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Manufacturing Investment
11. Mr. Lewis: To ask the President of the Board of Trade what has been the change in the level of manufacturing investment in the past 12 months. [10599]
The Minister for Trade (Mr. Anthony Nelson): The figures for the past 12 months will not be available until
those for the last quarter of 1996 are published next month. However, the conditions for investment are extremely favourable and the Confederation of British Industry expects manufacturing investment to grow by 8 per cent. this year and next year.
Mr. Lewis: When will the Minister accept that the Government's record on manufacturing investment is abysmal? Even the Secretary of State admitted not long ago that the Thatcher Government had a poor industrial investment record. Why is that situation unchanged?
Mr. Nelson: Like other Opposition Members, the hon. Gentleman never knowingly misses an opportunity to talk Britain down. Business investment grew by 5 per cent. last year and whole economy investment is six times higher than under Labour. Instead of decrying our excellent performance on the manufacturing front, he would do better to celebrate some of the excellent investment in manufacturing industry in his constituency. For example, Omega Engineering recently established a 250,000 sq ft European manufacturing plant in his constituency. Is that not better news than his question suggests?
Mr. Jacques Arnold: Is not the CBI's forecast of an 8 per cent. increase in manufacturing investment this year and next year one of the best results to be found in the European Union? What does my hon. Friend think would happen if industry were hit by windfall and other corporate taxes, as proposed by the Opposition this year?
Mr. Nelson: Yes. The performance of industry--particularly of manufacturing industry--would be severely prejudiced by such factors. My hon. Friend is right to draw attention to the CBI's studies in that respect. In the past 24 hours, its quarterly survey has confirmed that confidence in manufacturing industry has risen and that output is up. The number of jobs in manufacturing industry has increased by 130,000 in the past three years. That is good news on the manufacturing front, and it reflects the success of Conservative policies in government.
Mr. Corbett: I welcome the increased investment in the manufacturing sector and the forecast that that will continue, but can the Minister predict when manufacturing investment will return to its 1979 level?
Mr. Nelson: The important statistic is the investment in business as a whole. Those who produce computer games or sell computer software services will find that the distinction between the two in terms of employment and investment is becoming increasingly artificial. Whole business economic investment is growing substantially. Our output and exports are at record levels. International confidence, as reflected in investment, is also at a record level. That speaks well of the performance of our industry and of Government policies in action.
Mr. Ian Bruce: Has my hon. Friend assessed the effect on jobs of taking £10 billion from the publicly owned utilities, which invest in manufactured goods from British industry? How many jobs would be lost if £10 billion were removed from their investment and devoted to £10 billion-worth of make-work schemes, such as those offered by the socialists opposite?
Mr. Nelson: The Opposition have not accounted for any significant losses in employment resulting from their
plans, which would wreak havoc with investment, activity, profitability and the future of many utility companies. They have led the way with investment in recent years. Let us not forget that, during the difficult years of the recession, those utilities maintained high investment and employment. The price of their success is the prospect of a Labour Government introducing a swingeing tax thereon. That would be disastrous for their prospects, for consumer prices and, most of all, for the many people employed in those industries.
Mrs. Beckett: Is it not true that just over a year ago in the Budget the Government predicted a 10 per cent. increase in manufacturing investment this year, whereas the most recent figures show a decline of 16 per cent. for the same quarter? The Government claimed that an increase would be an indicator of success, but they have said nothing about the decline. Will the Minister confirm that the most recent figures for this quarter compared with the last show a decline not only in manufacturing investment, but in business investment and in whole economy investment? The Minister cited the CBI's prediction for manufacturing investment, but the Government have not predicted what will happen to manufacturing investment. Can the Minister make such a prediction today? Does it not appear that, according to the latest information--whether it be on investment, output, which is static or which is going down, or the forecast export levels in the CBI survey--we are reaping the rewards of this Government's utter neglect of manufacturing over many years?
Mr. Nelson: No. The right hon. Lady is wrong on just about every count. She should update her briefing before she reads it out. She did not refer--[Interruption.] Perhaps the right hon. Lady will give me a chance to reply to her question. The CBI quarterly survey became available yesterday. She may not always believe what the Government say, but she should not deride what the CBI says. It states:
- "Manufacturers' optimism grew for the third consecutive quarter. Manufacturing output growth is expected to accelerate over the next four months."
Scientific Research
12. Mr. Bayley: To ask the President of the Board of Trade if he will make a statement about the implications of the Budget for Government-funded scientific research. [10600]
Mr. Ian Taylor: The Government's commitment to research and the science and engineering base remains as strong as ever, with total Government funding of science and technology being sustained in 1997-98.
As my right hon. and learned Friend the Chancellor of the Exchequer said in his Budget statement,
"our universities and colleges make an important contribution to the economy . . . We want to ensure that the British science research base remains the best in the world, which it certainly is at the moment."--[Official Report, 26 November 1996; Vol. 286, c. 159.]
Mr. Bayley:
May I welcome the Minister's earlier expression of support for the Ministry of Agriculture, Fisheries and Food's Central Science Laboratory in York? Does he join me in recognising the importance to the economy of such public sector science and the additional 750 private sector bioscience jobs in the York area? Will he explain why the Government present an improvement in the science budget when the figures published after this year's Budget, compared with those published after last year's Budget, show that the Government will invest £25 million less in science over four years than they were planning previously?
Mr. Taylor: I am happy to endorse the hon. Gentleman's comments about the Central Science Laboratory and about the work that it undertakes. There was never any question about the excellence of that work. The prior options review was designed to ascertain how best to maintain that excellence in terms of basic research, and how the laboratory could connect with the private community that the hon. Gentleman mentioned in the biotechnology industries. That case-by-case analysis has been the hallmark of our prior options survey.
There is a cash increase in the science budget as a whole, year on year, compared with the lower inflation figures that were originally taken into account. The overall settlement of the public expenditure survey round shows the importance that science has within the total package of Government expenditure.
I draw attention to the extra £100 million that my right hon. Friend the Secretary of State for Education and Employment has found, including an extra £20 million for equipment. Again, it is important to strike a balance, and the settlement meets some of the comments made by the Committee of Vice-Chancellors and Principals.
Science in this country is doing extremely well. Researchers are doing a brilliant job in so many of the areas identified in the foresight programme. The year of engineering success was officially launched today; we should all take pride in talking up the work of the science community.
13. Sir David Knox:
To ask the President of the Board of Trade when he next expects to meet the President of the Confederation of British Industry to discuss the manufacturing sector. [10601]
Mr. Lang:
My ministerial colleagues and I regularly met the Confederation of British Industry to discuss a range of issues. In 1997, the CBI expects manufacturing output to grow by 3.5 per cent. and manufacturing investment to grow by 8 per cent.
Sir David Knox:
Does my right hon. Friend agree that reasonably stable exchange rates are particularly
Mr. Lang:
The rise in the pound is clearly a reflection of the world's perception of the strength of our economy and currency. A strong currency reduces input costs for manufacturing industry when importing from abroad. Manufacturing is now at an all-time high. It has increased by 9 per cent. since the recovery began. Given the high quality of productivity and the prospects for order books, I believe that the capacity exists to maintain that level.
Mr. Pearson:
Is the Minister aware of the widespread concern and dismay among trade associations about the Governments's proposals to turn the trade fairs and missions budget into a competition, at the behest of the Deputy Prime Minister? Does the Minister realise that that will prevent necessary long-term planning and will jeopardise future success? Why does he not tell the Deputy Prime Minister to get the tanks off his lawn?
Mr. Lang:
It is the policy of the Government, to which the hon. Gentleman referred, to which all Ministers subscribe. It is important to use Government funds as efficiently and cost-effectively as possible. The broad thrust of our policies--creating challenge schemes, getting the best value for the taxpayer--has been welcomed by industry, and that is reflected in its success in using the resources that we provide.
Mr. Harry Greenway:
Does my right hon. Friend recall that, in 1979, it took five men to produce a tonne of steel in this country compared with one man in Japan? Production output per man in the two countries is now equal, if not better in this country. Is that not a matter for great congratulation and a complete condemnation of a Labour Government and socialism?
Mr. Lang:
My hon. Friend is absolutely right to draw attention to the success of the steel industry, which is partly the result of privatisation and the release from the shackles of state ownership to which the Labour party subjected it. That success in productivity applies right across the manufacturing sector. Manufacturing productivity has risen by 80 per cent. since the Conservative Government came to power. We have largely closed the productivity gap with Germany and France, which widened under the last Labour Government. Whereas the Organisation for Economic Co-operation and Development table put the United Kingdom in 14th place in productivity growth under the last Labour Government, we are now top of the table.
Mr. Campbell-Savours:
Will the President of the Board of Trade join me in drawing the attention of the Confederation of British Industry and the international business community to the fact that west Cumbria has hundreds of thousands of square feet of modern industrial space waiting to be occupied by industries that we want to grow and make successful? We have a flexible, able and capable work force who want to work, and a development agency equipped to put together effective packages to help industries to come to our area. Will he help us now in this major effort to bring jobs to my under-employed community?
Mr. Lang:
I welcome the hon. Gentleman's endorsement of the success of Conservative policies,
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