HC Deb 27 June 1996 vol 280 cc459-60
11. Mr. Clifton-Brown

To ask the Chancellor of the Exchequer what assessment he has made of the findings of the Organisation for Economic Co-operation and Development report on the state of the British economy. [33416]

Mr. Waldegrave

The recent OECD report on the British economy confirmed and endorsed the success of the Government's economic policies across a broad front. The OECD expects the economy to continue growing at a healthy rate, with low inflation and falling unemployment.

Mr. Clifton-Brown

Has my right hon. Friend had an opportunity to evaluate the OECD report of 1979, and has he compared that with the report this year? Does not such a comparison show that in the intervening 17 years of Conservative Government, almost every economic indicator has improved substantially? Have not living standards improved substantially in that time? Is it not self-evident that if living standards are to double in the next 25 years, as is the Prime Minister's wish, we must have a Conservative Government for the next 25 years?

Mr. Waldegrave

My hon. Friend is absolutely right. No one would have dared to make such a well-founded pledge, as my right hon. Friend the Prime Minister has, in 1979 when, as the report shows, the economy was in collapse. You would rebuke me, Madam Speaker, if I read much of the report, but I remind the House that the OECD said: By the end of 1978, British external competitiveness was at its worst level since 1966"— another Labour year—whereas now, international cost competitiveness remains sound. That is the fundamental truth.

Mr. Gapes

Can the Minister confirm that in 1979 approximately half the number of people were out of work than is the case today? Can he confirm that five years ago, the work force in this country was 26 million, but that today, it is only 25 million?

Mr. Waldegrave

There are more people in work now than there were then—[HON. MEMBERS: "NO."] I believe that that is correct; I shall write to the hon. Gentleman if I am not correct. Much more fundamental is the point that the economies on the continent of Europe that have followed the advice of the hon. Gentleman and his Front-Bench colleagues since 1979 have had a far worse unemployment record during those difficult years than we have. That is the point. What matters is the future. Who is better now? We are better than the social democrat countries. Who will be better in future? The Conservative answer brings low unemployment; the Opposition's brings high unemployment.

Mr. Congdon

Does my right hon. Friend agree that one of the key factors in the improvement in the competitiveness of the British economy has been the success in controlling inflation? Does he also agree that that success would be put at risk if we allowed wage rates to rise by caving in to disputes in the public sector, whether in the Post Office or on the tube, or if we introduced a minimum wage which would put up employers' costs and feed through into inflation? Would it not be a disaster to let either of those things occur?

Mr. Waldegrave

The 1979 report described truthfully the disastrous state of British labour relations. The Labour party should be called on clearly to condemn today's unnecessary strike on the underground system because sensible mediation is on offer from the employers. I suspect that it will not do so because many Labour Members are sponsored by the relevant unions.

Mr. Darling

Given that the OECD has said that the British Government's deficit is the second highest in the G7, has the Chief Secretary any confidence that the Government will meet their borrowing target this year, when they have missed the target in each of the past four years?

Mr. Waldegrave

The public sector borrowing requirement is on a steady downward trend; there is nothing wrong with the public finances of this country. The hon. Gentleman would have a greater right to criticise if at any time in the past few years he had given an opinion on whether tax should be higher or lower and on whether interest rates should be higher or lower, or if he had given any other opinion on the management of the economy. The right hon. Member for Dunfermline, East (Mr. Brown), who is unable to be with us today because of Scottish problems, has never given advice on those issues.