§ 5. Mr. Eldon Griffiths
asked the First Secretary of State and Secretary of State for Economic Affairs how he accounts for the fall in the index of industrial production, as published by his Department, to its lowest level for two years.
§ 20. Mr. Stratton Mills
asked the First Secretary of State and Secretary of State for Economic Affairs if he will make a statement on the fall in the index of industrial production for November to 129, the lowest level for two years; and if he will forecast the trend for 1967 as a whole.
§ Mr. M. Stewart
The level of the index in November reflects mainly the downward adjustment resulting from restrictions to correct the balance of payments foreshadowed in my reply to the hon. Member for Harwich (Mr. Ridsdale) on 1st December [Vol. 737, c. 601–3]. It was also depressed by industrial disputes in the motor industry.
I am confident that with exports in the lead, industrial production will be rising this year.
§ Mr. Griffiths
A few minutes ago the First Secretary described this state of affairs as "sustained growth". Is it not a fact that the National Plan and many of the social programmes that flowed from it were founded upon the assumption of higher production? As this higher production is not forthcoming and the National Plan is a flop, how can anyone put any credit on any promises by the Government?
§ Mr. Stewart
I think that what I said earlier was that a prices and incomes policy must be sought which makes sustained growth possible. That is certainly true. The reason why there has been this down-turn is that which I gave in reply to the earlier Question. The hon. Gentleman's statement that the National Plan is a flop is not an opinion shared by people in industry generally. [Laughter.] It is perfectly true that the objectives there mentioned will take longer of realisation, but I do not regard that as a subject for rejoicing, as apparently it is to hon. Members opposite. With exports in the lead, we have reasonable hope of rising industrial production this year and I hope we shall get back again to those objectives.
§ Mr. Stratton Mills
Are not the figures shown in Question 20 the inevitable result of two years of doctrinaire Socialism? Would the right hon. Gentleman explain the fall of six points in the index since August on a seasonally adjusted basis, 1808 which is the heaviest for very many years and which seems to occur mainly in manufacturing industry rather than in service industries, which is exactly the opposite to the policy of redeployment?
§ Mr. Stewart
I have already given the reasons for the down-turn. The measures taken in July were, as is well known, the result of the need to correct the balance of payments. If the hon. Gentleman wants to look for the causes of difficulty in the balance of payments, he must make a more profound historical research than the last two years.
§ Mrs. Thatcher
Will the First Secretary also make a profound historical research and consider the policies of Mr. R. A. Butler, who, when faced with a deficit running at the rate of £800 million a year, was able to turn it into a balance within two years and introduce tax incentives as well?
§ Mr. Stewart
If there was that degree of talent in the party opposite, it is surprising that we inherited the position we did in 1964.