§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what annual rate of growth in GDP is implied in his objective of doubling the standard of living in 25 years; how that compares with the increase in the years since the first year of membership of the EEC; and what role interest rates play in achieving that objective.
§ Mr. NelsonThe standard of living can be measured in many ways. In order that real personal disposal income per head should double in 25 years, each year it would need to grow by 2.8 per cent. The growth rate of real personal disposable income per head between 1973, the year we joined the EEC, and 1994 was around 2 per cent. per annum.
Monetary policy is set to keep underlying inflation within the 1 to 4 per cent. target. A low inflation environment provides the best chance of delivering higher living standards through a period of sustained growth.