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House of Commons
Friday 6 December 1996
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Trade and Inward Investment
[Relevant documents: The White Paper on Free Trade and Foreign Policy: a Global Vision, Cm 3437, and the Report from the National Audit Office on Overseas Trade Services: Assistance to Exporters, of Session 1995-96, HC 293.]
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Conway.]
Mr. Dennis Skinner (Bolsover):
On a point of order, Madam Speaker. With the Government in turmoil, as they are now, what would be the precise arrangements for telling the House if the Chancellor of the Exchequer were sacked over the weekend? Would we be the first to be told about the sacking? [Interruption.] It is very important to next week's agenda, because the Chancellor is due to speak in the House--
Madam Speaker:
Order. That is not a point of order. The hon. Gentleman is trying to deal with a hypothetical situation. I think that we had better get on with our Adjournment debate.
9.34 am
9.35 am
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I welcome the opportunity of this debate to address the important subject of trade and inward investment, as I am sure does the whole House. The story is a good one. We are exporting more than ever before in our history, foreign investors are flocking to locate in Britain, and Britain is leading the world as a global champion of free trade. The debate centres on Britain's place in the world today, which is the envy of Europe.
The reasons for the astonishing success are clear: over the past 17 years, the Government have taken tough decisions, brought our economy up to date, and pursued policies based on a clear set of principles--Conservative principles of free enterprise, free competition and free trade. We pursued those policies in the face of constant opposition from the Opposition parties, and how foolish they now look for that opposition--in the eyes not just of the British people but of the world--because the world looks up to Britain; it takes Britain as a role model, whereas under the previous Labour Government, we were a laughing stock.
I invite the House to consider our export performance. We are selling more goods and services to the rest of the world than at any time in our history--more than when half the world was coloured pink or when Britain was the
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We have halted a long-term decline in Britain's share of world trade, and we have done so in the teeth of unprecedented competition from all over the world. As trade barriers have fallen and developing countries have burst on to the world stage, the fight becomes tougher each year. We are not only fighting, but winning: our share of world trade is increasing faster than that of France, Germany and Japan. I want it to grow further. It is already growing further in many parts of the world. Last year, our market share grew in five out of the six eastern European markets and in half the middle east and north African markets.
The reason why we are exporting more is that our goods and services are competitive all over the world. That position of fundamental strength gives me great cause for optimism about the fact that our performance can and will be sustained, provided that we do not change our policies. We are doing well where it counts--not just in the European Union, important though that market is. We are well placed in the world's most rapidly expanding export markets. Last year, British exports to Japan increased by 26 per cent. and to the Philippines by 22 per cent. We have a current account surplus with Japan of almost £1 billion and with the Asian tiger economies of more than £3 billion. In the past three years, British exports to India have risen by more than 80 per cent. It is no wonder that our position is increasingly the envy of the world.
Back in the 1970s, our economy was weighed down by declining industries, often underwritten by massive state subsidies. Any exports from those companies meant exporting taxpayers' money as well as the products themselves. That was untenable. But now, the sectors that are driving Britain's exports are the world's growth sectors, which need no such subsidy from the taxpayer. We are global players in new technology--we are now Europe's biggest exporter of computers, of microchips, of television sets. Our media industry now earns more for us than the lumbering behemoths of nationalised industries ever did.
Mr. Tim Smith (Beaconsfield):
Will my right hon. Friend confirm the figure that he gave just now? If it is correct that we have a £1 billion current account surplus with Japan, that is a remarkable transformation. Only a few years ago, it seemed virtually impossible to export to Japan and there was a huge flood of Japanese imports into this country. Now, we have fantastic Japanese investment here, plus British exports to Japan.
Mr. Lang:
My hon. Friend is absolutely right, and the picture is reflected in many other markets around the world.
We are now selling not only manufactured goods, but expertise--British know-how--all over the world. Only yesterday, I hosted a major conference at the Department
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Those privatised companies--which, as nationalised industries, were a national disgrace--are now international winners. They are almost invariably represented on the trade missions, which I and my ministerial colleagues lead, and I can tell the House from first-hand experience that they are among the most warmly welcomed by our foreign hosts, who are eager to do business with them--and excellent business they do. The companies that we privatised not only pay significant sums in tax every year--what a turnaround that is--but they now account for 10 per cent. of our exports. They are genuine, competitive exports, not subsidised by the British taxpayer. But still the Labour party, almost alone in the world, opposes privatisation.
Everywhere one goes around the world, one finds British goods and services being sold. Sometimes they dominate whole industries. Some hon. Members may follow motor racing and the Grand Prix circuit--the epitome of diverse international competition, one might think, but not a bit of it. Of the 22 formula one cars that started in the main Grand Prix this year, 18 were designed and built in Britain. What about the all-American Indy car circuit? Every car in this year's Indy 500 race was designed and built in Britain. At whatever position Damon Hill or David Coulthard take the chequered flag, we can be sure that Britain will be up among the winners every time.
It should be no surprise that British exports are booming. We have always been one of the world's great trading nations. The trouble is that for much of the post-war period, the venturing instincts of the British people were suppressed. They were weighed down with burdens on business, with taxes, with rules and regulations. We have liberated British business from the shackles of Government intervention, burdens and socialism. We have released the venturing instincts of British businesses--large and small.
Mr. Nigel Evans (Ribble Valley):
I am grateful to my right hon. Friend for giving way and, obviously, proud of the United Kingdom's tremendous achievement in attracting so much inward investment. On the subject of bureaucracy and red tape, one factor that adds costs to business in the rest of Europe is the social chapter. If the 48-hour working time directive were imposed on Britain, the Labour party would embrace it--it does not mind having extra costs heaped on businesses and the subsequent unemployment that that creates. What progress is my right hon. Friend making with negotiations with businesses in this country on the impact of the imposition of the 48-hour working time directive on employment in this country?
Mr. Lang:
My hon. Friend is right and puts his finger on a particularly important distinction between the Conservative party's approach to burdens on business and that adopted by the Labour party. If my hon. Friend can bear with me, I shall develop that theme a little later in my speech. I shall be publishing a consultation paper on the working time directive later today.
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The House will wonder how we have managed to achieve the turnaround and release the venturing instincts in British business. We have done so, first, by creating a stable and growing economy, which is blessed with low inflation, low interest rates and falling unemployment. My right hon. and learned Friend the Chancellor's Budget, which the House finished debating earlier this week, was living proof that we shall continue to run the economy in a sound, prudent way, while being true to our instincts as tax cutters and proponents of small government. My right hon. and learned Friend was able to point to low inflation, falling borrowing and strong growth; he was also able to cut taxes for individuals and companies alike. Next year, the average family will be £1,100 better off than at the previous election. We promised, and we delivered.
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