The Chancellor reminisced that he had watched England beat Germany in the 1966 World Cup final. Despite that victory, he said, the economy had gone into decline under the management of Harold Wilson. At least, if the national team failed to win Euro 96, we would have the consolation of beating Germany on the economic front.
Here is one facet of their war on Europe on which Conservatives can actually agree. Rejoice! Three decades after that glorious sporting victory at Wembley, Britain is once again doing better than Germany at something. The Kohl dole queue is growing as fast as ours shrinks, and the boffins all agree that the UK will enjoy faster growth this year than any of the other big European economies.
What was more, Mr Clarke claimed in his set-piece speech, this was a better British recovery than normal. Inflation had fallen to the lowest for a generation. Growth was steady and sustainable.
But Mr Clarke's claim to success in the management of the economy now rings very hollow. Put to one side the fact that it is well over two years since the Government last met the 2.5 per cent inflation target it set itself in the aftermath of Black Wednesday, and forget that the inflation rate is higher than that in most other European countries. Overlook our cheery Chancellor's refusal for nearly half a year to take the Bank of England's advice to increase the cost of borrowing, raising a tiny suspicion that he is engineering a pre-election boom.
Look instead at the Conservatives' record on growth - on how fast the amount the nation produces and earns increases year after year. The popular way of assessing this is to look at the UK's position in the league table of Gross Domestic Product per person. One thing is for sure: Germany is still ahead of us in this league. But are we catching up or lagging further behind?
The answer depends on the years between which the comparison is made. New research by the Labour-leaning Institute for Public Policy Research shows that between 1990 and 1996 only two countries - Finland and Sweden - fell more places in the international GDP league than the UK. Germany climbed five places to number 11, while the UK fell three to number 20, overtaken by Ireland, the Netherlands and, outside Europe, Australia.
On the other hand, a recent pamphlet for the Social Market Foundation, by the economic historian Nick Crafts, showed an improvement if the entire post-1979 period is compared to 1950-73. The average UK ranking advanced from 22nd out of 24 countries to 14th out of the same two dozen.
The fact is that most mature industrial economies grow at very similar rates. It is the "2 per cent rule". On average since the end of the Sixties, GDP in these countries has expanded by an average of around 2 per cent a year. It is only younger and more dynamic economies that can grow much faster, as they catch up in levels of output per head.
It is true enough, as the Conservatives claim, that UK growth will be faster than most of the rest of Europe's this year. But next year or the year after, we will be the laggard again. Our business cycle is simply running ahead of the Continent's.
Besides, there is an overwhelming obstacle in the way of a permanent improvement in Britain's economic prospects. This is highlighted by Mr Clarke's pre-election boom. The UK economy is the most unstable of the leading industrial nations. Measurements of the variability of output, inflation, interest rates and government borrowing calculated by economists at Lloyds Bank for the 18 years of Conservative rule put Britain at or near the top of the instability league in all four categories. Other countries that do badly on one measure tend to make up for it on another. So while Austria, the Netherlands and Germany do best overall, Britain comes out worst. This record of instability is, says the bank, "the biggest barrier to faster growth".
And faster growth is needed if a promise made by John Major is to be kept. At the Conservative Party conference in Bournemouth in October 1994, he pledged that living standards would double within the next 25 years. That would require promoting the economy from the 2 per cent path to a 3 per cent path. Growth this election year will beat 3 per cent, but bust will surely follow this boom.
Ken Clarke must be pondering the failure of this carefully-timed economic upturn to deliver better opinion poll results. Since the Government's ignominious exit from the European Exchange Rate Mechanism in 1992, the traditional direct link between confidence in the economy and the Conservatives' poll rating has broken down. The party is being penalised for failing to deliver what, before 16 September 1992, it had insisted was the be- all and end-all of economic policy - a stable exchange rate within Europe.
There has been a new mantra since "Black Wednesday": inflation on target and steady, sustainable growth. The Government has failed to deliver its own targets again, just as it failed even by its own lights in the last economic cycle.Reuse content