Clause 1. — (Charge of Income Tax for 1965–66.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 30 November 1964.

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Photo of Mr Harold Lever Mr Harold Lever , Manchester Cheetham 12:00, 30 November 1964

That is only so if we regard an incomes policy as something laid down from on high and followed with mathematical precision by workers, employers and the Government alike. An incomes policy has been pursued in the sense that people have been urged not to press their monetary claims to the limit of their strength. I think it true to say that of the trade union movement. Throughout the years after the war, and especially in the more critical period of labour shortage, the miners, for example, restrained their demands for wages to something very much below what they could have extorted from society, out of a sense of creative patriotism and making their contribution to the efforts of the country under its then Labour Government to extricate itself from the dangerous position in which we found ourselves after the war.

What I want to say about this increase is that it is not a harsh increase, it is not an unjust increase, it is not an inappropriate increase to the situation in which the country finds itself, it is not an increase which should be resented as part of a general incomes policy. I wonder whether those who have to bear this increase are as small-minded or mean-spirited as is sometimes alleged. I think that a man with £3,000 a year and two children will pay very little more than 10s. a week extra in Income Tax. I am quite sure that many people in that situation will welcome the readjustment in the incomes position, which enables the Government, even in their hour of difficulty—I see smiles, but there are people; and I am sure that there are some in the party opposite—who are capable of making a modest sacrifice cheerfully for the sake of redressing the difficulties of people in a very much worse position than they are—the old people, the sick and the disabled and those who have served their country in the war.

I therefore say that this increase is justified, and that not only is an incomes policy not unattainable, but it has been partially achieved, though imperfectly. We hope that my right hon. Friend, in the measures that he outlines to the country, will have a greater success with his incomes policy that in the past. That is not to say that there has not been some measure of attainment of an incomes policy already.

There is one other point I wish to make. It relates to the question of the effect abroad of this tax increase. The general assumption on the other side of the Committee—and, I am sorry to say, even on this side—is that the international bankers are waiting to pounce on the Labour Government unless they undertake to grind the faces of the poor in a satisfactory manner. Nothing could be further from the truth. Among the international bankers of this day and age are many enlightened people who recognise that whatever politics a Government may have an important matter is that they should play their part in advancing and continuously expanding the wealth of the free world.

The whole purpose of this policy is to put the Government's undertakings on a sound basis. What they do with the money from this policy is a matter strictly of their own concern. Since my right hon. Friend has undertaken these social policies he has shown a willingness to see that they are paid for. One way of paying for them is by Income Tax. There are other ways. In these circumstances, since members of the Conservative Party are always prating about the bad impact which we make abroad, it seems singularly eccentric on their part to deplore the fact that, in a most orthodox manner, my right hon. Friend is insisting that the good things we want for the old people have to be paid for by fiscal means.

While I cannot sing an enthusiastic song of appreciation about an increase in Income Tax, I unhesitatingly say that my right hon. Friend has done the right thing for the right reason.