§ 9. Mr. Alan W. Williams (East Carmarthen and Dinefwr)If he will make a statement on the latest figures for investment in manufacturing (a) in cash terms and (b) as a percentage of GDP; and what the comparable figures are for the United Kingdom's main competitors. [61301]
§ The Minister for Energy and Industry (Mr. John Battle)In 1996, the latest year for which internationally comparable figures are available, the Organisation for Economic Co-operation and Development estimates that 1035 the value of manufacturing investment in the UK was £15.4 billion, or 2.1 per cent. of GDP. Manufacturing investment accounted for 3.1 per cent. of GDP in Germany, 2.3 per cent. in France and 2 per cent. in the United States.
§ Mr. WilliamsI am grateful to my hon. Friend for those figures, which show once again that manufacturing investment in Britain lags behind that in our competitor countries. Why have we consistently invested less in manufacturing industry over the decades? What have the Government done to tackle the problem and what further action does the Department of Trade and Industry intend to take to boost manufacturing investment?
§ Mr. BattleSince the general election, manufacturing investment has been greater as a share of manufacturing output than at any time since 1985. The Government are taking key action to support manufacturing. We are investing in the science base to benefit engineering and technology. The DTI is a catalyst driving forward innovation, supporting the smart and link programmes that link government together in practical working partnerships focused on the future. We have taken action to strengthen supply chains, such as the industry forum masterclass that the DTI has set up. We are working on a detailed action plan with the textile industries to get designers nearer to manufacturers. I shall address the shipbuilding forum on 16 December. The forthcoming competitiveness White Paper will provide a framework within which we can all work to support manufacturing and the regeneration of some of the older industries.
§ Mr. John Redwood (Wokingham)Investment is under threat from the Government's policies of high taxes, high exchange rates and high interest rates. I am sure that the Minister agrees that a competitive exchange rate is crucial to future manufacturing investment and success. Given that the Secretary of State—who once again does not want to answer on manufacturing—thinks that it is a question of "when" rather than "if' we join a single currency, again showing his normal disregard for public opinion and Parliament, will the Minister answer these three questions? One: will he confirm that all 11 states entering the single currency are doing so at their exchange rate mechanism mid rates? Two: will he also confirm that our exchange rate mechanism mid-rate is DM2.95? Three: does he accept that entry at such a rate would be a hammer blow to manufacturing and manufacturing investment? Are he and his boss the Secretary of State proposing that we go cap in hand to seek a devaluation of our ERM mid-rate or are they saying that we should go in at that rate and that manufacturing can go hang?
§ Mr. BattleWe have made it absolutely plain that we will join at the appropriate rate. The right hon. Gentleman's questions come way down the course, but it is interesting that he asks them now. I am tempted to ask him whether he has cleared them with the leader of his party, who at least seems to be rather tougher than his previous leader, with whom the right hon. Gentleman fell out.