§ 3.44 p.m.
§ The CHANCELLOR OF THE EXCHEQUER (Mr. Chamberlain)
On the two previous occasions on which it has been my duty to present a financial statement to the Committee, I have been very conscious that a good deal of anxiety was mingled with the hopes that are traditionally associated with Budget Day. In 1932 many dark clouds still hung round the horizon. In 1933, although the outlook was distinctly brighter, there was no settled feeling that we were about to enjoy a spell of fine weather. To-day the atmosphere is distinctly brighter. The events of the last 12 months have shown gratifying evidence that the efforts of His Majesty's Government are bearing fruit. There is a small but distinct rise in wholesale prices; the rate of short-term interest has achieved new low records; the position of long-term loans has also improved to an extent which I think is perhaps not entirely realised. I wonder, for example, how many people recognise that stocks such as the old 2½per cent. Consols actually stand higher to-day than they did before the War. The volume of our industrial production has very much gone up and equilibrium has practically been restored in the balance of payments. If you look to what I might call the telltale statistics, the unemployment figures and statistics of such things as retail trade, consumption of electricity, transport, iron and steel production and house building, in every case you see a definite revival of activity. All this, combined with the fulfilment of the anticipation which I expressed at Halifax last December that I should wind up the year with a substantial surplus, has had its effect upon men's minds and it has established a new spirit of hope and confidence. If I might borrow an illustration from the titles of two well-known works of fiction, I would say that we have now finished the story of "Bleak House" and that we are sitting down this afternoon to 906 enjoy the first chapter of "Great Expectations."
Readers of Dickens do not need to be reminded that expectations, if carried to extravagant lengths, are apt to be disappointing. Do not let us allow ourselves to be tempted into forgetfulness of certain unpleasant facts which still have to be reckoned with before we can feel that our troubles are at an end. The improvement in the condition of the country is due almost entirely to the expansion of the home market and to the greater part of that market which has been secured by our own people. On the other hand, our export trade, although it is better than it was, is still far behind the figure at which it stood only a few years ago, not because we are being beaten out of the field by our competitors, for, on the contrary, as the Committee are aware, we have now regained our place as the first exporting country, but because of the disastrous shrinkage in international trade itself. The channels through which that trade formerly flowed so freely are still blocked, and indeed the passage seems to become more difficult as the spirit of economic nationalism continues to spread. We see new obstacles to international trade continually raised. We find ourselves in presence of new and formidable competitors who are scrambling for what little trade is left. Although the result of the past year has everywhere been rightly acclaimed as a remarkable achievement, yet there are certain features about the surplus of last year which cannot be expected to recur. Therefore, while I feel that the confidence in the future which is so widely prevalent has much to justify it, I feel bound to point out to the Committee that there are certain limitations and qualifications which cannot be ignored, and which must be borne in mind before we can feel that we have returned to normal conditions.