Balance of Payments

HC Deb 20 May 1969 vol 784 cc224-6

26. Mr. Sheldon

asked the Chancellor of the Exchequer what estimate he has now made of the balance of payments position for 1969.

28. Mr. Barnett

asked the Chancellor of the Exchequer what he now expects to be the outcome on balance of payments for 1969; and if he will make a statement.

Mr. Roy Jenkins

I have nothing to add to the reply to similar Questions given by my hon. Friend the Financial Secretary on 13th May.—[Vol. 783, c. 1209–11.]

Mr. Sheldon

Is my right hon. Friend aware that one of the advantages of introducing selective import quotas at present is that if the optimists are right that the balance of payments will improve the quotas can be withdrawn? On the other hand, if the balance of payments does not proceed as well as one might hope, the sooner such controls are introduced the better.

Mr. Jenkins

Yes, as my hon. Friend the Minister of State indicated earlier, there are, however, substantial disadvantages to selective import quotas.

Mr. Barnett

What does the Chancellor estimate will be the effect on the balance of payments of any reduction in the money supply which he has in mind; in other words, a reduction of £100 million? What will be the effect on unemployment, and to what level does he intend to keep money supply this year? Does he still persist in his central forecast of 3½ per cent. growth in 1969–70?

Mr. Jenkins

In giving my central forecast for economic growth—I am not sure the post-Budget situation was exactly as my hon. Friend has stated it; I think that was pre-Budget—I took into account my intention, announced in the Budget, to pursue a strict monetary policy. My hon. Friend is making the mistake of talking about reductions in money supply and of exactly equating money supply questions with questions of monetary policy. I cannot give him an exact mechanical answer to the two other questions.

Mr. Iain Macleod

Has not the Chancellor made a pronouncement since the one to which his hon. Friend referred? Did he not last week, first of all, finally abandon the £500 million target, and, second, did he not slip, deliberately of course, from the calendar to the financial year, thereby obliterating three disastrous months of this year?

Mr. Jenkins

I have no desire to obliterate anything. [HON. MEMBERS: "Oh."] The right hon. Gentleman should not exaggerate his disastrous months. January was not a disastrous month at all. My object remains to get a very substantial sustainable balance of payments surplus.

Hon. Members

When?

Mr. Jenkins

I must be frank with the right hon. Gentleman and with the House—[Interruption.] I hope that we can have a serious discussion of this matter in the House, otherwise there is no point in answering anything other than "No, Sir" or whatever it may be. I accept the fact that we have not achieved this target as fast as we had hoped to do. None the less, I believe that it would be wrong to abandon the target, and I think that we can get a substantial surplus in the year which is now beginning.