HC Deb 26 March 1981 vol 1 cc1062-3
2. Mr. John Evans

asked the Chancellor of the Exchequer what assessment he has made of the effects on unemployment of the Budget measures.

The Chief Secretary to the Treasury (Mr. Leon Brittan)

The Budget is an essential part of the strategy to combat inflation. This is vital to creating the conditions required for sustainable growth of output and employment.

Mr. Evans

Is the right hon. and learned Gentleman aware of the rumours that unemployment will reach 3,700,000 by 1983? Will he now state categorically that the Budget will add not even 500,000, never mind 1,200,000, to the present level of unemployment?

Mr. Brittan

Such rumours have nothing to do with the Treasury.

Mr. Waldegrave

Will my right hon. and learned Friend give an estimate of by how much he thinks final demand will increase during the next 12 months?

Mr. Brittan

I refer my hon. Friend to the estimate given in the Financial Statement and Budget Report. Paragraph 16 gives the figures for gross domestic product and manufacturing output, which I think is the information that he seeks.

Mr. Shore

Surely the Chief Secretary knows the forward estimates for unemployment as a result of the Budget? The figures must be part of the general information available to the Treasury. What does he expect the increase in unemployent to be over the next year? Will he comment upon the statement reported in the press today that Treasury Ministers believe that Britain has a "natural rate" of unemployment of 5 per cent?

Mr. Brittan

The second issue is referred to in a paper to the Treasury and Civil Service Select Committee which explains the matter fully. It is not the practice to publish unemployment predictions. If the right hon. Gentleman wants to know why, I refer him to an excellent explanation in a letter written by the right hon. Member for Leeds, East (Mr. Healey) to the hon. Member for Wolverhampton, North-East (Mrs. Short) on 11 July 1978.

Mr. Dykes

Does the Chief Secretary agree as a general principle that the rise in unemployment, taking other factors into account, increases rather than decreases the need to stimulate the economy?

Mr. Brittan

That proposition is expressed in too general a form for a general acceptance or rejection of it.

Mr. Carter-Jones

Since the Chancellor of the Exchequer took great credit for reducing the MLR, will the Chief Secretary say what the MLR was in 1979? Does he agree that unemployment has doubled since his party came to power?

Mr. Brittan

Such questions range rather beyond the question on the Order Paper. There is reason to be pleased that the financial situation arising from the Budget measures made it possible to reduce MLR by 2 per cent.