I congratulate my right hon. Friend on that good news. Will he take this opportunity to thank the British people for contributing to low inflation and low unit costs? Will he also warn them that high wage awards will undermine what has already been achieved? What will economic growth for the coming year be?
As for the last point, the forecast I made at the time of the Budget was that economic growth in 1988 would be 3 per cent. At present it looks as if it may be slightly more than that, but I have no new forecast to announce.
It is perfectly true, as my hon. Friend said—or implied —that although we have put the right economic policies in place and have stuck to them consistently year in, year out over nine years, despite everything the Opposition have said, the real credit for the dramatic success of the British economy—the economic miracle was what the Financial Times called it only this morning—goes to British business and industry and to the British people for their response to the economic policies and framework that we have put in place.
Further to the congratulations that my right hon. Friend has extended to British industry and the British people, does he accept that these figures are another sign of the excellent management of the economy which he and our right hon. Friend the Prime Minister have maintained?
If, as Conservative Members who have spoken on this subject have alleged, and the Chancellor has reinforced, low wage settlements in industry are a main contributor to economic growth, why did Treasury Ministers and virtually all Tory Members who are present here today vote last summer for hon. Members to get a 20 per cent. pay rise? Would not an example have been a good idea?
I do not think that that had a great effect on the economy as a whole, but I should set the record straight. The advice that the Government originally gave to the House was for a considerably more modest increase in Members' salaries. It was the view of the House that the increase should be greater.
The Chancellor has predicted economic growth at 3 per cent. New credit growth was 9 per cent. in the first three months—an annual increase of 35 per cent. So we shall have 35 per cent. growth in credit and 3 per cent. growth in output. Is that just right, too much, or not enough?
Fortunately, unlike the hon. Gentleman, I do not believe in a planned economy so I do not have to answer that question. But I take from it an implicit endorsement of the recent increase in interest rates.