Orders of the Day — International Monetary Fund (Letter of Intent)

Part of the debate – in the House of Commons at 12:00 am on 25th June 1969.

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Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West 12:00 am, 25th June 1969


I have made it clear, by my analysis of the unemployment figures and the figures of production of machine tools and investments, that I think that a number of danger lights are flashing. I do not think that there is any case for a more stringent squeeze which seems to be implied in the Letter of Intent. I am merely saying that I see no particular case for that.

There is one last point I want to take up on the Letter of Intent which perhaps the Chancellor can deal with, or leave to the Financial Secretary. It is the question of the date. It is a little odd, or so it seems, that this letter is dated 22nd May. A great deal has happened since 22nd May, including the abandonment by the Government of their policies to legislate in this Session about which the Chancellor was quite blunt in his Budget statement when he said: The Government have, therefore, decided to implement without delay, during the present Session, some of the more important provisions incorporated in the White Paper 'In Place of Strife'. My right hon. Friend the First Secretary will be intervening later in this debate to explain the provisions which the new legislation will embody."—[OFFICIAL REPORT, 15th April. 1969; Vol. 781, c. 1006.] The simple question is whether, in any of the earlier drafts which we would dearly like to see—the Chancellor is keen on revealing all in these matters—there was any reference, and it would be odd if there was not, to prices and incomes and legislation to be abandoned thereunder. Was there anything about the one thing which the I.M.F. above all wanted to hear, that action was to be taken to deal with industrial relations? I hope that the Financial Secretary will deal with this. I accept that the Letter was signed on 22nd May, but has anything been deleted from it before it was presented to the House, and, if not, what sort of discussions took place in those very interesting weeks on what was to happen to industrial relations and related legislation?

We are debating the Letter of Intent and I am trying to show, as I undertook, documenting my speech as I went along, that this is not a Letter of Intent. The Chancellor was merely allowed to hold the pen. This is a charade but what is one more charade among so many? This is one more humiliation that is dressed up as a compromise—[HON. MEMBERS: "Oh."] The Socialist Party increasingly lives in a dream world in which all that matters are cosy ovations in the Parliamentary Labour Party, all that matters is not the reality of what is happening to our economy but what can be sold to the Labour Party.

We have gone, cap in hand, to the central bankers and, as a result, there are not enough rods, poles or perches to accommodate all the chickens that are coming home to roost. The real world, as distinct from the world dominated by what can be sold to the Labour Party, is a world of an intolerable burden of debt, much of which has not been revealed, of borrowing to repay borrowing and of leaving the settlement to the successors of the present Government, of limitations on our economic sovereignty, of record and climbing levels of unemployment, of industrial production at near-stagnation levels.

Of course, we will move, sometime, into a surplus—the surplus that was a normal occurrence during nine out of the 13 Conservative years. It was as normal for us to be in surplus as it is for Socialist Governments to be in deficit. It is an economic miracle, however we look at it, that with everything that has been done to savage our economy at home we are not already in true surplus. The answer is quite clear. This, as with the previous crises since November, 1964, is basically a crisis of confidence, and confidence will not return until this discredited and disreputable Government get out.