§ 9. Mr. Knoxasked 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 1979.
§ Mr. Kenneth BakerIn the three months August to October 1982 the index of production for manufacturing industry was 88.3, compared with 101.9 in the same three months in 1979.
§ Mr. KnoxDoes my hon. Friend agree that output in manufacturing industry will rise only when the demand for its output is increased? To what extent does he expect demand for manufactured goods to increase as a result of the recent welcome change in the exchange rate of sterling?
§ Mr. BakerThe recent sharp drop in the value of sterling—it has dropped against the deutschmark and the French franc by about 12 per cent. in 10 weeks and by about 19 per cent. against the yen—will improve the competitive position of many British manufacturing firms that export. They must now make the most of this change in the value of sterling.
§ Mr. Ioan EvansIn the light of the Minister's reply and the fact that 2 million jobs have been lost in manufacturing industry in recent years, are not the Government showing scandalous complacency about manufacturing industry? Is the Minister satisfied that for the first time since the industrial revolution we are importing more manufactured goods than we are exporting?
§ Mr. BakerThe hon. Gentleman exaggerates. Throughout the Western world the share of each economy's output that is devoted to manufacturing is declining in terms of employment. In my view, that will continue for some time to come and it would be quite unrealistic for any Minister not to agree with that. We have many measures, in the Science and Technology Act and in the Industry Act, to support and encourage British manufacturing industry.
§ Mr. Teddy TaylorWill my hon. Friend say whether there is a section in his Department that keeps a close watch on our existing manufacturing enterprises being transferred to other nations by appallingly high subsidies, which appear to be in breach of almost every international agreement? Will he look, in particular, at the remarkable case of the transfer of Timex operations from Dundee to France and find out whether the subsidy offered is in breach of the rules, as appears to be the case? Will he consider having a section to watch this matter carefully?
§ Mr. BakerWe monitor changes of that nature, particularly dramatic ones such as the one my hon. Friend mentions. I have already asked for an inquiry to be put in hand into the nature of the incentives that were offered to part of the Timex company's operations to set up a manufacturing unit in France. If the incentives exceed those that are approved in the Common Market, we shall make the strongest possible protest.
§ Mr. BakerThere is to be a debate on Wednesday, when the Chancellor and the shadow Chancellor will speak. I should like to make clear that the adjustment—
§ Mr. James LamondAdjustment?
§ Mr. Baker—in the value of sterling creates for British companies that are exporting an opportunity to 11 export more. To that extent, the adjustment in the value of sterling will benefit British companies that are involved in the export of goods.