HC Deb 26 January 1978 vol 942 cc1570-2
2. Mr. Canavan

asked the Chancellor of the Exchequer whether he will now take further steps to reflate the economy.

The Chancellor of the Exchequer (Mr. Denis Healey)

I cannot at this stage add to what I said in my statement of 26th October. In addition to the tax reliefs and increases in public expenditure which I then announced, I intend—if economic and financial circumstances permit—in my spring Budget to provide some further stimulus to economic activity.

Mr. Canavan

In view of the staggering figures issued earlier this week, showing more than 1½ million unemployed, including more than 200,000 in Scotland, does my right hon. Friend agree with the secretary of the Labour Party in Scotland that the Labour Government ought to be deeply ashamed of these figures. As one of the principal causes of unemployment has been the cuts in public expenditure, will my right hon. Friend take immediate steps to increase public spending, which is absolutely essential for social services as well as for the provision of more jobs?

Mr. Healey

No Government could take any pleasure in the figures that were announced this week. I ad occasion recently to read a lengthy statement by the Labour Party in Scotland about unemployment, and it paid real tribute to the measures which the present Government have taken to limit the impact of unemployment and to keep it as low as possible. But I shall, as my hon. Friend perhaps knows, have an opportunity tomorrow afternoon to discuss the matter further with the Scottish council of the Labour Party.

Mr. Ian Lloyd

Is not "reflation" the most dangerous and misleading word in the whole of the economic dictionary? Should not its use be banned until inflation has been eliminated?

Mr. Healey

If I am asked my opinion on that suggestion, my answer is that I should like to ban every noun which ends in the syllables "flation", because I think that inflation, reflation, deflation and disinflation all have implications which are grossly misleading at various times.

Mr. Joseph Dean

Will my right hon. Friend take another look at the problems of the building industry and see whether he can make available an increased sum of money which would help to expand the public building sector, thereby reducing the tragic figures of unemployment in that sector?

Mr. Healey

My hon. Friend will be aware that we gave substantial stimulus to the construction industry in the July measures and in those which I announced in October. I have noted that the bodies representing the industry now expect an upturn in the current year. But I shall keep this matter under review and consider whether further assistance is appropriate.

Mr. Lawson

The hon. Member for West Stirlingshire (Mr. Canavan) men tioned unemployment. How does the Chancellor of the Exchequer account for the fact that, according to a Written Answer that I have received today, unemployment in this country is higher than in any other major Western industrial country—higher than in the United States, France, Germany and Italy? [HON. MEMBERS: "Rubbish."] This is from a Written Answer that I have received today.

Mr. Healey

I can account for the statistics in many ways. For example, Germany has been able to export unemployment on a very large scale by getting rid of foreign workers to Yugoslavia and Turkey. We welcome very much the recent fall in unemployment in the United States. That is because the United States is following policies which I hope to imitate this year in achieving a substantially faster growth rate than in the past.