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Growth Prospects

Volume 932: debated on Thursday 26 May 1977

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asked the Chancellor of the Exchequer what are the prospects for export-led growth in 1977.

Forecasts of the growth of exports were given in Tables 4 and 5 of the Financial Statement and Budget Report. The most recent trade returns show an encouraging growth in volume of our exports.

Is it not the case that the Treasury forecasts a continuing fall in our share of world trade in manufactures and a continuing rise in import penetration? Might this not have something to do with the fact that we are continuing to spend money from reserves to prop up the pound when our industrial costs are rising faster than those of anyone else?

My hon. Friend is quite right. There has been a fall over the years in our share of manufactures. But that has very little to do with the reserves or with the level of the pound; it is caused mainly by the lack of productivity by British industry and our failure to compete with our major competitors.

In the context of export values and the current level of the £ sterling, if the Bank of England ceased its intervention straight away what does the Minister think the value of the pound would be tomorrow?

The hon. Gentleman does not expect me to answer a hypothetical question of that kind. The main thing, and what is most important, is that the currency rate should be stable. It is stable at the moment and that is of great benefit to industrialists and the majority of people in this country.