I bet that the CBI is looking forward to an empty ministerial car drawing up outside its offices and the entire DTI team getting out. When the Secretary of State meets the CBI, will he tell it that 3,200 jobs have been lost every working day since the Prime Minister took office, that 4,000 jobs a week have been lost in manufacturing and that 40,000 viable companies are predicted to go bust this year? Will he also tell the CBI that the Chancellor's prophecy that recovery was just around the corner was last used by President Hoover in the United States in 1930 and that there can be no recovery until the Chancellor gets interest rates down substantially in order to jolt manufacturing out of the spiral of decline?
The hon. Gentleman is clearly brushing up his green credentials by recycling old jokes. I acknowledge that there is concern about the depth of the recession, but I know that industry believes that our first priority must be to get inflation down. In its meetings with me, the CBI has made it clear that it supports the priority that we give to that objective and that it has no intention of urging us to withdraw from the exchange rate mechanism. It is also confident that, as industry recovers from the recession we shall see a renewed, strong growth during the 1990s such as that which it praised us for achieving during the 1980s.
When my right hon. Friend meets representatives of the CBI, will he take the opportunity to remind its members of the Government's positive record in creating the framework for inward investment? Will he draw to their attention especially our success in securing about three fifths of American inward investment in the Community and about two fifths of Japanese investment in recent years? Will he also draw to their attention the contribution that that can make to pulling us out of the recession?
I shall certainly do that. This country's success in attracting inward investment from all over the world demonstrates that we have created the most attractive environment anywhere in Europe for industry, especially manufacturing industry. That is why the most recent figures produced by the Japanese show that about half of all Japanese investment in Europe comes to this country and that we attract more Japanese investment than the whole of Asia.
Given today's latest figures which show that there has been a 97 per cent. rise in small business failures in the south and a 115 per cent. rise in business failures in the midlands, and given the latest forecast that up to 1,000 businesses every week could go under, will the Secretary of State, in addition to any talks that he will have with the banks, now speak up for the needs of the businesses of Britain? Will he urge the banks to bring down interest rates of 16, 17 and 18 per cent. as a matter of immediacy, or is he abandoning the small businesses of Britain just as quickly as the Government have abandoned the unemployed?
I shall certainly ask the Director General of Fair Trading to investigate any anti-competitive practices in which I have received evidence that the banks are indulging, whether the evidence results from the inquiries of my right hon. Friend the Chancellor of the Exchequer or otherwise. I have received no evidence and no evidence has been submitted by the hon. Gentleman to me or to the Director General. [Interruption.] There have been allegations, but first we must establish the facts. That is what my right hon. Friend the Chancellor of the Exchequer and the Bank of England are doing. Only in the light of facts can decisions be taken.
I am aware of the deep anxiety among small businesses about various practices of which they accuse the banks. That is why I asked my regional offices to initiate a series of meetings—the first of which took place three weeks ago in the west midlands—between banks and businesses at which businesses could put directly to the banks the changes that they wish to see.
Does my right hon. Friend agree, first, that one feature of the British economy is its slowness to respond to a stimulus and, secondly, that confidence is a major factor in pulling the economy out of recession? Therefore, does not he think it prudent that we reduce interest rates as soon as that can conceivably be achieved?
Of course I agree with my hon. Friend on that. I accept the point that he makes. However, he will agree that the anxiety expressed by the Labour party about the level of interest rates is full of crocodile tears because it has declared that its policy would be to increase Government borrowing, which would drive up interest rates, increase inflation and give greater pain to small businesses than anything that they have suffered in the past.