Trade Deficit (Hansard, 15 December 1992)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)
My Lords, the prospective trade deficit forecast for 1993 remains at £19.5 billion. The Government are committed to a sound macroeconomic policy which provides sustainable, non-inflationary growth. It means ensuring open competition in our domestic markets and in international markets, through a conclusion to the GATT round, reducing the burden of government through the deregulation initiative and low taxes in order to ensure that enterprise is not stifled.

§ Lord Peyton of Yeovil
My Lords, does my noble friend realise that her reply will be welcome for its contrast with the earlier reply which seemed to be almost incredibly detached from such an important matter? Does she realise that it will be even more welcome if it heralds a departure from the wooden and neutral attitudes which have characterised the Government's approach to industry and its problems for too many years?

§ Baroness Denton of Wakefield
My Lords, I must point out to my noble friend that my noble friend Lord Henley was asked about figures and replied about figures. I am delighted to confirm to my noble friend Lord Peyton that, as my right honourable friend the President of the Board of Trade said, he will intervene on behalf of industry but not in industry.

§ Lord Brougham and Vaux
My Lords, what is the car industry doing as regards our balance of payments?

§ Baroness Denton of Wakefield
My Lords, I am delighted to tell my noble friend that the automotive industry is one of our leading success stories. Exports of cars in September were at their highest level since records began and in 1994 we should see a surplus in that area.

§ Lord Stoddart of Swindon
My Lords, is the noble Baroness not aware that the figure of £19.5 billion is enormous? Will she say how it is to be financed? Does she not agree that we can reduce that enormous deficit 490 only by promoting our manufacturing industry as it has never been promoted before because that is the key to our economy, to success, and to prosperity?

§ Baroness Denton of Wakefield
My Lords, it gives me enormous pleasure to agree with the noble Lord, Lord Stoddart.

Noble Lords
Hear, hear!

§ Baroness Denton of Wakefield
We shall indeed promote the international competitiveness of our manufacturing industry which will mean that our products are also attractive to the purchaser in the home country. We shall tackle the problem from both ends. We shall be able to finance that deficit.

§ Lord Richard
My Lords, is the Minister aware that the prophecy of a £19.5 billion deficit for next year is a cause for shame rather than for triumph? Does she not agree that the reduction in Britain's manufacturing base and the consequent shortage of UK manufactured goods mean that any economic recovery in the near future will increase rather than diminish the trade deficit? Finally, since the Treasury's forecast for the balance of payments deficit for the whole of this year was £6.5 billion whereas the actual deficit for the first nine months was £8.8 billion, what faith can we have in her figures?

§ Baroness Denton of Wakefield
My Lords, I should draw to the attention of the noble Lord, Lord Richard, that my noble friend changed the wording of the Question so that we are looking forward at what can be done. The success of manufacturing industry and productivity in the UK compared with the record of our European partners means that those figures can be achieved.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that the success of industry depends on industry itself? It has to make itself competitive and, in price terms, capable of producing the quality and the right price. Does my noble friend agree that the only point at which the Government come into it is to make certain that they give full and proper attention to a correct settlement of the GATT negotiations instead of being too preoccupied with what might develop in Europe?

§ Baroness Denton of Wakefield
My Lords, I thank my noble friend. I believe that it is the Government's role to create a climate in which industry can carry out growth. We have got interest rates down by eight points; we have inflation under control; and we have also fought hard and retained the European fighter project.

§ Lord Benson
My Lords, does the noble Baroness agree that the sensible course would be to publish a White Paper defining the Government's strategy for industrial production? That would answer questions for Parliament and the public. The penetrating questions that have been asked could be dealt with efficiently in that way.

§ Baroness Denton of Wakefield
My Lords, I recognise the anxiety of the noble Lord, Lord Benson.
491 I shall certainly convey his remarks to my right honourable friend. We believe that our industrial strategy is defined. If communication of the message is less than good, we shall look at areas for improving it. Perhaps I may take the opportunity of saying that on an earlier occasion the noble Lord said that the DTI should act as a football manager. I assure him that we aim to win the world cup.

§ Lord John-Mackie
My Lords, does the noble Baroness realise that there is a £3,000 million deficit in our temperate food balance with abroad and that we are taking out 2 million acres of arable land at the same time? Does that sound like sense?

§ Baroness Denton of Wakefield
My Lords, I am sure that if the noble Lord were to ask that question of my noble friend at the Ministry of Agriculture he would get a very good answer.

§ Lord Mackay of Ardbrecknish
My Lords, does my noble friend agree that our success in modern industry is very pleasing indeed set against the problems that we undoubtedly have with the left-overs of the Victorian age? In particular, does she realise how successful the UK pharmaceutical industry has been? Is she aware that some of the world leaders in that industry are based in the UK and that it is an area in which we have a very considerable balance of payments surplus?

§ Baroness Denton of Wakefield
My Lords, I thank my noble friend for drawing attention to the changes that have taken place in British industry. Not only do we have a successful story in the pharmaceutical industry, but we also have a substantial net export of TV sets. The records and tapes industry should be congratulated. It moved from a £139 million deficit in 1989 to a surplus of £42 million in 1991. There are industries which are doing very well.

§ Lord Jay
My Lords, does the Minister agree that one way not to reduce the deficit is to destroy the British coal industry?

§ Baroness Denton of Wakefield
My Lords, one way not to help British industry would be not to have a competitive energy policy.

§ Lord Peyton of Yeovil
My Lords, will my noble friend bear in mind the suggestion of the noble Lord, Lord Benson, for a White Paper? Will she also have in mind the real need for unity in this country? There is nothing disreputable in seeking unity. For too long we have been divided on problems which threaten the existence of all.

§ Baroness Denton of Wakefield
My Lords, I believe that noble Lords have heard me say in the past that one of the great benefits of inward investment has been to prove the skills of the British workforce. We recognise those and that there is a need for communication with unions. It gives me great pleasure to say that my right honourable friend the President of the Board of Trade recently met with Mr. Scargill.