§ The Chancellor of the Exchequer (Sir Geoffrey Howe)
The annual presentation of the Budget is rightly regarded as the principal economic act of Government. But every Chancellor—indeed, every Member of the House—very well understands that the economic well-being of the nation owes more, at the end of the day, to the spirit and vitality of its people than to any single act of Government. I do not seek, in saying that, in any sense to undervalue the proper role of Government, but simply to set it in perspective. What is the essential duty of Government is to provide responsible management of the financial framework within which the nation has to live. That duty must start from a sober and realistic assessment of the nation's economic condition. It is with that that I begin.
First, there is the fight against inflation. We have made real progress. Prices are now rising only about half as fast as they were last summer. In the last year we have had the most rapid fall in inflation of any major country. Living standards in the personal sector as a whole are estimated to have risen in 1980 by a further 2 per cent. There have been fewer industrial disputes than at any time in the last 40 years. In 1980 Britain's exports increased in value, and held up in volume, and we achieved a record current account surplus of £2¾ billion. Many British companies are clearly facing the challenge with much more success than might have been expected.
However, there are sharp contrasts. In 1980 total output in the United Kingdom fell by about 2½ per cent. and that of manufacturing industry by no less than 9 per cent. Interest rates have remained high. Many parts of industry have been extremely hard pressed. Although the latest figures suggest that the rise in unemployment may be slowing down, there are almost 1 million more people out of work than there were a year ago. For individuals, families, and sometimes for entire communities, this can mean real hardship. The Government share the nation's deep concern.