§ With regard to export incentives, I am sure the Committee will have read with interest the account of the very full survey carried out recently by a group set up by the F.B.I. under the chairmanship of Sir Archibald Forbes. For a number of cogent reasons the report of that group was against the introduction of Government financed export incentives. I agree with its conclusions on this central issue. The group made a number of other useful recommendations which are being studied and, in some cases, already acted upon. Meanwhile, in recent months, as the Committee knows, the facilities for export finance have been markedly improved, in addition to the thorough overhaul of our export credit guarantee system carried out in the last eighteen months.
§ If we reject a system of direct incentives, what other help can be given? Obviously, the changes in Bank Rate will assist. The high rate introduced in July played an important part in reversing the outflow of funds from this country and in checking the pressures on the economy. Now that sterling is strong, and the economy is no longer under the same pressure, we have been able to return to lower short-term rates. This will be helpful to exports and investment.
§ I must take into account the effect on the economy of these reductions and of the other factors which I have described and which point to a rising pressure of demand in the course of the year. Against that background the essential requirement, in my judgment, is that we should not, through the Budget, give such a further stimulus to home demand as would endanger the expansion of exports. On the other hand, we all want to see a growth of economic activity on a sound basis; in other words, of such a nature as not to involve us in renewed balance of payments difficulties.