ECONOMIC PLANNING

HC Deb 27 October 1966 vol 734 cc1293-5

Ql. Mr. Marten

asked the Prime Minister what further steps he proposes to co-ordinate the work of Ministers engaged in economic planning.

Q2. Mr. Frank Allaun

asked the Prime Minister if he will instruct the Ministers concerned to co-ordinate measures to prevent heavy unemployment.

The Prime Minister (Mr. Harold Wilson)

No new steps or measures of co-ordination are needed, Sir.

Mr. Marten

Does that mean that the Prime Minister is satisfied with the Government's economic planning? Will he read again the National Plan? Does not he agree that this has made a nonsense of purposive planning? Is not the thing to do to agree with the Conservative Party that what we really want, apart from productivity, is competition and incentive?

The Prime Minister

The measures taken by the Government are, in the Government's view, most likely to provide the basis on which we can advance in future without the danger of lurching into repeated balance of payments crises such as we have had all along. As for competition, it is a very vague prescription that we get from the Opposition. In some respects we have made key sectors of the economy—for instance, by means of a greater use of the Monopolies Commission—more likely to meet the competitive needs of industry.

Mr. Allaun

Will my right hon. Friend explain how production is to be expanded by having 500,000 men out of work after redeployment has taken place? Secondly, as many Labour M.P.s and T.U.C. leaders regard deflation as utterly wrong, will my right hon. Friend now consider relaxing the deflationary measures before it is too late?

The Prime Minister

These matters have been debated at length on two days this week, but in answer to my hon. Friend's question, we have made clear that it is necessary to have a period when, in order to obtain a substantial redeployment of labour, we cannot contemplate any general let-up in the policies that we have taken until we are in balance, and are seen to be in balance. In respect of particular problems of investment and matters of that kind, I told the Productivity Conference—and it has been repeated by my right hon. Friend—that some of the resources that have been freed as a result of our measures could properly be used to provide stimulants to investment, and, as I have told the House, this is what we are examining.

Sir A. V. Harvey

How does the Prime Minister expect exports to increase when home consumption is going down, with the result that the price of exports is bound to be put up, as in the case of motor cars?

The Prime Minister

It has been argued in past years whether we need a large home market with overspill at lower prices, but if we have a home market which has been booming too fast the result is that important export firms cannot get the labour or other resources necessary for increasing exports. Certainly this year the position has been that many of our best export firms have order books which are far too long and also far too uncertain in delivery, than which there is no worse inhibition to increased exports.

Mr. Orme

Would not my right hon. Friend agree that his statement of 20th July, in which he referred to a figure of 2 per cent. unemployment after redeployment—reaffirmed this week by his right hon. Friend the Minister of Labour—has caused great concern in this country? Will he not give a categorical assurance that the Labour Government will not stand for a level of 500,000 unemployed under any circumstances?

The Prime Minister

What I said in answer to a question—and in answer to questions elsewhere—and two separate questions were involved here—was that after redeployment this was a figure that we could contemplate, but I said that we did not envisage keeping it at that level, and the turning point from the disinflation which has been necessary to the expansion that we are all looking forward to and working for is the moment when we are in balance in our balance of payments.

Mr. Heath

Would the right hon. Gentleman tell the House what he now considers to be a realistic figure for the rate of growth up to 1970 under these policies?

The Prime Minister

No, Sir, I think that it would be very difficult to make an estimate, but I believe, as I have said a number of times, that the measures which were taken are more likely to enable us to resume rapid growth early without lurching into the crises which hon. Gentlemen opposite always had whenever we had a few months' boom.

Mr. Heath

If the right hon. Gentleman cannot give a figure for the rate of growth, can he tell us what is to be the basis of the Government's programmes in future?

The Prime Minister

The basis of the Government's programmes will be a continued expansion on the lines of the National Plan. The timing of the period of growth will depend on the speed and thoroughness with which we get into balance. Criticism does not lie in the mouth of the right hon. Gentleman, who three times expanded for eight or ten months, each time producing a bigger balance of payments deficit.