Reflation

HC Deb 01 December 1966 vol 737 cc591-2

3. Mr. Buchan

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will now begin the process of planned reflation by means of Government investment at selected points of industry.

Mr. M. Stewart

The timing of reflationary measures will depend on the improvement in our balance of payments. We have made clear on a number of occasions that they will be designed, like those already in being, to assist the movement of resources into exports and productive investment so that the basis of future growth is secure.

Mr. Buchan

Looking at these unemployment figures, especially in regard to Scotland, does not my right hon. Friend agree that enough is enough and that the time has now come, while avoiding the dangers of a consumer boom, to begin the process of selective reflation by Government investment and contracts, particularly in the machine tool industry and technological industry, in order that this process may begin?

Mr. Stewart

I think that my hon. Friend will agree that, in this matter, we have to watch both the danger of letting deflation go too far and the importance of having regard to the balance of payments. As I have said, when we are able to take reflationary measures, we shall have in mind the considerations referred to by my hon. Friend.

Mr. Higgins

In view of the Minister's original reply, can he say what percentage increase in exports he expects from Government investment? Is it not the case that, generally speaking. Government investment does not result in increased exports?

Mr. Stewart

I do not accept the implications of the latter part of that supplementary question. As for the first part, the hon. Gentleman may like to put down a Question on the subject.

Mr. Manuel

Does my right hon. Friend recognise that there is a great deal of concern about the present figure of unemployment in Scotland and that owing to the glowing report of the advance in our economy in Scotland over the past two years—now admitted by Scottish industrialists and businessmen generally—and recognising that it is a redevelopment area, is it not time that the screw was taken off in order to allow this area to make even greater progress than it is making now?

Mr. Stewart

Although the growth of unemployment in Scotland has not been as fast as in the United Kingdom as a whole, it is true that this is a matter for concern. As my hon. Friend knows, a number of measures have been taken to give special advantage to Scotland and certain other areas.

Mr. Edward M. Taylor

Does the Minister agree that there have not been any new measures recently? When he is considering reflation, will he do so on a regional basis and not as something to be considered in relation to the whole country?

Mr. Stewart

That is certainly one matter which will be taken into consideration.