Budget Resolutions and Economic Situation

Part of Orders of the Day — Ways and Means – in the House of Commons at 12:00 am on 11th April 1962.

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Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Middlesbrough East 12:00 am, 11th April 1962

For various reasons, I will not quote the Daily Herald or Reynolds News. Let me quote the Daily Express of 25th May, 1950. This is what it said: Biggest boom in Britain's history —never before have so many goods rolled off the production lines in the factories. Exports are up—never before have so many people been in work. Agriculture as well as industry shares in the bumper times—never before have wages been so high. It is true—and here perhaps I can satisfy the noble Lord—that the boat did go down. It went down because of circumstances over which the Labour Government of the day had no control—because of the Korean War. Tory Governments have never had to face a catastrophe of that kind in the whole of the past eleven years, yet there has been one economic crisis after another.

The reason that the Government are unable to adjust the economy and achieve prosperity is because they continue to believe in the blunt and brutal method of manipulating the Bank Rate, and it just will not do. The Chancellor claimed credit for a strong £. I do not give the right hon. and learned Gentleman much credit. One reason why the £ is strong is the presence of hot money in the country. Last month £72 million of hot money came in, but let us not forget that the money which has come in can just as speedily go out. If that happens we know, from what happened last July, what the result will be. Last July the disappearance of hot money resulted in the imposition of a 7 per cent. cent. Bank Rate, a wages pause and a rise in taxation. But still the Government persist in following this policy.