Finance Bill
Mr Robert Sheldon (Ashton-under-Lyne)
It is apparent that the hon. Gentleman still has not got my point. I am arguing in the context of the economies of the Western world and saying that we need to study them in this connection. To make petty party points at a time when we are really concerned with economic survival is a failure to understand the real problems facing Britain today.
At this stage of the Finance Bill, I find it difficult to criticise in any detail the tactics of it when there is so much with which I disagree about the strategy. That it is deflationary is obvious, but it is not deflationary merely to the extent of the £243 million referred to by the Chancellor. When one considers this year's Budget and compares it with previous Budgets, it is deflationary to the extent of £500 million a year. In other words, it is deflationary to a greater extent than is currently recognised because of the November measure, which in itself introduced a further measure of deflation that has been incorporated in this Finance Bill.
As a result of the deflation, we shall see a loss of production, a loss of investment, and, most important in an industrial context, a loss of the new techniques of manufacture which we need to understand and mobilise in the interests of the country. It is a loss that we shall never restore. We all know the argument that once one loses the machinery which should have been installed one loses not only the productive potential of the machines but also the skills arising from them.
Walking on the tightrope, as the Chancellor intends over the next few months, what is the outcome if consumption runs ahead of what he has planned? We know that he has drawn a very fine line, for reasons which we must congratulate him. He does not wish to deflate more than necessary, yet he knows that there are tremendous uncertainties ahead. He has had to decide how the level of consumption is to be permitted to increase. What will he do if consumption rises more rapidly than he has expected? What remedy will he introduce? Shall we have another rotation of the purchase tax regulator wheel? Shall we have further cuts of one kind or another?
By now, all Chancellors have learned that consumption in this country cannot be cut—