§ Considered in Committee [Progress, 23rd October].
§ [Major MILNER in the Chair]
§ AMENDMENT OF LAW
§ Question again proposed,
§ "That it is expedient to amend the law relating to the National Debt and the public revenue, and to make further provision in connection with finance."—[Mr. Dalton.]
§ 3.19 p.m.
§ Sir John Anderson (Scottish Universities)
The presentation yesterday by the Chancellor of the Exchequer of his Budget proposals seemed to me to be a model of lucidity and grace. As he was speaking, it was hard for me to realise that on two occasions in the recent past I had essayed that task and, of course, performed it, as I well realise, much less artistically. Now I come to what, up to this moment, I have always regarded as the much easier role of critic. I am going to be a not unfriendly critic to the Budget proposals. They had, I think deservedly, a good reception in the country and in the Press, but there are a few points, relating more to the Chancellor's argument than to what he is actually proposing to do, on which I shall have to express some disagreement. Although I hope in the main to follow the order of the Chancellor's argument I want in the 2016 first place to deal with the level of expenditure. I had something to say on that subject in the Debate on the Vote of Credit last week. The Chancellor told the Committee that he expected the results for the year to turn out very much as I had anticipated in my Budget speech on 24th April. I can assure the Committee I am in no way uplifted by that thought. When I made my speech, the expectation was that the Japanese war would continue throughout the year; that, at any rate, was the basis on which calculations were made. Even so, I did then hope, although I was not prepared to make any rash predictions, that a very much more favourable result would be achieved. Let me quote my actual words:The Treasury will not, as the months pass, be content with evidence that the estimated figure is not going to be exceeded. We shall make the most strenuous and sustained efforts to ensure better results and I have great hope, though I cannot give any guarantee, that the outcome will prove much more favourable. On this occasion we shall take no pride in establishing the accuracy of our forecasts, so long as the deviation is in the right direction."—[Official Report, 24th April, 1945; Vol. 410; c. 718.]It really is a staggering thought, as my right hon. Friend the Member for Woodford (Mr. Churchill) said yesterday, that expenditure is to be allowed to continue at the present rate for the rest of the financial year. It is perfectly true, as the right hon. Gentleman said, that there are items of expenditure which arise for the first tune with the cessation of hostilities. There are payments of gratuities, the repayment of post-war credits, payments in cancellation of contracts, and there is the effect of the termination of Lend-Lease. All these items have to be provided for.
Nevertheless, I cannot help saying that I think the Government are showing too great complacency in this matter. I do not want to suggest drastic expedients. I found myself more or less in agreement with the Chancellor's comments on the "Geddes Axe." I think, as I said last Tuesday, this is the business of the Government. The Chancellor and his colleagues, particularly those of them who are in charge of the spending Departments, ought to set about this business of economy with vigour. In my judgment, Treasury control ought to be exercised not from the outside, and operating on reluctant Ministers, but by co-opera- 2017 tion between the Chancellor and the Ministers of the spending Departments, the drive coming, naturally, from the Treasury through the Chancellor. I cannot think that the Treasury are really satisfied with the present position. It is well to know, as we all expected, that the Government are to return to the normal system of estimating in the next financial year. That certainly is all to the good, and we are glad to be assured that it will be the Chancellor's aim and purpose to bring the national accounts again into balance as soon as possible. When he was speaking yesterday I wondered whether he really thought it would be quite satisfactory if the first truly balanced Budget could be achieved, as it was after the last war, after a period of four years. He said he hoped it might be possible to do it rather before. I join with him in that hope, for we must not overlook the fact that this time we shall be starting on the process of cutting down from a very much higher level of taxation, and that is a very important consideration.
The Chancellor said that in balancing the accounts, in bringing them into balance, the aim would be to secure balance over a period of years. By that I understood him to mean, that taking account of chance fluctuations, there would be no slavish adherence to the principle of making an exact balance every year, so long as by ironing out the short-period fluctuations, there was a balance on the whole. With that doctrine I am in entire agreement. I was glad to hear the Chancellor's commendation of the White Paper on Unemployment. Well might he commend it, because he had a substantial part in drawing it up. He said it was not a bad paper, as White Papers go. I would venture to say that it was a particularly good White Paper.
I pass on to matters more directly relevant to the Budget, because a Budget is, after all, an affair of Ways and Means and not of Supply. I entirely agree that it is right, prudent and proper to hold back purchasing power as far as possible until supplies of goods are more freely available. To this extent a high tax-level has an economic as well as a financial justification. I was glad also to hear the Chancellor's warm tribute to the leaders of the National Savings Movement. It was, in my opinion, very well deserved, and I should like 2018 to add an expression of appreciation to the most devoted body of workers up and down the country, running into hundreds of thousands, whose selfless efforts have contributed so much to the very remarkable success of the Savings Movement. I note in passing that the Chancellor evidently has no sympathy with the views, as I thought very irresponsible views, expressed on the subject of savings by one or two of the Government's supporters.
I am glad also that the policy of price control is to be vigorously pursued until things return to normal. The Chancellor, in his remarks on that subject, did not seem to me to be quite so emphatic in regard to the importance of maintaining the stability of reasonable wage levels, though I cannot but think that he is in agreement with me on the point. In the White Paper of 1941—there are a great many vintages of White Papers, and this was an earlier one—in which the Foreign Secretary had a considerable hand, the connection between stable prices and stable wage levels was made very clear. It was made absolutely clear that the Government's hope of maintaining stable wage and price levels was entirely dependent upon the maintenance, through the operation of the normal negotiating machinery and through the exercise of wise restraint by responsible leaders, of a reasonable level of wages, avoiding any run-away rise.
I was very sorry that the right hon. Gentleman made so positive a declaration without any qualification or reservation about the determination of the Government to keep prices stable. I believe that success in that policy is, in fact, entirely dependent upon wages being kept at reasonable level. If they are not, the policy will inevitably break down and we shall be faced with all the dangers of inflation. I am not one of those who ever wanted to see wage control made subject to Government regulation during the war. I think the existing machinery has worked, on the whole, well, and we ought to continue to reply on it; but I do feel it my duty to emphasise this organic connection between price levels and wage levels.
I might say, incidentally, that I cannot help being in some doubt as to whether the Chancellor's estimate of the expenditure on subsidies that will be necessary to 2019 give effect to his policy, taking account of all circumstances including the termination of Lend-Lease—an estimate, I think, of £300,000,000 a year—may not be somewhat exceeded, even if there is no untoward happening. That, by the way. It is not possible in present circumstances to estimate absolutely.
I could have wished that the Chancellor had been able to tell us something about the progress of the Washington talks. Much depends upon the outcome of those conversations. To me there is, I confess, an atmosphere of unreality about all our discussions of the financial position while the outcome of those talks is still uncertain. The matter is delicate, but I have the greatest confidence in the competence of our negotiators. I hope that patience and restraint will be exercised in all quarters, and I have no doubt that the right hon. Gentleman will come down to the House, as soon as he has any information of a definite nature, and impart it to us.
I pass to a different topic, the question of interest rates. As the Chancellor knows, studies on this whole question of interest rates had been in progress within the Treasury for some time before he assumed his present office. I do not hesitate to say that of I had been in his position, I should have done exactly what he has done. I do not think there is any ground for the perturbation that has been shown in some quarters in connection with this matter. For years before the war, rates on Treasury Bills were at a level of ½ per cent. When the war broke out, in the altered circumstances and in view of the fresh risks that leaders had to take, it was very natural that those rates should be raised, and they were pegged round about 1 per cent., till the other day. On Treasury deposit receipts, that new financial device, which have a slightly longer currency than Treasury Bills, the rate was naturally somewhat higher, 1⅛ per cent.
§ Mr. George Porter (Leeds, Central)
Do I understand the right hon. Gentleman to make the statement that it was natural to increase the price of money during the war, when we were calling upon others to make great sacrifices, even to giving their lives?
§ Sir J. Anderson
I really do not think that question has any relevance to the 2020 subject-matter. The point I am making is that the reduction which has come about is merely a natural process of reversing something that had been done at the outbreak of war. The whole problem of interest rates is rather fascinating. Interest rates, as far as I understand the position, do not respond fully to the ordinary economic laws of supply and demand. There is what may toe called a psychological factor that has to be taken into account. Also, one must take account of the position of the Government as the largest borrower on short term. Now that action is no longer hampered by the necessity for using the Bank rate as the principal instrument in regulating the exchanges, there is greater freedom than there was before, and there is probably much less ground for objection to maintaining a large body of short-term indebtedness. Not only are the Government in a position to exercise a greater control than was previously possible over short-term rates, but the question which, in my view, is the important question in connection with interest rates, the quest on of the proper relation between longer term and short-term rates, can now be tackled. I was glad to hear that the Chancellor is going into that matter. He has very competent advisers in the Treasury who, I am sure, will serve him well.
I come to the main matter in the scope of any Budget, namely, the question of taxation. On certain minor matters which I dealt with in my last Budget speech and which were the subject of Clauses in the Finance Bill which I introduced, and which had to be scrapped because of pressure of time, in circumstances which are familiar to all hon. Members, the Chancellor has seen his way to agree with, I think, all my proposals. The most important of those subjects was motor taxation. It is, perhaps, wrong to refer to that as a minor matter. Fiscally, it is, but it is of vital importance. The Chancellor has explained that, after the more mature deliberation which was possible for him, he has come to the same view as that which I expressed provisionally and tentatively last April, on all points in connection with this matter. I know, as he does, that his decision will not give entire satisfaction throughout the motor trade. I really had lost hope of securing unanimity in this matter on the part of those concerned. But what I do 2021 hope is that now that all uncertainty is removed, the trade will settle down and tackle its job and will put the maximum drive into the production of cars for the export market, where I am assured the prospects are excellent.
I am very glad to know that the Chancellor of the Exchequer is going to proceed with the Clause in the first Finance Bill on the subject of double taxation. I hope he will retain that Clause in its wider form so that the powers to be taken can be applied to any arrangement on the subject of double taxation that may be made with any foreign country, or with our own Dominions. I know that the very important Agreement with the United States which was concluded before I left office has been followed by an Agreement with France. I hope other agreements are on the way. This Measure against double taxation, which is necessitated toy the high rates of tax now prevalent in most countries, will remove one of the most serious obstacles now remaining in the path of freer international trade.
The changes that the Chancellor announced in the Income Tax are, no doubt, properly to be regarded as the main feature of his Budget. With the restoration of the various allowances I am in complete agreement, but I might point out, in passing, that there is one allowance that has not been restored—the allowance in respect of earned income—although that part of the post-war credits which was attributable to the reduction in the allowance for earned income, is to go by the board with the rest. I think that there is an element of hardship there, and I doubt whether the failure to restore the special allowance for earned income to its former level, or even to raise it, is sound economically. Income Tax must remain, so far as I can see for any period to which we can look forward, much the most powerful weapon in the Chancellor's armoury. It must have a wide sweep and inevitably it will continue to press for some time to come with severity on all sections of the community that come within its scope. I agree with the Chancellor that it should not be carried so far down as to cut into incomes which are no more than sufficient to support the most moderate standard of subsistence. I think—I have thought for a long time—that that principle was violated by 2022 the tax as it has stood up to now. The Chancellor's new proposals give a limit of £2 7s. a week for a single person, and £3 17s. for a married couple without children. I do not think anyone can regard those limits as in any way too generous. So far, the Committee will observe, I have no fault to find with the Chancellor's proposals. I think that there is no Budgetary justification for his proposals as to the standard rate, or for regrading in the lower levels of income, but I think there is a very strong psychological case, and for that reason I agree with them.
I would at this point pause for a few moments to consider what will be likely, in the long run, to be the economic effect, the effect on the national interest, of the Chancellor's proposals as regards Surtax, proposals which take back some part and, in extreme cases, the whole of the concession represented by the reduction in the standard rate. The Chancellor was not very forthcoming with arguments in justification of that part of the proposals, which were obviously very welcome to hon. Members sitting behind him. I would like to examine such arguments as he put forward, because this is an important matter. He said that during the war we had made a notable advance towards social and economic equality, and that what was right for war was not wrong for peace. I am not sure that as an argument that stands up very well, but let us examine it a little closely. Social equality has very little to do with the Budget. I would venture to say that the pursuit of economic equality, which certainly has something to do with the Budget, is rather a questionable doctrine. My study of the natural sciences has taught me that, in order that energy may expend itself in useful work it is necessary that there should be inequality—inequality of pressure, of temperature, of electrical potential. Unless you get inequality, no work is done. May not something similar be true in human affairs? May not equality, if we could achieve it, which we never shall, make for stagnation? Is a man to be reproached because he wishes and strives to do better than his neighbour?
I would say this—I throw it out for consideration—that economic inequality, from a national point of view, is not an evil thing but is positively good, subject to two conditions. The first is that the lowest level is not too low by whatever 2023 standard of human needs is judged reasonable. The second condition—and this has some relevance to social equality—is that the higher levels are attainable to all, as rewards of character, ability and enterprise. I suggest that if these principles are followed, the interest of the individual and the interest of the community can be reconciled. So much for the first of the arguments that I understood the right hon. Gentleman to put forward. Then, he said, his proposals were designed to give the greatest incentive to the greatest number. I am afraid that as a statement of principle I do not very much like that either. So far as it goes, it is all right, but why, I ask—I am putting a series of questions, not wholly rhetorical—why weaken or destroy that incentive?
§ Sir J. Anderson
Those who can put their hands on their heart and say that money is of no account to them should range themselves in a row and give themselves some special designation. Why weaken and destroy the incentive of the small number of men, exceptional individuals, whose services to the nation may far transcend that of battalions of ordinary men? To be deprived of the services of such exceptional men—we all know some of them—might be an immeasurable loss to the community. Some very exceptional ones might go on struggling and striving, even if all reward were denied them, but we have to take account of the world in which we live, and that is certainly not the common experience. I suggest that the test should not be "the greatest incentive to the greatest number," but whether your policy creates such incentives as will be of the maximum benefit to the community. That, I suggest, is the true test.
Why is the Chancellor doing this? He is doing it to avoid giving relief to what are called rich men. I hold no brief for such. I have been a public servant all my life, and I have never aspired to the higher levels of opulence, but I think that when we are talking about rich men we ought to take account of several considerations that are apt to be left out of account. Take the question of the value of money. Before the 1914–1918 war, the line for Super-tax purposes was drawn at 2024 £2,500 a year. That figure to-day corresponds to £1,000 before the 1914–1918 war. It is right to take into consideration the effect of economic change in steepening the curve of progressive taxation.
§ Mr. Sydney Silverman (Nelson and Colne)
When the right hon. Gentleman says that the level of £2,500 corresponds in purchasing value to £1,000 before the last war, does he mean that the correct index figure, on which income levels should be calculated, is not 131, as the Chancellor suggested yesterday, but something like 250?
§ Sir J. Anderson
These are perfectly legitimate considerations, and if the hon. Gentleman can get out of the case I am making any argument which he thinks can be applied in another context, I do not mind. I was making a particular point.
§ Mr. Silverman
I want to follow the argument and I am trying to do justice to it. I understood the Chancellor to give yesterday the correct index figure for comparing the cost of living with 1939. I want to know whether the right hon. Gentleman dissents from the Chancellor's figure, and, if not, how he reconciles that figure with the statement that the value of £2,500 to-day is not more than £1,000 in 1914.
§ Sir J. Anderson
That is a little more than an ordinary interruption. I was taking the Chancellor's own figures and converting them in terms of pounds. The Chancellor said that a pound to-day has a value of 8s. compared with the period before the last war.
§ The Chancellor of the Exchequer (Mr. Dalton)
The only figure I quoted which, I think, is relevant to the point now being discussed, was the cost-of-living index, which now stands at 131.
§ Sir J. Anderson
I thought it was in answer to an interruption, but I now find that it was in answer to a Question yesterday, that the right hon. Gentleman, said:According to the best calculations available, the figure for "September, 1945, is 45. Calculated over the whole field of personal expenditure, the figure for September, 1945, would probably be about 40."—[OFFICIAL REPORT, 23rd October, 1945; Vol. 414, c. 1871.]That was the basis of the calculation that I made.
§ Sir J. Anderson
I apologise for the confusion into which I fell, but not for the argument I ventured to put forward.
I was saying when I was interrupted that I thought that in discussions about this matter insufficient account is often taken of the effect of these economic changes in steepening the curve of progressive taxation. It has, however, a marked effect, and the fact that it comes about by insensible degrees does not deprive it of any of its significance. My right hon. Friend the Member for, Wood-ford gave yesterday a striking example, which is relevant to the point I am making as to the progress that has already been made in the process of taxing the rich The same point is illustrated by the fact that the Chancellor expects to get only £7,000,000 from this particular expedient against a gross cost of his reliefs of £97,000,000. At this point, I should like to quote from a speech, because it is I think very relevant, that was made from this Bench on the second day of the Budget Debate last April:Take a very rich man who is paying not only Income Tax but also a substantial slice of his income in Surtax. He may be faced with a proposal to embark his capital in some fairly hazardous enterprise. If he felt sure that if he made a profit he would get it and that if he made a loss he would have to forgo not only a profit but the capital itself, he might still be willing to engage in that hazardous enterprise. But at the present time such a man is faced with this position: If his enterprise fails he loses his capital; if it makes a profit, no insignificant part of every pound of that profit goes in tax. Therefore, very often the rich man will hesitate about embarking on the hazardous enterprise, even though it might be very much to the benefit of the country as a whole that he should undertake it."—[OFFICIAL REPORT, 25th April, 1945; Vol. 410, c. 851–2.]If the right hon. Gentleman has not been impressed by any of the arguments that I have used, perhaps he will take account of the words of his colleague Lord Pethick Lawrence, from whose speech I have just quoted.
I have little more to say; I agree with what the Chancellor has decided in regard to the Excess Profits Tax. I agree with all the arguments he used and I am glad to know that he is arranging to release the credits corresponding to the first 20 2026 percent. of the existing tax. I think he may perhaps experience a little difficulty in devising machinery satisfactory to himself and to this House for giving effect to the statutory conditions embodied in the existing law; I do not think at will be altogether easy, and I believe he is right to make advances and consider farther how the conditions can best be enforced. I am inclined to think that the best course may be, in the majority of cases, to rely on a solemn declaration by responsible persons, reserving the right to reopen the transaction and investigate, and if necessary to recover sums that have been released if they are found to have been used in a manner inconsistent with the letter and spirit of the statutory provisions. That however is a matter which the Chancellor will no doubt consider.
In regard to Purchase Tax, I agree with the extension of exemption on which the Chancellor has decided. Until things become normal, or more normal, we should do well to retain that tax in some form. It has proved itself a useful tax, the public have got used to it, the machinery for its collection is in order, it brings in quite a respectable sum of money, and I think that if we could rely on it to bring in £100,000,000 a year it would be a very good weapon in the Chancellor's tax armoury. I see no reason why it should not be continued. The Chancellor spoke of this Budget of his as an interim Budget. Actually it is a final Budget, because we budget year by year, and mine was the interim Budget. What it really is, I suggest, is the first instalment of a process to be developed by His Majesty's Government, if they have the opportunity, during a normal term of office. I welcome the hope of further reliefs which the Chancellor's statement held out, but I think he was right to proceed, in the first instance, by very modest steps. The danger of inflation, as he observed, is always lurking in the background, and it will require a combination of appropriate measures to keep that danger at bay.
Although I have thought it my duty to be critical of the Chancellor on certain points, I confess that this, the first Budget of a fully responsible Labour Government, shows promise which I hope will be fulfilled in further instalments as they go along. My last word to the 2027 Chancellor is this: "Watch the spending Departments with an eagle eye; great responsibility rests upon you, for there lurk the foxes that eat up the vines of expanding revenue, and would deny to the people the tender grapes of social and other benefits for which their mouths are watering, and which we in all quarters of the House would wish them to have and to enjoy."
§ 4.6 p.m.
§ Mr. Benson (Chesterfield)
I should like to add my congratulations to the Chancellor on introducing his first Budget. It is nearly the most popular Budget that has been introduced for 20 years. I can only think of one Budget which has given greater satisfaction to this Committee than the present one, and that, paradoxically enough, was the one in which Sir Kingsley Wood clapped eighteen pence on the Income Tax and raised the standard rate to 10s. This is the first Budget of the present Chancellor and the first peacetime Budget and, as he said, it is really the beginning of a thought-out and considered process, and must not be judged solely on one year.
I have always been a great admirer of the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) and particularly of his clear and logical mind, but I must say that in his attempt to defend inequality he did not arrive at his usual high standard of logic. He laid down two propositions, first that the highest rewards should be within the reach of all, and second that the services to the community of exceptional men should reap high rewards. I do not think anybody on this side of the Committee would disagree with those two propositions, but what I think we do disagree with is his suggestion that either of these two propositions are characteristic of the capitalist system. The right hon. Gentleman referred to the highest rewards. But the highest incomes in this country are not the result of individual effort, they accrue to the owners of the great landed estates. [Hon. Members: "Oh."] Yes, they do. [An Hon. Member: "What about Lord Nuffield?"] There may be odd exceptions, but, broadly speaking, the majority of the very high incomes are derived from the ownership of land which is inherited.
§ Sir Frank Sanderson (Ealing, East)
Surely my hon. Friend appreciates that many of the great industrialists in this country commenced from small beginnings?
§ Mr. Osborne (Louth)
On a point of Order. The hon. Member said it was impossible for those two things to happen under the capitalist system—
§ Mr. Benson
I submit that that is not a point of Order. The right hon. Gentleman the Member for the Scottish Universities also said it was essential that men with exceptional capacity for social service should reap high rewards. I am not prepared to differ with the right hon. Gentleman on that point, but I would point out that social service of high intellectual quality is given to this nation by the technicians and research workers, who for the most part get a beggarly pittance as compared with the people who are enabled, by their business acumen, to exploit the discoveries that they make. An hon. Member has mentioned Lord Nuffield. It is not Lord Nuffield who designs the cars, it is not Lord Nuffield who has the technical knowledge to choose for example the particular steels required. These things are done by his technicians on salaries—and not particularly large salaries. Lord Nuffield's enormous wealth derives not from his technical ability but from his business acumen.
As I have said, this is a popular Budget. It is the first peace-time Budget, but unquestionably it is made under the shadow of six years of war. During the past six years there has been an enormous expansion in the cash income of the nation. It has grown from £5,000,000,000 to £9,000,000,000, but this has been very largely a fictitious growth. At the same time as the cash income has expanded, the volume of goods and services available has decreased by 20 per cent., and the only possible way in which we have been able to hold prices under those highly inflationary conditions has been for the Government steadily, year by year, to absorb the whole of the increased growth of the national income. That has been done with respect to approximately half by very savage taxation, and the other half by borrowing. The Government has been 2029 able to carry out that policy because of the acceptance by the nation of the need for austerity in war-time. The nation has met its responsibilities and difficulties, financial as well as military, with extraordinary responsibility. In the present situation there is still an enormous excess of income over goods available for purchase, and as the right hon. Gentleman says, from an economic standpoint there is not the slightest justification whatsoever for any tax reduction at all.
But the Chancellor's immediate problem is neither a fiscal problem nor an economic problem. It is purely a psychological one. The Chancellor has to face at least three, if not more, important factors. The first is that after six years of austerity, austerity tends to pall; the second is that the coming of peace inevitably brings a demand for some form of relaxation and the third is the effect of high taxation upon industrial output. There is no question that six years of high taxation, during much of which the Income Tax rate of 10s. in the pound fell on a not inconsiderable residual part of wages, had a very serious effect on industrial output. I think the Chancellor is right; some concession to the present mood of the nation was essential, and whether or not he gets the stimulus from the tax reductions for which he is hoping, one thing I think is obvious, and that is that he has probably done a good deal less harm by giving the concessions than he would have done if he had refused to give them.
When I listened to the Chancellor's proposals, one after the other, and found that he was making a concession of some £300,000,000 on Income Tax, I was a bit startled, but after a little I realised that the Chancellor is a very subtle man and that the risk is far less real than apparent. He has been able to make what was necessary—a spectacular concession—because he will not have to foot the bill for some considerable time. The effect of the announcement of these concessions is bound to be good, but it will not cost the Chancellor a penny until next April. [An Hon. Member: "What about the Purchase Tax"?] I was referring to the big Income Tax concessions. On Schedule E where P.A.Y.E. operates the concession is spread over 12 months, and the last part of the concession will be granted 18 months hence. And on the 2030 other schedules no concession is operative until about March, 1947. Thus the Chancellor has been able to make the necessary spectacular gesture to the country with considerable safety. What is more important is that by the time the concessions come into operation there will be a much bigger flow of goods to meet the increased purchasing power.
I think the Chancellor and the Committee must recognise that the primary and most important stimulus that can be given is to make money really worth while by seeing that there are goods to purchase. Anything that can be done to expedite the supply of goods is of vital importance. If something can be done in that direction I am certain we shall hear a good deal less about absenteeism than in the past, and that the goods will be a far more effective stimulus than any tax reduction.
I am well aware that the flow of goods depends upon the change-over from war to peace conditions, but there is something which can be done immediately, and I think it is of very considerable importance. I believe that if the Government are prepared to expand and extend very widely the range of utility goods, we can increase output. One of the curses of British industry before the war was the extravagant costs of production due to the multiplicity of types. We cannot afford that extravagance at the present time. The expansion of the range of utility goods would have that immediate effect of standardisation, would give an opportunity for mass production, and would lead to an enormous economy in every part of the process of production, from the production of the raw material to the stocking of the retail shops. This is a matter more for the President of the Board of Trade than for the Chancellor, but the Chancellor is also interested. The expansion of the range of utility articles would give the Government an opportunity of controlling price and controlling quality, and it would give real possibility of first-class design, for there is no reason why utility goods should be poor quality․
§ 4.20 p.m.
§ Whereupon, The GENTLEMAN USHER OF THE BLACK ROD being come with a Message, The Chairman left the Chair.
§ Mr. SPEAKER resumed the Chair.