HC Deb 28 October 1987 vol 121 cc295-7
15. Mr. Canavan

asked the Chancellor of the Duchy of Lancaster what is the latest balance of trade in manufactured goods.

Mr. Kenneth Clarke

In the first nine months of 1987 there was a deficit on trade in manufactures of £4.8 billion.

Mr. Canavan

Is the Minister not ashamed to stand at the Dispatch Box and confess that the manufacturing trading deficit for 1987 now looks so bad that it is in danger of beating even last year's record deficit of nearly £5½ billion? As a trading nation we would be down the plughole were it not for North sea oil. Would it not be in order for the Prime Minister to sack the Secretary of State responsible for this abysmal performance — the worst deficit in Britain's manufacturing history — instead of considering giving him another sinecure as chairman of the Tory party, whose policies are responsible for this fiasco?

Mr. Clarke

The hon. Gentleman knows that this country's overall trade position so far this year is better than forecast by the Chancellor in his Budget. It reflects the extremely encouraging outlook and continuing improvement in our manufacturing performance, so clearly described by my hon. Friend the Minister earlier. As he said, it is no good scratching about for particular statistics to try to demonstrate a pessimistic outlook. The hon. Gentleman should look at the latest Confederation of British Industry industrial trends survey, which is the most encouraging for many years in describing Britain's industrial and manufacturing outlook.

Mr. Roger King

Does my right hon. and learned Friend agree that virtually every industry in the west midlands is experiencing an upturn in its export potential—and none more so than the motor car industry, where some of the tied manufacturers of European companies are re-exporting their products to mainland Europe? Is that not a testimony to the quality and productivity of the British worker?

Mr. Clarke

One of the most encouraging aspects of our present manufacturing scene is how well motor vehicles production is doing and how much, especially in the west midlands, performance is outstripping that of our European competitors. It is proving a very good investment for the multinational car industry. That is even extending to Scotland where, as my hon. Friend knows, Ford is anxious to invest in a new plant in Dundee —unless the labour and trade union movement succeed in driving away that investment with a return to the bad old industrial practices that have caused so much damage in the past.

Mr. Pike

Does the Minister accept that many ordinary people judge the wealth and prosperity of the economy of this nation by our manufacturing industries and not by the paper wealth of the City? Is he aware that many industrialists and others are concerned about the Government's apparent complacency over Britain continuing to import more manufactured goods than it exports? When will the Government take real action to improve the position in our manufacturing industries? What action do they propose to rectify the current position?

Mr. Clarke

The country needs all the earnings that it can get, both from the manufacturing and the service sectors of the economy, including our strong financial services sector. Of course, I take pleasure in the fact that manufacturing output and investment are now rising strongly. As my hon. Friend the Member for Birmingham, Northfield (Mr. King) said, for many industries the current outlook is very much better than it has been for many years.

Mr. Riddick

Will my right hon. and learned Friend do all that he can to persuade the American Government and Congress that they should not respond to the current financial crisis by erecting additional trade barriers, especially in textiles, which is of particular interest in my constituency?

Mr. Clarke

I entirely agree with my hon. Friend. Obviously, we are concerned about some of the proposals before the American Congress. We very much hope that protectionist pressures will not grow and that the Administration and Congress will reject any such pressures. I am glad to say that our trading relationship with America is not especially threatened. For example, there was a successful outcome yesterday to the talks I had, as one of the Airbus Ministers, with the President's trade representative. We successfully eased misunderstandings and paved the way to an eventual agreement that would allow fair trade in the civil aircraft sector.

Mr. Blair

Is the Minister aware that there is serious concern about the effect on international trade of the stock market collapse and the turbulence in the foreign exchange markets? Does he agree with the Chancellor's statement that the behaviour of the stock markets is absurd, and with the Prime Minister's statement that the behaviour of the foreign exchange markets is 95 per cent. speculation? If so, what are his Department's proposals to reassure those who manufacture in the real economy and to control those who speculate in the casino economy of the markets?

Mr. Clarke

Obviously, it is important that in order to return to stability in the markets we should retain the present atmosphere of business confidence both in this country and in most of the other developed countries. The fact that the real economy of Britain is so strong should reassure those investing in the markets. At a time of great concern throughout the world, it is possible to feel more confident in Britain because of our improvement in productivity and performance and the underlying strength of the economy.