§ So we find ourselves, yet again, asking the question: how are we to check, and then reverse, the long decline? In particular, what can we, here in this House of Commons, do about it?
§ We do well to begin, I suggest, by acknowledging that there is a definite limit to our capacity, as politicians, to influence these things for the better. I suspect that that view is much more widely accepted outside this place than it is within.
§ I do not mean to be unkind to my predecessor when I invite the House for a moment to consider his experience. The Government of whom he was a prominent member consistently behaved as if it were possible for the Government to manage, indeed to plan, the economy, so as to promote efficiency and growth. The right hon. Member for Leeds, East did this with notable enthusiasm. In five years of office he introduced no fewer than 15 Budgets and economic "packages", and financed a wide range of policies in the name of "the regeneration of industry".
§ But at the end of five years the right hon. Gentleman must ask himself, to what avail? Has the industrial strategy, as he conceived it, really transformed the outlook for British industry? Are we not driven to the conclusion that the notions of demand management, expanding public spending and "fine tuning" of the economy have now been tested almost to destruction?
§
Certainly the Leader of the Opposition has come round to that view. He said in a memorable speech on 28 September 1976 to his own party conference at Blackpool:
We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you, in all candour"—
said the right hon. Gentleman—
that that option no longer exists …".
§ The right hon. Member for Leeds, East has, in the event, been proclaiming 240 the same conclusion. He has, throughout, asserted the importance of monetary policy. He rightly began the practice of setting money supply targets, and he claimed to make his public spending plans accordingly. This means that I am able to approach my task this afternoon on this one, crucially important piece of common ground: that the poor performance of the British economy in recent years has not been due to a shortage of demand. We are suffering from a growing series of failures on the supply side of the economy.