HC Deb 17 May 1989 vol 153 cc307-8
8. Mr. Clelland

To ask the Chancellor of the Duchy of Lancaster what was the share of imports in United Kingdom manufacturing sales three years ago; and what it is now.

Mr. Alan Clark

The share of imports in United Kingdom manufacturing sales was 34.3 per cent. in 1985 and 35.8 per cent. in the 12-month period ending in the first quarter of 1988. In other words, it was very little changed, although I recognise that that may not have been the answer for which the hon. Gentleman was hoping.

Mr. Clelland

Is the Minister aware that the difference between imports and exports has increased by 33 per cent. since 1979? Can he name any Government in this century who have had a worse record in trade deficits? If he can, will he give the statistics to verify his statement?

Mr. Clark

I admire the hon. Gentleman's footwork in rapidly changing the substance of his question. The answer to the first one was precisely what he did not want. In fact, our manufactured exports by volume increased by 5 per cent. in the last quarter. That is an annualised rate of over 20 per cent. Certainly, imports continue to grow, but that is a function of consumer choice spread across many sectors. It is a function of capital goods and a function of the demand for semi-finished products.

Mr. Roger King

Is my hon. Friend aware that one way of fighting import penetration is by import substitution, with British manufacturers producing the goods that we want? Is he aware, for instance, that the arrival of Toyota is extremely welcome in the British motor car industry, as indeed is the total amount of investment announced by manufacturing and component industries of around £7,000 million? Is not the way forward to produce all the products that we want for the home market and for export?

Mr. Clark

Certainly it is one way forward, among many. One of the most beneficial effects of inward investment is the disciplines imposed on components suppliers as a result of the local sourcing proportions that are required and the increased quality that is spread right across that sector.

Mr. Worthington

Does it remain the Government's attitude that, progressively, the share of the work force in manufacturing industry will fall and that in service industries rise? If so, is not that attitude fundamentally misplaced, in that most service industries require a very large number of manufactured goods, which ought to be produced in this country, and that they will themselves eventually be replaced by machinery?

Mr. Clark

Shifts in balance between various sectors of the work force have nothing to do with Government policy. The greatest increases in productivity usually arise in factories that are the most highly automated.

Mr. Nicholas Winterton

While I appreciate my hon. Friend's unique role in standing up for British manufacturing industry, does he agree that if manufacturing industry has a broader base it will be able to supply more of the machinery and materials required in the manufacture of export goods—which would be to the advantage not only of employment but our balance of trade?

Mr. Clark

At the risk of further incurring the mockery of our erstwhile colleague Mr. Parris, I entirely agree with my hon. Friend's absolutely valid point. The level of inward investment is such that as it seeps through the economy, and as its disciplines on component sourcing are imposed—there is no doubt that their requirements must be maintained—it will have a progressive effect that will contribute to overcoming the problem that my hon. Friend identifies.

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