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Mr. Gordon Brown: Will the Chancellor therefore confirm that he accepts that we were 13th in national income per head in 1979 and that we are now 18th? Will he also accept that we were 13th in 1974 and 13th in 1979, and that all the decline has happened under a Conservative Government? Will he explain why we have slipped from 13th to 18th under a Conservative Government?
Mr. Clarke: I have already pointed out to him that using GDP per head figures in that way is ridiculous. We published a whole document. The hon. Gentleman has become a monomaniac about one table, which he misuses in order to make his totally specious point. Our inward investment, our consumption, and our personal prosperity have risen throughout the years which, using this one table in a rather eccentric fashion, he claims were years of decline. It is no substitute for policy. We are doing better than the others now and the hon. Member for Dunfermline, East is trying to pretend that he has some hidden secret that might enable him to do better.
Mr. Brown: The right hon. and learned Gentleman now wants to talk about investment. Will he explain why we have fallen to 21st in the investment league since 1979?
Mr. Clarke: I shall give the hon. Gentleman some comparative figures on investment. Let us look at investment in the whole economy [Hon. Members: "From 1979."] I do not mind responding on the whole period of office. I am one of the last survivors of the long march and I am still here. I even survived a period in opposition to the Labour party, when it had a policy and it was a wrong one--it perhaps was even worse then.
Investment in the whole economy under the last Labour Government grew by a grand total of 1.4 per cent. Since the Conservative Government came to power, investment has grown by 31 per cent. Obviously, we have been in power far longer than the Labour party, so one has to look at the annualised rate of increase--for the hon. Member for Dunfermline, East, this man of detail, that means how much per year. It has been 1.8 per cent. per year under us, as compared with 0.3 per cent. each year under Labour. Investment has grown six times faster under Conservative Government than under the last Labour Government.
Let us look at a few international league tables--
Mr. Clarke:
Let me give the hon. Gentleman just one more figure from the Organisation for Economic Co-operation and Development on increased investment--[Interruption.] I have dealt with unemployment and now we are on to investment, which was the next point that the hon. Gentleman laboured.
Judging from the annualised rate for the increase in investment between 1979 and 1994, we have moved to the top of the investment league for major economies in Europe. I just gave the annualised rate for the United
Kingdom, which was 1.8 per cent. but in France it was 1.2 per cent., in Germany it was 1.1 per cent. and in Italy, 0.7 per cent. We have outstripped those countries, although they all did a great deal better than Britain ever did under a Labour Government. We are top of the table; we are not bottom any more.
The prospects for future investment, which is what matters--[Interruption.] That is what we are tackling in the Budget and that is what the hon. Member for Dunfermline, East will have to talk about next week--the prospects for future investment. Most forecasters share the Treasury expectation that investment will pick up strongly this year. The signs of investment growth are there. Manufacturing investment is, as I said, up 12 per cent. on a year ago. Business surveys all show that prospects for investment remain healthy and the Confederation of British Industry investment intentions balance remains buoyant.
All that investment record--the strong record now-- shows that we are making progress towards our goal. It is one of the reasons why the British economy has been growing faster than the G7 average for the past three years. If we are looking at league tables, the International Monetary Fund expects the United Kingdom to be joint top with Germany of the seven top economies--the G7 growth league table--in 1996. That is because of the success of our policies, to which the hon. Member for Dunfermline, East presents not the slightest alternative.
Mr. Roy Beggs (East Antrim):
Does the Chancellor agree that Government policies have largely contributed to the success that Northern Ireland now enjoys in attracting inward investment? Does he further agree that the location of that investment is best left to individual companies to decide rather than being subject to the direction of officials?
Mr. Clarke:
Yes, I entirely agree and I am absolutely delighted that the Northern Ireland economy is performing so strongly. As part of the United Kingdom, it is quite rightly benefiting from the success of British economic policy and of our success in making this country the most attractive location for inward investment in western Europe.
I can set out a policy, although I am in Budget purdah. The hon. Member for Dunfermline, East knows that he has the advantage of me on this occasion, or he ought to have, because I cannot give specific measures beyond that. With no purdah, he produces nothing. The veil remains tightly drawn and nothing is believed. Every time he comes to the House on occasions when he ought to be saying what he would do if he was given stewardship of the national economy, he ought to answer our questions-- the questions that I always ask.
Does he think that public borrowing is too high, too low or about right? Does he believe that we are controlling public spending too much or too little, and would he control it more firmly to achieve his incredible 10p rate? I have asked him questions, but he retreats into the childish obfuscations, "We will wait to see what the economy will be like. We will await the full information."
As is obvious from the folders that the hon. Member for Dunfermline, East clutches when he comes to the Chamber to speak, we shower him with information. We
have a Red Book of the Budget. Would a Labour Government put out a different Red Book? What on earth would be added to the knowledge of the British economy by a Labour Government, if they ever came to power?
What about the statistics from the Central Statistical Office? We have put it aside; it is a totally independent agency. What statistics does he want it to produce to enable him to form some judgments on these vital matters?
It is not that the hon. Member for Dunfermline, East is waiting to see the books, or that he does not know anything about the British economy. Every other financial commentator in the country bombards me with advice on what to do in the run-up to a Budget. Everyone I meet in the Rose and Crown tells me what he or she wants me to do in the Budget. The hon. Gentleman is the only man with no advice and no opinions--the only man in this country who thinks that talking about politics and economics is not allowed in polite company. He is shadow Chancellor and he has no opinions on any of those matters.
At the last election, Labour stood on a policy. The party had a policy of increasing taxation and public expenditure. It was set out with clarity. There was a shadow Budget and there were no excuses then. Labour was a tax-and-spend party. We stood on a platform of aiming for lower taxation and cutting taxes--[Interruption.] Both policies were obviously based on the mistaken belief that the recession was about to end. Faced with £50 billion of borrowing, we acted in the national interest. We raised taxation and controlled public spending. In every sensible step we took, we were opposed by the Labour party.
Had Labour won the last election, what would it have done? Yes, a Labour Government would have raised taxation because they would have raised public spending, which is what they committed themselves to. They would have increased taxation more and more because they would have discovered that they had to tackle that borrowing.
Since that time, we have consistently set out our aims-- our low taxation agenda, our desire to get borrowing down to zero and our desire for recovery. The Labour party-- the all-tax-and-spend party, which it still is--has relapsed into silence.
Mr. Geoffrey Robinson (Coventry, North-West):
The Chancellor must be aware that, just before the last election, the Government knew that the public sector borrowing requirement would go up to £50 billion.
Mr. Robinson:
Of course the Government knew that. Given that set of circumstances, how could they have gone into the election with the promises that they made at the time?
Mr. Clarke:
If the hon. Gentleman thinks that all economic forecasting is spot on like that, so that Governments always know what is going to happen, he is making the job of Chancellor of the Exchequer sound a lot easier than I have discovered that it usually is. At the last election, all the parties plainly proceeded on the basis that we were out of the recession. We reacted in the public interest and the Labour party reacted by going into a burrow, from which it never emerges with any policy.
We know that tax and spend has not been abandoned. In one week last month in speeches in the House, 40 per cent. of Labour Members called for more public spending. Nearly half the interventions from the Labour party around this silent trappist monk who speaks on economic policy are to demand more public spending. The silence of the hon. Member for Dunfermline, East merely leaves him exposed to all the pressures in his party. It is no good him pretending to be a better one-nation Conservative than I am. I was there first and I know my way around this course much better than he does. He is no one-nation Conservative--he is not a shadow Chancellor of the Exchequer at all.
Let us have a look at what some members of the hon. Gentleman's party say about his pronouncements. The right hon. Member--I am sorry, I am premature, the hon. Member--for Hackney, North and Stoke Newington (Ms Abbott) used these words early this week when she heard of something that struck into her soul so that she felt she had to respond to the hon. Member for Dunfermline, East; I think it was the 10p promise but it might have been workfare for young people. On the air, she said:
What about the TUC general secretary, John Monk, a man for whom I have considerable admiration? He said:
We have had enough of this stupid bidding match where the hon. Member for Dunfermline, East tries to emerge from his silence to claim that he is likely to cut taxes more than a Conservative Chancellor is likely to cut taxes--complete nonsense and quite incredible unless he gives us some policy.
"Gordon can say anything he likes if he thinks it is going to win the election. But ordinary Labour party supporters in this country, particularly the poor and the unemployed, when Labour is in power will be looking for other priorities from tax cuts."
"Rather than tax cuts, the emphasis should be to increase spending on areas that need it."
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