§ Ql. Mr. Cartwrightasked the Prime Minister when he last met the CBI.
§ The Prime Minister (Mr. James Callaghan)I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Thornaby (Mr. Wriggles-worth) on 17th February.
§ Mr. CartwrightDoes my right hon. Friend agree that the much more optimistic forecast from the CBI this week, the substantial improvement in official reserves and the prospects for a stable pound and stable interest rates mean that the prospects for production investment are better than they have been for a long time? Will he therefore press the CBI to seek to persuade firms to bring forward investment programmes so that industry can give a lead in the programme of national recovery for which my right hon. Friend called at the weekend?
§ The Prime MinisterThe reserve figures announced yesterday were at a record level. That is a sign of stability. The most encouraging aspect of the CBI trends is the reference to the fact that the CBI expects the rate of increase in prices to slow down towards the end of the year. That is something that I have been saying for some time, and I am glad that the CBI's views coincide with mine. [Interruption.] I hope that the Opposition are also pleased about it.
On investment prospects, I certainly hope that the CBI will continue to encourage new investment. The forecasts for 1978 are good and the indicators generally are moving in the right direction. However, that does not mean that there are not—as I said at the weekend—a number of serious problems that we must face and overcome. Nevertheless, the indicators are pointing the right way.
§ Mr. Peter BottomleyCan the Prime Minister tell the CBI what level of pay settlements during the next 12 months is consistent with decelerating inflation?
§ The Prime MinisterNo. We have not discussed figures with the CBI on that matter, although discussions are now going on with the TUC.
§ Mr. MacFarquharCould my right hon. Friend arrange a meeting between the Opposition Front Bench and Lord Watkinson, so that Lord Watkinson can tell them about his prognostications for the next decade, which coincide so closely with those of the Prime Minister?
§ The Prime MinisterLord Watkinson is not an utter stranger to those on the Opposition Front Bench, and he will no doubt be supplying the same information to them as he does to us.
§ Mr. BudgenDoes the Prime Minister agree that it ought to be no part of a politician's job to seek to encourage or discourage investment? Should not investment be decided by individual entrepreneurs according to their assessment of the profitability of each act of investment?
§ The Prime MinisterNo. I understand that that is the Opposition view, but I do not know what would have happened to Wales or Scotland during the past 20 years if that doctrine had been followed. In broad terms, of course, individual entrepreneurs will take their own decisions on profitability and they will also decide on what they expect to be the prospects for the economy as a whole and for reasonable expansion. It is the duty of all politicians to place in front of them the best assessment they can make about how the economy is likely to go in future.