Britons Braced For “Brutal” Budget

Press, Volume CVIII, Issue 31633, 20 March 1968, Page 13

Britons Braced For “Brutal” Budget

(N.Z. P.A. -Reuter— Copyright)

LONDON, March 19.

Britons steeled themselves this morning for what they fear would be the toughest peacetime tax increases and belttightening measures ever imposed in the United Kingdom. The Chancellor of

the Exchequer (Mr Roy Jenkins) was to present his Budget to the House of Commons later in the day, and the experts had for weeks predicted higher income taxes and a freeze on wage increases for the coming year.

For weeks, too, the Labour Government itself had openly warned that the Budget would be tough.

Many of the experts predicted it would be “brutal”. For in the land which spawned Carnaby Street, “mod” clothes and the Beaties, austerity clearly seems back in fashion. The aim is to make Britain and its people spend less and earn more through increased export trade. The Government has warned the nation that the gold crisis and the continuing threat to both the United States dollar and sterling makes it more necessary than ever for Britain to beat her baiance-of-payments deficit and to concentrate all the nation’s resources on a drive to export more. The Government announced in January that it was slashing its own spending by £1250m.

Now it is necessary to take at least the same amount from the pockets of the British taxpayer to help curb inflation and shore up the pound at its post-devaluation rate of $2.40.

On top of new taxes, Mr Jenkins is expected to announce, the Government's decision to introduce legislation this week putting a freeze on

most wages in Britain for at least 12 months, with no back payments at the end of the period.

And it was only on Monday that the Government's Prices and Incomes Board recommended that increased prices should be levied on gas, telephone, telegraph and postal services. It had already recommended higher rail and city transport fares. The prices of food and other commodities have risen 5 per cent or more since the devaluation of sterling last November and are expected to rise still further by the end of the year.

Government officials frankly concede that this combination of higher taxes, higher prices and a wage freeze

would mean slashing the living standards of the average Briton by at least 3 per cent. But, they say, this is deliberate policy, designed to reduce the nation's spending power and to enable it to concentrate more and more of its resources on export industries.

The expectation of tax increases has sent Britons on a wild spending spree since the beginning of the year. Sales of washing machines, refrigerators, television sets, cars and similar items have beaten all records.

Britons are not permitted by law to own gold as a metal, but dealers have reported huge jumps in the buying of gold and silver jewellery.