HC Deb 16 November 1983 vol 48 cc836-7
5. Mr. Knox

asked the Secretary of State for Trade and 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. Tebbit

In the third quarter of 1983 the index of production for the manufacturing industries was 94.9. This compares with 108.1 for the same quarter of 1979.

Mr. Knox

Does my right hon. Friend not find this reduction in the output of manufacturing industry alarming? What steps do the Government propose to take to raise demand for the output of manufacturing industry to the level of 1979?

Mr. Tebbit

I am sure that, apart from anything else, my hon. Friend will be pleased to notice that the index figure that I have given is 3 per cent. higher than that given for the last quarter of 1982, when he last raised this question. If my hon. Friend thinks that there is a lack of demand in the economy, he must be failing to do his own shopping.

Mr. James Hamilton

Does the right hon. Gentleman consider that one of the major reasons for the big difference in the percentages is the number of companies in the hands of receivers? This is happening every day of every week. Is he aware of the letter that I have sent to him about one of the major companies in my constituency, IBH (Holdings) Terex (Scotland), which is in the hands of the receiver, Why is that so, and why are the Government not assisting it?

Mr. Tebbit

The hon. Gentleman would probably take the view that the Government should not assist every company that falls into the hands of the receiver. A large number of companies do so because they are badly managed, have a bad work force, or are engaged in making a product for which there is no longer a demand. As to the detail of the question and the company to which the hon. Gentleman refers——

Mr. Hamilton

The right hon. Gentleman ought to know.

Mr. Tebbit

The hon. Gentleman says that I ought to know. There are a number of things that the hon. Gentleman should know, but he shows few signs of knowing any of them.

Mr. Beaumont-Dark

Does my right hon. Friend agree that manufacturing industry in the midlands is at long last beginning to improve? Does he accept that as long as any review of regional policy does something to help the west midlands, for a change, and does not dissipate its industry to other regions, recovery will continue?

Mr. Tebbit

I find myself in complete agreement with my hon. Friend.

Mr. Shore

Manufacturing output, as the Secretary of State says, is three points up on the trough of recession two and a half years ago, but it is also 17 points below the level that it was when he and colleagues took office, which is the largest fall ever sustained by either British industry or the industry of any other country. The House would like to know to what factors the Secretary of State attributes this massive and unprecedented decline in the performance of British industry. What is the main reason, and how can the Government assist in reversing the trend?

Mr. Tebbit

There is little doubt that the right hon. Gentleman understands the causes as well as most of us, even if he is not willing to admit it.

Mr. Straw

High interest rates.

Mr. Tebbit

The hon. Gentleman will recollect that interest rates are lower now than they have been for five and a half years. He also knows that inflation is lower, and that a lower exchange rate not only puts up prices of exports but reduces the prices of imported raw materials and food required to sustain our economy.

To return to the question of the right hon. Member for Bethnal Green and Stepney (Mr. Shore)—avoiding the interruptions from behind him—the principal causes are that our industry was uncompetitive in the——

Mr. Gould

It is more so now.

Mr. Tebbit

The right hon. Member for Bethnal Green and Stepney has many assistants. I wish that he would keep them in order.

Faced with the difficulties of a world recession, it was our industry, not that of our competitors, which showed that it was weak and went to the wall in many cases.

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