Manufacturing Industry: Government Strategy (Hansard, 1 February 1993)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)
My Lords, the Government attach great importance to the interests of the manufacturing industry. However, we do not believe publication of a White Paper in itself would make a real contribution to industrial growth.

§ Lord Benson
My Lords, I stifle a gasp of astonishment. Perhaps I may remind the noble Baroness that we have been waiting for months for a comprehensive statement of the Government's policy on industrial strategy. Would not one of the major effects be to lift back into manufacturing industry a large part of the unemployment that at present exists?

§ Baroness Denton of Wakefield
My Lords, I am sorry to cause the noble Lord, Lord Benson, to gasp with surprise. I believe that no government have taken greater care to express their determination to support manufacturing industry. The Prime Minister himself loses no opportunity to reinforce the activities of the DTI.

Lord Bruce of Donington
My Lords, is not the reason that the noble Baroness was unable to answer the Question put to her by the noble Lord, Lord Benson, that the Government do not have an industrial strategy and therefore it would be redundant for them to issue a White Paper?

§ Baroness Denton of Wakefield
My Lords, I point out to the noble Lord, Lord Bruce, that the Government's industrial strategy, which is very clear, consists of doing things about it. In practice, it means creating a climate within which industry can thrive and ensuring that the policies of both the DTI and the rest of government take the needs of business into account. I believe that the reduction in interest rates, the control of inflation and the currency benefits all show that determination.

§ Lord Prior
My Lords, contrary to what one might have expected, is the noble Baroness aware that I agree with what she said and do not agree with the other two supplementary questions? Is she also aware that the sort of visits the Prime Minister made to India and the Middle East last week do an enormous amount to help British industry, and that he should be warmly congratulated and encouraged with other senior Ministers to do more of the same and often? Is she further aware that we welcome the renewed interest of the Government in manufacturing industry and hope that before long that may percolate through to the Treasury as well?

§ Baroness Denton of Wakefield
My Lords, I thank my noble friend Lord Prior for saying so well something which very much needs saying. I hope that the whole House will celebrate the news that my right honourable friend the Prime Minister brought back with him from his visits this past week. I believe that the support of the Treasury in the reduction of interest rates and the nature of the Autumn Statement prove the support for manufacturing that runs throughout Government.

§ Lord Mason of Barnsley
My Lords, ought not the Minister to take her tongue out of her cheek, 3 especially bearing in mind those original replies? Does she realise that, following the announcement of 31 pit closures, 30,000 engineering jobs in the engineering support industries were to go? Where is the Government's faith in and support for manufacturing there?

§ Baroness Denton of Wakefield
My Lords, it always seems to escape noble Lords on the opposite side that one of the elements of global competition and future success for the United Kingdom is productivity. There are increases in productivity that are much to be admired at their highest levels. I would also point out that manufacturing output is over a fifth higher than it was in 1981. I would point out too that for industry to grow and be successful it is important that we have a balanced energy policy.

§ Lord Peyton of Yeovil
My Lords, I agree with my noble friend Lord Prior as to the real value of the Prime Minister's visits. Will she agree to persuade her colleagues that there would be some value in producing a clear White Paper on government industrial strategy in order, first, to prove that they have one, and, secondly, to clear away from the minds of those rather superior persons in the Treasury the idea that manufacturing does not count? It might even persuade some of her colleagues in the Treasury not to be too convinced that industrial manufacturing recovery is already an established fact. It is not.

§ Baroness Denton of Wakefield
My Lords, I am pleased to assure my noble friend Lord Peyton that the basis for manufacturing success and the success of many industries which we sometimes neglect to praise in your Lordships' House is well established. We have in this country in the pharmaceutical industry and in the automotive industries manufacturing capacity second to none. A White Paper certainly has its place in many instances. But I believe that industry itself would want to see us being practical, not talking about it.

§ Lord Ezra
My Lords, does not the noble Baroness agree that even though the Government may be hesitant, a number of other organisations—notably the CBI and the Engineering Employers' Federation —have produced their views on the subject? Would it not be to the advantage of government for their views on this important issue to be clearly set out so that we can stimulate a national debate and all of us can try to help industry to get moving again in Britain?

§ Baroness Denton of Wakefield
My Lords, I thank the noble Lord, Lord Ezra. I believe that we all are focused on helping industry to move in this country. Often one of the purposes of a White Paper is to stimulate public debate. There seems to be no need for that. Also, I am relying on my noble friend Lord Peyton to explain to the Engineering Employers' Federation why putting the DTI into Treasury would not work.

§ Lord Campbell of Alloway
My Lords, further to the question of the noble Lord, Lord Ezra, which I was about to ask in another form, I ask the following 4 question. What is the objection to publishing a White Paper so that it can at least be discussed and debated in Parliament?

§ Baroness Denton of Wakefield
My Lords, from experience in this House, your Lordships know well the resources required to produce a White Paper and its impact upon activity while it is under discussion. At this stage in the economic situation we believe that the best we can do is to pursue our policies in support of manufacturing industry.

§ Lord Ewing of Kirkford
My Lords, is the noble Baroness aware that I agree with the noble Lord, Lord Prior, that the Prime Minister should spend more time in India and less time in Glasgow? Is she aware also that the last time the Prime Minister visited Glasgow he promised faithfully that Great Britain would not leave the exchange rate mechanism, and that there would be no devaluation? The following Wednesday is now well known as "black Wednesday". On Friday, when the Prime Minister visited Glasgow, he promised faithfully that the green shoots of growth in the economy were already showing. Today the pound has collapsed. Can the noble Baroness persuade the Prime Minister to stay away from Glasgow?

§ Baroness Denton of Wakefield
My Lords, we can all remember a time when people from north of the Border complained that the Prime Minister never visited Scotland. I hope that the majority of people are now delighted that he does.

§ Lord Peston
My Lords, I felt your Lordships would like to hear me ask a question. We have only three Questions on the Order Paper today and I am sure that your Lordships would like to hear mine. I understand that a White Paper takes some work. However, one wonders what the noble Baroness's right honourable friend is doing before breakfast, lunch and dinner; given that he does not seem to be doing anything for industry at the moment, perhaps he could write a White Paper.
On a more serious note, does not the noble Baroness realise that her remarks sound complacent? Is she not aware that the two central facts regarding manufacturing industry are, first, that the balance of payments on manufacturing account continues to deteriorate and that there is a serious restraint on growth? Secondly, her remarks on productivity are quite misleading. Productivity ceased significantly to rise around 1989, and there is a genuine question as to when it will resume. That is one of the many reasons a White Paper would be helpful. However, does not the noble Baroness agree that nothing would be a substitute for improvement in the economic policy?

§ Baroness Denton of Wakefield
My Lords, I am sorry if I appeared to mislead the noble Lord, Lord Peston. Perhaps I can restate my comments on productivity. Productivity has risen nearly two-thirds since 1981. In the latest three months, productivity and exports are at record levels. We must acknowledge the achievements made in industries which are able to bring global contracts to this country. I apologise also if I sounded complacent. No 5 one in the Department of Trade and Industry has any doubts with regard to the amount of work to be done. I can assure the noble Lord that we believe that manufacturing industry provides the block upon which our economy will be built and service industries the cement.