HC Deb 23 March 1978 vol 946 cc1742-4
Q3. Mr. Hoyle

asked the Prime Minister whether he expects to discuss the trade deficit with the West German Government when he visits Bonn.

Mr. Foot

I have been asked to reply

Bilateral trade deficits cannot be treated in isolation from the wider problems of the world economy, which my right hon. Friend discussed with Chancellor Schmidt in Bonn on 12th March. My right hon. Friend has no immediate plans to visit Bonn again.

Mr. Hoyle

Is the Leader of the House concerned not only about our deficit with West Germany but about our deficit with other EEC countries, particularly in manufactured goods? Will he tell those countries that they cannot solve their unemployment problems at our expense? Will he also tell them that failure to take any action could lead to import controls being imposed against them?

Mr. Foot

The deficit in our trade with West Germany, other EEC countries and, indeed, other countries in the world is a matter of concern. We are doing our best to rectify it. There have been improvements in the balance as a result of improvements in our exports to West Germany. We are seeking to promote these exports as much as possible. The general methods of overcoming these difficulties were discussed by the Prime Minister in Bonn on his recent visit.

Mr. Ridley

As a matter of general policy, will the Government, when unfavourable international economic comparisons are made, spend more time trying to improve our performance than trying to make other countries appear worse than we are?

Mr. Foot

Certainly we shall present comparisons in the fairest way for all concerned. Maybe that will provoke the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) into occasionally making a patriotic utterance. However, that is a bit too much to hope for. He is too eager to damn everything done by this country, whatever the figures might say.

Mr. Norman Atkinson

Does the Leader of the House consider that there is any political significance in the fact that every Western leader today agrees that the worldwide problem of bilateral trade deficits cannot be solved by the free market mechanism? Does he not agree that this development wholly justifies the Socialist case made over the years, that there is now a necessity to plan world trade by interventionist policies? This can be done only if there is total rejection of the free market system in the Western world.

Mr. Foot

There should be much closer and urgent co-operation, and this is needed to overcome the immediate problems between the nations and Governments to which reference has been made on the Question. If the British Government, particularly at this time, were to turn their back on such discussion, this would be an absurdity. That does not mean that we cannot get long-term arrangements for improving the whole way in which international trade is conducted, although I do not necessarily believe that we should take the line that my hon. Friend has recommended. We need an immediate and major effort to overcome the present problems, and the Prime Minister's efforts in this respect will have the wholehearted support of hon. Members on this side of the House and of the overwhelming majority of people in the country.

Sir K. Joseph

Is not my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) right in believing that to a large textent the remedy for deficits lies in the hands of the Government, if only the Government would take the necessary steps to cut taxation and encourage enterprise and effort at all levels in the economy?

Mr. Foot

We know that the right hon. Member for Leeds, North-East (Sir K. Joseph) and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) often agree with one another. That is not a compliment to either of them.

Mr. Dykes

Will the Lord President agree that, whichever pair of glasses he uses, there must be some lessons to be learned from Germany and from the way in which the German trade unions have behaved over many years? Would he select some of the best examples and precepts of the German trade union movement that he would like to see followed by British trade unions?

Mr. Arthur Lewis

High wages.

Mr. Foot

The German trade unions have had considerable achievements to their credit over many years, and no one would deny that. The House should take note of the fact that many trade unions in Germany are now urging some of the extensionist policies that many of us wish to see. There is a close conformity of interests between trade unions in this country and in Germany, and we are seeking to foster these developments.