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Interest Rates

Volume 975: debated on Monday 3 December 1979

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the Secretary of State for Wales what assistance can be given to farmers and others in Wales in times of the present high interest rates.

Sources of assistance to farmers include capital grants under the farm and horticulture development scheme and the farm and horticulture capital grants schemes, together with loan facilities available through the Agricultural Mortgage Corporation and the Agricultural Credit Corporation.

While welcoming my right hon. Friend's explanation and accepting that the present high interest rates are an integral part of the Government's strategy for economic recovery, may I ask whether my right hon. Friend is aware that French farmers are heavily subsidised by their Government and that they are put in a position of unfair competition with our farmers?

I agree that French farmers are heavily subsidised, but Governments and the farming industry in this country have long preferred our method of assistance, namely, the substantial contributions towards the cost of capital investment which we provide under the schemes that I have described. My hon. Friend should be aware of the scale of support that we give our farmers in that way.

Will the Secretary of State explain to his hon. Friend the Member for Anglesey (Mr. Best) that the Tory Party fought the last election on cuts in public expenditure and that the hon. Gentleman cannot now call for more public money to protect certain groups from the disastrous consequences of the Government's economic policy?

My hon. Friend the Member for Anglesey (Mr. Best) was pointing to the problems of high interest rates which arise from the excessive public expenditure unleashed by the right hon. Member for Llanelli (Mr. Davies) when he had responsibility in the Treasury. I hope that the right hon. Gentleman takes responsibility for the consequences that we are suffering.

Is it not a fact that by delaying regional grant payments in one Budget the Government forced business men to borrow money, and by action in a subsequent Budget made it cripplingly expensive for them to do so? Where in the Conservative manifesto could any business man or householder who voted Tory last time have anticipated that the Government would force interest rates above the rates that Conservatives described as "usury" when they were in opposition? Finally, what comfort can this Shylock Government offer to business men whose businesses are bleeding to death as cuts reduce orders, real profits fall to the lowest level ever and interest rates soar to the highest level ever?

No doubt that, Mr. Speaker, is the one question that you suggested should be asked. The language used by the right hon. Member for Swansea, West (Mr. Williams) could be covered by the phrase of the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer. When faced with similar criticisms of high interest rates, the right hon. Gentleman said that the criticisms grossly exaggerated the effect of changes in interest rates on the real economy. That is absolutely right. The criticisms come ill from a former Minister who was involved in the overnight abolition of the regional employment premium, without any compensation for the economy. I remind the right hon. Gentleman that the CBI is pressing us to go on with the policies that we are following.