HC Deb 05 February 1998 vol 305 cc1215-6
7. Ms Keeble

What measures her Department has taken since 1 May to help British exporters; and if she will make a statement. [25690]

Mrs. Beckett

In accordance with our manifesto, we established the Export Forum, which recommended a series of improvements to our export promotion effort, which we are now implementing. In addition, we have reversed our predecessors' decision to abolish the trade fairs support scheme and have announced the largest ever programme of trade fairs and missions overseas. I plan to increase funding for my Department's export promotion work for 1998–99 by around £1 million compared with this year. I expect shortly to be able to announce a series of new measures to help British exporters.

Ms Keeble

I thank my right hon. Friend for that answer—and particularly for the trade fairs, which my local chamber of commerce will welcome. On Monday, I shall be visiting the Bostrom group, an extremely successful firm in my constituency which exports its products around the world, to talk about its current problems, which it attributes to the strength of the pound. What message does my right hon. Friend have for that company about the importance of the Government's long-term strategy for securing economic stability and the way in which that will resolve its short-term problems?

Mrs. Beckett

My hon. Friend is entirely right, and I am glad to learn that, like so many Labour Members, she continues to cultivate her links with the business community. We fully recognise the anxieties that are expressed, although, as I am sure she is well aware, the picture is not uniform—different sectors are affected to different degrees and in different ways. However, we accept the long-term need for a stable and competitive exchange rate and believe that the Government's actions to achieve long-term low inflation and stability will contribute to that end.

Mr. Bercow

Has the President of the Board of Trade studied the most recent survey of the British chambers of commerce which reveals that a balance of firms is still losing exports? If she has, why is she alone in failing to understand that all the steps that she is taking to help exporters are grossly outweighed by the massively damaging effects of an overvalued exchange rate caused by the precipitate five interest rate rises perpetrated by her Government?

Mrs. Beckett

I wonder where the hon. Gentleman was during the 1980s when the previous Government deliberately pursued a policy of a high exchange rate in defiance of economic reality and threw many firms out of business. Some firms have been disadvantaged to a degree, but it remains the case that the figure is somewhat patchy. In the three months to November, the volume of manufacturing exports was 6 per cent. higher than a year earlier and exports of goods and services in total are expected to grow by around 5 per cent. in 1998.

The Government are not complacent about the position and we shall continue to work with the private sector to promote exports.

Mr. Clapham

My right hon. Friend will be aware that at present around one third of exports come from companies that have settled in Britain as a result of inward investment and employ roughly about 18 per cent. of the work force. There is evidence that during the past 18 years the Tory Administration failed to nurture indigenous industry. Therefore, will she consider what mechanisms might be introduced to transfer technology from universities to British companies so as to strengthen British indigenous industry?

Mrs. Beckett

My hon. Friend is entirely right that Britain has a tremendous potential competitive advantage in the creativity and innovation of the British people and in the work that is done in our universities and other research establishments. We continue—partly by promoting the foresight programme and partly by other means—to work with those in such establishments to build better links between them and British companies. We fully realise that Britain's future competitive advantage lies in creativity and innovation rather than in the sweatshop mentality of the Conservative party.

Mr. Redwood

I agree with the right hon. Lady that we made mistakes in the early 1990s. We have learnt from them and we have apologised for them. Will she now learn both from that experience and from the current experience of manufacturing and exporting industries? I do not think that she has realised how serious it is out there for people who are trying to make things and sell them abroad. Will she tell the Chancellor of the Exchequer that there is grave damage from high sterling and high interest rates, that his Monetary Policy Committee has caused that damage and that he has added gravely to it by taxing savings and taxing business? Will the right hon. Lady get him to change policy before manufacturers and exporters go under because of her policies?

Mrs. Beckett

As I am sure the right hon. Gentleman is aware, my right hon. Friend the Chancellor is reducing taxes on business, so we are heading for the lowest corporation tax rate in the developed world. It is nonsense to suggest that the Government are complacent. We are well aware of the private sector's anxieties and concerns, and we are in continuing discussions with them about the issues on which we can support and be of assistance to them. I am rather surprised to hear the right hon. Gentleman being so critical of the Monetary Policy Committee and of the Bank of England. My impression was that many Conservative Members supported moves towards the type of independence for the Bank of England on interest rates that my right hon. Friend has introduced.