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Oral Answers To Questions

Volume 931: debated on Monday 9 May 1977

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Trade

Oil Slicks

1.

asked the Secretary of State for Trade whether he is satisfied with the contingency plans of his Department for dealing with oil slicks.

Contingency plans to protect the coasts from pollution have been tested by exercises and live incidents and shown to be generally satisfactory. Nevertheless my Department constantly endeavours to improve its capability in order to meet changing circumstances, such as the additional pollution hazards of offshore oil exploitation.

In the case of the recent Ekofisk blow-out, the blow-out preventer was wrongly fitted upside down. Does that not indicate a need for close: inspection? Since such incidents as the Ekofisk blow-out and the tanker which is today reported to be grounded off the coast of Germany could have disastrous consequences, what additional steps are the Government taking to ensure that the oil companies face up to their responsibilities to provide vessels to fight fires, to deal with pollution and to prevent damage to fishing grounds and coastlines?

The first part of my hon. Friend's question is a matter not for me but for the Secretary of State for Energy. As for the responsibilities of oil companies, the specific point that my hon. Friend has mentioned is being closely investigated with the oil companies. There is a Standing Committee on Pollution Clearance at Sea, and a whole variety of other methods have been established to ensure that there is the closest coordination between all organisations and parties which have some responsibility in this area.

Is the hon. Gentleman aware that I am grateful to him and to a galaxy of Ministers who have been explaining to me the precautions against pollution? The public will be grateful to the Government for the plans they have drawn up. Is he also aware, however, that there is still some anxiety about the chain of command and whether each local authority has sufficient resources to discharge its wide responsibilities?

This morning the right hon. Gentleman came to see the Secretary of State for Energy and, as he put it. a whole galaxy of Ministers. We had a long and fruitful discussion about a whole variety of matters that concern us all.

On the point about the chain of command, we do not wish to be complacent but we have no reason at present to consider that it has led to any difficulties. However, we are keeping the matter under review, as the right hon. Gentleman knows. The point about local authorities is a matter for the Secretary of State for the Environment, but I do not believe that there is cause for anxiety on this score, although the level of resources must be increased, and this matter is receiving careful attention.

Is the hon. Gentleman's Department responsible for evaluating the effect of pollution on fishing grounds? If not, who is carrying out such an inquiry and when are we likely to hear the results?

That is a matter for the Ministry of Agriculture, Fisheries and Food, but there is co-ordination with a number of Ministries involved in the matter and a joint effort is being made.

Is the hon. Gentleman aware that compensation has not yet been paid in respect of boats in Folkestone Harbour although the oil damage there took place more than 18 months ago? Will he give an assurance that he will speed this up?

I shall look at the matter, but I do not recall the hon. Gentleman previously having written to me about it. However, as he has now drawn the matter to my attention I shall certainly look into it.

Concorde

2.

asked the Secretary of State for Trade if he will make a statement on the Noise Advisory Council's report concerning Concorde engine noise during the first eight months of scheduled service between London and Bahrain and Washington.

20.

asked the Secretary of State for Trade what action he is taking to implement the recommendation of his Noise Advisory Council on Concorde noise levels.

The report is being studied and I shall respond formally to the Council's recommendations as soon as possible.

Can the hon. Gentleman confirm that the report indicates that at both 5 km. from the start of the takeoff roll and 30 km. from the start it was demonstrated that Concorde was noisier than the Boeing 707? Does he intend to have discussions with the manufacturers about this report, also taking into account the findings of the report which was recently submitted by the Civil Aviation Authority? Will he seek an assurance from the manufacturers that they will do something to make the aircraft less noisy?

My right hon. Friend the Secretary of State has tried to keep the House well informed about the situation. Two reports have been published recently, one by the Civil Aviation Authority and one by the Noise Advisory Council. The first of those reports is based on 12 months of operation of Concorde, and the hon. Gentleman has selected only one facet of that report. The overall conclusion reached by the CAA technical report was that on arrival Concorde is on a par with the Boeing 707 and that on departure it is within the range of noise levels recorded at permanent monitoring sites by subsonic aircraft using the same runways. Those are two pertinent points that should be borne in mind.

It is clear that the first two Questions on the Order Paper are of wider interest. I hope that hon. Members whom I call will direct short questions and that we shall have short answers.

Is my hon. Friend aware that our right hon. Friend the Secretary of State for the Environment is Chairman of the Noise Advisory Council and in that capacity is party to the report which says that Concorde is significantly noisier than any subsonic aircraft? In responding to that report, will my hon. Friend recognise that he is responding to our right hon. Friend who is a party to the view which I hold—namely, that Concorde is a very noisy aircraft indeed and should not be excluded from the limitations placed upon subsonic aircraft which have resulted in my hon. Friend giving answers to the House that have been misunderstood?

I am not answering my right hon. Friend; I am answering my hon. Friend who has a peculiar view about Concorde. My right hon. Friend was not responsible for the report or the views contained in it and has expressly said so. I regret to say that once again my hon. Friend is being carefully selective.

Does the hon. Gentleman agree that in eight of the 12 months the Boeing 707 was found to be the noisiest airplane at the statutory monitoring point at Heathrow and that the average weekly traffic movements over the past 12 months show seven Concordes and 463 Boeing 707s? Can he tell us when the Noise Advisory Council and other people will turn their attention to the real target if we are serious about cutting down aircraft noise?

The answer to the hon. Gentleman's first two questions is "Yes". On the third, I do not know.

What progress is the hon. Gentleman making in dealing with the problem of secondary or reflected noise from Concordes over the English Channel which has affected a number of constituencies all the way from the South-West to my own?

I have tried to keep hon. Members who are particularly interested in this matter closely informed about the steps that the Government have taken and I have written to them a number of times. We are carrying out intensive investigations and are discussing with the French possible changes to the flight paths.

Will the hon. Gentleman confirm that the Noise Advisory Council's report was based on a CAA report which was published earlier than the one he has mentioned and that it covered only about 1½ per cent. of the Boeing 707 flights out of Heathrow, although they have proved to be generally the noisiest planes?

Does one not have to be careful in talking about the Boeing 707, because the 320-C series of that aircraft is noisier than Concorde?

Has the Minister read reports that British opponents of Concorde have addressed public meetings in New York and alarmed people by claiming that there has been a huge fall in property values around London Airport because of the operations of Concorde? Will he take this opportunity to deny that outrageous allegation?

I am tempted to say only "Yes", but I should add that it is reprehensible that there has been an orchestrated campaign to damage this aircraft and the employment of many thousands of people who are dependent upon its successful operation. The situation is being considered by the district court in Manhattan and we ought to await the conclusions of the learned judge in the case.

British Airways (Disputes)

4.

asked the Secretary of State for Trade if he will list the disputes that have occurred at British Airways, or at BEA and BOAC before the formation of British Airways, over the last five years that have resulted in a loss of more than £1 million to the airline

Six disputes fall into this category. Industrial action was taken by cabin crew and engineering supervisors in 1974 and by TriStar maintenanace staff in 1975, when there were also problems with the integration of the cargo centre. This year there was industrial action by aircraft and catering loaders, and most recently of course by engineering maintenance staff.

Is the hon. Gentleman aware that these disputes usually take place during peak holiday times? Will he condemn the infliction of hardship on travellers as a means of industrial bargaining?

That is not a particularly constructive or helpful approach. It is not likely that industrial disputes would take place in the middle of the night when there are scarcely any aircraft movements. Of course the travelling public are inconvenienced, and one regrets that. British Airways management and the unions concerned are anxious to produce a better industrial relations scenario at Heathrow, and I believe that they are thinking positively about that.

Is my hon. Friend aware that, despite the many negotiations that have been going on at Heathrow between British Airways and the unions, there are still some sensitive points over which trouble could brew again because of misunderstandings? Will he consult the Secretary of State for Employment and ask him to offer his services to the unions and the management to prevent a recurrence of what happened some weeks ago?

My hon. Friend is right in saying that there are still sensitive areas at Heathrow. I can assure him that Ministers in the Departments of Trade and Employment are watching the situation carefully, as is ACAS. Although there may be difficulties—and one cannot be complacent about that—British Airways are taking a new initiative in employee participation with the unions, and this is to be encouraged.

Exports

5.

asked the Secretary of State for Trade if he is satisfied with the volumes of exports recorded for the last two months; and if he will make a statement on the efforts made by his Department to improve on this performance.

No, Sir. I am looking for a greater contribution from exports towards the elimination of the deficit on the current account of the United Kingdom's balance of payments.

Is the hon. Gentleman aware that the current trend in exports is rather worrying and that there has been a slight fall? Is he also aware that the trouble lies in the incentives to export, an example of which was the recent confusion over the taxation of people going abroad to market British exports? Could he do something to encourage exporting, because the Government are not doing it at the moment?

I am certainly aware that the recent trend in exports has not been as satisfactory as we should have liked, although in February and March our exports were up by 7 per cent. on the same period last year. America's exports fell in the first quarter this year, so it is not only our exports that are encountering difficulties. In regard to incentives, I am sure that the hon. Gentleman appreciates the importance of the new regime for exporters introduced recently by the Chancellor of the Exchequer. Our latest estimate is that exports will increase by about 5½ per cent. in the next year.

Has my hon. Friend seen the report prepared by economists working for the NEDC, which pointed out that the difficulties with exports were arising from non-price factors, particularly design, quality and delivery dates? Does he agree with the report's conclusions which highlighted these reasons for our not maximising export effort?

I am sure that non-price factors are important, although it is impossible to quantify them precisely. British exports have generally always had a high reputation for quality, but not always for delivery. I think that the emphasis that the Government have given to securing export-led growth for our economy by a tight monetary policy on the home market should ensure that once the export drive gets under way it will be sustained and will not be broken off short.

Japan

6.

asked the Secretary of State for Trade what is his policy towards trade with Japan following his recent visit.

11.

asked the Secretary of State for Trade what further measures he proposes to take to encourage Anglo-Japanese trade following his recent visit to Japan.

12.

asked the Secretary of State for Trade what proposals he has for reversing the current trend in the balance of United Kingdom trade with Japan.

31.

asked the Secretary of State for Trade, following his recent visit to Japan, what action is proposed regarding the United Kingdom's trade relations.

During my discussions with Japanese Ministers and business leaders, I stressed that a satisfactory trading relationship could not be achieved without a substantial increase in British exports to Japan. I look forward to Japanese co-operation in improving opportunites for imports from the United Kingdom and in continuing to restrain sensitive exports. The Government will continue to give strong support to British business men wishing to sell in Japan.

because, unlike the Leader of the Opposition, the ordinary person in the street is fed up with the fact that Japan is seeking to destroy vital industries in this country while refusing to accept British imports on the same terms as we accord to Japanese imports?

When in Tokyo I made perfectly clear to the Ministers concerned that we looked to an improvement in our exports to Japan and that the Japanese Government and industry could assist in that respect.

Does the Minister think that the tone of his remarks in Tokyo helped our relationships with Japan, particularly on a trading basis? Will he confirm that many of the so-called non-tariff barriers affect domestic products as they affect imported products? Is it not true that British manufacturers who set out to be as efficient as their Japanese counterparts enjoy a considerable measure of success when exporting to Japan?

The hon. Gentleman asked whether I thought my remarks in Tokyo helped our relations with Japan. When one discusses matters with another Government, it is best to make clear the anxieties that are felt at home. I made that perfectly clear, and I do not think it was misunderstood or that it in any way harmed our relations with Japan. Of course British manufacturers must produce the right product, but they find by experience that it is peculiarly difficult to sell in Japan even when products are competitive. This relates to reasons the removal of which could be assisted by the Japanese authorities.

Does the right hon. Gentleman share the scepticism of his hon. Friend the Member for Bolsover (Mr. Skinner) in recognising the futility of trying to improve the balance of payments by ministerial edict? When invisible earnings are taken into account, is it not arguable that our total trade with Japan is in surplus?

I do not expect to improve the balance of payments by ministerial edict. I believe that the Japanese Government could bring a certain influence to bear in terms of the level of Japanese imports. As for the level of invisible earnings, that matter has been discussed on many occasions. It is clear that invisible earnings are an advantage to this country, but they do not come anywhere near balancing our deficit with Japan.

May I congratulate my right hon. Friend on the frank and novel way in which he spoke to the Japanese Government and industry, which undid some of the harm caused by the visits made to Japan by the right hon. Lady the Leader of the Opposition? Will he consult the Department of Industry and tell its officials to keep an eye on the industries set up by Japan in this country, since those industries are not becoming manufacturing industries but instead are assembling plant and components imported from the Far East?

The matter to which my hon. Friend refers is one for my right hon. Friend the Secretary of State for Industry. My hon. Friend will no doubt know that the Department of Industry has brought pressure to bear on Japanese investors in this country to use locally-made components.

Since the communiqué issued after the recent summit meeting laid great stress on giving the Tokyo Round negotiations another boost, may I ask whether the Prime Minister of Japan and the President of the United States gave any indication of their wish to give the multilateral trade negotiations further help by reducing tariff barriers to our exports, since these are considerable in both countries?

I discussed this matter on a recent visit to Washington, and when in Tokyo I met the Japanese Prime Minister. Both countries felt it necessary to give an impetus to multilateral trade negotiations. This means removing non-tariff barriers which currently impede our exports to those countries. The problem in Japan, however, is not primarily a matter of formal obstacle. The trading system there does not allow freedom of imports in the same way as does the trading system in European countries.

In talking to firms in this country which wish to increase their exports, will the right hon. Gentleman encourage them to emulate British Leyland, which has taken the step of setting up its own offices in Tokyo with a view to pushing ahead with its exports?

Yes, Sir. Many British firms have devoted considerable efforts to increasing exports to Japan, and in the last five months for which we have figures in sterling terms the value of our exports shows a 42 per cent. increase over the equivalent period in the previous year. There is no doubt that currently British industry is making substantial efforts to export to Japan, but we could do even better if there were a change of attitude on the part of the Japanese.

A M Devereux Ltd

7.

asked the Secretary of State for Trade if he will seek an early meeting with the Official Receiver in companies liquidation with regard to the case of Messrs. A. M. Devereux Limited, in view of the continuing delay in resolving the liabilities of the company and making payment to the outstanding creditors.

A receiver for the debenture holder of A. M. Devereux Limited is in possession of the assets, and he is required to pay the preferential and debenture holder's claims. I am not in a position to intervene.

The Official Receiver, as liquidator of the company, cannot make any payments to the ordinary unsecured creditors until the receivership is completed and any surplus funds then remaining are paid over to him.

Is it not intolerable that one of my constituents, a former employee of this company, has already had to wait more than four years for the arrears of wages and holiday pay which are due to him? Is the Minister aware that as long ago as August 1974 the Official Receiver said that this case was almost completed, and yet we now have more difficulties emerging in correspondence and we are told that the Inland Revenue has created more difficulties? How much longer will this saga continue? Will the Minister bang a few heads together and get things moving?

I have already told the hon. Gentleman that I cannot intervene. If his constituent has any problems about the conduct of the Official Receiver, he has available to him recourse to the courts under Section 80 of the Bankruptcy Act. The receiver inherited a number of difficult accounting problems and he had to wait for the new accounts to be published. He hopes that those accounts will be finalised in three months' time.

European Community

8.

asked the Secretary of State for Trade whether he is satisfied with the United Kingdom's trade with the EEC.

No, Sir. I am looking for a further improvement in our visible trade position with the Community, following the reduction of some £270 million in our deficit with it in 1976.

Is the Minister aware that since we joined the Community in January 1973 we have accumulated a total trading deficit of over £8,300 million and that this figure is now running at an annual rate of £2,500 million? Is he further aware that our trade with the Common Market represents 38 per cent. of our world trade yet 57 per cent. of our total trade deficit? Since we cannot allocate invisibles to trade areas, does he not agree that this terrible deficit must in some part be the cause of the decline in the value of sterling last year?

The hon. Gentleman has spelt out the size of the total trade deficit since 1973, and I agree that it is far too large. But it is also true to say that since 1973 our trade has deteriorated in respect of our other main industrialised partners, namely, the United States and Japan—marginally in one case but significantly in the other.

The hon. Gentleman should be fair in taking account of some offsets that exist, partly in terms of monetary compensation amounts, which at the lowest point of devaluation were worth £400 million a year. In terms of invisibles we have had a surplus in the EEC of £350 million in one year and of £150 million in the next. Those figures are very much lower than the deficit on invisible trade, but they are not insignificant.

Is my hon. Friend aware that our trade deficit with the EEC is now four or five times greater than our trade deficit with Japan?

In view of what has been said in other replies about our trade with Japan, will the Minister confirm that the EEC offers a vast assured home market if only this Government would make it possible for the goods to be produced?

The question of whether it is an advantage that there is a mutual reduction of tariffs must be seen in the context of the changing pattern of trade and the size of the deficit or surplus. I do not think that the existence of that assured market has yet quite produced the results which some hoped to see from it.

Does my hon. Friend recall that, as an anti-Marketeer, he argued on platforms against British entry into the Common Market on the basis that we should not be able to supply this 250 million population-type market with our consumer durables even though we should be buying its food? Second, does my hon. Friend know that at the county council elections in my constituency of Bolsover the other day several anti-Marketeers stood on the platform of still being against the Common Market, that every one of them was returned and that we made a Labour gain as well?

Many conclusions have been drawn from the anti-Common Market stance taken by candidates at the recent elections. Whatever be the truth about that, however, there is no alternative in the short term but to improve our competitiveness and our productivity and to reduce the margin which separates us and the EEC, since there is no reason why, in terms of manufactures, we cannot further reduce the deficit considerably.

Is there any evidence whatever to show that, if we had not entered the Community and we still had a substantial tariff barrier against our goods into the EEC, and vice versa, our deficit would not be even greater than it now is?

The evidence on that point is conjectural, but I shall allow it to the hon. Gentleman that interest rate differentials and differentials in domestic inflation rates are considerably more important in modern trading conditions than are relatively small changes in tariffs.

Investment (Heads Of State)

9.

asked the Secretary of State for Trade if he will introduce amending legislation to the Companies Act 1976 to ensure that the investments of the Royal Family and Heads of other States will be subject to the same disclosure as those of commoners.

As the Government have declared that they favour wider disclosure, is not this special secrecy positively feudal? Second, what is to prevent relatives of foreign potentates each taking up to 5 per cent. of shares in a British company, thus acquiring control unknown to the British public, to the company concerned and to its employees?

The object of the section in the Act was to deal with the problem of warehousing. That is what it effectively does, and the section is drafted for that purpose. Under the section, if anyone holds 5 per cent. this has to be revealed, and the exemption does not cover that. My hon. Friend asks whether it is possible for a large number of people associated in a family to acquire control of a company by each acquiring less than 5 per cent. Under this system it is one of the functions of the Bank of England to police exactly that sort of undesirable happening.

Trade Balance

10.

asked the Secretary of State for Trade if he will make a statement on the latest balance of trade position.

There has been an underlying improvement in the United Kingdom's balance of payments position in recent months, which is expected to continue through 1977.

I thank my right hon. Friend for that reply, but is it not true that, although free trade might be a fine principle, imports come too easily into this country, with substantial effect on the textile and footwear industries and now also on special steels? Is he aware that the Japanese are now talking about taking 20 per cent. of our gardening tools market? Further, on the question of exports, will my right hon. Friend have a word with his right hon. Friend the Secretary of State for Energy about the surplus coal in this country? Why cannot we export it to the EEC in place of the imports which are coming from countries outside the EEC?

It is one of the objects of the multilateral trade negotiations, which the leaders at the summit asked should be given impetus, that trade should be free of impediments to exports and imports. In the specific areas to which my hon. Friend referred, the Government have taken action. For example, they have taken action in respect of footwear, although I know that further representations are to be made to me, and they have taken action in respect of steel and special steels. As regards textiles, my hon. Friend knows that the situation is currently the subject of the renegotiation of the multi-fibre arrangement. I shall certainly discuss the point about coal with my right hon. Friend.

Does the Secretary of State appraise our present trade position as Mr. Sam Brittan has suggested, from the point of view of a model of modern mercantilism? Second, in connection with the multilateral trade negotiations, does the right hon. Gentleman accept that the principles of the common agricultural policy are entirely open to be renegotiated in the course of those negotiations?

As regards the standpoint from which I appraise the multilateral trade negotiations, I suggest that the hon. Gentleman reads the 54-page lecture which I gave but which I hesitate to summarise at the moment. As for the part to be played by the common agricultural policy in the multilateral trade negotiations, it is quite understood that the multilateral trade negotiations cannot affect the general principles of the common agricultural policy.

That has been accepted as part of the European position in these negotiations, and I think that the United States also accepts it. That does not mean that other forms of action may not be possible in regard to agriculture.

I have not had the advantage of reading my right hon. Friend's 54-page lecture, so will he tell the House, in view of all the various statements made today which underline our point that we have effectively gained nothing out of being in the Common Market, whether in any part of that lecture he spells out what tiny advantages we have got from being in this monstrosity?

In the course of the lecture I briefly referred to our membership of the European Economic Community and I indicated some of the advantages in trade negotiations which have accrued to us therefrom. For example, in the specific area of textiles and the negotiation of the multi-fibre arrangement, I assure my hon. Friend that the views of this country would weigh a great deal less were they not associated with the views of eight other important trading nations.

I have not had the benefit of reading the right hon. Gentleman's lecture, but does he not agree that, unless some details of the common agricultural policy can be renegotiated at Geneva, there is a danger of the Geneva negotiations being fouled up altogether? Further, will he seek at Geneva to obtain some redefinition of anti-dumping?

As for whether the negotiations are likely to be fouled up, I believe that there is now a better understanding in Washington of the position of the European Community in respect of agricultural policy. I discussed this matter when I was in Washington, and I do not believe—although, of course, no one can at this stage guarantee it—that the problems of agriculture will prevent the successful outcome of the multilateral trade negotiations. As for anti-dumping, one of the issues which, I know, a number of countries involved in the multilateral trade negotiations wish to discuss is the problem of subsidies, and we should certainly like to see the United States Government bring their domestic legislation on countervailing into line with what was agreed by the constituent Powers many years ago.

Car Imports

13.

asked the Secretary of State for Trade what was the total import penetration of the British car market by foreign producers for the first three months of this year compared with the same period of 1976.

According to figures from the Society of Motor Manufacturers and Traders, import penetration of the United Kingdom car market in the first three months of 1977 was 42·8 per cent., compared with 34·7 per cent. in the same period last year.

Does the hon. Gentleman realise that the situation is still giving rise to considerable concern and that in January this year, for example, we exported only 103 British cars to Japan, compared with 162 in the same month last year? What improvement does the hon. Gentleman expect in the export of parts and components to Japan as a result of the buying mission which came to Britain in March?

Certainly I agree with the hon. Gentleman that there is considerable concern about the trading position in respect of our motor car industry. The basic problem remains that we have to produce sufficient cars to meet domestic demand and also the demands of overseas markets. With regard to the export of commercial vehicles and components, we have a very substantial surplus, although certainly in the case of trade with the EEC it does not match the deficit on trade in cars. I cannot give a direct answer to the hon. Gentleman's last point but will certainly let him know.

What estimate has been made of the possible total import penetration if the policy of the Conservative Party had been pursued and British Leyland had been allowed to collapse and Chrysler had withdrawn from this country? Will my hon. Friend in a positive way support the "Buy British" campaign to help the British car industry in this country?

The consequences had British Leyland and Chrysler been allowed to collapse are virtually unimaginable. There can be absolutely no question of this, whatever Opposition Members may say while they remain in Opposition. With regard to the point about the "Buy British" campaign, there is a major difference between us and some of our competitors inasmuch as there is a natural nationalistic desire on the part particularly of the Germans and the Japanese to buy their own products. That desire does not, for various reasons which can be conjectured, appear to be developed here to the same extent. I assure my hon. Friend, however, that we are very well aware of this and that, in ways which I cannot publicise, we are seeking to take measures in this direction.

Is the Under-Secretary able to relate the import penetration to production figures in this country for the first three months of this year? Can he also tell the House whether his Department will be making representations to the Government about the new Mini development and its place in international trade?

I cannot closely relate import penetration levels and production in the first three months, particularly because, following disputes such as those we have seen, although certainly some sales are less and increased imports result, there may be a delay rather than a loss in other cases. The new Mini is a matter for my right hon. Friend the Secretary of State for Industry, and certainly close consultations about this are going on at the present time.

Will my hon. Friend liaise with his right hon. Friend the Chancellor of the Exchequer about the unfair competition which exists between those who sell British cars and those who sell foreign cars? Will he accept that there is a great economic and financial advantage to the car purchaser to take up an offer from Fiat, Datsun, Toyota and Volkswagen because of their low interest charges? Does he further accept that in this respect the position when buying from British Leyland militates very unfairly against the British car industry, and that this is one of the major factors in persuading the British buyer to buy foreign cars? Will he accept that it is simply a matter of economics and that there is unfair boosting from foreign Governments? Finally, will he deal with this situation?

The differential in interest rates makes a considerable difference, as my hon. Friend spelt out It is the Government's firm intention, as one of our central aims in our economic policies, to reduce the level of interest rates in this country. I do not think there can be any question of subsidising the interest rate in the way that my hon. Friend seemed to suggest, but interest rates have come down very considerably in the last four months and I hope that they will continue to do so.

Latin America

14.

asked the Secretary of State for Trade what discussions he has had with the Chairman of the British Overseas Trade Board about export promotion in Latin America.

I am in regular contact with the Chairman of the British Overseas Trade Board about the board's export promotion activities, including those in Latin America.

The Minister must be extremely worried about our lack of success in Latin America. Is he aware that only 2·9 per cent. by value of our exports went into that market in 1976, and that that was a lower figure than in 1974 or 1975? Will he say what fresh impetus the Government intend to give to marketing in that area?

Although the hon. Gentleman is quite right to quote the figure of 2·9 per cent., it compares favourably with the 2·5 per cent. for our visible exports to the Eastern bloc, Russia and Eastern Europe, and is by no means insignificant.

With regard to fresh initiatives, in the last couple of years we have organised two major British industrial exhibitions in Sao Paulo and Caracas. In Brazil, too, our largest market, we have substantially increased both our trade and investment. We recently signed a memorandum of understanding that identified particular areas for co-operation when we are trying to get increased industrial development.

What are the prospects of exports of British engineering products such as the high-speed train and the advanced passenger train, in view of the extension of railways in Latin America?

I am sure that they are considerable. At the time of the visit of the President of Brazil we signed economic agreements with that country about steel and rail development plans, in each case worth probably well over £100 million. I hope that the rolling stock that goes with the rail manufacture will follow this.

Is the Minister aware of the considerable advances being made in selling to Chile by countries such as France and Germany? Notwithstanding the Government's well-known attitude to the political régime in that country, will the Minister make clear that he has no objection to the expansion of trade with it?

As has been made clear by my right hon. Friend's predecessor, although we have embargoed military supplies, normal facilities are made available for trade with Chile and ECGD cover is available subject to normal review and normal underwriting criteria.

Civil Aviation (Bermuda Agreement)

15.

asked the Secretary of State for Trade what progress he has made towards the renegotiation of the Bermuda Agreement.

18.

asked the Secretary of State for Trade if he will report on the progress being made by his officials in the renegotiation of the Bermuda Agreement.

The fifth round of negotiations for a new Air Services Agreement was held in Washington from 28th March to 22nd April. During my visit there on 26th and 27th April I reviewed the position reached with the United States Ministers concerned. Although some progress has been made, there are important issues still to be resolved. Negotiations resume in London on 16th May and I hope that we can reach agreement before the old agreement terminates on 22nd June.

Does the Secretary of State expect—as opposed to hope—to get a new agreement before the old one expires on 26th June? Does he still think that it was a very clever idea to start the renegotiations six months before the change of Administration in the United States? Will he say whether he thinks that the matter of New York landing rights for Concorde being negotiated at the same time has made it more difficult or less difficult to arrive at an advantageous Bermuda Agreement for the British carriers?

I hope that there will be an agreement by 22nd June. I think there are grounds in the negotiations to make that hope justifiable—that there will be an agreement by 22nd June. But, of course, I cannot give any guarantee. There are still some substantial matters outstanding between the two Governments.

The hon. Member asked whether it was sensible to start renegotiations six months before the change of Administration. It seems to me to have been right to do it then. I know of nothing that persuades me that it was not right to do it then. It has proved possible in the last few months—notably in the round of negotions just ended—to discuss the matter substantially and, as I said in my original answer, to make some progress. I do not think the fact that we had a six months' ground-clearing period before that has hindered the situation. It has obviously helped.

With regard to whether the negotiations concerning landing rights for Concorde in New York have harmed or hindered the situation, we now await the decision of the judge in the New York court on that question, and I have no comment to make. I have certainly indicated to the United States authorities that the subject of Concorde was a serious element in the negotiations at Washington. It will now unfortunately be the courts—I should have preferred it to be the Port of New York Authority—that will resolve this matter.

Will the Secretary of State tell the House whether the prospects of getting the Skytrain service accepted in America have been improved by the present difficulties in renegotiating the Bermuda Agreement?

I do not think that the renegotiations have affected the prospects for Skytrain one way or another. The hon. Gentleman will know that, as I announced in the House, we are trying to get Skytrain into the United States by means of a separate memorandum of understanding. I discussed this matter with United States Ministers when I was in Washington. The hon. Gentleman may know that the Department of Transportation has announced that it is in favour of Skytrain being allowed into the United States. That is a most helpful decision by that Department. We now await the recommendation of the CAB and eventually the decision of the President. As I have made perfectly clear, the willinginess of the British Government to support Skytrain is an indication that we, too, believe in competition.

Will the Secretary of State oppose attempts by American airlines to abolish their favourable rate for air freight under an agreement made with the shipping agents of British airlines in view of the great assistance that it has been to the textile and other industries?

I should prefer to look into that question and then to write to the right hon. Gentleman.

Scotch Whisky Exports

16.

asked the Secretary of State for Trade what is the current level of exports of Scotch whisky; and how this compares with the level 10 years ago.

In the 12 months ending March 1977, 93 million proof gallons of Scotch and Northern Irish whisky was exported compared with 42 million gallons in the same period ending March 1967.

Will the Under-Secretary bear in mind the unique qualities of this particular asset as a major dollar earner and source of employment in Scotland? Does he agree that it is time that these unique qualities were protected by the Government? Will he look in particular at the question of single malt whiskies and do everything possible to prevent the export of bulk shipments of this particular brand of whisky, as importers in many countries are now watering it down with inferior local rye whiskies, to the detriment of the good name of Scotch whisky?

I shall certainly look into the matter raised by the hon. Lady. I should point out that in the last five years there has been only a very slight increase in the share of total Scotch whisky exports taken by bulk exports—about ½ per cent. up to 29½ per cent. There is no guarantee that restrictions would promote equal exports of bottled Scotch. In fact, restrictions on bulk ex, ports would probably invite retaliation against bulk imports of other drinks, such as rum and table and fortified wines for bottling here.

Is my hon. Friend aware that for once I agree with everything said by the hon. Member for Dunbartonshire, East (Mrs. Bain)? Is he further aware that there is great concern among trade unionists in the Scotch whisky trade about the increasing trend towards bulk rather than bottled exports? Will he tell the distillers that that is harming not only employment prospects for workers in the bottling industry in Scotland and elsewhere but the international reputation of Scotch whisky, because many unscrupulous importers are bringing in good-quality Scotch whisky in bulk, mixing it with foreign rubbish, then bottling it and selling it under a Scotch label?

I shall certainly look at the balance of interest here in preserving both the unique reputation of Scotch whisky and employment in bottling it without losing the employment which we get from bottling imported wine and rum.

Company Directors (Statutory Obligations)

17.

asked the Secretary of State for Trade how many reminder letters have been sent to directors of a company in default of their statutory obligation during the last 12 months; and how many of those involved were deceased theatrical managers.

In the 12 months to 31st March, the Registrar of Companies for England and Wales sent some 45,000 reminder letters to persons notified to him as directors. It is not possible to say how many of these letters may have been addressed to theatrical managers, deceased or otherwise. My Department's objective is to secure increased compliance with the law by the living rather than to engage in spiritual communication with the dead.

I thank the Under-Secretary for that assurance. Does he recognise that this Question follows an earlier Question which I put down to his Department asking why it was making frenzied attempts to contact the late Mr. Arthur Bouchier, the ghost of the Garrick Theatre? Would it not be helpful if the Department saved the taxpayers' money by ending the reminder system, or at least if its officials read history—preferably theatrical history?

The hon. Gentleman is probably making his last positive appearance on this matter. Mr. Bouchier was a famous actor-manager, I gather, at the Garrick Theatre. It may be noteworthy that two of his longest-running productions were "The Golden Silence" and "The Arm of the Law". We have not been in a state of frenzy about this matter. It would be helpful if directors of companies—I am talking of the living rather than of spirits—advised the Companies Registry when one of their number departed this soil.

More generally and seriously, is the hon. Gentleman aware that the irresponsibility of a relatively small number of companies in not complying with their obligations under the Companies Act is not only a serious clog on commercial practice but very damaging to the overburdened majority, particularly of small firms, which try to wrestle with the matter? Is he aware that he would have the support of the House if he clamped down rigorously on the minority?

The hon. Gentleman is quite right. We stepped up the number of prosecutions quite dramatically in 1976, more or less doubling the figure for the previous year. I hope that the hon. Gentleman's observations will be taken to heart where it really matters.

British Airways (Chairman)

21.

asked the Secretary of State for Trade when he last met the Chairman of British Airways.

My right hon. Friend met Sir Frank McFadzean and his board members on 31st March.

Has the Minister had any discussions with the Chairman of British Airways about an approach to IATA in order to seek a reduction in the excessively high surcharge on Concorde fares which is likely to price Concorde out of the market, even if it is allowed to land in the United States?

Does my hon. Friend agree that it would have been better to appoint as Chairman of British Airways someone who believed in public ownership rather than someone who spent his time writing pamphlets for a centre run by the right hon. Member for Leeds, North-East (Sir K. Joseph)?

My right hon. Friend and I are concerned to have as Chairman of British Airways somebody who cares about the corporation and has proved and is proving his ability to carry out that job well. I believe that that is true of Sir Frank McFadzean. My right hon. Friend the Prime Minister has already made comments on Sir Frank's extraordinary political and economic views in other regards.

When the Minister next meets the Chairman of British Airways, will he suggest to him that he takes a holiday abroad on a package tour, travels with the Chairman of the British Airports Authority and, when landing at Heathrow or Gatwick, experiences all the frustrations which ordinary people face instead of the red carpet treatment which he normally finds?

I think that the Chairmen of British Airways and of the British Airports Authority are fully aware of the present difficulties at Heathrow and Gatwick. The hon. Gentleman knows that extensive changes are taking place at both those airports, and one unfortunate consequence is inconvenience to passengers. I hope that when the developments have taken place considerable advantage will be gained by passengers.

Companies (Audit Committees)

22.

asked the Secretary of State for Trade if he will make a statement of his views as to the value to companies of appointing audit committees in accordance with North American practice; and if it is his intention to propose that the appointment of audit committees should now be made statutory in certain classes of company.

Proposals for the establishment of audit committees deserve attention and, as the hon. Member will recall from an answer I gave him on 14th February, they are being examined alongside the more fundamental reappaisal of the structure of companies following publication of the Bullock Report.

Will the Minister bear in mind the good sense of the New York Stock Exchange authorities, which have not only made absolutely clear their intention that all companies quoted in New York must have audit committees by the end of 1978 but left plenty of time for the companies to make the necessary preparations and for people suitably qualified for this work to prepare themselves for their responsibilities?

I am aware of the advantages which are claimed for this practice, not only in the United States but in Canada, and the hon. Gentleman does not allow me to forget that. This matter must fall within the general review of company law which relates to the publication of the Bullock proposals.