HC Deb 17 April 1996 vol 275 cc703-5
10. Mr. Pope

To ask the President of the Board of Trade what was the level of manufacturing investment in plant and machinery in (a) 1989 and (b) 1995. [23925]

The Minister for Science and Technology (Mr. Ian Taylor)

Manufacturing investment in plant and machinery, measured in constant prices, was £12 billion in 1989 and £10.3 billion in 1995. Investment in plant and machinery has grown by 16 per cent over the past two years as the economy has recovered from the recession.

Mr. Pope

Manufacturing accounts for only 20 per cent. of gross domestic product. Almost 3 million jobs in manufacturing have been lost since 1979. Manufacturing output is stagnant. This appalling state of affairs is the result either of incompetence or of malice on behalf of the Government; which is it?

Mr. Taylor

The manufacturing base has been immensely strengthened since 1979 when compared with the appalling performance under the Labour Government. Manufacturing output has reached a peak. It is recovering very quickly. I am delighted that 3,000 extra jobs were created last month alone in the manufacturing sector. Manufacturing output has risen 6.25 per cent. above its previous peak. That is all good news on the 20th anniversary of the Royal Academy of Engineering, which I shall be celebrating with it this evening.

Mr. Batiste

Is it not clear as we look around the world, including at Japan, America, Taiwan and Germany, that companies that are the best manufacturers regard Britain as the best place in Europe in which to manufacture? Is that not a consequence of the range of Government measures introduced since 1979, which have been opposed root and branch by the Labour party, year in and year out? Those measures are even now threatened by the Labour party's commitment to the social chapter, which would tie us irrevocably to the social costs that are making German manufacturing uncompetitive.

Mr. Taylor

I entirely agree with my hon. Friend. Over the past 10 years the United Kingdom has received £100 million-worth of inward investment, which has created employment throughout the country. We are the only Group of Seven country in which non-manufacturing costs form a lower proportion of total labour costs than in 1980. Our manufacturing record and the way in which we have responded to world competitive challenge are remarkable. The Labour party should remember to give some praise to British manufacturers' efforts.

Mrs. Beckett

Will the Minister take the opportunity to dissociate the Department of Trade and Industry once again from one of the more dangerous recent statements of the Deputy Prime Minister, when he suggested that levels of investment in manufacturing offered no cause for concern, especially as his justification was that business investment in the United Kingdom was a higher percentage of gross domestic product than in most other countries within the Group of Seven? The Library tells me that it is unable to substantiate the statement.

Does the Minister accept that, as the confidence of the Deputy Prime Minister seems to be misplaced, so too is the Government's rejection of measures such as investment allowances, which would encourage increased investment in manufacturing?

Mr. Taylor

I shall not get into a debate over librarians' statistics with the right hon. Lady. I want to get it across to the House that manufacturing industry is making an enormous effort to compete in the world. The CBI figures show that manufacturing investment could be up by 9 per cent. this year. Even the Institute of Manufacturing's figure is up by 7 per cent. The right hon. Lady would be best served if she gave attention and encouragement to that process.