HC Deb 12 March 1979 vol 964 cc16-8
12. Mr. Knox

asked the Secretary of State for Trade what was the United Kingdom's current account surplus in the most recent month for which figures are available.

Mr. John Smith

In January there was a current account surplus of £1 million.

Mr. Knox

In view of the substantial and increasing benefits from North Sea oil, why was the surplus so low?

Mr. Smith

I would always wish that the surplus was higher, although the hon. Gentleman will notice that the surplus for 1978 was £254 million. It must be the job of everybody to increase our manufacturing performance so that we improve these figures.

Mr. Skinner

Will the Minister confirm that one of the reasons why the surplus is not as good as it should be is that we have a £2½ billion trade deficit with the Common Market? Are we not further bothered by the fact that it arises out of our contribution to the Common Market budget, which is roughly £20 for every man, woman and child? That is affecting the invisibles also and worsening the situation.

Mr. Smith

My hon. Friend is correct to draw attention to this situation in regard to invisibles. With regard to the United Kingdom contribution to the Community, he knows the figures and the stance which my right hon. Friend the Prime Minister has taken and which he intends to pursue at the highest level within the Community.

Mr. Tim Smith

What is the effect of the current exchange rate, coupled with rising unit labour costs, on industrial competitiveness? What is the Government's present policy with regard to the exchange rate? Will they seek to maintain the exchange rate at about the present level, or will they seek a gradual reduction in order to assist exporters?

Mr. Smith

The hon. Gentleman invites me to enter a very delicate area of economic policy. He really should address this question to my right hon. Friend the Chancellor of the Exchequer.

Mr. Madden

Is the Secretary of State aware that a spokesman of the Scottish CBI is reported today as having said that the advent of a Tory Government would do nothing to improve Britain's trade position?

Mr. Smith

I am pleasantly surprised that such good sense comes from the Scottish CBI.

Mr. Nott

Can the Secretary of State say how it is possible for any Government to get their forecasts of the current account surplus so hopelessly wrong? Only 18 months ago the Chancellor of the Exchequer predicted a current account surplus of over £1,000 million. A year ago in the Budget the Government predicted a surplus of several hundred million pounds, but now we are just breaking even. Now that the Secretary of State has fairly recently taken over the job from his predecessor, will he be giving better advice to the Chancellor of the Exchequer on the future direction of our overseas trade and will the forecasts be rather better than in the past—certainly those for the coming year?

Mr. Smith

I do not know how far my predecessor was responsible for the advice given to the Chancellor of the Exchequer. Obviously these are matters which are extremely difficult to forecast. I do not think that getting them right or wrong is the prerogative of any particular Government. My main concern as Secretary of State for Trade is to improve our trading prospects as best I can. I am more concerned with doing that than with getting figures correct.