Manufacturing Output

HC Deb 12 July 1982 vol 27 cc627-8

1. Mr. Dubs

asked the Secretary of State for Industry what are the latest figures for the output of British manufacturing industry; and how this compares with 1979.

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

In the six months to March 1982 manufacturing output stood at 90, taking 1975 as 100, compared with 89.2 for the previous six months. The figure for 1979 as a whole averaged 104.4.

Mr. Dubs

In view of the gloomy figures that the Secretary of State has just given and the depressing economic forecasts, three of which were in the Financial Times this morning, does the Secretary of State hold out any hope for a recovery in British manufacturing output over the next two years?

Mr. Jenkin

Yes, Sir. The consensus of all the major surveys in the country is of a modest increase in output for the rest of 1982, and a further increase in 1983. I stress that, apart from the Liverpool forecast, which stands out on its own, the forecasts do not suggest that it will be substantial. That will be won only when we have recovered much of the competitiveness that we have lost in the past few years.

Mr. Stokes

Does my right hon. Friend agree that the output of British industry could be far higher if there were greater demand for its products in the home market? Does not import penetration still present a grave challenge to our manufacturers, who are becoming, but ought to be, more competitive?

Mr. Jenkin

My hon. Friend is absolutely right. People complain about a lack of demand in the home market for consumer goods, but let them look in the shops and see from where the goods are coming that most people are buying. There is no lack of demand for goods. The lack of demand is for the products of many British factories—by no means all—because they are not yet as competitive as they could be.

Mr. John Garrett

What does the Minister think about the OECD outlook for July? It points out that output has fallen more in Britain than in any other OECD country during the recession and that there is no prospect of closing the gap between our dismal and their more hopeful economic performance.

Mr. Jenkin

The OECD is taking an unduly pessimistic view of the prospects for the economy. We shall have an opportunity to explore this matter in greater depth on Wednesday, because the Opposition have chosen industry as a Supply day subject. Over the past 12 to 18 months there has been a remarkable advance in industrial productivity. We have achieved a substantial improvement in the rate of increase of unit labour costs, and we have regained a significant part of the competitiveness that we lost in the previous five years, but we have a great deal further to go before we regain all our competitiveness and compete on equal terms with our neighbours.

Several hon. Members

rose—

Mr. Speaker

Order. Answers are very long today. We shall have to do better if we are to have more questions.

Mr. Beaumont-Dark

Does my right hon. Friend agree that manufacturing industry is delicately poised for a recovery that we still hope is to come? That being so, will he urge the Chancellor of the Exchequer, if he is planning to raise extra money to meet the cost of the Falklands campaign, to bear in mind the delicate state of our industry and the fact that it cannot bear any further taxation if it is to survive?

Mr. Jenkin

I am sure that my right hon. and learned Friend the Chancellor of the Exchequer will take careful note of what my hon. Friend has said.