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A Nine-Cent Loaf. The new government, he announced, will cut the annual outlay for food subsidies from £410 million down to £250 million, a slash of 39%; prices will be allowed to rise in the marketplace accordingly. It means, Butler reckoned, that the food bill of every Briton will rise immediately by about 21¢ a week. Sample increases: milk from 14¢ to 15¢ a quart; stewing beef from 23¢ to 28¢ a pound; bread from 7¢ to 9¢.
The Opposition exploded with a roar. "Woolton! Woolton!" stormed Laborites, shaking their fists at the Peers' Gallery where, next to the Duke of Edinburgh, looking down on the budget proceeding, sat Lord Woolton, one of the powers in the Tory Party. As wartime Minister of Food, Woolton had introduced food subsidies ; during last autumn's election campaign he said emphatically that the Conservatives did not plan to cut them. "More broken promises!" cried a Labor M.P.
Rab Butler was howled down three times before he could proceed. But soon, unruffled and undiscouraged, he continued with some good news. The government intended to ease the burden by:
¶ Raising family allowances from five to eight shillings ($1.12) a week for each child after the first.
¶Increasing old-age and widows' pensions.
¶ Reducing income taxes in the middle-and lower-income groups, and exempting 2,000,000 Britons from paying any income tax at all.
A Big Carrot. Here, in the rejuggling of subsidies and taxes, was the key to Rab Butler's budget. After six years of Socialist Labor's policy of "fair shares for all," Britain was switching back to an economy based on greater rewards for harder work. The new taxes were rigged to encourage overtime work, which in the past had been discouraged by tax rates. If it encourages coal miners, for example, to produce only 10% more coal, that alone would go a long way toward erasing the deficit in the international balance of payments.
"Restriction and austerity are not enough," concluded Rab Butler. "We want a system which offers us both more realism and more hope." He sat down to thunderous cheers from the government side of Commons.
His policy was both courageous and clever—courageous because it risked the Conservatives' popularity by putting up the food bill, clever because it softened that with concessions and incentives that the Opposition would find hard to attack. Example: exactly half of the £160 million saved by cutting food subsidies will be given back to the people in the form of increased social benefits. The Laborites, convinced that they were watching the beginning of the shrinking of their welfare state, pounced to the attack. Their theme, as set next day by former Chancellor Hugh Gaitskell: the budget "is a lamentable move to take from the poor people and give to the wealthier."