Exports to the United States (Hansard, 5 March 1985)

§ Lord Orr-Ewing
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 value of our visible exports to the United States in 1984 was £10.1 billion. Our invisible exports are of the same order. Excluding exports of oil, and eliminating a distortion caused by exceptional exports of silver bullion in 1983, the value of our remaining visible exports was 40 per cent. 1206 greater in sterling terms in 1984 than in 1983. British exports maintained their share of the growing import market for manufactured goods and we hope to see greater penetration this year.

§ Lord Orr-Ewing
My Lords, I appreciate that those results are good, but while the exchange rates are favourable to this country ought we not to make a dynamic effort to increase our exports to the United States? Can my noble friend say in which areas the success rate has been good as regards the expansion of exports? Also, can he say in which areas there is considerable potential for further increases, so that those outside this House can attend to this matter while the opportunity is there?

§ Lord Lucas of Chilworth
My Lords, the United Kingdom's import penetration in the United States represented some 15 per cent. of all United Kingdom exports. Last year the British Overseas Trade Board launched an "Export USA" promotion, in which eight particular sectors were identified as having the highest opportunities for penetration. They were health care, computer software, food-processing machinery, construction equipment and services, knitwear, contract furnishing, women's clothing accessories, and non-weapons sales to the United States Department of Defense.

§ Lord Diamond
My Lords, with regard to the Minister's statement that British exports have maintained their share in the American market, can he say, on an exactly comparable basis, what has happened to the share achieved by Germany and, in particular, by Japan?

§ Lord Lucas of Chilworth
My Lords, I cannot say so in those precise terms; but in 1984 our increase on 1983 was some 33 per cent.; Germany's was 30 per cent., and Japan's was 37 per cent.

§ Lord Taylor of Gryfe
My Lords, does the Minister agree that the achievements he has just related are substantially due to the support for British exporters from the Export Credits Guarantee Department? Has the noble Lord seen the recent report of the all-party committee which underlines the importance of maintaining these services?

§ Lord Lucas of Chilworth
My Lords, I am aware of the report of that committee, but I have to confess to the noble Lord, Lord Taylor of Gryfe, that I have not studied it.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the anxieties that lie behind the question of his noble friend Lord Orr-Ewing are very well founded indeed? Is he also aware that today the exchange rate of the pound as against the dollar shows that the pound is now worth roughly less than one-half of what it was worth in 1980 and that there has been a legitimate expectation that British exports, particularly to the United States, would have accelerated rather more than they have done?
Will the noble Lord give the House an undertaking that he and his right honourable friends will draw the attention of British industry—not all of British 1207 industry, but large sections of it—to the findings of the Institute of Marketing on the marketing effort in this country and its after-sales service? Furthermore, will the noble Lord give some attention to the findings in February of the National Institute of Economic Research which analysed some of the faults in the management structure in very wide sections of British industry?

§ Lord Lucas of Chilworth
My Lords, first of all, I detected no anxiety at all in the Question, nor indeed in the supplementary questions that my noble friend Lord Orr-Ewing put to me. On the noble Lord's second point, he will recognise, as I do, that the major shift as between the dollar and sterling occurred in January of this year. He, I am sure, will accept that it is a little too early to see the dramatic increase that can he measured. It is significant to say that the penetration of British manufactured goods has improved markedly in the last 12 months, when oil was only 28 per cent. of all British exports to the United States. As regards the point on after-sales service and the faults of British management, I think that that is something of a generalisation and I should be unwise to embark on any deep answer to it.

§ Lord Beswick
My Lords, would not the noble Lord agree that, as a general view, anyone who tries to prove his case with percentages lays himself open to suspicion? The noble Lord tried to show that we were doing rather better than Germany or Japan in the United States in the last year. Will he now give the actual figures and not percentages?

§ Lord Lucas of Chilworth
My Lords, I do not seek to mislead either the House or the noble Lord, Lord Beswick. I explained to the noble Lord, Lord Diamond, that I did not have the answer in the same terms as those in which he asked his question. I gave the nearest to it that I had available.

§ Lord Rochester
My Lords, will the noble Lord confirm that the chemical industry in particular is taking every advantage of the present opportunities for export to the United States?

§ Lord Lucas of Chilworth
My Lords, the chemical industry, in regard to both organic and inorganic materials, has had a very significant impact in the United States in the last 12 or 14 months.

§ Lord Orr-Ewing
My Lords, may I ask my noble friend whether, if economies have to be made in Foreign Office representation in the 50 states of the United States, we can make sure that economies do not take place among the commercial attaches, who form a very important part of the drive for exports in the United States? Can they be given better training, be of higher calibre, and have more ambition and more thrust to help forward this process?

§ Lord Lucas of Chilworth
My Lords, I am quite sure that my noble friend Lord Orr-Ewing intends no criticism of our commercial attaches in the offices in the United States. For some little time now all 1208 ambassadors and commercial counsellors leaving for new posts abroad have undertaken a certain amount of training and familiarisation with British industry and commerce. The Department of Trade and Industry talks to all people before they go out to a new post and also when they are on leave in this country. Those in overseas posts are fully seized of the importance of supporting British businessmen, and our record in that direction in America is extremely good.

§ Lord Davies of Leek
My Lords, does not the noble Lord agree that so far as manufacturing industry is concerned, it is not wise of this House to criticise the efforts of manufacturers who have been intelligent enough—as has been the British pottery industry—to establish a first-class market in America? I do not think they need any lessons from the House of Lords on how to penetrate these markets.

§ Lord Lucas of Chilworth
My Lords, British industry is very well aware of the opportunities in that important area of the world. It is interesting to note that historically the United Kingdom has run a trade deficit with the United States, but since 1981 this has been reversed and in the last three years a surplus of some £800 million has accrued to the benefit of the United Kingdom.

§ Viscount Trenchard
My Lords, would my noble friend agree that this matter should be judged not only on the figures of increased exports to the United States of America, but also by whether firms, using a quite exceptional exchange rate, have decided with the profits that they can make at the moment to invest in making new products in order to penetrate on a permanent basis?

§ Lord Lucas of Chilworth
My Lords, I take note of what my noble friend Lord Trenchard says on this matter. It is not only a question of improving the product; successful exporters to the United States should be encouraged to leave some of that money behind in the United States to establish a firm physical presence in that country, rather than rely on agencies and other factors to continue their sales effort.

§ Lord Hatch of Lusby
My Lords, as the noble Lord has been referring to general manufacturing exports and as the value of the pound has steadily declined over the past five years, thus making British prices competitive, can he tell the House whether general British trade in manufactures has been in deficit or in surplus over the past two years?

§ Lord Lucas of Chilworth
Not without notice, my Lords.