Trade Balance in Goods and Services (Hansard, 15 November 1984)

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

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, the latest estimate of our trade balance in goods and services is for the second quarter of this year, when there was a deficit of £123 million.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that that is not an Answer to my Question? I asked for the figures for September 1984. Am I correct in assuming, as has been reported, that the total deficit for September 1984 was £514 million and that of this figure, £764 million was a deficit in the balance of goods alone; and that both these figures equalled the record deficit in the history of this country, which was set by the present Government in April of this year?

§ Lord Lucas of Chilworth
My Lords, I believe that my original reply gave an answer to the Question which the noble Lord originally asked, which was about goods and services; I gave the latest available figures for goods and services. For goods alone, there is an estimated deficit of £578 million for the current account as a whole. That represents a £228 million deficit on our trade in goods. It would be wrong to take one month in isolation from others.

§ Lord Hatch of Lusby
I have asked for that one month, my Lords. Can the noble Lord not provide the figures which his department can give him for the month of September 1984?

§ Lord Lucas of Chilworth
My Lords, I repeat that in his original Question the noble Lord asked about the trade balance in goods and services for September. I will repeat my original Answer. The latest estimate of our trade balance in goods and services is for the second quarter of this year, when there was a deficit of £123 million.

§ Lord Beswick
My Lords, the noble Lord the Minister says that one month should not be taken in isolation. Does that mean that he is optimistic about the other months?

§ Lord Lucas of Chilworth
My Lords, the noble Lord, Lord Beswick, may recall that in the Autumn Statement my right honourable friend the Chancellor 410 of the Exchequer said he anticipated that there would be a balance of payments on the current account of a zero nature.

Lord Bruce of Donington
My Lords, is the noble Lord aware that when the Chancellor of the Exchequer incorporated that estimate in the Autumn Statement he of course took into account the oil position as well? Is not the main point of interest at this time the appalling deficit which we have in our trade balance in manufactured goods? Is that not really the position?

§ Lord Lucas of Chilworth
No, my Lords, that is not the position. All our exports contribute to the overall balance. Last year £40 billion worth—that is, two-thirds—of all visible exports were in manufactured goods.

§ Lord Hatch of Lusby
My Lords, surely the Minister is dodging the question. Is it not the case that in the month of September our exports fell by roughly £100 million and that imports increased by a like amount? Is it not the case also that in his Budget earlier this year the Chancellor predicted a £2 billion surplus overall for the trade balance this year? Is it not the case that at the present time, so far this year, the deficit is running at a rate of £530 million? How does the Minister equate those two figures? Is this part of the Government's supposed recovery?

§ Lord Lucas of Chilworth
My Lords, the noble Lord, Lord Hatch of Lusby, quite wrongly accuses me of trying to dodge the question. I do not believe that the noble Lord could ever justly accuse me of attempting to dodge any question he may address to me. The large deficit, exceptional for the month of September, is due in the main to two reasons. First, there was the bringing forward of imports to beat the November accelerated VAT deadline, which had a lot to do with it. Secondly, there was the impact of the miners' strike.

§ Lord Hatch of Lusby
Really, my Lords, the Minister cannot get away with that. The figures published in September expressly excluded the effects of the miners' strike. Will he now answer the question of how the Chancellor's prediction of six months ago is being manifested in the present deficit, whereas he had claimed that there was going to be a £2 billion surplus?

§ Lord Lucas of Chilworth
My Lords, it is the noble Lord himself who is confusing the issue. He speaks of goods and services and then moves on to talk about the current account as a whole. The current account as a whole is projected to have been in deficit by £578 million in September. That is represented by a £828 million planned deficit on trade in goods and a projected—I say "projected"—£250 million surplus on invisible transactions.
In the first nine months of this year, there was a deficit on the current account as a whole of £913 million, for the reasons which I have sought to explain. My right honourable friend the Chancellor of the Exchequer said last Monday that he expected the current account as a whole to balance by the end of this year.

§ Lord Peyton of Yeovil
My Lords, I wonder whether my noble friend is aware how much his patience is admired, even if some may feel that it is not well directed?

§ Lord Lucas of Chilworth
My Lords, I am most grateful to my noble friend Lord Peyton. Having suffered at the hands of adversaries in the past, perhaps he recognises the experience very sharply.

§ Viscount Montgomery of Alamein
My Lords, as someone who has been involved in promoting exports for a very long time, may I ask my noble friend whether he does not agree with me that predicting the trend of any specific type of sale from one month to another is an almost impossible task for any kind of industry?

§ Lord Lucas of Chilworth
My Lords, I agree with my noble friend and I sought to explain that point in my earlier answers to supplementary questions. Nevertheless, as my noble friend will be aware, there has been a significant increase in our exports of manufactures over the past 12 to 18 months.