HC Deb 19 April 1989 vol 151 cc319-20
1. Mr. Clelland

To ask the Chancellor of the Duchy of Lancaster what was the balance of trade in information technology in 1979 and 1988.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton)

For the information technology and electronic manufacturing sector the United Kingdom had an adverse balance of trade in 1979 of £444 million. In 1987, the latest full year for which figures are available, the adverse balance for this sector was £2,226 million.

Mr. Clelland

Is that not a further example of the complete failure of the Government's industrial policy? Is it not time that the Chancellor of the Duchy and the Secretary of State got down to implementing a serious industrial policy for Britain? For example, will the right hon. Gentleman discuss with his right hon. and noble Friend the COCOM arrangements affecting trade with the Eastern bloc countries? If those arrangements were relaxed, would it not offer massive opportunities to British firms, mainly small firms, to export to Eastern bloc countries? Will the right hon. Gentleman do something about that?

Mr. Newton

In the light of the hon. Gentleman's opening remarks, I should point out that the deficit in information technology doubled between 1978 and 1979, deteriorated dramatically in the early 1980s, and since then has remained broadly stable. I invite the House to draw its own conclusions from that. On the rest of the hon. Gentleman's question, I draw attention to the many opportunities that British firms have taken and, perhaps most important of all, the obvious significance of the recent decision by one of the world's leading electronics manufacturers, Fujitsu, to come and do business in Britain.

Sir Ian Lloyd

In the light of the interesting report of the Select Committee on Trade and Industry on the subject, and in view of the fact that the rather regrettable deficit represents a large proportion of the total trade deficit, does my right hon. Friend consider the Government's response to the Select Committee report to be adequate?

Mr. Newton

My hon. Friend will be aware that my right hon. and noble Friend the Secretary of State is meeting the Select Committee next week to discuss that very matter. The Government have given their considered views in response to the Select Committee report. There are some differences of opinion, but well over half the Select Committee recommendations have been accepted or are already the subject of action.

Mr. Stott

Is the Minister aware that last year the trade deficit in electronics was £3.9 billion—an increase of 15 per cent. on the previous year and accounting for almost one third of the total massive balance of payments deficit? In the past year alone, the deficit in electronics, telecommunications and audio equipment has risen by a staggering 40 per cent. In the light of those disgraceful figures, is it mot time that the right hon. Gentleman and his Department addressed themselves to the magnitude of the problem instead of contemptuously dismissing the recommendations of the Select Committee which at least attempted to point the Government in the right direction to rectify a quite disgraceful performance?

Mr. Newton

First, I hope that the hon. Gentleman will acknowledge that, despite the size of the absolute figure, the deficit is a relatively small proportion of a very large market and represents less than 15 per cent. of the United Kingdom market. Secondly, as I hope that I have made clear, there is no question whatever of the Government having dismissed the Select Committee recommendations contemptuously. Thirdly, the most important single thing that the Government can do is what they have done with conspicuous success—to make this country a more attractive place for people to invest in and develop their businesses.