Trade Figures: Accuracy (Hansard, 12 December 1989)

The Paymaster General (The Earl of Caithness)
My Lords, while figures underlying the visible trade balance are fairly soundly based, figures for invisibles are less reliable.

§ Lord Peyton of Yeovil
My Lords, does not my noble friend think that it would be rather eccentric for the Government to continue to lend their authority to figures in which they do not have very much confidence? Will he particularly have in mind that it is the habit of some City commentators to pore over those figures rather like a Roman general of old pored over the entrails of a sacrificed chicken, and perhaps arrive at equally ill-founded conclusions?

The Earl of Caithness
My Lords, we have confidence in the visible balance. There is also the invisible balance, in the accuracy of which we have slightly less confidence. That makes up the current account balance. We then have to take into account the capital flows identified, which are large. In order to get the balance we have a balancing item, which is quite large. I believe that to be the reason behind my noble friend's Question. We are aware that this situation has led to some poring over the entrails, but I can reassure my noble friend that the Central Statistical Office and the Bank of England are working hard on this matter in order to get more accurate figures.

§ Lord Barnett
My Lords, however inaccurate the figures, can the Minister confirm that it remains the Government's policy to have those inaccurate figures in surplus some day? Indeed, is it not correct to say that the Government's policies are to reduce the amount to negligible if not nil proportions in order to get that surplus that the Government would wish to have? Can the Minister confirm that however long and painful it will be, and even if the efforts go beyond a general election, the Government will still wish to pursue a surplus on the balance of trade?

The Earl of Caithness
My Lords, we certainly would like to see an improvement in the current account deficit. I am sure that the noble Lord is aware of the good news regarding exports in the past year. We hope that next year's exports will also improve. In those circumstances the current account deficit should come down.

§ Lord Renton
My Lords, is it not true to say that even the invisible earnings figures are firm in parts because the earnings from banking and insurance are not merely estimates but are based on actual takings?

The Earl of Caithness
My Lords, my noble friend is right. Some parts of the invisible balance are more 1210 accurate than others. Interest, profits and dividends reflect on the capital, which is slightly less reliable.

§ Lord Orr-Ewing
My Lords, does my noble friend recall—or is he too young—that some 25 years ago a Labour Government actually won an election by bandying around a deficit figure of £800 million which we all had to fight on? When the true figure was published after the election had been won by Labour, the amount turned out to be £357 million. In those circumstances, the figure was doubly as bad in those days as it is now.

The Earl of Caithness
My Lords, I have to say that I do not remember the situation with quite the clarity that my noble friend does. Where figures are subject to revision, they are revised.

§ Lord Hailsham of Saint Marylebone
My Lords, did not Julius Caesar have the right way with sacrificial chickens?

The Earl of Caithness
My Lords, I cannot remember whether he did or not. I shall talk to my noble and learned friend about it later.

§ Lord Hailsham of Saint Marylebone
My Lords, he threw them into the sea.

Lord Bruce of Donington
My Lords, is the Minister aware that his confirmation of the general accuracy of the visible trade figures affecting this country and the outside world will certainly be well received? I am sure the noble Earl will agree that the figures are based on the trade and navigation returns, which in turn are derived from Customs and Excise. Generally speaking, I believe the figures are regarded by the Government as being accurate or reasonably accurate. Will the noble Earl confirm that we shall still receive figures from Customs and Excise despite any European legislation that might seek to require us to abolish this frontier requirement?

The Earl of Caithness
My Lords, I am grateful for what the noble Lord said about Customs and Excise for I have a special responsibility for it. I shall pass on the compliments of the noble Lord. He raised a very important point, because with 1992 matters will change. I can reassure the noble Lord that the European Commission is organising discussions on a replacement measurement system which could, for example, be linked to the control of VAT on inter-Community trade. Therefore we shall continue to have reliable figures.

§ Lord Peyton of Yeovil
My Lords, will my noble friend take note of the great satisfaction that we all register and the comfort we take from the fact that part of the accounts are good and reliable, in the same way as the curate's egg? Does the Minister agree that there is something amiss in accounts where the overall deficit is £14 billion and there is a balancing item as large as £12 billion? No auditor would sign accounts like that, or, if he did, he would go to prison.

The Earl of Caithness
My Lords, I admit that the situation is not what we would like it to be. That is why I hope that my answers have been slightly more accurate than the balancing item. I confirm to my noble friend that an enormous amount of work is being done by the Bank of England and the CSO to try to rectify matters for the future.