HC Deb 03 April 1963 vol 675 cc473-4

To illustrate the consequences of such measures for the Exchequer in the coming year I shall give the Committee first the Exchequer figures for 1963–64 on the basis of the present tax rates.

On the basis of existing taxation, Inland Revenue duties are expected to yield £3,990 million. Customs and Excise duties are estimated at £2,740 million. I expect £160 million from motor vehicle duties and £218 million from other revenue. Total revenue is, therefore, estimated at £7,108 million, or £314 million more than last year's receipts.

Coming to expenditure, the Consolidated Fund services are expected to require £790 million, an increase of £37 million on last year's estimate. The bulk of this increase is on the net provision for National Debt interest: last year there were large interest receipts under the arrangements for winding up the British Transport Commission.

The Estimates of Supply expenditure for 1963–64 total £6,139 million, which is an increase of £527 million, or 9.4 per cent. over last year's Budget Estimate. This is much the largest increase, both in absolute and in proportionate terms, in any year since 1951–52.

The increases are widely spread. They are analysed in the Financial Secretary's Memorandum. The Committee will have noted that grants to local authorities are up by 11.5 per cent., from £950 million to £1,059 million—a not inconsiderable additional contribution to their growing expenditure.

Supply expenditure as a whole is now about the same, as a proportion of gross national product, as it was ten years ago. In the current economic situation, I am able to accommodate this expenditure. But this must not be allowed to obscure the true significance of the present trend of expenditure which arises solely from the working out of existing policies, and poses problems for the future which the Committee must weigh with great care. Any proposals which involve additional expenditure particularly of a recurrent nature must still be subject to the most stringent tests in the light of the burden already laid on our economy.

This gives a total of £6,929 million for estimated expenditure this year above the line. With total revenue at £7,108 million, there would, on the basis of existing taxation, be a surplus above the line of £179 million compared with last year's estimate of £433 million and a realised surplus of £353 million.

The estimates for below-the-line receipts and payments have been published in the recent White Paper. I need only remind the Committee that net payments are expected to be £597 million, or £178 million more than last year's outturn.

Thus the prospective overall deficit, or net borrowing requirement of the Budget in the coming year, would be £418 million, compared with last year's estimate of £74 million and the actual deficit of £66 million.

The Committee will see reflected in these figures the effect of the measures already taken both to stimulate public expenditure and to reduce taxation. They will also see that tax concessions of the order I have suggested will produce an above-the-line deficit.