It is not cured but we have gone a very long way indeed on the road to curing it. The effect of the Government's policy on exports has been referred to as well. Exports last month were at an all-time high—higher than they had been in the previous month. The balance of payments situation has been steadily improving over the last few months. This is not the record of a Government who have faltered or failed to stand up to the economic crisis. It is the record of the Government who have tackled that crisis with determination—determination to do the job even at the risk of losing some popularity.
It is against this background of determination that we must view the situation. The right hon. Gentleman said that we had shot Santa Claus straight between the eyes. I am sorry to say, five days before Christmas, that we must tell the House and the country that there is no Santa Claus. There is no way of getting more money to spend on social expenditure and local government services except by increasing the national income and it is essential to make this clear.
My right hon. Friend has been asked to accept responsibility for the cuts that have been made in the relevant expenditure. That was accepted in the White Paper. It has been stated by my right hon. Friend and I have no hesitation in repeating it. Of course we accept responsibility for the cuts.
There are really two kinds of cut. There is an element of what one might call "fat" in estimating. There is bound to be. In aggregating the estimates of a vast number of local authorities, as we have to do, there is always a certain amount of over-estimating. But, as my right hon. Friend said, that is not the whole story. He has said that, with our present level of national income, we cannot have more local government expenditure than we are allowing for. If we had more, he said, we would find ourselves again in economic troubles and again facing inflation and again in difficulty with our monetary position.
It is curious that among all the many quotations which have been produced in the debate those which have not been produced are those which have spoken of the inflationary effect of public expenditure and of the importance of keeping it down. What we have had tonight, quite understandably, in the face of an attempt to control public expenditure, has been a scolding for not spending more. I do not quarrel with that and it is quite understandable. However, if a Government are fit to govern, at the moment they have to take responsibility for saying to local authorities and the nation that we cannot afford at present to go beyond this level.
I want to make clear the limits of what we are saying. We are not saying that there has to be a cut in the standard of services. The hon. Member for Northants, South (Mr. Arthur Jones) said that my right hon. Friend had spoken about reducing growth and lowering the standards of services, but he was not correct. My right hon. Friend spoke about reducing growth. He is satisfied that the level of relevant expenditure at present is enough to keep the services going at the level at which they have been going for the past two years, but he recognises that there has been and has to be some slowing down of growth, some decelerating of the natural ambitions of local authorities to improve their services.
I would like for a moment to consider the position of education. We have been asked questions about the standard of education. This is important not only because education is a very important service, but because it is the biggest in relevant expenditure. My right hon. Friend the Secretary of State for Education and Science studied the original forecasts which came in and found that those for teaching staff, pupils and students, required revision—they were not fully accurate. That did not mean that in all cases they had to be reduced. The figures for 1968–69 show an increased estimate for teachers' salaries, because my right hon. Friend is satisfied that there will be an increase in the number of teachers in the service by then. My right hon. Friend said last week, I think, that there was no intention to defer raising the school-leaving age, which answers the right hon. and learned Member for Hexham.
We have heard a good deal about education generally and the failure of the National Plan. The estimate in the National Plan is for an increase in education expenditure of 5·8 per cent. per annum from 1964–65 to 1969–70. In fact, under the Rate Support Grant Order the increase for 1966–67 to 1967–68 will be 5·8 per cent. and for the year 1967–68 to 1968–69 it will be 5·8 per cent. and for the year 1965–66 to 1966–67 it has been 6 per cent. We have thus kept up within the target set by the National Plan. My right hon. Friend the Minister of Health assures me that the position is the same—