§ 23. Mr. Hugh Jenkinsasked the Secretary of State for Trade to what extent the United Kingdom's membership of the EEC is responsible for the worsening of the United Kingdom balance with other EEC countries since entry.
§ Mr. MeacherIt is not possible to identify separately the effects of our entry to the Community from other major influences on the pattern of our trade, except that there has been some switching of our sources of supply, particularly in regard to foodstuffs, after entry to the EEC in 1973.
§ Mr. JenkinsMay I also, Mr. Speaker, wish you a happy new year? Since the switch of resources mentioned in an earlier question by my right hon. Friend the Member for Battersea, North (Mr. Jay) seems to have played a part in maintaining a £2 billion deficit over a period of three years, and as there is no immediate sign of radical improvement, what advice is the Secretary of State for Trade tendering to his Cabinet colleagues concerning our continued membership of the EEC?
§ Mr. MeacherI believe that I have missed out up to now, Mr. Speaker, and may I also wish you a very happy new year?
I have sought to indicate that there has been a significant improvement in the trade balance account. In 1976 it reduced by £300 million at the same time as our deficit with the rest of the world increased by nearly £500 million. Ultimately protection against increased imports requires exactly the same economic conditions as increased exports, namely, better productivity, salesmanship and improved delivery. I am glad to see that in these other respects a recent survey published in The Times indicated that there is a real improvement.
§ Mr. MartenAs the shift in resources has been about 7 per cent. or 8 per cent. in our trade, and as the larger part of that shift has been in food—which is putting up the price of food in this country—would it not be a very good thing to shift some of that back to food elsewhere than the Common Market?
§ Mr. MeacherUltimately that is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food. I think I should leave it to him.
§ Mr. ShersbyWhat steps is the Minister taking, in consultation with the Secretary of State for Industry, to improve the delivery of British motor cars to the 1042 Community? In particular, what steps is he taking to improve the availability of servicing and spares facilities?
§ Mr. MeacherAll the British car firms—not only Leyland but also the three American multinationals—are rationalising their motor vehicle plans to take in the EEC, and they are certainly extending their distribution network. There have, however, been substantial imports from the European subsidiaries of these companies which account for about one-quarter of our total car imports. But, of course, there are also counterpart exports by the British companies to the EEC.
§ Mr. AdleyThe Minister said earlier that we were merely following the French, Gemans and Italians in financing credits to the Soviet Union. Does he not think that it might be advantageous, rather than to follow our EEC partners, once in a while to do something new such as, for instance, offering low-interest loans to other East European countries such as Hungary and Poland to buy British aircraft rather than leave these massive loans in the hands of the Russians and not have them taken up?
Mr. MeaeherThat is a remarkable suggestion coming from a member of a party that has shown continuing and consistent opposition to COMECON trade. I can assure the hon. Gentleman that we offer exactly the same conditions of credit and interest rates to our exporters to COMECON countries—where in 1975 we had a surplus of £100 million, and probably nearly £50 million last year—as we offer to exporters to other areas of the world.
§ Sir Bernard BraineIn answer to earlier questions, the Minister gave the impression that the Government's arrangements for helping to promote trade and identify markets are all very satisfactory. Does he recall that the Select Committee on Overseas Development, in its report last year on the small area of the Caribbean, indicated that the present institutional arrangements for promoting British trade and investment, identifying markets and co-ordinating aid were totally inadequate? The Select Committee made a recommendation that a new trade development agency should be created. If that is true of the 1043 Caribbean, is it not also likely to be true of other regions? What are the Government doing to improve their own performance?
§ Mr. MeacherThe proof of the pudding is in the eating. An improvement in our balance of payments position to a degree reflects the adequacy of existing institutional arrangements. However, I am prepared to look at the proposal for a new trade agency. I am not being unfair when I say that this has been thought of before, and I know that there are practical difficulties about it. However, we shall certainly look at it.
§ Mr. NottThe Minister indicated that we have exactly the same terms on our COMECON trade as we have in respect of other countries. I understood him to say earlier that the rate of interest on the Russian credit was confidential. Can he please say whether it is confidential or whether it is the same as our terms of other trade?
§ Mr. MeacherThe question referred to COMECON, and there the conditions are exactly the same. With regard to the Anglo-Soviet credit agreement of February 1975, it is true that there are special terms in respect of that which merely reflect the competition.