The Great Debate
Sir: In view of the Prime Minister's apparent determination to take Britain into the Common Market, the Government will find that measures designed to boost the economy are not so effective as heretofore.
Previously such measures have caused an increase not only in consumer spending but also in capital investment (in order to produce goods to satisfy the consumer demand).
Now, however, when many large companies are planning to supply British consumers from factories sited on the Continent, the normal effect of increased capital spending (in so far as it occurs in Britain) will be much diminished; such companies will merely be stimulated to accelerate their continental developments.
As the capital investment effect is a very material part of any increase in economic activity we may be surprised by how little difference a government boost will make to the level of (say) employment. To make matters worse, the propensity to invest overseas will mean that any government measures to increase economic activity will cause a surprisingly high loss of foreign reserves. These are only some of the rather unpleasant surprises which await us unless we abandon the disastrous proposal to join the Common Market as at present constituted.
R. E. G. Simmerson Chairman, Conservatives Against the Common Market, 10 St Andrews Mansions, St Andrews Road, London W14
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