I hope that my hon. Friend will forgive me if I begin by saying how glad we all are to see the right hon. and learned Member for Monklands, East (Mr. Smith) fit and well and back in his place.
Since 1981, consumers expenditure has grown on average by 31½ per cent. a year in real terms, while exports have grown by 4 per cent. a year and investment by 5 per cent. a year.
I thank my right hon. Friend for that reply. Do not those excellent figures show that much of the extra demand is spent on investment which will balance the problem with the balance of payments deficit? Are we not really paying the price for the fact that throughout the time when the Labour party was in office, investment was seven times lower than the rate of increase in consumption?
My hon. Friend is right. We have had increasingly in recent years an excellent performance on investment. Investment growth last year was probably the highest ever and certainly private investment last year was the highest percentage of GDP since records began in 1955. As my hon. Friend indicated, over the whole of our period of office since 1979, investment grew at 27¾ per cent. compared with only 25¾ per cent. for consumption, whereas under the Labour Government, consumption was up by 10½ per cent. and investment only a puny 1½per cent.
Is the Chancellor aware that the rise in exchange rates is doing immeasurable damage to much of Britain's manufacturing industry? As imports are being sucked into the United Kingdom, many jobs are being lost at home in all sorts of industries, but in particular in the footwear industry and in Millers, a company in my constituency. What will he do about that? Will he leave exchange rates at the present high level and accept job losses at home with the consequent effect on the Exchequer?
I think that the hon. Gentleman is wholly unaware of what has happening in the British economy. Unemployment has been coming down month after month for over two years now in every region of the country. I would have thought that he might first become aware of that and when he has become aware of that, he might welcome it.
Will my right hon. Friend the Chancellor confirm that in 1988 investment grew by more than 12 per cent. and that that was twice as fast as the growth in consumption? Will he also confirm that the rate of unemployment in Stockton, South has fallen faster than in any other constituency in the north of England and that that is undoubtedly due to the hard work of local entrepreneurs and the increased level of self-employment in that region?
I agree with what my hon. Friend says and I am sure that the quality of the hon. Member representing Stockton, South must have played some part in this excellent performance. Indeed, investment growing at something like more than double the rate of consumption in 1988 was no flash in the pan. During the whole of the period that I have been Chancellor of the Exchequer, investment has grown very nearly twice as fast as consumption. Indeed, going back to 1981, investment in this country has grown faster than in any other country of the European Community and faster, indeed, than in any other major industrial nation.
On the question of growth, investment and the impact of the exchange rate, does the Chancellor recall his previous statements that we would join the European monetary system when the time was appropriate, and his new statement last night that previous difficulties had "clearly diminished over time"? Will the Chancellor give us his own assessment of the advantages of joining the European monetary system and say whether he has persuaded the Prime Minister of them?