HC Deb 27 October 1980 vol 991 cc9-11
8. Mr. Dobson

asked the Secretary of State for Trade what is the current imbalance in trade in manufacturing goods between Great Britain and the EEC.

21. Mr. David Knox

asked the Secretary of State for Trade what has been the deficit on visible trade with the EEC so far in 1980; and how this compares with the deficit during the same period in 1979.

Mr. Nott

In the first three-quarters of this year the United Kingdom had a crude visible trade deficit with the European Community of £448 million, a considerable improvement on the deficit of £2,589 million for the corresponding period of last year. In the first three quarters of this year the United Kingdom deficit in manufactured goods with the Community was £1,638 million—again an improvement on the deficit of £2,118 million in the corresponding period of last year.

Mr. Dobson

Does the Secretary of State accept that since Britain had a favourable balance of trade with the Six before we joined the Common Market the figures demonstrate how disastrous joining the Common Market has been for British manufacturing industry?

Mr. Nott

I do not think that the figures demonstrate any such thing. The figures before and after entry cannot be compared in that simplistic way. Whether we are in the Community or outside it, nine out of our 10 leading markets are now in the Community. Our export and import trade with the Community is improving year by year.

Mr. Knox

Can my right hon. Friend confirm that the deficit fell by 80 per cent. in the first nine months of this year compared with last year? Does he anticipate that we shall move into surplus in the near future?

Mr. Nott

I am afraid that I cannot calculate the percentage as fast as that. I hope that we shall move into balance in due course. It is vitally important that we continue to improve our trading position in the Community. Trade is better than it has been for the last few years. I hope that it will continue that way.

Mr. Jay

Do the Secretary of State's figures refer to trade with the Six or the Eight?

Mr. Nott

The figures in my initial answer refer to the existing Community.

Mr. Dykes

The deficit has come down by three-quarters since the autumn of last year. Would that process be further helped at this stage by lowering the value of sterling in exchange rate terms?

Mr. Nott

Much as I should like to debate that broad and interesting question with my hon. Friend it must await another occasion.

Mr. Newens

Is the Secretary of State concerned about the contribution to the imbalance in manufactured goods caused by movements of goods within multinational companies? Is he aware that many multinational companies import goods into Britain on terms which are totally unfair to our other organisations which are seeking to do a reasonable job on behalf of Britain?

Mr. Nott

There is a problem involving over- and under-invoicing by multinationals. That used to be a matter of concern for exchange control purposes but is no longer. It could now conceivably be a problem for the Inland Revenue and the tax authorities. Other than that I can see no reason why we should be worried about the cross exchange of goods between multinational corporations operating in Europe or anywhere else.

Mr. Teddy Taylor

The Secretary of State indicated that our manufacturing trade with the EEC was £1,638 million in deficit for the first nine months of the year. Does he have to hand our trade balance in manufactured goods with the rest of the world? Why does he think that our trade with the EEC in manufactured goods has been so bad compared to our trade with the rest of the world since we joined the EEC?

Mr. Nott

Over several decades we have tended to have a larger surplus with the rest of the world than with the original Six. We had a larger surplus before we entered the EEC. The total current deficit with the whole world this year is £200 million. That compares with a £3½ billion deficit last year. The position has improved in nearly all markets, including the Community.