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Survey Of Government Expenditure

Volume 486: debated on Tuesday 10 April 1951

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We have then a gap of some £150 million in the current year. There are obviously two ways we can set about closing it—either by cutting down Government expenditure or by increasing taxation. I propose to look now at our prospective expenditure more closely. But first I should like to make two general observations. We are in a period where incomes and costs are rising, and this is bound to affect the Government as it affects private institutions. This makes the task of reducing or even stabilising expenditure all the more difficult.

Secondly, it is no use supposing that Government expenditure is something remote and separate from people's lives, which can easily be cut without affecting them in any way. Much expenditure, such as that on defence, is, of course, incurred in providing services for the benefit of the community as a whole, but we must not forget that there are also quite substantial sums spent for or given to certain sections of the community whose standard of living is directly dependent on them. Nothing, therefore, can be more misleading than to suggest that large cuts in Government expenditure can be made without hurting people. They usually hurt just as taxation hurts, though it is not always the same people who are affected. To get 5 per cent. off pension expenditure, for example, the reality is that we either have to cut pension rates by 5 per cent. or find some way of getting rid of 5 per cent. of our pensioners.

The prospective expenditure for this year, I would remind the Committee, I have put at £4,197 million. Let us proceed to analyse it. Of this, £584 million is for Consolidated Fund services, very largely interest on the National Debt both internal and external. I do not imagine that anyone in the Committee is likely to propose seriously that we should default on these obligations. Just under £1,500 million is, as I explained earlier, due to be spent on defence, including Civil Defence, stockpiling, and capital expenditure associated with defence. It is, without doubt, the duty of the Chancellor of the Exchequer and his officials to scrutinise, with the utmost care, every item in this vast programme. That we intend to do to the best of our ability. But obviously I cannot cut down the provision for defence here and now.

Taking the provision for the Consolidated Fund Services and Defence together, we reach a figure just under half of the total estimated expenditure of £4,197 million, and the whole of this amount must be excluded altogether from the economy field—I do not think the Committee will disagree. The remainder—about £2,125 million—is, broadly, expenditure of the Civil Departments and falls into two categories. Over three-quarters of it is accounted for by social services and food subsidies. Of these I will speak a little later.

Meantime, there remains some £510 million of expenditure out of our original total of £4,197 million. This covers a very wide range of services which I have not the time to discuss in any detail. But it has all been scrutinised with the greatest care in the preparation of the Estimates. By no means all of it is domestic civil expenditure. There is, for example, £97 million for foreign and colonial services, including colonial development and welfare—incidentally showing an increase of £15 million above last year. Then, even that part of the Ministry of Supply Vote not in the technical sense attributable to defence—some £50 million in 1951–52—is, in the main, related to defence expenditure, as I think the Committee realise, and cannot be regarded as an ordinary Civil Vote.

If we exclude these two items, the rest is well below £400 million. There is, for example, £51 million for agriculture and food production, £10 million less than last year's total of £61 million. Works at £42 million is £9 million less than last

year, civil aviation at £18 million is £3 million less. Police at £30 million and roads at £30 million are both slightly up on last year. Home information, apt at times to be a controversial item, has been reduced by nearly 20 per cent., to less than £3½ million. I cannot agree that this is excessive, when one remembers that apart from ordinary Departmental information services, it also covers important publicity campaigns, such as recruitment to the Forces and industry National Savings and so on.

I shall not go into further detail. The total estimated expenditure in this field—that is apart from Defence, Consolidated Fund, Social Service and Food Subsidies is £510 million compared with £540 million estimated last year. It seems to me that at a time of rising costs this is a good result. I hope, however, that those with practical suggestions to make, on other than trivial points, will make them in the debates to come, thus departing from the usual practice of combining vociferous general demands for economy with powerful arguments for action involving an increased outlay by the Exchequer.