§ Mr. GEORGE LAMBERTasked the Chancellor of the Exchequer if he will circulate a statement comparing the present rate of national expenditure with the rate in or about, say, December last and explaining, so far as possible, the items which make up the current expenditure and the basis on which the figures are compiled?
§ Mr. BONAR LAWTwo considerations have to be borne in mind in comparing the rates of national expenditure during isolated periods of any one year or of different years.
Firstly, the national expenditure is not incurred at a uniform rate throughout the year, but fluctuates very considerably owing to a variety of causes. Such comparisons must therefore be misleading 40W unless all the circumstances governing the rate of expenditure during a given period are taken into account.
Secondly, it is impossible for the Treasury to give final figures of total current expenditure until a considerable time after it has been incurred. So far as Consolidated Fund Services (e.g., debt charges) are concerned, the figures of Exchequer Issues published weekly represent final charges. These charges are, however, not incurred evenly throughout the year, but fall chiefly in June and December when the principal dividends are payable, and adjustments must be made on this account in considering averages for short periods. The Exchequer issues also reflect a close approximation to facts in the case of Supply services other than Votes of Credit. But this does not apply to expenditure on Vote of Credit services, the principal cause being that as much of it takes place outside of the United Kingdom it is impossible to pass the entries relating to these transactions through the Exchequer Account until a considerable period after the event. In fact, the estimates of expenditure out of the Vote of Credit are reached by adding to the amount of cash which has been drawn from the Paymaster-General in London for Vote of Credit services, the amount of expenditure for Vote of Credit services which has been incurred abroad, based on telegraphic advice. The figures which have been given in the various statements made in the House of Commons as the expenditure out of the Vote of Credit have all been prepared upon this principle, as have the figures given below.
In my last statement on the Vote of Credit I dealt with the first five weeks of the current financial year, namely, the period 1st April to 5th May inclusive. The following table compares the expenditure in these five weeks with the five succeeding weeks, namely, the period 6th May to 9th June, and with the period of nine weeks from 8th October to 9th December, 1916, with which I dealt in the first Vote of Credit statement which I made in the House. In each case the figures relating to Consolidated Fund services and to Supply services other than Vote of Credit, represent the Exchequer issues. The figures relating to the Vote of Credit have been prepared on the basis explained above.
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TABLE A. — Nine weeks— 8th Oct. to 9th Dec., l916. Five weeks— 1st April to 5th May, 1917. Five weeks— 6th May to 9th June, 1917. Ten weeks— 1st April to 9th June, 1917. Consolidated Fund Services (Exchequer Issues)— £ £ £ £ Total 38,669,000 9,715,000 45,689,000 55,404,000 Daily average 614,000 278,000 1,305,000 792,000 Supply Services other than Votes of Credit (Exchequer Issues)— Total 18,057,000 8,266,000 8,346,000 16,612,000 Daily average 287,000 236,000 288,000 237,000 Votes of Credit (Figures prepared on special basis explained above)— Total 360,000,000 261,000,000 209,600,000 470,600,000 Daily average 5,714,000 7,457,000 5,989,000 6,723,000 Total 416,726,000 278,981,000 263,635,000 542,616,000 Daily average 6,615,000 7,971,000 7,532,000 7,752,000 But the comparison suggested by the table is vitiated by several circumstances. In the nine weeks ending 9th December, 1916, the issues for the Consolidated Fund services included a whole half-year's dividend upon 4½ per cent. War Loan and 5 per cent. Exchequer Bonds, 1920. The issues in the ten weeks ending 9th June, 1917, included the April dividends on Consols, etc., on unconverted 5 per cent. Exchequer Bonds. 1919, and 1921, and on the 4 per cent. War Loan, as well as the June dividend on the unconverted 4£ per cent. War Loan, 5 per cent. Exchequer Bonds, 1920, and the 5 per cent. War Loan. In the period ending 9th December, 1916, the issues for Supply services other than Vote of Credit were decidedly above the
TABLE B. — Actual, 1916–17. Estimated, 1917–18. Increase per day. £ £ £ Consolidated Fund. Services— Total 139,120,000 222,895,000 — Daily average 381,000 611,000 230,000 Supply Services other than Votes of Credit— Total 85,328,000 92,486,000 — Daily average 234,000 253,000 19,000 Total 224,448,000 315,381,000 — Daily average 615,000 864,000 249,000 The increase of £230,000 per day under Consolidated Fund services is entirely due to the increase, in the debt charge.
42Wnormal for the year, while, during the first ten weeks of the current financial year the issues for Supply services other than Vote of Credit have been below the anticipated average. So far as present indications go there appears to be no reason for revising the Budget Estimate for the year 1917–18 in respect of Consolidated Fund services or Supply services, excluding Vote of Credit, and the growth of expenditure under these heads may fairly be illustrated by comparing the actual issues in 1916–17 reduced to a uniform daily average with the daily average on the estimated issues for the year 1917–18.
On this basis the comparison as regards the two classes of services in question becomes as follows: —
The following table relating to expenditure on Vote of Credit services analyses in detail the totals already given. The 43W figures represent the total cash placed by the Treasury at the disposal of spending officers and past experience suggests that they are in excess of the real expendiure. They include all outgoings in respect of advances which may be recoverable, either in the same year or in a subsequent year, or in respect of the purchase of commodities which are resold.
TABLE C—VOTE OF CREDIT — Period 8th Oct. to 9th Dec, 1916–63 days. Period 1st April to 5th May, 1917–35 days. Period 6th May to 9th June, 1917–35 days. Period 1st April to 9th June. 1917–70 days Army, Navy and Munitions— £ £ £ £ Total 249,500,000 173,000,000 147,300,000 320,300,000 Daily average 3,960,000 4,943,000 4,209,000 4,576,000 Loans to Dominions and Allies— Total 104,000,000 68,000,000 46,300,000 114,300,000 Daily average 1,651,000 1,943,000 1,323,000 1,633.000 Miscellaneous— Total 6,500,000 20,000,000 16,000,000 36,000,000 Daily average 103,000 571,000 457,000 514,000 Total 360,000,000 261,000,000 209,600,000 470,600,000 Daily average 5,714,000 7,457,000 5,989,000 6,723,000 The increase of expenditure on Army services is in part attributable to payments or advances which will be ultimately recoverable. The expenditure on Munitions has also been affected by temporary causes, such as more rapid deliveries being made on account of the early termination of certain orders. But notwithstanding this I have reason to fear, as I have already stated, that there will be some excess under the heads of Army and Munitions upon the figures on which the Budget Estimates were based.
As regards Loans to the Allies, His Majesty's Government were still liable during the opening weeks of the current year to fulfil commitments which were undertaken before the entry of the United States into the War. The advantage of the entry of that country is now being felt.
Under the head of Miscellaneous there has been a substantial increase as compared with last year. It would not be in the public interest to set out in detail the items which account for it, but I may say generally that the growth of expenditure is due to charges for transport on land and sea, including purchases of ships, the purchase of food supplies, and to the charge for War pensions, which has now reached a figure of about £250,000 per week and will, of course, continue to expand.