§ 2.45 p.m.
§ Lord CARR of HADLEYMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what was the percentage increase in national productivity, defined as output per person employed over the economy as a whole, between 1973 and 1976, and between 1970 and 1973.
159§ The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)My Lords, over the three-year period from 1973 to 1976, the annual output per person employed in the United Kingdom fell by 1 per cent. Over the previous three-year period from 1970 to 1973, there was a rise of 9.3 per cent. in annual output per person employed.
§ Lord CARR of HADLEYMy Lords, this is extremely serious and depressing news which the Government have given. Do the Government accept that, even discounting this fall, our low productivity as compared with other countries is one of the major causes of the industrial and economic problems in this country? How do the Government account for the fact that during their period of office there has been this decline in overall productivity given the fact that, in spite of world difficulties, countries like Germany, France, the Netherlands, Belgium and the Republic of Ireland have all managed to go on increasing their overall productivity during the same period? Lastly, what are the Government going to do to reverse this very serious trend?
§ Lord McCLUSKEYMy Lords, I am extremely reluctant to engage in anything resembling political jousting with the noble Lord, who has had a distinguished career, both in politics and in Government, but he tempts me beyond my capacity to resist. He referred to the period of office of this Government, and the implication was that the fall in productivity was somehow the fault of the Government. My Lords, the Question which the noble Lord has asked is but a pale shadow of a Question that was asked in the other place by Mr. Nigel Lawson on 13th June, and had the noble Lord asked here the Question which was asked there (to which a full reply was given) we should have seen that, under the Labour Government from 1967 to 1970, productivity rose by 9.2 per cent.—almost the same amount by which it rose during the Conservative three-year period for which we have been given figures.
The noble Lord will know as well as I do that that was a good base on which the Conservatives could build when they came into office in 1970. When the present 160 Government came into office, the Conservatives handed over a three-day week, falling productivity, deeply disappointing investment, a monetary explosion and deep and bitter poisoning of industrial relations. From that base, the Government had to face the worst world recession since the 1930s. I need not describe that recession to noble Lords, but, when the noble Lord asks me, "Is not the Government's performance the cause of our problems?", I answer that the disappointing productivity figures to which I have made reference are the result of the world recession which we have had to face, and of the considerable inflation and unemployment resulting from the enormous surpluses of the OPEC countries.
I turn now to the latter part of the noble Lord's supplementary question—the matter of remedies. What the Government are doing and will continue to do is, first of all, to pursue good industrial relations. They will do this not, as the noble Lord did when his Government were in office, by trying to dictate to the workforce, but by trying to discuss with them, to identify and to solve common problems. Secondly, they will do it by continuing to make such changes as were made in the Budget, changes designed to make hard work more remunerative in terms of take-home pay.
Several noble Lords: Order! Speech!
§ Lord McCLUSKEYMy Lords, I was asked a five-part question, and I am answering the fifth part. The Government will continue to provide a wide variety of incentives for industrial investment, and to provide support for tripartite "Neddy" meetings to work out ways of improving industrial performance.
§ Lord CARR of HADLEYMy Lords, I seem to have touched the noble Lord on a sensitive point, and I shall not make a speech at him. But, seriously, I did not ask him any of the questions to which he replied in the first part of his speech. What I hoped we could treat seriously in a nonpartisan way—
Several noble Lords: Oh!
§ Lord CARR of HADLEYYes, my Lords, because our poor productivity record is of great national concern. Even 161 when it was rising during the last three years of the last Labour Government, and in the period when there was a Conservative Government, it was still rising from an uncomfortably low level. The very serious point is that it has now fallen from that low level. A serious aspect is that, in spite of the world recession, which has of course made things difficult, most other competitive countries have managed to continue a rising productivity. The only question I asked the noble and learned Lord was: what are the Government going to do to change our trend? We suggest that until they change their taxation and public expenditure policies, this terrible trend will continue.
§ Lord McCLUSKEYMy Lords, you will be happy to know I have very little to add to what I have already said. A direct comparison with countries like Germany—and others have done the same —which can export a number of their workforce, is invalid. Output on this basis is a relationship between a gross domestic product on the one hand, and the number of persons employed on the other hand. These comparisons are not valid in the way that the noble Lord suggests.
§ Lord BOYD-CARPENTERMy Lords, does the noble and learned Lord accept, as the Chancellor of the Exchequer appears now to be accepting, that one of the causes of the falling off in industrial productivity is levels of taxation upon earnings unequalled throughout the world?
§ Lord McCLUSKEYMy Lords, I have mentioned the Government's view on taxation, but the main cause is that in a recession productivity is bound to suffer.
§ Lord DUNCAN-SANDYSMy Lords, without going into the lengthy Party political arguments contained in the Minister's reply, may I ask him simply whether he would be prepared to publish comparable figures for the countries mentioned by my noble friend Lord Carr of Hadley together with any explanatory notes which he thinks are necessary?
§ Lord McCLUSKEYMy Lords, if asked to do so, I will certainly endeavour to publish such figures.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, is the noble and learned Lord aware that for one who was tempted—so he claims—beyond endurance, he was remarkably well prepared for yielding?
§ Lord McCLUSKEYMy Lords, a compliment from the noble and learned Lord—rare as it is—is gratefully received.
§ Lord BLYTONMy Lords, will the Minister state what was the balance-of-payments situation when we left Government to the Tories in 1970, and the position when we came back to Government in 1974?
§ Lord McCLUSKEYMy Lords, I will give my noble friend the same answer as I gave earlier: if asked to do so, I will be delighted to state the situation to the House.
§ The Earl of ONSLOWMy Lords, is the noble and learned Lord really asking the House to believe that all the successes of the Government are the Government's own doing, and that all the faults of the Government—which are legion—are the faults of the previous Tory Administrations going back to Disraeli?
§ Lord McCLUSKEYMy Lords, I am saying only this: a straight comparison of productivity figures during the period of Administration by the Conservatives and the subsequent period is not helpful.
§ Lord LEATHERLANDMy Lords, may I ask my noble and learned friend whether I may bring a little joy to his heart? Is it not a fact that within the past 12 months, from April last year to April this year, industrial production in this country rose by 2.3 per cent?
§ Lord McCLUSKEYMy Lords, I have figures only in relation to the three years period and I cannot confirm what my noble friend says.