HC Deb 02 August 1976 vol 916 cc1198-200
15. Mr. Adley

asked the Secretary of State for Industry what steps he intends to take to raise the level of industrial production.

Mr. Alan Williams

Industrial production is already rising, mainly in response to export demand. We have already taken a number of steps to put firms in a better position to take full advantage of the upturn.

Mr. Adley

In view of the Government's outstandingly successful employment policies, which have given us unemployment at record levels, why does the Minister think that the level of industrial production now appears to be lower than it was during the three-day working week?

Mr. Williams

The hon. Gentleman seems to overlook the fact that the world has gone through its worst recession since the war, and obviously we could not escape that. Of course, in that context, manufacturing investment has fallen, but at the moment the output is showing signs of increasing. In the second half of this year—and certainly next year—we expect to see an increase in investment.

Mr. Dalyell

In order to take advantage of the upturn, what is being done to identify potential bottlenecks?

Mr. Williams

Bottlenecks have particularly attracted attention in the context of the sectoral studies within the NEDC. The Department is now following up the recommendations of those studies to see what action can be taken to eliminate bottlenecks. In addition, we have also established certain industry schemes which are working towards that objective, as indeed is the Accelerated Projects Scheme.

Mr. Nelson

Will the Minister now explain why the Government have deliberately chosen to follow a policy of confrontation with industry by introducing the employment tax—the payroll tax—last week? Does he recognise that that alone will substantially undermine the opportunity for industry to invest, and seriously debilitate the prospects of those industries employed in the export field not passing on the extra costs that this tax will impose on them?

Mr. Williams

If this is what the hon. Gentleman calls confrontation, he must call the situation that his Government produced outright war.

Mr. Robinson

Is my hon. Friend aware that we on the Government Benches are sick and tired of the ignorance of Conservative Members, at a time when manufacturing industry is paying no mainstream corporation tax, when its gearing is at an all-time low, and when it is flush with cash and has access to enormous funds which would enable it to get that investment up and industrial production up? Will he therefore take that up as a matter of urgency with the CBI?

Mr. Williams

I have no doubt that what my hon. Friend has said will be noted with interest by those who speak on behalf of industry. I re-emphasise what my right hon. Friend the Secretary of State has said, namely, that we believe that, on reflection, looking at the package as a whole, the CBI will realise that it has over-reacted. We hope that Wednesday's NEDC meeting will clear the air.

Mr. Heseltine

When he is thinking about the question of ignorance of facts, will the Minister remind the hon. Member for Coventry, North-West (Mr. Robinson) that after the last two years of Labour Government the balance of corporate strength is negative in British industry?

Mr. Williams

I am sure that my hon. Friend will have noted that comment, for what it is worth.