HC Deb 22 December 1983 vol 51 cc551-3
7. Mr. Ward

asked the Chancellor of the Exchequer if he will publish figures to compare the progress of the recovery in the United Kingdom with that of each other European country.

Mr. Lawson

The European Commission expects faster growth in the United Kingdom than in any other member country both this year and next. I will circulate the Commission's figures in the Official Report.

Mr. Ward

Does my right hon. Friend agree that we could accelerate our lead over much of the rest of the Community by reducing Government expenditure still further? Is it not better for the taxpayer, rather than the Government, to decide how money should be spent, especially in relation to regional aid and grants to bodies such as the Arts Council, the Sports Council and so on?

Mr. Lawson

My hon. Friend will be aware of the Government's new proposals for regional assistance recently outlined by my right hon. Friend the Secretary of State for Trade and Industry. I confirm that it is our policy to maintain firm control of public expenditure fat- the purposes that he mentioned, I am hopeful that in the next three years we shall be able to maintain total public expenditure broadly constant in real terms.

Mr. Wainwright

Does the Chancellor agree that the United Kingdom lead in European recovery as shown in the OECD report is largely based on the natural bounty of North sea oil? What do the Government intend to eo about the state of our manufacturing industry and the supply side of the economy, which the OECD severely criticised?

Mr. Lawson

The criticism was a gross overstatement. North sea oil accounts for about 5 per cent. of the economy, so it must be kept in perspective, important though it is. The performance of the supply side of the economy is, of course, vital. That is why we are so determined to reduce the burden of taxation, because high taxation is inimical to the efficient working of the supply side. That is also why we are reforming trade union law, to make the labour market work better, and pursuing policies of privatisation and competition.

Sir Dudley Smith

Does my right hon. Friend agree that anyone with reservations about the success of the Government's recovery programme has only to look across the Channel to France, where Socialist management really equates with inflation?

Mr. Boyes

That is not true.

Mr. Lawson

Sadly, it is indeed true that at present the worst performance among the major European countries is that of Socialist France, because when the Socialist Government came to power they embarked on policies of the type advocated by the British Labour party. After little more than a year, however, they had the wisdom to recognise the folly of their ways, They have now changed to policies much closer to those pursued by the United Kingdom and I hope that in clue course there will be an improvement in their economic performance.

Dr. McDonald

Would it not be better to make comparisons with the rate of growth in the United States, which is expected to be 5 per cent. next year as a result of policies which the Prime Minister so viciously condemned at Question Time recently? Is it not time that the Government abandoned policies which resulted in a nil rate of growth between 1979 and September 1983, stopped fantasising about the rate of the growth in the United Kingdom next year, followed an American-type boom and allowed us to experience the growth now being enjoyed by the United States?

Mr. Lawson

I am pleased, if a little surprised, at the hon. Lady's enthusiasm for President Reagan and his policies. That is not evident every day in the House of Commons. The Americans have pursued a policy of tight control of the money supply, though not of the fiscal deficit. They also have another advantage—there is no Socialist party in the United States.

The figures are as follows:

GDP* growth
1983 1984
United Kingdom 2.8 2.2
Belgium −0.9 −0.6
Denmark 2.2 1.2
Germany 0.7 2.1
Greece −0.2 1.5
France −0.3 0.4
Ireland 0.5 1.8
Italy −0.8 1.5
Luxembourg −2.4 −1.0
Netherlands 0.3 0.0
EC average 0.5 1.5
* The figure for the United Kingdom is GDP (0).

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