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Balance Of Payments

Volume 226: debated on Thursday 17 June 1993

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4.

To ask the Chancellor of the Exchequer if he will make a statement on the balance of payments.

The visible deficit was much the same in the first quarter of this year as in the fourth quarter of last year. Some deterioration after the movement of the exchange rate is to be expected, but our trade prospects are now very good.

Is the Minister aware that the real story is that imports are growing at twice the rate of exports? Would he care to reflect on the report published this week by the Bank for International Settlements which concludes that the Government's failure to invest in manufacturing industry means that there is not enough manufacturing capacity to support even our domestic markets when demand is low. A total of 44 per cent. of manufacturing jobs in the west midlands have been lost since the Government took office. Does not that show how short-sighted the Government have been to ignore the importance of manufacturing industry?

We have not ignored the importance of manufacturing industry or manufacturing companies. After all, if the hon. Gentleman had looked at the Financial Times' survey of the top 500 companies in Europe, he would have seen that 10 United Kingdom companies were in the top 20 for profitability. That reflects their investment, as does the fact that our export volumes are at record level.

As my right hon. and learned Friend is the 13th Chancellor in whose Question Time I have ventured to pose a question, may I confidently express the hope that he will have a happier tenure of office than his 12 predecessors? Before his officials and special advisers have time to bemuse him with contradictory economic theories and dogma, may I respectfully suggest that he should take a firm grasp of the basic proposition that if we had a large balance of payments surplus it would not matter if we had a large public sector borrowing requirement? In other words, the balance of payments is the critical statistic. So he was absolutely right in his Guildhall speech to stress the importance of helping British industry.

I am sure that my right hon. and learned Friend the Chancellor of the Exchequer will be very grateful for my hon. Friend's good wishes, especially as they come from such a wealth of experience, and for the advice that he has given.

On the question of growth in our manufacturing base, can we be told when the Chancellor will set out the detailed policy changes which will demonstrate a change in the substance rather than merely the style of his prececessor? Does he not accept that giving more television interviews than his predecessor, or the fact that he has spent most of his life in the midlands, do not in themselves add up to a new industrial policy?

We shall set out the changes at the usual time, and particularly in the Budget.

Can my right hon. Friend confirm that our exports to non-EC countries have grown in the past year? Should we not all be congratulating British business and business men for their export achievements?

Yes, indeed. I echo my hon. Friend's congratulations. In value terms, exports, excluding oil and erratics, to the whole world were 12½ per cent. higher in the first quarter of this year.