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Oral Answers To Questions

Volume 934: debated on Monday 27 June 1977

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Oral Answers To Questions

Order. There is a fair amount of grouping of Questions today and I hope, therefore, that I may expect to have brief questions and as brief answers as possible.

Trade

Food And Fuels (European Community)

2.

asked the Secretary of State for Trade what were the amounts in £ sterling of the cost of imported food and fuels, respectively, from the EEC countries over the past three months ended 31st May 1977; and what were the amounts of oil and coal, respectively, which the United Kingdom exported to those countries during the same period.

In the three months ended May 1977, the value of imports of food—including live animals —and fuels from the EEC was £622 million and £261 million, respectively. Exports of petôum and petôum products and of coal, coke and briquettes to the EEC were £250 million and £12 million, respectively.

What would be the cost of importing a similar quantity of food from countries outside the EEC? Is my hon. Friend aware that there are many complaints about the cost of food from the Community in view of the price of food available from other sources? Is it not time that the Department produced information on that matter? On the question of coal, is not my hon. Friend aware that 40 million tons of coal are imported—

Order. The hon. Gentleman is now giving information. He has asked a lot of questions. Perhaps he will ask one for luck to finish.

Will my hon. Friend say what his intentions are for trying to persuade the EEC to take some of our surplus coal instead of buying coal from countries outside the EEC?

The National Coal Board is certainly well aware of the surplus of steam coal, although stocks declined last winter. It is making efforts to unload as much as possible on EEC markets.

As for food, an article of 11th June in the Economist estimated that the CAP adds between £500 million and £600 million a year to our trade deficit. There were two recent estimates by eminent economists on this matter. Professor Josling estimated that the saving for the United Kingdom of buying at world prices would be £380 million. Wynne Godley estimated that the saving was £200 million plus £430 million saved in payments to the CAP. I cannot give authority to these figures because they depend on factors which are systematically unquantifiable.

I agree with the Minister that the figures are confusing, but do we not get back to the fact that the Common Market has tariffs because food is cheaper outside the EEC and that an import tariff has to be imposed to bring the price up to Community levels?

I accept, as everyone must, that that is the case. The aim of the EEC is to achieve as much self-sufficiency as possible in both industry and agriculture.

Has my hon. Friend read the replies given last week by the Secretary of State for Prices and Consumer Protection in which he indicated that the effect of the CAP on our retail price index was very marginal?

The effect on the retail food index of the estimates which I have already quoted from two eminent economists works out at between 1·5 and 3 per cent.

What is the basis for the Minister's statement about the EEC's policy on self-sufficiency?

I think the contention that the EEC and the Treaty of Rome are based on the intention that member States shall be collectively as self-sufficient as possible is well understood. It is not enshrined in any particular article, but I have no doubt that it was in the minds of the founders of the EEC.

Is my hon. Friend aware that he would have considerable difficulty in persuading housewives that the EEC was responsible for such a small percentage of the rise in prices, particularly on basic foods such as milk and dairy products? In the case of many basic foods such as beef, he would find it virtually impossible to do that.

I was quoting the results of the studies which have been undertaken by two eminent economists. I was not giving my own view.

We have noted that the Minister's figures were rather questionable—I think that that was the term he used. However, have any estimates been made of what the margin would be between EEC and world food prices if the EEC were to start buying these products on the world market? What would that do to that margin? Would it not narrow very quickly indeed?

The effects of such a suggestion, which is purely hypothetical, cannot be quantified. If the hon. Gentleman wishes to pursue this matter, however, I suggest that he puts down a Question to my right hon. Friend the Minister of Agriculture, whose Department is most closely concerned.

Air Services (United Kingdom-United States Agreement)

3.

asked the Secretary of State for Trade when he expects to conclude the renegotiation of the Bermuda Agreement; and if he will make a statement.

17.

asked the Secretary of State for Trade if he will make a statement on the renegotiation of the Bermuda Agreement on civil aviation.

asked the Secretary of State for Trade if he will make a further statement on the renegotiation of the Bermuda Convention.

asked the Secretary of State for Trade what advantages have been gained for British civil airlines in the renegotiation of the Bermuda Agreement with the United States of America.

I made a statement to the House on 23rd June on the conclusion of the negotiations.

Is not the return to dual designation a remarkably rapid reversal of Government policy since single designation was the basis for the recent distribution of routes between British Airways and British Caledonian? What efforts have been made to ensure that the balance of advantage to the airlines has not been undermined by the new agreement?

The hon. Gentleman has, no doubt, taken part in many negotiations during his life and he will, therefore, know that in the course of negotiations certain points are given up and others are obtained. On the question of dual designation and single designation, we got substantially what we expected to obtain. As for the balance of advantage to particular airlines, we can make our own judgment, but this is something which will emerge only over a period of time. May I say how delighted I am that British Caledonian, as a result of this agreement, is now able to start its solo service to Houston in October? That is a major benefit for it, as are the provisions in respect of single designation for passenger control which will assist it to maintain its competitiveness on that route and to achieve it at Atlanta when it starts there, as I hope, in three years' time.

Is the Secretary of State able to confirm that British Caledonian will retain its existing licence to fly to Los Angeles and that it will be the second British carrier flying from that city? With regard to Houston, in the light of what has happened does he agree that British Caledonian's existing licence to Atlanta and Houston might reasonably be expected to include Dallas-Fort Worth?

The question of Dallas-Fort Worth was covered in policy guidance and is a matter for the Civil Aviation Authority in the first case. We have not decided that Los Angeles should be the second point to which we operate a dual designation. That is a matter which we must retain as an option for the time being.

Does the Secretary of State recollect that, on the subject of the Los Angeles route, he said last Thursday that the reason why the Americans would have two carriers whereas we would have only one was that the British share of the traffic was so small? Does he not think that it would be a good idea to try to double the designation for the British operators to put us on the same footing as the Americans and increase our share of the traffic?

If the hon. Gentleman checks what I said about Los Angeles last Thursday, he will find that it was that in our view Los Angeles at the moment did not deserve dual designation. However, that was an American requirement which, in the course of negotiations, we conceded. That must mean that it will remain open for us to exercise our option in the British interest as to where our second dual designation should operate.

Can the right hon. Gentleman confirm that the signatories to the agreement on the American side are fully competent to ensure its implementation in every State of the Union?

The hon. Gentleman put that question to me the other day, I think. The competence of the American Federal Government must be a matter for the federal system. I am satisfied that within this agreement, on the matters on which the Federal Government are competent, we have achieved substantially what we were out to achieve.

Concorde

5.

asked the Secretary of State for Trade if he will make a statement on Concorde's landing rights at Kennedy Airport, New York.

We continue to challenge in the United States courts the Port of New York Authority's ban on Concorde.

Will the Secretary of State tell Mr. Brock Adams that his devious attempt to divert attention from New York by seeking to hold inquiries into the interest in Concorde in other cities in the United States will fool no one and is no more revelant or helpful than if the right hon. Gentleman were to suggest, for instance, that Pan American should divert half its flights to Heathrow to Newcastle upon Tyne? Will the right hon. Gentleman continue to press the point that, once the American Government have signed a treaty, either they have the competence to enforce it or they should not have signed it in the first place?

We have all heard a great deal from Mr. Brock Adams recently. Mr. Brock Adams will have an important rôle in determining the future of Concorde at Washington. As for New York, the courts will decide and we are continuing with our case in the courts. We have every hope that they will decide in our favour. We have treaty rights in this matter, and those are preserved in the new agreement.

Would not the right hon. Gentleman agree that even if Mr. Brock Adams' suggestions, or whatever they are, for other airports have no legal force or any other kind of force, if in due course Concorde is able to fly to other airports as well as New York that would be most welcome to us and to the right hon. Gentleman?

Certainly, but it must be absolutely clear that the next gateway in the United States to which we wish to operate Concorde is New York.

Would not the right hon. Gentleman agree that while New York remains the stumbling block the project's future is being damaged? Can he say what plans the Government have for seeking overflying rights in other parts of the world so that the remaining seven Concordes that have not been sold may find purchasers?

We are continuing to press overflying rights in other parts of the world to enable us to establish routes. However, I cannot conceal from the House the fact that in other parts of the world we are told that access to New York is a consideration that will determine whether those overflying rights are granted. Therefore, this is of great importance to us. I am sure that the people in the United States Administration fully understand this. It is of very great importance to us to have access to New York.

If the United States continues its obstinate attitude with regard to flying rights to New York for Concorde, may I ask my right hon. Friend to consider conveying to his opposite number in the United States Government the point that that may well have some unfortunate effect on the flying rights of American airlines to London?

We have made our position over Concorde perfectly clear to the United States. I have never thought it right, in respect either of Concorde or of the negotiations which we have just concluded with the United States, to make threats. We want to establish our rights in respect of Concorde, just as we wish to establish our rights in relation to air services generally. We shall continue to press on the United States Government our entitlement in this respect.

Has the right hon. Gentleman any contingency plans for the way in which he will approach this problem in the event that the court actions do not produce landing rights for Concorde within a reasonable time?

We are, of course, in contact with our French partners in this enterprise. I do not want to lead the House into the belief that there is any dramatic step that we have in mind to take. What we are trying to do at the moment is to establish our rights under the law of the United States, as we understand it, to get Concorde into New York.

Product Liability Insurance

6.

asked the Secretary of State for Trade what conclusions he has reached as a result of his Department's investigation into the difficulties being experienced by some United Kingdom exporters in obtaining product liability insurance for their exports to the United States of America.

My Department's investigation was announced on 13th May and information is still being collected. We hope to make a preliminary assessment next month.

Is the Minister aware that the effect of the American product liability insurance appears to be to erect something of a non-tariff barrier to trade? Can he say what estimate he has made of the effect of this legislation on British exports to the United States and whether he has made any representations to the United States Government?

We are concerned about this development. We hope that it will not develop into a non-tariff obstacle for our manufacturers. We have to get this into the correct perspective. It has developed out of the American legal system and it affects manufacturers both in the United States and elsewhere. We certainly take this matter very seriously, as is evidenced by the request for information that we have made to manufacturers here.

Will the hon. Gentleman tell us whether the report in The Times last week was correct which said that his Department, together with the Department of Industry, was considering additional ways of helping smaller companies to tackle export markets? If that is so, will he tell us what additional steps he has in mind?

We are anxious to ensure that we consider the totality of the problem in relation to ECGD to see what effect that will have on the situation. It would be a little premature for us to divulge what the remedies are for what may be a very serious problem before we have entered into discussions with exporters.

Will the hon. Gentleman seek opportunities diplomatically to get the message to the American people, if necessary over the heads of their Government, that this protectionist device, especially in health products and medical products, is denying the American people marvellous benefits that are being enjoyed by much poorer people in other parts of the world?

We have this problem in a variety of areas, including shipping and aviation. It is a matter of examining the American legal process as well as the American political process. The hon. Gentleman need be in no doubt that if, following an investigation, we consider this to be a potentially damaging problem, we shall make the strongest representations.

Japanese Steels

7.

asked the Secretary of State for Trade what progress has been made in the conversations in Osaka about the dumping of special steels by Japanese manufacturers; and if he will make a statement.

A Department of Trade investigation team paid two visits to firms in Osaka earlier this month in connection with the anti-dumping case on Japanese sections and flats. The team was not con- cerned with special steels because the Japanese have given the European Commission certain forecasts of export levels to the United Kingdom which should help to ease the United Kingdom's industry's difficulties in the immediate future.

Is my hon. Friend aware of the rather serious position that has developed in respect of special steels over the past three years? Is he aware that import penetration has increased from 10 per cent. to 50 per cent. on the home market and that Japanese imports in particular have increased from 84 tons of tooled steel in 1974 to 914 tons in 1976, with a doubling of imports of stainless steel bars? Does my hon. Friend accept that there is a case for more drastic action than merely forecasts from Japanese manufacturers?

I am well aware of the serious state of the special steels industry. I have discussed this issue with my hon. Friend and representatives from the industry. On the figures that I have, the overall import penetration rate was not 50 per cent. in 1976 but 32 per cent. However, I accept that there was a considerable increase. As for Japanese forecasts, we must take into account that in virtually all previous cases where the Japanese have made forecasts they have turned out to be met. To that extent they are rather more than what we mean by forecasts. In fact, they are firm predictions.

Does my hon. Friend realise that, in spite of the fact that we might have an admiration for the Japanese and how they produce special steels, their imports to this country are far greater than our industries can stand? When is he having discussions with them, and will he be firmer so as to ensure that they realise that they are harming industries in Great Britain?

I can assure my hon. Friend that we have been very firm. That is why the Japanese agreed in the talks of 23rd-24th May that their forecasts for this year for alloy tool steel and highspeed steel exports to the United Kingdom would be at a level that would bring them back to their 1975 export total. Furthermore, the latest forecast for stainless steel bars is 1,200 tons for this year, which is a substantial drop on last year's figure and an even greater drop on the earlier forecast level of exports of that product to this country for this year.

Will the hon. Gentleman confirm to some of his hon. Friends and to some of mine that this is an example of where our membership of the EEC has undoubtedly been of help to us in arriving at an agreement which helps British industry?

I think that is perfectly fair. As a result of being in the European Economic Community, it has been possible through the Commission to have a greater effect on the Japanese than we could have had alone.

What was the extent of subsidisation of Japanese exports of special steels?

If the hon. Gentleman is suggesting that there is dumping of special steels, I must tell him that we have not received an application from our industry. If he is suggesting that there is some sort of internal subsidy that we can countervail, again the evidence has not been presented to us. However, if it were we would consider it carefully and take the necessary action.

Tourism

8.

asked the Secretary of State for Trade if he is satisfied with the contribution made by tourism to invisible earnings.

Does my right hon. Friend accept that there is likely to be an even larger surplus on the travel account this year than in 1976? Does he agree that, in view of the importance of the contribution that the travel industry is making to our economy, there is certainly a strong case for upgrading tourism from sixth position in my right hon. Friend's list of I think, eight ministerial responsibilities?

I entirely agree that it looks as though the surplus on tourism this year will exceed even last year's figure, which is very valuable. I can assure my hon. Friend that the success of tourism is a very welcome benefit to our balance of payments. I assure him that I give it the attention that I think is necessary. I am not absolutely sure that ministerial attention is always a direct guide to the success of an industry.

Will the right hon. Gentleman confirm that tourist spending in the United Kingdom is now up to £5·6 million a day? Does he agree that that is remarkable in relation to tourist board grants of about £20 million a year?

I think that the performance of the tourist industry is extremely satisfactory and that the grants we give it are small. I do not say that it does not require certain other forms of assistance that we can give. We are working out some other minor forms of assistance. The success of the tourist industry is a great credit to the efforts that the industry itself is making.

As nearly half of the enormous tourist income coming into the country comes to the London area, will my right hon. Friend ascertain what he can do to encourage the tourist authorities to do more to spread the earnings into the countryside, especially to the East Midlands?

We have a policy of trying to guide tourists to parts of the United Kingdom other than London, which has had a certain amount of success. We shall continue pressing for that objective.

I congratulate the Secretary of State on his modesty in admitting that a lack of ministerial interest may possibly lead to success for an industry. Has he heard of the slogan which was carried in the back of motor cars during the American election stating "Please do not promise to do anything for me this year. I am still trying to recover from what you did for me last year"?

I am not aware of that poster. The hon. Gentleman should not be surprised about my comment about tourism. After all, it is a comment of the sort that I have made many times before.

Industrial Democracy

9.

asked the Secretary of State for Trade if he will make a statement on the Government's current intentions on the Bullock Report on industrial democracy.

12.

asked the Secretary of State for Trade when he expects to complete his consultations on employee participation in industry.

19.

asked the Secretary of State for Trade if Her Majesty's Government have decided not to implement the Bullock Report on industrial democracy.

26.

asked the Secretary of State for Trade what progress is being made to implement the Bullock Report on industrial democracy.

asked the Secretary of State for Trade whether he will make a statement on when the Government propose to introduce legislation implementing the Bullock Report on industrial democracy.

asked the Secretary of State for Trade if he will make a statement on the latest position regarding the implementation of the Bullock Report.

A statement will be made to the House as soon as we have completed our consultations on the report.

Is the right hon. Gentleman aware that continued uncertainty about whether the Government will pursue wrong-headed proposals in the Bullock Report is causing a damaging lack of confidence in parts of industry? Will he clear up that uncertainty by making clear that the Government's proposals will not be based on the majority recommendations in the report, and that such rights as are given in any legislation will not be only to those nominated or elected by trade unions but will be given to all employees?

I hear the hon. Gentleman's views and I note his comment about uncertainty. I hope that it will not be very long before the Government make a pronouncement on the subject, but I cannot make one today.

Will my right hon. Friend consider giving priority to this legislation rather than to legislation on devolution or direct elections to Europe? Is he aware that there is widespread support for the majority proposals in the Bullock Report? Does he agree that it is right that workers who invest in industry, and not only those who invest money, should have a say?

I agree that workers should have a say in the control of the companies in which they are employed. I cannot estimate the priority that the Government will place on legislation in this area as against devolution. However, I hope that we shall come forward with practical proposals.

What are the right hon. Gentleman's own views about the Houghton Report, which was commissioned by the Prime Minister and which recommended, among other things, that all members of the work force, and not only trade union members, should be able to be chosen and nominated as employee directors?

I do not think that the report was commissioned by the Prime Minister, but it is a valuable and interesting report and has helped us to formulate our thinking on this subject. The hon. Gentleman has put to me a specific question about the nature of the proposals we shall make. I cannot make any pronouncement on them today.

May I urge more speed on my right hon. Friend? Does he agree that one of the great failures of British industry in the past 30 years has been in not enabling and encouraging people on the shop floor to be more involved in and to have a greater say in what goes on in places in which they are employed? Is not that one of the keys to our industrial recovery?

I agree with my hon. Friend that we need to do a great deal more in this country to involve employees in the control of their companies and in participation in their places of work. This is the object of the proposals we shall bring forward. I cannot say anything today on the detail of those proposals or the structures which will be proposed.

Will the Secretary of State take a hard look at the ACAS Code of Practice 2 dealing with the disclosure of information to trade unions for collective bargaining purposes, and particularly paragraph 11? Will he then give careful consideration to the question of whether he should allow time for that code to operate before he decides whether it is necessary to introduce compulsory legislation to change the structure of boards of directors?

I shall look at the text to which the hon. Gentleman has referred; but he, for his part, will be well aware of the Government's commitments in this regard.

Multi-Fibre Arrangement

10.

asked the Secretary of State for Trade if he will make a statement about the progress being made in the renegotiation of the Multi-Fibre Agreement.

The Community's negotiating directives for the renewal of the MFA were agreed by the Council of Ministers on 21st June. The EEC will, therefore, be able to present its detailed proposals for substantial changes in the operation of the MFA at the next meeting of the Textiles Committee in Geneva on 5th July.

Can my right hon. Friend give a categoric assurance that there will be no betrayal of British textile interests in these talks and that he will pursue the very tough line outlined to the House by the Under-Secretary of State some months ago? In addition, will he turn a deaf ear to the overseas textile interests which are seeking to lobby the Government, aided and abetted by Opposition Members, because the British textile industry is fully aware that there can be no weakening of the objectives which he and his colleague have spelt out?

I assure my hon. Friend that we propose to take a strong line in the negotiations. He is no doubt aware of the nature of the mandate which we have agreed within the EEC. It will be our objective in the negotiations in Geneva substantially to achieve that mandate.

Is the right hon. Gentleman satisfied that the European stance—which appears to be one of global quotas and no categorisation with- in those quotas—will sufficiently protect the British textile industry?

No doubt the hon. and learned Gentleman is aware that initially we had a rather different proposal from that which the Community as a whole has now adopted. However, we are satisfied that the proposal on which we are now agreed, if operated determinedly by the Commission, can achieve all the objects we shall have in mind in the negotiation.

Will the right hon. Gentleman bear in mind that there was a meeting this morning between the wool textile delegation and the all-party group at which there was general support for the Government line on this issue, but will he note two great anxieties? The first relates to the timing of the renegotiation, which is a matter of some urgency. Secondly, whatever the outcome of the MFA negotiation, the question of United States tariffs is still of major concern to the United Kingdom textile industry.

As to the timing of the negotiation, the existing agreement expires at the end of this year and, if possible, we must have a new agreement in place well before that date. We propose to negotiate the question of the United States tariff within the framework of the multilateral trade negotiations, and we hope to achieve results, because the United States tariffs in this field are undesirably high.

Trade Balance (European Community)

11.

asked the Secretary of State for Trade what is the latest estimate of the United Kingdom's balance of trade with the rest of the EEC.

16.

asked the Secretary of State for Trade what has been the trade balance with the rest of the EEC for the latest period of 12 months.

22.

asked the Secretary of State for Trade what was the balance of trade between Great Britain and the EEC countries during 1976 and 1977 to date; and how this compares with 1975.

29.

asked the Secretary of State for Trade if he will make a statement on the latest trends in United Kingdom trade with other members of the EEC.

In the year ended the first quarter of 1977, the United Kingdom had a visible trade deficit, on a balance of payments basis, with the EEC of £2,235 million. This compares with £2,077 million in 1976 as a whole, in both cases less than the deficit in 1975.

As our trading position with the Common Market has become substantially worse since our entry, to such an extent that the overall deficit now is almost exactly the same as the amount we had to borrow last year from the IMF, why do we not get out now instead of having to borrow all this money to pay for our membership of this rich man's club, which is undermining our economy and contributing largely to inflation and unemployment?

Although the deficit with the EEC on visible trade remains a very serious one, it has, relatively, been getting less. The export-import ratio shows that it reached its lowest level in 1975, and since then it has been substantially improving. This reflects the fact that last year our exports to the EEC grew half as fast again as our imports from the EEC.

Although the annual deficit is running fairly regularly at £2,300 million, is not one of the worrying matters the deficit on trade in manufactures of all kinds with a country like Germany which, I believe, is now running at about £1,000 million to £1,400 million a year? That was the area in which we were supposed to be doing rather well when we joined the EEC.

It is true that the deficit on manufactures is extremely serious. In fact, it concerns not only Germany, to which we tend to give a lot of attention, but the Netherlands. It reflects the fundamental problem of British industry, which is lack of competitiveness and lack of productivity. The basic requirement is to put that right. How far it is helped or impeded by the EEC is a matter of question.

Will my hon. Friend confirm that since we joined the EEC our export position has improved by 87 per cent. as against 49 per cent. for the rest of the world? Is it not time that the Government started to tell the success story of joining the EEC instead of hearing all this nonsense time after time?

It is true that our trading position vis-à-vis the EEC has improved relative to our trading position with the rest of the world. For example, in the first quarter of 1977 compared with the first quarter of 1976, our visible trade deficit with the EEC worsened by £95 million, but with the rest of the world it worsened by £1,141 million. It is also true that the deficit has remained at slightly over £2 billion in money terms for the last three years. Because it is in money terms, that is a reducing proportion of our total trade deficit.

Does my hon. Friend think that the situation would improve by getting out or by staying in?

It is extremely difficult to disentangle the exact effects of the EEC on our trade position. It depends not on short-term effects but on the long-term effects of eliminating tariffs, and that will depend on our differential economic advantage in particular sectors. There can be no doubt that it varies between sectors. For example, we have done relatively well in textiles and chemicals and potentially could do well in insurance. We have done poorly in cars, plastics and cereals.

Does the hon. Gentleman agree that the uncompetitiveness of British industry is one of the main strands of the deficit with the EEC? Another strand is the fact that there has been a great switch to trading with the EEC rather than with third countries. Is it not also a fact, as the hon. Gentleman has tentatively said, that our trading position with the EEC is improving month by month, notwithstanding the machinations of the Government?

I indicated from the figures which I quoted that the deficit has increased. It is larger on an annual basis, taking the figures for the first quarter of this year, than it was last year. I said that the export-import ratio is improving, and there is certainly reason to suppose that it will improve further.

Japanese Exports

13.

asked the Secretary of State for Trade if he will make a statement on his policy on Japanese exports to Great Britain, in view of the effects on certain sectors of British industry.

We shall continue to look for Japanese restraint in cases where their exports would otherwise disrupt our market.

While the long-term solution to the problem must be the increased competitiveness of British industry, will my right hon. Friend, in association with his EEC counterparts, put more forcible pressure on the Japanese to restrain their exports to this country and to Western Europe, in the short term at least?

Both from this country and from within the European Community we are placing such pressure on the Japanese authorities and on industry, with some success. About one-third of our imports from Japan are subject to some kind of agreement about the level they will achieve. I am sure that the long-term answer to the problem is to increase our exports to Japan. It was to that end that I made a speech in Tokyo a couple of months ago. That speech was subsequently supported by the Vice-President of the Commission, Mr. Haferkamp, during his visit to Japan.

Is the Secretary of State aware that, if he wishes to increase the level of competitiveness and productivity of our industry, it will be done not by making speeches in Japan but by reducing taxation, so that our taxation can be on the same level as that of the Japanese, which is exactly half of ours?

I did not actually think that by making a speech in Japan I should increase the competitiveness of our industry. What I thought I might achieve was an increase in the access to the Japanese market for our industry, which would help to increase its competitiveness.

My right hon. Friend's speech in Japan was welcomed by industrialists in this country, but, having said what he has, will be go further and accept that there are many industries which feel that the Japanese are dumping in this country and that there is unfair competition? Our industrialists do not mind fair competition, but will my right hon. Friend recognise that the Japanese are adopting practices which are much deplored by British industry?

Wherever there is alleged dumping we look into it, but my hon. Friend must remember that it is not always a matter of dumping. Sometimes it is the fact that the Japanese are more competitive than we are. We therefore have to operate policies in a very difficult economic and social climate in order to protect industries, which are not yet competitive, against genuine Japanese competition.

We also wish in that context and against that background to improve our export performance in Japan, and I believe that that can be done with the assistance of the Japanese authorities. There are restrictions of an informal kind which limit imports into Japan, and I think the competitiveness of our industry would improve if we were able to gain greater access to the Japanese market.

Pilotage

14.

asked the Secretary of State for Trade to what extent he has consulted with pilots who are actively engaged in the day-to-day running of pilotage over proposed changes to its organisation within the United Kingdom.

4.

asked the Secretary of State for Trade to what extent pilots are being kept informed of his Department's views on changes which may affect their future.

My Department attaches the greatest importance to close consultations with pilots' representatives on all matters affecting the pilotage service. The Advisory Committee on Pilotage is seeking the views of pilots and other interested parties on what changes to the organisation of local pilotage authorities are desirable. I hope that their first report on proposals for legislation will soon be available to the interested organisations.

Will the Minister appreciate that there is a lack of confidence on the part of a large number of pilots in the representation on the Advisory Committee on Pilotage? Will he receive a delegation of pilots who have the day-to-day responsibility of managing the ships, so that it may explain the proposals and he may take note of the views of those who operate this excellent service?

Before we set up the Advisory Committee on Pilotage we wrote to all interested bodies—local pilotage authorities, local pilots, shipowners and port authorities. We could not please everybody in its composition, but nevertheless I believe that the Advisory Committee on Pilotage is very broadly representative. I see no reason for my receiving any delegations, nor have I received such a request.

Is the Minister aware that there is disquiet in the pilotage service, particularly in Harwich? Will he visit Harwich to talk over the problem with some of the pilots there?

The very reason why the advisory committee was established was to ensure that we could get as wide a consensus as possible for amending legislation to the Pilotage Act 1913, but one cannot please everybody and I dare say that we may not be able to please the hon. Gentleman.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

New Products (Overseas Demonstrations)

18.

asked the Secretary of State for Trade if he will review arrangements for the assistance of new British products being demonstrated abroad.

The British Overseas Trade Board has a number of schemes which are designed to assist firms to exhibit and demonstrate their products overseas and which are kept under constant review.

Will my right hon. Friend look again at the Department's policy of helping small firms with particular products of greater investment potential which are trying to break into the American market? Will he look in particular at the firm of Dare Hydrahone Ltd., in my constituency? This firm wanted to go to the Investment Castings Convention in Denver in October. It was told that it could not be fitted into anything until January. Is not the well-known saying about horses for courses vitiated if we persist in putting our horses on the wrong course?

No. I am well aware of the case of Dare Hydrahone. The point about this firm is that it wanted to demonstrate its water-jetting equipment at the Denver exhibition, because that was the most suitable forum. I accept that. But the firm wanted the Government to assist it on an individual basis, pound for pound, and I have to tell my hon. Friend that we are certainly not permitted to do that. We can assist only on a joint venture basis, otherwise, quite apart from the question of breaking international obligations, we should merely be starting an international race over credit which would not redound to our interests or those of anyone else. We therefore gave the firm the first opportunity that we could.

Will the Minister also take note of the problems of old products, as opposed to new, and in particular the reduction of the British Overseas Trade Advisory Council's help for exhibitions? Is he aware that the wool textile industry believes that the cost of £675 a unit of exhibition space—an increase of 600 per cent.—will seriously deter British exporters of wool textiles from exhibiting in Germany? Is this a good thing?

The BOTB has been obliged to make reductions amounting to several thousand pounds out of a budget of £19 million for 1977– 78. This has involved a reduction in joint ventures from just under 400 to about 300. I point out that the number of joint ventures—nothing else has been touched in the programme—put out by the French and Germans is in each case about 50, and in the case of the Americans about 120. Therefore, we shall still provide a much better service than is provided by any of our main international competitors. But we have tried to ensure that the cuts will be concentrated in areas which will do the least damage to industry.

Will my hon. Friend study carefully the document which has been provided to him by the British Wool Textile Export Corporation, which suggests other means of distributing the savings in this respect?

I am certainly perfectly prepared to look at any proposal, because we are talking about 1977–78 and the cuts have not yet been made. In our view, this was the best way, the most cost-effective way, of making the cuts, but if we can find other ways of making equivalent cuts we shall look at them closely.

Referring specifically to the question by the hon. Member for Derby, North (Mr. Whitehead), may I ask the Minister to make a deliberate point of establishing contact with Oil Recovery International in my constituency, which has received a lot of help from the Department of Industry in developing a product to pick up oil from polluted water? The only other competitor is an American company. Given maximum assistance from the hon. Gentleman's Department and everyone else, does he not agree that there is a real winner here for British industry?

I shall look at the particular project. I understand that the proposal is at the present time being evaluated at Warren Springs Laboratory.

Scotch Whisky (Japanese Import Duty)

20.

asked the Secretary of State for Trade what progress has been made in efforts to persuade the Japanese Government to lower the rate of duty imposed on Scotch whisky.

Both we and the EEC Commission have been pressing the Japanese Government to reduce the fiscal burden on Scotch whisky. The Commission expects to have further discussions with the Japanese next month; and the issue is also being pursued in the multilateral trade negotiations.

Is the Minister aware that the basis on which the Japanese authorities assess duty on whisky is different as between the domestic product and imported Scotch whisky, to the disadvantage of the latter? Does he not agree that this is one of the difficulties of increasing trade between the two coun- tries, to which his right hon. Friend referred a few moments ago? Will he therefore put every possible effort into his representations on behalf of the Government and the EEC to persuade the Japanese Government to remove this disparity?

Yes, I am certainly aware that imports of Scotch whisky into Japan have not only to pay an import duty but also an ad valorem liquor tax. This discrimination puts them in a disadvantageous position. We are certainly telling the Japanese and have in the past constantly reminded them about this, both bilaterally and through the EEC. My right hon. Friend raised it in Tokyo in April with the International Trade and Industry Minister, Mr. Tanaka. We are aware of the importance of the Japanese market for this purpose because it is the largest market outside the United States of America, and we shall continue with our efforts.

Can my hon. Friend say why no hon. Member from the Scottish National Party is here to get after this Question? On a more serious point, why on earth do the Japanese want to put this duty on? Surely they want more and more Scotch whisky.

I am sure that they want more if they know their real drinking requirements. But they are trying to develop their own particular brand of suntory.

May I give the hon. Gentleman another opportunity to correct a mistake that he made earlier in saying that the EEC is striving for self-efficiency in industry and agriculture, since he is not likely to succeed in the current negotiations that we are discussing on this Question if others such as the Japanese really believe that that is the objective of the EEC?

I am grateful for the hon. Gentleman's concern for my accuracy. I still think that I was quite correct in what I said. In this case, I hope that we shall shortly get a breakthrough with the Japanese.

Ussr (Shipping)

21.

asked the Secretary of State for Trade what representations have been made to the USSR regarding the undercutting of Western freight rates by the Russian merchant fleet.

30.

asked the Secretary of State for Trade whether he will make a statement on his recent discussions with the Russian Minister for Shipping.

A wide range of important issues was covered in discussions between my right hon. Friend and myself and Mr. Guzhenko, the Soviet Minister of Merchant Marine, during his recent visit. These included Soviet undercutting of freight rates, the provision of excessive capacity on certain liner trades and the need for a fairer balance between United Kingdom and Soviet ships in our bilateral trades. The Soviet Minister was left in no doubt that we expected real progress to be made in achieving an equitable resolution of these problems.

Since it is very damaging to Western interests that the Soviet Union should undercut freight rates of the Western world by up to 30 per cent. and should monopolise Anglo-Soviet trade in its own ships by 85 per cent., are the Government prepared to undertake any co-ordination with the Western world in retaliatory action if no progress is made in the discussions?

We have made it plain to the Soviet Union that we prefer a policy of accommodation rather than confrontation. Nevertheless, as the Soviet Minister well knows, there is provision in Part III of the Merchant Shipping Act 1974 for us to introduce countervailing measures. We have been discussing this whole procedure with other Ministers in the Western world. However, the picture is not always as bleak as the hen. Gentleman suggests. There has been some improvement in the bilateral trades in that the Soviet Union has agreed that an additional ship should be available to serve those particular interests. Of course that is not enough, but it is a sign of improvement.

Is my hon. Friend aware of the general anxiety about the very rapid increase in Russia's merchant shipping fleet, which is apparently out of relation with the increase in its international trade? Will he confirm that an offer was made for some provision for a return to British shipping being used for the timber trade if that were possible?

The last point raised by my hon. Friend refers to the matter raised earlier by the hon. Member for Shoreham (Mr. Luce). The Russian Minister was helpful as far as the bilateral lines of trade were concerned and wanted to see a movement towards parity. I think that that is an advance. The important thing about the size of the Soviet merchant fleet is that it should be in balance with the trade generated by the Soviet Union, and this was another point that we made firmly to the Soviet Minister.

Is it correct that there are to be two further meetings on this matter in August? Are not all the facts known about Russian activities in this matter? What are these further meetings intended to discuss? Is it perhaps time that the Government showed a little of their muscle in this matter—and I do not mean that in a pejorative sense?

The important thing is to examine the possibilities of arriving at an accommodation rather than to jump into a position of conflict and confrontation. That is the purpose of the meeting to be held in Russia in August. It will be attended by ship owners as well as departmental officials, and they will be able to continue the very helpful dialogue that has started. I hope to be able to go to the Soviet Union in October to see what progress hase been made over the course of the next three months.

Mineral Imports

25.

asked the Secretary of State for Trade what percentage of the United Kingdom's mineral imports of antimony, vanadium, manganese, platinum and vermiculite come from South Africa; and what other sources of supply are available.

South Africa is the most important United Kingdom supplier of these minerals. With permission, I shall circulate in the Official Report the detailed percentages and a list of other main sources.

Does not the hon. Gentleman agree that Western Europe is almost wholly dependent on Southern Africa for the supply of key minerals?

Does not this explain the Russian drive to replace Western influence throughout that area?

The degree of dependence on minerals from Southern Africa varies considerably. I suspect that there

Percentage of imports during year 1976 consigned from South Africa (by weight)

Other main sources

Antimony:
OresNot available*Chile, Bolivia, China, USSR and Pakistan.
MetalNil
Vanadium (including metal content of pentoxide,ashes and residues and ferro-vanadium)30Finland, USSR and Chile.
Manganese:
Ores42USSR, Brazil, Ghana, Gabon. India and Australia.
Metal82
Ferro-manganese and ferro-silico manganese 39
Platinum group metals:
OresNot available*USSR and Canada.
Metal (including scrap)13
Vermiculite (including perlite and chlorite),unexpanded99USA.

* The details are not available as they would disclose confidential commercial information.

Bankrupts

27.

asked the Secretary of State for Trade when he intends to introduce Section 7 and Section 8 of the Insolvency Act 1976.

It is hoped to bring these sections into force on 1st October 1977.

I thank the hon. Gentleman for that reply. He will recall that this Question follows correspondence that I have had with him about a constituent of mine. Does he not agree that delays of this kind are worrying because they cause not only financial loss but considerable hardship to many businesses? Does he have proposals to improve the situation for the future?

The situation was complex. There has to be an amendment of the bankruptcy rules, which by their very nature are complicated. That had to be cleared by the Insolvency Rules Advisory Committee, set up under the Insolvency Act 1976, and it could not be done by June as I had hoped. It is now to be done in October. But this is a significant advance in the general position on what had been achieved before. I think that the hon. Gentleman's constituent will receive a significant benefit from the working of the Act.

are many motives for Russian intervention in Southern Africa and not just this one. This, however, is a matter for my right hon. Friend the Foreign Secretary.

Following is the information:

Is it not also true to say that Mr. Kenneth Cork has been set up as chairman of this review committee to look into the question of so-called small-time bankruptcies? If that is the case, why do not he and the Government turn their attention to the councillors at Clay Cross who were made bankrupt and had their cars taken away along with various other goods and possessions? Should they not be discharged from bankruptcy in order that they can take a proper and honourable part in civic life again, since they have done nothing wrong in any case apart from carrying out Labour Party policy?

I find it a little difficult to see how that specific matter arises from the Question on the Order Paper. My hon. Friend has a vendetta against Kenneth Cork, but I have absolute confidence in Mr. Cork's ability to head this wide-ranging review into insolvency law. It is not a so-called investigation of small-time bankruptcies.

Industry

Plessey Company Ltd (Wearside)

34.

asked the Secretary of State for Industry if he will make a statement on the report of the National Enterprise Board about the investment potential of the areas affected by the Plessey closures on Wearside.

The report, copies of which are available in the Library, makes a number of useful proposals for action by the Board itself and by my own and other Departments, not only on Wearside but also in the North-East and North-West generally. The Board intends to pursue vigorously the intensified regional activities proposed in the report. It is considering setting up a contracting company to undertake certain activities on behalf of small metalworking companies in the North-East and the possibility of similar action in other industrial sectors in both the North and North-West Regions.

The Government have accepted the recommendation that there should be a widening of the differential in regional selective financial assistance in favour of special development areas. This change will apply to all such areas in the United Kingdom. In those areas we intend to increase from two to three the number of possible interest-free years for Government loans and interest relief grants for suitable viable employment-generating projects. We shall also increase the rent-free periods for Government factories in appropriate cases.

While we welcome publication of the report, and particularly the acceptance by the Government of these recommendations, which we shall study closely, may I ask my right hon. Friend meanwhile to look at the current issue at the Plessey factory, Sunderland, which concerns the implementation of the recommendation or suggestion of the Posner Report that the Strowger orders should be brought forward? I know that my right hon. Friend is favourable towards the suggestion. As it would mean saving hundreds of jobs that are sorely needed in Sunderland, will he do his best to get acceptance of that recommendation?

A good deal of work has taken place already and, if necessary, discussions with Plessey will continue. It was our intention to try to get £3 million of accelerated Strowger orders for Plessey. We understand that there were objections from some other companies which manufactured this equipment. But if my right hon. Friend has any information on this that he wishes to pass on to me, I shall consider the matter further.

Will the right hon. Gentleman say when he hopes to put before the House his findings on the general question of Plessey and the way that the company has been affected by Post Office purchasing policy?

The hon. Gentleman is probably not aware that I appointed Mr. Michael Posner to examine the reasons for the decision of the Post Office to cut back on Strowger orders. It is not for me to say whether that report will be debated. A good many Questions have been tabled, and we have tried to answer them as fully as possible.

Is my right hon. Friend aware how important it is for the Strowger orders to be brought forward? Touching on another matter that he mentioned, may I ask whether he can give us some idea of how many jobs—

I hope that my hon. Friend will allow me to continue with my own question about Sunderland. Can my right hon. Friend give any idea of how many jobs he envisages being created?

Arising out of the discussions which my right hon. Friend the Minister of State has had with Plessey, I understand that 400 new jobs will be created in the North-East as a result of the help under the Industry Act 1972.

Since I saw this report only at 3.25, I am sure the right hon. Gentleman will accept that I have only been able to glance through it. Is he aware that these well-intentioned measures and suggestions will achieve little, if anything, for local needs compared with creating a climate less hostile to enterprise and effort by way of reducing wasteful Government spending and thus being able to reduce the marginal rates of direct taxation for all concerned?

I thought that the right hon. Member for Leeds, North-East (Sir K. Joseph) would give a wider welcome to the report. There are many useful suggestions in it. But no doubt he will want to consider it further. I remind him of the measures that we have taken over the last few years in helping the climate for investment. If we look at the Government's own investment intentions, we see that investment is likely to be up by between 10 per cent. and 15 per cent. this year over last year. If the right hon. Gentleman does not wish to take notice of Government statistics about investment intentions, perhaps he will rely on the CBFs investment intentions survey, which shows that it will be even higher.

Is not this report a sequel to the fact that private enterprise generally and continually over a fairly long period has been unable to provide the necessary investment and thereby the manufacturing jobs, as instanced not only by Plessey but by Courtaulds, which had about £6 million of taxpayers' money to carry out the philosophy of the right hon. Member for Leeds, North-East (Sir K. Joseph) to let the free enterprise tall poppies grow? Is it not time that we, as a Socialist Government, intervened in a positive way instead of having to pick up the pieces after private enterprise has so obviously and abysmally failed?

I want to see the investment climate improved. I agree with my hon. Friend to the extent that private industry should have invested more. Over the last few years, the Government have done their bit by the selective investment scheme and the accelerated investment scheme and also broadly by maintaining the level of investment in public industries. But in this case, concerning telecommunications equipment, the decision was governed by the over-capacity which the Post Office already had and was not prepared to see increased, apart from the £3 million of advance orders, and the technological changes going on in that industry. [Interruption.] Even if it had been publicly owned, the technological changes in the telecommunications industry would have taken place.

In view of the fact that 1,400 workers on Merseyside are likely to be unemployed as a result of the Plessey closures, can my right hon. Friend indicate how many of these jobs will be saved as a result of the National Enterprise Board's report? Can he indicate also what positive action is being taken to bring those workers back to work?

The unemployment position in Merseyside is intolerable, and I can understand my hon. Friend's views on this matter. It must be brought down as quickly as is practicable. I dare say that my hon. Friend has not yet had a chance to look at the report of the NEB, but it has made some useful suggestions. I have ascertained that the NEB has commercial freedom to operate in the regions, including Merseyside, and that there will be no shortage of resources for viable projects.