House of Commons Hansard Debates for 31 Oct 1989

Dame Elaine Kellett-Bowman (Lancaster) : It was nine minutes.

Mr. Gordon Brown : It was a nine-minute speech this afternoon, which was dignified and a model of what a speech in these circumstances should be. Let us recall what the Prime Minister said about the Chancellor's departure on Sunday. She said that she did not know why he had resigned. When asked whether he would have stayed if Sir Alan Walters had gone, she said :

"I don't know, I don't know."

She did not seem to know why he had gone.

Can anybody be in any doubt why he resigned after what we have heard today? It was not a personality clash, some wayward gesture or a spur-of-the- moment decision. As we have heard this afternoon, it was a fundamental question of policy--a question of exchange rate policy, which is right at the heart of the Government's economic strategy. As the former Chancellor well knows, it is a matter that has not yet been resolved.

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The former Chancellor told us three things this afternoon : first, that he believes in exchange rate management ; secondly, that he had come to the conclusion that the European monetary system and the exchange rate mechanism were the best vehicle for it ; thirdly, that the sooner we were able to join rather than later, the better for this country. It is perfectly clear what the dispute of which, as he said, the Walters article was the tip of the iceberg was all about. Can anybody doubt how strongly he felt about EMS?

Mr. Lawson : If I may just set the record straight, the tip of the iceberg I was referring to was that this one article was merely the tip of the iceberg of Alan Walters's activities generally. I was not referring to the wider issues as being part of the iceberg. That is a different matter on which I was giving my views to the House.

Mr. Brown : I am grateful to the former Chancellor. Before he arrived in the House, I said what a dignified speech he had made. The former Chancellor clarified the Walden interview in even greater detail than we had suspected. When the Prime Minister was asked whether the Chancellor would have stayed if Sir Alan had gone, she said :

"I don't know, I don't know."

From what the former Chancellor has now said, it is clear what the result might have been.

No one can doubt how strongly the Chancellor felt about European monetary co-operation, no one can doubt how much he felt that the Madrid compromise was in difficulties, and no one can doubt that the issue was not just Professor Walters's activities, but the Prime Minister's apparent agreement with the views of Sir Alan. Yet this is the Prime Minister who said on Sunday--and on Thursday and again today--

"I have always supported my Chancellor."

The issue that still remains to be resolved is whether the Prime Minister, since Thursday's events, has ever repudiated Sir Alan Walters. Has she ever repudiated his view that the EMS was "half-baked"? Has she ever repudiated his view that the EMS had only a minimum level of plausibility? Has she ever repudiated Sir Alan's view that he spoke for the Prime Minister as well as speaking for himself? It is not what the Prime Minister did not know on Sunday, but what she did not want to say, that is the issue. That is the question at the heart of the Government's confusion of policy, which remains even to this day.

What are the Government's views on these major issues of economic policy or, more appropriately, what are the views of the Ministers one by one, because that is the way in which we now have to deal with these matters?

Let us start with the views of the Prime Minister. Can anybody doubt that, although the Government's official policy was to believe in exchange rate management and co-ordination, the Prime Minister has always believed, in her own words, that one "cannot buck the market"? While the official policy for many months was for co-ordination, the Prime Minister's view is that sterling should be floating free on the foreign exchanges and determined by market forces. The Government's official view was to join the exchange rate mechanism, but what is the Prime Minister's view? Has she ever given us one good reason for joining?

Let us consider the Prime Minister's excuses for not joining. In 1985, she said that she could not join because of the strength of the dollar. In January 1986, she rejected

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joining because she said that the British economy was different. In March 1986, the reason was the special status of sterling. In April 1986, it was the potential drain on our reserves. In June 1986, it was speculation. In November 1986, as the Financial Times article reveals, the reason was our economic weakness. The Prime Minister said that we would go in strong--if she was going to take us in. In 1987, her reason for not joining was the deflationary impact of the links to the deutschmark. In 1988, the excuse was inflation, and in 1989, the number of conditions to be met has multiplied.

In June this year, the ex-Chancellor referred to the two main preconditions for joining the exchange rate mechanism, which he identified as inflation and the removal of exchange controls. The Prime Minister, in response, said :

"Far many more conditions must be taken into account."

It was a question of waiting to see what happened with inflation, and even then sterling could join the EMS only if the conditions clearly existed. The Prime Minister then added cabotage, and on Sunday she added doubts about policy towards British family farms. Under those circumstances, is that evidence of the Prime Minister wanting to join the EMS? Is the Prime Minister looking not for arguments to go in, but for excuses to stay out? She is not looking for actions we can take, like reducing inflation, to make it possible for us to join ; instead, she is looking for action that she expects others to take so that we can stay out. How many more conditions will she have added by 1990? If the Prime Minister has her way, we will not be new members of the EMS by 1990, but there will certainly be new conditions.

Where do the rest of the Cabinet stand? Where does the Deputy Prime Minister stand? At the weekend, he said that it was of the highest importance that the Government remained committed to the position, clearly and in good faith. He said that we had to be clear about what was agreed in Madrid. How did the letter or spirit of Madrid include cabotage, which was added by the Prime Minister? How did it include dealing with the French farmers or, as the Prime Minister said, that "artificial and cultural barriers had to come down"?

Is anyone in any doubt that the Prime Minister was attempting to create conditions to make it more difficult to join? Is it correct that on 24 January in a Lobby at the House, as the Daily Telegraph reported, the Prime Minister said that Britain would not join during the course of this Parliament?

Where does the Deputy Prime Minister stand in all this? What does he think of the Prime Minister's interview? What does he think of the new conditions? The truth is that he hoisted the flag of insurrection for 18 hours and then threw up the white flag of surrender. That was the shortest rebellion in history. When will he have the courage of his convictions rather than the courage of the Prime Minister's? I have already welcomed the new Chancellor to his job. He has had the right training for the job over the past few weeks when he was Foreign Secretary--private humiliation, public repudiation and then instant promotion. They say that the Chancellor is ambitious. I cannot believe that. If he was truly ambitious last Thursday, he would have waited half an hour, looked at the jobs on offer and then gone for the most influential vacancy of all, that of part-time, back-stage economic adviser to the Prime Minister.

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What are the Chancellor's views on European monetary co-operation? Let us consider what he said when he first addressed that subject in November 1981. He last spoke in detail on that matter as a humble Back Bencher. He said :

"At the beginning of the parliamentary recess I firmly believed that Britain should not enter the European monetary system. I have returned to the House, having spoken to firm after firm in my constituency, believing that the sooner we enter the European monetary system to improve exchange rate stability the better it will be for our exports and our interests generally. I have no doubt that that is the right course."--[ Official Report, 4 November 1981 ; Vol. 12, c. 68.]

What was right-- [Interruption.] The Chancellor does not think that he said it. It appears in Hansard of 4 November 1981. What was the right course to be followed, immediately and unconditionally? The right course then is apparently not the right course now. Does the Chancellor still believe that the sooner we enter the better? Does he still believe that it is still the right course unconditionally? What are the Chancellor's real views? From what he said this afternoon, hon. Members did not get a full appreciation of his views--it was "on the one hand, on the other hand."

The truth was in an answer to an intervention by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who asked whether the Chancellor believed that the EMS is half-baked. The Chancellor would not or could not answer the question. He refused to repudiate Sir Alan's view. If he believes that the EMS is half-baked, why does he not say so? If he believes, against Sir Alan, that it has only a minimum level of plausibility, why does he not say so? If the Chancellor wishes to intervene now and repudiate Sir Alan's view, I should be happy to let him do so.

On what terms did the Chancellor accept the job? Did he ask that Sir Alan be removed? Clearly not. Did he ask that the Prime Minister drop her view that the EMS is half-baked, or did he just say, "Yes, Prime Minister"? Did she say, "My adviser will be in touch"? The only thing that we can say with certainty after the Chancellor's speech today, which added to rather than ended the confusion, is that his position is unassailable. Where are we now? We have a Prime Minister who is clearly hostile to European monetary co-operation, senior Ministers who are in favour of it, and a Chancellor who has not made up his mind. The divisions will still remain to be resolved, and they go right to the heart of economic strategy. Do the Government believe in management of our economy or do they believe that they cannot buck the market?

What will the Cabinet Ministers do? Will they stand up to the Prime Minister? Look at the Cabinet--the right team for Britain's future. Last month's right team for Britain's future has given way to this month's right team for Britain's future. Last month's right team has less future than could possibly have been foreseen.

What of the Ministers themselves? The Prime Minister was directly asked about that on Friday. Jean Rook asked :

"You are accused of refusing to recognise your Cabinet as a team or working with it. What is your reaction?"

The Prime Minister replied :

"A leader must lead, must lead firmly, must have firm convictions and must see that these convictions are reflected in each piece of policy."

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There was not a mention of the team at all, no mention of working together, and not even a mention of the chairman of the Conservative party.

On "Panorama" last night, the Foreign Secretary came nearest to giving us the answer to how to deal with the Prime Minister. How does he deal with the Prime Minister? He answered :

"to argue, but courteously. Then you will find yourself being contradicted, and sometimes told you don't know what you are talking about."

[Interruption.] Obviously, the Ministers know what it is all about. The Foreign Secretary went on to state :

"But if you persevere, and have good arguments on your side, then you will find you will gain ground."

The right hon. Members for Henley (Mr. Heseltine) and for Shropshire, North (Mr. Biffen), Lord Pym, Lord Prior and now the former Chancellor--the people who have persevered--have gained ground, but the ground that they are on is the Government Back Benches. Who are the real decision makers in the Government? Faced with a choice between a Chancellor of six and a half years' standing, whom she had praised as brilliant, wonderful and marvellous, and a part-time adviser two months back, for most of the time contactable only by telephone, the Prime Minister chose her back-stairs adviser. When faced with the choice between the adviser, as she said, with only the power to advise and the Minister with the power to decide, she chose the adviser. Why? I suspect that it was because, in her own words, he is "one of us". It was the most damaging appointment of an adviser by a head of Government since--I was going to say, since Caligula's horse, but at least the horse stayed in Rome and worked full-time.

What sort of Cabinet do we have? Ministers sweep into Downing street in chauffeur-driven cars and wave to the television cameras as they ascend the steps of No. 10, but then find that the only person who listens to them is the policeman on the door. We have "do-as-you-are-told" Ministers in a "speak-when-spoken-to" Cabinet in a "Yes, Prime Minister" Government.

Our argument is not about the constitutional theories of government or about the end of Cabinet government or the pretence of it ; it is about the lives and aspirations of millions of people throughout the country and about how they have been hit by the failures of a Government who are now divided. They tell us that we are going to have a soft landing, they tell the passengers to fasten their safety belts, but all we can hear is the noise of the squabbles in the cockpit about who has the controls.

They have had 10 years, at the end of which the Chancellor still tells us that the economic miracle is intact, but that his policies are going to hurt. Why are they going to hurt if there is an economic miracle? It is because the balance of payments deficit is the worst that we have ever known--yet the Chancellor cannot even admit that it is a problem. No other country has a deficit so big, yet the Government cannot concede that it is worthy of action. Inflation is the highest of all our major competitors, yet the Government came into power 10 years ago with the objective of zero inflation. We have the highest interest rates and the highest mortgate rates in the world. I advise Conservative Members that they cannot begin to solve those problems as long as the philosophy is "you can't buck the market".

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What did the Prime Minister say about all this on the Walden interview on Sunday? When faced with these difficulties facing industry, business, home owners and families, she said :

"Let's get down to the success we've had the way in which people now copy Thatcherism, as they call it, the world over Country after country is following our policies. They come in and say to me : We've tried everything else, now we'll try Thatcherism' ". Is France, with a 3 per cent. inflation rate, aspiring to the Thatcherite inflation rate of 7.5 per cent.? Is West Germany, with a trade surplus, attempting to strive towards the Thatcherite deficit that is approaching £20 billion? Is Japan, with 5 to 6 per cent. interest rates, aspiring to the Thatcherite miracle of interest rates at 15 per cent.? How many other countries aspire to deficits of the size that we have, and how many other countries aspire to inflation rates and interest rates at our levels? The Thatcherite miracle is not for export, because, as everybody knows, the miracle does not exist.

At the end of this week, where are we in the future course of policy for this country? The former Chancellor has gone because the Prime Minister preferred an itinerant adviser to a senior Minister--a court favourite to a Cabinet Minister. We have a new Chancellor who has been unable to tell us his view, but who has added to the confusion over exchange rate management rather than resolved it. We have a Foreign Secretary who says that the Government's job is to persuade people, when it is clear that it is his job and that of his colleagues to persuade the Prime Minister. We have a Deputy Prime Minister who raised the standard of revolt, but lowered it immediately afterwards. Yet that is what we are told is the "right team" for Britain's future. Is anybody in any doubt that, with the Cabinet divided and Conservative supporters throughout the country in disarray, we have now entered the first days in the final collapse of the Government--

Dame Elaine Kellett-Bowman : Rubbish.

Mr. Brown : The real question that we must ask this evening is, who can now look to the Government for support? On Sunday, on that Walden interview, there was no mention of the problems people have or of those facing industry and business. These problems cannot be solved if we have a Prime Minister who is so out of touch and so protected from reality by unelected advisers that she does not even acknowledge that the problems exist. We need Cabinet government and democracy, and we need a Government who will take action to solve our economic problems. For that, the country will have to look to Labour. 9.35 pm

The Chief Secretary to the Treasury (Mr. Norman Lamont) I start by joining my right hon. Friend the Chancellor of the Exchequer in paying tribute to my right hon. Friend the Member for Blaby (Mr. Lawson). My right hon. Friend was a good friend to me and it was a matter of great sadness to me that he felt that he had to resign. I worked with him for some three and a half years, and those were stimulating and enjoyable years. My right hon. Friend has had a great impact on this Government, as my right hon. Friend the Chancellor said, but not just as Chancellor of the Exchequer. As Financial Secretary to the Treasury, he played a key part in the abolition of exchange controls. As my right hon. Friend the Chancellor

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said, it will be for history to judge the significance of the tax reforms introduced by my right hon. Friend the Member for Blaby. I believe that both sides of the House will agree that the speech that my right hon. Friend made was one of force, eloquence, and enormous lucidity, and it retained, as my right hon. Friend always does, a capacity to surprise. Those are the qualities which the people who have worked with my right hon. Friend know he has and for which they appreciate him.

Mr. Radice : If the former Chancellor's speech was so good, and if his case was so good, why did the Chief Secretary not resign with him?

Mr. Lamont : I spent no less than six or seven hours last week trying to persuade my right hon. Friend not to go, not simply because I did not wish him to resign but because I felt that it was a mistake, that it was unnecessary for him to resign and that his position, although difficult, was not impossible. Having expressed that view to my right hon. Friend, it would have been false if I had behaved any differently, and I know that my right hon. Friend agrees with me. It is curious, as my right hon. Friend the Member for Guildford (Mr. Howell) and my hon. Friend the Member for Stamford and Spalding (Mr. Davies) pointed out, that an issue as esoteric and narrow as the European monetary system should come so to dominate a debate as it has dominated the House today. My right hon. Friend the Chancellor has taken the first possible opportunity to emphasise that he wants to join the exchange rate mechanism as soon as the conditions set out after the Madrid summit can be satisfied. My right hon. Friend has made it crystal clear that he intends that they should be satisfied. He also went on to sound a note of caution by saying that the ERM is not a panacea. It is neither the salvation nor the ruin of the British economy. It is not, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) suggested, that my right hon. Friend wanted to put up some Aunt Sally to knock down. It is because of the feeling that my right hon. Friend and I have, like many other hon. Members, that sometimes it is important to put this issue in perspective. We must remember that the British economy has been managed at different times with different exchange rate regimes. We have had fixed rates and floating rates, and it is not obvious, at least to me, that economic success is correlated exclusively with one or the other. There are, as my right hon. Friend the Chancellor said, no soft options either inside or outside the EMS. If we are inside it, we shall still have to use interest rates to link our currency with low-inflation currencies. If we were outside the EMS, and even if the currency floated freely, which is not the Government's policy, we would still have a tight squeeze to contain inflationary pressures. Either way, there are no soft options.

Mr. D. N. Campbell-Savours (Workington) : The right hon. Gentleman has said that the position of the ex-Chancellor of the Exchequer last week was difficult. How was it difficult?

Mr. Lamont : My right hon. Friend the Member for Blaby has expressed his view and the reasons why he resigned. I do not wish to add to anything that has been said on that score.

The Opposition--

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Several Hon. Members rose --

Mr. Lamont : I am not giving way.

The Opposition have argued that there are divisions

Mr. Stuart Bell : The Minister has said that his position was difficult but that it was not impossible for him to stay in his job. Will he tell the House why his position was difficult?

Mr. Lamont : The hon. Gentleman misheard me. If he reads the report of the debate in Hansard he will note what I said.

The Opposition have sought to present themselves as the party that is united on the issue of the ERM. Those of my right hon. and hon. Friends who were present for the debate on the economy last week will agree, I am sure, that I was able to demonstrate fairly clearly that there are considerable divisions within the Opposition. The right hon. and learned Member for Monklands, East (Mr. Smith) believes that it is important to enter the ERM because the volatility of the currency matters. The hon. Members for Sedgefield (Mr. Blair) and for Dagenham (Mr. Gould) do not think that the volatility of the currency matters at all. The hon. Member for Dagenham has said that he has a general hostility to the prospect of full membership. That is the view of a member of the shadow Cabinet, not of a part-time adviser to the Labour party. Is the hon. Member for Dagenham going to resign or not?

We are not surprised about the issues on which Opposition Members disagree, because we are used to them disagreeing. More remarkable is the point on which they all seem to agree. It is not clear, however, why they think that their long list of conditions would be more easily satisfied than those laid down by the Government. Their list is much longer than the Government's, much more amorphous and much more difficult to satisfy. It is the Labour party which is likely to lay down conditions that will never be satisfied.

The Opposition want what they call the deflationary tendency in the ERM to be removed. That is the issue on which all Opposition Members seem to be agreed. That is the most astonishing feature of all. For the majority of people, the essence of the ERM is to join it so that currencies will converge towards the lowest inflation rate, towards the German rate. That is why people want to join it. The Labour party is the only group I can think of that wishes to join it while not accepting the main reason for it.

The Labour party's policy document states :

"Substantial changes would therefore be required before the next Labour Government could take sterling into the exchange rate mechanism".

The Labour party wants to subvert the monetary discipline that the system can provide. That is something that the Germans, for instance, could never tolerate. Further, the Labour party's policy document tells us that there must

"be less reliance on interest rate adjustment and more on co-operation between central banks."

That is mere wishful thinking. How can a Government run a monetary policy without using interest rates? Perhaps someone would tell me that.

The Labour party wants to undermine the position of the Bundesbank. Labour's proposals to link the ERM to growth and to remove its deflationary bias would, if any of our European partners were foolish enough to accept

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them, drive the Germans out because those proposals are not consistent with the Bundesbank's constitutional duty to secure price stability.

It is extraordinary that everyone who advocates participating in the ERM is usually attracted to it as an anchor against inflation--except the Labour party, which does not want to join it until it is sure that it cannot be a bulwark against inflation. That is not surprising because we know that, whether in or out of office, Labour is always the party of inflation.

My hon. Friend the Member for Bridlington (Mr. Townend) asked why we were having this debate today. After all, we had an economic debate last week. Perhaps in future we shall have economic debates once a week, or twice a week. That would be a good thing--far better than doing the public expenditure survey round or sitting in the Star Chamber. I would not mind. But perhaps we are having an economic debate for the reason to which my hon. Friend the Member for Gravesham (Mr. Arnold) referred--that although the Labour party knew that it had to initiate a debate, it did not dare put down a censure motion and have a censure debate. Mr. Mandelson decided that the matter would be better handled by the right hon. and learned Member for Monklands, East (Mr. Smith) and the hon. Member for Dunfermline, East (Mr. Brown), and that is why we are having an economic debate today.

Perhaps I am doing Opposition Members an injustice. Perhaps the real purpose of having a debate is so that Opposition Members could give those parts of their speeches that they did not give us last week--the bits that dealt with their policies. Those were the bits that we were to wait for.

It is hardly surprising. The right hon. and learned Member for Monklands, East belongs to the Crossman school of politics. My hon. Friends will recall that some years ago, when the late Mr. Crossman published a Labour policy document on pensions, he was asked by the press why it did not contain any figures. He replied that it did not have any figures because they would all be shot to bits by the Tories. That is the attitude that the right hon. and learned Gentleman takes. He knows that he cannot produce any policies which will not be shot to bits by the press and will also please his hon. Friends.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : On a point of order, Mr. Speaker. Page 6104 of today's Order Paper gives the title of today's debate as "Government economic policy". The Minister is not addressing himself to that issue.

Mr. Speaker : There is also a Government amendment.

Mr. Lamont : We can all see that the Opposition have enormous confidence in themselves. They are terrified that we shall discuss their policies. That is a real advertisement for their confidence. In the past week, the right hon. and learned Member for Monklands, East, who does not believe in policies, has been in a bit of difficulty because he is being pressed all the time by the media. He is being asked what he will do and how his credit controls will operate. The right hon. and learned Gentleman has managed to get through by putting on his best Glasgow family doctor appearance and looking confident.

Mr. Onslow rose--

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Mr. Lamont : I shall give way in a minute. [Interruption.]

Mr. Speaker : Order. I hope that the House will settle down. We have 10 minutes left.

Mr. Lamont : I have always thought that the right hon. and learned Gentleman--"Dr. Smith"--would be a very good Glasgow general practitioner. He is very nice, very charming and very reassuring, with a good bedside manner. No doubt he would be one of those doctors who whisper in the patient's ear, "I think that that Mrs. Thatcher has gone a little too far with the NHS," but in every other way he would be excellent. The only trouble is that we would be wondering, has he kept up to date? Has he not read any textbooks, or articles in the Lancet ? Does he know about the latest medicines that are available on the market? The more we listen to the right hon. and learned Gentleman, the more extraordinary and old- fashioned his policies seem.

Mr. Harry Ewing : On a point of order, Mr. Speaker. I should like to help the Chief Secretary. For the past five minutes he has been going on about doctors. If there is a doctor in the House who can provide him with a couple of tranquillisers, the debate will proceed much better.

Mr. Speaker : I think that what would help the Chief Secretary, indeed, the whole House--would be for hon. Members to listen to his speech with the same care with which they listened to the speech of the right hon. and learned Member for Monklands, East (Mr. Smith).

Mr. Lamont : We know that Labour is not a tolerant party--we know how easy Labour Members find it to listen to any argument against themselves--and that has been illustrated tonight.

Mr. Morgan : Will the Chief Secretary give way?

Mr. Lamont : No.

When the right hon. and learned Member for Monklands, East was asked on the radio the other day what his policy was against inflation, he replied, "Industrial strategy." I must say, I was astonished. I know that the right hon. and learned Gentleman had to say that he believed in industrial strategy when he was Secretary of State for Trade, but it never occurred to me then that he really believed in it. Nor did it occur to me that he could really believe in it today. Whatever else his industrial strategy may be, it has nothing to do with the immediate problem of inflation that faces us now.

The truth is that the right hon. and learned Gentleman has no policy--he simply has a phrase, albeit rather less coarse than the sort of phrase that the Leader of the Opposition uses when he is asked what is Labour party policy. We are told that Labour policy is to be one of backing winners--its record on that was not very good last time--and innovative technology. I think that we would be a bit more impressed by that if we had not sat here, year after year, listening to the right hon. and learned Gentleman ask for more money for shipbuilding, coal and all the other sectors that are not exactly at the leading edge of British industry. The idea of an industrial strategy is mildewed, moth-eaten and one might even say half-baked. Does anyone really believe that the investments of the Industrial Reorganisation Corporation and the National Enterprise Board when Labour was in office did the British motor industry any good whatever? Is not the future of

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today's motor industry, as a result of our policies of privatisation and attracting foreign investment, better than it ever was under Labour's "industrial strategy"?

Mr. Morgan rose --

Mr. Lamont : No, I will not give way.

It was the same when the IRC and NEB were investing in industrial technology. My hon. Friends may not remember the plethora of companies named after Greek islands and Greek gods. The gods may have been immortal, but the companies certainly were not, and they cost the taxpayer many millions of pounds. If we had never benefited from the activities of the NEB and the IRC, can anyone imagine that our industrial performance would have been any different? Of course it would not have been, although the taxpayer would have been billions of pounds better off.

What the right hon. Member for Monklands, East forgets is that in that golden age--that wonderful period when we had an industrial strategy-- industrial production went down. What we need is not an industrial strategy in the sense in which he means the phrase, but a strategy for profits and commerce. That is what we have had lately, and that is why the health of our commerce and industry is better that it has been for years.

Whenever the right hon. and learned Gentleman has a problem, he has only one answer--to call a meeting. When he was asked a few years ago what he was going to do about car imports he said, "I'm going to call a meeting with the multinationals." He was asked what he was going to do about imports when he was Secretary of State for Trade. He said, "I'm going to call a meeting of the central working party." When the right hon. and learned Gentleman was asked last week how he would operate credit controls, he said that he would call a meeting of the bankers. The only answer he has is to call a meeting.

Credit controls did not work in the 1970s and they will not work now. The right hon. and learned Gentleman forgets that credit controls would also be highly damaging to British industry. Have the Opposition forgotten the effect of credit controls on the car industry in particular? Do they want to reintroduce the stringent credit controls that were imposed on the car industry? There is no doubt that their reintroduction would be vastly more damaging to investment--

Mr. John Maxton (Glasgow, Cathcart) : Will the right hon. Gentleman give way?

Mr. Lamont : There have already been a large number of interventions. I do not intend to have my speech disrupted by the hon. Gentleman.

The reintroduction of credit controls would have a very damaging effect on industry. Last year, the president of the Society of Motor Manufacturers and Traders said :

"High interest rates, though painful, are a far more palatable solution than the reintroduction of credit controls. Those we most certainly do not want. The whole tactic was hopeless to manage and very destablising."

That is the view of manufacturing industry, and the right hon. and learned Member for Monklands, East, ought to take it into account. The right hon. and learned Gentleman also put forward the policy of supply side Socialism. We are told that the Opposition will free up the market and free up the workings of the economy. What a supply side policy normally means is liberalisation--lifting the burden of

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