Manufacturing Productivity (Hansard, 17 May 1989)

§ 3. Mr. Eadie
To ask the Chancellor of the Duchy of Lancaster which of the seven major industrial countries have a higher manufacturing productivity level than the United Kingdom, and which have a lower level.

§ Mr. Atkins
No reliable comparisons exist for absolute levels of manufacturing productivity between different countries, but available figures show that in the 1980s the United Kingdom has had the fastest rate of growth in manufacturing productivity of the seven major industrial countries.

§ Mr. Eadie
Given the information that the Minister has offered to the House, he must agree that we start from a low base due to the slaughter of manufacturing capacity in industry in the early 1980s. The Minister must be concerned that our training performance is much lower than comparable EEC countries. The import of industrial machinery is helping to increase our manufacturing capacity, but does the Minister not find it worrying that as a result of the policies of the 1980s we no longer have the indigenous capacity to make that machinery?

§ Mr Atkins
I prefer to take the hon. Gentleman back to the 1960s and the 1970s rather than just the 1980s. Between 1960 and 1970 the United Kingdom's average growth rate was only 3 per cent., and it was only 1½ per cent. between 1970 and 1980. Since 1980 our rate of growth has averaged 5 per cent. Of course, productivity 302 can always be improved and we recognise, as much as the Opposition do, that productivity must be improved if we are to maintain our competitive edge in world markets. We are making up for the difficulties that we had in the 1960s and the 1970s. I am sure that I do not need to remind the hon. Gentleman of them as his party was as much in power then as mine.

§ Mr. Anthony Coombs
I welcome the huge improvement in manufacturing productivity over the past 10 years, but is not the gap in absolute terms between ourselves and the Germans and Americans still too wide? In this context, does my hon. Friend share the concern of many Conservative Members about the offer recently made by the Engineering Employers Federation of a 6 per cent. wage increase and a reduction of one and a half hours in the working week? Of even more concern is the rejection by the trade unions of that substantial offer, which plays into the hands of our competitors just as we are catching them up.

§ Mr. Atkins
My hon. Friend is right to draw attention to the possibility of uncompetitiveness resulting from high wage increases which are not related to productivity. His point is well taken. I was interested to learn recently that a survey by the German chamber of industry showed that the rate of manufacturing productivity of German companies in the United Kingdom is greater than in Germany.

§ Mr. John Garrett
Does the Minister agree that the rate of increase in our manufacturing productivity is now falling, and that its absolute level is still way below that of our main competitors? Will he explain how that can be radically improved, given our inadequate investment in machinery and plant, and in management, supervisory and craft training?

§ Mr. Atkins
As the hon. Gentleman well knows, training matters are for my right hon. Friend the Secretary of State for Employment, and I should be the first to welcome the training initiative being taken in that Department. Clearly, there is always room for better management. The enterprise initiative, which forms part of what the Department of Trade and Industry is doing, has proved to be one of the most popular schemes that the Department has produced. It includes "Managing into the 90s" which is encouraging middle managers in small and medium-sized companies to recognise that productivity is one of the most important factors influencing their increased competitiveness as we move towards the 1990s and the turn of the century.