HC Deb 11 July 1974 vol 876 cc1523-4
1. Mr. Norman Lamont

asked the Chancellor of the Exchequer whether he will make a statement on the United Kingdom's participation in the OECD Policy Committee meeting on 24th and 25th June.

The Chancellor of the Exchequer (Mr. Denis Healey)

United Kingdom officials attended the meeting of the Economic Policy Committee of the OECD in Paris on 24th and 25th June. The main items discussed were the problems of inflation in all OECD countries and the balance of payments imbalances resulting from the increases in the price of oil, together with the appropriate policies for dealing with them.

Mr. Lamont

Will the Chancellor of the Exchequer confirm the report in The Times that the United Kingdom was almost the only country among those present to press for a degree of reflation in the international economy? Does he agree that when Germany is deflating, France is deflating, when even the Italians have managed to agree on a deflationary package, and when the Americans are raising interest rates, given our inflationary situation and our balance of payments, we should be the last rather than the first to opt out of the burden that is to be borne in slowing down inflation?

Mr. Healey

As hon. Members will know, Her Majesty's Government are never responsible for that type of report in The Times. In fact, it is an inaccurate report. The view taken by all members of OECD has always been that it would be a great mistake for all countries to try at the same time to close their balance of payments deficits that have resulted from the oil price increase. We know that this year there is certain to be a surplus of approximately $70 billion of currency payments made to the OPEC countries, which they will be incapable of absorbing in terms of imports.

Mr. Horam

Is my right hon. Friend aware that there is strong support for the mistaken report in The Times about my right hon. Friend's views on reflation, and that those who support that point of view are hoping that he will translate words into action and come across with a spot of reflation.

Mr. Healey

I must tell my hon. Friend that I receive a great deal of advice from many sources. I fear that all of it is conflicting. I shall take all of it into account before I finally come to a decision.

Mr. Nigel Lawson

Will the Chancellor of the Exchequer answer the question which was put by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)? The fact is that the Americans and the Germans have a large payments surplus. Therefore, any reflation must come from them first. If we were to lead the way in reflation that would be, in the words of Sir Alexander Cairncross in The Times of Tuesday, to court disaster.

Mr. Healey

I have the impression that the hon. Gentleman himself has answered the question.