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Volume 463: debated on Wednesday 6 April 1949

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I can now turn to the summary of the financial results for which I have planned, by the various changes that I have indicated. Overall there is just a balance, with a small surplus of £14 million for the year, after meeting all Government expenditure, capital and revenue. On the conventional Budget basis the surplus would be £470 million; but on the true revenue basis it shows a disinflationary contribution of some £492 million, which can, I think, be regarded as satisfactory to continue with our purpose. I very much wish that the facts of the situation had enabled me to present a more attractive picture to the Committee and the country. But we have to face our economic and financial problems with realism, and must not allow ourselves to be carried away by the quite understandable desire to court electoral popularity. Nor must we jeopardise our hopes of recovery and prosperity over the long-term by a too hasty desire to anticipate the benefits of what we have already accomplished.

We have chosen, quite deliberately—and in this all parties have participated—to have our benefits in the form of extended social services, extended on the widest scale, and bringing untold benefits to the people by way of increased comfort and easement of their conditions. This has been accomplished partly by increased production, and partly by a redistribution of our national wealth; and we must face up to the consequences of this deliberate choice. Each year, and year after year, we must provide, out of taxation, the money required for these services and for our defence; while, at the same time, we must maintain our overseas trade, invest sufficient moneys to restore and enlarge our capital equipment, both social and industrial, and provide ourselves with the best possible supply of consumption goods.

We are thus faced with a choice as to how we should distribute the national product. There are many who suggest that we should allow the individual, the wage-earner, the salary earner, and the profit earner, more to spend for himself by reducing the charge upon him by way of taxation. But that can only be done at the expense of our social services or of our defence. The need, in the existing circumstances, for an adequate defence cannot be doubted, and we are therefore thrown back upon the question of how much we should spend upon the social services. It has always been the policy of the Labour Party to expand the social services, as the best and most certain means of redistributing the national wealth, and it is unthinkable that we should go back upon that policy. Nor must those who support it allow themselves to be drawn into demanding remissions of taxation, if those remissions leave an inadequate sum available to provide the social services to which we are all so fully pledged.

From a financial point of view, this means a large Budget, and high taxation. From an economic point of view, it means that we must create an ever greater national wealth, so that the individual load of taxation may be diminished in proportion as our national wealth grows. We must, therefore, regulate the speed of the development of our social services by the rate at which we can increase our national wealth. It is by a better organised productive effort that we shall provide ourselves with the means to meet and discharge these new social obligations, which we have willingly assumed as a community, not temporarily, but for all time.

We thus enter upon the fifth post-war financial year with tremendous achievements to our credit; for not only have we, as a result of the policies adopted, travelled a long way on the road to economic recovery, but we have, in addition, carried through, and paid and provided for, the greatest programme of social services ever undertaken in any country in so short a period of time, while at the same time surpassing all previous records for exports and for capital investment at home. A people with that record need have no doubts as to their capacity to meet and overcome the many difficulties which must still be faced. We have proved that the wise and progressive policies of democratic socialism can do more for the workers and for the country than any alternative which offers. This Budget is designed to carry on with those policies, and to consolidate the economic gains that we have won; and it is in that spirit that I ask the Committee to give it their support.

It is now my duty to propose the necessary Resolutions to the Committee. For the convenience of hon. Members I have arranged for copies to be handed round, and with the agreement of the Committee I propose to put the Resolutions summarily, as has been the recent practice.