§ In the balance of payments there has been a considerable change for the better. I am referring to the balance of payments as a whole; the results of our trading transactions, Government overseas expenditure, invisibles and movements on capital account. Full details appear in the relevant White Paper. Exports were £156 million higher in 1961 than in 1960. Imports were £100 million less than in 1960, mainly because of the lower level of investment in stocks. Foreign investment in United Kingdom securities developed on a considerable scale after July, and there has been a small net inflow of long-term capital in 1961, in contrast with the large net outflow in I960 and previous years.
§ As the White Paper makes clear, the overall figures show a considerable change in 1961 compared with 1960 and earlier. There was an improvement of about £400 million, taking the current balance and the long-term capital balance together, and, although in 1961 as a whole there was still a small deficit, the second half of the year showed a small credit.
§ It is true that our interest rates have been high, but it is quite wrong to think that the improvement in our balance of payments was due mainly to hot money. On the other side, it should be remembered that there were certain special capital receipts during the year, such as the Ford transaction and the repayment of debt by Germany and France.
§ I would sum up the experience of the last financial year as follows. The £ was in danger last summer. That danger has been averted. But we still have a considerable way to go to achieve a satisfactory surplus on our balance of payments, having regard to our heavy and continuing obligations for defence, 964 aid and investment overseas. Nevertheless, the underlying position is now sounder; the movement of our costs is under better control, and the pressure of home demand is not excessive. We should now be able to take full advantage of the export opportunities ahead.