Exports (Hansard, 24 November 1993)

§ 13. Mr. Austin Mitchell
To ask the President of the Board of Trade what has been the percentage change to the volume of exports of manufacturers to (a) other EC countries and (b) the rest of the world since August 1992.

§ Mr. Needham
The volume of United Kingdom exports of manufactures to other EC countries was 0.3 per cent. higher in the three months ended August 1993, compared with the same period a year earlier. The volume of manufacturing exports to the rest of the world increased by 13.8 per cent. over the same period, resulting in an overall increase of 6.2 per cent.

§ Mr. Mitchell
On those figures, the Minister accepts that our trade in manufactures with the rest of the world is doing much better, thanks to the fact that our devaluation in relation to the rest of the world was much greater than it was against the EEC. On the other hand, we are doing less well against the EEC because of the surreptitious policy of shadowing the deutschmark, which in real terms has brought the real exchange rate back to the figure before wonderful Wednesday in 1992. Does that not mean that almost half our trade in manufactures in volume terms is now outside the EEC and we need a much bigger fall in interest rates to get the pound down to a competitive level in Europe?

§ Mr. Needham
The recovery in this country happened in the second quarter of 1992, before we came out of the exchange rate mechanism. It may not have occurred to the hon. Gentleman that the major reasons why our exports to Europe are not doing so well as they are to the rest of the world is because—

§ Mr. Mitchell
Of the pound.

§ Mr. Needham
It has nothing to do with that. It is because Europe is in deep recession. Our volumes have increased in Europe. As for the rest of the world, the hon. Gentleman is absolutely right. We have done remarkably well. The Government are working with British industry to ensure that we are making export credit available and that we have a long-term strategy with industry to maximise opportunities outside the EC as well as in it. The hon. Gentleman has accepted that those figures prove that. On that basis, he will congratulate us.

§ Mr. Paice
Does my hon. Friend agree that it is amazing that there is relative silence about the exceptional export figures, particularly to the rest of the world? Would my hon. Friend like to take this opportunity to note a very traditional manufacturing company in my constituency, Standens of Ely? That company has been fabricating materials for export to the far east and the Pacific rim, with considerable help from my hon. Friend's Department. Should not such achievement be sung about from the highest mountains?

§ Mr. Needham
My hon. Friend has given one example. I am sure that an endless series of my right hon. and hon. Friends could give similar examples, as could Opposition Members if they searched their telephone books and listened to their industrial constituents. British capital goods companies have set themselves a target to double their exports to non-OECD countries in the next few years from £10 billion a year to £20 billion a year. That is the answer to Opposition Members on the resurgence of manufacturing in this country.

§ Mr. Bell
The Minister has referred to export credit. What would he tell exporters who increase their competitiveness and productivity, yet when it comes to export credit guarantees look askance at Europe and see what they think are more competitive rates? The President of the Board of Trade said at the Confederation of British Industry conference that our rates were broadly in line. Is the Minister aware of the anxiety of exporters who fear that the European Commission is looking at a new directive designed to create a level playing field for export credit guarantees which they believe is tilted towards the French? Will he give the House an assurance that in relation to that 447 directive and the negotiations, the Department of Trade and Industry will play an active part, with a strategy for trade and for industry, and not leave it to the Treasury with a strategy for money?

§ Mr. Needham
When it comes to export guarantees, as the hon. Gentleman knows, we have increased the cover by £2.5 billion, we have reduced the premium rates by 25 per cent., we have several markets back on cover and we have increased short-term insurance cover by £1.4 billion. British industry and commerce are much better placed than they were before. However, I accept that it is vital that we are not the only ones playing on the level playing field. Any directives from the Community or any proposals that come forward will be considered by the Department of Trade and Industry and by the Government to see whether they are of benefit to our industry. We are of course determined to make sure that British industry receives the maximum support possible. That is what we have been doing and we shall continue to do it.