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Oral Answers To Questions

Volume 886: debated on Monday 17 February 1975

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asked the Secretary of State for Trade if he intends to make an official visit to Norway.

The Secretary of State for Trade and President of the Board of Trade
(Mr. Peter Shore)

I intend to arrange a visit to Norway within the next few months, but I have no firm date as yet.

I welcome the right hon. Gentleman's announcement. Will he take this opportunity to learn that Norway operates on a different economic scale from this country and consequently that if Britain were to leave the Community there would be little chance of our obtaining the sort of free trade agreement with the Community that Norway obtained?

I hope to learn a number of things from my visit to Norway, and I hope to observe the obvious prosperity which Norway is enjoying in spite of the many gloomy forecasts to the contrary exactly three years ago.

Is my right hon. Friend aware that before the referendum in Norway the public were told that all sorts of appalling consequences would follow if they did not join the EEC, and that none of them has followed?

My right hon. Friend is right. There are, of course, special factors such as oil which have helped, but the story of Norway in recent years has been one of a highly successful economy.

Laker Airways


asked the Secretary of State for Trade what representations he has received from Laker Airways on the Skytrain; and whether he will make a statement.


asked the Secretary of State for Trade what representations he has made to the United States Government since 3rd October 1974 in connection with the application by Laker Airways for permission to operate transatlantic Skytrain services.

My right hon. Friend received the Laker Airways' letter of 15th January addressed to all Members. Since there may be an appeal against the Civil Aviation Authority's recent decisions on Skytrain, I should prefer to avoid comment.

A number of formal and informal representations, one of which I made myself, have been made to the United States Government specifically about their delay in issuing a permit, the last being on 3rd October 1974. Thereafter, in the light of the imminent need for the Civil Aviation Authority to review the fare and the licence as a whole, further representations would have been inappropriate, but the United States Government were kept informed of the proceedings.

Is not the delay by the Civil Aeronautics Board in the United States in licensing the Skytrain intolerable? Can the hon. Gentleman say whether, in the most recent representations that he made, he laid down a deadline by which the British Government would expect the licence to be issued?

The delay was most unfortunate. The Civil Aviation Authority's expression of opinion about it is one which I wholly support, but I think it would be impossible for me, in the light of the circumstances now prevailing, with the possibility of an appeal coming to my right hon. Friend the Secretary of State, to lay down any deadline.

I appreciate the Secretary of State's past record of robust defence of independent British interests in this matter. May I ask whether he will be prepared to consider retaliatory action against American carriers if the American Government remain in breach of the treaty? Is the Secretary of State prepared to ensure that this matter is raised with President Ford when he visits this country after Easter?

I wholly endorse the hon. Gentleman's view about my right hon. Friend's robust defence of British interests which is continually deployed at Question Time in the House. So far as retaliatory action is concerned, having regard to what I have already said it would be inappropriate for me to comment other than to say that such action does not generally produce effective results.

Does the hon. Gentleman agree that there has been tremendous delay over this matter? Presumably the appeal will be made by a British airline, Will the hon. Gentleman give an assurance that whatever appeal is made will be dealt with expeditiously so that the matter can be settled so far as this country is concerned?

I have already commented on the delay. If notice of appeal is filed—and that has not yet taken place—the appeal will be conducted fairly and expeditiously.

Eec Countries


asked the Secretary of State for Trade if he will make a statement on the latest figures for the United Kingdom's trade balance with the Common Market countries.


asked the Secretary of State for Trade what are the balance of trade figures with the EEC for the latest three-months period.

The visible trade deficit with the EEC Eight, on a balance of payments basis and seasonally adjusted, is provisionally estimated to have been £614 million in the fourth quarter of last year.

While not wishing to take up the time of the House rubbing salt into that wound, may I ask the Secretary of State to take this opportunity of explaining in clear words that when Britain leaves Europe we shall not turn our backs on Europe or be isolated from Europe, which are the current defeatist themes of the dispirited pro-Marketeers?

The hon. Gentleman knows very well that I have never taken the view at any stage—nor do I hold the view now—that if we decided at the end of the day, with the assistance of the British people, to withdraw from the EEC this would lead to a great disaster for our trade. I do not believe that. It would be a great mistake for people to try to conduct the debate on this matter in terms of bogies and scares of the most unconvincing kind.

Will the Secretary of State give us an assurance that he will cease his malevolent misinterpreta-of these figures, more epecially since the Foreign Secretary contradicts what he says, while all the other objective authorities do the same? Will he give us an assurance that if, as seems likely, the Government make a recommendation that the renegotiated terms are acceptable to them, he will have the guts to resign?

I am not sure what a malevolent interpretation is, but I will always listen very carefully to my hon. Friend on the subject of malevolence. I have said nothing so far in my answer about the interpretation. All I have given is a factual reply.

If my hon. Friend will allow me to complete my sentence, I was saying that the figures for the last quarter of 1974 showed a trade deficit on a balance of payments basis with the EEC Eight of £614 million. I stick by those facts.

Since the right hon. Gentleman's Department recently informed the House that in 1974 as a whole one-third of our exports went to the EEC and one-third of our imports came from the EEC, does not this show that the problem of our trade deficit with the EEC is only part of the problem of our global trade deficit?

Yes, indeed. We have another absolutely major factor in our trade deficit, which is above all the price of oil. The oil deficit is greater than the EEC deficit. However, if we eliminate the oil trade—which according to some points of view it would be fair and reasonable to do—there is no blinking the fact that the greater part of our non-oil deficit is attributed to the deficit with the EEC or is accounted for by the EEC deficit.

Do not these figures show, upon any interpretation, that the rest of the EEC countries have as great an interest in retaining industrial free trade with this country as we have with them?

I think, on the basis of the experience of the last two years, that it is an undeniable fact that the EEC has found it much easier to get into the British market than British exporters have found it to get into the EEC.

Has my right hon. Friend noted two answers given to me last week, one of which showed that the proportion of our total deficit with the EEC and with the world was lower in 1974 than in the previous year and in 1969 and the second of which showed that from 1971 to 1974 our exports to the EEC more than doubled, representing a much greater increase than our exports to the Commonwealth, which increased only by 40 per cent.? Is not it a fact that if we withdraw from the EEC British exporters will be severely hurt and our balance of payments may not be any better than it is now?

I cannot accept the point made in the last part of my hon. Friend's supplementary question. I think that depends entirely on two factors: first, what kind of arrangements should be made with the EEC to cover our trade and, secondly, how much importance in the total mix we are to attribute to a given level of tariffs. These are obviously matters which we can discuss, although I do not think we should draw alarmist conclusions. The share of our deficit attributable to the EEC marginally decreased last year but only because we were faced last year with a fourfold increase in the oil bill. But that does not mean anything.

Will the Secretary of State tell us the facts concerning our invisible balances with the EEC? Did not the question of the hon. Member for Oxford (Mr. Luard), and did not the Secretary of State's answer a few days ago relate to the non-oil deficit? Is not it therefore irrelevant to make the point which the Secretary of State has just made?

I have always been very careful in the House to distinguish between the total deficit and the non-oil deficit. I do not think anyone can accuse me of making any attempt to confuse the two. I fear that many lion. Members on both sides have recently confused the two. I have done my best to sort it out in the most straightforward way. If people cannot bear the facts, I cannot help them.

I think that some figures will be available soon as regards invisible trade with the EEC, but I shall get in touch with the hon. Gentleman.


asked the Secretary of State for Trade if he will undertake a detailed analysis of trade of the United Kingdom with the original six members of the Common Market.

Trade between Britain and the EEC is continually under review and, of course, detailed statistics are regularly published.

Does my right hon. Friend agree that the increase in the trade deficit to approximately £2,000 million has not only been against the trends forecast by some hon. Members but that one would have expected the opposite to take place bearing in mind the floating of the pound some years ago? Can my right hon. Friend suggest to the House any trends in trade with the EEC which account for this extraordinarily large deficit?

I can only help my hon. Friend in terms of the categories of trade in which there has been the principal deterioration. I have already told the House that the main categories in which we have suffered serious deterioration are food, steel, chemicals and across the whole range of what one might call semi-manufactures. There is not a clear pattern which emerges from this.

Are we to understand from the right hon. Gentleman's previous reply that he has no figures for the balance of trade in invisibles between this country and the EEC? In view of the way in which, by innuendo, he continually seeks to give the impression that since we joined our overall deficit with the EEC is worse than it would otherwise have been, will he confirm that he has no data which supports this view?

The hon. Gentleman must not attribute sentiments to me and then ask me to deny them. That is a frivolous approach to the question. I do not have with me figures of invisible trade with the EEC. I shall be happy to give those figures as soon as they are available. However, they are not collected on the same regular basis as we collect figures for invisibles globally.

Is my right hon. Friend's memory as good as mine, bearing in mind the selective sets of statistics which have been exchanged between both sides of the House, including the Minister, since half-past two? Does my right hon. Friend think, as I do, that no Minister in any Government has ever thought other than that entry to the EEC would be a difficult task and that benefit would come later rather than sooner?

I have the greatest respect for my hon. Friend and his memory, which I am sure is superior to mine on many matters, but what he has just said is not correct. I remember clearly how during the period of negotiation, members of the Conservative Front Bench proudly and confidently proclaimed that there would be great benefits for the British people. My right hon. Friend the Member for Battersea, North (Mr. Jay), in particular, was looked upon as being utterly ridiculous when he gave the figure of up to £1,000 million as the balance of payments deficit.

Does the right hon. Gentleman recognise that what the hon. Member for Kingston upon Hull, West (Mr. Johnson) said is essentially true, and that in his heart he must know it? I have just returned from a convention in Switzerland at the weekend which was attended by business men from inside and outside the Community and from North America, and not only they but their wives and families and most other people outside this country believe that if we leave the Community it will be seen by our friends round the world as the final folly of a once great nation.

There is undoubtedly a difference between business sentiments and the sentiments of the great majority of people in the country. But there was a difference also in Norway, and the predictions and gloom there turned out not to be justified.

Is not the outstanding fact which emerges from all the figures that, whereas we had virtually no trade deficit with the EEC Six in 1970, our trade deficit with the Six last year was almost equal to our whole non-oil trade deficit with the world?

In 1970 we had a very small deficit with the EEC. Last year we had a deficit of just on £2,000 million. The deficit with the EEC was equal to the whole of our non-oil deficit.


asked the Secretary of State for Trade what proportion of the deterioration in the trade balance with the original six members of the EEC since Great Britain's entry has been due to relative movements in exchange rates; and what steps he is now taking to improve the balance by taking advantage of the reduction in prices of British goods in Europe due to the exchange rate movements.

Our trade has been affected by a number of economic factors and there is no certain way of identifying the individual effect of movement in exchange rates. In qualitative terms, the sterling float has strengthened our competitive position in European markets and elsewhere. The Government and the British Overseas Trade Board have recognised the importance of this and have been urging exporters to examine their pricing policy to take advantage of the increased competitiveness both for themselves and the balance of payments.

Does my right hon. Friend agree that after a devaluation there is an initial deterioration of the trade balance, which he has pointed out with regard to Europe, but that it also provides the opportunity for greatly improved exports to the countries affected? Does not my right hon. Friend therefore agree that there are excellent opportunities for exports in Europe?

I hope that there are great opportunities for Britain's trade. Indeed, we have to make those opportunities because the present state of our trade, in spite of the recent improvement, is unsatisfactory, and we jolly well have to get back into balance. As for the initial effects of devaluation, it is difficult to get this question right because there has been a two-phase movement in the exchange rate in relation to the EEC. This was not a single-date devaluation but a float which began in June 1972. There was an initial fall of perhaps of 10 per cent. or more by the end of that year followed by relative stability and then further devaluation in 1973. We have now had some 16 months of relative stability in exchange rates, and I have yet to see the improvement in our export performance that we had hoped for.

In view of the right hon. Gentleman's contradiction of the Prime Minister's recent remarks, will he say whether the disposition of collective irresponsibility in commenting on EEC matters has now begun?



asked the Secretary of State for Trade what effect he estimates his new guidelines for tourism and its promotion in the United Kingdom will have on the volume and value of tourist activity in the West Country Tourist Board area.


asked the Secretary of State for Trade what consultations he has had with the travel, hotel and catering industries in the formulation of his policy guidelines for the tourism industry: and if he will make a statement.

The new guidelines are designed to maximise the benefits of tourism for the national economy as a whole rather than to define the position of particular districts or interests. The three national tourist boards and the British Tourist Authority, who are very closely in touch both with regional problems and with the trade, are being consulted about implications of the guidelines. Until their analysis has been received and studied I should not wish to add to my right hon. Friend's lengthy written reply to my hon. Friend the Member for Leeds. West (Mr. Dean) on 21st November last.—[Vol. 881, c. 525–6.]

Will the Secretary of State give us an assurance that, in developing the untapped potential of tourist areas outside the established centres, no damage will be done to the existing tourist areas and that there will be no reduction of money spent on the promotion of tourism in areas such as the West Country, where this is the No. 1 industry?

I cannot give the hon. Gentleman that assurance at this stage until the results of the review are known and studied. The Government appreciate the importance of tourism to the West Country. However, promotion must be seen as a local and commercial responsibility as well as an Exchequer task. Government funds are available to prime the pump but resources are too limited to make an indefinite subsidy. Above all, there are the less prosperous areas which, with appropriate help, can attract tourism and benefit from it to the benefit of us all.

Is the Minister aware that his right hon. Friend's recent statement was welcomed by many people as evidence that the Government were prepared seriously to rethink the tourist policies? Is he further aware that my interest in the industry enables me to look at how other countries promote tourism? Will he, for instance, take note of the fact that the Hungarians have embraced capitalism in their promotion of tourism in Western Europe and that the Swiss do as he suggested should be done and fully incorporate the views of commercial interests in the promotion of their tourism? Will the Secretary of State keep an open mind on the total rethink of the tourist policy being pursued by the Government?

I am grateful for the hon. Gentleman's remarks. I assure him that the Government's mind is open on this issue. However, until my consultations are complete we do not wish to add anything to what I have said.

Will the Secretary of State bear in mind, if the Government are successful, as we hope they will be, in developing tourism, particularly in areas such as the West Country and Wales, where the resident population may be low, the strain on the local economy in terms of car parks and other facilities? Will he have discussions with his colleagues in the Department of the Environment and the Welsh Office to consider whether financial assistance can be made available to local authorities for this purpose in the next financial year?

When we have the result of the review and the comments of the British Tourist Authority and the tourist boards, we shall undertake such discussions as are appropriate including, if necessary, discussions with the Department of the Environment.

European Economic Community


asked the Secretary of State for Trade if he will make a statement on his assessment of the trade-diversion and trade-creation effects on the United Kingdom balance of trade arising from United Kingdom membership of the EEC.

Although there has undoubtedly been a switch towards the EEC in the sources of our imports, particularly foodstuffs, I am not ready to make any overall assessment of the effect of membership of the Community on trade creation and trade diversion.

Does my right hon. Friend agree that there was general agreement on all sides, and indeed in the White Paper itself, that there would be trade-diversion effects which would lead to a loss in terms of Britain's balance of trade, but that those who advocated British membership of the EEC continued to argue that this would be more than offset by the trade creation within the EEC? Is it not rather strange reasoning that those advocates should now use the losses due to the trade-diversion effect as some justification for our massive deficit with the EEC?

There is a great deal of sense in what my hon. Friend has said. There is, however, a difficulty in any event over the period that we experience about isolating these two effects in so far as they ever could be separately identified and, further, doing it against the background of many other factors that are at work in our trade. It would be a worth while study, no doubt, but a very difficult one to make.

Will the Minister confirm that more than half the crude trade deficit with the EEC Eight last year was accounted for by the food and live animals sector? Has not that deficit increased because our food importers are buying cheaper food from Europe?

The hon. Gentleman should look carefully at the food items and distinguish those that may be cheaper in Europe than they were in the rest of the world during the year 1973–74 and those that were dearer. He must consider the mix of those two facts before reaching any conclusion. On the hon. Gentleman's first point about half the deficit—

No, almost certainly the hon. Gentleman is wrong about that. I think he will find that it is more like one-third.

Insurance Policy Holders


asked the Secretary of State for Trade when he expects to introduce the promised legislation to protect policy holders.

In view of the possible delay and the danger of retrospective legislation, will the Minister look at the position of Nation Life policy holders? Will he, for example, consider engaging in further discussions with the insurance interests to see whether agreement can be reached to a joint declaration between the Government and the Life Offices Association indicating that, when the amount from the liquidator from realisable assets is known, those who have effected these contracts can know that the Government and the insurance industry combined will then be prepared to make up the difference between that percentage and perhaps 80 per cent. to 90 per cent. of the original investment? Does the Minister realise that great worry and concern exist among a great many people and that joint action by the Government and the insurance companies would be most welcome?

I appreciate the anxiety and distress that have been caused as a result of this unfortunate failure, but I cannot agree that Nation Life should be encompassed by the Government's scheme. This scheme is to be financed by a statutory levy on the insurers and it would be wholly unreasonable to expect them to pay out for losses in respect of companies that fell before the announcement was made by my right hon. Friend on 29th October last year.

Does my hon. Friend realise that there are thousands of people throughout the country who get involved in this sort of thing and that the dreadful thing is that I am told that even today Nation Life is taking contributions from individuals? Will he have another look at the problem, because it is a great pity when working-class people are so kidded on by financiers of this kind to invest in concerns such as Nation Life and then lose their money to the extent that they will lose it?

It is true—this is one of the principal reasons for the introduction of our scheme—that ordinary people who have no expertise in these matters and who rely on the expertise of others, which is not always forthcoming or available, find it very difficult to distinguish between one company and another and one policy and another. Therefore, it is a fundamental aspect of our scheme that we should help such people. It is quite another thing to introduce the scheme on the basis of retrospection to a degree where the insurance industry could not possibly have recognised that it was being called upon to help this organisation.

Airport Charges


asked the Secretary of State for Trade if he will make a statement about the consultations held between his Department and the British Airports Authority over the authority's proposed increases in airport charges.

A proposal by the British Airports Authority for an increase in airport charges is being examined by my Department, and I expect to inform the authority shortly whether the increase is approved.

Will the Minister confirm that among these proposals is one for a 35 per cent. increase in charges at Gatwick, for instance, to start on 1st April, which is a tremendous burden for the airline operators to have to take aboard bearing in mind that they were told six months ago that only a 25 per cent. charge was likely? Secondly, will the Minister use his rights to veto this extraordinarily inflationary proposal by the British Airports Authority?

No, Sir. It is perfectly true that there is to be a 35 per cent. increase on 1st April 1975, but it has to be borne in mind that the last increase was on 1st April 1972; charges were adjusted on 1st April 1974. As for the 25 per cent. point, the situation has changed and in those circumstances the calculations of the British Airports Authority had to change.

Within the context of devolution, and given the express wish of the Scottish Council that such a body should be set up, will the Minister establish in Scotland a Scottish airports authority to take over the running of airports there which are currently managed by the British Airports Authority?

That is quite another question. The point will be examined, but I cannot give the hon. Gentleman any assurance that a separate airports authority will be established, because I am not at all sure that simply to manufacture another organisation would improve efficiency, which is the important criterion.

Japan (Trade Missions)


asked the Secretary of State for Trade how many trade missions visited Japan in 1974; and how many are planned for 1975.

Twenty-seven missions visited Japan in 1974. So far plans are firm for 22 missions in 1975.

Is my hon. Friend aware that that information is very welcome? Will he urge upon British industry the importance of exploring the Japanese market, which is one of the largest industrial and consumer markets in the world? Has his attention been drawn to the recent ineptitude of British Leyland in its approach to that market?

I am well aware, as are the Government and British exporters generally, of the importance of the Japanese market. I welcome any signs on the part of any major British company in particular which has so far neglected this market that it is seeking, through the British Overseas Trade Board and other bodies, to get into this fast-growing market.

Will the Minister do his best to ensure that the message conveyed by these missions to the Japanese is that the Government intend to proceed not by restricting imports into this country from Japan but rather by encouraging an increase of existing exports to Japan, including fine worsted cloth?

I am happy to give that assurance. That remains Government policy. We want to see a further increase in the volume and the value of British exports to Japan, which have increased greatly in the past two years, thanks largely to the British Overseas Trade Board and the many British exporters who have taken part.

Will any of these missions concern itself with ensuring that our exporters in this country are given a fair crack of the whip in getting their goods into Japan? It seems that a huge tangle of red tape is erected by Japan to make it very difficult for our car exporters in particular to get into that country.

There is a later Question on the Order Paper about car exports and imports which I do not want to anticipate. On the general point about red tape and restrictions in Japan, the position has eased a great deal in the past few years. I believe that British exporters who may well have been put off three or four years ago will find a different situation when they seek the advice of the British Overseas Trade Board and visit Japan themselves.

Will the Minister make a careful study of the correspondence he has received from Pressac Limited—a firm in my constituency which manufactures components for the television and motor industries—about the serious effect to employment that results from what it believes may be unfair importing practices?

The Government are always willing to look closely at any sign of unfair trade practices such as dumping or subsidisation in any form. We always have to be approached in the first place by the industry concerned. We are happy to advise it upon the evidence that it requires and the submissions it should make. I believe that the Pressac matter is under consideration.

Burmah Oil Limited


asked the Secretary of State for Trade if he has received an application from shareholders of Burmah Oil Limited for an investigation under Section 164 of the Companies Act in order to determine why the directors sold a substantial asset of their company at less than it was worth.

Is the Minister aware that according to the latest count the shareholders have lost about £117 million as a result of this sale? Will he tell the House whether the Government put any pressure upon the directors of Burmah Oil to the effect that they would receive the Bank of England guarantee only if they made the sale at low value? Will he say whether that is true?

I have no knowledge of any such pressure, but that is a matter for my right hon. Friend the Secretary of State for Energy.

Commonwealth Countries


asked the Secretary of State for Trade what was the crude trade balance between the United Kingdom and our other Commonwealth trading partners in each of the years 1970 to 1974, respectively.


asked the Secretary of State for Trade what is the trade surplus or deficit with the Commonwealth for 1974 to the latest convenient date; and what is the comparable figure for 1973.

The "crude" trade deficits—that is, the difference between exports valued fob and imports valued cif—with the Commonwealth in each year between 1970 and 1974 were £468 million, £174 million, £312 million, £637 million and £580 million respectively.

Why is the right hon. Gentleman getting so worked up when on those figures, particularly in the latter years, there has been a deterioration in our trade with the Commonwealth which proportionately has been much worse than the effects of our trade with the EEC? Does he now suggest that we should leave the Commonwealth?

The hon. Gentleman is entitled to put whatever interpretation he wants on the figures, but they seem to me in a sense to show a certain stability. They begin in 1970 with a deficit of £468 million. Last year there was a deficit of £580 million. There has been some up-and-down movement in the middle. That does not indicate any great change. I would point out that there is a component of oil in the 1974 figure. Presumably that relates most of all to our trade with Nigeria.

Does my right hon. Friend agree that the selection of figures for periods relating to Commonwealth and EEC trade does not help the great argument? Is he aware that there will be a feeling abroad that the persistent argument that we are hearing for remaining within the EEC seems to suggest that it was some sort of miracle that Britain existed at all before the EEC was created? Does he agree that the logic of that thinking that the protagonists of the EEC should bear in mind is that, for the miracle to continue, the sooner we get out the better?

I agree with my hon. Friend that the figures should be treated with the most scrupulous care. I entirely agree with his other remark. One of the most disagreeable features of the whole debate about the EEC is that the protagonists of entry on any terms are constantly seeking to denigrate this country and to create a mood of gloom and doom about our national future.

Airline Flights (Security)


asked the Secretary of State for Trade if he has plans to introduce sky marshals as security guards on passenger flights of British airline companies; and if he will make a statement.

I have given careful consideration to the use of armed guards on flights of British airlines, but I am not satisfied at present that this would on balance be in the interests of the safety of the passengers and crew.

Is the hon. Gentleman aware that in the Middle East at least one national carrier has introduced sky marshals with conspicuous success? Should he not give further consideration to introducing sky marshals equipped, for example, with low-velocity rifles? They would seem on the evidence so far to have improved security on some Middle East carriers.

I am aware of success in this respect concerning E1 A1. That is unquestionably the case. However, each Government must make their own decision on the basis of the threat or the risk as it appears to them. Unhappily the position of Israeli aircraft is unique. United States airlines which deployed the use of sky marshals for some little time have now, so far as I am aware, abandoned the concept in the interests of passenger safety and because of the pressure exerted by crews. Our own crews are distinctly worried about the possibility of sky marshals being carried. That is the position even if we were to take into account the possibility of the use of different weapons such as those the hon. Gentleman has mentioned.

Light Aircraft (Insurance)


asked the Secretary of State for Trade whether he will seek powers to make the possession of third-party insurance compulsory for the owners of light aircraft.

The insurance of light aircraft against third-party risks is the subject of current consultation between my Department, the Civil Aviation Authority and representatives of owners and operators. It would be premature to anticipate the outcome of these discussions.

Does the Minister agree that the financial consequences for a pilot's dependants can be catastrophic if he is not adequately insured in the event of his death while piloting an aircraft or while carrying passengers in an aircraft? What sort of third party cover does the Minister have in mind?

I entirely agree that failure to insure or failure to carry a sufficiency of insurance could have calamitous results. I am concerned about the matter, but the risks that have hitherto been embraced do not seem to cause us to enter into any panic about the situation. As the hon. Gentleman will know, there is absolute liability. What I and the CAA are seeking to encourage is that pilots should take out insurance to a value of £100,000. That, on expert opinion, would seem to be the right sort of figure. I hope that we shall obtain an effective response and that it will not be necessary to introduce legislation.

Arab Trade Boycott


asked the Secretary of State for Trade what representations he has received from British companies about the operation of the Arab trade boycott; what replies he has sent; and whether he will make a statement.

I regret that I cannot quote individual cases, but the Department has received representations from United Kingdom companies which are worried by the effects of the boycott. Her Majesty's Government deplore all trade boycotts other than those internationally supported and sanctioned by the United Nations, and while the position is explained to interested traders any subsequent decision is a matter for the commercial judgment of the firm concerned.

I thank my hon. Friend for that rather resounding declaration. I welcome the terms in which it was made. Has his Department taken note of and studied the effects of current American legislation against the Arab boycott? Does he think we should introduce similar legislation?

Yes, my Department is aware of American legislation, but we are not certain that if similar legislation were introduced in this country it would be likely to be effective or add much to our knowledge of the working of the boycott. It would also add to the already heavy burden of documentation placed on our exporters. So far as I am aware, the existence of the legislation does not prevent American exporters from providing boycott declarations.



asked the Secretary of State for Trade if he will pay an official visit to the USSR.

I plan to visit the Soviet Union in May this year for the fourth meeting of the Anglo-Soviet Joint Commission.

I thank my right hon. Friend for his reply. May I suggest that he tries to go a little earlier in view of the success of the Prime Minister's mission, which ends today, and in view of the fact that the expanding trade with the USSR which is available to us would go a long way to offsetting our appalling trade deficit with the Common Market? Will my right hon. Friend bear in mind that Britain is now about seventh in order with the Soviet Union whereas we used to be first among all the Western European countries—a position now held by West Germany?

Our trade with the Soviet Union has been at a regrettably low level for a long time, considering the size of its industrial base and the size of our industrial base. Like my hon. Friend, I very much welcome the obvious success which my right hon. Friend the Prime Minister has enjoyed in his visit to Moscow. Whether that should incite me to visit Moscow ahead of the Joint Commission is a separate matter. A great deal of work has been done and we shall follow it up as necessary. However, I have definitely in mind the Joint Commission meeting in May.

When the right hon. Gentleman goes to Moscow, will he correct the impression given by the Prime Minister during the playing of the national anthems and take off his hat and not keep it on, which the Prime Minister did, as we saw on television last night?

I cannot comment on the incident because I did not see it. However, I think that the hon. Gentleman's intervention was extraordinary and rather unworthy.

Export Promotion (Eec Countries)


asked the Secretary of State for Trade what advice, in the light of the EEC negotiations, his Department is giving to British exporters seeking to establish new sales outlets in the Common Market.

The full range of the Department's export services continues to be available to such exporters. The current renegotiation of the terms of our membership of the EEC has in no way weakened our encouragement to exporters.

Does not the Under-Secretary of State think that his Department should explain to exporters the likely effect of the EEC negotiations leading, as the Secretary of State for Trade wishes, to Britain's withdrawal from the EEC? Is it not a fact that British exporters who are starting new sales outlets in the EEC may find themselves without the tariff advantages which they now expect to enjoy?

I do not accept that the present uncertainties about membership seriously limit the value of the advice which my Department can give. In the event of a decision being taken to withdraw—and that obviously is by no means certain—I am confident that Europe must continue to be a major market for all British exporters.

Is the hon. Gentleman aware that many business men who have exported to the Continent for many years are getting quite desperate about the increase in documentation, or plain bumf, occasioned by our entry to the EEC? Many of them look back almost nostalgically to the days before we entered when it was easier to export than now.

We are aware of the difficulties resulting from complicated documents not only in the EEC but in other markets. I can assure the House that my Department is working with our partners in the EEC and other parts of the world to standardise, on an international basis, trade classification and other documentation procedures to speed up the flow of exports, which must be in the interests of all of us.

Eec And Efta Countries


asked the Secretary of State for Trade what was the average monthly deficit in 1974 on an Overseas Trade Account basis in United Kingdom trade with the eight other members of the European Community and with EFTA.

Does my right hon. Friend agree that the figure for the European Community contains a significant oil element? Does he also agree that, as the EFTA population is only one-fifth of the EEC population, we did rather worse on a population basis with EFTA than with the EEC last year?

I agree that the figure for trade with the European Community contains an oil element, but it is relatively small in the context of our total trade with the EEC. The EFTA deficit is larger than I would wish and reflects almost wholly the doubling of the price of forest products of all kinds, for which EFTA is our principal source of supply.

The right hon. Gentleman said that the figures should be treated with the most scrupulous care. Does he recall that at the end of October in his departmental publication his statisticians gave their reasons for our deficit with the EEC but they did not mention membership of the Community as being one of them? When will the right hon. Gentleman do as he has been asked and publish the facts on which he bases his insinuations that our membership of the EEC is the principal cause of the size of our deficit?

I have not said that. The only conclusion I can draw from what the hon. Gentleman said is what the House would expect, and that is that there is no censorship wihin the Department of Trade. If the statisticians of the Department wish to draw attention to certain factors and features, I am perfectly happy that they should do so.

Japan (Motor Vehicles)


asked the Secretary of State for Trade if he is yet in a position to make a statement about the imbalance in trade in motor vehicles between the United Kingdom and Japan for 1974.


asked the Secretary of State for Trade if he will restrict the import of Japanese cars in Great Britain.

The imbalance narrowed last year mainly as a result of a fall of 11 per cent. in imports and now amounts to £61 million. I look forward to a further reduction in 1975, now that the British industry is better able to meet demand at home and abroad. I have no proposals for import restrictions.

Has the Minister studied recently the prices of Japanese cars in this country, particularly in view of the rate of inflation in Japan? If he has not made such a study, will he accept that it would show that there is cause for fear about dumping? Will he make such a study?

I do not think that it is for the Department to undertake the study. It is for the British industry or the Society of Motor Manufacturers and Traders to undertake such a study in support of any claim they may wish to make that Japanese motor cars are being dumped here or subsidised. If and when we receive such evidence, we shall obviously give it very serious consideration.

Will my hon. Friend inform the Japanese Government that in the present depressed state of the market we cannot continue with the situation in which for every British car imported into Japan the Japanese export 100 cars to Britain? Will he inform them that if that situation continues he will reconsider his decision and impose quotas on Japanese cars?

If my hon. Friend's comments were based on the feeling that the fault lay entirely with the Japanese, there might be a case to answer, but I can assure him that the major reason why we have not exported many cars to Japan has been the shortage of capacity in this country. In this connection I refer my hon. Friend to a statement by the Deputy Chairman of BLMC on the radio on 2nd February when he said:

"Up to now we have not tried"—
that is, selling cars to Japan—
"because we have not had the vehicles available."

The House will be glad to hear the Minister's comments about dumping. Would it not be wrong to extend any protection to a British industry which is suffering from inflationary wage settlements?

I have every confidence in the British motor car industry as a result of trips that I and my right hon. Friend have made to various markets abroad. There have been no complaints to me while overseas about quality, reliability or price The main complaints have been about delivery and the shortage of capacity in Britain.

Has my hon. Friend any information about reported Japanese intentions to export completely knocked down cars to Britain on a large scale? Will he investigate this matter in order to ensure that this method is not used to conceal dumping?

I have not heard the reports and I am grateful to my hon. Friend for drawing my attention to the matter. If those reports were correct I do not think that the company concerned would be acting wisely or realistically, and I would consider any evidence put to me about unfair trading practices such as dumping.

Manufactured Goods (Eec Countries)


asked the Secretary of State for Trade if he will show the average level of tariffs imposed on United Kingdom imports of manufactured goods from EEC countries at the present time and prior to United Kingdom membership of the EEC, the corresponding figures for United Kingdom exports to EEC countries and the present value of the trade involved in each direction.

The average levels before accession were estimated to have been 10 per cent. for United Kingdom imports and 8½ per cent. for EEC imports. These have now been reduced to 4 per cent. and 3·4 per cent. respectively. In 1974 United Kingdom exports to and imports from the EEC Six were £3,813 million and £5,759 million on a balance of payments basis.

Does my right hon. Friend agree that the figures he has given, together with the figures he gave earlier this afternoon, demonstrate once more that the balance of advantage in this arrangement has accrued to the EEC countries and not to us? Will he therefore confirm my view that if Britain should decide to withdraw from the Common Market it is most unlikely that the EEC countries would act against their own interests in restoring tariff barriers and, therefore, that the point about tariff barriers should not be taken seriously in the debate about Britain's continued membership?

Undoubtedly in the early period of our entry into the EEC the balance of advantage in trade has clearly been gained by the other countries. That is the general picture. Of course I wholly agree with my hon. Friend when he says that there would be very strong reasons on both sides of the Channel for maintaining a free trade arrangement if the British people decided to withdraw.

Why does the right hon. Gentleman keep rabbiting on about the terrible EEC deficit? [HON. MEMBERS: "Because it is true."] Will he say why he disagrees profoundly with the Prime Minister, who said quite categorically on 14th January that both sides of the House had always expected that in the initial period there would be a deficit situation as United Kingdom exporters built up their trade?

I seldom disagree with my right hon. Friend the Prime Minister, but on that occasion I think he must have been revealing his well-known generosity of character in being so kind to the Opposition.

Food And Live Animals


asked the Secretary of State for Trade what proportion of the United Kingdom deficit with EEC countries in 1974 arose from trade in food and live animals.


asked the Secretary of State for Trade by how much the trade deficit in food and live animals has increased in percentage terms between (1) the United Kingdom and the six original members of the EEC and (2) the United Kingdom and the rest of the world between 1971 and 1974.

In 1974 the crude trade deficit—that is, the difference between exports valued fob and imports valued cif—in food and live animals with the Six accounted for 33 per cent. of our crude trade deficit in all goods with the Six. Between 1971 and 1974 the crude trade deficit in food and live animals increased by 297 per cent. The corresponding figure for the rest of the world is 37 per cent.

Will the hon. Gentleman help the House by relating that answer and the Secretary of State's earlier answers to the answer given by the Secretary of State for Prices and Consumer Protection last week that food Prices in this country were now rather lower than they would be if we were outside the EEC? Is not the only way of reconciling these two Government statements to agree that our food importers have been switching on a massive scale to supplies within the EEC as these are cheaper and more secure?

One can draw several conclusions from the switch in our trade, but none of them has necessarily to be picked out as being more important than another. For example, it is a fundamental principle of the common agricultural policy that there is Community preference and that one gives preference to food supplies from within the Community irrespective of price comparisons between supplies inside and outside. We should also take into account the depreciation of sterling. The argument as to whether food is or is not cheaper inside the EEC was effectively answered by my hon. Friend the Minister of State for Agriculture, Fisheries and Food on 23rd January, when he gave a list of commodities in three sections: first, those for which prices were lower inside the EEC; secondly, those for which there was no significant difference; and thirdly, those for which prices were higher outside the EEC.

Is my hon. Friend aware that the most fundamental issue facing the people of the United Kingdom is the facts of the case? Every Britisher must know why Britain was taken into the Common Market and whether it is in our interests to remain in or come out.

Yes, Sir. My hon. Friend and the hon. Member for Mid-Oxon (Mr. Hurd) have raised a fundamental point which will feature largely in the referendum campaign.

Will the Minister confirm that our total crude trade deficit with the Eight last year was £2,215 million and that food and live animals accounted for £1,224 million, which, by my arithmetic as opposed to the Secretary of State's, is rather more than half of the total trade figure?

May I clarify this statistical confusion? Some answers are given, depending on what the questioner wants, relating to the EEC Six while others relate to the EEC Eight. The answer that the hon. Gentleman has mentioned relates to the EEC Eight. My hon. Friend's answer related to the EEC Six.