Manufactured Goods (Hansard, 14 May 1986)

§ 13. Mr. Canavan
asked the Secretary of State for Trade and Industry what is the latest balance of trade in manufactured goods.

§ Mr. Alan Clark
In the first quarter of this year there was a deficit of £1.4 billion.

§ Mr. Canavan
How can the Government claim that their economic policies are a success when they have been responsible for the worst manufacturing trade deficit in British history? Bearing in mind that the deficit has existed continuously since the 1983 general election, will the Minister admit that we shall probably never see a manufacturing trade surplus again until this incompetent Tory Government are replaced at the next general election by a Labour Government who are committed to industrial regeneration and the growth of exports?

§ Mr. Clark
I am just as anxious as the hon. Gentleman to see a manufacturing trade surplus. The wealth of a nation is measured by its gross domestic product, which is composed of many different elements. The hon. Gentleman's supplementary question does less than service to our manufacturers, whose exports in 1985, both by volume and by value, were higher than ever before.

§ Mr. Teddy Taylor
Does my hon. Friend share my alarm at the fact that the deficit in trade with the EEC in the first quarter of the year, at £2.8 billion, was the highest ever recorded and is equivalent to almost 1 million job losses? Why do we find it so difficult to make good trading arrangements with the Common Market as compared with the rest of the world?

§ Mr. Clark
My understanding is that the exceptionally high deficit in the first quarter of this year reflects trade in the more erratic items.

§ Mr. Pike
When will the Government realise that we shall never solve the country's financial problems until we get our trade in manufactured goods back into surplus? When will they realise that people in the north-west, who depend heavily on manufacturing industries, will never be got back to work unless the Government change direction and get our manufacturing industries back into surplus?

§ Mr. Clark
Trade in manufactures is but one element in the overall picture of trade. The overall surplus reflects revenues from oil, a surplus in services and the money from increasing manufactured goods and exports. We spend on imports of intermediate goods to fuel growth. on capital goods to invest for the future and on consumer goods to enhance freedom of choice.

§ Mr. Nicholas Winterton
Does my hon. Friend agree that his original answer was somewhat disappointing to those of us on the Tory side of the House who feel that genuine wealth is created by manufacturing industry and that it is upon manufacturing industry that service industries depend? In view of the somewhat unsatisfactory results in the by-elections and local government elections last week, will my hon. Friend prevail on our right hon. Friend the Secretary of State for Trade and Industry and on Treasury Ministers to give manufacturing the emphasis and priority which it deserves, to stand up for British manufacturing industry in the arenas of the world and to provide fair rather than unfair competition?

§ Mr. Clark
My hon. Friend is entirely right. It is a principal objective of the Government and this Department to ensure fair conditions of trading. In fair conditions, I am confident that, provided British manufactures are competitive—much of their decline, it must be admitted, rests in that they have lost competitive quality in several respects—they will advance. As I told the hon. Member for Falkirk, West (Mr. Canavan), manufacturing exports increased by 5.5 per cent. last year.

§ Mr. John Smith
Is the Minister aware how serious it is that, in the first quarter of 1986, we have had a balance of trade deficit on manufactured goods as high as £1.4 billion? What do the Government intend to do to reduce our balance of trade deficit in manufactured goods, bearing in mind that, as the oil balance deteriorates, it will become a much more serious problem? Why, if the so-called erratic items were so important, was no reference made to them when the trade figures were published, or is this the hon. Gentleman taking a semi-detached view of the matter?

§ Mr. Clark
I do not think that it was thought necessary to make any special reference to what were only exceptional figures for one quarter.