HC Deb 24 November 1993 vol 233 cc449-50
18. Mr. Robert Hughes

To ask the President of the Board of Trade what is his estimate of the growth of manufacturing industry for the year 1992–93.

Mr. Sainsbury

My right hon. and learned Friend the Chancellor of the Exchequer will publish new forecasts of manufacturing output when he presents his Budget to the House on 30 November. However, it is very encouraging that manufacturing output, manufacturing productivity and manufacturing investment all rose in the last 12 months.

Mr. Hughes

Surely the Minister is aware that, according to the last published figures, manufacturing industry grew by only 1 per cent. in the previous 12 months. Does not his answer mask the massive decline in manufacturing industry that took place during a period when the Government continually denied that we were going into recession, even though we were already deep in one? Will the Minister now stop complacently pretending that the recovery has taken hold and introduce a proper strategy for investment-led growth in manufacturing, which is the only way the country can get out of its balance of payments problems?

Mr. Sainsbury

Manufacturing output rose by 1.6 per cent. over the past 12 months. I would have hoped that that would be welcome to the hon. Gentleman, in the light of the decline in many of our major export markets in continental Europe. The sort of policies proposed by the party that he supports—saddling manufacturing industry with the burdens and restrictions that would follow from the social chapter—would be likely to stifle any further growth in output more quickly than anything else.

Mr. Clifton-Brown

Although I welcome the growth of manufacturing output last year and predictions of more growth next year, may I ask my right hon. Friend to point out to his colleagues in the Council of Ministers how much labour on-costs, such as those from the social chapter, will hamper manufacturing industry? Will he point out to them that it is essential that those labour on-costs be kept to a minimum so that both this country and the rest of Europe can remain competitive with the rest of the world?

Mr. Sainsbury

It was my impression at a meeting of Council of Industry Ministers last week that a number of colleagues in other Community countries are now conscious of the points that my hon. Friend makes and are perhaps beginning to have second thoughts about the wisdom of some of the things to which they have signed up.

Dr. Berry

Is the Minister genuinely surprised that manufacturing output is higher this year than last, given the appalling state of the economy last year? Is it not more relevant to recognise that the trade deficit in manufactured goods at this point in the trade cycle has never been worse in recent economic history? How does he explain that?

Mr. Sainsbury

I hope that the hon. Gentleman will be prepared to welcome the changes since 1981. Manufacturing output is up by nearly a quarter, and productivity and exports are up by nearly three quarters. My right hon. Friend the President of the Board of Trade has already pointed out—perhaps the hon. Gentleman was not listening or was not in his place at the time—that it is normal for advanced economies to experience a decline in the proportion of manufacturing in their total gross domestic product. This country is no exception.