§ 3.17 p.m.
§ LORD BALOGHMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they have any modification to make in the Statements or speeches of the Lord Chancellor and the Minister Without Portfolio on the 5 per cent. rate per annum advance in gross national product of this country in view of Sir M. Clapham's speech to a meeting of Members of Parliament.
THE LORD PRIVY SEAL (EARL JELLICOE)No, my Lords. I would, of course, always hesitate to modify reasoned and considered statements made by my noble friends, but in any event the remarks made by the President of the Confederation of British Industry to a Meeting of Conservative Members of Parliament on December 5 on the subject of economic growth were misreported in The Times, as Mr. Clapham himself made clear in a statement issued on December 6. Mr. Clapham's view was that the Government's target of 5 per cent. growth per annum was attainable over the next year or so because sufficient spare capacity was available. He went 751 on to say in his speech that 5 per cent. growth could be sustained in the long term only if there was a major shift of resources from consumption to investment. The Government accent that a higher level of investment is required, and they believe that the present range of investment incentives and the favourable economic climate will soon lead to the increase in industrial investment which recent business surveys are predicting.
§ LORD BALOGHMy Lords, is the noble Earl aware that since I put down this Question the National Institute have confirmed that the Government are off course to the tune of 1½ per cent.? Is he further aware that there has been a statement by Lord Drumalbyn's Department that there has been a decline of 11 per cent. in investment? Putting these two facts together, does not the noble Earl think that my Question, as usual, really understates the issue?
EARL JELLICOEMy Lords, I am of course aware, being a regular subscriber to the National Institute, of their report, and I would remind the noble Lord, Lord Balogh, that it states (and I must say that I have some sympathy with the National Institute) that it is virtually impossible to get an accurate picture of where the economy stands at present. The Institute then go on to say that their predictions are, of course, liable to a very wide range of errors, as many of their predictions have been shown to be in the past.
§ LORD SHACKLETONMy Lords, is the noble Earl confirming that the Government themselves have absolutely no idea where the economy is standing and where we are going? The rest of us, of course, are well aware of the Government's position. Would it be possible, since Mr. Clapham's speech (I think the possibility of his becoming Sir has now been damaged somewhat) has been quoted inaccurately in the Press, (which I know from Party meetings, does sometimes happen), to have the speech laid so that we can see it?
EARL JELLICOEMy Lords, I do not think that that would be necessary. Indeed, the speech was to a private meeting, although I noticed that it appeared on 752 the front page of The Times the next morning. If I may say so, in mild criticism of that august journal, it was a little surprising to me that no mention appeared in The Times of Mr. Clapham's explicit denial, which was made the very next day. The first part of the noble Lord's supplementary I will treat for the good fun it was doubtless intended to be.
§ LORD SHACKLETONMy Lords, the noble Earl is in fact confirming what I said in good fun?
§ BARONESS WOOTTON OF ABINGERMy Lords, could the noble Earl say whether the original estimate of 5 per cent. was based on any evidence other than wishful thinking, and, if so, what?
EARL JELLICOEMy Lords, as I have said before, and I know that this will delight the noble Lord, Lord Balogh, it was made on the basis of a very carefully calculated economic model.
§ LORD ROBBINSMy Lords, the noble Earl has mentioned margins of error in his animadversions on statements which have been made elsewhere. Could he inform the House what he would regard as appropriate margins to apply in regard to statements of the kind that we are now discussing?
EARL JELLICOEMy Lords, I find this very difficult. I happen to have a great respect for the National Institute, otherwise I would not subscribe, at great cost, to its periodicals. All I can do is to quote that august authority:
The implication is that one or more of the measures of G.D.P. must be incorrect, and possibly by a margin of several percentage points.
§ LORD BALOGHMy Lords, nobody is second to me in admiration for the accuracy of the noble and learned Lord who sits on the Woolsack; I have encountered him on various occasions and have always been worsted. Nevertheless, may I ask how the noble Earl reconciles the statement that it is impossible to foresee the future with the statement in the same breath that he maintains that a very careful calculation has been made?
EARL JELLICOEMy Lords, I think that it is perfectly possible. We all surely know that in these areas there are involved wide questions and wide matters of judgment, and there is great difficulty 753 in reconciling what are possibly rather contradictory indicators. One makes the best possible judgment that one can at the time. That judgment was made by the Government, and the Government adhere to that judgment.
§ LORD BYERSMy Lords, is it not rather odd that a stickler for accuracy like the noble Lord, Lord Balogh, has admitted to a serious understatement in his own question?