Manufacturing Industry Output (Hansard, 18 February 1986)

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

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, in the year up to November 1985 manufacturing output was 5½per cent. lower, on average, than it was during 1979. On the same comparison output per head was 23½ per cent. higher in 1985 than it was in 1979. Between 1974 and 1979 manufacturing output fell by nearly 3 per cent., and output per head increased by 5½ per cent.

§ Lord Orr-Ewing
My Lords, as we have heard a great deal of abuse about reducing productivity, poor capital investment and a general derogation of British industry, will my noble friend take an opportunity to make these facts rather more widely known? These figures are very startling and need to be more widely appreciated in every part of our nation.

§ Lord Lucas of Chilworth
My Lords, I am most grateful to my noble friend for his reception of this information. We shall certainly take every opportunity to ensure that the public at large as well as industry itself appreciate the great strides that have been made in all directions since 1979.

§ Lord Hatch of Lusby
My Lords, does the noble Lord include in "all directions" the figure which he has just given for the fall in manufacturing output since 505 1979? Will he let the nation know about that fall and the reasons for it? As the noble Lord who has asked the Question has included investment, this time will the Minister answer me directly as to whether it is a fact that today investment in manufacturing industry is 18 per cent. lower than it was in 1979?

§ Lord Lucas of Chilworth
My Lords, in reply to the first question of the noble Lord, Lord Hatch of Lusby, perhaps I may say that I believe that I answered him quite fully on 21st January when he posed a very similar Question. Dealing with investment, it is perfectly true that investment is at a lower level than it was in 1979. However, there has been a 4 per cent. growth per year since 1981, which I think to some extent redresses the unfair balance which the noble Lord is trying to indicate.

§ The Earl of Lauderdale
My Lords, will my noble friend confirm that this improved productivity has been accomplished in a period of rising energy prices; but will he accept that one of the by-products of the collapse of the OPEC cartel and the collapse of crude oil prices must now mean that there is an opportunity for industrial prices to improve still further?

§ Lord Lucas of Chilworth
My Lords, my noble friend will appreciate that the point he makes is but one factor in a whole range which manufacturing industry has to take into account. Yes, to some extent they will improve, hut not of course to an extreme extent.

§ Lord Diamond
My Lords, will the noble Lord kindly, give us the figures for the comparison of productivity? He has already told us of improvement in productivity over the past five years in this country. Can he give us the comparative figures of increases in productivity with our main competitors—that is to say, the United States, Japan, France and Germany?

§ Lord Lucas of Chilworth
My Lords, not precisely. I regret to tell the noble Lord, Lord Diamond, that without notice I cannot do that. However, I can tell him, as I stated on 21st January, that in general terms, if one drew a graph, industrial production in the United Kingdom would look very similar to that in France and West Germany. But this afternoon I do not have figures for the United States of America.

§ Lord Avebury
My Lords, can the Minister give the proportion of manufactured goods bought in 1979 and 1985 respectively which was met by domestic output? As consumption has increased considerably over this period, is not the fall of 5½ per cent. an underestimate when taken together with the growth in the use of these products over the same period? Has not the fall been much more startling than the one he mentioned?

§ Lord Lucas of Chilworth
My Lords, I do not think that the fall has been more startling if one takes into account the fact that in 1979 we started from a very much lower base. The noble Lord himself will probably recall that in 1979 British manufacturing industry was overmanned to such an extent that productivity was totally uncompetitive compared to 506 that of our European competitors, and therefore the baseline from which the noble Lord derives his figures would not provide as fair a comparison.

§ Lord Somers
My Lords, is it possible to say what percentage of the drop in production has been due to strikes or other industrial troubles?

§ Lord Lucas of Chilworth
My Lords, I do not have the figures. I do not think that that comparison would be helpful considering that in manufacturing industries management and workforce, all those concerned, have improved the position so dramatically in the last five or six years that now our strike record is one of the best—when I say "the best" I mean "the lowest"—of all the industrialised nations. That is a great credit to all those involved in the manufacturing industries.

Lord Bruce of Donington
My Lords, is the noble Lord aware that we on this side of the House welcome the increase in productivity which has taken place among those who are fortunate enough to be employed in manufacturing industry? Is he aware that unemployment has increased by 2 million since his party came into office? Is he further aware that he has not satisfactorily answered the question with regard to investment in manufacturing industry? Is this matter not very important? Will the noble Lord bear in mind that the manufacturing performance in total has been such as to produce a deficit in our trade balance in manufactured goods of some £6 billion per annum as against a surplus of over £2 billion before 1979?

§ Lord Lucas of Chilworth
My Lords, the noble Lord, Lord Bruce of Donington, asks a number of questions. So far as investment is concerned there has been, as I have said, a 4 per cent. growth in investment a year since 1981, which is quite considerable and is reflected in the greater competitiveness of our manufactured products which achieved a record volume of exports last year. If the noble Lord, as he has on more than one occasion, seeks to take out of the current account and the trade deficit isolated instances, of course he will get the kind of figure that he mentions. We tend to look at the whole position with regard to our trade both at home and overseas, which on current balance is in credit again.

§ Lord Murray of Epping Forest
My Lords, will the noble Lord do us the courtesy of replying to the point made by my noble friend Lord Bruce, that the productivity of an extra 2½ million people is nil, and that in giving productivity figures he should make allowances for that fact?

§ Lord Lucas of Chilworth
My Lords, in answering my noble friend Lord Orr-Ewing I said that output per head was 23½ per cent. higher in 1985 that it was in 1979; I think that demonstrates the better competitiveness of industry, which has resulted in an export performance of the nature I have given. If we had stayed with the figures of employment and overmanning which obtained in 1979 our manufacturing industry would not be in the very healthy state it is today. It is due to this Government's 507 policies that our manufacturing industry is so much more successful than it was in 1979.

§ Viscount Mersey
My Lords, does my noble friend not agree that the most encouraging figures were admirably put across by our right honourable friend the Prime Minister on the "Panorama" programme last night? Does she not merit the approval and admiration of this House?

§ Lord Lucas of Chilworth
My Lords, I saw most of the "Panorama" programme, and I believe that my right honourable friend the Prime Minister gave a very true and very encouraging account of the state of the nation as it is today.