Manufacturing Industry (Hansard, 18 June 1986)

§ 12. Mr. Knox
asked the Secretary of State for Trade and Industry what is the most recent figure for output in manufacting industry; and how this compares with the figure for the same month six years ago.

§ Mr. Peter Morrison
Manufacturing output in April 1986 is estimated at 104.4 based on the 1980 average of 100. This is 1 per cent. higher than in April 1980.

§ Mr. Knox
Is my hon. Friend not concerned that manufacturing output has not only fallen over the last six years but that it is substantially lower than it was in 1973? Is he aware that 1973 was 13 years ago, and can he think of any comparable period since the industrial revolution when manufacturing output in this country fell?

§ Mr. Morrison
I am aware that manufacturing output fell between 1973 and 1979 by 4 per cent. — the five years of the last Labour Administration. However, in the last five years, output has increased by 11 per cent.

§ Mr. James Hamilton
Contrary to what the Minister has said, according to the CBI there has been a dramatic fall in manufacturing output, and without a booming 1039 manufacturing industry other jobs fall by the wayside. Will the Minister re-phrase his answer to his hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) and give the exact figure?

§ Mr. Morrison
I am quite happy to give the exact figure. Manufacturing output continued to fall from 1979 to 1981, which means that the current level is below the 1979 level. I am concerned. However, during the last five years, output has increased by 11 per cent.

§ Mr. Grylls
Does my hon. Friend agree that the problems of manufacturing industry in the late 1970s and early 1980s were almost directly the result of the hyperinflation from which this country was suffering? Surely the best help for manufacturing is to get ourselves competitive and to keep inflation down to the level that this Government have achieved.

§ Mr. Morrison
I certainly agree with what my hon. Friend has said, but one could add several other elements. Perhaps it had something to do with very low productivity and the fact that strikes were very much to the fore during that period. That has a lot to do with output going down. Equally, now that the strike record is a lot better, it has a lot to do with output going up in a very satisfactory way.

§ Mr. Hardy
Does the Minister not agree that the position in the last seven years has been the worst in British history since records began? Does his concern take him so far as to analyse the position in competing countries? If so, does he not accept that Britain's record is far worse than that of our competitors and that the competitors who have fared very well indeed have been those whose Governments have taken an entirely different approach from that adopted by the present United Kingdom Administration? Does he not think that there are lessons to learn from our competitors?

§ Mr. Morrison
As the hon. Gentleman will have heard in an answer to a previous question, I am always concerned about our relative position in the international market place. I agree that we must look very carefully indeed at our Japanese, German and United States competitors and,g where we can, learn lessons. I am sure the hon. Gentleman will also note that since 1980 we have had a 30 per cent. increase in output per head. That is a very satisfactory base on which to build.

Mr. John Mark Taylor
Does my hon. Friend agree that the figures he has just quoted might be even better if there were a little more sympathy and compatibility between VAT deadlines and actual trade credit? Will he have a word with industry and his right hon. and hon. Friends at the Treasury to see whether they can improve cash flow in business?

§ Mr. Morrison
As my hon. Friend would expect, I am always concerned to convey to my right hon. and hon. Friends at the Treasury particular aspects that bear directly on how they are able to operate in industry, and I shall certainly take his comments on board.

§ Mr. Williams
Does the Minister recollect that world trade in manufactures has increased by more than 17 per cent. since this Government came to office? Will he now give us the figure which until now he has so coyly avoided? How much lower is manufacturing output today than it was in 1979?

§ Mr. Morrison
I am not avooiding it. In fact, I had not been asked that question until the right hon. Gentleman put it to me. There has been a fall of 6 per cent. since 1979. I know that the right hon. Gentleman does not like the good news, but he will appreciate that the major fall happened in the first two years, and since then there has been a very significant increase over the following five years.

§ Mr. Neil Hamilton
Does my hon. Friend agree that output in manufacturing industry would be much higher if British manufacturing industry were even more competitive than it is now? One factor in that is the unrealistic increase in wages that has taken place in recent years. Does my hon. Friend agree that if the representatives of manufacturing industry spent less time wailing about factors beyond their control, such as interest rates and exchange rates, and more time considering matters within their control, such as wage rates, the state of British manufacturing industry would be much better?

§ Mr. Morrison
I agree in part with my hon. Friend, but I do not think that the picture is as black as he likes to paint it. Obviously I agree with his main premise that the better the productivity, the greater the output. From my visits to every part of the country I know that productivity gains in many companies, both old and new, are significant. In those companies employment is now secure, whereas it was not secure seven years ago.