§ Mr. Cash
I congratulate my right hon. Friend on his award of parliamentarian of the year yesterday. Has he noticed that the CBI has published two reports over the past weeks since the fall in share prices, one of which showed that exports and orders are at their highest level since 1977, and, furthermore, that investment intentions are also at their highest level since 1977? Does that not show that, under my right hon. Friend's Chancellorship British industry is expanding and maintaining an economic growth which will take us well into the next decade?
§ Mr. Lawson
Yes, indeed, I noticed those excellent survey results. No doubt if the CBI had had figures for before 1977 they would have been the best since well before that date. However, that series of questions only began in 1977.
It is very significant that the figures show that the confidence of British industry has been undiminished by the stock market fall.
§ Mr. Beith
Will the Chancellor be discussing with the CBI the forecast by the National Institute of Economic and Social Research that growth may fall to 1.5 per cent.? Does he expect the CBI to agree with the institute's proposal for a two-stage lowering of interest rates to respond to the events of recent weeks, or does he still cling to the hope that there will be no deflationary impact on the British economy?
§ Mr. Lawson
What I do know is that the National Institute of Economic and Social Research has always got it wrong. Indeed, there is a very interesting special article in this month's issue on the British economy since 1979 —I commend it to the hon. Gentleman—admitting that the institute got it all wrong, and that the economy has performed far better than it ever imagined it would.
§ Mr. John Townend
If the increasing strength of sterling starts to affect the buoyant level of British manufacturing exports, will my right hon. Friend consider making further reductions in interest rates?
§ Mr. Lawson
I am always ready to consider reductions in interest rates when I consider them appropriate. Since the stock market collapse interest rates have, as my hon. Friend will be aware, come down by a full point. At the present time I do not think that any further reduction is called for, but it is something that I shall bear in mind —keeping in mind, too, that although it is a particularly difficult juncture at the present time because we are all concerned with the possible recessionary influences that may come from the stock market collapse, particularly from the United States, there are still inflationary forces in the economy that have to be kept under control.
§ Mr. John Smith
The right hon. Gentleman predicted in his interview in the Financial Times earlier this month that there would be a G7 meeting within a week of a deal being reached in Washington. Since that meeting clearly has not occurred, will he tell us what is holding things up and when that important G7 meeting that everyone is waiting for will take place? When it occurs, what will the British Government propose as a strategy to avoid recession? Will the right hon. Gentleman tell us why he is resisting the calls to reduce interest rates, which would do so much to support British industry in what may be a difficult time ahead?
§ Mr. Lawson
As my hon. Friend the Member for Stafford (Mr. Cash) has pointed out, British industry is doing extremely well and is extremely confident about the future. That is since the stock market fall. I hope that there will be a G7 meeting before Christmas. There are further stages to go through. We want to make sure, if we can, that the United States Congress will support the package that has been negotiated between its leaders and the Administration. That has to take place after the Thanksgiving holiday in the United States. We also wish to make sure that there are proper preparations for the meeting, including ensuring that the conditions are right for all parties concerned to agree to a stabilisation of the dollar. In my opinion that is an essential element in avoiding the recessionary dangers to which the right hon. and learned Gentleman referred.