§ 2.52 p.m.
§ Lord Brougham and VauxMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government how British productivity growth compares with that of other industrial countries.
§ Lord BeaverbrookMy Lords, since 1979 British productivity growth in the whole economy has been second only to that of Japan of all major industrialised countries; and in manufacturing it has been the fastest.
§ Lord Brougham and VauxMy Lords, I thank my noble friend for that informative, encouraging and good news reply. Can he tell the House how this recent growth in manufacturing productivity compares with the experience of the 1970s?
§ Lord BeaverbrookYes, my Lords. The UK's average growth rate was only three-quarters of a per cent. per annum between 1973 and 1979 and we were at the bottom of the productivity growth league. This contrasts with the period since 1979 when our average growth rate has been 3½ per cent. per annum, and we have been at the top of the productivity growth league.
§ Baroness SeearMy Lords, will the noble Lord agree that if we are starting from such a low base it is not really very surprising that the increased rate was as high as it was?
§ Lord BeaverbrookMy Lords, it would be helpful if noble Lords opposite were occasionally to recognise a very considerable national achievement when they see one.
§ Lord BarnettMy Lords, although some of your Lordships may understand the excellent figures that the Minister has given us, may I ask whether he can explain to those of us who are less sophisticated in these matters, so that we may understand more clearly, why manufacturing output is still below the level of 1979, which was not itself particularly high?
§ Lord BeaverbrookMy Lords, the world recession, brought on by the second oil crisis, caused major shocks to a manufacturing industry already suffering from poor competitiveness following years of high inflation and low productivity. The result was a steep fall in output; but manufacturing industry is now leaner, fitter, more competitive and better adapted to meet the demands of a modern economy, and the growth of output since 1971 has been impressive.
§ Lord Williams of ElvelMy Lords, in quoting his figures, will the Minister recognise that the increases in manufacturing productivity since 1979, to which he refers, have been entirely due to the shedding of labour, and that this has created unemployment in the manufacturing sector? Does he further agree that the increase in productivity in the whole economy as opposed simply to manufacturing, which now represents only 25 per cent. of total national output, is round about the level of the average Western European country and significantly below that of Japan?
§ Lord BeaverbrookMy Lords, with regard to the first question asked by the noble Lord, high productivity growth helps this country to compete in a fiercely competitive world and to expand in both home and overseas markets. It is only in a soundly based high productivity economy that secure jobs can be created. As regards the figures that the noble Lord gives me, I can only say that over the past four years the performance of this country has been quite remarkable.
§ Lord EzraMy Lords, as the Question is closely intertwined with productivity, will the noble Lord kindly indicate how British industrial investment has compared with that of other developed countries?
§ Lord BeaverbrookMy Lords, I understand that the past four years have been record years with each year increasing on the previous one. As regards other countries, this Question refers to Britain.
§ Lord LeatherlandMy Lords, can the noble Lord tell us how many people are now unemployed?
§ Lord BeaverbrookMy Lords, this is a Question on productivity not employment.
§ Lord Murray of Epping ForestMy Lords, can the Minister explain how the fact that between 2 and 3 million extra people are now unemployed as compared to 1979, that their productivity is nil and that the fall in their productivity has been 100 per cent., contributes towards the wellbeing of British industry or of the economy?
§ Lord BeaverbrookMy Lords, the workforce has increased by 1.3 million in the past four years. The service industry has created 1 million new jobs. Let us be very clear that without strong productivity growth our industry would be much less competitive and unemployment would have been much greater.
§ Lord RochesterMy Lords, can the noble Lord tell us a little more precisely how the level of British productivity, as opposed to its growth, compares with that of other industrial countries?
§ Lord BeaverbrookNo, my Lords; but if the noble Lord would like to put down a Question I should be happy to answer it.
§ Lord Hatch of LusbyMy Lords, as the Minister is talking about productivity, can he give the comparable figures for manufacturing production, as distinct from productivity, in 1979 and 1986?
§ Lord BeaverbrookMy Lords, manufacturing sector productivity has grown at an average annual rate of over 3 ½per cent. since 1979. That is, as I have said, faster than any other major industrialised nation.
§ Lord Hatch of LusbyMy Lords, I asked for figures and not for productivity.
§ Lord DiamondMy Lords, no doubt the noble Lord will share everybody else's view that one of the main elements in being competitive is that of unit labour costs in manufacturing, which he has quoted. Can he tell me how the figures which he has given—which I find so surprising that they are well worth careful investigation—correspond to or reconcile with the figures given by his noble friend who is sitting next to him, which show that, comparing 1979 with 1986, unit labour costs in manufacturing in Japan went up by 15 per cent., in Germany by 20 per cent. and in the UK by 60 per cent.—three times as much or more?
§ Lord BeaverbrookMy Lords, I am very interested to hear the noble Lord's figures, but I am not in a position to comment upon them. I do not think that he would expect me to do so, bearing in mind the original Question.