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Column 735

McNair-Wilson, Sir Michael

McNamara, Kevin

Madden, Max

Mahon, Mrs Alice

Marshall, Jim (Leicester S)

Maxton, John

Maxwell-Hyslop, Robin

Meale, Alan

Michael, Alun

Michie, Mrs Ray (Arg'l & Bute)

Miller, Sir Hal

Morris, Rt Hon A. (W'shawe)

Morris, M (N'hampton S)

Mowlam, Marjorie

Oakes, Rt Hon Gordon

Pike, Peter L.

Radice, Giles

Rees, Rt Hon Merlyn

Riddick, Graham

Robertson, George

Rogers, Allan

Ross, Ernie (Dundee W)

Rost, Peter

Salmond, Alex

Sayeed, Jonathan

Shelton, Sir William

Shepherd, Richard (Aldridge)

Shersby, Michael

Skeet, Sir Trevor

Skinner, Dennis

Smyth, Rev Martin (Belfast S)

Spearing, Nigel

Speller, Tony

Spicer, Sir Jim (Dorset W)

Steel, Rt Hon Sir David

Stott, Roger

Tapsell, Sir Peter

Taylor, Matthew (Truro)

Thompson, D. (Calder Valley)

Thompson, Patrick (Norwich N)

Thurnham, Peter

Turner, Dennis

Waller, Gary

Wareing, Robert N.

Watson, Mike (Glasgow, C)

Welsh, Andrew (Angus E)

Widdecombe, Ann

Wigley, Dafydd

Williams, Rt Hon Alan

Wolfson, Mark

Woodcock, Dr. Mike

Tellers for the Ayes :

Mr. Barry Field and

Mr. David Evans.

NOES

Beggs, Roy

Brazier, Julian

Carlisle, John, (Luton N)

Clark, Sir W. (Croydon S)

Emery, Sir Peter

Glyn, Dr Sir Alan

Gordon, Mildred

Gow, Ian

Knight, Dame Jill (Edgbaston)

McNamara, Kevin

Maginnis, Ken

Molyneaux, Rt Hon James

Oppenheim, Phillip

Ross, William (Londonderry E)

Smith, Tim (Beaconsfield)

Stanbrook, Ivor

Viggers, Peter

Tellers for the Noes :

Mr. Bill Walker and

Mr. Clifford Forsythe.

Question accordingly agreed to.

Bill ordered to be brought in by Mrs. Teresa Gorman, Mr. David Evans, Mr. Gary Waller, Mr. John Lee, Mr. Ron Davies, Mr. Tim Devlin, Mrs. Ann Taylor, Mr. Jim Marshall, Mr. Graham Riddick, Sir Michael McNair-Wilson, Mr. Den Dover and Mrs. Alice Mahon.

Tax Relief for Household Employers

Mrs. Teresa Gorman accordingly presented a Bill to allow tax relief on earned income in respect of the earner's employment of home helps, child minders and other workers in cases where such employment is essential to the earner's availability for work ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time upon Friday 30 March and to be printed. [Bill 91.]

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Opposition Day

[10th Allotted Day]

Balance of Payments and Interest Rates

Mr. Speaker : I must announce to the House that I have selected the amendment in the name of the Prime Minister.

4.5 pm

Mr. Gordon Brown (Dunfermline, East) : I beg to move,

That this House condemns the Government's economic failure which has brought the highest interest rates, the worst trade deficit and the highest inflation of the United Kingdom's major competitors ; is concerned at the rising number of business bankruptcies and redundancies and at the investment cutbacks in the run-up to 1992 ; deplores the further reductions in support for regional investment, research and development, and export help ; and calls for an investment budget for industry and training.

Last Wednesday, the trade deficit doubled to £1.8 billion--a deficit of £1.5 billion in manufacturing and a deficit of more than £1 billion with Europe. Even after taking into account all the Government explanations, there is a deficit over the whole year of £1 billion with France, £2 billion with Italy, £3 billion with the Netherlands, £4 billion with Japan and more than £9 billion with Germany.

The deficit is not just in traditional industries, such as clothing and textiles--in which it was more than £1.5 billion--but in the high- technology industries too. For example, in electronics there was a deficit of £1.5 billion, in computers it was more than £1.5 billion, and in information technology it was more than £3 billion. The deficit announced last Wednesday is bigger and worse, as a share of our national income, than that of any competitor country. That deficit reflects the huge fall in the British share of world industry, despite all the ministerial claims that the position has stabilised. It is a deficit which has arisen because, during the past 10 years, manufactured imports have risen twice as fast as manufactured exports. It is a deficit that reinforces the need for Labour's approach : an industrial policy to invest in training, research and development ; a policy in the regions to ensure exchange rate stability, by opening negotiations to join the exchange rate mechanism ; a budget for investment to help bring interest rates down ; and a commitment to a British export drive.

Instead, we have a deficit with western Europe and even with some eastern European economies, such as Russia, East Germany, Hungary, Romania and Czechoslovakia, but not, of course, with Bulgaria and Albania--at least, not yet.

The deficit was dismissed and written off in 1987 as due to freak figures, a blip or changes in the customs procedures. As it gathered pace in 1988, it was dismissed as the result of cross-Channel strikes and a sign of growing investment in Britain. Even when the deficit reached £20 billion in 1989, it was explained away as due to excess demand, then to excess investment, and to a surge in investment. It is a deficit that has already brought the traditional Government response to embarrassing eco- nomic problems--the proposal to cut the publication of the figures. No doubt, after 23 changes in the relevant definitions, this problem can be made to disappear too.

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Column 737

Last Wednesday we were told that the deficit was due to "erratics". That is the special factor in January--erratics in our trade. When the import figures are published next month, no doubt the special factor will be that Perrier is back.

The Secretary of State for Trade and Industry believes that, by means of the market, the deficit is self-correcting. The Minister for Industry believes that Labour is exaggerating. The Under-Secretary of State for Corporate Affairs tells me, in the months that the deficit doubles, that it is improving by leaps and bounds. The explanation is --erratics. however, the real erratics are lined up before us. In case Ministers want to use the term again, I refer them to a dictionary definition of "erratics" :

"geological anomalies the stranded relics from a bygone age." What does the Under-Secretary of State for Corporate Affairs say about the deficit? On 1 February, speaking to that most challenging of audiences, the Cheltenham Conservative Association Patrons Club, he said :

"Labour has got its timing wrong again. In the last six months Gordon Brown has gone on and on about the balance of payments, totally oblivious to the fact that the figures have been improving by leaps and bounds."

After another year of similar monthly improvements by leaps and bounds, we really shall be finished. I must caution him about talking in the grand language of leaps and bounds, when it was a mere blip that proved to be the undoing of the last Chancellor of the Exchequer.

The trade deficit is not a temporary difficulty of the last few months. It is a major problem that has been created over the last 10 years, as Britain moved from a manufacturing surplus of £2.7 billion to a deficit of £18 billion.

Mr. Tim Smith (Beaconsfield) : Why does the hon. Gentleman not quote some of the other figures that were included in the official statistics published last week? Why does he not tell us about the underlying trend-- that imports are no longer rising, while exports are rising by 15 per cent. in volume? How much better than that does he think a Labour Government could do?

Mr. Brown : I am genuinely surprised that the hon. Member for Beaconsfield (Mr. Smith) should believe that a £20 billion deficit last year and an £18 billion deficit this year represent a triumph. When I looked at the figures for last month, I found that imports were increasing while exports were decreasing, that manufactured imports were increasing and that manufactured exports were decreasing. If the hon. Gentleman regards a trend that will leave us with a £15 billion deficit in manufactured goods as a success story, that shows just how limited the Conservative party's ambitions now are.

Never in our trading history, until this Government, have we recorded a manufacturing deficit. Never have so many industries has such big deficits for so long, with the result that we are falling behind many of our major European competitors. Instead of a Secretary of State for Trade and Industry, we have a Secretary of State who is promoting Japanese trade and German industry. We want a Secretary of State for British trade and British industry.

The deficit reflects an even bigger problem that this Government have failed even to address during the last 10 years. While manufacturing employment has risen in

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Japan and fallen far more slowly in other countries, it has fallen by 27 per cent. in Britain. Moreover, manufacturing output, which rose by 30 per cent. in America and 40 per cent. in Japan, has risen by only 13 per cent. in the United Kingdom during the last 10 years. Manufacturing output has fallen throughout the last 10 years in metal goods, mechanical engineering, motor vehicles, drink and tobacco, textiles, man-made fibres, clothing, footwear and leather--all that, in the old workshop of the world.

Perhaps the greatest failure of all is that manufacturing investment has moved up only very slowly during that 10-year period, while it has risen far faster in all our competitor countries, including a 40 per cent. rise in Japan.

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