§ Mr. Maudling
It is against this general background that I wish to set out the basis of my Budget proposals. This basis must clearly be twofold: the level of public expenditure and the pressure of demand. I put the level of public expenditure first deliberately, because I believe that in recent times we have been a little apt to concentrate on the modern concept of using the Budget to regulate the pressure of demand while forgetting that far and away the largest factor in determining the amount of revenue to be raised is the accepted level of public expenditure.
The final Budget judgment, of course, depends upon the pressure of demand. It is this factor that determines the extent to which the Government should in any financial year seek to cover its outgoings out of revenue. But the first factor is the magnitude of those outgoings, which determines the level at which the balance is struck.