HC Deb 17 November 1970 vol 806 cc1035-8
Q6. Mr. Barnett

asked the Prime Minister which Minister is responsible for improving the rate of economic growth.

The Prime Minister

My right hon. Friend the Chancellor of the Exchequer has overall responsibility for the Government's economic policy.

Mr. Barnett

As the Chancellor of the Exchequer obviously has failed to do anything at all about growth—or would the Prime Minister disagree with the O.E.C.D. Report that in 1971 we shall have the lowest growth and the highest inflation—what does the Prime Minister intend to do about the situation? Would he confirm that he does not intend in any circumstances to introduce a wage squeeze?

The Prime Minister

I have already made plain on many occasions our views on this matter. As the right hon. Gentleman the present Shadow Chancellor of the Exchequer had abandoned any question of freeze or incomes policy and had also abandoned any attempt to reform industrial relations, I would imagine that the hon. Gentleman himself would have seen no point in that course. In regard to the earlier part of his question about dealing with inflation, we have on many occasions made clear the policy of Her Majesty's Government, and within the long-term objectives towards which we are working in cutting Government expenditure, in reducing taxation and in reforming industrial relations we shall also use the other monetary and fiscal techniques which the Chancellor of the Exchequer has at his command when it is appropriate to do so.

Mr. Roy Jenkins

Will the right hon. Gentleman tell us what proposals he now has to deal with the accelerating inflation which has clearly got worse since he took office—[HON. MEMBERS: "No."]—certainly—both absolutely and relatively to other countries? Will he also tell us whether he accepts that it is clear that, despite what he chose to say when the May trade figures were published, the balance of payments is secure for this year and for a large part of next year, which gives him elbow room which no other incoming Prime Minister and Government have inherited since the war?

The Prime Minister

As the former Chancellor of the Exchequer knows well, in the months prior to the General Election we pointed out the trend in the balance of payments, and what we pointed out has been proved absolutely right. We also inherited nearly £1,500 million of overseas debt and, in addition, a rising wage inflation which was encouraged by the right hon. Gentleman's right hon. Friend the Leader of the Opposition and was stoked up by his own abandonment of monetary control policies during the three months prior to the General Election.

Mr. Roy Jenkins

If the right hon. Gentleman's words about the trend have any meaning, it must be that the balance of payments was deteriorating and would continue to deteriorate. Does the right hon. Gentleman now take the view that the balance of payments surplus on current account for this year will be less than £400 million or that it may be more? If he accepts that it will be £400 million, what possible reason has he for saying that there was a continuing downward trend? If the right hon. Gentleman wishes to take any credit for it, will he outline any single measure which the Government have taken relating to the balance of payments since they took office?

The Prime Minister

The former Chancellor of the Exchequer never for a moment questioned what was happening to the trend as far as 1970, 1971 and 1972 were concerned, not in the least. The right hon. Gentleman told the House and the country that he would not be able to maintain the same level on current account balance, let alone overall balance. Of course, that has been recognised. In the short time that we have been in office we have made cuts in Government expenditure and a reduction in taxation—[Interruption.] Right hon. and hon. Gentlemen may complain, because they were never capable of doing it themselves, but it is what the country wants and that is what it is getting.

Mr. Roy Jenkins

Will the right hon. Gentleman set a new practice so far as his Premiership is concerned by answering one question directly at the moment? The outcome on current account for 1969 was plus £400 million. The right hon. Gentleman now says that it is clear—he claims that I made it clear, which I did not, but he claims that he acts on this—that the outcome would be worse than for 1970. Will he now tell us clearly—we are nearly at the end of the year—whether the Government's expectation is that the outcome for 1970 on current account will be better or worse than for 1969?

The Prime Minister

When 1970 is finished the figures will be published and the right hon. Gentleman will see for himself.

Sir T. Beamish

Since the United Kingdom had the lowest growth rate in the whole of free Europe during the five and a half years when the Labour Party was in power, is it not rather touching that right hon. and hon. Gentlemen opposite should expect my right hon. Friend to clear up the mess in five months?

Mr. Barnett

On a point of order—

Mr. Kaufman

On a point of order—

Mr. Speaker

Order. Mr. Barnett, to raise a point of order. One of the rules of the House is that when Mr. Speaker is on his feet hon. Members give way. Mr. Barnett.

Mr. Barnett

In view of the unsatisfactory and evasive nature of that reply, I beg leave to give notice that I will raise the matter at the earliest possible moment.

Mr. Speaker

Order. Notice should be given in the conventional way. Mr. Kaufman, to raise a point of order.