§ Mr. Gouldasked the Chancellor of the Exchequer whether, in making his proposals on 7 July, he made any assessment of the extent to which the reduction of £1,000 million in Government spending on goods and services might be replaced by an increase in private spending.
§ Mr. LawsonAs I explained to the House on 7 July—[Vol. 45, c. 418]—the purpose of the measures is to ensure that unplanned overspending does not deflect us from our economic strategy, and put the recovery at risk.
§ Mr. Gouldasked the Chancellor of the Exchequer to what extent the proposals announced by him on 7 July were in response to the likelihood of prices rising if public spending were not reduced; and what assessment of the relationship between the two was made.
§ Mr. LawsonThe purpose of the measures announced on 7 July is to bring public expenditure in 1983–84 closer to the planned path. Firm control of public spending is a key element in our economic strategy, and therefore to the achievement of low inflation.
§ Mr. Gouldasked the Chancellor of the Exchequer whether he has made any estimate of the number of jobs which will be lost, all other things being equal, by the reduction of £ 1 billion in public spending announced on 7 July.
§ Mr. LawsonIt will be for each Department or other body affected to decide how to implement the reductions. There may be some short-term effect on numbers employed, for example through reduced recruitment. But the overall impact of the measures on jobs will be much less than the damage which would be caused by allowing public expenditure and borrowing to rise above planned levels, hence jeopardising the Government's whole economic strategy, and the recovery.