HC Deb 31 October 1990 vol 178 cc975-7
7. Mr. Watson

To ask the Secretary of State for Trade and Industry what was the balance of trade in manufactures with the European Community in (a) 1979 and (b) 1989.

Mr. Sainsbury

The United Kingdom trade deficit in manufactured goods with the European Community was £3.1 billion in 1979, and £14.4 billion in 1989.

Mr. Watson

As we have ended a decade under this Government with a deficit, as the Minister said, to the tune of £14.5 billion, and with a manufacturing deficit in excess of £11 billion for the first nine months of this year, when do the Government intend to introduce industrial policies specifically related to training, research and development and export promotion? Those policies are essential to turn round the trade deficit which the Minister so blandly announced.

Mr. Sainsbury

It is surprising that Opposition Members so constantly try to denigrate the performance of British industry. With manufacturing output, manufacturing productivity and manufacturing exports at record levels in 1990, we should commend that achievement.

Mr. Ian Taylor

Does my hon. Friend agree that Britain has been the country most favoured by non-EC countries for inward investment and that that has dramatically improved the chances of performing well in manufacturing during the 1990s? Does he also agree that we have a particular interest in the successful completion of the 1992 programme and in the application of all the directives by every member country?

Mr. Sainsbury

I very much agree with my hon. Friend. There is no doubt that the environment that the Government have created for industry and enterprise is proving attractive not only to those seeking to invest in Europe from outside Europe, but to other Community countries.

Mr. Caborn

Has the Minister had time to read the second report on state support within the European Community, which was produced in July? If he has, will he comment on the fact that in member states, support per person in high-tech industries, in technology transfer and research and development—all within the rules—is 100 per cent. greater in France and 50 per cent. greater in Germany? Why have not the Government supported high-tech industries at least to try to have a level playing field, which major manufacturers have in the rest of Europe?

Mr. Sainsbury

I suppose that it is only to be expected that a Labour party spokesman always looks to the state to provide some form of what he calls support. The most effective support for British industry—any type of British industry—is the provision of a climate in which enterprise is rewarded and recognised.

Mr. Douglas

Will the Minister consider the Scottish economy and its contribution to export performance? How much consideration did his Department and the Treasury give to the high valuation of the currency in the exchange rate mechanism, which will certainly inhibit exports from places such as Scotland? Would he care to comment on the effect of our exchange rate in the ERM and the prospects for exports?

Mr. Sainsbury

If one examines the central rate against the deutschmark over the past decade, one sees that the entry rate for the ERM was very much along that central rate over an historical period. In addition, if one looks at purchasing power parities, one sees that most analyses show that the entry point was at the lower end of the range.

Mr. Oppenheim

Will my hon. Friend take note of the fact that the Dutch electronics company, Philips, which, over the years, has lobbied extremely successfully for more and more subsidies and protection from the European Community, at the expense of other industries and consumers, now finds itself in the most tremendous mess? Should not that ring some alarm bells about the simplistic, interventionist prescriptions being proposed by Opposition Members? Is not it time that the Government stopped tamely acquiescing in the failed industrial strategies that have been propagated by the European Community over the past 30 years?

Mr. Sainsbury

My hon. Friend draws attention to an interesting point when he refers to Philips. That company's failure to pay sufficient attention to productivity has led to its problems. We should spend our time praising rather than denigrating British industry because productivity in British manufacturing industry is at record levels.