Manufacturing Industry (Hansard, 28 November 1996)

§ 3. Mr. Barry Jones
To ask the Chancellor of the Exchequer if he will make a statement about his fiscal proposals to assist United Kingdom manufacturing industry. [4858]

§ The Chief Secretary to the Treasury (Mr. William Waldegrave)
The Government's economic policies provide the environment for a healthy and successful manufacturing sector.

§ Mr. Jones
Does the right hon. Gentleman accept that the strengthening pound is posing very real problems for Britain's export industry? Does he agree that, for example, British Steel, which is one of the leanest and 449 fittest of companies, is encountering problems in exporting? What will his Government do to tackle this growing problem?

§ Mr. Waldegrave
As the House knows, the Government do not maintain an exchange rate target. I agree with the hon. Gentleman that the privatised British Steel's export performance is marvellous—up by about 400 per cent. since it was denationalised—and it is a fine company. We do not maintain a target for the exchange rate and do not intend to do so.

§ Mr. Wilkinson
Does my right hon. Friend agree that the extremely positive measures that Her Majesty's Government have taken in the Budget—for example, reducing corporation tax for small companies to 23p in the pound, in line with the standard rate of income tax, and reforming the uniform business rate—are immensely helpful, as small companies have to expand, by virtue of their retained profits, and those retained profits should be healthier by virtue of Her Majesty's Government's measures?

§ Mr. Waldegrave
My hon. Friend is right that the measures in the Budget, and the climate for business maintained and supported by the Budget, are extremely good for small business. That is why the welcome given to it, in resounding terms, by the Forum for Private Business was accurate. It said that this was The best budget in a decade for owner-managed firms. The same is true for other small firms, which have the benefit of the action on business rates and the benefit of the lower corporation tax. My hon. Friend was entirely right in what he said.

§ Mr. Grocott
Can the Chief Secretary confirm that the number of jobs in manufacturing industry has fallen terrifyingly since the Conservative party came to power in 1979? Can he explain to the House whom he blames for that?

§ Mr. Waldegrave
What matters, surely, is manufacturing output, which fell under Labour. This country has had a remarkable turnaround in manufacturing productivity since 1979, and we have now outpaced Germany and France. That is the key figure for the future of British manufacturing industry, and it is why, for example, Britain is Europe's biggest exporter of televisions and microchips, and of other products of other industries out of which we had been driven when Labour governed this country.