I should like to begin with a philosophical comment. I do not think that when one is speaking of hardships or benefits one can reasonably speak in terms of classes or social groups but only in terms of individuals.

Deficit financing proper is rather the process whereby a Government spends more money that it withdraws from the economy by taxation, borrowing, running down reserves, etc.; thereby causing in most circumstances, and very acutely in ours, monetary inflation and severe pressure on the balance of payments.

I would suggest to my honourable Friend that the foreign investor is at least as discouraged by high national debt for that, as all example shows, is the surest precursor of high taxation.

One trouble is that when Government gets into a business it tends to make it uneconomic for anyone else.

I am confident, however old-fashioned this may sound, that funds left in the hands of the public will come into the Exchequer with interest at the time in the future when we need them.

Revenue has increased in this way is in no small measure, I am convinced, due to our low tax policy which has helped to generate an economic expansion in the face of unfavourable circumstances.

Over a wide field of our economy it is still the better course to rely on the nineteenth century's "hidden hand" than to thrust clumsy bureaucratic fingers into its sensitive mechanism. In particular, we cannot afford to damage its mainspring, freedom of competitive enterprise.