HC Deb 14 October 1976 vol 917 cc604-6
2. Mr. Tebbit

asked the Chancellor of the Exchequer if his July economic package has yet improved the situation concerning inflation, unemployment, and the value of sterling.

The Chief Secretary to the Treasury (Mr. Joel Barnett)

The measures announced by my right hon. Friend on 22nd July relate to the financial year 1977–78. They have improved the prospect for that year and succeeding years.

Mr. Tebbit

Could there be a reply from the Treasury Bench that would more clearly underline the charges of complacence, ignorance and sloth which have been levelled against the Government than that reply? Do the Chancellor, his Financial Secretary or any of those humbugs on the Government Bench imagine that that reply will do anything to arrest a further slide in unemployment, a further increase in inflation or the increase in unemployment that is now taking place?

Mr. Barnett

I find it extremely difficult to take talk about unemployment from the hon. Gentleman or, indeed, from any Opposition Members, knowing, as they do, what their proposals would do to unemployment. The kind of bitter and twisted statements that come from the hon. Gentleman will do very little to help sterling or this country.

Mr. Speaker

For the record, let me say that it is not permitted to call anyone a humbug in this place. One may say that an argument is humbug, but not the hon. Gentleman concerned.

Mr. Tebbit

Further to that matter, Mr. Speaker, I apologise to the House and to those on the Treasury Bench for referring to them as humbugs. It is just their policy which is humbug.

Mr. Heffer

Does my right hon. Friend agree that the effects of the cuts on the construction industry have been disastrous? Is he not aware of the NEDC report which indicates that unless something is done, when there is an upturn there will be no construction industry left for construction to go ahead? Is it not time for a great deal of rethinking of Government policy as regards the construction industry?

Mr. Barnett

I very much appreciate my hon. Friend's concern. However, I am sure he will appreciate that, whatever measures are taken to deal with our present problems, particularly the very large borrowing requirement that we still have, they are bound to have some effect on the construction industry, and particularly if he agrees with me and with the TUC that our priority must be to ensure that we pre-empt the maximum resources for manufacturing industry.

Mr. David Howell

Will the Chief Secretary say what is the Government's inflation rate target for next year now that all hope of single figures by Christmas has presumably been abandoned? Is it right that Ministers are now moving to approximately 15 per cent. as their likely estimate for inflation next year?

Mr. Barnett

Certainly, if we were working on the basis of the hon. Gentleman's proposals we would be working on the basis of something very much higher.

Mr. Gould

What hard evidence is there that the pound is undervalued to set alongside the unpleasant facts that we are continuing to run a very substantial deficit in our trade, particularly in our trade in manufactured goods with our Common Market partners, and that no one, least of all Chancellor Schmidt, seems to be buying pounds?

Mr. Barnett

I appreciate what my hon. Friend has said, and I noted with interest the laughter of Opposition Members on the aspect about the pound being undervalued at present. Nevertheless, one is bound to recognise, as my right hon. Friend the Chancellor has done, that the level of the pound at any given time depends upon our industrial performance now and in the future. We have to get that industrial performance improved. That is our main task.