HC Deb 31 October 1990 vol 178 cc972-4
4. Mr. Thurnham

To ask the Secretary of State for Trade and Industry what is his estimate of the United Kingdom's current share of world trade; and if he will make a statement.

Mr. Lilley

Latest estimates of the United Kingdom share of the value of the main manufacturing countries' exports of manufactures was 8.2 per cent. in 1989. The United Kingdom's share has been broadly unchanged since the early 1980s, following decades of decline.

Mr. Thurnham

Bearing in mind the importance of our invisible trade, which at 17 per cent. of the total is more than double that of our nearest competitors, may I ask my right hon. Friend to do his utmost to remove the barriers to invisible trade? I hope that he will have the Opposition's full support, because no doubt their prawn cocktails were largely paid for by the City's invisible trade.

Mr. Lilley

My hon. Friend makes a telling point. I agree that we must welcome exports of invisibles just as we welcome exports of manufactures and other goods. We are taking action in the single market negotiations to remove barriers to invisible trade as well as visible trade and taking action in the GATT negotiations to extend the agreement to free trade in invisibles. We naturally regret the obstacles put in our way in both negotiations by some of our partners who are not as enthusiastic about free trade as we are.

Mr. Hoyle

Why is the Secretary of State so complacent? Does he realise that British companies are finding it more difficult to export and keep up their share of world trade? Does he realise that we are facing the worst recession since the 1980s, due to the Government's disastrous economic policies? Instead of being his usual spineless self, will he stand up for Britain and tell the Prime Minister and the Chancellor that they are wrong? If not, the rest of British industry will go down the plughole.

Mr. Lilley

My right hon. Friend the Prime Minister is extremely good at standing up for Britain and I endorse her stand. On the trade front, exports in the last quarter were up by 8 per cent. and imports were static compared with a year earlier. That is not a sign of the phenomenon that the hon. Gentleman tried to describe.

Mr. David Martin

Will my right hon. Friend confirm that the strength of our world trade relies heavily on the strength of our financial and exchange markets? What would be the effect of a single currency and a single banking system being adopted by the European Economic Community, and liable to be dominated by Germany?

Mr. Lilley

It is clear that it is not necessary, for success in international markets, to be part of a larger monetary zone. One need only think of Switzerland, for example, which is a very successful country even though it has a currency of limited circulation. Likewise, Canada, which has a closely integrated economy and is the biggest trading partner of the United States, feels no necessity to adopt the United States dollar as its currency.

Mr. Gordon Brown

Is the Minister so complacent as to be unaware of the problems faced by millions of people and by exporters in particular? What sense does it make to compound the evils of his high interest rate policy by hitting industry twice over, with cuts in the Department of Trade and Industry budget, a 25 per cent., cut in research and development, a 40 per cent. cut in technology transfer, a 60 per cent. cut in regional enterprise grants and even cuts in export services? Instead of blaming everyone but themselves, why do not the Government accept that this is a recession labelled "Made in Downing street"?

Mr. Lilley

The hon. Gentleman still lives in a dream world and believes that the success of industry is in direct proportion to the amount of Government money that is spent on it. He has only to look at the success of Japan to realise that that is not the case. The Ministry of International Trade and Industry, the Japanese equivalent of the DTI, spends a smaller proportion of Japanese income on supporting industry than we spend here, but it is very successful nevertheless. We should learn from Japan's successes, not from socialist policies of higher spending.

Mr. David Davis

Given the cant and nonsense that we have just heard, will my right hon. Friend tell the hon. Member for Dunfermline, East (Mr. Brown) what has happened in export services since we introduced charging in that sector?

Mr. Lilley

I shall be delighted to do so, and it is most interesting. There was much suggestion that once we introduced charging, demand for the services would decrease, but it has, in fact, increased. By general consent, the services are much better now that they are more professionally provided and professionally used. There has been a great welcome for the improvement in the calibre of export services since they have been charged for. That is welcomed by industry and it will show up in higher export figures in due course.