HC Deb 10 May 1995 vol 259 cc743-4
15. Sir David Knox

To ask the President of the Board of Trade when he next expects to meet the President of the Confederation of British Industry to discuss manufacturing industry. [21956]

Mr. Heseltine

I and other DTI Ministers regularly meet the Confederation of British Industry to discuss a range of issues. The latest CBI survey confirms the strength of manufacturing industry. Export orders are growing faster than ever and export optimism is at its highest for a generation.

Sir David Knox

Does my right hon. Friend agree that reasonably stable exchange rates are particularly important if manufacturing exports are to continue to rise, as they have recently? Will he confirm that, whether or not we are in the exchange rate mechanism, it is a major objective for the Government to prevent fluctuations in the exchange rate, as upward and downward movements are particularly detrimental to the manufacturing sector?

Mr. Heseltine

I know that my right hon. and learned Friend the Chancellor of the Exchequer will have all those matters carefully in his mind. My hon. Friend will understand that the Government's determination to maintain strict control over the economy is at the forefront of our objectives.

Mr. Sheerman

Does not the President of the Board of Trade realise that when he meets the CBI he has no credibility at all if he pretends that in the past 16 years we have not lost market after market and home market after home market? Is not his credibility zero if he does not talk to the CBI about how we haul back on that long path to securing those markets for British manufacturers?

Mr. Heseltine

The hon. Gentleman makes an interesting point by suggesting that the problem existed 16 years ago. I agree. Precisely because the last Labour Government did so much to undermine the competitiveness of British industry, it has been a hard and painful process to turn it round. However, the latest CBI survey shows exactly how substantial our success has been. Inflation has been below 3 per cent. for the past 18 months—the first time that has happened since 1961. Exports are some 11 per cent. higher. Growth in the economy has been 3.9 per cent. over a year. Understandably, the CBI reflects those exciting figures in its forecasts of the state of optimism of British industry.

Sir Michael Grylls

Despite the huge improvements in British manufacturing industry in the past decade or so, will my right hon. Friend discuss with the financial institutions the gap that appears to exist in long-term finance for firms with a turnover of between £3 million and £50 million? In Britain, those medium-sized firms still find it difficult to get long-term secured loans—true secured loans, not overdrafts dressed up as loans—for expansion and developing new products. It would pay dividends if my right hon. Friend used his influence in that direction.

Mr. Heseltine

My hon. Friend takes a great interest in those matters. I am totally sympathetic to the point that he makes. I have frequent conversations with representatives of the financial institutions and the Bank of England on those important issues.