Manufacturing Productivity (Hansard, 31 January 1991)

§ 10. Mr. Wells
To ask the Chancellor of the Exchequer by how much manufacturing productivity has increased between 1979 and 1989.

§ Mrs. Gillian Shephard
Manufacturing productivity increased by 50 per cent. between 1979 and 1989, more than in any other major industrial country over the period in question.

§ Mr. Wells
Does my hon. Friend agree that that performance shows the success of the Conservative Government's economic policies? Will not we need more and a longer period of such Conservative Government policies now that we have joined the European exchange rate mechanism, because manufacturers can no longer take refuge in a devaluation of our exchange rate and must increase their productivity still further?

§ Mrs. Shephard
My hon. Friend is absolutely right. Manufacturing output, employment and the number of firms reached record levels in 1990. Membership of the ERM is an additional discipline.

§ Mr. Ron Brown
Is not it the case that our manufacturing production will go down if ICI leads the fertiliser business? That is likely simply because of dogma. The Secretary of State for Trade and Industry has blocked Kemira, a state-owned company, from taking over the fertiliser business owned by ICI. Is not that a disgrace when we remember that, in my constituency of Edinburgh, Leith and south of the border, many people are likely to lose their jobs? What does the Minister intend to do about that, remembering that a fight-back will take place and that a general election is just around the corner?

§ Mrs. Shephard
The hon. Gentleman raises a matter which, as he recognises, is more properly for my right hon. Friend the Secretary of State for Trade and Industry. However, I make the general point that an increase in unemployment depends crucially on how companies and labour forces split an essential reduction in unit labour costs between pay settlements, lower investment and fewer jobs.

§ Mr. Favell
As it is clear that the social charter would have an adverse effect on manufacturing productivity, may I have my hon. Friend's cast-iron assurance that the Government will not give in to Commissioner Papandreou and agree to the social charter?

§ Mrs. Shephard
The Government will continue to pursue the prudent and sensible economic policies that have brought so much success over the past decade.

§ Mr. Boateng
Given the current state of the Government's economic policies and their perverse and asinine equation of working with hurting, how many people have to be flung out of work before Ministers go to the Dispatch Box to tell us that their economic policies are working—2 million or 2.5 million? Have they any idea?

§ Mrs. Shephard
The real threat to employment and to economic success is inflation. I repeat my point that the increase in unemployment will depend crucially on the way in which management and labour forces deal with wage settlements. We do not need any lectures from the Opposition when we remember that manufacturing output under Labour fell by 2½ per cent.

§ Mr. Bill Walker
Did my hon. Friend notice that, in 1979, Scotland's premier exporting industry, the Scotch whisky industry was in recession? It was overstocked and underproducing, while distilleries and bottling and blending plants were closing. Today Scotch whisky exports are at an all-time high and that is the direct result of the Government's policies.

§ Mrs. Shephard
My hon. Friend is absolutely right. The Scotch whisky industry has had remarkable success. It now exports 85 per cent. of what it produces. That is in large measure due to its own efforts and the Government's successful policies and support.