Gross Domestic Product (Hansard, 18 January 1990)

§ 4. Mr. Stevens
To ask the Chancellor of the Exchequer what was the growth in gross domestic product during the 1980s (a) in the United Kingdom and (b) in other European Community countries.

§ 6. Mr. Fishburn
To ask the Chancellor of the Exchequer what was the growth in gross domestic product during the 1980s (a) in the United Kingdom and (b) in other European Community countries.

§ The Chief Secretary to the Treasury (Mr. Norman Lamont)
Since 1980, growth has averaged 2.7 per cent, a year in the United Kingdom, compared with 1.9 per cent in other European Community countries.

§ Mr. Stevens
My right hon. Friend's reply not only shows the relative improvement in the Government's success compared with other EC countries, but also gives the lie to the Opposition's continual talking down of our economic progress. Does my right hon. Friend agree that there remains potential for substantial growth in the United Kingdom economy and that, in order to realise that potential, it is vital that we should continue to improve our productivity and hold down unit prices to improve further our international competitiveness?

§ Mr. Lamont
My hon. Friend is right to stress that the growth in productivity has paved the way for the dramatic change in Britain's growth trend. During the 1980s, our economy has grown faster than any other major EC economy and that has been based precisely on the facts that my hon. Friend mentions.

§ Mr. Fishburn
Does my right hon. Friend agree that, despite the trade figures that have been announced today, it will still be at least 20 years before the average Briton enjoys the same wealth per head as the average Frenchman or German, so that we are only at the start of a wealth creation process with the hardest part yet to come?

§ Mr. Lamont
The gap in living standards between ourselves and the French has narrowed, but my hon. Friend is right to say that there is a gap. However, that will continue to narrow if we can maintain the sort of rate of growth differential that we have had in the past decade.

§ Mr. Shore
Would not the result be significantly different if the Minister were to take the base year 1979 rather than 1980? Taking account of the relatively poor performance of the European countries during the past decade, how far would he attribute full membership of the ERM/EMS as a factor in producing that rather poor outward result?

§ Mr. Lamont
If one took 1979 as the base year, the British economy would still have grown faster than the EC average and faster than the French and the Germans', something that has not happened in Britain for many years. In the 1970s we were bottom of the league; in the 1980s we have been top of it. The relevance of the ERM is much more to do with inflation, although inflation might ultimately also have consequences for growth.

Mr. Alan W. Williams
Is it not the case that, since 1979, our growth rate has been scarcely better than that of any other EC country, despite the enormous advantage of North Sea oil? If we look ahead over the next year, is not the Treasury's forecast is for less than 1 per cent, growth and that what the Government's economic policies have introduced is a self-inflicted hard landing?

§ Mr. Lamont
I answered the first part of the hon. Gentleman's question when I replied to his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Even if we take the base date as 1979, with the 396 recessionary environment which existed then because of the high inflation that we inherited from the Labour party, our growth rate has been above that of France, Germany and the EEC average. Of course, we are having a pause this year. That is not surprising after the excellent record that we have had. However, the trend of our exports and productivity means that the long-term outlook for this country is far better than it was then when the Labour party was in power.