HL Deb 28 July 1982 vol 434 cc230-2

2.53 p.m.

Viscount Mersey

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 whether discussions have taken place between them and the French Government about the latter's adoption of economic policies which show that the French Government recognise the need for firm control on Government borrowing and inflation.

Lord Cockfield

My Lords, the opportunity arises frequently for Governments to exchange views on economic affairs; for example, at meetings of the European Council and the Finance Council. The French Government indicated a change in emphasis in their policies at the EMS realignment meeting on 12th June. The annual Anglo-French summit will take place in November, and will provide a further opportunity for an exchange of views.

Viscount Mersey

My Lords, I thank my noble friend for that full reply. May I ask him whether he would not agree that there now seems to be common ground among the parties in this country that we cannot buy our way out of recession, as M. Mitterrand tried to do initially? Indeed, my noble friend Lord Boardman made this very point last Monday. Was not M. Mitterrand's initial reflationary policy further proof of this?

Lord Cockfield

My Lords, I entirely agree with what my noble friend says. The French Government that came into power just over a year ago came in on the basis of a reflationary policy. They have since had to modify that policy in very material respects.

Lord Bruce of Donington

But, my Lords, is the noble Lord aware that there is hardly anything in the Government's record that justifies their being able to give any advice to anybody? Would it not be far better if the noble Lord decided to devote some interest to his own country and to its prosperity, as distinct from the disaster into which his own Government have put it?

Lord Cockfield

My Lords, I was not giving advice to anybody, although from time to time I am tempted to give advice to the noble Lord himself. He will find that after 12 months in office the French Government have had to devalue the franc twice, have had to introduce a freeze on wages and prices, have had to reduce Government expenditure and have now set a limit of 3 per cent. on the budget deficit—a figure somewhat comparable to our own.

Lord Molloy

My Lords, is the noble Lord aware that the almost jocular way in which he approaches these questions does not give much encouragement to the 3 million unemployed, two-thirds of whom were created by this Government; nor to the hundreds made bankrupt every day; and does he not think that a policy which deliberately creates inflation is a form of governmental masochism so that they may get credit for reducing it? Is this not a serious issue that ought to be treated by any Government spokesman in a most serious way?

Lord Cockfield

My Lords, the noble Lord will not be surprised to hear that I do not agree with a single word that he says. These matters were debated at length in your Lordships' House as recently as Monday; and, if I may suggest it with respect, the noble Lord having participated in that debate, it would pay him to read the record of the whole of the debate again.

Lord Harmar-Nicholls

My Lords, did I understand from my noble friend that we have contact with the French Government through the EMS? Does that mean that, although we are not members of the EMS, we do take part in any discussions arising within that organisation?

Lord Cockfield

My Lords, my noble friend raises what is in effect a very technical point. We are in fact members of the EMS, but we are not members of the exchange rate mechanism.

Lord Shinwell

My Lords, will the noble Lord not find it embarrassing to exchange views with a Socialist Government? Is there not a danger of him being converted?

Lord Cockfield

My Lords, the answer to both parts of that question is, "No".

Lord Underhill

My Lords, as the noble Lord referred, in answer to one supplementary, to whether another noble Lord had read the debate on unemployment held last Monday, may I ask him whether he has re-read that debate, and whether he recalls that from all sections of the House there was pressure for constructive capital expenditure, including from the CBI, and that he did not reply to those points?

Lord Cockfield

My Lords, I have in fact re-read the whole of the debate. I indicated at the time that I would be reading it, and I did in fact re-read it. I have nothing to add to the very full and comprehensive reply I gave to the debate or to the opening speech that I delivered on behalf of the Government.