HC Deb 29 November 1973 vol 865 cc567-9
7. Mr. Douglas

asked the Chancellor of the Exchequer what has been the balance of payments deficit per head of the United Kingdom population for the years 1964 to 1973.

The Chief Secretary to the Treasury (Mr. Patrick Jenkin)

With permission, I will circulthe figures in the OFFICIAL REPORT.

Mr. Douglas

Is the Minister aware that it is likely that the deficit per head in 1973 will be about £25 compared with a surplus of £25 in 1970, so that the Government have bequeathed to the nation an indebtedness of £50 per head?

Mr. Jenkin

As I am sure the hon. Gentleman recognises, it is not usual to give forecasts of balance of payments figures for the full year. I can tell him that the current balance is a £945 million deficit.

Mr. Adam Butler

Does my right hon. Friend agree that the pound is currently undervalued and that much of the present deficit is due to that? Further, does he agree that exports would not be lost if sterling prices were to increase? Will he consider using the reserves to improve rather than to maintain, as has been done in the past, the exchange value of the pound?

Mr. Jenkin

I take note of my hon. Friend's last remark. My right hon. Friend the Chancellor of the Exchequer has indicated on a number of occasions that in the Government's opinion sterling is at present undervalued. For those who seem to take such a delight—I refer to the Labour Party—in the difficulties

1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 (January-October)
£ £ £ £ £ £ £ £ £ £
−7.1 −0.9 + 1.5 −5.7 −5.1 + 8.0 + 12.4 + 19.0 + 1.5 −17.0

which confront the Government, I must say that for the first time since the war the volume of our exports this year has grown faster than the volume of world trade.

Mr. Healey

Is it not the case that the volume of our imports has increased very much faster than the volume of our exports? Does the right hon. Gentleman agree that we have a balance of trade deficit in Europe which is almost equivalent to the whole of our balance of payments deficit on current account? Does he accept that if the pound is undervalued it is because of the Government's total failure to control our balance of trade and because we have now by far the largest deficit in our balance of payments that has ever been imagined in British history?

Mr. Jenkin

The right hon. Gentleman is wrong about the volumes of exports and imports. Let me give the House the percentage change from January to September 1973 over the second half of 1972. During that time the import volume went up by 11½ per cent. and the export volume by 13 per cent. The right hon. Gentleman has made in debate the statement which he has made today, and perhaps he will now withdraw it.

Mr. Healey

The figures which the right hon. Gentleman has given were carefully chosen to refer to a period nine months earlier, for a period relating to the 18 months before January 1973.

Mr. Jenkin

The right hon. Gentleman is wrong again. I made it clear that the figures which I gave are the latest volume figures for January to September 1973, compared with the second half of last year. The right hon. Gentleman persists in error. I hope he will learn to get it right.

Following is the information :

13. Mr. Ashton

asked the Chancellor of the Exchequer what is his latest estimate of the balance of payments deficit for the current financial year.

Mr. Patrick Jenkin

It is not the practice to give forward estimates of the current account balance.

Mr. Ashton

Is that because the figure will be so astronomical that the Minister cannot yet add it up? Has he seen the speech made by the right hon. Member for Wolverhampton, South-West (Mr. Powell) in which he says that he fears for the Government's and the Prime Minister's mental stability and comments on the way they transmute their disasters into success and then transfer the blame to their enemies? Does the Minister agree with that? If not, why will he not give the figures?

Mr. Jenkin

Without wanting to bore the House, I must tell the hon. Gentleman that it has never been the practice of any Government to give forward estimates of current account deficits. The reasons he has adduced have nothing whatever to do with it.

Mr. Pardoe

Without making a forward estimate, will the Minister say whether he agrees with Mr. Murray, the General Secretary of the TUC, that we need only to increase exports by 3 per cent. to 4 per cent. to solve our problems? Will the deficit this year at 1964 values be bigger or smaller than the 1964 deficit?

Mr. Jenkin

I agree with Mr. Len Murray when he said that he thoroughly supported the strategy of growth and with it the growth of exports. The General Secretary was talking sound sense.

Forward to