HC Deb 21 June 1989 vol 155 cc322-3
6. Mr. Bell

To ask the Chancellor of the Duchy of Lancaster what has been the change in competitiveness of British industry in the last 10 years.

Mr. Newton

Competitiveness involves numerous factors, including quality, reliability, assurance of delivery and after-sales service. In relation to price competitiveness alone, unit labour costs in United Kingdom manufacturing compared with those in other industrial countries, allowing for the effects of exchange rate movements, are thought to have been on average the same in 1988 as in 1979.

Mr. Bell

To translate that into real terms, 51,000 jobs were lost on Teesside alone between 1979 and 1981 and although we welcome British Steel's £600 million profit, we should not forget that it was achieved at the cost of the loss of 130,000 jobs, many of them on Teesside. Will the Minister confirm that we have lost about 9 per cent of world trade since 1979, a loss which has been greater than that of our industrial competitors? Does the Minister think that that reflects a supply side economic failure or success?

Mr. Newton

On the specific point raised, the indications are that in recent years the decline in Britain's share of trade has stopped, and may even have been reversed after many years—indeed, decades—in which there was a persistent tendency to decline. With regard to the north-east, there is no doubt that there have been substantial changes in the pattern of employment over the period in question, but they reflect an increase in the competitiveness of the relevant industries, including steel, which means that there are now secure jobs whereas previously there were insecure jobs.

Mr. Favell

Is it not a fact that Britain has nothing to fear while the spirit that is obvious today abounds in the many people who have come into London and other industrial cities in the face of the most extraordinary difficulties? An example is the young lady I saw in a baker's in Strutton Ground today, near my London accommodation, who had come into work at 5 am. Despite having had a six-hour journey to reach home last Friday, she is back again today.

Mr. Newton

I have not had the opportunity to make that young lady's acquaintance, but I am happy to pay tribute to her efforts and to those of many others who have overcome needless industrial disruption to get to work today.

Dr. Reid

On the subject of security in the steel industry, the steel workers of Bellshill will be grateful to the Minister for his assurance that their jobs in the Clydesdale Tube Works are guaranteed. Does the Minister agree that competitiveness is often a function of investment at plant level and that no matter what efforts are made by the work force, in the absence of that investment and technological capital equipment the work force often comes off worst? Is the Minister aware that in the Clydesdale Tube Works at Bellshill over the past two years the workers have increased quality, delivery times and productivity beyond all recognition, but we understand that there is still a threat over their heads due to lack of investment in the mills? How does the Minister intend to ensure that his assurance today that steel jobs are secure will be maintained now that he has privatised the steel industry so that it is outwith our control?

Mr. Newton

Eight or nine years ago the steel industry gained a mention in the "Guinness Book of Records" for the largest corporate loss ever made. It has now been privatised, is making substantial profits and has far greater capacity to invest than would have been the case if the previous policy had been allowed to continue.

Mr. Nicholas Bennett

Would my right hon. Friend care to speculate about the effect on the competitiveness of British industry if we had a policy of increasing company and personal taxation, imposing import controls, increasing regulation and bureaucracy, and subsidising inefficient industries—all policies that have been espoused by Opposition Members during the past few years?

Mr. Newton

The result would have been the same dismal performance that we saw between 1974 and 1979, when Britain's international competitiveness declined by about 25 per cent.