Healey gives Britain a cheerful Budget

Press, 28 October 1977, Page 6

Healey gives Britain a cheerful Budget

NZPA-Reuter London Britain’s Labour Government has held out to the nation a winter of cautious economic relaxation but left itself plenty of room to manoeuvre in case of new reversals.

A General Election is possible as early as next (northern) spring, but the Chancellor of the Exchequer (Mr Denis Healey) told Parliament yesterday that his new economic package was not designed to catch votes. His autumn mini-Budget included income tax cuts worth about 31800 M a year and other measures designed to fight unemployment. In the light of the country’s better financial position Mr Healey said he would not take up the S36OM worth of international monetary fund (1.M.F.) special drawing rights available to [Britain next month. ' But he said the GovernI ment would keep the stand;by facility in place until it expired at the end of next year.

His Budget speech — the twelfth he has made in three years and a half as Chancellor of the Exchequer — was generally welcomed. The Liberals, whose 13

votes in Parliament have kept Labour in office since March, suggested that their influence was visible, especially in Mr Healey’s measures to stimulate small businesses.

The Conservatives’ spokesman on the economy, Sir Geoffrey Howe, attributed Labour’s success to LM.F. tutelage and suggested the new measures were “a Budget of repentance” designed to win votes.

Government sources suggested that had Mr Healey wanted to chase votes, he could have made bigger concessions.

Mr Healey’s package gave the Opposition no obvious stick with which to beat the Government. This must especially irk the Conservatives because a public-

opinion poll yesterday showed the two parties as neck-and-neck in popularity.

For months the Conservatives have been ahead of Labour. The latest poll, published in the conservative “Daily Telegraph,” came after the two parties’ annua) conferences.

Introducing his package, Mr Healey said it was part of an 18-month programme for economic expansion, with a continuing fall in the number out of work — now 1.5 million — as its prime objective. A Treasury forecast made public as Mr Healey spoke said that if earnings could be held to the guidelines inflation could be down to 6.5 per cent by the end of next year, less than half the rate forecast for the end of 1977.