Manufacturing Production (Hansard, 12 July 1982)

§ Lord Orr-Ewing
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Minister of State for Defence Procurement (Viscount Trenchard)
My Lords, in recent months the index of manufacturing production has recovered the ground lost as a result of bad weather at the turn of the year. The underlying level of output has been broadly flat since last autumn, at a level about 2 per cent. above its low point in the spring of last year, but all the leading forecasters expect growth to be resumed in the second half of this year.

§ Lord Orr-Ewing
My Lords, I thank my noble friend for the good news that in a period of world recession our manufacturing output has increased by 2 per cent. Can he perhaps tell the House how productivity compares with that, as measured by output per man-year in manufacturing industry?

§ Viscount Trenchard
Yes, my Lords; indeed that is perhaps one of the most encouraging pieces of news. In the first quarter of 1982 output per head in manufacturing was 12 per cent. higher than at the end of 1980, and a record for all time, by quite some considerable margin.

Lord Bruce of Donington
My Lords, is the noble Viscount aware that the Question posed by his noble friend related to recent months, and that, excluding of course oil production, there has in fact been no increase in manufacturing production? Is he further aware that most reputable forecasts do not predict any increase at all, however insignificant, until next 6 year? Is he also aware that during the past year promises of increased production and forecasts have always been predicated in relation to a period some three months forward, so far without result?
Furthermore, is the noble Viscount aware that this disastrous performance has at the same time been accompanied by a massive increase in unemployment? When will he and his noble friends face the fact that their economic and financial policies are completely disastrous and have devastated British industry, and does he realise that that is reflected by a further increase in bankruptcies?

§ Viscount Trenchard
My Lords, within both my Answer and the definition of manufacturing production, only oil refining is included. That does not alter the trends of the figures that I gave in my Answer, which no doubt the noble Lord will look at in the official record. So I have nothing to change in respect of that. We have had a flat period after a 2 per cent. growth. As far as most forecasts are concerned, I have seen and will continue to see, I believe, variable forecasts; but with the kind of return to competitiveness that we have started to see with these productivity figures there is little doubt in the minds of most forecasters that the upturn which started last year will be resumed. The question is timing.
The noble Lord gives me a feeling sometimes that he is overjoyed if there is any slight lull in recovery and rather distressed if recovery is taking place. Far from disastrous results, this Government have, for the first time, tackled the root causes of inflation, our industry is becoming steadily more competitive and it can only be a matter of time before the results are realised.

Lord Paget of Northampton
My Lords, the noble Viscount, in displaying the lull to which he refers, stretched "recent months" back to January and made that his datum. Would it not be a bit odd if in midsummer there was not some increase in performance on one of the worst winters this century has seen? We do not want to be depressed about a lull in the depression; we want to see one.

§ Viscount Trenchard
My Lords, I made clear that by the autumn of last year we had seen a 2 per cent. increase from the low point at the beginning of the year. I also made clear that since that period the output has been flat. Certainly the flat since that period includes a particularly low December result and a recovery from it in month-by-month figures since that time. The noble Lord will of course also recollect that we have had two rail strikes, which did not improve the figures in March (I think it was) and will not be improving them at the current time.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that, while everyone will welcome the slow improvement that he has been able to announce, people in industry are conscious of the fact that they are still burdened with the restrictions arising from the various Employment Acts which remain in existence and the high rate of interest? Is there any way in which the Government are able to influence an improvement in both those spheres?

§ Viscount Trenchard
My Lords, I think those supplementaries, though I understand my noble friend's feelings on this subject, are wide of the Question. The employment legislation—the Act that we have enacted and the Bill that we intend to enact—will help to improve our competitive position.

§ Lord Molloy
My Lords, is the noble Viscount aware that British manufacturers can make some efforts to overcome inclement weather? Their great difficulty, and their almost impossible task, is to overcome the policy of the present Government, where we have seen a rise in unemployment to 3 million people and the highest rate of bankruptcies that this country has seen since the war. Does the noble Viscount not think that he is exhibiting only a degree of petulance, while we on this side are just as much concerned about those who have lost their jobs as we are about those who, under this Government, have lost their businesses as well?

§ Viscount Trenchard
My Lords, I would not agree with any of that. The share of world markets held by British manufacturing goods was, as I have so often said, halved between 1960 and 1975, and it was still in a very had shape when we came to power. The results of this were hidden from the British people because world growth during the 'sixties and 'seventies was unique, and we shall probably never have a period like it again. We are now beginning to recover the competitiveness which was lost over all those years, one has to say under all Governments.

§ Lord Orr-Ewing
My Lords, is my noble friend aware that in the private sector, in real terms, there has been considerable investment in improved machinery, improved lay-outs and improved productivity schemes, and that this has been a healthy reaction and has resulted in high productivity? Is it not sad that in the public sector, in such places as the railways, where there has been massive investment in electrification of the line between Bedford and St. Pancras and where the rolling stock sits in the sidings, all that investment comes to no avail because ASLEF refuse to drive the trains?

§ Viscount Trenchard
My Lords, there is evidence that the productivity increases which I mentioned stem from the better use of existing investment, which is the really important thing. Investment is continuing, and there is indeed a slight upturn in investment intentions. As far as the public sector is concerned, yes, there has been a great deal of investment in that area, also. While there is some evidence of much better use of that investment in some of our nationalised industries, there is certainly not enough evidence of that investment being properly used.

Lord Bruce of Donington
My Lords, will the noble Viscount take steps to ensure that his noble friend Lord Cockfield receives a copy of the reply he has given this afternoon, since it is in complete contradiction to the predictions which were given by his noble friend some three months ago? Will the noble Viscount accept as a matter of principle that we on this side of 8 the House shall be truly pleased, and indeed delighted, when output in this country achieves one half of the rate of increase it achieved under Labour Governments?

§ Viscount Trenchard
My Lords, I should like to point out, as I said very clearly in my first Answer, that output per man has reached an all-time high, well above any of the levels that were reached under the previous Government.

Lord Bruce of Donington
No, my Lords.

§ Viscount Trenchard
I am sorry; that is correct. Output per man in manufacturing industry is well above any previous year. I would ask the noble Lord to look up the position—and perhaps he will let me know if he can find any other facts, because they do not exist.

Lord Bruce of Donington
I shall be delighted, my Lords.

§ Lord Mayhew
My Lords, is this not the position; that any small improvement that the Government achieve in productivity will be offset by the eager support given by the Opposition to damaging national strikes?

§ Viscount Trenchard
My Lords, I would rather not be drawn on to that one, but, yes, I very much agree that current industrial disputes are never helped by public statements.

§ Lord Jenkins of Putney
My Lords, is it not the case that if, by their policies, the Government were to achieve an increase in the number of unemployed to 10 million, the productivity of those remaining in employment would be quite phenomenal but total production would continue to fall?

§ Viscount Trenchard
My Lords, until British industry is fully competitive and starts to regain the share of world markets which we lost under previous Administrations, the future levels of employment will never be secure. Once that competitiveness has been regained, and once we start to regain that share of world markets, employment will follow.