HC Deb 03 April 1962 vol 657 cc199-200
23. Mr. H. Hynd

asked the Chancellor of the Exchequer what improvements in production and exports have resulted from the Government's policy of concessions to Surtax payers and the pay pause.

Mr. Brooke

The Government's purpose is to increase our efficiency and competitive power. The trend of industrial costs is certainly more favourable to exports than it would have been without the pay pause. We now have good prospects for an expansion of production based firmly on export growth; and the Surtax changes which will take effect next January, bringing our tax system more into line with those of our principal competitors, are an extra incentive to make full use of these opportunities.

Mr. Hynd

I hope that the Chief Secretary's optimism will be fulfilled, although it does not seem to have a very sound basis. Will he take the opportunity of next Monday's Budget to withdraw the concessions promised to Surtax payers so that they will be able to take a fair share of any sacrifices which may be necessary to bring the country out of the financial mess into which the Government have got it?

Mr. Brooke

The Government have taken all the right measures to create the most favourable conditions for an expansion of export trade this year. I cannot hold out any special expectations one way or the other six days in advance about the Budget.

Mr. Mitchison

Since the Government's policy was introduced production and exports have fallen. Is that what the Government meant to be the effect?

Mr. Brooke

What the Government meant to do was to end the weakness of sterling. Sterling is now strong and people on the Continent are envious of the favourable position into which we have now got ourselves, thanks to the Government's measures.

Mr. Ridsdale

Is it not a fact that since the pay pause our costs have improved greatly relative to what has been happening in Germany and elsewhere on the Continent?

Mr. Brooke

That is absolutely true, and it is fundamental.

Mr. Jay

Is it not rather a striking comment on the Government's policy that in the year in which the biggest Surtax cut was announced for twenty years there has also been the biggest fall in production in this country for twenty years?

Mr. Brooke

The Surtax cut has not yet taken effect. As I have said, we are better placed for a big increase in exports than any other large industrial country in the world.