BALANCE OF PAYMENTS (Hansard, 20 January 1970)

§ Q3. Mr. Arthur Davidson
asked the Prime Minister what recent consultations he has had with the National Economic Development Council with regard to improving exports; and if he will make a statement.

§ The Prime Minister
The National Economic Development Council gave particular attention to the balance of payments in its review of the outcome of the recent consultations with industry at its meeting on 16th December. Discussions in the council are continuing.

§ Mr. Davidson
In view of the continuing excellent export figures and the part that they have played in helping us to achieve in 1969 the highest balance of payments surplus for the past 12 years, which I am sure the whole House would wish to acknowledge, could my right hon. Friend say whether he discussed with the N.E.D.C. ways of easing restrictions on certain key industries to stimulate home sales?

§ The Prime Minister
The N.E.D.C. shares the general gratification at the improvement in our balance of payments. What we have been concerned with at recent meetings, some of which I have chaired and some of which the Chancellor has chaired, has been to see what can be done to improve further on these exports, and that is why we have been going into this question industry by industry.
Of course we have had in respect of a number of industries views about the 254 home market, and these have been considered by the Government. I cannot go beyond that. My own impression from these discussions is that industry is extremely confident not only of maintaining the present level of exports but of improving substantially on that level, particularly since export orders in the last two years, many of them in long lead items, take time to manufacture and have not yet shown in the trade returns.

§ Mr. Peyton
Would the Prime Minister try to look a little beyond these ritualistic congratulations and say whether he thinks that high interest rates and a very sluggish, miserable growth are pretty poor foundations on which to build future success?

§ The Prime Minister
The hon. Gentleman is looking to broad horizons. If he were to look a little wider than this country, he would find that interest rates are high all over the world and that this has been the determinant factor on our own interest rates. I will not speculate about the future of interest rates, but since the hon. Gentleman is concerned about gratification, perhaps he will recall that the Government of which he was a member, in their last year of office, achieved, after 13 years, a current balance of minus £381 million, on which no doubt he congratulated himself. Against that minus £381 million, the figure last year was about plus £350 million, on which no doubt he will congratulate us.

§ Mr. Maudling
The Prime Minister was asked whether he was consulting "Neddy" about improving exports. We were glad to hear his answer. Has he consulted "Neddy" about rising prices and high unemployment?

§ The Prime Minister
We rely on the right hon. Gentleman always to find for each new year the issues to compare with issues in the previous year about which he had been so pessimistic and has now been proved wrong. We have had many discussions with "Neddy" on incomes, prices, investment and unemployment, and it is only too well aware of the disastrous consequences when the right hon. Gentleman was in charge of its policy.

§ Mr. Heath
In view of the discussions which the Prime Minister said he has had with "Neddy" in the light of the present balance of payments situation, will he 255 tell the House when the Government will turn to a policy of full employment?

§ The Prime Minister
The right hon. Gentleman knows, as I have made clear many times, that during the period when we had to clear up the mess of the export situation which the Opposition left, we have had to hold down internal demand in order to get goods going for export. The answer to his question is that as progressively the restructuring of industry, which we did and he neglected, takes effect, we can have both full employment and a high surplus balance of payments. In 1962, after the Tories had been in office for 12 years, there was one of the highest unemployment figures on record, and in 1964 they left behind a deficit of over £800 million.