Manufacturing Industry

HC Deb 08 March 1995 vol 256 cc320-2

4. Mr. Ronnie Campbell

To ask the President of the Board of Trade what proportion of gross domestic product was invested in manufacturing industry in 1993.

Mr. Heseltine

Manufacturing investment was 2.3 per cent of gross domestic product in 1993 and 10.2 per cent. of manufacturing output, when measured at constant prices.

Mr. Campbell

But is it not true that, in the past 15 years, 40 per cent. of jobs in manufacturing industry have been lost? There was the loss of the pits, the loss of the shipyards and the loss of the steelworks—and the Government do not even know that they have done it.

Mr. Heseltine

The hon. Gentleman is trying to imply that the overmanning that had done so much to hurt British industry could somehow be sustained. He should allow us enormous credit for the fact that Britain is now manufacturing at far higher productivity rates and is therefore far more competitive than it was. Investment forecasts for manufacturing industry next year are seen to be rising significantly.

Mr. Budgen

Does my right hon. Friend agree that among the factors that influence investment in manufacturing industry are the levels of manufacturing output and of interest rates? As manufacturing output fell significantly in January, the most recent month for which figures have been recorded, is it not a great relief to my right hon. Friend that we are no longer in the exchange rate mechanism, and are not being forced to raise our interest rates today, along with the countries that had the misfortune to remain in the ERM, which will crucify their domestic economies because of their loyalty to the European dream?

Mr. Heseltine

My hon. Friend has very strong views on that subject, and I admire his ingenuity in trying to exploit them in the context of the question. But that is not relevant to our position today, because the outlook for British manufacturing investment for next year is extremely encouraging.

Mr. Wilson

Do not the appalling figures for manufacturing output released this morning give the lie to the over-inflated hype that we hear from the Government about the success of manufacturing and about the recovery? Is it not extraordinary that, when exports are doing relatively well, factory output is falling? What does that tell us about domestic demand? Is it not true that all the claims about economic recovery are fragile and that the real economy, as represented by this morning's figures, has little to do with the world of the Chancellor of the Exchequer and of the Governor of the Bank of England?

Mr. Heseltine

The hon. Gentleman does not live in the real world. The figures announced today show that output in January was 4.3 per cent. higher than output a year ago, and that productivity in the fourth quarter of last year was 5.9 per cent. higher than that of a year ago. The latest CBI forecasts show an 8.4 per cent. growth in manufacturing investment this year, and those by the National Institute of Economic and Social Research show an increase of 9.3 per cent. When will Opposition Members recognise success when they see it?

Sir Donald Thompson

Is it not obvious to my right hon. Friend and to the rest of the House that, as unemployment is falling, manufacturing industry and other industries are improving?

Mr. Heseltine

My hon. Friend is right. Employment is increasing both in manufacturing industry and in the service industries, and one of the most exciting things that is happening is that British manufacturing exports are rising significantly throughout the world. All the forecasts suggest a better year this year, and an even better one next year.