HC Deb 27 March 1969 vol 780 cc1767-8
2. Mr. Ridley

asked the Secretary of State for Economic Affairs why the list of reasons in "The Task Ahead", on page 16, for the possible failure of devaluation includes failure to restrain adequately the rise in personal consumption; and why it was decided not to include failure to restrain adequately the rise in public consumption.

Mr. Shore

Our balance-of-payments objectives would be jeopardised if either personal or public consumption were inadequately restrained. Chapters 5 and 6 show clearly that public expenditure and consumption have already been severely restrained and will continue to be kept under close control.

Mr. Ridley

Since we are told officially by the Postmaster-General that devaluation has failed, would the right hon. Gentleman accept that it is because of the failure to restrain public consumption? Would he give the House the figures for the increase in both public and private consumption over the last four years of the present Administration?

Mr. Shore

I cannot give those figures without notice. But the hon. Gentleman should be a little more accurate in interpreting the comments made by my right hon. Friend. He did not say that devaluation had failed. He suggested that there had been a certain disappointment at the speed with which the economy had responded to it. I would disagree with my right hon. Friend in terms of our export response, which has been very good.

Mr. Cant

Would my right hon. Friend remind the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that a study of the O.E.C.D. statistics shows clearly that the critical difference between this country and any other advanced industrial country is the percentage of our gross national product spent on personal consumption?

Mr. Shore

I am grateful to my hon. Friend for that helpful reminder. As a nation we spend, and have spent for many years, a very much greater part of our gross national product on personal consumption, and a successful strategy in switching resources to the balance of payments must mean some reduction in that proportion.

Mr. Iain Macleod

Is the Secretary of State aware that the Question on the Order Paper has nothing at all to do with that point? If he cannot answer the supplementary questions so far put to him, may I put a more simple question to him? Is it or is it not true that the Chancellor of the Exchequer set out a year ago in his Budget to reduce consumption, and did he or did he not succeed?

Mr. Shore

My right hon. Friend set out in his Budget of last year to reduce personal consumption. When it became apparent that the Budget had not had the effect that had been anticipated, he introduced further measures in November. The right hon. Gentleman's contribution on both occasions was to deny that it was necessary.