§ 3.35 p.m.
§ The Chancellor of the Exchequer (Mr. Roy Jenkins)Introducing last year's Budget, I said that my major task was to deal with the consequences of devaluation. This year I am able to report that we have achieved some progress in making the changes in the structure of our economy which are essential to the movement from a heavy deficit on the balance of payments to a substantial surplus. 992 But there is clearly still a long way to go.
I have always made it plain that the strengthening of our economic position is bound to take time. The improvement has been a good deal slower than we hoped. In spite of the price advantages of devaluation, our share of world markets declined further in 1968, and we failed to substitute home produced goods for imports on anything like the necessary scale. Our competitive position has been damaged by irresponsible industrial action, and 1968 was a particularly bad year for unofficial strikes.
I therefore cannot report to the House today that we have yet succeeded in our objectives, or that without further corrective measures we can now expect a sustained surplus to appear. The task last year was to create a massive turn-round in the economy; the task this year is to make sure that this turn-round does not peter out before it has gained full momentum.
While I shall not have to propose measures as stringent as those in the last Budget, it remains essential that we should continue to do everything necessary to put our balance of payments on a secure and healthy basis—not because a balance of payments surplus is an end in itself, but because it is an essential means to the sustained growth and prosperity we all want.
I have framed this Budget accordingly, and it is therefore with the balance of payments and our external position that I start my economic survey.