§ It is important that the significance of this should not be misunderstood here or abroad. The line which now divides our Budget accounts is confusing, chiefly because people think that it corresponds with the accounting distinction between current and capital expenditure. My predecessor referred to this in his Budget speeches and I am glad to be able to tell the Committee that soon after the Recess we shall be laying a White Paper on a possible basis for the reform of the Exchequer accounts. It is intended at this stage as a basis for public discussion of this complicated matter.
§ In the meantime, I would point out that the line divides expenditure not according to its economic character, but according to the nature of the Government's borrowing powers. For below-the-line payments the Government have specific powers to borrow, while if we 475 think it right to borrow for above-the-line expenditure we must turn, as we shall be doing this year, to our general borrowing powers. In other words the line has significance for our Parliamentary procedures, but none for the impact of the Budget on the economy.
§ There is rather more significance in the overall deficit. With my proposals this will approach £700 million—a figure which, though large, is less, both absolutely and in relation to the national income, than was budgeted for in 1959. But this figure, though it is the starting point for Exchequer financing and debt management, must not be taken as a measure of the Government's needs from the market in the coming year. As the Committee knows, there are other public funds from which the Exchequer can and does borrow, and other sources, such as National Savings, to which it can turn, before resorting to the market.
§ The main point is that in framing my Budget I have had to form a view on the probable development of demand in the economy as a whole and have judged that there is likely to be a margin of resources available which can and should be brought into use by tax concessions. Such a judgment must be based on an analysis of the kind I gave the Committee a little while ago; it cannot be done by inspection of the Exchequer figures alone.