HC Deb 10 May 1995 vol 259 cc739-40
11. Mr. Grocott

To ask the President of the Board of Trade what estimate he has made of when the United Kingdom will achieve a surplus in the balance of trade for manufactured goods. [21952]

The Minister for Trade (Mr. Richard Needham)

My right hon. and learned Friend the Chancellor of the Exchequer will publish new forecasts for the balance of payments in June. Manufacturing exports were at record levels in 1994 and the prospects for this year are excellent.

Mr. Grocott

I do not blame the Minister for not answering the question, but will he confirm what the Under-Secretary failed to in his answer to my hon. Friend the Member for Newham, North-West (Mr. Banks)—that Central Statistical Office figures show that in 1979 in the key manufacturing sector of transport, equipment and machinery there was a surplus of £2 billion and that in 1984 there was a deficit of £5 billion? In the face of those incontrovertible facts, I suggest to him in a friendly and helpful way that the Government should abandon their policy of getting the message across, because in that key area their message has been one of 16 years of failure.

Mr. Needham

Every month the hon. Gentleman comes back for more; he often asks these questions. Let me give him the figures for cars. In 1979, exports of cars from the United Kingdom were worth £838 million and imports of cars into the United Kingdom were worth £2.6 billion—exports were a third of imports. In 1994, we exported £5 billion-worth and imported £9 billion-worth. We have more than halved the gap in one of the most important areas of manufacturing about which the hon. Gentleman asked. Between 1974 and 1978, the United Kingdom had 4.9 per cent. of world trade and between 1989 and 1993 we had 5.2 per cent. Will the hon. Gentleman please congratulate the Government on their magnificent achievements?

Mr. Waller

Imports of capital equipment have increased during the past year, which has reflected a welcome revival in the confidence of British manufacturing industry. Is it not especially pleasing that exports of the British capital equipment industry have done very well and that we are now in surplus with the rest of the world? Does not that demonstrate a favourable currency position and the fact that our exports are capable of competing effectively in terms of quality anywhere in the world?

Mr. Needham

My hon. Friend draws our attention to the capital goods sector, our share of which to non-OECD countries has increased from 5 per cent. two years ago to 7 per cent. last year. Wherever one looks, the success story of British manufacturing is there to be seen. Of course, we had to get over the 1960s and 1970s when we had to live with the results of Labour Governments, and it took some time to do so. Our good results are now coming through.

Mr. Bell

The Minister mentioned the 1960s and 1970s, but he might have also mentioned the 1980s. In that regard he might have read an interview with Sir Denys Henderson, the chairman of ICI in The Times on 17 April. He made it clear that in the 1980s his relationship with the Government had lapsed because, in his words, it was the Government's view that manufacturing industry did not matter. Is it not true that because of the policy pursued in the 1980s we had a deficit on our manufactured trade last year of £10.7 billion. The Minister does all that he can for exports, which we welcome, but he never tells the House that our imports have risen higher than our exports. As he mentioned the Chancellor of the Exchequer in his opening remarks, I remind him that the Government's only policy seems to be whether to raise interest rates, and even that depends on local election results.

Mr. Needham

The hon. Gentleman is a fair and reasonable opponent, although he always likes to reflect on the negative rather than the positive. He must accept that the legacy that was inherited in the 1980s meant that it took some time to set things right. Between 1974 and 1979, UK productivity rose by less than 1 per cent., in Germany it rose 4.5 per cent., in France it rose 5 per cent., in Italy it rose 5.5 per cent. and in Japan it rose 5.9 per cent. Between 1979 and 1993 our productivity has risen, on average, 4.1 per cent.—more than three times the amount that it rose under the last Labour Government. After Japan, we have had the highest increase in manufacturing productivity of any country in the Organisation for Economic Co-operation and Development. That is a magnificent achievement. The facts can be seen in the figures that I quoted on car exports. The hon. Gentleman should give some credit to the Government and to the people of this country for that.