HC Deb 30 January 1985 vol 72 cc265-7
5. Mr. Teddy Taylor

asked the Secretary of State for Trade and Industry what was the total surplus or deficit in trade in manufactures with the European Economic Community in 1984; and what was the comparable surplus or deficit in 1974.

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

The deficit in trade in manufactures with other members of the Community was £7¾ billion in 1984, offset by a surplus in trade in oil of £7.4 billion. In 1974, the deficit in manufacturing was £½ billion.

Mr. Taylor

We still have a surplus in our manufacturing trade with the rest of the world. What are The main reasons for the devastating and appalling deficit in trade with the Common Market, which must be having an appalling effect on unemployment in this country?

Mr. Tebbit

What is important in these matters is not the particular balance in relation to one country or group of countries, or one manufacturing or trading activity as opposed to another, but the overall balance. In 1984, overall, we were in surplus, whereas in 1974, overall, we were in deficit. The position has improved in the last decade.

Our customers come here to buy because we offer the best value for the things that they buy from us. In exactly the same way, our consumers go where they think they can find the best value.

Mr. Crowther

Will the Secretary of State urge on the Leader of the House the need for a debate, in Government time, on the report of the Select Committee on Trade and Industry, which has demonstrated dramatically the seriousness of the problem? Despite what the right hon. Gentleman said about the need to balance one thing against another, does he agree that manufacturing is at the heart of wealth creation in Britain? What does he suggest that we live on when the oil runs out?

Mr. Tebbit

Of course manufacturing is an important part of wealth creation, but it is not the only part. If we lived in a slightly more rational world, coal extraction would be a wealth creating activity, instead of a wealth destroying one as it is today. The hon. Gentleman's question about a debate is an appropriate one to put to my right hon. Friend the Leader of the House during business questions.

Mr. Michael Marshall

What is the latest indication that my right hon. Friend has received from the Confederation of British Industry about membership of the EEC? Does he agree that the CBI's previous assessment showed that 90 per cent. of its members thought that withdrawal from the Community would be a disaster for their business prospects?

Mr. Tebbit

Like the great majority of the British people, the CBI favours our continued membership of the Community. The problem for some right hon. and hon. Labour Members is that they opposed membership, lost the battle and have not yet been able to reconcile themselves to our membership.

Mr. Wrigglesworth

Does the Secretary of State agree that the most striking feature of our current trade figures is that our non-oil visible trade deficit has increased from £2.5 billion in 1982 to £11.4 billion last year, while our oil surplus has steadily increased? Does he agree that that explains why the pound has been under pressure; that it is because we are overdependent on the oil part of our economy?

Mr. Tebbit

If the hon. Gentleman is right — I am not saying that I necessarily agree with him — the reasonable consequence of what he says is that we should try to stick the oil back in the ground and pretend that we never found it.

Mr. Dorrell

Does my right hon. Friend agree chat EC countries still represent the largest and richest market for manufacturers in the world? How can it possibly be in our interests to cut ourselves off from that market? Does my right hon. Friend agree that the answer lies in making our manufactures sufficiently competitive for European consumers to choose to buy them?

Mr. Tebbit

My hon. Friend is absolutely right. That is why, as my right hon. Friend the Prime Minister said earlier this week, it would be prudent for those who are engaged in wage negotiations to consider the type of wage negotiations that are going on in Germany and to contrast them with some of the absurd demands that are being made in Britain.

Mr. Tom Clarke

Do the figures which the right hon. Gentleman has just given include steel manufacturing? If so, are we not in danger of becoming over-generous compared with some of our European partners?

Mr. Tebbit

I always try not to be over-generous with our European partners. My business is to try to be as generous as possible with Britain. I understand that the figures include steel, but, as the hon. Gentleman knows, our steel industry was almost destroyed by the ravages of the Beswick review and other idiotic affairs of that type.

Sir Anthony Meyer

Does my right hon. Friend agree that the demand for overall industrial protection, which is implicit in many of the supplementary questions that have been fired at him, are utterly inconsistent with Britain's need to earn its living in a competitive world?

Mr. Tebbit

My hon. Friend is right. It is theoretically possible for us to put up barriers and to prevent our people from buying goods in the most advantageous markets, but we cannot force the rest of the world to buy our goods against its will.

Mr. Bill Walker

Does my right hon. Friend agree that the Japanese have managed to penetrate the European market, despite all the problems? Does he further agree that the lesson for British workers and management is that, if the Japanese can penetrate the market, the answer lies in their own hands?

Mr. Tebbit

Yes, but I only wish that it were a little easier for all European manufactures to penetrate the Japanese market. That seems to be rather difficult, and the reason does not always lie in the quality or price of the goods.

Mr. Gould

The Prime Minister professes to be puzzled by the fall in the pound's value. Do not the calamitous figures which the Secretary of State gave at least offer part of the answer? How can the Government continue to talk convincingly about economic recovery when this deficit, which is worth 1 million jobs in British industry, is allowed to continue and to grow? Can the Secretary of State tell the House whether the issue is being considered by the special working party which he set up to examine our disastrous decline in manufacturing trade? Will he assure us that, despite his public show of indifference, he, at least, is taking the matter seriously?

Mr. Tebbit

If it were a question of our balance of trade and balance of payments, sterling would, in general, have been lower under Labour Governments than it has been under Conservative Governments.