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Economic Situation

Volume 645: debated on Tuesday 25 July 1961

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Mr Selwyn Lloyd's Statement

With permission, Mr. Speaker, I wish to make a statement on the economic situation.

I think that it will be for the convenience of the House if I make a fairly detailed statement today. I am arranging for copies of it to be put in the Vote Office later this afternoon, at about half-past four, I hope. I think that this procedure will have the advantage that the House and those hon. Members wishing to take part in the debate on Wednesday and Thursday will have made available to them the text of my statement, and, incidentally, it will curtail my speech tomorrow.

Introduction

In my Budget speech on 17th April I referred to the unsatisfactory balance of payments and the probable expansion of home demand with its effect upon costs, and upon our competitiveness. I provided for a very large surplus of over £500 million above the line, but I clearly indicated that I thought the situation might require further measures. I asked for two new powers—the regulators.

In the three months since the Budget, home demand has continued to increase and is likely to increase even more than was then foreseen. There are labour shortages in most areas. Investment is rising strongly. The building industry already has more demand upon it than it can satisfy, and parts of the engineering industry are coming under increasing pressure.

Simultaneously with the increase of pressure on our domestic resources, we are faced with a critical external situation. This is the third successive year in which our overall balance of payments has been in deficit, and this is, clearly, not a situation which can be allowed to continue.

In 1960, the deficit on current account was about £350 million and there was also a net movement overseas of capital funds, by way of Government loan and private investment, of about £200 million. This was not reflected in the reserve figures because of a large flow of funds to London. Indeed, during 1960 the reserves rose by £177 million and, in addition, we strengthened our position with the International Monetary Fund to the tune of about £130 million.

During the first half of 1961 our current account was still in deficit though at a substantially lower rate than last year's rate. There have, however, been heavy withdrawals of short-term balances and, in spite of the Ford transaction and the prepayment of German debt, our reserves of gold and dollars have fallen by about £164 million over the past six months. This fall would have been much greater but for the special arrangements made with the central banks.

If rising personal demand and rising investment demand are not matched by increased production, the burden falls on the balance of payments. We have less for exports and we import more. In addition, prices go up, our competitiveness suffers, and it becomes more difficult to sell our goods abroad.

In my view, therefore, our aims at the present time should be as follows: First, we should maintain investment in productive industry with a view to the long-term growth of the economy. At the same time, we must make ourselves more competitive. Both are vital for a long-term improvement in the balance of payments.

Secondly, we must see that public expenditure is brought under better control.

Thirdly, we must take action designed to protect our position in the immediate future.

The proposals which I shall now outline are, in part, long-term and matters to which I have been giving consideration for some time; in part, they are required by the exigencies of the present situation.

Growth, Profits, Wages And Salaries

I shall deal, first, with growth in the economy. The controversial matter of planning at once arises. I am not frightened of the word. One of the first things I did when appointed Chancellor was to ask for a plan of the programme for development and expenditure in the public sector for five years ahead. I referred to the problem as affecting the economy as a whole in my speech in the economic debate last February. I have thought about it a great deal since and discussed it with representatives of both sides of industry. In addition to plans in the public sector, including those of the various nationalised industries and plans for certain industries in the private sector, developments in the economy as a whole are studied by a number of bodies.

These include the Economic Planning Board, presided over by the Permanent Secretary to the Treasury, the National Production Advisory Council on Industry, over which I preside, and various other advisory councils. I think that the time has come for a better coordination of these various activities. I intend to discuss urgently with both sides of industry procedures for pulling together these various processes of consultation and forecasting with a view to better co-ordination of ideas and plans.

I stated some time ago, in February, that I thought that an annual increase of 3 per cent. in the gross national product was feasible, but only if we have a 6 per cent. annual expansion of exports. I want to discuss with both sides of industry the implications of this kind of target for the various sectors of the economy.

To suggest that British industry is generally inefficient gives a totally false picture. We have many go-ahead and progressive concerns whose performance matches that of similar ones anywhere else in the world. In addition, in the field of exports, bodies like the Western Hemisphere Export Council and the Export Council for Europe are doing excellent work. But in substantial areas of industry there is room for a greater readiness on the part of both sides for radical changes in outlook and methods. This will be assisted, in my view, by the reductions in tariffs which should come from current negotiations. Much more effort is still needed in the training of skilled labour. A determined attempt is needed to deal with restrictive practices which are out of date. A start was made with the Restrictive Trade Practices Act, dealing with one aspect, but there is much more to be done by both sides of industry.

Today, I want to deal in particular with one aspect of the drive towards lower costs. The wages and salaries bill for 1960–61 was about £1.000 million, or 8 per cent. higher than in 1959–60. Over the same period, incidentally, company profits fell by about £13 million. Personal incomes other than wages and salaries—rents, dividends, interest and income from self-employment—rose by about £450 million, or 6½ per cent. Gross dividends formed £161 million of this second figure—a 20 per cent. increase. Over the same period, national production in real terms rose by £650 million, or by about 3 per cent.

These are the figures: £1,450 million increase in personal income against £650 million increase in production. They do not make sense. Of course, one has to deduct tax and savings from the first figure to get the amount actually spent, but the second figure has to provide not only for increased personal consumption but also for increased public expenditure, increased private investment and exports. These figures reveal in the simplest form what is our present difficulty, and what it is all about. We are cashing in ahead of production, and, in the process, making ourselves uncompetitive.

Profit margins are now being squeezed to some extent, but in some cases they are still too high.

With regard to dividends, although it is true that gross they represent only 7 per cent, of the figure for wages and salaries, and net of tax even less, they have increased substantially. In present circumstances, I do not consider that a further general increase in them in the coming year is justified.

Tax-Free Profits

Before I deal with wages and salaries, I want to say something about those profits which escape taxation. I have already explained my practical objections to a conventional capital gains tax. However, that does not affect my view that certain profits at present tax free should be brought within the existing system of taxation. I said so in my Budget speech and again the other day. I have made sufficient progress in this matter to be able to say definitely that in next year's Budget I shall be bringing forward measures designed to impose a clear liability to tax over a wider field than at present.

The activities I want to see taxed are of two main kinds. The first kind are those seeking short-term profits, which are more in the nature of speculation than investment, for example, short term transactions in shares and securities. The second kind are, in effect, trading activities—often in real estate—hut cloaked in such form as to escape liability under the present law.

Wages And Salaries

Turning to wages and salaries, of course, increases in real wages and salaries are desirable, but only provided that national productivity increases sufficiently, always remembering that increases for those who work in fields such as the social services have to be found out of increases of productivity in industry. As the figures which I gave a little time ago show, at present we are heavily over-drawing on our productivity account. In my view, there must be a pause until productivity has caught up and there is room for further advances. It is not possible in any general statement to cover every particular case. Where commitments have already been entered into, they should be met.

Subject to this, however, a pause is essential as a basis for continued prosperity and growth. In those areas for which the Government have direct responsibility we shall act in accordance with this policy. The Government ask that the same lines should be followed elsewhere both in the private sector and in those parts of the public sector outside the immediate control of the Government.

In itself, however, such a pause is certainly not a lasting solution to the problem of rising costs and prices. A pause must mark the beginning of a new long-term policy. That policy is that increases in incomes must follow and not precede or outstrip increases in national productivity. During the pause we must work out methods of securing a sensible long-term relationship between increases in incomes of all sorts and increases in productivity.

Public Expenditure

I now come to public expenditure. It is now so great that unless it is brought into a proper relationship with the resources likely to be available in the long term, our chances of sound growth will be gravely prejudiced. I also want some immediate contribution from the public sector towards lightening the present overload on the economy. In making these adjustments, we must see that priority is given to whatever directly affects national efficiency, and that we do not wastefully disrupt programmes under way. We shall, therefore, not interfere with the investment that the nationalised industries require for attaining their financial targets and providing essential supplies and services.

The sums required for assistance to industry will fall away next year, and we shall apply very strict criteria to any new proposals. We shall have to look critically at the level of agricultural support during the 1962 Review. In the services provided by central and local Government, we shall have to ask for desirable proposals to be postponed or abandoned. Authorisations and loan sanctions to local authorities will have to be considerably reduced.

The house purchase scheme under the 1959 Act, which is now costing about £40 million, will, in consultation with the Building Societies Association, be suspended.

Next year, unless checked, Government supply expenditure will rise substantially. I intend to do my utmost to keep this increase at a level not more than 2½ per cent. in real terms, which should be within our expanding capacity to carry; that is to say, about £125 million above the estimates for 1961–62.

This increase in Supply expenditure over 1961–62 Estimates will be broadly offset by the savings below-the-line following the completion of the steel loans and the suspension of the house purchase scheme. Taking it all together, I would put the effect of the decisions which we have taken as being to reduce the load in 1962–63 by some £175 million compared with what it would have been otherwise, to which can be added £125 million on account of the savings below the line or about £300 million in total.

I do not wish to create any false impression about this; except for the below-the-line items these are not cuts on this year's figures; they are part of the process of containing future expenditure for which I ask the House's wholehearted support.

With regard to this year's expenditure, it would be a waste of resources to delay work in progress or to postpone necessary maintenance. Nevertheless, there will be a stringent re-examination to see what savings can be made in administration and in other respects.

On one particular matter affecting public expenditure my right hon. Friend the Minister of Education will tomorrow inform both sides of the Burnham Committee that, while recognising that teachers have a good case for some increase in pay, the Government cannot agree to the size of the increase in salaries for teachers in primary and secondary schools as proposed in the Burnham Committee's provisional agreement. The Minister is also concerned about the distribution of the proposed increases. He will, therefore, ask the Committee to make some reduction in the increase and will give them his views on how the revised sum might best be distributed to meet the needs of the education service.

My right hon. Friend will also discuss with the constituent associations how in future the Government's views can best be made known to the Committee at an earlier stage. The present procedure is not satisfactory.

Other Measures To Relieve Strain On Balance Of Payments

Before I deal with the private sector at home, I wish to say something about overseas expenditures.

Government expenditures overseas—defence, aid and administrative—are running at present at a rate which will certainly rise to some E480 million next year and quite possibly, on present trends, to £500 million. I do not believe that we can sustain such a level. My aim is to hold that figure down to £400 million in the year 1962–63. This compares with £330 million in 1958–59.

Defence

It is right that we should carry heavy burdens for the sake of maintaining our commitments to our friends and allies around the world. But the defence programme must be carefully examined, particularly in relation to the overseas payments which it involves. The Minister of Defence has put in hand another review of the whole of this programme to see what can be done to lighten the burden.

In fulfilment of commitments to N.A.T.O., we are spending some £80 million a year across the exchanges in Western Europe. Of this sum, over £65 million goes on the maintenance of our forces in Germany, in accordance with our obligations under the revised Brussels Treaty. I have come to the conclusion that the strain upon the balance of payments caused by this expenditure cannot be allowed to continue next financial year. We have, therefore, invited the North Atlantic Council to review the financial conditions under which our forces are maintained. Such a request is provided for under the terms of the Treaty. It does not affect our determination to stand by our N.A.T.O. obligation in the defence of West Berlin and the review will relate to the next financial year.

Overseas Aid To Underdeveloped Countries

Assistance to underdeveloped countries from United Kingdom Government funds has risen steadily from some £80 million in 1957–58 to £150 million in 1960, and disbursements are expected to increase still further this year to about £180 million. Most of these disbursements are being made under commitments to other Governments and to international organisations, and these commitments will be honoured. I am bound, however, to take steps to contain the increase and to see it does not rise much above the present level. There is no question of cutting back, but even to sustain this level is a considerable challenge. It will not be easy. The figure of £180 million compares, I say again, with a figure of £80 million in 1957–58 when our balance of payments was better.

Overseas Administrative Expenditure

Finally, there is the cost of our diplomatic and various administrative services overseas. The total expenditure on these is not large in comparison with that of the commitments which I have been discussing. But, even so, these services must make their contribution towards the reduction in total expenditure overseas which our present situation demands. I look for a saving here of 10 per cent. in the financial year 1962–63.

Private Investment Overseas

I now come to private investment overseas. The volume of investment in the non-sterling area, which is subject to control, has been rising steadily. It is true that it produces earnings in the long run. But these earnings do not always benefit the balance of payments in the short term—partly because of the tendency to invest further in the overseas enterprise concerned and partly because of local restrictions on remittances. I therefore propose a more severe test than at present. The test for new investment in the non-sterling area will be that it will produce clear and commensurate benefits to United Kingdom export earnings and to the balance of payments.

Remittance Of Overseas Profits Profits

The powers to control investment in the non-sterling area apply equally to investment made out of profits earned over- seas by British companies and their subsidiaries. I am not satisfied that in all cases an adequate proportion of profits earned overseas is being repatriated to this country. I propose to request United Kingdom firms operating overseas to look at their policies in order to ensure that a higher proportion of earnings is remitted home. So far as non-sterling investment is concerned, I propose to reinstitute on a selective basis the examination of company accounts by the exchange control authorities to ensure that this policy is followed.

Monetary And Credit Policy

I now come to measures designed to affect the private sector here at home. The Bank of England have called upon the clearing banks for further special deposits. In the case of the London clearing banks the call is for 1 per cent., of which half is to be deposited by 16th August and the balance by 20th September, 1961. In the case of the Scottish banks the call is for a percentage equal to one-half of that called for from the London clearing banks. In making this call the Governor of the Bank of England has made it clear that it is the intention that the impact should fall on advances.

The banks have been asked that, when reviewing existing commitments or considering new lending, they should be particularly severe on proposals related to personal consumption, including finance for hire purchase, as well as finance for speculative building, property development, or for other speculative purposes, so that all possible room should be left for the finance vitally needed for exports and productive industry. I am sure that, despite the difficulties, the clearing and Scottish banks will as usual give their full co-operation.

The Governor is also drawing the attention of the other United Kingdom banks, including the foreign and overseas banks and the accepting houses, to the action taken with the clearing and Scottish banks. He will see the British Insurance Association and ask that the insurance companies should observe a similar policy in their lending. I look to these institutions, also, to give me their support. It is not my intention to force a down-turn of private investment in productive industry. I am not pro- posing any change in the initial or investment allowances. At the same time, the demands made by private investment, particularly on the building industry, are growing rapidly and it is right that some less essential forms of development should be postponed. I do not rule out further measures if they appear necessary.

The Government do not intend to alter the present hire-purchase restrictions.

Bank Rate

With my approval, the Bank of England is announcing a rise in the Bank Rate from 5 per cent. to 7 per cent. I have agreed to this partly because of the need to restrain credit internally, and partly because of the unsettled international situation.

The effect of all this will be to make credit more expensive and more difficult to get. The impact will be felt particularly on credit for personal consumption and property development.

Customs And Excise Surcharge

I have also decided that I must take action under Section 9 of this year's Finance Act. The Treasury has, therefore, made an Order, the Surcharge on Revenue Duties Order, the effect of which is to put a surcharge of the full permitted amount of 10 per cent. on the range of Customs and Excise duties referred to in the Finance Act, and an Purchase Tax. The surcharge will take effect from midnight tonight.

I wish to make it clear that, taking Purchase Tax, for example, the increase is the equivalent of 10 per cent. of the existing rates, not an addition of a further 10 per cent. to the existing rates. There is some misunderstanding about this. Thus, for goods now chargeable at 5 per cent. the increase would, in effect, raise the rate to 5½ per cent., not to 15 per cent.

The Order will be laid forthwith, and hon. Members will see in the explanatory note the full list of duties to which it relates. I must stress that the effect on prices of individual articles will be a matter for the traders concerned to determine.

The effect of the surcharge will be to withdraw purchasing power from the economy at the rate of £210 million per year. It can, of course, be reduced or removed at any time, but if it were maintained till the end of the current financial year, it would fortify the surplus above the line to the extent of £130 million.

Imf Drawing

Finally, I have decided to take action to fortify our reserves by a substantial drawing from the International Monetary Fund. This is being put in hand. The actual amount will be announced shortly when the discussions with the Fund are concluded. I would remind the House that such drawings have to be repaid within a period of three to five years, and this means that it is all the more necessary for the policies and measures I have outlined to be pursued with resolution.

I believe that these measures will protect our position in the immediate future and will form the basis for a long-term improvement in the balance of payments. They mark the first steps, following upon the five-year review, to establish a better relationship between public expenditure and the national resources. They will enable essential investments in productive industry to continue. At the same time, they will assist to restore our competitive power, to expand our exports, and to promote soundly based growth in the economy.

It is, of course, a truism to say that the whole tone of the statement of the Chancellor of the Exchequer was utterly inconsistent with the prospectus on which the Government got back to office. Perhaps it will take the smirk off the Prime Minister's face if he is reminded that the boasts of prosperity on which he won the last General Election are now being sustained by borrowing sixteen years after the war.

The Chancellor's statement lasted for half an hour, and I want to put these questions to him. First, is he aware that his whole statement has shown the classical bias of the Government against public services and public expenditure, while, despite his warning, their tenderness to the private sector? The Chancellor referred to labour shortages. Will he tell us why, despite labour shortages and a record investment programme over the last year, there has still been no increase in productivity? How does he explain that?

The right hon. and learned Gentleman said that rewards should not go ahead of the increase in productivity necessary to earn those rewards. Wild he tell us, then, why we had nothing from him in his proposal about scrapping the Surtax concession in the last Budget?

Turning to the specific proposals, is he aware that the most clear and specific ones are the restrictions in housing, in house purchase, which are to be administered by Government fiat, and, at the same time, the increase on the interest rates which, of course, will bear far more harshly on local authorities than on the private sector? Will the right hon. and learned Gentleman also try to justify his attack on wages in the public sector, including the salaries of teachers?

Does not this once again show the Government's bias against people who, in the main, are underpaid and are essential to the community against other people, whose spending power is increasing all the time with Government help?

With regard to the private sector, while we welcome the Chancellor's halting progress towards a capital gains tax on the lines that we have suggested many times, will he tell us why he is doing nothing to repeal relevant provisions of the 1957 Finance Act, which enable private companies to keep their profits overseas as a means of avoiding taxation? Warnings here are not good enough.

There are a great many other points which we shall want to debate tomorrow and on the succeeding day, but in relation to this regulator, this 10 per cent. increase in indirect taxation, has not the Chancellor yet understood, as we told him repeatedly during the discussions on the Finance Bill, that this is a measure which will press most heavily on ordinary families? An increase of 5d. on an old-age pensioner's tobacco is a very serious thing, of which the Government really ought to be ashamed. This will press on ordinary families, but he is doing nothing to increase, by a similar surcharge, the level of direct taxation on the wealthier taxpayer, in that he is still maintaining his Surtax concession.

Will the right hon. and learned Gentleman say how he can justify this discrimination between the essential, on the one hand, and the inessential, on the other; between the public sector and the private sector; and, finally, between ordinary families and the richer taxpayers who are getting away with it?

The right hon. Gentleman began his questions by referring to prospectuses. That is a matter which we are very ready to debate with him and his right hon. Friends. He also referred to borrowing. The right hon. Gentleman and his hon. Friends have some experience of that, too.

The right hon. Gentleman went on to say that my statement showed a classical bias against public expenditure. It did nothing of the sort. It showed my belief that we have to bring public expenditure under proper control in relation to national resources.

The Surtax proposals do not come into effect until 1963, but I maintain that the proposal I have made for restricting credit in these present circumstances is fair between the public and the private sector.

The Opposition did not vote against regulator No. 1 when it went through in the Finance Bill, and I would have thought that it was clear from the facts I have outlined that these are precisely the circumstances in which that sort of regulator ought to operate.

Before my right hon. and learned Friend concluded that he should in any way reduce any overseas spending, what consideration did he give to the question of the financing of the social services generally? For example, is it still justifiable that the State should bear about £68 million a year on school meals and milk? [HON. MEMBERS: "Oh."] Is he aware that he will have the fullest possible support for any measures he takes to strengthen the value of the £, such as he announced this afternoon?

I note what my hon. Friend said. I will bear it in mind, but I have tried to keep a proper balance in these proposals.

Is not the upshot of what the Chancellor of the Exchequer said that nothing new or unexpected has developed in the world economic scene? What we have been told is that Tory economic policy has been totally mis- calculated and totally inadequate. Is it not only three months since we had a Budget in the House, which is now shown to have been quite irrelevant to the economy of the country? Have not we been told today that the only thing the Government can think of in the current year is again to put up the Bank Rate and increase Purchase Tax? Is it not time that a Government who have come to the end of their road should resign?

I do not think that the hon. Gentleman can have listened very carefully to my statement. As regards the suggestion of miscalculation, I indicated very clearly in my Budget speech what the trends were, and the hon. Gentleman knows quite well that the international situation has certainly not improved since then. The figures which I have given show that internal demand has continued beyond what was to be expected. I do not remember at any time during my Budget speech any hon. Member of the Labour Opposition, or even of the Liberal Party, suggesting that the Budget ought to be harsher. Therefore, I think that there is a considerable element of humbug in this sort of criticism.

While congratulating my right hon. and learned Friend on his tough, resilient, and realistic statement this afternoon, may I ask him to answer two short questions? First, what does he intend to do with the extra £140 million in taxes that he is raising under Section 9 of the Finance Act in the current year, and £210 million in a full year? Is it intended to put it back into a fund for perhaps post-crisis tax credit to those who paid it, or what does he intend to do with it?

Secondly, in view of the dangerous inflationary pressures which he has explained this afternoon, would not it have been advisable to increase the incentives to personal savings, and to study the drop in the results of the National Savings movement in the last few months and perhaps have a new issue of National Savings Certificates, the 11th issue, or increase the limit on the present issue—but at least do something as a further hedge against inflation by giving people incentives to save instead of to spend. Would not that have been advisable?

The yield of the extra tax will be used to fortify the surplus and diminish the inflationary pressure. I think that my hon. Friend's second point is a matter for debate. I am not at all out of sympathy with the suggestion that he put forward, but I think that it is a matter for debate.

Will the Chancellor of the Exchequer agree that during the past year there has been virtually no change in British industrial production? Can he say whether the measures that he has announced this afternoon are intended, as far as he is concerned, to increase production, to reduce production, or to leave it unchanged? Can he also say by what means the Government propose to increase the long-term efficiency and competitive power of British industry?

The answer to the right hon. Gentleman's second point is, "By reducing costs". As for the first point, I believe that the best way upon which to build an increase in British production is to have the economy soundly based, to have public expenditure in proper relation to resources, and also for the steps to be taken in industry which I intimated in my statement.

My right hon. and learned Friend spoke of drawings from the International Monetary Fund. Is he aware of disturbing reports that I.M.F. assistance to sterling may be made conditional on our merging with the Common Market? If such pressure is applied, do the Government realise that if they tell the people and trust the people they will have the unswerving support of the nation for any measures necessary to resist such interference in British affairs?

There is no question or possibility of any such condition being imposed. As for drawing upon the International Monetary Fund, I would remind the House that during last year we strengthened our drawing powers by about £130 million. Our view of this Fund has always been that it should be used for immediate recourse in time of temporary difficulty.

In his survey of the economic position of the country has not the Chancellor overlooked one very important item, namely, the fact that we are now spending £1,600 million a year on military organisations? When he referred to the need for maintaining our obligations to N.A.T.O. and, at the same time, called upon the Minister of Defence to review our overseas military expenditure, what did he mean? Did he mean that we intend to withdraw some of our forces from the West, or are we to reduce our military commitments in some other theatre? Can we have some clarity in these matters?

As for military expenditure overseas generally, what I said stands. The Minister of Defence will have a review to see whether the burden upon our foreign currencies can be reduced. As for Western Europe, we are acting in accordance with the terms of the W.E.U. Treaty and in accordance with the procedures established by N.A.T.O.

Is my right hon. and learned Friend aware that the farming community will expect to make some contribution towards the national effort to overcome our difficulties? Nevertheless, has he taken full account of the fact that what has led to the subsidisation bill increasing at the ratepayers' expense year by year has been the uncontrolled nature of imports of products similar to those the stimulation of production of which is being encouraged by the Government? Can he therefore give an assurance that the whole question of import policy with regard to those commodities which are subject to the encouragement of Price Reviews will be fully examined?

The answer to the first part of that supplementary question is "Yes, Sir". The second part opens up wider issues.

Does the Chancellor think that the trade union movement will accept the philosophy of wage restraint in the light of the decisions that he has announced today?

I am in the hands of the House, but I would point out that we shall have two days in which to debate these matters.

Since I gather that it is your wish, Mr. Speaker, that we should not proceed too far in this matter today, may I ask the Chancellor of the Exchequer one further question? Is he aware that there is not a single specific measure that he has announced this afternoon which seems likely in any way to increase productivity or exports of British industry? Is he further aware that he has lost a great opportunity of achieving a sense of national unity in this crisis by the gross unfairness of the proposals that he has put forward?

One right hon. Gentleman has asked a question of another. I hope that the House will allow the other to answer.

I quite understand the dislike of that question receiving an answer, but the right hon. Gentleman asked it. When he considers my statement I think that he will see that I have been fair in my proposals—that I have tried to deal fairly with both sectors of industry—public and private, and that in my suggestion of restraint I have covered not just the wage earners, but other sectors of the economy.