If the solution of the problem of domestic inflation which this Government inherited had already been completely tackled, that would indeed be a compliment to the financial policy of my right hon. Friend the Chancellor of the Exchequer, but I think that it would be premature to accept it. The House must recognise that we inherited a very grave economic position, but I am not going to waste the time of the House by saying how it arose. We, at any rate, did not create it. We inherited it, and a state of affairs in which the gold and dollar reserves of the sterling area were running out at a speed which, if continued unchecked, would have seen their complete exhaustion by September of this year.
We inherited a balance of payments crisis of the utmost gravity. That is a situation against which we are still contending, not, I am glad to say, without success, but equally I am bound to say that it is one which in six months has not been completely overcome. We are bound to bear that in mind in considering any step which will involve further inflationary pressure, and we are bound to consider it against the background of an economic position of very great difficulty and of every great national importance.