Skip to main content

Economic Growth

Volume 87: debated on Wednesday 27 November 1985

The text on this page has been created from Hansard archive content, it may contain typographical errors.


asked the Secretary of State for Trade and Industry what has been the average annual growth in the economy over the last six years.

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Leon Brittan)

In the six years up to and including the first half of 1985, the annual average growth rate of gross domestic product was 1·25 per cent. Since the first half of 1981, the average growth rate has been 3 per cent.

Will the Secretary of State confirm that the annual average increase in output has been less than 1 per cent.? Grim as the national figures are, they actually hide unacceptable regional disparities. Will he confirm that the Welsh share of gross domestic product has fallen faster and to a lower level than that of any other region, with the exception of Northern Ireland, and is now 20 per cent. lower than the national average? Given that regional aid has been cut by £300 million this year, how does the right hon. and learned Gentleman expect regions of Britain to share in any growth that may come?

I do not accept the hon. Gentleman's general comments about the economy. They are belied by the fact that we are entering our fifth year of uninterrupted growth—[Interruption]—whether or not the hon. Gentleman regards that as a matter of amusement. The right test of regional policy is not simply the amount of money being spent. The changes that we have introduced to relate the amount being spent not just to capital investment, which might have taken place anyway, but to the production of jobs, represent a very sensible change of direction. So far, the results in terms of new jobs are encouraging.

If it is my right hon. and learned Friend's intention to help the regions in this way, what is the point in the Department giving £1 million in grants to English Sewing Limited to create 300 jobs in Scotland, while destroying 300 jobs in my constituency and that of my hon. Friend the Member for Amber Valley (Mr. Oppenheim) in Derbyshire?

I shall come to that, but my hon. Friend will be aware that the policy is normally to give assistance only where there is a net increase in jobs. I am advised that his figures are not accurate and that the number of jobs that will be created is substantially larger. However, I will of course look into my hon. Friend's point.

Does the Secretary of State agree that behind those figures lies the devastation of large sections of British manufacturing industry during the past six years? Will he persuade his colleagues that, instead of spending any resources that may be available at the time of the Budget on tax cuts, which will go into consumer expenditure, they should be put into soft loans, as has been done on the ATP scheme, to help British industry at home, and into more education and training, so that industry, particularly high technology industry, is not short of the skilled people it needs?

The hon. Gentleman does less than justice to the fact that output has entered its fifth year of growth and that manufacturing output is 11 per cent. above its 1981 level. The hon. Gentleman is right to identify particular areas of assistance, but the extent to which it can be given is a matter of judgment. I am sure that the Chancellor of the Exchequer will be interested to hear the hon. Gentleman's recommendations for the next Budget.

Does my right hon. and learned Friend agree that one of the essential ingredients for achieving greater economic growth is improved competitiveness, so that we must examine carefully industrial costs under the Government's control? In that context, does my right hon. and learned Friend agree that a reduction in employers' national insurance contributions would help competitiveness?

I am sure that my hon. Friend will also wish to take into account the fact that the national insurance surcharge has been removed. That was not an easy task, because of its size and the amount of revenue that it raised. My hon. Friend is right to stress the importance of improving competitiveness. Those concerned with reaching pay settlements should have that at the forefront of their minds if they wish to improve levels of employment, as we all do.

Has not the pathetic 1¼ per cent. growth in production been achieved entirely through increased North sea production, which was determined even before the Government came to office? Is not manufacturing production, in a year when the country is awash with energy, substantially lower than during the three-day week when electricity supplies were cut off? In view of that, what achievements do the Government have to boast about?

The right hon. Gentleman is living in an unreal world. [HON. MEMBERS: "Nonsense."] Yes, he is, if he thinks that oil should be excluded and does not matter and that the achievement of oil is automatic. That achievement was possible only as a result of private enterprise taking the opportunity to benefit from the oil. The right hon. Gentleman ignores the Budget changes which have facilitated the exploitation of marginal fields which otherwise would not have taken place.