The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): The United Kingdom has recorded a deficit on trade in manufactured goods in each year since 1983, but since 1979 the volume of manufactured exports has doubled.
Mrs. Mahon: Is not the record of deficit after deficit, year after year, an appalling indictment of the Government? Contrary to what the Government would like the public to believe, is it not true that the Conservative party is neither the party of trade nor, as the record shows, the party of industry?
Mr. Lang: The hon. Lady is talking nonsense. The United Kingdom's capacity to trade successfully internationally has been transformed in recent years. It is the fifth largest trading nation on the face of the earth. The volume of manufactured exports has doubled since 1979, and we export more per head than either Japan or the United States. That is the product of the increased competitiveness achieved by the Government.
Mr. Bernard Jenkin: In assessing the United Kingdom's manufacturing performance since 1979, is not it important to take into consideration the fact that the industrial base that we inherited from the last Labour Government had perhaps 30 or 40 per cent. obsolete capacity? Is not our economic and industrial performance the envy of our European partners, and is not that put at risk by the prospect of a Labour Government?
Mr. Lang: My hon. Friend is right. The great tragedy is that, during the 1960s and 1970s, under socialist Governments, Britain became so uncompetitive that we failed to prepare for the emerging manufacturing nations. The problems that were ignored in those days, such as nationalised industries being propped up by massive subsidies, overmanning, demarcation disputes and appalling industrial relations that brought the country to a halt, ended up putting us in the hands of the International Monetary Fund. They were at the root of the difficulties that this Government had to clear up in the early 1980s. We are now out there competing successfully and winning new markets all over the world.
Mrs. Beckett: I agree that the record of British companies and of Britain has been transformed under the Government's stewardship, but how can the Secretary of State complacently compare it with the record of the previous Government when he has just acknowledged that trade in manufactured goods was then in surplus, while under this Government it has been in deficit every year
6 Nov 1996 : Column 1228for 13 years? As to whether our partners in the European Union should envy that record as a sign of greater competitiveness, we are 15th out of 15 in export growth since 1979, and 13th out of 15 in trade results for 1995. We also have a trade deficit with the rest of the European Union of £4 billion. How can he call that a record of success?
Mr. Lang: The hon. Lady overlooks the facts that our current account for the second quarter of this year was in surplus by the largest amount for nine years; that our services produced a surplus last year of £6 billion; that the revenue from our overseas investment produces a surplus of £9.5 billion; that our exports are up by a third to record levels since the recovery began; that, since 1981, our exports have grown faster than those of France and Germany; and that, since 1979, when the Labour party was last in office, the volume of our exports has doubled. That has been achieved by the competitiveness that the Government have attained, reversing the decline of decades to which the Labour party so substantially contributed.
Mr. Waller: Does my right hon. Friend agree that it is remarkable that some 40 per cent. of all inward investment in Europe comes to Britain? Does he accept that that is not an accident but because of the environment that the Government have created, which encourages manufacturing, and that it could easily be thrown away if a different Government were elected?
Mr. Lang: My hon. Friend is right. That is one of the reasons why employment in manufacturing has risen by some 150,000 over the past three years. That is a rate of about 1,000 new manufacturing jobs per week on average. The success of our inward investment is the world's verdict on the competitiveness of the United Kingdom. That is reflected in the fact that more than 400 new inward investment projects came to this country last year. They come because the Government have transformed Britain into the enterprise centre of Europe, able to compete with any country in the world.
Mr. Campbell-Savours: Ministers know that the designation of assisted area status is directly linked to the level of unemployment as shown in the statistics. I do not believe the official published statistics for unemployment in my constituency. I believe that they are fiddled, false and untrue, and that they grossly misrepresent the situation in Workington. Will Ministers sponsor a house-to-house survey in my constituency to establish precisely the real level of unemployment so that, the next time there is a review of assisted area status, real data can be taken into account?
6 Nov 1996 : Column 1229Cumbria has objective 2 area status, which means that it is eligible for investment funds for business support measures. [Hon. Members: "Reading."] I am not reading. On house-to-house surveys, I suggest that he does some canvassing. He will find that many of his constituents have seen the improvement in our economy, the continuing fall in unemployment and continuing inward investment.
Mr. Jacques Arnold: Is not the greatest industrial incentive a sound economy such as the Government have created here, and the absence of the social chapter which the Opposition would impose on this economy?
Mr. Pearson: Is the Minister aware that regions such as Baden-Wurttemberg in Germany and Emilia Romagna in Italy, whose manufacturing sectors compete directly with those in the west midlands, enjoy living standards that are, on average, 40 per cent. higher than those in that region? When will the Government instigate a real regional policy and provide the amount of industrial support that our competitors enjoy?
Mr. Knight: The other day, I saw a reference to a German report that praised the British economy and said that its strength explained why we were winning the lion's share of inward investment--not just in the west midlands but in the east midlands and other areas, too.
Mr. Atkins: Is my hon. Friend aware that the north-west region, where my constituency is, is doing extremely well in terms of the incentives that it offers to the rest of the world? That is why, for instance, that great Japanese company, Isuzu, decided to build trucks at Leyland in my constituency--it was the most profitable option on offer compared with anywhere else in the world. Does that not confirm the view that the President and my hon. Friend have expressed, that the only incentive needed is a continuation of a Conservative Government?
Mr. Knight: My hon. Friend is absolutely right. The motor industry is a good example. In the 1960s and 1970s, companies such as General Motors were looking to get out of Britain. Today, they are increasing their investment here. Only three weeks ago, Vauxhall announced a new £200 million investment in Ellesmere Port. General Motors is moving investment into Britain under our current arrangements.
The Minister for Science and Technology (Mr. Ian Taylor): My right hon. Friend the Chancellor of the Exchequer will set out his latest estimate of the balance of trade in manufactured goods in his "Financial Statement and Budget Report" on 26 November.
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The deficit on trade in manufactured goods in the last three months reduced by £250 million from the previous three months.
I am not asking about the past three months. My question is about what progress we are making. The Government have been in power for nearly 18 years, yet it is always jam tomorrow. We want to know where all the hundreds of millions of pounds from North sea oil have gone, while the deficit continues. Does that not prove that this Government do not know how to manage trade?
Unemployment in the hon. Gentleman's constituency has fallen by 9.4 per cent. in the past year, and Siemens Measurements Ltd. has made an inward investment there. He should welcome that success. We should celebrate the strength of manufacturing industry, the way it is adapting to new technologies and challenging suppliers all over the world, and the way it is penetrating new markets with a rapid rate of growth. In every year under the Conservative Government, annual growth rates in manufacturing output, investment and productivity have been higher than under the Labour Government.
Mr. Eastham: I am not asking about the past three months. My question is about what progress we are making. The Government have been in power for nearly 18 years, yet it is always jam tomorrow. We want to know where all the hundreds of millions of pounds from North sea oil have gone, while the deficit continues. Does that not prove that this Government do not know how to manage trade?
Mr. Taylor: Unemployment in the hon. Gentleman's constituency has fallen by 9.4 per cent. in the past year, and Siemens Measurements Ltd. has made an inward investment there. He should welcome that success. We should celebrate the strength of manufacturing industry, the way it is adapting to new technologies and challenging suppliers all over the world, and the way it is penetrating new markets with a rapid rate of growth. In every year under the Conservative Government, annual growth rates in manufacturing output, investment and productivity have been higher than under the Labour Government.