HC Deb 19 March 1970 vol 798 cc608-11
Q5. Mr. Blaker

asked the Prime Minister what recent consultations he has had with the National Economic Development Council with regard to the effect of rising prices on Great Britain's competitiveness; and if he will make a statement.

The Prime Minister

The United Kingdom's competitive position is regularly reviewed by the Council and information about this was before the Council at its meeting on 16th March.

Mr. Blaker

Is the right hon. Gentleman aware that the House was told last month, in answer to a Question from me, that between the third quarter of 1968 and the third quarter of 1969 average earnings rose four times as fast as the gross domestic product? Can he say what the trend has been since the third quarter of 1969 and how it compares with the position in our main competitor countries?

The Prime Minister

On the particular period which the hon. Gentleman mentioned, the figures which were before the Council on Monday were, in fact, the I.M.F. figures, and they showed that over the period mentioned by the hon. Gentleman the changes in export prices, in terms of dollars, were, for Britain, plus two; for the United States, plus three; for France, plus two; for Germany, plus three; for Italy, plus 7¼—there was a slight difficulty in that case; for Japan, plus three; and for all industrial countries, plus three, showing that during that period we improved, not worsened, our competitive position.

Since then, there have been no authoritative I.M.F. figures. Certainly wages costs have risen somewhat in this country, as they have in other countries. Hon. Members have no doubt seen recent reports saying, for example, that in Germany, one of the most competitive countries, there has been a 13 per cent. increase in wages in the last quarter of 1969 over the corresponding period of 1968.

Mr. Atkinson

Does my right hon. Friend know that the C.B.I. is advising its constituent members not to inform the P.I.B. in advance of any price increases? Would he express to the House some disappointment at the fact that the C.B.I. is contracting out of its obligations in respect of price increases? [Interruption.] Would he say whether we are to look forward to a period of non-co-operation from the C.B.I.?

The Prime Minister

I have read Press reports to that effect. I find them difficult to believe and I am glad to tell the House that, so far, the C.B.I. has made no official representations to the Government in this respect. If it is, in fact, the case that the C.B.I. is organising a strike in these matters, on the question of what it has been doing —

Sir Ian Orr-Ewing

Really!

The Prime Minister

—or working to rule, if the hon. Gentleman prefers it, in respect of something which it has considered its national duty for several years, and if it is doing that in order to influence legislation in this House—which is what the Press reports suggest—then I see no difference between its action and the threats of Mr. Clive Jenkins, which were rebuked from this Front Bench yesterday.

Sir K. Joseph

How does the Prime Minister reconcile the Answer which he gave to my hon. Friend with the National Institute's figures, showing that against a price rise in British manufacturers exports of 7 per cent. since devaluation, West Germany's price index of manufactures exports in the same period has risen by 2 per cent., Italy's not at all and that of the French has fallen? Are we not up against the familiar phenomenon that although wages may rise higher in other countries, their export prices rise less than ours?

The Prime Minister

The right hon. Gentleman has obviously been doing his homework very carefully and so have I. His question related to a different period from that taken by his hon. Friend. If the right hon. Gentleman is referring not to the period between the third quarter of 1968 and the third quarter of 1969, but to the period since devaluation, as I think he is, in giving the National Institute estimates—

Sir K. Joseph

That is right.

The Prime Minister

—I quote the N.E.D.C. figures on Monday which showed the following: United Kingdom dollar export prices since devaluation, minus 2¾ per cent.; U.S.A., plus 4½ per cent.; France, plus 1 per cent.; Italy, plus 3 per cent.; Japan, plus 4 per cent.; other industrial countries, plus 2 per cent. and Germany—and these are the I.M.F. figures—plus I per cent. against our minus 2¾ per cent.—[Interruption.]

Mr. Speaker

Order. We all have the good name of Parliament in our keeping. Too much noise does not help anyone.

Sir K. Joseph

Does the Prime Minister not recognise that since devaluation gave us a differential of 14 per cent. improvement against our rivals, his Answer shows a massive erosion of our competitive position?

The Prime Minister

The right hon. Gentleman's reputation for accuracy in these matters might have been enhanced if he had not risen a second time. The figures which I quoted relating to the N.E.D.C. are those provided by the I.M.F. The right hon. Gentleman can quote the I.M.F. figures if he wants to do so. The figures which I quoted—and I said this twice—related to export prices [HON. MEMBERS: "In dollars."] Exactly. The point is that I was quoting dollar prices.