HC Deb 14 June 1982 vol 25 cc592-4
2. Mr. Gwilym Roberts

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

The Minister of State, Department of Industry (Mr. Norman Lamont)

In the first quarter of 1982 the index of production for manufacturing was 89.8 compared with 103.0 in the first quarter of 1979.

Mr. Roberts

Does the Minister accept that when North Sea oil is no longer available the British ecomomy will depend on the output of British industry? Is the hon. Gentleman as frightened as I am about the appalling figures of output, which is at its lowest level for about 13 or 14 years?

Mr. Lamont

The hon. Gentleman has asked me to look a long way ahead, because North Sea oil is destined to last for about 20 to 25 years. The hon. Gentleman knows that industrial output in almost all countries has fallen during the recession. Over the past year British manufacturing output, when compared with the previous year, has risen faster than that of France, the United States or the OECD average. Is it any wonder that an independent survey in the United States has stated that Britain is one of the first countries to lead the way out of the recession?

Mr. Stokes

Does my hon. Friend agree that all the industries supporting the task force in the South Atlantic are setting a marvellous example for the rest of British industry and are showing that if Britain has sufficient determinination there is nothing that it cannot do?

Mr. Lamont

My hon. Friend is right. There have been some remarkable achievements by British industry, not least in the shipbuilding industry, in getting ships ready very much to time and to cost. One wishes that the achievements in defence supplying industries, which have been so obvious during the past few weeks, could be secured in normal times as well.

Mr. Geoffrey Robinson

Rather than fobbing off the House with meaningless prospectuses for manufacturing industry, will the hon. Gentleman confirm that manufacturing output is now lower than it was during the period of the three-day working week? Will he give a meaningful statistic to the House by telling it precisely when he thinks manufacturing output will rise to the level that the Government inherited?

Mr. Lamont

In many countries manufacturing output is lower now than it was in 1979. There has been a world recession. Over the two halves of last year manufacturing output rose, company profits increased by 25 per cent., business confidence, according to CBI surveys, increased, short-time working fell and the rise in unemployment moderated. By any standard a gradual recovery is under way. The Budget forecast is that manufacturing output this year will rise by about 3 per cent. We believe that a gradual recovery will take place.

Mr. Forman

Will my hon. Friend confirm that within the somewhat disappointing aggregate figures there are some rays of hope if the figures are considered sector by sector?

Mr. Lamont

My hon. Friend is right. Private house building figures and electrical engineering output are at higher levels now than in 1979. According to CBI and departmental surveys, there are good prospects for the chemical sectors, the food and drink industries, mechanical engineering, pottery, timber, paper and printing. There are sectors where the outlook is less promising, but it is idle to pretend that there are not sectors where recovery is imminent.

Mr. Orme

Where are the signs of revival that were heralded by the Government at the beginning of the year? We have stagnation and the Government are pursuing a monetarist policy. What action did they advocate at the recent meeting of the seven nations at Versailles? Did they make any positive proposals?

Mr. Lamont

Does the right hon. Gentleman not think that there is some evidence of recovery in the fact that manufacturing output is 2 per cent. above the level at which it stood during the spring of last year? Company profits have increased and short-term working has fallen.

As I have said, the rise in unemployment is moderating. These are definite signs of recovery, and that cannot be denied.