§ 8. Mr. David Kidney (Stafford)What assessment she had made of the impact of the current strength of sterling on the competitiveness of United Kingdom exports. [45059]
§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett)The Government understand exporters' concerns about the level of sterling and appreciate the difficulties that it is causing them. However, the level of sterling is not the only factor affecting the competitiveness of UK exports. In particular, business needs a stable macro-economic environment in which it can make long-term decisions. We are working in partnership with business to improve that and all aspects of British competitiveness.
§ Mr. KidneyI thank my right hon. Friend for that reply. Two weeks ago, I attended the first of a series of briefings at the Foreign Office, jointly hosted by the Foreign Office and the Department of Trade and Industry, for Members of Parliament and representatives of exporters in their constituencies. The presentations that evening were excellent, especially those by the exporters, large and small, and I was left with the distinct impression that the support services for our exporters are first class. However, it was no surprise when one of the exporters raised the question of the strong pound, asking, "How are we expected to win contracts abroad when our competitors have a price advantage simply because of the differences in the value of national currencies?" How can my right hon. Friend and her Department best help British exporters to be competitive in such a climate?
§ Mrs. BeckettI, too, have had many similar conversations with people in the business community, particularly exporters. They are aware of the Government's view that a stable and competitive exchange rate is what will be most beneficial to them in the long term; they are also aware that we have taken steps that we—and, indeed, the markets—believe will produce such an outcome. Of course we all recognise that, in the short term, the level of sterling can cause problems, although its effect, as shown in the trade figures, is more patchy than one might expect.
Our competitor countries have undergone similar experiences of a strong currency, in some cases for many years. We believe that the best way to tackle exchange rate problems is to strive to compete on the basis of quality, as our competitor countries did. That is what the Government continually urge British business to do in any case, as we believe that it will produce the best outcome for Britain in the long term.
§ Sir Peter Tapsell (Louth and Horncastle)Is it not both extraordinary and encouraging that, at a time when many of the most successful exporting countries are desperately anxious about the weakening of their currencies, 498 we should be more concerned about the strength of ours? Is that not an enormous endorsement of the great success of the previous Government's policies?
§ Mrs. BeckettI am not sure how the hon. Gentleman arrives at the conclusion in his final sentence. I certainly agree that, in the past, people have bemoaned the weakness of sterling—it is always a moot point whether a high or a low exchange rate is good or bad. Given what I know to be the breadth of his experience, however, I think that he is likely to share the view that a stable exchange rate is often the most beneficial, as it enables business to plan for the long term—we are certainly working to achieve that.
§ Mr. Derek Foster (Bishop Auckland)A few weeks ago, my right hon. Friend intervened speedily and decisively to win 350 extra jobs in my constituency at Black and Decker, a world-class manufacturer and exporter, but is not she a little worried that the present excessive reliance on interest rates is undermining what I assume would be her preferred economic strategy of growth being driven by exports and investment rather than consumption?
§ Mrs. BeckettIt has certainly been the aim of successive Governments to achieve growth driven by investments and exports. We take the view that our policies will, in the long term, bring about such an outcome. We are continually working with the business community, and we held discussions at a series of seminars, co-sponsored by the Treasury and ourselves, to try to deal with the long-seated problems that the previous Government so plainly failed to overcome.
§ Mr. John Redwood (Wokingham)The President of the Board of Trade is quite right to say that high sterling is not the only threat to jobs and businesses in manufacturing. Wage inflation is up; taxes are massively up; regulatory costs, imposed by the Government, are up; interest rates are up; and, yes, sterling is up as well. What is her Department's forecast of the likely number of job losses in steel, automotive development, textiles and all the main areas of manufacturing in the next couple of years?
We left all those industries in good heart after the recession of the 1990s, but the Government's policies are destroying them. The Government are losing control of the economy and doing enormous damage to manufacturing. They are creating not stability, but bust in manufacturing and an inflationary boom in everything else.
§ Mrs. BeckettAll I can say to the right hon. Gentleman is that, if industry had been in as good heart as he says, he would be on the Government, not the Opposition, Benches. The picture that he presents is not one that anyone would recognise. We are aware of the concerns that have been expressed in some parts of manufacturing about interest rates, but we inherited a legacy of inflationary pressures and of failure to raise interest rates when it would have been right to do so, in the run-up to the general election. We hope and believe that, over time, we shall be able to overcome that legacy.
§ Mr. Barry Sheerman (Huddersfield)Is not the real task for British industry to become world class? We need 499 more world-class companies. The Royal Society for the Encouragement of Arts, Manufactures and Commerce spent three or four years designing a working toolkit for tomorrow's company. Is it not about time that we gave it a hand to ensure that every small, medium and large enterprise can implement that toolkit, becoming innovative and successful in exporting?
§ Mrs. BeckettI know of the tremendous amount of work that my hon. Friend has done, including in some cross-party groups in the House, to promote the cause of British companies and manufacturing. I certainly agree that it is enormously important to continue to discuss what can be done to improve competitiveness and to encourage people in businesses large and small to learn from each other, to benchmark the best and to spread understanding of what will best promote the competitiveness of individual companies and hence of Britain as a whole, and I shall certainly bear my hon. Friend's remarks in mind.