HC Deb 26 October 1971 vol 823 cc1465-6
21. Mr. Cronin

asked the Chancellor of the Exchequer if he will make a statement on the effect of the reflationary measures he announced on 19th July, 1971, on the economy.

Mr. Barber

There have been welcome signs of expansion.

Mr. Cronin

Bearing in mind the steady increase in the appalling unemployment figures, the fact that we have the world's record inflation, and that capital investment is still declining, is there any reason to believe that there has been a change in the extraordinary incompetence with which the Government have been running our financial affairs?

Mr. Barber

The position is that preliminary estimates—which I am sure the hon. Gentleman will have seen because he is particularly interested in these matters—show that in the third quarter the volume of consumer expenditure was 2½ per cent. higher than in the first half of the year. The hon. Gentleman will also know that exports are well up, not only in money terms but in volume terms. There has been a remarkable increase in private housing starts and completions, which rose sharply in July and August. Those are the sort of facts which warrant my making the statement that I made.

Mr. Roy Jenkins

Is the right hon. Gentleman aware that on at least four occasions in the last 12 months he has told us that he believed growth was coming through strongly? He was wrong on those occasions. Will he now say what reason he has to believe that his views are better founded on this occasion and what, in view of the confident forecast that he has given to the House—ill-founded though it is on his previous record—he believes will be the course of unemployment over the coming winter?

Mr. Barber

I have already said that I believe that in the course of the coming year the increase in unemployment will stop and the level of unemployment will come down. I have also said frankly—and I should have thought that the right hon. Gentleman, as a former Chancellor of the Exchequer, would accept it—that, as I said earlier in the year between April and July, if it were necessary at any time to take further measures those further measures would be taken. Indeed, I took such measures in July. I think that, by and large, they were applauded by the whole House because they were a genuine attempt to deal with a difficult situation which was inherited from the right hon. Gentleman.