I can well understand the concern of the hon. Member for Willesden, West (Mr. Pavitt) at the statement by his right hon. Friend the Chancellor of the Exchequer. When the Chancellor made his statement, many of us might have thought that it was novel, extremely well delivered, compact and easy to put into operation. After an hour's reflection, however, my views agree very much with those of the hon. Member.
The impact of the Chancellor's statement will be enormous. When the public study it in the hours ahead, they will be concerned, because it is quite contrary to what we were led to believe during the General Election. Only three or four weeks ago, we were told by the Chancellor that there would be no severe taxation in the forthcoming Budget. He eased up a little on that as the campaign went on, but I understood him this afternoon to say that in a full year his new tax will raise £340 million. If that is not severe taxation in one year, I do not know what is.
It was hinted last year that the Corporation Tax would probably be at a level of 35, 37½ or, possibly, 40 per cent., although the latter figure was suggested as unlikely. More recently, the Press have suggested 42½ per cent. Many people will, therefore, give a sigh of relief that it is not to be higher than 40 per cent. In my view, that is much too high, because it means that the investment that is required in industry will not be made. Profit margins in industry are narrowing daily. Salaries and wage rates and every single charge in industry are on the increase. If profits disappear, the people who suffer in the long run are the workers and, in consequence, the Government, who will fail to get the revenue which they expect.
We heard what the Chancellor said about sterling. I understand his concern that large sums have been leaving Britain for Australia, New Zealand and elsewhere. If, however, we are to impose restrictions on the export of sterling to those countries, we must expect something in return. We must expect them to take some sort of retaliatory action.