BUDGET STATEMENT (Hansard, 3 April 1963)

§ The Chancellor of the Exchequer (Mr. Reginald Maudling)

I hope that the Committee will bear with me if, for reasons which I will explain, I depart to some extent from the conventional pattern of the Budget statement. It has become customary not to announce tax changes until some way through the speech. The Budget statement has also continued to be influenced by what Aneurin Bevan once described as the conventions of a pastoral society, which regarded the Budget solely as an annual set of accounts, and treated tax changes as incidental to the presentation of these accounts.

The purpose of the Budget has, of course, for some time now been universally recognised as being far wider than this. The issues with which any Chancellor must deal cover our whole economy, and any tax changes should be incidental to these wider issues. Nor, as a matter of practice, is there any reason why tax changes should not be announced at the beginning of the statement.

I must as usual present the annual Exchequer figures and we must provide for the annual renewal of Income Tax, I regret to say. But the drawback of the conventional pattern is the danger of confusing necessary annual details and statements with the broad economic picture, and the tendency for tax changes, large and small, to be jumbled together at the end of the speech. To my mind, this can obscure the main theme and purpose of a Budget, which should be crystal clear.

The theme of this Budget is expansion: expansion without inflation, expansion that can be sustained. Of the need for economic expansion, there can be little question. If we are to play our full part in this dangerous world, if we are to build for our own people the standard of life they desire, 455 if we are to increase our aid to the peoples of Africa and Asia who still count in shillings what we count in pounds, then we must have more rapid and more steady economic expansion.

The purpose of the Budget can also be clearly stated: it is to do the Government's part in achieving the rate of growth broadly described as the 4 per cent, target, which we have already accepted in the National Economic Development Council.

I am confident myself that this is not only a desirable target, but also one that can be attained, and attained without any strain upon our currency, if we as a nation have the will to achieve it. Indeed, I would go further. Not only is it untrue that expansion and a strong pound need conflict: in fact, the two depend upon one another. Sound expansion without inflation will not weaken sterling, but strengthen it.

I stress that this is a task for the whole nation. Of course, the Government have primary responsibility; of course, we must take the initiative. But Government policy alone cannot achieve the objective. We must have the cooperation of management and of unions in bringing British industry up to the peak of efficiency and in assuring the stability of incomes, and, therefore, of costs, which is quite essential if we are to win the exports upon which this rate of growth depends. This co-operation we seek not by appeals, but by action, action that will pave the way for a joint effort.

The purpose of the Budget is, therefore, to do the Government's share towards this target of a 4 per cent. rate of growth in the confident belief that as the Government set the lead so management and unions as well will join in a national drive to achieve a national objective.

These are the reasons why I intend to depart from the conventional pattern of a Budget statement. I propose before coming to the main theme, which I have just described, to deal with a number of matters small and large, including a number of tax changes. They must be dealt with in this Budget, and some of them are very important, but these items are extraneous to the main theme, which is economic expansion.