HC Deb 14 February 1996 vol 271 cc995-6
4. Sir David Knox

To ask the President of the Board of Trade when he next expects to meet the president of the Confederation of British Industry to discuss manufacturing industry. [13506]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Philip Oppenheim)

My right hon. Friend and other DTI Ministers regularly meet the Confederation of British Industry to discuss a range of issues.

Sir David Knox

When my right hon. Friend next meets the president of the CBI, will he, after congratulating him on the improvement in manufacturing output over the past three years, discuss with him the fact that manufacturing output has gone up by only 10 per cent. since 1973? What steps might be taken to ensure that it goes up much faster in the next 20-odd years?

Mr. Oppenheim

I note that my hon. Friend started with the figure in 1973. One reason why manufacturing output has not gone up very much since 1973 is that, between 1974 and 1979, in the heroic days of Labour's industrial strategy, manufacturing output fell. Under this Government, manufacturing output has increased sharply. Not only has it increased, but we now have quality, exportable manufactures—in stark contrast with the situation in the 1970s.

Mr. Sutcliffe

Is not manufacturing the key to the economic growth of this country? Since 1979, we have lost 2.7 million jobs, especially in communities such as mine. What do the Government intend to do to create a situation in which we can have more investment in manufacturing and in which manufacturing is seen as more important than the service sector? What do the Government intend to do to create jobs?

Mr. Oppenheim

I entirely agree with the hon. Gentleman that manufacturing is a vital sector of our economy. He will therefore be pleased to note that, whereas in the 1960s and 1970s manufacturing productivity growth in Britain was bottom compared with that of the G7 major industrialised countries, since 1980 Britain's manufacturing productivity growth has been top among the major industrialised countries. That is why industries such as British Steel, which was the world's largest loss maker, is now the most profitable in Europe, why an industry such as British Leyland, which was the butt of music hall jokes, is now producing high quality, exportable cars, and why British Airways, whose passengers rated it below Aeroflot, is now the world's favourite airline.

Mr. Wilkinson

Will my hon. Friend initiate a study by Department of Trade and Industry statisticians and suggest the same on the part of the CBI into the effect of European Union cohesion fund and European Union structural fund allocations to countries such as Spain, Portugal and Italy, which are able thereby, at the expense of the British taxpayer, to increase their manufacturing competitiveness and to cost Britain jobs?

Mr. Oppenheim

Despite cohesion funds, Britain still attracts 40 per cent. of Japanese and American inward investment into Europe. That has been a great success story and has underpinned the massive improvement in British manufacturing competitiveness since 1979.

Mrs. Beckett

Does the Minister not recognise that the continuing concern of the CBI and others about Britain's manufacturing strength has been reinforced by the recent sustained fall in output described in the City as an appalling performance? Incidentally, the Minister will, I am sure, recognise that what he told the House about the last Labour Government's record is not correct. [Interruption.] It is not correct—I have told him that before. He must check his figures.

The Government still consistently refuse to take the advice either of the CBI or of engineering employers—let alone of Labour Members—and to take action that would encourage manufacturing investment, which is now 20 per cent. below the 1989 level. Is that not one of the main reasons why, far from being the enterprise centre of Europe, the UK has dropped from 13th to 18th in the world prosperity league?

Mr. Oppenheim

I can see that the right hon. Lady has nicely caught the spirit of St. Valentine's day. I shall not be so churlish and I wish her a happy Valentine's day.

My figures on the fall in manufacturing output under the last Labour Government are correct and I will send the right hon. Lady those figures so that she does not make the same mistake twice. [Interruption.] If she will be quiet for a minute and let me get a word in edgeways, I can tell her that investment has risen six times faster under this Government than under Labour. There is one big difference between investment now and investment in the 1970s: in those days, investment was directed by bureaucrats and politicians into low-grade, dossed-out, state-run industries, but investment nowadays is in high-grade, exportable manufactures.

Mr. Nicholas Winterton

Does my hon. Friend accept that manufacturing industry is the only genuine source of non-inflationary economic growth and that it is therefore essential that this country's manufacturing base is widened? Will he therefore not just talk to the CBI, which does not represent manufacturing industry in any adequate way, but spend as much if not more time talking to the Engineering Employers Federation, which does represent manufacturing industry, the United Kingdom Industry Group, which specifically represents manufacturing industry, and the Manufacturing and Construction Industries Alliance, which I formed with the support of Members of all parties in the House? Those are the organisations that are in touch with manufacturing industry, not the CBI.

Mr. Oppenheim

I thank my hon. Friend for his views. I agree with him about the importance of manufacturing industry. Although it is obviously not the sole generator of wealth in the economy, it is crucial. I agree also that it is important to speak to a range of organisations. Ministers in the DTI do that, and intend to continue doing so.