If that is so, it is a remarkable admission. I shall look forward to the comments from the Government Front Bench if the Government are saying that they are not aiming at a growth rate of 5 per cent. It sounds as if the hon. Member for South Angus (Mr. Bruce-Gardyne) is trying to offer excuses in advance for failure to perform. It is that failure which I suspect will come about.
I query one aspect of the Chancellor's Budget judgment concerning confidence on the export and import front. I accept the argument put forward by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and his grave fears about the balance of payments situation. The Chancellor has calculated that imports will rise over the next 18 months by about 7 per cent. He said that they rose in the last 18 months by about 10 per cent. He said that exports will rise by nearly 7 per cent. as against 3·9 per cent. over the last 18 months. I do not see why he believes that will happen. There was nothing in his Budget speech to indicate how he has found this new confidence in decreasing imports and increasing exports. I doubt whether it will happen. The figures given in table 4 of the Financial Statement and Budget Report show that he believes it will happen over different periods of time. I cannot accept that he is justified in saying that.
If it does not happen, what will the Chancellor do? He may be right and it may happen, but if it does not will he go for a lower rate of growth? Will he accept the sinister advice of some of his hon. Friends and go down to 3½ per cent., 3 per cent. or even less? Does he think that a lower growth target would solve the balance of payments problem?
A great deal of our Budget judgment, and the Chancellor's judgment, must depend on what it is thought will happen at the completion of the international currency negotiations. I am deeply pessimistic. It seems highly likely from what has been said recently, including what the Chancellor has said, that he will accept a non-settlement—namely, a settlement that will not work. The Chancellor and many of his hon. Friends, and certainly I and my hon. Friends, are all Europeans. We do not have to continue proving we are Europeans by our willingness to rush headlong into a European monetary settlement which will not work and which is against the short-term and long-term interests of the British people and the people of Europe.
A European monetary solution must come eventually. I hope that it will come, but it must come as an integral part of a much wider European integration. Tax harmonisation, a proper European regional policy, a European prices and incomes policy and certainly the harmonisation of social security must come before monetary integration. That integration is logically the last step in the process of European harmonisation and not the first step as the Chancellor seems to suggest.
What is the Chancellor's intention? When questioned on this matter some 10 days ago he said:
I did not say that we wished to refix. I said that we intend to refix.—[OFFICIAL REPORT, 12th February, 1973: Vol. 850, c 984.]
I do not believe that the Chancellor needs to distinguish between his wish and his intention. The Chancellor must stick to his guns in these negotiations and stick to the policy of floating. It would be far better if the currencies of the whole world floated. There is no question of our going back to pegging the pound along with the other European currencies.
I come to the question of the Chancellor's record on taxation cuts. The right hon. Gentleman clearly thinks, if the Budget is to be believed, that he has already done a great deal in this respect. I imagine that propaganda has had its effect. A very large number of people in my constituency believe that, if there is one promise that the Government have carried out, it is their promise to reduce taxation. The promise was boldly given in "A Better Tomorrow" under the heading "Lower Taxes", and it said simply:
We will reduce taxation… We will concentrate on making progressive and substantial reductions in income tax and surtax.
This has not happened. In 1969–70, which was the last full financial year of the Labour Government, income taxes amounted to £5,155 million. Yet the Budget papers show that in 1973–74, the fourth year of the Conservative Government, income taxes will amount to £7,593 million. Therefore, in four years the Conservatives have managed to increase revenue—admittedly, not rates—from income taxes by a cool £2,438 million. They have taken £2,438 million
more out of the nation's wage packets than the thieving Socialists ever dared to do. This is an increase of 47 per cent. in income tax revenue in four years.
Moreover, the coverage of income tax will now be higher than it was, certainly a year ago. We have not got the figures for how much higher it will be than when the Conservatives came to power, but I strongly suspect that there are more people paying income tax now than there were when the Labour Government were last in power, and 1 million more people will be paying income tax this year than last year.
The Conservatives also promised to switch the burden of taxes from taxes on income to taxes on consumption. Yet between 1969–70 and 1973–74, while total taxes will have risen by 14·6 per cent., Inland Revenue taxes will have risen by 40 per cent. So it has gone in precisely the opposite direction to that promised.