I am changing my mind. My hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) has put me right. The Chancellor reduced Purchase Tax on gramophone records. Therefore, if right hon. and hon. Members opposite cannot be all that grateful to the Chancellor they might be a little grateful to him for having reduced the Purchase Tax on gramophone records.
The hon. Member for Loughborough followed very closely the arguments of the right hon. Member for Huyton, except that he was not so amusing. The right hon. Member for Huyton seems to have sacrificed being "shadow" Chancellor for the substance of being official clown.
The hon. Member for Loughborough made several points which his right hon. Friend made, and I should like to comment upon three. First, I hope that it will not escape notice that the Opposition have been using the legitimate, but essentially unfair, trick of debate in that where it concerns the stabilizing tendency in the cost of living no credit whatever is given to the Government and all emphasis is laid upon the fall in commodity prices and imports. Where it is a matter of recession and unemployment, all the blame is placed upon the Government and no account whatsoever is taken of the recession in the United States and the fall in commodity prices. They cannot have it both ways. In any case, it does not do justice to their powers of debate.
My right hon. Friend the Paymaster-General was over-generous to the right hon. Member for Huyton in thinking that that right hon. Gentleman really meant it when he said that the strength of sterling would come before any other consideration, no matter what political party was in power. I do not believe that. Socialist policy is a policy of inflation, involving a financial crisis every two years and a devaluation every three — except that in the second three-year period they usually give up office and leave a Conservative Government to take over.
That is what Socialist policy means, and when the Socialists start their General Election campaign they should, if they were honest, hold out to the rest of the world that they are offering a Socialist £which they will devalue in three years' time. That is the most important indictment to be made against them. The strength of sterling is the most important political and moral asset that my party can claim.
I want to add my comment to that already made on the remarks from the benches opposite about the so-called "old-age pensions." They are not old-age pensions, but retirement pensions. I deprecate the use of the term "old-age pensions" because it has an emotional overtone, and heightens the undesirable tendency to make retirement pensions a party political issue. My right hon. Friend the Minister of Labour was absolutely right in saying that, sooner or later, this pension must be regarded as an element in the economy upon which agreement must be reached between the two sides.
This point has been raised by one hon. Member opposite after another. They must have decided that, as this is a good Budget, they might as well bring in one of their main election cries. But it does not stand up at all. The different interests in the economy have to be looked at—and after—in turn as well as may be, and I do not think that any fair assessment of the Government's record in relation to retirement pensioners can possibly justify what has been said by the other side. We all know that the retirement pensioners now have a higher real rate of pension than they have ever had since these pensions were introduced.
The suggestion that retirement benefits should be tied to the cost of living is not only a confession of failure and despair but is, in itself, highly undesirable. As a matter of fact, if the benefits were so tied they would be lower, in real and in money terms, than they are today. It is a pity that that note has been introduced. It is not only unsuited to our Parliamentary procedure, but is rather undignified and unbecoming to Parliament in general.
I congratulate my right hon. Friend the Chancellor of the Exchequer on what I consider to be a fundamentally well-conceived Budget. I should like to try to assist him in two respects—and if I do so only briefly now it is because it will be more suitable to develop my arguments during our consideration of the Finance Bill. First, I am sorry that he has not abolished Schedule A tax. I hope that he will be pressed from this side to do so, and I shall join in any such pressure.
Secondly, I join with my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer), who said that it is time to remove the injustice of married couples, both earning and attracting Income Tax, being assessed together. The case for it is not strong enough. This would be a good occasion to do away with it, and I hope that at a later stage we shall be able to press my right hon. Friend on that as well.
I also want to assist my right hon. Friend by emphasising the central theme of the Budget. My right hon. Friend said:
Every Budget should have a main aim or theme running through it, related to the current needs of the economy. I have no doubt whatever what the first requirement is today. It is an improvement in the competitiveness of our economy." — [OFFICIAL REPORT, 7th April. 1959: Vol. 603, c. 47.]
That has been rather overlooked and neglected. Indeed, it is remarkable that so few references have been made to that central theme, although it has been said that if one wants anybody to understand anything one has to repeat it three times and my right hon. Friend said it only once.
It was right that he should take that as his then-re this year, and to lay his main emphasis, in effect, upon exports. He, and every other Chancellor, has to face a very difficult choice, and a balance of advantage and disadvantage. This year, my right hon. Friend has made the right choice and the right balance. He has decided to stimulate the economy. At the same time, I hope that he will remember that he always has with him two unsolved and extremely difficult problems, and that one of them may well catch up with him and overwhelm him.
We have not even approached a solution of the central difficulty of finance and economics in a free democracy—reconciling expansion with a stable cost of living. The bogy of inflation should continue to frighten my right hon. Friend. No free economy—and, I venture to say, no controlled economy—has succeeded in expanding without inflation. My right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) said that the Russians had succeeded in doing so. Whether or not they have succeeded is an extremely interesting argument. I noticed in The Times a few weeks ago a most interesting leading article which argued that even the Soviet Socialists had not succeeded in reconciling expansion with a stable economy.
Nevertheless, my right hon. Friend made the prime point. The Soviet Socialists have the one control that Socialists in this country are not prepared to assume—control of wages. If we are not to control wages, there is little point in controlling the rest of the economy—unless, of course, one is prepared for the ultimate solution to inflation, the solution of the party opposite, and one that is always at hand—a devaluation.
One can always solve inflation by devaluing the currency. That is the Socialists' answer, and that is what they did. If the Socialists have a coherent economic philosophy it is that they get office, inflate the economy, solve balance of-payments difficulties by a devaluation. and then get out and leave it to the other party to build up the economy once more. That is the British Socialist economic philosophy.
My right hon. Friend must try to solve the problem in another way. If I knew the solution I would tell him. Right hon. Gentlemen opposite may laugh, but perhaps they will ponder this. It is a great comfort to them, but presents us with great difficulties. No degree of economic control or direction will make an economy " go ", any more than a rudder will make a ship go [Interruption.] It is, of course, worth having a rudder, and that is what my right hon. Friend is using. At least, he did not capsize, as the party opposite did.
Just as no amount of Government control will make an economy "go", so no amount of legislative or Parliamentary control will affect the object of wage control. It cannot be done by any form of legislative action. Just as the economy depends for initiative and impetus on the creative genius of the people, so the control of wages depends on the innate discipline of the community. Whether that discipline exists or not we shall see. It is a problem which will continue to beset this Front Bench and the opposite Front Bench if they come over to this side.
Members opposite are ill-advised to pretend that they can avoid the ultimate evil of devaluation and the ultimate harm that will do to the expansion of world trade simply by controlling less important parts of the economy.
The second great difficulty that my right hon. Friend must have in mind is the difficulty of the fluctuation in commodity prices in the world as a whole. 1 have no doubt that he is considering what can be done about that. That is not such a difficult problem as the control of wages. If the Financial Secretary replies to the debate tonight, perhaps he will say whether the Government are as aware as they should be of the problem of the fluctuation in commodity prices, and whether, in fact, there is not something that can be devised in the form of an equalisation account or something like that. The worse these fluctuations are in the long run, paradoxically the better they are for us in the short run.
With these two reservations, I believe that my right hon. Friend the Chancellor of the Exchequer has made an honest and sensible effort to keep the economy on the right lines, and it will be propelled on those lines not by anything that any Government can do, but because of the resource, inventiveness and skill of our people.