HC Deb 06 April 1981 vol 2 cc669-70
3. Mr. Stoddart

asked the Secretary of State for Industry what estimate he has made of the decline in output in manufacturing industry in the last 12 months.

The Minister for Industry and Information Technology (Mr. Kenneth Baker)

Manufacturing production in the 12 months to January 1981 was about 11 per cent. lower than a year earlier.

Mr. Stoddart

Is that not frightening and disgraceful? Is it not a condemnation of the policies followed by the Government since they were elected in 1979? Will the Minister now take up the TUC's demand for additional public expenditure and reflation of private demand? Will he also try to ensure that our oil revenues are used for manufacturing investment to protect us when the oil supplies run out? It would be far better—

Mr. Speaker

Order. The hon. Gentleman has asked three questions and was getting on to his fourth. Perhaps the Minister will answer on what he has been asked so far.

Mr. Baker

I do not agree with many of those comments. It was not lack of demand that led to the drop in manufacturing last year. Consumer demand was buoyant last year, as the figures show. The central reason for the drop in manufacturing was that destocking in 1980 amounted to £2,000 million. That is the largest recorded drop in our history. All those in the chain—retailers, wholesalers and manufacturers—are holding less stock.

Mr. Robert Taylor

How valuable and accurate are these statistics? A company in my constituency has reduced its work force by 20 per cent. but maintained the same productivity. Does its productivity count as stagnant, or as having increased by 20 per cent.?

Mr. Baker

My hon. Friend has put his finger on an important point. What he describes as happening to a firm in his constituency is common throughout industry. The statistics lag behind events. It is difficult to estimate what is happening to productivity.

Mr. Orme

Does the Minister agree that 750,000 jobs have been lost in manufacturing industry alone in the past 18 months? That is serious for industry. In view of mounting opposition to the Government's policies, confirmed recently by the Bank of England, which said that no upturn seemed likely in the near future, what do the Government propose to do?

Mr. Baker

If the right hon. Gentleman is urging us to change course and to abandon our determination to deal with inflation, I do not accept his recommendation. If we abandon that strategic objective, we shall never break out of the cycle of increasing inflation and unemployment.

The business survey that appeared in the Financial Times this morning showed that the recession is slowing and that in certain areas there is a pick up in demand. That supports the latest CBI "Monthly Trends Inquiry"—[Interruption.] I hope that the right hon. Gentleman will welcome good news when he hears it.