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.

My own views on all matters of public revenue and public expenditure are conditioned by an acute appreciation of whose is the sacrifice that produces public revenue and to whom accrues the benefit of public spending.

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.

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.

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.

A glimmer of light is better than no illumination at all.

I hold that two principles are important first that there should be a steady expansion of public services, not an irregular one related to revenue accruing in any particular year the second that taxes should be constant over long periods (provided, that is, that they are neither burdensome nor inequitable).

I am also, I must confess, a little sceptical of the theory that we have a right, if we could, to pass on our capital burden to future generations. I remarked last year in this context that our predecessors had not passed any significant part of their burden on to us.

I largely agree with those that hold that Government should not in general interfere with the course of the economy merely on the strength of its own commercial judgment. If we cannot rely on the judgment of individual businessmen, taking their own risks, we have no future anyway.

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.

If people want consultative government, the price is increased complexity and delay in arriving at decisions. If they want speed of government, then they must accept a greater degree of authoritarianism. I suspect that the real answer is that most people prefer the latter so long, that is, as government's decisions conform with their own views.

I am afraid that I do not believe that any body of men can have enough knowledge of the past, the present and the future to establish development priorities - which presumably means procuring some developments as being good and prohibiting others as being bad.