HC Deb 25 July 1972 vol 841 cc1516-8
13. Mr. Ashley

asked the Chancellor of the Exchequer what further steps he now proposes to take to reduce the level of unemployment.

7. Mr. Charles Morrison

asked the Chancellor of the Exchequer whether he remains satisfied with the estimated growth now taking place in gross domestic product; and if he will make a statement.

21. Mr. Dempsey

asked the Chancellor of the Exchequer if he is satisfied with the working of the economic incentives provided in his Budget; and if he will make a statement.

The Chancellor of the Exchequer (Mr. Anthony Barber)

I would refer the hon. Member for Stoke-on-Trent, South (Mr. Ashley) to the answer I gave to the same Question on 27th June.—[Vol. 839, c. 275.] The indications are that the economy is growing broadly in line with the rate forecast at the time of the Budget, namely, 5 per cent. a year over the period there mentioned.

Mr. Ashley

Is the Chancellor aware that the rate of growth has not significantly affected the long-term totally unemployed and that we are all set for a return to 1 million unemployed this winter? Would he now care to answer the question: what further steps does he propose to take to reduce unemployment?

Mr. Barber

During the last three months unemployment has fallen by 137,000. Regarding future prospects, it is highly relevant to note that consumer expenditure in the second quarter was 2 per cent. above the first quarter level; the volume of retail sales rose further in May to be nearly 2 per cent. above the first quarter level; new car registrations in May were at a record level—some 10 per cent. higher than the previous peak. June was another new high. The industrial production index rose by 2½ per cent. in May. In April and May together industrial production was about 3¼ per cent. above the rate for the second half of 1971. Taken together these indicators point to a rapid expansion since the Budget, which I hope will be further reflected in the unemployment figures.

Mr. Dempsey

Does the Chancellor mean what he says in view of the figures published only recently which show that we have the highest unemployment since 1940 at this time of the year in the United Kingdom and Scotland, the latter having twice the national average? Is the right hon. Gentleman aware that more than 10 per cent. of the insurable population in some parts of Scotland, including my own area, are unemployed, that young people have reached the age of 18 never having worked, and that we are now being afflicted with the human drama of fourth-year apprentices being paid off with no hope of completing their apprenticeships? It is reminiscent of the blind alley employment of the hungry 1930s. Will the Chancellor take effective steps to reverse this alarming unemployment trend?

Mr. Barber

The reflationary measures we have taken over the past two years are on an unparalleled scale—notably the tax cuts of £3,000 million and the additional short-term public expenditure which has been specially tailored to raise demand and employment by about £1,700 million.

Mr. Body

Will my right hon. Friend boast a little louder that our rate of growth now exceeds that of every country in the European Economic Community, other than France?

Mr. Barber

The rate of growth of the economy at present is more than twice as fast as it was during the period 1964 to 1970.

Mr. Joel Barnett

In view of the Chancellor's complacent satisfaction about growth, employment and the balance of payments, will he assure us that he has ruled out any possibility of a statutory prices and incomes policy?

Mr. Barber

I have repeatedly said that although some right hon. and hon. Gentlemen have had experience of a statutory policy and tramped—[Hon. Members: "Answer the question."] I will come to the question—through the Lobbies night after night in support of such a policy, we know that this is not the answer to the problems which we face. We believe that the right answer is to work together, the two sides of industry and the Government—[Interruption.] This is typical of the Opposition. They do not care two hoots whether there is co-operation with the unions or the employers. All they want to ensure is that this country is brought to its knees by one means or another. We shall continue with our efforts to reach a reasonable agreement with both sides of industry.

Mr. Bruce-Gardyne

Reverting to the original Question, if it should appear as the year wore on that the achievement of the growth objective laid down in the Budget would conflict with the other objective of restraining domestic inflation, which of those two objectives would have the greater priority?

Mr. Barber

I have no doubt that two of the several objectives which any Government ought to pursue are faster growth and the containment of inflation.