When my right hon. Friend the Chancellor of the Exchequer winds up this debate he will be replying not only to the debate in general, but, no doubt, to many of the points made by the right hon. Member for Huyton (Mr. H. Wilson) including, no doubt, so many of the personal attacks on him as he thinks worth answering. In the meantime, I hope that the right hon. Gentleman will bear with me while I try to deal with some of the points which he has raised in the course of a speech which was certainly comprehensive, and touched on many points which, rightly, the House would wish to know about.
But may I just say, first, these things about the terms of the Amendment and what the right hon. Gentleman has said? The Amendment begins by referring to the
… serious economic problems facing the country …
No one denies that this country does face—and has faced for years—serious economic problems, but I do not know what at the present moment the right hon. Gentleman thinks that he is doing to help us in their solution. One of the remarks which he made early in his speech was that already, before the Middle East episode, we were facing a desperate economic crisis; and he referred to the possibility of devaluation in 1957 already being in people's minds. That is as unhelpful as it is untrue.
The Amendment then refers to the aggravation of these economic problems by
… the Government's policy in the Middle East …
Of course, no one denies for one moment that the intervention which we have made in the Middle East creates greater problems for our economy and for the Chancellor of the Exchequer. Of course it does. No one denies that, or would deny that.
In what I have to say I shall try to throw some more light on the extent and nature of these burdens, which should not be minimised, nor should they be exaggerated. But I think that there is one point—one very important point indeed—which the right hon. Gentleman omitted in his remarks. He talked about the cost of the action that we have taken, which, as I think he would agree, it was difficult if not impossible to estimate in exact detail beforehand. But he made no reference whatever to the cost which we might have had to meet by not taking action.
It is perfectly reasonable to refer to the cost of interference on our oil imports, the raising of freight rates, etc. It is perfectly reasonable to refer to that effect on our economy, if at the same time we calculate the effect on our economy if at the present moment there was a war raging throughout the Middle East, with the Israelis involved, and the Arab countries strongly backed by Russian arms.
Do right hon. and hon. Gentlemen opposite really think that if war were taking place at present between Israel and the Arab countries, the combatants would stop their fighting from time to time to allow our ships to pass through the Suez Canal? Of course not. [HON. MEMBERS: "Where are they now?"] A fair estimate of the cost of our intervention can be made only against the background of the cost of inaction which every day that passes shows would have been greater even than we thought.
Finally, this Amendment, strangely enough in the light of the right hon. Gentleman's speech, says that Her Majesty's Ministers do not
intend to pursue policies adequate to deal with the situation.
I think it was apparent to all of us that any suggestion as to what those policies might be was conspicuously absent from the right hon. Gentleman's speech. Not one single suggestion did he make. So far as I can gather from studying recent Labour Party publications on these matters, the sort of policy they would advocate would be to increase investment by imposing more controls and to increase output by increasing taxation. Those are the suggestions which they have been making in their recent policy documents, and nothing different from that or more useful than that appeared in the right hon. Gentleman's speech this afternoon.
I wish to deal with this Amendment by taking each part; by talking first about the economic problems facing the country and the effect upon them of the intervention in the Middle East; and secondly, by dealing with the question of policies to meet that situation. What are the serious economic problems which the country is facing, and to which the right hon. Gentleman referred at some length in the opening part of his speech? I think it most important to recognise that we have both short-term and long-term economic problems which are distinct but are interlinked. It is certain that sometimes action which has to be taken to deal with one makes the solution of the other more difficult—[HON. MEMBERS: "Hear, hear."] I am glad that hon. Gentlemen appreciate that.
Take, for example, the case of investment action. To restrict the credit base in order to put right the balance of payments problem of itself is inevitably liable to restrict investment. The reason, surely, is that this country has committed itself, by a decision of all political parties, to a policy of maintaining a very high level of activity and employment in a country where an excessive level of employment or activity leads inevitably to a balance of payments crisis.