HL Deb 14 October 1982 vol 434 cc909-11

3.16 p.m.

Lord Beswick

My 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 what was the value of manufactured goods imported from the European Community by the United Kingdom in each of the years 1972, 1980, 1981 and to what extent it is estimated that the amount for 1982 will be affected by the dramatic improvement in productivity claimed by it to have been achieved in the first quarter of this year.

Lord Cockfield

My Lords, the figures are £2.3 billion, £15.2 billion and £15.8 billion, respectively. Productivity has been rising substantially for more than a year now, but to a large extent this has been offset by pay increases exceeding those in major competitor countries. While a rise in productivity is helpful, just as excessive pay increases are unhelpful, it is not possible to provide a quantified estimate of its effect on the 1982 outturn.

Lord Beswick

My Lords, I am grateful to the noble Lord for those figures. Does he recall that before the Recess much emphasis was placed upon our manufacturing exports to EEC countries? But is it not a fact that the figures which he now gives us about our imports from those same countries put the position in truer perspective? Is it not a fact that before membership we had a very substantial trading surplus with the EEC countries in manufactures, whereas since our membership we have gone into very significant deficit?

Lord Cockfield

My Lords, the figures for which the noble Lord asked and those I gave him related to imports only. What matters, of course, is the balance of trade between ourselves and the European Community. Contrary to the popular belief, we did, in fact, on a balance of payments basis, show a surplus in our trade with Europe in both 1980 and 1981, although in the first half of the current year there is a deficit. But Europe remains our most important market, both in the export and import fields.

Lord Kaldor

My Lords, would the noble Lord confirm that what he has just said about the balance of our trade with Europe having been favourable was entirely due to oil? The Question related to manufactured goods and asked only about imports. But what is really important, from the point of view of the future manufactures of this country, is the balance of imports and exports in manufactures without taking oil into account.

Lord Cockfield

My Lords, I do not agree with the noble Lord that the only thing that matters is the balance in manufactured goods. In fact, the balance in services and in other invisibles is also of very great importance. Nor am I prepared to disregard the importance of oil in the same way as the noble Lord does. If one analyses the trade figures in detail, one can always pick out individual groups in which this country shows either a substantial surplus or a substantial deficit.

Lord Bruce of Donington

My Lords, is the noble Lord aware that this Question itself relates to manufactured goods? Will he not come absolutely clean on this? There has been a deficit in our trade with Europe in manufactured goods; he knows that perfectly well. Is he not prepared to confirm that? The deficit is both unforeseen in terms of the accession and also very substantial and considerable. Will the noble Lord also bear in mind that the oil supplies from this country are, so far as one can see, not of indefinite duration? Will he take steps to cease destroying the manufacturing base in this country?

Lord Cockfield

My Lords, I do not of course agree with the noble Lord's analysis. That will come as no surprise to him. I have never said, and I do not now say, that we have a surplus on our manufactured exports. The point I am making, which is a very valid one, is that one must look at the totality of our trade and that one is not entitled to pick out individual pieces of that trade and ignore the rest of it, because in this world our prosperity depends on the totality of our output and not simply on the output in specific areas. I regret just as much as the noble Lord does the fall in our manufacturing output, but, unlike the noble Lord, I welcome the increase that we see in other parts of our total economic activity.

Lord Beswick

My Lords, the noble Lord said that we should not look at one narrow sector of our activities, but is it not a fact that when we came to consider exports from this country to the EEC the noble Lords opposite spoke about this narrow sector of manufactured goods? I am asking for comparable figures. On the basis of comparable figures we have gone from a substantial surplus into a very significant deficit with the European countries. If the noble Lord, as he appeared to be, is underestimating the effort of manufacturing industry in this country, can he say why, in the same period when we have run this deficit with the European countries, we have contrived to increase our surplus with non-EEC countries so far as the manufacturing trading balance is concerned?

Lord Cockfield

My Lords, on a question of fact, the noble Lord asked for figures of manufactured goods imported from the European Community. That, therefore, was the question which I answered. Had the noble Lord asked for figures relating to exports or the balance of payments I would equally have willingly given them. There is no secret about the figures, which are, of course, published regularly. So far as the general point which the noble Lord is making is concerned, it is perfectly true that great changes have taken place in the pattern of this country's economic activity since 1973, but the important point that needs to be borne in mind is how important a market the European Community is as a whole for the United Kingdom; that no less than 43 per cent. of our total exports go to the European Community.