If the people paying a halfpenny a week in tax will be so much encouraged by this, may I put a question to the hon. Gentleman? If Income Tax concessions are so vital for incentives, as the Chancellor says they are, why did he not give them last year and not this year? Last year, there was less inflation and more slack in the economy. Last year, there was a surplus on our balance of payments and not a deficit. Last year, we had rising gold reserves and not falling gold reserves. But the Chancellor said, "No, we must still have a standstill Budget." He resisted all the pressure from his hon. Friends to give Income Tax concessions. He said, "The country cannot afford it; we are flat out; the position is not favourable enough."
Yet this year, when there is more inflation, when we have a deficit and not a surplus in our foreign balances, when gold reserves are falling and not rising, the Chancellor can afford it. The Committee must admit that it seems a very serious coincidence of events—a worsening balance of payments situation, an Election in a few weeks' time and the sudden recollection by the Chancellor of the importance of incentives. It is a coincidence which will not impress the country as a whole very favourably.
It seems quite clear that one cannot say that there is any improvement in the situation since 24th February, and that either the statement which the Chancellor then made or his Budget statement yesterday is totally and completely fraudulent. He was either misleading the country about the crisis in February or misleading the country in the middle of April. In particular, to say on 24th February that we must take measures to restrain demand, and then, on 19th April, to increase demand by nearly £150 million, is an inconsistency so obvious as to amount to complete chicanery.
When the Chancellor, at one point in his speech yesterday, after relating the measures which he had taken on 24th February, said:
… thank goodness that we took action in time … "—[OFFICIAL REPORT, 19th April, 1955, Vol. 540, c. 39.]
there was a devout and complacent cheer from the benches opposite. What action; in time for what? This electioneering Budget in time for 26th May. That was presumably what the cheer was really for. Otherwise, can hon. Members opposite really justify this action at this time?
Do they deny that the economy is at full stretch? Do they deny that the foreign balance is still worsening? Do they deny that there is no sign whatever of improvement since 24th February? Do they deny that there is no sign that the Bank Rate is, in fact, moderating excessive home demand? Do they really suggest that the position is any better than it was on 24th February, that there is any improvement which can justify this total change in mood?
There is one thing about this Budget from our point of view on this side of the Committee and that is that we shall not have any more of this story of the Labour Government running away in 1951, because the present Government are also running away from an economic crisis; but they are doing much worse. They are leaving behind them a Budget which cannot possibly be justified as providing any help in that crisis.
Somebody said this afternoon, "Would not the Labour Government have intro- duced an electioneering Budget?" With great respect to the Chancellor, I really cannot imagine a Labour Chancellor of the Exchequer coming along six weeks before a General Election, after what he had said on 24th February, and introducing a Budget like this. The howls of horror there would have been from the benches opposite can very easily be imagined.
It may be that the Chancellor was quite wrong on 24th February and that there really is not a serious crisis; everything is going to get better; consumption is being restrained; and by October we shall be in a very good foreign balance situation. I very much hope that that will happen. If it does it will justify the Chancellor's Budget and prove that he was extremely ill-informed on 24th February; but if it does not happen, and if the Chancellor was right on 24th February, I suggest to hon. Members opposite that they will buy their extra votes at a very heavy cost to the reputation of the Chancellor, to the reputation of the Conservative Party of Great Britain, and to the financial security of the country.