HC Deb 26 October 1971 vol 823 cc1453-5
10. Mr. Hordern

asked the Chancellor of the Exchequer what is his latest estimate of the growth of the gross domestic product to July, 1972.

11. Mr. Dixon

asked the Chancellor of the Exchequer what he estimates will be the rate of growth of the gross domestic product in the first half of 1972 compared with the first half of 1971.

The Chancellor of the Exchequer (Mr. Anthony Barber)

On the information at present available I expect that between the first halves of 1971 and 1972 the rate of growth of G.D.P. will at least equal the rate of 4–4½ per cent. forecast in July.

Mr. Hordern

Does my right hon. Friend agree that, if achieved, this rate of growth will represent double the annual average rate of growth achieved by the last Government? Will not it be sustained by a higher level of company earnings which the previous Government did their best to diminish at every opportunity?

Mr. Barber

I agree with my hon. Friend. I believe that we are now much better placed than for many years past to embark on a period of economic growth which can be sustained. The whole House will probably agree that it is sustained growth which British industry needs so desperately if it is to have the confidence to invest, modernise and re-equip.

Mr. Dixon

If, as now seems likely, we shall have a rate of growth about twice as large as that under the Labour Government, does my right hon. Friend agree that it will be possible to make further decreases in taxation and further increases in various social benefits?

Mr. Barber

I do not wish to anticipate any of my Budgets, but the general reason- ing behind my hon. Friend's views is correct.

Mr. Taverne

In view of the rise in productivity, is not it very questionable whether unemployment will fall by July, and on the basis of the Government's present policies is not it likely that the current astronomical unemployment figures will rise further during the winter?

Mr. Barber

As the House knows, I have said that the present level of unemployment is unacceptably high. It was one of the principal reasons why I took further action in July, in addition to the action that I took in my Budget. But I have made my position clear on this, and I ask the House to accept it.

Dame Irene Ward

Can my right hon. Friend add to his achievements by seeing that we get some growth on the North-East Coast? It is very important to have balanced growth all over the country, so that everyone can benefit. I look forward to this happening, and I shall be glad to have that assurance.

Mr. Barber

My hon. Friend knows that we have taken a number of special measures to try to deal with the unemployment problem in the regions and in those areas which have an especially high rate of unemployment. In addition, the general measures that we have taken will be of help in the regions. After all, over the year we have cut taxation by about £1,400 million, we have abolished hire-purchase terms control, interest rates have fallen, and credit has become easier, there has been the price restraint by the nationalised industries, and we have made increases in public expenditure in the development and intermediate areas. All these will help.

Mr. Crawshaw

Does not the right hon. Gentleman agree that he might be able to anticipate this growth because of the strong economic position that he found at the Treasury when he took over, and because—unlike the Labour Government—he has not had to continue thinking every month about our overseas deficits?

Mr. Barber

No, Sir; I disagree with the hon. Gentleman. I checked the other day and I was told that in the early months after we took office from the previous Government the rate of increase in wages and earnings was the fastest for over 50 years, and inevitably this was pushing up prices at an increasing rate and creating the very conditions which have resulted in the present high level of unemployment.