HC Deb 31 October 1990 vol 178 cc980-1
11. Dr. Michael Clark

To ask the Secretary of State for Trade and Industry what was the growth of manufacturing productivity in (a) the United Kingdom and (b) other G7 countries during the 1960s, 1970s and 1980s.

Mr. Lilley

In the 1960s Britain had the slowest rate of growth in manufacturing productivity of any of the seven major industrial countries. In the 1970s we again had the slowest rate of growth in manufacturing productivity of any of those countries. In the 1980s we had the fastest rate of growth in manufacturing productivity of any of those countries.

Dr. Clark

Will my right hon. Friend join me in congratulating British manufacturing industry on its remarkable achievement? Does he agree that increasing productivity leads to lower unit costs, which lead to increased sales, profits and investment, which is the best way to expand our manufacturing base?

Mr. Lilley

My hon. Friend is absolutely right. We should congratulate British industry because its manufacturing productivity has increased even faster than that of Japan. Scottish Labour Members make comments about the performance of industry, but we should note that Scottish manufacturing productivity has grown even faster than that of the rest of the United Kingdom. Scotland has outstripped even Japan and I pay tribute to Scottish industry for that. It never receives a word of praise from Scottish Labour Members.

Mr. Eastham

If industrial production was so bad in the 1960s and 1970s and is supposed to be so good now, why do we have the worst balance of payments deficit in our industrial record, of £20 billion?

Mr. Lilley

The hon. Gentleman should realise that a balance of payments deficit normally reflects an excess of demand that is growing even faster than rapid output. If a country spends £520 billion and produces £500 billion worth of output, it has a £20 billion deficit. That reflects not competitiveness, but excess demand. That is why my right hon. Friend the Chancellor of the Exchequer has slowed the rate of growth in demand. The deficit is already diminishing and will continue to do so.