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Manufacturing Industry

Volume 78: debated on Wednesday 1 May 1985

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6.

asked the Secretary of State for Trade and Industry what is the most recent figure for output in manufacturing industry; and how this compares with the figure for the same month five years ago.

For February 1985 the index of production for manufacturing is 102, based on 1980 being the equivalent of 100. This is 4 per cent. lower than its value in February 1980, though 10 per cent. higher than its value during the trough in the first quarter of 1981.

Does my hon. Friend not find it alarming that output has fallen by that amount in the past five years? To what extent does he think that Government economic policies have been responsible for the fall?

My hon. Friend will know that manufacturing in the previous peak in 1979 was below that of the earlier peak in 1973. The trend is long term. I should have thought that my hon. Friend might have felt it worth while to refer to the significant CBI industrial trends survey published today. It is one of the most optimistic ever published. Manufacturing export orders are shown to be the best since 1977. The outlook for employment in manufacturing is also the best since 1977 and every sector is displaying much greater confidence. That shows that Government policies are benefiting manufacturing.

Is the Minister aware that a particular example of the decline can be seen in south Leeds, which was the manufacturing core of that great city? The industry has been in decline there in recent years. Is it now the perceived wisdom that manufacturing industry will never come back again and that it is all over and done with?

Of course that is not the perception. It is very much the Government's intention that the country should have a strong manufacturing base. That is borne out by the results shown in the CBI survey, which shows that manufacturing is participating fully in the recovery and that in 1984 manufacturing grew more quickly than the economy as a whole.

Exports are encouraging, but if we are to build on that tentative improvement we shall have to remain competitive. Is my hon. Friend not worried about the growing signs of protectionism around the world? Does that trend not reinforce the need for a round of GATT talks very soon in order to stop the growth of protectionism, which will damage our jobs and exports?

I am sure that my right hon. Friend the Minister for Trade will note what my hon. Friend says.

Does any member of the Government know anything about major manufacturing industry? If not, will the Government listen to those who do, such as Mr. Harvey-Jones of ICI and Lord Weinstock?

I will certainly listen to what the chairman of ICI says, especially about pay restraint. I noted what Mr. Harvey-Jones said the other day, and I agreed with some of his comments. I agree that one of the concerns of the manufacturing sector is the level of electricity prices. That is why we need a competitive coal industry—one one of the aims for which the Government have worked very hard.

Is it not true that there are bags of opportunities in our home market as well as opportunities for exporters? If only our motor manufacturers, for instance, took the same proportion of our home market as the French, the Germans and the Italians take of theirs, we would have the answer to the question, "Where are the jobs to come from?"

My hon. Friend is absolutely right. I am sure that he is well aware that every 1 per cent. of penetration of the domestic market is equivalent to a quarter of a million jobs. If only we could hold back the tide of imports, employment would rise.

The Minister's complacency will be taken very badly by British manufacturing industry. Is he not aware that manufacturing output is still 10 per cent. below what it was when the Government came to power in June 1979? That is a bigger drop than has been suffered in any other industrial country, and the biggest drop since the war. Is he not thoroughly ashamed of that disgraceful record?

I would take the hon. Gentleman's comments more seriously if he acknowledged that manufacturing output fell sharply between 1974 and 1979. I was referring not to what the Government thought about the future of business but to what business men themselves see as the future for employment, investment, output and exports.