HC Deb 23 January 1991 vol 184 cc315-6
10. Mr. McFall

To ask the Secretary of State for Trade and Industry what plans he has to boost manufacturing output.

Mr. Leigh

The Government promote continued growth of manufacturing industry with policies such as reducing rates of tax on profits, privatisation, deregulation, elimination of restrictive practices, trade union reform and negotiations to reduce trade barriers through the general agreement on tariffs and trade and in the European Community. In addition, my Department continues to operate a range of schemes to improve business performance under the enterprise initiative.

Mr. McFall

As manufacturing production has gone down by a staggering £2£5 billion in the past three months, 23,000 manufacturing workers are on short-time work, redundancies are running at more than 1,500 per week and high interest rates are costing British business £30 billion per year, when will the Government do the decent thing and either own up to their mistakes, overhaul their policy and start helping British industry or shut up shop and let the Labour party get on with the job of reviving British industry?

Mr. Leigh

I assure the hon. Gentleman that we have no intention of shutting up shop, or of letting our industry fall into the tender hands of a party that managed to reduce manufacturing output when it was in power. The hon. Gentleman's list is entirely selective. He ignores the fact that the prospects for British industry have been transformed in the last decade in terms of output, productivity and investment. The cost of a 1 per cent. rise in interest rates, even sustained over a full year, is far less damaging to industry in terms of wage costs than a 1 per cent. rise in inflation. The Government are determined to lick inflation.

Mr. Grylls

Does my hon. Friend agree that this question shows that there is a good deal of ignorance about what Governments can and cannot do? The one thing that Governments certainly cannot do is to boost manufacturing output. However, they can create the right climate. Will my hon. Friend use his influence with the Treasury to promote lower corporate and capital taxes for business to encourage it to make the decisions to expand and boost output?

Mr. Leigh

My hon. Friend is right, and he well knows that corporation tax in Britain is among the lowest in the industrialised world. He is also right to say that we cannot simply boost output by increasing subsidies, as suggested by the Labour party; nor can we increase investment by piling up taxation. Inventiveness and hard work cannot be encouraged by imposing controls. Those are the policies of the Labour party, but they did not work in the past and will not work in the future.

Dr. Moonie

If the Government are not responsible for the mess that industry is in, who is?

Mr. Leigh

Industry is not in a mess. As I have said, the prospects for manufacturing industry have been transformed in the last decade. Output, productivity investment and exports are well above 1980 levels and exports are at a record level. I do not mind repeating that message, because we are proud of it.