§ Mr. FlightTo ask the Chancellor of the Exchequer if he will make a statement on the state of manufacturing industry in the UK. [92767]
§ John HealeyThe global economic slowdown of 2001 was the principal cause of recent difficulties faced by UK manufacturers. G7 industrial output grew by 4.7 per cent. in 2000. During 2001 it contracted by 3.6 per cent. This was the sharpest slowdown in G7 industrial activity since 1975. But manufacturing output showed signs of stabilising in the course of 2002—in Q3 it rose by over 1 per cent., ending six consecutive quarters of decline.
The stable macroeconomic framework is creating the right underlying conditions to enable manufacturing to invest, grow and prosper. The UK stands ready to benefit from any sustained recovery in the sector due to strong economic fundamentals and the Government's pro-active enterprise agenda.
In particular, corporation tax is now lower than in any major industrialised country. Cuts in capital gains tax mean the UK's CGT regime will be more favourable than the US's from April. R&D tax credits for large companies will provide an important boost to UK manufacturing and RDAs have been created to drive growth in every English region.