HC Deb 15 May 1996 vol 277 cc939-41
11. Mr. Chisholm

To ask the President of the Board of Trade what has been the change in the level of manufacturing output in the past three months. [28366]

Mr. Oppenheim

Manufacturing output has grown by 0.5 per cent. during the past three months.

Mr. Chisholm

Will the Minister confirm that manufacturing industry is now officially in recession following the second quarterly fall in output? Will he also confirm that manufacturing employment will continue to fall over the next few months, as stated in the leaked memorandum from the President of the Board of Trade to the Chief Secretary to the Treasury? How many more people will have to lose their jobs because of the Government's neglect of manufacturing industry?

Mr. Oppenheim

The hon. Gentleman is wrong on both points. First, manufacturing industry is not in recession; in fact, it has expanded at a time when in most of the rest of Europe it has been stagnant, or has contracted. Secondly, manufacturing employment rose last year. We shall be able to take Labour's complaints about manufacturing industry seriously only when it first has the guts to admit to the disastrous legacy that it left as a result of its industrial strategy in the 1970s, and secondly makes clear what its policies are. Even when it has a policy, such as the minimum wage, it has not the guts or the honesty to tell people at what level it will set that wage. However, we know that every one of its policies would cost manufacturers jobs and competitiveness, raise costs and lose exports.

Mr. Forman

Does not asking a question about the level of manufacturing output over the past three months show a complete lack of proper perspective? If we consider the level over a sensible period, such as since 1980, we discover that manufacturing output has increased by about 30 per cent. Will my hon. Friend confirm that those are the figures on which the House should focus?

Mr. Oppenheim

My hon. Friend is absolutely right. One of the most astonishing things about the attitude of Opposition Members is that they seem conveniently to forget that, when they were in power, our manufacturing performance was diabolical—manufacturing output fell and the balance of trade was moving rapidly into deficit. Under this Government, not only has manufacturing output risen sharply, but we have had the best record of any major industrial country in manufacturing productivity growth.

Mr. Sheerman

The Minister knows that, in the bad old days of 1979, 2.5 million more people were working in manufacturing industry than are today. We made more, and sold more abroad than we imported—that is pretty good economics. If the Minister is going to put his head in the sand and ignore the fact that there is a manufacturing downturn that is serious for the country's future, we face a disaster in the autumn. When will the Government address reality?

Mr. Oppenheim

The hon. Gentleman is right on one important point. Manufacturing jobs have been lost—not only in this country, but in every industrial country in the world. Indeed, as the hon. Gentleman well knows, a huge number of manufacturing jobs were lost under the last Labour Government. That is in the nature of modern economies—when productivity increases, more is made by fewer people. In a sense, that is the sign of a successful economy. The difference between the 1970s, and the 1980s and 1990s is that, in the 1970s, we were losing manufacturing jobs and manufacturing output whereas, since 1979, we have increased our output substantially and become more productive and competitive. That is the only way in which to create what we all, regardless of party, ultimately want: a competitive economy that will guarantee high-quality jobs for everyone.

Mr. John Marshall

Does my hon. Friend agree that it is absurd, even by their standards, for Opposition Members to talk about manufacturing output when they would impose a national minimum wage, a social chapter and a single currency—all of which would lead to a reduction in manufacturing output?

Mr. Oppenheim

My hon. Friend is right. Apart from that, Opposition Members are reticent about telling us the exact detail of their policies, and I can probably understand why. They are probably afraid that the hon. Member for Hartlepool (Mr. Mandelson) will put the evil eye on them—just as he has done to his old buddy the shadow Chancellor. As my hon. Friend said, the Opposition policies of which we know—the minimum wage and raising taxes on business—would cost jobs, cut exports and cut our competitiveness.

Mr. Ingram

Why does the Minister refuse to accept the truth, which has been stated by independent commentators, that our manufacturing industry is facing a Government-induced recession? Is it because the Minister shares the view of Geoffrey Dicks, an economist at NatWest Markets, who said of the recent downturn in manufacturing output that it is not worrying that manufacturing has become as small a part of the economy as it has? Is not that statement an accurate reflection of the Government's policy towards the manufacturing sector? The Government do not want it to work; they want to hurt it.

Mr. Oppenheim

Perhaps the hon. Gentleman will tell the House why, if there is a so-called recession in manufacturing—which, in fact, does not exist—it is worse in Europe, where manufacturing output has fallen sharply, than in this country? The truth is that manufacturing industry in Britain has regained three quarters of the competitiveness against Germany that it lost in the late 1970s under the last Labour Government. When will Opposition Members admit the disastrous legacy of ruin that they left for manufacturing industry in 1979? I do not deny that there are problems in manufacturing industry—of course there are, we are still not as competitive as the best—but we have made up much of the ground that we lost in the 1960s and 1970s, primarily under Labour Governments.

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