TNAG-0389-FCO40-435-Visit-of-trade-mission-of-the-London-Chamber-of-Commerce-and-1973 — Page 56

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The essential point, it seems to me, is that Britain now has a Government which is making a resolute effort to break the vicious "stop-go" circle and to achieve sustained growth. while containing inflation. It is a difficult task, which has been made vastly more difficult by the surge of world prices. Britain's imports are now costing at least an extra £1,000 million a year, with the inevitable results for our internal price level and our balance of payments. An essential element in our agreement with the EEC was that the increase in food prices caused by the adoption of the common agricultural policy should be gradual and spread over five years event the increase in all prices has been dramatic and indeed brutal. It has had very little to do with British membership of the EEC, but that doesn't make it any more palatable to the British public. The political consequences for the

Government are obvious.

in the

In actual fact the Government's economic policy has had remarkable successes for which to my mind it has received

far too little credit. Economic expansion has been sustained

at an unprecedented rate. There has been a dramatic increase

in productivity. Industrial production in 1973 is expected to increase by nearly 10%. There has been an upsurge in investment : and the latest estimate for 1974 is for a

further increase in manufacturing investment of 15%. Exporting is now profitable and British export prices are highly competitive. In the first eight months of 1973 the volume I repeat volume of exports rose by 13.2%, while that of imports rose by only 8.2%. There are good reasons for expecting that in 1974 there will be a marked improvement in the at present serious deficit in the balance of payments.

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