What is wrong with the intellectual processes of this particularly able and honourable Professor is that he acknowledges that we have not yet reached the Nirvana, or promised land, and that in the period in which we have a mixed economy it is inevitable to have profits.
I think that one weakness of the right hon. Gentleman's speech is that he is trying, by his language today, to make it less likely that we shall have that type of prosperity upon which alone full employment can rest, and that he is trying by aiming at reducing the few to make the position of the many worse.
In answer to the Amendment in general, it is our intention to create new wealth, new opportunities and a greater prosperity. It is only in this way, by getting a larger cake, that we can distribute larger portions to all sections of the community, as, indeed, I shall show in the course of my speech.
The first point to which the Amendment is designed to draw the attention of the House is that there should not be confidence in the policies of Her Majesty's Government. I was not surprised that the right hon. Gentleman spent so little time on the last three and a half years. In fact, whether the right hon. Gentleman looks at the position at home or abroad, he will find at home that confidence has recently been registered in our policy, and if he had come with me recently to Europe he would have heard the nations of Europe, led by representatives from France and Italy, backed by others, ask Britain again to take the chair at the Council of the O.E.E.C., which, I think, indicates a great deal of confidence not only in British policy but also in British leadership.
Confidence in our policy has been, and will be, essentially based upon the way in which we can build the prosperity of the future. When we look round and see what we have achieved, when we consider that we have carried and absorbed into the economy an immense defence burden, which the right hon. Gentleman himself, with the Leader of the Opposition, took on, when we consider that we have increased the social service programme in almost every particular, when we realise that we have felt and carried the strain on our overseas balance of payments despite the increase in imports for our factories and food for our people, and when we consider that we have given incentives to industry and agriculture and to millions of our fellow people, and when we consider that we have increased production and raised our exports, I cannot believe that the House and the country will believe half of what the right hon. Gentleman said.
It would be foolish to imagine that our economic policy is without its difficulties, or that the prospect is entirely set fair. I think it is important for the House to register—and that may be one use of this debate—that there will continue to be internal and external difficulties—and I shall be speaking of them and facing them quite frankly later on. The real point is whether, like this Government, we recognise, face and deal with these difficulties in time, or whether, like the Administration in which the right hon. Gentleman was Chancellor of the Exchequer, we allow our reserves to run out and our lifeblood to drain away.
The right hon. Gentleman asked me about the policies of 24th February, and I will take the opportunity to deal with these. But let me first deal with the first challenge in the Amendment, namely, that relating to full employment. It really is quite a change—the language of the right hon. Gentleman—compared with the criticism made of Conservative policies in the past in regard to full employment. There is practically no word of criticism. It seems now to be taken for granted that under our Government we have been able to ensure full employment, and that we shall be able to continue to do so.
What is the bogey now brought forward? The right hon. Gentleman quoted the "Sunday Express." May I quote the "Daily Express" of yesterday? The bogey, according to the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock), is no longer, according to this article, the great fear of the brutal Tories and the unemployment which follows from their policies. This is what she says:
Right now the basic insecurity the workers feel is this: they are haunted by the spectre of the van driving up to the door to take away the T.V. set.
The terrible bogies of the Conservative Party are reduced to this haunting anxiety. That is a remarkable tribute to the policy of Her Majesty's Government during the last three and a half years. If people are to be haunted by this fear, my advice would be not to buy T.V. sets or other appliances unless they can afford them and pay for them in the proper way.
The figures in connection with full employment which I can quote are, I think, rather remarkable. If we disregard the dislocation caused by the fuel crisis in 1947, unemployment reached its post-war peak in April, 1952, when the figure for the United Kingdom as a whole was 468,000. On 3rd March and 10th November of that year, we were warned from the Opposition benches that unemployment would reach 1 million by the end of 1952. In fact, what has happened? Since then unemployment has fallen steadily, and now it is as low as it has ever been in peacetime. For example, the unemployment percentage in May was down to 1 per cent., and for every person unemployed there were 1½ vacancies. No other major industrial country in the world can show unemployment percentages as low as ours. The German figure for last year was 7 per cent., the United States figure was 5 per cent. and if the House turns its attention to our figure, which records the lowest unemployment in peacetime, I think they will realise there is not very much point in this aspect of the Amendment criticising Government policy.
The truth is that we have been carrying out a policy of full employment with all its attendant risks for the economy and with all the danger of rising prices and everything else, whilst still carrying out a strict monetary policy. I noticed that in his speech the right hon. Gentleman rather turned his argument. Instead of associating a strict monetary policy with a rise in unemployment, he seems to think that it was possible to carry out the two together. That is an example of the manner in which we have conducted our social and economic policy over the past three and a half years, and as far as I am able to see—one must always be cautious in any prognostications; but it will be the intention of the Government so to conduct our policy—we shall maintain the fullest possible level of employment.
The biggest threat to employment in the United Kingdom would come from any serious deterioration of the balance of payments or from lower productivity, which would be due perhaps to industrial unrest or to similar reasons, and it is, therefore, to those important points that I now want to direct the attention of the House.
I believe that the measures such as stricter credit and the hire purchase policy the Government are following are essential to protect our balance of payments and, therefore, to maintain employment. I can only give the House this assurance, that Her Majesty's Government will continue most closely to watch their effect and to see that they are effective.
The right hon. Gentleman asked me to give an extension lecture upon the Bank Rate. Heaven forbid that I should do anything of the sort, but I will describe to the House some of the points in trying to answer the questions raised by the right hon. Gentleman. It clearly takes some time for the effect of the Bank Rate and the tightening of credit to make themselves felt. Therefore, my right hon. Friend the Prime Minister was absolutely right in making his observation.
But the published figures already bear witness to the effective pressure which is being exercised. In the three months since the Bank Rate was increased to 4½ per cent. bankers' deposits—that is to say, money available for transactions carried out by cheque by persons or firms—have been reduced by £143 million. That is a very considerable figure when the House realises that in the same period last year they rose by £97 million.
Bankers' advances have not fallen, as the right hon. Gentleman deliberately drew to the attention of the House. They rose by—I will give the latest figure—£104 million compared with a rise of £53 million in the same three months last year. It is important that the House should have all the facts. What is the reason for this rise? The rise has been in a large part due to advances to the basic industries, particularly of gas and electricity. These and other advances have been necessary partly because the market for long-term capital has been inactive owing to the effects, first, of the Election, which is never a good time for these sort of things, and then of the strikes.
In fact, the rise in total advances would have been considerably greater had there been no check on expansion. We shall watch these figures, bearing in mind another point made by hon. and right hon. Gentlemen opposite, that we desire to maintain investments. The answer to the right hon. Gentleman is this, that, although I do not regard the figure of bank advances as yet satisfactory—I say deliberately "as yet"—we have at least maintained a very considerable degree of investment. That is also the answer to the point frequently made from the benches opposite that the tighter monetary policy may not enable us to keep up investment. I believe we are managing not only to maintain full employment but also to keep up a high degree of investment.
It is said on the one hand that the restrictions are not tight enough, and on the other that they are hampering desirable investment, and I should like to give the House the latest figures on investment to indicate that in this respect we are maintaining the prosperity of the economy. The area of new factory space approved for manufacturing industry in the first quarter of 1955 was the greatest for any quarter since the war, and about two-thirds higher than a year earlier. Completions in the final quarter of 1954 were slightly down on 1953, but the area of new factories started was nearly two-thirds higher. For the year as a whole completions were up by 17 per cent. and starts by 45 per cent., which is nearly half, and indicates, in answer to the point previously made by the right hon. Gentleman, that we can report considerable progress.
At the same time net new home orders for machine tools in 1954—and this is a vital part of our industry which I am sorry to see is threatened with nationalisation in the programme of hon. and right hon. Gentlemen opposite—were two-thirds up on a year earlier, and in the fourth quarter they were over twice as high. In January this year they were over two-thirds higher than the rate in the first quarter of 1954. These are all satisfactory signs of investment, and the House may now like to know what is the effect of some of the restrictive measures which have been imposed.