Labour's new M.P.S•

We were all wrong: every journal from the Todmorden Weekly Advertiser to the Times, from The Newsletter to I,R.I.S. News (and ourselves) had expected a very stiff “Budget which would increase taxation, etc., and cause a wave of resentment against the Government, All of us will sigh a sigh of relief that income tax, fags and beer have not gone upe But before we rejoice we should take a look at the long-term effects of Mr, Callaghan's measures, In this respect it is useful to re-read what the Economist said last Friday: ",.e-liost Labour-inclined economists will agree, if pressed, that the British economy would benefit from the sort of strong direct action that we favour - big export incentives buttressed by a stern incomes policy, a heavy payroll tax but with its yield given back in larger investment incentives. They say simply that such a2 mixture is politically impossible. Nearly five years before the next general election is due, why on earth?..." We are to commission articles from specialists who will explain the economic consequences of the complicated measures which Mr. Callaghan proposes but certain things are absolutely clear: the overall effect of the Budget is quite deflationary; it will lead to steady increase in the cost of living (officially estimated to be 1%); it will seek to help employers in manufacturing to resist the wages drift by drastically altering the rekationship between supply and demand of labour; it is designed to complement a tough incomes policy; and finally it represent yet another stage in Mr, Wilson's endeavour to rationalise British capitalism. In a word the Budget is antiworking class, but anti-working class in a more obscure manner, Whereas we would have all have noticed an increase in the price of fags immediately, it will be only over a period of months that the full significance of this Budget and Labour's job tax is understood. One thing is absolutely obvious thoughs every union in the country should throw out the incomes policy. How can they be expected to implement at a time when the Government — deliberately puts up the cost of living?