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Import Controls

Volume 980: debated on Monday 3 March 1980

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asked the Secretary of State for Trade if he will consult the Trades Union Congress about the necessity to regulate imports into the United Kingdom.

I am always willing to have discussions with the TUC, but there is no question of introducing any general regulation of imports into the United Kingdom.

Is the Secretary of State aware that the majority of trade unions in manufacturing industry conclude that it is necessary to introduce a planned regulation of world trade in order to increase its volume? Is he further aware that if the Government refuse to intervene the trade unions will be compelled to take action, because of the rate of destruction of jobs in the country, and introduce selective industrial embargoes on certain goods coming into the country? Will the right hon. Gentleman reconsider his answer and introduce planned regulations in order not to force trade unions to take action?

I am not sure how the hon. Gentleman or the TUC will set about planning world trade, as he puts it, from London. The selective controls which the hon. Gentleman mentions would put up prices and thereby raise costs. They would divert goods from the export market to the home market, which would damage our balance of payments. If they succeeded, which I do not believe they would, they would further strengthen the pound and erode profit margins. They would also provoke retaliation from other countries. I do not believe that the hon. Gentleman's proposed policy stands up to serious argument.

Will my right hon. Friend accept that I agree with all the arguments that he put forward and believe that the suggestions of the hon. Member for Tottenham (Mr. Atkinson) are lunatic and self-defeating? Is my right hon. Friend aware that the American response to tentative efforts by the EEC over synthetic fibres indicates the dangers of retaliation, even among allied nations?

As I understand it, Labour Members are advancing the argument that we should identify core industries and impose controls to protect them. The single greatest core industry in this country is food, but I understand that the Labour Party and the TUC want a completely open market there. Apart from anything else, the proposed policy is not consistent.

With regard to synthetic fibres, we have throughout said that we believe in the open trading system. However, where there is a sudden surge of imports which come within article 19 of the GATT we are prepared to act, which is what we did for two textile products.

Is the Secretary of State aware that a most effective way of limiting manufactured imports is to have a realistic exchange rate so that the price is increased and not reduced, as appears to be the Government's policy? Is the right hon. Gentleman further aware that the main argument that the Government use for not intervening in the exchange rate market is that it would affect monetary aggregates? Will he accept that a high price is being paid by British industry to maintain our monetary position?

The hon. Member for Tottenham (Mr. Atkinson) wishes to plan world trade and the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) wishes to plan international exchange rates. In my view, there is no way in which the Government, at present, could successfully hold down the price of sterling, which I understand is what the right hon. Gentleman is suggesting, for anything more than a short time. Such a policy would be utterly self-defeating.

Is my right hon. Friend aware that most business men would agree that putting a great barrier around this country would in no way make industry more efficient? However, will my right hon. Friend make certain that imports are not dumped? Will he look into the question of black and white television sets from Thailand, which are virtually being dumped?

I entirely agree that we we must act vigorously through the EEC Commission wherever dumping arises. This is now under the direct authority of the Community, but we must give every assistance that we can to as speedy action as possible under the regulations set out in the GATT.

I followed my hon. Friend's question about monochrome sets from Thailand. I am aware of the suggestion that about 200,000 such sets are about to arrive. However, this is a prediction of what one firm in Thailand might do, and so far it has not done so. The sets have not appeared yet, but we shall investigate the danger of their coming here.

Is the Secretary of State aware that he spent months attempting to get a Community solution to the problem of unfair trading in textiles by the United States and ended up by getting pathetic quotas? For example, for nylon carpet yarn the quotas were 30 per cent. higher in 1980 than the total imports of 1979 which he considered disruptive. Is that the way to protect British trading interests?

In my view, the quota for nylon carpet yarn was appropriate to the circumstances. In settling the quota I was particularly concerned not to damage the downstream carpet industry. Had we set those quotas too low it might have helped those who were producing nylon yarn, but it would have damaged an even greater number of firms which were producing the downstream products—the carpets themselves. Therefore, in employment terms there was an argument for a relatively high, rather than a very low quota.