HC Deb 23 February 1978 vol 944 cc1677-8
4. Mr. Dykes

asked the Chancellor of the Exchequer when he next intends to chair a meeting of the National Economic Development Council.

Mr. Healey

I hope to take the chair at the next meeting on Wednesday 1st March 1978.

Mr. Dykes

Does the right hon. Gentleman agree that although there was some improvement in the British economy in respect of financial statistics there has not yet been any improvement in real performance? Will he say to what extent the NEDC is worried about this matter, in terms of priority? Bearing in mind the deterioration in our terms of trade and volume of exports in recent months, may I ask what plans the NEDC has on specific headings to try to obtain a programme for real economic recovery?

Mr. Healey

I welcome the tribute made by the hon. Gentleman to the improvement in our financial situation. It is true that so far this has not been adequately reflected in the behaviour of output or employment, although there was an increase last year in the volume of private manufacturing investment, which is part of the real economy, of between 12 per cent. and 13 per cent. The hon. Gentleman will be aware of the substantial increase in retail sales in the last two months. We can expect that to be reflected in the coming months in the build-up of stocks and new production.

Mr. Skinner

Has my right hon. Friend seen the forecast by the Cambridge Economic Group with its devastating comments about unemployment not only in the next two decades but much earlier—as near as 1980, and going on to 1985? On that basis, does he think that in the next Budget and succeeding Budgets it will be necessary to err on the side of Benn rather than other pressure groups, whose views have been made known?

Mr. Healey

I am not sure what abstract economic concept is intended by the word "Benn". I am not familiar with that concept. In regard to the Cambridge Economic Group and its fore- casts, I study these matters with the attention they deserve. I remind the House that the Cambridge Economic Group told me three years ago that our balance of payments deficit would increase with our public sector deficit. That forecast turned out to be entirely wrong.

There should be scope for some stimulus to the economy in the next Budget, and I am sure that my hon. Friend will be glad to know that I propose to take full advantage of that scope.

Sir G. Howe

Will the right hon. Gentleman confirm that the national output in each quarter of last year was running at a rate below that achieved in 1973, and that there is no sign whatever of the upturn forecast in his Budget last autumn? Will he also confirm that, as has been reported, the Prime Minister does not share his optimism about the future of the economy? Will he tell members of the NEDC that they would be better advised to agree with the Prime Minister than to accept his own views?

Mr. Healey

I must warn the hon. Gentleman not to rely on Press reports by people who were not present at the meeting concerned, but to rely instead on the denial of those reports by both the TUC General Council and the Labour Party National Executive Committee, whose members attended an excellent meeting with me on Tuesday morning.