Oral Answers to Questions — Lord President of the Council (Speech)

– in the House of Commons at 12:00 am on 24th November 1966.

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Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South 12:00 am, 24th November 1966

asked the Prime Minister whether the public speech made by the Lord President of the Council at Sheffield on Saturday 19th November, 1966, about the Government's economic measures of 20th July, 1966, represents Government policy.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

asked the Prime Minister if the public speech made by the Lord President of the Council at Sheffield on 19th November concerning the effects of the current economic policies on production represents Government policy.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

As I cannot have two supplementary Questions, I address myself only to Question No. 11. Is it not the fact that the Lord President said in Sheffield that the Prime Minister's statement of 20th July contained economic and financial measures which were too drastic? Is that the Prime Minister's view today, and, if so, how does he reconcile it with this morning's publication of a figure of 541,000 unemployed, before we have even entered the winter season?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The hon. Gentleman can have, under the rules, only one supplementary, and perhaps it is as well, because obviously in framing the supplementary he had not read the speech of my right hon. Friend.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I happened to read every word of it through the courtesy of my right hon. Friend, which I mentioned on Tuesday, in showing it to me in advance. I read and agreed with every word of it. I cannot teach the hon. Gentleman how to react politically to any situation. Still less, apparently, can I teach him to read.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

Is my right hon. Friend aware that the speech of my right hon. Friend the Lord President was a very excellent contribution to the current difficulties in which the country finds itself? [Interruption.] Nevertheless, can he give an assurance that the deflation will not get as deep as it did in the winter of 1962–63 when the unemployed in Scotland alone totalled 136,000?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I think that my hon. Friend will not mind my saying that what he really meant was that my right hem. Friend's speech was a contribution not to our economic difficulties but to the solution of those difficulties. Her Majesty's Government's position has been stated by my right hon. Friends and myself both in relation to the date at which there could be any easing up on the general situation and as to the measures which can be taken now in the matter of encouragement of investment. As regards the position in Scotland, which we are watching, as the whole House will, with great care and concern, the unemployment figure there is still a good deal less than it was in November, 1963, as well as in November, 1962.

Mr. Gresham Cooke:

As the Prime Minister has previously stated that he takes full responsibility for the effects of his measures of 20th July, and as unemployment has now reached, as my hon. Friend said, 541,000, at what figure of unemployment does he now intend to reintroduce inflation?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Of course, I take full responsibility. My difficulty this afternoon is not in giving answers but in trying to tell hon. Members what supplementary questions they wanted to put.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Ambiguity is not out of order.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I did not think that there was any ambiguity, Mr. Speaker. Certainly the hon. Gentleman is on a much more serious point. Of course, I take full responsibility for the measures which I announced on 20th July. I said on that occasion that after redeployment we regarded the figure which I then gave as a figure which would be acceptable and should not be exceeded until we were able to start a position of reflation, once we are paying our way. But I believe that, while there is a great deal of redeployment still going on, we are certainly not in a period of post-redeployment and, while these figures today are heavily inflated by the effect of the unofficial strike in North Oxford—very heavily inflated—we shall watch the figures very carefully indeed. But it would be inimical to everything we are trying to do, including the fight against inflation, if we now rushed precipitately to put into reverse the measures which I think the country as a whole recognised were necessary in July.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Is not my right hon. Friend aware that very many of us on this side of the House approve entirely of what my right hon. Friend the Lord President said, and furthermore would like to see the kind of action indicated in that speech? The time has now surely come to introduce selective and far-reaching measures of reflation.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Since my hon. Friend agrees with my right hon. Friend and I agree with my right hon. Friend, obviously my hon. Friend and I are in agreement. What was said by my right hon. Friend about selective reflation in terms of encouragement of investment is what I said at the meeting of the Productivity Conference two months ago, and this is the basis on which we should be concentrating our endeavours at this stage.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

Is the Prime Minister aware that, while we welcome any measures the Government take to encourage investment, we also think—and this view is generally held by economists, trade unions and managers throughout the country—that the measures taken so far, including those of 20th July, have gone much too far and that there should be some relaxation, for example of hire-purchase regulations, Bank Rate and credit restrictions generally?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

It is not usual to discuss movements of Bank Rate in the House. On the hon. Gentleman's other question about hire purchase, when he reflects I think that he will feel that to take precipitate action to restimulate consumer expenditure at this stage would be the wrong way, and would simply be a telescoping of the old stop-go policy of waiting two or three years and then putting back the same measures. I think that it would be very defeatist to assume that British industry, knowing that it can now get investment goods much more easily because of the freeing of labour and capacity, will take the craven line about the future and will not this time try to increase its investment.

Several Hon. Members:

rose

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Mr. Heath—Business Question.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I thought that the Leader of the Opposition was going to ask the Business Question. I call him now to ask a supplementary question.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

On a point of order, Mr. Speaker. I beg leave—[HON. MEMBERS: "No."]

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Mr. Heath—supplementary question.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

The Lord President said in his speech, which both the Prime Minister and I have read, that the level of unemployment was being shaped by the measures the Government took on 20th July and was being planned in this way. What the House and country want to know in this serious situation is exactly what the Government have shaped and planned for unemployment in the future. That is the first thing they want to know. Secondly, will the Prime Minister put before the House the evidence he has of the redeployment going into manufacturing industry, because all the evidence the Press has produced shows that it is redeployment into the service industries and not into the manufacturing industries which produces exports?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

On the first question, I have nothing to add to the figures and estimates I gave and the policy laid down in answer to supplementary questions on 20th July. With regard to the second question, I am sure that in the forthcoming economic debate for which the right hon. Member for Enfield, West (Mr. Iain Macleod) asked earlier this week, it will be possible to speak more fully about the redeployment. B.M.C. is the firm that is far worse hit than any other motor car firm, and there may be lessons to be drawn from that about the employment practices and other practices of different firms. In the case of B.M.C.—which is a bit surprising in all that has happened—the studies I have made of the 12,000-odd which it was intended to put off, show that something like 4,000 are not yet redeployed—[Interruption.]—They are not yet redeployed. I want to come to that next. I am talking globally at the moment. These are early days for getting the redeployment into work of one kind or another. With regard to the actual places in which redeployment occurs, we do not know about those who have found their own work, many of whom have gone into manufacturing. To our knowledge—I am drawing on my memory here and I can correct this next week if I am wrong—I would say that something like 60 or 70 per cent.—I think that it is in fact 55 per cent.—have gone into manufacturing industry and 30 per cent. have gone into services, but those services include basic services such as transport and public transport.

Several Hon. Members:

rose

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. We are well past Question Time. Mr. Heath—Business Question.