Trade Balance

Debate between Lord Anderson of Swansea and Lord Livingston of Parkhead

Thursday 11th December 2014 Lords Chamber

[Lord Livingston of Parkhead]

The original Question was on the balance of trade, not the balance of payments; they are, of course, two quite different things. The balance of trade is in deficit to around £30 billion; it is a deficit of about 2% of GDP, which is significantly better than under the previous Government, when it was on average 2.5% of GDP. As the UK is growing much faster than its partners it is difficult to forecast exactly when it will come to zero. Certainly the OBR expects to see a significant improvement going forward, but I am reminded of the words of J K Galbraith, who said that the only purpose of economic forecasts is to give astrology a good name.

[Lord Anderson of Swansea (Lab)]

There has traditionally been a deficit on our balance of trade, but always this has been counterbalanced by a large surplus on our service industries. Will the Minister therefore pay tribute to them, including the creative industries and the City, for ensuring that?

[Lord Livingston of Parkhead]

The noble Lord is correct that services have been and remain a very strong surplus for the UK. It has to be recognised that, increasingly, services and goods are becoming intermingled. I know that when Rolls-Royce sells a jet engine, almost half the value is a service. One of the things that we should cease doing to a degree is separating off goods and services, because increasingly they are the same. I commend our creative industries, our professional and financial services, our aerospace sector and, indeed, our growing motor vehicle industry which, of course, is the second largest producer of cars in the whole of Europe.

Free Trade Agreement: US and EU

Debate between Lord Anderson of Swansea and Lord Livingston of Parkhead

Thursday 23rd October 2014 Lords Chamber

[Lord Anderson of Swansea]

To ask Her Majesty’s Government what assessment they have made of the prospects for the free trade agreement between the United States and the European Union.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, we are pushing for a broad agreement that eliminates the vast majority of tariffs and reduces other unnecessary barriers to trade. This will help small businesses in particular and promote growth and jobs. There have been seven rounds of negotiations with good progress, given that it is slightly over a year since the negotiations started. We are aiming for an ambitious agreement in 2015.

[Lord Anderson of Swansea (Lab)]

My Lords, the Minister will be well aware that at the EU Council meeting in June 2013 the French won a signal victory by using their political veto under the cultural exemption to exclude audio-visual services from the negotiating mandate because they considered them a matter of national interest. I should also mention that the Commission was given leave to produce further changes to the negotiating mandate. Do we consider the National Health Service to be a key national interest? If so, have we tried to exclude our health service from the investment provisions? If not, why not?

[Lord Livingston of Parkhead]

The difference between the NHS and audio-visual services is that audio-visual services were included originally, whereas the NHS was always exempted. It is probably best if I quote the EU Trade Commissioner on the matter:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds”.