§ 17. Mr. Dykesasked the Chancellor of the Exchequer what factors have appeared since 6th March which may have a bearing on the Budget judgment for the medium-term course of the economy.
§ Mr. BarberNone, Sir.
§ Mr. DykesDoes my right hon. Friend not agree that among many factors there are, perhaps, three principal ones at the moment, namely, the overseas currency situation, the substantial spare capacity in industry, and the relatively low level of stocks to total output? Does that not lead him and others to believe that the concept that early over-heating is creeping into the economy is a ridiculous exaggeration?
§ Mr. BarberMy hon. Friend is right. Almost all commentators agree on one point, namely, that there are still plenty of spare resources to sustain a fast growth rate for some time to come. 646 Making a general observation in relation to my hon. Friend's Question, I have no reason to diverge in any way from the view I took in my Budget Statement on 6th March about the medium-term course of the economy.
Mr. AshfonIs not one such factor which has arisen since the Budget the decision by the building societies to increase interest rates? Was that not caused to a great extent by the Chancellor's decision on Budget Day to raise interest rates on national savings and premium bonds, which has made them less competitive? Is this not a major cause of inflation, for which he is partly responsible?
§ Mr. BarberI was talking about the medium-term course of the economy, and nothing that has happened since 6th March affects my judgment on that