Unemployment

HC Deb 14 May 1968 vol 764 cc1025-7

29. Mr. Frank Allaun

asked the Chancellor of the Exchequer what steps he now intends to take to relieve the deflationary measures, in view of the upward trend in unemployment.

Mr. Roy Jenkins

None, Sir. The Government's measures are not deflationary, but on the contrary are intended to create the conditions for an export-led expansion on a scale permitting a downward trend in unemployment.

Mr. Allaun

Is not the Chancellor's gamble on his vast inroads into future home consuming power being taken up by increased exports? What happens if they do not grow sufficiently?

Mr. Jenkins

No, Sir. In present circumstances the gamble would be not to allow room for the export demand to be met as it builds up. I certainly think that there is no possibility of achieving, as I think that we can achieve, a secure underpinning of the balance of payments position if we change our policy at a few weeks' notice.

Mr. Marten

If the policy is not deflationary, how can the Chancellor explain the fact that in the last 16 months unemployment has been above the 500,000 wholly unemployed mark on 12 occasions, while during the whole of the 13 years it was above that mark on only seven occasions?

Mr. Jenkins

I accept everything the hon. Gentleman says, but the fact of the matter is that, contrary to the views sometimes expressed, the Budget, combined with other factors in the situation, is not intended to have, and in my view over a period will not have, a net deflationary effect.

Mr. Mendelson

In view of the recent trends in the unemployment figures, is there not a danger that there might be greater need to support an export boom by a boom at home? Would my right hon. Friend not be running too great a risk if he did not encourage more investment at home, to support the development of our exports?

Mr. Jenkins

I am very anxious to see a strong development of investment at home, but I do not think that a consumer-led boom at home would support the export boom, as my hon. Friend says.

Mr. Hordern

If taking £923 million out of the economy is not deflationary, what figure would the Chancellor put as being deflationary?

Mr. Jenkins

I said taking that, in connection with other factors, and I stick to this. I noticed that yesterday upstairs, the hon. Gentleman was urging me to do more to contain a consumer-led boom.

Mr. Michael Foot

Can the Chancellor tell us when we may expect a substantial reduction in the present high level of unemployment, and can he give us some clear assurance that the Government have completely abandoned any idea of maintaining, permanently, a larger margin of unused resources than we have had in the past 10 years?

Mr. Jenkins

I have no desire at all to maintain the present level of unemployment, but I believe that it is essential that, as that level is reduced, and as production takes up, it should be done, if we are to cure our balance of payments difficulties, by means of an export-led boom.