§ 3.18 p.m.
§ The Chancellor of the Exchequer (Mr. Dalton)Since my predecessor made his Budget statement last April, great changes have occurred. The British people have celebrated first, VE-Day and then, VJ-Day. They have also elected a new Parliament. It is in this changed world that I open to-day a supplementary or interim Budget. This is the third time within the last six years that a Chancellor of the Exchequer has found it necessary to do this. In September, 1939, Lord Simon had to revise his Budget of the previous April to take account of the outbreak of the world war. In July, 1940, after the formation of the all-party Government under the leadership of the right hon. Gentleman the Member for Wood-ford (Mr. Churchill)—a Government whose name and whose luster will forever shine forth from the pages of our history—following this event, and the immediate sharp impetus this new Government gave to the war effort, the late Kingsley Wood introduced a supplementary Budget, which further stepped up the war-time increase in taxation. I present a supplementary Budget this Autumn, on the morrow of great victories. Yet my task, in some respects, is harder than those of my predecessors
In the war years, menaced as we were by the most powerful and brutal enemy that this country has ever had to face in all her long history, all sections of the nation played their full part. The burdens borne by the general body of the taxpayers were light indeed compared with burdens of another sort which fell, in battle and in blitz, upon our fighting men on all fronts, by land and sea and 1876 air, upon our merchant seamen and upon great numbers of civilians in this country. Yet measured by the standards of pre-war taxation these burdens of war-time taxation were indeed heavy, and they were most patiently and most patriotically borne by all. Now, as we turn the first page of a new chapter, there is a most widespread and natural desire for tax reduction. There is likewise a desire, not less widespread nor less natural, for increased expenditure upon the social services—upon housing, health and education and many other social objects. Over the years immediately ahead, within the five-year lifetime of this Parliament, I hope we shall be able to go far to satisfy both these desires. Towards these ends His Majesty's Government, with the support, I hope, and the encouragement of this House of Commons, will shape their policy and make their five-year plan.
We are now in a transition period, marked by many special, though I hope transitory, dangers. In particular we must all be resolute against inflation; we must increase the production of peace-time goods as rapidly as possible, and we must be prepared to hold back purchasing power until it is safe to release it, until there are enough goods to buy. It is a contrast from the old pre-war situation. In the old days, in those ignominious years, as many of us deemed them, between the two wars, our purchasing power often fell short of our productive power. Because men had not enough money to buy each other's products, those who made those products were thrown into unemployment, and the products were not made. Deficiency of purchasing power, particularly among the poorest and among those whose needs were greatest, led to deficiency of production, and hence to ever-increasing poverty and unemployment. Those were the days of deflation and defeatism.