HL Deb 26 February 1969 vol 299 cc1090-5

3.58 p.m.


My Lords, with your Lordships' permission, I should like to repeat a Statement on "An economic assessment to 1972" which is being made in another place by my right honourable friend the Secretary of State for Economic Affairs. The Statement reads as follows:

"As I promised the House last week, the Economic Assessment to 1972 was published today. My intention, in publishing the Assessment, is to make available for the widest study and discussion the Government's view of the likely development of the economy over the next four years.

"The Assessment takes as its starting point the necessity to earn a balance-of-payments surplus of the order of £500 million a year and to maintain a substantial surplus for a period of years. After allowing for a contribution from non-trade items, we believe it to be prudent to aim at a surplus on visible account of some £300 million a year.

"The Assessment considers the rates of growth of national output consistent with the surplus which we need, It discusses a range of possible growth rates from an average of a little below 3 per cent. a year to an average of around 4 per cent. a year. Within this range the Assessment takes as the starting point for further analysis a basic case of an average growth rate of 3¼ per cent. a year and sets out the reasoning behind this. But this basic case does not constitute a forecast of what will happen. It is, indeed, one of the main purposes of publishing the Assessment and the subsequent consultations with industry to help to achieve a higher rate of growth providing always that it is compatible with our balance-of-payments requirements.

"The working population of the country will remain stable over the period of the Assessment and we cannot, therefore, expect a contribution to growth as in the past from an increase in the working population. But we do expect a contribution to output from a fall in the level of unemployment, although the speed at which we can increase the level of employment will depend both on our successes with the balance of payments and on the continued success of our regional policies. A strong regional policy will remain essential if we are to make full use of our labour resources in the country as a whole.

"To meet our objectives of a substantial surplus and greater economic growth a switch of resources is required. The first claim on our increasing resources must be for exports and imports saving. Secondly, while the share of public expenditure will remain broadly stable, there will be important shifts within the total, particularly a reduction in resources allocated to defence. Thirdly, although private expenditure will increase there must be a fall in the proportion of resources going to consumption. Lastly, and very important, a larger share must go to productive investment.

"Arising from discussions in N.E.D.C., certain key sectors of industry, including chemicals, vehicles and engineering, have been selected for detailed consultations through the E.D.C.s or in other ways as appropriate. A central part of the consultations will be to indentify the contribution of these industries to our balance-of-payments objectives. We shall go on to consider jointly the constraints hindering better economic performance and the action required to remove them. These further consultations with industry, will be taken fully into account when we come to revise the Assessment.

"The Assessment starts a new phase in the process of consultation between Government and industry. It begins against the background of real improvement in exports and investment. This must be sustained. To this end, discussions must go wider than the N.E.D.C. and the E.D.C.s and, indeed, wider than this House. The 'Task Ahead', which the Assessment describes, is one for all of us."


My Lords, I should like to say how grateful we are to the noble Lord the Leader of the House for repeating this Statement. I understand that this new document is not a repetition of the Government's ill-fated National Plan, but rather an analysis of conditions that must be fulfilled if certain desirable results are to be achieved. The noble Lord said, in the final sentence of his Statement: The 'Task Ahead' … is one for all of us. May I ask whether we shall find that this new document begins to recognise that the greatest need of all is a new attitude of mind, a new confidence in this as a country where go-ahead people have got a future, a country where people in all walks of life who mean to work hard and get ahead are treated as precious assets, and not penalised but given every possible incentive to do so?


My Lords, I have not yet had time to look at this document but I gather from what the noble Lord has said that it is in no way a prediction; that it is not even a forecast. I think I am right in saying that it is hardly an assessment; it is merely an aim. I understand that that is the case. I should like to have confirmation of it. If it is an aim, I see that it is nevertheless stated that there is a necessity for us to earn a balance-of-payments surplus of the order of £500 million. If that is a necessity, I suppose it means that if we do not attain that we shall be very badly "down the drain", that something terrible will happen. I hope not; but I imagine that that is the assumption. We are aiming at a surplus on the visible account of some £300 million a year and some £200 million, I believe I am right in thinking, comes from what used to be called invisible exports of the old type—insurance and so so; or is there any other significance in the phrase "non trade items"?


My Lords, not being a Party leader I am precluded from the privilege of making a statement and I must therefore ask a question. Does my noble friend recall that he estimated a balance-of-payments surplus of £500 million a year with £300 million on the visible account? Is he also aware that in the current Quarterly Review of the Westminster Bank, a copy of which I will give him after we leave the House, there is an interpretation by an expert economist which leads one to the conclusion that the form in which we issue our own trade statistics is not so optimistic a one as reality would demand; and, further, that we really are, according to that economist, better off than our monthly figures indicate? I shall be glad to let my noble friend have a copy of that Review.


My Lords, I think my noble friend may not suffer from not being a Party Leader, judging by the question that he purported to ask.

Let me say in reply to the noble Lord, Lord Brooke, that I agree with everything he said, except the imputation behind it as was reflected in the reaction from his own side; though I think this is permissible in these circumstances. But I would say that of course it depends on a recognition of the value of every individual's work. I think that that is fundamental, and there should be no disagreement about this, although there may be disagreement about how we set about making that clear.

In answer to the noble Lord, Lord Gladwyn, I say that this is an assessment. I will not follow his catalogue. The noble Lord, Lord Brooke, is quite correct in noting a significant difference between this and the planning document of 1965; but it is an assessment. It is intended, as is made clear, to allow the widest participation and consultation, and to indicate to particular areas of industry, and to the community generally, where it is hoped that they can contribute. Of course changes will be made as matters develop; but none the less it is made clear that it is essential to aim at certain targets. I am afraid that I cannot remember the noble Lord's second point.


My Lords, it was said that we are under the necessity of earning a surplus of £500 million. Does that mean that it is absolutely needful for us to do so and that if we do not attain it we shall be very much in the red and, as it were, "down the drain"?


My Lords, I hesitate about using the phrase "down the drain"; but I think it is clearly understood by everybody in this House, and I hope by the majority of people in the country, that it is of the highest importance if we are to achieve reasonable progress. I do not think I need go further. We shall have the opportunity of debating this matter. For this reason I will not follow my noble friend Lord Leatherland. If I were to read every bank review—and most of them pass across my table—I should have no time to deal with other matters. I do not know whether even the bankers read all the bank reviews; but for the reason I have given I will not attempt to discuss the particular economic points, interestingly made as they were, in my noble friend's question.


My Lords, is my noble friend aware that the aim of £500 million surplus in 1972 is a glorious one? Is he further aware, listening to the noble Lord, Lord Gladwyn, who is a Common Marketeer, that if we join the Common Market we shall have a £500 million adverse balance on the balance of payments? Do we do this exercise for nothing?


My Lords, could the noble Lord say what is the cost of producing this Assessment and how many civil servants have been spending full time in drawing it up?


My Lords, I was about to answer the noble Lord, Lord Blyton, by saying that he may have the opportunity on an Unstarred Question next week: to make his views known. His views are well known to us, and I would never discourage him from saying what he wishes to say on the subject. Nor would I ever be discouraged from watching him and the noble Lord, Lord Gladwyn, "having a go". So far as the noble Baroness's question is concerned, I do not know what she wants us to do. If we publish something we do wrong; if we do not publish something, we do wrong. If she wishes to know, and waste further public money, I will find out how many civil servants were asked. But one of the extra causes of work is the demands that Parliament, as well as the Government, makes on civil servants. It is quite right that it should; but Parliament should not then grumble about it.


My Lords, I certainly do not want any further examination to be made as to the expense or number of civil servants. I asked what the amount was only because I thought that perhaps the noble Lord had it in his brief.


My Lords, the cost of the Green Paper is 10s. 6d., but the noble Baroness will get it free.

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