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Economic Growth

Volume 131: debated on Thursday 14 April 1988

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2.

To ask the Chancellor of the Exchequer for how many years the rate of economic growth in the United Kingdom has averaged 3 per cent., or more.

The six years to 1987 saw average economic growth of 3 per cent. a year. This is the longest period of steady growth, at around this rate, for half a century.

Are not those figures an eloquent testimony to the success of the Government's economic policies? Is it not interesting to note that in the last year, when we have had growth of 4ยท5 per cent., we have been firmly at the top of the international league of growth of our major competitor countries?

My hon. Friend is absolutely right. It is a great contrast with the 1960s and 1970s, when we were bottom of the international growth league. It is a contrast also with the performance of the last Labour Government, when the growth rate in every year was lower than the average of the last six years under this Government.

What will happen to growth if exchange rates are at a high and uncompetitive level? Will the Minister heed the warnings of the CBI and others about the effects on GDP of what is happening to exchange rates, or would that be bucking the market?

I am happy to say that the outlook for growth is very favourable and we remain one of the more rapidly growing countries in the Western world.

Does my hon. Friend agree that industrial growth is proceeding well and that it was fed very much with the pound much lower than it is today? My right hon. Friend the Chancellor, who is in Washington, says that we will have a stable pound. Without a stable and lower pound we will not maintain economic growth.

Economic growth has been improved and our economy transformed by a series of measures to improve the supply side performance of the British economy. That is of the utmost importance and has been achieved within a monetary framework which keeps monetary policy bearing down on inflation and ensures that exchange rates are reasonably stable.

Given that the Minister thinks that the Government's economic record is so wonderful, can he tell us how many people are in full-time employment in the United Kingdom now compared with the figure for the last year of the Labour Government?

I remind the hon. Gentleman that over the past year the fall in unemployment has been greater than ever previously recorded.