Mr Norman Lamont: I have to tell my hon. Friend that although I read the Grimsby Evening Telegraph I do not read the Derby Evening Telegraph, but I certainly shall in the future. In confirmation of what my hon. Friend says, she is absolutely right about the effect of mortgage rates, a point I made in answer to the right hon. Member for Salford, East (Mr. Orme). It is indeed cheaper for first-time buyers to buy...
Mr Norman Lamont: I see that the hon. Gentleman has had to work hard to get his supplementary to that question. Usually he asks me outside the Chamber which question I am answering in order that he can put his supplementary to the appropriate question. [HON. MEMBERS: "Oh."] There is nothing more difficult than having to think of a supplementary on your feet, is there? The hon. Gentleman should recognise that...
Mr Norman Lamont: My hon. Friend is absolutely right. I have made it consistently clear that the interest rate policy that the Government will follow is one of achieving low inflation combined with a sustained recovery. That is the objective of monetary policy. The reduction in interest rates that we made a week ago was consistent with low inflation, based on the advice that we had from the Bank of England and...
Mr Norman Lamont: I set out the conditions for rejoining the ERM in my letter of 8 October to the Chairman of the Treasury and Civil Service Select Committee.
Mr Norman Lamont: The Government have made it clear again and again that we do not seek a depreciation of the currency, but we have made it clear that interest rates will be set according to a range of factors. That includes domestic money conditions, asset prices—particularly house prices—and also the exchange rate. The exchange rate will continue to be among the factors that we take into account in...
Mr Norman Lamont: I hope that my hon. Friend is not suggesting—I am sure that he is not—that the recent reduction in interest rates was other than fully justified and justified by economic criteria. I certainly believe that it was. It was based on the advice of the Bank of England; it was based on what is happening to money supply and to asset prices. I believe that the reduction in interest rates that we...
Mr Norman Lamont: As regards what the hon. Gentleman has said, I do not entirely agree with him about speculation in foreign exchange or other markets. Speculation is a fact of life. The truth is that Opposition Members have never adjusted to the fact that we live in a global economy. That is why they are so hostile to inward investment. They think that we can pursue policies on our own, regardless of the...
Mr Norman Lamont: I do not believe that it would be in the interests of this country if the exchange rate mechanism collapsed, as my hon. Friend said. I have, however, made it clear to the House on many occasions that I do not think that, in present circumstances, we can contemplate rejoining the ERM as long as economic conditions in this country and in Germany are not in step. I am sure that the whole House...
Mr Norman Lamont: None. The United Kingdom has the lowest short-term interest rates in the European Community.
Mr Norman Lamont: I am sure that my hon. Friend's constituency is typical of many that are benefiting from the reduction in interest rates. That is being reflected in high streets throughout the country. Retail sales in the last three months are up 1 per cent. on the previous three months and are the highest since 1990. In the car industry—it is not so strongly represented in my hon. Friend's constituency,...
Mr Norman Lamont: I am very surprised by the right hon. Gentleman. We have had from him and his hon. Friends on the Liberal Bench and from Labour Members nothing but pressure to reduce interest rates. We now have the lowest interest rates in the European Community. That is good for our economy, and nobody can gainsay that.
Mr Norman Lamont: It is certainly true that recovery is strongly under way in the United States, based on the low interest rates that have obtained there for some time. Given that a higher proportion of our exports goes to the United States than do the exports of other European Community countries, we stand to benefit enormously. I have made clear for many months my belief that it would be for the benefit of...
Mr Norman Lamont: As question 5 is on that subject, I do not know why the hon. Gentleman could not hang on and ask a supplementary question that is relevant to the question tabled. He may insist on asking an irrelevant question but I shall give a relevant answer. First, the Christopherson plan has nothing to do with interest rates, so the hon. Gentleman should be clear about that. Secondly, we shall discuss at...
Mr Norman Lamont: Ministers at the last Economic and Finance Council agreed that there should be a full discussion of the Community's economy at the Edinburgh Council and that member states should consider what action can be taken, both individually and collectively, to hasten recovery.
Mr Norman Lamont: I do not agree with the hon. Gentleman. I believe that the measures that I announced in my autumn statement have been widely welcomed by industry and all the representative organisations of industry. They accorded very well with the proposals that they were asking for and thought were appropriate from the Government. Although unemployment in the United Kingdom has risen, it has risen, as the...
Mr Norman Lamont: My hon. Friend is absolutely right. Opposition Members and the shadow Chancellor seem to think that the only place where jobs come from is Government spending. The shadow Chancellor's only answer to the unemployment problem is more spending. As my hon. Friend says, more spending can destroy jobs rather than create them. It is essential, when not only Britain but every country in Europe is...
Mr Norman Lamont: The truth is very different from what the hon. Gentleman says. As I have already said, Britain has taken the lead in putting the economic issues on the agenda at Edinburgh. Labour Members ought to tell us why they make it appear to all those who follow these events from abroad that our rebate is up for negotiation. Why should the Opposition weaken our position at Edinburgh?
Mr Norman Lamont: The Society of Motor Manufacturers and Traders estimates that there were 106,902 new car registrations in November—6.25 per cent. more than in November 1991.
Mr Norman Lamont: My hon. Friend is absolutely right that foreign investment in the motor industry in this country is making an enormous contribution both to manufacturing output and to our exports. As my hon. Friend said, the SMMT is expecting a substantial rise in production, not just next year, when Nissan, Toyota and Honda come on stream—[Interruption.] Hon. Gentlemen are quite wrong. Those companies are...
Mr Norman Lamont: The hon. Gentleman is quite wrong. We are not prepared to accept a change in it.