HC Deb 18 May 1981 vol 5 cc2-3
4. Mr. Marlow

asked the Secretary of State for Industry when he expects an increase in industrial activity.

The Secretary of State for Industry (Sir Keith Joseph)

I expect a recovery in industrial output to commence some time this year. It may already have begun. The latest available index of industrial production, for February, was 1 per cent. higher than in January, but one month's figures are not, of course, sufficient to establish a trend. A sustained increase in industrial activity can be achieved only through improved competitiveness, wage moderation, good management and co-operative working practices.

Mr. Marlow

If money could be saved by cuts in headquarters staff and senior civil servants within the Ministry of Defence, thereby reducing interest rates and the taxes imposed upon industry, could industrial activity increase at an even faster rate?

Sir Keith Joseph

Conditions which favour lower interest rates are obviously favourable to industry.

Mr. Woolmer

Has the Secretary of State seen the report of the Charterhouse banking group, referred to in The Times today which says that output is expected to decline by 3 per cent. this year, and that an upturn will not come at least until next year, and that that depends on a change in Government policies? When will the Government institute a change in those policies and prevent unemployment from going well over 3 million, let alone over 2 million?

Sir Keith Joseph

The hon. Gentleman can take his choice among the various forecasts, but unemployment flows far more from trade unions pricing their members and others out of jobs than from anything that is within the Government's power.

Mr. Moate

Will my right hon. Friend agree that one of the things that could act as a major impediment to any upturn in industrial activity is high industrial energy costs? Will he accept that there is ample evidence that the hoped-for benefits from the Budget are not getting through to many major energy users in industry? Will he look at the question again?

Sir Keith Joseph

I am symphathetic to one aspect of my hon. Friend's question but I cannot agree that nothing else could be more prejudicial to industrial output. If the cure for high energy costs were to add to inflation or interest rates, that would be equally damaging to industry, if not more so.

Mr. Orme

Will the Secretary of State give us examples of high wages creating unemployment? Does he agree that Government policy is not working and that there is no possibility of a reduction in unemployment at the moment? What action do the Secretary of State and the Government propose to take?

Sir Keith Joseph

Unemployment, which has risen so fast in this country, largely reflects the uncompetitiveness accumulated over recent years, particularly due to wage pressure unaccompanied by the higher productivity which our competitors have established.