Manufactured Goods (Hansard, 28 January 1987)

§ 3. Mr. Ron Davies
asked the Secretary of State for Trade and Industry when he next intends to meet the Confederation of British Industry to discuss the trade deficit in manufactured goods.

§ The Minister for Trade (Mr. Alan Clark)
My ministerial colleagues and I meet the CBI regularly at the National Economic Development Council and on other occasions and a variety of subjects are discussed. I have no plans for a separate meeting on this subject.

§ Mr. Davies
When the Minister next meets the CBI through the forum which he has mentioned, the NEDC, will he discuss with it last month's deficit in manufacturing trade of £753 million? Will he discuss with it also the consensus that seems to exist that our trade position will worsen and that next year we shall have a deficit of about £3 billion in our overall balance of payments? Given the deterioration in Britain's manufacturing trade, what proposals does the Minister have for the time, which will shortly arrive, when North sea oil is expended?

§ Mr. Clark
Stripped of their doctrinal slant, I share some of the hon. Gentleman's views. I accept that a manufactured import can mean, all too often, a job exported. That is all true, but, in a free society, consumer choice—taking consumers as both firms and individuals—is paramount. The trade gap is the aggregate of the many individual consumer choices and it points in the direction of a preference for the foreign product.

§ Mr. Hickmet
Has my hon. Friend seen the CBI report published today which shows that output and export opportunities for industry are the highest for many years, and perhaps since the war, and that the prospect for British exporters, as a result of beneficial exchange rates and the economic and industrial policies pursued by the government, is the best for many years? Is not the only danger that we shall return to the bad old ways of the policies pursued by the Labour party when it was in Government, should the country be so unfortunate as to have a Labour Government after the next general election?

§ Mr. Clark
My hon. Friend is right to draw attention to the opportunities and prospects. The export performance of British industry is strong. There is, however, a trade gap which is accounted for, as I said to the hon. Member for Caerphilly (Mr. Davies), by the aggregate individual preference for foreign imported goods. When British manufacturers are perceived by the domestic consumer as competitive, we shall see the gap being corrected.

§ Mr. Hoyle
When the Minister meets the CBI, will he discuss with it, along with the Secretary of State, the Department's plans to try to persuade Honda to take a large share-owning in Rover, along with the scrapping of the Metro Mini? Would those plans not mean the demise of Rover as a group that can design, engineer and manufacture its own products?

§ Mr. Clark
I do not know the basis on which the hon. Gentleman makes his accusations. He has heard my right hon. Friend the Secretary of State express his confidence in the increasingly creditable performance of Austin Rover and its prospects for the future, a view which has been echoed by my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet).

§ Mr. Robert Atkins
May I confirm my hon. Friend's view by drawing his attention to the report of the speech delivered to the Welsh CBI on this very issue by the Leader of the Opposition, suggesting that the next Labour Government would not, within their policies, be able to achieve any increase in manufacturing jobs? Does this not fly in the face of some of the noise, cant and humbug that we hear from the Opposition Benches?

§ Mr. Clark
I did not see the announcement. Perhaps it is part of the new image of candour and open speaking cultivated by the Leader of the Opposition. How long that will last remains to be seen.

§ Mr. Robin Cook
Will the Minister confirm that the sum of the Government's record in manufactured trade is that they inherited a surplus of £3 billion and have managed to convert it into a deficit of £6 billion? Is the Minister aware that this morning's figures show that the visible trade deficit last year quadrupled to £8.5 billion, yet Conservative Members can only say "So what?" Is he aware that the only other country that manages to combine an oil surplus with a deficit on visible trade is war-torn Iraq? As a well-known British patriot, what possible pride does he take in that parallel?

§ Mr. Clark
The hon. Gentleman is a master craftsman in bandying statistics. I know that he has expressed reservations in a most elegant and amusing way about the City of London. He may care to ponder on the fact that the total foreign exchange earnings surplus in the City of London last year was £8.5 billion, which exactly matches the deficit on manufactured account.