§ Q7. Mr. Boyd-Carpenterasked the Prime Minister whether the speech of the First Secretary of State and Secretary of State for Economic Affairs about economic policy at Cumbernauld on 24th February represents the policy of Her Majesty's Government.
§ The Prime MinisterYes, Sir.
§ Mr. Boyd-CarpenterDoes the right hon. Gentleman recall that on this occasion, three weeks ago, his right hon. Friend is reported as saying that as of now a gradual reflation of the economy would start? Surely a statement of that sort and the statement made to the C.B.I. yesterday should be made in the first place to this House.
§ The Prime MinisterMy right hon. Friend said on that occasion that reflation must be gradual, with the emphasis on investment, and must not be premature. That is exactly the position which has been stated repeatedly in the House. I have myself said repeatedly that, having released resources by the stern measures taken last year, they must be devoted first and foremost not to a restoration of consumer durable goods production but to certain investment projects, both in the public and the private sector.
§ Mr. HeathCan the Prime Minister say that the short-term rate of growth of which the Chancellor speaks constantly is consistent with the long-term rate of growth of which the First Secretary spoke and which he requires to carry out his plans?
§ The Prime MinisterYes, Sir. The right hon. Gentleman will be aware that in the short term—and this has been true of the last two years and must be for a little time ahead—the first concentration must be on getting the balance of payments right. I am sure that the right hon. Gentleman will have been overjoyed to see yesterday that as a result of the policies of this Government, on a comparable basis, the balance of payments deficit has been reduced from £822 713 million in 1964 to £189 million in 1966, and that the balance of payments surplus in the fourth quarter of last year was the highest since figures began to be collected.
§ Mr. HeathAs the Prime Minister has given the House an assurance about the rate of growth, can he tell us what the rate of growth is?
§ The Prime MinisterI have just said to the right hon. Gentleman that we must concentrate first, in the short-term, about which he asked, on getting the balance of payments right. The right hon. Gentleman's rate of growth over 13 years was very little higher—I am quoting his own figures of last weekend—than his estimate of what it will be under this Government for the next six years, despite a 28 per cent. windfall in the balance of payments. It resulted in an £800 million deficit, and it was our first duty to get rid of it.
§ Mr. BenceIn view of the fact that this speech on reflating the economy was made in Cumbernauld, which is in my constituency, can my right hon. Friend assure the House that we can take it that the first steps in reflation will be taken in Scotland?
§ The Prime MinisterMy hon. Friend will be aware that the first steps taken in this kind of selective reflation—namely, the increase in the programme for advance factories—was biased very heavily in favour of Scotland and other development areas. This is continuing and will continue.
§ Mr. SandysWill the Prime Minister give a straight answer to my right hon. Friend the Leader of the Opposition? Will he say what is the present rate of growth?
§ The Prime MinisterIn answer to the shadow Leader of the Opposition, I have already said that I am not in a position to make a forecast of the rate of growth for this year—[Interruption.] The House will understand the need to get the balance of payments into surplus. We are not content to get into an £800 million deficit—
§ Sir G. NabarroYou have got it all wrong.
§ The Prime MinisterThe hon. Member for Worcestershire, South (Sir G. Nabarro) will see from the figures pub- 714 lished yesterday that we are getting it all right, despite the way the hon. Gentleman and others left in 1964—[Interruption.]
§ Mr. SpeakerOrder. There is too much inflation at the moment. Mr. Bottomley.