Gross Domestic Product

HC Deb 24 October 1972 vol 843 cc975-6

13. Mr. Body

asked the Chancellor of the Exchequer what he estimates to be the current growth in the gross domestic product.

32. Mr. Knox

asked the Chancellor of the Exchequer what is his latest estimate of the growth of gross domestic product.

Mr. Higgins

The indications are that the economy is growing at the rate forecast in the Budget, namely 5 per cent. a year over the period referred to in the Budget Statement.

Mr. Body

Does my hon. Friend agree that this is a matter for more self-congratulation? Ought not he and his right hon. Friend to go about the country boasting that we are now exceeding the growth rate even of France and therefore of all the countries of the Six—or might that boast be a slight contradiction of what we heard 12 months ago?

Mr. Higgins

It is true that my right hon. and hon. Friends and I go about the country, not boasting, but giving an objective appraisal of what we have achieved. It is also true to say that my right hon. Friend and my Treasury colleagues point out that we are determined to achieve the rate of growth mentioned and that we believe that the prospects in the European Community will give us great opportunities in future.

Mr. Knox

While recognising the great improvement in the rate of growth under this Government compared with the Labour Government, may I ask my hon. Friend whether he will consider a further reflationary package to increase the rate of growth to 6 per cent.?

Mr. Higgins

It is worth stressing that between 1964 and 1970 the gross domestic product grew at an annual rate of 2.2 per cent. and that the economy is now growing at more than twice this rate, due in some considerable measure to the very large reductions in taxation which my right hon. Friend has brought about. As to the point of a 6 per cent. growth rate, the Budget forecast allowed for growth at 6 per cent. between the first half of this year and the first half of next year because it was realised that the coal strike would depress output in the first half of this year.

Mr. Joel Barnett

In the midst of the welter of congratulations which the hon. Gentleman and his hon. Friends are receiving, would he care to explain why there is the need for these crisis conferences with the CBI and the TUC? Is he prepared to scrap them now that everything is going so well?

Mr. Higgins

I have made it clear that I do not believe that it is right to be complacent. Certainly, having taken steps to bring down the rate of inflation created by the previous Government's irresponsibility, we believe it is now right that we should hold discussions on a tripartite basis to find a solution to these problems which will be long-lasting and will continue under not only this Government but the Conservative Government after the next election, too.