HC Deb 09 March 1981 vol 1000 cc608-9
13. Sir David Price

asked the Secretary of State for Industry what is his latest estimate of the likely trends in manufacturing output through 1981.

Mr. MacGregor

I am afraid that I must ask my hon. Friend to wait until tomorrow, when the latest forecast of manufacturing output will appear in the Financial Statement and Budget Report. Until then I have nothing to add to the answer given to him on 12 January.

Sir David Price

In anticipation of tomorrow's statement, does my hon. Friend agree that the only people who can safely secure a reflation in the Western World economies are the fat cats in the Middle East? Within that context, does my hon. Friend agree that the time has come for the Government to concentrate a little more on the public sector capital investment programme and that this would be of substantial help to manufacturing industry, without being inflationary? Will my hon. Friend bring forward some major programmes along those lines?

Mr. MacGregor

If by his first remark my hon. Friend means that the doubling of oil prices over the past 18 months has been a material factor in the present world recession, I agree with him. I have noted his comments on the second point, but he will understand why it is not possible for me to say anything today.

Mr. Sheerman

Is the Minister aware that tomorrow's statement is hardly necessary, because every independent body has forecast a catastrophic decline in output and industrial production next year? Will the hon. Gentleman convince his right hon. and hon. Friends on the Treasury Bench that new initiatives are necessary, before it is too late to save British Industry?

Mr. MacGregor

I think it would be right to say that quite a lot of what has been happening over the past 18 months has been beneficial for the future competitiveness of British industry. British industry wants most of all to see a reduction in interest rates, which will depend on the ability to contain public expenditure, an action for which it also calls. That is the direction in which the Government are aiming.

Mrs. Kellett-Bowman

Bearing in mind that we shall have known long before tomorrow how savagely the North-West has been hit by the decline of manufacturing output in the textile and footwear industries, does my hon. Friend agree that the North-West should receive a higher proportion of United Kingdom and EEC regional aid?

Mr. MacGregor

My hon. Friend knows that the purpose of regional policy is to assist areas that have particularly high levels of unemployment. As was made clear in earlier answers to questions, the Government look at the overall position in relation to regional aid and assisted area status, but there must be significant evidence of long-term change in any particular area before that status is changed.

Mr. Orme

Will the Minister acknowledge that much of the responsibility for what has happened during the past 18 months lies at the door of his Department? It is no good his putting that off until tomorrow's Budget Statement. We have seen the reports by the TUC and the CBI, which make a gloomy forecast for industry in 1981. What action will the Minister and the Secretary of State take?

Mr. MacGregor

I have already indicated that what can eventually be done on interest rates at some point will be of considerable assistance. Some of the reports that have been made in the past few weeks in relation to the Budget Statement have urged much higher Government expenditure and a much larger public sector borrowing requirement, but that would not be in the interests of manufacturing industry because it would add significantly to levels of inflation, when inflation is falling in accordance with one of the major desires of British industry.