§ 9. Mr. John Grantasked the Secretary of State for Industry what has been the overall percentage reduction in British manufacturing output since mid-1979; and what are the comparable figures for each of the other European Economic Community countries, the United States of America and Japan.
§ The Under-Secretary of State for Industry (Mr. John Butcher)In the third quarter of this year the index of production for manufacturing was 15 per cent. below its average level in 1979. A table containing comparable figures for other countries will be published in the Official Report.
§ Mr. GrantDoes not that answer in effect represent an utter condemnation of Government policy? Will the Minister confirm that the country is heading fast for its first peacetime trade deficit in manufactured goods for more than a century? Are not Ministers ashamed to be presiding over that state of affairs?
§ Mr. ButcherThe condemnation should go back more than the last three years. The hon. Gentleman will be aware, for example, that in 1976 his erstwhile colleagues in the Labour Party published a confidential report which extracted the trends for the 12 years up to that period and said that there could be 2.5 million people unemployed in 1980. The hon. Gentleman will know why that projection 9 was made. We have developed a mismatched economy over the past 20 years, producing goods for which there is low demand and not producing enough goods for which there is high demand. It will take a very long time to solve that problem, but I believe that, with a second term of office, this Administration will do it.
§ Mr. ChapmanIf the reduction in our manufacturing output is worse than in the other countries mentioned in the original question, is not a significant reason for that the fact that our output per man is much more inefficient? How has output per man increased in, say, the last three years? If it has increased appreciably, does that not augur well for British industry when the recession ends?
§ Mr. ButcherNo doubt my hon. Friend will be aware of what has happened to the French and British economies since President Mitterrand took office. He will know, for example, that unit labour costs in France increased by 13 per cent. in the first year of the President's term of office, and that in the United Kingdom the comparative figure was 5½ per cent. I ask the House to consider the effect of those trends when mirrored under a Wilsonian Administration for a long time and their effect on our economy. My hon. Friend is right when he says that unit labour costs in this country have been a sad story for a long period.
§ Dr. John CunninghamAfter listening to the Under-Secretary's answer one would think that the Government had only just taken office, not that they had been in office for three and a half years. As investment and orders, particularly export orders, are still going down, will the hon. Gentleman tell us when he expects to see a reversal of that disastrous industrial decline?
§ Mr. ButcherThe hon. Gentleman should not pretend that things that take place in macroeconomic policy have an immediate effect. I assume that he has never pretended that. The hon. Gentleman should also remember that the development of our mismatched economy has been two decades in the making, and he and his colleagues cannot disclaim all responsibility for those developments.
§ Following is the table:
| Indices of Production for Manufacturing | |
| Percentage change: latest three months on 1979 | |
| United Kingdom | -15 |
| France | - 4 |
| West Germany | - 5½ |
| Italy | + ½ |
| Belgium | - 2½ |
| Netherlands | + 1 |
| Luxembourg | -11 |
| Denmark* | + 2½ |
| Ireland | + 1½ |
| Greece | - 5½ |
| United States of America | -10 |
| Japan | +11 |
§ * Index of volume of sales.
§ Source: CSO and OECD (Monthly Economic Indicators).