Budget Proposals

Part of the debate – in the House of Commons at 12:00 am on 17th March 1952.

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Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North 12:00 am, 17th March 1952

I hope that the hon. Member will show patience. It was a complicated Budget, but I shall be much shorter than the Chancellor was.

Since there is to be no drop in consumption, the gain goes to those at the top of the scale. A married man without children and earning £2,500 a year and upwards gets about £50 a year gain out of the tax change, against which there are a few pounds a year for the extra food costs. The married man with two children earning £2,000 a year and upwards gets nearly £60 gain out of the tax change.

What is the purpose of these benefits to Surtax payers? We should like to know. Is the Chancellor doing this to give an incentive for extra work? If that is the argument, can he tell us why he has given a cool extra £25 a year to a single man with a wholly unearned income of £10,000 a year? When all is said and done, why should such a man get an extra 10s. a week when the old-age pensioner is getting only another "two bob"? Why is it necessary to give the Surtax payers an incentive by way of tax relief, and the lower paid wage earners an incentive by means of a tax increase—for that is what is meant by the increase in the insurance contribution and the cancellation of subsidies?

Perhaps the Chancellor will answer this—either now or this evening: Was it on purpose, or was it by mistake, that at this time of national crisis—as he told us—he gave away an extra £25 to the single man with a wholly unearned income of £10,000 a year? If he did it on purpose, we should like to know what his purpose was. If he did it by mistake, does he think that is a very good advertisement for the way he made his Budget; and will he take note that we shall be very glad to co-operate in the Finance Bill in correcting that mistake?

It is also rather strange that last January, when the Chancellor introduced his health charges and the economies in education, we were told that the situation was so serious as to require cuts in purchasing power inflicted on the sick, the old and the school children. Why, then, do we have these free gifts to Surtax payers in March? Are we to assume that the health charges are no longer necessary? Is that why the Bill keeps disappearing into the distance?

Why did the Chancellor make the cuts in subsidies which produced these evil social results? He had one curious sentence in his Budget speech, saying that on some grounds he would have preferred to postpone it, which seemed to suggest some doubt. I hope it was not, as some of the Tory newspapers suggested, mainly intended to appease foreign exchange speculators and foreign bankers.

The Chancellor gave us only three pitiful arguments. The first was what he called: … the … intensity of our situation … Note the rather woolly phraseology. But if so, why then the benefits for the Surtax payers? Second, he said he did it because: … subsidies conceal from the consumer the real cost of what we have to pay … "—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1298–9.] If the Chancellor really believes that, why does he go on taxing beer and tobacco? Or, indeed, why does he believe in free education, about which he boasts so much? Why is it right to subsidise a child's school books and wrong to subsidise his milk?