Recovery began last summer, Major says: Ministers respond to business critics

THE PRIME Minister and the Treasury defended themselves yesterday against business attacks on their competence, claiming credit for an economic recovery that had started as long ago as last summer, writes Anthony Bevins.

In a clearly inspired intervention during Commons questions, Michael Bates, Conservative MP for Langbaurgh, asked John Major whether he agreed that this week's output figures pointed to 'growth in the UK economy commencing in the middle of last year'.

Mr Major entirely agreed, adding: 'We were elected in the spring and the figures that we now have about growth in the second half of last year show that the recovery began to get under way in the summer.'

The point was further underlined last night in a speech by Michael Portillo, Chief Secretary to the Treasury, who told the North West Institute of Taxation, in Manchester: 'Just as the recession started before we joined the ERM (in October 1990) some recovery was apparently under way before we left (last September).'

Apparently stung by the criticism of Peter Morgan, director-general of the Institute of Directors, who said on Tuesday that any recovery had occurred 'more or less over the dead bodies of Bank and Treasury officials', Mr Portillo said governments could not deliver instant recovery.

'But the argument being made by some that our improvement is in spite of, and not because of, government policy is wrong,' he said.

'It has required an unflinching pursuit of low inflation, which has been difficult and unpopular. Without the achievement of low inflation, there could be no recovery.'

(Photograph omitted)