Confederation of British Industry (Hansard, 9 December 1982)

§ 4. Mr. Foster
asked the Chancellor of the Exchequer when he next expects to meet the Confederation of British Industry.

§ 6. Mr. Dobson
asked the Chancellor of the Exchequer when he next excepts to meet representatives of the Confederation of British Industry to discuss the level of demand in the British economy.

§ Mr. Brittan
The Chancellor and I will be meeting representatives of the Confederation of British Industry on 14 December, when we shall be able to have a wide-ranging discussion.

§ Mr. Foster
When the Chancellor meets the CBI, will he discuss why, although British industry has done everything that the Chancellor asked of it in making itself slimmer and fitter and has sought in every possible way to reduce its costs and to introduce more flexible working practices, it is now 30 per cent. less competitive than when the Government came to power?

§ Mr. Brittan
If anybody from the CBI makes that point, my right hon. and learned Friend the Chancellor and 965 I will wish to correct the figures and to point out that competitiveness has improved by 20 per cent. since the beginning of 1981, while the net fall since the Government came to office has been 18 per cent. In this context I welcome the opportunity to correct the wrong assumption of the hon. Member for Motherwell and Wishaw (Dr. Bray) that the gain in competitiveness was caused by the fall in the exchange rate, which is true only to a small extent.

§ Mr. Dobson
When the Chancellor meets the leaders of he CBI, will he remind them that they supported the policies on which the Government were elected and that they welcomed the Chancellor's first Budget and the lifting of exchange controls? Will he therefore exhort them to take responsibility, with him and the Prime Minister, for the fact that for the first time in history this country has become a net importer of manufactured goods?

§ Mr. Brittan
The hon. Gentleman is quite right. The CBI supported those policies and still does. Indeed, in its reaction to the autumn statement the CBI rightly pointed out that, as a result of my right hon. and learned Friend's announcements, business costs will have been reduced by nearly £900 million by April 1984.

§ Mr. McNally
When the Minister meets the CBI, will he ask to see the latest survey by the North-West region CBI, which shows that only 8 per cent. of industry in the North-West expects any improvement in circumstances next year? Will he consider the request from the CBI, the chambers of commerce and local authorities of all political persuasions for investment by the Government in the North-West, without which they believe there is no prospect of industrial recovery for the region?

§ Mr. Brittan
I appreciate the difficult conditions in the North-West and, indeed, in the North-East. At the same time, however, I believe that the right course is for the Government, through the various policies and departmental spending programmes, to reflect a proper order of priorities for the country as a whole, which will obviously include giving proper attention to the needs of the North-West.

§ Mr. Kenneth Carlisle
Will my right hon. and learned Friend remind the CBI of the importance of lower interest rates, as 1 per cent. off interest rates is worth £300 million to industry? Does he agree with the CBI that increased public spending and borrowing tends to put up those interest rates?

§ Mr. Brittan
I agree with all those propositions, and I am sure that the CBI will as well.

§ Mr. Jay
Is it not now clear that the Chancellor's decision to abolish exchange control is forcing the Government to keep up interest rates, thereby holding back recovery, particularly in the building industry?

§ Mr. Brittan
I do not accept that. If the policy suggested by the right hon. Member for Stepney and Poplar (Mr. Shore) and his hon. Friends for reimposing exchange control were introduced, the value of the pound would rise, at least temporarily, which is contrary to another of the Labour Party's major policy objectives, however mistaken that may be.

§ Mr. Robert Sheldon
Is the Minister aware that the latest CBI survey expects even weaker export growth and increased import penetration? Does he still believe his comment that the evidence of recovery is all around us?

§ Mr. Brittan
The latest CBI survey reflects the fact, which we have all pointed out and about which there is no mystery, that economic conditions and prospects have been disappointing in the past year. There is no question about that—[HON. MEMBERS: "Oh!"] I am astonished that Labour Members should have listened so carelessly the last time I answered questions that what I say on this occasion has caused surprise. Our estimate of what will happen is set out in the autumn statement published last month, which shows the prospect and expectation of a modest increase of output over the coming year. That remains our expectation.