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Gross National Product

Volume 973: debated on Thursday 8 November 1979

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10.

asked the Chancellor of the Exchequer what was the annual average of growth in the gross national product between 1974–5 and 1978–79.

Does not that miserable figure demonstrate clearly the enormity of the task to which my right hon. and hon. Friends have set their hands? Does my right hon. Friend understand that the evidence is overwhelming from all parts of the country that the wealth creators, large and small, are solidly behind the Government's present economic policies?

I am grateful for my hon. Friend's comments. I am sure that the figures demonstrate that last year's public spending White Paper predicated a rate of growth and a rate of increase in public spending that was in no way validated by the experience of the economy under the previous Labour Government.

Does the right hon. Gentleman agree that the outlook for the gross national product in the first two years of this Government's administration is about minus 1 per cent. or possibly minus 2 per cent.? Does he accept that the Government's inflationary policies are driving the country into a deeper and worse recession than is faced by any other country in Europe?

The White Paper published last week states that the immediate prospects for output are poor. That comment would not have been made without careful deliberation. Behind us is a record of facile and easy promises made by the Labour Government. If the country emerges reasonably unscathed from the economic recession, it will be because profitable activities are encouraged and not harassed.

Is my right hon. Friend aware that the previous Government virtually ruined the economy during their five years in office? In view of the need urgently to catch up with other countries, what rate of growth does my right hon. Friend wish to see once the current medicine has begun to work?

I have no particular views about the desirable rate of growth. That is something that industry will tell us, rather than us telling industry.

Will the right hon. Gentleman accept that not only is the immediate prospect of growth poor, but that there is no evidence that over the next four years the growth rate will, on average, be in excess of the 1·5 per cent. that he has mentioned? Will the right hon. Gentleman now reply to the serious question asked by my right hon. Friend the Member for Leeds, East (Mr. Healey) about investment intentions?

I do not want to speculate on the average rate of economic growth during the lifetime of this Parliament. However, I know that, on the whole, politically motivated investment has a poorer record than has business motivated investment.