HC Deb 23 April 1968 vol 763 cc31-3
Q5. Sir C. Osborne

asked the Prime Minister on what statistical evidence he based his official forecast placed before the Trades Union Congress in July, 1966, that there would be 2 million unemployed if the Government's wages freeze and squeeze policy failed.

The Prime Minister

The figure of 2 million unemployed was an estimate of what could happen in the event of a breakdown in world trade comparable to that which occurred between the wars.

Sir C. Osborne

The Prime Minister was reported by the Labour correspondent of The Times—the most respected man in Fleet Street for that type of work—to have given this figure of 2 million unemployed if the wages and prices and incomes policy failed. What is his estimate today?

The Prime Minister

It was not a question of what was reported by even the most distinguished industrial correspondent. What I said privately to the T.U.C. in July, 1966, I later said publicly when I addressed the Trades Union Congress in Blackpool. I set out there in full detail what was at risk if this country and others were involved in a series of protectionist and other measures which led to a fall in world trade.

As to the present situation, I have already answered Questions to the hon. Gentleman about the meeting that the Chancellor and I had with the T.U.C. recently. Clearly, if the prices and incomes policy were to fail and the Chancellor's Budget policy were to fail, there could be the most serious effects in terms of our earnings abroad and, therefore, on our employment. It is not possible to quantify what it would mean, but it would be a very heavy price indeed.

Mr. Barnett

Would the Prime Minister at least make clear that the legislation will be used only as a last resort, giving the voluntary system a chance to work? Would he not agree that the prospective legislation could jeopardise the long-term prospects for a viable economic policy for a very doubtful and small amount of short-term gain?

The Prime Minister

I cannot agree with the second part of my hon. Friend's Question. As to the first part, I would refer him to the White Paper. As to the question of integration between the voluntary system operated by the T.U.C. and our own legislation, I dealt with this at some length last Friday at the Scottish T.U.C., and I shall be placing a copy of what I said in the Library.

Mr. Heath

What is to be the underlying trend of unemployment, seasonally adjusted, for the rest of the year?

The Prime Minister

It is a little difficult, as the right hon. Gentleman knows, after the last two months and some doubts about the seasonal correction, to ascertain exactly what the current trend is. I would not like to make a forecast, but the right hon. Gentleman will be aware that when he spoke last autumn to the Old Bexley Conservative Ladies—[Interruption.]—Old Bexley is, I think, the name of a place—he said, referring to this winter: When we get to the three quarter of a million mark, as it will do… The right hon. Gentleman knows it did not, and I hope that he will be very pleased that it did not.

Mr. Macleod

The Prime Minister says that he is unwilling to make a forecast on this most important matter. Is he aware that the Chancellor of the Exchequer, in response to a question from me in the Budget debate, did make a forecast of the trend, presumably seasonally adjusted? He said that it would be downwards. Is the Prime Minister contradicting that?

The Prime Minister

It is certainly our view that trends, seasonally adjusted, will be downwards, but for the last two months the figures have not been falling as sharply as in the previous six months. That is why I do not want to try to make a detailed forecast. When export orders now being won are turned into production, we expect a seasonally corrected downturn in unemployment. The right hon. Gentleman will be glad to know that unemployment this winter turned out to be less than it was when he was Minister of Labour, eight years after his party took office.