§ 3. Mr. Hunter
To ask the Chancellor of the Exchequer what is his estimate of the rise in manufacturing profitability in 1987.
§ The Chief Secretary to the Treasury (Mr. John Major)
Manufacturing profitability is estimated to have risen by about 1½ percentage points in 1987 to 8½ per cent., the highest level since the beginning of the 1970s.
§ Mr. Hunter
Does my right hon. Friend's answer not highlight one of the many strong features of our economy, as without profitability there can be no expansion through reinvestment, and without that expansion there can be neither the job nor the wealth creation to finance our welfare and social programmes?
§ Mr. Curry
Are not improved industrial relations contributing substantially to improved profitability? Is it not therefore particularly silly and reactionary for the Trades Union Congress to seek to drive out from its ranks those unions willing to conclude single union agreements, to the great benefit of the company for which they work, the real earnings of their own work force and employment?
§ Mr. Nigel Griffiths
Does the right hon. Gentleman agree that a major threat is posed to manufacturing profitability by the high pound and high interest rates, which are estimated to cost £600 million this year?
§ Ms. Armstrong
Will the Minister encourage some of that profitability to be reinvested, particularly in research and development? We still have a shocking record of investment in research and development in this country, particularly in the northern region, and we need that research and development to ensure future capacity in manufacturing and in the real economy, which will produce the jobs and the prosperity of the future.
§ Mr. Major
I have some sympathy with what the hon. Lady says. There is a substantial amount of public sector investment in research and development, and I would welcome increased private sector investment in research and development. I hope that that forms part of the significant investment boom that we are now seeing.