What assessment he has made of the effect on the balance of trade of depreciation of the euro.

In the latest Office for Budget Responsibility forecast, while sterling is assumed to be stronger against the euro, the balance of trade is forecast to improve. I recognise that a strengthening pound can create pressure for some exporters, but any discernible impact on the balance of trade has been more than offset by other factors, such as demand conditions in overseas markets.

The UK has a trade deficit of about £1 billion a week with the rest of the EU, equivalent to 1 million jobs lost, and the significant depreciation of the euro rate against sterling, while bringing a short-term benefit to the trade balance because of the J-curve effect, will cause serious longer-term damage to the economy. What discussions has the Secretary of State had with the Chancellor and the Governor of the Bank of England about this worrying matter?

I have had a lot of discussions with both of them about this issue, but since the hon. Gentleman is an expert on the subject he will know that what really matters is the real effective exchange rate. We have devalued substantially against the dollar, by more than 10%, and that must be put into the mix. One lesson we learned from the 2008 financial crisis, when we had sterling devaluation of 25%, is that that does not automatically translate into improved trade.