§ 2.44 p.m.
§ Lord AVEBURYMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they will publish estimates they have made of the change of average retail prices in the countries which provide our major export markets from the fourth quarter of 1979 to the fourth quarter of 1980.
§ The MINISTER of STATE, TREASURY (Lord Cockfield)No, my Lords, I do not think it appropriate for Her Majesty's Government to be publish- 1532 ing forecasts relating to the economic performance of other countries, who might well feel that this was intrusion in their domestic affairs. The OECD, which is an international body, does publish such forecasts every year, including forecasts of price movements. Their forecasts for 1980 are expected to be published in the next few days.
§ Lord AVEBURYMy Lords, is not such a forecast implied in the statement made by the Treasury in their document Economic Prospects for 1980 that the United Kingdom's costs and competitiveness have not greatly changed from their recent level, taking the fourth quarter of 1980 on the fourth quarter of 1979? Does the noble Lord still think that the assumption on which this calculation is based—that there will be a progressive reduction in the level of settlements over the coming year—is justified and that the rate of retail price inflation will come down over this period to only 14 per cent., bearing in mind the rapid acceleration in the rise of retail prices over recent months?
§ Lord COCKFIELDMy Lords, the noble Lord asks a number of questions. Inevitably—as was clearly stated in the document to which he refers—it was necessary to make certain assumptions. The assumptions were as stated. There is of course a difference between an assumption and a forecast. So far as the level of pay settlements is concerned, it is a matter of great importance that it should come down. We believe that the present level of inflation does impose very great difficulties for our exporters, and we think that the best way that these difficulties can be overcome is by reducing the level of inflation. It is to that end that Her Majesty's Government's policies are directed.
§ Lord AVEBURYMy Lords, may ask one further question? Even if we reduce the level of price settlements to the 14 per cent. assumed in the document, is the noble Lord really telling us that in the other OECD countries inflation will proceed at this rate of 14 per cent. year on year, the fourth quarter of 1979 on the fourth quarter of 1980? If it will be at some much lower rate than that, how can the document say that our price competitiveness will be maintained?
§ Lord COCKFIELDMy Lords, success in exports of course depends on a large number of factors other than price competitiveness. It depends on the quality of goods and on excellence of design. It depends on good delivery dates; it depends upon adhering to those delivery dates; it depends upon after-sales service and the availability of spares. Moreover, there is a difference between price competitiveness and the level of retail prices. The prices in an export market do not necessarily follow precisely the trend of retail prices in the country of origin.
§ Lord AVEBURYI am sorry to pursue this matter. Is not the noble Lord trying to draw red herrings across this issue by referring to all these other features of success in export markets, which are not so much as mentioned in the economic prospects for 1980? I was asking whether the noble Lord was seriously telling the House that he can stand before us and say that the price competitiveness will be maintained, knowing perfectly well that inflation in the other OECD countries will not be proceeding at the same rate as it does in this country or anything like it.
§ Lord COCKFIELDMy Lords, I have already made the point that price competitiveness depends upon quite a number of factors other than the level of retail prices in the exporting country. The most important of these factors is the level of productivity. Many of our exporters—and it is greatly to their credit and we should pay them a tribute for this—have succeeded in obtaining substantial increases in the level of productivity. We hope that they will continue to do so with the co-operation of their work forces and this will maintain our position in the export market.
§ Lord MACKIE of BENSHIEMy Lords, would the noble Lord agree that it would be a reasonable assumption that the forecast of the White Paper is wrong?
§ Lord COCKFIELDMy Lords, I am not prepared to accept any such assumption on the noble Lord's part.
§ Viscount DAVIDSONMy Lords, would my noble friend agree that in any case most people use statistics in the same manner as a drunken man uses a lamppost: more for support than illumination?