HC Deb 09 March 1971 vol 813 cc243-5
Q6. Mr. Ashley

asked the Prime Minister when he next proposes to take the chair at the National Economic Development Council.

The Prime Minister

As I told the House last week, I intend to do so on 7th April. This meeting will provide an opportunity to carry forward the discussions which I am having with the C.B.I. and T.U.C. this week.

Mr. Ashley

Would the Prime Minister confirm or deny that an N.E.D.C. study has given him conclusive evidence that the Government's de-escalation policy on wages is completely unworkable? If such a study exists, will he strive to retain credibility in the Government's honesty although not in their competence, by publishing such a study?

The Prime Minister

I know of no such study by N.E.D.C. or by any organisation connected with it which has reached any such conclusion. Nor do I believe that such a conclusion is right. As I told the House last Thursday, I believe that there is evidence that the rate of escalation has been slowed down considerably and that we are beginning to move in the opposite direction.

Mr. Bruce-Gardyne

In his discussions with the T.U.C., will my right hon. Friend bear in mind that Mr. Feather and his friends can commit no one but themselves and that even the extent of that commitment must be in doubt?

The Prime Minister

The Trades Union Congress and the General-Secretary have never attempted to disguise that fact. That does not in any way preclude a very wide area of economic policy which we can discuss with the T.U.C.

Mr. John Mendelson

In these discussions, would the Prime Minister bear in mind the recent Report issued by the National Institute of Economic and Social Research and the urgent need pointed out in that Report for a policy of reflation? Will he now agree that it is high time, in view of the liquidity difficulties which so many firms are facing, for the Government to encourage immediate new investment if we are not to reach a serious recession by the end of the year?

The Prime Minister

A number of such reviews have been published, including that which the hon. Gentleman mentioned and one by the T.U.C. which we shall be discussing on Thursday. The C.B.I. has expressed its views, which I was glad to have. None of these reports alters the fact that the reason for the lack of investment is to a considerable degree the unprofitability of firms today, and the lack of resources to invest which stems from unprofitability in the past and from the inflationary rise in wages. These two matters have to be considered together.