Tax cuts in U.K. Budget

Press, 13 April 1978, Page 9

Tax cuts in U.K. Budget

NZPA-Reuter London Britain's Labour Government has unveiled a populist, give-away Budget, but coupled it with new warnings about wage restraint. The Chancellor of the Exchequer (Mr Denis Healey) has provided income-tax i cuts for all, especially the I lower paid, in announcing a 2500 M stimulus for the i economy. With possibly an eye on i imminent by-elections, the package contained higher pensions, bigger child benefits, and free milk for I schoolchildren up to 11. Only the price of high-tar I cigarettes — considered a health hazard — went up. I Mr Healey tried to cool an | euphoria by emphasising that the Government’s success in reducing inflation would be ruined unless wage increases were pegged over the next year. Government sources said 1 they hoped wage rises, which averaged about 13 per'i cent last year, might even, be held to half as much ini I the coming year. Trade] ; unions seemed certain to resist. ■ Mr Healey’s Budget, des- : fcribed as Britain’s first con-| ■ tribution to a common inter-i: ■ national effort to boost' i world recovery, contained!: ! few surprises. * ; ; Because of the country’s! recent financial recovery, he| I had been expected to reduce I the high level of taxation. His cuts will put back nearly two pounds a week into the average Briton’s 1 pocket, but they fell short of ■ those demanded by the powerful Trades Union Congress !and the Liberal Party. I It was generally seen as a I cautious Budget. Mr Healey i

said one of its prime objectives was to help fight “intolerably high” unemployment but the Confederation of British Industry contested this. I The C.8.1.’s president, Mr i John Greenborough said it had not provided any inI centive for those who must I lead the revival of trade and ■ industry. Trade unions gave it a i guarded welcome and the! pound and share prices I moved up. The harshest reaction i came from the Leader of the j Opposition (Mrs Margaret Thatcher), who said the Budget was only “election deep” and would lay the foundtions of a new bout of inflation. The Labour Party, which is in an over-all minority of eight in the House of Commons, was clearly hoping the measures would boost its electoral recovery.