Orders of the Day — Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 17th April 1958.

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Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet 12:00 am, 17th April 1958

The position is that the Government will help sound projects if they are in certain particular areas, which is quite a different thing. If the right hon. Gentleman cannot appreciate the distinction, then he is below his usual form.

I have been dealing with various forms of control. The only other form of control which could be introduced, I think, is price control, and the right hon. Member for Huyton himself specifically excluded that in his speech yesterday. It appears, therefore, from the analysis I have made, that there can be no way whatever in which the system of physical controls could restrain inflation or could solve our balance of payments problems if we were foolish enough to resume economic expansion at a pace which could not be supported without a return to inflation and a return to a balance of payments problem.

We wish to speed up and resume expansion, but the conditions for doing so are that it should not lead to a return to inflation and it should not lead to another balance of payments crisis. I have endeavoured to show that a system of controls would be no answer whatever to the problem that the country now faces. The only answer, I suggest, is the one upon which the Government rest, that we confine expansion at the moment to particular sectors, such as export credits and the particularly difficult areas, where expansion can be encouraged without danger of inflation or danger to our balance of payments.

As soon as it is possible to resume a greater rate of general expansion, it will be the desire of the Government to do so. But it is quite insupportable for the Opposition to pretend that it is possible now to resume rapidly a rate of economic expansion, a general reduction of taxation and a general removal of restrictions without entirely going against the principle of the right hon. Member for Huyton himself, that we must put the strength of sterling first and foremost. I again welcome what the right hon. Gentleman said about the importance of sterling and giving its strength priority over all other considerations. I will conclude by repeating that however sincere he is in that, it is a fact that the policies advocated by him and his colleagues would have precisely the opposite effect.