On behalf of my right hon. and hon. Friends, I should like to offer our personal congratulations to the Chancellor of the Exchequer on presenting his second Budget. A Budget speech is sometimes tiring for the Committee but it is always an ordeal for the Chancellor. There were moments towards the end of the right hon. Gentleman's speech when we were a little concerned because we thought that the strain was telling upon him. None of us would consider it in any way discourteous if the right hon. Gentleman feels that he would like to withdraw from the Chamber after his massive performance.
The right hon. Gentleman gave us a fairly bald. straightforward narrative, and although we disagree with some of the ways in which he presented his Budget and some of the interpretations that he placed upon the statistics, and although we shall have some criticisms and suggestions to offer, I think that the whole Committee would wish me to say that we appreciate his modesty, his unassuming manner, his firm refusal to try to secure cheap applause and his good humour even when, towards the end of his speech, a certain restlessness was evident on this side of the Committee.
It is not my purpose to embark upon a lengthy economic speech or criticism of the Budget. My right hon. Friend the Member for Huyton (Mr. H. Wilson) will make the main speech on behalf of the Opposition tomorrow. I would wish only to make a few comments which occur to me after listening to the right hon. Gentleman. He has produced a Budget which involves giving away something not far short of £400 million. It is a very large sum, and, if I may say so. I think that he is a lucky man to have been able to do this. Any Chancellor who is in a position to give away £400 million may be fairly described as lucky.
Before we discuss the exact way in which it is proposed to distribute this money, I think that we should consider the circumstances out of which the decision to give away £400 million arose. The right hon. Gentleman spoke of the solid achievement of last year, but he knows perfectly well, as the whole Committee does, that it would have been possible and desirable to produce a Budget of this kind only in circumstances where there was unemployment, slack in our economy, and where it was necessary to take positive action to expand from the stagnation in which we have been resting these last few years.
It is a paradoxical fact that with the modern understanding of the part which may be played by the Government in our economic affairs, which owes so much to the late Lord Keynes, one can produce a popular Budget when things are bad far more easily than when things are good. That is, in effect, what the right hon. Gentleman has done this afternoon.
The Chancellor referred to the balance of payments and described it as being exceptionally favourable in 1958. So it was. But the right hon. Gentleman himself pointed out—I must say in all fairness to him—on no less than four occasions that the reason for this was not due to anything which he had done, to anything which the Government had done, but was simply due to the extraordinary improvement in the terms of trade which we had enjoyed in that year. Indeed, the whole of the improvement, and more than the whole of the improvement, in our balance of payments was due to the reduction in the price of our imports.
The right hon. Gentleman referred to the rise in consumption—a small rise, I think of about 2 or 2½ per cent. in real terms—but he did not go on to explain that that was not due to any expansion of production but to a decline in stocks. In other words, we were consuming more than we produced. The other reason was a fall-off in exports so that more was consumed at home.
The Chancellor referred to the greater price stability. But, once again, this is overwhelmingly due to the fall in world prices to which he referred so often.
The next point I wish to make is that, having got into this position, the first important move made by the Government was to use the public sector to get them out of it. The right hon. Gentleman quite rightly made much play with the expansion in public investment. I agree with him that it was right that public investment should be expanded. But in order for public investment to be expanded there must be a public sector, a large public sector. Where would the Government be today were it not for the nationalised industries? The right hon. Gentleman would not be boasting of the expansion of public investment; he would be worrying far more than he was about the decline in private investment.
Finally, on this general issue I could not help wondering as I listened to the right hon. Gentleman, to his arguments and to the reasons why he believed that we might now have this expansionist stimulus, why he did not say and do so many of these things six months or even a year ago. After all, a year ago we were in the middle of the most favourable six months in our balance of payments. The favourable part was all in the first half of last year. There was far less danger of expansion involving us in a balance of payments crisis at that moment than there is now. It has never been made clear why it was necessary to wait so long before giving the economy the boost to the economy which it certainly needs.
To refer briefly to the changes which the right hon. Gentleman has introduced, I am very glad that he has decided to do something about post-war credits. As he knows, I have pressed this rather strongly this year because it has seemed to me that in a year of depression it was so obviously right that this problem should be tackled and that post-war credits should be repaid faster than they have been. I am only sorry that the right hon. Gentleman decided to limit the repayments, the change, to two years only. In my view he might well have gone down five years. That, of course, would have meant paying back a larger amount, but I do not believe that the whole of it would have been spent, and it would have removed from the Government and the Treasury altogether a much larger part of the problem. Nevertheless, I certainly agree with what the right hon. Gentleman has done so far as it goes.
I also agree with the right hon. Gentleman's decision to restore the investment allowances. I am glad the right hon. Gentleman has done that because there were certain advisers in the technical Press who were saying that we need not bother about investment, we needed simply to boost consumption, which in my view is quite wrong. That, too, I certainly welcome.
I welcome, also, the announcement that public service pensions are to be raised. I must withhold further comment about that until we know the details of what precisely is proposed.
We welcome, of course, the reduction in Purchase Tax, though I cannot help pointing out that the one class of commodities which is not affected by this is the most essential class. The benefits go to the less essential, to the luxury type of article, which, of course, has paid the higher tax.
No doubt, too, there is much to be said for a reduction in Income Tax and in the beer tax. But I must say this. When one is looking at the problem as a whole and seeing how best we can distribute this very substantial sum of money, I most deeply regret that the Chancellor and the Government decided to leave out a class of persons who, I think, are the most deserving of all, namely, the old-age pensioners.
I would have thought that, in circumstances where the right hon. Gentleman quite openly is trying to stimulate consumption, it would be right to do so where at present the hardship is greatest. That he has failed to do. That is indeed our main criticism of the distribution of the £400 million.
We shall pursue this matter in the days to come in this debate. We certainly welcome the tax reliefs such as they are, but we deplore the circumstances which gave rise to them, and we could wish that more had been done—and very much more had been done— for a very deserving class of people, namely, the old-age pensioners.