Business of the House

Kelvin Hopkins Excerpts

Thursday 20th December 2012 Commons Chamber

[Mr Lansley]

My hon. Friend knows, I hope, that we have no plans to change the inflation targeting framework that was set out in the Bank of England Act 1998. As he rightly says, for a significant period that target was not being met, but the framework makes that transparent because it requires the Governor of the Bank of England to write to the Chancellor to explain why it has not happened. Inflation has substantially reduced in the past year or so. Alongside the fiscal credibility of the Government, that gives international markets and businesses confidence in the credibility of our monetary policy too.

[Kelvin Hopkins (Luton North) (Lab)]

Season’s greetings to everyone. In particular, I want to wish British industry a happy new year, but I fear that it might not be so. Britain has a visible trade deficit with the rest of the European Union of, typically, £1 billion a week. Britain’s manufacturing sector is half the size of Germany’s as a proportion of GDP. Britain’s industry has been damaged time and again over many decades by an over-valuation of our currency, and over the past 18 months or so we have seen a substantial weakening of the euro, which is again forcing up the value of sterling, with the result that our trade deficit will be even more difficult to overcome. Will the Leader of the House make time for a debate on exchange rate policy and its implications for British industry?

[Mr Lansley]

The hon. Gentleman is describing a situation that relates to the decline in British manufacturing that occurred dramatically over the life of the previous Labour Government. I entirely absolve him of responsibility for some of that Government’s policies, which he did not necessarily support, although he supported that Government. We are very clear that we must achieve for the future a rebalancing of our economy. That is why British manufacturing has substantially improved its trade in and exports of goods to some of the new and emerging markets such as China, India, Russia and Brazil. It is not a matter of losing markets in Europe; we have to win them as well. In 2011, we exported £300 billion in goods, up 12.5% on the year before, and we need to sustain that progress.