HC Deb 06 November 1996 vol 284 cc1227-8
6. Mrs. Mahon

To ask the President of the Board of Trade if he will list the years since 1979 in which the United Kingdom recorded a deficit in manufactured goods. [529]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

The United Kingdom has recorded a deficit on trade in manufactured goods in each year since 1983, but since 1979 the volume of manufactured exports has doubled.

Mrs. Mahon

Is not the record of deficit after deficit, year after year, an appalling indictment of the Government? Contrary to what the Government would like the public to believe, is it not true that the Conservative party is neither the party of trade nor, as the record shows, the party of industry?

Mr. Lang

The hon. Lady is talking nonsense. The United Kingdom's capacity to trade successfully internationally has been transformed in recent years. It is the fifth largest trading nation on the face of the earth. The volume of manufactured exports has doubled since 1979, and we export more per head than either Japan or the United States. That is the product of the increased competitiveness achieved by the Government.

Mr. Bernard Jenkin

In assessing the United Kingdom's manufacturing performance since 1979, is not it important to take into consideration the fact that the industrial base that we inherited from the last Labour Government had perhaps 30 or 40 per cent. obsolete capacity? Is not our economic and industrial performance the envy of our European partners, and is not that put at risk by the prospect of a Labour Government?

Mr. Lang

My hon. Friend is right. The great tragedy is that, during the 1960s and 1970s, under socialist Governments, Britain became so uncompetitive that we failed to prepare for the emerging manufacturing nations. The problems that were ignored in those days, such as nationalised industries being propped up by massive subsidies, overmanning, demarcation disputes and appalling industrial relations that brought the country to a halt, ended up putting us in the hands of the International Monetary Fund. They were at the root of the difficulties that this Government had to clear up in the early 1980s. We are now out there competing successfully and winning new markets all over the world.

Mrs. Beckett

I agree that the record of British companies and of Britain has been transformed under the Government's stewardship, but how can the Secretary of State complacently compare it with the record of the previous Government when he has just acknowledged that trade in manufactured goods was then in surplus, while under this Government it has been in deficit every year for 13 years? As to whether our partners in the European Union should envy that record as a sign of greater competitiveness, we are 15th out of 15 in export growth since 1979, and 13th out of 15 in trade results for 1995. We also have a trade deficit with the rest of the European Union of £4 billion. How can he call that a record of success?

Mr. Lang

The hon. Lady overlooks the facts that our current account for the second quarter of this year was in surplus by the largest amount for nine years; that our services produced a surplus last year of £6 billion; that the revenue from our overseas investment produces a surplus of £9.5 billion; that our exports are up by a third to record levels since the recovery began; that, since 1981, our exports have grown faster than those of France and Germany; and that, since 1979, when the Labour party was last in office, the volume of our exports has doubled. That has been achieved by the competitiveness that the Government have attained, reversing the decline of decades to which the Labour party so substantially contributed.

Mr. Waller

Does my right hon. Friend agree that it is remarkable that some 40 per cent. of all inward investment in Europe comes to Britain? Does he accept that that is not an accident but because of the environment that the Government have created, which encourages manufacturing, and that it could easily be thrown away if a different Government were elected?

Mr. Lang

My hon. Friend is right. That is one of the reasons why employment in manufacturing has risen by some 150,000 over the past three years. That is a rate of about 1,000 new manufacturing jobs per week on average. The success of our inward investment is the world's verdict on the competitiveness of the United Kingdom. That is reflected in the fact that more than 400 new inward investment projects came to this country last year. They come because the Government have transformed Britain into the enterprise centre of Europe, able to compete with any country in the world.