Balance of Payments

Oral Answers to Questions — Trade and Industry – in the House of Commons at 1:43 pm on 19th February 1997.

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Photo of Don Touhig Don Touhig , Islwyn 1:43 pm, 19th February 1997

To ask the President of the Board of Trade if he will make a statement on the balance of payments current account. [15040]

Mr. John M. Taylor:

The balance of payments current account was close to balance during the first three quarters of 1996—the strongest performance for a decade.

Photo of Don Touhig Don Touhig , Islwyn

But will not 1996 be the 11th consecutive year in which the balance of payments current account has been in deficit? The Treasury forecasts an even wider deficit in the next two years, giving Britain the longest run of balance of payments deficits for 130 years. Are the Government proud of that record?

Mr. Taylor:

The current account balance was strong in 1985–87, was weak in 1989–90, and is strong again now. As I have said before, there have been only six years since 1946 in which there was a surplus in visible trade: 1956, 1958, 1971, 1980, 1981 and 1982. All those were years in which there was a Conservative Government.

Photo of Mr Michael Stephen Mr Michael Stephen , Shoreham

Does my hon. Friend agree that a factor of great importance to British exporters is the value of the British pound? If the pound becomes too strong, it will be much more difficult for British exporters to win in foreign markets. Is there not a case, perhaps, for cutting interest rates to reduce the value of the pound?

Mr. Taylor:

That is properly a matter for my right hon. and learned Friend the Chancellor of the Exchequer.