THE NATION'S WEALTH
Help off the hook
BY 'AN ECONOMIST'
Since the Finance Bill, published earlier this week, proved to contain few surprises, the debate in the House on this year's historic Budget now drops into some obscurity, as the clauses of the Bill are argued to and fro, one by one, until early June.
There will be little further discussion of the Government's general economic strategy, therefore, until lain Macleod's dictum— quoted by Mr. Jenkins in his attack on Mr. Barber's proposals, 'that all budgets which looked good in April looked bad in July and vice versa'—is put to the test.
Cynics may say that the 1970 Budget, in- troduced in he last days of March, already looked bad in the first days of April, but that would be going too far. All the same, ap- • prehension about the present economic • strategy has gained ground rapidly and a significant section of the Tory party is clearly uneasy about it.
The structural weakness of current policies is clearly inflation. Inflation is the most cor- rosive agent ever invented, sufficiently powerful to destroy much more robust economic systems than this one, and in the cruellest possible way. Inflation causes distress and impoverishment, particularly to the more helpless members of society. Infla- tion is good to those who already own land, houses, cars and other material things, but for many more, inflation brings poverty. All of which, together with a re-reading of backbenchers' contributions to the second, third and fourth days of the Budget debate, brings one to the enigma of the week.
Why does the Labour party refuse to iden- tify itself with the victims of inflation, who in many ways are just those people whom the left normally imagine depend on it for their political voice? The way the price level is going, and is likely to go-9 per cent up last year and about the same again for the next twelve months—means that the Government is defenceless to any attack on this point. Not only has the attack failed to develop, but the Labour party may yet even manage to help the Government off the hook on which it could be painfully and permanently impaled. So—to make the paradox almost unbearable—the attack which the Labour party should have made in the House was made instead by Mr Powell (brilliantly), Mr Turton (solidly) and Mr Biffen (roguishly). How have we arrived at a situation in which it is Mr Powell who defends the trade unions, while the left wishes to shackle them with an incomes policy?
The full debate suggests a number of reasons, one of which was the tactical disposition of Labour's forces. It was almost inevitable that Mr Jenkins should lead his troops on to the field under a banner bearing inspiring words such as 'socially divisive', and 'a budget for strengthening inequality'. As a result, seasoned campaigners in the Labour party went automatically into the drill by numbers of 'good for the Stock Ex- change', 'the Chancellor's freebooting allies in the City', 'a gambler's budget', 'a gravy train for the rich', etc.
There are two real explanations for the paradox. One is the desperate conservatism
of the left and the other is that most Labour backbenchers—and many Tories too—are really half in love with easeful inflation. The left's conservatism was epitomised by Mr Joel Barnett. who mourned the demise of SET, corporation tax, and the ending of investment grants. He attacked the idea, which he agreed was widespread, that tax reforms might be a virtue in themselves. 'I do not welcome the reforms for their own sake', he said. If Mr Barnett could express himself more strikingly he has a good chance of appearing in a dictionary of quotations alongside the Duke of Cambridge who, it will be remembered, about a hundred years ago asserted that 'all innovation is to be deplored, however beneficial'. Other members of Mr Barnett's party equally deplored each and every change in Labour's tax edifice introduced by the Chanceller.
Above all, however, it seems that the left likes inflation. In an emotional way it feels that inflation provides more employment, is better for growth and is a great leveller, none of which is true. In contrast, monetary policy, which could and would stop inflation, is rather nasty, because it means charging money for using money, which is usury. If the left's dislike of monetary policy is ir- rational. it must at least be said that the op- portunities open to the Government during the Budget debate to explain further what monetary policy can do, if allowed to, were completely, missed by government spokesman. On this subject the Treasury front bench collectively resemble the poor cat in the adage. 'Letting "I dare not" wait upon "I would". They won't be able to wait much longer. Inflation is provoking more and more discontent. Cats may have nine lives, politicians don't.
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