§ Of course, as inhabitaints of a country that has always been deeply involved in the international economy, we pay a great deal of attention to events outside 238 our own country. But it would be very dangerous if preoccupation with this or that world crisis—the oil crisis, the dollar crisis or whatever—led us to believe that our economic troubles could be blamed mainly on the outside world. The truth is that our troubles are very largely home-made. If we tackle them ourselves, we can pull our own economy round, even in a world of slow growth. If we do nothing to change course, nothing that happens beyond these shores can help us.
§ As it happens, the international environment is unlikely to give us any comfort in the years immediately ahead. Oil prices are now, on average, about 30 per cent. higher than six months ago. That is one reason why growth in most countries is likely to be significantly lower than in 1978. So we clearly now need to do more about both conservation and supply of energy.
§ For that reason, it will be an important subject for discussion at the next meeting of the European Council and at the economic summit in Tokyo at the end of this month.
§ In this disturbed situation, the European Community can, and should, be a source of stability and strength for its members. In one important area, however, present EEC policies are seriously hindering our efforts to help ourselves. The United Kingdom and Italy, which are among the poorer members of the Community, are transferring substantial resources to richer member States—[HON. MEMBERS: "Oh."]—chiefly through the Community budget. We have already made it very clear to our partners that this cannot be allowed to continue. [HON. MEMBERS: "Oh."] It is plainly unfair, and it is against the interests of the Community itself. We shall continue to press for an agreement which meets our case.
§ I repeat, however, that progress internationally, whether on energy policy or within the Community, will not cure the deep-seated weaknesses of our own domestic economy. Nor will North Sea oil. Growing production will certainly put us in a better position than other countries, without oil of their own, but it must not be allowed to conceal the grim truth about what has been happening to the balance of our own trade, particularly in manufactured goods.239
§ North Sea oil will itself do nothing to solve the problems on the supply side of our economy. Nor will it check inflation. Indeed, in some respects it may actually make matters worse, unless we correct some other aspects of policy which are at present working in the wrong direction.