Fiscal Restraints (Hansard, 22 December 1983)

§ 13. Mr. Kirkwood
asked the Chancellor of the Exchequer whether he has any proposals to remove existing fiscal restraints with a view to stimulating future economic growth.

§ Mr. Peter Rees
The Government intend to maintain the balanced fiscal, monetary and supply side policies which are already creating sustainable non-inflationary growth.

§ Mr. Kirkwood
Has the Minister had a chance to study the lucid and penetrating article published by his right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) on 7 December in which he argued that there should be a further relaxation of the Government's strict monetary policy and an increase in public investment, which, as a proportion of GNP, is at its lowest level since the first world war? Could the right hon. Gentleman possibly be wrong?

§ Mr. Rees
I noted my right hon. Friend's contribution on that subject in the papers and in our recent debate on the Autumn Statement. However, he and the hon. Gentleman overlook the fact that the resurgence of growth in this country started in 1981, so whatever view one may take of the tightness or otherwise of the Government's fiscal policy, that cannot have been a major factor.

§ Mr. Bottomley
Does my right hon. and learned Friend agree that if money supply is growing at 8 or 9 per cent. a year, the decisions taken by people in the economy will determine how much of that increase is inflation and how much is growth?

§ Mr. Rees
Myriad individual decisions are important in that regard, but I stress that, overall, it is the Government's dedication to the containment and reversal of inflationary pressures which has made growth possible for a number of investors and entrepreneurs in the private sector.

§ Mr. Nellist
Will the Minister estimate what economic growth has resulted from the fact that, since the lifting of exchange controls, so-called patriotic industrialists and financiers are sending £32 million a day out of this country for investment abroad?

§ Mr. Rees
Perhaps the hon. Gentleman's remarks should be directed to a wide range of investors, including the trustees of the NCB's pension fund. I stress that our overseas investments are making a massive contribution to our invisibles.