Certain parts of the evidence were sidelined and excluded on those grounds.
Turning to my main theme on the White Paper, it is interesting and valuable, to a certain extent. It is a much more elaborate variation on what was suggested a good many years ago and used to be called the split Vote on Account. The idea was to have a White Paper in the autumn setting out what Government expenditure would cost if policy remained as it was and, therefore, hon. Members would have a chance of estimating what sort of taxation would be involved and whether people would stand for it.
The Chancellor quoted the Plowden Report. That Committee was the first to suggest a five-year forward look. Plowden said that he did not think that it would happen, and the reason why he said that was that officials of the Treasury at that time were against publishing a five-year forward look. They feared that if they set out the suggested expenditure for five years, there would be no chance of getting it down—and, indeed, it would almost certainly go up—whereas, on the other side, the growth might very well not occur. That is precisely what has happened, and that is why we have been in such difficulty.
I suppose that it is a certain victory for the Chancellor and the Treasury, and I do not think that there could be a White Paper set out in this form unless the Department of Economic Affairs had surrendered unconditionally. I have always thought that that Department was the silliest of all the very silly ideas of the Prime Minister. The idea of creative tension is like saying that the Foreign Office is too much in favour of Europe and that we need an anti-Foreign Office against Europe. It was as silly as that.
It was always certain that the Treasury would win. But it would take time, and that was one reason why our economic policy was confused for so many years. Fortunately, however, the Department has surrendered, and no massacres or starvation will result. The last Minister has a holiday on full pay in the Cabinet, and no doubt the civil servants involved are carrying on their laborious mischief in other Departments, certainly with equal pay and probably with equal status.
Another matter that I suppose the Chancellor may take some bows for is an overall balance in the Budget. The difficulty is that taxation is now so high that it is inflationary on its own account. It is having the effect of cutting down savings with an acceleration in wage claims and wage awards. Therefore, it is ultimately self-defeating.
On the other hand, the Government have put up taxes, cut back on a great many things, and instituted a savage monetary policy which out-Chicagoes Chicago, because any deficit on the balance of payments has to be counted against domestic credit expansion.
It would be easier for the Government to pride themselves on this if it had come about as a result of purposive action on their part. But we have had measure after measure. I once counted up and found that deflationary measures had been introduced on 30 different days. I then lost patience. All these measures have been thrust upon us by our creditors. They have not said, "You will not spend money on this; you will put up taxes by so much." They have said, "Unless you pull yourselves together you will not get any more money". In one instance they set down something definite. In the Letter of Intent, a definite figure for domestic credit expansion was laid down. Our creditors have had a tremendous amount to do with what happened.
In the canticles of praise that the Prime Minister and the Chancellor sing to themselves, they should end, "Non nobis domine—not unto us the praise but unto Pierre-Paul Schweitzer".
The severe credit squeeze is producing some ghastly results. So many old people have had their savings damaged and destroyed. It will be a long time before any confidence returns in the market for Government securities.
The Prime Minister likes to dwell on the palmy days of 1964, but 1966 is his real year. That was when he promised that there would be a steady 3·8 per cent. growth and no great increase in taxation, no health charges, and other matters.
Hon. Gentlemen opposite have constantly been marched up and down the hill saying that trade union legislation is essential for wage restraint, and so on. The Grand Old Duke of York marched his men up and down the hill, and the poor old "Duke of Scilly" is doing the same thing. He does not seem to mind the occasional yelp from below the Gangway.
I turn now to one of the main reasons why we have got into such difficulties and why it took us five years to get over an acute balance of payments crisis, whereas five months have been about the maximum before.
One reason is the size of the nationalised industries. This has destroyed the gilt-edged market and the market in Government securities. How can the Government raise capital for the nationalised industries? Basically, there are four ways. First, they can put aside money out of profits. Many of the nationalised industries do not make any profits. The ones that do are ordered by the Treasury to put aside a certain percentage on their assets, but that is much less than an ordinary private company would put aside. Therefore, there is already a drain.
The next way is by selling Government securities to genuine savers outside the banking sector. The original idea of nationalisation was that that would cause no difficulty because the Government would be able to sell all the bonds that they wanted. But people will not buy them. Until recently there were no net sales of Government securities. There are some sales now, but not many.
If the companies do not save and the Government cannot sell bonds, there are two other resources. The first is inflation. That is what has happened in past years. There has been an enormous increase in the quantity of money, because the bonds were not sold. The second way is to put up taxation enormously and cover the capital requirements of the nationalised industries out of taxation. That is what the Government are now doing. That is one reason why we are so heavily taxed.
What can we do about this? One thing that we can do is not to nationalise. Nationalising the docks seems to me to be an act of supreme folly. The Government have gone out of their way to conceal the amount of extra Government securities which will have to be created to do this. Steel was nationalised and is making a loss. The Government's holding is called a public dividend stock, but they get no dividend. So they have to put up all the capital expenditure. On the other side of the balance sheet the Government issued nearly £1,000 million of 6½ per cent. bonds which mature next year and will have to be refinanced at a higher rate of interest. All this comes straight on the Budget.
I have always looked on the gas industry as one of the more efficient of our nationalised industries. I note that it took two months to turn off somebody's stove—but that might happen to anybody. How can it conceivably make up a 14 per cent. wage increase in a year? The First Secretary of State said that it must not put up its prices, but must fulfil the Treasury's target. It cannot do it. So, in effect, this deficit comes on taxation again.
When it is inevitable that the prices charged by some nationalised industries must go up, it is no good waiting six months or a year while poor Mr. Jones makes up his mind. He is not running the show. The Government are supposed to be running it. They ought to know whether the Gas Council is justified in increasing prices. If not, they should sack the Council and get somebody else to run the industry. The effect of constantly delaying these matters piles up the money supply and the charges on taxation.
The Steel Board is applying for its third increase in one year. This is absolutely hopeless. I believe that better control of nationalised industries is essential. My right hon. Friend the Member for Enfield, West spoke about investment grants. A very large sum is at stake there.
Economists have estimated that, on the basis of the White Paper, there is no real justification for a decrease in taxation in the next Budget. In view of the wage flood that is even more certain, but it does not mean that we may not get it. I believe that with taxation at this level, in the long run, inflation will continue to accelerate.