asked the Secretary of State for Trade if he will make a statement on the latest figures for the United Kingdom's trade balance with the Common Market countries.
asked the Secretary of State for Trade what are the balance of trade figures with the EEC for the latest three-months period.
The visible trade deficit with the EEC Eight, on a balance of payments basis and seasonally adjusted, is provisionally estimated to have been £614 million in the fourth quarter of last year.
While not wishing to take up the time of the House rubbing salt into that wound, may I ask the Secretary of State to take this opportunity of explaining in clear words that when Britain leaves Europe we shall not turn our backs on Europe or be isolated from Europe, which are the current defeatist themes of the dispirited pro-Marketeers?
The hon. Gentleman knows very well that I have never taken the view at any stage—nor do I hold the view now—that if we decided at the end of the day, with the assistance of the British people, to withdraw from the EEC this would lead to a great disaster for our trade. I do not believe that. It would be a great mistake for people to try to conduct the debate on this matter in terms of bogies and scares of the most unconvincing kind.
Will the Secretary of State give us an assurance that he will cease his malevolent misinterpreta-of these figures, more epecially since the Foreign Secretary contradicts what he says, while all the other objective authorities do the same? Will he give us an assurance that if, as seems likely, the Government make a recommendation that the renegotiated terms are acceptable to them, he will have the guts to resign?
I am not sure what a malevolent interpretation is, but I will always listen very carefully to my hon. Friend on the subject of malevolence. I have said nothing so far in my answer about the interpretation. All I have given is a factual reply.
No, you have not.
If my hon. Friend will allow me to complete my sentence, I was saying that the figures for the last quarter of 1974 showed a trade deficit on a balance of payments basis with the EEC Eight of £614 million. I stick by those facts.
Since the right hon. Gentleman's Department recently informed the House that in 1974 as a whole one-third of our exports went to the EEC and one-third of our imports came from the EEC, does not this show that the problem of our trade deficit with the EEC is only part of the problem of our global trade deficit?
Yes, indeed. We have another absolutely major factor in our trade deficit, which is above all the price of oil. The oil deficit is greater than the EEC deficit. However, if we eliminate the oil trade—which according to some points of view it would be fair and reasonable to do—there is no blinking the fact that the greater part of our non-oil deficit is attributed to the deficit with the EEC or is accounted for by the EEC deficit.
Do not these figures show, upon any interpretation, that the rest of the EEC countries have as great an interest in retaining industrial free trade with this country as we have with them?
I think, on the basis of the experience of the last two years, that it is an undeniable fact that the EEC has found it much easier to get into the British market than British exporters have found it to get into the EEC.
Has my right hon. Friend noted two answers given to me last week, one of which showed that the proportion of our total deficit with the EEC and with the world was lower in 1974 than in the previous year and in 1969 and the second of which showed that from 1971 to 1974 our exports to the EEC more than doubled, representing a much greater increase than our exports to the Commonwealth, which increased only by 40 per cent.? Is not it a fact that if we withdraw from the EEC British exporters will be severely hurt and our balance of payments may not be any better than it is now?
I cannot accept the point made in the last part of my hon. Friend's supplementary question. I think that depends entirely on two factors: first, what kind of arrangements should be made with the EEC to cover our trade and, secondly, how much importance in the total mix we are to attribute to a given level of tariffs. These are obviously matters which we can discuss, although I do not think we should draw alarmist conclusions. The share of our deficit attributable to the EEC marginally decreased last year but only because we were faced last year with a fourfold increase in the oil bill. But that does not mean anything.
Will the Secretary of State tell us the facts concerning our invisible balances with the EEC? Did not the question of the hon. Member for Oxford (Mr. Luard), and did not the Secretary of State's answer a few days ago relate to the non-oil deficit? Is not it therefore irrelevant to make the point which the Secretary of State has just made?
I have always been very careful in the House to distinguish between the total deficit and the non-oil deficit. I do not think anyone can accuse me of making any attempt to confuse the two. I fear that many lion. Members on both sides have recently confused the two. I have done my best to sort it out in the most straightforward way. If people cannot bear the facts, I cannot help them.I think that some figures will be available soon as regards invisible trade with the EEC, but I shall get in touch with the hon. Gentleman.
asked the Secretary of State for Trade if he will undertake a detailed analysis of trade of the United Kingdom with the original six members of the Common Market.
Trade between Britain and the EEC is continually under review and, of course, detailed statistics are regularly published.
Does my right hon. Friend agree that the increase in the trade deficit to approximately £2,000 million has not only been against the trends forecast by some hon. Members but that one would have expected the opposite to take place bearing in mind the floating of the pound some years ago? Can my right hon. Friend suggest to the House any trends in trade with the EEC which account for this extraordinarily large deficit?
I can only help my hon. Friend in terms of the categories of trade in which there has been the principal deterioration. I have already told the House that the main categories in which we have suffered serious deterioration are food, steel, chemicals and across the whole range of what one might call semi-manufactures. There is not a clear pattern which emerges from this.
Are we to understand from the right hon. Gentleman's previous reply that he has no figures for the balance of trade in invisibles between this country and the EEC? In view of the way in which, by innuendo, he continually seeks to give the impression that since we joined our overall deficit with the EEC is worse than it would otherwise have been, will he confirm that he has no data which supports this view?
The hon. Gentleman must not attribute sentiments to me and then ask me to deny them. That is a frivolous approach to the question. I do not have with me figures of invisible trade with the EEC. I shall be happy to give those figures as soon as they are available. However, they are not collected on the same regular basis as we collect figures for invisibles globally.
Is my right hon. Friend's memory as good as mine, bearing in mind the selective sets of statistics which have been exchanged between both sides of the House, including the Minister, since half-past two? Does my right hon. Friend think, as I do, that no Minister in any Government has ever thought other than that entry to the EEC would be a difficult task and that benefit would come later rather than sooner?
I have the greatest respect for my hon. Friend and his memory, which I am sure is superior to mine on many matters, but what he has just said is not correct. I remember clearly how during the period of negotiation, members of the Conservative Front Bench proudly and confidently proclaimed that there would be great benefits for the British people. My right hon. Friend the Member for Battersea, North (Mr. Jay), in particular, was looked upon as being utterly ridiculous when he gave the figure of up to £1,000 million as the balance of payments deficit.
Does the right hon. Gentleman recognise that what the hon. Member for Kingston upon Hull, West (Mr. Johnson) said is essentially true, and that in his heart he must know it? I have just returned from a convention in Switzerland at the weekend which was attended by business men from inside and outside the Community and from North America, and not only they but their wives and families and most other people outside this country believe that if we leave the Community it will be seen by our friends round the world as the final folly of a once great nation.
There is undoubtedly a difference between business sentiments and the sentiments of the great majority of people in the country. But there was a difference also in Norway, and the predictions and gloom there turned out not to be justified.
Is not the outstanding fact which emerges from all the figures that, whereas we had virtually no trade deficit with the EEC Six in 1970, our trade deficit with the Six last year was almost equal to our whole non-oil trade deficit with the world?
In 1970 we had a very small deficit with the EEC. Last year we had a deficit of just on £2,000 million. The deficit with the EEC was equal to the whole of our non-oil deficit.
asked the Secretary of State for Trade what proportion of the deterioration in the trade balance with the original six members of the EEC since Great Britain's entry has been due to relative movements in exchange rates; and what steps he is now taking to improve the balance by taking advantage of the reduction in prices of British goods in Europe due to the exchange rate movements.
Our trade has been affected by a number of economic factors and there is no certain way of identifying the individual effect of movement in exchange rates. In qualitative terms, the sterling float has strengthened our competitive position in European markets and elsewhere. The Government and the British Overseas Trade Board have recognised the importance of this and have been urging exporters to examine their pricing policy to take advantage of the increased competitiveness both for themselves and the balance of payments.
Does my right hon. Friend agree that after a devaluation there is an initial deterioration of the trade balance, which he has pointed out with regard to Europe, but that it also provides the opportunity for greatly improved exports to the countries affected? Does not my right hon. Friend therefore agree that there are excellent opportunities for exports in Europe?
I hope that there are great opportunities for Britain's trade. Indeed, we have to make those opportunities because the present state of our trade, in spite of the recent improvement, is unsatisfactory, and we jolly well have to get back into balance. As for the initial effects of devaluation, it is difficult to get this question right because there has been a two-phase movement in the exchange rate in relation to the EEC. This was not a single-date devaluation but a float which began in June 1972. There was an initial fall of perhaps of 10 per cent. or more by the end of that year followed by relative stability and then further devaluation in 1973. We have now had some 16 months of relative stability in exchange rates, and I have yet to see the improvement in our export performance that we had hoped for.
In view of the right hon. Gentleman's contradiction of the Prime Minister's recent remarks, will he say whether the disposition of collective irresponsibility in commenting on EEC matters has now begun?
The hon. Gentleman must try to do better than that.