Previous SectionIndexHome Page

Mr. Berry: I thought that the right hon. and learned Gentleman was the Chancellor of the Exchequer, and not me. If his policies and those of his predecessors have been so effective in tackling unemployment, why has unemployment under the Tories not been less than the level they inherited in any single year since 1979?

Mr. Clarke: We employ a higher--[Interruption.] There have been huge changes in our labour market and those of our international competitors since 1979, and this country has prospered from these changes when compared with the rest of the western world. There are far more people in our work force now than in 1979. We have a higher proportion of our work force in employment than any other major western European economy. [Hon. Members: "That is irrelevant."] It is not irrelevant. We have a lower level of unemployment than either France or Germany. The background is that we alone of the western European economies are creating new full-time jobs. We have a background of falling unemployment.

The Labour party has no policy on the labour market except the social chapter, the minimum wage and a bit of policy about bringing back trade union recognition. Labour Members never speak about it. They give no detail about it. They would not even tell the Labour conference what figure they would put on the minimum wage. They know that the only policies they have on unemployment would drive it up, destroy jobs and put us back in our good performance compared with the rest of western Europe. That is why--

Mr. Berry: Will the Chancellor give way?

Mr. Clarke: No. It is enough. It is one consequence of the rules of the House that, when one gives way, one has the last word. I cannot keep coming back to the same point.

Mr. Berry: It is not my fault.

Mr. Clarke: It is not the hon. Gentleman's fault. It is because Labour Front-Bench Members have nothing to say on unemployment.

The record that I have just described is the reason why an independent body such as the OECD has described our recent economic performance as impressive. I will not give the House all the other favourable adjectives that it has used about the current performance of the British economy. I have no intention of putting any of it at risk. The Labour party does not have the slightest clue what it would do about it if ever the whole thing were put into its hands. I hope that that will always be avoided.

This year, growth in the economy has slowed. That is because I raised interest rates in order to keep inflation down. I did so because rising inflation destroyed the last three recoveries. I increased interest rates early to nip inflation in the bud. That, and my control of public expenditure, allowed me to resist pressure that might otherwise have taken interest rates further.

22 Nov 1995 : Column 690

The approach of the Labour party to public spending control, the tax measures that I had to take, public borrowing in general and all the interest changes that I have ever made or refused to make has been non-existent. There has been no response. The official Opposition, pretending to be a Government in exile, have no views on the struggle that we have made to ensure that the recovery is not jeopardised again by a return to inflation.

We used to have an official Opposition. We used to have a Labour party with socialist policies. We beat it time after time in elections. The Labour party has vacated those policies. Labour Members have turned from those policies to light entertainment in their speeches. They hope that they will get away with that and put themselves in charge of the best and strongest economic recovery in western Europe. Heaven forfend; the future of Britain is far too important for that.

No serious independent forecaster expects the economy to move back into recession. All the signs are that growth will be sustained. A great deal of that will depend on investment. Of course we agree on the importance of investment and improving Britain's investment record. Business surveys suggest that the prospects for investment are good. Good economic conditions stimulate investment.

Manufacturing investment rose by 12 per cent. last year. Consumer spending is on a steady upward path. Rising incomes and employment should keep it that way. We have retained our competitive position in the overseas market. Those are the policies. Those are the results on which the well-being and prosperity of British people and their families depend. Those are the serious matters to which the Labour movement in the House and outside contributes absolutely nothing.

We have heard a great deal about league tables. The Labour party has used the table out of the competitiveness White Paper, to which it has added a little. It has bought advertising space to publicise the table and said that the OECD figures of GDP per head since 1979 are some kind of prosperity league table. GDP per head is open to its difficulties. Is the Labour party going to turn Britain into a secondary banking haven? If so, exactly how does it propose to go about it? Are we going to compare the proportion of oil revenue per head of population to that of Norway? Is that somehow rediscovery of oil? Norway is always one of the countries that the hon. Member for Dunfermline, East cites as having overtaken us.

We have overtaken social democrat countries in Scandinavia which have followed the policies which until recently the Labour party advocated. Of course we have been overtaken by Hong Kong and Singapore, which are small island states in Asia. We should consider our position now in relation to productivity, inward investment and competitiveness in world markets. The hon. Gentleman misuses the tables.

The hon. Gentleman starts with 1979, when we took over an economy racked by debt, recession, strikes and unemployment. For a time in 1981 the United Kingdom's economy dropped to 19th--even in the hon. Gentleman's league table--but that was because of the hon. Gentleman's party's recession, and, even in his table, we have recovered from that recession.

Mr. Gordon Brown: Will the Chancellor give way?

22 Nov 1995 : Column 691

Mr. Clarke: I shall give the hon. Gentleman some fresh figures and then give way.

Let us just examine where we are now. I agree that the measure of purchasing power parities is the way to do it. The United Kingdom's GDP per person is in line with the European Union average. The Central Statistical Office's recent "Business in Europe", another of our glossy publications, shows that, between 1981 and 1993, the United Kingdom's economy grew faster than those of Germany, France, and Italy, and it grew faster than the European Union average. That growth is showing on the ground: there are now 3.5 million active businesses in the United Kingdom, which is 50 per cent. more than there were in 1979. Business numbers are still rising, and business profitability is very high.

The hon. Gentleman referred to nationalised industries. The first thing to say about nationalised industries is that they used to cost the British taxpayer £50 million every week. Privatised companies now contribute about £55 million every week in revenue.

Mr. Alex Salmond (Banff and Buchan): On a point of order, Madam Deputy Speaker. There is some noise in the Chamber. When the Chancellor was speaking about those comparisons, I could not hear whether he took as his starting year 1979, when the Conservatives came into office, or 1981, which was after a very deep recession.

Madam Deputy Speaker: The Chancellor can deal with that himself.

Mr. Clarke: The starting point that is always used by Opposition spokesmen--it is logical to look at when we first came into office--is 1979. In 1979, we took over from a Government who had an enormous amount of public borrowing because of its attempt to reduce taxation. It was an economy in steep decline which, between then and 1981, had to be turned round. Using 1979 as the date pulls down the average figures. Until 1981, the decline that we had been left carried on. The argument is very old, and it is only because those figures have been dug out that I resort to it. We had that argument all the way through the 1980s, and we always won it because people clearly remembered why we had to increase taxes and get borrowing under control when we first came in. They remembered how we got to the 1981 position, for which the comparisons are very different.

Throughout the 1980s, our growth pattern was faster than those of the other European countries I have named.

Mr. Gordon Brown: Will the Chancellor give way?

Mr. Clarke: The hon. Gentleman should listen a little further because he might learn something, perhaps for the next speech.

Mr. Salmond: How on earth can the Chancellor seriously compare the records when he misses out the first two years of an extremely deep recession? If he wants to compare the Government's record against that of other countries or against that of other parties, he should compare it over the whole 16 years; he should not miss out the first two years.

Mr. Clarke: I make it quite clear when I say that, throughout the 1980s, we grew faster than Germany, France and Italy. In his intervention, the hon. Gentleman pretended to mishear what I said, and he said that I was

22 Nov 1995 : Column 692

wrong. He knew perfectly well, however, what I was talking about. He wants to include the first two years after the winter of discontent in order to pull our record down. The winter of discontent was the creation of the Labour party, and it was the achievement of the Conservative party to get us out of it and set ourselves on the way to being the enterprise centre of Europe.

Next Section

IndexHome Page