Economic Policy

Part of Opposition Day – in the House of Commons at 4:58 pm on 6th November 1986.

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Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook 4:58 pm, 6th November 1986

The Chancellor says that it is. He will have the opportunity to quote the figures in a moment.

The truth is that, despite the reduction in oil prices and the other factors that have come to the Government's aid, the achievements of which the Government boast are relatively poor compared with what has happened in the EEC. While that part of the Government's record is relatively poor, the rest of the Government's record is absolutely castastrophic. The Government's failure is the Chancellor's personal failure. He is the author of the medium-term financial strategy and the inventor of the nominal targets, and it is the pursuit of those targets which has devastated the real economy.

I know very well that the Chancellor's response will be to defend himself with selective statistics, false comparisons and bogus forecasts. The time has come to deal with some of the sleight of hand in which the Chancellor specialises from debate to debate. The obvious example is that we are told that output in this country is at its highest level in history. So it is, but all that that means is that we are no longer doing worse than we were on the day that the Conservatives were elected. For some years we were doing worse than on election day.

Although we are no longer doing worse than on the day that the Prime Minister entered No. 10 Downing street, we are still doing spectacularly badly. Since 1979 the economy has expanded at an annual average of 1·4 per cent. In the previous 30 years the figure was 2·6 per cent. If the Chancellor, or the hon. Member for Rutland and Melton (Mr. Latham), wants to ask what the figure was during the Labour Government, let me tell them that it was 1·8 per cent. over the entire period that we were in office— a great deal better than the Government's record since the election.

The Chancellor tells us, too, that exports are at a record level. We are not told that a combination of expanding world trade and a boom in consumer spending has caused imports to rise at an even faster rate. We are not told that we are losing our share of world trade while increasing the volume and value of our imports. The fact is that, in those areas, the Chancellor never tells us the whole truth when it is convenient for him, particularly with regard to trade exports and imports, because to give a truthful account of our balance of payments record would be to expose the cynicism of the Government's policy. We are facing a consumer-led balance of payments crisis. The Chancellor's response to that is to attempt to buy votes by cutting taxes, as I have not the slightest doubt he will in next year's Budget.