§ Mr. Sillarsasked the Chancellor of the Exchequer what assessment he has made of the latest OECD view of the development of the United Kingdom economy; and if he will outline where the Treasury view differs from that held by OECD.
§ Mr. Denzil DaviesIn many respects the views of the OECD and the Treasury are similar. They foresee improvements in production, productivity and trade in the next four years. Mr. Freeman, who contributed to the OECD "Economic Outlook", said in a BBC interview
Provided we can maintain the rise in ex, ports and we can get a shift of resources into investment, I think we are heading for the best opportunity the United Kingdom has had since the second world war for sustained expansion".This is also the Government view. The OECD "Growth Scenario to 1980" shows an average growth in GDP for the United Kingdom of 3½ per cent. from 1975 to 1980; "potential unemployment" is shown as falling to 4 per cent. in 1980, consistent with 3 per cent. for unemployment as usually recorded.The Government recognise that this growth rate would be insufficient for the achievement of their target of 3 per cent. 995W unemployed before 1980. They are, therefore, seeking in tripartite consultations in the context of the NEDC industrial strategy ways of improving the economic performance of selected sectors of industry, in order to ensure faster growth in production and employment.
For the short-term the OECD foresees GDP growing at only 1¼ per cent. a year in the second half of this year, and at an average annual rate of 3¼ per cent. in the 18 months to mid-1977. The Government expect steady growth at 4½ per cent. throughout this period, with exports continuing to grow fast, and an early recovery in industrial investment.