Economic Growth

Oral Answers to Questions — Economic Affairs – in the House of Commons at 12:00 am on 11th July 1968.

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Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West 12:00 am, 11th July 1968

asked the Secretary of State for Economic Affairs what has been the average anual rate of economic growth since his Department was established; and what was the average annual rate for the immediately preceding period of similar length.

Photo of Mr Peter Blaker Mr Peter Blaker , Blackpool South

asked the Secretary of State for Economic Affairs how the rate of economic growth to date in the period covered by the National Plan compares with the target annual average given in the Plan; and what is the difference represented in terms of resources available in total and per head of the population in the three years 1965 to 1967.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

In the three years 1965–67 the average annual rate of economic growth was 1·8 per cent. but it is now rising at a higher rate of between 3 and 4 per cent. The corresponding rate in the preceding years 1962–64 was 3·6 per cent. The target for the national plan was an annual average growth of 3·8 per cent. In terms of resources the difference between the target and actual performance in the three years 1965 to 1967 was about £1,800 million which is equivalent to rather over £10 per head of population per year.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

Do not those figures show that the rate of growth upon which the prosperity of the nation depends has been halved under the Labour Government, and does this not prove the ineffectiveness of the Minister's Department and of Government policies?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

It certainly shows that comparing the second three-year period with the first the rate of growth was at about half, but that in itself does not explain the reason. The reason, as I see it, is that at the end of the previous three-year period—it greatly affected the average of those three years—we had a year of what I call irresponsible and elec-torally-minded growth of nearly 6 per cent. in G.D.P., the highest that we have ever had, and a year which also coincided with the worst balance of payments crisis that we have had.

Photo of Mr Peter Blaker Mr Peter Blaker , Blackpool South

Does not the Government's poor performance, combined with the fact that public expenditure is still at National Plan levels help to explain why the Government are having to forecast that the standard of living next year will be lower than in 1966 when the last election took place?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

It is almost axiomatic that, if one wishes to maintain public expenditure at the higher level we have sought to maintain in spite of the recent cuts, and the overall gross national product is not rising, there will be that much less available for private expenditure. That is the case today.

Photo of Mr Robert Cant Mr Robert Cant , Stoke-on-Trent Central

Would my right hon. Friend be interested to know that I was a captive listener to a conversation by two eminent Conservative Members this morning and that they confessed privately with some reluctance that we are going to get an economic miracle after all? Will he be surprised to learn that they were not prepared to concede any credit for this to the Government?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I am always happy to hear that hon. Members opposite are looking ahead rather than at the immediate situation and are seeing the signs of positive change and improvement which I believe are there.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Does the right hon. Gentleman agree that, in the year 1964, which he described as one of irresponsible growth, he and his right hon. and hon. Friends urged the then Government to expand even faster? Does he also agree that, in relation to resources for future growth, there is no lack of manpower but that the principal problem is overmanning, much of which needs to be retrained and redeployed?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I remember the Budget of 1964 very well. Along with certain others, I was asked to comment on it in a long B.B.C. programme. My judgment now is what it was then—that it was an irresponsible Budget. There was the certainty of economic crisis that year and the Budget was only explicable in terms of the coming General Election. On the second point put by the right hon. Gentleman, I have no dispute at all.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Long answers mean fewer Questions.