It was not my intention to follow up the remarks made by the hon. Member for Barkston Ash (Mr. Alison), but he has made one or two statements which provoke me to reply. I was interested particularly in the expression "wage drift" so often heard during the Budget debate. One would imagine from it that wages continue to drift away and become much too high for the economy to bear. The right hon. Member for Wolverhampton, South-West (Mr. Powell) has a philosophy that the seller should be entitled to get as much as possible for the product that he is selling, but presumably the party opposite is endeavouring to exclude the man who has his labour to sell. If we live in a capitalist society, a free-for-all in which everybody is selling for the highest possible price, hon. Members opposite should not condemn working people for selling their labour for the highest price that they can get.
One would imagine from listening to their speeches that hon. Members opposite were concerned only with two classes in our society, the bankers and the employers. The points of view that they put are those of the bankers and employers, but 80 per cent. of the population are producers. They are the steel workers, the transport workers, the engineers and others who are producing the goods on which the prosperity of the nation depends. Consequently, for the first time for many years a Chancellor has taken this factor into consideration when framing his Budget.
A number of hon. Members opposite have spoken on the present state of our economy. The hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) said that the Government had inherited a difficult situation. Surely that must be one of the under-statements of the year, but even that is a concession because during the debate on the Address we were told by hon. Members opposite that the economy had never been better and that lack of international confidence was due entirely to the fact that a Labour Government had imposed import charges and had increased the duty on petrol. They alleged that it was the Labour Government's failure to inspire confidence in international banking circles which had caused an economic crisis. The hon. Member for Langstone went on to say that he thought that this responsibility should be shared and that it was fruitless to hold an inquest on who was responsible for the trade deficit. This is a big step from the attitude of the right hon. Member for Bexley (Mr. Heath) who during our debates has placed the whole responsibility on the present Chancellor and the Labour Government.
We are now told that we are to share responsibility with the previous Administration who accept some share of the blame for the situation in which we find ourselves. In October, when my hon. and right hon. Friends were warning electors from a hundred platforms of the serious economic situation with which we were faced, we were told by the complacent hon. and right hon. Gentlemen opposite that our economy had never been sounder. Indeed, as late as November we were told that the figure we gave of the possible gap between imports and exports had been exaggerated. Now we know that the figure is £746 million and might well have been over £800 million had the fact that we were not paying capital and interest on the North American loan been taken into account.
These are facts which cannot be challenged. The public know that they are true. It is, therefore, no good hon. Members opposite inviting us to share the responsibility. When they are faced with a problem and they get into a mess they tell us, "Let us take this matter out of politics. This is not a matter for controversy between the two sides." Now that they have created these difficulties, they are again inviting us to take the question of the trade deficit out of politics. They want us to agree that all share the responsibility, and there ought not to be inquests on who was really responsible.
We have to consider the Budget in the context of the economic situation in which we found ourselves after 13 years of Tory financial policies which had sapped and weakened the industrial power of Britain. The question to ask is whether this is a fair Budget. Now that the dust has settled since last Tuesday and we can look at the Budget in retrospect, it is clear that the public see this as a fair and just Budget. People who have been interviewed on television or in the streets by newspapers have agreed that, in the circumstances, it is a fair Budget.
Hon. Members opposite, apart from attacking the Chancellor, attach no great importance to suggesting what they would have done in a similar situation. Many times they have been challenged to say what they would do if faced with the task of raising an additional £250 million of revenue. We had the bright suggestion this afternoon that a £1,000 tax should be put on betting shops and a £5,000 tax should be put on fruit machine operators. That is not a very helpful suggestion. We all know that many bookmakers are now closing their fixed odds betting businesses and about 10,000 people are likely to be unemployed as a result. However, although not very helpful, it was at least a suggestion of how the Chancellor could raise revenue.
There is really no need for hon. Members opposite to tell us how they would set about solving our economic problem. We know only too well what they did when in office. Their traditional method for dealing with an economic crisis is to cut school building, to stop hospital building, to attack the social services, to stop local authorities borrowing money and to hold them back in their plans for redevelopment. If any money is available, of course, it is usually put by the Tories to the benefit of the Surtax payers. The traditional Tory method for making our economy work is to attack the social services and to cut down on anything for the welfare of the infirm, the aged and those who are unable to defend themselves.
As my hon. Friends have done, I invite hon. Members opposite to tell us how they would raise £250 million. Would they find the money at the expense of the Army, the Navy or the Air Force? I am sure that those who are admirals or group captains would raise their hands in horror if they were called upon to cut our defence expenditure, the sacred cow of the Tory Party. We shall see something of the reaction to that sort of suggestion in the hysteria which will probably develop tomorrow in the debate on the TSR2. We cannot really expect any useful suggestions from hon. Members opposite. It is certain that they would not find the money at the expense of defence costs. Indeed, under the Tories we should have been committed to spending about £750 million over the next ten years on the TSR2, an aircraft which might well be obsolete by the time it was finally completed. How would hon. and right hon. Members opposite find the necessary £250 million, the estimated amount required to reduce purchasing power in this country? There has been a lot of criticism of the Budget but very little helpful or constructive suggestion on how our problem could be met.
The Budget must be considered in the context of our general economic plan, particularly in the context of our plan for guaranteed incomes. The mass of the people, those who work for a living and do not live by owning capital, must be assured that they are living in a just society if they are to be asked to co-operate in building up our economy. Because the Chancellor has produced a just and reasonable Budget, we can expect the co-operation of those who earn their living at the bench, in the factory or at the desk.
The Chancellor has attacked the speculators, the property manipulators and the land racketeers because it is unjust that people should make vast fortunes in this way, often without putting in any effort—particularly in the case of land—to increase their capital while, at the same time, ordinary working people have to fight hard and, perhaps, even strike to get 4 or 5 per cent. increase in their wages. The Chancellor has shown that he intends to treat all sections of society on a just basis.
The right hon. Member for Bexley said that this is a Socialist Budget, and he used the word as a term of derision. But there is nothing wrong in a Socialist Budget if the basis of the Budget is social justice. We believe that this is an instalment, perhaps a hesitation instalment, in social justice. We are very proud to have a Socialist Chancellor opening the door to social justice by his Budget. What do the Tories expect us to do, produce a Tory Budget, give £100 million to the Surtax payers, and cut the social services? Of course, it is a Socialist Budget. The right hon. Member for Bexley seems to imagine that he and his right hon. Friends are still the Government and that we should have produced a Tory Budget. That day has gone. They must learn to live with the cold hard fact that it will be many years before they sit again on these benches.
The nation must have confidence that our priorities are right, that the emphasis is on the people who earn money, not on the people who make money. Although most speakers opposite have concerned themselves with the point of view of employers and bankers, the vast majority of the people want equity in the Budget. Fears have been expressed about the effect of the Corporation Tax and the Capital Gains Tax on certain sections of society. We must look at this question in the context of our guaranteed incomes policy, and I commend what the Chancellor has done in this respect. Hon. Members opposite have talked about incentive being destroyed, about employers being no longer able to make profits, but, if we are to develop our economy at a growth rate of about 5 per cent. with wage rates increasing by about 3½ or 4 per cent., we on this side will expect the Chancellor to see that the growth is justified in profits as well as in wages and salaries.
We have heard this very day of a strike of shop assistants in one of the largest stores in the North-East. These men are being paid £9 4s. 6d. a week, and their take-home pay for a 44-hour week is just over £8 a week. Many of them are married men with families. The firm is the House of Fraser. Lord Fraser is the man known for his activities in the markets, his take-over bids, and the rest. We therefore have to consider that we are not only dealing with the people who are making the money but with the people who are earning it.
We are concerned that in the North-East there is no wages drift. The wage rates are very much below the rates prevailing in the Midlands and the South, and that is precisely because our rate of unemployment is twice the national average. We therefore look to the Chancellor to give our economy whatever assistance he can. The North-East has been based for far too long on its traditional heavy industries, and if new industries are to go there we must have periods of retraining for many tens of thousands of people. That is why we on this side welcome the Government's proposals for substantial redundancy payments to give those in the older industries the opportunity to move to others.
From the regional point of view, we also welcome the Chancellor's declaration that local authorities in such areas as ours will be able to borrow up to 50 per cent. of their requirements from a Public Works Loan Board. In the past, most, if not all, the larger authorities have had to go into the finance market to get capital.
This is a progressive Budget. It has not done everything that some of us would have liked. We should have liked to have seen the Chancellor acting a little more vigorously towards the Surtax payer, looking again at death duties and doing a little more, perhaps, for the regions and, in particular, doing a little more to help local authorities with their rate burden. Nevertheless, we have only made a start. My right hon. Friend has said that this is the first of many Budgets by which he wants to make a comprehensive reform of our present tax system. It is all very well for the party opposite to say that this Budget soaks the rich; they have not even got their toes wet yet—they are just feeling the cold water. We hope that subsequent Budgets will show that this one has opened the way to real social justice.
I am convinced that people will welcome this Budget because, recognising the difficulties created by the former Administration, they know that the present Government will tackle them in a fair manner. Consequently, whenever the Government go to the country—and it may not be for many years yet—they will be given a vote of confidence because by this Budget, and similar measures now in hand, they will have laid the foundations for a system of society based on justice and equity.