Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 16th April 1969.

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Photo of Mr Hugh Fraser Mr Hugh Fraser , Stafford and Stone 12:00 am, 16th April 1969

I shall not delay the House for very long. I congratulate the hon. Member for Ashfield (Mr. Marquand) on the interesting either micro or macro-economics he talks. I congratulate him, too, on one resounding phrase in his advice to the Chancellor, when he advised him "to keep his chin down and march solidly forward". That is the advice of how to march blind towards an unknown objective, and that is the point to which I wish to come. We are extremely worried about which direction we are marching in, and the most alarming thing this afternoon was the introduction of the right hon. Lady who addressed us for an hour-and-a-quarter.

I know that these Budget debates are something of a set piece, with the Chancellor playing the part of Hamlet. I thought that he was going to introduce the right hon. Lady as a Lady Macbeth to make the debate more exciting or macabre, but she did not turn out to be Lady Macbeth. She walked about the stage like Regan or Goneril discoursing to the winds about things which were irrelevant. She then became a somewhat weepy Ophelia, and ended up as Lady Godiva and became naked of any ideas whatsoever. I found that extremely alarming. That is the result of the Government placing so much weight on the question of what action the right hon. Lady takes against the trade unions.

The situation is probably rather more serious than has been made out by those who have taken part in the debate. One has to take, as the Chancellor did yesterday, the period from the time, not when we devalued, but when other countries thought our currency was not worth more than it was, when we were devalued against. First, the right hon. Gentleman did not take sufficient action immediately. Secondly, we then had the period when I used the soubriquet last year of Rob Roy, when the right hon. Gentleman produced the enormous impost of £1,200 million, but I think we have seriously to consider whether what has been done in this Budget will be sufficient to avoid a further financial crisis this year.

The Chancellor has drawn his net very wide. He has captured in his tax net budgerigars and overplayed songsters, but he has scraped the bottom of the parrot's cage in the methods that he has adopted. Although the sharks, the minnows, and the others have been brought into the net, the fact is that the great whale of inflation still urges forward, and that has been given extra motive power by three things.

First, there is the clear ending of any attempt by the end of this year to continue the prices and incomes policy. Second, there is the fact that a whole variety of expenses will be incurred at the end of this year in further pensions, and so on, but we have not yet been told how the money is to be found. Third, there is the impetus given to price increases by the increase in S.E.T.

What brakes does the right hon. Gentleman propose to put on this motivation of further inflation in our system? I suggest that there are three. The right hon. Gentleman poured scorn on what he described as fancy solutions, and the hon. Member for Ashfield poured scorn on the fancy solution of a floating £. It is perfectly proper for a Chancellor to pour scorn on fancy solutions. However, yesterday the Chancellor himself in his strategy proposed three fairly fancy solutions. Those fancy solutions are, first, an attempt to get savings by offering rates which are South American in the first instance and which, if the savings are kept in for seven years, become positively Brazilian.

The second solution is that there will be expansion of the Chicago school way of thinking which has not been specified, which has not succeeded very much so far, and which was at the back of the Treasury's mind last year, although there was a 6½ per cent. increase in the amount of money in circulation in one year.

Thirdly, there is the concept put forward by the First Secretary this afternoon that this is the time to have a swing at the unions. The relevant White Paper is entitled "In Place of Strife". It should be just entitled, "Strife, 1969". It will be ill-digested. It is almost impossible to conceive of a less balanced speech than that delivered by the First Secretary this afternoon, especially the final concession which she seemed to be prepared to make to the unions and which apparently withdrew one of the main sanctions of the non-striker against the striker. Everybody nodded their heads and said, "What fine, brave, courageous, decent, human stuff this is".

The introduction of such legislation now will not in any way contribute to the very real problem which we shall have this year in achieving a balance of payments and avoiding a financial crisis. We shall see what is in the Bill. I believe that the effort to bring into this Budget something which is totally irrelevant to the economic issues of today and something which will not succeed in solving any immediate problem shows the failure of the Budget.