HC Deb 12 February 1992 vol 203 cc957-9
1. Mrs. Irene Adams

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

The Secretary of State for Trade, Industry and President of the Board of Trade (Mr. Peter Lilley)

The reduction of inflation is the precondition of renewed sustainable growth.

Mrs. Adams

Given that the second Tory recession is set to cost 550,000 manufacturing jobs and 100,000 companies and is set to put the United Kingdom at the bottom of the European Community league table on under-investment and employment in 1992, will the right hon. Gentleman now admit that urgent action is needed to boost employment in Britain to take us out of this situation? Will he also introduce training schemes to put the United Kingdom back where it was before we had a Tory Government and to take it out of this recession?

Mr. Lilley

The key to renewed growth is lower inflation, which in turn makes lower interest rates possible. The interest rates in this country are now down to their lowest differential with those on the continent that we have seen for many years. We certainly do not need higher taxes, a minimum wage and the restoration of trade union power, which would prolong the recession and abort a recovery.

Mr. Brandon-Bravo

I thank my right hon. Friend for responding so promptly to my request that either his good self or my hon. Friend the Minister for Corporate Affairs should visit Nottingham. I understand that the Minister is planning to visit Raleigh Industries within the next 10 days. That company is the most famous cycle manufacturer in the world, but it is subject to the most unfair dumping of bicycles from China. I hope that the Minister will do all that he can to protect that most famous name in the industry.

Mr. Lilley

I recognise the powerful representations that my hon. Friend has made for industries in his constituency, and particularly the bicycle industry. My hon. Friend the Minister for Trade will meet representatives of that industry when he visits Nottingham and will discuss the problems with them. Anything that we can do within the context of European Community trade policy, we will do.

Mr. Gordon Brown

On top of the 2,300 jobs tragically lost at British Aerospace today, the textile and motor trade federations are now predicting 40,000 more job losses this year, the Building Trades Federation predicts that 50,000 more jobs will be lost this year, the Engineering Employers Federation predicts that 70,000 more jobs will be lost, and the Confederation of British Industry has said that 200,000 jobs will be lost in total unless Ministers take action. Has not the Government's last remaining friend, the Governor of the Bank of England, now extinguished the Government's last remaining claims to a pre-election recovery, and is it not the case that, having lost his support, the Government have now nothing left to lose but the election?

Mr. Lilley

I naturally regret the loss of jobs by British Aerospace and other companies, not least those in my constituency. I remind the hon. Gentleman that the press release from British Aerospace today began: The aviation market continues to suffer from the world-wide recession". The hon. Gentleman, however, continues to deny the existence of that recession, which makes a mockery of those who have lost their jobs as a result of it. British Aerospace has to reach world standards of productivity and efficiency, as it made clear in its press release. Perhaps the hon. Gentleman would care to tell the House of the additional job losses that would follow if Labour's reckless defence cuts were superimposed on the problems already faced by the industry.

The Governor of the Bank of England said that there are firm indications of an upturn coming and that the basis of sustainable growth remains a credible commitment to the goal of price stability. The Labour party could never credibly offer that.

2. Mr. Cran

To ask the Secretary of State for Trade and Industry what was the increase in manufacturing output between 1985 and 1990.

Mr. Lilley

Manufacturing output rose by nearly one fifth between 1985 and 1990.

Mr. Cran

Does my right hon. Friend agree that the United Kingdom is fortunate to have a large proportion of world-beating, world-class companies? That is illustrated by Rolls-Royce, which has quadrupled its share of the jet engine market since 1987 and, even today, by the news of the British Aerospace section, which has a £13 billion per annum order book and in size is second only to that in the United States. Does my right hon. Friend agree that there would not be nearly so many such companies if they had to put up with the economic and industrial policies of the Labour party?

Mr. Lilley

My hon. Friend is right to mention the strengths of those companies, even when they face difficulties in world markets, and to emphasise the difficulties that they would face at home if a Labour Government were adding to those problems. There has been a tremendous growth in exports in the aerospace industry, as in other industries. We welcome that and will do all we can to sustain and build on it in the future.

Mr. Alex Carlile

Will the Secretary of State confirm that bankruptcies and liquidations, affecting manufacturing as well as other industries, are at record levels not only in the south-east but particularly in Wales and Scotland? Will he also confirm that the fact that those bankruptcies and liquidations are occurring now in high-tech industries is a particularly worrying aspect? Does he agree that there is plenty of venture capital about, but that the venture capitalists do not have the confidence to know where to invest it? How will he instil confidence in the market so that investment in manufacturing industry can really start again?

Mr. Lilley

Confidence will not be instilled by harping solely on the negatives. Naturally we regret any rise in bankruptcies, but let us remember the strengths of British industry, which has increased exports in the past 10 years by more than France, Germany, the United States or Japan—[Interruption.] The hon. and learned Gentleman does not like that answer because he wants to talk Britain down.

Mr. Beaumont-Dark

Does my right hon. Friend accept that the motor manufacturing industry is one of the greatest providers of employment in this country? Will he encourage his right hon. Friend the Chancellor of the Exchequer to understand that the company car is not a tax-avoidance weapon but an essential tool of British industry and that, if we are to have a strong home-based industry, we do not need taxes so high that Jaguar and Rolls-Royce lose money? If those companies cannot sell their products at home, and if the Government do not encourage them at home, people abroad will not be encouraged to buy them either.

Mr. Lilley

I have always shared with my hon. Friend a belief in the importance of manufacturing industry, particularly the motor car industry. Therefore, like him, I rejoice in the fact that in the last three months of last year the motor car industry earned a surplus on the balance of payments, and exports of motor cars rose by 55 per cent. I shall convey his point to my right hon. Friend the Chancellor, who also recognises the great importance of a strong and recovering motor car industry.

Dr. Moonie

I notice that the main question carefully ended with the date "1990". Why has manufacturing output fallen faster and further in Britain's economy than in those of any of our competitors in western Europe? Does the Minister not yet realise that the country needs action, not words?

Mr. Lilley

The hon. Gentleman should remember that manufacturing output fell under the last Labour Government and that it is up under this Government. Compared with 10 years ago, at the same point in the economic cycle, output is up by nearly a quarter, investment is up by a third, manufacturing productivity is up by more than a half and manufacturing exports are up by nearly three quarters. That is a record to be proud of and to build on in the future.