§ 2.37 p.m.
§ The Question was as follows:
§ To ask Her Majesty's Government what steps are being taken to expand exports to the Federal Republic of Germany, in view of the increased value of the deutschemark.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, exporters are already taking advantage of the favourable exchange rate to expand their sales to the Federal Republic, and the British Overseas Trade Board and our posts in the market will continue to provide the service needed to help them.
§ Lord EzraMy Lords, is the noble Lord aware that over the past three years on visible trade account we showed a deficiency with western Germany of no less than £3.5 billion and that last year this result was arrived at even after we had earned over £2 billion on oil exports? In view of the fact that Germany represents our second largest export market, should we not now be mounting a special effort to recover our situation there, having regard to the improvement in the currency position?
§ Lord Lucas of ChilworthMy Lords, the truth of the matter is that over the three years which the noble Lord mentioned both our penetration of the German market and the volume of our non-oil exports—that is, our manufactured exports—have shown increases, and the Federal Republic now takes 11.4 per cent. of our worldwide exports, which is an increase of 1.4 over the 1983 figure.
§ Lord BarnettMy Lords, it will be recalled that the Prime Minister was delighted to boast that the pound was very strong, which it was, in 1979 to 1981. Are the Government now pleased that it is lower?
§ Lord Lucas of ChilworthMy Lords, it is not a question of being pleased or displeased. The net result of the current rate is that it puts our exporters in a more competitive position—a position of which I would hope they would take full advantage.
§ Lord Harmar-NichollsMy Lords, is my noble friend aware that the Question, asks what Her Majesty's Government are doing about increasing exports? Is not that a matter for private enterprise exporters to deal with, and it could well be that government intervention would be counterproductive?
§ Lord Lucas of ChilworthMy Lords, I appreciate what my noble friend is saying. Certainly it is largely for industry to take advantage of the market places; but the Government, through the British Overseas Trade Board, spend some £5 million annually. We also have staff in London to support those exporters and six Foreign and Commonwealth Office posts in the Federal Republic to aid and assist those industrialists who take advantage of the position open to them.
§ Lord GladwynMy Lords, would not the prospects for our exports be brighter if we were now able to join the European Monetary System?
§ Lord Lucas of ChilworthMy Lords, I am sure that the House will agree with me that that question is a little wide of the original Question.
§ Lord Williams of ElvelMy Lords, can the noble Lord give us figures for the visible non-oil trade balance between the United Kingdom and West Germany over the past three years?
§ Lord Lucas of ChilworthMy Lords, manufactured exports from the United Kingdom to the Federal Republic of Germany in real cash terms in 1982 were £3,409 million; in 1983, £3,943 million; in 1984, £4,409 million; in 1985, £5,755 million. That shows an increase of 69 per cent in 1985 over 1982.
§ Lord Williams of ElvelMy Lords, I am sorry to come back again to the noble Lord, but I asked for the visible trade balance, which of course includes imports as well as exports.
§ Lord Lucas of ChilworthThe answer is, "No", my Lords.
§ Lord DiamondMy Lords, does not the Minister's wide experience in the affairs of his department indicate to him that one of the problems that exporters have is not knowing what rate of exchange will apply at the time they are paid for the goods they are wishing to export? Therefore, is it not directly relevant and pertinent to the Question on the Order Paper that the Minister should answer the question of the noble Lord, Lord Gladwyn?
§ Lord Lucas of ChilworthMy Lords, there are a number of factors which influence the competitiveness or otherwise of our exporting industrialists, and currency fluctation is but one. However, it is one that is widely recognised by Her Majesty's Government. In 661 direct answer to both noble Lords, all I can repeat is what my right honourable friend the Chancellor of the Exchequer said in answer to a Question in another place on 6th January this year.