§ 7. Mr. Dykesasked the Chancellor of the Exchequer if he has made specific calculations of the effects on unemployment and demand from the operation of the multiplier in (a) direct tax reductions and (b) additional public expenditure.
§ Mr. Peter ReesTax cuts encourage growth of employment by helping to improve the performance of the economy. Permanent new jobs cannot be bought by injecting additional demand into the economy.
§ Mr. DykesAs the net figures for capital formation in the public and private sectors are not the same as the gross figures that the Government keep using, and as they show that we are seriously under-investing, why do my right hon. and learned Friend and my right hon. Friend the Chancellor of the Exchequer continue to indulge in fantasy notions of mass entrepreneurship on a grand scale rather than accept that every pound of additional capital spending in the public and private sectors is bound to produce six or more new jobs than would every extra pound of reduced taxation?
§ Mr. ReesI do not think that there will be universal acceptance of my hon. Friend's statistic. As he is concerned with public investment, or investment generally, I remind him that total fixed investment has risen by about 8 per cent. since last year.
§ Mr. WinnickDespite all the rhetoric, why does the right hon. and learned Gentleman not admit that the curse and misery of mass unemployment will not be ended until the Government leave office?
§ Mr. ReesI am tempted to borrow the expression that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) uses on these occasions: fatuous questions are likely only to elicit fatuous answers.