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Volume 938: debated on Monday 7 November 1977

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Japan (Motor Vehicles)


asked the Secretary of State for Trade what is the current level of market penetration by Japanese car manufacturers in the United Kingdom; and if he will make a statement.


asked the Secretary of State for Trade what was the number and value of British motor vehicles exported to Japan during the nine-month period ended 30th September; and what were the comparable figures For each of the preceding two years.

I will publish the figures in the Official Report. I am disturbed at the level of market penetration.

Is my right hon. Friend aware that in the first six months of this year no fewer than 75,000 units were imported into Great Britain from Japan while at the same time no more than 416 units were exported from Great Britain to Japan? Is he aware that at the current rate this represents a total import of 150,000 units a year, representing a loss of between 10,000 and 15,000 jobs within the British economy? Will my right hon. Friend give us an undertaking that the days of pussyfooting with the Japanese are over and that in particular he will attempt to deal with the marketing strategies of the multinational companies which refuse to allow their British subsidiaries to export to Japan?

Order. May I say that if that length of question is repeated throughout Question Time we shall not reach No.14?

There is an understanding between the SMMT and the Japanese Automobile Association, renewed in September, that the level of market penetration this year will not be significantly different from what it was last year, though on the present figures that will be difficult to achieve. I have impressed upon the Japanese Ambassador the dangers to which this gives rise.

There is no question at all but that there would be greater employment in the United Kingdom economy and in the car industry if the United Kingdom could produce more cars. That would have a general effect on the level of import penetration.

Is the Secretary of State aware that in the first nine months of this year 121,000 Japanese vehicles were imported into the United Kingdom, compared with 86,000 in 1975 and 96,000 in 1976? What steps will he take to overcome the lethargy barrier that seems to afflict British industry in exporting British motor vehicles to Japan?

I am aware of the figures. The British industry has attempted to develop exports to Japan, but one problem, to which I have drawn attention in discussions with the Japanese Government, is the barriers which make it difficult for British exports—and, indeed, other European exports—to penetrate the Japanese market, and not only in respect of motor cars. We have repeatedly pressed upon the Japanese authorities the importance of bringing their accounts into better balance. It is vital that they should do so, otherwise there will undoubtedly be a reaction, whether from this country, from the European Community or from the United States.

Why single out Japan when the level of car imports in the first nine months of this year reached nearly £1 billion, and EEC imports were £707 million of this? Will the Secretary of State please put this into balance and stop some of his Back Benchers singling out Japan with adverse and sometimes unfair comments about the position as a whole?

The position in respect of imports of Japanese motor cars has to be seen against the background of the overall Japanese surplus with this country and. indeed, with the world as a whole. I believe that a surplus of that dimension —which, contrary to forecasts, has been increasing, not diminishing—is in the long run unacceptable if the world's trading system is to continue. That is the reason why so much concern needs to be expressed about Japanese exports and specifically about motor car exports.

Nevertheless, it is certainly true that the expansion in imports of motor cars has come primarily from Europe. It is equally true, I believe, that if the British motor car industry produced more motor cars it would improve both its domestic penetration and its export achievement.

What is the Government's attitude towards the Japanese efforts to establish factories in this country and employ British labour?

Can the Secretary of State tell the House how many private buyers of motor cars now buy imported cars? Will he say whether this is related to the availability of the British product?

Again, it is unfortunately true that a very large proportion I think well over 50 per cent. now—of private buyers are choosing imported cars, and I think that that is significantly affected by deliveries from British manufacturers. We cannot escape the fact that if we arc to deal with import penetration affecting motor cars we have to produce more cars within the United Kingdom and offer customers more reliable supplies.

Following are the figures:



£ million



asked the Secretary of State for Trade if he is satisfied that Her Majesty's Government are now fully in possession of the United Kingdom's treaty rights, concerning Concorde landing rights in the United States of America.

This is a complex matter, but, with the start of tile New York service on 22nd November, British Airways will be operating Concordes on the two routes to the United States of America that they currently plan.

Now that the untruths and distortions of the anti-Concorde campaign in New York can be seen as such, does not the Minister agree that the arbitrary imposition by the American Government of even a 16-month trial is itself an interference with our treaty rights? Might this not be an opportune moment for setting aside the trial and allowing British Airways to operate the aircraft in accordance with our agreement with the American Government?

This is a very complex legal matter, and it would he quite wrong if we made a premature judgment on the situation. We need to consult very closely with our French partners in this matter before we make an announcement about the proposed noisemaking rules.

Is my hon. Friend happy that British Airways will be able to exercise their right to enter New York later this month, and is there any suggestion that there may yet be moves to stop Concorde going into New York?

I am delighted that British Airways will be making their inaugural flight on 22nd November. I know of no moves currently to thwart that very desirable objective.

Since Concorde has been operating at a loss, should we not be grateful to the American Government for making a contribution towards the British balance of payments?

In fairness, the right hon. Gentleman ought to reserve his judgment until Concorde has had a full period in which to operate into the most fruitful of the routes, which is, of course, between London and New York.

Will my hon. Friend confirm or deny reports that, despite the legal breakthrough that has now taken place, British Airways will not be able to operate Concorde into New York as effectively as Air France because of the insufficient training of pilots?

As the House will know, there were difficulties at the commencement of the training programme. These are being overcome, and it is hoped that British Airways wi11 be able to operate the full service early in the new year.

Foreign Boycotts


asked the Secretary of State for Trade if he will make a statement on the trade loss to Great Britain through the secondary aspects of the Arab boycott.


asked the Secretary of State for Trade whether he will study recent United States legislation aimed at combating foreign boycotts of trade relations with friendly States, with a view to introducing similar legislation in the United Kingdom.

No figures are available for the effect of the boycott on our trade. We are keeping a close watch on the preparation of the American regulations, as regards both their possible extraterritorial impact on the United Kingdom and their potential effect on United States firms and their trading operations. But I have no present intention of introducing similar legislation.

In view of the fact that some 80 British companies have been abused by this boycott, involving the harassment of workers' jobs and investment potential, would my right hon. Friend like to go somewhat further and provide more than moral support to the companies, the management and trade unions which arc in volved in a considerable battle? The German experience is surely worth noting. The information is there.

We have made it clear repeatedly that we deplore the boycott. We are prepared to give advice to individual firms in exercising the judgment which they must make about how they react to the boycott. As for the "German experience ", I know of no German experience— I think I know of all the German experience to which my hon. Friend refers— that implies that Germany is in any way operating differently from the United Kingdom in relation to the boycott.

Will the Secretary of State accept that both the American and the Canadian Governments do more than the British Government to protect their business men from foreign boycotts? Does he not accept that there is a need for an EEC initiative in this respect, so that British business men can, without any problem, trade with whomsoever they wish?

Before we come to conclusions about the implications of either Canadian or American action, we have to study exactly what it is intended that those two countries will do in relation to the boycott. So far, one of my concerns about the American regulations is that they attempt to regulate the affairs not merely of American companies in the United States but of British companies in the United Kingdom. I hope that the Americans will find ways of fulfilling their policies which will not have an extraterritorial reach.

Does not the Secretary of State agree that the proposals of both the American and Canadian Governments have been pretty well known for a considerable while? Is it not possible for him at this stage to say what he feels could usefully be done to see whether we could follow some of their examples, although obviously not all of them?

I think that the hon. Gentleman is wrong. The American regulations were issued in draft form, I believe, on 20th September. They are now open to comment, and the final regulations will not be issued until those comments have been received and, no doubt, considered by the American Administration. Nevertheless, I must emphasise two matters to the hon. Gentleman. First, our own export record to Israel is rather good relative to the records of other European countries and, indeed, that of the United States. Secondly, individual companies in this country are entitled to consider the impact upon their affairs and employment in their companies of one reaction or another to the Arab boycott.

Retail Trading Inquiry


asked the Secretary of State for Trade what were the results of the 1976 inquiry into retail trading; and what benefits have been secured or are expected to be secured from this census.

Provisional results of the 1976 retail inquiry are likely to be published around the end of the year. They will provide information which is essential to the requirements of the Government and outside users.

I thank the hon. Gentleman for his written assurances about trying to reduce the burden of form-filling on small businesses in the future, but is he not conceding that the 1976 census was particularly and excessively bureaucratic, time-consuming and costly and that it should not be repeated? Can he give us a specific example of where this country would be worse off if these retail inquiries were abandoned altogether?

So far from the 1976 retail inquiry being particularly bureaucratic, the number of firms to which the inquiry was sent out was 30,000, compared with the total of 300,000 forms sent out by the Conservative Government in their retail inquiry in 1971. The position would therefore appear to be 10 times better, from the hon. Gentleman's point of view, under Labour. The information is required for Government purposes for details of stocks, capital expenditure and sales of each commodity type. Without this material, it would be impossible for the Chancellor of the Exchequer to control the economy in the way that he is able to do so.

Is the Minister aware that one of the many complaints of small retailers who are burdened with these inquiries is that, when they have taken the trouble to submit these returns, they never receive the courtesy of being told what has happened and what the results of the survey are? Will he, therefore, undertake to extend to firms which have gone to the trouble, voluntarily and at their own expense, to return these forms the courtesy of giving them the results of his census and eventually any conclusions that the Government may draw from them?

I think that that is a valuable suggestion. It was raised at a meeting which I had with persons to whom the retail inquiry forms had been sent out. We are considering how we can do that without undue extra bureaucratic expense, certainly to let the main retail organisations know the results.

Is the Minister aware that this country used to be a country of small independent shopkeepers and that one needs only to go down the High Streets of towns and cities to see that they are becoming filled with multiples backed by financial institutions? It does not need an inquiry to tell us that. All that is needed is for the Government to ease up on the restrictions, the taxation and all the rest that is now imposed upon the very small businesses and to encourage them.

I have already indicated the way in which we are reducing the burden. The retail inquiry for 1977 will actually go out to 25,000, which is less than the total for 1976. But of course, if we are to get up-to-date statistics for the whole retail trade, it must include a minimum proportion of retail traders in order to get that result.

Are not the new arrangements that 30,000 forms will go out every year, whereas the old arrangements were that 300,000 forms went out every 10 years? I cannot understand how 30,000 multiplied by 10 is fewer than 300,000. If I have understood the position incorrectly, perhaps the Under-Secretary, with his long experience of these statistical problems, can put me right.

I do not think that the hon. Gentleman listened to my last answer. I indicated that we were steadily reducing the number of forms sent out each year, so that the total result would be considerably less burdensome than it was under the Conservative Government in 1971.

Hosiery Imports


asked the Secretary of State for Trade if he will make a statement on his policy with regard to the import of hosiery into the United Kingdom.

United Kingdom imports of hosiery from low-cost suppliers will be covered by the new Multi-Fibre Arrangement bilateral agreements which are currently being negotiated. If these bilateral negotiations are unsuccessful, the Commission will propose unilateral measures for the EEC.

I should like to congratulate my hon. Friend on the firm stand being taken in the EEC negotiations on the Multi-Fibre Arrangement. Bearing in mind that the effects on employment in the hosiery and knitwear industry may be very serious, will he go ahead with bilateral agreements to reduce hosiery imports if the EEC negotiations fail or take a wrong turning?

I certainly hope that the bilateral negotiations now being undertaken with, I believe, 26 negotiating countries will be successful. The EEC mandate is an extremely tough one, but it is also being negotiated toughly by the Commission. It remains true that, if the results are not in accordance with the mandate, the United Kingdom, as with any other member State, will be able to veto acceptance of a further MFA. We shall certainly want to ensure that in all essential aspects, including hosiery, our interests are met

Slater Walker Companies


asked the Secretary of State for Trade what inquiries are in progress into the affairs of the Slater Walker companies.

Is my hon. Friend aware that the Bank of England has already spent many millions of pounds in helping Slater Walker put of the quagmire in which it has become involved? How many more millions of pounds will be given, either by the Bank of England or the Treasury, to help Slater Walker?

My hon. Friend's Question asks whether inquiries into the affairs of the companies are in progress. I do not think that his supplementary question was addressed to that matter, but consierable inquiries have already been undertaken by the accountants instructed by the company under Section 109 of the Companies Act 1967, by the Singapore Stock Exchange and by an inspector appointed by the Singapore Government. At present, there is no further requirement under the duties that are imposed upon my right hon. Friend which would justify a further inquiry.

When does my hon. Friend expect the report of the inquiry which has been instituted by the Department to be made available?

The inquiries were undertaken under Section 109 of the Companies Act 1967. No report will issue therefrom.

Multi-Fibre Arrangement


asked the Secretary of State for Trade if he will make a statement on progress being made in bilateral negotiations on textiles prior to renegotiation of the Multi-Fibre Arrangement.


asked the Secretary of State for Trade if he is satisfied with the progress being made in the renegotiation of the Multi-Fibre Agreement.

Negotiations are taking place in Brussels between the EEC and a number of low-cost supplying countries. It is too early yet to judge what the outcome of these negotiations will be, but the EEC has made it clear that it will not renew the MFA in December unless the results are satisfactory.

Does my right hon. Friend appreciate that both sides of the British textile industry are extremely grateful for the very useful role that the British Government have played in the past few weeks in the renegotiation of the MFA? Will he give assurances that extremely tough bilateral arrangements will be sought, particularly in the cases of Hong Kong, South Korea and Taiwan, and that if these bilateral arrangements are not acceptable Britain and her EEC partners will take unilateral action to ensure that there is no market disruption of the British textile industry?

I am grateful to my hon. Friend for his comments about the British Government. We thought it necessary to make the mandate more specific, and I think that that was achieved by our intervention a few weeks ago. It is certainly our object to provide in the renewed MFA a better level of protection for the United Kingdom textile industry. The European Community has indicated that, if it is not possible to get satisfactory bilateral agreements, the Commission will propose unilateral action by the European Community. We consider that statement by the Community to be a most important element in this total situation.

Will the Secretary of State bear in mind when renegotiating either the MFA or the bilateral agreements that our textile industry cannot afford a steady increase in imports unless imports are strictly related to domestic consumption? If that is not done, it will be absolutely fatal. Will he bear this point firmly in mind when he is renegotiating, and also remember that this will mean that on some occasions there is a negative quota for a year—that is, a quota below that of the previous year?

The hon. Lady will appreciate that we are in negotiation. We have taken 1976 as a basis, which means that in certain cases, if a mandate is achieved, there will be a reduction in imports in, say, 1978 and 1979. As to relating imports to consumption in this country, the hon. Lady will know that we do not have a recession clause in the mandate.

On the other hand, if we achieve the mandate it should give the British textile industry much better security in the next period than it had in the previous period, and it might allow the British textile industry to expand its production. These are our objectives. We hope that the mandate will be achieved. The United Kingdom has the position in that negotiation that my hon. Friend has just explained.

Will my right hon. Friend state the Government's principle on the question of a finished article or garment being imported into this country at less than the cost here of the raw materials required to make it? What action will the Government take about such articles coming in?

My hon. Friend is referring to cases of dumping. If there are cases of dumping, the industry which feels that it is being dumped against should get in touch with my Department. With the industry, we shall draw this to the attention of the European Commission, which is now responsible for the question of dumping in most places. In the MFA we are concerned with the control of undumped imports.

Will the right hon. Gentleman bear in mind that if Spain and, possibly, Portugal join the EEC and have greater access to our textile markets, we must ensure that Taiwan, Korea and Hong Kong, among others, have less access to our markets than before? Is he aware that otherwise our textile industry will get into an even worse state?

The hon. Gentleman knows that there are arrangements to cover low-cost sources in Europe. We shall no doubt be negotiating the entry of Spain, Portugal and Greece into the Community, and we shall have to take account of all these effects on the United Kingdom economy.

£ Sterling (Exchange Rate)


asked the Secretary of State for Trade what estimates he has made of the likely effects on United Kingdom trade overseas arising from the recent upward adjustment in the exchange rate of the £ sterling.

We do not know where the sterling rate is going to settle, and any estimate of the effect of the upward movement on trade must at this stage be uncertain. An appreciation of sterling might be expected initially to improve the trade balance as import prices are reduced. The eventual effect will depend on domestic costs and on how trade prices and volumes respond.

What is the best future rate of exchange for sterling for successful British exports next year? Why did the Secretary of State disagree with the Chancellor a week ago?

There is no evidence to substantiate what the hon. Gentleman has just said. There was Government discussion of this matter, and a common view prevailed about a matter on which there are conflicting interests.

What action will the hon. Gentleman take with his colleagues to put over to British exporters the example of West Germany and Japan, which shows that it is possible to have a very strong currency but also to have a $15 billion trade surplus?

The British Overseas Trade Board is constantly seeking to improve the export performance of British industry. Indeed, there is good evidence in the recent period that it has at least played a part in achieving the substantial improvement in the non-oil balance of trade, which in the third quarter of this year went up to £600 million. The BOTB must be seen to be playing a part in that, but the industrial strategy in the sector working parties is also designed to improve industrial performance compatible with a strong currency.

Does my hon. Friend accept that, unlike the Japanese and German currencies, the pound might be artificially revalued as a result of North Sea oil? Some of us are quite happy about the pound floating up to a certain extent, but what investigations or proposals has the Department considered for protecting British industry if the pound were to be too highly revalued as a result of North Sea oil?

My hon. Friend has raised an important question. It is not unfair to say that, as a result of authorising a free float a week ago, the net result compared with, say, 10 days ago is a rise in the rate to only $ 1·80 from the level immediately before of about $1·77. There are many considerations. Of course, preserving export competitiveness is a key consideration, but one must also look at the impact of an inflow of foreign money, which brings the reserves to over £11 billion.

Does the Minister agree that British industry should not have to rely upon being competitive on a low and unrealistic valuation of sterling as that is merely an illusion of competitiveness, and that it is only by abandoning that illusion that we can concentrate on the real causes of lack of British competitiveness, particularly low productivity and the lack of incentives to increase our productivity?

Of course it is important to improve productivity, and there is ceaseless effort so to do. But I think that the hon. Gentleman is a little cavalier in assuming that he knows the appropriate level of the sterling exchange rate. I think he clearly implied that sterling was undervalued. What is an under- valued sterling exchange rate is a moot point.

Would not my hon. Friend agree that, if inflation rates in this country are higher than they are abroad, that must mean that our goods become less competitive and thus, if the exchange rate is going up, it must have an adverse effect upon the export of manufactured goods?

It is perfectly true that, in the end, the exchange rate must reflect the differential in inflation rates. But it is also true that during 1976 the pound depreciated by what many observers would feel was considerably more than the then existing differential in inflation rates. No doubt we are partly seeing—I merely say "partly seeing "—a readjustment of that excess drop of last year.

Export Credit Guarantees


asked the Secretary of State for Trade how many applications for export credit guarantee have recently been refused for failing to comply with the Government's pay policy.


asked the Secretary of State for Trade whether he will make a statement on his decision, under Section 2 of the Export Guarantees Act 1975, to refuse export credit guarantee support to James Mackie and Sons Limited of Belfast.

The Government have made it clear on a number of occasions that compliance with the Government's guidelines on pay may be a factor in the consideration of applications for export credit support under Section 2 of the Export Guarantees Act 1975. After careful consideration, and following prior advice to Mackie's, I decided not to offer cover in respect of two applications.

Did not the Secretary of State make quite improper use of his generally accepted power in the case of Mackie's, while in similar circumstances no subsequent action was taken against the Ford Motor Company for breaching the pay guidelines? What assurances may British industry have that this kind of arbitrary step will not be repeated?

I do not accept that this was an improper use of Section 2 of the Act, which permits me to make a judgment of the national interest in respect of particular guarantees asked for. It has been made clear that this is one action that the Government may take if, in their judgment, the national interest is imperilled by particular pay settlements.

Will the right hon. Gentleman now answer my hon. Friend's question? What did Mackie's do wrong that the Ford Motor Company did not do wrong?

As far as I know, Ford made no application to me under Section 2 of the Export Guarantees Act. In any case, as I think the hon. Gentleman will agree, there is a difference between a settlement at 12 per cent. and a settlement at 22 per cent.

Is it not true that there is no law which gives the Government any authority to make trade unionists or employers obey their wishes in this connection? Is it not the case that punitive action is being taken against some and not against others, when we know that for the last two years everything that the Government have done in respect of wages and incomes has been proved wrong? Why should they penalise people now?

My hon. Friend says that there is no law. There is a law—Section 2 of the Export Guarantees Act.

Is not this the most disgraceful use of the Government's discretion? Is the only policy that the Government follow that of "Might is right "? Is it really the case that the Government will use their discretion against the interests of companies and of the country only where the company is small or medium-sized but that where a larger company or institution, either in the public or in the private sector, is involved the Government will turn a blind eye to a breach of their so-called pay rules?

The Government are doing everything they can to ensure that their pay guidelines are successful, and they will continue so to do. I notice that the Opposition have been complaining recently about the lack of support given by the then Opposition to the difficult circumstances in the late 1973–74 period. I suggest to the hon. Member for St. Ives (Mr. Nott) that he considers whether it is up to him now to support the Gov- ernment maintaining their counter-inflation policy.

Is it not a fact that the Government have simply used perfectly legal sanctions to support the pay policy? Anyone in the House who cares to see the rate of inflation brought down should support the Government in using whatever sanctions are available. Will the Secretary of State confirm that any firm that is able to afford to pay its employees more than the 10 per cent. guidelines does not need my money or that of the British taxpayer to bail out its exports?

The hon. Gentleman is right in saying that this was a perfectly proper use of legal powers of the Secretary of State for Trade under Section 2 of the Export Guarantees Act.

Why does my right hon. Friend stand by the criterion, as seemingly he does, that it is right to bully firms into not paying wage increases of a very minor kind similar to those in Northern Ireland but to refuse to bully firms which are putting up prices to the tune of 15 per cent. and 18 per cent. even now? Why do the Government refuse to take action against, say, the Chairman of Wedgwood, whose salary has increased from £75,000 in 1975 to £113,000 this year, at a time when the rest of the work force has been under an incomes policy? Why does he tackle it in that fashion?

It is perfectly right for the Government to use what powers they have to secure the success of their 10 per cent. guidelines. If they do not achieve that success, the rate of inflation, instead of going down, will go up, contrary to the interests of the country. As for prices, that is a matter for my right hon. Friend the Secretary of State for Prices and Consumer Protection.

If the Secretary of State and the Government wish to publish legislation to control the pay norm, that is a matter for the House of Commons. But the Government's discretion under Section 2 of the Export Guarantees Act 1975 was never intended to be used as a sanction in this case. If the Government wish to have sanctions, why do they not come to the House for them in the proper manner instead of abusing their authority and discretion in this way?

There is no question of abuse of authority in this case. Section 2 of the Export Guarantees Act permits the Secretary of State for Trade to make a judgment of the national interest. It seems perfectly clear that a judgment of the national interest includes the inflationary effects of certain settlements. It was my consideration of that, among other aspects of this matter, that led me to my conclusion.

Aircraft Noise (Heathrow)


asked the Secretary of State for Trade if he will reconsider the areas covered by the Heathrow Noise Insulation Grant Scheme so as to include other areas within the Royal borough of Windsor and Maidenhead, and in particular those directly under flight paths.

The present scheme will close on 31st December. I shall consider whether any new insulation scheme is necessary in the context of decisions on airport strategy which will be discussed in the forthcoming White Paper.

I thank the Minister for that answer. I am glad that he is reconsidering the matter. Does he agree with me that, although it will be a long time before all aircraft are quiet, any householder who is inconvenienced unreasonably by aircraft noise should be entitled to a grant for double-glazing wherever he lives?

The hon. Gentleman is asking me to prejudge the result of the consultations that will follow publication of the White Paper. That I cannot do. What I am prepared to concede is that the present scheme, which was devised in 1966, is deficient, and I think it is right, therefore, that we should review the position afresh.

Will my hon. Friend give urgent consideration to the effect upon the medical services in hospitals beneath flight paths? He has had correspondence from me recently on this matter, but I am far from satisfied with the action that the Government are taking to protect medical services when these are disrupted by loud noise.

This is one of a number of difficult problems. We have to consider not only hospitals but it schools, and some progress has already been made there. Certainly I should not close my mind to the consideration of the matter referred to by my hon. Friend. I suggest, however, that we must take into account public expenditure in this area, and I cannot envisage that it will be possible in the foreseeable future to extend the scheme as widely as my hon. Friend hopes.

Is the hon. Gentleman aware that in London the limits of the scheme are currently determined by reference to borough boundaries, although the borough councils have no say in the matter, and that the borough boundaries bear no relationship to the pattern of aircraft noise? Does not the hon. Gentleman agree that this is completely irrational, and will he look at this aspect critically when he deals with the matter?

The scheme was designed in 1966 and accorded with the general principles enunciated by the hon. Gentleman, but I believe that it is now seen to be deficient and that it should be reviewed. The hon. Gentleman is right to say that local administrative boundaries do not necessarily bear a proper relationship to the question of aircraft noise. I agree that it is high time that we look at the situation again.

Does my hon. Friend agree that, important though the question of extending insulation measures is, people afflicted have occasionally to open their windows and to go outdoors? The noise is a massive assault on people in the surrounding area. How is the Department getting on with ending flights of the noisy Trident and in stopping night flights?

My hon. Friend may not have observed that we are taking steps to ensure that noisier aircraft movements at night are phased out over the next 10 years. That, I suggest, will be an encouragement, but the only way of getting to grips with this problem is to obtain quieter aircraft. That is a longterm project, however, and, apart from the mitigating steps that I have announced already and those which I shall be announcing, I suggest that the future should be judged on the basis of how quickly we can get quieter aircraft into operation.

Balance Of Payments


asked the Secretary of State for Trade what are the latest balance of payments figures; and what further action is proposed to increase exports and reduce imports.

In the third quarter of 1977 there was a record surplus on the current account of £526 million. My Department will continue to be closely involved in the effort to improve our share of both home and export markets.

I congratulate my right hon. Friend on those figures and the tremendous improvement since March 1974. Will he, however, avoid complacency and look again at the request made by the TUC and the CBI to introduce selective import controls? Meanwhile, since the British car and television component manufacturing industries are working below capacity, will he consider the launching of a "Buy British" campaign?

I am grateful to my hon. Friend for his congratulations, but they are due to British industry, in respect of both goods and services, for achieving a remarkable transformation in our balance of payments.

The hon. Gentleman said "In spite of the Government ". It was his Government who permitted the country to run into serious balance of payments deficit, even before the oil price increase. There are a number of areas in which we already use selective import controls, but I and the Government would oppose any attempt to use the term "selective controls" as a guise for covering a policy of general import controls, which is an idea we reject. As for buying British, we have encouraged British industry to locate its purchases in the United Kingdom where possible.

On the question of cars, which we discussed earlier, private consumers will be greatly influenced by the availability of British cars. That is a much more impor- tant factor than any "Buy British" campaign.

Does not the right hon. Gentleman recognise that a surplus on current account is always and necessarily balanced by an export of capital to the same value? Is that his intention?

The right hon. Gentleman's questions about the operation of exchange control in this country are for my right hon. Friend the Chancellor of the Exchequer and not for me. As for the equation he makes, it is also true—as the other part of the equation to which the right hon. Gentleman frequently refers—that the current account will be greatly affected if there are not the capital movements necessary to finance it.

Although I welcome the obvious advances that have been made in exports, is my right hon. Friend aware that at Aintree the Courtaulds company is about to lay off 1,800 workers in the textile industry unless it receives a temporary employment subsidy? That is serious for an area like Merseyside, where there is an unemployment rate of 12·1 per cent. Reverting to a previous Question, does it not mean that the Multi-Fibre Arrangement must be renegotiated at the earliest moment, the workers kept at work and assistance given to them?

Matters regarding temporary employment subsidy are for my right hon. Friend the Secretary of State for Employment. As for the renegotiation of the Multi-Fibre Arrangement, Courtaulds is fully aware of the Government's intention in that respect. Indeed, we have had many messages of support from Courtaulds for the attitude we are taking in the renegotiation.

Will the Secretary of State acknowledge that the balance of payments is particularly vulnerable to any dramatic increase in the price of imported raw materials? Will he, therefore, tell the House when he intends to conduct an in-depth survey into ways and means of import substitution?

Such a survey is being conducted at the moment by the sector working parties under the aegis of the NEDC. It is true that changes in the price of raw materials can greatly affect the balance of payments, as we saw with the increase in the price of oil.

Motor Vehicles


asked the Secretary of State for Trade what is the trading balance of the British motor car industry with Japan, France, Italy, the Federal Republic of Germany and the United States of America for the year 1976 and to date.

In 1976 and January to September 1977, there were deficits with the countries mentioned except for the United States of America, where we had a positive balance. With permission I will circulate the detailed figures in the Official Report.

Is my hon. Friend aware of the low morale of workers in the car industry? Will he say what action the Government intend to take, and when they intend to take it, against the penetration of foreign cars into this country? Does he not realise that the future of jobs and the British-based car industry is in danger while the present situation continues?

I am well aware of the intense concern in the industry on that matter. As my right hon. Friend said, he has already made clear to the Japanese Ambassador the concern that would be felt if the import of Japanese motor cars were to be significantly higher than last year. We have received assurances about that.

The main thrust of imports otherwise comes from EEC countries, where we cannot now impose restraints because Article 135 of the Treaty of Accession cannot be invoked after 31st December this year. Our main concern is to ensure that home production is increased. In 1973 we produced 1·9 million cars. This year and last year it looks to be about 1·3 million cars.

Does the Minister agree that the long-term health of the British motor industry will not be helped by artificially controlling imports of foreign cars from Japan and elsewhere?

Our concern primarily is to increase the production of British cars. There is no doubt that if we were able to produce nearer to the levels which we achieved three or four years ago the share of foreign cars imported into this country would be reduced.

Is my hon. Friend aware that the reason for the positive balance with only one country—the United States of America—is due to the excellence of the cars produced in my constituency? Will he make every effort, therefore, to ensure that, although the Metzenbaum amendment has been defeated in the American Senate, no action will be taken against exporters of British cars such as Rolls-Royce which is likely to damage their exports?

I am well aware of the important contribution which Rolls-Royce and, indeed, other high-quality car manufacturers make to the British export performance in the American market. We have expressed our concern about the Metzenbaum amendment and about any energy conservation measures which would unfairly discriminate against imports, because, although British imports into the United States account for about 1 per cent. of the American market, they account for about 25 per cent. of our exports.

Is the Minister aware that in both Japan and Britain motorists drive on the same side of the road, yet British Leyland puts the windscreen wipers on the wrong side of the windscreen on Marinas and Dolomites—over to the left—as if they were left-hand drive vehicles? How does the Under-Secretary of State expect cars made in Britain to appeal to British drivers when windscreen wipers are put in the wrong position?

I am sure that it would be useful if British Leyland were to appoint the hon. Gentleman as its consultant.

Does my hon. Friend realise that Chrysler United Kingdom, which is subsidised by the taxpayer, is not allowed by its American parent company to export motor cars to Japan? Is he aware that Chrysler's Japanese partner, Mitsubishi, freely exports motor cars to this country? Is not this a lunatic trading policy, and cannot he give my constituents and those in every car-producing town in the country an assurance that the Government will take some action against the multinationals which deprive us—unfairly in a discriminatory way—of employment?

We have a planning agreement with Chrysler, and I expect this to be one of the topics we shall discuss with that company.

Following are the figures:

Crude balance in value terms—i.e., exports valued fob compared with imports cif:


1977 January-September

Federal Republic of Germany—219—286
United States of America+169+120

Exports (Cost Escalation Scheme)


asked the Secretary of State for Trade of he will make a statement on the future of the cost escalation scheme for exports.

Does the Minister appreciate the concern felt in a number of manufacturing and export companies about the future of this scheme? Is he aware that they are particularly worried about the rumours that next spring the scheme will be scrapped completely and that they are surprised that this should be the case when the Chancellor of the Exchequer has suggested that the rate of inflation will be in single figures next year?

I am well aware of the concern that has been expressed. About 23 guarantees have been issued for contracts worth over £200 million. It is an important scheme, but it is intended to compensate for an excessive rate of inflation. In the light of the Government's success in substantially reducing that rate, we shall have to take account of the situation as we expect it to be at March of next year, which is when the present scheme ends.

Will the Minister take account of the situation as it is, not as he expects it to be, and, when considering the future of the scheme, will he take account particularly of the need to cover large components that go into a minimum order—for instance, turbines for the Ontario hydro scheme, where indi- vidual items are less than £2 million but where four turbines make £2 million?

The hon. Gentleman is referring to the access rules which have been drawn up fairly tightly. But we have also to take account of international criticisms that have been made in various forums about our scheme. Even if it were deemed desirable to renew it in the light of the prevailing situation, I do not believe that we could ease the access rules.

Employee Participation


asked the Secretary of State for Trade what consultations he has had with interested parties regarding legislation on employee participation in industry.

Is the right hon. Gentleman aware that, despite the clear impossibility of basing any legislation on the Bullock Report, it is as urgent as ever to find ways—I emphasise the plural—of enabling employees at all levels within an enterprise to be more closely associated with the running of the enterprise?

I agree with the hon. Gentleman that it is necessary to find such ways. We are now, in the light of the composite motion passed at the TUC, having further discussions on whether such ways can be found that would command the type of consensus in industry that we have been looking for throughout this investigation.

I accept that there is need for the widest possible agreement, and that there are certain difficulties about legislation, but would it not be a good thing if the Government published their own views as soon as possible?

We shall bear in mind what my hon. Friend suggests. It may be that we shall think it right to publish a White Paper at some stage during this Session so that there may be further consultation on employee participation.

What regard does the right hon. Gentlemen's timetable have to the timetable of the passage of the Fifth Directive on Company Law in the European Economic Community?

I do not know whether the right hon. and learned Gentlemen thinks that the Fifth Directive is making very much progress at the moment. Obviously, if it did we should have to take account of it. While bearing in mind the European Green Paper, we are progressing on our own lines in so far as we can find any agreement in this country on the ways in which we should progress.

Does not the right hon. Gentleman agree that it is quite wrong to think that British Industry is simply waiting for legislation before it introduces or finds ways of involving its employees in decisions? Is it not true that in thousands of companies all over the land, and without legislation, steps are being taken to consult employees and to bring them into decision-making?

Fortunately, the hon. Gentleman is right. Nevertheless the CBI, evidently hissatisfied with the progress that is being made without legislation, has proposed that there should be legislation.



asked the Secretary of State for Trade if he is satisfied with the level of British exports to Japan.

Our exports have grown 35 per cent. in sterling terms in the first nine months of this year, 24 per cent. in dollar terms. This is a creditable achievement, but we should be able to do much better. I am in touch with the Japanese about means of encouraging further imports from the United Kingdom.

I welcome that news, but would not my right hon. Friend agree that, in addition to the Japanese barriers to our exports which he mentioned earlier this afternoon, there is also a British self-imposed barrier— that of relative ignorance of the Japanese market? Will he urge British companies seeking seriously to penetrate the Japanese market to train some of their executives in a study of Japan and its language in the way as the Japanese have studied our culture and our language with successful results?

Certainly, but I think that my hon. Friend, who is expert in this matter, will agree that this relative ignorance has been substantially reduced in recent years by the definite attempt by major and, indeed, smaller British firms to penetrate the Japanese market. The figures I have read out show that they have had some success, but we need a great deal more success before this situation will be anything like satisfactory.

Does the Secretary of State agree that there is a good case for the use of voluntary quotas between Japan and this country on matters such as special steels, which would allow us to export more to Japan and seek to reduce its level of imports to a more balanced figure?

The hon. Gentleman knows that in a number of cases already such voluntary restraint arrangements exist. I believe that in world trade generally it will be necessary to have such arrangements in order to reduce the effect that aggressive export drives can otherwise have, taking account of present levels of unemployment.

Is not one of our most important potential exports to Japan the reprocessing of nuclear waste? Is there any calculation of how much money has been lost through our inability to make up our minds about whether the process is safe?

As my hon. Friend knows, the Windscale inquiry has just been completed, and I hope that the report arrives at a conclusion that will enable us to take advantage of this great opportunity.