§ Let me now sum up my proposals as far as we have got. In order to achieve our balance of payments objective and meet the needs of defence we have to reduce Government civil expenditure, cut back sharply on civil investment and make do with no more for personal consumption than last year. To prevent consumption increasing I must keep the Budget surplus substantially unchanged.
§ It is on this foundation that I shall base my Budget proposals; and with full recognition of the fact that high Government expenditure accompanied by high taxation themselves have an inflationary effect. In this country of ours commitments have been piled on commitments, and taxation has been raised to the ceiling. This country has taken on far too much at once, as everybody who looks at us from outside would agree. So, if this Budget is to fulfil its main function—to restore confidence in the pound—it must further reduce Government expenditure and make a significant start in reducing taxation. If I am 1289 successful, a Chancellor from now on will have more room for manoeuvre and will not find the economy crammed right up against the ceiling.
§ I am, therefore, asking that the nation should throw off some of its crippling load of expenses and taxes, and should go into action with its loins girt, inspired by the sense that if we work harder we can earn more, or that if we are in need or reach old age we shall be cared for. We must also be satisfied that the rewards of effort are fair, and that undue profits are not made out of the nation's necessities. [HON. MEMBERS: "Hear, hear."] Fortified by that support from both sides of the Committee, I now approach the aspect of the question to which I turn first, namely, the profits which are being made by certain sections of the community as a result of the defence programme.