Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 12th April 1962.

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Photo of Mr Edward Du Cann Mr Edward Du Cann , Taunton 12:00 am, 12th April 1962

The hon. Member for Wallsend (Mr. McKay) in that part of his speech which related to the problems of old people spoke with sincerity and made a number of very worth-while points to which I shall refer later. In the second half of his speech when he discussed the financial affairs of companies and of the country at large—I say this with great respect to him—he was much wider of the mark than I have ever heard any other speaker in the House of Commons be, and that is saying something. This is a matter which we might discuss together some time, when I shall do my best to put him right.

I think that it is right to come back to the Budget now. I want most warmly to congratulate my right hon. and learned Friend on his Budget. It is a tough Budget, but I believe, that it is a sound and sensible one. If the country were now in a state of economic crisis, it is abundantly clear that my right hon. and learned Friend would be criticised very sharply on both sides of the Committee for that. It is, therefore, appropriate that we should offer him our congratulations that the balance of payments is better than it has been for some time. That is not to say that it is yet totally satisfactory. We should also congratulate him on the fact that exports are rising and imports falling, although we should again like to see further progress made, and so would he. We congratulate him, lastly, on maintaining a state of full employment, though again many of us on both sides of the Committee, judging by what has been said already, think that we are in a state of over-full employment.

It is a fact that the standard of life in this country is very high. It is a fact that it is continuing to rise. My right hon. and learned Friend, as the chief administrator of the economic well-being of the nation, deserves the credit for this, together with his colleagues. This creates a slightly difficult situation in England, for this reason. We are a curious people. We are much happier in defeat than we are in victory. For example, we remember Dunkirk very much better than we remember El Alamein.

There is a difficulty in the United Kingdom at the moment in that people find it hard to adjust themselves to the new lush circumstances in which they live. They are able for the first time for many years—a very different picture exists today from that which existed before the last war—to fill their houses with material goods, which make living so much easier. They have more money in real terms and more leisure than they ever had before. They find it difficult to adjust themselves to the new situation.

As a result, there is perhaps an especial need for the Government to give the people a lead and a clear purpose and particularly, through fiscal measures and in other ways, to ensure that in their philosophy they are given something concrete to bite on. It is clear that the people look to the Chancellor of the Exchequer in this Budget to give that lead. We have heard much criticism from commentators outside Parliament and from speakers on both sides of the Committee to the effect that my right hon. and learned Friend has not fully done that. In some ways he is the prisoner of the Budget situation, because before Budget day commentators in this place and outside it build up the position greatly. I believe that the public is led to expect far too much and far more than any Chancellor of the Exchequer could possibly deliver.

This is most unsatisfactory. After all, the purpose of the Budget is twofold. Its first purpose is to provide the revenue which the Government must have to administer the country. Its second purpose is as an instrument to control the economy, but it is only one of many instruments and it is by no means the chief instrument. The sooner that point is better appreciated in the country at large the better.

Our economy requires constant surveillance. Now that the Chancellor of the Exchequer has so rightly set up the National Economic Development Council, which everyone on both sides of the Committee wishes well, it is plain that the Budget will become of less and less importance as a single instrument to control the national economy. I hope very much that the Council will look particularly into the training of labour, the mobility of labour, about which the hon. Member for Gloucester (Mr. Diamond) so rightly spoke, the hoarding of skilled labour, which has been one of our economic difficulties in recent years, and especially into restrictive practices on both sides of industry. Last, but by no means least, I hope that the Council will pay particular regard to the need for realistic training and apprenticeship schemes.

All these things will happen. It is quite wrong for anybody to feel let down because the whole financial system of the United Kingdom has not been turned upside down by the Chancellor of the Exchequer on this occasion. In any case, he would have been quite wrong to do that, because the most effective changes are probably those which are accomplished most gradually. He has himself already endeavoured to reduce the scale of importance of the Budget in the context of our national affairs, it seems to me, by sparing those of us who have to sit on these benches having to listen to the usual thirty minutes of economic polemics which used to precede the announcement of the previous year's results. I congratulate my right hon. and learned Friend on that, and if he can further reduce the occasion of its importance it would be a good thing.

Incidentally, I must say that the Opposition, and some of the outside commentators, do themselves a disservice by finding their chief line of argument or discussion on the Budget to be this new tax on sweets, soft drinks and ice-cream. It is, of course, perfectly true to say that it is to some extent hard upon the children and, perhaps, on old and retired people, but on the generality of the community it is a tax that is very much overdue. I went to the cinema the other night, for the first time in a long time—and saw such a wretched film that I cannot see myself going again for a very long time—and noted in the interval that the queues for the sweets, soft drinks, chocolate, popcorn and the rest were enormous; and the noise they made eating those things afterwards was almost a disgrace.

The truth is that it is not the price of admittance that makes the cinema pay so much as the sale of the soft drinks, sweets and chocolates, and so on in the interval. The agitation about this tax I believe to be completely "phoney". Indeed, if that is all the Opposition can find seriously to complain of it is an indication that the Budget is just about right for the national needs.

This Budget is, of course, a standstill operation. It is a holding measure. Its purpose is to consolidate the gains we have made since the financial crisis of July—and the very substantial gains made in raising the standard of life ever since the Conservatives formed the Government in 1951. As such, I support it. In some quarters it has been called dull, but that is a totally misleading description. Rather, I regard it as being an exciting Budget, because it is setting the stage for sound growth in 1963 and 1964.

I believe that the country is beginning to be only too well aware of this, and only too well aware of the fact that it would have been very easy for the Chancellor to give money away—as it is called, although that is the wrong phrase, because he only returns to the people their own money in tax concessions—and be popular. I do not believe that that is what the people want, but that, instead, they congratulate the Chancellor on budgeting for a borrowing requirement of only £74 million, which compares with last year's estimate of £69 million.

Of course my right hon. and learned Friend had to rein in. Of course he was right not to try to bribe the electorate in any sort of way. After the Chancellor's television appearance, which I dare say many hon. Members saw, one of my constituents wrote to the following effect: I was very much struck by the way in which the Chancellor said that he would do what he believed to be right in the country's interests and, so to speak, devil take everything else. I will always support a man like that and so, I believe, will the country at large. That is profoundly true.

I have spoken about the excitement of the Budget. There is some excitement. If a man gives a lead there is excitement. There is excitement in the Purchase Tax consolidation leading, as it so obviously does, to a change to an overall sales tax, maybe to export incentives, and so on, in due course. There is excitement and good sense in the idea of a single corporation tax. That might make United Kingdom investment very much more attractive to foreigners. It is particularly noteworthy that the volume of investment in the United Kingdom in common stocks, as it were, gilt-edged stocks, in the last year amounted to £184 million, of which £155 million was in the last six months of the year. That is a great thing. There are great opportunities here. It is completely and totally right that the Government should be taking us forward, so to speak, gradually into a prospect of change.

My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke), whose speech I very much enjoyed and with which I very largely agreed, spoke about the moral purpose of our nation. I have felt for a long time, and I think that many hon. Members will agree, that it is distressing to see the growth of materialism in our country. It is perfectly plain that an attitude has developed among people of all classes and types of seeking to grab all they can for themselves, and "devil take the hindmost", which means very largely at the expense of the other fellow. I do not say that everybody does it, but it is a tendency, and we are all very well aware of it. For my own part, I deplore it.

The Government have introduced the pay pause. This has not been altogether a satisfactory policy, as we all know. In the first place, it has been thoroughly unfair, particularly on some civil servants, on the nurses, especially, and it is also true, as my noble Friend said, that a coach and horses was driven through it by the Electricity Authority, among others. I thought that the responsible Minister at that time should have resigned, but that is neither here nor there.

On the other hand, that policy has succeeded, from a psychological point of view, I believe, beyond our wildest dreams, for the country is at last fully aware of the need for voluntary restraint. It was prophesied when that policy was introduced that it would perhaps lead to a head-on clash between organised labour on the one hand and the Government on the other. That has not occurred, and I congratulate both the Government and organised labour on handling the situation so tactfully. It is plain that our competitive position is improving, as my hon. Friend the Economic Secretary to the Treasury said in his very able speech this afternoon. It is plain also that if this policy succeeds in the end, it will be those very people Who are practising restraint at the moment who will be the gainers, and, what is more, they will deserve success.

The second aspect of life which has bothered me very much has been the attitude of our citizens to the Welfare State, and, indeed, to the State in general. The other day, I was driving my little car—and. in view of what was said by the hon. Member for Sowerby (Mr. Houghton) about business expenses, I should immediately say that it is my own car—from my office to the Palace of Westminster, when I turned on the radio hoping to pick up Mr. Acker Bilk, who is a well-known son of Somerset—