Information Technology

HC Deb 31 October 1990 vol 178 cc984-5

16. Mr. Martyn Jones

To ask the Secretary of State for Trade and Industry what is the latest estimate of the balance of trade in information technology.

Mr. Douglas Hogg

According to the latest estimates, the United Kingdom had a deficit of £685 million in the manufactured products of the electronics and information technology sector in the first quarter of 1990. Those figures are for hardware only. There are no separate figures for trade in software.

Mr. Jones

Is not that a deplorable gap in a valuable world market? Should not we encourage our own product base in that important sphere? When will we invest in the research and development necessary to do that?

Mr. Hogg

The hon. Gentleman has not reflected on those matters. All major OECD countries, with the exception of Japan, have a deficit in information technology. The United Kingdom has a substantial surplus of £900 million in its trade with the rest of the Community, including France, Germany and Italy. I am sure that the hon Gentleman will be pleased to know that output in electronic and information technology industries in the United Kingdom has increased by 37 per cent. since 1985. Perhaps he should do a little more homework before he asks a question.

Sir Ian Lloyd

What view does my hon. and learned Friend take about the fact that we are now almost completely dependent on Japan for the chemicals used in the manufacture of semiconductors?

Mr. Hogg

Whenever possible, we welcome inward investment in those sectors. I am glad that generally throughout the IT industry there have been substantial improvements in our domestic capacity. I welcome that and attribute it, at least partly, to Government policy.

Mr. Mullin

What will be the effect on our trade in information technology of our entry into the ERM at the ludicrously inflated rate of DM2.95? How long will it be before we have to devalue?

Mr. Hogg

I am sorry for the hon. Gentleman because he is normally a bright fellow who does his homework, but he has not done so today. At present our surplus with West Germany is £470 million, our surplus with France is £557 million and our surplus with Italy is £212 million. I expect that happy trend to continue.