HC Deb 15 June 1971 vol 819 cc210-2
6. Mr. Marten

asked the Chancellor of the Exchequer what is his latest estimate of Great Britain's growth rate for 1972.

Mr. Barber

The estimate contained in the Financial Statement and Budget Report was for an increase in gross domestic product of about 3 per cent. between the first halves of 1971 and 1972. Estimates for the second half of 1972 are not available.

Mr. Marten

On the assumption that the Government hope that it will rise even further, and bearing in mind that the tendency has been for the growth rate of the E.E.C. to flatten out and go down, will my right hon. Friend give an assessment of the effect of the flattening out or decline in the E.E.C. growth rate on our own growth rate?

Mr. Barber

If my hon. Friend will put down a Question asking for these specific figures, I shall be happy to supply them. If one looks at the figures for the annual trend rate of growth of G.N.P. between 1959 and 1969 of the E.E.C, the average was 5.3 per cent., which is much better than we did in this country.

Mr. Roy Jenkins

Without wishing to follow the hon. Member for Banbury (Mr. Marten) on this point—[HON. MEMBERS: "Why not?"]—I do not agree with him—is it not clear that the British growth rate, for which the Chancellor has direct responsibility, shows that the forecast of the position on which he based his Budget was over-optimistic and that its objectives are not being achieved? Does he endorse the view of his hon. Friend the Minister of State that there is no question of the Budget judgment being wrong, and will he, therefore, stick to it for some time to come?

Mr. Barber

The estimate which was given in the Financial Statement and Budget Report, to which I referred in my answer to the main Question, was an estimate of the growth rate of G.D.P. between the first half of 1971 and the first half of 1972. Our estimate is still the same as the one in the Financial Statement and Budget Report. This, as the right hon. Gentleman will know, is the growth rate that was forecast by the National Institute.

Mr. Roy Jenkins

The right hon. Gentleman has not answered the second and more important part of my question, which is: does he still regard the Budget judgment as right for the remainder of this financial year?

Mr. Barber

If and when I consider it necessary to take any further action I shall take it, and I shall not anticipate any such action at any time during the course of the year. This Question was put down as a specific one by my hon. Friend, and I have answered it. I have told the right hon. Gentleman that I stand by the forecast of the increase in G.D.P. which was made in the Financial Statement and Budget Report.

Mr. Lane

Arising out of the first supplementary question, is it not the overwhelming view of economists and industrialists that, given fair terms of entry into the Common Market, our growth rate during the 1970s is likely to be much faster if we are able to take advantage of the enlarged market than if we are left outside an increasingly prosperous and influential area?

Mr. Barber

That is certainly a view to which I subscribe.

Mr. Sheldon

Since the National Institute's forecast for 1971 shows a reduction in the G.D.P. this year compared with last year, and since even the Financial Times is calling for the use of the regulator, is the right hon. Gentleman considering using the regulator?

Mr. Barber

There was a fall in domestic output in the first quarter from the level of the second half of last year, but this was expected, and I mentioned this.