Manufacturing Investment (Hansard, 12 July 1989)

§ Lord Brabazon of Tara
My Lords, the forecast presented by the Chancellor with his Budget in March forecast total business investment to rise by 8 per cent. in 1989. No forecast for manufacturing investment was given. The DTI's survey of investment intentions published in June suggested that manufacturers plan to increase investment by 15 per cent. in 1989.

The Viscount of Oxfuird
My Lords, I thank my noble friend for that reply. Can he confirm that the United Kingdom's growth in world trade will have to increase by 2 per cent. in order to make good the deficit in the United Kingdom's manufacturing trade? That was expounded by Mr. Glenn Hoggarth, the chief UK economist with the Henley Centre, in his letter to the Financial Times of July 7th. Does my noble friend believe that the forecast investment will achieve that required increase in manufacturing trade?

§ Lord Brabazon of Tara
My Lords, I read the letter to which my noble friend referred. We do not regard that as a sensible way to see how the current account deficit could be reduced. What matters is how our imports compare with our exports and not our share of world trade. However, the rapid increase in manufacturing investment in 1988, and the continuing strong growth this year, will help to improve further the supply side performance.

Lord Bruce of Donington
My Lords, the Minister gave a percentage figure in relation to manufacturing investment. Can he tell the House by how much in real terms investment in manufacturing industry has increased above the level attained in 1979? Will he also confirm that some 14 per cent. of imports into this country in 1988 consisted of capital goods, and that the total deficit on our current account for the importation of manufactured capital goods amounted to about 1.5 billion as distinct from the positive balance of trade in capital goods in 1979?

§ Lord Brabazon of Tara
My Lords, in reply to the noble Lord's first question, manufacturing investment grew by 14.5 per cent. last year to reach its highest ever level. In the previous five years it grew on average by 9 per cent. a year; whereas, under the previous government, up to 1979 it grew by less than 2.5 per cent. a year. With regard to his other point concerning imports, I regret that I do not have those figures with me this afternoon.

§ Lord Williams of Elvel
My Lords, can the Minister tell the House when manufacturing investment as a proportion of gross domestic product will achieve the levels that it achieved in the 1960s and 1970s?

§ Lord Brabazon of Tara
My Lords, I do not have the figure as a percentage of gross domestic product. However, business investment, which includes manufacturing investment, is now the highest ever recorded proportion of gross domestic product.

Lord Bruce of Donington
My Lords, is it not high time that the Minister acquainted himself with the statistics available for manufacturing investment rather than relying on percentages which cover totally different categories? Can the Minister not give us precise answers to precise questions in the House?

§ Lord Brabazon of Tara
My Lords, I feel that I have given fairly precise answers to the questions that have been put, particularly as they relate to the one on the Order Paper.

§ Lord Ezra
My Lords, in view of the substantial gap in our manufacturing balance of payments, is the Minister of the opinion that policies are being pursued now regarding the rebirth of manufacturing industry in this country which will eventually close that gap?

§ Lord Brabazon of Tara
My Lords, I should have thought that the figures that I gave for manufacturing investment would seem to prove that to be the case.

§ Lord Orr-Ewing
My Lords, will my noble friend say what percentage of the satisfactory increase in manufacturing investment comes from inward investment by overseas companies? Can he also say whether that has been affected by the wildcat strikes and the many claims in the public sector of our transport system?

§ Lord Brabazon of Tara
My Lords, I regret that I do not have a figure for inward investment; but of course we welcome inward investment and hope that the latest series of strikes will not affect people's judgment when they come to make those decisions.

The Viscount of Oxfuird
My Lords, does my noble friend agree that, despite the increased interest rates at this time, this country's export performance is holding up extremely well?

§ Lord Brabazon of Tara
Yes, my Lords, I think it is very fair to say that.