HC Deb 17 February 1970 vol 796 cc194-5
20. Mr. Ridsdale

asked the Chancellor of the Exchequer why stock accumulate fell from plus £117 million at 1963 prices in the first quarter of 1969 to minus £19 million in the third quarter; and what is his estimate for stock accumulate for 1969.

Mr. William Rodgers

Any explanation of movements in stockbuilding must be to some extent speculative. The pause in the growth of demand in early 1969 may have led to some involuntary stockbuilding; later in the year there may have been an adjustment reinforced by credit stringency and expectations of price-falls. Figures for 1969 are not yet available.

Mr. Ridsdale

How much of the current surplus in the balance of payments is due to destocking in industry, and how much is due to the fact that aggregated investment in manufacturing industry is £1,000 million below the aggregate target aimed at in the National Plan?

Mr. Rodgers

I would not dispute that the reduced rate of stockbuilding in the second and third quarters of 1969 has, through its effect on imports, contributed to the rapidity in the improvement of the trade balance. Other factors, such as the continued expansion of exports, have been important, too.

Mr. Barnett

Has my hon. Friend seen the recent report of the Liverpool Business School, which seems to indicate that it is possible that one reason for our economic difficulties is the high proportion of stock carried in this country in relation to the national income? Will he consider inquiring into the whole question of stocks carried by companies in this country?

Mr. Rodgers

I have seen the report, and certainly we will note its contents.

Mr. Alison

Does the hon. Gentleman recognise that the stock-output ratio is now at its lowest level since 1960? What effect upon the external balance does he anticipate from a return to a more normal level?

Mr. Rodgers

A return to a more normal level will not affect the external balance.