Balance of Trade

HC Deb 24 January 1983 vol 35 cc645-6

4. Dr. John Cunningham

asked the Minister for Trade what is his present forecast for the balance of trade for 1983, indicating separately his forecasts for the balance on invisible trade, visible trade in oil and visible trade in non-oil goods.

15. Mr. Ron Lewis

asked the Minister for Trade what is his present forecast for the balance of visible and of invisible trade for 1983.

The Minister for Trade (Mr. Peter Rees)

It is not the practice to forecast at this level of detail. Such a forecast would be subject to too many uncertainties.

Dr. Cunningham

It will be obvious that I cannot thank the Minister for that particularly unhelpful reply. Is not the Minister seeking to disguise the likelihood that Britain will become a net importer of manufactured goods? Is not that a grave prospect for this country in our present economic crisis, and will the hon. and learned Gentleman tell us whether he regards the recent 12 per cent. devaluation of sterling as being of assistance to our seriously deteriorating trade balance?

Mr. Rees

I would not care to forecast the next year's figures with any confidence. The forecasts range from minus 0.6 per cent. from Cambridge, as one might expect, to plus 3.5 per cent. from the London Business School. I prefer to leave astrology to the Opposition.

As regards the 12 per cent. depreciation, we are entitled to ask whether the Opposition Front Bench is still enamoured of the idea of a 30 per cent. devaluation. That may be a recognition of what would inevitably follow from the arrival of a Labour Government at the seat of power. There is no "quick fix" for British industry by that route. However, I hope that our industry will take advantage of the recent depreciation of sterling to increase its exports still further.

Mr. Kenneth Carlise

Does my hon. and learned Friend agree that it is misleading to draw too detailed a conclusion from an analysis of our trading performance, but that the overall balance is important? Does he also agree that our trade surplus has been one of the brightest spots of our economic performance over the past year?

Mr. Rees

I am grateful to my hon. Friend for reminding the House that it is likely that for 1982, as in 1981 and 1980, we shall have had record surpluses on our current account.

Mr. Archer

Does the Minister's coyness about giving figures have anything to do with the fact that the surplus about which he has spoken rests solely on the oil surplus and that that is the only cloak for the Government's nakedness? Is he content with the fact that manufacturing production has fallen to its lowest level for 15 years and is 18 per cent. below the level at the time when the Government took office? Do the Government accept that their policies may have something to do with that?

Mr. Rees

No, I do not. I remind the right hon. and learned Gentleman that our service industries make a considerable contribution to the surplus on our current account and that about 11.5 million of our fellow countrymen are employed in those industries.

Mr. Dorrell

Does my hon. and learned Friend agree that the proposals announced by the Leader of the Opposition at the weekend would result only in this country being insulated from its most important trading partners, which would lead to a deterioration in our economic prospects and more unemployment?

Mr. Rees

My hon. Friend is right to remind the House that the Leader of the Opposition stated at the weekend that the present free trade system is a major obstacle to world recovery. Apart from his cavalier disregard of the interests of British exporters and consumers, the right hon. Gentleman's memory presumably extends back to the 1930s, when retaliatory protectionist measures of the type that would inevitably follow from his policies resulted in a drop in world trade of about 40 per cent. in three years, with disastrous unemployment consequences.