§ The Government has been returned with a mandate to carry on the process of change and modernisation that began in the last Parliament. Our mandate is to achieve three separate objectives all at the same time. They are a strong pound, a steadily growing industrial strength and full employment.
§ The Budget is about this Triple Objective, and is a major weapon in its attainment. But despite its importance, the Budget cannot by itself achieve the Triple Objective without the active support of the other policies of government and a positive approach from all sections of the nation.
§ For example, the attitude of industrial management and workers towards the quiet unobtrusive work of increasing productivity, of getting greater efficiency and of abandoning restrictive practices is certainly more important than the annual Budget Day. The Budget can influence these matters for good or for ill but if the will for greater efficiency is missing from the factories, then the Government's financial measures by themselves will not do the trick.
§ Or take prices and incomes: the Budget can have a substantial influence on both in the short-term. But when, as at present, there are jobs for all, the Budget's influence can be easily shrugged off by employers who can charge higher prices and workers who can get higher wages. I want to see higher wages as much as the next man; but I must warn the country that the increased output in 1965 was not nearly large enough to justify the big wage increases that were claimed and conceded. Therefore, the Government renews its appeal to the country for support in carrying out the policy of tying together increases in incomes and increases in productivity. We aim to carry this message through 1431 the trade union conferences and employers' confederations right back to the bargaining table where employers and workers sit down together.
§ I agree with Mr. George Woodcock that the voluntary work done by the T.U.C. during the last year has produced more results than the critics commonly allow. But that voluntary work needs reinforcement by legislation—legislation that would require people to stop and think before wage claims are settled or higher prices fixed. That is not much to pay for the blessings of full employment and steady prices. So the country needs the Prices and Incomes Bill.
§ I said just now that a strong pound was part of the Triple Objective. A strong pound is no more than a shorthand way of describing a favourable overall balance in our overseas payments.
§ There is no need for me to say that the efforts of our exporters are at least as significant as Budget Day, although, of course, the Government has a major responsibility to play by keeping overseas expenditure on defence and aid within the limits of our strength.
§ In the last Parliament, the balance of payments deficit overshadowed all our other policies. It has become a talking point at home and abroad. I welcomed—indeed I encouraged—this discussion because it made people more aware than they were before of the problems we face. But over the next five years, as our policies take effect, I look forward to the time when the achievement of the Triple Objective will enable discussion of the balance of payments to be relegated to its proper place, and enable the country to concentrate on other and different issues.
§ For the present, I claim that during the last 18 months we reconciled the elements in the Triple Objective to an extent not done before in similar circumstances. The balance of payments deficit was halved; full employment was maintained while actually we raised the level of employment in the regions and in Scotland and Wales; and industrial investment was kept at a high level. Now we can take a longer look at some of our problems, knowing that there is a growing understanding, abroad as well 1432 as at home, and a willingness to see our position in its true perspective. This country has a secure Government for the first time for three years. So political uncertainty has been ended and it is now for the Government, with the co-operation of everyone in the nation, to put an end to economic uncertainty.
§ The Triple Objective, I repeat, of a strong pound, a steadily growing industrial strength and full employment, is well within the capacity of the British people. It is a great challenge. I do not find the prospect unduly daunting. I shall return to this later.
§ However, as you will know, Sir Eric, the procedures of the House require me to turn next to more mundane matters of changes in the law relating to existing taxes. Certain Resolutions must be moved at the end of my speech and I therefore now say a word about them.