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Manufacturing Industry (Exports)

Volume 986: debated on Monday 16 June 1980

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asked the Secretary of State for Trade if he is satisfied with the export performance of Great Britain's manufacturing industry.

Although export volume has held up very well, in spite of the lack of buoyancy in world trade, it is not part of my job to be satisfied or complacent.

Has not British price competitiveness dropped alarmingly against that of the Japanese, Americans and West Germans? Is not current Government policy of a strong pound and high interest rates working against British exporters? Will the Secretary of State agree that it is likely that this winter a major British company will go bankrupt unless policy changes are made?

Our competitiveness has been seriously eroded in the past two years, and the movements in world currencies, which have meant a strengthening of sterling, caused mainly by the security of North Sea oil, have produced that result. However, our export volume has stayed remarkably stable. It has held up very well indeed at a time when there is a lack of buoyancy in world trade.

In reiterating what the Minister said, should we not remind the British public and the Opposition that our export achievements as a nation have been magnificent, and that we have been unduly modest about them?

I agree entirely. There is no other major nation that is exporting as much as 30 per cent. of its gross domestic product.

Will the Secretary of State now admit that if interest rates continue to remain high, the pound stays overvalued, the rate of inflation remains high internationally, and industrial investment continues to decline, there will be no way in which British firms can restore their competitiveness in the next two years?

The best way to restore the competitiveness of British industry is for industry to increase its productivity and ensure that wages do not continue to outstrip production. Generally, industry must make products that the world wants to buy. There is no collection of policies that the Government could follow that would make these factors any less important.

Is my right hon. Friend aware that there has been much criticism of the Export Credits Guarantee Department over its operations in Zimbabwe? It appears that the ECGD does not give as advantageous terms to British exporters as those received by competing countries such as France and Germany.

If there are any complaints about the ECGD's facilities for Zimbabwe I hope that my hon. Friend will bring them to my attention. Generally, the ECGD has the highest reputation among British industry and throughout the world. If there are any particular problems, I hope he will let me know them.