HC Deb 15 January 1979 vol 960 cc1309-12
13. Mr. Radice

asked the Secretary of State for Industry whether he is satisfied with the performance of manufacturing industry.

The Minister of State, Department of Industry (Mr. Alan Williams)

It is the objective of the Government's industrial strategy to improve the performance of manufacturing industry.

Mr. Radice

Can my hon. Friend give any estimate of the impact of the road haulage strike on manufacturing industry?

Mr. Williams

It is diffcult to do so at this stage. My hon. Friend will have seen the information that was given last week. He will be aware of the possible magnitude of the jobs loss that is involved, but at present we are still collecting the necessary information through our regional offices.

Mr. Brooke

Is the Minister of State satisfied with the level of investment in manufacturing industry, both in the past year and for the year to come?

Mr. Williams

Yes. I am satisfied, in the circumstances. The hon. Gentleman may be aware that investment in the private sector, excluding iron and steel, increased by 13 per cent. during 1977. It increased by 15 per cent. in the first half of last year. We have not had the final outturn figures, but if one adds on the 10 per cent. that now probably goes via the servicing sector, because of the development of leasing agreements, the probability is that this year we shall have investment back to the peak levels of 1970, an attainment never achieved under the Conservative Party.

Mr. Madden

Does my right hon. Friend agree that there are no instant solutions for improving the performance of manufacturing industry? Does he also agree that if the recent proposals by the Leader of the Opposition were implemented we would be likely to see a worsening of industrial relations, an increase in strike action and dislocation of industry, about which the Opposition are supposedly so distressed?

Mr. Williams

Indeed. I doubt whether there is anyone in the House of Commons who bears more responsibility for the situation in which the country now finds itself than the right hon. Lady. In the early stages of the pay round she tramped round the country urging a return to a free collective bargaining scramble, and this is the situation that she is likely to have engendered.

Sir Keith Joseph

Does not the Minister of State remember that his right hon. Friends the Chancellor of the Exchequer and the Prime Minister both said last year that we were returning to free collective bargaining? Can the Minister explain why, after a strong surge in productivity in the years 1970 to 1974, productivity has sagged deplorably during the past five years, during which output per man hour in manufacturing —the heart of the question being put to him—has been only a quarter of that in Germany and France, while their unemployment record has been better than ours? Is not the explanation that the Government have created an economic climate which is totally hostile to the growth in productivity which must lie behind increases in real earnings and in social benefits?

Mr. Williams

The right hon. Gentleman should go back to his work bench and reconsider the figures. Since 1975 productivity has increased by 13 per cent. Between the fourth quarter of 1977 and the second quarter of 1978, it increased by 4} per cent. I draw his attention to an article inThe Dresdener Bankin August last year, which shows that unit labour costs in Britain are the lowest in Europe. They are 83 per cent. of those in Germany. Unit labour costs are what productivity is all about. The right hon. Gentleman referred to that in his supplementary question. They are lower here than in Germany and lower than in Japan.

Sir K. Joseph

The Minister of State should not try to escape by mixing up and confusing the essential figures. Unit labour costs may be low because real pay in this country is low. Can the Minister of State explain why, apart from the explanation that I have given of a bad economic climate created by the Government, figures of the National Institute of Economic and Social Research and of the United KingdomEconomic Trendsannual supplement show that our increase in output per man hour in manufacturing—the very subject on which the Minister is answering—has been one quarter of that in Germany, France—

Mr. Speaker

Order. The right hon. Gentleman will, I know, bring his question to a conclusion as quickly as he can.

Mr. Williams

The right hon. Gentleman asked his original question about productivity. I gave him an answer on productivity and indicated a 13 per cent. increase.

Mr. Pardoe

Can the Minister of State say what real wealth was created by British manufacturing last year and What real new wealth it expects to create this year in percentage terms? How much of this does he think should go into investment, and therefore how much will be available for real increases in wages?

Mr. Williams

I need notice on the first detailed question, because I do not have those figures available. I agree with what I believe is the intent of the hon. Gentleman's question namely, that as high a proportion as possible of the real wealth should go back into investment. Private sector industry tends to put about two-thirds of its profits back into the company. The figures that I gave earlier of an increase in investment were in real terms. We are virtually back to the level of 1970, and that was never achieved under the Tories.

Mr. Litterick

Is my right hon. Friend aware that the performances of the British nuts and bolts industry and of the British Steel Corporation have been severely damaged in one case and significantly damaged in the other by the importation of nuts and bolts manufactured from cheap steel produced by Common Market steel producers who are consistently violating their own Common Market rules? Can he tell the House what representations his Department is making, if any, to Common Market institutions to bring this damaging practice to an end?

Mr. Williams

This matter has been raised by my right hon. Friend the Minister of State as recently as last month in Brussels.