§ 9. Mr. MacShaneTo ask the Chancellor of the Exchequer what estimate he has made of the impact of the rise of sterling since January on British exports. [4864]
§ Mrs. Angela KnightThe trade figures in goods released yesterday for the third quarter show that the volume of UK exports of goods, excluding oil and erratics, were up by 3 per cent. on the previous quarter, and 7½ per cent. on a year earlier. Exports have been performing well this year, despite the rise in the pound and weakness of activity in Europe.
§ Mr. MacShaneDoes the Minister share the concern of many of our leading exporters about the continuing rise in sterling? Yes or no?
§ Mrs. KnightThe best thing for our exporters is to continue to be competitive and to show the sort of performance that they have shown in the past. They have been doing an excellent job, and will continue to do so. We expect exports to increase next year, not least because activity in Europe looks likely to start to improve.
§ Mr. PicklesExporters in my constituency say that what they need more than anything is a period of stability. 456 They want low inflation, low interest rates and to be able to invest. They have had 49 months in which inflation has been below 4 per cent. Does my hon. Friend agree that that is the most important thing for exporters?
§ Mrs. KnightMy hon. Friend is entirely correct because, in the past, a low exchange rate has been accompanied by high inflation, which has rapidly eaten away any trading advantage that the United Kingdom might have had. That is why concentrating on a low inflation target means that UK exporters have the stability that they need. It enables them to ride out any short-term currency fluctuations. The continuing stability in the UK has been recognised by many companies—large and small, exporters and non-exporters. We are determined to keep that stability. During the last Labour Government. this country's biggest exports were probably companies leaving Britain.