I have found the original speech here.
We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment.
That is the history of the last 20 years. Each time we did this the twin evils of unemployment and inflation have hit hardest those least able to stand them. Not those with the strongest bargaining power, no, it has not hit those. It has hit the poor, the old and the sick. We have struggled, as a Party, to try to maintain their standards, and indeed to improve them, against the strength of the free collective bargaining power that we have seen exerted as some people have tried to maintain their standards against this economic policy.
You know we have not been creating wealth as fast as we have been distributing it. Over the last three years you know that our domestic product has risen by 2 per cent and the increase in our public expenditure, including central and local government, has increased by 18 per cent. We have made shift to meet this, yes, by higher taxation at some points, borrowing from abroad and, worst of all, by printing money. Now we have to get back into balance again. Of course it cannot be done in twelve months. Our creditors understand this. Those with whom we discuss these matters in other countries understand this, because the disruption would be too great for the social system to bear. But it would be folly to continue to borrow at the present rate of £10 billion a year, even if we could find the lenders - and we are not always very polite to them. Whatever we do in the short term, the only long-term cure for unemployment is to create a healthy manufacturing industry that will hold its own overseas, and in doing so it will then certainly be able to retain its grip on the domestic market. It is by a healthy and expanding manufacturing industry that we shall be able, in due course, to resume the growth and improvement of our social services and also create the jobs that are necessary if we are to reach what we all desperately require: our full employment targets.
Like everyone in the Labour Movement, I believe in a high level of public expenditure. But I part company with those who believe we can rely indefinitely on foreign borrowing to provide for greater social expenditure, a better welfare service, better hospitals, better education, the renewal of our inner cities and so on. In the end these things, comrades, are only provided by our own efforts.