TREASURY Chief Secretary Michael Portillo came under fire in the

Commons yesterday for not mentioning unemployment once in his speech

praising the Chancellor's autumn statement on the same day that

thousands of new job losses were announced.

Labour's spokesman, Miss Harriet Harman, said Chancellor Norman

Lamont's package of recovery measures would not end ''the relentless

increase in unemployment''. Even on the Government's own predictions of

their effect the measures did not add up to recovery, she said.

''There's a strong sense in this country that the recession has

stalked in and engulfed every region of this country,'' she added.

Deriding the Government's claim that #1750m would be released for

capital spending from council sales of housing, she said it would

require a 20% jump in sales at a time of recession and housing market

slump.

Mr Portillo claimed that the Autumn Statement package ''created the

conditions for a return of confidence and so remove a barrier to growth

in our economy''.

He denied that the 1[1/2]% ceiling on public sector pay deals next

year was an incomes policy. ''It is a decision by a major employer to

control its costs.''

He promised that the ratio of public spending to Britain's gross

national product would be brought down. Much of it was due to the

recession and associated costs like unemployment benefit. When recovery

arrived, the money spent on benefit would not be allowed to move into

other programmes.

''The ratio of spending to GDP must be reduced. That is a fundamental

objective of this Government and I reiterate it unambiguously,'' he

said.

Borrowing would be brought down ''towards balance'' as the economy

recovered.

Mr Portillo warned: ''We need to consider in the longer term the

balance between provision by the state and provision by the individual''

and hinted that further incentives for individuals to render themselves

at least partially independent of state benefits could be introduced.

Mr Terence Higgins (Worthing -- Con) predicted that the Autumn

Statement would be seen in the future to have been a turning point in

the progress of the economy.

Mr Robert Sheldon (Ashton-under-Lyne -- Lab) called for an expanded

housing repairs programme which could ''get people working next week''.