Curbs To Stay In Britain

Press, Volume CVII, Issue 31522, 9 November 1967, Page 15

Curbs To Stay In Britain

(N.Z.P.A.-Reuter —Copyright) LONDON, November 8. The Government has pledged that economic restraints will stay and deflationary policies will not be changed—at least for the time being.

The Chancellor of the Exchequer, Mr James Callaghan, gave the warning last night in the House of Commons, rejecting demands by Labour Left-wingers for a general reflation of the economy. Mr Callaghan, frequently interrupted by Labour backbenchers during his speech, said economic prospects for 1968 were bright but this did not mean ail restraint should be thrown overboard.

He also said that unemployment would reach a winter peak next February but figures would drop significantly next year. The Government won a vote of confidence for its economic policy by a majority of 82 votes, although 46 Labour Left-wingers earlier informedi

the Prime Minister, Mr Harold Wilson, that they could support the party’s line in 1968 only with the utmost reluctance.

Mr Callaghan said the country had now entered a period of controlled expansion in industry, the economy was growing and production was increasing. To reflate was the worst thing the Government could do.

“The long-term policies must be pursued steadily and patiently,” he said. Mr Reginald Maudling, the Opposition spokesman in the debate, praised Mr Callaghan for refusing to devalue sterling.

Devaluation was no solution to the country’s problems, he said.