I am delighted that the hon. Member makes this point, because if there was a decline in 1952 there was a much greater decline comparing 1951 with 1950. That is my whole point and I am obliged to him for making it for me. In fact, the decline in production of textiles in 1952 is the result of a decline in the consumption of textiles and clothing which started in the middle or slightly before the middle of 1951. Hon. Members opposite try to throw the blame upon us for the decline in production of these articles. They should observe that the decline in consumption started when they were in power.
To sum up my comments on the movement of production during this period, the fact is that, so far from what hon. Members opposite try to make out in this Amendment and in other speeches, there has been no sudden change with the change of Government from a rising level of production to a falling level of production. At the beginning of 1951 production was tailing off. I have some figures here which show the level of production and the movement of the index of production, adjusted for seasonal variations. They show that at the beginning of 1951 it was 118; it remained at 118 for the next two quarters; and it has now gone back to 116 after a short decline in the middle of 1952.
Over the period as a whole there is no substantial decline, but a steady level with a dip in the middle of 1952. That dip in 1952 is largely attributable to a decline in the production of consumer goods, that decline in the production of consumer goods stemming directly from the decline in consumption which took place before the General Election.
Having dealt with that wholly unfounded suggestion and having shown
figures in authoritative documents, I want to turn now to the question of what we ought to do. [HON. MEMBERS: "Oh."] The Amendment draws attention to the drop in industrial output and
notes with deep concern that industrial output in Great Britain, which rose substantially between 1945 and 1951, suffered a serious fall in 1952. …
I thought I was entitled to take some time in pointing out that that is wholly inaccurate—or, shall I say, misleading.
I turn to what we have to do now. Obviously, the object must be to stimulate and increase production but not, at the same time, to run into the danger of further inflation and a further undermining of our balance of payments position and of the confidence in sterling which we have achieved. We must steer a pretty narrow course between the danger of allowing too much slack in the economy and the danger of creating a balance of payments crisis through inflation.
I will take, first of all, the position abroad, to which the right hon. Member for Leeds, South has referred. I will deal with the question of making sterling scarce, but not too scarce, because I think that is a most important point. Our objective, in 1952, has been very largely to make sterling scarce, because only by making a currency adequately scarce can we maintain its exchange value. One of the reasons for the faltering or falling confidence in sterling under the previous administration on some occasions is, in our opinion, that they made sterling too widely and too readily available.
On the other hand, as the right hon. Gentleman said, it is perfectly true that we can proceed to make sterling too scarce, which is just the same process as over-reducing your purchasing power at home, whereby we merely waste resources without doing anything to help economic stability. That is why we have taken certain steps to relax, for example, the exchange control over the granting of credit by British exporters, in which sphere my right hon. Friend the Chancellor of the Exchequer recently announced considerable relaxation. We think that will help considerably to promote trade and to achieve our objective.
In the Organisation for European Economic Co-operation, we have taken a very bold step by increasing our imports from Europe, in order to contribute to the general development of trade, at a time when we have a very large outstanding debt with O.E.E.C. and at a time when we are still by no means in a very large and comfortable surplus with them. In the course of the Budget debate the right hon. Member for Leeds, South suggested that we were pursuing a restrictionist policy in world trade. I do not think that that is a fair comment. We are trying to do everything we can to extend international trade. That is one of the main reasons why we have relaxed our restrictions against O.E.E.C. countries. There is, however, a limit to the extent to which we can go.