There is no need to correct the record. This is a most important aspect of the economy but it is not the only one. My hon. Friend the Member for Luton, West quoted Wynne Godley as saying:
It is more important to get control of the economy right than to become neurotic about the control of public expenditure.
That should summarise our views on these matters. Of course it is of critical importance to get control of the economy right, but there are other matters affecting the economy, particularly the problems of manufacturing industry, that are even more worthy of our closest consideration.
The difficulties my hon. Friends have spoken of, affecting low levels of employment, concern the control of the economy. Controlling the economy today is quite a different matter from what it used to be in the early post-war years, or during the 1960s. The problems of high levels of inflation and public sector borrowing requirements remove from the Treasury the fine controls it once had.
Perhaps I may quote from the 1944 White Paper. This is the essence of the Keynesian argument which can still be valid today, although some different assumptions have to be fed in. The White Paper said:
Action taken by the Government to maintain expenditure will be fruitless unless wages and crises prices are kept reasonably stable. This is of vital importance to any employment policy, and must be clearly understoood by all sections of the public. If we are to operate with success a policy for maintaining a high and stable level of employment, it will be essential that employers and workers should exercise moderation in wages matters so that increased expenditure provided at the onset of a depression may go to increase the volume of employment.
This is what it is all about. As long as one is not resorting for so long to deficit financing, one can engage in a certain deficit in order to increase the volume of employment; but this is not possible in the same way today, with the current high level of the public sector borrowing requirement. We have to reduce the levels of inflation and the public sector borrowing requirement so that we can return to that kind of control over the economy which we once had and still need.
There has been some comment on how far the increased expenditure was foreseen. I have some information for hon. Members. As the Treasury evidence to the General Sub-Committee of the Expenditure Committee made clear, we have to take account of major events between publication of the expenditure planned for 1974–75 in Cmnd. No. 4829 of November 1971 and the publication of the out-turn figures some years later. These events included a reflation of the economy, the oil crisis, accelerating inflation, a major cut in public expenditure and a new Government with rather different priorities. If all these events could have been anticipated, I am sure the Opposition's 1971 plans would have been different.
The Treasury has given the Expenditure Committee a full analysis of the changes in the figures and there is no need for me to repeat them. If any hon. Member wishes to pursue this point, the figures are set out in Volume 2 of the Committee's First Report for 1975–76.