Oral Answers to Questions — National Finance – in the House of Commons am 12:00 am ar 16 Mai 1991.
To ask the Chancellor of the Exchequer in what year was manufacturing trade last in surplus.
In 1982.
Is not the truth of the matter that Britain enjoyed a manufacturing trade surplus every year since the industrial revolution, until this mob came into government, and finished up with a deficit in 1982? We had a trade surplus when we had the spinning-jenny and when we invented the steam engine, but now, under this gang of spivs, we have a plastic economy —and the wheels have dropped off.
I am grateful to the hon. Gentleman for the typically understated way in which he asked his question, and for auditioning for the job of conducting the proms at the same time. As the hon. Gentleman knows, the manufacturing deficit turns on the increase in exports and in imports. As it happens, during the period that we moved into deficit, the increase in exports year-on-year was running at 7½ per cent. between 1983 and 1990. The hon. Gentleman may be interested to have the comparative figure under Labour between 1974 and 1979, when manufacturing exports achieved a year-on-year increase of 2 per cent. The increased prosperity of the 1980s of course brought increased demand for imported goods.
Has my right hon. and learned Friend had an opportunity to study reports on manufacturing industry in the north of England? They show that it is holding up very well in the northern region and that small firms are doing better than large companies in the present recession. Is not that a credit to the Government, who have pursued a policy of broadening employment from the large manufacturing industries, such as shipbuilding and steel, across a wider variety of small businesses employing people in many different types of work?
What my hon. Friend has said is true not only of the northern region but of south Wales and Scotland, where a much more diversified manufacturing economy now exists than ever before. Most notably, this shows the confidence of overseas investors in the United Kingdom and in those regions. The number of Japanese companies now investing in the north is especially noteworthy.
Mr. John Smith:
Does the Chief Secretary not appreciate that, as well as the figures that show fast-rising unemployment, we have today seen figures released by the Central Statistical Office that reveal that investment has plummeted by 20 per cent. in the past year? Is that not the most awful way to prepare for the operation of the single market after 1992? What do the Government intend to do about that fall in investment?
The right hon. and learned Gentleman fails to disclose that any fall in investment represents a fall from the dramatically higher level —indeed, the historically high level —of the past few years. The right hon. and learned Gentleman shakes his head, but I gave him the figures yesterday. [Interruption.] The right hon. and learned Gentleman seems to want to ask questions and then to intervene from a sedentary position, but I shall give him the figures anyway.
Total business investment in 1978 amounted to £35·8 billion at 1985 prices. By 1988 the figure had risen to £ 52 billion, in 1989 it had reached ££56 billion, and in 1990 it stood at £55 billion. To criticise the Government for a fall from historically high levels is not to go to the root of the matter.
Of course we regret any reduction in investment, even when it represents a fall from very high levels, but, given the performance of manufacturing industry in the export market, even during the current recession, I am confident that investment will soon bounce back to the levels that we achieved in the late 1980s.
To ask the Chancellor of the Exchequer what is his assessment of the latest trend in the balance of trade for manufactured goods.
The deficit on United Kingdom trade in manufactures has fallen sharply. In the first quarter of 1991 the deficit was £1·3 billion—less than 1 per cent. of GDP and the lowest for over five years.
Can my hon. Friend confirm that that encouraging trend in the balance of trade in manufactured goods is reflected not only in a fall in imports, but in an increase in exports? Does she agree that that in turn reflects great credit on the competitive performance of our manufacturing exporters in world markets?
I certainly agree. In 1990, the United Kingdom volume share of world trade in manufactures rose for the second successive year. Mention has already been made of the splendid performance of the car industry; in the latest quarter, the volume of exports was up 40 per cent. on the previous year. My hon. Friend is absolutely right—and exports are due to increase.
Is the Minister aware that the Governor of the Bank of England described our recession as home grown? Given the massive reductions in export services, in assistance for innovation, and in training, how does the Minister expect us to regain our place in world manufacturing?
The hon. Gentleman has slightly misquoted the Governor of the Bank of England, who qualified that observation.