Orders of the Day — Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 21 April 1955.

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Photo of Mr Archibald Manuel Mr Archibald Manuel , Central Ayrshire 12:00, 21 April 1955

The right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) will forgive me if I do not follow too closely the points with which he has been dealing. I disagree almost completely with the whole trend of his speech, and I think that that will become apparent as my own speech develops.

It appears to me that when the Chancellor of the Exchequer was introducing his Budget proposals he tried to create the impression that he was doing the best thing that could be done for the country and the people at this particular time with the surplus at his disposal. However, we must remember that he has used only approximately half of the surplus he had, £155 million, still leaving him £148 million. We must recognise that when he introduced the Budget it was fairly obvious to any keen student of facial expressions and human nature that, while he tried to create the impression that he was doing the correct thing, at the same time he seemed to be most anxious and worried about the future.

We can understand the cause of his anxiety. It is quite apparent to all of us who take a political interest in the levels of exports and imports that the Government are in a sticky position. It is no secret to the Committee or the country that the Government have no great expectations of clearing up the economic difficulties during the course of the coming summer and that they believe that there is a distinct possibility that by the autumn things will be economically very difficult for the Government, no matter which party is in power.

In trying to justify his proposals, the Chancellor said that he wanted to give encouragement to employers and workers a like—I imagine a very difficult job, but that is what he said. He met that position by a reduction in the standard rate of Income Tax of 6d. in the £. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) today completely exposed that hollow claim by showing that the vast majority of decent working-class people earning a weekly wage will not be getting Income Tax relief at the rate of 6d. in the £ but will be getting any relief they receive at the 3d. rate. The first thing we have to get known is that this is not a 6d. relief for the people who are producing the goods. The people who produce the wealth of the country are to get only 3d. in the £ relief while those who draw unearned incomes will get 6d. in the £.

To me the position is much worse than that, because there is a large sector of the working class which will get no relief at all from this Budget, nothing whatever. The actual position is that the wages of 9½ million workers are far too low for them to pay any Income Tax. It has always been part of our philosophy on this side that the under-dog should be helped when we have money to help, that if the Government have a surplus at Budget time their first concern should be for the weakest sections in the community. On this side of the Committee we can make no compromise with poverty. That is what the Chancellor is doing. He is making a compromise with poverty conditions which are being experienced by many of those 9½ million families.

These workers and their families do not get anything from the Budget. Their position is becoming steadily more difficult because of rising costs, especially the rising cost of food. The Chancellor has increased their difficulties by the steps he has already taken in the restriction of hire purchase, his dearer money policy and with the Public Works Loan Board's rate of interest to local authorities which is now being increased. This means dearer building costs, dearer schools and hospital extensions.

Consequently, and inevitably, this will involve higher local rates. That is inevitable. I am told by local authorities in my area that if their housing programmes are to proceed at the same tempo as they have in the past, inevitably local rates will have to be increased. Also rents will have to go up. I know that the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) is not as concerned as I am. Possibly the Tory local authorities which he represents are not building the number of houses that those in my area are building, and possibly they are fixing higher rents and therefore will not need to put up the local rates.