Prospect for 1967
CHARLES CLORE
The budget this year has been most disappoint- ing. Although it is a relief that we are not to be burdened with a further mass of complex legislation, I would have thought that we need some real incentive to both capital and labour in the form of reduced taxation.
Whilst part of the loss of revenue from any such reduction would no doubt be made up by higher profits and earnings, the major part would appear only to be available from savings in government expenditure. The present Gov- ernment is clearly disinclined to do this, with the result that a sensible economic policy is sub- ordinated to political philosophy.
In my opinion, incentives financed by re- ductions in government expenditure would have given the economy a speedy boost both in private investment and in production. As things are, I envisage only a slow growth in produc- tion this year.
The Government has been fairly successful with its wage freeze, but this in turn has brought about a reluctance on the part of many workers to make any special effort. Produc- tivity has therefore suffered and the real cost of production has in many cases increased even though prices have been held. This and the general economic situation during the past fifteen months have put a brake on business and we have seen the effect on profits. I think as the brake is released conditions may im- prove, but it will be a slow improvement which, in my view, may not become apparent until the latter part of the year.
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