HL Deb 05 February 1968 vol 288 cc911-3

2.38 p.m.

LORD BYERS

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what measures they propose to take in advance of the Budget to curtail the present alarming increase in personal consumption and consumer spending.]

LORD BESWICK

My Lords, the arguments against taking additional measures to restrain personal consumption in advance of the Budget were set out in some detail in the speech of January 23 by the Lord Privy Seal, and by myself in my speech on January 24.

LORD BYERS

My Lords, I thank the noble Lord for answering the Question, but is he not aware that there is a record spending spree going on at the present time? Is it right to maintain this uncertainty up to the Budget? Surely one of the halves of the devaluation package was some restraint on consumer spending. Is it not about to get out of hand?

LORD BESWICK

My Lords, the answer to the last part of the noble Lord's question is, No. As for his assertion that there is a record spending spree, I am not certain to what figures he is referring. The fact is that there are no really reliable statistics about it, although there is a lot of speculation in the Press. If the noble Lord will look at the speech to which I referred, he will see that a great many of consumer durables—in the case of washing machines it is 75 per cent.—come from the depressed areas, and we want to build up demand there. There is no evidence—and I shall be glad if the noble Lord can provide the figures on which he bases his assertion—that home demand is impinging on export demand.

LORD BYERS

My Lords, surely it is within the noble Lord's knowledge, with all the Press reports and even one's own experience, that people are buying motor cars, washing machines and all the rest of it. If his contention is right, is there any need for cutting consumer consumption at the time of the Budget? What is so magic about March 19?

LORD BESWICK

My Lords, one of the things the noble Lord ought to know is that the Chancellor of the Exchequer does not make decisions based on Press reports. So far as motor car production is concerned, I am advised that in the last three months of 1967 production was still 12 per cent. below what it was three years ago. There is slack to take up, and until that slack is taken up we need not get alarmed about hindering exports.

LORD BYERS

My Lords, may we take it that the Government are quite happy that this is having no adverse effect on the export drive?

LORD BESWICK

My Lords, the noble Lord can take it that the Government are not getting alarmed as the noble Lord is.

THE EARL OF DUNDEE

My Lords, apart from Press reports, many people think there is a great deal of reason to believe that the Chancellor of the Exchequer was not well advised in the reasons he gave on January 23. Will the Government keep a very careful watch on the position and be prepared to revise their estimates and change their decision before March 19, in the interests of our export drive, if they think it necessary?

LORD BESWICK

My Lords, as the noble Earl will remember, one of the things I said in that speech was that it was much easier to be dogmatic if one did not have the responsibility for executing the decisions taken. The fact of the matter is that the Chancellor of the Exchequer has two factors to take into account. One is confidence at home, and although additional measures would no doubt have assisted the creation of favourable opinion abroad, it was still necessary not to undermine confidence at home. While there was this slack to take up, in so many of our industries, it was unwise to take premature action.

LORD BROCKWAY

My Lords, while I congratulate my noble friend on his answers, will he take into consideration that the expenditure of the rich on consumption, even of one meal, would be a day's wage to a worker, and that that fact should also be taken into consideration in any reduction of consumption?

LORD BESWICK

My Lords, this may well be the case. Here we are talking, in the main, about consumer durables, and there is no evidence at all as yet that the present demand is anything more than anticipatory buying which later on will fall away, at a time when we hope the export demand will be building up.

LORD BYERS

My Lords, is it not a fact that the Government statistics are usually at least three months out of date?

LORD BESWICK

My Lords, what the noble Lord is saying is that the Treasury assessment of economic trends is made four times a year, and therefore so far as his statistical proposition is concerned I agree with him. But the most recent Treasury assessment is not yet available. It will be available within the next week or so, and it would be much better, I should have thought for the Chancellor to wait for that and not base any decision upon Press statements.