Manufacturing Industry

HC Deb 14 December 1983 vol 50 cc977-9

2. Mr. Alton

asked the Secretary of State for Trade and Industry if he will make a statement on the latest figures for manufacturing trade.

5. Mr. Canavan

asked the Secretary of State for Trade and Industry what is the United Kingdom's current balance of trade in manufactured goods; and if he will make a statement.

16. Mr. Ray Powell

asked the Secretary of State for Trade and Industry what estimate he now makes of the likely deficit in the United Kingdom trade in manufactures for 1983.

The Secretary of State for Trade and Industry (Mr. Norman Tebbit)

In the three months ended in October, exports of manufactures were valued at £10.2 billion and imports at £10.8 billion and the balance therefore was in deficit by £0.6 billion. Large surpluses on trade in oil and invisibles offset this, however, so that the current account as a whole was in surplus by £0.4 billion.

Mr. Alton

Is there room for complacency on the part of the Government, bearing in mind that since 1979 there has been a reduction of 20 per cent. in the number of employees in manufacturing industry, a reduction of 14 per cent. in industrial output, and that manufacturing industry is probably in a worse state, relatively speaking, than at any time since the industrial revolution?

Mr. Tebbit

I agree that complacency is not what we need. However, the hon. Gentleman might have made the point that the Vauxhall plant at Ellesmere Port, for example, close to his constituency, is becoming extremely successful. It is putting on a second night shift, and the chairman of the company said: By the end of 1984, 65 per cent. of all Vauxhalls sold in Britain would be British built, compared with 50 per cent. at present. We do not want to be complacent, but if the hon. Gentleman and others would do all that they could to encourage such trends instead of, as some right hon. and hon. Gentlemen do, doing all that they can to impede them, we would make more progress.

Mr. Canavan

Is the Secretary of State not ashamed of the fact that, according lo figures from his Department, he is heading for a record deficit of over £2,000 million in trade in manufactured goods by the end of the year, compared with surpluses of over £5,000 million in 1977 and 1978 when the Labour party was in power? The latest figures out today show a further drop in industrial production. Does industry have any future at all now that the former Secretary of State for unemployment has reappeared as the Secretary of State for de-industrialisation?

Mr. Tebbit

The hon. Gentleman misses some of the points. We have a substantial surplus on invisibles and oils, and unless we are to have an extremely large trade surplus, which would bring its own problems, we must have deficits on some classes of goods. The hon. Gentleman does not read his Scottish newspapers. If he had read the Glasgow Herald on Monday — [Interruption.] The hon. Member for Falkirk, West (Mr. Canavan) asked the question, and if he would shut up for a moment he might hear the answer. The paper said: Scottish firms making good progress in exports field. Scotland's exporters are in buoyant mood, recording the highest degree of optimism for export orders since 1979. The optimism is borne out by the Scottish Council whose first quarter trade mission next year is already almost full.

Mr. Powell

I read the Welsh newspapers and sometimes the Scottish and English ones. I also obtain facts and figures from the Library. The Library has given the information that there is a £1,220 million deficit this year. In addition, it says that 109,000 people who were in Welsh manufacturing industry have been unemployed since 1979. What will the Government do about that?

Mr. Tebbit

The hon. Gentleman should understand that we could not conceivably remain in surplus on each category of our trade without substantial capital outflows to balance our surplus or a steadily appreciating currency. As I understand it, his party's policy is to control capital outflows and devalue the pound.

Mr. Pawsey

Is my right hon. Friend aware that about 11 per cent. of manufacturing output goes into the motor car industry? Will he therefore take steps to improve the competitiveness of the motor car industry by reducing the car tax?

Mr. Tebbit

I am not sure that that would be the best thing for the motor industry while still over half the buoyant demand for motor cars is satisfied by imports. When we obtain a much higher share of the home market, my hon. Friend will have a better case for saying that the tax should be cut.

Mr. Beaumont-Dark

Does my right hon. Friend agree that manufacturing industry has gone through a difficult time, largely due to over-weak management and over-militant unions, but now that unions and management are more realistic, industry, though from a lower base, is growing on a proper tack and will continue to do so while that co-operation exists?

Mr. Tebbit

I am sure that is so. I heard an Opposition Member ask "Where?" I have just told the House about the success of Vauxhalls. That could be put alongside the greater success of Jaguar, BL and many other companies. The trouble is that the Opposition are professionals at dragging up all the bad news and ignoring the good.

Mr. Shore

I wish that the Secretary of State would address his mind to what is, after all, one of the most serious matters that falls within his responsibility. Does he deny that last year we had a surplus of about £2.5 billion, while this year, on current trends, it looks as though there will be a deficit of £2 billion. Can he recall any year in which a more massive adverse movement in our balance of trade has taken place? It is the first year in our history that we have had a deficit on manufactured goods. How is that adverse trend reconciled with all that the right hon. Gentleman has said about improving the competitiveness of British industry? If that is clear evidence that British industry is ceasing to be competitive in a major way, what on earth does he intend to do about it?

Mr. Tebbit

I am afraid that the right hon. Gentleman does not listen to what is said and does not apply his mind to the basic arithmetic. Is he seriously suggesting that we could run a huge surplus on manufacturing goods—

Mr. Shore

The Japanese do.

Mr. Tebbit

The right hon. Gentleman must sit down and listen — on oil and invisibles and preserve our currency? The right hon. Gentleman says that the Japanese do. Is he suggesting that we adopt Japanese trading practices and wreck the world's trade structure?