HC Deb 04 June 1981 vol 5 cc1055-6
3. Mr. Campbell-Savours

asked the Chancellor of the Exchequer which of his Budget measures have proved beneficial to the economy of the Northern region.

10. Mr. Foster

asked the Chancellor of the Exchequer when he expects his policies to result in an up- turn in the economy of the Northern region.

Mr. Brittan

Business throughout Britain, including of course the Northern region, has benefited from our success in bringing down inflation and the cut in minimum lending rate announced on Budget day. The benefit of the other measures in the Budget specifically designed to help businesses, such as the stock relief scheme and the proposals relating to small businesses, will be felt before long. The forecast published at Budget time shows some growth in output between the first and second halves of this year, and further recovery in 1982. The Northern region will share in the benefits.

Mr. Campbell-Savours

As a Member of Parliament for the Northern region, the right hon. and learned Gentleman will be aware of the great sense of concern and despair in the region about the Budget. Will he consider inflating the economies of the Northern region and the regions of high unemployment by a programme of selective public investment in capital projects in the areas of industrial decline?

Mr. Brittan

I share the hon. Gentleman's concern about the state of the economy in the Northern region. The indications that I see are quite clear. Above all else, that part of the country feels that any recovery which comes must be soundly based and must not consist simply of a cash injection which will rapidly lead to inflation.

Mr. Foster

Will the Chief Secretary confirm that nowhere else in Western Europe has manufacturing output fallen by 20 per cent. and unemployment risen by 77 per cent? Therefore, will he admit to the 200,000 unemployed in the Northern region and to the 22,000 on short-time working that the Government's policies have caused the severity of the depression in the Northern region? Will he now abandon his obstruction to further investment in British Telecom, British Gas and British Rail?

Mr. Brittan

I do not accept the hon. Gentleman's diagnosis at all. We have done worse than other countries in Western Europe because of the backlog of years in which our productivity did not increase as much as that in competing countries whereas pay levels did, with the result that people have priced themselves out of employment.

Mr. Robert C. Brown

Is the Chief Secretary aware that if the Government pigheadedly stick to the policies that they have pursued in the last two years, there will be no industrial base left in the Northern region? Will he acknowledge the sense of seeking to alter those policies to get some public investment moving in the region, particularly to help the construction industry?

Mr. Brittan

Of course public investment has its part to play, but I do not accept that it is only by means of public investment that we shall get things going in the Northern region in the way in which Opposition Members and I want. I believe that a soundly based recovery, based upon a real handling of the inflation which underlies the problem, will lead to growth and to increases in employment over a period of years.

Mr. Shore

The House has listened to a statement from the Chief Secretary of almost mind-blowing complacency. He ought to visit the Northern region and find out exactly what has gone on there. What evidence is he prepared to give the House that private investment and output or public investment and output are growing or are likely to grow in the Northern region?

Mr. Brittan

I shall not receive any lectures from the right hon. Gentleman about visiting the Northern region. I am a Member of Parliament for the Northern region, not one for the London area. The right hon. Gentleman knows perfectly well that I regularly go to my constituency and I do not need to read about what goes on from learned economic tracts. I shall not take that from the right hon. Gentleman. He knows perfectly well that I have not been complacent and that I have not said that the Northern region or the country as a whole is at present replete with investment plans. I have said that I am perfectly confident that it is only by dealing with the underlying causes of our problems, which I described in answer to the hon. Member for Bishop Auckland (Mr. Foster), that there is any chance whatever of providing a basis for sound investment. That is the case, whether or not the right hon. Gentleman likes it.