I am very glad to have this opportunity of replying to the hon. Member for Nelson and Colne (Mr. S. Silverman). Some of his argument I did not follow, with most of it I did not agree, and I particularly disliked the suggestion of impure motives. I hope that by the time I have finished my intervention, he will have a different idea about that.
I believe that this Amendment is vital to our economy at the present time for the reason that we must stimulate demand. I think that is now necessary. We have had arguments in this Committee earlier about the textile trade, about shoes and clothing and the falling off in demand. I believe we have now come to the position when relief of Purchase Tax is not a stimulation of demand. The Front Bench explained at length that 75 per cent. of textiles have no Purchase Tax on them and that it is a lack of demand which is keeping people from the shops. Therefore, I believe that by a direct reduction in taxation we may try to stimulate this demand.
This I also think is a Liberal principle and those of us who are Members of the Liberal-Conservative group—[Interruption.] I am very proud to be a member of a group which has Liberal and Conservative support—think we are fully entitled to press this point of view in the Committee. Why do I believe this argument to be unanswerable? There has been a definite change in the financial atmosphere of the country. In the last six years there was a lusty demand which was created by the need for capital expenditure after the war; there was a lusty demand created by increased commodity prices, by the building up of homes and by the gratuities paid to soldiers when they returned. There was a lusty demand created by capital and Government expenditure over the last six years. All that was inflation.
When I sat on the benches opposite I listened to speech after speech by Socialist Chancellors of the Exchequer. One which impressed me most was by the right hon. Member for Leeds, South (Mr. Gaitskell), when he was talking about the Budget surplus. His whole argument was that the Budget surplus was something which must be creamed off in order to reduce demand. That was a disinflationary activity. Nevertheless, because of other factors of Socialist extravagance—their Government expenditure and overspending of the national purse—we ran into the financial crisis of 1951, and the present Chancellor of the Exchequer was consequently faced with a picture of serious inflation.
We know that two consequences can flow from that. One is a state of national bankruptcy such as occurred in Germany after the 1914–18 war. The other, if that is avoided, is a return to a falling-off in demand, and what we used to call industrial depression. We can congratulate the Government on the steps they have taken to avoid the first alternative of national bankruptcy. Has not their brave and courageous attitude in cutting down imports and raising the Bank rate had the result of warding off that alternative?