Gross Domestic Product

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 7th July 1970.

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Photo of Mr Robert Sheldon Mr Robert Sheldon , Ashton-under-Lyne 12:00 am, 7th July 1970

asked the Chancellor of the Exchequer what estimate he has made of the increase in gross domestic product during the current financial year.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

asked the Chancellor of the Exchequer what level of economic growth he expects to achieve in the current financial year; and if he will make a statement.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

The forecasts published by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) at the time of his Budget in April pointed to an increase in gross domestic product between the first halves of 1970 and 1971 of about 3½ per cent. Progress has on the whole been disappointing, but I am not prepared to give a revised forecast at this stage.

Photo of Mr Robert Sheldon Mr Robert Sheldon , Ashton-under-Lyne

Before the Treasury grip gets a hold of the right hon. Gentleman, will he accept that it is only in the first few months that he has his options fully open to him and that it is the action that he will take in the next few months with regard to domestic credit expansion and the use of the regulator to stimulate demand that will determine the kind of Chancellor that he will be?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I understand and do not particularly dissent from that point; but, although at the moment we are not running up to the growth forecast of my predecessor, I think that it is too soon to conclude that output is stagnating. There are one or two more encouraging signs, and I do not think it right to take action yet to stimulate the economy.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Will the Chancellor accept that he could well be accused of extreme lack of sincerity in his many speeches on unemployment, for example, if he does not take action now to deal with the level of economic activity and to reduce the level of unemployment without waiting for any further Budget either in the autumn or next year?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

It is a separate matter from the Budget. As I said in answer to the hon. Member for Huddersfield, West (Mr. Lomas), demand management, as no one knows better than the hon. Gentleman, is a matter not for one day in the year but for every day in the year. When I believe it right to give a stimulus to the economy, I will certainly do so.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

Have we not had a good deal of evidence in the last five years of the deleterious effects of attempts to fine-tune the economy? Will my right hon. Friend resist the urging of right hon. and hon. Members opposite to pursue this policy, which has not produced great success in the past?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I said earlier—obviously I will expand on this, Mr. Speaker, if I succeed in catching your eye in this afternoon's debate—that there are some factors more encouraging than the growth factor taken in isolation. The growth factor taken in isolation does not at the moment live up to my predecessor's expectations at the time of the Budget. However, the Budget is only two or three months behind us and I think that we should see rather more figures before we move on that.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

asked the Chancellor of the Exchequer what was the increase in gross domestic product at factor cost, and in unit labour costs in manufacturing, in the last six-month period for which figures are available, as compared with the preceding six months.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

Figures for unit labour costs in manufacturing are not available for six-month periods, but the most recent provisional estimates for the whole economy show that unit labour costs rose by about 4¼ per cent. between the six months to March and the preceding six-month period. The corresponding increase in the gross domestic product—at factor cost at constant prices—was about 1 per cent.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

The Leader of the Opposition has said that the Conservative Government have inherited the strongest economy in living memory. Could my hon. Friend give us any idea of the scale of longevity required to recall a condition of such soaring inflation and stagnating output as the previous Government left behind them?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

My hon. Friend has somewhat taxed my political memory, but I should have said that it would mean going back 20 or 30 years. Certainly, the present trend in unit labour costs is extremly disturbing and, unless moderated, could have a serious effect on our competitive position.