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Balance Of Trade

Volume 982: debated on Monday 31 March 1980

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asked the Secretary of State for Trade what plans he has to meet the Trades Union Congress regarding the United Kingdom balance of trade.

I meet representatives of the TUC frequently in my capacity as a member of the National Economic Development Council, and this topic is often discussed in that forum.

Does not the right hon. Gentleman agree that the TUC is right to be alarmed about the massive surge of imports, and that the Budget, by its appalling neglect over the years ahead of the topic of industrial investment, will make the matter worse? What urgent action will the Government take to protect our highly vulnerable motor car and textile industries?

The only way in which either of those industries can succeed is by becoming more competitive. There is no way in which controls will improve the position of the motor car industry or the textile industry, much of which is highly efficient. If the hon. Gentleman thinks that barriers would make those industries more efficient, rather than less, I cannot agree with him.

Do not more than half the questions on the Order Paper and my right hon. Friend's detailed answers, and his pronouncements on tufted carpets, man-made fibres, footwear and even Channel-hopping fares, and so on, admit the fundamental principle of the need for protectionism—it is effective—subconsciously or consciously? Therefore, may we assume that my right hon. Friend's only objection to applying it more generally is fear of retaliation?

By no means do I admit the need for protectionism. What I admit is the need for fair trade. Protectionism is very different from saying that firms must compete in an open market fairly with the products and the firms of other nations. They are two different things.

Does the right hon. Gentleman agree, if he accepts the concept of fair trade, that there are many nations—for example, Japan—that do not have strict import controls but hedge round the products coming into their countries in such a way that there are effective import controls? Could we not learn a lesson from some of our competitors and do something similar in the interests of our people?

The hon. Gentleman referred specifically to Japan. About one-third of everything that we import from Japan is already under some kind of restraint.

The hon. Gentleman's mathematics are brilliant.

The industry-to-industry understandings on motor cars have been very successful. The Japanese have held to them. It is not a one-way process.

When my right hon. Friend meets the leaders of the TUC again, will he point out the profitability to Britain of our trade with the developing world, with which we enjoy a substantial balance of payments surplus, and therefore point out to them that any action taken to control imports from that source will not be in our national interest?

A great volume of goods that we import from the developing world is already under some kind of import restraint. We do not wish to extend this process further than necessary. We have a substantial surplus on our trade with the developing countries, and it is profitable trade for us. Trade is a two-way process, not a one-way process. We cannot have it all our way.

The Secretary of State referred to our relationships with Japan. He will be aware of the considerable obstacles put in the way of British exporters seeking to exploit the Japanese market. Some obstacles to the whisky industry were erected recently. What is the right hon. Gentleman doing to create the same opportunities for British exporters in Japan as many Japanese importers have in this country?

I discussed this matter not more than two months ago in Tokyo with my opposite number there. I discussed with Japanese Ministers the raising of the whisky threshold. But that is not a non-tariff barrier erected by the Japanese. The position changed because the sterling-yen exchange rate changed. I shall continue to raise with the Japanese all those areas in which they are, by one means or another, keeping out British goods.