HC Deb 22 February 1982 vol 18 cc575-6
4. Mr. Winnick

asked the Secretary of State for Industry what has been the decline in manufacturing production since May 1979; and when he now expects to see a revival of manufacturing production.

5. Sir David Price

asked the Secretary of State for Industry what are the prospects for United Kingdom manufacturing output during 1982.

The Secretary of State for Industry (Mr. Patrick Jenkin)

In the fourth quarter of 1981 manufacturing output was 16 per cent. below the level of the second quarter of 1979, but 2 per cent. higher than in the second quarter of 1981.

The latest Treasury assessment suggests that the improvement which began last year will continue during 1982.

Mr. Winnick

Is the right hon. Gentleman aware of the dramatic decline in manufacturing production since the Government took office, and that the December figure was the lowest since monthly figures were first calculated? Do not those factors show only too well the tragic decline that has occurred under this Government's economic policies? Do not the figures illustrate once again how justified have been the pessimistic speeches of a number of the right hon. Gentleman's Cabinet colleagues and show that recovery is not round the corner but very far away?

Mr. Jenkin

I am sure that the hon. Gentleman is aware that the whole Western world has been going through the deepest recession since the war.

Mr. Orme

We are the worst.

Mr. Jenkin

I remind the right hon. Member for Salford, West (Mr. Orme) that unemployment last year in Germany, Sweden, the United States of America and Canada rose substantially faster than it did in Britain. All the evidence now suggests that we reached the trough of the recession during the middle of last year and that the index of industrial production in the last quarter of 1981 was some 2 per cent, higher than it had been in the second quarter. There is every prospect that this improvement will continue.

Mr. Stokes

Is my right hon. Friend aware that manufacturing output in the United Kingdom will increase only when more customers at home and abroad wish to buy our products?

Mr. Jenkin

My hon. Friend has stated an obvious truth with admirable clarity.

Mr. Orme

does the Secretary of State agree that the December figures for manufacturing output had declined to the lowest level for 15 years and by 2.4 per cent. in December alone? Is that not a disastrous state of affairs and does it not contradict the confidence that the right hon. Gentleman has been expressing in previous months? What action will the Government take? My hon. Friend the Member for Jarrow (Mr. Dixon) referred earlier to the order for the P and O liner. What action will the right hon. Gentleman take to secure that order for British shipyards?

Mr. Jenkin

The right hon. Gentleman seems to have forgotten that the December blizzards were some of the worst winter weather since the late 1800s. If he imagines that in Britain, where we are not accustomed to such severe weather conditions, industrial production can remain unaffected, he is living in a dream world.

The right hon. Gentleman referred to the P and O liner order. British Shipbuilders' yards are now fully booked with orders. That order has not come to British Shipbuilders because British Shipbuilders was not able to deliver in the time required by the customer. British Shipbuilders' merchant shipbuilding order book is increasing. I should have expected the Opposition to be delighted to know that the merchant shipbuilding yards of British Shipbuilders are now fully occupied.

Mr. Grylls

Does my right hon. Friend agree that a most important achievement of British industry in the past year to 18 months has been a great improvement in productivity, and that, as the world comes out of recession, this should lead to more orders for British firms and therefore greater output?

Mr. Jenkin

My hon. Friend is right. The figures show that the increase in exports currently taking place is one of the most encouraging phenomena that we have seen for a long time. We are on the verge of an export-led boom—[Interruption.] Perhaps I should rephrase that. We are on the verge of an export-led recovery for which successive Governments ever since the war have striven. I congratulate British industry on having secured an unparalled number of major industrial orders from foreign customers. That is the best harbinger for the future.