The Manufacturing Industries: Employment Levels (Hansard, 24 October 1984)

§ Lord Dean of Beswick
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)
My Lords, the figures for Great Britain in June of each year fell from 197 7,133,000 in 1979 to 5,480,000 in 1984. I will, with your Lordships' permission, circulate the detailed figures for each year in the Official Report.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply and I await with interest the figures that he is going to circulate. Would the noble Lord not agree that the figures he has just given indicate quite clearly the devastation and destruction that has happened to our manufacturing base, as a manufacturing nation, over that particular period? Would he not also agree that a far better use could have been made of the huge sums of money from our North Sea oil revenues? That money would have been better used for investment into our manufacturing base to retain jobs rather than being distributed, not needlessly but in a way that was no use whatsoever in an objective sense in the creation of jobs, in unemployment and related social benefit.

§ Lord Belstead
My Lords, I would not draw the conclusion that the noble Lord has drawn from my Answer. The Government want to see an efficient and competitive manufacturing sector, and I believe that we are going a long way towards achieving that end. The fact of the matter is that manufacturing output is now rising whereas it fell between 1974 and 1979. The noble Lord mentioned investment. Investment in manufacturing rose by 9.5 per cent. in the first half of this year and was up 15 per cent. on the previous year. The difficulty about the figures is that there is of course a long-term trend towards services, which is to be found in many countries and that trend we have also made use of in the United Kingdom.

§ Lord Dean of Beswick
My Lords, I regret coming back to the Dispatch Box so soon; but I think that it is accepted that in the search for more jobs the service sector will have to take a larger percentage of people into employment in order to have some effect on the dole queue. However, the main area for provision will once again be the manufacturing sector. The Minister would do well to look at the figures and say whether the Government have any ideas when they will increase the 9 per cent. investment into a more realistic figure.

§ Lord Belstead
My Lords, all I would say is that investment in manufacturing is increasing. I believe that if we stick to our guns it will continue to do so.

§ Lord Gisborough
My Lords, can my noble friend say whether or not productivity has risen during that period? Secondly, what is the position as regards vacancies?

§ Lord Belstead
My Lords, as I said in my original Answer, productivity has risen very considerably. I am glad that my noble friend has asked me about vacancies because it really does not seem very much 198 good our being worried, as we all are, about the level of unemployment if vacancies are not taken up. The fact of the matter is that vacancies in September were at their highest level for four and a half years.

§ Lord Kaldor
My Lords, as compared with the peak reached in the first quarter of 1979, manufacturing output is still down about 13 to 15 per cent. and manufacturing investment—despite the 9 per cent. rise that has been mentioned, I believe, for the past year—is still more than 40 per cent. lower than it was before the present Government came in.

§ Lord Belstead
My Lords, I should like to look at those figures; I do not know that I agree with the noble Lord, but I do not have figures today to rebut them.

§ Lord Rochester
My Lords, is it not inevitable that, in order to remain internationally competitive and to do this by continuing to improve productivity, there will continue for some time to come to be a decline in employment in manufacturing industry, particularly in large-scale organisations? But does not this accentuate the need to focus attention increasingly on measures designed to increase employment in such diverse units as co-operatives, enterprise trusts, community businesses and science parks?

§ Lord Belstead
My Lords, I do not think that the Government would disagree in the very least with what the noble Lord, Lord Rochester, has said, speaking as I know he does from long experience of these matters. However, let me add two other points. First, as the noble Lord will well know, there are certain sectors of manufacturing which are successful at the present time and which are showing encouraging increases in employment. Secondly, surely we also need to train for the future; and of course that is what the Manpower Services Commission is all about and that is what the debate in your Lordships' House two nights ago was all about.

Viscount St. Davids
My Lords, would not the noble Lord agree that this is merely part of a very long-term trend and that the same thing has happened in agriculture over more than a century? Originally agriculture was the occupation of the great majority of the people of this country, but it is now the occupation of only a very small percentage. Is it not true that the same is clearly happening in the industrial sector and that it is probably irreversible? Moreover, is it not true that the only people who fail to recognise this are the dinosaurs on the Labour Party Benches?

§ Lord Belstead
My Lords, I agree with the noble Viscount that the trend in the reduction in employment in manufacturing is something which has been going on since the 1960s. If I may just refer to what the noble Lord, Lord Kaldor, said just now, the fact of the matter is that, despite that long-term trend in employment, we have today a situation where productivity is up, investment is up, employment in services is up, vacancies are up and the total numbers in employment compared with last year are up. I think that that is a reasonable outlook for the future.

§ Baroness Seear
My Lords, at the risk of being classified as one of the dinosaurs, may I ask the 199 Minister to confirm that, even in industries such as textiles where the trend downwards has been going on for a long time, there has been an increase in trade at the upper end of the industry where they are trading up market and have adjusted to new types of demand?

§ Lord Belstead
My Lords, I believe that that is true. I should like to confirm that that is so, and if in any way it is wrong I shall write immediately to the noble Baroness, but I believe that what she says is indeed true.

§ Lord Beswick
My Lords, the noble Lord said that there were the increases in percentages; would he not agree that in each of those cases the reason why he can give an increase in the percentage is that he is talking now about such a low base compared with 1979? Secondly, the noble Lord says that there are many vacancies in manufacturing industry that are not being taken up. Would he be kind enough to tell us to which industries he is referring?

§ Lord Belstead
My Lords, the noble Lord is absolutely right; I invariably find myself in agreement with the noble Lord, Lord Beswick. It is indeed the case that we start off from a low base in so many things because when the present Government came into office we had just passed through one of the most ghastly winters that this country can ever remember which was presided over in the dying months of the Labour Government of that time. Therefore, the noble Lord is absolutely right on that point. So far as the increase in employment in certain sections of manufacturing is concerned, if the noble Lord would care to glance some time at the electrical and electrical engineering industries, metal goods of various kinds, instrument engineering, industrial plant and steel work and processing of plastics, he will find that there has been an increase in employment in those various occupations bordering on 30,000.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the horrendous figures which he has been kind enough to give in his Answer to the first part of the Question are, in the main, a reflection on the gross incompetence of the Government in pursuing policies which, outside the limited number of economic acolytes close to the Prime Minister, are elsewhere regarded as 100 years out of date?

§ Lord Belstead
My Lords, I think that the noble Lord is being less than fair. It is clear from the exchange that we have had that the reduction in employment in manufacturing has probably been taking place for about 20 years. It is also the case that employment in services in this country has gone up by 1⅓ million people in the past 10 years. Surely we need to recognise what is needed for the future: we need to put our investment where it will do most good. I am very glad to have been able to confirm at this Question Time that investment in this country is going up.

§ Lord Kaldor
My Lords, will the noble Lord confirm that Britain's share in world trade in manufactured goods, which showed a slowly rising trend in the 1970s, has fallen by 19 per cent. since 1979 and is now barely over 7 per cent.? Will he also confirm that 200 service industries could never provide the foreign exchange and the exports that this country essentially needs for both food and raw materials?

§ Lord Belstead
My Lords, I must say that I am astonished that the noble Lord, with all his experience, starts to talk to me about overseas trade from this country. I am no expert, but one thing I do know: if we go into the sort of siege economy that the Labour Party would want if they were in power, we would find that the figures for overseas trade from this county would be disastrous. I do not think that there is any more to be said on that particular subject.

§ Viscount Trenchard
My Lords, perhaps I may help my noble friend by asking him to confirm that the main loss in the share of the market for manufactured goods referred to by the noble Lord, Lord Kaldor, took place between 1960 and 1978, when our share of world markets was halved, and that this was because we were completely uncompetitive with the rest of the world? Will my noble friend also confirm once more that the only reason this did not show in massive linemployment under administrations prior to 1979 was that the period between 1960 and 1979 was one of phenomenal growth, when the trade of the free world doubled, which has never happened before and which will probably never happen again?

§ Lord Belstead
My Lords, I am grateful to my noble friend for pointing out both those points with which I agree. Perhaps I could end this exchange by commenting on something of which I have personal knowledge. Today the exports of food and drink from this county, for which many people work very hard and for which the Ministry for which I work is ultimately responsible, are worth some £4,000 million a year, which represents an increase of some 10 per cent. a year in those exports over the past five years.

§ Lord Tordoff
My Lords, as the noble Lord himself has raised the question of exports, is it not the case that this Question has to be seen against the very sad background of the fact that manufactured imports into this country have exceeded manufactured exports for the first time since the Industrial Revolution?

§ Lord Belstead
My Lords, perhaps we had better not go down this road too far. However, as the noble Lord will know, we have surpluses in oil and in invisibles, and it is neither necessary nor desirable to balance our trade in every commodity.

§ Baroness Ewart-Biggs
My Lords, on the matter of vacancies, to which the Minister referred, can he say how they are spread over the whole county? Will he also say whether they are vacancies appropriate to take in the young people who leave the youth training schemes?

§ Lord Belstead
My Lords, I do not have that information for the noble Baroness. However, as the vacancies are now very numerous—as I say, they are now the highest that they have ever been for the past 4½ years—it can reasonably be taken that they have a good spread across different sorts of jobs and also a wide spread across geographical areas.

§ Lord George-Brown
My Lords, is the noble Lord aware that two remarks he has made must be considered bothersome, even to him, when he reads them tomorrow? First, he said that employment in service industries has risen by I think 1.3 million; he also said that our investment in that had increased enormously. A little later, in answer to the noble Lord who is sitting below me, he said that exports of food and drink—and he was involved in drink—had increased enormously. I mean in the production of drink, my Lord Chancellor, not what you choose to think! Perhaps he knows his colleague better than I do! These two matters take—

Noble Lords
Question!

§ Lord George-Brown
My Lords, is the noble Lord aware that these two matters bother those of us concerned with manufacturing, either on the capitalist side (the provision of capital) or on the labour side (the provision of labour)? They bother us most. Of all the figures that the noble Lord has given, there is nothing that can possibly disprove that when our population is greater than ever, we are moving from a manufacturing country to a service industry country, which cannot possibly support the population. Would he please ask—

Noble Lords
Oh!

§ Lord George-Brown
My Lords, I am sorry if I am talking too long, but it is worth it. Would the noble Lord please note that all these figures show that Great Britain, which built itself great as an industrial manufacturing country, is trying to become a Switzerland, when it cannot possibly be one?

§ Lord Belstead
My Lords, with respect to the noble Lord, I said that investment in manufacturing at the present time is increasing, but there is nonetheless in this country—as there is in other countries—a long-term trend towards services. When we looked at the services we found that in the past 10 years the increase in employment has been of the order of 1⅓ million people.

§ Lord Shinwell
My Lords, would the noble Lord be kind enough to tell your Lordships who the noble Lord was who made that long speech just now?

§ Lord President of the Council (Viscount Whitelaw)
My Lords, I think that that last comment, coming from the noble Lord whom we all so much admire, brings a very long exchange to a very proper conclusion.

1979	7,113,000
1980	6,804,000
1981	6,100,000
1982	5,803,000
1983	5,539,000
1984	5,480,000