Trade: UK and Soviet Union (Hansard, 21 April 1989)

§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, in the light of Mr. Gorbachev's recent visit I deem the prospects to be fairly good, particularly in light industry, including food processing and packaging, electrical and electronic products, and the construction of hotels. It will be up to our companies as well as their Soviet customers to convert these prospects into actual business, but your Lordships may be sure that the Government will give our businessmen every possible support.

Lord Campbell of Croy
My Lords, I thank my noble friend for his reply, which is encouraging. The present low level of trade seems surprising in view of the improving relations in general. Could not British consumer goods help to relieve the queues and drabness of shopping in the Soviet Union, and is there not a demand in this country for Soviet products in addition to fur hats and real vodka?

Noble Lords
And caviar!

§ Lord Young of Graffham
My Lords, our appetite for vodka must be such that we have an adverse trade balance with the Soviet Union! Our imports from there considerably exceed our exports to them. The real difficulty in trading with the Soviet Union is simply their lack of hard currency. That will tend to rule out consumer products. In the main, our endeavours in the Soviet Union are confined to capital projects, particularly concerning power generation, food, and the like. That is where we shall have the furthest and best advances.

§ Lord Mellish
My Lords, the Minister will be aware that the new change of heart in Russia is entirely due to Mr. Gorbachev. There is a realisation that armaments are out and that the economy of their nation is all-important. Therefore this is a chance for us to prove whether Mr. Gorbachev is genuine by removing every barrier possible to enable the Soviet Union to trade with us.

§ Lord Young of Graffham
My Lords, perhaps I may convert what the noble Lord, Lord Mellish, said into a question. It is true that we should endeavour to 982 encourage trade as far as we can with the Soviet Union. Nevertheless, we should not forget that the overwhelming preponderance of land forces in Europe is on the Soviet side. We should follow the two courses together; namely, to keep up our guard and endeavour to increase our trade.

§ Lord Bottomley:
My Lords, is the Minister aware that I was the Minister responsible for trade with the Russians between 1947 and 1951? I had an expert trade adviser who worked in the Foreign Office and who is now a Member of this House. He is responsible for this Question today. At that time trade with the Eastern European countries was quite high. Have the Government considered using the services of the Minister's noble friend?

§ Lord Young of Graffham
My Lords, this seems a slightly unusual alliance and I must obviously pay considerable attention to it. I shall speak to my noble friend.

§ Lord Renton
My Lords, is my noble friend aware that he is not called upon to exceed the call of duty when answering questions?

The Viscount of Falkland
My Lords, while bearing in mind and agreeing with the Minister's remarks as regards consumer items, is it not a fact that one of the main features of perestroika now is the need to produce consumer items in Soviet shops? Their shopping list is absolutely enormous. Is there not some way in which we can encourage British firms to enter into joint ventures to produce consumer items? The future for trade with the Soviet Union is very profitable indeed if we get in now.

§ Lord Young of Graffham
My Lords, yes. Among a number of agreements that I signed when Mr. Kamentsev, the trade Minister, was here with Mr. Gorbachev was one which involved a British company going into the Soviet Union and working with a producer of washing machines. The company will be redesigning them and then enabling those products not only to be sold in the Soviet Union but exported. Another company is involved there in the redesigning of jeans and their manufacture, and in other clothing apparel. A number of these projects are going ahead, but the difficulty is that they require hard currency and therefore there must be an element of export involved as well.

§ Lord Williams of Elvel
My Lords, can the Minister tell the House how many British firms took stands at the recent Moscow fair?

§ Lord Young of Graffham
My Lords, that is a piece of information that I do not have with me. I shall write to the noble Lord and put a copy of the letter in the Library.

Viscount St. Davids
My Lords, does the Minister not agree that the real danger to glasnost and perestroika, which are in our favour, is the lack of consumer products which may cause the Russian people to reject those concepts? Therefore it is very much in our interests to promote every form of 983 export to the Russian empire which would help Mr. Gorbachev and those concepts.

§ Lord Young of Graffham
My Lords, my responsibilities lie within the United Kingdom and not with other countries. It is very much a matter for the Soviet authorities. I am sure that they are aware of these matters and they figured very much in the talks that we had a few weeks ago. I have no doubt that they will figure again in the talks when I go to the Soviet Union in June this year.

§ Lord Peston
My Lords, can the Minister say whether it is the case that we have a problem in trading with the Soviet Union because of a lack of facility with the Russian language? Is he aware that one cause of that is the considerable shortage of Russian language teachers in our schools?

§ Lord Young of Graffham
My Lords, it is true that we are not blessed with too many speakers of the Russian language. Increasingly the commercial language of the world is English and many of these transactions take place in our language.

Lord Campbell of Croy
My Lords, can the Minister say whether the press reports are correct that my noble friend is to lead a trade mission to Moscow in June this year? Whether the reports are correct or not, I am sure that he has the best wishes of the Members of the House in that mission. Is the Minister aware that a recent manifestation of perestroika which has helped good relations was the tour of a Soviet rugby team in Scotland where its excellent play, sportsmanship and success was admired and appreciated?

§ Lord Young of Graffham
My Lords, it is true that I am going to the Soviet Union and I will be taking a team of businessmen with me. I shall in fact be holding my third series of meetings this year with their trade Ministers. That shows that the tempo of our talks is certainly rising. As regards sporting activities in Scotland, I hear what my noble friend says.

§ Lord Annan
My Lords, can the Minister say whether the level of the rouble is one of the reasons impeding trade between this country and the Soviet Union? Some people have found the level to be unreasonably high.

§ Lord Young of Graffham
My Lords, I suspect that there are many impediments to trade, one of which is the shortage of currency. I suspect that that is more important than the rate of exchange.