Good Tidings

The first lesson in the Sunday service at the Church of St. James the Apostle in the Essex village of Greenstead Green was read to the congregation by that distinguished parishioner, Chancellor of the Exchequer Richard Austen ("Rab") Butler. The text was from Isaiah. "How beautiful upon the mountains," read Butler, "are the feet of him that bringeth good tidings ... of good."

Two days later, on Budget Day, Rab Butler rose in the House of Commons and passed out to Britons the best economic tidings in years:

P: For the first time since 1929, the government proposed not only to impose no new taxes but to reduce present taxes. P: There would be more free enterprise. Great Britain, said Butler, will "step out from the confines of restriction to the almost forgotten but beckoning prospects of freer endeavor and greater reward for effort."

Frosting Last. Butler did not prematurely betray the news that lay in the battered red dispatch box in which budgets are transported each April from the Treasury to Commons. Before the House, he went at it as a boy eats cake--saving the sugariest bits of frosting until last.

"The account I gave [last year]," began Butler, "was, inevitably, a bleak one . . . The difference today is very striking." Britain's balance of payments had been converted from a 1951 deficit of -L-398 million to a 1952 surplus of -L-291 million. Gold and dollar reserves at the end of March had climbed to -L-774 million (a great improvement, but still only about a quarter of what Britain should have as leader and banker of the sterling area). Now came a reward: H.M.'s government was about to add two ounces a week to the Briton's sugar ration, and soon would be able to abandon sugar rationing entirely. Rab Butler accepted the pleased outcries with one of his rare smiles.

Lightening the Ship. Great Britain is still in economic peril, he went on. In fact, he had to admit, much of the improvement came not as the result of his last budget, but of lucky breaks in the flow of world economics. Butler's estimates last year had, in fact, proved ludicrously wrong (he had figured on a surplus of -L-510 million and had realized only -L-88 million). Britain was faced, as brutally as ever, with the choice of producing more and selling more overseas or perishing.

"We can, and we must, do much better," said Butler. But the time had come, he went on, when "doing better" could be accomplished not through more government controls and interventions, but through more incentives for production, savings and investment. "We must get out of the slack water, lighten the ship and give her way," the Chancellor said.

While Tories squirmed with delight and

Laborites with uneasiness, he dipped into the budget box for the details: P: Slashed: the onerous purchase tax. The levy on furs, jewelry, cosmetics and similar luxuries dropped from 100% to 75%; for automobiles, vacuum cleaners and the like, from 66.6% to 50%; for carpets, linoleum, domestic hardware, clocks, watches, toys, etc., from 33.3% to 25%. To halt the disappearance of the London taxicab (TIME, April 20), the heavy purchase tax for London cabs was abolished. P: Discontinued: entertainment taxes on amateur theatricals, amateur sporting events and professional cricket matches. "In this country, cricket occupies a special place among sports, not only as forming part of the English tradition, but as a common interest helping to bind together . . . the Commonwealth." Tory benchers broke into roars of approval. But from a few Laborite followers of soccer, which Britons consider their national sport, came a glum mutter: "Class favoritism!" P: Added: tax deductions, based on the cost of new plants and equipment (to encourage new investment). P: Soon to go: the excess-profits tax (30%), which will end next Jan. 1, leaving British industries and businesses with about $280 million more of their profits than they may now keep. P: Cut across the board: British income taxes. The cut for Britain's 16 million income-tax payers was a flat sixpence per pound. That, for example, brought the "standard tax rate" down to $1.26 for each $2.80 of income.

Churchill Cheers. "This budget moves for the first time in many years in a new direction," concluded Butler. "We can now look to a more hopeful way. We can lighten our load and liberate our energies." Encased to the last in his impenetrable Oxford-don manner, Rab Butler sat down. The Laborites sat in morose silence: he had left them few chinks to shoot at. Two or three Tories had brought along their silk toppers, the traditional thing to wave on jubilatory occasions, and now waved them with the fervor of shipwreck survivors signaling smoke on the horizon. Prime Minister Churchill, however, was not satisfied with the demonstration. His face working with emotion, he rose and wigwagged some papers in his hand to rouse his backbenchers to louder applause. To old Winston Churchill, who was himself Chancellor the last time taxes were pared back, 24 years ago, this was indeed an occasion for cheers.

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