Budget Resolutions and Economic Situation
Mr Iain Macleod (Enfield West)
The Chancellor of the Exchequer yesterday received some congratulations which he well deserved for the manner of his speech, and I gladly add my tribute to them. It was particularly easy to listen to and a good deal more agreeable than his previous Budgets, in that the taxpayer, for once, did considerably better out of it.
In one respect, which I will come to, the right hon. Gentleman's philosophy was less coherent than I normally find it and, on the biggest issue of all, which unquestionably is the inflation facing the country, he showed a lack of courage in the House, although he redeemed it to some extent with his television broadcast in the evening.
When my right hon. Friend the Leader of the Opposition christened this Budget "a one-month Budget" he made a point that is worth spending a moment or two to develop. The total personal disposable income in this country is slightly over £30,000 million. Thus, 1 per cent. on prices represents approximately £300 million off spending. It is in such terms that Budgets are normally considered. Price increases over the six months to February, 1970, totalled 3⅓ per cent., that is to say, they cut purchasing power by over £1,000 million.
Breaking it down, in December, 1969, purchasing power was cut by £210 million—about the same as the Budget—in January, 1970, by £250 million, and in February, 1970, by £160 million. I guess that when we get the price index for next week the figures will be substantially higher still. The description, therefore, of this Budget as "a one-month Budget" which wipes out the price increases of a single month, is entirely accurate.
There was some irritation that my right hon. Friend said that this was the first Budget since—[Interruption.]