HC Deb 16 November 1983 vol 48 cc835-6
4. Mr. Gould

asked the Secretary of State for Trade and Industry what is his preferred index of the competitivenes of British manufactured goods.

Mr. Kenneth Baker

The competitiveness of British manufactured goods has many aspects, including both cost and price competitiveness and the important non-price factors in competitiveness such as design, reliability, delivery performance. No one measure is adequate.

Mr. Gould

Why does the Minister not give a precise answer to the question? Is it because he knows that any index that he cares to look at would show a substantial loss of competitiveness since 1979 and that the index that has most commonly been relied on shows a decline of no less than 33 per cent? Does not this dreadful figure show that those bits of British industry that have survived the past four years are not leaner and fitter, but smaller and much weaker?

Mr. Baker

There are many aspects of competitiveness, and the main one, as the hon. Gentleman will be aware, is wage inflation. A large part of the competitiveness of British goods was lost through high inflation. If we have high wage inflation when there is low wage inflation among our competitors, that inevitably leads to British goods being relatively more costly, and thus to fewer sales overseas.

Mr. Carter-Jones

Will the Minister consider the effect of competitiveness where a monopoly is held by an aircraft supplier? Will he consider giving aid to the British airframe and aero-engine industry, particularly to allow the A320 to become competitively effective?

Mr. Baker

That is a different question.

Mr. Budgen

Does my hon. Friend agree that all this discussion shows that it would be unwise for the Government to attempt to manipulate the sterling exchange rate to hold it up?

Mr. Baker

Yes, Sir.