Orders of the Day — Budget Statement

Part of the debate – in the House of Commons at 12:00 am on 12 November 1964.

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Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester 12:00, 12 November 1964

I am grateful, Dr. King, to my hon. Friends for their support, but I hope that it will not be quite as vociferous as it has been from time to time. Can therefore, with apologies for burdening the Committee with some figures, try to explain this in the way in which the hon. Gentleman attempted to address himself to the subject?

First, let us deal with the effect of what we have been doing for the current year. I am giving the figures at the annual rate. I do not think that they differ from the figures he gave, but as neither of us can see HANSARD just yet I am not precisely aware of them.

As far as revenue is concerned, there is the import surcharge running at £200 million and the additional tax on petrol at £93 million. The export rebate, on the other hand, is £75 million, leaving a difference of approximately £220 million. Thus, the effect of our actions immediately is, at the annual rate, £220 million net coming in.

There will be a certain amount of destocking. No one can put a precise figure on that. We estimate that the £220 million plus the destocking are just about right to cover the import saving. This import saving is the action we were compelled to take in order to deal with the situation I have described.

Given that one inherits that situation, given that one must do something about it, and given that one must save approximately £300 million in imports, and that one saves it, one must take countervailing action to deal with what otherwise would be resulting inflation. We have dealt with that partly by £220 million in the revenue items and we estimate destocking to cover the balance.