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Volume 977: debated on Monday 28 January 1980

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asked the Secretary of State for Industry if he will make a statement on the effects on domestic industry of the level of import penetration of the United Kingdom market.

An increasing level of import penetration clearly has serious implications for British industry; but this is as much the result of our industrial weaknesses as the cause.

Will the Minister cease being so complacent at a time when excessive imports, which we cannot afford, have destroyed our motor cycle and typewriter industries, and half our footwear and car industries, leading to the closure of factory after factory, with the consequence of putting people on the dole? Will he consider, as part of a package to rescue British industry, negotiating with our international traders, with a view to reaching an agreement similar to that reached with Japan? Will he consider negotiating with West Germany, which sends us goods costing £1½ billion more than those we export to that country? If it is right for Japan, why is it not right for West Germany?

Once again the hon. Gentleman is taking his party line, which is to erect some form of barrier against imports. British industry is perfectly capable of competing with German, or any other, industry. Our approach to import penetration is to try to do our best to encourage British industry to become fully efficient and competitive. That is the answer to imports.

Does my hon. Friend agree that the reason why British industry is not competitive is that it takes many more people to produce goods here than it does in the countries of most of our competitors? Is it not time that the Opposition got down to encouraging productivity instead of complaining in this way?

My hon. Friend might also have said that our wage rates are lower. If we had the same productivity as our competitors, we could compete and have higher wages.

Is the Minister not aware that the main element of productivity is capital investment? How can he possibly increase productivity if he denies investment, through the National Enterprise Board, to BSC and other major industries?

Does my hon. Friend agree that every cloud has a silver lining? In that respect, one positive effect of import penetration has been the improvement in our trade balance with non-EEC countries.

Yes, there has been a switch of our excess trade with the Common Market to trade with non-EEC countries, which has been one of the contributory factors.

Is the Minister aware that, while it is true that we are in the black with the rest of the world, the trade deficit with the EEC has reached such proportions that last year in manufactured goods we were in deficit to the tune of £2,500 million? The hon. Gentleman says that he understands that there is not a subsidy for steel, let alone an unfair one, in other countries. Does he not realise that in West Germany coking coal is subsidised 30 times as much as it is here?

I did not say that there was no subsidy. I said that there had been subsidies in all industries, and I remind the House that steel industries on the Continent were coming back into profit.