Government Policies (Impact)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 18th April 1991.

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Photo of Mr Robert Maclennan Mr Robert Maclennan , Caithness and Sutherland 12:00 am, 18th April 1991

To ask the Chancellor of the Exchequer what indices he relies upon to measure the impact of his policies upon the economy of the nations and regions of the United Kingdom.

Photo of Mr David Mellor Mr David Mellor , Putney

The Government use a wide range of indicators.

Photo of Mr Robert Maclennan Mr Robert Maclennan , Caithness and Sutherland

I recognise that the paucity of the information on regional matters, including regional unemployment—so startlingly increased today—shows that the Government are having difficulty managing fiscal aspects of the economy in the regions. Would not decentralisation of government to the nations and regions of the United Kingdom increase and improve economic performance?

Photo of Mr David Mellor Mr David Mellor , Putney

That does not follow. On unemployment, it is interesting how well the Scottish economy has been holding up compared with what has been happening further south.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Is unemployment one of the indices? The Prime Minister said that he wants a classless society, which I understand to be an opportunity society. Has the Chief Secretary seen the news, out today, that the Government have destroyed all opportunities for 100,000 people, that there are now over 2 million people with no opportunities at all and that that figure is rising rapidly to 3 million? What is he going to do to apologise to those 2 million or 3 million people for whom the Government have destroyed all hope of opportunity?

Photo of Mr David Mellor Mr David Mellor , Putney

The other statistics that the hon. Gentleman will not have failed to see are that 26·5 million people are in employment and that the number of jobs in Britain has increased by over 3 million in the past eight years. The rise in unemployment is regretted, but there is no reason why, as the upturn recommences, employment should not grow. It is not just the Government who might have something to do about that. What about the hon. Gentleman's friends in the trade unions and their attitude towards wage bargaining? Some of the wage increases that are being sought at a time of difficulty for many companies can result only in higher unemployment.

Photo of Mr John Ward Mr John Ward , Poole

Will my right hon. and learned Friend contrast the effect of a Government taking positive action to get the economy right with the actions of their predecessor, when Labour Members were responsible for near bankruptcy?

Photo of Mr David Mellor Mr David Mellor , Putney

That is absolutely right. All the key indicators in the 1980s showed a great recovery from the problems of the 1970s. Unfortunately, the Labour party has not learnt its lesson. Only yesterday it reiterated its proposal for a national minimum wage. Even if that led to only half the differentials being eroded, it could lead to 750,000 more people unemployed. Since Mr. Bill Jordan said that the differentials of his members will not be eroded at all, that could add 1 million to the dole queue. The Labour party has nothing much to teach us about managing the economy.

Photo of John Butterfill John Butterfill , Bournemouth West

One of the indices that certain expert economists seemed keen on a little while ago was the pound's parity within the exchange rate mechanism. They said that we had entered at much too high a level and that this would cause terrible damage and prevent us from cutting interest rates. Should not those people be eating their words now?

Photo of Mr David Mellor Mr David Mellor , Putney

There is no doubt that we have been able to live within our place in the ERM. In our six months of membership, interest rates have fallen from 15 to 12 per cent., which is less than the average level of interest rates since 1979.