European Economic Community

HC Deb 28 October 1987 vol 121 cc293-4

12. Mr. Grocott

asked the Chancellor of the Duchy of Lancaster what is the current deficit in the balance of trade between the United Kingdom and the other countries of the European Economic Community.

Mr. Kenneth Clarke

In the 12 months to September the deficit was £8½ billion, on the balance of payments basis.

Mr. Grocott

Will the Minister confirm that among the figures there is a £9 billion deficit in manufactured goods alone? Is it not the case that, especially since 1979, there has been a massive export of jobs in manufacturing industry from Britain to Europe? Will the right hon. and learned Gentleman give the House his latest estimate of the date when membership of the European Community will be beneficial to British manufacturing industries?

Mr. Clarke

Comments of that kind have to be set against the historical basis, whereby I think it is right to say that Britain has always imported more manufactured goods from western Europe than it has exported to western Europe— [Interruption.] — well, certainly since about 1870.

Our trade with the European Community has grown substantially since our membership. It now provides a market for about half our exports, whereas it provided a market for about a third of them before we joined the Community in 1970. The hon. Gentleman also ought to know that, in recent years, the balance between imports and exports between ourselves and the European Community has been improving substantially in our favour. Between 1986 and 1987, in the first nine months, exports grew by 20 per cent., while imports grew by 13 per cent. thereby improving the trade balance from our point of view.

Mr. Yeo

Does my right hon. and learned Friend agree that if further progress is made towards the internal market our balance of trade will improve significantly, as we will be able to to increase our exports of financial services to other member states?

Mr. Clarke

I certainly do, and I believe that that should be our biggest single priority when we consider the advantages that we can derive from the European Community. We should decide, as urgently as possible, exactly how British industry will respond to the change from our domestic market to the much enlarged single. European market, which undoubtedly will be completed by 1992.