The National Income White Paper

Part of Financial Statement – in the House of Commons on 25th April 1944.

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To return to the question of the sources from which our Budget deficit can be financed, the Committee is, I think, now familiar with the test we apply each year in examining whether our total borrowings have remained within sound limits. The question is whether, broadly speaking, our borrowings have been covered by the total of overseas disinvestment, by personal and impersonal savings, and by the sums available for investment in the hands of the public and of various official funds. As in previous years, the figures for these items are not available for dates beyond the end of the last calendar year; but, having regard to the continuing upward trend of savings, if it can be shown that the balances and savings available from such sources during the calendar year 1943 were sufficiently large to cover the deficit in the financial year 1943–44, we may safely reckon that our finances have still remained on an even keel. From the figures contained in this year's edition of the White Paper on the national income, it is clear that the 1943–44 deficit was so covered, and I think I need only refer in detail to two items. Overseas disinvestment—and I apologise again for the word—[HoN. MEMBERS: "What does it mean?"] It means realisation of overseas investments and addition to external debt. Overseas disinvestment, which includes the still increasing sterling balances which the Dominions and other overseas countries leave in this country, was slightly higher in 1943 than in 1942. It was £55,000,000 higher than the figure of £600,000,000 assumed in last year's Budget. The other important item is the yield of private savings. While the net impersonal savings during 1943 remained at approximately the same level as in earlier years the gross savings were about £100,000,000 below the Budget estimate, owing to a fall of that amount in the excess of tax liabilities aver payments. That fall was due to the fact that as the general level of profits is flattening out tax payments come to approximate more closely to tax liabilities over the year, and the figure for unpaid liabilities is, therefore, falling. On the other hand, personal savings—that is, the savings made out of the incomes of individuals—are estimated to have reached £1,490,000,000, as compared with £1,300,000,000 assumed in the Budget. The excess is in large measure due to the fact that as a result of later information the totals of personal savings in recent years are now put at higher levels than were given in last year's White Paper. As the totals of savings for 1943–44 must have been somewhat larger than for the calendar year 1943 we can confidently assert the out-turn of the year 1943–44 was satisfactory.