From Socialist Review, [12th Year No. 5,] May 1962, p. 5.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
So much of Government’s expenditure is earmarked years in advance that the budget can’t effect major changes, economically speaking, from year to year. Of the total outlay last year, just under one-quarter went on an inflexible arms budget, another eighth on interest charges (mainly payment for past wars), another sixth or more on long loans to nationalized industries, private firms and so on, and under one-half on all the rest of civil administration. Even here there is little room to manoeuvre: civil service pay, provision for education, national assistance, national health, roads and the rest are pretty well inflexible and determine very closely what the Government is going to take in taxes.
In other words, there is litle interest in the budgetary ‘what’. The totals are well known in advance. What might be interesting is the ‘who’. Who is made to cough up when the Chancellor stretches out his hand ‘ready to receive’ like the judge in the Caucasian Chalk Circle? Even here the budget usually holds few surprises. The Tories don’t need the long Thursday afternoon rigmarole to shift the load from their class to ours: the Rent Act which transferred £100 million per year from tenants to landlords was not a budgetary measure, nor was the pay pause, nor the increase in Bank Rate nor any of the other steps which squeezed part of the pay packet into the pig-skin wallet. Not that the budget is neutral: reducing purchase tax on luxuries and raising it on furniture as in the last one is not a random choice. Still, it’s to be expected from the Tories ...
What is highly interesting though, is the use of budget day as a pivot in Tory election strategy. Two things are important here. Tory success at the polls is entirely dependent on their being able to suffuse a ‘we’re all middle class now, and prospering’ fog amongst workers. Since next year is election year and the stock market has recently been the scene of rich and publicized killings, the Chancellor thought it politic to reinforce the ‘equality of treatment’ strand in Tory policy. Hence his ‘capital gains tax’ which, as the Economist points out ‘is an optional tax, easily and legally avoided, and for some easily and illegally evaded’.
But who cares? The Tories aren’t interested in the money, but in purveying a feeling of equity; not in taxing their class, but in letting ours know that we’re not the only ones to be docked. The Chancellor explained his case lucidly:
While the main junction of any system of taxation must be to bring in revenue, it must also be designed to produce a feeling of broad equity of treatment between taxpayers. At present, it is pretty widely felt to be inequitable that those who supplement their incomes by speculative gains should escape tax on those gains. I do not think that they should continue to do so; and I tell the Committee frankly that it is on this account and not mainly for the yield, that I put forward this proposal.
The second electioneering aspect of Lloyd’s budget lies in its drabness. Little was given, little taken away this time. But next time, April 1963, what an orgy of tax concessions there’ll be! The promised abolition of Schedule A (a tax on mainly middle-class owner-occupiers) and the raising of the surtax floor will conjoin bountifully to save the middle class from Liberalism. A possible penny off beer will, it is hoped, send workers reeling to the polls holding Tory tickets. And the normal Tory barn dance will be stomped through: April budget (expansive) – Spring election (Tory victory) – Autumn budget (cruel and deflationary).
The Tories have served notice of their intentions. What the Labour leadership is doing about it is a mystery. Not the faintest ‘peep’ to contradict the ‘one class, one nation’ humbug; and not the shadow of a policy to fight the next election on – or are they waiting for the Liberals to helm them to their seats?
Last updated on 18 February 2017