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Interest Rates

Volume 975: debated on Monday 3 December 1979

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asked the Secretary of State for Wales what calculations he has made of the effect of the recent increase in the minimum lending rate on employment prospects in Wales.

I do not believe that meaningful estimates of this kind can be made.

The right hon. Gentleman is understandably coy about giving unemployment forecasts for Wales. Is he not aware that the Government's policy of high inflation and high interest rates will put thousands of people in Wales on the dole and that it makes a mockery of the Conservative Party's claim to be the party of small business? Will he now assure the House that he will not be party to any further increase in interest rates?

It is remarkable that a former Treasury Minister who repeatedly refused to give forecasts of that kind should ask me to do so. It is equally remarkable that charges about high inflation should come from the Treasury Ministers who created the present situation We shall continue the fight against the high inflation that we inherited from the previous Government, even if in the short term it means high interest rates.

Will my right hon. Friend bear in mind that whenever the previous Labour Government made elaborate forecasts about an improvement in the economy they were invariably followed by a marked deterioration?

I have always had a good deal of scepticism about forecasts of that kind. We always remember the unending succession of forecasts from my predecessor, who week after week and month after month told us that the economy in Wales was being transformed, yet week after week and month after month under the previous Administration unemployment in Wales went up.

With regard to unemployment and the apparent further uncertainties in the steel industry, can the right hon. Gentleman give a guarantee that the remaining jobs at BSC Shotton—about 4,500–will be saved? Will he guard these remaining steel jobs like a tigress guards her cubs?

Eventually, and in the long term, jobs in any industry depend upon the ability to market goods. I know of no proposals that affect the jobs to which the hon. Gentleman referred.

Is my right hon. Friend aware of any suggestion from the Opposition on how to combat inflation, or of any advice from any Labour Member to the unions not to press inflationary wage claims?