Budget Proposals (Hansard, 14 November 1974)

§ 5. Mr. Duffy
asked the Chancellor of the Exchequer if he is satisfied with the reception accorded by industry to his Budget proposals on the 12th November.

§ Mr. Healey
My Budget measures aim at a fundamental reconstruction of the economy in circumstances of the gravest difficulty. I did not expect that everyone would be completely satisfied with the balance which has been struck. The TUC reaction has been encouraging and its support is most welcome. The CBI's reaction has been more grudging. But I 570 believe that on closer inspection the CBI will realise that my measures give industry the opportunity for achieving a fair return on capital providing it shows the necessary vigour and alertness.

§ Mr. Duffy
Is my right hon. Friend aware that on balance his Budget has been well received in many other quarters than the TUC and CBI, and that The Times and the Financial Times in their leader titles yesterday described it as a step in the right direction? Nevertheless will he confirm that the doubts expressed since publication yesterday evening of the trade figures—especially in this morning's Guardian—about his growth target and the fact that it can be export-led are ill-founded?

§ Mr. Healey
Yes, certainly. I read with interest the article in this morning's Guardian, but it failed to point out that the estimates published in the Red Book which accompanied my Budget Statement on Tuesday recognised that there will be a fall in the volume growth of exports in the coming months from the present growth of 5 per cent., which is lower than the growth in the first half of this year, to 4½ per cent. growth. However, this will still be in line with the expected growth in world trade at the lower level which I predicted in my speech on Tuesday.

§ Mr. Peter Rees
What significance does the right hon. Gentleman attach to the fact that as a consequence of his Budget the pound has gone down and Krugerrands have gone up?

§ Mr. Healey
I would attach the same importance to Krugerrands as I always attach to what happens in this area. So far as what has happened to the pound is concerned, the hon. and learned Gentleman will be aware that there was a certain flurry over the pound through a misunderstanding in the first few hours after I announced that we did not propose to continue the guarantee on sterling balances. The hon. and learned Gentleman will be glad to note, as I was, that the pound was completely steady yesterday.

§ Mr. Canavan
Has my right hon. Friend received any representations from workers or board members in the nationalised industries protesting against the proposed phasing out of subsidies in 571 those industries? Docs he not realise that particularly in the case of nationalised fuel industries it would be fairer to compel industrial consumers to pay for fuel at cost price while retaining the benefit of subsidies for domestic consumers, thus helping to protect working people and their families from the effects of inflation, in the same way as with agricultural and food subsidies?

§ Mr. Healey
What has struck me with regard to my proposals to phase out price subsidies in the nationalised industries—I remind my hon. Friend that I did not talk about phasing out social subsidies which exist, I think, with the agreement of all parts of the House on, for example, the railways—is that they were welcomed by both trade unions and management in all nationalised industries. Indeed, I note that in yesterday's debate one of my hon. Friends who was deeply concerned in his union capacity with one of the nationalised industries greatly welcomed the step which I propose to take.