§ 2. Mr. Barry Jonesasked the Chancellor of the Exchequer if he will estimate the impact upon inflation of a reduction of unemployment of 1 million over a two-year period.
§ The Chief Secretary to the Treasury (Mr. Leon Brittan)Depending on what causes it, a fall in unemployment may, in the short term, be associated with either a rise or a fall in the rate of inflation. Any numerical estimate would require a number of assumptions and would inevitably be highly uncertain.
§ Mr. JonesWill the right hon. and learned Gentleman explain not only how, but when, unemployment will be brought down by the Government? Does he realise that the suspicion is growing that giving priority and justice to the British unemployed is a matter of election planning? Did not the statement on Monday cynically abandon for many years all hope for Britain's unemployed?
§ Mr. BrittanI do not agree with any of the premises behind the hon. Gentleman's three supplementary questions. He knows that his Government did not make predictions for unemployment. This Government do not make them either. He also knows that the measures announced by my right hon. and learned Friend in his statement on Monday, including, principally, the 653 reduction in the national insurance surcharge, will assist British industry and therefore assist employment prospects.
§ Mr. Beaumont-DarkDoes my right hon. and learned Friend agree that the biggest impact on inflation and unemployment would take place if more people accepted low wage deals, particularly in the public service?
§ Mr. BrittanI do, Sir.
§ Mr. Joel BarnettIs the Chief Secretary still forecasting that everything will get better as surely as night follows day?
§ Mr. BrittanI have never made such a forecast and I do not make it now.
§ Mr. HoramIs the Chief Secretary aware that each percentage reduction in the retail prices index has been accompanied by an increase of about three-quarters of a million in the number of unemployed? Does he regard that as an acceptable trade-off?
§ Mr. BrittanThe figure may or may not be right, but I do not believe that there is a causal relationship between the two. The hon. Gentleman knows enough about these matters to realise that because one statistic accompanies another, it does not mean that one causes the other.
§ Mr. ViggersCan my right hon. and learned Friend explain what the effect on inflation would be if the Government were now to try to bring down unemployment in the way suggested by the Opposition?
§ Mr. BrittanAstronomic.
§ Mr. Robert SheldonDoes the Chief Secretary realise that it is easy to control inflation by high unemployment, which leads to a reduction in living standards? It is much more difficult to control inflation by getting the agreement of the people to a continued and steady rise in their standards of living. The Chief Secretary and his Government have succeeded in their wretched objective—
§ Mr. Speaker'Order. With respect, the right hon. Gentleman is advancing an argument, not asking a question.
§ Mr. SheldonI was asking whether the Chief Secretary realises that it is easy to achieve the first objective of reducing living standards by high unemployment, and whether he realises that it is much more difficult, but more productive, to improve living standards through agreement with the people.
§ Mr. BrittanI do not accept that our objectives are as the right hon. Gentleman describes them. Above all, it is a simplistic fallacy to believe that increased living standards can be achieved by consensus. They have to be achieved by action on the real components of the economy.