HC Deb 01 May 1991 vol 190 cc309-10
12. Mr. McAvoy

To ask the Secretary of State for Trade and Industry what was the trade balance in manufactured goods in (a) Germany and (b) Britain in 1990.

Mr. Sainsbury

The United Kingdom had a deficit of £13.7 billion. Germany had a surplus of £60.2 billion.

Mr. McAvoy

Will the Minister admit that these figures emphasise the true state of the British economy? Does he realise that our trade in manufactured goods shows a performance worse than that of any other industrialised country, with the exception of the United States, since 1979? In the face of declining investment, a fall in output, and major problems for British exporters, when will this "do nothing" Department of Trade and Industry do something?

Mr. Sainsbury

I am sorry to find the hon. Gentleman joining those of his colleagues who spend their time denigrating the performance of British manufacturing industry. Manufacturing output, manufacturing productivity and manufacturing investment last year were at record levels. Let us look a t British manufacturing exports to Germany against British manufacturing imports from that country. Interestingly, the ratio, at 59 per cent., was higher last year than in any year between 1975 and 1979.

Mr. Quentin Davies

Is it not right that, in 1990, Britain's share of world trade in manufactures increased, for the second year running, after being more or less stable throughout the 1980s and having fallen catastrophically during the previous three decades? Is that not a remarkable sign of a real turnround in the performance and competitiveness of this country's industry?

Mr. Sainsbury

My hon. Friend is quite right to draw attention to the significance of the fact that our manufacturing exports reached a plateau—did not fall, but reached a plateau—in the 1980s after decades of decline. That is a tribute to the increase in productivity to which I have referred—an increase that is essential if our manufacturing industry is to continue to prosper in the 1990s.

Ms. Quin

Will the Minister now admit that the prospects for an improved trade balance are not helped by the fact that his proposed sell-off of the Export Credits Guarantee Department has turned out to be a complete fiasco? Can he tell us why there is no British bidder left for the ECGD? Will he confirm that the Government's lack of commitment to export credits for not-so-easy markets, and in the long term, has caused both bidders and exporters to react with alarm and dismay?

Mr. Sainsbury

I am sorry that the hon. Lady refuses to recognise that the Confederation of British Industry, among others, has welcomed the proposed privatisation of the insurance services group of the Export Credits Guarantee Department. I am sure that the CBI has given this welcome because it realises that a privatised insurance services group will be able to provide a better, more flexible and more responsive service to its customers—British industry.

Mr. Charles Wardle

If the United Kingdom's trade balance in manufactured goods is to compare favourably with Germany's, will it not be necessary, first, for this country to equal Germany's performance in respect of inflation and competitiveness? Is not that precisely what the Government's anti-inflationary policies are designed to achieve?

Mr. Sainsbury

My hon. Friend has put his finger on an extremely important point. One of the major factors in the success of German industry since the war is the relatively stable inflationary environment in which it has operated. If we were to return to the policies that are always advocated by the Labour party, we should have again the inflation levels—more than 15 per cent., on average—that characterised that party's last period in government.