§ 2.40 p.m.
§ THE EARL OF SANDWICHMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government why the aggregated errors shown as the Balancing Item in U.K. Balance of Payments White Papers defy analysis and reconciliation: what steps are being taken to resolve them: and whether the errors relate more to the trade figures than to the Balance of Monetary Movements.]
§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)My Lords, the balancing item represents the net total of both errors and omissions throughout the accounts, and we can only speculate about its nature. The past behaviour of the figures suggests that the balancing item includes a positive element attributable to the current account, which is probably fairly persistent and regular. Other components, particularly those which would properly belong to the balance of monetary movements, such as unidentified short-term flow of funds and trade credit, probably fluctuate widely and from positive to negative. Recent improvements in the accuracy and coverage of the balance-of-payments figures have significantly reduced the average size of the balancing item. Further improvements are in hand, notably an extensive inquiry by the Board of Trade into international trade credit.
§ THE EARL OF SANDWICHMy Lords, I am much obliged to my noble friend for that detailed reply. As the Balance of Payments White Papers habitually include a jejune note saying that the item represents the net total of errors and omissions and other items, and no more than that, could my noble friend give consideration to expanding the note on the lines of his Answer just now, in order that people who read the White Paper may find the explanation as they study the figures?
§ LORD DRUMALBYNMy Lords, I will convey my noble friend's suggestion to my right honourable friend, and I am sure he will give it consideration.
§ LORD SHACKLETONMy Lords, could the noble Lord give any indication of whether the balancing item is going to be positive or negative this year? There was a very large positive balance of payments in the first quarter; could it be possible that it might go the other way later? Do the Government or the Treasury have any view as to how it is likely to work out?
§ LORD DRUMALBYNNo, my Lords, this would depend on developments in this country and also elsewhere, and it would be impossible to forecast this. I am afraid that my answer must be in the negative.
LORD HAWKEMy Lords, would my noble friend not agree that the whole balance-of-trade figures are made up of so many speculative elements that the surprising thing is not the balancing figure, but that the balancing figure is not very much bigger than it is?
§ LORD DRUMALBYNMy Lords, the balance-of-trade figures are made up not only of speculative elements. There is some degree of estimation involved, but firm figures also are included.
EARL ALEXANDER OF HILLS-BOROUGHMy Lords, in view of the important answer the noble Lord made to the supplementary question by my noble friend Lord Shackleton, may I ask—in view of to-morrow's debate on the Finance Bill which will open up the economic position and when this whole matter will be discussed—whether it will be possible for us either to have some statement on behalf of the noble Lord's right honourable friend made to-morrow in the debate or to be given one beforehand through the usual channels?
§ LORD DRUMALBYNMy Lords, I will also convey that request to my noble friend, who will be taking part in the debate. I am sure he will give consideration to trying to explain a little further this balancing item.