The hon. Member for Sheffield, Bright-side (Mr. Winterbottom) dealt vividly with the problems in the areas of unemployment in the north of England similar to those we have had in Northern Ireland for many years. I do not agree with much that the hon. Gentleman said, but there are several points on which one might find common ground with him. Later in my speech I propose to discuss the problems of areas of unemployment and, with the permission of the Committee, I will deal with the hon. Member's points then.
The atmosphere in the Chamber after the Chancellor has made his speech is always very special. There is a tremendous build-up to the speech and then after he has departed, hon. Members who are left find that the experience of speaking in an almost empty Chamber is quite unique. There are many days in the year when there are few hon. Members in the Chamber at a given time. But after the Budget speech there is a special atmosphere. There is the advantage that if an hon. Member mislays his notes other hon. Members tend to be tolerant because they realise that the hon. Member who is speaking has been constructing his speech as he sat listening to the Budget statement.
I was glad to note that all hon. Members opposite who have spoken have, in broad terms, given a welcome to the Budget statement and have said that they regard it as a necessary Budget at this time. I wonder how rare have been the occasions in the last 18 years when there has not been a Division on one of the Resolutions put to the Committee after the Chancellor's statement. I welcome the Budget, but I will not bore the Committee by detailing all the points to which I extend a specific welcome. I certainly welcome the tone of my right hon. Friend's statement. I consider that it was the tone of his statement rather than any specific item which commended it to most hon. Members.
The theme of growth without inflation will be widely welcomed. It is easy to use that phrase, but is it possible to achieve that aim? What will be the annual rate of inflation from following such a policy? How soon will it be before we have a balance of payments crisis? I do not wish to be unduly pessimistic, but these matters represent a definite risk which any Chancellor has to take in pursuing a policy such as has been advocated. I am convinced that it is worth taking that risk and certainly those in the areas where the rate of unemployment is high believe strongly that the risk is worth taking.
One problem with which I wish to deal, and which concerns our whole approach as a country, is the future of the sterling area. I am not an economist, but I am passing on to the Committee the views which have been expressed by Mr. Andrew Shonfield in an excellent book on British economic policy since the war. Mr. Shonfield puts the point forcibly and convincingly that the rôle of the sterling area has changed since the war. Formerly we were a deposit bank. Now we have become an investment bank. Generally speaking, the old Commonwealth countries are debtors and the fast-developing countries in the Commonwealth are creditors. It may be argued that those countries should spend more of their accumulated wealth on developing themselves. This is gradually taking place and the new developing Commonwealth countries are starting to abandon the practice of leaving large sterling balances in London. Thus, the whole rôle of the sterling area will be altered.
The considerable potential strain put upon our balance of payments by the withdrawal of funds from the sterling area has been one of the main causes of the economic crises since the war. One hears the argument that on balance the City of London benefits from our rôle as banker for the sterling area. I wish to quote to the Committee what Mr. Shonfield says about this. He argues that what was in the past a substantial benefit to the City of London from our rôle as banker for the sterling area has now become marginal. He writes:
All told, the loss might, therefore, be of the order of £40 million. But that would still leave over two-thirds of the total estimated £125 million of foreign exchange earnings of the City of London intact. The amount lost in the course of putting some armour on the pound sterling and withdrawing the country from a number of activities, which render its economic life intolerably exposed to international pressures, is about 1 per cent. of Britain's annual income from the export of goods and services.
As I said earlier I do not claim to be dogmatic on the subject. I am merely putting to the Committee views in this book and which appeared to me convincing. I do not believe that it would be possible for us to have a policy of growth without inflation, and without balance of payments crises, unless and until there is a radical reform of the whole rôle of the sterling area; though this is one of the ideas in politics, like deflation, which is almost a dirty word. I feel there is a strong case for a study to be made by the Treasury of the whole rôle of the sterling area.
I wish to turn now to a subject which has nothing to do with the rôle of the sterling area but relates to the effect of the Budget proposals on young married people. I cannot help feeling that, from the point of view of young married people, there is something a little disappointing in the speech of the Chancellor. In the first year of marriage young people experience considerable financial strain, and particularly now that they are marrying at a younger age. They are faced with the expense of putting a deposit on a house and meeting the cost of furniture and carpets. Many people have argued the case for a reduction in Purchase Tax and similar schemes, but I should like to see a scheme which would provide, in addition to those reliefs that a certain amount of the income of the couple would be exempt from tax for the first year of their married life, or perhaps for the first and second years, as a form of additional marriage allowance. This scheme might be an inducement to matrimonial happiness if it could be granted only in the first year of the first marriage.