Recession (Hansard, 3 July 1991)

§ 4. Mr. McAvoy
To ask the Secretary of State for Trade and Industry if he will make a statement on the recession in industry in the United Kingdom.

§ Mr. Lilley
Growth is set to resume in the second half of this year in response to lower inflation and an upturn in the world economy.

§ Mr. McAvoy
Is the Secretary of State aware that since the present Prime Minister took office more than 500,000 people have been made unemployed, manufacturing jobs have been disappearing at a rate of 4,000 a week and nearly 16,000 businesses have collapsed? When will the Government stop making pathetic excuses and implement the obvious package of reform measures required to take this country out of recession, to boost skills, increase investment and reduce unemployment? How many more manufacturing jobs is the Secretary of State prepared to see lost before he stands up for British industry?

§ Mr. Lilley
The Government are right to make the defeat of inflation their priority. We are succeeding in defeating inflation. It has fallen from almost 11 per cent. to 5.8 per cent. and it is heading to below 4 per cent. by the end of the year. Interest rates have come down too. That is the best way towards sustained non-inflationary growth. The Opposition have no policies and no strategy to deal with inflation, recession or unemployment.

§ Mr. Riddick
Does my right hon. Friend agree that although times have been difficult in the past few months and years, manufacturing industry in the north of England has combated those difficult times by becoming more aggressive and combative in export markets, and that there are now clear signs that we have reached the bottom of the recession and that confidence is being restored to businesses in the north? Does he agree that we shall see the interesting and, from my point of view as a northern Member, encouraging phenomenon of the end of the recession starting in the north of England and spreading to the south? Will he join me in condemning the Opposition who seem to glorify in wallowing in doom and gloom about industry throughout Britain?

§ Mr. Lilley
That was very much the message that I received during my recent visits to Teesside, Tyneside and county Durham. It is greatly to the credit of industry in the north of England, especially in the north-east, that it has diversified so much, has attracted inward investment and is exporting strongly. That is encouraging for the future. Like my hon. Friend, many of those industries say that they expect to come out of the recession ahead of the rest of the economy.

§ Mr. Beith
Why does the Secretary of State assume that a firm anti-inflation policy must be accompanied by rising unemployment? He should resist the blandishments of Labour and Conservative Members who believe in devaluation. He could maintain a strict interest rate policy and at the same time promote measures designed to ensure the repair of hospitals and schools, and the building of houses while there are so many people out of work.

§ Mr. Lilley
The hon. Gentleman is mistaken if he believes that one can fight inflation while prematurely relaxing fiscal policy.

§ Sir Hal Miller
Will my right hon. Friend comment on the performance of the motor industry which on the latest figures is exporting 49 per cent. of production with totally beneficial results for the balance of payments on manufactured goods, about which we hear so much from the Opposition? That trend is likely to improve further when American and Japanese investments come on stream.

§ Mr. Lilley
My hon. Friend makes an important point about an exceedingly important industry which is doing very well. Its output in the past three months was up 6 per cent. on last year, and that has largely been achieved by an excellent record of substantially increasing exports.

§ Mr. Gordon Brown
With every major national and international report saying that every region and every sector of industry faces yet another summer of redundancies, closures and bankruptcies, will the Secretary of State tell the House how many more thousands of people will become unemployed, how many more businesses will go under and how much industrial capacity, skill and strength will be destroyed before the Government cut interest rates and improve investment and employment opportunities in all parts of the country?

§ Mr. Lilley
The hon. Gentleman has played that recorded message endless times in the House. He has no positive policy to get out of a recession, to combat inflation or to solve unemployment. All the Opposition's policies would aggravate those problems. Increased public expenditure to the tune of £35 billion would aggravate inflation and a minimum wage would increase unemployment.

§ Mr. Charles Wardle
Would not the surest way to prolong the recession be to relax the grip on inflation and allow prices and public spending to soar, which is what the Opposition advocate, thus making Britain chronically uncompetitive?

§ Mr. Lilley
My hon. Friend is absolutely right, and that is why industry and the CBI have endorsed our strategy. They recognise that we have our priorities right, and they and many forecasters are confident about growth in the second half of the year.