HC Deb 03 February 2000 vol 343 cc1202-4
13. Mr. David Kidney (Stafford)

What assessment he has made of the prospects for growth in the United Kingdom's manufacturing sector over the next 12 months. [106897]

The Economic Secretary to the Treasury (Miss Melanie Johnson)

The pre-Budget report forecast is manufacturing output growth of 1½ to 2 per cent. this year.

Mr. Kidney

I thank my hon. Friend for that answer. Recently, Stafford's premier manufacturer, Alstom, announced quite heavy job losses later this year. As my right hon. Friend the Chancellor of the Exchequer has announced that the Budget will be on my birthday, may I ask for a birthday present, namely fiscal measures that are targeted to help those sectors of the economy that are exposed to international competition and hit by the value of the pound?

Miss Johnson

I am sorry to hear about the difficulties that are being experienced by the company to which my hon. Friend referred. I shall be happy to meet him to talk about them.

It is a coincidence that the Budget will be introduced on my hon. Friend's birthday. He should draw no conclusions from the fact that the Treasury team does not give birthday presents. However, our best birthday present has been to the country, and it has been the prudence with which we have looked after the economic affairs of the nation, the caution that we have deployed and our policy of sound public finances, leading to the fastest rate of growth in the United Kingdom for five years. Manufacturing output rose by 1.1 per cent. in the three months to November on the previous three months. We have stabilised the economy and ensured that we do not return to the record interest rates that the Opposition allowed to happen when in government. We have avoided a return to the boom-and-bust policies of the Tory years.

Mr. Nicholas Winterton (Macclesfield)

The Government have talked about the optimistic outlook for manufacturing industry. I am sure that the Minister would agree that the manufacturing base is too small. Do the Government see an expansion of it? What policies will the Government pursue to bring that about, as that will lead to more stable and sustainable economic growth?

Miss Johnson

I am grateful to the hon. Gentleman for his support for manufacturing industry, which I strongly share. Manufacturing productivity is now up by 6 per cent. on the previous year. That is the strongest growth for five years. These developments augur well for the future. The Conservative Government, in sharp contrast to the present Government, presided over zero growth in productivity from 1995 to 1997. I am sure that he agrees that it is the present Government's policies that are helping to provide the base on which manufacturing and exports will continue to grow.

Dr. Vincent Cable (Twickenham)

Is the Minister aware that concern about the future of British manufacturing industry has been expressed by no less a body than the International Monetary Fund, which considers the pound to be 15 to 20 per cent. overvalued? What reply has the Treasury given to the IMF?

Miss Johnson

The IMF has given the UK Government a glowing report on their management of the economy, on which I am sure the hon. Gentleman would wish to congratulate us, although I did not hear him do so. As I said, manufacturing output has improved. We have on many occasions drawn to the attention of hon. Members an increase of 700,000 jobs across the UK economy. That is supported by strong manufacturing output.