§ Q2. Mr. Barnettasked the Prime Minister if he will appoint an economist with special responsibility for balance of payments to serve on the Cabinet Consultative Committee.
§ The Prime MinisterThe Central Policy Review Staff will include individuals with economic expertise. But the staff will not be so large that any one economist would concentrate exclusively on balance-of-payments questions.
§ Mr. BarnettCan we be assured that the Prime Minister's views on balance-of-payments trends are based on better advice than that which he had last June when, as he conceded last Thursday, he made the most irresponsible statements, including forecasting devaluation based—on the kindest interpretation—on a bad guess?
§ The Prime MinisterWhat I said the other day was what I said in June, that the trend on current account taken over the preceding six months was downwards. This cannot possibly be repudiated. The hon. Gentleman refers to devaluation, and if he looks up that paragraph in my June speech he will see that I said that if we had another four years of Labour Government with the same people pursuing the same policy, that would be the consequence. The electorate fully realised that and took the necessary action.
§ Mr. John WellsDoes not my right hon. Friend agree that the policies of the Labour Party have tended continually to encourage wage inflation by their inflationary demands, and should not hon. and right hon. Gentlemen opposite take a more responsible line by supporting my right hon. Friend?
§ The Prime MinisterI would not describe them as "policies" of the Labour Party. It is merely a constant exhortation to go for higher wages regardless of the consequences.
§ Mr. TaverneIn the light of the strong balance-of-payments position, will the Prime Minister reconsider the declared policy of the Government to keep the rise in demand to the limit of the productivity potential increase? If this is the policy of the Government, how does the Prime Minister propose to reduce unemployment?
§ The Prime MinisterThe hon. and learned Gentleman is on an important question of policy, much wider than this Question, and one which my right hon. Friend the Chancellor of the Exchequer has always to consider. I hope that the hon. and learned Gentleman will recognise that, quite apart from the question of expansion, the demand on the balance of payments to repay indebtedness incurred by himself and his right hon. Friends remains with us.
§ Mr. Roy JenkinsIs the right hon. Gentleman seriously telling us that he is so thickly shrouded in self-righteousness that he genuinely believes that he was justified in saying in June that the balance of payments was on a downward trend?
§ The Prime MinisterI said that the current account was on a downward trend. The right hon. Gentleman agrees 1908 with me, and these are facts to which I stick. The right hon. Gentleman might admit, perhaps, that in the fourth quarter of this year there was a remarkable recovery.
§ Mr. Roy JenkinsI do not know what the right hon. Gentleman means by saying that I agree with him. All I agree with him is that the current account is what we are both talking about. Is he seriously suggesting that the performance of the current account during the last six months has been due to measures taken by himself and his Government rather than by his predecessors? If so, will he tell us which measures have been taken by the present Government to strengthen the current account in 1971?
§ The Prime MinisterI am stating two matters of fact: that in the first six months, taking the whole of the six months and not just one month's figures, the trend was downwards; and that in the fourth quarter there was a remarkable recovery.