§ 20. Amendment of the law
Motion made, and Question proposed,
That it is expedient to amend the law with respect to the national debt and the public revenue and to make further provision in connection with finance, so, however, that this Resolution shall not extend to making amendments of the enactments relating to purchase tax so as to give relief from tax, other than
amendments making the same provision for chargeable goods of whatever description and amendments reducing any of the several rates of tax generally for all goods to which that rate applies (and for which the rate is not altered in pursuance of some other resolution of the Committee of Ways and Means).—[Mr. P. Thorneycroft.]
§ 5.23 p.m.
§ Mr. James Griffiths (Llanelly)
It is customary on these occasions that the first speech after the Chancellor has presented his Budget proposals is made by the Leader of the Opposition. My right hon. Friend hopes to participate in the debate at a later stage. He asked me to tell the Chancellor—I am sure the right hon. Gentleman will understand—that it is not out of lack of courtesy to him that he does not utter the words which the Leader of the Opposition usually utters on these occasions.
My right hon. Friend is today sporting a lovely scarlet carnation. That has no relevance to the Budget proposals but marks something upon which we all desire to congratulate him. Today is my right hon. Friend's birthday, and we wish him many happy returns.
I have noticed during the time that I have been privileged to serve as a Member of Parliament that great Parliamentary occasions like Budget day develop and gather their own traditions and customs. One of the customs is that this first speech shall be brief. As a trade unionist nurtured in the conviction that all customs ought to be retained until something better is found to take their place, I hope I shall not unduly strain that old custom.
The Chancellor has kept faith with one old tradition. He has brought along the old dispatch box which I am told is the one that Gladstone used. It is a link with the past, but I am not sure what Gladstone would say of the Budget proposals that it carries these days.
Since I first heard a Budget speech twenty-one years ago—I say this with due deference to all ex-Chancellors who are present—I have noticed that all Chancellors seek to clothe their Budgets in their favourite metaphors and also like to find some resounding peroration with which to end their speech. In retrospect, some of the metaphors and resounding perorations seem rather curious.
1009 I particularly remember the first Budget speech which I heard in April, 1936, for it was at that time that I made my maiden speech. The Chancellor was the late Neville Chamberlain, and he used the titles of Dickens's novels as metaphors, and described his Budget as being from "Bleak House" to "Great Expectations." I think that all of us now, looking at subsequent events, would say that his metaphor was upside down. There are two ex-Chancellors present who were even more prone to such metaphors than is the present Chancellor.
We admire the confidence with which the present Chancellor approached his very great ordeal. We admire the vigour with which he sustained his fairly long statement, and we also admire the clarity with which he made it. He did not give us as many hostages to fortune as some of his predecessors have done in the metaphors which he used or in his peroration.
I notice that the Lord Privy Seal is present. He will recall—perhaps it came to his mind as he listened to his right hon. Friend—how in 1955 he gave hostages to fortune. When we came to the present Chancellor's proposals, perhaps the beginning of the right hon. Gentleman's 1955 Budget speech was in his mind, having regard to all the advice which has been tendered to the Chancellor recently. I remember the 1955 Budget speech. For greater accuracy, as the Prime Minister said earlier, I have refreshed my memory.
The Chancellor in 1955 began by saying:This year the Budget comes at a particularly tantalising time, both from the political and the economic point of view."—[OFFICIAL REPORT, 19th April, 1955; Vol. 540, c. 35.]Indeed it did. It was before the General Election of 1955. The right hon. Gentleman ended with a peroration in which he said that in his Budget he was taking the country and the people of the country with him to the uplands of prosperity. Within six months the country was back in the moors, fens and boglands, and the right hon. Gentleman himself is not back from them even yet.
When the Prime Minister was Chancellor of the Exchequer the metaphor that he used was the "plateau". I sympathised with the present Chancellor when 1010 he had to say something about the "plateau" of 1956. He let the Prime Minister down lightly. He described the "plateau" of 1956 as the "gentle slope." of 1957. There are millions of people in the country who do not think of it as a gentle slope, and I shall return to that point in a moment.
I do not propose to examine the Budget proposals in very great detail, but there are one or two to which I would refer briefly. First, I think that all of us—it was clear from the way in which the Chancellor's announcement was received by the Committee, and I think it will be similarly received by the country—wholeheartedly welcome on the whole what the Chancellor is doing about Entertainments Duty, in particular in relation to the live theatre.
The right hon. Gentleman is for the time being a Welsh Member of Parliament, occupying one of the few remaining seats where Tories can find an abiding place in Wales. Indeed, he knows perfectly well that in those places he and his hon. Friends hang on precariously. The Chancellor, like myself, will recently have had representations that the one remaining "live" theatre in Wales is being closed. In South Wales, therefore, there will be not a single living theatre. The nearest will be in Bristol, and that one continues precariously. Nevertheless, what he has said about the taxation of entertainment and sport will be given a fairly warm welcome.
Let me say a word about the Purchase Tax reductions—so far as they go. We shall examine them very carefully, but in so far as they bring some easement to the people's burdens they will be accepted. The principal sections among the people who feel those burdens most are the family men and the old people, the infirm, the afflicted, the aged.
So far as I understand it—and this is subject to closer examination, of course —I am glad that the instrument of the Budget is to be used to help parents in the education of their children. The children are our greatest assets, and we shall need them. I am, indeed, very proud to belong to a community which makes its own arrangements for providing opportunities for our youth, and I hope that the Chancellor will not make matters more difficult. I would tell him that what he proposes in his Budget to do 1011 may very well be undone by what we fear he may do in changing the relationship of central to local government finance. That is the fear of all educationists, but in so far as the proposals do help parents they are all to the good, because we need all the gifts, all the talents, and all the knowledge of our children in the future. We must make sure that wherever a boy or a girl has gifts or talents which deserve to be fully developed and which we shall need, we shall do all we can to help to develop them.
The right hon. Gentleman made reference to proposals in regard to companies which invest overseas, and I should like to say a word or two about the Commonwealth countries and Colonies. All of us who go to the Commonwealth countries and Colonies, particularly those that are on the threshold of democratic independence, are becoming increasingly worried by the fact that those places are looking all the time, and increasingly, outside this country for the capital that they need for their development. I do not like it.
I was in the West Indies, and I know that it was a tragic mistake to sell, as we did, our Trinidad oil interests. By doing so, we disposed of one of the greatest assets that the West Indies had. Everywhere one finds penetration by other countries. There is, for example, the report which has been made by Vice-President Nixon following his visit to Africa. I hope that when we examine the proposal it will prove to be something that can be of help in developing the Commonwealth countries and Colonies.
I have read that in these days the terms of trade are turning in our favour, that imports will be cheaper and that we should rejoice because of it. I hope that we shall temper our rejoicing. Indeed, one of the concerns of those who are interested in this subject is the way in which, in the last two years, the prices of primary products and raw materials have been falling. When we consider this matter later, I will urge upon the whole Committee that this is a cheapness for which we may pay a very heavy price.
In Ghana, where the independence festivities have just concluded, the price of cocoa—their life blood—has halved in the last two years; and they are now eating into their stabilisation fund, which is the 1012 basis of their future development. It would be of no use—or at least of much less use—our producing some budgetary relief in the form now proposed—or in any form in which it will finally emerge— if, at the same time, these Colonies find themselves in poverty because of the fall in the prices of their primary products.
The important matter nationally is the winning of a new place in the world. The 50 million people of whom the Chancellor spoke are dependent for half of their food on the outside world. We need leadership, but we have to lead—not bully our way into that position. We have all these problems to face in this mid-twentieth century, and in the end the battle for a new place in the world, and the battle to sustain and expand our economy, will be won in the fields, the factories, the mines and the workshops. How does this Budget look to those people working in them? I say quite frankly to the Chancellor that my first impression is that his Budget will immensely disappoint millions of our people.
The right hon. Gentleman has provided for a section but, after all, a fairly small section of our more than 4 million old people. None of us grudge that. He provides them with some relief in taxation. But what about the others? One in four of our old-age pensioners depends on National Assistance. What a miserable, bare life. Here we are, with £100 million and more to give, but the poorest in the land get nothing out of it at all—nothing whatever. There is nothing for the poor, nothing for the sick, nothing for the maimed—and, apart from a little off Purchase Tax, precious little for the millions of others who do not earn enough to get Income Tax relief.
Therefore, I would say to the Chancellor that whatever cheers he has had from his side of the Committee, whatever cheers he may get from those other people who will regard this Budget as being what they have been shouting for—a middle-class Budget—he will get few cheers from the rest.
I want to see skill and knowledge rewarded, but I want to see it rewarded at the expense of idleness, not at the expense of the poor. I want concessions made to provide an opportunity for those who bring to their country their knowledge, skill and experience in industry, in the professions and in administration, but I 1013 want them provided at the expense of those who derive so much wealth from the country and give so little service to it—[HON. MEMBERS: "Who are they?"] Who are they? Indeed, they are there— [HON. MEMBERS: "Who are they?"] There are plenty of them, but I will not deal with that matter now. We can discuss it again.
There must be opportunity with some degree of equality to it, and there is no real equality here. This is not distributing wealth in favour of the poorest; that is quite clear.
§ Mr. Cyril Osborne (Louth)
What equality does the right hon. Gentleman propose? And at what figure does he want to start it and limit it?
§ Mr. Griffiths
Thank goodness, we have much more equality now than when I started life in the pits as a boy of 13, and it is a better country for it. If we are to get the men and women upon whom this battle for a bright future depends, they must be given the opportunity. They get very little opportunity from the Budget.
I say to the Chancellor that there will be great disappointment. The country has today been distributing its favours and its surpluses, and providing reliefs but, apart from a few things—almost a few farthings in the collection—for the poorest and for those in receipt of low incomes there is nothing at all. This is not a Budget that will help to win the battle of Britain. We shall have to wait for another Government and another Chancellor to produce such a Budget.
§ 5.39 p.m.
§ Mr. Eric Johnson (Manchester, Blackley)
Sir Gordon, it has been my privilege to catch the eye of your predecessors in the Chair in time to congratulate, I think, three successive Chancellors on their Budget speeches. I should like to congratulate my right hon. Friend also, and need only say that his speech was made with the vigour and the clarity which we have come to expect from him, and that the lucidity of his exposition came up to the high standard set by his predecessors.
It is difficult immediately to absorb and evaluate all that my right hon. Friend has said. I expect that all of us during the past few weeks have been coming to various opinions about what we thought 1014 my right hon. Friend would include in his Budget, what we hoped he might include, and perhaps what we thought he ought to include, even if we did not really expect him to share our views.
Very high in our list of expectations would come what he has said about the reduction in Entertainments Duty in respect of cinemas. I welcome it very much, and I am sure that we are all glad to know that he has been able to go a step further and abolish the tax altogether in respect of the live theatre and sport. I assume that the abolition will cover all sports which have hitherto had to pay Entertainments Duty.
I should like to make a suggestion to my right hon. Friend as to how he might recoup some of what he has lost in revenue in giving up Entertainments Duty, quite apart from what he may get from the licence on television sets. I should like briefly to refer again to the proposal for a tax on betting. The Committee will recollect that we had a debate last year on a Motion moved by the hon. Member for West Ham, North (Mr. Lewis) on this subject of a betting tax. On that occasion, the Government gave an undertaking that such a tax would be introduced as soon as Parliamentary time permitted. I asked my right hon. Friend the Home Secretary a question about it only a few days ago, and his reply was that time did not yet permit.
I do not want to weary the Committee with statistics on betting; they have been given a number of times already. Briefly, the position is that, leaving the totalisator out of account altogether, there is £50 million a year staked at dog tracks with bookmakers who contribute about £1½ million in bookmakers' duty. For horse racing, the figure staked is about the same, some £50 million, but no duty and no direct contribution to the Exchequer is paid. By contrast, there is a large amount about £160 million at a rough guess, staked with the off-course starting price bookmakers, who make no contribution other than the Income Tax which they pay, presumably, on their profits; nor do they make any contribution to the sport which provides them with their living.
The football pools, on the other hand, provide a very different picture. About £21½ million a year goes to the Exchequer, out of about £70 million a year staked on the football pools. There 1015 is here a very marked contrast with about £1½ million out of about £260 million staked annually with bookmakers.
It seems to me that there is ample scope for my right hon. Friend to recover what he has given to horse racing and dog racing, which, in the last nine months of 1956, paid £920,000 and £540,000 respectively in Entertainments Duty.
§ Mr. Marcus Lipton (Brixton)
The hon. Gentleman overlooks just one point. There is a considerable sum of money collected from street bookmakers who are prosecuted from time to time.
§ Mr. Johnson
I am at the moment concerned with the proposals of my right hon. Friend the Chancellor of the Exchequer rather than with matters falling within the province of my right hon. Friend the Home Secretary. I do not know what the contribution made in that way amounts to, but I imagine that it is a very small proportion.
I would suggest that the system of betting should continue as it is now, subject to a few modifications. First, there should be a tax on cash betting off the course, which should be legalised—as was accepted after the debate last year—and under the control of the Betting Control Board or its agents. Secondly, any profit-making organisation which offered facilities for all betting on the course and credit betting off the course on horse, or dog racing should be licensed and registered. This procedure would replace the present tax on the dog track bookmaker. The registration should entail an annual, flat-rate fee irrespective of the size of the firm, and, in addition, there should be a levy of so much for every employee of the firm.
Such a provision would have a quite a wide scope. Nearly everyone in the country, I believe, would agree that it would be right for the sport on which these bets are laid to derive some benefit through some form of contribution arranged as best it could with the Exchequer, and that the Exchequer, also, should benefit by this very large sum.
It did not altogether surprise me—I would put it among the things for which we certainly hoped—that my right hon. Friend has abolished the extra 1s. duty on petrol. Judging from the number of cars on the roads in the past few weeks, it will not be long before he recovers the 1016 small amount which the Revenue has so far lost owing to petrol rationing. I would only hope that the oil companies, the taxi-cab proprietors and, more especially, the private car hire proprietors, will follow the very good example set them by my right hon. Friend this afternoon.
§ Mr. Johnson
A consideration of petrol duty brings me to the subject of roads. It is really not much good having more petrol if the roads are to remain in their present condition. In the Economic Survey, 1957, it is said thatInvestment in the basic services of fuel, power and transport, including new road building, is expected to increase.Investment in road building will have to increase a very great deal if it is to be of much practical use. It has been most astonishing in the post-war period that no Government, irrespective of party, have faced this problem or made a serious attempt to do anything about our overcrowded and antiquated roads. This is all the more remarkable when we think what other European countries, which suffered more than we did during the war, have been able to do.
In Germany last year, 175 miles of autobahn were completed and about 1,300 miles were already under construction or planned. In Holland, 137 miles were completed, 140 miles were under construction, and 600 were planned. In this country, twelve years after the war is over, all we find is that a start has been made on one miserable little motor road, eight miles long, which it will take two years to complete.
The speed of road construction is not a matter for my right hon. Friend the Chancellor except in so far as it may be slowed down by lack of money or the economy is damaged as a result of so little progress being made. But if the mechanical side of road building is not his concern, the financial side most certainly is. We have often been told that we cannot afford these expensive road building schemes in this country, despite the fact that—I think I am right in saying—the average amount spent on the roads per vehicle per year was £19 in 1938 and is only £17 now, although the materials now cost a lot more.
1017 We all know perfectly well that this is a very expensive business. I am told that the cost of building a mile of motorway is about £300,000 and that it takes about 450 tons of steel to do it. For all that, I should like to suggest that it is not a very bad investment to put £300,000 into building a mile of motorway when it is estimated that the annual saving in vehicle operating costs from a mile of motorway would be £40,000. That is about 13 per cent. on the amount invested.
§ Mr. E. Fernyhough (Jarrow)
I represent a constituency which is interested in shipbuilding and ship repairing. Since the end of the war, these industries have constantly been short of steel. Will the hon. Member tell me whether he would take steel away from the shipyards, which are short of steel for building ships for the export trade, and devote it to the roads?
§ Mr. Johnson
I quite appreciate the hon. Gentleman's point, and it is possibly one of the reasons why the road programme has been slowed down. It is equally desirable to have adequate roads on which to transport the cargoes which these ships might take away, but it is not much good building ships if the cargoes they are to contain are too expensive. I realise that this is a valid point, and I only drew attention to it in a general sort of way.
Other countries have these problems as well, and they have tackled them. France and the United States have both introduced special financial legislation to deal with their road building problem, and a great many other countries regularly devote either part or the whole of what they receive from road users' tax revenue to building roads. A suggestion which has been put forward, and which I myself have put forward tentatively more than once, about a road loan to help us to build roads, had a very chilly reception, but I hope that my right hon. Friend will think again about it.
I would again refer to the Economic Survey, in which the last paragraph but one states:Our prospects, therefore, depend mainly on our success in the expansion of exports.I believe that our exporting industries are being unduly handicapped by the 1018 hopelessly inadequate state of our road system.
I have one more topic which I wish to bring to the attention of the Committee. In the Budget debate last year, I expressed the view that neither management nor organised labour in industry was doing as much as it ought to do to keep down prices. I said that on the one side —and I still believe it to be true today— there is far too much anxiety to pass increased costs on to the consumer, and that, on the other, there still appears to be a failure to realise that increased wages without increased production do not do anyone very much good.
What is quite certain is that the people who suffer by the perpetual state of wages and prices chasing each other are these to whom reference has been made this afternoon; that is, those who are trying to live on small fixed incomes. My right hon. Friend showed that he is aware of that problem, and has indeed put forward certain proposals to help, and these I welcome very much.
I did wonder whether my right hon. Friend could not have gone a little bit further to help the old people who are really very badly off. All hon. Members of the Committee are aware that for some time old-age pensioners' associations have been pressing their Members of Parliament to do something to try to get them an increase of £1 in the retirement pension, which would bring it to £3 per week for a single person. I apologise for quoting figures again, but to do that would mean an extra £220 million on the cost of pensions right away.
That would be in addition to the present £450 million which they cost, so that the people who are talking in terms of a small amount of £100 million now are really not being very realistic. The cost of raising the retirement pension to £3 now would amount to a charge of 1s. 6d. on the standard rate of Income Tax, or of 4s. on the National Insurance contributions, and, of course, in twenty-five years, it will be very much higher. Pensions of £3 per week would cost £1,200 million a year.
I expect that a great many hon. Members read the interesting and, I thought, excellent article in the Economist of 2nd March on the subject of pensions. It drew attention to the fact that there were three 1019 different problems to be faced, and that they could not possibly be tackled by following the same line of action; that is, a flat increase in the insurance benefit. The article went on to say:This is impossible. It is arithmetic, not black reaction, which stands in the way.When we think of these figures, I think we must admit, if we are honest with ourselves, that that statement is perfectly true, and that a flat increase in the pension is not the solution of the problem.
I wish sometimes, as I am sure many other hon. Members do, that we could have a debate on this subject and go further into the whole matter, when it would be out of order to refer to anything which any party other than our own had said or done, and in that way have a really impartial discussion. We all want to do our best to help, and of that there is no doubt.
There are three problems to be tackled, and the first and, perhaps, the most important is the relief of need and providing a minimum standard for those who are worse off. The second problem would be to devise a method of encouraging people to save more for themselves, perhaps by considering a subsidy on savings of their own. The third problem is what are we to do to get the present generation at work to repay the debt to those who have now retired—not a debt due to them for what they have done for the country, although I recognise that fact—but the debt to them because the high level of wages and incomes today has created that inflation which, unfortunately, will destroy the value of the savings of the people who have already retired. I believe that it would be generally admitted that the relief of need is the first thing which must be tackled by any State pension scheme.
§ Mr. Percy Collick (Birkenhead)
I am interested in the hon. Gentleman's statement about the importance of the relief of need, and in that I am with him the whole way, but today the Chancellor is distributing £100 million, and not one penny of that, as far as I understand it, goes to the very poorest of the old-age pensioners. How does he justify that?
§ Mr. Johnson
If the hon. Gentleman had permitted, I was going a little further. What I am trying to suggest is that we really have to get down to thinking out 1020 the whole problem. I do not think that the present system will work very much longer. We shall have, somehow or other, to tackle it in a different way. I was trying to meet it by saying that the first thing to tackle is the relief of need, and I believe that, to start with, there should be an inquiry, although I know that my right hon. Friend did not agree the other day, into the question of what really is an adequate standard for the very poorest people.
Let us get that quite clear to begin with, because there is very much argument and doubt about it. I understand that the hon. Gentleman and perhaps many other people would disagree with and dislike what I say, but I believe that the Government, having started the inquiry, must make it perfectly clear that any improvements which may be suggested by that inquiry should be applied to National Assistance scales for the very needy rather than increased retirement benefits for everyone. I believe that to be right, and I wonder—and this is a matter more directly concerning my right hon. Friend the Chancellor—whether there is a substantial reason why the National Assistance benefit should not be financed by the National Insurance contribution, instead of out of taxation, as it is now.
A change of that nature might not seem important, but I think that it would have a psychological value. Somehow, we must ensure that people feel that they have a right to these Assistance benefits when in need, and regard them as something towards which they have contributed. We want to break down their objection to them as being charity, because they are no more charity than the State pension itself. They have not paid the full cost of that either. If we could break down that attitude, it would be a good thing.
My final point on changes is a small one which would give a little help to all pensioners. It concerns what appears to me to be an unfairness of the present scheme. Today, only about half the pensioners draw the tobacco duty relief, which is worth 2s. 3d. a week. Inquiries confirm that those who do not draw it tend to be the poorer section of pensioners, those who are too poor to smoke or who are living alone. I suggest to my right hon. Friend that he might consider 1021 withdrawing the present arrangement for tax relief and increasing the pension by 2s. 3d. The cost would be about £10 million a year, which is not really a very large sum. It would have a beneficial effect. The whole problem is a difficult one, as we all know. I do not believe that it can be solved by periodical increases in the flat-rate of benefit. What is needed is a new approach.
Any impartial person who heard my right hon. Friend's speech this afternoon, and who has read the Economic Survey, could not fail to be amazed at the strength of our position today and at the scope of the opportunities that still lie ahead for those who are willing to look for them. My right hon. Friend is, I know, fully aware of the perils as well as of the opportunities. When we think of the dangerous run on our reserves which was taking place last year, and the prompt action taken by my right hon. Friend the Prime Minister, when Chancellor of the Exchequer, and its immediate effect, it is not a bad thing to contrast those measures and their effect with what happened in 1947, 1949 and 1951, when we were faced with similar runs on our reserves.
§ Mr. Collick
The hon. Member should get his facts right. He talks about the strengthened position of our finances. Does he not recognise that the gold and dollar reserves are hundreds of millions of pounds less today than in 1951? Does he regard that as a strengthening of our position?
§ Mr. Johnson
I was about to contrast not the actual state of the reserves, but the action taken to strengthen them and its immediate effect. The hon. Member and others will remember that in 1947, when faced with a similar problem, we had cuts in investments and in imports, the direction of labour was introduced by the party opposite, food rations were reduced, the basic petrol ration was abolished and there was a complete ban on foreign travel. We do not have to do any of those things today.
In 1949, the housing programme was reduced and, above all, the £ was devalued. In 1951, the party opposite did the wisest thing that it could have done: it did nothing until it had had a General Election and left somebody else to deal with it. This year despite the serious blow to our trade and the effect 1022 of the closing of the Suez Canal, which carried so much of our commerce, we appear almost to have taken our difficulties in our stride.
Apart from petrol rationing and the sharp increase in the price of petrol, from which relief is to be given as from today, the ordinary citizen has felt remarkably little inconvenience as a result of our financial difficulties and the future for our industries seems to be far from gloomy. The only conclusion that one can draw from that state of affairs is the one which I draw: that Her Majesty's Government today is in much surer and much more competent hands than it was in the five years up to 1951.
§ 6.5 p.m.
§ Mr. William Blyton (Houghton-le-Spring)
One thing that can be said about the Budget is that throughout the long speech of the Chancellor of the Exchequer there was not one crumb of comfort for the old-age pensioner.
There were some remarkable statements in the right hon. Gentleman's speech. He said that the Government had a part to play in fighting inflation. It could be said that this is the third "budget" that we have had during the year. The first came last year, when the Government told us that everybody using the National Health Service must pay Is. for each item on doctors' prescriptions. Next, the bread subsidy was abolished, with the result that the price of bread today is higher than ever. The Government took away the milk subsidy and increased the cost of welfare foods.
Then, we had another "budget" statement early in the year to say that 10d. would be added to the cost of National Insurance stamps, in return for which there was to be less benefit. This is the third increase in the cost of the stamps since 1952. Sevenpence was put on in 1952, Is. in 1955 and l0d. this year.
The Government put up the cost of school meals. In 1955 they put Purchase Tax on everything, but a little bit of that impost is to be given back today. It must, however, be remembered that the tax is to continue upon clothing. Next, we had the Rent Bill, which will considerably reduce people's standard of life later in the year.
1023 If that is the Chancellor's way of trying to fight inflation, by reducing the purchasing power of people in employment, he is bound to find himself in industrial trouble of the kind that we have seen recently. The Government, who believe in a free-for-all economy, cannot by political action expect profits and dividends to increase and raise the cost of living and then expect the trade unionists to sit at the end of the queue complacently accepting wage restraint. As one who has lived always in the trade union movement, I say that if by political action the Government continue to increase the prices of foodstuffs, the trade unionist is bound ultimately to demand an increase in wages to meet the additional cost.
I want to say a word or two about old-age pensions. The action taken by the Government in these little "budgets" which they have given us before introducing their big Budget has destroyed the purchasing value of the increase in pensions that was given in 1955. The pensioner, without any increase in his pension, is having to meet every increase in the cost of living that the Government put upon him. That is why there have been petitions from old-age pensioners signed by thousands of people asking for an increase in their pensions.
There is another aspect of the pensions issue about which there is no crumb of comfort in the Budget. The disregards under the National Insurance Acts have not been altered since 1947. A pensioner who may have a little superannuation pension from his employers finds that the disregard of 10s. 6d. has not been altered although the value of money has completely altered since the disregards were first instituted. For example, 30,000 miners will lose the increased pension that has been given to them, because these disregards have not been altered. I am speaking about people who have had to save up for their old age and have no fixed income except the old-age pension.
Many of the women have had to manage on the low wages and unemployment relief of their menfolk in the inter-war years. After bringing up their families they are now on old-age pension. It was a rough deal on the part of the hon. Lady the Joint Parliamentary Secre- 1024 tary to the Ministry of Pensions and National Insurance to talk about our old people being bad managers. If anyone is a good manager it is the working-class old-age pensioner of today. He was brought up in a very hard school, on low wages, on unemployment benefit after means test, and on the allowance of Is. a week per child in 1931. We have resented very much that slur passed on our aged folk who helped to produce the wealth of the nation in the past.
The Chancellor said today that we depend upon the managerial staffs for our economy and that they ought to have something as an incentive, but surely, in our modern industrial economy, there are far more people elsewhere than on the managerial side. If the Government's programme is to depend on increasing exports next year, the men on the floor of the shop, the engineers, the semi-skilled men, and the men in the pits and in the shipyards, are as vital to the economy as are the managerial staffs who are to receive tax relief on incomes of £2,000 and over. What about giving an incentive to the men in industry who have been working overtime to secure an increase in our exports? If the Government give an incentive to the managers at £2,000 a year and over, they should give it to the men on the floor who, after working overtime to increase exports, find that their overtime earnings are taxed.
I am pleased that some tax relief has been given to the cinemas. I know men who own small cinemas in the mining villages who have been feeling the financial draught very keenly in the past two years. Figures given to me by people in my division show that they have been living on their capital because of the amount of money that Entertainments Duty has taken from these small picture houses. Whilst they would have liked to have had more than the tax concession given to them today, I think that we are on the right road towards making these small cinemas pay better than they have paid in the last two years.
When the Budget is explained to working men and they are told that their overtime will be taken into consideration as income to be taxed, while managers receive a tax relief because they are regarded as more important to the economy than the men on the floor, and when the old-age pensioners hear that 1025 £100 million has been distributed today and they are not to receive a penny, and when they learn that the Chancellor went as near as he possibly could today to arguing for wage restraint in industry in the future, in spite of the fact that working-class people are shortly to bear enormous increases in rent, these people will say that this is a bad Budget. Any surplus that there was available should have been given to the poor and the aged folk who have been petitioning the Government to give them something to meet increased prices which the Government themselves have created by political action. When they read the evening papers tonight, many old folk will be full of dismay at a Budget which gives them not one crumb of comfort.
§ 6.16 p.m.
§ Brigadier O. L. Prior - Palmer (Worthing)
I should like to comment upon two points made in previous speeches. One was made by the right hon. Member for Llanelly (Mr. J. Griffiths), when he said that his policy would have been to get the extra money required from what he called "the idle". This is the sort of fallacy that has been running through Socialist doctrine ever since the war.
There was a time, and I knew it and lived through it, when many people in this country, from the time they got up in the morning until they went to bed at night, did nothing but enjoy themselves; and they worked very hard in trying to do that. Those days have passed altogether. There has been a revolution since the war which has altered all that and I am happy that it has happened. It is all to the good.
The hon. Member for Accrington (Mr. H. Hynd) appears to be dissenting, but I ask him to name one single family in the country whose son is not working normal hours, and probably many more. It is complete nonsense to say otherwise and the hon. Member knows it. I happen to live among people like those whom hon. Members opposite criticise and I know.
§ Mr. H. Hynd (Accrington)
I am not prepared to name any family. Perhaps it would be invidious if I did, but everybody knows many people like that, who live in Bermuda and other places, and who do nothing at all but enjoy a very comfortable existence.
§ Brigadier Prior-Palmer
The emphasis is on "many". If the hon. Member were to get together all the people from Bermuda and the South of France, or from anywhere else that he likes to name, and take from them every single penny, would it make any difference at all to the wage packets of people in this country? Of course it would not. But, quite apart from those people, those who stay in this country are working extremely hard, and it is quite right that they should do so.
There is a section of the community who might be described as idle. They are the people who have retired, or some women who are actually not in employment. But I can assure hon. Members opposite, if they do not know it already, that these people work a great deal harder than most salary or wage earners in doing voluntary work from six or seven in the morning until goodness knows what time at night. I have seen them at it. If hon. Members opposite try to take away the last vestiges of income on which these people are living in retirement, they will kill all the voluntary work in the country on which we rely very much indeed.
The hon. Gentleman the Member for Houghton-le-Spring (Mr. Blyton) spoke derisively of the Chancellor for giving no incentives to those on the floor of the factory, but for giving incentives to those in the £2,000 a year class. The hon. Gentleman's memory must be short. He must have forgotten the incentives given in the last three Budgets to those very people. There was the reduction in taxation for people earning £12, £8 and £7 a week. There was the increase in family allowances. That, apparently, is to be forgotten, while the people who are now being helped have not had one single halfpenny of assistance since the war.
§ Brigadier Prior-Palmer
No, I am answering the point made by the hon. Member for Houghton-le-Spring.
They had the same reductions as everybody else—the same family allowances, the same everything.
§ Brigadier Prior-Palmer
The problem of the Chancellor of the Exchequer in these days is much more difficult than 1027 it was in the old days. In those days the Chancellor trod a very wide path between inflation and deflation. Today, the situation is entirely different. My right hon. Friend is walking on a very narrow tightrope and there is no doubt in my mind, though I am not an economic expert, that almost anything done at a time of full employment is almost bound to be inflationary.
Some people say that if taxation is reduced that is inflationary. Others say that if taxation is increased it is inflationary. The fact is that the tightrope on which the Chancellor walks is so extremely narrow that it is a difficult one on which to keep a balance. I think that today the Chancellor managed to keep his balance better than almost any other Chancellor has done since the war.
It is not the task of the Government to direct and to control. That has been one of the great mistakes made in the past. It is the task of the Government to create the climate in which the people will prosper and will produce of their best. I suggest that in the Budget preceding this one we had the most perfect example of how that can be done. By trying to encourage investment savings and production the pressure on inflation has been reduced. The disinflationary Budget succeeded in raising our exports by £250 million and in improving our balance of payments position by £300 million. Also, there has been an enormous increase in savings, and industrial development has risen by 5 per cent.
That shows that this type of fiscal policy can have the desired effect without damaging the economy of the country. Yet, as a result of this, and of other policies of various Chancellors since the war, a certain section of the community has been finding it unprofitable to work any harder. Those people have been helped in this Budget to a certain extent, and I hope that in future Budgets even more will be done for them, because, otherwise, they will not stay in the country. We shall then lose our finest brains, because these people will go to places where their industry and brains are paid for adequately. The queues we have seen at emigration offices have been proof of that.
Everybody realises that wages have kept ahead of the rise in the cost of living 1028 throughout. Figures can be quoted to prove this. It is those living on small earnings who have been suffering. I am grateful that the Chancellor today has done something to try to help those people who, owing to their situation in life, have found themselves earning less in salary than the wages of the top and higher paid industrial workers. There are large numbers of people whose salaries have not been raised since the war although the cost of living has gone up. They found themselves saddled with commitments which they were not able to throw off. They live in privately built houses, not in council houses. They have tried to educate their children at their own expense. Possibly they were wrong in trying to do that. Those people have had a raw deal.
This is not just Tory talk. There was an excellent article written in the Economist last week by an hon. Gentleman who sits opposite which said precisely that. Also, we have heard it from the trade unions. It was high time this was realised, for if we do not utilise those brains, that kind of ability and that kind of capacity, we shall never compete with other nations. It is sometimes forgotten that the education of these people cost their parents a large amount of money, even to the deprivation of their own comfort and at the sacrifice of many amenities. They really believe that they have done something for this country which should reap a greater reward than they have had so far.
I have had to tear up one page of my speech about earned income relief, but there is one aspect of it which has not been mentioned in this Budget, and which is long overdue. That is the question of the double taxation of the married couple. It seems to me fantastic that this continues. Its repeal is enshrined in our Tory policy, and it has been recommended, and why it has been omitted from this Budget I do not understand. What is happening at a time when we are trying to encourage women to help in our production drive? If the income of a married woman is at the Surtax level, she is taxed at the Surtax rate on the first penny she earns.
There is another rather serious, though not major, undesirable effect of double taxation in that there are people living together in this country, but who are not 1029 married, merely to avoid that tax. Though they may keep from their friends this piece of news, they are careful to ensure that the Income Tax collector knows all about it. I suggest that this is not a sensible state of affairs.
I was extremely glad to learn that assistance is to be given to people who wish to keep their children at State schools over the age of 15. It has been sad to see able boys and girls taken away from the high schools and grammar schools because their parents needed them to help to augment the family income. I think that this relief will have the effect of enabling many people to keep their children longer at school than they would have done otherwise.
There is another aspect, and that is the question of university scholarships. I know only too many people of the kind I have been talking about who, although their children have won a county scholarship, have been unable to send them to a university owing to the rigid and crippling conditions of the means test. The test certainly needs to be overhauled. I do not suggest that it should be abolished. I do not suggest for a moment that somebody with a lot of money should be allowed a free scholarship to a university. I do suggest, however, that the level should be raised considerably, because, here again, children of ability cannot go to universities since their parents cannot afford to send them. I hope that the Chancellor will be able to do something about that.
There is another class which has not so far been mentioned. We have heard a good deal about old-age pensioners. Hon. Members might remind themselves that the Conservative Party has raised the old-age pension no fewer than three times since it came into power, and has also increased the National Assistance level, so that it should remain ahead of the cost of living. What has been done may not have been enough, but how much did hon. Gentlemen opposite do when they were in power?
§ Brigadier Prior-Palmer
I am speaking now about retired people who have just enough income to be above the National 1030 Assistance level, but are below the Income Tax level.
There is a very large number of retired people living on about £150 a year. I wonder how many people would like to live on £100 or £150 a year. These people have had no relief from any Government, because it is so difficult to know how to help them. Admittedly, one way to help them is to reduce the cost of living and remove inflation, and we have been trying to do that long enough and with a certain amount of success. However, I do not believe that it is beyond the wit of the Treasury to find some way in which to give these people assistance. Some of these people will be helped by the reduction in the Purchase Tax. When Purchase Tax was imposed as part of the credit squeeze, they were more hard hit than most people.
In the old days it was the fashion to-save up for one's old age, and when one retired, one invested one's savings in a couple of houses. These people are among the landlords about whom hon. Members opposite talk so often. I know all about the big landlords, and how wicked they arc, but there are hundreds of thousands of small people who own little bits of property, bought with their life savings, from which they have been getting 7s., 8s. or l1s. a week, whereas a comparable council house has been attracting 28s. to 34s. a week. Something has now been done about that by the Rent Bill. These two things will help these people a little, but it will not be enough, and they deserve further help from the Chancellor.
I have been batting a long time for the hoteliers on the subject of the tools of their trade being taxed, and I am glad that they will now be helped.
I wish the Chancellor or the Minister of Housing and Local Government would encourage local authorities to build homes for lonely old people now living by themselves. A very enlightened scheme is being instituted at Horsham, and I would recommend any local authority to see how it is run. Local authorities should be encouraged to do this.
I wonder what the Government intend to do to improve relationships in industry. All hon. Members must agree that this is vital to our survival as a nation and to 1031 the maintenance of our standard of living. More must be done than has been done in the past. The Government should use every effort and every aspect of publicity to put over to the people the facts of our economic situation so that we may combat the insidious infiltration into the factories of Communists whose object is not the welfare of the workers, but to wreck our economy. It is becoming very serious when we have a trade union leader saying that what matters is not the country, but the people whom he represents. That was one of the most serious remarks that has been made for a long time. Luckily, that man has been repudiated by a large number of more responsible trade unionists, but it shows a feeling that exists.
I wonder whether the Government could encourage industry in schemes for incentives on a greater scale. If it could be done, it could be interesting, and it would cut the ground from under the feet of Communists. One could direct the attention of the Communist in the factory to what happens in Russia, where, inside the factory door, there is a huge notice board bearing a graph and the names of those who produce more than the norm, which is not referred to as "sweated labour" in Russia. The workers in our factories must be made to realise that the only way in which they can obtain a higher standard of living and increased wages is by greater productivity and increased exports. That is fundamental.
I should also like to see some managements begin to realise what man management means. There are some excellent managers who understand man management and whose personal relationship with people on the factory floor is of a high order, but there are some who are still living in the past. I believe that the blame for the recent shipyard strike can be apportioned fifty-fifty. I believe that the shipbuilding industry is very out-of-date in these matters. I am informed that it is common for a man in the shipbuilding industry to be given two hours' notice. I do not know whether that is true. If it is, it is utterly monstrous.
I have had something to do with man management in my thirty years in the Army, and I suggest that if some of these gentlemen want good relations in their factories the finest thing they could do 1032 would be to employ some of the officers who will now be leaving the Services. We might then get better feelings in industry. This may not suit some hon. Members opposite, because they came into power on the basis of class hatred and bitterness. The last thing some of them want is good relations in factories, although some of the more responsible hon. Members opposite do not agree with them and know that what I am saying is true.
I have been slightly controversial, but that is apt to happen when I am interrupted. I hope that the Chancellor will continue as he has begun, because I believe that he will be one of the greatest Chancellors we have had since the war.
§ 6.40 p.m.
§ Mr. H. Hynd (Accrington)
We have listened to a speech from the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) which was at times amusing and certainly, as he himself said, at times controversial. Surprisingly enough, I found myself almost cheering one or two of his remarks, particularly when he suggested better treatment for people on small fixed incomes. I shall look forward with great pleasure to seeing the Amendment which the hon. and gallant Gentleman will no doubt table when the Finance Bill reaches its Committee stage and I shall have great pleasure in joining him in the Division Lobby and seeing whether we can get something out of the Government for those people for whom he has expressed such great sympathy.
The hon. and gallant Gentleman misunderstood some of the reactions on this side of the Committee to some of his statements. For example, he deplored the two hours' notice given to men in the shipyards and compared that with his experience in managing men in the Army. Of course, it is not usual in the Army to give two hours' notice of dismissal to a man who is not behaving himself. There is not quite the same problem. Nevertheless, as the hon. and gallant Gentleman said, there is a tremendous need for better man management relations in British industry.
I suggest that the hon. and gallant Gentleman could make a contribution in that direction if he would not talk quite so much about trade unions being run by Communists, while referring to "some" employers being bad employers. 1033 I hope that he will recognise that there are good and bad on both sides and he might admit there are some trade union leaders who are not Communists.
§ Brigadier Prior-Palmer
The hon. Member cannot have been listening very carefully to what I said. I leant over backwards to point out that the minority are Communists and that, by and large, trade union leaders in this country are mostly responsible people. If the hon. Member wants me to quote one name, I will say Sir Thomas Williamson.
§ Mr. Hynd
There is no doubt that the whole trend of the hon. and gallant Gentleman's remarks was to the effect that a lack of incentive was displayed by the workers, whereas the employers, the "brains of industry," without whom we could not exist, the people earning between £2,000 and £3,000 a year, were the people who really mattered, who ought to be encouraged, and who, indeed, have been encouraged by this Budget. That was the whole trend of his speech as I heard it, and I tried to listen very carefully.
The £100 million which the Chancellor has distributed today has gone almost entirely to the better-off section of the community. I think that even the hon. and gallant Gentleman will agree with that remark. In other words, this is part of the pay-off for the people who voted Conservative at the last Election and who are expected to vote Conservative at the next Election. This has been the kind of Budget which we expect from a Conservative Chancellor, and in that sense we are not disappointed.
The sympathy shown for Surtax payers is rather overdone. After all, even if it were true that some of these people have had no salary increase since the war, they are not the people for whom the greatest sympathy need be shown. Some, indeed, have not had a salary increase since the war because they have found other ways of augmenting their incomes, particularly through the expense account racket, which is becoming rife. It is time that the Treasury dealt with it. Incidentally, I hope that one of the sections of the community which the hon. and gallant Member had in mind when he was talking about people who have not had a rise for a long time to meet the increased cost of living was Members of Parliament.
1034 Two of the reductions which have been made today have, of course, been simply the handing back of part of what the Government took away not very long ago. One is the 1s. tax on petrol. But even this Government would not have had the nerve to hang on to that Is. for very much longer. We need not be too effusive in our thanks about that concession. The other is the reduction in Purchase Tax on domestic articles, for which we are grateful. But we do not forget that the tax on domestic articles was increased by this Government not very long ago, so that, again, we need not overdo our thanks about it.
We have not yet had time to digest the Budget altogether, so our remarks today must be very brief. Nevertheless, I want to refer to two matters, as I am disappointed that nothing has been done about them. One is a matter of insurance. The position at present is that anyone can get relief up to £10 on insurance where it is the husband's insurance or the wife's insurance, but if both husband and wife are insured, even if the wife is insured on her own income, they cannot both get a relief of £10. If the Government are trying to provide incentives, and to encourage saving, the Chancellor might carefully consider this point. It would obviously not cost very much and would be a great incentive, because insurance is a form of saving. I suggest that the Chancellor should look at the provisions of the Income Tax Act, 1952, and consider whether that small relief could not be given in the way that I have suggested.
The other matter is to do with Entertainments Duty which, of course, includes the tax on sport. I think that everybody in the Committee was delighted to hear that the cinema tax was being reduced— I wish it had been abolished—that the tax on the living theatre was to be abolished and that the tax on sport was to be removed altogether. However, one tax on sport is left and it continues to be an anomaly. For the life of me, I cannot see why the Chancellor does not do something about it. It is the difference in the taxes on horse racing and on dog racing. I think that the Committee knows, because it has heard it ad nauseam, that there is a differential of 10 per cent. in the taxes on horse racing and dog racing. I had hoped that the Chancellor would 1035 have taken the opportunity this year to put that anomaly right, and I do ask him to see what he can do about it.
§ 6.47 p.m.
§ Mr. E. M. Cooper-Key (Hastings)
When my right hon. Friend introduced the Budget, he referred to the general theme as being one of expansion, and I certainly congratulate him on a realistic approach to the national problem today. It is not easy to produce proposals which at the same time bring applause in the country and confidence abroad. The crucial factor today lies in the £. The real test of the Budget is not whether some section of the community will be better off at someone else's expense, but whether in the next twelve months the £ will continue to hold its value.
If the £ fails, all fails, including our defence policy, pensions, the social services, savings, and the standard of living; and heaven help the old-age pensioner; worse still, our position as banker to the sterling area collapses. Upon the stability of the £ depends not whether we are a first or second-class Power, but whether we exist as an international influence at all. These courageous proposals will strengthen our financial position immediately and our industrial position in the near future.
On the domestic front, the proposals will be judged against a background of long-term inflation which is beginning to cause real social distress. In this connection, my constituents are getting rather tired of Ministerial speeches and quotations of the cost of living which bear no relation to the prices which they are paying in the shops. People in my constituency are continually told that we are spending more, saving more, and eating more, than at any time previously. A great deal of that may be because of this constant inflation.
The real distress and hardship in the country today will be found not in the working-class homes in the Midlands and other industrial centres, but in the bed-sitting rooms of suburbs and provincial towns, especially in areas along the South Coast. These are the very people who are the victims of this mid-twentieth century swindle, which has been perpetrated by successive Governments, in the depreciation of the national currency to 37½ per cent. of its 1939 value. That reflects very sadly upon the treatment of 1036 thrift in the present age. I was surprised to hear a Conservative Chancellor discriminating against the saver.
During the debate many suggestions will no doubt be made about the causes and cures of inflation. The first cause lies in the system which allies wages to the cost of living rather than to production. During 1956 the increase in our national productivity was less than 2 per cent, above that of the preceding year. The semi-nationalised industries, over which the Government must exercise some control, increased wages by 5 per cent. I am in favour of high wages geared to high production, but it is time that the Englishman learned that he has no divine right to a higher standard of living than the Turks, the Armenians —
§ Mr. Cooper-Key
—or the Greeks, but is entitled to only what he earns. The Government must set an example.
Many people believe that trade unions and management carry a fair share of the blame in failing to put before the employees the real nature of the problem of rising prices. I was in Canada a few months ago and noticed some posters exhibited in some of the factories. One poster said:Our work guarantees our wages.Another poster said:We rob ourselves when high costs steal wages.It is immaterial who put up those posters, but I wonder how long they would stay up in British factories.
A further contributory factor towards inflation is to be found in our social services. I am in favour of these services, but there is no doubt that many people who could easily afford to pay for them are availing themselves of them at the expense of others who are less well off. Social services should be paid for by those who can afford them.
§ Mr. A. Blenkinsop(Newcastle-upon-Tyne, East)
Does not the hon. Member feel that social services are in fact being paid for largely by those who can afford to pay? Are they not largely paid for through Income Tax, and other taxation?
§ Mr. Cooper-Key
Yes, but many people are availing themselves of these services who could easily pay for them out of their own pockets.
§ Mr. Cooper-Key
After a man has provided for the board and lodging of his family it is not unreasonable that he should wish to educate his children rather better than he himself was educated, and also provide rather better accommodation for his wife, or save something for his old age. There is no reason why many of these services should not be paid for by those who can afford to pay for them.
The social services were devised at a time when we expected a level of unemployment of about 10 per cent. We have now enjoyed seventeen years of full employment and it is high time that this burden upon the resources of our nation was re-examined. It is a fact that many people are making an unnecessary demand upon our national resources which our resources are not able to meet. That is the nature of our domestic problem of inflation. The solution is easy to find, if the courage is there.
I want to make a plea on behalf of the hotel industry, which is the largest dollar earner in the country. The Treasury has always treated this industry harshly. Alone of all industries it pays Purchase Tax upon the tools of its trade—furnishings, glass, china, etc.—and no capital allowances are granted for alterations and improvements. The Government make available interest-free loans for fuel-saving schemes, and just as good a case can be made out for a similar concession for the improvement of our hotels.
The Chancellor has introduced a very courageous Budget, and I am sure that it will be applauded by all sections of the community.
§ 6.56 p.m.
§ Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)
I intervene only very briefly to deal with one subject, although I should have liked to begin a general discussion upon the issues raised by the hon. Member for Hastings (Mr. Cooper-Key). I will leave him to the tender mercies of my hon. Friends. I wish to call attention to a special matter in which I have been considerably interested over a period of years. This matter was dealt with in a rather unhappy way by the Chancellor of the Exchequer.
I refer to his decision to dispose of the larger part of the National Land Fund. I do not suggest that this point is of the 1038 same importance as some of the other issues with which we have been dealing, but it is of very considerable interest to many people, especially young people, who had been looking forward to the possible future use of the Fund for the development of our national parks and of sport and activities in the countryside. This is a matter which should be of interest even to the Chancellor.
When one considers the minute value —if there is any value at all—that the Chancellor will get from this proposal, one is amazed that he should have spent time in considering it. He could be said to have misled the House as to the intention when the Fund was set up. If I heard him aright, he said that it was set up purely to deal with the question of the taking over of land by the State in lieu of the payment of death duties.
It is quite true that that was the legal purpose for which the Fund was established. Immediate use could have been made of the Fund in that way under the existing law, but my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) made it clear that his hope was that it could be made available for the positive development of some of our outdoor amenities and activities. He specifically mentioned at that time his great hope that it would be of value in helping towards the establishment and development of our national parks, in particular, as one of many other possible purposes.
It is quite amazing that a Chancellor of the Exchequer, in the midst of many of his other preoccupations, should have announced the abolition of the greater part of this Fund. He was fair enough to admit hat its abolition will do nothing to help the Budget. It makes no kind of contribution to budgetary financing of any kind. Again, we may ask why he bothered to abolish it. Presumably he did so because as long as the Fund remained at its present size there was always bound to be some pressure—in my view rightful pressure—upon the Government of the day to make use of it for the purposes for which it was established.
One hon. Member opposite referred earlier to the question of the condition of our roads. From time to time there has been a great deal of agitation about what is often called the "selling" of the Road Fund and its use for other purposes. Here, in effect, we have a Chancellor who 1039 is "selling" this Fund, which was quite plainly intended for the benefit and encouragement of outdoor activities and the help of younger people in particular.
It is very extraordinary that he should have taken this step. I should have thought that it was common ground on both sides of the Committee—it is not a political issue of any kind—that we want to do what we can to encourage outdoor activities. The people who have spent so much time and effort, in a voluntary way, in trying to defend the countryside from spoliation, are, one would have thought, the people who might have received encouragement. The national parks have been starved of finance. The efforts made by a number of distinguished persons, including Lord Strang, the Chairman of the National Parks Commission, to secure the use of this Fund, which was established for the benefit of the national parks, have been turned down and, indeed, the Fund has now been disposed of. This will be regarded, certainly by all those active members of organisations who hope to make use of national parks, as an indication of the Government's complete lack of any interest in or consideration for their affairs.
The Government may well say that this is not a matter which has any particular electioneering value. It may be that any consideration of the proper use of this Fund would not have persuaded a single Tory who did not vote in the recent by-elections to vote in the next Election. If electioneering is the major purpose of this Budget, such a consideration perhaps would not have contributed to it, but it would have been a very useful and a valuable act if the Chancellor had at least defended the Fund and offered some suggestions on how it could be most practicably used. Instead of doing that, he has taken this occasion to destroy it. The right hon. Member the Economic Secretary seems to be groaning and wincing and moving about, so perhaps he would like to make some comment on the matter, although I do not suppose that he knows anything about it. If he has any interesting remarks which he would like to make, perhaps he would make them now?
§ Mr. G. B. Drayson (Skipton)
Surely the hon. Gentleman has mistaken the 1040 Chancellor's intention. The Chancellor has left £10 million in the Fund. He said that £50 million was too much and he has reduced the Fund to £10 million. If £10 million is shown to be inadequate and there are activities which require assets from the Fund, no doubt some money will be made available.
§ Mr. Blenkinsop
I am afraid that the hon. Member does not know the history of this matter very clearly. There is no doubt that the Fund is only to be used for the purpose of acquiring and taking over certain assets as provided for in legislation, and I would question whether the sum of £10 million was completely adequate. I am calling attention to the fact that when the Fund was set up it was specifically mentioned that it was intended for use in the future for the encouragement of national parks, among other things. So far, although representations have been continuously made, no effort has been made by the Government to honour that original undertaking. That is the point that I am making.
The Chancellor quite clearly indicated that he had no intention at all of allowing extra funds to be made available for the purposes that I have mentioned, which could easily make use of the interest on the whole capital sum and usefully make modest inroads into the Fund itself. These are not large sums which would involve us in any way in any inflationary expenditure—far from it.
The Fund would merely be a means of helping to defend the countryside against some of the industrial dangers which have approached it from time to time, especially in areas of outstanding natural beauty, and it would have made a real contribution and been of real assistance to many young people who, in this land of ours, have little enough opportunity of getting the fresh air and exercise which they certainly ought to have. This Fund was designed for that purpose, and it will remain a matter of deep disappointment to many people that the Chancellor has taken the opportunity, in this Budget, to destroy the hopes of a great many young people.
§ 7.5 p.m.
§ Mr. Ronald Russell (Wembley, South)
I hope that the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) will forgive me if I do not pursue 1041 his argument. I want to revert for a moment to something which was said by my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer) when he was talking about man management. I could not agree more than I did with what he said about the need for improving relations between management and men. I think that the example which he quoted of failure on the part of management is something that is the cause of a good deal of our trouble today.
I mention that because there are two factories in the Borough of Wembley where there are excellent arrangements between the management and the men, largely because the management know how to look after the men. They are so excellent, in fact, that neither factory employs a single trade unionist. I will not make any comment on that except to say that quite clearly if there were need for a trade union organisation in those two factories obviously one would have been formed. The fact that one has not been formed in either factory means, I suggest, that the men are well satisfied with the existing conditions.
One factory, which employs about 100 men, makes bismuth metal, and the other, which employs about 300 workers, makes chewing gum. Which is the more important of those two commodities I do not know, but at any rate both managements seem to run their factories on such excellent lines that the conditions among the workpeople are almost a model, so there is no demand for a trade union organisation, and the men are perfectly happy without one.
I do not want to pursue that subject further. I should like to turn now to the Budget, and I hope that my right hon. Friend the Chancellor will forgive me if I do not take up the time of the House in saying how much I agree with what has been done. I should like to refer to one thing which has not been done in the Budget. That is in relation to the tax on greyhound racing totalisators. I mention this because I think that it has been recognised by previous Chancellors that for some time a case has been made for remedying the injustice done to greyhound racing by the 10 per cent. pool betting duty which applies to the greyhound totalisators only and not to horse racing totalisators.
1042 I am not one who wants to tax horse racing any more than it is taxed at the moment, but I think that it is unjust that the pool betting duty should be applied to greyhound racing totes when it is not applied to horse racing totes. The receipts from the duty have gone down steadily from £94 million in 1948–49, the first full year when it was imposed by Sir Stafford Cripps, to £5.8 million in 1954–55. There was a slight increase to £5.9 million in 1955–56. It may be that the receipts have now evened themselves out. The fact that they have gone down from the original highest total—presumably from the estimate that Sir Stafford Cripps made of the receipts at the time—shows that the duty has not achieved its purpose. In the last calendar year, 1956, I understand that there was a reduction of about 10 per cent. in the attendances at greyhound racing meetings.
In other words, although possibly the receipts from the pool betting duty may have slightly increased, nevertheless there has been a reduction in attendances at greyhound racing meetings. I realise that the removal of the Entertainments Duty from all forms of sport will help a little and will relieve the greyhound racing industry of tax, amounting altogether to about £500,000 a year. That is something which will help it. I suggest, however, that the injustice of taxing the greyhound racing tote but not the horse racing tote is something that ought to be removed. It is an injustice on the industry as a whole, and I am disappointed that it has not been looked at, particularly in view of the small amount which it would cost to remove that tax or, at any rate, to curtail it.
I wish to say something about a subject which has not been touched on since the Chancellor sat down, the question of the export trade. My right hon. Friend said he looked forward to a further increase in exports. I expect that most hon. Members have read the Economic Survey, or at any rate the parts in which they are particularly interested. They will have read paragraph 88, which says:The primary producing countries will in general offer further openings to United Kingdom exports.My right hon. Friend laid stress on the North American market. I hope that he is right. I hope that the North American market this year will show as 1043 big an increase as it did last year, but what disappoints me is that there has been a falling off instead of an increase in some of our conventional and very valuable Commonwealth markets, for instance, in Australia and New Zealand. If there has not been a falling off in actual exports, there has been a distinct falling off—for a number of years—in the proportion of their imports from this country. That is a distressing sign because it shows that other countries are gaining in the share which they are obtaining of the imports of those countries and, therefore, are encroaching on our markets.
Over the five years from 1950 to 1955 in the four older Dominions, Australia, New Zealand, Canada, and South Africa, there has been a decrease in our share of those countries' imports and an increase in the United States' share of their imports. I shall quote only the example of Australia. In 1950 the United Kingdom share of Australia's imports was 51.8 per cent. and in 1955 it was 44.2 per cent. On the other hand, the United States' share was 8.2 in 1950 and in 1955 it was 11.9 per cent. I will not weary the House, but I could quote similar figures for the other three older self-governing countries of the Commonwealth.
That suggests a very dangerous trend. I am sure it is due to the fact that we are not in a position to give a better rate of Imperial Preference to the primary produce which we import from those countries to the United Kingdom. Accordingly, not only have they not been able to help our exports by giving us any increased preference, but in the case of Australia there has been a slight reduction of some items in the trade agreement recently negotiated—which is the subject of one of the Budget Resolutions we passed today. Now we have a trade delegation coming from New Zealand, if it is not already here, to discuss a rather similar trend.
The reason for that situation is the General Agreement on Tariffs and Trade. I shall not weary the House with arguments for or against that, but I suggest that it shows a rather dangerous trend. While clearly it is a good thing for us to be gaining exports, so far as their total value is concerned, into the North American market of Canada and the 1044 United States, it is not going to do us very much good if we are losing ground in our old Empire markets of Australia, New Zealand, and South Africa. The economic policy which was started by the party opposite and has been continued by the present Government has led to that, and from it there seems to be no departure even at present.
That brings me to the question of one country in which there seems to be room for an enormous improvement in our export position. If we do not get that improvement I suggest that we ought to look at the source of imports. I refer to the Argentine. It is most astounding, when looking at the December issue of the Trade and Navigation Returns, to find that the Argentine has a favourable balance of trade with this country of more than five to one. It is worse than in 1955, when the balance was very nearly four to one. It appears that we are not taking as much meat or wheat from Australia as Australia is willing to send us, yet we are buying large quantities from the Argentine and piling up an adverse balance of trade against us.
That is a policy which I think ought to be looked at. For example, last year we spent £56 million in buying meat from the Argentine. At the same time we bought £70 million worth from Australia and £35 million worth from New Zealand. I am sure the reason is the minute amount of preference we give to Australian and New Zealand meat—about ⅔d. per pound on beef and ¾d. on mutton —it may be the other way round; I never remember which is which, but at any rate it is a miscroscopic preference—compared with the value before the war. That might be a reason why our importers are not buying more from Australia and New Zealand and are spending so much in the Argentine. It might be one of the reasons why the Australians are rather resentful and are contracting their imports from this country.
We spent, very rightly, £77 million in buying wheat from Canada last year, but bought only £16 million worth from Australia, yet we bought £26 million worth in the United States and £8½ million worth in the Argentine. There is no preference whatever on wheat and we have no means of encouraging importers to buy more wheat from Australia in preference to Argentine or 1045 the United States wheat. At one time there was a preference of 2s. a quarter on wheat. That was abandoned by the Anglo-American Agreement in 1938. Since then wheat has been on the free list. I know that the General Agreement on Tariffs and Trade prevents us from increasing that preference, but because of these defects I am worried about the prospects of our policy for increasing our export trade.
While I am all in favour of increasing our trade with the United States and, of course, with Canada—incidentally there is plenty of room for wiping out an unfavourable balance with the United States—it would not be much good to us in the long run if we sacrificed the markets that we have in Australia, New Zealand, and South Africa, because by the restrictions of the General Agreement on Tariffs and Trade we were not able to continue more preferential trade with those countries. I hope that the Government will look at that danger and see that we do not neglect our Commonwealth markets in return for mere will-o'-the-wisp American markets.
§ 7.19 p.m.
§ Mrs. Lena Jeger (Holborn and St. Pancras, South)
This will be a bitterly disappointing Budget for anyone who was foolish enough to hope that the Government would give any help or encouragement to the poorest and most needy in our country.
Many people are desperately tired of lectures about the necessity to increase the total national product. So many of them have not got it in their power to do that directly. Those words are falling again and again in a monotonous knell on the ears of old-age pensioners and lower-paid workers who, by the very nature of their employment, however hard they work, cannot appreciably add to the gross national product, which is supposed to be the preliminary to any increase in the standard of living.
I propose to confine myself to one or two special points, but I must, first, refer to another matter which was mentioned by the Chancellor. This is the question of continuing high interest rates. I have never pretended to be an economist, but it seems to me, particularly as a member of a local authority, that high interest rates are one of the most inflationary elements in our economic situation. The 1046 Chancellor quoted the higher figures of spending on education, health and other social services, but he did not tell us how much of that additional expenditure is caused by higher interest rates on loans.
Every time a local authority builds a school or a regional hospital board extends a hospital, the charge on the money which it borrows goes up, and the increase has to be met by the ratepayers or taxpayers, thus further impinging on the standard of living. It is fair and reasonable that the citizens should complain on this score. There was nothing whatever in the Chancellor's speech to help in this respect.
I also cannot understand why, after making it so difficult for people to obtain bank loans, the Chancellor still thinks it essential to continue high interest rates as a disincentive to borrowing. A man cannot get a loan unless he desperately needs the money for an approved purpose, and if he desperately needs it I cannot see the fairness of charging him the present high interest rates, which result in higher prices for the end product and more inflation in the economy.
I wish to refer to one or two things omitted by the Chancellor. The right hon. Gentleman showed some concern, which we all welcome, for the family man, but why is his concern limited only to the family man who is above a certain income level? I had hoped very much that the Chancellor might have found it possible to extend family allowances to the first, the most expensive, child. This is something which many of us have hoped for for a long time. I have never heard a really good case made against it. Any parent could tell the Chancellor— the right hon. Gentleman must know from his own experience—that it is with the first child that help is most needed. By that means, the right hon. Gentleman could have extended some benefit to families in the lower income groups, but it seems that they were not considered by him.
I cannot tell the railway workers in my constituency who earn £6 or £7 a week that there is anything in the Budget for them. We were told that it was a good thing to encourage families which were trying to keep children at school. Of course it is, but it does not cost a man earning £8 a week who has two children any less to keep those children at school 1047 than it does a man earning £1,000 a year, who will get some tax relief from the Budget. It may be illogical to oppose taxation reductions given to some people on the ground that they do not apply to other people, but if there were time I think we should have to apply our minds to the whole problem of the fiscal relation between the individual and the State.
The Royal Commission on the Taxation of Profits and Income considered whether we were not at the point where the activities of the Inland Revenue and the National Insurance Department could be co-ordinated so that one Department would both collect the taxes and distribute the benefits. The Royal Commission rejected the proposal, and I could not support it in the form in which it was presented to the Royal Commission, but I believe the time is coming when we have to bring some completely fresh thinking to bear on the issue and consider whether, to relieve the severest measure of poverty, the Inland Revenue will not have to be used as a means of giving to our citizens as well as taking from them. Otherwise, we are always in the position of taxation reliefs bringing no help to the poorest, who often have the largest families and are in the most difficult position.
There was nothing in the Chancellor's speech about the repayment of post-war credits. I feel that the post-war credits now represent a debt of honour. It must be a great disappointment to many ageing people that the right hon. Gentleman, at a time when he seemed to have a fair amount to give away, did not see fit to reduce even by a few years the qualifying age for the repayment of post-war credits.
I had been hoping to hear something about one matter which was accepted by the Royal Commission. I refer to special Income Tax allowances for totally disabled, especially blind, people. With great courage and great endeavour, many such people train themselves for ordinary occupations. They go out into the world taking jobs as telephonists, typists, and masseurs, and they do useful work in the community. They could remain at home and ask for National Assistance, but many of them, with a spirit of independence which we must admire, go out into ordinary employment.
When a blind man takes a job as a typist or a telephonist, it entails expendi- 1048 ture over and above that which a sighted typist or telephonist has to meet. The blind man often has to have help to get to and from work, although many manage alone, and often has to have someone to help at home. The Royal Commission was right to recommend that some relief should be afforded to recognise the courage and independence of such people who go out to work.
The Royal Commission recommended a special allowance of £100, and I think that that would be fair. I urge the Chancellor to consider the matter, particularly in respect of blind people, who have a special call upon our consideration. The amount of money involved cannot be very large, but the relief would give great encouragement to many people who are severely afflicted.
The Chancellor spent much time discussing the position of the Surtax payer. I cannot remember a single occasion when I have agreed with the hon. and gallant Member for Worthing (Brigadier Prior-Palmer), but I agreed with him today when he said that the Chancellor should have spared a thought for the problem of the aggregation of the incomes of married couples. It is unacceptable to me as a principle that a married woman's income should belong to her husband, and I should not have thought the Chancellor would have accepted it.
§ Mrs. Jeger
Perhaps it is more often the other way round. Yet, from the Chancellor's point of view, a wife's earnings belong to her husband. If a couple are working as doctors, for instance, the woman is taxed at Surtax rates on the first penny of her earnings, irrespective of the value of her work to the community.
I should like the Chancellor to look at this for two reasons. First, because I think that this is a shadow from the past subservience of women, which I think that even this man-ridden Government should try to put right. Secondly, because I think that many professional women are holding back their services from the community for this very reason; because, by the time a woman has paid someone to help in the house, perhaps to 1049 look after her children, by the time she has met her own extra expenses in travelling to her job, and the Chancellor then starts taxing her from the very word "Go" at Surtax level, there is very little encouragement for her to work at all.
That leads me to my final point. We have heard a great deal lately of the need for more women, scientists particularly, to play their part in our developing nuclear programme. I, for one, welcome this, but what happens when a woman does her day of skilled work in an atomic laboratory, working on all the most advanced and exciting discoveries of the modern age? As I say, she is first taxed at Surtax level from the word "Go." Then, when she leaves her factory, her laboratory, at this time of high endeavour and great discovery, as soon as she gets home she is expected to use a hand-operated sewing machine—because, if she uses an electric one, the Chancellor refuses to reduce the Purchase Tax on it from 30 per cent. to 15 per cent. [HON. MEMBERS: "Shame."] I really cannot understand this discrimination.
§ Mrs. Jeger
Is the use of electricity a sin of Eve which must be punished by the Chancellor with this penal taxation? What kind of thinking is going on in a Treasury that says, "We will reduce the Purchase Tax on a sewing machine which a woman still turns by hand." If hon. Gentlemen do not understand, perhaps I may explain that turning the wheel by hand leaves only one hand free to arrange and deal with the material which is being sewn. It is possible to put a sheet sides to middle in half the time if one can work with one's foot on the pedal of the electric motor and so have both hands free to deal with the work. I do not expect the Chancellor and hon. Gentlemen opposite to know about these things. I only ask them to think about them for a moment, and to listen patiently to those who do.
Purchase Tax, of course, should never have been put on household goods at all. It was the party opposite that, for the first time, put it on pots and pans, and the tools of the housewife's trade. We do not buy these things because we want them—they are the implements of 1050 our drudgery. We spend money on them that we would much rather spend on, perhaps, a new hat or something which would give us greater pleasure. These things are needed in a well-equipped and well-run home.
During the present century there have been many changes in our society. One which I welcome, is the decrease in the number of people earning a drudges living as domestic servants. Now, however, we are faced with the opposite alternative. We are without that vast body of people doing servile jobs, people whom the Victorian upper and middle classes used to exploit, but when we try to use the inventions of science to bring some light and efficiency into our homes the Chancellor penalises us with taxation.
The right hon. Gentleman announced today that, in certain cases, this 30 per cent. tax is to be reduced to 15 per cent. How mean that is. Why not take the whole thing off altogether? If he will not do that, why is he so pernickety as to keep it at 30 per cent. on anything which is designed for operation by electricity or gas? Anybody would think that we were living in the Stone Age, when we were supposed to use a bit of flint to get a spark to start a fire. Surely we live in an age when woman has every right to expect in her home the use of electricity and gas.
I have referred to sewing machines, but the Chancellor has put us in an equally stupid position over electric irons. I wonder whether any hon. Gentleman opposite has ever tried to iron a shirt. Until one gets used to it, shirts are very difficult to iron, and take a lot of time. All that the Chancellor does about this is to reduce the tax on irons—unless they are electric ones. Does he really mean that he wants us not to use electric irons? Is the country, after six years of Conservative misgovernment, short of electricity? Is the power station programme running down? Docs he not know that electricity now costs so much that no housewife is extravagant with it?
Today, more married women than ever are going out to work—and our economy needs it. There is a lot of argument whether it is a good thing or not, but I was very interested to see a report from the National Council of Women the other day which said that there was no evidence that the homes or the children of 1051 women who went out to work were any less well cared for than those of women who did nothing else but attend to them all day.
Believe me, whether or not a woman is a slut does not depend on whether or not she goes out to work. Some of the best-kept, most-scrubbed homes in my constituency are those of women who are up at four o'clock in the morning cleaning out the carriages at Euston Station and then going back to do their own work. It is because so many women are going out to Work that I think that we have an especial right to ask for consideration in these matters.
Again, why should a refrigerator be regarded as a luxury which has to be taxed? I should have thought that as we are trying to raise our standard of living, as we believe in higher standards of hygiene and welfare, a refrigerator in every home should be our objective. I believe it to be one of the test standards of a real rise in the standard of living. Are we not supposed to have hot water in our homes? If we buy an electric immersion heater, we pay tax on it. This not only affects us in our own homes, but affects the expenditure of schools, hospitals, local authorities and institutions of all kinds which have to buy these very important things.
We hear a great deal about smokeless zones—something else which I very much welcome—but if a woman, trying to be co-operative and not use fuel that smokes, decides to pay £10 for an electric con-vector heater, she will have to pay £3 Purchase Tax. What sense does that make? If she buys a vacuum cleaner— and surely that should be looked on as a basic necessity in every home—she has to pay over £8 in Purchase Tax on a cleaner costing £26.
Electric irons are becoming very expensive. Nowadays, it is possible to pay about £6 10s. for one—plus 23s. Purchase Tax. The basic prices of these goods are going up all the time, and, of course, the Purchase Tax goes up in proportion. The question whether a household can or cannot just manage to get a washing machine might well be decided by the fact that a washing machine priced at about £40 bears over £10 Purchase Tax.
It is interesting to note, in considering all the apparatus using electricity and gas in the home, that there is one thing 1052 which the Chancellor of the Exchequer has kept completely free of Purchase Tax. That is the cooker. This seems to bear out the old adage that men really take their stomachs very seriously. They leave us with our tax-free electric cookers, but we have to iron their shirts with our taxed electric irons and pick up their dirt with our taxed vacuum cleaners. Indeed, this Budget might have been described as the "anti-housewives' charter", because the concessions are so small. The great range of unfairness is really quite incomprehensible.
It may be that, during the passage of the Finance Bill, the Chancellor will find it possible to reconsider these matters. I hope that he will do so not in any partisan way, but will remember that they touch the needs of millions of our people in their homes.
§ 7.42 p.m.
§ Dame Irene Ward (Tynemouth)
I thank my right hon. Friend the Chancellor of the Exchequer for the beginning he has made in his Budget in dealing with the taxation problems of those living on small fixed incomes. It must be five years now since I, supported by a number of my hon. Friends, made representations to the Chancellor that this was a way of helping those living on small fixed incomes to meet the rising cost of existence. It has taken considerable time to achieve the objective which I had in mind.
I am not surprised that it is the present Chancellor who has made the breach with Treasury tradition. I recollect very well that many years ago, during the war, he and I worked together on what was called the Tory Reform Committee, the recommendations of which set the pattern of many of the social services in operation today. When my right hon. Friend the Chancellor took over office, I felt that he was likely to be receptive to the kind of proposals which were put forward on behalf of all those who have these particularly difficult problems in life to face. I offer him my thanks and my congratulations.
I know that in the battle of life fought by those living on small fixed incomes this is a very small step forward; but I have always held the view that the only way to help this section of the community is to take them group by group and try 1053 to find the appropriate measure of relief. One such measure of relief is the introduction of a special scheme of taxation relief such as my right hon. Friend has proposed. Although the actual assistance necessarily is small, I am pleased that it has created a breach in Treasury tradition.
During the live years during which I have struggled to get acknowledgment of the problems of these people, and obtain for them special tax reliefs, I have felt that it was not the amount of money involved which was the hurdle. After very long experience in wrestling with the Treasury, I have found that the Treasury always dislikes creating any new precedent, particularly in taxation matters. Year after year, the correspondence I have had with various Chancellors of the Exchequer has shown that that was the major hurdle. Therefore, my right hon. Friend deserves the very warmest congratulations for his imaginative action.
Everyone will agree that this is an imaginative Budget. That a part of the imagination which my right hon. Friend has brought to bear upon it should have had some fruitful results for those on small fixed incomes, fills me with very great appreciation. Of course, it would not be consistent with my approach to these problems if I were not to add that, the breach having once been made, it offers for the future unlimited opportunities for giving further assistance to that section of the community which has had the hardest treatment of all.
I realise that on Budget day it is a break with tradition to carry on the speech making until the normal hour for the rising of the House, and I have only a few words to add, I welcome the new arrangements made for shipping. This will give great encouragement to those interested in shipping. On the North-East Coast, we have a great tradition both in shipping and in shipbuilding. Many of my constituents earn their living in these industries and the fact that, in a very difficult year for our finances, the Chancellor should have had an imaginative approach to the problems facing shipping, which is such a source of strength to the economy of our country and so bound up with the traditions of our national life, gives great satisfaction to me.
1054 If the records of HANSARD were searched, it would be found that Chancellors have received more blows than kind words from me, but on this occasion I am delighted to congratulate my right hon. Friend. I look for further favours to come for the benefit of those who really deserve consideration and sound treatment from the Chancellor of the Exchequer and from the House of Commons as a whole.
§ 7.49 p.m.
§ Mr. George Chetwynd (Stockton-on-Tees)
I am glad to have an opportunity to take part in this debate and to express my immediate and almost instinctive reactions to the Budget. The hon. Lady the Member for Tynemouth (Dame Irene Ward) seems to think that the Chancellor ought to be congratulated for his imagination. I do not wish to congratulate him on that, because I realise that most people will have to make considerable use of their imagination to discover what will be their benefit from the Budget. Indeed, it will be only in the imagination that many of them will get any benefit whatsoever.
In my view, the Chancellor is to be condemned for missing a glorious opportunity. This Budget, it seems to me, is dictated more by political considerations than economic considerations or considerations of social justice. Let us look at the chance which the Chancellor had. It is the first time for many years that he has been able to count on a reduction in defence expenditure to help him to do something to spread certain benefits. He decides that he can have £100 million to disburse, and if one looks at the recipients one sees that: in almost every case these benefits go to a very narrow, small, favoured section of the community.
The Budget is distinguished more by what it leaves out than by what it contains. For instance, there is no mention whatever of any benefit for the old-age pensioners, as such. There are a few crumbs from the table, as it were, for those living on small fixed incomes, which shows that the Chancellor realises their need and their plight, but if those living on small fixed incomes at certain levels are to benefit from tax concessions, how much greater is the need of those on even smaller incomes who are not within the (ax-paying bracket at all?
1055 I would have thought that, if the Chancellor had £100 million to give away in this Budget alone, he could have devoted £50 million to the relief of distress amongst those who are worst off; that is, the old-age pensioners, the sick and disabled, but, instead, we see once more a Conservative Government getting their priorities wrong. Instead of helping those whose need is greatest, they give their blessings and benefits to those who may be comparatively hard up, but who, nevertheless are so much better off than the vast majority of the people.
If the Chancellor can give relief to some of the old-age pensioners and to some on small fixed incomes, surely the case is overwhelming for giving it to all, no matter whether he could not give everything that we wanted him to do. At least he could have made a start with either 5s. or 7s. 6d. on the pension, which I think would have been the best way of tackling it and of disbursing the £100 million.
Again, if we look at those outside the range of Income Tax, those with large families, the low wage-earner, and so on, again there is no relief for them in this Budget. Two things, I am certain, could have been done to help them. First, the iniquitous National Health Service prescription charge could have been removed, and, secondly, rather than play about with children's allowances for people in the Income Tax brackets, it would have been far more just, and far more wise in my view, to have extended family allowances either by an increase in the amount for each child or by extending the allowance to the first child. That would have given a measure of relief to those who are hardest hit.
I welcome the amount which is given in the increase for children staying on at school. It is a very desirable thing, but I am not so sure that the £25 difference will encourage people to keep their children at school. I think that it will have to be tied up with increases in maintenance grants and allowances and things of that kind before they will make up their minds that their children should stay on at school after the ordinary school-leaving age.
The Chancellor posed the main question how, since we are living in a world of competing nations, we can keep our 1056 exports up and our prices down. What he fails to realise is that it is Government action over the past year which has tended more than anything else to put our costs up and to price us out of overseas markets. I could detail them all, but they have all been given before—ending with rents, milk, bread and all the rest—and these are essential parts of ordinary household expenditure, and represent costs which have all gone up through Government action. We cannot expect the worker to refrain from putting in his own demand in the free-for-all economy in which we seem to be living.
How can the Chancellor think that the ordinary worker will work harder, pro-duce more, and be more cheerful and co-operative in the future when the worker who is looking for something in this Budget gets nothing, and sees the blatant discrepancies between his contribution and that of a minority—the Surtax payers? I dare say that there will be a song in the heart of the Surtax payers in the morning, but it will be a chilly morning for the ordinary worker and producer.
I do not accept that the future success of our economy depends upon these few people and the effort that they have put into it. I do not accept that the majority of them are deterred from extra effort or initiative by the fact that they have to pay rather more Income Tax than other people. I do not think that it works that way. We have had one or two so-called incentive Budgets from Conservative Chancellors before, which were supposed to deal with this problem, but they never have dealt with it, for the simple reason that in six years of Tory rule we have seen the gap which was closed under the Labour Government once more widening between the top and the bottom.
It is because we have departed from these feelings of fairness as between all sections of the community that I believe that we are not getting the effort today. In my view, it has nothing to do with Income Tax at all, but is because the Government have reversed the trend which we established when in power.
I do not think that we have to bribe a section of the community like this to give of their best. The small number of people in this group who have the initiative, the brains, give what they have because it is part of their nature, part of 1057 their ability and their willingness to do it, and I believe that the Government are completely on the wrong lines in the way they are going. Of course, we all know why the Chancellor has done this. The cheer which he received at the end of his speech from the Tory Party is the measure of the pressure which has been put upon him as a result of the falling-off in Conservative votes in recent by-elections. This Budget is designed to rally the faithful. [An HON. MEMBER: "The unfaithful."] It is to bring the unfaithful back. Nevertheless, what the Chancellor has forgotten is that by doing this he will harden the opposition; and that will be of far more value to us, politically speaking, in the future.
If I may say a kind word about the Chancellor, I do welcome what has happened over Entertainments Duty. It would have been very difficult, looking back over the last few months, to have done anything less than what the Chancellor has done, but I am wondering whether all the considerations on Entertainments Duty are considerations of the owner of the cinema or the theatre, or whether the concession will result even in a little rebate in the price of seats to the customer. I would have thought that part of this concession might be used for lowering theatre and cinema prices to the customer, because I am not certain that Entertainments Duty is the only disincentive to people going to such places. There are all sorts of other reasons. One of the main reasons is that general costs have risen so much that there is so little left for many people to be able to afford to go to the cinema as much as they would like.
§ Mr. John Rankin (Glasgow, Govan)
I thank my hon. Friend for giving way, but I am sure that, on reflection, he will agree with me that the Chancellor has done nothing for the cinemas, because every penny that he is giving of this £6½ million is coming from the television viewer, who is to be mulcted to the extent of £8 million.
I am grateful to my on. Friend for anticipating my very next point.
I do not think the Chancellor is justified in putting an extra £1 on the television licence so as to be able to give something away to the cinemas. I do not think 1058 that he can argue that it is the competition of television that has put the cinemas, in difficulties. We have to judge the cinema as a separate item and this £1 increase will be a very severe blow to a great many people.
I should like to ask the Financial Secretary to the Treasury, on this point, whether some means may be found whereby the old-age pensioner, for instance, can be relieved of this extra £1. It is no good the hon. Gentleman saying that he has the interests of these people at heart, and that he knows they are in a difficult position, while, at the same time, imposing this extra tax. Of course, old-age pensioners have television sets. They have them on the "never-never" system, and, therefore, the extra £1 will make all the difference. I hope that the hon. Gentleman will give serious consideration to removing this extra charge as far as old-age pensioners are concerned.
In Purchase Tax, as has been rightly pointed out, the Government are giving back only half of what they put on before. I should have thought that there was a clear case for taking everything off the Purchase Tax at this time rather than devoting the bulk of the Chancellor's give-away to the Surtax payers.
The Chancellor could have made a move in lowering the age of entitlement to post-war credits. This would have benefited many of the people who write to us almost weekly asking for relief on hardship grounds. Day in, day out, the Treasury says that it cannot devise a scheme that would be workable. These are the kind of considerations which should have been given in the Budget by a realistic Chancellor of the Exchequer. The Budget pinpoints the fundamental difference between the two political parties. I believe that it is an immoral Budget, because it offends against all our concepts of social justice.
§ 8.1 p.m.
§ Mr. Robert Crouch (Dorset, North)
I should like, first, to congratulate my right hon. Friend the Chancellor of the Exchequer upon the way in which he introduced his Budget and the excellent Budget that it is. I was not disappointed in what he did—
§ Mr. Crouch
—because I have known my right hon. Friend over a number of years and I always felt that when the time came for him to take up high office he would meet his responsibilities and take his duties as seriously as any of his predecessors have done.
It does not surprise me in the least that there have been criticisms from hon. Members opposite. If they have not had much confidence in the Government during the last 12 months, the country has. [HON. MEMBERS: "Oh."] Oh, yes. The Chancellor said that personal savings had increased by £100 million. It is the people of the country and the small savers who matter. Had they no confidence in the Government, we would have seen a reduction instead of an increase in savings.
Another point made by my right hon. Friend was the necessity to increase exports. We are all agreed on that. The co-operation of both employer and employee is needed, because the export market gets increasingly difficult. During the last two years, I have had the opportunity to visit the majority of the countries of the Middle East and I have always been pleased with the demand that there is for British exports. Unfortunately, however, on many occasions we do not get the orders because our prices are too high.
I was very impressed indeed, when in Israel at the beginning of this year, to see the way in which that country is dealing with certain forms of manufacture. The Israelis are not concerned about restrictive practices. What they are concerned about is turning out goods for which the factory is laid out and selling them against us in the Middle East.
§ Mr. Crouch
Not in Israel. We must get together, employer and employee, and ensure that we get our exports into the markets where our goods are badly needed.
We are all, on both sides, pleased with the announcement by the Chancellor of the removal of Entertainments Duty from the live theatre and from sport. A great deal was said by the hon. Member for Stockton-on-Tees (Mr. Chetwynd) about the tax on the cinema. Coming from a rural area, I am pleased to think that 1060 the population figure has been raised from 2,000 to 3,000 to enable certain places to come into a lower tax group. In a constituency like mine, comprising eight local authorities, two of which are boroughs, the existing law has reacted unfairly for a number of years.
§ Mr. Shurmer
I think that the hon. Member is making a mistake. There was no tax at all on the small areas with a population of 2,000. The limit has now gone up to 3,000.
§ Mr. Crouch
Oh, yes, we have been paying tax. Some of these small but ancient boroughs will benefit very much indeed.
What will be welcomed throughout the country, in spite of what hon. Members may have said to the contrary, is the reduction in Purchase Tax on so many items. It will be welcomed by the people as a whole as the most pleasing feature of the Budget.
There is another direction in which there is no doubt that millions will benefit. Two hours and five minutes ago, people began to benefit by the reduction of Is. in the duty on petrol. This will be of benefit to millions of people working in our factories. I shall benefit—we will all benefit—to the extent of Is. a gallon.
I must now declare a personal interest. I welcome the concession that the Chancellor has given to those of us who have children. I have three. The youngest was 14 yesterday and the other will be 17 in a few months' time, before the Finance Bill becomes law. Hence I declare my interest and I thank my right hon. Friend for that concession.
§ Mr. Crouch
I could not afford them.
On behalf of a large number of my constituents, I welcome the increase to £250 and £400 in the allowances for people who reach the age of 65.
My right hon. Friend said that the duty from motor transport will go up by £2 million. He did not explain how this figure is arrived at, but presumably it will be as the result of more motor vehicles going on the roads. He went on to say that he would permit the Transport Commission to have £50 million more to develop the railways. While I 1061 believe that the railways must be modernised, something must also be done to assist road transport, which is an important part of our communications, by improving the roads.
Something should be done, too, to assist road transport by relieving the Purchase Tax on chassis. Is it generally realised that road transport operators pay 23 per cent. of the tax on petrol and oil, yet account for only 14 per cent. of the country's consumption? A concession should be given on chassis, which at present carry tax of 33⅓ per cent. It is neither fair nor just that an efficient form of transport should be continually penalised as against nationalised transport. None of us objects to fair competition, but this is rather unfair.
I do not for one moment think that my right hon. Friend will be any different to any of his predecessors. He has something in the "kitty", something which he is prepared to give away. All Chancellors do that. It is by their concessions that many of them gain popularity. I have a plea to make to my right hon. Friend. When the time comes for us to discuss the Finance Bill, I hope that my right hon. Friend will bear in mind that British Railways are to benefit by £50 million and that he should do something about the iniquitous 33⅓ per cent. tax on motor chassis.
§ 8.10 p.m.
§ Mr. Joseph Slater (Sedgefield)
After listening to the speeches made so far in the debate, I naturally expected the hon. Member for Dorset, North (Mr. Crouch) to make some claim on the Chancellor on behalf of the industry of which he has so much knowledge, but the hon. Member never gave a thought to the farm labourers who are the basis of that industry, and he never considered how the Budget will affect them in the course of this financial year.
In the recent past we have had two Chancellors, one of whom told us that he sought to give us an incentive Budget and the other who said that he was giving us a standstill Budget. On this occasion, the present Chancellor says that this is a progress Budget, but after looking at the policies pursued by the Government during the last year we cannot fail to 1062 notice that to solve the internal and external problems of the country they have intensified measures that had already failed to improve the situation in 1955. They have increased the Bank Rate and they have intensified the credit squeeze. Hire-purchase restrictions have been made more severe and housing subsidies have been reduced or abolished, with the result that in the past twelve months life has been made more difficult for the less fortunate.
Chancellors in the past have made urgent appeals for increased production. That appeal has been made again today. I do not dissent from such an appeal. I fully realise that it is vital to the economy and that, irrespective of party, we ought to do everything we can to that end. I ask the Financial Secretary to the Treasury what incentives the Chancellor and the Government have provided for that purpose. They have done nothing. They have merely followed the old Tory rule in seeking to lower the standards of our people instead of improving them.
I know that it has been said in some quarters that the cost of living went up by only 3 per cent. in the past twelve months and that there is nothing for us to worry about. Those who use that kind of argument forget that the cost of living did not stop at that point and that the index does not tell the whole story, because measures such as the Rent Bill and the increased charges placed on parents with children at school, by way of more costly school meals, and other impositions have further increased the cost of living. With the failure of output to rise, consumption has remained at approximately the same level as it did in 1955, and unemployment has been on the increase. The number of people who are working on short time has increased. Time and again we have been told by the Government that there were more vacancies than there were people to fill them, but is that the case today? As more men come on to the labour market, were is also a falling-off in overtime in industry.
I have never favoured overtime. I have always believed that a man's working conditions should be such that he should not have to depend on working overtime in order to live, but up to the moment we have not reached that position. What do 1063 the Government intend to do to offset the rise in unemployment that is now taking place? Arguments put on this side of the Committee on more than one occasion have offered the Government a solution to this problem, provided that they were prepared to accept the advice which my hon. and right hon. Friends have offered even within recent weeks. I refer particularly to the appeal for a greater concentration on East-West trade. It is no use our allowing ourselves to be fobbed off by America or anyone else in this respect. Unless we take the initiative the day will come when we shall have reason to regret not having acted sooner.
Rapid changes are in progress throughout the world, and backward countries are coming into their own. They are no longer prepared to live in the past. They are looking forward to the future. We ought to encourage them. As their markets are being opened, we, in the interests of good association with these people, should enter those markets. I shall be very interested to hear what the President of the Board of Trade has to say on this subject, if he takes part in the debate.
Last year was a year when national output remained stationary. The tragedy is that while we have been suffering from the effects of the lopsided policies pursued by the Government, the economies of other countries in Western Europe and the United States have shown considerable progress. In February this year the Chancellor announced cuts in welfare subsidies and an increase in National Insurance contributions. He expected to save on this account about £57 million in a full year and £37 million in 1957–58.
We were also told that from 1st April the price of welfare milk was to be increased from l½d. to 4d. a pint, and that there was to be a corresponding increase in the price of National dried milk. The cost of school meals was also to be increased. The Exchequer was expected to save £40 million on welfare milk alone and £3½ million on school meals. The increase of 10d. in the National Insurance stamp was estimated to bring in a further £6 million in a full year from the employed. The argument for those increases has been the increase in the cost of running the various social services. That has been said in particular with reference to the National Health Service. What did the Guillebaud Committee say? It 1064 showed decisively that the cost of our Health Service as a proportion of the national income has been decreasing, not increasing.
The Chancellor said that he has £100 million to distribute. I am of the opinion that some consideration ought to have been given to the charges which this Government are responsible for imposing upon many of our people who have to depend upon the National Health Service. I realise that appealing to the Government to reduce many of the present charges is like beating the wind, but there is nothing to stop the Government from reducing, or abolishing altogether, some of the charges which are hurting many people.
The policy of the Government has been to ask for a standstill on applications for wage increases. I ask the Government how they expect to achieve a standstill in respect of such applications so long as they pursue policies which impose increased charges upon wage earners? Not only is the wage earner finding that deductions are being made from his wage packet, but he also finds that his dependants are committed to the payments to which I have referred, if they avail themselves of these services.
The debate that we had on old-age pensions on 25th February did not please the old-age pension community, particularly the speech made by the hon. Lady the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance. I do not believe that old-age pensioners ask for an increase in their pensions merely for the sake of asking. I believe that the House of Commons has a responsibility to those important sections of our society, the aged, the infirm, the unemployed, and the sick.
The Government have that responsibility just as much as the industrial barons have a responsibility for looking after the interests of their shareholders. Last year, nearly 3,000 large industrial concerns in this country increased their profits by about £170 million over 1955. Even the mild pleas of the Chancellor did not stop dividends from rising by over 10 per cent., whereas wages rose by 7½ per cent.
It is obvious that one industry which escaped the credit squeeze of this Government was the steel industry. Last year, 1065 35 steel companies increased their profits by no less than £30 million, and were able to pay their shareholders a dividend of 23 per cent. more than in 1955. Yet, despite this apparent prosperity, steel prices were raised on 15th December by a sufficient amount to make the steel companies better off by between £40 million and £50 million a year.
It appears to me, therefore, that the steel companies are determined to protect their shareholders from any squeeze by staying one jump ahead of the Government. And just as the shareholders are taken care of by the industrial barons of this country, so I believe it to be the responsibility of the Government to come out positively against the attitude displayed by the Minister of Pensions and National Insurance and his Joint Parliamentary Secretary when we are considering the application for increases in pensions.
Today, those pensioners are repeating their applications to hon. Members. I hope sincerely that the Chancellor will have second thoughts about the £100 million which he has already sought to distribute. If he cannot take the increase from that amount he ought to see whether it is not possible to find some other money which will provide our aged people with an increase of the sum which they are receiving now.
§ 8.25 p.m.
§ Mr. G. R. Howard (St. Ives)
The hon. Member for Sedgefield (Mr. Slater) will, I trust, forgive me if I do not follow him in his criticisms of the Chancellor of the Exchequer. Bearing in mind the tradition of the House to rise early on Budget Day, I will make my contribution brief and will merely commend what the Chancellor has done.
I am sorry that the hon. Member for Holborn and St. Pancras, South (Mrs. L. Jeger) is not in her place. In talking about electric irons she said that we mere men have no use for such things. Perhaps she is right about electric irons, but I can appreciate what the Chancellor has done about kitchen utensils. I am very fond of cooking, and I often help my wife out in that regard and give her a spell off duty.
Although I am pleased about the reduction of Purchase Tax from 30 per cent. to 15 per cent. I hope that next year 1066 my right hon. Friend may consider the question of a sales tax. I know it is unfair to expect him to do so at once, because he has only been in his office three months, and it is a formidable task for anyone to embark upon. I say that for the following reason. Since the Budget speech this afternoon I have telephoned a small trader in my constituency. I asked what the Purchase Tax change would mean to him, and he told me that, so far as he could estimate it would mean, on his turnover, a loss of to him of between £300 and £400.
This is one of the matters which is so unfair in the incidence of Purchase Tax. If it is imposed to stop people from spending, then exactly the same effect could be achieved by having a sales tax, which could be collected from the person buying the goods. That would mean that the small traders would not have to buy goods at a figure containing Purchase Tax at a certain rate and run the risk of a subsequent change in it. I hope, therefore, that something can be considered next year on the lines of a sales tax. Then again, the present arrangement involves a great deal of work for the small trader in having to estimate the varying changes in price of all the different good's in his shop. I hope that in considering that group of Purchase Tax, Group 11, which comprises furniture, hardware, ironmongery, turnery, tableware, etc., we shall see that the benefit is also given to the small craft potters, many of whom are established in rural constituencies. These men are skilled craftsmen in many cases on their own. If they wish to turn out pleasant-looking and useful casserole pots, for instance, I hope that they will benefit from this concession.
I add my words to those of other Members who have said that we all hope for some further concession during the Finance Bill. I hope that the Chancellor will consider the position of the small craft potter, who is carrying on a very useful trade. These craftsmen are doing a fine job and keeping going an old custom which is some cases has passed from father to son for hundreds of years.
When the Chancellor was speaking about credit and the advice which he has given to the banks, I could not help thinking of the difficulties of the small traders in a seaside town, like some in my constituency, who for very many 1067 months of the year do very little trade. They need credit facilities during the winter months, when there are few visitors, as they only do a good trade in the short summer season. If my right hon. Friend could devise some guidance and help for those small traders on the lines devised by the Minister of Agriculture for the farming community, it would be of great assistance in genuine cases of people who have not very much capital behind them.
As one who spent the whole of the last war in the Navy at sea, most of it doing convoy escort duty, I should like to add my congratulations to the Chancellor on what he has done in providing new allowances for shipbuilding. It is only fair to our great merchant fleet that they should get this assistance. My hon. Friend the Member for Tynemouth (Dame Irene Ward) mentioned that the concession will help the men who work in shipbuilding and repairing, but we must also remember that we rely on our own Merchant Navy in an emergency to carry our supplies to us.
It is no use thinking that in an emergency we can rely on people running under flags of convenience—these people with funny flags and some odd standards, as far as one can see. We shall certainly not be able to rely on them. They will not come to our aid except at a large profit to themselves. They will try to soak us with the largest possible charters they can get. The British merchant seaman will come to our aid as they have always done in the past. They are the people who always stand by us so magnificently in time of war.
§ Mr. Hector Hughes (Aberdeen, North)
In making this speech on behalf of the merchant seamen, I hope that the hon. Member will not forget the fishermen who manned the minesweepers during the war.
§ Mr. Howard
I am sure that the hon. and learned Member would not expect me to forget the fishermen. I have had some experience among them. I see them often; in fact I was with some of them on Saturday morning. There is no one for whom I have greater respect. Indeed, I served with them for many years in the war. In my speech I was thinking in terms of the immense importance of merchant shipping to this country and the immense importance of our 1068 having a large, modern and prosperous merchant fleet to fight the competition of ships running under flags of convenience.
Next, I would say, "Jolly good riddance to the petrol duty". I was delighted to see the Chancellor's action in that respect, which will be a great help to us in the holiday resorts. In many cases it will make all the difference for people with smaller incomes who wish to go on holiday. The family may wish to go by car from the Midlands to west Cornwall, and obviously it will be much cheaper than going by train. I welcome this concession, and others which I hope we shall have in the second rationing period. The sooner we get rid of rationing the better.
Lastly, I add my words of congratulation to the Chancellor for what he has done about Entertainments Duty. I am glad that it has been taken off the living theatre and off sport. Whatever we say about canned entertainment, by which I mean films and television, for example, nothing can possibly replace the live theatre, and many of the repertory companies and companies in small theatres have been struggling against terrible odds because of this duty. Thank goodness it has been abolished. Perhaps that will bring forward new talent in the theatre.
I welcome the raising of the population limit for entertainment tax exemptions from 2,000 to 3,000. The man who really wants help above all others is the small cinema owner, the man running a small cinema which is almost a family concern and which is run by him and his wife. Such men have been suffering the most terrible conditions for several years. I have cited cases and given facts and figures of men who have sustained losses year after year and who have only just been able to carry on for another year. Let us hope that that provision will help them.
In conclusion, while welcoming what the Chancellor has done on the lines that I have indicated, I hope that this will be the first instalment of bold and imaginative steps which will do everything possible to help a large majority of the people of this country.
§ 8.36 p.m.
§ Mr. John McKay (Wallsend)
The tone of the speeches from the benches opposite has not been surprising. It is plain 1069 that this is a class Budget, a Budget determined to try to raise the standing of the Conservative Party by giving reliefs and help to those people who are the party's main support.
One of the Chancellor's main themes was that one of the chief aims of any Government, whatever party is in power, ought to be stability. As with all platitudes, we can all agree with that, but what is important is to know the fundamental things which make for stability. One of those fundamentals is a clear indication that the workers are getting a fair share of the wealth produced.
That is one of the main problems of today. Some hon. Members have referred to shipbuilders and have said that we must ensure that they are helped in every way. What has been the difficulty which shipbuilders have had to meet in the past year? They have not suffered poverty. Have they not returned reasonable dividends? Have they not set aside large accumulations of money for future expansion? Surely, for several years, shipbuilders have done those things, as they have been done in many other industries.
It is largely because that has been the situation, not only in shipbuilding, but in engineering, that we have had agitation from workers for increased wages. The more we read financial papers on these matters, the more we are driven to the conclusion that those papers are arguing that certain changes should be made largely on the ground that workers are building a strong economic position for themselves. However, when the situation is examined, that view is found to be incorrect. It does not tally with the increases in the cost of living and the amount of money which wage earners are getting. It is not true that their economic position has tremendously improved.
Another aim and object on which we ought to insist was mentioned by my hon. Friend the Member for Sedgefield (Mr. Slater). It is that a man should be able to keep his family reasonably without earning overtime by working at weekends. Working overtime is looked upon as something that the workers should be expected to do. We know that they will do it if they cannot feed and clothe their families reasonably merely by working an ordinary week. Whatever money 1070 there is in the pockets of wage earners is entirely due to their working overtime.
Taking any period that we may choose —from 1938 to 1956, in respect of which there are regular index figures—it will be found that it is the business men and financiers who are making the money and feathering their nests. Financiers and employers take the view that, as a class, they are entitled not only to produce the goods and get good dividends but to put aside money, out of the profits accruing to them, to build up an accumulation of wealth in their industries far beyond anything that the ordinary worker can look forward to.
What is the ordinary worker's capital? Can he build up his economic position so that he has three, four or five times as much wealth as he used to have? He cannot. That is his general economic position, and that is the position in which the business people want to keep him. I do not want to spend too much time upon this matter, but I must point out that if there is one thing which stands out above any other in connection with this problem it is the fact that, although workers are now living better than they used to, they are doing so only because they are working overtime.
We are all anxious to help the aged people. We need not go right back to 1956 to appreciate the difficulties that arise. There are two conclusions at which we can arrive. Either we are prepared to prolong the need of the old people and are willing that it should be met entirely through National Assistance, or we would like to modify or radically amend the insurance and pensions schemes. Nearly 1 million people—including the wives and families of the men concerned—have to depend upon these schemes because of sickness and unemployment. We seem to ignore all these members of our community.
Let us consider our position in 1953. Comparing one section of the community with another, how are we dealing with initial allowances? In 1953, the initial allowance for sole traders and partnerships was £10 million and in 1956 it was £19 million, an increase of 90 per cent. In 1953, companies' initial allowance was £112 million rising to £216 million in 1956, an increase of 93 per cent. In the same period, the initial allowances for 1071 farmers rose from £8 million to £14 million, an increase of 75 per cent. and dividends, profit and interest rose from £899 million to £1,245 million, an increase of 38 per cent. General wages showed an increase of 28 per cent. What has been the increase in old-age pensions since 1953?
The Conservative Party made a lot of what they did at the end of 1954 by way of increasing pensions, which were implemented in 1955. The Government raised the rates of pensions for married pensioners from 54s. to 65s., an increase of only 20 per cent. There is no question that something ought to be done for them. People talk about their being able to receive National Assistance. There are very few people with more experience of National Assistance than I have. I have visited houses where, on some occasions, the National Assistance officers have refused to help. I have been ashamed of the conditions of the houses. After my personal visits, the officers had to do something.
National Assistance is, after all, based on a form of means test. It is not easy for these old people to live, as one can well imagine. There comes a time when many of them need clothes and, perhaps, more bedding and a little furniture. The National Assistance officers show as much good will as possible, but we have to do something to change the situation so that many of these old-age pensioners do not have to go to National Assistance for the income which it is necessary that they should have.
§ 8.50 p.m.
§ Mr. Norman Dodds (Erith and Crayford)
I have heard many Budgets presented, but this is the first time that I have stayed after a Budget speech to raise a particular point, which, in this case, I must say that I felt very angry and, at times, dismayed about. Today, the Chancellor spoke for nearly two hours and during all that time he did not make a single reference to the millions of poor, old-age pensioners. I should have thought that at least he would have had the decency to mention their plight, which I think hon. Members on both sides of the Committee recognise.
I was shocked at the callousness of the Chancellor today. He must have known that up and down the country petitions are being prepared. Many have already 1072 been handed to Members of Parliament, to be presented in the House. I protest that the Chancellor, who, today, gave away more than £100 million, has not given one penny piece to millions of the poorest in the community. The hon. Lady the Member for Tynemouth (Dame Irene Ward) said that the Budget was imaginative. With her, I was pleased that some old people living on small incomes will get some tax concession, but what about those whose incomes are well below anything that will be affected by that concession?
I well remember that during the Christmas Recess I spoke at a great demonstration of old-age pensioners in Crayford Town Hall, in Kent. On that occasion the news sheet of the National Federation of Old-Age Pensions Associations had a report on its front page describing how a deputation from the executive of that Federation had seen the present Minister of Pensions and National Insurance. The Federation believed that from that visit there would result an increase in pension, and the amount which was mentioned was 5s. It was really pathetic to see some of the old people who had already earmarked those few shillings and decided how to spend them.
During the past week I have been handed from many branches of the Federation thousands of signatures to a petition. The petition reads:We, your constituents, whose names and addresses appear below, ask for your help in bringing to the notice of the Government the great poverty now being endured by the old-age pensioners of this country. As the cost of living is constantly rising, the basic pension remains static. It is quite obvious that pensioners are getting worse off all the time; they cannot buy even the bare necessities of life, such as food, fuel or clothing.It must be obvious to any hon. Member who has any contact whatsoever with old people that that is a fact.
I wish to point out that when the last increases were made in old-age pensions and National Assistance those increases were largely because of the increased cost of living which had come about earlier. Tonight, I am convinced that there will be millions of old people who will be intensely miserable, because I am sure that they had a right to expect that if anything was to be given away today they, of all people, would at least get something.
1073 I repeat what I said at the beginning of my speech. I really do not understand how the Chancellor, in his long speech, could not even express regret that he could not at this time give the old-age pensioners an increase. Therefore, although wanting to say a lot more, on their behalf—at least, on behalf of thousands in my constituency—I merely express my disgust that, in giving £100 million away, these poor old people should have been completely forgotten and not even have had a word of sympathy from the Chancellor of the Exchequer.
§ 8.55 p.m.
§ Mr. John Rankin (Glasgow, Govan)
In his Budget speech the Chancellor said that he had decided to give a 40 per cent. building allowance to the shipbuilding industry. As that is one of the principal industries in my constituency—
§ The Financial Secretary to the Treasury (Mr. J. Enoch Powell)
That is not so. It is an investment allowance to the shipping industry.
§ Mr. Rankin
I am very sorry. I misunderstood what the Chancellor said. Two hon. Gentlemen opposite who have spoken shared that misconception. I must withdraw a welcome which I was prepared to give to something which I thought would be of some interest to my division.
I should, however, like to draw the attention of the Financial Secetary to a constituency point which is of interest to a great many people in the engineering industry. Howden's, a well-known engineering firm, expanded after the war into the manufacture of steel furniture, particularly steel desks. They have a grievance that steel desks manufactured for domestic use and export have to carry 30 per cent. Purchase Tax in the home market. They feel that this is unfair because wooden desks manufactured for exactly the same purpose have only 5 per cent. Purchase Tax.
They believe that in such discrimination a serious injustice is being done to the manufacturers of steel desks in particular and steel furniture in general. They do not want the 5 per cent. tax on wooden desks to be increased, but feel that Purchase Tax levied upon their own products might be reduced nearer to the 5 per cent. borne by similar products in 1074 wood. I will not pursue the matter any further now, but the hon. Gentleman will hear a great deal more about it in Committee.
The Chancellor said today, "The truth is that we have all been trying to take more out of the economy than we put into it". I will take that as a text for the main part of my speech. The Chancellor would do the community a great service if he had those words framed in letters of gilt and hung in the Stock Exchange, in some of the "posh" hotels in the West End and in the offices of speculators and other sections of the community who put nothing into the economy but draw out of it far more than they ought.
I say that because, in page 37 of the Economic Survey, the Government, dealing with the prospects for the United Kingdom in the coming year, put special emphasis on the need… to start to build up the reserves to a point at which they are strong enough to take in their stride a temporary reverse such as they have recently suffered.The Survey goes on to say thatWe will have to earn more in order to pay for the increased imports which will be needed when the expansion of industrial production is resumed and to compensate for the reduction in net oil earnings that must result from the closing of the Suez Canal.In addition, we have to face the drawing of 561 million dollars from the International Monetary Fund, which means that… even if the terms of trade should improve slightly, exports must be increased more rapidly than in recent years …The Survey further emphasises thatOur prospects … depend mainly on our success in the expansion of exports.Throughout those closing paragraphs the Government are insisting on the need for building up our export trade. With that, of course, all of us on this side are in complete agreement. We want to encourage exports, and we are glad that the Government are emphasising that need. But we do not want unduly to check imports. We do not want to restrain consumption, because, as the Chancellor himself pointed out, the demand must be there if consumption is to be increased.
To a large extent the Chancellor is altering the policy which has been pursued during the last year. According 1075 to the Survey, there will be an attempt to increase production, which was deliberately checked by the Government as an act of policy. That brings me to a matter which I raised yesterday in the House. The Government are emphasising the need for increased exports, and hon. Gentlemen opposite have asked why we are not developing such markets as the North American and Commonwealth markets.
I have no objection to these things being done, but why are we not developing the China market? Here we have one of the greatest markets in the world: a population of 600 million; a Government—as I know personally from contact with their Minister of Trade and Commerce—anxious to trade with us; a Government who are heaping up balances in Hong Kong, and who are entering into trading agreements with many nations in the Far East and Middle East. Yet we, who are expounding the need for exports, have for years been ignoring the fact that in the Far East we have the biggest market in the whole world. Yet, because we are tied to America's coat tails, we are unable to develop it.
It seems strange that when we have produced the H-bomb, which we are to test in a few weeks and defend on the ground that by its possession we will be able to have a foreign policy of our own, we should still leave our trading policy in the foreign field as a sort of guided missile in American hands. I hope that before the Budget debate comes to an end we shall hear from the Government something about the development of our trade with China.
To achieve the purpose which he has expressed, the Chancellor has produced what I suppose he would call an incentive Budget. The query which occurs to me at once is: for whom is the Budget an incentive? One might say that the £24 million to be taken off Purchase Tax will help the ordinary person; but it will help him only once, because, as was pointed out, the concession applies to those types of goods which most people buy very infrequently, or perhaps only once. The children's allowances are only a small affair and so, too, is the over-65 allowance, welcome though it is.
We are all pleased that the aged single person will be exempt from tax up to £250 income and the married couple will 1076 be exempt up to £400. But the scandal is that this decision in respect of the aged completely ignores the 1 million old-age pensioners who get absolutely nothing whatever from this Budget. It is really shocking. They might at least have had some hope given to them. It would not have been hard for the Chancellor to have said that now he is exempting altogether from tax the person who has £5 per week for pension or the married couple having nearly £8 per week, he was thinking also of doing something for the one who has only £2 per week, as so many have. This is one of the gross injustices which lie in the Budget, that these million persons receive in this "incentive" Budget not even a kindly nod from the Chancellor.
I should imagine that at the most the amount which will filter through to the working person from the Budget will scarcely reach £30 million. This is a class Budget. If we look at the other class, what do we find? The allowance of £17½ million which is to be given in respect of children who remain at school will go mostly to those who are able to keep their children at private schools and ordinary secondary schools up to 17 and 18 years of age. They form a not particularly large section of the community.
Surtax relief will bring a total of £34 million to an even better off class, and these two groups alone will command £51 million of the £100 million which the Chancellor is giving away. We have to remember that these Surtax payers who are to get £24½ million from earned income relief, an amount equal to all that is being distributed over the entire community in Purchase Tax remission, represent not more than 700,000 people altogether, yet they get £24 million distributed among them.
The person with £10,000 a year will, under this Budget, get a relief of £600 a year, but the person with £2 per week as his total living wage will not get a brass farthing. That, I suppose, is part of what the Tories call an incentive Budget, and a just allocation of the resources which they are asking the whole community to try to increase. We have a different name for it, but as it is not very polite we will reserve it for a private occasion.
I should like to say a word or two about another relief which has been 1077 granted—the relief of £6½ million to the cinema exhibitors. That is claimed as something which the Chancellor has done to benefit the industry, but, of course, the fact is that the Chancellor has given nothing at all. He is taking £8 million from the television viewer, giving £6½ million of it to the cinema industry, and so making a profit on the transaction He is gaining £1 million of income, and, at the same time, getting the credit for giving away £6½ million.
It is an easy thing to do—give away money which he takes from others; but out of the £6½ million that he surrenders the levy consumes £3¾ million, so that if we take off the levy—and we should remember that the amount that is being given to the industry was to help it with the levy payment—if we take the £3¾ million from the £6¾ million, the benefit to the industry, as I see it, is to be £2¾million, and, to meet that, the Chancellor is taking £8 million from the television viewer.
It is grossly unfair that he is putting a tax on television, which, as one of my hon. Friends said earlier, is not in competion with the cinema at all. Television is appealing more and more to an older type of audience, and will not subtract from the cinema audiences. The big combines in the cinema industry recognise that, and they are bringing their industry into line to fit in with a smaller viewing public. They are adapting themselves to a viewing public of about 20 million per week, because they realise that the marginal audience will hive off and become largely a television audience. I hope that the Financial Secretary will take note of the figures I give, because, later, we will need to get an exact idea of how the £6 million is to be distributed.
Take the case of a Is. 3d. seat. The Chancellor said today that 11d. of the 1s. 3d. would be free of tax and that the remaining 4d. will be shared with the exhibitor on a fifty-fifty basis, so that the tax collects 2d. and the exhibitor gets 2d. Does that mean that the 2d. includes the amount which is charged to the levy? In the case of the 1s. 6d. seat, there will be 3¾d. for tax and 3½d. for the exhibitor. Will the 3½d. which the exhibitor has to pay include the Entertainments Duty and also the levy which is to be imposed by the Bill now in another place? These 1078 points are not clear and I trust that the Financial Secretary is paying attention, so that during the Committee stage of the Finance Bill we will have a clear statement of the Chancellor's intention concerning the levy. Is the levy payment covered by the £6½ million which, he says, will go to the industry?
The Chancellor today appealed for an all-out effort to promote the exports by which the nation lives. We hope that he will get that effort, but one thing that must be made clear is that if he is to get it he will have to have a copper or two in the "kitty," so that, during the Committee stage of the Finance Bill, we may manage to obtain for the working class a better share of their own product than is coming to them so far through the Budget.
§ 9.17 p.m.
§ Dr. Donald Johnson (Carlisle)
I wish to express my appreciation of the Chancellor's Budget proposals. I have to confess to a certain personal interest. It so happens that I am doubly interested, in that in the year when I hope to reach the age of 65, my youngest child will become 12 years of age, and I shall have another older child to support also. That, however, is talking merely of the future. Instead, I should like to say something more of the present on behalf of my constituency of Carlisle.
Carlisle is an isolated place 55 or 60 miles from the nearest big centre of population. This means that the local entertainment industry is of particular importance to us. On that account particularly, we appreciate the remissions of tax which have been announced this afternoon. We have had attempts to provide a live theatre which, it is no exaggeration to say, have been crippled by taxation. The remission will, perhaps, give us the opportunity to have a live theatre occasionally or, possibly, even to keep one going permanently. We have a limited number of cinemas and we have a football team. These sum up the main popular entertainments in our rather isolated city.
One of our very limited number of cinemas has already closed as a result of the effect of Entertainments Duty. Therefore, we greatly appreciate this remission. More important still, we appreciate the remission on account of our football team which has been in very dire straits in 1079 recent years. Like many of the Third Division teams, its existence was being threatened by the recent incidence of Entertainments Duty.
The team's balance sheets for the past three seasons illustrate the sort of thing from which it has now been saved. In 1954–55 the team showed a slight profit, entirely due to the transfer fees from the sale of its best players, which, of course, was mortgaging the team's future. In 1955–56, which was an average year, the team lost several thousand pounds. In 1956–57, which has been a particularly good year through the windfall of cup ties against First Division teams, as much as £4,200 has been paid in Entertainments Duty. Even with that windfall, I understood that the team would do no more than just about break even.
It was quite clear that with taxation of that character the team, which is of great importance in keeping up the morale of a city like Carlisle, faced a very poor future indeed. Now, with the present remission, our local entertainment industry, including the football club and the cinemas, can look ahead to a future which will be entirely different. I am sure that not only those concerned but the whole population of the city will be grateful to my right hon. Friend.
I should like to express my appreciation on more general lines of my right hon. Friend's remission of taxation in the higher brackets, not through any personal interest but because I think that he is giving our young people an incentive not only to work, but, what is more important, to work and stay at home and give their gifts and talents to the country of their birth.
We have rightly devoted a great deal of debate and thought to the question of technical education. Great proposals have recently been put forward for technical colleges and universities to keep pace with our competitors across the Atlantic and in Soviet Russia so that we can train more of our young people in the technical skills necessary to keep us abreast of the times as a modern nation. But what has been the use of educating our young people and of spending this money on technical schools merely to have them emigrate to Canada and the United States because they felt that, once they were qualified, 1080 there were better openings for their skills there, and a better future, with the perfectly proper incentive of considerably higher incomes than they could earn in this country? These tax remissions, which have quite properly started as remissions for people with family and other responsibilities, will be an incentive to our young people to stay in this country. First, there will be the incentive to a technical career and, secondly, there will be an even more important incentive—to use their skill here instead of having to emigrate in order to get the benefit of their training.
It is that principally which has given so many of us on this side of the Committee the feeling, which I am sure will be shared by hon. Members opposite and by people throughout the country, that we are at the beginning of a new era of incentive and opportunity. That is the reason why the proposals of my right hon. Friend have my fullest support.
§ 9.27 p.m.
§ Mr. Edward Short(Newcastle-upon-Tyne, Central)
The hon. Member for Carlisle (Dr. D. Johnson) has spoken about his constituency. I know Carlisle very well and I know many people there. The hon. Gentleman talked about the football team, the cinemas, the theatre, and the higher income levels, but he did not say a word about the old people, the most needy of his constituents. Not a word could he spare for them in his congratulations to the Chancellor of the Exchequer. I have risen tonight simply to add my voice to the almost universal protests on this side of the Committee, that in a Budget in which over £100 million is given away not one penny has been given to the greater part of the old-age pensioners, because it is clear that the Income Tax concession will not affect by far the greater part of them.
This Budget will go down into history as the shameful Budget; the Budget when well over £100 million was distributed but not one penny went to the most needy section of the community. I should not have intervened in this debate had I not felt so deeply about this. Last night I attended a rally of old people in my constituency where there were between 400 and 500 present in their sixties, seventies and eighties. I spoke to them and I collected petition forms. I have given those 1081 to the Chancellor, and so he has received petitions signed by many hundreds of thousands of old people.
Towards the end of his speech today the Chancellor enumerated his proposals and referred to representations that he had received from businessmen, cinema owners and many others. In many cases he was meeting their requests. Yet he had received petitions from hundreds of thousands of old people, the really depressed section of the community, and not a word did he say about them. That is why I think this Budget will go down into history as the shameful Budget.
After the meeting last night my old people gathered around and talked to me. I questioned them about their own personal budgets. I was shocked to find that some of them were spending between 60 per cent. and 65 per cent. of their income on food. Just imagine that. I believe that the retail index allows for 35 per cent. being spent on food, but in discussing the needs of old-age pensioners the index has very little relevance; they spend not 35 per cent. but very nearly double that figure. One old lady said to me, "If it were not for the help I get from one or two of my children I should often go hungry."
That shocked me and made me feel ill. It is shocking that in this great rich industrial community of Britain an old lady should be able to say, "If it were not for my children I should often go hungry". This year we are spending £1½ million on the Royal family, and yet we have people in the country who can say "If it were not for my children I should go hungry". What a disgrace to a modern community that that sort of thing should happen.
These old people have been passed over in the Budget in order to help the £2,000-a-year-plus class. That class are not all able young executives about whom we are always reading in the Daily Express. Many of them belong to the spiv class, the "smart alecs" who have done well in the post-war period. They are the people who are being helped, too. There are genuine young men who want to get on in industry, but I have never accepted the argument that taxation at that level is a disincentive. To argue that there are no opportunities in this country of ours, in this great industrial community, is a 1082 lot of nonsense. There are tremendous opportunities for young men who have guts and courage and the will and ability to go ahead in industry. This sort of help to them is not necessary.
Another factor which we must remember about these people is that they are all trained at the expense of the State nowadays. They do not have the long, expensive educations which they used to have. They are all—doctors, executives, lawyers, teachers, even Ministers—trained at the expense of the State.
We have heard today that £17 million has been allocated from the Budget in order to apply the earned income levels to the Surtax payer, yet nothing at all has been provided to increase the miserable pittance of the old people. I feel that it is a disgrace to a modern community that after a man—or woman—has given his life to the service of the community he should, when he stops work, be placed for the remaining years of his life on the subsistence level. There is something wrong with a society which allows that to happen.
In our working lives we do not work just to earn money. The men who build ships do not use the ships; they are for the use of the community. Our work is a service to the community, and I believe that it ought to be part of the social contract between the worker and the community of which he is a part that when he has finished his work his standard of living will be maintained. Speaking for myself, I believe that it ought not to be regarded as insurance; the old-age pension should be taken out of insurance altogether and should be provided for in the Budget. It is wrong that it should be looked upon as insurance.
§ Mr. Short
As my hon. Friend said, war pensions are an example. I repeat that that should be envisaged as part of a social contract between the members of the community and the community itself.
In the Budget this year we have begun to see the first effects of the great changes which are occurring in defence. Over the next five or six years there will be some very large savings on defence. I have read the White Paper carefully, but I should not like to hazard how much the 1083 saving will be. It must be quite plain that we shall not need navies in the future or the greater part of what at present we regard as an Air Force; we shall need no fighters and very few bombers, and we shall need very small ground armies in the Armed Forces. By 1960 we shall be saving perhaps £600 million or £700 million a year, compared with what we spend now. We have seen the first savings this year.
How is that great saving on defence to be used? If this Budget is any indication, that saving will go not to that section of the community which needs it most, but to the better-off section of the community. Does the hon. Member for Galloway (Mr. Mackie) wish to interrupt?
§ Mr. John Mackie (Galloway)
Yes. Certainly some concessions have been given. The hon. Member ought not to anticipate greater concessions being given hereafter.
§ Mr. Mackie
No, not on the spur of the moment. The hon. Member was here during the Chancellor's statement and I am sure that he will read, mark, and inwardly digest what the Chancellor said.
§ Mr. Short
Is the hon. Member so out of touch that he imagines that old-age pensioners getting National Assistance pay Income Tax? What a commentary on the other side of the Committee that an hon. Member should make a comment like that.
The point that I was making was that in the next few years we shall save hundreds of millions of pounds in our Defence Estimates. I suggest that the greater part of that should be diverted to that section of the community where the greatest poverty remains. After all, 1084 old people represent a sector where the last citadel of poverty in this country remains. This immoral Government— and surely a Government which when it has £100 million to distribute can show so blatant and callous a disregard for the most needy section of the community is an immoral Government—has passed them over. The Financial Secretary to the Treasury smiles. The Chancellor did not use the phrase "old-age pensioner" or "retirement pensioner" in any section of his two-hour speech. The Government have shown such disregard for those people, have passed them over to give bonuses to the men who get £2,000 to £10,000 a year, that they ought to be utterly rejected by the community.
On behalf of the old people in my constituency, I want to say that I am shocked and disgusted that nothing has been done for them in this Budget. If the Government had the guts to go to the country now, they would be absolutely rejected by the electors.
§ 9.40 p.m.
§ Mr. A. S. Moody (Gateshead, East)
I was one of those who came to the House today thinking that there would be a distribution of a surplus and hoping that that distribution would be based on the needs of the needy, but as the Budget speech unfolded, it seemed to me that the surplus was to be given to pampering the greedy, rather than to the needs of the needy. I have very mixed feelings about the whole set-up. I can understand hon. Members opposite congratulating the Chancellor, for although he has been in office for only about three months, he has very clearly found what an unholy mess his two predecessors made of the job, and he has taken some corrective action to try to redeem their failures. The right hon. Gentleman the present Lord Privy Seal taxed pots and pans, but the Government have now found that that was just nonsense and that tax has been removed.
Hon. Members on this side of the Committee have pleaded against Purchase Tax, especially in regard to the furnishing industry. In my area the furnishing trade has slumped very severely because of the credit squeeze. Many firms have changed over from overtime to short-time working, and many people have left the industry because they could see no hope in its future. The trade union which 1085 caters for the furnishing trade reports the loss of a considerable number of craftsmen, who will never return to the industry.
All the other concessions are simply adjustments in respect of past Tory failures. After the damage has been done to the furnishing trade the Government decide to make some concessions. These should have been made three years ago, or the duties should never have been put on in the first place. We are grateful that at last the Chancellor has given way to representations from all sides in regard to the tax upon the living theatre, but in any case it was a tax which looked like disappearing. Some of the old theatres, which have been of great educational and entertainment value for many years, have had to close down. As we come to this House by omnibus we may pass the Stoll Theatre, which has had to close because of the penal Entertainments Duty imposed upon the living theatre. When the damage has largely been done and the tax has therefore almost disappeared, the Chancellor decides to take it off altogether.
The same story can be told in respect of sport, and in regard to Third Division football in particular. Last week at the First Division match at Birmingham there was an attendance of just over 6,000 people. Birmingham usually has an attendance of from 25,000 to 30,000. I believe that it is merely because of the fall in revenue from sport that the Chancellor has decided to ease the tax.
To take the burden of tax from the living theatre and place it upon persons who own television sets is not fair. Many working men and old people have scraped and saved upon the monthly instalment system in order to purchase television sets. They paid a good price for them, and a good part of that went in Purchase Tax. A television set is not cheap to buy, and a licence fee of £3 a year is plenty to have to pay. It is an imposition to impose an extra £1.
If the B.B.C. is being run at too high a cost there are better ways of dealing with the matter. We have only to think of the salaries paid for a half-hour appearance on "What's My Line?", where the same stock questions are asked every week, or to read the contracts made 1086 with artistes who are paid first-class salaries to take part in second-class programmes and who very often give third-class performances. If the television service is not paying its way the Government should have looked in the direction of making cuts in the ways I have mentioned rather than have imposed an extra £1 upon the licence fee and, therefore, an extra burden upon the people who have bought their sets with difficulty and have a struggle to maintain them.
What shocks me most of all are tie omissions from the Budget. Thieving from the Road Fund was mentioned casually this afternoon. Surely it was not beyond the wit of the Chancellor to promise that in the near future he would produce an imaginative scheme for the development of British roads.
There is also, as my hon. Friend the Member for Wallsend (Mr. McKay) has told us, the question of the old folk. The Chancellor knows, and the Minister of Pensions and National Insurance knows, that during the last two months old-age pensioners' organisations all over the country have held mass meetings which have been about the best attended meetings held in this country for a long while. The poor old people have gone around and obtained literally millions of signatures; they have made their final great effort, really believing and expecting that after what they had been promised in interviews with the Minister of Pensions and National Insurance they would get some substantial consideration in this Budget. But the Budget contains no mention of them. This Budget is a failure because it gives exactly nothing to the mass of the workers of this country.
The Budget may please hon. Members opposite because it brings relief to the people with whom they mostly associate but who are not what we would regard as needy people. The Budget has neglected the needy and pampered the cause of the greedy. It is lacking in soul, in imagination and in the spirit of generosity. It is those in distress who have the right to expect help from any responsible Government. Therefore, I say that the Government should go to the country, if they are so convinced of their greatness, and give to those people whom once again they have cheated an opportunity to pass judgment upon them.
§ 9.47 p.m.
§ Mr. John Mackie (Galloway)
I listened with very great interest to the impassioned speech of the hon. Member for Gateshead, East (Mr. Moody), but before I deal with anything that has been said by hon. Members opposite may I say that I listened with very great interest and, on the whole, with general agreement to the speech of the Chancellor of the Exchequer this afternoon?
In his preliminary remarks, before he came to any question of tax relief or what he was about to do for this, that or the middle section of the community, my right hon. Friend made great play— if that is not too flippant a phrase to use —with the fact that the credit squeeze was to be maintained in full severity. I should like to enter this mild caveat that I would hope that before another Budget comes round—and I quite agree that he has been in difficulty with the bankers, as he told us himself—he will realise that with regard to certain industries, particularly the industry with which Scotland is most concerned, agriculture, the credit squeeze has had certain bad results.
It has resulted, particularly so far as some of the smaller farmers are concerned, in their not being able to develop their farms or agricultural enterprises as fully as they would have wished. I quite realise that in the present economy there is no desire by the Government or the powers that be that certain branches of the agricultural industry should be, to use an old-fashioned phrase, hyper-trophied. At the same time, I do not think that the Chancellor or those of us associated with him would wish to penalise, so far as the banks are concerned, those farmers who are just "pegging their way" in the industry and on their own farms, in the purchase of further mechanical devices. The ordinary farmer who is credit-worthy should be granted the accommodation he desires. I am perfectly certain that that is the case with dairy farmers and, to a certain extent, sheep farmers, in southern Scotland.
I welcome the Budget generally, I think the speeches of hon. Members opposite, particularly in the earlier stages of this debate, have proved that they are somewhat disappointed that the Chancellor has gone so far as he has gone in giving 1088 certain concessions, especially to theatres and cinemas.
§ Mr. Mackie
Certainly, but I am glad to think that we are on a party basis and have not a Coalition Government, although no doubt hon. Members opposite would welcome being called into a coalition as they realise that their chances of success at the next General Election are diminishing day by day. I can quite understand the interruption of the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short). Suggestions were made by the hon. Member for Gateshead, East, for whom I have a great respect, that the allowances, or concessions— whichever word we like to use—to old folk were completely inadequate. I do not for a moment agree in that respect
§ Mr. Mackie
The hon. Member for Newcastle-upon-Tyne, Central will no doubt interrupt me if he desires. I say that this is a first instalment.
§ Mr. Mackie
I have not been fully into that, but I realise that the deputy Leader of the Opposition this afternoon welcomed the provisions in regard to old-age pensioners so far as they went. I associate myself with him 100 per cent. I hope that the concessions, or allowances, or whatever word is most appropriate to use, are only a foretaste of what will be forthcoming if the present Government continue in office and if their handling of our financial affairs continues to be as satisfactory as it has been up to the present. Of course I make the reservation about the credit squeeze.
Before I was interrupted by the hon. Member for Newcastle-upon-Tyne, 1089 Central—I make no objection to his intervention—I was about to say that I welcome the concessions to theatres and, more particularly, to small cinemas. By having made that concession, the Chancellor of the Exchequer has acted very wisely indeed. The deputy Leader of the Opposition congratulated him this afternoon. Therefore, it would not be out of place for me also to offer my congratulations.
I speak for a rural area. The hon. Member for Newcastle-upon-Tyne, Central speaks for an urban area, but he will agree that in rural areas it is essential that the workers, who have very little opportunity for distraction, should have an opportunity to see cinematograph displays at an admission charge which is not unduly high. During the last two or three years I have had many representations on the point from cinema managers in my constituency. I am not throwing any bouquets, for I have never done that during the twenty-six years that I have been a Member of Parliament, but I think that this afternoon the Chancellor went a great way towards meeting the reasonable claims of those people.
Subject to my reservation regarding to the credit squeeze, I am very pleased to welcome the Budget proposals.
§ 9.56 p.m.
§ Mr. Frank Allaun (Salford, East)
I do not wish to follow up the remarks of the hon. Member for Galloway (Mr. Mackie), because I want to deal with the fundamental issue of the Budget. It is a rich man's Budget and one which will never be forgiven by the old-age pensioners. The Chancellor has ladled out caviare to the man on £2,000 a year, but not a sausage to the man on £2 a week. The right hon. Gentleman is giving to those with imagined need, but giving 1090 nothing to those with biting, desperate need.
Members of Parliament are sent to the House of Commons to better the lot of the people. By that, surely we mean the poor and the weak, because those in other sections of the community have obviously been able to do without our help. Surely, to overlook the lot of the poor and to help the rich contradicts the principles on which we were sent here.
We hear a great deal about the Welfare State, but if the Chancellor ever goes round the back streets of our cities he will find that the Welfare State still has a mighty long way to go. Even the foundations of the Welfare State are now being destroyed. There is bitter poverty, particularly among old-age pensioners. Hon. Members must agree that they are the worst hit; indeed, they are the "submerged tenth" of 1957.
What will the old-age pensioners be thinking this evening as they listen anxiously to the news? I have here this month's issue of the "Old-Age Pensioner", the organ of the National Federation of Old-Age Pensions Associations. Its leading article states:What will the Budget give? Pensioners are most concerned. Budget Day, on 9th April, is awaited anxiously by the whole nation but by no section more animatedly than the old-age pensioners. They wait with bated breath and fluttering hearts for action by the Chancellor of the Exchequer that will bring immediate help to this vast army of veterans who have materially assisted to make the country great, rich and prosperous, but who have been left far behind in the inflationary cost of livingThe article goes on —
§ It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
§ Resolutions to be reported Tomorrow.
§ Committee also report Progress; to sit again Tomorrow.