HC Deb 15 March 1990 vol 169 cc651-2
2. Mr. Tredinnick

To ask the Chancellor of the Exchequer if he will make a statement on the growth during the 1980s of manufacturing productivity in (a) the United Kingdom and (b) other major industrial countries.

The Chief Secretary to the Treasury (Mr. Norman Lamont)

The average annual growth of output per person employed in United Kingdom manufacturing industry between 1980 and 1988 was 5.3 per cent., compared to 3.4 per cent. for the other Group of Seven economies.

Mr. Tredinnick

I thank my right hon. Friend for his reply. Is he aware that unemployment in the east midlands has fallen by 20 per cent. in the past year? Is he further aware that employment in manufacturing has increased by 18,000 since 1983? What are the figures for manufacturing output? Have they increased under this Government? How do they compare with the figures under the previous Labour Government?

Mr. Lamont

Manufacturing output has increased. Manufacturing productivity has been a remarkable success story. It has grown faster in this country than in any other G7 country, including Japan and the United States. It has grown at twice the rate of the 1970s and it is higher than it was in the 1960s. That helps to explain the remarkable success of industry in my hon. Friend's constituency and in neighbouring areas.

Mr. Robert Sheldon

Will the Chief Secretary accept this, the last of my pre-Budget recommendations: that the 25 per cent. capital allowance for plant and machinery is hopelessly inadequate, given the level of inflation and the value of capital equipment, which deteriorates over the first year of its life? That level is not an investment incentive; it is an investment disincentive. Will the Chief Secretary seek to remedy it?

Mr. Lamont

I always listen carefully to the right hon. Gentleman, and I note what he describes as a late Budget representation, although it seems to be a little wide of the original question.

Mr. John Townend

Does my right hon. Friend agree that for productivity to increase there must be more investment in manufacturing and research and development? Is he aware that in east Yorkshire and Hull an enormous amount of development is taking place? In my constituency, BP has just finished a new acetic acid plant costing £250 million and has announced plans for a research laboratory, which will employ over 200 scientists and high-paid technicians.

Mr. Lamont

I am pleased to hear the good news from my hon. Friend's constituency. He is right that productivity is related to investment. However, it is related not to investment alone but also to good management and good industrial relations, which have improved remarkably.

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