HC Deb 16 November 1970 vol 806 cc870-4
The Secretary of State for Trade and Industry (Mr. John Davies)

The previous Administration announced in June, 1969, that there had been a significant under-recording of exports in the trade statistics because some export documents were not being lodged with Customs by exporters, despite their legal obligation to do so. Exporters and their agents were urged to lodge the necessary documents in good time, and a procedure was instituted for checking from ship and aircraft manifests that the necessary documents had been received. By November, 1969, the shortfall of export documents had been reduced to negligible proportions. The checks carried out for the early months of 1970, however, now show that a degree of shortfall, of about 2 per cent., has re-emerged.

In view of the importance of these figures the Government do not regard it as acceptable that they should be subject to this uncertainty. The Government, therefore, intend to institute as soon as practicable a system of pre-entry whereby exporters will be obliged to give the Customs details of exports before they are loaded on the ship or aircraft.

Successive Governments have over a period of years been attempting to simplify the documentation of exports, and we are grateful in particular for the work that Lord Thorneycroft and his Committee have undertaken in this field. The Government therefore regret the need for this change and officials of Her Majesty's Customs and of my Department will consult the interested parties in order to work out arrangements which will place a minimum burden on traders consistent with the overriding requirement for accurate recording.

Mr. Mason

It is pleasing to know that today's trade figures show a £27 million surplus on visibles and that invisibles are running with a favourable surplus of £40 million, just as my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) predicted. I gained the impression when we left office that under-recording was running out due to an extensive checking procedure which the Labour Government brought into being. Obviously there has been quite a lapse, otherwise our export figures would be many millions of pounds greater.

First, will the right hon. Gentleman say what has been discovered to cause this fresh lapse of under-recording? Secondly, which group of exporters is guilty of this practice? Finally, can he assure the House that these new procedures and consultations will be carried out with urgency so that all concerned can feel assured that the monthly trade statistics, for which the right hon. Gentleman is personally responsible, reflect accuracy?

Mr. Davies

The situation, which had been remedied by the measures taken, has now deteriorated quite seriously. The time taken in detecting this deterioration is, as the right hon. Gentleman knows, considerable, because the inquiry which follows the examination of manifests is a most complicated process. Therefore, the shortfall has undoubtedly been running back to quite early months in the year.

It is impossible to say at this stage precisely what sectors of the commodity markets have been most affected, but this will be part of the consultative process on which I shall be embarking very shortly. I can assure the right hon. Gentleman that we shall treat this matter with due urgency, but I am very anxious to ensure that the weight of this system is not unduly onerous on industry and exporters. Therefore, I plan to have fairly extensive consultations before bringing a new system into force.

Mr. Pardoe

I welcome the knowledge that the Government regret the need for this change, but is the right hon. Gentleman aware that some of us do not share his view of the importance of the accuracy of these figures? Is he further aware that a 2 per cent. error either way is neither here nor there? Is it part of the Government's policy of disengagement that we should have to run to his Department and say, "Please, sir—permission to export"?

Mr. Davies

May I just point out that the 2 per cent. in question involves a figure of some £150 million over the year? This is a very significant figure indeed, bearing in mind particularly the detailed scrutiny to which these figures are put and also their importance not only to the Government but to industry. The figures involved are important both from the point of view of commodities and the territories to which exports are made.

Mr. Sheldon

Would the right hon. Gentleman consider whether my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) was not underestimating the balance of payments surplus if there were £150 million arising, as he has said today? Could the right hon. Gentleman say whether, in the discussions he will be having as to the limitation of the problems to the small exporter, who, I suppose, is the person primarily involved, he will consider that to him it is more important to get these exports than to get the forms?

Mr. Davies

On the first question, the balance of payments figures are not affected because the difference in question is taken up in the balancing item. It really is a shift, and the importance of the figure is that more and more interest is concentrated on current balance at the moment—and the figure specifically affecting the current balance—but the total balance of payments is not affected by the adjustments which will be made. As far as the small importers are concerned, they, of course, will be very much in our minds when having the consultations which we are undertaking.

Mr. English

Is the right hon. Gentleman aware that industry as a whole will be grateful for his assurance that this will not add to the delay in export documentation, if that is the case; but would he also say why he has specifically mentioned aircraft in his statement?

Mr. Davies

I think I must enter a slight hesitation on an absolute guarantee that there will be no delay. If exporters produce the papers in proper form and in due time there will be no delay; if not, there must inevitably be some delay. I mentioned ships and aircraft as being the primary vehicles of our export trade. Perhaps it is worth while my saying that, as far as postal packets are concerned, these requirements will not have to be applied.

Mr. Taverne

Would the right hon. Gentleman reassure the Chancellor of the Exchequer that there will be no charges from this side of cooking the books?

Mr. Davies

I am grateful for that reassurance.

Mr. Ronald Bell

Would not my right hon. Friend agree that the sooner we get our economy back into a state in which the flow of trade has not to be clogged up by such trivialities the better?

Mr. Davies

Like my hon. Friend, I am of course most anxious to see our economy build up, but I think that to call £150 million a triviality is not really reasonable in any country's balance of trade.

Mr. Adley

Would my right hon. Friend say whether the devaluation which was the cause of the present unfortunately limited balance of payments surplus was not also the prime cause of the present inflation which we are all suffering?

Mr. Davies

I think that that is another question.

Mr. Ginsburg

rose—

Mr. Geoffrey Finsberg

rose—

Mr. Speaker

Order. I called Mr. Ginsburg, not Mr. Finsberg.

Mr. Ginsburg

As a matter of academic interest, would not the Secretary of State admit that his statement means that the May export figures were under-recorded? Perhaps he would like to call the attention of the Prime Minister to this?

Mr. Davies

Certainly I accept that the figures throughout the summer have been under-recorded. I should like to point out, however, that the underlying trend is not affected by the under-recording.

Mr. Geoffrey Finsberg

I am grateful for your recognising, Mr. Speaker, the hon. Member for Dewsbury (Mr. Ginsburg), who must be getting some of my mail. May I ask my right hon. Friend, when he is examining this more closely, whether he will give some thought to the feeling that it might be wiser if these figures were issued quarterly and not monthly? Then they would have more relevance.

Mr. Davies

This issue has been raised on many occasions and it is under constant examination. It has always appeared difficult to seize the exact, best moment in time to make this shift which I think many of us would consider desirable.

Mr. Michael Foot

In view of these signs of improved trade figures, may we not expect the Government to pluck up their courage and have an economic policy which they can divulge to the country?

Mr. Davies

I think that that, again, raises other questions with which this statement does not deal.