So far as public sector finances are concerned, the House will recall that in 279 November I put the public sector borrowing requirement for 1974–75 at £6,300 million. Since then there have been further changes which have increased this figure to £7,600 million. Current receipts in total have been much the same as expected, but there have been a large number of changes on the expenditure side. Nearly £300 million of the increase is accounted for by the measures already announced in respect of Burmah Oil, the Crown Agents and Channel Tunnel compensation. There has been an increase of about £1,000 million in current expenditure, the bulk of which is accounted for by higher wages and prices than had been expected in November, not least as a result of the Houghton award for teachers. Within this total, a further £100 million reflects additional expenditure on subsidies, principally in respect of agriculture and housing. The fact is that when inflation is running at the rates hitherto regarded as normal, it has little significant effect on the balance between public expenditure and receipts. But in the conditions of last year the inflation caused by excessively large wage and salary increases raised public expenditure in money terms much more than public sector receipts, and the public sector deficit rose sharply. This inevitably faces the Government with the unenviable choice between cuts in the expenditure programmes previously planned or massive increases in taxation. Indeed, it must cause one to reflect seriously on the wisdom of planning public expenditure solely on the basis of constant prices.