Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 11th October 1976.

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Photo of Mr Denis Healey Mr Denis Healey , Leeds East 12:00 am, 11th October 1976

No. That statement is totally untrue. I am surprised that the hon. Gentleman should give currency to a statement for which there is no foun- dation in fact. That type of rumour mongering by people who should know better—I believe that the hon. Gentleman has some rôle in the financial community—is one of the factors which has damaged sterling consistently in the last year.

The basic condition for the granting of assistance of this kind by the IMF is that the country which applies for it must present a satisfactory programme of policies to ensure restoration of its balance of payments. I have made it clear that this is the objective of the Government's present policies. Equally, I have emphasised that this implies both the determined maintenance of those policies and, within the framework which they set, such adjustments as events may require from time to time to ensure that they are carried through successfully.

Such adjustments may be painful, but this Government will not shirk from making them if the situation requires it. We did not shirk last week. As I have made clear time and time again, to negotiate within the framework of existing policies means accepting a great deal which is unpopular as well as a great deal which is popular. It may also mean a readiness to adapt elements in our policies to harsh realities if the main thrust of policy is to be preserved.

I announced our objectives in my economic statement last July when I said: Our overriding priority is to restore the prosperity of the British economy through the regeneration of our industry and to provide the essential conditions to bring down, and to keep down, the intolerable level of unemployment. To do this we must ensure that manufacturing industry has sufficient resources available to take advantage of the exceptional opportunities now open to us in the export field; we have got to get our rate of inflation down to the level of our competitors and hold it there; and we have got to do both in a way which will protect the poorest and weakest of our people and retain the social consensus on which the success of all our policies depends."—[Official Report, 22nd July 1976; Vol. 915, c. 2010.]