HC Deb 29 June 1983 vol 44 cc563-4
4. Mr. Lofthouse

asked the Secretary of State for Trade and Industry to what extent the competitiveness of British industry has changed since May 1979.

The Minister for Information Technology (Mr. Kenneth Baker)

According to IMF figures, United Kingdom manufacturing industry's relative unit labour costs were 22 per cent. higher in the fourth quarter of last year compared with the second quarter of 1979, but this figure masks the substantial improvement of about 15 per cent. between early 1981 and the fourth quarter of last year.

Mr. Lofthouse

Does the Minister agree that the competitiveness of British industry has declined by one third since 1979, partly due to the high exchange rate? What do the Government intend to do about that?

Mr. Baker

The factors relating to productivity and competitiveness are very great. The exchange rate has certainly had an effect and its relative decline since 1981 has affected competitiveness. The competitiveness of British industry, however, lies essentially in the management and hands of British industry. That is the only way in which to retain our world share of trade.

Mr. Budgen

Does my hon. Friend agree that any attempt by the Government to hold up the value of sterling against other currencies would be especially disadvantageous to the west midlands and to heavy manufacturing industry generally?

Mr. Baker

All Governments should be exceedingly modest when considering the external value of sterling. That lesson has been learnt the hard way by successive British Governments since the war.

Mr. J. Enoch Powell

What is the possible value or meaning of global statistics such as those?

Mr. Baker

The right hon. Gentleman should address that question to the person who asked it. The statistics are prepared by international and domestic bodies, but domestic competitiveness and productivity can be measured quite clearly and effectively.

Mrs. Currie

Does my hon. Friend agree that although the British footwear industry, which is active in my constituency, can produce leather goods at prices and qualities to beat the world, it cannot compete with dumped goods from eastern Europe? Will he therefore press for this unequal competition to be altered?

Mr. Baker

I appreciate the points raised by my hon. Friend. My right hon. Friend the Minister for Trade will be dealing with trade questions. The problems of the footwear industry are well known to the Department. I agree that when goods are dumped the Government and the European Commission have a real responsibility, which they fully accept, to ensure that competition is fair. British industry can compete effectively around the world if the terms are fair.