HC Deb 18 April 1983 vol 41 cc8-9
8. Mr. Knox

asked the Secretary of State for Industry what is the most recent figure for output in manufacturing industry; and how this compares with the figure for the same month in 1974.

The Minister for Industry and Information Technology (Mr. Kenneth Baker)

In the three months ended February of this year the index of manufacturing production is provisionally estimated to have been 88.6, 1 per cent. higher than in the previous three months. A comparable figure for the three months ended February 1974 is 105.5.

Mr. Knox

Does my hon. Friend agree that the fall in manufacturing output that has taken place under both this Government and the Labour Government is a national disgrace? To what does he attribute it and what steps do the Government propose to take to ensure that output rises to take up the slack in manufacturing capacity?

Mr. Baker

The decline in manufacturing output is a phenomenon but has affected not just the British economy, it has affected Western economies across the world. My hon. Friend will know that last month's Budget provided specific assistance to industry of about £750 million and that we also launched the successful small engineering firms investment scheme.

Mr. Geoffrey Robinson

Does the Minister agree that that is a grossly complacent reply to a serious question? The drop of 17 per cent. in manufacturing output over that period represents nothing less than a national catastrophe. We hear of the upturn that is all around us and which was confirmed by the Secretary of State again today. When will the Government give a commitment to get remotely back to the level of industrial output that existed when they took office?

Mr. Baker

I am delighted to hear the hon. Gentleman refer to the upturn. Industrial production, extending just beyond manufacturing output, rose by 1 per cent. in February to 103.6 per cent. and in the three months to February it rose by 1.5 per cent. and is some 2.5 per cent. higher than it was a year ago. That is further evidence that we are pulling out of the long winter of the recession.

Mr. Adley

In answering the question of my hon. Friend the Member for Leek (Mr. Knox), will my hon. Friend take this opportunity to say something from the Dispatch Box about the importance of the service sector in our economy? Does he agree that—

Mr. Speaker

Order. The question is about manufacturing industry. There should be a separate question on service industry.

Mr. Baker

The manufacturing sector provides jobs for the service sector. For example, retail sales last month were some 4.5 per cent. higher than they were a year ago. One cannot draw distinctions, in fact, the service sector is becoming a much more important element in our economy than traditional manufacturing.

Dr. John Cunningham

Is it not a deception for the Government to talk about a recovery when manufacturing output is at a 17-year low and when they have the worst output record of any Government for a long time? The Minister talks about a recovery. Have we not heard that before from the Prime Minister, the Chancellor of the Exchequer, the Chief Secretary and the Secretary of State for Industry? Have they not all simply been misleading the country? Where is the manufacturing recovery taking place? Is it coming in textiles, steel, paper, shipbuilding or engineering?

Mr. Baker

I am only too pleased to tell the hon. Gentleman. There are unmistakable signs that the recovery is taking place. Retail sales are 4.5 per cent. higher than they were a year ago and housing starts are 30 per cent. higher. Car sales for the first quarter of this year are 21 per cent. higher than they were last year. The trouble with the Labour party is that it has been so preoccupied with blaming the Government for the world recession that it has failed to recognise that the Thatcher recovery in Britain is now under way.