Manufacturing Industry: Employment Figures (Hansard, 24 February 1992)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My 4 Lords, in the four quarters to December 1991, the number of employees in employment in manufacturing industries in Great Britain fell by 97,000, 92,000, 87,000 and 59,000 respectively. Those figures represent falls of 2 per cent., 1.9 per cent., 1.8 per cent. and 1.2 per cent.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply. However, I believe it is rather misleading. I am not suggesting that the Minister is trying to mislead the House, but the figures he has just mentioned are misleading because the annual figures show that the number of jobs in manufacturing industries in Great Britain fell by 334,000 between September 1990 and September 1991. The number of jobs in manufacturing industries in Great Britain fell by 129,000 in the previous 12 months. That represents an increase of between 250 per cent. and 300 per cent. Is that not a dangerous situation and one that is far worse than that suffered by our major competitors? Would not the Government do better to pump some money into industry in an attempt to get the figures down rather than talk about a giveaway Budget?

§ Viscount Ullswater
My Lords, I believe the figures I gave are the answer to the Question tabled by the noble Lord on the Order Paper. Having said that, no one underestimates the difficulties that both businesses and individuals are facing in the present economic climate. However, it remains the case that the falling trend in manufacturing employment goes back to the mid-1960s. Falling manufacturing employment as a share of total employment is a common trend among all industrialised countries. Despite the recession in the past three months manufacturing output was still more than one-fifth higher than it was 10 years ago in 1981.

§ Lord Hailsham of Saint Marylebone
My Lords, is it not possible that the theory that one can cure unemployment by pumping money into industry depends on what will come out of the pumping and not what goes into it?

§ Viscount Ullswater
My Lords, that is correct. Manufacturing industry has some good success stories. Output from industry in the office machinery, electrical and instrument sector has increased by 61 per cent. over the past 10 years. However, employment in the industry has dropped by 20 per cent. One has to understand that output can increase but employment can sometimes go down.

§ Baroness Turner of Camden
My Lords, is not the Minister aware that both the Engineering Employers Federation and the TUC have been making recommendations for tax incentives to enable manufacturing industry to pick up again? Will the Minister bring the submissions of both those bodies to the attention of his right honourable friend?

§ Viscount Ullswater
My Lords, I am certain my right honourable friend is aware of those submissions. However, it is not for me to suggest what he might consider.

§ Lord Ezra
My Lords, does not the noble Viscount agree that the rate of decline in investment in manufacturing industry has exceeded the figures of the rate of decline of employment in this period? Does he not also agree that those two factors combined suggest that manufacturing industry in this country faces a serious future? Does that not require the most urgent attention?

§ Viscount Ullswater
My Lords, I believe investment was at a record high in 1989. Any fall from that can be measured accordingly. Investment is a matter of concern but I understand that figures will reveal that the UK share of world trade is likely to rise in 1991 for the third year running after decades of decline. Since 1979 the volume of manufactured exports has grown by over 90 per cent. and at a rate of over 5 per cent. a year. That is a good record.

§ Lord Cledwyn of Penrhos
My Lords, during the tenure of the noble Lord, Lord Young of Graffham, as Secretary of State for Trade and Industry, we were constantly told by him at Question Time that the decline in manufacturing industry that was taking place year by year throughout the 1980s would be made good by the contribution of the service industry. Is that still the philosophy of the Government?

§ Viscount Ullswater
My Lords, I cross swords with the noble Lord the Leader of the Opposition. When he talks about the decline in manufacturing he may be referring to the decline in the employment figures in manufacturing industry. Manufacturing has remained consistently at just under 25 per cent. of GDP throughout the past 10 years. Manufacturing has not declined. Certainly there may have been a loss of 1 million jobs in manufacturing over the decade, but that has been compensated for by an increase of 2 million jobs in the service industry.

§ Lord Gisborough
My Lords, is it not the case that the reduction in manpower in the manufacturing sector has made our manufacturing industries more efficient and therefore we have been able to sell more goods?

§ Viscount Ullswater
My Lords, the latest figures for manufacturing productivity show a sharp improvement over the past few months. In the year to the three months ending December 1991 manufacturing productivity rose by 3.3 per cent.

§ Lord Mason of Barnsley
My Lords, is the Minister aware that the CBI has confirmed that Britain is experiencing the worst recession since the last war? Is he further aware that the figures he has just revealed to the House show that over 360,000 jobs were lost in manufacturing last year? During the same period investment in manufacturing fell by 15 per cent. Industrial production in the same period fell by 2.9 per cent. and yet it increased in Japan by 2.3 per cent. and in Germany by 3.2 per cent. Why is it that Britain suffers so badly compared with our international trade competitors?

§ Viscount Ullswater
My Lords, the noble Lord tells a very interesting tale. I have to ask myself why it is 6 that improvements in productivity, industrial relations and the general economic environment have made the United Kingdom an attractive destination for overseas investment. America and Japan have the whole of Europe to consider, but between 1988 and 1990 the United Kingdom accounted for 46 per cent. of all US investment in the European Community and 48 per cent. of Japanese investment. If all that the noble Lord said was correct, why do they favour this country as the right place to invest?

Lord Bruce of Donington
My Lords, when will the Government abandon as their first priority the aim of making Britain a country in which bankers can live? Why do they not give the appropriate priority, which the people of the country as a whole demand, to the manufacturing and construction sections of British industry?

§ Viscount Ullswater
My Lords, the Government's first priority is the defeat of inflation. That is to the benefit not only of industry but also our citizens.

§ Lord Rochester
My Lords, does the noble Viscount agree with the principle that training and retraining should be increased when unemployment rises so that the skill level of the workforce is at least maintained against the tendency of unemployment to reduce it? If so, can he explain why the Government have just decided to reduce expenditure on training by £170 million next year in real terms?

§ Viscount Ullswater
My Lords, of course it is important that the levels of skills should be kept up to date and that re-skilling should take place. However, I do not entirely agree with the noble Lord. In times of high unemployment it is important to get people back to work. Those who have current skills are given every opportunity, through Employment Action and job clubs, to get hack into the workforce rather than learning a new skill.

§ Lord Molloy
My Lords, why do not the Government take into consideration the social aspects of the issue, such as repossessions and unemployment, which affect thousands or even millions of families? The figures which have been quoted may or may not be accurate—one does not know precisely—but the fundamental issue is that high unemployment and a high rate of repossessions do our country no good at all. The Government refuse to face up to that fact.

§ Viscount Ullswater
My Lords, that is why my first supplementary answer started with the words: no one underestimates the difficulties that both businesses and individuals are facing in the present economic climate".

§ Lord Peyton of Yeovil
My Lords, does not my noble friend find it surprising that such questions should come from the party opposite? Perhaps they indicate only a loss of memory on the part of noble Lords opposite.

§ Viscount Ullswater
My Lords, I can only answer the Questions put down on the Order Paper.

§ Baroness Turner of Camden
My Lords, is the Minister not aware that by the late 1980s investment in British manufacturing industry had barely 7 recovered to the 1979 level and is now in sharp decline, in contrast with all our European partners such as Germany, France, Italy and other countries in the EC?

§ Viscount Ullswater
My Lords, if we look at the whole of the 1980s, between 1980 and 1990 growth in the United Kingdom was faster than in France, Italy or Germany. That compares with the 1960s and 1970s when the United Kingdom was bottom of the EC growth table.