Economic Growth (Hansard, 22 December 1983)

§ 1. Mr. Alton
asked the Chancellor of the Exchequer what is the present rate of growth of the United Kingdom economy.

§ The Chancellor of the Exchequer (Mr. Nigel Lawson)
Output this year is expected to be about 3 per cent. higher than last year.

§ Mr. Alton
Is there not a note of complacency in what the Chancellor has just told the House? Does he agree that, if the CBI figures are right, next year's growth could be only 2 per cent., which will inevitably mean that we will stabilise the present level of unemployment? Given that there are now more than 3 million people out of work, does the right hon. Gentleman agree that we need to improve the level of growth? Is he not worried that too much of this year's growth was based on personal borrowing, not on genuine manufacturing improvements?

§ Mr. Lawson
The hon. Gentleman has asked a number of questions. Of course there is great concern about the level of unemployment, but there is room for cautious satisfaction that the rate of unemployment appears to have levelled off and that employment is rising for the first time since the recession began.
As for the outcome for next year, the Treasury has made its best forecast and the Treasury's track record in forecasting, as the hon. Gentleman knows, is considerably better than that of outside bodies. The forecast of the European Commission is that our growth next year will be higher than that of any other country in the Community, as, indeed, it has been this year.

§ Mr. Ian Lloyd
In the context of the comments on the radio this moring on the very favourable OECD report on Britain's economic performance, did my right hon. Friend by any chance hear the grotesque piece of economic blasphemy from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in which he referred to the Labour party's ragbag of discredited policies as being the equivalent of the Sermon on the Mount? If any comparison is to be made, surely the only comparison would be with Mount Desolation.

§ Mr. Lawson
My hon. Friend is absolutely right. The record of the right hon. Member for Birmingham, 548 Sparkbrook (Mr. Hattersley) as a forecaster is wed known to the House. My right hon. and hon. Friends will remember, for example, that during the election campaign he said: There is no doubt that inflation will be in double figures by the end of this year if this Government remains in office.

§ Mr. Straw
Does the Chancellor agree that no country among the major industrialised countries has suffered a greater collapse in industrial and manufacturing output than Britain under this Conservative Administration betweeen 1979 and 1983? As the right hon. Gentleman is so full of seasonal good cheer, will he say when manufacturing output will return to the level of May 1979? Will that be before, or after, 1990?

§ Mr. Lawson
I do not know when manufacturing output will be at the 1979 level. What is encouraging is that output as a whole is already back to the level that it was at the peak in 1979 and is continuing to rise.

§ Mr. Alan Howarth
With regard to the present rate of growth in the United Kingdom economy, I note that my right hon. Friend recently happily assumed the duties of Father Christmas. Having regard to prospective rates of growth, will he now go further and, as fairy godmother, wave his wand so as to endow our friends in the United State of America, in the interests of us all, with a medium-term financial strategy?

§ Mr. Lawson
I do not have a magic wand, so I am unable to perform that miracle, although it would be desirable if it were brought about. However, I am grateful for the role in which my hon. Friend casts me. It is rather better than the role of The Ghost of Christmas Past, which was the role adopted by the right hon. Member for Sparkbrook on the radio this morning.