HC Deb 19 July 1971 vol 821 cc1040-1

Together with the cuts in taxation which I announced last autumn and in the Budget, the total reductions in taxation in this financial year will now amount to about £1,100 million, and in 1972–73 to over £1,400 million.

In addition, there are the new measures to assist the development and intermediate areas which my right hon. Friends the Secretaries of State for Scotland, Wales and the Environment announced last week and which involve additional expenditure of about £100 million, to be incurred in this financial year and the next. These measures will mean a substantial further injection of demand into the economy.

The removal of hire-purchase terms control will also, as I have said, add substantially to demand.

I have also made allowance for the effects on aggregate demand of price restraint by both the private sector and the nationalised industries and of the lower level of money pay increases which should accompany this new situation.

My predecessors have always found that one of the most difficult forecasts to make is the change in national output resulting from a variety of new factors, and any such estimate must inevitably be subject to a considerable margin of error. Taking into account all the factors, I now expect the increase in national output between the first halves of 1971 and 1972 to be 4 to 4½ per cent.

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