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Balance Of Payments

Volume 938: debated on Monday 7 November 1977

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asked the Secretary of State for Trade what are the latest balance of payments figures; and what further action is proposed to increase exports and reduce imports.

In the third quarter of 1977 there was a record surplus on the current account of £526 million. My Department will continue to be closely involved in the effort to improve our share of both home and export markets.

I congratulate my right hon. Friend on those figures and the tremendous improvement since March 1974. Will he, however, avoid complacency and look again at the request made by the TUC and the CBI to introduce selective import controls? Meanwhile, since the British car and television component manufacturing industries are working below capacity, will he consider the launching of a "Buy British" campaign?

I am grateful to my hon. Friend for his congratulations, but they are due to British industry, in respect of both goods and services, for achieving a remarkable transformation in our balance of payments.

The hon. Gentleman said "In spite of the Government ". It was his Government who permitted the country to run into serious balance of payments deficit, even before the oil price increase. There are a number of areas in which we already use selective import controls, but I and the Government would oppose any attempt to use the term "selective controls" as a guise for covering a policy of general import controls, which is an idea we reject. As for buying British, we have encouraged British industry to locate its purchases in the United Kingdom where possible.

On the question of cars, which we discussed earlier, private consumers will be greatly influenced by the availability of British cars. That is a much more impor- tant factor than any "Buy British" campaign.

Does not the right hon. Gentleman recognise that a surplus on current account is always and necessarily balanced by an export of capital to the same value? Is that his intention?

The right hon. Gentleman's questions about the operation of exchange control in this country are for my right hon. Friend the Chancellor of the Exchequer and not for me. As for the equation he makes, it is also true—as the other part of the equation to which the right hon. Gentleman frequently refers—that the current account will be greatly affected if there are not the capital movements necessary to finance it.

Although I welcome the obvious advances that have been made in exports, is my right hon. Friend aware that at Aintree the Courtaulds company is about to lay off 1,800 workers in the textile industry unless it receives a temporary employment subsidy? That is serious for an area like Merseyside, where there is an unemployment rate of 12·1 per cent. Reverting to a previous Question, does it not mean that the Multi-Fibre Arrangement must be renegotiated at the earliest moment, the workers kept at work and assistance given to them?

Matters regarding temporary employment subsidy are for my right hon. Friend the Secretary of State for Employment. As for the renegotiation of the Multi-Fibre Arrangement, Courtaulds is fully aware of the Government's intention in that respect. Indeed, we have had many messages of support from Courtaulds for the attitude we are taking in the renegotiation.

Will the Secretary of State acknowledge that the balance of payments is particularly vulnerable to any dramatic increase in the price of imported raw materials? Will he, therefore, tell the House when he intends to conduct an in-depth survey into ways and means of import substitution?

Such a survey is being conducted at the moment by the sector working parties under the aegis of the NEDC. It is true that changes in the price of raw materials can greatly affect the balance of payments, as we saw with the increase in the price of oil.