Balance of Trade

Oral Answers to Questions — Trade and Industry – in the House of Commons at 11:30 am on 7th April 2005.

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Photo of Mr Teddy Taylor Mr Teddy Taylor Conservative, Rochford and Southend East 11:30 am, 7th April 2005

What the latest estimate is of the UK balance of trade for 2004–05; and what the balance of trade with the EU was in the same period.

Photo of Jacqui Smith Jacqui Smith Minister of State (Industry and the Regions and Deputy Minister for Women), Department of Trade and Industry

The Government do not produce forecasts on a geographical basis. The latest official figures, published at the time of the Budget, for the UK's total balance of trade in goods and services in 2004 show a deficit representing 3.3 per cent. of GDP. The Treasury forecasts that that will fall to between 3 and 3.1 per cent. of GDP by 2007.

Photo of Mr Teddy Taylor Mr Teddy Taylor Conservative, Rochford and Southend East

Is the Minister aware that, in the 34 years that have passed since I resigned from the Government—before she was born—over the decision to join the EU, which we were told would improve trade dramatically, I have been watching for that improvement? I was horrified when I phoned up the House of Commons Library this morning and was told that, in 2004, our deficit in trade in goods and services with the rest of the world was £6.4 billion, but with the European Union it was £32.5 billion, which means that the European part accounts for 84 per cent. of our deficit. Is not that an horrific figure and should not the Government think carefully before getting more involved in an enterprise that has brought us an horrendous trade deficit?

Photo of Jacqui Smith Jacqui Smith Minister of State (Industry and the Regions and Deputy Minister for Women), Department of Trade and Industry

I offer the hon. Gentleman my best wishes for what comes next. I have happy memories of our time together on the Treasury Committee and I have always been impressed by his independence of mind and his diligence in representing his constituents. He is, of course, famous—even notorious—for his views on Europe, but perhaps I can give him a little reassurance today. One of the reasons for the figures he cites is that the beneficial levels of growth that we in the UK have experienced compared with other parts of the EU mean that opportunities for UK exporters in Europe are somewhat reduced. In addition, I hope that he will be reassured to learn that, although the EU trade deficit in December last year was £2.4 billion, in January this year it had decreased to £2.2 billion.