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Balance Of Trade

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 13th April 1994.

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Photo of Mr Bruce Grocott Mr Bruce Grocott , The Wrekin 12:00 am, 13th April 1994

To ask the President of the Board of Trade what was the balance of trade in manufacturing products in (a) 1979 and (b) the latest year for which figures are available.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

In 1979, the United Kingdom had a surplus of £2.7 billion in manufactured trade. In 1993, there was a deficit of £7.8 billion. Since 1979, the volume of UK exports of manufactures has grown by 60 per cent.

Photo of Mr Bruce Grocott Mr Bruce Grocott , The Wrekin

As the Minister mumbled those disgraceful figures into the Dispatch Box, perhaps I can spell them out a little more clearly. The £2.7 billion surplus in 1979, in real terms, at current prices, would be a £6.8 billion surplus which, after 15 oil-rich years, is now a £7.8 billion deficit. What is the latest Government thinking about a scapegoat for that? Is it the foreigners, the unions, or Labour local authorities? Is it too much to expect the Minister to give us a parliamentary first today and stand at the Dispatch Box and apologise to the country for representing a Government of the most appalling economic and industrial incompetence?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

If the hon. Gentleman thinks that Labour-controlled local authorities have anything to do with the manufacturing decline of this country, he lives in cloud cuckoo land, as do most of his hon. Friends. If he and his colleagues had been in power, there would have been no reform of the trade unions, no privatisation of public utilities and every business man in the country would have fled because of the tax impositions advocated by Labour Members.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

As one of those hon. Members who, probably more than many others, recognised the vital role of manufacturing industry, I fully support the Government's new approach to it and their recognition of its importance. Will my hon. Friend ensure that the Government continue to create the right climate for the expansion of manufacturing industry, especially low inflation and low interest rates which are essential to the success of this vital sector?

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

When does the Minister expect to publish his report on the competitiveness of British manufacturing industry? Will he set out in that report his Department's priorities specifically to rebuild the British manufacturing base so that we can secure the advantages of the post-GATT eighth round? Will he be prepared to build into that incentives for companies that make long-term commitments to research and development and innovation in order to counter the short-termism which so often discourages such enterprise?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I am sure that my right hon. Friend the President of the Board of Trade will have noted what the hon. Gentleman has said.

Photo of Robin Cook Robin Cook , Livingston

The Minister invited the House to imagine what would have happened had there been a Labour Government in power. Why does he not admit that if a Labour Government had transformed a surplus of £7 billion at 1993 prices to a deficit of £7 billion in 1993 he would be demanding that they resign? Why does he not take that message himself? Why does he not admit that the cumulative surplus under Labour was more than £80 billion and that the cumulative deficit under the Conservatives has been more than £80 billion? Is that not the real measure of the appalling damage done to our manufacturing industry by 15 years of Conservative rule?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

If the hon. Gentleman, with his total lack of understanding and knowledge of industry, had been in power, the deficit would have been £17 billion rather than £7 billion. If he examined the percentages for a moment, he would find that the deficit now is 1¼ per cent. of gross domestic product and the surplus in 1979 was 1½ per cent., so the difference is about 2⅔ per cent. That total number in terms of the size of the economy, when compared with the increase in the surplus on services, is almost meaningless.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Is it not a fact that our balance of trade in manufacturing was falling very sharply in the 1960s and 1970s and especially in the latter part of the 1970s but that since then our record in manufacturing exports, output and productivity has for the first time since the war been better than the average of our main competitors? Does that not mean that in the past 15 years we have made up much of the ground lost when Labour was implementing its industrial strategy to turn British Steel into the world's largest loss maker and British cars into the butt of international music hall jokes?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

My hon. Friend is absolutely right. To cite just one statistic, in the three months to the end of February our exports to Asia have risen by 25 per cent. in value. In the same three months last year, they rose by 11 per cent. in value. Britain's success in increasing our manufacturing exports is unrivalled by that of any other country.