HC Deb 08 December 1988 vol 143 cc430-1
12. Mr. Turner

To ask the Chancellor of the Exchequer when he next expects to meet representatives of the Confederation of British Industry; and what matters will be discussed.

16. Mr. Buckley

To ask the Chancellor of the Exchequer when he next expects to meet representatives of the Confederation of British Industry; and what matters will be discussed.

Mr. Lawson

This evening I shall be meeting the economic and financial policy committee of the CBI, where a wide range of subjects will be discussed.

Mr. Turner

In view of the hostile resolution at the CBI conference—[HON. MEMBERS: " Reading."]—and the fact that the base rate increases—[Interruption.] I shall not give way. As, since May of this year, industry has lost £700 million in base rate increases, and manufacturing companies' overseas order books are the lowest since April as a result of the Government's sterling policy, why does the Chancellor not take the Edinburgh Hundreds?

Mr. Lawson

I must tell the hon. Gentleman that he has been sadly misled by the brief which someone has handed to him. In fact, the CBI acknowledged that British business today is doing better than ever before. Manufacturing productivity has been rising faster in this country than ever before and faster, indeed, than in any other major industrial country. Investment this year is running at some 12 per cent. growth in real terms—twice as fast as the growth in consumption and there will be further substantial growth in investment next year. As my right hon. Friend the Chief Secretary pointed out a moment ago, private-sector investment this year as a percentage of GDP is at the highest level since figures were first collected in 1955.

Mr. Buckley

Will the Chancellor take the opportunity tonight to dispel the fear of the chairman of the CBI, who is worried about the high interest rates that the Chancellor has brought into the economy? These are seriously undermining small companies. Is he aware that a £1 billion increase in costs to British industry is a direct consequence of the increase in interest rates that he has brought about since May? Does the right hon. Gentleman accept that, according to the CBI conference, his current policy is gravely undermining the Government's policy on business starts and expansion?

Mr. Lawson

That is untrue. The CBI recognises that the Government's policy has provided a better climate for business and industry to prosper than ever before. It knows that profitability this year is expected to be at the highest level since 1960, and it knows, too, that the Government's insistence on getting inflation down is the most important safeguard for British industry in competing throughout the world.