HC Deb 14 October 1976 vol 917 cc614-7
9. Mr. Adley

asked the Chancellor of the Exchequer when he intends to bring forward further economic measures.

11. Mr. Michael Latham

asked the Chancellor of the Exchequer whether he intends to announce further economic or fiscal measures in the near future.

15. Mr. Teddy Taylor

asked the Chancellor of the Exchequer whether he intends to bring forward further economic measures in the near future.

Mr. Healey

I have nothing to add to my statement in the debate last Monday.

Mr. Adley

In the light of that answer, will the right hon. Gentleman give a categorical assurance to the 20 million people in this country who have bank accounts and the 8½ million people who have company pensions or are involved in life assurance schemes that the Government will not destroy their past and ruin their future prospects by nationalising the banking and insurance industries?

Mr. Healey

My right hon. Friend the Prime Minister has made it absolutely clear that this Government have no intention whatsoever of nationalising the banks and the insurance industry. He and I will do our best to see that it will not figure in the programme of the next Labour Government which will be taking office in a few years' time.

Mr. Heffer

Is my right hon. Friend aware that the next Labour Government's programme will be drawn up by a liaison committee and that what will be in that programme will not be decided by my right hon. Friend or by any other individual but will be decided by the majority of such a liaison committee?

If I may now come to the question of the economic proposals, is my right hon. Friend aware that many of us would like some alternative? Why are he and his right hon. Friends so dedicated to opposing any type of import controls when past Labour Governments have successfully brought in import controls, which had an important effect in helping to overcome our problems at that time?

Mr. Healey

First, let me say that this Government have no ideological or political objection to import controls if they will help the economy. Traditionally, of course, the Conservative Party has been the party of protection in this country. There is nothing specifically Socialist about interfering with the flow of trade. This Government have already introduced controls on imports from many countries. Indeed, imports from almost all countries outside the OECD are already under some sort of control—that is to say, the COMECON countries and the countries of the Third World—but whether or not that makes sense depends on the interests of the British people. I have made it clear many times that I do not think that it would make sense from anybody's point of view to protect the less efficient and declining industries at the risk of destroying the markets on which the more efficient and growing industries depend for demand.

Mr. Latham

Is not Mr. Sam Brittan absolutely right when he refers to demoralisation in Government circles because, although Ministers know perfectly well what must be done to save our economy, they lack the political support or will to do it? Was that not clear in the right hon. Gentleman's answer to the hon. Member for Liverpool, Walton (Mr. Heffer)?

Mr. Healey

It is not for me to comment on Mr. Sam Brittan. Sometimes he is right and sometimes he is wrong—but he is quite wrong in believing that either the Government or I are demoralised.

Mr. Cronin

Is my right hon. Friend aware that one of the basic problems of the economy is the lack of investment in British industry, although there has been some indication of substantial improvement in the near future? Will he consider making substantial cash grants for investment as a part of any future fiscal measures that he has in mind?

Mr. Healey

This Government have done more to stimulate investment than earlier Governments, particularly through our assistance by means of tax relief on stock appreciation, which ensures that no manufacturing company which invests its profit pays any tax whatever. But I do not think that across-the-board grants for investment have proved an effective way of encouraging investment. A recent study by the EEC shows that we have more generous investment incentives than any other country in Europe, yet we have a lower level of investment than many. I believe that possibly a better answer to this problem is the type of accelerated investment project programme such as we saw successfully applied this year.

Mr. Taylor

In view of the horrifying burden of repayments of interest which the right hon. Gentleman has placed on the taxpayers of tomorrow, can he categorically assure us that he will not agree to further foreign borrowing by Her Majesty's Government or by nationalised industries? In view of the state of our borrowing, is he aware that if Britain were a public company he would be very lucky indeed to escape imprisonment?

Mr. Healey: The programme of borrowing abroad by the nationalised industries was begun successfully in 1973 by the previous Administration, which borrowed nearly $3 billion by that means in that year. I believe that it is now making a very important contribution towards dealing with our current account balance of payments problems.

Mr. Litterick

Is my right hon. Friend aware that this week the Warwickshire County Council announced its decision to invest £96,000 of its employees' pension fund contributions in Japan? What has the Treasury done, if anything, to dissuade that authority from doing so? Does my right hon. Friend agree that such decisions are highly damaging to the British economy and amount to the use of British workers' money to damage British workers' interests?

Mr. Healey

I must confess that I am totally unaware of the case to which my hon. Friend refers. If he will give me details, I will look into it, but I understood that it was not possible for British bodies to invest money in that way abroad without exchange control permission. I suspect that my hon. Friend has his facts somewhat awry, but if he sends me details I will look into the matter.

Mr. Nott

If the Chancellor is not demoralised—I am using his term—by a fall in the value of sterling of 30 per cent., by a 15 per cent. minimum lending rate, by 1½ million unemployed and by inflation which is now beginning to rise again, what exactly will it take to demoralise him?

Mr. Healey

I am grateful for the hon. Member's curiosity. He will recall that the Chancellor under whom he served raised minimum lending rate to 13 per cent. at a time when inflation was lower than it is today and that, therefore, the effective interest rate was a great deal higher than it is at the moment. I regret to say that the hon. Gentleman, even today, shows no sign of demoralisation.