§ What, then, should be my final Budget judgment? This year there are clear limits to the possibilities of large remissions of taxation, especially of indirect taxes which would encourage spending at home and so risk diminishing our export effort. With very full employment, higher social benefits, increased old-age pensions, generous support prices for agriculture, and better pay packets, our people must realise that all the good things of life are not, and cannot be, confined to Budget day. Indeed, some might urge that no tax concessions at all should be made this year. But I judge that this would be a timid policy which might prevent us from achieving the full increase in production of which we are capable.
§ In conditions of stricter monetary discipline, industry will have to scrutinise its plans with a shrewder and more selective eye. The plans should be all the better for that. They should, therefore, be all the more likely to show the maximum return to the whole economy from any encouragement I can give them. We do not want to smother the new spirit in British industry which many observers believe is transforming our approach to production problems. I believe that, given a continuing incentive, both management and men will accept the challenge to redouble the efforts which they are now making and so increase production and improve exports.
§ Since I became Chancellor of the Exchequer, three-and-a-half years ago, I 56 have continually called for investment and expansion, and I have adopted whatever measures were within my power with this in view. There are risks in everything that is worth doing, and, on the analysis which I have made, I feel no hesitation in deciding where my duty lies between policies of expansion or of restriction. If we are to achieve the full increase in production of which the economy is capable, we must continue to provide encouragement to the whole productive effort of the country. We must seek fresh incentives to the forces of growth by the stimulation of output and productivity.