§ I can now sum up my proposals in this incentive Budget. It has been designed to give to our production the extra help which our financial resources 61 permit. This help takes four main forms—the restoration of the initial allowances for plant and machinery, a lessening of the load of Purchase Tax, a prospect of the future ending of E.P.L., and the reduction of the standard and reduced rates of Income Tax. These steps are all designed to encourage industry both as a corporate whole and as a living structure of human beings. Only by increasing our national wealth can we continue in our proud position of leader and banker of the sterling area. Only thus can we regain our economic independence. Last year we reintroduced the monetary weapon.
§ Now on taxation this Budget moves for the first time for many years in a new direction. It does so because the economic circumstances show this to be the right course. The path of restriction has been so firmly fixed in people's minds that it now tends to be regarded as the inevitable line of conduct. But we can now look to a more hopeful way. We can lighten our load and liberate our energies. The fact that we have not been getting the best out of our productive capacity springs in part from our terrible burden of taxation, which is about the highest in the world. Even after this Budget we shall not have "let up" to a level which can be called even moderate. All reliefs are carefully designed for the prime purpose of giving the incentive for greater production.
§ I will give the final figures. This year the reductions in Purchase Tax and other Customs and Excise Duties will cost £45 million. The minor easements will cost £7 million. The reduction of Income Tax will cost £117 million. This makes a total reduction in taxation this year of £169 million. I told the Committee that the prospective surplus was £278 million. As a result I shall carry forward a surplus above-the-line of about £109 million, some £20 million more than the surplus above-the-line realised last year. This is, I believe, about the right amount, taking into account the wider economic and financial issues which I have discussed. Next year the cost will be £259 million.
§ The success of the policy I advocate will depend on the extent to which industry and the public respond to the call. I have confidence in the response of our people. So in this spirit we take 62 a new direction. We step out from the confines of restriction, to the almost forgotten but beckoning prospects of freer endeavour and greater reward for effort.