HC Deb 01 February 1972 vol 830 cc237-8
Q6. Mr. Sheldon

asked the Prime Minister if, in view of further rises in unemployment, he remains satisfied with the co-ordination between the Departments on economic problems; and if he will make a statement.

The Prime Minister

Yes, Sir. There is already close co-ordination between all Departments concerned with economic policy in its various aspects. In my speech in the House on 24th January I set out the reasons underlying the growth in unemployment over recent years; and outlined the range of measures taken by the Government, including an unprecedentedly powerful stimulus to demand, aimed at bringing down the level of unemployment.—[Vol. 829, c. 1024–42.]

Mr. Sheldon

We have heard a great deal about the powerful stimulus created by the £1,400 million. However, despite the remarks of the Chancellor of the Exchequer at the end of his Budget State- ment summarising the purpose of the spending of this £1,400 million as being for incentives—the words he used were "creating the spirit of endeavour "—is not the real cause of unemployment that the Chancellor of the Exchequer spent this money wrongly for political reasons and so failed to bring about an increase in demand which would have led to investment and a reduction in the number of unemployed?

The Prime Minister

I do not think that the hon. Gentleman can argue that the additional expenditure on infrastructure and increased investment in the nationalised industries and bringing investment of that kind forward, is mistaken policy or that the policy is limited solely to a reduction in taxation. The encouragement of investment both in infrastructure and in the nationalised industries, as well as in the naval shipbuilding programme, deny the hon. Gentleman's thesis.

Mr. Bidwell

We all know how distressed any Prime Minister must be with the present level of unemployment. Can he tell us by how much it should be reduced this year?

The Prime Minister

The hon. Gentleman knows that it is not customary to make forecasts of the movement of unemployment. At the same time, we all agree that unemployment is much too high, and the measures which are being taken are, of course, taken with the intention of reducing it.

Mr. Kinnock

Has the Prime Minister read this morning's report by the Industrial Policy Group? Is he aware that that body's view of investment conflicts directly with the view of his Government? Will he tell us who is wrong—his Ministers here or his mates outside?

The Prime Minister

There are sometimes differences in estimates of what is likely to happen about the future of investment. Every Government have to make the best judgment they can. We have been trying to increase public investment at the moment, when the capacity exists, but at the same time to see that the economy does not become overloaded when there is a subsequent increase in private investment.