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Manufactured Goods

Volume 982: debated on Monday 31 March 1980

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9.

asked the Secretary of State for Trade what new plans he has for imposing further import controls on manufactured goods.

Does the Minister agree that probably the majority of this House would refuse to accept the view that permanent and general import controls would be a solution to our trading problems? Having said that, however, may I ask whether he agrees that there is an increasinly strong case for further selective import controls on a temporary basis, if only to prevent or, at least, to retard the increasing de-industrialisation of the United Kingdom economy?

The claim that the United Kingdom is being rapidly de-industrialised is sometimes exaggerated. I take the hon. Gentleman's point about temporary as opposed to permanent import controls. However, if one were to exclude motor vehicles alone, the export/import ratio declined by only 1 per cent. in 1978 and 1979. Therefore, there is no ground for the scare stories that one hears about the imminent and total de-industrialisation of this country. That simply is not true.

Does my right hon. Friend agree that temporary import controls all too soon become permanent and become the slippery slope into a form of protectionism from which it is impossible to escape and which would be disastrous for our economic affairs and do nothing to benefit the interests of the consumer or the efficiency of British industry?

I agree with my hon. Friend that those against whom we imposed import controls would, in many cases, probably retaliate against our exports, whether we called the controls temporary or permanent. There are agreed arrangements for temporary controls under the GATT, but I agree that temporary controls would too easily become permanent. We are an exporting nation, with nearly one-third of our gross domestic product in exports, and it is the export penetration of overseas markets on which we should be concentrating.

Has the right hon. Gentleman seen the effective British Leyland advertisement which gives a catalogue of the massive penetration of foreign manufacturers in this country? Will the Government start a "Buy British" campaign to encourage consumers to buy British goods? It appears that we are being flooded by foreign manufactured goods.

I have seen the British Leyland advertisement, but it does not say what proportion of overseas markets we have in the products mentioned in the advertisement. It concentrates almost entirely on the import penetration of those products, but does not say whether our industries are exporting. The car industry is still among our leading exporters and we still export more than £2,000 million worth of textiles every year.

Does my right hon. Friend agree that the exchange rate for the pound is artificially favourable to importers? Will the Government reconsider their policy and look at ways, perhaps by exporting capital or reducing the rate at which we exploit our North Sea assets, of bringing the exchange rate for the pound better into balance, for the benefit of our export trade in particular?

I agree with my hon. Friend that we should not discourage the export of capital, and that is why we abolished exchange controls. It is important that we build up some income-producing assets abroad. As for the Government managing the exchange rate or forcing it down, I do not believe that in current circumstances it would be possible for the Government to hold the pound down for long, even if we wished to do so, given that there are international pressures pushing it to its present level.

Is the Secretary of State aware that the Metropolitan Police have been obliged to buy their overcoats from West Germany as a result of the EEC supplies directive? Will he renegotiate that directive, so that public sector purchasing policy can at least ensure help for the British industries that need extra orders?

I do not know of any EEC directive that obliges anyone to buy anything anywhere. I understand that the supplies directive requires countries not to discriminate against others in their public purchasing policies. I will inquire into the purchase of the overcoats, but I am sure that we did not have to buy them from West Germany.