§ 2. Mr. Denis MacShane (Rotherham)What assessment he has made of the impact of the value of the pound sterling since 1996 on exports. [141834]
§ The Financial Secretary to the Treasury (Mr. Stephen Timms)The appreciation of sterling relative to the eurozone currencies since 1996 has certainly caused some problems but, overall, exporters have still achieved robust growth. Exports of goods have risen by 25 per cent. over the past four years and by 7 per cent. over the past year.
§ Mr. MacShaneMy question refers to 1996 because the main rise in the value of sterling happened under the former Tory Chancellor—another economic snafu he left his successor. Is my hon. Friend aware that every tonne of steel exported to the EU since 1996 has been exported at a loss, so that, while demand for exports has gone up, profits have gone down? Is he also aware that steelworkers, car workers, textile workers and farmers are fed up with being crucified on the cross of an overvalued sterling left to the Government by the Conservatives? While the only policy of the Opposition on this can he summed up in six words—"Europe, Europe, Europe. Out, Out, Out!"—the time is coming when many members of the public want a clear statement from the Government that the overvalued pound and undervalued euro is causing real damage to our economy.
§ Mr. TimmsI suggest to my hon. Friend that export growth has generally been much stronger than might have been expected given the exchange rate difficulties faced by exporters. The UK's exports to the European Union have grown much faster than have our exports to countries outside the EU. The average of independent forecasts shows export growth of more than 7 per cent. this year. The exchange rate differential causes problems for firms exporting into the eurozone, but improvements in productivity are helping to balance that. The 8 per cent. growth rate in the European Union between 1997 and 1999 has also helped. The UK steel industry is among the most efficient in the world. On that basis, I believe that it can look forward to a bright future.
§ Sir Michael Spicer (West Worcestershire)Productivity rates are crucial to this question, so why do the Chancellor of the Exchequer and the Prime Minister continue to distort the productivity figures? In particular, why have productivity rates fallen under Labour? That is demonstrated today by the Institute of Management Services index on productivity, which shows a continuing fall.
§ Mr. TimmsThe figures have been made clear. The pre-Budget report contains figures that set out the precise position. The main rate of corporation tax is lower in the UK than in any big EU country and any major industrialised country in the world. As my right hon. Friend the Chancellor said, business investment has reached record levels, which is helping to boost productivity. The UK receives 40 per cent. of all investment into the European Union made by the United States and Japan, which also encourages better productivity. I point out to the hon. Gentleman that the 791 UK was ranked ninth on competitiveness this year by the World Economic Forum, as compared with 15th in 1996. We are making steady progress in the right direction.