HC Deb 15 March 1990 vol 169 cc658-9
17. Mr. Duffy

To ask the Chancellor of the Exchequer when he expects to next meet the director-general of the Confederation of British Industry; and whether the current level of interest rates will be on the agenda.

Mr. Ryder

My right hon. Friend will be addressing the CBI's annual dinner on 17 May.

Mr. Duffy

As now is the time—or so the House has been led to believe—when the economy will begin to turn the corner, inflation will be brought under control and interest rates will begin to edge downwards, what prospects will the Chancellor of the Exchequer offer to the CBI at the dinner in May? Will it still be a story of "Great Expectations" or will he own up, at long last, to "Bleak House"?

Mr. Ryder

When my right hon. Friend the Chancellor has the pleasure of dining with the CBI in May, he will be able to remind it that in the 1980s we had low inflation compared with the 1970s. The highest rate of inflation under this Government is lower than the best achieved by Labour—[Interruption.] The underlying strength of the British economy is as great as that of most other countries in the western world. Investment has been increasing by 40 per cent. in the past three years. Profitability has hit record levels. Manufacturing productivity in Britain in the 1980s has been higher than for 20 or 30 years—[Interruption.] Moreover, the British growth rate in the 1980s is far higher than in the 1970s, when the hon. Gentleman's party was in office.

Mr. Speaker

Order. There seems to be a carnival atmosphere. I ask the House to settle down.

Mr. Bill Walker

Does my hon. Friend agree that the Confederation of British Industry has enjoyed a period of sustained growth—the longest since the second world war—and a longer period of sustained and increasing profits than at any time since the second world war? Does he further agree that wages are a much more important factor in arriving at costs than the cost of borrowing money will ever be?

Mr. Ryder

My hon. Friend is right to say that the 1980s have been a period of great economic success, not least in Scotland. He is also right to warn against high unit labour costs. Those high costs prevent Britain from becoming even more prosperous and prevent employers from taking on more people at their places of work.