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Summary

Volume 486: debated on Tuesday 10 April 1951

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I must now summarise these proposals to see whether they represent an adequate contribution to the solution of the problem with which we started. The gap to be filled was, as the Committee will remember, £150 million. This was increased, by the changes in pensions which we propose, to £170 million, but I have estimated also that the additional corporate savings which should result from the increase in the Profits Tax will amount to £30 million, and therefore reduce the gap to £140 million. [ Interruption.] As some hon. Members appear to be leaving the Chamber, I would say that I fully appreciate the ordeal through which the audience has had to go.

The tax changes which I have proposed should yield, in 1951–52, an additional £61 million from Customs and Excise duties, and an extra £77 million in the field of Inland Revenue—a total of £138 million in all. In terms of the conventional Budget, they will turn an above-the-line deficit of £99 million into a modest surplus of £39 million. In terms of the alternative classification which, as I have explained, gives us a much truer picture of the current expenditure and revenue, they produce a surplus on current account of £224 million which in my judgment is about what we require.

The Committee has accompanied me very patiently on this long journey through such a maze of facts and figures and explanations and arguments. I will not detain hon. Members for more than a few minutes longer.

In the circumstances in which we have been placed this year it was impossible for the Budget to be both honest and popular. I know that this Budget will not be popular, but I claim that it is honest. It is honest because so far as fiscal policy can do so, it will protect us from inflation. It provides on the best judgment I can make at least sufficient, though no more than sufficient, of a Budget surplus on current account to bring our national savings up to the level required to avoid inflation. It is also, I would argue, a sound Budget, in so far as it deliberately assists, both by its general anti-inflationary character and by some more specific measures, the transfer of resources to defence.

I claim, too, that it is a fair Budget. It does something to help those who are most hard hit by rising prices—those with low fixed incomes. The proposed increases in taxation are admittedly severe, but they are not crippling, as they would, I fear, have had to be if we had also substantially increased the subsidies. Moreover, the incidence of the new taxes which fall admittedly most heavily on the better off, must be judged in the light of the decision not to increase the subsidies—a decision which, of course, affects all consumers, but presses more hardly on those who are not so well off.

This Budget will be the subject of prolonged argument here in this place, on the platform, in the Press, in the country. That is as it should be. That is the way in which we in this island go about our democratic business. But let the arguments be frank and fair; let the real alternatives be posed against each other so that people may judge more easily and clearly between them. If anyone thinks that the right way to meet the cost of defence is to lift the burdens I am proposing to lay on some shoulders, and impose them instead upon others, let him say so and say why. That is fair and honest. What is not honest is to pretend that you can do the lifting without the re-imposition.

Again, if anyone thinks that even in this time of rising costs Government expenditure should be cut substantially, let him say so, and say particularly where and how it should be done. That is fair and honest. But it is unfair and dishonest to base a self-righteous demand for cuts on rhetorical generalities, supported by a few flimsy and trivial illustrations. It is worse still, of course, if the evasion is openly justified by the brazen plea that to say what you really mean would cost votes.

And let us not altogether forget in the forthcoming debates the setting of this Budget. It is a setting physically remote from this Parliament of ours, but spiritually it is very close, for the setting is the clash and conflict between the two great forces in the world today—between Soviet imperialism on the one side and the Parliamentary democracies on the other.

It is this clash and the particular episode in it—Korea—which has imposed upon us here in Britain the need to turn our industries to defence and to call up our young men from their jobs and their homes. It is this clash, which, working through the huge demands of re-armament everywhere, has forced up the prices of materials and food throughout the world, and has also led to shortages of materials which hold back our rising production.

In all this, of course, we are not alone. In Europe and in the United States itself the same economic difficulties are to be found, springing from the same political forces. That is the plain and simple truth. Re-armament in peace-time does not come easily to democratic peoples, especially so soon after a major war. The popular urge to relax, the pressure for higher and higher living standards, the absorption with domestic issues, are all powerful influences which weaken the will to re-arm. And we must face it; the very process of democratic government to some extent encourages all this—often, in the past, with fatal or near fatal results. It has happened many times in history that democracies have played, while dictatorships have prepared. It is our responsibility and our opportunity, all of us, to see that this does not happen again.

Let us in our debates have some regard for the vital importance of keeping all sections of our people united on the necessity of doing what has to be done. Let us keep them satisfied that their political leaders—all of us here are in that sense political leaders—think too gravely of the issues at stake to use them as occasions for merely playing politics. Heavy as our new burdens may seem at times, how small even they are when set against the greater issues which lies behind them. If by these measures we can save the peace—as we believe we can; if we can protect ourselves from the nightmare of the police state, so utterly destructive of all that we value most in human relationships, there is not one of us here that would not cheerfully accept the burden, and far more too.

In all our debates and discussions, heated and prolonged though they will be, let us remember the great moral issues which lie in the background and let us shape our conduct accordingly so as to inspire our friends and confound our enemies.

It is now my duty to put the appropriate Ways and Means Resolutions to the Committee. I assume that, in accordance with recent practice, hon. Members have now received a copy of the Resolutions and that the Committee will be agreeable to my putting them in a shortened version.