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 David Marquand Mr David Marquand , Ashfield 12:00 am, 11th October 1976

The hon. and learned Gentleman must forgive me if I do not give way to him. We have been asked to be brief, and I want to comply with Mr. Speaker's request.

We must have higher, not lower, taxation on high incomes.

Fourthly, the Government must face the fact that some form of controls on imports is almost certainly inescapable. I do not find it easy to say that. I know all the arguments against controls. Indeed, I have used them. I know the case against import controls by heart. I shall not bore the House by reciting it.

In this emergency situation more drastic action must be taken to put the balance of payments right. I cannot see how it can be done by a further depreciation of the exchange rate. The only alternative is some form of import control. An import deposit scheme would not have the distortionary effects which are one of the main arguments against import controls. I think that such a system will have to be introduced in the next 12 months and that the Government will have to accept that fact.

Fifthly, I agree with my hon. Friend the Member for Chester-le-Street (Mr. Radice) that there must be a determined effort to deal with the problem of the sterling balances. The Chancellor of the Exchequer was unresponsive when he was asked a question about that matter by one of my hon. Friends. I know that it is easy to talk about the sterling balances. We always talk about them in crisis situations. When things are going well, nothing is done about them; but this nostrum is trotted out again and again in times of emergency. But I do not accept that enough has been done to solve this problem. It will not be easy, but the Government must give an earnest of their seriousness regarding this matter greater than they have yet done.

Sixthly, and finally—this is perhaps the most controversial and difficult of all the proposals that I have been trying to put forward—I believe that there must be a kind of political concordat in this country to take industrial policy out of politics. That involves sacrifices from the Conservative Party, because at the moment they are engaged in drawing up a very Simpliste laissez-faire programme rather like the one they adopted before the 1970 election. They did not carry it out while they were in power, of course, because the facts of life were too strong for them, but they are now going back down the same sterile path which they trod between 1966 and 1970.

We on this side of the House must accept that the mixed economy is here to stay. That means also that the Conservatives must accept that selective State intervention in the form of the National Enterprise Board is here to stay, too, as part of the mixed economy. Unless there is this acceptance on both sides of the House, there is no prospect of our economy recovering from its problems.

I cannot pretend that we face an easy task in getting out of this crisis, but the kind of package that I have tried to sketch out promises at least the possibility of success. I am sorry that I did not see such a possibility in either of the Front Bench speeches this afternoon.