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Volume 165: debated on Wednesday 17 January 1990

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To ask the Secretary of State for Trade and Industry if he will make a statement on the actions he is taking to improve the levels of British exports.

One year ago today my noble Friend Lord Young of Graffham launched a package of measures offering a wide range of help, advice and support to firms at each stage of the exporting process. Staff in the embassies and regional offices are always available to give information and advice.

I am encouraged to note that the volume of non-oil exports in the three months to November 1989 was 13 per cent. higher than a year earlier.

My right hon. Friend's news is much appreciated. He will no doubt recognise the importance of the 20 per cent. increase in exports last year, and he is to be congratulated on his recent announcement on the Export Credits Guarantee Department. Is he aware of the importance of the export credits guarantee to the north-west of England? Can he give us a timetable for the implementation of his plans?

I am glad that my hon. Friend recognises the remarkable export performance of British industry in the past year. It represents a remarkable gain in our share of exports, to which the whole House will wish to pay tribute.

On the ECGD, my announcement before Christmas will have the effect of giving added impetus to the credit insurance industry in the long term by making sure that credit insurance will be available to our exporters within and without the Community. It will be necessary for legislation to be introduced, but I cannot estimate when it will be introduced. Apart from that difficulty, the Government will proceed with urgently required plans for the future of the ECGD as soon as possible.

What would be the impact on unemployment nationally if the Government's export promotion allowed the balance of payments to trade in surplus?

I could not be expected to answer that off the top of my head. The balance of payments includes the capital account, which produces a large amount of inward investment—about £1·5 billion from Japan alone last year—and which in turn is a major contributor to United Kingdom employment. The calculation that the hon. Gentleman seeks is somewhat wider than he would like to acknowledge.

Does my right hon. Friend agree that exports will increase in the years to come as the significant investment in manufacturing, domestic and foreign, comes on stream? Does he further agree that this is a sign of great confidence in our economy, and that if Opposition Members truly wished to support their constituents and their jobs, they would welcome that inward investment instead of carping about it, as they often do?

My hon. Friend is right. In addition to the 13 per cent. volume increase in exports in the past 12 months, export order books have been showing a distinctly healthy trend, even in the past few months. British exports in the future will embarrass Opposition Members because they never like to hear good news.

Will the Secretary of State confirm that we have not only the biggest trade deficit of all our European competitors but the highest interest rate and the worst inflation, and that that is hitting exporters? What will he do to prevent Britain from becoming the only country in Europe, in the run-up to 1992, according to CBI figures, in which manufacturing investment this year is falling?

I would not accuse the hon. Gentleman, in the words of the hon. Member for Kirkcaldy (Dr. Moonie), of being sufficiently clever to sit on his hands and beat his breast at the same time, but he was attempting to do something very similar in that supplementary question. Investment is keeping up extremely well and, in addition to the list of factors that he suggested, we have the lowest taxation on industrial payroll companies. Why does he wish to add a 0·5 per cent. payroll levy, which would raise a further £1 billion from British industry, thus severely debilitating it at a time when he says British industry needs help not hindrance?

Is my right hon. Friend aware that we must increase our manufacturing exports and that, to achieve it, the Government cannot ignore the need for a strategy for manufacturing industry? Is he further aware that unless we increase our manufacturing exports, our balance of trade deficit will continue, and there will be ongoing pressure on the pound, which will contribute to inflation and the country's economic problems?

We have a strategy for manufacturing industry, and that is to let companies get on with the job without interfering with them. I suspect that that played a large part in the highly successful performance of British exports to which I referred.