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cided that the restoration of the pre-October 1970 rate
of company taxation should be advanced from 1973-74
to this year. The cost of this concession, which reduces
the rate of taxation of company profits to 50 per cent,
will be £2.7 million this year in addition to the sum of
£2.7 million already taken into account in the pre-
budget estimate of tax revenue. When the provision for
free depreciation is taken into account, the over-all tax
position of companies is now, in fact, more favourable
than it was before the October, 1970, increase.
Free depreciation
Last year, as a special measure to encourage a con-
centration of capital investment in the two-pear period
ending 31st March, 1973. I extended free depreciation
to the whole country for that limited period. Represen-
tations have been made to me that the concession cannot
be claimed in cases where, although expenditure has
been incurred, the asset will not be brought into use
before the limiting date. I propose to remedy this in the
Finance Bill.
Death duties relief
I have had under consideration the threshold at which
estate duty becomes payable. The present exemption
limit is £5,000, introduced in 1960. I have decided to
increase it by 50 per cent to £7,500. Furthermore, a new
scale of rates from 1 per cent upwards will operate for
estates between £7,500 and £11,000 so that these estates
will also have their liability to duty reduced. The
exemption limit for legacy and succession duties will
also be raised from £5,000 to £7,500.
When comparing the rates of estate duty chargeable
in this country with those chargeable elsewhere, it is
important that the abatements of estate duty provided
here be taken into account. These abatements provide
considerable relief from duty where that relief is most
needed, that is, in estates which pass to a widow or to a
widow with dependent children. I increased these abate-
ments last year from £1,000 to £1,500 in the case of the
widow and from £500 to £750 in the case of each de-
pendent child.
This is an expensive form of relief. In the last finan-
cial year, it cost more than £650,000 in estate duty.
Nevertheless, I have come to the conclusion that further
relief is called for and have decided to increase the
widow's abatement from £1,500 to £2,000 and the de-
pendent child's abatement from £750 to £1,000. In the
case of a widow without dependants, the effect is to raise
the exemption limit from £15,300 to £17.750; where
there are three dependent children, the new exemption
limit will be £30,200 as compared with £25,250 pre-
viously.
These concessions will cost £130,000 in the present
year and £500,000 in a full year.
Financing the deficit
The tax reliefs which I have announced will cost in all
£14.1 million this year. When added to the social welfare
and other concessions and taking account of the open-
ing gap of £8.6 million, they bring the overall deficit in
the budget to £34.8 million. To finance part of this
deficit I propose to bring into the Exchequer an excep-
tional non-recurring receipt of £7 million from the Cen-
tral Bank.
The balance of the deficit—£27.8 million—will be
financed by borrowing. To the extent that the budgetary
measures give rise to increased economic activity, there
will be a consequential increase in revenue which will
reduce correspondingly the borrowing requirement.
Equal Pay
Before coming to my concluding remarks, there are
two important matters to which I wish to refer.
The first of these is equal pay for women, which the
Government accept in principle and which they now
affirm as a national aim. The second relates to efficiency
in the public service.
The Government have been considering the interim
report on equal pay submitted by the Commission on
the Status of Women. The Employer-Labour Confer-
ence have arranged that the working party established
to negotiate on pay, with a view to reaching a new
National Agreement, will take the recommendations of
the commission into account in these negotiations. The
Government welcome this decision and hope that agree-
ment will result which will be acceptable to all. Pro-
gress on this front depends on the will of the entire
community, whatever general arrangements are accepted
by the conference will be applied to the public service.
The commission also recommended the enactment of
legislation to give effect to their proposals. They sug-
gested that legislation should take into account any
phasing arrangements agreed by the conference. The
Government will, accordingly, consider what specific
action is required in this area in the light of the con-
ference's finding. It is also intended to consider the
question of ending of restrictions on the employment of
women which, by excluding them from equal work with
men, are an automatic barrier to equal pay. It is hoped
that the final report of the commission will be available
when the legislation is peing prepared.
In the meantime, the various restrictions under statute
or regulation which comprise the "marriage-bar" in the
public service are being examined. It is hoped that all
non-statutory restrictions on the employment of married
women will be ended as soon as possible and that the
necessary legislation for the repeal of any statutory re-
strictions and for the prohibition of restrictions on the
employment of married women generally will be enacted
within the period of two years recommended in the
interim report.
Efficiency in the public service
Acceptance of the principal of equal pay will increase
substantially the cost of pay in the public sector.
Foremost among measures to promote efficiency in
the public service I must place the administrative steps,
which are continuing, for the reorganisation of the pub-
lic service. As well as the legislation for the setting up
of the Department of the Public Service, which will, I
expect, be enacted during the current parliamentary
sessions, two other main developments should be men-
tioned.
First, the Report of the Public Services Organisation
Review Group emphasised the great responsibility of the
Government to select the right men for the top posts in
the new Department. The Government have recognised
this by the exceptional arrangement whereby two of the
three posts of Deputy Secretary in the new Department
were filled by a competition open to all comers. I am
satisfied that, in this way, we have got the best available
talent to carry the heavy burden of leading and directing
the reform and reorganisation of our public service
instiutions.
Secondly, the Government have decided to accept, on
an experimental basis, the major administrative reform
recommended by the review group by initiating, in a
number of selected Departments, the separation of
policy and execution and by reshaping them into an
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