Imports

HC Deb 05 June 1991 vol 192 cc272-4

14. Mr. Lofthouse

To ask the Secretary of State for Trade and Industry what plans he has to reduce import penetration.

Mr. Lilley

The Department's policies aim to foster the competitiveness of British industry.

Mr. Lofthouse

Is not that a very complacent answer? There has been a 10 per cent. increase in import penetration since 1979, and currently 50 per cent. of cars, 80 per cent. of videos and 90 per cent. of office equipment are imported. Is the Secretary of State aware that National Power and PowerGen are contemplating importing another 30 million tonnes of coal, which will add £170 million to our balance of payments deficit? Has he no plans to control those imports?

Mr. Lilley

If the hon. Gentleman wishes to control imports, he must first persuade his party to propose that we leave the EC, as the matter is entirely within EC competence.

It so happens that import penetration in the United Kingdom as a proportion of gross domestic product is almost exactly the same as that in Germany, which is not generally held to be an uncompetitive country. I am glad to say that our exports have risen in volume terms by some 60 per cent. over the past decade, which is proof that British industry is competing abroad with increasing success. That is a result of our policy of encouraging competition.

Mr. Andrew MacKay

Does my right hon. Friend agree that, if we really believe in free trade, we should not be unduly worried about import penetration, but should do everything possible to encourage our exports? Is he really satisfied that we have an open market in Japan in all respects?

Mr. Lilley

I am never satisfied. Every time that I meet the Japanese industry Minister, as I did yesterday, I encourage him to open his market further to British goods. Over the past three years, when we have made our campaign to encourage the exporting of goods to Japan a priority, exports have nearly doubled. We are now launching a new campaign, with the support of the Japanese Government, to open up opportunities for British industry on an expanding scale. I am delighted that industry is responding to those opportunities.

Mr. Turner

Will the Secretary of State accept that import penetration is not helped by the obsessive mergers and takeovers with which we are so beset? A company in my constituency, S. Edge and Co., has traded successfully for many years. It has an excellent work force and an excellent product, but, as a result of a takeover, it is having to call in the receiver. What will the Secretary of State do about those 350 jobs?

Mr. Lilley

If a merger or takeover reduces competition, we can take action to prevent that under our mergers and competition policy. However, it would be wrong to protect every company from the prospect of managerial change or increased competition as a result of takeover.

Mr. Grylls

Does my right hon. Friend agree that almost all the Labour party's policies would make British firms less competitive in this market and, therefore, make import penetration even worse? Will he continue to warn the British public about that danger?

Mr. Lilley

My hon. Friend is absolutely right. It is no coincidence that the only period since the war, in a complete economic cycle, when there has been virtually no growth in productivity outside the oil industry and in non-oil GDP was during the previous Labour Government. That should be contrasted with the success of the 1980s when for the first time in a peacetime decade for a century, Britain outstripped France and Germany.