Exports and Imports (Hansard, 2 July 1973)

§ 21. Mr. Ewing
asked the Secretary of State for Trade and Industry if he will 22 make a statement on the export/import trade figures for May 1973.

§ Sir G. Howe
Imports in May were at a high level, but included large increases in the basic materials and industrial supplies necessary for our continued expansion. It is now also clear that the volume of exports this year has expanded faster than the volume of imports, and that we have achieved major increases in sales to our most important trading partners: the Community, the United States of America and Japan.

§ Mr. Ewing
Is the right hon. and learned Gentleman aware that his statement that imports in May were at a high level could be classed as the understatement of the year? If these figures are so good and paint such a rosy picture for the future, can he explain why his right hon. Friend tells the Welsh Conservatives not to worry and stomps the country telling everyone that all is bright and rosy for the future? When can we expect a change in the pattern of exports, when the value of exports will exceed the value of imports and when the trade figures will again show a surplus?

§ Sir G. Howe
The hon. Member appears to cast a gloomy view over the whole scene. I would remind him and the House, in answer to his last point, that the volume of exports in the first four months of this year has increased by 12 per cent. over the last half of last year, which is exactly twice as much as the increase in volume of imports during the same period. The Government remain committed to this pattern of expansion of exports and I cannot see why the hon. Gentleman should take such a gloomy view of our determination to continue that development.

§ Mr. Ridley
Is it not extraordinary that the hon. Gentleman has not realised that one month's trade figures are of no significance when the pound is floating and it is impossible to have a balance of payments shortage as a result? Will my right hon. and learned Friend make sure, however, that the pound continues to float so that the hon. Gentleman can continue to be wrong?

§ Sir G. Howe
My hon. Friend is entirely right to draw attention to the fact that one must look at the long run 23 of figures. The underlying important factor which the country should take seriously is the extent to which our prospects for a continued expansion, not only in volume of exports but in the advantage in trade, depend on our being able to maintain a steady pattern of growth and a reasonable containment of inflation in this country. That is the policy to which the Government are committed. We are on course for an expansion in prosperity, which hon. Members on both sides of the House so much want.

§ Mr. Mason
If we are looking at the long run of figures, is not the right hon. and learned Gentleman aware that the visible trade deficit rose from £233 million to £363 million between the last quarter of 1972 and the first three months of this year? Invisibles are running at an annual deficit of £800 million. These figures, allied to the present raw material shortage, look like registering the biggest visible trade deficit since the war. Does not this show that this "phoney" boom is based on Britain living in debt? It is a boom on tick. What does the right hon. and learned Gentleman visualise the Government doing to try to bring the visibles back into the black?

§ Sir G. Howe
I invite the House to note that, in assessing our balance of payments, one must take into account also the extent to which our invisible earnings are running, namely, at nearly £60 million a month. I invite the right hon. Member for Barnsley (Mr. Mason) to answer this question. [HON. MEMBERS: "The Minister should answer."] The country is entitled to know the Opposition's attitude on these things. Do they wish us to contain and restrain the prospect of expansion and growth? Do they wish us to cut back and restrain the growth now taking place? This is the question they must answer. The Government are committed, as my right hon. Friend the Chancellor of the Exchequer said, to a policy of steady and sustained growth, with a view to raising living standards and maintaining full employment. If the Opposition wish us to change from that and stop the boom, let them tell the country.

§ Mr. Mason
In the same period as the Minister has taken, invisibles fell back from £197 million surplus to £174 million. Thus, the trend is the same in invisibles 24 as has already happened in visibles. So when do we expect the cut-back?

§ Sir G. Howe
The right hon. Gentleman still does not come back to the central point. Our invisible earnings are continuing high and substantial. Our balance of visible trade is being produced by an expanding volume in that trade. The right hon. Gentleman is possibly the last hon. Member entitled to ask, as he did a moment ago, when we shall get the nation out of debt. We have got it out of debt—[HON. MEMBERS: "Oh."]—out of the debt into which his Government put it. We are determined to maintain a pattern of steady and sustained growth.