British Record - Issue Supplement: Budget 1966-67 - The Budget

Sep 21, 2026

Uploaded by Ophelia

British Record presents the UK Budget for 1966-67, setting out three linked objectives: a strong pound, steadily growing industrial strength, and full employment. The Chancellor, James Callaghan, explains how the Budget depends on broader government policies and national support, tying income increases to productivity gains and emphasizing exporters’ efforts and restraint in overseas defense spending and aid. Key new measures include a Selective Employment Tax focused on services, plus steps to curb capital outflows and adjust trade import policy while continuing management of the balance of payments.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages4

Reading Time10 min

AccessFree to download

The Budget

New Measures

Background to the Budget

British Record ISSUED BY BRITISH INFORMATION SERVICESAn Agency of the British Government ● THE BUDGET ● BRITAIN AND THE E.E.C. ● U.s.-U.K.DOUBLE TAX CONVENTION ·SUPPLEMENT:BUDGET 1966-67 THE BUDGET Three separate objectives "….a strong pound,a steadily growingindustrial strength,and full employment"were the aims of Mr。JamesCallaghan,Chancellor of the Exchequer,in drawing up the Budget which hepresented to Parliament on May 3.Details of the new measures introducedin the Budget are given in the Supplement to this issue of British Record. The Chancellor made clear in his speech that although the Budget isa major weapon in the attainment of this triple objective,it could notsucceed without the active support of other Government policies and apositive approach by all sections of the nation.He listed,in this re-spect,the importance of(a)"...the attitude of industrial managementand workers towards..increasing productivity,of getting greater effi-ciency and of abandoning restrictive practices...”,(b)the country'ssupport in"...carrying out the policy of tying together increases in in-comes and increases in productivity,"(the voluntary work of the TradesUnion Council—though more effective than some critics allowed—neededthe reinforcement of legislation that the Prices and Incomes Bill mentionedin the Queen's Speech would give--see British Record Nos.4 and 8 of March 4and April 26),(c)the efforts of exporters,and(d)the Government's actionin keeping overseas defense expenditure and aid"...within the limits ofour strength"。 In the last Parliament the balance of payments deficit overshadowedother Government policies and became a talking point at home and abroad.The Chancellor had welcomed this because it had made people more awarethan before of the problems facing the country.During that time the deficithad been halved;full employment had been maintained and the level raisedin the areas of less industrial activity;industrial investment had beenkept at a high level.The Chancellor looked forward to the time when,asthe Government's policies took effect,the achievement of his triple objec-tive would enable the balance of payments problem"...to be relegated to itsproper place,and enable the country to concentrate on other issues."New Measures The Chancellor's strategy of achieving his triple objective combinesa direct attack on the overseas deficit on capital and invisible accountwith a redeployment of domestic resources as to improve the visible balance. The most striking feature of the Budget is the introduction of a Selec-tive Employment Tax.This tax,by putting its main weight on the taxationof services,which have been hitherto largely untaxed,introduces thenecessary degree of deflation in the economy without the adverse effectswhich traditional fiscal measures such as increases in income tax,customsduty and purchase tax involve,and makes a positive contribution to theThis material is fled with the long-run structural changes needed to achieve a healthy balance of payments.Department of Justice,wherethe required registration state-ment of B.I.S.under 56 Stat.248-258 as an agency of theBritish Government is avail.BRITISH RECORD is available free on request.able for inspection.Registra·tion does not imply approvalMaterial from it may be freely quoted.of this material by the UnitedStates Government. On the capital side,the Chancellor proposes to check the outflow tothe developed sterling countries—Australia,New Zealand,South Africa andthe Irish Republic—by a program of voluntary restraint.But it is theChancellor's intention to maintain the voluntary principle which underliesthe concept of theSterling Area,and investment in the less-developedsterling countries will not be affected.The present exchange controlchecks on capital outflows to the non-Sterling Area will be maintained,and the Government has already put in hand a thorough review of its own over-seas expenditure.Much of the latter is associated with defense,andnego

FAQs

What triple objectives does the Budget aim to achieve?

A strong pound, steadily growing industrial strength, and full employment.

Why does the Chancellor say the Budget needs support beyond itself?

Because it cannot succeed without active backing from other government policies and a positive approach across the nation.

What is the main feature of the Budget’s new measures?

The introduction of a Selective Employment Tax, with emphasis on taxing services that have been largely untaxed.

Sep 21, 2026

Uploaded by Ophelia