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Mr. Denis MacShane (Rotherham): Will the right hon. Gentleman give way?

Mr. Waldegrave: This is becoming an interesting seminar. It may have been the hon. Gentleman who complained last year about the pound going down.

Mr. MacShane: Certainly the steel industry, with which I am connected, is concerned about the rocketing rise of the pound. After the right hon. Gentleman's last answer to the hon. Member for Wolverhampton,

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South-West (Mr. Budgen) can he tell us where he thinks the pound will be in three or four months' time? [Interruption.]

Mr. Waldegrave: My disrespectful hon. Friends are making various suggestions, one of which is that the hon. Gentleman may wish to go on holiday and buy his currency in advance. I do not think that the hon. Member for Edinburgh, Central (Mr. Darling), my opposite number, or the right hon. Member for Dunfermline, East would want to give a target for the pound three months ahead, and I shall certainly not do so.

However, as the hon. Member for Rotherham (Mr. MacShane) is a learned Member, I shall ask him to look at one piece of research which was published recently by the Treasury--he may already have read it. It shows that the United Kingdom's improved trading performance in the 1980s, when, for the first time in decades, we held our share of world trade, cannot be explained in terms of devaluation, of competitiveness provided by the pound. It shows that that better trading performance results from the fact that our goods are better made, are of higher quality and are winning markets on their merits. That is an encouraging conclusion.

Mr. Geoffrey Robinson: Will the right hon. Gentleman confirm, in regard to the fiscal tightening which he said was a major aspect of the Chancellor's stance on the Budget, that, far from being a tax-cutting Budget, the total tax take has increased yet again, from 35.75 per cent. of GDP to 36.25 per cent? In other words, it is another tax-increasing, not a tax-decreasing, Budget.

Mr. Waldegrave: I am not sure what point the hon. Gentleman is making. We had an unproductive discussion earlier about the fact that, if one considers the same base years, the tax burden on the economy in the approach to this general election is the same tax burden as before the last election. But putting up taxes is not the only way of tightening the fiscal position: the fiscal tightening in this Budget comes in part from expenditure cuts which, I guess, the hon. Gentleman and his hon. Friends will vote against if they get the chance, seriatim. They will then claim to be a responsible party with respect to spending control.

Mr. Kevin Hughes (Doncaster, North): Will the Chief Secretary give way?

Mr. Waldegrave: No, I must proceed.

The right hon. Member for Dunfermline, East is fond of using a league table. Let me give him another, on a subject that he does not seem to find so attractive--the league table on jobs. I shall give him the latest figures for the Group of Seven countries. The figures are not exactly up to date; they would probably be a little better if they were, but they are the latest figures we have which allow us to compare all the G7 countries on the international standardised definitions relating to unemployment.

The best is still Japan, by a long way. As most hon. Members probably know, Japan has an unemployment rate of 3.3 per cent. and falling. The second is the USA, with 5.2 per cent. unemployment and falling. The third--this is the first time in decades that we have been in clear third position on international standardised definitions--is the UK, with 8.1 per cent. and falling.

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Next comes the group of countries that are taken as the models in Labour's economic policy--the social democrat and Christian democrat interventionist economies. In fourth place is Germany, with 9 per cent. unemployment and rising. Fifth is Canada, with 9.8 per cent. and rising. Sixth is Italy, with 12.2 per cent. and rising. Seventh is France, with 12.5 per cent. and rising. That is a league table which, for some reason, the right hon. Member for Dunfermline, East does not often produce.

Mr. MacShane: What about the Netherlands?

Mr. Waldegrave: The Netherlands is not a member of the Group of Seven.

We do not hear many comparisons of productivity and investment from the right hon. Gentleman. Jobs are being won because, unlike the position in the 1960s and 1970s, when we regularly were bottom of the table for productivity growth, we are now at the top. Our growth in manufacturing productivity has been almost three times that of Germany since 1980. That is because of good business investment, which is up by a third in real terms since 1979. Investment in plant and machinery alone is up by 50 per cent. The right hon. Gentleman made much of investment figures last year, which were indeed disappointing, but the run since 1979 shows that business investment has transformed the UK, and the figures for next year are likely to be good again.

Whole economy investment has grown faster since 1979 than in any other major European Union country and at about double the average rate for Britain in the 1970s under Labour, when our investment growth was much lower than the EU average at that time.

Mr. Campbell-Savours: Will the Chief Secretary give way?

Mr. Waldegrave: No, I want to make progress.

Our business investment is now in line with that of the other G7 economies. There are healthy predictions for business investment this year and next, not just from the Treasury but from the Confederation of British Industry and the National Institute for Economic and Social Research.

Because of our better investment performance, there has been a dramatic closing of the gap in manufacturing productivity between the UK and Germany. That, in the long term, is the most encouraging development of all. In 1979, the gap was 50 per cent.; it is now 10 per cent. As the hon. Member for Coventry, North-West (Mr. Robinson) will know, from his former connections with the motor industry, productivity in automotive components is now reckoned to be higher in the UK than in Germany. If that had been predicted 15 or 20 years ago, it would have been considered very optimistic indeed.

Our improved performance is not restricted to capital goods. There has been a huge improvement in the investment in people. One in three are now in higher education, as opposed to one in eight in 1979. Employers spend £10.5 billion every year on training. I am happy to say that 95 per cent. of manufacturing firms are planning to maintain or increase that level next year.

The right hon. Member for Dunfermline, East, for all his wit, has not been an effective spreader of gloom. Ever since he took over his job, everything has got very much

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better for the British economy. Unemployment has fallen month by month. Foreign investment has flooded in, particularly to the right hon. Gentleman's native Scotland. The total last year for the United Kingdom was £14 billion, and this year looks like being another record breaker. Our trade performance has improved and our inflation has fallen.

I am sorry, therefore, that I must correct the classical reference made yesterday by my right hon. and learned Friend the Chancellor. He referred to Cassandra. She made correct predictions, which no one believed. The right hon. Member for Dunfermline, East makes predictions that are not correct, but no one believes them anyway, so it does not much matter.

Mr. David Shaw: My right hon. Friend will have noticed that there was a prediction that would damage the possibility of Dover getting its A2 road if Labour ever got into office. Will he confirm that not only has Dover got the dualling project in the road programme under the Budget, but there has been a £100 million improvement in the past few years to the A20 from Folkestone to Dover, and the Sandwich to Dover road has been improved under the Conservative Government? The Conservative Government back Dover, whereas Labour gets very angry and wants to do down Dover.

Mr. Waldegrave: I would not want to get involved in the issues affecting Dover, about which my hon. Friend is much more learned than I am. He is a doughty fighter for Dover. It sounds as though a great deal of money is being spent on roads in and around Dover, and I am sure that that is a good thing.

Mr. Campbell-Savours: Will the Minister take his copy of the Red Book and turn to page 88? Let us clarify a particular prediction. Will he look at the sixth figure from the bottom on the left, for 1996-97, in the column headed "Total taxes and NICs" as a percentage of money GDP? Is it true that it reads 35¾ per cent? For the year 1997-98, does the figure read 36¼ per cent? Will the Minister advise me on these matters? Is that an increase or a reduction? If it is an increase, does it not mean that taxes are going up? May I have a simple answer to my elementary question?

Mr. Waldegrave: The hon. Gentleman knows the answer to his question perfectly well. I was answering a slightly different question earlier, but also an important one. I was making a modest correction to the point made by the right hon. Member for Sedgefield (Mr. Blair), who said that the tax burden when we went into the last general election was lower than the tax burden now. In fact, it is about the same, or a little lower.

Mr. Gordon Brown rose--

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