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Industrial Performance

Volume 115: debated on Wednesday 29 April 1987

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4.

asked the Secretary of State for Trade and Industry when he last met officers of the Confederation of British Industry to discuss the performance of British industry.

I last met officers of the CBI at the meeting of the National Economic Development Council on 1 April. The performance of the economy, including industry, was among the matters discussed.

Is my right hon. Friend aware of the results of the latest CBI survey, which were announced yesterday, which show that manufacturing output in Britain is expected to rise by well over 3 per cent. this year—an excellent figure — and that companies are now more optimistic about future orders than they have been at any time in the last 10 years? Will my right hon. Friend point out to the officers of the CBI that those results testify to the success of Government policies and are good news not only for British industry but for Britain?

I entirely agree with my hon. Friend. I hardly need to point out to anyone—it is perfectly obvious to everyone in the country—that the success and prospects for British industry are better now than they have been for probably a generation. The survey from which my hon. Friend quoted is the most optimistic survey that the CBI has ever produced since it started to keep such records. I believe that manufacturing output will do extremely well this year, as will manufacturing exports, and the forecast for British industry is extremely good.

Is the Secretary of State aware that the CBI has been critical of the amount of investment that has taken place in research and development, which is one of the reasons why British industry has failed in many areas?

The CBI, if it is critical about research and development, is certainly not critical about anything else. We see the survey as a great success, and we know how successful British industry is. As for research and development, certainly no one can level that criticism at my budget, which has seen a total transformation. Most of the money that used to be spent on propping up loss-making nationalised industries is now being spent on research and development.

Does my right hon. Friend agree that, in an expanding economy, successful employers need to be able to attract labour from unsuccessful employers? Does he agree also that if the SDP proposals for statutory pay controls were introduced, this would stultify the economy and restrain growth?

Yes, I am sure that that is absolutely right. It will be interesting to have the proposals explained to us in greater detail. I suspect that they will prove equally unconvincing.

If the Secretary of State pays attention to results rather than to projected surveys, will he confirm that since 1979 manufacturing output is down by 4 per cent., that investment in manufacturing industry is down by 17 per cent., and that British industrial capacity has been reduced by 20 per cent.? Is that an advertisement for the success of Government policies over two terms?

Britain's manufacturing output has grown for six successive years. The volume of manufacturing output is 14 per cent. higher than it was in the depths of the recession. The growth of manufacturing output showed a sharp spurt in the second half of last year. Outside forecasters agree with the Government in predicting strong growth in manufacturing output in Britain throughout 1987. We expect it to expand 4 per cent. faster than the rest of the economy, and faster than in any year since 1973.