SPECTATOR'S NOTEBOOK
NIGEL LAWSON
By a most curious coincidence, the charges against the Sunday Telegraph (and others), arising from that paper's publication of the Scott report on the state of the Nigerian army, are scheduled to be heard at the Man- sion House on the twenty-second of this month—the very same day fixed for the Owen case, in which a Labour MP is accused of passing secrets to the East Germans. I'm afraid that this freak of chance has led some who ought to know better into base and baseless speculation about the Government's motives in bringing charges against the Sun- day Telegraph in the first place. But regard- less of whether or not the paper is guilty, which it would be improper to discuss, the question of the Government's motive in de- ciding to issue summonses in this case is one of major public interest.
For governments in the past have always made a point of using the notorious blanket Section 2 of the 1911 Act very sparingly in- deed—certainly so far as the press is con- cerned. Four months ago, for example, the Attorney-General was asked in Parliament whether he would proceed against the SPEC- TATOR for 'publishing official information concerning the Department of Social Secur- ity in contravention of the Official Secrets Acts' (this was a reference to the articles by 'Robert Odams'). The Attorney-General said that he wouldn't, and pointedly gave no reason. Fair enough: it's when there is a prosecution that a justification is called for —and then on explicit national interest grounds.
Now it could well be held that this coun- try's national interest is served by improving relations with foreign governments (such as, for example, the government of Nigeria). But to employ this conception of national inter- est to justify proceedings under the Official Secrets Acts would be to set a most danger- ous precedent. For it would imply in effect that the interests or convenience of a foreign government could determine whether the British Attorney-General uses his discretion- ary power to bring proceedings under the British Official Secrets Acts.
Marginal comment
The response to our 'Robert Odams' articles underlined, incidentally, the widespread dissatisfaction there now is, not merely with the 'welfare rackets', but also with the way the supplementary benefits system works even when it is not technically being abused. At the same time, the once characteristically middle-class disgruntlement at the level of taxation has become a national complaint. All this has been a cause of considerable distress and astonishment to the more socialistically-inclined members of the pre- sent Government. Their surprise, at least, may be lessened if they take a look at Pro- fessor Prest's recent (and very largely ignored) pamphlet 'Social benefits and tax rates'.
Published by the Institute of Economic Affairs, whose contribution to intelligent politico-economic debate in this country is immeasurable, the pamphlet argues, with the aid of impressively complicated tables of examples, that 'contrary to popular belief, a sizeable number of families is. actually or potentially, taxed in effect at very high marginal rates'. The marginal rate is tech- nically the extra tax on extra income; and it is clearly this rate that destroys incentives and creates disgruntlement. Professor Prest makes his discovery by looking at the not effect of income tax and cash benefits— since many cash benefits are related to in- come, and the true marginal rate of tax is the extra tax plus the loss of benefit arising from an increase in income.
Unhappy families
- Professor Prest's conclusions are fully borne out by the Government's own published figures, based on the official Family Expen- diture Survey. In 1968, for example, the average family of two adults and no chil- dren in the £559-£675 a year bracket had a gross income of £619 and a net income (after income tax and national insurance contributions, but plus cash benefits) of £854. The average similar family in the £1,196-£1,447 a year bracket had a gross income of £1.344 and a net income of £1,135. In other words. £444 of the extra £725 of income is taken away: a 'tax rate' of over 60 per cent—approximately 12s 3d in the £—and this at very modest income levels. Nor is this merely a minor curiosity. The family with no children under sixteen is the biggest single category of taxpayer, and the range I have taken includes 40 per cent of the families in that category.
What are we to conclude from this? First. I think, that since cash benefits are much more 'income-related' than is generally real- ised, those (notably in the Tory party) who argue for a still closer relationship of bene- fits to 'needs' are on very dangerous ground indeed. Second, that one way out of the dilemma of how to provide adequately for the really poor without destroying all incen- tive might have to be a greater reliance on benefits in kind. Third. that the Conserva- tives are fully justified in emphasising the need for cuts in direct taxation—and, fourth, that the general public is even more justified in feeling fed up with the whole tax/benefit system as it now exists.
Sing a song of six words Like David Walder, f shan't be looking at the results of next week's local elections primarily as a clue to the general election result (for one thing, the abolition of the business vote makes 'swing' calculations meaningless). But I shall be looking at them as a pointer to what general election can- didates might dream up to make use of the six-word description of themselves or their party which the Government's new law eccentrically allows them to put on the bal- lot paper. After all, these are the last words a voter will read before casting his vote— and judging by the fate of most election literature, often the only ones. Much thought must surely go into framing them so as to have the most favourable possible effect. Some candidates might feel a policy declara- tion of value—`Conservative, pro-hanging, anti-Common Market' is OK even if a churl- ish town clerk counts 'pro' and 'anti' as full words— while others might prefer a slogan : 'Labour, the fun party with soul.' As a not wholly disinterested observer I should welcome readers' suggestions for the ideal all-purpose six-word 'description' for candi- dates of either party (or none)—consonant, of course with the obscenity laws and race relations Acts.
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