HC Deb 19 June 1996 vol 279 cc862-4
8. Mr. Pawsey

To ask the President of the Board of Trade what was the United Kingdom's trade balance with EU countries in the last quarter for which figures are available. [32115]

The Minister for Trade (Mr. Anthony Nelson)

During the first quarter of 1996 the United Kingdom had a deficit in trade in goods of £994 million with EU countries.

Mr. Pawsey

I thank my hon. Friend for that response. What action does he believe British industrialists could take to improve the level of exports to the Community? Does he agree that the Community is either a common market or nothing, and that there is no need for us to go deeper into a political union with Europe with a common currency and funding common defence and foreign policies?

Mr. Nelson

We still have a long way to go to take full advantage of the single market, which we pioneered and which we still have an obligation to see through. Undoubtedly, however, our exports have seen exponential growth there, characterised by a large number of small to medium-sized companies that employ many people. Exports are not important in themselves, but in the employment to which they give rise. The Government's policies of low inflation, low taxation, low interest rates and low non-wage costs—all distinctively British and Conservative—have resulted in high exports and substantial growth of small to medium-sized businesses in Europe. We should welcome all that.

Mr. Nigel Griffiths

Why is the Minister being so modest when the President of the Board of Trade revealed on 20 February that Britain has the worst deficit in the European Union apart from Greece, whose most memorable export achievements are the Elgin marbles and Nana Mouskouri? When Italy, Germany and five other neighbours have trade surpluses and we have a deficit, is it any wonder that the Conservatives have relegated this country in 18 years to 18th place in the world prosperity league?

Mr. Nelson

I thought for one shocking moment that the hon. Gentleman was about to break ranks by not asking a dismal and despondent question putting Britain down, but of course he fell into line. The truth is rather different.

Mr. Griffiths

Explain the decline since 1979.

Mr. Nelson

I will. Many of the figures that are given for deficits relate to trade in goods and do not necessarily take account of trade in services, and we are one of the few countries in Europe that has a surplus on that account. We have seen tremendous growth, which we should all welcome, in our exports to Europe, characterised by manufacturing exports. The picture is much brighter and the hon. Gentleman does his party and the country no service by trying to paint it otherwise.

Lady Olga Maitland

Will my hon. Friend confirm that Britain exports more per head than the USA, Japan and our main European competitors? Does he agree that that is because this country is unfettered by the social chapter and the minimum wage?

Mr. Nelson

My hon. Friend is right. This country has an outstanding record on exports, not only in absolute but in comparative terms. Much of that record derives from the fact that we have not imported high wage costs and non-wage costs from the European Union in the social contract. We must ensure that the difference between the parties on that issue is brought into sharp relief for the country and the electorate, because it is a key component of job creation and exports for this country.