I put total expenditure above the line for 1954–55 at £4,523 million, an increase of £264 million on the original estimate for 1953–54. This, of course, allows for the reduction in the Ministry of Food Estimate as a result of the Annual Review of agriculture and the consequent price settlement. Consolidated Fund Services amount to £667 million, or £6 million less than last year's estimate. They need, I think, no detailed comment.
There is no change in the amount provided for the service of the Debt, but I do propose to alter the form in which that provision is made. Ever since the Finance Act of 1928, this has been the Permanent Debt Charge, which was a sum fixed in advance to cover the service and reduction of Debt over a period of years. But every year Parliament has authorised, instead of the sum prescribed in 1928, the actual amount required to service the Debt in the coming year. The fact is that the growth of the Debt, particularly during the last war, has made the existing provisions for the Permanent Debt Charge ineffective. I propose, therefore, to repeal them, and so bring the law into accord with the established practice.
The increase of total expenditure over last year is more than accounted for by Supply Services. Defence expenditure at £1,555 million, as compared with the £1,497 million estimated a year ago, rises by £58 million. Civil expenditure at £2,301 million shows an increase of £212 million over last year's original estimate of £2,089 million. In sum, therefore, the above-the-line account shows a surplus of £14 million.
To complete the picture in broad outline, I need only mention that the below-the-line estimate shows an increase of £16 million in the provision of capital for the National Coal Board; a reduction of £52 million in the provision for War Damage, partly due to the clearing up last year of the Business Scheme; and, in the light of last year's experience, a reduction of £100 million in the provision for loans to local authorities. We may also have to finance certain compensation payments under the Town and Country Planning Bill now before Parliament; but it is too early to name a figure for them. After allowing for the offsetting receipts, I put the net payments below the line at £388 million.
Such, then, in outline, is the Budget picture for 1954–55 on the existing basis of taxation. Its essential features are revenue of £4,537 million, expenditure of £4,523 million, and a small surplus of £14 million above the line.
The Committee will see that we have before us, therefore, the picture of a Budget broadly in balance—the picture of a Budget which showed a moderate surplus on last year's out-turn and seems likely to show a virtual equilibrium in the year which lies ahead. This is not a bad record for a country which has been carrying a defence load double that of five years ago and an ever-enlarging system of social services.
What then, shall be the pattern of this year's Budget? Are we to leave things as they are, or are we to make changes this way or that? The measures proposed in last year's Budget seem still to be working themselves out broadly according to plan, and to be providing the right sort of general climate in the economy. So far as I can judge, they are likely to continue to do so, and they ought, therefore, to be given more time to produce further beneficial effects.
But I must remind the Committee of some powerful forces of wind and weather which may well blow us off course. Three of them are very much in my mind—the more so since they are by no means wholly under our own control. The first is the formidable mass of Government expenditure. The second is the level of world trade, and of our own share of that trade. The third is the possible effect on the sterling area and ourselves of the current decline in American production. I will examine these in turn.