HC Deb 19 February 1997 vol 290 cc909-11
6. Mr. Austin Mitchell

To ask the President of the Board of Trade if he will make a statement on the change in manufacturing production in the latest quarter relative to (a) the last quarter of 1973 and (b) the last quarter of 1989. [15027]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

In the final quarter of 1996, manufacturing output reached a new high and was 2¼per cent. higher than in the final quarter of 1989 and 8 per cent. higher than in the final quarter of 1973. However, between 1973 and 1979 manufacturing output fell by 5 per cent.

Mr. Mitchell

Is the Secretary of State worried that the increases in output since 1973 and 1989 are so pathetically small, as every other advanced industrial country has had a much bigger rate of increase during that period? Is it not even more worrying that we are at present supposed to be enjoying a boom, but manufacturing production increased by only 0.5 per cent. in 1996? Manufacturing firms are not investing because they have no confidence in the Government, and now—threatened with an overvalued pound—company reports are beginning to show losses and reduced profits. Does not that bode ill, as the worst effects will come through only in a few months' time?

Mr. Lang

I do not think that the hon. Gentleman heard my earlier answer. Manufacturing output is now at an all-time high and this country is manufacturing and exporting more than ever before. The figure is up by 8 per cent. since 1973—and it would be a lot higher but for the fact that, under the last Labour Government, manufacturing did not rise at all, but fell by 5 per cent. We are going through not a boom, as the hon. Gentleman put it, but a period of sustained and sustainable growth which is spreading manufacturing employment—up by 125,000 in the past three years—and prosperity throughout the United Kingdom.

Mr. Congdon

Does my right hon. Friend agree that improvements in manufacturing productivity have played a significant part in our economic success, particularly since 1992? Does he further agree that, if we were voluntarily to impose the burdens of the social chapter on our industry, we would experience the high levels of unemployment currently being borne by France and Germany, which we want no part of?

Mr. Lang

My hon. Friend is absolutely right. Manufacturing productivity has increased dramatically since 1979, and the rate of growth in productivity has been the highest in the G7. We have been closing the gap with Germany and France, which widened under the last Labour Government. He is also absolutely right to say that imposing the European social model on our workplace would damage not just productivity, but output and growth in the economy. We would experience—as we did under the last Labour Government—a much less satisfactory manufacturing performance.

Mr. Hoon

Is it not clear from the Secretary of State's answers that any longer-term consideration of Britain's relative economic performance compared with our immediate EU competitors demonstrates the underlying weakness of the British economy under successive Conservative Governments? Does the right hon. Gentleman agree that, in terms of real gross domestic product growth since 1990, Britain lags behind the EU average and well behind the United States?

Mr. Lang

The hon. Gentleman seems unaware of the fact that this country's economy is growing faster than those of the rest of Europe this year, and is expected to grow faster next. He may also be unaware that the volume of our exports has been growing faster than those of France and Germany since this Government came to power—as has productivity—and that the productivity gap widened under the last Labour Government. With exports doubled since 1979, and up by a third since this recovery began, the British economy is in better shape than any other economy in Europe.

Mr. Garnier

Is my right hon. Friend aware that manufacturers in the east midlands, particularly in my constituency, are enjoying huge order books, both for long-term and short-term orders, and that their opposite numbers in the European Union are unable to employ people to do overtime because of the restrictions that are imposed there? Would he care to compare the miserable picture painted by Opposition Members with the good news that we hear day by day in our constituencies?

Mr. Lang

My hon. and learned Friend is right. Nothing illustrates that fact better than the comparison of unemployment figures. In this country, unemployment has been falling for the past four years and now stands at 6.5 per cent, whereas in Europe it has been rising: in Germany, it is well over 11 per cent; in France, it is over 12 per cent; and, in Spain, it is over 20 per cent. That is the price that they are paying for the European social model.