HC Deb 13 March 1996 vol 273 cc975-7
13. Mr. Nicholas Winterton

To ask the President of the Board of Trade what are his policies for the promotion of British manufacturing industry. [18701]

Mr. Oppenheim

The Government attach high priority to manufacturing as an important and growing sector of our economy. There has been an enormous improvement in our manufacturing performance, which will be sustained and built on if we maintain sound monetary policy and low interest rates, and refuse to burden industry with a minimum wage and the social chapter.

Mr. Winterton

Now that the Confederation of British Industry has sidelined yet again its support for manufacturing industry, thus justifying my establishing the all-party manufacturing and construction industries alliance, may I urge the Government to redouble their efforts, as they are doing in the textile industry, to encourage import substitution by identifying goods in which we have a trade deficit, and liaise with industry in bringing forward proposals to encourage British suppliers to compete for orders which otherwise—sadly—will go overseas?

Mr. Oppenheim

My hon. Friend is right to emphasise the importance of manufacturing to the British economy. The best way to improve business prospects and manufacturing in Britain is to carry on running the economy sensibly with a sensible monetary and fiscal policy, to ensure that taxes are not too high and to try to improve the education system—often in the teeth of opposition from Labour local education authorities.

Many important high-tech sectors of British manufacturing have done very well over the past 16 years. In pharmaceuticals, for example, we have moved from being the third largest exporter to being the largest exporter, having overtaken Switzerland and the United States. Our aerospace industry has also done extremely well, especially in very high-tech aero engines, in which Rolls-Royce has increased its share of the civil air engine market from 10 per cent. to 30 per cent. In many high-tech sectors, Britain has done very well and it is very important that we continue with that progress. I am not sure that an interventionist sector-by-sector approach is necessarily the best way to take that forward, but I agree with my hon. Friend's underlying point.

Mr. Sheerman

Will the Minister encourage his colleagues to stop gloating when the German, French or Spanish economies get into any trouble and remember that they are our major customers for manufacturing products and that when they start getting into trouble, it is not long before we follow them into recession? Will he remember that the lead element needed to reactivate British manufacturing is top-quality managers? Are the actions of the Chancellor of the Exchequer and the Secretary of State for Education and Employment encouraging that development by cutting university education, university postgraduate education and business schools? Is that the right way to tackle our manufacturing dilemmas?

Mr. Oppenheim

I agree with the hon. Gentleman about the importance of education to the overall competitiveness of the economy. However, I should point out that the number of people aged 16 and over in higher and further education has trebled under the Government. The hon. Gentleman should pay tribute to the progress that we have made. A recent survey showed that in the late 1970s the competitiveness and productivity gap between Britain and Germany widened. That gap has narrowed by 75 per cent. since 1979 and it is a tribute to the progress that we have made in making British manufacturing more productive and competitive since that time.

Mrs. Roche

Let us keep talking about 1979, because since then investment in manufacturing has fallen by 10 per cent. in real terms. Does that not explain why some small businesses in that sector are so disillusioned with the Government, who have totally failed to make this country the enterprise centre of Europe, as claimed by the Prime Minister?

Mr. Oppenheim

I am delighted to concentrate on 1979, because I remember that manufacturing output fell under the Labour Government, whereas it has grown sharply under the Conservative Government. Not only that, but business investment and manufacturing productivity have risen at twice the rate they did under the Labour Government.