Economic Improvement (Hansard, 11 March 1982)

§ 11. Mr. Winnick
asked the Chancellor of the Exchequer when he now expects to see a substantial improvement in the economy.

§ Sir Geoffrey Howe
The published forecast shows the recovery being firmly established over the next year, as inflation comes down.

§ Mr. Winnick
Is the Chancellor of the Exchequer aware that most people will understand that, after his latest Budget, the chances of a substantial improvement in the economy are as remote as they were under his previous Budgets, and that all the evidence shows that mass unemployment will continue under his Government?

§ Sir Geoffrey Howe
If the hon. Gentleman persists in deceiving himself and in setting such a wide distance between his own perception and that of the rest of the country, it is his misfortune, not mine.

§ Dr. Mawhinney
How close a relationship does my right hon. and learned Friend see between a substantial improvement in the economy and a substantial reduction in interest rates?

§ Sir Geoffrey Howe
If the process proceeds as expected, the two should be closely related.

§ Mr. Geoffrey Robinson
Is the Chancellor of the Exchequer aware that the figures published yesterday, showing a massive £4 billion investment in the overseas portfolio, reveal that his stewardship has been an utter disaster in a year—1981—when there was a net disinvestment in manufacturing industry? How can any recovery be based on that loss of investment and jobs at home, when money is flowing across the exchanges into portfolio investments abroad?

§ Sir Geoffrey Howe
If the hon. Gentleman had taken part in the NEDC discussion on this subject the other day—the opportunity may yet present itself to him—he would have a better insight into the problem. The movement of money into portfolio and other investment overseas is entirely beneficial, for two reasons. First, it provides better opportunities and outposts for British trading opportunities. Secondly, it replaces the rundown of capital assets in North Sea oil with income-producing assets overseas. Moreover—this is something that I should have thought the Labour party would have mentioned—it makes the exchange rate lower than it would otherwise have been.