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UK Trade Balance

Volume 459: debated on Thursday 3 May 2007

The UK deficit on trade in goods and services was £54.1 billion in 2006. Total UK exports, including goods and services, were £370 billion in 2006, up by more than 13 per cent. on 2005. The UK’s exports of services were £126 billion in 2006, up 10 per cent. on the previous year, and the UK’s surplus on trade in services increased by almost 22 per cent. between 2005 and 2006 to £29.6 billion. In 2005, the UK was second only to the United States in terms of both its inward and its outward foreign direct investment stocks, despite the fact that the UK accounts for only about 1 per cent. of the global population.

The Minister has given figures that show things being turned around, but has he noticed a trend, in that the UK trade deficit widened in 2007? In fact, in February, it stood at £4.3 billion. Furthermore, our trade deficit with the EU widened further to £2.7 billion, with exports falling by £100 million, and imports rising by £300 million. That is of extreme concern to the United Kingdom. Will the Minister tell us what the Government propose to do about that?

Actually, investment in manufacturing has increased. In terms of international comparisons, we stabilised this year at about 2.7 per cent. of gross domestic product; trade figures in the United States are over 6 per cent. of gross domestic product; in Spain, they are 8.8 per cent.; in Portugal, 9.4 per cent.; and in Greece, 9.6 per cent. Throughout the whole period of Conservative government, the deficit was over 5 per cent. of GDP, so we have brought that deficit down, turned it around, and we have the most successful economy in the G8.