HC Deb 17 February 1970 vol 796 cc184-5
5. Mr. Barnett

asked the Chancellor of the Exchequer what estimates he has made of the levels of economic growth attainable for each £100 million by which the current account surplus on balance of payments is reduced; and if he will make a statement.

Mr. Roy Jenkins

The figure would vary according to the level of surplus which formed the starting point, and according to the length of time taken into consideration. Accepting a decline in the surplus below an appropriate target level could raise the rate of economic growth in the short run only to lower it in the long run, because of the difficulties into which it would lead the national economy.

Mr. Barnett

Does my right hon. Friend still accept that our productive potential is only 2.9 per cent. and that in the next five years he could attain only between 3 and 3½ per cent.? Would he not accept that we could achieve a higher rate of economic growth if he reduced his target of a £550 million surplus which, in any case, is not needed in the present state of our economy when our creditors do not want repayment immediately?

Mr. Jenkins

I think our creditors are quite glad to have repayment. As to the other point my hon. Friend mentioned, the main reason that the rate of our economic growth has been unsatisfactory, taking one year with another for quite a long time past, is that there have been continual interruptions, particularly after any strong period of growth, because of balance of payments difficulties. My object is to get a steady rate of growth in the future.