§ Mr. Maurice Macmillan
No, Sir. However, we are keeping the situation under review, and, if it is judged that action to stimulate the economy is necessary, we shall not hesitate to take it.
§ Mr. Hunt
Is not the great attraction of a cut in purchase tax that it would act immediately and directly on prices and thus give reassurance to those who are becoming increasingly alarmed at the rate of inflation in this country? Although, in the light of my hon. Friend's reply, we are prepared to wait just a little longer for further Government action, will he convey to the Chancellor that our 1108 patience in this matter is not inexhaustible?
§ Mr. Macmillan
My hon. Friend has, no doubt, forgotten that there are Budget measures which have not had time to take effect in the economy. The cut in selective employment tax became operative yesterday. There is another £163 million to come from the increase in child allowances—£205 million in a full year—and £560 million from increases in retirement pensions and National Insurance benefits. My right hon. Friend has already said that if and when he judges the economy to need further stimulus, he will consider what action should be taken.
§ Mr. Taverne
Is the Chief Secretary aware that the nugatory effect on prices of the main weapon which the Chancellor used in his Budget—namely, the cut in S.E.T.—is now becoming obvious, and that the unprecedented unpopularity into which the Government have fallen in a record short time is due to the feeling which people have that they have been "had"?
§ Mr. Macmillan
I do not in the least accept what the hon. and learned Gentleman said. There have been considerable price reductions as a result of the cut in selective employment tax. The full effects have not yet been felt since the cut did not become operative until yesterday. The measures which the Government have taken to keep down nationalised industry prices have been sedulously opposed by right hon. and hon. Members opposite.