Budget Resolutions and Economic Situation

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

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Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford 12:00 am, 12th March 1973

I chose my words very carefully, because it is important to get this exactly right. It is the question of the tax that becomes due in the current year.—[HON. MEMBERS: "Answer"] The question that I would ask the right hon. Member is this: is that man paying more tax next year or less? I do not see how, in the face of these figures, the right hon. Gentleman can go on with his foolish jibe about bonanzas for the rich.

The right hon. Gentleman spent most of last year arguing that the benefits of unification went entirely to those with more than £5,000 a year. It took us the best part of a year to make him realise that most of the benefit goes to those with incomes of less than £5,000 a year. This time I thought the right hon. Gentleman was doing a little better. In answer to my hon. Friend the Member for Bosworth, he admitted that he was aware that many surtax payers will face bigger tax bills in the next three years than they faced last year. But I must confess that, where the right hon. Gentleman is concerned, I am not optimistic that his progress will be sustained. I am willing to wager that long after we have parted with the Finance Bill, he will go on talking nonsense about bonanzas for the rich.

Most impartial commentators have recognised that, in making his Budget judgment, my right hon. Friend faced a uniquely difficult task. The sheer range and diversity of the advice offered to him was evidence of that. Since Budget Day, the comments have been no less diverse. But on one thing most people seem to agree: my right hon. Friend's decision to continue to go for growth is absolutely right. For it is only by sustaining the higher growth rate now being achieved that we can create the resources needed to fulfil the ambitions of our people, both for a higher standard of living and for a higher quality in the public services. It is growth which will be the key to more stable prices. It is growth which will stimulate higher investment. And it is growth which will enable us to do still better for the old, the sick, the disabled and the low paid.

Last autumn growth was threatened by run-away wage-cost inflation. The Government acted with great resolution, and already inflationary expectations are subsiding. In recent weeks growth has been threatened by instability in the international monetary system. The prompt collective action in which my right hon. Friend played such a notable part has averted the immediate threat.

Growth is now threatened by disruption in industry and in the public service—and here the remedy lies with ordinary men and women who must surely see that by taking industrial action in this way at the present time they only do damage to themselves, to their industries and the whole nation. They must know that the Government cannot conceivably give in on the phase 2 limits.

As I understand that the right hon. Member for Bristol, South-East (Mr. Benn) is to reply, may I say that I was astonished to read the report in The Times of what he is inviting his right hon. and hon. Friends to do in this regard. In an article in The Times of last Friday, under the heading Mr. Benn urges Labour to join TUC in protest the political commentator wrote Mr. Wedgwood Benn has astonished some of his Shadow Cabinet colleagues by suggesting joint action between the Labour Party and the TUC in the unions' one-day industrial protest against the Government's counter-inflation measures. We always knew that the right hon. Gentleman had populist aspirations, but how, after making proposals of that sort, he can regard himself as a democrat passes my understanding.

We cannot allow inflation and disruption to strangle growth. My right hon. Friend's Budget is again going for growth. It is an honest Budget, it is a courageous and fair Budget, and it deserves to succeed.