HC Deb 25 July 1977 vol 936 cc24-7
50. Mr. Gow

asked the Chancellor of the Duchy of Lancaster whether, in his capacity as special adviser to the Prime Minister on economic matters, he will make a statement on his meetings with his EEC colleagues at the end of June.

51. Mr. Tim Renton

asked the Chancellor of the Duchy of Lancaster whether, in his capacity of special adviser on economic matters, he will make a statement on his meetings with his EEC colleagues at the end of June.

The Chancellor of the Duchy of Lancaster (Mr. Harold Lever)

I had no meetings with EEC colleagues at the end of June.

Mr. Gow

If the right hon. Gentleman had had such meetings, would he have drawn the attention of his colleagues to the imbalance between the level of public expenditure in the United Kingdom and the level of public expenditure in the other countries of the Community? If he had done so, would he have acknowledged his own repentance in that the Government are now committed to a continuing and substantial reduction in the resources required for public expenditure in the next few years?

Mr. Lever

Any educational activity that I might have been tempted to pursue in relation to the size of public expenditure I should have focused where it was most clearly needed—namely, on the Opposition Benches. Public expenditure in this country is not at all out of line with the level of public expenditure in other countries of the European Community. Public expendture is not ex hypothesi a bad thing. It is a good thing in principle if it is wisely and in proper proportion directed. It is the Government's intention to continue wise public expenditure and to have due regard to the proportions and timing of that public expenditure.

Mr. Renton

In the course of the right hon. Gentleman's many informal meetings with his colleagues on the Continent, is he able to convince his EEC colleagues that Britain is ready to embrace the European cause? Does he believe that himself? If so, when will he start to convince those of his Cabinet colleagues —one of whom is sitting close to him on the Government Front Bench—who voted against the direct elections Bill?

Mr. Lever

I do not regard it as my function specifically to assert the right direction that any of my right hon. Friends embraces. Other members of the Community have recognised that there is a genuine difference of opinion on both sides of this House about the wisdom and attractions of being members of the Community. They recognise that and also recognise that the overwhelming majority of Members on both sides—in aggregate at any rate—fully recognise that we have joined the Community and that we are determined to make a success of our membership as a loyal, if critically constructive, member of the Community.

Mr. Hooley

In any discussions that my right hon. Friend has with his EEC colleagues, will he emphasise the importance of expanding resources for the IMF, particularly with a view to helping developing countries with balance of payments problems?

Mr. Lever

Yes, Sir. I think that it is of great importance for the general prosperity of the world and the fuller recovery of the world from the present recession that we should advance our co-operative thinking in precisely those areas.

Mr. Pardoe

Reverting to the question asked about public expenditure, may I ask the right hon. Gentleman to confirm that the borrowing requirement in the current financial year is approximately the same proportion of the GNP as it was in the last year of the last Conservative Government? Will he confirm that public expenditure in this country is not a higher proportion of GNP than in most of the OECD countries? Will he also categorically state that, unless private investment takes up the slack and brings down unemployment, some Government will have to increase public investment?

Mr. Lever

There is a very natural reticence on this side of the House, especially in my case, to emphasise those areas —whether it be the weather or proportions of public expenditure—which in the case of my Government resemble what happened under the Conservative Government. When I said "my Government" it was intended as shorthand to mean the Government of which I have the privilege to be a member. I have already answered the point about the proportion of public expenditure. On investment, I am absolutely clear that there is plenty of scope for useful public investment in the nationalised and publicly-controlled industries. I am also clear that we will get ample investment in the private sector if the conditions favouring successful investment in that sector exist.

Mr. Molloy

Does my right hon. Friend agree with the recommendations of the TUC Economic Committee apropos public expenditure, warning that indiscriminate cutting of public expenditure could have disastrous effects on prices and employment? Does my right hon. Friend further agree that these are the sort of things that he should be talking about to his EEC colleagues because they are recommendations from people who know far more about industry and finance than do many Opposition Members?

Mr. Lever

I am very much opposed to any indiscriminate cutting of public expenditure. It is not necessary to discuss this with my EEC colleagues.

Mr. Biffen

In the right hon. Gentleman's role as special economic adviser, will he use all his authority and influence to support those in the Council of Ministers who are resisting the grotesquely inflated budget for the Common Market which has been proposed by the Commission, even if in so doing he treads on the sensitive corns of Commissioner Jenkins?

Mr. Lever

I was not aware until the hon. Gentleman mentioned it that Commissioner Jenkins—or President Jenkins—had any specially sensitive portions of his anatomy that I should avoid. I shall always support my colleagues in constructive and useful contributions to the EEC.