Balance of Trade (Hansard, 15 March 1989)

§ 7. Mr. Wray
To ask the Chancellor of the Duchy of Lancaster what studies the Department of Trade and Industry is carrying out regarding the effect on the balance of trade of oil production and exports (a) falling by 50 per cent., and (b) ceasing completely.

§ Mr. Newton
The latest estimates indicate that the United Kingdom will remain self-sufficient in oil until at least the end of the century, and that the level of output is likely to decline only gradually. My Department is therefore not carrying out any studies based on such hypothetical propositions as the hon. Member suggests.

§ Mr. Wray
Does the Minister agree that people in this country are concerned when they consider what has happened in spite of the rise in exports—from £2.9 billion to a peak of £6.5 billion in 1986–87? Why have this Government turned a surplus of £1.6 billion in 1981 into a deficit of £20 billion in 1989?

§ Mr. Newton
It is difficult to understand what the hon. Gentleman is seeking to say. It seems to me that in any commentary on these matters it is necessary, apart from anything else, to consider what has happened to oil prices over the period.

§ Mr. Grylls
Does my right hon. Friend agree that there is evidence that British manufacturing industry is investing very heavily at the present time, and that that will not only improve its competitiveness, but increase its capacity to supply the home market and to export? Is it not the case, therefore, that the prospects are very good?

§ Mr. Newton
Yes, indeed. My hon. Friend makes very much the point that I was seeking to make a few moments ago to the hon. Member for Dagenham (Mr. Gould).

§ Mr. Kennedy
The Minister will be aware that the quality of bids that the Department of Energy has received so far for the next licensing round is encouraging news for anyone interested in future oil production, but, although it may not be his direct responsibility, will he note that in terms of 1992 the oil-related sector is concerned about the offshore supplies office and its remit to ensure as much United Kingdom content as possible in fabrication work? What discussion has the Department had here, and, more crucially, with the European Commission, to secure some base under the Single European Act for an OSO-type unit?

§ Mr. Newton
The hon. Gentleman is right about the encouraging response in the latest round in respect of oil exploration and extraction, which is one reason why I am not prepared to speculate on the highly hypothetical and pessimistic basis of the original question, and I am grateful to him for making that point. The best single guarantee of participation by the offshore industry in the opportunities that remain in the North sea, and a healthy return for British industry, whether before or after 1992, is the growing strength and efficiency of British industry and its competitiveness in that area.

§ Mr. Tony Banks
The Minister just said that there was a great deal of investment in British manufacturing industry. If that is so, why is the manufacturing deficit going up all the time? When shall we see some beef on this economic miracle?

§ Mr. Newton
It is an undoubted fact that there has been a substantial increase in manufacturing investment, which in turn is part of a striking rise in overall investment in Britain in recent years—about twice as fast as consumption. That is a dramatic contrast to the position when the Labour Administration was in office, and it is a clear sign of the continued strengthening of the British economy.