§ 1. Mr. Stallardasked the Chancellor of the Exchequer what are his Department's assumptions about the rate of growth of the United Kingdom economy until the 1990s.
§ The Chancellor of the Exchequer (Sir Geoffrey Howe)Working assumptions for the medium-term were given in this year's Financial Statement and Budget Report. For longer-term purposes alternative assumptions have at different times been made for trend growth rates of 2 to 2½ per cent. and ½ to ¾per cent.
§ Mr. StallardI am grateful to the right hon. and learned Gentleman for his reply. Is it not a fact that the Think Tank's report on the demolition of the welfare services and the position of health care was based on an assumption of low growth until the 1990s if the Government remained in power? Will the right hon. and learned Gentleman confirm that that accurately represents the policy upon which the Tory Party intends to fight the next election?
§ Sir Geoffrey HoweI shall confirm no such thing. At different times analyses are founded on a whole range of different assumptions. There is no central assumption, and it would be quite unwise to have one.
§ Mr. Bill WalkerIn those assumptions, are there any calculations that show clearly how other manufacturing nations are expected to fare in the same period?
§ Sir Geoffrey HoweObviously one of the key components in trying to assess the most plausible outlook for the United Kingdom's economy is the need to assess first the outlook for the world economy. At present the prospect for industrial nations is very much in line with our own.
§ Dr. John CunninghamGiven the latest CBI economic and industrial survey, which shows that output is likely to continue to fall, that investment will probably continue to drop and that export orders will also fall, is not talk of a recovery at best deception and at worst a cynical attempt to disguise from our people the catastrophe taking place in the British industrial economy?
§ Sir Geoffrey HoweThe hon. Gentleman has a greater talent for hyperbole than for accuracy. Most independent outside forecasts suggest that the Government's forecast of growth of about 1.5 per cent. next year is in line with their forecasts. That is likely to occur because there is some real growth in the United Kingdom economy. Unfortunately, too great a part is being met from imports. That is why it is important to continue to improve our competitiveness both at home and abroad.
§ Mr. ShoreCan the Chancellor of the Exchequer tell us a little more about the Think Tank report, which is obviously of great interest to the whole country? We know that it exists, and public speeches have been made about it by, among others, the Chief Secretary to the Treasury, who is sitting on the Front Bench. I return to the basic question put by my hon. Friend the Member for St. Pancras, North (Mr. Stallard), which is highly relevant. What is the assumed most likely rate of growth upon which the Central Policy Review Staff based its options about expenditure and upon which the Treasury gave its approval in the note accompanying the CPRS paper before the Cabinet?
§ Sir Geoffrey HoweI shall not discuss the contents of the CPRS report for the benefit of the right hon. Gentleman or anyone else. The Government are often invited to put forward assumptions—most typically in evidence given to public inquiries—upon which such organisations can work. It is the practice never to put forward a central single assumption, because that would be wholly misleading. There can be no confidence or certainty about any such thing in any country, under any Government. That is why I told the House that alternative assumptions have been given on a number of occasions of 2 to 2½ per cent. and ½ to ¾ per cent. If one is looking for the ½ per cent., that was the average rate of growth in this country from 1973 to 1981. It is not our expectation for the future.