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Manufacturing Output

Volume 22: debated on Monday 26 April 1982

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asked the Secretary of State for Industry if he will give the latest 12-month figures available of the increased percentage in output per head in manufacturing industry and the same information relating to nationalised industries.

Output per head in manufacturing industry increased by some 10½ per cent. between the fourth quarter of 1980 and the fourth quarter of 1981, the latest period for which figures are available. Aggregated figures for the nationalised industries, many of which do not form part of manufacturing industry, are not compiled.

May I congratulate my hon. Friend on his appointment and wish him well in his important responsibilities? May I welcome his answer and ask whether he agrees that increased output leads to the greater likelihood of increased investment in industry, which in turn leads to better job prospects and the prospect of new jobs and to higher wages for all employees in industry?

My hon. Friend is absolutely right, and I thank him for his kind remarks. There is a benign relationship between productivity, profit and investment, and the regeneration and recreation of jobs that are soundly based on productivity.

May I add my congratulations to my lion. Friend on his well-deserved appointment? Notwithstanding the welcome increase in output announced by my hon. Friend, does he agree that it is imperative that the increase should continue if British industry is to remain competitive, prevent import penetration and resecure many of the overseas markets lost during the years of uncompetitiveness?

The problems with which the Government are currently wrestling are both long-standing and deep-seated. I agree wholeheartedly with my lion. Friend's observations, and I assure him that the improvements that he has outlined will be sought by the Government, especially in the public sector.

Is the Minister aware that average productivity will rise if every firm, except the most productive, is driven into bankruptcy?

That is rather a simplification of economic objectives. Output increases genuinely when a fixed number of workers produce an enhanced amount of output for the same input. I hope that the hon. Gentleman, when he joins us in debates, especially on British Telecom, will agree with that assertion and that we shall be working on the same side to achieve that objective.


asked the Secretary of State for Industry if he is satisfied with the rate of recovery of output from British manufacturing industry.

No. Much obviously depends on the world-wide recovery from the international recession. It is, however, encouraging that between the first half of last year and the second half manufacturing output increased by 2·5 per cent.

In view of the Minister's reputation for fairness, does he accept that output in the manufacturing industry is lower than when the Government first took office and lower than it has been for the past 14 years? Does he accept that his Department has reigned over the destruction of the base of the British manufacturing industry and the addition of 2 million or 3 million people to the dole queue?

Manufacturing output is lower, but the hon. Gentleman—who is also very fair—must acknowledge that that is true of most parts of the world. No doubt he will have seen, according to press reports last Friday, that the Conference Board, a distinguished American body, has concluded that a world recovery may be shaping up—and that Japan, Britain and France are in the vanguard of that recovery. It is significant that Britain is singled out as being in the vanguard. It is certainly the case that manufacturing output is higher now than it was in the spring of 1981.

Does the Minister agree that it will help to increase manufacturing output if. we attract overseas investment? Will he explain how Wales, with a population and rate of unemployment similar to the Northern region, has a budget four times that of the North of England Development Council for industrial promotion?

Manufacturing output and, often, productivity are enhanced by inward investment, and the United Kingdom has been successful in that. There is a separate question on the order paper on the point that the hon. Gentleman has raised, but it is important to bear in mind that 90 per cent. of all American investment has been attracted here by central Government activity, mainly through the Invest in Britain Bureau and the overseas diplomatic posts.

Does my hon. Friend agree that in some industries, such as the whisky industry, where there is over production, if management and workers apply themselves, increased sales can be obtained and increased profits can be achieved, such as was done by Arthur Bell and Sons?

I entirely agree with the general point. What is most important about the way in which improvements are now showing in the British economy is that they are concerned with fundamental problems such as that to which my hon. Friend drew attention. It is significant that in the last quarter of last year output per man hour in manufacturing industry reached a record level and was more than 6 per cent. higher than the average for 1979—the previous best. In many other ways there are improvements on the shop floor and between management and work force, which is where improvement is needed if we are to sell our products.

What hope does the Minister have for the recovery of the pottery industry? Three more firms in my constituency have closed during the past few months and unemployment is serious. We need ministerial intervention. May we have that as soon as possible and then some Government help?

The Government give assistance in many ways, not only through tax reliefs for capital investment, but with schemes designed to improve economic performance and competitiveness. If the right hon. Gentleman wishes to contact me about the prospects for the pottery industry I shall endeavour to answer his questions.

Does the Minister agree that the fall in output in manufacturing industry since 1979 has been 14 per cent., and that both the CBI and the TUC see no longterm propects for that industry? What will the Government do about employment and the manufacturing sector?

The important points are that manufacturing output is again rising and that many of the changes are highly beneficial for our future competitiveness. My right hon. Friend referred to unit labour costs, but industrial stoppages are at their lowest for 40 years. The most hopeful sign for the future is that we are tackling our fundamental problems.