Engineering Output (Hansard, 31 October 1990)

8. Mr. Alan W. Williams
To ask the Secretary of State for Trade and Industry what representations he has received about the level of engineering output.

§ Mr. Douglas Hogg
My Department regularly receives representations about many areas of industry, including the engineering sector.

Mr. Williams
Will the Minister comment on yesterday's report by the Confederation of British Industry, which predicts that manufacturing investment will fall by 6.7 per cent. this year compared with its level last year? Will he comment also on last month's report by the Engineering Employers Federation, which predicts that, over the next year, output in the engineering industry will fall by 5 per cent? What hope has the Minister to offer the engineering industry as it faces a recession?

§ Mr. Hogg
The advice that I would give is that those things have to be kept in perspective. One important piece of perspective is the growth of employment in the hon. Gentleman's constituency of Carmarthen. Over the past 18 months, employment there has risen by 24.3 per cent., and over the past 12 months it has risen by 15.5 per cent. I regard that as good news. Taking a broader perspective, in the quarter ended September 1990, output in the engineering industry increased by 3 per cent. compared with the previous 12 months.

§ Mr. Roger King
Does my hon. and learned Friend accept that this country is now a favoured location for investment by Japanese, United States and many European companies that are involved in engineering and manufacturing processes? Does he further accept that, once they have been set up in this country, companies such as Nissan in the north-east produce goods of such high quality that they are capable of being re-exported back to countries such as Japan?

§ Mr. Hogg
My hon. Friend makes an important point, and it can be exemplified. Mechanical engineering output has increased by 15 per cent. since 1985, while it fell between 1974 and 1979; electrical and electronic engineering output has increased by 23 per cent. since 1985 while it fell between 1974 and 1979. The plain fact is that this country is the magnet for inward investment in Europe. We receive about 41 per cent. of American inward investment in Europe, and about one third of Japanese investment in Europe. We can be sure that that investment would not be coming in if the Labour party were in power.

§ Mr. Henderson
May I bring the Minister back to the report from the Engineering Employers Federation? Is the Minister concerned about its prediction that 80,000 jobs will be lost in the industry between mid-1990 and mid-1991? Do the Government accept any responsibility for that disastrous state of affairs? Will they now recognise that there is a need for an active industrial policy, as seen in the successful economies in Germany and Japan? Will the Minister announce a package of emergency measures in the Gracious Speech?

§ Mr. Hogg
We have an extremely effective industrial policy. That is why we saw output in manufacturing industry increase by 32 per cent. between 1981 and the present; it is why we have seen investment rise by 60 per cent. between 1981 and today; it is why we have seen exports in manufactured goods rise by 55 per cent. since 1981; it is why we have seen profitability at its highest-ever level; and it is why productivity has improved so much. We have an extremely good and successful industrial policy.