According to the World Bank, full trade liberalisation could bring up to $300 billion of benefits and contribute to reducing world poverty. There must be no going back to protectionism. Reaching a Doha trade deal is a crucial step. Europe and America must urgently make progress on agriculture, and further offers on industrial goods by India and Brazil are needed. That would help both the developed world and developing countries.
Growth in world trade is manifestly crucial to the UK. The most recent statistics show that the UK has taken the lion’s share of foreign direct investment. What can my right hon. Friend do to ensure that regions such as the east of England continue to benefit from that?
I am grateful to my hon. Friend. Foreign direct investment in Britain from the rest of the world has been very high indeed. Of company headquarters located in Britain over the past 10 years, about 400 have been located from the rest of the world as regional or world headquarters to Britain. In France, Germany and Ireland the figure is fewer than 100, so we have done well. Maintaining our rate of growth in exports is crucial, as is maintaining business investment at a high level. It is by these means that we will maintain and extend the industrial and services sector of the economy, and hopefully bring additional jobs to my hon. Friend’s constituency.
Can the Chancellor tell us whether UK trade has been affected at all in recent years by the payment of bribes on defence orders? Can he give us an assurance that since the legislation banned bribes in 2002, there has been no Government connivance by any Department, including his own, in the payment of such bribes?
It was our legislation that banned something that had been a practice under previous Governments, and it was our party that led the way to making that change. On trade—I know the hon. Gentleman wants to know the figures illustrating the growth in trade—exports are growing by 6½ per cent. this year. We expect them to grow by 5¼ to 5¾ per cent. next year. That shows an economy that is far more balanced than in previous years.
My right hon. Friend has already pointed out the crucial nature of achieving a positive end to the trade round in Doha, but as the American congressional mandate runs out in July, how optimistic is he that that great prize can be claimed?
I am grateful to my hon. Friend, who has taken an interest in both the trade deal and in what is happening as a result of trade to developing countries. I believe that there is still a window of opportunity for a trade deal. A meeting of all the major negotiators is to be held next Wednesday, and it is incumbent on all the major parties—that is, Europe, America, India and Brazil—to see what they can do in the next few days to move matters forward. The failure to reach a world trade deal will allow protectionist forces to grow, and I hope there will be all-party support for pushing forward with moves that will make possible a trade deal in the not too distant future.
The Chancellor knows that one of the sectors in Britain that struggled most in world trade is manufacturing. When he took over, the manufacturing trade deficit was £7 billion. Last year it was £59 billion. It is hardly surprising that 1.25 million jobs in manufacturing have been lost in his 10 years at the Treasury. While he is in elegiac mode at the end of his term at the Treasury, can he explain whether that is a deliberate result of his policy, or whether it has been an accidental attack on British manufacturing, for which he would now like to apologise?
The hon. Gentleman is conveniently forgetting that in two recessions under the Conservative Government, not 1 million but 3 million manufacturing jobs were lost, and that manufacturing went down from 7 million to 4 million during the period of a Conservative Government. He also knows that in every advanced industrial country, a restructuring is taking place—in America, the rest of Europe and Japan—because there is a shift of manufacturing activity to China and Asia. He knows also that Asia is now out-producing Europe.
The question is which economies are going to adjust, modernise, reform and have modern manufacturing strength to enable them, if not to create additional jobs, to have additional wealth as a result of manufacturing industry. I believe that in aerospace and pharmaceuticals, in information and technology and the creative industries, and even in the modernisation of industries such as steel, we are showing that by high levels of investment—and now high levels of training, with apprenticeships and new people coming into these industries with skills—we can compete with the best in the world. I hope that there will be all-party support for building modern manufacturing strength.
Nearly 40 top international companies have their UK headquarters in Swindon, thus creating an economic powerhouse in our part of the south-west. Does my right hon. Friend agree that in the week when it was reported by the World Bank that Russia was on track for high gross domestic product growth and China’s trade surplus with the EU was nearly £160 billion, it is absolutely vital that, as Prime Minister of this country, he continues his strong economic record and work with the global economy?
I am grateful for the work that my hon. Friend does to bring new jobs and new industry to Swindon. As a result of the policies that are being pursued, the growth rate in Swindon has been higher than in the economy as a whole. I can assure her that we will not follow the failed policies of the Conservative party. We will not allow interest rates to get out of control, we will not allow inflation to get out of control, and we will not cut public investment in universities, in the new deal or in apprenticeships, as the Conservatives threaten to do. We will ensure that we have balanced economic growth in this country.