Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 7 March 1973.

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Photo of Mr David Crouch Mr David Crouch , Canterbury 12:00, 7 March 1973

I was interested to hear that the hon. Member for West Lothian (Mr. Dalyell) is going to Ditchley this weekend. I am sorry that I shall not be with him. I was invited but I have other engagements. I would have liked to have been there to confirm that the hon. Gentleman is not really so gloomy about our prospects as he sometimes sounds in this Chamber. It has been said of my hon. Friend the Member for Leek (Mr. Knox)—a fellow Scot—that he is a fanatic who lives up to his name. I think he is a fanatic. But sometimes in our debates, particularly on the economy, the hon. Member for West Lothian fills me with an air of depression if not gloom.

For example, in referring to the Chancellor's share savings scheme the hon. Member used the phrase, already used by others, that it might create a lack of mobility of labour. I cannot see how this can be so because it is so easy for a person in a share savings scheme who chooses to move to get out of the scheme by taking his savings in cash. That is how I understand my right hon. Friend's proposal.

We must try to see most of the proposals put forward by any Chancellor in at least two ways. First there has to he a conservative approach, and secondly a more generous approach. In this case I agree with the right hon. Member for Devon, North (Mr. Thorpe) who said today that it was an important step in the right direction.

I am pleased about three elements in the Budget. I am glad about the Chancellor's determination to continue with a high rate of growth. This was the most important and overriding element in his statement yesterday. I was concerned beforehand that he might have felt that he should not continue with the rate of growth which we have now achieved. It is remarkable, with all the vicissitudes on the industrial scene and the world monetary scene, that we have been able to gear ourselves up, thanks to the Chancellor's measures, to a growth rate of 5 per cent. I am glad that he has given such a clear indication that he is determined to keep that up for a long time.

It pleases me too that the Chancellor did not have cold feet about VAT. If ever a new tax has been given the wrong publicity by the Press and by many other spokesmen it is this one. This is an across-the-board tax and we now know that the Chancellor has fixed it at 10 per cent. I am glad that we have one rate and not two rates, as is the case on the Continent, and that it is not 12½ per cent. or 7½ per cent. The Chancellor has stuck to his guns and has not deferred this tax. I could not understand the right hon. Member for Leads, East (Mr. Healey) suggesting—and this was the only constructive thing he said—that the Chancellor should defer the introduction of the tax. He did not say what other form of taxation he would have continued. He did not say whether he would have continued with a half-rate SET or a half-rate purchase tax. All that he could offer us was that he would not have done anything because he had cold feet.

The hon. Member for West Lothian spoke of the North Sea oil and gas revenues and the failure of the Government in recent years to take a sufficient share from those facilities on the North Sea shelf. I accept the Chancellor's decision and the recommendation of the Public Accounts Committee. The Government were not entirely wrong to be so generous in deciding not to recover more taxation. At least the exploration was done rapidly. There has never before been such rapid industrial exploration and development. I have had close briefings from some of the oil companies and the Gas Corporation about this and I feel that when the public know what is happening in the North Sea, especially the northern part, they will realise that the work done in the last five years has laid the foundations for an entirely new future for Great Britain. By 1985 the North Sea will be producing enough oil to make us self-sufficient. In three years from now in the gas industry we shall be using only North Sea gas. The Government were not altogether wrong in having a rather less tight tax arrangement, thus encouraging such rapid development.

About a week ago I recorded with a certain Mr. William Hardcastle a speech on the Budget of about one minute in length which, I understand, was put out yesterday while the public were waiting to hear what the Chancellor was saying. A number of us had been asked what we hoped for from the Budget. My present speech will last rather longer, but in that one minute I expressed the hope that the Chancellor would do two things. I was rather schizophrenic because I wanted him to spend more in one direction while curtailing expenditure in another. My disappointments are that he has done neither. Perhaps it was a pity that he did not hear my one-minute speech before making his Budget speech yesterday.

I wanted my right hon. Friend to spend more of the taxpayer's money on those who today are finding it very difficult to meet the sudden rise in the cost of living which has occurred in the last year, particularly in food prices. I had hoped to see an additional sum allocated to family allowances. This to me was the most readily available mechanism for meeting a real problem which everyone of us faces today.

Only the other day in a radio broadcast I heard the Prime Minister's housekeeper saying that she had to ask for an increased allowance from the Prime Minister himself. The same has happened in my family. The same happens in every family. To every retirement pensioner, every young family and every family with children this is a problem of real magnitude and I am sorry that my right hon. Friend did not see fit to do as I suggest.