Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 8th March 1973.

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Photo of Mr Joseph Harper Mr Joseph Harper , Pontefract 12:00 am, 8th March 1973

Since the Chancellor of the Exchequer presented his Budget thousands of words have been spoken. It has clearly emerged that this is a "mark time" Budget. When will the real Budget make it appearance? Will it be this summer or just before the next General Election?

The Budget reminds me of the poverty of the 1930s when the women of that era used the pittance that they received to make ends meet. It reminds me of that era because it makes a little go a long way. I do not want to be churlish. I welcome the increase in old-age pensions and unemployment sickness and injury benefits, together with maternity allowances, invalidity allowance and other benefits.

It is doubly welcome that at the same time as the old-age pension has been in creased supplementary benefits have also been increased. That means that an old-age pensioner relying on supplementary benefit to receive a living does not have the increase given with one hand and taken or clawed back with the other. However, we must remember that before any increase can be given there must be a "come from". The move which has been made towards a bigger graduated contribution from employees rather than a flat-rate payment is a proper move. Although it is a small move it is a proper one towards social justice.

No one can object to the zero-rating of kids' clothing. I am sure that the Department will find a formula to ensure that that provision is not misused. I often wonder who is wearing whose clothes. The kids today continue to be bigger, better and brighter than before. After these anachronistic taxes have been removed from sweets, they will be eating so many sweets that they will be bigger than ever. Whether they will become better or brighter is a different thing altogether. The Chancellor should also have zero-rated fresh foods.

A Budget can only be regarded as a good one if it is seen by the public to be fair, and accepted as such. Having regard to the present financial crisis, inflation being at the highest level at which it has ever been, the public will not see it as a fair Budget. Where the Chancellor has gone wrong—and I speak as a fellow Yorkshireman—is in the endorsement of last year's Budget, regarding the £300 million which is to be given to the surtax payers and to people living on incomes received from investment. The ordinary man sees his wages frozen, yet sees other people getting away with huge increases. Some people will be getting more from tax concessions in a week than the ordinary man will get for five or six days' work.

Millions of people have lost from inflation. They have lost in particular from the steep increases in food prices. I have an uneasy feeling that there is not much joy to look forward to in future when the full impact of the rent and rate increases takes place.

What do we have? We have a Budget which has widened divisions and is in direct contrast to what the Prime Minister said at the last General Election. We must ask ourselves certain questions. Knowing the answers and knowing that they will not be accepted by the Government, we may as well ask the Government why they have not raised the threshold of taxation. The Government could have helped the worker who pays a small amount of tax. The Chancellor does not have to rely on what he receives in tax from this category of worker. In fact, he has eroded much of what he gave to them in last year's Budget.

Family allowances would have helped even more. If the Chancellor could not find the money to increase family allowances he could have made a start and paid it to the first born. I have a vested interest because I am a grandfather. An increase in family allowances was promised by the previous Chancellor. I believe that the late fain Macleod would have honoured his pledge to increase them. The division in this country which I have been talking about has led to the current industrial unrest. We have industrial action being taken by workers who, in our most pessimistic moments, we would not have thought would have taken such action—namely, the hospital workers, the gas workers and, last but not least, the civil servants.

I now turn to the increase in investment rates. I know that it is much better in certain circumstances to save than to spend, provided that one has something to save. I take note of the incentives that have been offered. How will they affect the building societies? On listening to the radio this morning and reading the Press—which was more than usual gloomy reading—it seems that the building societies are about to put up their interest rates. If they take that course, it will mean that more newly married couples will be pushed out of home ownership in addition to the newly married couples who have already been pushed out.

One of the most significant factors apart from high interest rates is the price of land for building. Although the land hoarding charges introduced in the Budget will help a little, the only real solution is to bring building land into public ownership. Before any Conservative hon. Member starts to boo, I recognise that that is anathema to the Government. However, it is the only solution.

I have only a few more points to make. I shall speak briefly so that more of my hon. Friends may speak: I do not want any hon. Member from the Government side to pinch time that I could use. I shall not argue about the rate of VAT. As we all know, it is 10 per cent. We would all have liked it to be placed at a lower rate. Any fool can say that.

I have a few questions to ask about the mining industry. There are miners' welfare schemes into which the National Coal Board and the miners contribute. These welfare schemes, which are registered charities, have never been subject to tax. Will they attract 10 per cent. VAT? I hope not. Will the miner home coal schemes, which organise the supply and delivery of concessionary coal to work people, also be subject to VAT?