The country needs more hospitals and more schools. It needs new highways. It has to continue slum-clearance and the building of homes. Yet Britain has been spending $7,000,000,000 a year on social services and $4,200,000,000 on defense. Under existing circumstances, and in view of present Conservative policies, can the old middle class look forward to an important reduction in taxation under any government? Reduction of taxation was one of the goals sought by Conservative government when it planned a revision of Britain's defense program. This revision, first planned by the ministry of Sir Anthony Eden and given new impetus by the Macmillan government, has other objectives, including the diversion of young men, capital, and productive capacity from defense to industrial production for export. But an easing of the defense burden would create conditions for tax relief in the Conservative circles that need it most. The reduction of defense expenditures places any Conservative government in a dilemma. The party expects the government to maintain Britain's position as a nuclear power--that is, as a major power. The political repercussions of the Suez crisis showed the depth of nationalism within the party, and, indeed, within the country. Yet it seems plainly impossible for the Tories to reduce taxation of the middle class drastically without cutting the defense expenditure that has maintained Britain, somewhat precariously, in the front rank of world powers. Of course, tax relief will not fully answer the difficulties of the old middle class. Its incomes, ranging from the pensions of ex-officers to the profits of small businessmen, have lagged behind prices. Stabilization of prices is essential if this class is to maintain its standards. The rebellion of the old middle class against Tory policy and leadership, if carried to the limit, might result in the creation of an extreme right-wing party. Such a party would be brought into being more easily if the sort of inflation which helped wreck the German democracy after World War I were to appear in Britain. Would the political good sense of the British enable them to reject the vendors of extreme political panaceas who would appear at such a juncture? The old middle class contains today, as it has since 1945, persons and organizations fanatically opposed to the unions and to labor in general. Extremist organizations, some of them modeled on the Poujadist movement in France, have appeared. In many cases the opposition to labor policies and personalities has been expanded in these groups to include the "traitors" at the head of the present Tory government, who are considered betrayers of their party and their class.