HC Deb 27 April 1971 vol 816 cc228-30
Q1. Dr. Gilbert

asked the Prime Minister when he next intends to take the chair at a meeting of the National Economic Development Council.

Q2. Mr. Sheldon

asked the Prime Minister when he next intends to take the chair at a meeting of the National Economic Development Council.

The Prime Minister (Mr. Edward Heath)

I have nothing to add to the reply which I gave on 20th April to a similar Question from the hon. Member for Heywood and Royton (Mr. Barnett). —[Vol. 815, c. 943–4.]

Dr. Gilbert

While at the next meeting of the N.E.D.C. the right hon. Gentleman will doubtless be discussing cost inflation, can he identify for the House any element at all of demand inflation in the present economic situation? If not, can he tell us how far unemployment should be safely reduced before he thinks any such element might appear?

The Prime Minister

The next meeting of the N.E.D.C. will discuss inflation in other countries and various methods being used to combat it there. It is hoped that the members of the N.E.D.C. will have a greater understanding from that discussion of inflation and the methods of dealing with it. What is obviously important is that increased demand should not combine with cost inflation to produce a still greater inflationary situation. That, from the discussions at the last N.E.D.C. meeting, was apparent to all.

Mr. Sheldon

Since the right hon. Gentleman has repeatedly stated that the escalation of wage demands is the main cause of high unemployment, and since he has also specifically stated that escalation of wage demands has been brought to a halt, will he now explain why it is that unemployment is still rising?

The Prime Minister

Because employers are still under pressure of trying to find the liquidity with which to deal with high wage increases already granted. This liquidity has been increased as a result of the Budget, and one is, therefore, hopeful that firms will now be able to use these resources for greater investment, which is a prime demand of the Opposition.

Mr. Hordern

Does not my right hon. Friend agree that the sole contribution made by the Leader of the Opposition and the Labour Party to controlling inflation has been to support every wage claim so far advanced? Would not he also agree that the Leader of the Opposition would be much better employed in eating steak at the St. Ermin's Hotel for a 15-year transitional period?

The Prime Minister

I am not sure that I would want to sentence even the Leader of the Opposition to that. My hon. Friend makes the point that the Opposition have abandoned a compulsory wages policy and a voluntary wages policy and are inciting workers to higher wage increases. It is perfectly true that they are bankrupt in all ideas.

Mr. Thorpe

Without following the Prime Minister in his attack on the culinary standards of the St. Ermin's Hotel, may I ask him whether he does not think that the N.E.D.C. might usefully concentrate its efforts next time it meets on discussing unemployment? Is he aware that some of us find it difficult to comprehend how it was that, as Leader of the Opposition, the right hon. Gentleman, without benefit of Treasury statistics, had no difficulty in prophesying what the levels of unemployment were likely to be—albeit that he was usually wrong—whereas now that he has the benefit of all these statistics it is impossible for us to find out whether he expects the unemployment level to rise, whether he expects the Government to maintain it or whether it is Government policy to reduce it? Can we have a frank answer?

The Prime Minister

It was the thought of putting the right hon. Gentleman the Leader of the Opposition through a 15-year transitional stage which I did not wish to threaten him with. The agenda of the N.E.D.C. meeting has been settled jointly between the employers, the trade unions and the Government, and two subjects are monetary control and inflation in other countries.

Sir G. de Freitas

If the right hon. Gentleman does not attend the next meeting, will he at least draw the attention of the N.E.D.C. to the fact that the rise in unemployment in the East Midlands was greater last month than in any other region in Great Britain? This is a very serious new development.

The Prime Minister

The N.E.D.C. is supplied at every monthly meeting with an index of statistics, giving economic indicators.