HC Deb 17 June 1982 vol 25 cc1078-80
10. Mr. Canavan

asked the Chancellor of the Exchequer if, on the basis of the most recent economic indicators, he remains satisfied with the outlook for the economy.

Mr. Brittan

Lower inflation, the resumed decline in interest rates, business surveys, most outside forecasts and other indicators all point to a continuation in the recovery in the course of this year and in 1983.

Mr. Canavan

Will the Minister now answer the question that his hon. Friend failed to answer earlier and which the Prime Minister and other Ministers have consistently failed to answer? What is the total estimated cost to the economy of the Falklands operation? Does the Treasury intend to recover that cost by increased taxation, increased borrowing or further savage cuts in public expenditure, which will cripple essential services such as housing, health and education?

Mr. Brittan

I have nothing to add to the earlier answer by my hon. Friend on the subject, particularly since the supplementary question does not relate to the original question. I am happy to reaffirm my hon. Friend's answer. What he said is a significant statement of Government policy. It would be possible to finance the expenditure caused by the Falklands operation in an inflationary way by printing money. Other Governments might have done that, but we shall not.

Mr. Eggar

If my right hon and learned Friend is to build on the achievements that he has outlined and at the same time increase public sector investment, which we all desire, will he confirm that the essential prerequisite to further progress is the control of current public expenditure and, in particular, of public sector wage settlements?

Mr. Brittan

That is so. The message is getting across that the benefit of lower wage settlements is to be found not only in lower inflation rates, which lead to improving the prospects of recovery, but in reducing unemployment difficulties.

Mr. Richard Wainwright

Since the growth in unemployment and its grim outlook go side by side with the increasing dilapidation and obsolescence of essential public assets, when will the Government tackle both problems by proposing projects for repairing the country's infrastructure?

Mr. Brittan

I agree that projects for repairing our country's infrastructure have an important part to play to the extent that they can be financed in a way that does not lead to inflation.

Mr. Speaker

Mr. Squire. No. 11.

Mr. Shore

rose—

Mr. Speaker

I did not realise that the Opposition Front Bench spokesman wanted to ask a question, or I should have called him earlier.

Mr. Shore

I have to come back to the question of the outlook of the economy and the evidence of recovery. I have in my hand the Index of Industrial Production published half-an-hour ago. It is one of the major indicators of the state of the economy. Does the Chief Secretary confirm that it shows, once one leaves out oil and gas, that there has been no improvement whatever in the past year? If that is so, will the right hon. and learned Gentleman explain why that important piece of information, which is normally available in the Library at 2 o'clock has beer withheld until after 3 o'clock? Will he now make a real effort to tell the truth about the state of the economy?

Mr. Brittan

I cannot help thinking that there is something a little synthetic in that. The figures were published at 2.30 pm as normal. They show an increase in industrial production for all industries from 100.3 to 101.