HC Deb 22 March 1982 vol 20 cc676-7
11. Mr. Gwilym Roberts

asked the Secretary of State for Industry if he will give the latest figures available for United Kingdom manufacturing industry productivity and total output; what are the corresponding figures for three years previously; and if he will make a statement.

Mr. Kenneth Baker

I will arrange for the figures to be published in the Official Report. They show that productivity in manufacturing industry reached a record level in the last quarter of 1981, while output recovered by about 1½ per cent. between the fourth quarter of 1980 and the fourth quarter of 1981.

We are beginning to see real improvements in productivity, which, if combined with continued restraint in wage settlements, can only strengthen the prospects for British manufacturing industry.

Mr. Roberts

Does the hon. Gentleman agree that, in reality, any increases in productivity have been minimal and that output in manufacturing industry is the lowest for 14 years? As that is the result of the Government's slimming down policies, does the hon. Gentleman accept that the effect of those policies has been to put 2 million more on the dole and to destroy the whole background of British industry?

Mr. Baker

No. The gains in productivity are significant. They were about 9 per cent. last year. Specifically, they were about 8½ per cent. by output per person-hour and 10½ per cent. by output per head. Those figures are not trivial. They are significant, real, tangible and measurable.

Mr. Stokes

As the productivity of British industry improves, will it not thereby become much more competitive and attract more customers at home and abroad? Will the Opposition perhaps remember that industry wants customers, customers and more customers?

Mr. Baker

I agree with my hon. Friend, who has made the point with his usual perception.

Mr. Geoffrey Robinson

Welcome though some signs of an increase in productivity are, does the Minister agree that the facts on the other side of the equation are that we have a 15 per cent. drop in manufacturing output, a 20 per cent. drop in manufacturing investment, and that last year we had, in effect, a net disinvestment in manufacturing, without allowing for leasing, which is marginal in the total? When does he expect to get back to the levels that prevailed in May 1979?

Mr. Baker

The hon. Gentleman cannot have seen the capital investment figures published by my Department last week. Capital expenditure in the last quarter of 1981 was 1½ per cent. up on the third quarter. Manufacturing was plus 1 per cent. and services 1½ per cent. The Opposition must appreciate that when the economy is turning up, and the figures show it, they should welcome it.

Mr. Henderson

Does my hon. Friend agree that an important way of improving productivity further in British industry would be for more manufacturers to buy the brilliant British inventions in robotics, which would give the robotics manufacturers the opportunity to create more jobs for people?

Mr. Baker

Yes, and there is growing evidence that that is happening.

Mr. Orme

The hon. Gentleman referred to the quarterly figures. Will he confirm that they are worse than my hon. Friend the Member for Coventry, North-West (Mr. Robinson) implied just now? Since this Government came to office there has been a 20 per cent. reduction in output in the manufacturing sector at a time when it is 30 per cent. down on investment. Is this not the lesson that the country has to learn?

Mr. Baker

No, Sir. The right hon. Gentleman has overlooked the fact that the fall in manufacturing output last year was halted. Output in the fourth quarter was 2 per cent. higher than in the spring. If the right hon. Gentleman is referring to the very bad months of December and January, he should remember that we had the most severe weather that we have had for many decades. In addition, industrial production was disrupted by the rail strike. We can do nothing about the weather, but we can do something about strikes.

Following is the information:

Seasonally adjusted index numbers Manufacturing industry 1975=100
Output Output per person hour
4th quarter 1978 103.9 107.0
4th quarter 1979 104.5 109.9
4th quarter 1980 88.5 106.9
4th quarter 1981 89.9 116.0

Note: Some indicators within the index of industrial production are based on sales data, which may overstate or understate the level of output. The index numbers used in the table allow for this by adjusting for changes in the level of stocks in these sectors.