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Manufacturing Industry

Volume 115: debated on Wednesday 29 April 1987

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7.

asked the Secretary of State for Trade and Industry what is his latest estimate of the level of import penetration in the manufacturing sector.

For the year 1986, imports of manufactured products are estimated to have accounted for 34½per cent. of United Kingdom home demand.

Does the Secretary of State agree that an import penetration level for the manufacturing sector of nearly one third suggests that we are not as competitive as the Government claim in manufacturing, a view surely confirmed by the record deficit on manufacturing forecast in the Budget?

In fact, the hon. Gentleman is somewhat mistaken. Over half that total is accounted for by the import of material, either semi-finished, intermediate or capital, necessary for British manufacturing industry, for jobs and production at home. With regard to the pessimistic forecast to which the hon. Gentleman drew attention, in the final quarter of last year exports were up 6·5 per cent. and imports were up only 3·5 per cent. For the period December 1986 to February 1987, exports were up 2 per cent. and imports were actually down 3 per cent.

Is there not rather a lot of British hypocrisy in the talk about retaliation against imports when the European industrial tariff is actually higher than the Japanese industrial tariff and when so much of the European public sector is closed to Japanese or American penetration? Is it not rather odd to be demanding access for Cable and Wireless to the Japanese market, when the Japanese are not allowed into our market?

I do not know how appropriate it would be for me to be tempted to return to the subject of Japanese-United Kingdom trade on a question that does not actually relate to that topic. However, it has always been my view that the obstruction to our exports to Japan and the need to open up that market—to which my right hon. Friend the Secretary of State drew attention earlier—arises not so much from tariffs, but from the various obstructive devices that the Japanese interpose between our manufacturers and fair and proper access to their domestic market.

Do the Government recognise the tremendous continuing damage in many parts of the country, certainly in the west midlands, resulting from the high level of import penetration? Has the Minister abandoned the views that he used to advocate as a Back Bencher when he sought adequate protection for the British manufacturing industry? Has he finished with those views?

I am quite ready to let hon. Members assess what they think my views are from what I say. The level of import penetration which the hon. Member deplores, is, as I have said frequently, not within the control of the Government; it is the consequence of a variety of individual and corporate choices that are made seeking value and quality for money.

Does my hon. Friend agree that the high import figure shows that plenty of opportunities exist for British manufacturers if they care to take them? Will he support this by holding more "Better made in Britain" exhibitions?

Yes, what my hon. Friend says is perfectly right. We support "Better made in Britain" exhibitions. We are giving a research grant to the "Think British" campaign, and public purchasing is over 95 per cent. British sourced.

Does the Minister understand that the full implication of one of his previous answers is that the Government seem to have no responsibility for our balance of trade in manufactured goods? Is he aware that it was only under this Government that in 1983, for the first time, we had a balance of trade deficit in manufactured goods? Given that the deficit was nearly £6 billion last year and will be £8 billion this year, have the Government the remotest idea how this dreadful imbalance can be corrected?

Considering that the right hon. and learned Gentleman had the answer less than two minutes ago, presumably he is choosing deliberately to misrepresent what I said. The Government have no responsibility for the large and widely diffused mass of individual and corporate choices which account for the present level of import penetration. I said no more than that. If the right hon. and learned Gentleman cares to tell us what the Labour party would do to direct choice, we shall be interested to hear it.