HC Deb 19 June 1978 vol 952 cc3-6
2. Mr. Michael Marshall

asked the Secretary of State for Trade what is the present position regarding trade talks with Japan; and if he will make a statement.

18. Mr. Arnold

asked the Secretary of State for Trade whether he is satisfied with the current trading figures between the United Kingdom and Japan.

Mr. Dell

Our bilateral trade balance and the size of Japan's balance of payments surplus with the world are not satisfactory. The next trade talks are between the EEC Commission and Japan on 21st and 22nd June. Further discussions will take place at the Bonn Summit in July.

Mr. Marshall

Since the Japanese Minister is at present visiting the European Community to consider where and how Japanese investment might usefully be channelled into Europe, will the Secretary of State say what the Government propose to do to make more encouraging noises to the Japanese, especially after the somewhat unfortunate atmosphere created by the Hitachi situation?

Mr. Dell

As the hon. Gentleman knows, inward investment is primarily a matter for my right hon. Friend the Secretary of State for Industry. He will know also that my right hon. Friend the Member for Swansea, West (Mr. Williams), Minister of State, Department of Industry, recently visited Japan in order to encourage Japanese investment in the United Kingdom. After all, if the Japanese are to invest overseas and within the European Community, there are considerable advantages in their investment being in this country.

Mr. Ronald Atkins

Is my right hon. Friend aware of the rapid build-up in the import of Japanese commercial vehicles, and will he go beyond simply watching the situation which he indicated in reply to a question which I raised with him previously and take some action?

Mr. Dell

There is an understanding with MITI about the import of light commercial vehicles. That understanding has not been broken. We are, of course, carefully watching the level of shipments from Japan of vehicles of this type. In respect of heavier vehicles, imports from Japan so far this year, either directly or indirectly, are neglible.

Mr. Ridsdale

May I press the Secretary of State on the question of capital investment in Europe and the United Kingdom? Does he realise that the present figure of capital investment per worker in West Germany is £23,000, in Japan £30,000 and in the United Kingdom £6,000? What we need is capital investment. When I was in Japan recently I found a great willingness to invest in this country—

Mr. Speaker

Order. The hon. Gentleman is giving information instead of seeking it.

Mr. Dell

I do not think I need say more than I said earlier. My right hon. Friend the Minister of State, Department of Industry has recently visited Japan precisely for the purpose of encouraging Japanese investment in this country. Other Ministers have visited Japan for that purpose.

Mr. Litterick

Has my right hon. Friend read the report on the machine tool industry published recently by the North-East Trades Union Studies Information Unit, which points out that for the last decade the importation of foreign manufactured machine tools has been increasing steadily, and that in particular the matrix division of Tube Investments Ltd. is assembling Japanese machine tools under licence? What steps does my right hon. Friend propose to take to reverse this trend?

Mr. Dell

Unfortunately, I have not read that report. These are questions for my right hon. Friend the Secretary of State for Industry, and he considers them within the compass of the industrial strategy. We wish to increase our exports to Japan. We have insisted with the Japanese that their surplus both with this country and the world as a whole has to be brought down. They have shown recognition of the fact in the statement that they have made. We must now wait to see evidence of achievement in this respect.

Mr. Sims

Does the right hon. Gentleman agree, in relation to the statement he has referred to, indicating that the Japanese Government intend to increase their imports by an emergency programme of £4,000 million, that this country's efforts would be best engaged in trying to get some of that business, thereby expanding trade, rather than restricting it, as some of his hon. Friends want to do?

Mr. Dell

I have of course seen the statement about the emergency import programme, but I should emphasise that I do not think that it will do very much for the working of the world economy if those increases in imports take the form of increases in the imports of oil by Japan for the stocking of large quantities of oil in tankers. We want to see a large increase in the import of goods by the Japanese.

Mr. Nott

In drawing a distinction between the import of oil by the Japanese and the import of manufactured goods, is not the right hon. Gentleman denying the fact that, in the last resort, trade is multilateral? If Japan is importing more oil, surely that must be to the benefit of the world trading community and the British. Surely we want to encourage trade of every kind.

Mr. Dell

I am afraid that the effects of even higher OPEC surpluses would reduce the benefit to the world trading system of any reduction in the Japanese trading surplus. The basic error in what the hon. Gentleman has said is that trade is not purely multilateral. I wish that it were, but in fact it is not. There are many forms of restriction on the movement of trade. That is why I emphasise that it would do us very much better if the Japanese increased their imports of manufactured goods than if they increased their imports of oil to stock.

Later—

Mr. Arnold

On a point of order, Mr. Speaker. When my office telephoned the Department of Trade this morning I was told that my Question No. 18 would not be linked with Question No. 2. I should be grateful if the Minister would explain why this was not adhered to.

Mr. Dell

Further to that point of order, Mr. Speaker. I am very sorry that the hon. Member was so informed. I was not aware of it. I am prepared to take any supplementary question now.

Mr. Speaker

I think that the House will feel that it is fair that the hon. Gentleman should ask his supplementary question.

Mr. Arnold

I am much obliged, Mr. Speaker.

What indications has the Secretary of State had of any increase in the competitiveness of United Kingdom exports to Japan as a result of the changes in the Japanese tariffs which came into force on 1st March?

Mr. Dell

The changes have undoubtedly had a beneficial effect on the competitiveness of British products, and I would hope to see an improvement in our export record as a result. There is still some discrimination against us—for example, in whisky as against bourbon. I do not think that anything that was done by the Japanese in those concessions meets the needs of the present situation, helpful though those concessions were.