THE TABLET, April 14th, 1956. VOL. 207, No. 6047

HE TABLET WEEKLY NEWSPAPER & REVIEW

Published as a Newspaper

Pro Ecclesia Dei, Pro Regina et Patria

FOUNDED IN 1840

APRIL 14th, 1956

NINEPENCE

In a Cold C l im a te: The Chilly April Visit B uddhism and N a t io n a lism : A Report from Ceylon. By I. T. S. Crowther A noth er S ov ie t V isitor: The Armenian Catholicos. By M. A. Doughty Teachers in C o n fe r en c e : Salaries and Status. By C. E. Robin

Enter th e C a th o lic L aw y er : A Quarterly from the United States From R ugby to R om e : Dr. Arnold’s Convert Son. By Margaret M. Maison C r itic s’ C o lum n s : N o teb o o k : B ook R ev iew s : Letters : Chess

BEFORE THE BUDGET

I N all the long history of the Exchequer the problem that now faces successive British Chancellors is something new. It is how to check spending without making people feel that they are worse off. If spending is not checked, imports outdistance exports, for spending abroad is a very large part both of current food consumption and current amusements and of business activity. Thus it is sound to import steel to make motor-cars, provided those motor-cars can be sold abroad ; but for the last few years it has been proving harder to sell cars abroad and very easy to sell them in England. This is something that is to the interest of wage-earners in the motor industry, who are now calling on the Government to lift its restrictions on hire purchase, and of the British public, which likes cars. But it creates a serious balance-ofpayments problem.

Mr. Macmillan, like his predecessors, has really to find ways of off-setting the advantages which the Welfare State has b rought; ways of taking away with one hand what is given, or seems to be given, with the other. Desperate exhortations to save are made to people who for a generation have been told that it is all wrong that they should have to save, and that the Government will see to it that those who have not saved shall not be markedly worse off than those who have ; that those who have shall have their unearned income taxed, and their pensions docked, and that all alike, the thrifty and the unthrifty, are entitled to the best in health and education for themselves and their children. If all this is axiomatic to the two parties, how thin the case for saving becomes ; and if there is not sufficient voluntary saving the Government is left to devise ways of compulsory saving, which means taking away the money which people hoped they were free to spend now that such a number of the major expenses of life have been covered for them by weekly payments, employers’ contributions, or grants from the taxes.

Mr. Macmillan is driven to tackle the demand for imports, because if he shuts imports out he invites retaliation from abroad, and this is something which British exports must not be asked to face.

Labour Party economists, notably Mr. Douglas Jay, try to suggest that the trouble has all come about through the reliefs, small as they are, which Mr. Butler gave last year to industry. Mr. Jay and his friends say very little about current consumption by the mass of the population, although it is that which would worry them if they were at the Treasury. The Labour Party’s remedies are to increase taxation on that section of the community which will not vote for them anyway, and in particular on business. They show no recognition that one great source of our troubles has been that heavy taxation of commercial activities makes it to the interest of business to spend money on whatever may create goodwill, with either the public or their staff, rather than pay the money over in taxation for which nobody will ever thank them. Great taxes on profits, in addition to standard income tax, are a direct encouragement to business to seek not profits but growth, to spend more than would otherwise be spent on salesmanship and public relations, to join the scramble for staff which has forced up wages and thé rate of pay for quite elementary services.

The truth is that, politically inexpedient as it may be, the balance of economic advantage for this country will be found to lie in reducing company taxation so that those in charge of the business of the country become as anxious as their grandfathers used to be to get the maximum advantage from every pound, to see how much they can do with how little outlay.

But today’s Chancellors are really men of whom too much is asked. It was thought to mark a great progress over the ruling ideas a quarter of a century ago when the Treasury came to assume more and more responsibility, not only for the finance but for the economic activity of the country, a change registered by the creation of the office of Economic Secretary by the side of the long established Financial Secretary to the Treasury. But now the office is becoming something more, and the Chancellor finds himself preoccupied with incentives and disincentives, and has to tell the public what it is appropriate for them to aim at. The heavy hand of the Government lies across the whole intricate network of British banking machinery, telling those in charge of it to