On the ropes and no end in sight: Tory alarm over recession grows Manufacturing output falls Jobless fears

THE PRIME MINISTER was facing mounting backbench pressure last night for positive action to end the recession after manufacturing output fell in August for the first time in four months. Indications grew that the demands may become politically irresistible when the Commons reassembles on Monday.

Official figures showed that manufacturing output dropped by 0.3 per cent in August, driven lower by a steep fall in car output. The depression in the motor industry deepened yesterday as Lotus and Ford announced fresh cutbacks in the face of declining sales.

Today's unemployment figures, for September, could bring further evidence of economic relapse. The City expects them to show the number of jobless climbed by 40,000, to 2.84 million. Even in the past three months, usually a more reliable guide to trends, manufacturing production was barely changed after rising earlier in the year.

Fears are growing that the decline in manufacturing may have accelerated in September, following the devaluation of the pound and expectations that confidence fell sharply as a result. Adding to worries of a further fall in manufacturing output last month was a recent Confederation of British Industry survey, which revealed businesses were decidedly less optimistic over output prospects.

The manufacturing sector had been the one bright spot in an otherwise bleak economic landscape but yesterday's figures suggest improvement was temporary and has come to an end.

The Treasury attempted to put on a brave face, saying that the fall in car production was already known: 'Manufacturing is still significantly above the trough, with the current trend looking flat rather than ownwards.'

The Central Statistical Office halved its estimate for the annual trend rate in manufacturing growth to 0.5 per cent. In the past three months, output was depressed by a 2 per cent fall in metals production and a decline of more than 1 per cent in chemicals output, indicating demand for basic materials has tailed off. Export markets for chemicals may have been hit by the pound's recent strength against the dollar.

Meanwhile, growing numbers of Tory MPs are accusing ministers of being obsessed with inflation when, they say, the recession is eating into the core of the economy with no apparent government response. Disaffection has spread from frequently vociferous backbench critics to normally loyal MPs and members of the key 1922 committee executive - some of whom are accusing the Government of drift.

Sir John Hannam, one of the executive's secretaries, said the Government 'cannot go on sitting it out', while Sir Tony Durant, an executive member, said: 'I am very concerned about the present situation. The Government must provide a package which could include a reduction in interest rates and include some capital investment in order to restore a sense that we know what we are doing.'

James Pawsey, another executive member, said: 'I am growing more concerned every day that the Government has made inflation the principal villain. I am beginning to think that they are fighting the wrong war, and that they need to concentrate on the economy at large.' He judged with other senior MPs that 'the disquiet will surface when the House reassembles'.

Sir John, who expected at least a

1 point interest rate cut 'in the very near future', said that Norman Lamont's job as Chancellor would be in jeopardy if he did not act. 'My confidence in the Chancellor continuing would be severely shaken if he doesn't begin to give greater priority to getting the economy moving. If he doesn't, I would say he is not the man to be

Chancellor.'

Conservative fears over the economy in general surfaced as some backbenchers demanded a rethink of the pit closures. Winston Churchill, MP for Davyhulme, wrote to Michael Heseltine, President of the Board of Trade, arguing that the economic case for the closures was not there. 'For the Government to edge unemployment in the industrial field towards a graveyard spiral, throwing tens of thousands on to the slag-heap at a time of deep recession when unemployment is already rising disturbingly fast seems to be the height of irresponsibility . . .'

Britain, he said, was losing too many manufacturing jobs. 'We can't just survive on Kentucky Fried Chicken and playing the money markets.' Labour demanded a statement on Monday on the pit closures, and plans a full-day debate on them on Wednesday.

John Smith, the Labour leader, denounced the cuts as 'senseless economics and energy madness' and accused the Government of being 'out of touch with reality and common sense'.

Today's unemployment figures are expected to show a further narrowing in the rates in different parts of Britain, with the total rising faster in the South.

That has been a consistent pattern since unemployment started rising again in the spring of 1990. The Conservative heartlands of southern England - where unemployment fell lowest in the boom of the late 1980s - have suffered most. This has narrowed the disparity with unemployment rates in the North, which have risen less quickly.

The national jobless rate has risen from its low of 5.4 per cent of the workforce in May 1990 to 9.9 per cent in August, but the rate in the South-east has almost trebled. In May 1990 the unemployment rate was half the national average, but the proportion is now more than 95 per cent.

On current trends unemployment in the South-east will be above the national average by the middle of next year. The jobless total in London recently topped the national average for the first time on record.

(Graphic omitted)

Arts & Entertainment
A stranger calls: Martin Freeman in ‘Fargo’
tvReview: New 10-part series brims with characters and stories

Arts & Entertainment
Shaun Evans as Endeavour interviews a prisoner as he tries to get to the bottom of a police cover up
Review: Second series comes to close with startling tale of police corruption and child abuse
Sport
Raheem Sterling and Luis Suarez celebrate during Liverpool's game with Norwich
football Another hurdle is out of the way for Brendan Rodgers' side
Arts & Entertainment
Schwarzenegger winning Mr. Universe 1969
arts + entsCan you guess the celebrity from these British Pathe News clips?
VIDEO
Have you tried new the Independent Digital Edition iPad app?
News
Portrait of Queen Elizabeth-II by David Bailey which has been released to mark her 88th birthday
peoplePortrait released to mark monarch's 88th birthday
Arts & Entertainment
The star of the sitcom ‘Miranda’ is hugely popular with mainstream audiences
TVMiranda Hart lined up for ‘Generation Game’ revival
Life & Style
The writer, Gerda Saunders, with her mother, who also suffered with dementia before her death
healthGerda Saunders on the most formidable effect of her dementia
Sport
Manchester United manager David Moyes looks on during his side's defeat to Everton
footballBaines and Mirallas score against United as Everton keep alive hopes of a top-four finish
Sport
Tour de France 2014Sir Rodney Walker on organising the UK stages of this year’s race
Arts & Entertainment
Jessica Brown Findlay as Mary Yellan in ‘Jamaica Inn’
TVJessica Brown Findlay on playing the spirited heroine of Jamaica Inn
News
YouTube clocks up more than a billion users a month
mediaEuropean rival Dailymotion certainly thinks so
Arts & Entertainment
The original design with Charles' face clearly visible, which is on display around the capital
arts + ents
Arts & Entertainment
‘Self-Portrait Worshipping Christ’ (c943-57) by St Dunstan
books How British artists perfected the art of the self-portrait
News
People
News
Sir Cliff Richard is to release his hundredth album at age 72
PEOPLE
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Geography Teacher

£130 - £140 per day: Randstad Education Ilford: Secondary Geography Teacher Lo...

Do you want to work in Education?

£55 - £70 per day: Randstad Education Cheshire: Are you a dynamic and energeti...

SEN Teaching Assistant

Negotiable: Randstad Education Group: SEN TAs, LSAs and Support Workers needed...

Private Client Senior Manager - Sheffield

£50000 - £60000 per annum: Pro-Recruitment Group: The Sheffield office of this...

Day In a Page

Rubin ‘Hurricane’ Carter: The man who could have been champion of the world - and the Bob Dylan song that immortalised him

The man who could have been champion of the world

Rubin ‘Hurricane’ Carter and the Bob Dylan song that immortalised him
Didn’t she do well?

Didn’t she do well?

Miranda Hart lined up for ‘Generation Game’ revival
The Middle East we must confront in the future will be a Mafiastan ruled by money

The Middle East we must confront in the future will be a Mafiastan ruled by money

In Iraq, mafiosi already run almost the entire oil output of the south of the country
Before they were famous

Before they were famous

Can you guess the celebrity from these British Pathe News clips?
Martin Freeman’s casting in Fargo is genius

Martin Freeman’s casting in Fargo is a stroke of genius

Series is brimming with characters and stories all its own
How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players