Economic Strategy (Hansard, 27 October 1994)

§ 3. Mr. Clapham
To ask the Chancellor of the Exchequer if he will make a statement on the relationship between the Government's long-term economic strategy and the level of unemployment.

§ 13. Mrs. Clwyd
To ask the Chancellor of the Exchequer if he will make a statement on the relationship between the Government's long-term economic strategy and the level of unemployment.

§ The Chief Secretary to the Treasury (Mr. Jonathan Aitken)
The Government's economic strategy is to achieve sustained non-inflationary growth and higher living standards. There is a direct relationship between the success of this strategy and a steady fall in unemployment.

§ Mr. Clapham
I am grateful to the Minister for that reply, but when one compares it to reality, it does not stack up. Are not the Minister and the Government using the large pool of unemployment as the only 992 weapon to tackle inflation? If the Government are really confident about sustained economic growth, why did they increase interest rates?

§ Mr. Aitken
The hon. Gentleman asks a question about unemployment in somewhat churlish terms. He does not seem to have noticed that unemployment has fallen in the past 20 months by 406,000, and that it came down by 28,000 in September or nearly 1,000 a day. In the hon. Gentleman's constituency, there has been a 7.3 per cent. fall in unemployment since last year.
My right hon. and learned Friend the Chancellor of the Exchequer made a small rise in interest rates, for very good reasons of prudence, to ensure that inflationary pressures do not arise in future. There is no evidence that that has had an adverse impact on the continuing fall in unemployment.

§ Mr. Anthony Coombs
Does my right hon. Friend agree that a significant feature of the recent large reduction in unemployment, apart from the fact that it is in direct contradiction with the forecast that was made by the hon. Member for Dunfermline, East (Mr. Brown), is that it has been accompanied by a significant increase in investment and exports? To maintain that increased investment in the long term, will my right hon. Friend consider capital gains tax reforms, which would more adequately reflect the value of long-term investment?

§ Mr. Aitken
My hon. Friend mentions the brilliant forecasting skills of the hon. Member for Dunfermline, East (Mr. Brown), who predicted some 20 months ago that "unemployment will rise" month after month. Since that great prediction, unemployment has fallen month after month. The hon. Gentleman deserves a good kick up his endogenous zone for that wrong prediction.
On my hon. Friend's second point, he is quite right to say that the growth in exports is most encouraging; it is rising at 10 per cent. a year, which is a remarkable figure. On his points about capital gains tax, I am sure that he will understand that I cannot anticipate my right hon. and learned Friend's Budget.

§ Mr. Gordon Brown
Given the importance of his responsibilities for economic strategy, will the Chief Secretary now take the opportunity to tell us that at no time was any part of his bill last year in the Ritz hotel in Paris paid for by a Mr. Ayas? Will he answer the question? [Interruption.]

§ Madam Speaker
Order. I cannot allow that line of questioning on a question to which it does not relate. The hon. Gentleman may wish to pursue the matter through me to the Privileges Committee. Alternatively, of course, he has the opportunity to— [Interruption.] Please hear me out. The hon. Gentleman has the opportunity to table a substantive motion if he wishes to make a criticism and to seek a statement or a debate through the Leader of the House at business questions.

§ Mr. Aitken
With great respect to you, Madam Speaker, I would very much welcome a chance to answer that question, not least because it is my first chance to clear myself of the scurrilous accusations that have been made. With your indulgence, I simply say to the hon. Gentleman that, first, I completely deny the 993 allegation that he has made. Secondly, I think that he should be aware that the Cabinet Secretary has today sent a letter to the editor of The Guardian, Mr. Peter Preston, repudiating and denying the scurrilous allegation that Mr. Preston made this morning, to the effect that I had lied to the Cabinet Secretary. The relevant sentence from Sir Robin Butler's letter reads: For the record, I confirm that I do not regard Jonathan Aitken as having lied to me or misled me. I hope that the House, which is a very fair-minded place, will accept both my assurance and the Cabinet Secretary's assurance and put an end to the hysterical atmosphere of sleaze journalism by The Guardian.