HC Deb 11 July 1974 vol 876 cc1541-3
Q1. Mr. Norman Lamont

asked the Prime Minister whether the broadcast on the economy on ITN on 24th June by the Chancellor of the Exchequer represents Government policy.

Q8. Mr. George Gardiner

asked the Prime Minister whether the broadcast by the Chancellor of the Exchequer on Independent Television News on 24th June about the state of the economy represents the Government's policy.

Q9. Mr. Nigel Lawson

asked the Prime Minister if the broadcast of the Chancellor of the Exchequer on Independent Television News on 24th June on the state of the economy represents Government policy.

Q10. Mr. Wyn Roberts

asked the Prime Minister if the interview given on ITN on 24th June by the Chancellor of the Exchequer about the state of the economy represents Government policy.

The Prime Minister (Mr. Harold Wilson)

Yes, Sir.

Mr. Lamont

In view of the Chancellor of the Exchequer's admission, in that broadcast, of the damage to confidence which is being caused by the Government's proposals on nationalisation, would not further damage be caused if the Government delayed publication of the White Paper? Cannot the Prime Minister see that the more the details of these proposals are fudged and the more the publication of the details is delayed the greater will be the damage to confidence? Should not Parliament have the same right as was recently given to the Executive of the General and Municipal Workers Union, and should not Parliament discuss and debate the proposals before the recess?

The Prime Minister

As that string of questions emerged from an inaccurate account of what my right hon. Friend said, and as he said nothing of the kind, I do not think that the questions fall to be answered.

Mr. Gardiner

As it appeared from the broadcast that the Chancellor said that he would like a mandate to get on with the job, does the Prime Minister concede that he does not have this mandate at present?

The Prime Minister

We have a mandate, but it has been frustrated in a series of occasional votes by a party which never dared to vote until it knew that it could not have a June election.

Mr. Lawson

As the Chancellor of the Exchequer has publicly admitted that he grossly over-estimated the effect of the three-day working week, and as the Treasury has revealed that the drop in production during that period was a mere 3½ per cent., will the Prime Minister bring those facts to the attention of his ill-informed colleagues so that he may emancipate them from the ignorant slogans of the last General Election?

The Prime Minister

The result of the last General Election was to end a damaging confrontation which, day by day, was getting more serious. I note the enthusiasm with which the hon. Gentleman is trying to make a case for fighting the next General Election on a return to the three-day working week.

Mr. Roberts

In that broadcast the Chancellor referred to the need for a proper return on capital as an incentive to investment. Does the Prime Minister confirm that the return on capital in private industry is about three times as great as it is in nationalised industries? Will he also confirm that although we hear a great deal about the £2 million a day subsidy to private industry, the taxes paid by private industry amount to £10 million a day? Finally, will he confirm that the threat of nationalisation is the biggest disincentive to investment?

The Prime Minister

My right hon. Friend, at a meeting of the National Economic Development Council last week—which I chaired—went fully into the matter of the return on capital. He has asked the CBI—representatives of which are coming to see him today—to make any further representations it wishes on this matter in addition to what was said in NEDC. This same problem occurs with publicly-owned industries in almost every country in the world. They are industries which are mainly labour-intensive, industries which are services, and industries which for many years, under successive Governments, have had their pricing policies restricted in what both Governments believed to be the national interest.

The hon. Gentleman will be aware that last December the then Conservative Chancellor made certain serious pronouncements which turned out to be totally wrong. He said that subsidies would cost £500 million, but we had to find £1,400 million in subsidies for these industries. The Chancellor at the time of the election knew that these subsidies would be needed but he did not tell the country.