Home Market

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th March 1965.

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Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough 12:00 am, 9th March 1965

asked the Chancellor of the Exchequer in view of the evidence against export subsidies, details of which have been sent to him by the hon. Member for Louth, what steps Her Majesty's Government propose to take to tighten the home market; and if he will make a statement.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The Government's policy is to secure a redeployment of our national resources that will encourage exports, save imports and maintain full employment.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

Is the Chancellor aware that both the Governor of the Bank of England and leading industrialists who are most exercised with the export markets agree that export subsidies will not help our balance of trade? Does not he agree that curtailing the home market is the best way to put our balance of payments right?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

There have been no export subsidies so far. What the Government have done is to rebate some of the indirect taxes paid by exporters. I am not quite sure, in considering the second part of the hon. Gentleman's supplementary question, whether he is calling for a substantial and severe deflation of the economy.

Photo of Mr Edmund Dell Mr Edmund Dell , Birkenhead

Is my right hon. Friend aware that the car manufacturers, who have long been among our most successful exporters, have always insisted upon the importance of high home demand in order to stimulate exports?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Yes, that is so. They have done well in exports. I regret that there was a falling off last year because of the tightening of overseas markets, but I hope that their exports will go up again this year.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

Is the right hon. Gentleman aware that I was not asking for severe deflation at home but that the nation should be made to live within its means. The best way to do that is to curtail the home market so that exporters could have a high home demand.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Of course the nation must live within its means. That is the phrase that I have used on several occasions. But, in our view, the best way of doing that is not to create unemployment at home.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

I am not advocating that.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The lessening of home demand must have such a consequential effect. We believe that the right way to redeploy our resources, and that is the task we are engaged upon.