Trade Balance

Lord Tomlinson Excerpts

Thursday 11th December 2014 Lords Chamber

[Lord Livingston of Parkhead]

I commend the noble Lord for his enthusiasm for exporting, although I think that he does the UK some disservice. We are the sixth largest exporter in the world—the second largest exporter of services. I agree with him that it has not been a key priority for past Governments, but it most certainly is for this Government. With regard to import substitution, while I would not refer to it in these terms, there is for instance the recent announcement by the Prime Minister of a Reshore UK service within UKTI to encourage manufacturers to come back to the UK. That is just one example of the many things we are doing to help our position in the long term on the balance of trade.

[Lord Tomlinson (Lab)]

Will the Minister do the House a favour by reminding us what the balance of payments deficit is at present, and then perhaps address the original Question about when we are likely to be in surplus?

[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.