Manufacturing: Investment and Output (Hansard, 8 July 1987)

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

§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, manufacturing investment statistics are available only quarterly. The latest available figures are for the first quarter of 1987, during which investment, including leased assets, was £1,642 billion (in 1980 prices) compared with £2,081 billion in the first quarter of 1979. Manufacturing output data for May 1987 are not yet available. Based on 1980 equal to 100, in April 1987 output was 108.1 compared with 110.9 in April 1979.

§ Lord Hatch of Lusby
My Lords, is it not remarkable that after eight years of this Government's policy, which they claim has made Great Britain again a leading figure in world economics, they have still not restored either investment or output to the level it was at the time they took office? What do they intend to do in the future to rectify the weakness? Is their action to be seen in the Chancellor of the Exchequer emasculating the National Economic Development Council?

§ Lord Young of Graffham
My Lords, I have been a member of the National Economic Development Council for five and a quarter years and I have yet to see what it has done directly to promote exports other than giving advice. I can tell everyone in your Lordships' House that exports for the first quarter of 1987 were 20 per cent. higher than the average level in 1979. They were actually 40 per cent. higher than the first quarter of 1979, but that quarter was part of the winter of discontent and it could be said that the government of that day contributed towards the lack of export opportunities. According to OECD figures, output expectations in the United Kingdom are more optimistic than anywhere else in the Community. The balance of firms expecting output to increase was 24 per cent. in the United Kingdom compared with 11 per cent. in Italy, 5 per cent. in France and minus 5 per cent. in West Germany. Such matters are not directly the responsibility of the Government but it is a tribute to the Government's creating the right 668 climate to enable British industry to make the most of its opportunities.

§ Lord Williams of Elvel
My Lords, does the noble Lord agree that a central component of a successful manufacturing investment is a stepped-up effort in research and development? Will he tell the House whether and when the Government intend to put forward proposals, which I think he foreshadowed in his speech on the Address, on that matter?

§ Lord Young of Graffham
My Lords, I congratulate the noble Lord on his ingenuity in managing to turn one question into another. If he wishes to put down a Question on research and development, I shall be more than happy to answer him at that time, assuming of course that we are in a position to give an answer. The main component in getting better production and profitability from manufacturing and other exports is attention to quality, design and delivery. These are not matters where the responsibility lies directly with government.

§ Lord Ezra
My Lords, at the risk of being told that I am also turning one question into another, I should like to ask the noble Lord whether in perusing the Financial Times this morning he noticed that a large part of it was devoted to management training? It seems extraordinary to the reader of those articles that, in spite of the fact that we need to devote more resources to management training these days to get industry moving in Great Britain, the Government, through the UGC, are cutting down the contribution to management training by 20 per cent. Will he comment on that situation?

§ Lord Young of Graffham
My Lords, that is entirely another question. I shall be delighted to answer the noble Lord if he cares to put a Question down.

§ Lord Cledwyn of Penrhos
My Lords, does the noble Lord continue to believe that a job in the service industries is equivalent to a job in manufacturing?

§ Lord Young of Graffham
My Lords, I continue to believe that a job which results in wealth creation is important. It matters little whether that wealth creation is through manufacturing or services.

§ Lord Leatherland
My Lords, I should like to ask the Minister whether he can tell the House how many people are unemployed in this country.

§ Lord Young of Graffham
My Lords, I am delighted to tell the noble Lord—and I hope he will forgive me if I am not accurate to the nearest thousand—that the figure is 2,950,000.

§ Lord Basnett
My Lords, the noble Lord mentioned his membership of the National Economic Development Council. I ask him to recall that at that council—

Noble Lords
Question!

§ Lord Basnett
I am sorry, my Lords. Does the noble Lord recall that at that council there were discussions about the need for greater infrastructure investment in this country to stimulate manufacturing investment? May I further ask him whether he is aware that employers throughout Europe have signed a statement—and this applies to all the industrial nations, the OECD employers—that there is a need for greater investment and for a set of policies which will give confidence in manufacturing countries for the restoration of their manufacturing base? That point has been made—

Noble Lords
Order, speech!

§ Lord Basnett
My Lords, my question is this. Will the noble Lord say what the Government intend to do about the representations made to the OECD and to the finance Ministers in the presence of Nigel Lawson?

§ Lord Young of Graffham
My Lords, this Question started off in connection with the National Economic Development Council and the noble Lord asked whether I remember a particular discussion. I have to say in this case that I do. It is slightly remarkable, as I have recently calculated, that I have spent a month of my life sitting at the Neddy table. There have been many discussions. Of course other countries have made representations about the level of infrastructure investment. I seem to recall that question being raised on previous occasions. What I rejoice in is the way in which British industry has risen to the challenge, how we have an export-led boom and how British goods are re-establishing the reputation they once proudly held for design, quality and delivery

The Earl of Halsbury
My Lords, is the distinction between manufacture and service as clear cut as might be implied by some of the questions? Specifically, is computer software a manufacture or a service? You do it by hand with pencil and paper, but it is also a service to whoever has a computer.

§ Lord Young of Graffham
My Lords, I am reminded of another debate which was equally sterile, I suspect, some 180 years ago when people asked how this country would survive if we stopped growing produce and started making things. For the past half a dozen years people have asked how this country can survive if it stops manufacturing and starts providing services. I have little doubt that in 200 years' time people will again ask how this country can survive if it stops providing services and does some other unimaginable thing. We must create the wealth and then we can afford the caring society that we all want.

§ Lord Leatherland
My Lords, the Minister has just given some figures about unemployment, but can he tell us whether it is a fact that there are now nearly 3 million people unemployed in this country and whether the Government intend to do anything about it?

§ Lord Young of Graffham
My Lords, that is a different question, but I can assure the noble Lord that 2,950,000 is near to 3 million.

§ Lord Hatch of Lusby
My Lords, the Minister did not answer my first question, which was why is it that after eight years of so-called successful policy by the Government neither manufacturing output nor investment has yet reached the level it was when they took over. He gave some selected figures of exports from this country for early this year. Will he give the House the import figures parallel to those export figures? Is the noble Lord aware that the noted firm, Phillips and Drew, said only this week that if there is an increase in demand in this country the amount of capacity which was destroyed by this Government in their early years will mean that the increase will lead to at least a 20 per cent. increase in the present level of imports?

§ Lord Young of Graffham
My Lords, it seems only a few months ago that I heard some noble Lords in the party opposite prophesying that we would have a tremendous balance of payments crisis. I did not see it come about. Many forecasts are made. I have great confidence in British industry and the British economy and I suspect that we shall continue to make the steady progress that we have made in the past few years. It is founded on real progress; namely, on the quality and the ability of British industry.