National Economic Development Council

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th July 1992.

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Photo of Mr Piers Merchant Mr Piers Merchant , Beckenham 12:00 am, 9th July 1992

To ask the Chancellor of the Exchequer what representations he has received concern-ing the abolition of the National Economic Development Council.

Photo of Mr Jacques Arnold Mr Jacques Arnold , Gravesham

To ask the Chancellor of the Exchequer what representations he has received concerning his announcement on the abolition of the National Economic Development Office.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I have received a small number of letters commenting on my announcement.

Photo of Mr Piers Merchant Mr Piers Merchant , Beckenham

Does my right hon. Friend agree that this apparently massive outburst in public concern shows that the only tears that have been shed for the abolition of the National Economic Development Council are the crocodile tears of Opposition Members who are as out of touch with popular sentiment on this issue as they are with economic reality? Does he further agree that he was absolutely right to abolish the NEDC?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I am grateful to my hon. Friend. As I explained to the House when I made the decision, I did not think that the National Economic Development Council any longer reflected the needs and realities of the United Kingdom economy in the 1990s. Of course, we want to talk to industry and to hear its concerns, but I do not think that discussions in the council were helpful or enlightening. In terms of the work carried out by the sectoral working parties, my right hon. Friend the President of the Board of Trade has announced plans for the reorganisation of his Department and the sponsoring divisions. That is a much more sensible way to listen and talk to industry about the future as industry sees it.

Photo of Mr Jacques Arnold Mr Jacques Arnold , Gravesham

Does my right hon. Friend agree that his decision puts the final seal on the former way of running the British economy—the corporatist way?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

As I have repeatedly said, the only way to improve our living standards and increase our share of world trade is by improving our competitiveness and keeping down inflation. That is the responsibility of Government. The discussions at the National Economic Development Council did not contribute to policy in any way.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

Does the Chancellor nevertheless agree that one of the unfortunate side-effects of the abolition of the National Economic Development Council is that the Chancellor will no longer have the opportunity to hear views on economic policy that do not coincide with those of the Treasury? On the same lines, does the right hon. Gentleman agree that the study by the National Institute of Economic and Social Research of economic modelling during the 1980s, which was paid for by the Treasury, showed that the Treasury's performance in such modelling was disastrous? The Treasury's thought police attempted to ban from public funding institutions such as Wynne Godley's outfit at Cambridge university, which correctly forecast the appalling levels of the previous depression and this one. Does the right hon. Gentleman agree that there should no longer be an attempt to create a monopoly on economic policy by withdrawing public funding from universities whose ideas are different from those of the Treasury?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The hon. Gentleman must surely know that decisions about funding individual universities, individual research bodies and individual eocnomic groups are not taken by the Treasury or by the Government. As for the hon. Gentleman's first point, of course I have made it clear that I am prepared to talk to the Trades Union Congress and to hear its views, but I do not believe that the confrontational talks which took place so regularly in the National Economic Development Council were of any use to anyone—indeed, many people who attended them were sheer bored by what went on.

Photo of Mr Tony Banks Mr Tony Banks Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson, Shadow Spokesperson

Why, then, do the Japanese and the Germans find it valuable to have continuing dialogue with their trade unions when their countries are a damned sight more successful economically than ours? Why will the Chancellor not treat the trade unions as valuable partners within the economy and start talking to them and stop treating them like traitors?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Unlike the hon. Gentleman, I do not believe that decisions in the economy are made at the level of the sector. They are made by individuals and by firms. That is the way the economy of this country works. If there are such institutions in Germany or Japan —I am not sure whether what the hon. Gentleman says is right—perhaps that is a comment on the nature of the discussions that take place.