asked the Minister for Finance if he will make a statement on the increasing adverse balance of payments in the trade returns over the past few months.
Ceisteanna—Questions. Oral Answers. - Balance of Payments.
7.
On present indications, the deficit in visible trade for the year 1959 is likely to be some £20 million more than for the year 1958. The greater part of the increase is attributable to exceptional factors such as higher imports of cereals due to last year's bad harvest, and reduced exports of store cattle due to the prolonged drought in Britain. A further part appears to be due to increased capital formation. So far as increased consumer spending may be involved the situation is being carefully watched.
Invisible transactions in 1959 cannot yet be fully assessed but I am confident that increased income under this heading will help substantially to offset the trade deficit and thus relieve the balance of payments.
Can the Minister say how much of the increased deficit is due to increased capital formation and how much is due to increased consumption?
I am sorry I cannot give the figures at the moment.
Would the Minister not say that a good deal of the increased deficit is due to the fact that we are dealing with countries that buy goods value only about £2 million from us in some cases while we have to buy goods value £9 million from them and they make no trade agreements with us? Would not that be one of the causes?
The goods we take from these countries are goods necessary for the country's welfare and they have to be got somewhere. Very often there is no great choice as between the merits of the countries from which we import them.
If they are to be got, they might as well be got from countries with which we have a favourable balance of trade.