Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 13th April 1959.

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Photo of Mr Roger Cooke Mr Roger Cooke , Twickenham 12:00 am, 13th April 1959

Because I have been trying to calculate our costs vis-à-vis those of Germany and Western Europe in particular, where costs have been held fairly stable in the last year. On that, and carrying that graph forward, one sees that about 2 per cent. would be the maximum that we ought to give.

Finally, I could not help reflecting how lucky the nation is to have in 1959 a Chancellor from this side of the Committee rather than one from the opposite side of the Committee. If we were still paying tax at 1951 rates, we would be paying £1,200 million a year more than we are at present, which would be equivalent to 26s. a week—over £65 a year—for every family in the land.

My hon. and learned Friend the Financial Secretary has given us one or two figures that would have to appear in any Labour Budget, and I should like to add a few more. If the right hon. Member for Huyton (Mr. H. Wilson) were Chancellor, he would have to implement what is set out in the little black book entitled "The Future Labour Offers You". That implementation would be rather a black day for this country. Not only does it undertake to increase pensions, war pensions and industrial injuries by 10s. a week at a cost of over £200 million, but to abolish Health Service charges and to increase hospital services by, say 50 per cent.—items that would come to probably another £200 million a year.

The party opposite has also undertaken certain steps in education, including reducing primary and secondary school classes very substantially. The cost of that. so I am told, is well over another £200 million a year. In addition, the interest in relation to the municipalisation of houses would cost another £250 million a year. That being so, a Labour Chancellor would have to find from the nation about £900 million a year more than we are raising.

How would he do it? I suppose that it would be quite simple. To begin with, he would add 1s. 6d. on to the standard rate. That would bring in about £390 million. An extra 6d. a gallon on petrol would provide another £60 million. By putting on another 6d. on every packet of 20 cigarettes he would get about £90 million, and £60 million would come from 3d. on the pint of beer. I suppose that he would put up Purchase Tax by 25 per cent.—another £115 million.

That would bring in only £715 million, but it is still a very substantial sum, and the right hon. Gentleman for Huyton would probably be called the "right hon. Gentleman for high taxation." To meet this heavy extra expense a Labour Chancellor would have so to inflate the economy—and, indeed, the Opposition in their programme have promised to do so by £1,700 million a year—that he would run into a balance of payments crisis, just as the party opposite did in 1947, 1949 and 1951.