CBI (Hansard, 16 May 1991)

§ 12. Mr. Squire
To ask the Chancellor of the Exchequer what representations he has received recently from the CBI about business expectations.

§ Mr. Norman Lamont
I am in regular contact with the CBI. The latest CBI quarterly industrial survey shows a marked improvement in the trend of forward-looking indicators for business optimism, orders and output.

§ Mr. Squire
Did my right hon. Friend notice two particularly salient points in that survey—first, that the number of firms expecting higher unit costs was the lowest 421 for three years and, secondly, that the overall level of business optimism was the highest for a year? Do not he and the country expect from the merchants of doom and gloom on the Opposition Benches some recognition of this improvement?

§ Mr. Lamont
The Opposition seem to have a vested interest in failure and seem to want bad developments. My hon. Friend is absolutely right. Another point that he might have mentioned is that the CBI survey also shows that the number of firms expecting to increase prices is very low. As my hon. Friend says, the CBI survey has a good track record as a forward indicator of growth in the economy. Everything in the surveys is consistent with my Budget forecast that the recovery will begin in the second half of the year.

§ Mr. Boateng
Putting aside the merchants of gloom and doom, does the Chancellor of the Exchequer agree with the remark of the chairman of Marks and Spencer that business is in for a "longish, hardish, roughish time"? If the Chancellor does not agree with that, let him answer this question: who knows more about running a business in these times—the chairman of Marks and Spencer or himself?

§ Mr. Lamont
I am sure that the chairman of Marks and Spencer knows much more about running Marks and Spencer—that is his job. I have always said that business is difficult and tough at the moment. But, equally, I have said —and I have given my reasons for this belief—that business will turn up in the second half of the year. All the indications are there. Surveys by the CBI, the Institute of Directors and the Association of British Chambers of Commerce, as well as the 3i's survey of business, including small businesses, all indicate that the business climate is slowly but definitely improving.