Orders of the Day — Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 5 April 1960.

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Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet 12:00, 5 April 1960

It is wrong to say that the expenditure is uncontrolled. Whether it is fully or properly controlled, obviously, is a thing which needs discussion and thought. I agree with that. But to say that it is uncontrolled is quite wrong.

For the sake of the party opposite I will draw a veil over the question of defence expenditure, because after the last debate on defence we can well imagine that we should get less defence but certainly no less expenditure from them, and that is quite clear.

Education, roads and the financing of local employment are, of course, essential investments in our economy and necessary to put us in the position to earn in the future the revenue and wealth which we ought to earn. The social services and the increased overseas aid we provide are a recognition of the moral duty to help those people in this country and other countries who have been left behind following the rising tide of general consumption.

All these items of expenditure are individually justifiable, but I think that what we and the country have to face are the consequences of this growing expenditure, urged on us from all sides, when looked at as a single sum. This expenditure has been urged on us from all sides as individual items, and not in a single sum, I agree; but the problem is essentially the lack of correlation between claims for spending on individual desirable items and the total bill as it is presented to the taxpayer. That is the fundamental problem at present facing the Exchequer.

Regarding the question of expenditure, though there may be grounds for critical examination, it certainly does not lie in the mouths of hon. Members opposite to criticise after what they said at the General Election. I listened with interest to what the Leader of the Opposition said yesterday in his account of the General Election. I thought it was rather like putting a looking glass before us—Alice in the looking glass. I fear that the strain of the last few weeks has caused the right hon. Gentleman to lose his grip on his logic as well as his party, which is not altogether surprising. The right hon. Gentleman said In a sense the point we have been making has been proved. It is clear that if we have an expansion, if we have a rapid rise in income and a rapid rise in production … we get a rise in revenue at the same time."— [OFFICIAL REPORT, 4th April, 1960; Vol. 621, c. 77.] That is precisely the point we made at the election—[HON. MEMBERS: "Oh."] —precisely, that the natural growth of revenue would be committed to the natural growth of expenditure upon the schemes to which I have just been referring.

We said, time and again, that the natural growth of revenue is mortgaged to existing expenditure which, by and large, the party opposite supported and asked us to increase. It was on top of that natural growth of expenditure that they wanted to pile the hundreds of millions which they cast before the electorate at the last election.