Economic Growth

HC Deb 13 March 1997 vol 292 cc484-5

5. Mr. Hall

To ask the Chancellor of the Exchequer what representations have been made to him on the rate of economic growth. [18524]

Mr. Kenneth Clarke

I receive many representations on economic growth. Since 1992, the United Kingdom has had the strongest and longest recovery of any major European Union nation, and can expect continued, healthy growth. The Organisation for Economic Co-operation and Development expects the United Kingdom to grow faster this year than the United States, Japan and all the major European economies.

Mr. Hall

Under the Tories, Britain has suffered two of the worst economic recessions since the war, and slower growth than any other major industrialised country in the world. Can the Chancellor tell us why we have fallen from 13th to 18th place in the world prosperity league and why we have been relegated to the European second division?

Mr. Clarke

With respect, I think that the hon. Gentleman was not paying close attention to the reply that I gave to his main question. I could go back to the rather serious recessions that took place in industrially bankrupt Britain when the Labour party was last in power. At the moment, we are enjoying the strongest growth of any major country in western Europe. We are expected to outperform other members of the G7. It is not only me who says so. It is not only the OECD that says so. The International Monetary Fund expects us to outgrow the other major European economies next year, and we are on course to be one of the most successful industrial economies in western Europe. That is the prospect. It is the result of very tough and effective decisions that we have taken over the past few years.

Mr. Yeo

Does my right hon. and learned Friend agree that one of the reasons for our outstanding economic performance in the past few years is the enormous competitive advantage that we have enjoyed because we have escaped the onerous obligations of the social chapter? Does he further agree that if a Government ever came to power who accepted those obligations, the consequences would be the destruction of a huge number of jobs in this country and the erosion of our competitive advantage?

Mr. Clarke

I agree with my hon. Friend. I think that the vast majority of Finance Ministers of the other European countries realise that they have now to go through the difficult structural changes in their economies and the changes in their labour markets that this country has undergone during the period of Conservative rule. We will continue to outperform them until they do—unless, of course, we have a Labour Government who plunge us back into the old-fashioned type of social democratic economy from which the rest of Europe has desperately to try to escape over the next few years.