolerable burden of taxation with all its consequences for our costs and balance of payments.971
§ Total expenditure above the line in the coming year is £6,364 million. The total revenue on the basis I have indicated I put at £6,807 million. The surplus above the line would then be £443 million. This compares with my Budget estimate last year of £506 million. It is £63 million less, but last year's figure included, as I said earlier, £60 million of special capital receipts.
§ Net payments below the line are estimated at £507 million, a decrease of £114 million on last year's outturn. Details of these items have been published in the recent White Paper, and I will not go into that this afternoon.
§ So, with a surplus above the line of £443 million and net payments below the line of £507 million, the overall deficit, or net borrowing requirement of the Budget for the coming year, would be £64 million, compared with the estimated figure of £69 million last year and with the actual deficit of £211 million. These figures, as I have said, and I want there to be no misunderstanding about this, are based upon estimates of what the revenue would be, if the rates as increased by the Customs and Excise surcharge were to continue throughout the whole of this financial year. What, therefore, I do about the surcharge is very important.