Economic Upturn

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 15th July 1982.

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Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

asked the Chancellor of the Exchequer if he is satisfied with the momentum of recovery in the real economy since the second quarter of 1981 to date.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The turning point was reached in the spring of last year. A gradual recovery has begun and is expected to continue.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Is the Chancellor of the Exchequer aware that the Cambridge economic policy group recently forecast that by 1990 there would be 4¼ million unemployed in Britain? Is he further aware that the same group forecast that by the end of this year—I understand that Sir Terence Beckett agrees—there will be 4 million unemployed? If that is so, does he agree that his economic policies have failed and that he should therefore resign?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The hon. Gentleman must bear in mind that unemployment has been rising steadily for many years under successive Governments. That is happening at the same time as unemployment rates elsewhere are rising even faster. The solution is to be found only in the continued determination to fight inflation, to correct the balance of the economy, to restore competitiveness and in the economy's capacity to improve its output performance.

Photo of Patrick Cormack Patrick Cormack , Staffordshire South West

How does my right hon. and learned Friend envisage the economy developing in the West Midlands in the next year?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The economy in each region has its own components. That means that patterns will not be identical. However, if the economy as a whole continues to improve as we believe is likely, and if those concerned with production on both sides of industry in the West Midlands apply themselves to improving their own performance, which is the most important factor, I see no reason why the West Midlands should not share the improvement.

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science)

Bearing in mind the size of the upturn that the Chief Secretary to the Treasury sees taking place all about us, will the Chancellor undertake to ensure that at the end of his period of office manufacturing output will be higher than it was at the beginning?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

It is not possible—[HON. MEMBERS: "Ah!"]—for anyone in any circumstances to give absolute assurances of that type. The hon. Gentleman is better placed than many hon. Members to appreciate that the extent to which we can succeed in improving economic performance depends on the performance of people in industrial units and companies. If we were able, for example, to improve the performance of the motor industry, a huge demand for motor cars in Britain would be satisfied by British working people.

Photo of Mr Jocelyn Cadbury Mr Jocelyn Cadbury , Birmingham, Northfield

Did my right hon. and learned Friend see the recent article by Samuel Brittan arguing that some fiscal stimulus could be given to the economy now without prejudicing the Government's monetary policy? Does the Chancellor agree that the least inflationary way to help British industry out of the recession would be to abolish the national insurance surcharge, which is a tax on employment and was imposed by the Labour Government?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

I read the observations of one brother Brittan with almost as much attention as I listen to the observations of the other. We have made clear our dislike of the national insurance surcharge in the changes that will shortly come into effect reducing the burden of that tax, which, the House will recall, was introduced with acclamation by the Labour Party.