HC Deb 19 December 1984 vol 70 cc291-3
19. Mr. Pike

asked the Secretary of State for Trade and Industry what steps he proposes to take to seek to ensure that in 1985 the United Kingdom exports more manufactured goods than it imports.

Mr. Channon

There is no means, short of direct controls incompatible with our interests as a trading nation, of doing what the hon. Member wants.

Mr. Pike

Does the Minister accept that this country's wealth has always depended on the manufacturing industries and that it is essential that we get back into a surplus of trade in those industries as soon as possible? Does he further accept that many Opposition Members and people in the country at large are very concerned at the Government's apparent disregard of the fact that we have been trading in deficit on manufactured goods?

Mr. Channon

What is far more important than a surplus or deficit in any one part of our trading account is whether we are making any progress in trying to increase the productivity of the British manufacturing industry and, indeed, other industries. We are making considerable strides, in that our productivity has been increasing in the past three years at more than twice the rate achieved by either France or Germany. That is a creditable achievement.

Mr. Forth

Does my right hon. Friend agree that the Labour party's obsession with mercantalist economics is typical of its attitude to economic policy in general, and that what is required is recognition of the fact that the contribution to be made by the export of services to our economic future is as important, if not more so, that of manufacturing?

Mr. Channon

My hon. Friend is absolutely right about the voodoo economics practised by Opposition Members, but what we should like to see, of course, is a good performance — [Interruption.] It is the hon. Member for Bolsover (Mr. Skinner) today—

Mr. Skinner

And the hon. Gentleman yesterday.

Mr. Channon

What he said yesterday, the hon. Gentleman says today.

It is very important to the British economy that we should try to make all our industry competitive, and we should try to do as well as we can with all sectors of our industry. Both manufacturing and services are important.

Mr. Crowther

Does the Minister accept that the rate of productivity in many British manufacturing industries is now very high and that the real problem about competitiveness is in areas that are within the scope of the Government's own policies; for example, energy prices and the alarmingly imbalanced exchange rates between sterling and European currencies?

Mr. Channon

In fact, at the present rate of sterling in many parts of the world, British goods are more competitive than ever before, rather than less competitive. This is because so many currencies are linked to the dollar. It is perfectly true that other factors affect competitiveness, but I am sure that the hon. Gentleman will be fair enough to recognise the steps that we have taken to try to help businesses, via taxation reforms, the abolition of the national insurance surcharge and the control of public spending—which I emphasise. There are major efforts to help British industry.

Mr. Maxwell-Hyslop

Will my right hon. Friend confirm that, important as our manufacturing base is—as long as it suits its product to what the market actually wants—our service industries in the export market do not have the import element within them that most of our manufacturing industries do, and that makes them even more important in terms of balance of payments to this country?

Mr. Channon

As my hon. Friend says, it is absolutely right that our service industries are providing more substantial amounts for our balance of payments and our export effort. I am sure that that trend will continue over the next few years.

Mr. Gould

Is not the acid test of our international competitiveness how well we actually perform in international markets? Is the Minister completely unaware of the fact that the deficit in our trade and manufactured goods which appeared for the first time last year threatens already this year to more than double? Is that not so alarming a trend as to dent even the Minister's complacency?

Mr. Channon

We have had this discussion before. So far, I have been unable to convince the hon. Gentleman that, although there has been a considerable surplus in the past few years, it is impossible at all stages to have a surplus in oil, manufactured goods and everything else—

Mr. Gould


Mr. Channon

It is not rubbish. If we did that, we would have to export even more capital. When the hon. Gentleman is not whingeing about one thing, he is whingeing about the other.

Mr. Batiste

Will my hon. Friend confirm that during 1985 the Government will have to make a decision about participation by Britain in the American manned space station programme? Is he aware that that participation is vital to our manufacturing industry over a wide range of high technology products? When will he be in a position to make a statement about participation in that very important programme?

Mr. Channon

I hope that we shall be in a position to make a statement early next year.