The hon. Member for Stalybridge and Hyde (Mr. Blackburn) has given us an extremely interesting speech. One point he made is that we were not as strong today to face an economic crisis as we were in 1951. All he has to do is to look at the rate of the £ sterling on the foreign exchange to get the answer to that assertion. He also chided us for not having been co-operative when we were in Opposition. Whether he really suggests that the article on the Budget written by his right hon. Friend the Member for Battersea, North (Mr. Jay) in the "Daily Herald" was exactly co-operative I leave to the hon. Member to decide.
He also told the Committee that the average man was no better off after this Budget than he had been before it was introduced. The reception which the Budget has received throughout the country gives the lie to that. It is clear that everybody is better off as a result of the Budget, and that the all-round reductions in Purchase Tax have been of considerable advantage. We are already beginning to see the prices of goods coming down in the shops. What fascinated me particularly about the speech of the hon. Member for Islington, North (Mr. Fienburgh) was the way in which he attacked the Chancellor of the Exchequer for treating too liberally the people with incomes of £1,000 a year. I wonder how that ties up with the clamant demand of hon. Members on the benches opposite for an increase in their own salaries.
A point with which I wish to deal is the question of the cost of living, because much of the gravamen of the speeches from the other side of the Committee has been that since we have been in power the cost of living has continued to rise. It is perfectly true that that is so, but we made it quite clear that it would take time to overcome the legacy which we inherited from the party opposite when they left office. What is important is that we should get the trend of the cost of living reversed. The effect of that downward trend will then become cumulative and hasten the progress towards lower costs.
Last year the cost of living rose under a Conservative Government by 4½ per cent., compared with 12 per cent. in the last year under the party opposite. Even food prices, which rose more rapidly because of the removal of food subsidies, rose only 9 per cent. compared with 18 per cent. the year before. It will be seen that we have already started to reduce the rate of the rise. This Budget will have the effect of bringing down the cost of living, and once we achieve that we shall have honoured the pledge we gave at the time of the Election.
The hon. Member for Gloucestershire, South (Mr. Crosland) was right when he said that if the Budget succeeds in stimulating production, as we are convinced it will, there is a danger that we may find ourselves without sufficient coal to meet the increased industrial demand. I hope my right hon. Friend will be able to do something more to stimulate the use of coal economising plant in order to encourage the more efficient use of coal.
I do not agree with the hon. Member for Gloucestershire, South that a way out of the difficulty would be to impose a tax on coal. The whole country would feel that to put a tax on coal to discourage its use would be a return to Socialist methods. We should encourage the economic use of coal in every possible positive way. I would pay tribute to the miners who have increased their output and who are fully aware of the difficulties which would face this country if we do not get enough of this basic commodity.
Unlike the right hon. Gentleman the Member for Dundee, West (Mr. Strachey), I welcome the statement of the Chancellor that he is moving towards convertibility as rapidly as possible. The purpose of money is to assist the exchange of goods, whether between individuals or countries, and to avoid the inconveniences and difficulties of bartering. Lack of convertibility hampers the proper functioning of money in the international sphere and if we can achieve convertibility it will prove a considerable advantage.
Hon. Members opposite fear, if I understand them correctly, that if we have a convertible £ people will hoard their £s in order to exchange them at a later date for dollars rather than use them to help buy the goods we produce in this country. They fear that making the £ convertible would deal a blow at the exports of this country. Surely that would apply only if people continue to believe that the £ will depreciate in value in terms of dollars or gold. If we convince people that the £ is good currency, and if anything better than the dollar, there will be no temptation for anybody to hoard £s in order to convert them into dollars, gold or anything else.
The essential pre-requisite to convertibility is to convince the world that Britain will maintain a stable £ and stop trying to get 21s. worth of goods out of 20s. worth of work, as we did when the party opposite were in power. I believe that this Budget by increasing production will play a large part in bringing nearer the day when convertibility is practicable. I welcome the Budget and congratulate my right hon. Friend the Chancellor of the Exchequer