§ These transactions were in part reflected in the financial structure of the banking system. There was an increase in the holdings by the banks of Floating Debt and securities. This more than offset the decline to which I referred earlier in the total of advances and commercial bills discounted. The banks during the year have been faced with the problem of operating a credit policy somewhat more restrictive than those of which they had recent experience. They succeeded well in invigorating, rather than damaging, the industrial organism, and made their contribution towards the general easing which I have already described.
§ If we stand back and look at the developments of 1952 as a whole, we see clear evidence of the success of our disinflationary policies. The developments of 1952 have vindicated the strategy of the last Budget. Employment has been maintained; inflation has been checked; we have created room to expand exports—[Interruption]—and we have a surplus on the balance of payments. I can only say that I am glad the Committee have caught that point, because they are going to hear more on this problem of exports before I have finished this afternoon. It is a major one.
§ On the other hand, despite the successful past that I have announced, let us all face frankly the many difficulties, dangers and problems which are still before us: the high level of Government and other public expenditure, large parts of it inevitable, the difficulty in selling more goods abroad, the signs of under-production with short-time working, the need perpetually to watch inflationary tendencies, the absolute need to maintain confidence in sterling. So we can have no permanent satisfaction until or unless we face these anxious problems and overcome them.
§ Now let us look at the immediate Budgetary prospect.