To ask the Chancellor of the Duchy of Lancaster what has been the increase in manufacturing profits and in manufacturing investment in the latest three years for which figures are available.
Figures for profits are available only up to 1986. Gross profits of manufacturing companies, including income from self-employment, at current prices increased by £2·2 billion in 1984, £2·3 billion in 1985 and £3 billion in 1986. Gross investment in the manufacturing sector, including leased assets, increased by £1·6 billion and £1·9 billion in 1984 and 1985. respectively, was unchanged in 1986 and is estimated to have increased by a further £0·8 billion in 1987.
Against the background of those figures, is the Minister not alarmed when, with such a growth in company profits, our manufacturing investment is still 11 per cent. lower than in 1979? Is the Minister not perturbed by the pathetic level of research and development in this country, which is lower than that in France, Germany and Italy and less than a third of the rate of increase in Japan since 1981? Does he accept that that low level of R and D is a major contributory factor to our poor level of investment in manufacturing industry? Will the Minister set up an inquiry to examine those issues and consider the impact on investment?
I will certainly not set up an inquiry. The hon. Gentleman seems to think that profitability and investment are somehow inconsistent with each other. Of course, profitability in manufacturing in this country is not yet back to the levels that it reached in the early 1970s. If one wants people to invest in industry, one has to show a return on it. If people can make more money by investing in the building society than in manufacturing industry, they will do that. Profitability is now increasing and has been increasing for some years. However, it still has some way to go before it hits the levels of the early 1970s. [Interruption] I am asked what went wrong. The answer is the Labour Government in the late 1970s.
Is it not a fact that manufacturing industry in the United Kingdom is now setting the pace in the Western world, unlike the time when overmanning in nationalised industries, paid for by the taxpayer, put those industries on a treadmill of failure? We have released those industries, and that is why the jobs that we are creating are real jobs, not overmanning manufactured jobs.
My hon. Friend puts his points robustly and well. The trend that I have disclosed is one of rising and increasing success for British manufacturing industry. It shows that not only profitability but investment, are increasing. It is encouraging that our investment intentions survey shows a further increase in investment this year of 16 per cent. with a further real terms increase in 1989. That is thoroughly good news.
In support of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), may I ask the Minister to consider the fact that in 1986 import levels in textiles, steel, chemicals and motor cars exceeded £6 billion? Against that information, is the Minister not being complacent, and will he listen carefully to what my hon. Friend has said, because the Government have surrendered much of British manufacturing industry?
I hear what the hon. Gentleman has said. Of course, I listen carefully to what anybody says on this important subject. Exports from this country have increased pretty dramatically. Many of the goods to which the hon. Gentleman referred are imported by British industry for use in British industry. About 75 per cent. of imports are for industry, not for consumers.