HC Deb 30 April 1981 vol 3 cc896-7
7. Mr. Winnick

asked the Chancellor of the Exchequer if he is satisfied with the effects of his Budget on the regeneration of the economy.

Sir Geoffrey Howe

It will be some time before it is possible to give a considered answer to this question. But there is no reason to doubt its beneficial effects.

Mr. Winnick

Do not all recent reports—even the CBI one—show that a further decline is to be anticipated in output, demand and employment? Leaving aside propaganda speeches, will the right hon. and learned Gentleman accept that there is no evidence of industrial recovery after the disaster of two years of Tory Government?

Sir Geoffrey Howe

I do not accept that. A number of signs point in the opposite direction. The CBI survey to which the hon. Gentleman referred provides growing evidence of improving business confidence, a reduction in the expected rate of destocking and a stabilisation in company liquidity. Beyond that, there is increasing evidence of a growth in production. In February, there was growth in industrial production of ¾per cent. and a growth of 1 per cent. in manufacturing production. Therefore, there are signs that output may have stopped falling.

Mr. Marlow

Will my right hon. and learned Friend agree that one of the canniest predictors of improvements in the economy, for obvious reasons, is the Financial Times index? Has he noticed any change in the index since the Budget?

Sir Geoffrey Howe

Not only have I noticed a change, but most hon. Members will have noticed a significant change in the index. It is one of the indicators that points towards an improvement in the economy's outlook. There are others. For example, there is a clear sign of an improvement in housing starts in the private sector. In addition, there are signs from at least one organisation that there was a sharp improvement, in executive recruitment in the last three months of last year.

Mr. Straw

Is not the right hon. and learned Gentleman aware that the CBI trend survey, which was issued yesterday, said that at its best the economy was only bouncing along the bottom of the recession and that employment was likely to fall still further? Has he seen today's report, which suggests that 500,000 people have lost their jobs, over and above those on the dole? When will the unemployment figures, now above the 3 million mark, start to fall?

Sir Geoffrey Howe

I repeat what I have said about measurement. Unemployment figures are being published today on the same basis as under previous Administrations. Our policies are directed towards lowering those figures. Hon. Members will have observed that the underlying increase in unemployment is slowing down. As the Secretary of State for Employment made clear earlier this week, it is inevitable that improvements in the level of employment should follow the beginning of improvements in the economy as a whole.

Mr. Lee

Would my right hon. and learned Friend care to comment on a survey that I have carried out in the last 24 hours in my constituency in North-East Lancashire? Is he aware that of the dozen major firms that I talked to, six spoke about a maintained level of activity and six spoke about things distinctly improving?

Sir Geoffrey Howe

I am grateful to my hon. Friend, because he has given an important piece of evidence from his constituency which supports the general evidence that is becoming more widely available.