Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 28th October 1955.

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Photo of Mr Geoffrey Rippon Mr Geoffrey Rippon , Norwich South 12:00 am, 28th October 1955

I cannot, while I am addressing the Committee, check those mathematics, but council-house tenants in many cases—certainly in London—are getting more than the statutory rate subsidy. In order to reach a realistic situation, that subsidy should be brought into line with the current level of wages and the value of the £. My argument is that some pressure ought, in fairness, to be applied to tenants of rent-restricted houses, not only on a basis of equity in rent but on a social basis, so as to ensure the proper maintenance of those premises.

It has been suggested by the hon. and learned Member for Gloucester that there was never a hint in the course of the Election that such was the Conservative view. I should have thought that it had been recognised for a considerable time that there is need to overhaul what has been judicially described as a welter of chaotic verbiage. Even many Socialist pamphlets have recognised that there is some need for revision of the Rent Restrictions Acts. It is, therefore, outrageous to suggest that it is something which was hidden up the Government's sleeve until after the Election had taken place.

Reference was made by my hon. and noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) to the crisis which we now have to meet. Again, I feel that we should all welcome the Government's proposals in so far as they are designed to strengthen sterling and to improve our international trade position. At the same time it is very important that the fact that measures have to be taken from time to time to maintain the stability of our national economy should not give rise to undue pessimism. I share some of my hon. and noble Friend's sentiments about the degree of crisis from which we are now suffering. The Chancellor himself has emphasised that there is nothing in the nature of a serious economic crisis.

Fluctuations in our gold and dollar reserves, resulting from unfounded misapprehensions about the prospect of sterling convertibility, are not a sign of economic weakness; nor are the returns and monthly statistics which reflect the effect of the dock strikes, not only of June, 1955, but of October, 1954. It may be economic heresy but—speaking not as an economist—I must confess that I am somewhat doubtful about the value of some of the statistics published—and so frequently misinterpreted. They always relate to past events and conditions, and some of those who form their opinions solely on the basis of the monthly returns, and change their economic opinions accordingly, are in the unhappy position of people who have their noses so close to the grindstone that they do not see the wheel going round. As our export figures relate to the orders and imports of eighteen months or two years previously, and the import figures relate to current orders and future production. I think we might have more to worry about if our export figures were too considerably in excess of our import figures, because that might mean that orders were falling off, that production would fall and that unemployment would rise.

Apart from that aspect, I feel, as I think most hon. Members on both sides have felt, that the fundamental problem is that of internal inflation. We all recog- nise that wages and dividends unrelated to greater effort or more efficient production not only tend to force us out of competitive world markets but bring little benefit to those who receive them, and do great injury to those who do not.

I do not want to say much about the increased Purchase Tax and Profits Tax. I regard the Purchase Tax as valuable not merely as a means of syphoning off purchasing power but because it will direct more of our production—particularly of craft goods like silverware and cut glass—to the export markets. Since the Chancellor does not need that additional revenue to maintain a financial surplus, the fairest thing to do in the present circumstances would be to use the additional revenue to assist those who have been left at the bottom of the spiral of wages and prices. I certainly hope that the Government contemplate some early legislation, whether by means of a new Pensions (Increase) Act or otherwise, to help those people. At present, there are, in my own constituency, many who are undoubtedly suffering hardship.