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Information Technology

Volume 165: debated on Wednesday 17 January 1990

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To ask the Secretary of State for Trade and Industry what is the current balance of trade in information technology with Japan.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs
(Mr. Eric Forth)

According to the latest figures available from the business statistics office, the United Kingdom had a trade deficit with Japan in manufactured products of the electronics and information technology sector of £1·8 billion in 1987 and, provisionally, £2·2 billion in 1988.

Why is a major competitor like Japan ahead in production, and why are we, who are often in the forefront in invention, lagging behind? The Government appear to be unable to resolve that major problem. Is the Minister aware that there is a major deficit with Japan, much of it in high-technology goods? Does not that require urgent action by the Government and why do they not get on with it?

The hon. Gentleman highlights the important phenomenon that all the major OECD countries, except Japan, have a trade deficit in information technology. The sad truth is that most countries are unable to compete with Japan and certain other countries in that sector, partly because the Japanese have been very successful in identifying the sector and promoting it. Our export performance, which, as my hon. Friends have pointed out, is excellent, is across a wide range of goods. I see no incompatibility between our excellent performance across the range and the Japanese specialising, for example, in information technology.

Does my hon. Friend share my disturbance at the deficit with Japan? Will he note that in my constituency several companies in this sector are selling successfully into the Japanese market, which seems to show that what companies need most is not Government assistance but being based in Esher?

I congratulate my hon. Friend on the fact that companies in his constituency are capable of developing and making products in this sector which can be exported everywhere, including Japan. There are many such cases throughout the United Kingdom. I see no reason why, with a liberal economic regime and liberal Government policies, a low tax base and a skilled and trained work force, companies should not be able to compete in the sector and export throughout the world, including Japan.

Will the Minister try to answer the question posed by my hon. Friend the Member for Ealing, Southall (Mr. Bidwell)? What does his Department intend to do about the problem other than beating its breast and sitting on its hands?

A moment ago I told the House what it is appropriate to do: we shall continue to provide an invigorating economic climate in which companies are free to make their decisions about investment, to develop their products and to seek the most effective markets for them. I hope that the Government will not propose a latter-day interventionist policy of the sort which people throughout eastern Europe have realised, belatedly but welcomely, is a total failure. We hope to continue the excellent trend of policies that we have established over the past 10 years to liberate our industries and give them every opportunity to continue to succeed.