§ Mr. Teddy Taylorasked the Secretary of State for Trade and Industry what are the basic differences between the means of calculation used in determining trade deficits in manufactures with the European Economic Community as set out in his answers to the hon. Member for Southend, East on 14 May, Official Report, column 473 and on 20 May; which form of calculation reflects most accurately the trade situation; whether his Department uses the overseas trade statistics at the customary form of calculation; and if he will make a statement.
§ Mr. ButcherThe figures quoted in the reply dated 20 May were on the Overseas Trade Statistics (OTS) basis, as the question stipulated; those in the earlier reply were on the balance of payments (BOP) basis.
Detailed monthly trade data are compiled on the OTS basis by Her Majesty's Customs and Excise; the value of imports, but not exports, includes the costs of freight and insurance. These figures thus overstate the value of imports compared with exports and the "crude" balances derived from them are affected accordingly—surpluses are smaller and deficits bigger. The insurance and freight charges, where due to non-United Kingdom residents, are transferred to the appropriate headings in the invisibles account when the current account of the balance of payments is compiled.
Where possible, visible trade figures are given on the BOP basis, derived by my Department from the OTS figures, but in less detail. BOP figures of trade with the European Community are available quarterly.