Balance of Trade Figures

HC Deb 24 April 1978 vol 948 cc987-9

10. Mr. Radice

asked the Secretary of State for Trade if he is satisfied with the latest balance of trade figures.

Mr. Meacher

No, Sir. I am not.

Mr. Radice

Is my hon. Friend aware that in the first quarter of this year there was a visible trade deficit of £518 million, with an alarming increase in imports? Does he think that the trend will be better in the next quarter?

Mr. Meacher

The latest Treasury forecast, as I am sure my hon. Friend will know, was of a current account surplus for 1978 of about £750 million. But it is still our expectation that the rise in exports this year, at about 3½ per cent., will be substantially less than the rise in imports of 7½ per cent.

Mr. Tim Renton

Why is the latest Treasury forecast of the current account surplus about half the forecast of the current account surplus that the Treasury made three months ago?

Mr. Meacher

It is because of the changes in the international climate and the marking down in the level of growth in world trade.

Mr. Noble

Is it not a fact that since the early 1950s or mid-1950s every time the Chancellor of the Exchequer has re-flated the economy the balance of trade has got worse than in the preceding cycle? Is not the lesson of that that if we are to protect British jobs and British industry, and not export unemployment, the Government must take steps to protect us against low-cost imports?

Mr. Meacher

As my hon. Friend knows as well as any hon. Member, the Government have taken considerable measures to protect jobs and business against low-cost imports, above all in textiles, where, in effect, free trade is at an end and where the level of potential access to the United Kingdom and EEC markets is now under very precise regulation, but also in sectors such as steel footwear, and consumer electronics.

Mr. Baker

Does the Minister consider that the forecast of surplus that he has just announced as the latest Treasury forecast is likely to be maintained with the exchange rate at about its present level?

Mr. Meacher

It is true that last year the pound lost most of the price-competitivenes that we gained as a result of the changes in 1976. But we still have a position over cost, particularly labour costs, which is better than it was two years ago. Whilst it is true—and this needs to be remembered—that the pound has certainly appreciated against the dollar, it has not appreciated against the mark or the yen, and it is now back to the point, roughly, where it was before uncapping.