Balance of Trade: Manufactured Goods (Hansard, 3 November 1983)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Lyell
My Lords, in the first three quarters of 1983 the United Kingdom's balance of trade in manufactured goods is estimated to have been in deficit by £ 1¾ billion.

§ Lord Hatch of Lusby
My Lords, can the noble Lord tell the House what was the last year in which the balance of trade in manufactured goods for Britain was in deficit? Can he also confirm that, as as result of the Government's policy over the last four years, what they inherited as a surplus of £5 billion a year has now 629 sunk to a deficit, and that during the same period the employees in manufacturing industry have declined from over 7 million to round about 5 million?

§ Lord Lyell
My Lords, I could not confirm the figures of the noble Lord's last suplementary without further consultation, but may I write to him on that point? So far as the noble Lord's second question was concerned, he referred to the figures in 1979. I could not give him a definite answer on that. I can tell him, though, that in 1980, 1981 and 1982 the United Kingdom had a visible balance-of-payments surplus of £1.2 billion, £3 billion, and £2.1 billion. We regard that as extremely encouraging, and indeed a tribute to British industry. So far as the noble Lord's first supplementary question is concerned, research undertaken by the Government has been unable to unearth the two precise years, although we understand that 1918 and 1931 may have been the years to which the noble Lord was addressing his mind—I stress "may have been".

§ Lord Soames
My Lords, can my my noble friend tell us what was the productivity per man employed in industry last year compared with 1979?

§ Lord Lyell
I am sorry, my Lords, I am not able to give my noble friend that precise figure, but I shall find it and be in written touch with my noble friend as speedily as possible.

§ Lord Beswick
My Lords, would the noble Lord agree that the noble Lord, Lord Soames, should take into account that productivity per man is not a question of a man running around and working harder; it is a question of investment?

§ Lord Soames
It is a question of both, my Lords.

§ Lord Beswick
Would the noble Lord comment on the fact that reported in the press today was a statement of the chairman of British American Tobacco explaining why they are proposing to put £730 million in Eagle Star, and saying that they examined the situation and decided that the financial sector in this country was the most profitable? Is this not one of the most devastating criticisms of the British economy?

§ Lord Soames
Why?

§ Lord Beswick
As a result of Government policy it is much more profitable to dabble in money than to make actual goods.

§ Lord Lyell
My Lords, the remarks which are attributed to the chairman of British American Tobacco, alas, I have not had an opportunity of reading yet, since I was attempting to struggle through the figures for this particular question all morning, but I thank the noble Lord and I shall certainly read them. However, I am sure that the noble Lord, Lord Beswick, and indeed your Lordships would regard the comments of the chairman as being congratulatory to the financial sector of the United Kingdom economy, and indeed we would wish to add our congratulations to that sector.

§ Lord Mishcon
My Lords, does not the noble Lord the Minister realise that his own record of productivity about which we have just heard is about the poorest in the country?

§ Lord Lyell
My Lords, I take that on board, but of course with this Government we have a high record. I intend to improve on my personal part in that record later today.

§ Viscount Trenchard
My Lords, does my noble friend agree that in so far as we have a small deficit in manufactured goods in terms of trade today it stems directly from a drop in our share of world markets from nearly 20 per cent. in 1960 to under 10 per cent. in 1978? Under this Administration and the previous one, would he agree that the slide has now been arrested and that we are starting to regain our share notwithstanding the world recession? Would he further agree that we now have a chance to start to catch up in prosperity the 13 nations that overtook us in the 1960s and 1970s?

§ Lord Lyell
My Lords, as is normally the case my noble friend is absolutely correct in four particular cases. I would wish, and the Government would wish, to thank him for his support, and indeed for pointing out these encouraging facts.

§ Lord Hatch of Lusby
My Lords, may I try to ask the noble Lord a question which he can answer? Is it not the case that this is the first year since the Industrial Revolution that Britain is in deficit in its manufacturing trade? Is it not further the case that. notwithstanding the boasts of the Government about the so-called recovery based on a 6 per cent. increase in retail sales, it is demonstrably caused by a rapid increase in imports over exports; and that this is at least partly attributable to the massive outflow of capital from this country to our competitors rather than an investment in manufacturing industry in this country to supply the demands of our retailers?

§ Lord Lyell
My Lords, the answer to the noble Lord's last question is definitely no. So far as the noble Lord's first question was concerned, I would stress to him and to your Lordships that it is not necessary, or indeed even desirable, to have a surplus on trade in every single commodity. As the noble Lord, and indeed your Lordships will know, the structure of the economy of the United Kingdom has naturally changed and is changing with the advent of such things as North Sea oil; and indeed we only need to look at my part of the country in Aberdeen to see that. Secondly, we now enjoy surpluses on trade in oil and indeed on services, and occasionally we enjoy surpluses on other commodities.

§ Lord George-Brown
My Lords, is the Minister aware—

§ Lord Alport
My Lords, may I ask the noble Viscount the Leader of the House—

Several noble Lords
Lord George-Brown!

§ Lord Alport
I think it is the turn of this side of the House, my Lords. May I ask the noble Viscount the Leader of the House whether the discussion that has taken place over this Question is not entirely unsuitable for Question Time since it has involved the expression of a series of opinions which have no relation to the obtaining of information from the Minister? Is it not extremely unfair on the Minister that he should be asked to answer a small debate of this sort without having proper opportunity of preparing for it?

§ Lord George-Brown
My Lords, while the noble Lord the Minister is having his consultations—

§ Lord Lyell
My Lords, I hesitate to intervene and I shall certainly await with eagerness the noble Lord, Lord George-Brown. Perhaps I may attempt to reply to the kind supplementary question of my noble friend. I am grateful for his support. I regret that some of the questions have gone a little wide of the original Question on the Order Paper. I have done my best. I have undertaken to write to my noble friend Lord Soames. If I have missed any details, then certainly I shall write to any noble Lord to whom I have promised to write.

§ Lord George-Brown
My Lords, the simple point that I wish to put to the Minister—

Several noble Lords
Ask! Ask a question!

§ Lord George-Brown
My Lords, if you put it to the noble Lord, then you are asking him. Is not the answer to the noble Lord, Lord Beswick, and to many others who intervened, that this country cannot survive on a financial and leisure basis only? Is it not true that we have to he a manufacturing-based country? Thirdly, we have a deficit on our manufacturing base not just because we are not investing but—should he not have said to the noble Lord. Lord Beswick?—because the trade unions by their practices are refusing us permission to make use of the investment we are making. Should he not invite the noble Lord, Lord Beswick, to use his influence to bring the trade unions to understand that restrictive practices are also at the bottom of our problem?

§ Lord Lyell
My Lords, I hesitate to intervene in any putative conversation between old friends, the noble Lord, Lord Beswick, and the noble Lord. Lord George-Brown. But I stress to the noble Lord. Lord George-Brown, and to the House, that our industrial output—indeed, our manufacturing exports—have risen from, in 1981, £37 billion to nearly £39 billion in 1982; and. on 1983 figures, our exports are at the rate of £40 billion for this year. I believe that those figures provide firm encouragement for British industry. As a Government we are very grateful for their help in supporting our trading profession. As for the noble Lord, Lord George-Brown, wondering whether I would be able to deviate from any of the answers on trade, certainly I believe that I should not this afternoon.

§ The Lord President of the Council (Viscount Whitelaw)
My Lords, perhaps noble Lords feel that we have had a very good run on this Question.