§ 3.35 p.m.
§ The Chancellor of the Exchequer (Mr. R. A. Butler)
A Budget speech must, of necessity, contain an array of figures upon which the judgment of the Chancellor of the day is based. I have often marvelled, both as a member of the Opposition and now in my present position, at the composure with which hon. Members gradually assimilate the mass of calculations and ultimately realise the fate which is likely to overtake them.
This year the Budget comes at a particularly tantalising time, both from the political and the economic point of view. It is, therefore, more than ever necessary that the Committee should exercise its soul in patience, and should analyse with me the facts and features of the economic situation in as objective a manner as our various temperaments permit. I am fortified by the fact that the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) has recently referred to me, in the most amicable terms, as having an "unprepossessing personality." This seems to me the one attribute vital to the post which I hold. I shall, at any rate, attempt to be neither too desiccated nor overcalculating.
During this last year we have learned much about the problems which we must solve if we are to succeed in combining expansion and stability, particularly when competition is becoming fiercer and the terms of trade are less favourable. But the expansion of the economy has brought with it many improvements in living standards for our people.
Let us look for a moment on the sunny side of things. In each of the past two years the average person has been able to buy for his own use 4 per cent. more goods and services than in the previous year. Since October, 1951, real wage rates, which make full allowance for changes in the cost of living, have risen by 6 per cent. in contrast to the period between mid-1947 and 1951 when they were falling. Over the same period, to 36 October, 1954—the latest date for which figures are available—earnings in industry, again in real terms allowing for changes in the cost of living, rose by 9 per cent.
There have also been very substantial increases in social service payments, some by more than a half again in value, none by less than a quarter. For example, the weekly rate of sickness benefit, which was 26s. in October, 1951, will be 40s.; and the corresponding figures for industrial injuries benefit are 45s. and 67s. 6d. When our new scales are fully effective, the increase in retirement pensions, sickness and unemployment benefit, and family allowances since October, 1951, will be much greater than the increase in the cost of living—in some cases more than twice as much, in some nearly four times as much. The Government have deliberately helped old age pensioners and those who rely on the social services. We have also reduced the burdens on every taxpayer. Rising real wages, rising benefits, falling taxes, all these are clear signs of improving standards.
In introducing this, my fourth Budget, I have to take account of all these improvements. Can we have them and more, too? How does this Budget fit into a series designed from the beginning to keep up the momentum of our progress? My aim in 1952 was to rescue and fortify sterling. The following year I deliberately gave the incentives needed to encourage effort and the expansion of production. New spirit was infused into industry.
Last year, some people thought that I might have been a little more expansive and a little more expensive. But I am satisfied that what happened justified my decision and my judgment. The expansion of the economy continued throughout 1954. Employment kept at a record level. Industrial production rose by more than 6 per cent. The increase in exports, which began late in 1953, was well sustained. Home demand for manufactured goods expanded. Stocks and work in progress increased, and the rise in investment continued.
The Committee is aware of our substantial investment in our basic industries of coal, steel, gas and electricity; of our massive designs for modernising road and rail transport; of the increase in factory 37 building; and of other encouraging signs that the demand for investment in private manufacturing industry is rising in response to the incentives of my last two Budgets. In fact, our experience over 1954 has shown us how rich an opportunity we have of increasing the future standard of living of our people. Now we must decide how we can best maintain our progress and, at the same time, keep in balance with the rest of the world.