Orders of the Day — Clause 15. — (Continuation of Powers Under S. 9 of Finance Act 1961.)

Part of the debate – in the House of Commons at 12:00 am on 16 June 1966.

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Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West 12:00, 16 June 1966

I thought that the Chancellor intended to speak at this point. However, if he would rather I spoke first I will do so, and no doubt he will address the Committee then. I hope that after the right hon. Gentleman has spoken we can give him the Clause and go to bed. I will not speak for more than a few minutes, and I assure the hon. Member for Stoke-on-Trent, Central (Mr. Cant) that we want the right hon. Gentleman to have these powers, that we realise that it may be necessary for him to have them, and that there is no question of my hon. Friends opposing them or voting against the Clause.

I congratulate my hon. Friend the Member for Worthing (Mr. Higgins) on the way in which he initiated this discussion and requested the Chancellor to bring us up to date on his Budget judgment and present thinking. I am sure the right hon. Gentleman will agree that we have had some excellent speeches in this short debate on the Clause. Speaking as an old Parliamentary hand, I admire the skill with which hon. Members have kept in order, which is a difficult thing to do when discussing this subject of the powers under the Clause and the regulator.

What interests me about the economy today—and I was recently looking at graphs going back over the last 10 years—is that although one can parallel any single incident, stagnant production, or whatever it might be, one cannot find a time when everything was happening at once, as it is now. This is why the present situation concerns us very much indeed, and why we have to look at this Clause, and the possible use of a regulator that can bring in £320 million, in the light of the fact—as I think my honourable Friend the Member for Oswestry (Mr. Biffen) said in a splendid speech—that we have at the moment the worst of both worlds. We have all the bad effects of "Stop", without the occasional advantages that that can bring to our economy.

My hon. Friend quoted—he was splendidly up to date—a Press release issued at 10 o'clock last night, three hours ago, from the and the sentence he quoted— The analysis of earlier cycles suggests that these figures imply an absolute decline in investment in manufacturing industry over the next 12–18 months". —is the one which worries us. In this C.B.I. release there are a number of good features, particularly on the export procedures, but I think that my honourable Friend the Member for Oswestry put his finger on our present dilemma when he said, in effect, that the trouble was the First Secretary of State.

I do not wish to attack the First Secretary of State in his absence tonight, but almost since October, 1964, the Chancellor of the Exchequer has been trying to bale water out of the boat but has not been able to do it as fast as the First Secretary has succeeded in pouring it in. As a result the ship has never been anything other than waterlogged, and it is because of this that the questions raised by my hon. Friend the Member for Barkston Ash (Mr. Alison) and my hon. Friend the Member for Guildford (Mr. Howell) are so important now.

I will just summarise the anxiety which I have, which was put very well by my hon. Friend the Member for Barkston Ash, in considering the Budget judgment. When I spoke in the Budget debate I used the hawk and dove anology and said that what worried me about whether enough was being done was that if one took the hawk view of the economy the Chancellor was waiting dangerously long, and if one took the dove view it was strange to hit an economy, which was presumably then on the down-turn, as fiercely as at first sight the S.E.T. proposals seemed to do. I say "at first sight" because I agree very much with what has been said following Professor Paish, and, indeed, the National Institute's Economic Review, and I doubt very much whether the measures are going to be as deflationary as at first sight would appear.

We would very much like the Chancellor of the Exchequer, when he replies in a minute from now, to tell us, particularly on the question of bank advances, how his thought has advanced in the weeks since he made his Budget speech. Lastly, there was a really splendid little cameo of a speech from my hon. Friend the Member for Guildford. I am sure he is right when he concentrates on the erratic impact of the S.E.T., which leads him to the gloomy conclusion, which I fear I share, that we will probably use the regulator and, I would think, use it in an upward direction. All this comes back to the problem that he emphasised, that there is not really a basic shortage of manpower in this country. There is a vast surplus of manpower, because our productivity is hopelessly uncompetitive.

I will not strain your patience further, Sir Eric. I have been conscious in the last few minutes that I have been straying a little out of order, but it is difficult on the Committee stage of a Finance Bill to find opportunities for what might be called a general economic discussion. Therefore, I make no apology for taking this opportunity on Clause 15 of inviting the Chancellor—and, if I may say so, it is very good of him to stay to reply to this debate at this time of night—to bring us up to date with his thinking, and sifter that I am sure that we would agree to give him the Clause.