Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 12th March 1973.

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Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford 12:00 am, 12th March 1973

I do not recall having then any advice, although no doubt it would have been valuable, from my hon. Friend the Member for Bolsolver (Mr. Skinner). I do not think that we should go too deeply into this matter, but I am willing to argue it with my hon. Friend on this or any other occasion. However, I want to have a bit of an argument with the Chancellor the Exchequer.

It is true that some of my hon. Friends, including, no doubt, my hon. Friend the Member for Penistone (Mr. Mendelson), would have liked a more expansionary Budget in 1970. We could have had one. Quite a lot of my hon. Friends wanted a more expansionary Budget in 1968 and 1969. They would have been absolutely wrong in 1968, and we would have been in an appalling mess if we had had one. A Chancellor of the Exchequer never lacks hon. Friends who urge him to introduce an expansionary Budget. Sometimes they are right, sometimes they are wrong. But the fact that they can be pointed to on a particular occasion is not of unique significance.

I was endeavouring to deal with the mistiming of the Government's stimulus. When they should have been giving it, they were making cuts in public expenditure. The central count against them is that they should never have allowed the economy to get into a position in which we could have a public sector deficit in this past financial year of nearly £3,000 million without a full state of activity—without full employment. Once we have a massive public sector deficit, even well below full employment, almost inevitably it continues through to further years, which may be years of different conditions, producing a highly un-manoeuvrable mass for the direction of the economy. That is what we have now. The deficit is not only to continue through but is to rise from the present very large figure to £4,400 million in the coming financial year.