One Economic Straw
From the whole Economic Survey for 1953 a single sentence, fiat in phraseology put potentially explosive in content, stands out. It comes very near 'the end of the Survey of policies and prospects for 1953 and it reads, " Now that total demand is no longer ekcessive, economic activity has become much more directly dependent on the assessment made by business people' of economic prospects, for changes in business expectations can have far-reaching effects on stocks, and through stocks on production." This sentence has been seized upon by the finan- cial crystal-gazers, who, regardless of the dangers of reading too much into the words of a Chancellor as guarded as is Mr. Butler about the disclosure of his intentions, have markt. 1 it as the one possible _indication of the nature of the forth,:oming Budget. Let it be conceded at once that in this case reason is the supporter of hope. Not only in times of moderate demand, but at all other times as well, the view which business takes of economic prospects is important—and none the less important for having been 'often ignored in the past eight years. The Government wants it now to be more venturesome. So what is more reasonable than that taxation, and in particular the taxa- tion of enterprise, should be reduced ? The guess that that is what this crucial sentence means is, to the business community, almost irresistible. Yet even if the Chancellor had in fact decided to be kind to business people, he could not by that means alone ensure that there would be a new spurt towards higher productivity.' The tendency to assume that more profits simply mean lower personal consumption is very strong in' the trade unions, in the Labour Party and among the rank and file of the workers—and the Budget is a political as well as a financial, pronouncement. The political situation is under control at the moment. The economic successes which the present Government have scored and which ' are set out in the Survey have strengthened their grip on the House and on the country. The Chancellor can himself afford to be a little more venturesome than he was last year. But just how venturesome he can be is still a matter for very subtle calculation.
