One of the pleasures of being in one's second Parliament is that it gives one the opportunity to hear maiden speakers and to compliment them on their contributions to our debates. I join the right hon. Member for Walsall, North (Mr. Stone-house) in complimenting sincerely the two maiden speakers who have spoken today. I thought that my hon. Friend the Member for Pudsey (Mr. Shaw) spoke with the elegance of that most distinguished son of his borough, Sir Leonard Hutton, when batting for England. The hon. Member for Ormskirk (Mr. Kilroy-Silk) introduced to our debate a subject with which many of us were unfamiliar but the importance of which none of us can doubt after listening to him. I am sure that the House will look forward to hearing both hon. Members on many future occasions.

I shall not deal in any detailed way with the speech of the right hon. Member for Walsall, North, although I shall touch on a number of his points during my brief remarks.

I want first to add my congratulations to those of many other hon. Members to the Chancellor of the exchequer on his formidable speech yesterday, though I think that he was a trifle modest. He said at the beginning that he faced unusual difficulties, having been in office for only three weeks and with the economy in such a difficult state. I understand the right hon. Gentleman's position on both counts. However, he faces other difficulties. One is the problem of his own Left wing and of others of his supporters in the Labour Party. Another is the problem of the TUC.

Since coming to office, the Government have been clear and open about the TUC. Basically, what the TUC says, this Government do. We have seen that with its plans for the Industrial Relations Act, the Housing Finance Act, the subsidies, the tax changes and so forth. The Government have been very open, and we understand the position.

What we are beginning to ask, however, is what the country is to get in return. By that I do not just mean what the leaders of the TUC will give—and I understand that they have been in Downing Street today. I mean also what the members of trade unions will provide. The Government have fulfilled massively all their pledges towards the social con tract. The time is rapidly approaching when the country will want to see what the trade unions will provide in return, and here a difficulty may arise.

The Government have fulfilled to the letter, or are in the process of fulfilling, their side of the social contract. But all is not what it seems to be. When the TUC put forward its suggestions for food subsidies and so on, naturally it expected the Government to reduce the cost of living. In its recommendations to the Chancellor of the Exchequer, I do not believe that the TUC envisaged that one of the main results of the first Labour Budget would be to push up the retail price index.

It is regrettable that the Chancellor of the Exchequer was not able to be a little more frank on the subject yesterday. It is a pity that the fact that the Budget will push prices up by some 2½ per cent. should have come out only on the second day of the Budget debate and without the explanation of the whys and wherefores which the right hon. Gentleman could have given when making his speech. I have no doubt that he will provide them and explain that the impact of the subsidies to reduce prices will take effect before the impact of the other measures to increase prices, although that may lead some suspicious people to suppose that in the interval between the depressing effect on the retail price index of the subsidies and the upward effect on prices of the other measures, a General Election may intervene.

Be that as it may, the country will not be fooled by glossing over the salient facts in the situation. I hope that the Government, when they have bad as well as good news, will make an effort to take the country into their confidence from the outset so that facts of the kind that have come to light today come out not after a Minister has made his speech but at the time that he makes it.

There are a number of other factors on which the House will want more information. My right hon. Friend the Member for Carshalton (Mr. Carr), the Shadow Chancellor of the Exchequer, referred to the lack of information about the Government's forecasts for both economic growth and earnings. There are also some other points.

Yesterday the Chancellor told us about the loan, but we have not heard much, as yet, about the terms and conditions and, above all, the cost. Nor have we been told about the precise purpose of the loan. It is a substantial loan. Presumably, given the level of our balance of payments deficit, the loan will not cover everything up until the time that the North Sea begins to yield its riches. No doubt the Government will seek further financial assistance during the year by turning to the International Monetary Fund, the Euro-markets and ultimately the Arabs. All this is vital and germane to the way that the economy is managed. Therefore, the House is entitled to ask what the implications will be for interest rates and, of course, for the exchange rate.

The comments made by the right hon. Member for Walsall, North about the exchange rate were most interesting. I do not know whether they reflect the Government's views. Given the enormous weight of borrowing that the Government will have to undertake, it is important that the House be given rather more information than it has yet received on how the Government see interest rates moving and on their intentions towards the exchange rate.

I want to deal with only one other aspect of the Chancellor's speech— namely, the impact of the Budget on the corporate sector. I cannot stress too strongly that there are grave grounds for concern about the level of investment in British industry and the future prospects of employment.

It is no answer for Ministers, when these matters are raised, to pour scorn on the last Government's record. The figures are there for all to see. I agree that the previous Government's record on industrial investment was far from good. Now that the new Ministers are in their places perhaps they will tell us what they propose to do to get investment up. What they have started doing is most unlikely to achieve the result that we all desire. They have already increased taxes on the corporate sector, they are accelerating the rate at which companies must pay their taxes, and they have imposed on companies the additional burden of higher national insurance contributions.

Yesterday the Chancellor seemed to suggest that the corporate sector was doing very well, that companies had very high profits, and that they could afford to give up a bit for the general good. But, looking at the Financial Statement and Budget Report produced yesterday by the Financial Secretary to the Treasury, whom I congratulate on assuming his great office, we see that the position of the corporate sector is by no means as strikingly good as the Chancellor would have us believe. The Financial Statement shows that, deducting stock appreciation, the rate of increase in profits during the last calendar year was about the same as wages. Although the rate of increase in wages was quite high in terms of percentages, hon. Members on both sides of the House will know that high percentage figures at a time of rapid inflation do not necessarily mean that we are better off. What is true for wage earners is also true for companies.

Since the end of the last calendar year the corporate sector has suffered two major blows—the three-day week, of which we have heard a great deal, and the very tight price control that the Government have introduced.

Without going into the particular merits of either the three-day week or the very tight price control, I believe that hon. Members on both sides of the House will agree that the combination of those two factors must have a depressing effect on corporate profits. Indeed, during the last calendar year we see that profits, as a share of the GNP, fell from 11·5 per cent. in the first quarter to 9·2 per cent. in the final quarter. Therefore, before these two hammer blows to which I have referred, the rate of increase in profits was falling, and profits, as a share of the gross national product, were also falling. The danger, even before the Chancellor's statement yesterday, was not of industrial profits rising too much, not of investment outstripping our expectations, but of the private sector running into a liquidity crisis.

I think it would be agreed by hon. Members on both sides of the House and by all Governments that have been in power since the war that it is vital for the British economy to achieve a more rapid rate of growth and for British industry to achieve a greater degree of investment. This is important if we are to secure all the various political and social objectives that we all wish to see. It is also necessary if we are to get Britain's economy back on to a sound footing and to ensure that we have full employment. When investment falls, in the end employment is damaged. There is no escape from that situation, and there is no easy answer either.

The Government have made it clear that they will pursue a tight credit policy and will not allow the money supply to run riot. They propose to adopt a reasonably stringent credit policy so that there will be no chance of the corporate sector going to the banks to be bailed out or going to the Government for financial assistance. Therefore, I hope that the Government will make clear what precise measures they believe are necessary to keep industrial investment up and to get a better rate of industrial investment in the next few years than we have had in the past. If they believe that no measures are necessary, I should like Ministers to explain how the measures introduced in this Budget will prevent the kind of decline in industrial development which could ruin the Government's plans in other areas.