I warn my hon. Friends...that once we cut defence expenditure to the extent where our security is imperilled, we have no houses, we have no hospitals… - Denis Healey

It is far better that more people should be in work, even if that means accepting lower wages on average, than that those lucky enough to keep their jobs should scoop the pool while millions are living on the dole. That is what the social contract is all about.

No country would suffer more than Britain from an international trade war, since we depend more on world trade than any of our competitors. That is why we cannot accept the proposal made in some quarters that we should seek to solve our problems through imposing import controls for a long period over a whole range of manufactured consumer goods.

The trouble about Europe is what I call the Olive Line, the line below which people grow olives. North of the Olive Line people pay their taxes and spend public money very cautiously. South of it they fail to pay their taxes at all, but spend a lot of public money.