HC Deb 06 December 1979 vol 975 cc590-1

3. Mr. Knox asked the Chancellor of the Exchequer what the rate of economic growth has been during the past 12 months.

Mr. Biffen

In the Industry Act forecast published on 22 November, the level of GDP in the second half of 1979 was estimated to be slightly above the level of a year earlier.

Mr. Knox

Does my right hon. Friend agree that in recent years economic growth in this country has been unnecessarily low? As there appears to be little evidence that damping down the rate of economic growth contributes to the battle against inflation, may I ask what measures he proposes to take to promote faster economic growth?

Mr. Biffen

I doubt whether the relationship between Government activities and the rate of economic growth is as close as my hon. Friend suggests. However, I believe that the Government are right in having the containment of inflation as the central tenet of their economic policy.

Mr. Healey

Is the right hon. Gentleman aware that his colleague, the noble Lord Gowrie—a member of the Government in the House of Lords—said yesterday: We believe that we are in for deflation, recession, rising unemployment over the next two years and in for the first real cut in living standards for people in many years—".—[Official Report, House of Lords, 5 December 1979, Vol. 403, c. 729.] Does the right hon. Gentleman feel that that statement coincides with the manifesto on which the Government fought the last election?

Mr. Biffen

The right hon. Gentleman normally identifies me with the views that he has just quoted. It is true, as the Treasury forecast confirms, that the United Kingdom, in common with all other major economies in the Western world, will be facing a period of economic recession.

Mr. Ian Lloyd

Has my right hon. Friend's attention been drawn to the interesting fact that, for the first time, industrial investment in Japan has exceeded that of the United States? Does he realise that next year the figure for GNP per head in Japan is expected to equal that of America? Will he draw the appropriate conclusions from that for Opposition hon. Members?

Mr. Biffen

Absolutely.

Mr. Jay

As it is now six months since the Government's incentive Budget of June, may I ask whether the Chancellor detects any sign of industrial revival?

Mr. Biffen

The Government's views on the prospects for the economy were canvassed in yesterday's debate and during the previous week. I have nothing to add to the remarks then made.