British industry chiefs contradict Thatcher

Press, 4 February 1982, Page 6

British industry chiefs contradict Thatcher

NZPA-Reuter London The voice of British industry yesterday challenged the Government’s assertion that Britain was pulling out of recession, insisting that there was still no sign of imminent economic recovery. The Confederation of British Industry, which represents the nation’s main employers, said a detailed survey of industrial trends showed “no evidence of any significant improvement in demand and output in the next four months.”

Its prognosis contrasted with recent optimistic statements from the Prime Minister (Mrs Margaret Thatcher) and Ministers who have told Britons that things are beginning to get better. The analysis also foreshadowed more job losses ahead, with unemployment already at a record level after surging through the three million mark for the

first time last month. It said 42 per cent of firms surveyed expected to cut jobs in the next four months and only 6 per cent were likely to take on workers.

The survey also showed that 77 per cent of firms were still operating below full capacity, and one C. 8.1. economist described the economic scene as "flat as a pancake.” The C. 8.1. said that the only encouraging signs were a slight boost to business confidence and stronger investment intentions, pointing to a modest economic pickup at least nine months away.

Adding to Mrs Thatcher’s embarrassment, a senior Minister earlier gave a bleak assessment of the economy, saying that living-standards could ony fall. Francis Pym, leader of the House of Commons, said the country would have to struggle “just to hold on to

something like our present living standards." His remarks, which are likely to increase pressure within the Conservative Government for a reflationary Budget next month, clearly irked Mrs Thatcher. Official sources said the speech had not been cleared in advance by the Prime Minister and she did not share its gloomy assessment of the economy. The trade union movement yesterday joined the clamour to boost State spending and reflate the economy, stem unemployment and get Britain back on the road to prosperity. The Trades Union Congress, in what it billed as its programme for recovery, called for an £8.3 billion (SNZI9 billion) economic package. It said this would create 677,000 jobs, boost growth by 3.7 per cent and add only 1.1 per cent to inflation—at present 12 per cent.