Making Room at the Top

For reasons uniquely British. Budget Day is the House of Commons' most festively expectant annual occasion, signaling the power of the purse, which raised the House to supreme authority in Britain. Some M.P.s arrived soon after dawn, hours before the Chancellor of the Exchequer was due to show up carrying the battered dispatch case used by Gladstone and by every Chancellor since. A few Tory traditionalists wore black silk toppers. Sir Winston Churchill, who attended his first Budget Day in 1901, beamed from his bench below the gangway, sporting a huge red geranium in his lapel.

This year the Chancellor, whose single pronouncement could make millions of Britons richer or poorer, was Peter Thorneycroft, 47, a smooth, somewhat over-groomed son of a Tory ironmaster. On his first budget outing, Thorneycroft kept to the traditions by droning a prosaic prognosis of the nation's economic health until 4:30, the hour the Stock Exchange closed. Then, safe at last to let his secrets out, the youthful-looking Chancellor raised his voice and announced bold changes in the country's tax setup.

Time to Relax. Instead of last year's $812 million surplus, Thorneycroft foresaw a whopping $1.5 billion operating surplus from buoyant tax returns and the big savings in defense. He intended to pass out $275 million at once in tax relief. Brushing aside fearful warnings of inflation, he said: "The answer to an over stretched economy is not to tax it but to relax it." He freed firms doing business abroad from all taxes on their overseas trading operations, removed some unpopular domestic levies, e.g., the 1955 "pots and pans" tax and the "Suez shilling" on gasoline, lowered others and granted graduated income-tax exemptions for children to help their parents pay higher school bills. But Thorneycroft's boldest move was to single out for relief the 300,000 Britons--mostly engineers, executives, scientists--who earn more than -L-2,000 ($5,600) a year and therefore pay a surtax on top of their regular income tax. It was the first break surtax payers have had since 1920. Said Thorneycroft: "We are determined that in the society which we seek to create there should always be room at the top."

Three Years to Grow. Such welfare-state heresy started a sharp fisc fight. "The richer a man is the more he gets under this budget,'' cried Labor's Harold Wilson. "One of its principal virtues," answered the Tory Telegraph.

Actually, the Tory gentry with inherited wealth did not gain from Thorneycroft's budget. Its incentives were all directed at the rising middle class, which has contributed so many valuable men to the long lines of emigrants leaving for Australia and Canada. Conservative M.P.s flocked around Thorneycroft afterward with a kind of locker-room enthusiasm unseen in House of Commons lobbies in several years. Said one, noting that Thorneycroft was hanging on to most of his surplus: "If things turn out well, he can give more next year and even more the year after that. Remember, the year after that will be election year." Prime Minister Harold Macmillan agreed. "This is a plan for victory," he told Conservatives. "And the last of our three victory budgets will be better than the first."

This file is automatically generated by a robot program, so reader's discretion is required.