§ Ql. Mr. Bruce-Gardyneasked the Prime Minister whether the public speech of the Chancellor of the Exchequer to the annual dinner of the Confederation of British Industry in London on 14th May about the Government's attitude to profit and the private sector represents the policy of Her Majesty's Government.
§ Q2. Mr. Nigel Lawsonasked the Prime Minister whether the public speech of the Chancellor of the Exchequer on the economy at the CBI dinner on 14th May represents Government policy.
§ Q7. Mr. George Gardinerasked the Prime Minister whether the Chancellor 1403 of the Exchequer's public speech to the CBI on economic policy on 14th May represents the Government's policy.
§ Q8. Mr. Tebbitasked the Prime Minister if the public speech made by the Chancellor of the Exchequer to the CBI on economic affairs on Tuesday 14th May represents Government policy.
§ Q14. Mr. Wyn Robertsasked the Prime Minister if the public speech of the Chancellor of the Exchequer to the CBI on economic matters on 14th May represents Her Majesty's Government's policy.
§ Q16. Mr. Ridleyasked the Prime Minister whether the speech of the Chancellor of the Exchequer on 14th May to the CBI on the profit motive represents Government policy.
§ The Prime Minister (Mr. Harold Wilson)I would refer the hon. Members to the reply which I gave on 21st May to the hon. Member for Derbyshire, South-East (Mr. Rost).—[Vol. 874, c. 108-9.]
§ Mr. Bruce-GardyneCan the Prime Minister explain what is the use of the Chancellor saying that his Government —by which he presumably means the Government to which he belongs—believe in the need for profitable investment when the Secretary of State for Industry is busy fashioning his oddly-named Enterprise Board to nationalise what he picks out as the key sectors of the economy? Can the Prime Minister at least tell the House which side of the argument he is on, or is he, as usual, a "don't know"?
§ The Prime MinisterIn the speech to which the Questions refer, my right hon. Friend the Chancellor repeated what has been said by myself, by him and by others on a number of occasions now and under the previous Government. As far as I am aware, what my right hon. Friend the Secretary of State for Industry has been saying is entirely in accordance with the manifesto which we presented to the country during the election. [Interruption.] It is entirely consistent with that. When my right hon. Friend the Secretary of State is ready to make statements to the House with the full authority of the Government, having brought them before the Government, the hon. Gentleman will be able to study 1404 what it is he will be voting upon. 1 support the manifesto on which we fought the election. I have never found out whether the hon. Gentleman supported the manifesto on which he was elected in 1970.
§ Mr. LawsonIn his speech the Chancellor said that he believed in private industry that was vigorous, alert, imaginative and profitable. Is the Prime Minister saying that to nationalise the largest companies, which it is the policy of his right hon. Friend the Secretary of State for Industry to nationalise, is likely to make them more vigorous, more alert, more imaginative or more profitable, particularly in the light of his own remark that he was not in favour of raising the efficiency of Marks and Spencer to that of the Co-op?
§ The Prime MinisterIt was not my remark. I wish I had thought of it, but I only repeated it. It was originally made by my right hon. Friend the Secretary of State for the Environment. Everyone gets credit for his own. My right hon. Friend the Chancellor was exactly stating the Government's position. I thought that successive Governments believed in a mixed economy and that the argument between us over a quarter of a century, or perhaps more, has been about where the boundaries should be drawn between the private and the public sectors. I hope that all the adjectives quoted by the hon. Member for Blaby (Mr. Lawson) are the desire of all of us, on both sides of the House, for the private sector.
§ Mr. AtkinsonDoes my right hon. Friend agree that there is something fundamentally wrong with the imaginative private enterprise system if it needs an injection of between £2 million and £4 million a day subsidy from the taxpayer?
§ The Prime MinisterIn commenting on private ownership in industry I have never thought of using words as strong as those used by my predecessor about capitalism. It has been the desire of successive Governments to ensure that private ownership should be responsive to the needs of the community in a wider sense than considerations only of its private profit. That is what the Leader of the Opposition was referring to on a famous occasion. I remind Conservative Members who are upset about take-over 1405 by due legislative process that a relatively small firm such as Slater Walker has carried out far more take-overs than those proposed at any time by my right hon. Friend the Secretary of State for Industry.
§ Mr. GardinerIn view of the optimism of the Chancellor's speech, may I ask the Prime Minister whether he accepts the National Institute's forecast that production is likely to remain stagnant and investment is likely to fall?
§ The Prime MinisterI do not think my right hon. Friend was noticeably optimistic. What he said was realistic. The National Institute for Economic and Social Research, for which we all have great respect, has given its views. It is difficult for it, for the Government, the Opposition or anyone else at this moment to form a very clear view because the indices on which all of us have to work are still not sufficiently up to date in relation to the period following the three-day week. All who are making prognoses for the future are using figures based on either the three-day-week period or the period immediately after it.
§ Mr. TebbitWould the Prime Minister care to define for the benefit of the House and industry generally what the Chancellor meant by "proper social use of profits", as it would appear that profits are not permissible unless proper social use is to be made of them?
§ The Prime MinisterI think that my right hon. Friend, who will no doubt be glad to develop this more fully in the continuing debates on his Budget, had in mind a number of aspects of "proper social use". The most important social and economic use is for profits to be ploughed back for investment purposes rather than to be distributed.
§ Mr. RobertsHow does the Prime Minister reconcile the Chancellor's attempts to allay fears of nationalisation with the attempts of the Secretary of State for Industry to boost such fears? Is not this irreconcilability between the right hon. Gentlemen having a disastrous effect on investment?
§ The Prime MinisterI have already answered that twice this afternoon. My right hon. Friend the Chancellor was 1406 talking about the private sector of industry. As I have tried to say, there may be arguments between us about where the boundaries should be drawn between private and public industry. This is one of the things dealt with in our manifesto and repeated by my right hon. Friend the Secretary of State for Industry. In a mixed economy there must be an adequate degree of economic success within the private sector. That was what my right hon. Friend was saying.
§ Mr. RidleyIs the right hon. Gentleman aware that the Chancellor's words do not tie in with the Government's actions and that higher taxes, price control and the possibility of vastly increased wage claims are leading to a crisis of confidence in industry which is already showing itself in a failure to make investment decisions? If the Government really believe in profitable private enterprise, will they reverse some of the disastrous economic policies upon which they have embarked?
§ The Prime MinisterThe hon. Gentleman is rather misunderstanding the situation. He has referred to extortionate wage claims. There have been substantial increases in wages recently in view of the operation of the threshold which was supported by our party and carried through by the party opposite in what I think was then a mood of optimism based on the belief that there would be a rather lower rate of increase in world prices. I do not think that the hon. Member is justified in saying what he has said about wages at present. As for investment intentions, investment under the previous Government never got back to the figure at which it stood in 1970. The reduction in investment intentions over the past few years occurred well before the Budget. A number of other surveys of investment intentions—the CBI and the Financial Times surveys, for instance—confirmed that. The main cause of this reduction was the general uncertainty following the energy crisis. It was the energy situation and the three-day week which more than anything else cut back confidence in British industry.
§ Mr. SkinnerWould my right hon. Friend be prepared to comment—in this doom-laden situation about which we hear so often—upon the fact that Sir William Armstrong, head of the Civil 1407 Service, is to receive £34,000 as head of the Midland Bank plus an £8,000 pension? If there is enough money around to pay that kind of salary and pension to this man, why do we so often hear talk about there not being enough in the same pot for the workers?
§ The Prime MinisterI have already answered questions about Sir William Armstrong and I have nothing to add to what I said on that occasion. Certainly in so far as the questions are about profits—and most of them have been today, arising out of my right hon. Friend's speech—it is a fact that every week in the Sunday Times Business News one can see the profit figures for the previous year. The current figures show substantial increases. It is a fact, which my right hon. Friend welcomed, as I do, that a considerable part of any increase in profits being earned today is earned because more industrialists, who face fairly strict price controls as a result of the activities of both Governments, are turning more to exporting. In the current situation there is a chance of earning more profits in this direction as well as helping our balance of payments deficit.
§ Mr. HeathIs the Prime Minister aware that he has amply demonstrated this afternoon that it is impossible to reconcile the statement of the Chancellor at the CBI dinner with the statement of the Secretary of State for Industry? Is it not a fact that the real policy of the Government is that expressed by the Secretary of State for Industry and that the remarks of the Chancellor about profitability were added as an afterthought to his speech, as a sop to the industrialists who were present, at a time of rapidly declining investment? The Prime Minister asked my hon. Friends to await a statement to Parliament from the Secretary of State for Industry. Is it not also the fact that his plans have just been published by Transport House in a document headed "The Current Work Programme of the Department of Industry. Note by Tony Benn"? What exactly is the constitutional position of this document? Have the Government now handed over complete control of their policy to Transport House? Have they abdicated the work of government, and are all future statements on policy to be issued by Transport House instead of by the Department to Parliament?
§ The Prime MinisterThe right hon. Gentleman, as the architect of our investment decline, is now seeking to find an excuse to get away from his responsibilities. [HON. MEMBERS: "Answer."] Before I answer the right hon. Gentleman's hysterical questions, and I have already dealt with the earlier parts of them three times this afternoon, I will point out to the right hon. Gentleman that no Prime Minister has ever been more confident about increased investment than he was as soon as he had negotiated the terms for entry to the Common Market. He spoke at the Guildhall and called on industry for a massive increase in investment, which never happened. Investment never got back to the 1970 figures.
The document referred to by the right hon. Gentleman—I am glad he is on the Transport House mailing list, because of may help to educate him out of some of the fallacies which produced the industrial disaster earlier this year—is exactly what its title, which he read out, suggests. This is the basis on which my right hon. Friend is working within the manifesto approved by the whole of the Labour Party, the National Executive and the Shadow Cabinet. Policy decisions will be a matter for the Government. Once again I would refer the House to the clear answer given on these matters by my right hon. Friend the Secretary of State for Trade to the hon. Member for Truro (Mr. Dixon) yesterday. The Government will take responsibility for these matters and the House will have the fullest opportunity of debating them and discussing any legislation which is brought forward.
§ Mr. HeathThe Prime Minister cannot be allowed to get away with that. This is a document which by all constitutional processes ought to be published either by the House or by the Department concerned. Instead of that, it is clear from its title that the working programme in the Department is now being issued in a document by Transport House. If that had happened under the last Government, the right hon. Gentleman would quite rightly have criticised us for issuing such a document through Central Office in Smith Square. The Prime Minister must take this matter seriously and recognise that if he is now to abdicate government to Transport House he had better say so openly, so that we know where we stand.
§ The Prime MinisterI am surprised (hat after three months of it the right hon. Gentleman does not know where he stands. The rest of the country knows. I am surprised to hear questions from him on these matters because whenever he could do so he made his statements outside the House of Commons, at televised Press conferences in Lancaster House, from Conservative Central Office, the Tory Party conference and so on. There has never been such a record— [Hon. Members: "Answer the question."] I have answered the question. I know that Conservative Members do not want to listen to the answer, but I will give it to them for the fifth time. The work being done follows the work on the manifesto that we put openly to the country in the General Election, and when the priorities are decided by the Government the results of our work will be brought to the House. The right hon. Gentleman will then have adequate opportunity in the years ahead to debate the successive development of these programmes.