From Socialist Review, Mid-April 1965, p. 3.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
There’s little that’s, real behind the hocus-pocus of the Budget, with its parliamentary peacockery, its battered Treasury Box, the verbal meandering until dealings switch from the floor of the Stock Exchange to the stockbrokers’ officers at 4.30 p.m. New departures in expenditure are almost impossible since most of the items are committed years in advance. This is true of the outlay on current and future wars (29 per cent of the total last year), on the National Debt or past wars (10 per cent), and on most of the social services like National Assistance, unemployment benefits, health, housing, education, etc. (28 per cent), as on most of the rest. The room for manoeuvre remains very small – a couple of hundred million each way on a total of around £8,000 million.
The same is true of Revenue. Fixed expenditure and the need to operate within a capitalist consensus sets fairly inflexible limits to what the Chancellor can do in current circumstances. The argument revolves around relatively small sums : is he going to squeeze another £100 million out of tax-payers? or will it be £200 million? or, in an election year, will he “give away” £50 million?
No wonder really big business takes Budgets in its stride. The giant firms also make long-term plans, are committed years in advance to certain levels of expenditure, and find short-term adjustments a nuisance. As Lord Fleck, then chairman of ICI told the Radcliffe Committee on the Working of the Monetary System in 1959.
“It would be wrong to say that Budgets are of no interest, but I cannot recall any of them that made any significant change in our approach to what we were thinking of doing.”
His views were echoed by Lords Godber of Shell and Heyworth of Unilever.
Yet behind the hocus-pocus and the minute adjustments of revenue and expenditure there is more than pure tradition. With more than two-fifths of annual investments in its hands, anything the Government does in the economy is of enormous consequence to private capital. So they watch it like hawks. On the other hand, it is now easy for some capitalists here and abroad to switch their wealth from Pounds to any other currency and the country’s reserves of such currencies and gold are so low that the Government – particularly our Labour Government with its repulsive mixture of cowardice and orthodoxy – dare not upset them. And it so happens that the ones who find it easiest to transfer funds abroad and therefore have the strongest claim to be cosseted and comforted – the bankers and financiers – are the most backward, the most conservative and with the narrowest time-horizons of all sections of their class. Their first reaction is to bolt at the first hint of trouble and, what with the obvious shakiness of British capitalism, there are hints enough.
Given the Pound’s weakness, the Budget message is directed primarily to them. They have to be made to feel confident that the Government’s economic power will be used in a manner they would approve of. And given their flighty internationalism, their conservatism and extremely short-term perspectives even in capitalist terms, the manner must be nasty, brutal and deflationary – whether it is necessary for British capitalism to deflate or not. And the more openly this is done the better.
Confidence is the theme. If Callaghan can inspire confidence in London as a conservatory for capital; if he can persuade the City and its friends abroad that they will grow riotously under his care, he will have done his duty. But to do it and live down the radical origins – of so long ago – of the Labour Party, he needs to be harsh to workers, the old and poor; patently so, even exaggeratedly so.
It’s not difficult to agree with Lords Fleck, Godber and Heyworth – the Budget is unlikely to effect a radical turn in Britain’s economic life. But as a Declaration of Dependence on the most purblind section of private capital the whole world over it is unbeatable.
Last updated on 18 February 2017