Tax Cuts Expected In British Budget

Press, Volume XCI, Issue 27638, 20 April 1955, Page 13

Tax Cuts Expected In British Budget

(Rec. 8 p.m.) LONDON, April 17. Financial experts predicted last night that Mr R. A. Butler, the Chancellor of the Exchequer, will aim at reducing the cost of living in the “election” Budget he is. to present in the House of Commons today.

Rising prices will be one of the big issues in the election to be fought on May 26. By some judicious tax cuts the Chancellor may help his party on the campaign platforms to counter Labour claims that the Conservatives have been unable to hold down costs sufficiently. One popular guess is that he will rdiuce the heavy tax on motor fuel, which stands at 2s 6d for every gallon.

Some other forecasts were: Sixpence off the standard rate of income tax, which is at present 9s in the £. A cut in the purchase tax levied on cotton goods. This is considered a virtual “certainty” as an aid to the Lancashire cotton industry, which is at present suffering un-

employment because of foreign competition and lack of overseas orders. A drop in the entertainment tax to meet the pleas of theatre and cinema managements that they are being hit by the high prices they have to charge at a time when television is a big competitor. Reductions in the beer and cigarette taxes. These optimistic forecasts come from financial quarters who believe that Mr Butler, by raising the bank rate and taking other quick measures, has already largely succeeded in averting the economic difficulties that seemed to be looming a month ago. More pessimistic forecasts believe that Britain is still heading for an economic crisis and that Mr Butler cannot afford to give too many concessions in his Budget, much as he would like to help the Conservative election campaign. The nation’s balance of payments still looks unhealthy, they say. Imports have shown a steep rise without exports keeninv nacp.

The optimists, however, are well in the majority this year.

But a third possibility cannot be ruled out—that Mr Butler will present only a “holding” Budget with little controversial in it because of the impending election. This would pass through the House of Commons in the shape of a Finance Bill without much debate in the few weeks that remain before the election. Then, if the Conservatives are returned to power, the Chancellor could make new financial proposals. This is what happened in 1929, tne last occasion on which there was a May election. Sir Winston Churchill, then Chancellor of the Exchequer, presented only a short Budget before the election.