HC Deb 15 July 1982 vol 27 cc1162-3
12. Mr. Adley

asked the Chancellor of the Exchequer if it is his policy to seek to make investment in the service sector as attractive as investment in the manufacturing sector; and if he will make a statement.

Mr. Bruce-Gardyne

The Government's economic policy aims at providing the right background for profitable investment by companies, whether in the manufacturing or the service sector. But the key to investment, as my hon. Friend will know, is profitability. That, in turn, depends substantially on productivity and sensible wage bargaining, which is not in the gift of this or any Government.

Mr. Adley

My hon. Friend will know of my interest in the service sector. Will he confirm that the Government recognise that £1 of overseas earnings from, say, tourism or airlines, is just as valuable to the economy as £1 of overseas earnings from manufacturing industry? Are the Government convinced that the service sector is just as important as the manufacturing sector to the economy of this country?

Mr. Bruce-Gardyne

Yes, the Government accept that. Our general policy has been to avoid introducing new measures that discriminate in favour of specific industrial sectors. The measures introduced by my right hon. and learned Friend in the 1982 Budget that were designed to help business—the NIS changes—and the measures designed to encourage enterprise and innovation, do not discriminate between specific sectors of industry. I can assure my hon. Friend that the Government have no desire to have a pecking order in manufacturing and service industries.

Mr. Skinner

Will the Minister consider the problems of investment in the service industries, in particular those relating to shipping? Will he condemn Lord Matthews, Trafalgar House, Cunard and all others involved in refusing to place an order with British shipyards for the replacement of "Atlantic Conveyor", using British steel? What representations, investment encouragement or other assistance is the Minister giving to see that that takes place?

Mr. Bruce-Gardyne

I am not entirely clear how that arises from the original question. The shipping industry must live in an international climate and if it is obliged, or persuaded, to purchase new equipment at a higher price than that which its overseas competitors pay, its ability to compete will be reduced and in the long term the industry and the country suffer.

Mr. Nicholas Winterton

Although I do not underestimate the importance of the service industries, will my hon. Friend reconsider his remarks to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) and admit that manufacturing industry is the real wealth creator? In an effort to slow down the increase in unemployment, and perhaps reduce it, will he ensure that our manufacturing industry does not suffer from unfair competition, not only from the developing countries, but from developed countries in the European Community?

Mr. Bruce-Gardyne

I agree that one of the duties of the Government is to ensure that our industries do not suffer from genuinely unfair competition. Where there is evidence of genuine unfair competition, it is the Government's duty to take countervailing action. That is accepted. However, I do not agree with my hon. Friend's assumption that there is a wealth-creating aspect in manufacturing industry that does not apply to the service industries.