HC Deb 25 October 1966 vol 734 cc799-800
4. Mr. Marten

asked the Chancellor of the Exchequer if he will make a statement on the effectiveness of the measures announced on 20th July.

32. Mr. Stratton Mills

asked the Chancellor of the Exchequer what estimate he has made of the likely balance of payments outcome for 1966; and if he will make a statement.

Mr. Callaghan

The balance of trade is improving. The drain on the sterling reserves has stopped. In the domestic economy there is an easing in the pressure on resources and on costs. The evidence so far available therefore is that the Government's measures are having the desired impact.

Mr. Marten

What is the Chancellor's latest estimate for the restoration of the balance of payments? Would that include the servicing of our overseas debts but presumably not the capital repayment? What long-term plans has he for steadying up the growth in the rate of local government expenditure?

Mr. Callaghan

I see no reason to alter the forecasts made after the July measures, namely, about moving into surplus in 1967. That would include servicing the debt but not repayment of the capital or repayment to the International Monetary Fund, which I would expect to be borne on the reserves. As to the question about local authority expenditure, the Estimates season is coming round and an approach will be made to local authorities in due course about their spending.

Mr. Mills

Can the Chancellor of the Exchequer be a little more specific in his estimate for 1967? What progress has been made with the £100 million reduction in the level of Government overseas expenditure foreshadowed in the measures of 20th July?

Mr. Callaghan

I cannot be more specific on the first part. The second part is a separate question.

Sir G. Nabarro

Does not the Chancellor of the Exchequer agree that the effects so far have included destroying investment in the private sector of industry, which has dropped calamitously in the last few months? What steps does the right hon. Gentleman propose to take to restore investment in the private sector?

Mr. Callaghan

I do not think it is true that private investment has dropped calamitously. I think that what caused the hon. Gentleman to use that phrase is a forecast of what investment will be in 1967, which is a different matter.

Mr. Higgins

What is the maximum level of unemployment that the Chancellor now expects in the coming winter?

Mr. Callaghan

I have no reason to alter any forecasts that have been made so far.

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