HC Deb 24 November 1983 vol 49 cc444-5
6. Mr. Nellist

asked the Chancellor of the Exchequer if he will estimate the total required capital investment, at 1983 prices, for the British economy to gain equal competitiveness with the economies of Japan and Germany.

The Economic Secretary to the Treasury (Mr. Ian Stewart)

No. Competitiveness is deternined by a wide variety of factors.

Mr. Nellist

Is the Economic Secretary aware that some time ago the National Westminster Bank, which can hardly be called a Socialist institution, produced estimates which, when taking into account inflation since then, show that about £200 billion of investment is required in manufacturing industry for Britain to regain competitiveness with Germany and Japan? Is he further aware that as investment in manufacturing industry is now £5 billion a year, such a scale of investment cannot be foreseen under the Chancellor's stewardship and under private ownership of our economy not only in the next century but in the one after that?

Mr. Stewart

I find it extremely difficult to contemplate the economic conditions in the next century, let alone in the century after that. I have no doubt that what is true today will still be true then, which is that our competitiveness depends on unit costs, including wage costs, on the quality of goods, on the attention to the needs of the market and on delivery dates. The Industry Act forecast includes a projected increase in investment of 4 per cent. in the coming year. That will be a helpful step in the direction that we want to go.

Mr. Beaumont-Dark

Does my hon. Friend agree that one of the problems faced by our industry in competing with the Japanese, the Germans, or anyone else has been restrictive practices, which Opposition Members have done most to keep entrenched? Does he further agree that unless we change working practices we shall never be able to compete?

Mr. Stewart

I entirely endorse what my hon. Friend has said. I believe that a great deal of the improvement in the competitiveness of British industry that we have achieved over the past year or two has been as a result of the much more realistic attitudes of the work force of this country, along the lines of what my hon. Friend has just said.

Mr. Donald Stewart

When do the Government intend to call the bluff of the Japanese car firm Nissan, which has been promising for more than three years to set up a plant in the United Kingdom, or does the hon. Gentleman think that Japanese competition is justified because of the extra rip-off by British car manufacturers on their models, for sale in the domestic market as against the European market?

Mr. Stewart

That is a question for my right hon. Friend the Secretary of State for Trade and Industry. I do not think that we should discourage investment in this country from Japan or other countries.