Skip to main content

Trade

Volume 986: debated on Monday 16 June 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Floating Exchange Rates

1.

asked the Secretary of State for Trade how many individuals and how many organisations have made representations to him opposing floating exchange rates.

I can think of no recent representations that have concentrated on opposing floating exchange rates as such, although the problems caused by fluctuating exchange rates have been pointed out to Trade Ministers and officials on a number of occasions.

Does not my right hon. Friend agree that the British economy worked better with a fixed exchange rate than it has worked with floating exchange rates? In view of the uncertainty that floating exchange rates cause among those engaged in international trade, would he not agree that it would be a good idea for Britain to join the EMS at an early stage? That would at least remove the uncertainty in respect of European trade.

I agree with my hon. Friend that the fixed exchange rate system worked well in the immediate post-war period, but in current conditions, where there is a great divergence in performance and in rates of inflation, and in view of the exchange rate problems connected with the North Sea, I cannot agree that a return to a fixed exchange rate would create any greater certainty for British industry.

Has the Secretary of State received any representations from British industry about the crippling effect of the high rate of the pound? What does he propose to do about making British industry more competitive?

I receive representations on the subject most days, and I understand the problem that a high parity causes for British manufacturing industry.

If representations are made to the Secretary of State against the floating exchange rate, will he pay no attention to them? Does he not agree that the efficient British exporter is still incredibly successful in the export markets of the world?

It is a misconception to believe that fixed exchange rates would not fluctuate. They would fluctuate more violently than floating rates, because they would have to be changed.

Paper Products (Overseas Suppliers)

2.

asked the Secretary of State for Trade what recent representations he has received about unfair trading practices employed by overseas suppliers of paper products to the United Kingdom market.

Recent representations that have been made to my Department by the paper industry about unfair trading practices have included allegations of dumping of paper products and of price discrimination in the supply of pulp for paper making. My Department is following up those allegations.

Is my hon. Friend aware of the rapidly worsening situation facing the United Kingdom paper industry? Is he aware of the dubious practices and irresponsible increases of capacity that are now being generated by our Scandinavian and Common Market competitors? Does he believe that we can continue with our free and easy attitude towards imports? Is it not a fact that we are now becoming a soft touch? We should toughen up our attitude towards unfair trading practices.

I wish that my hon. friend would go to Brussels and retail that description of Britain there. It is not the way in which our Common Market partners see us. We fight our corner for British industry. We are aware of unfair practices and we are pursuing the matter. If my hon. Friend provides specific information, we shall take action.

Is it not clear that the Brussels institutions are bound to say that we are not a soft touch? They could not say anything else. They would be daft if they did so. Is it not clear that we must examine the matter more seriously than this Government or any other Government have done for a long time?

I would not wish to defend the hon. Gentleman's Government to him. I know that the hon. Gentleman himself finds that difficult. For our part, we are prepared to stand by our record and show that we take action when we have information on which we can act.

Car Imports

3.

asked the Secretary of State for Trade what percentages of United Kingdom markets for cars, sold at £3,000 or under and for four-wheel drive vehicles, were taken by imports in 1977, 1978 and 1979 to date, from Eastern Europe and Japan, respectively.

As my hon. Friend has the information about imports of four-wheel drive vehicles, in particular from Japan and Eastern Europe, will he not therefore understand the real threat that that poses? In the case of Eastern Europe, will he not consider some limitation? In the case of Japan, will he not make it plain that we require a longer-term agreement than the present annual agreement negotiated on an industry basis?

As my hon. Friend knows, the agreement on motor cars is negotiated between the SMMT and JAMA; the Government are not a party

NEW REGISTRATIONS OF LIGHT FOUR-WHEEL DRIVE VEHICLES, UNITED KINGDOM

Imported vehicles

Total

Japan

United States

Other Countries

*

Number

Percentage of total

Number

Percentage of total

Number

Percentage of total

New registrations Number

197765(1)1(—)56(1)6,890
1978679(10)175(3)40(1)6,616
19793,387(32)255(2)596(6)10,656
January-May :
1979979(23)113(3)153(4)4,295
19801,524(32)63(1)326(7)4,721

* Including vehicles imported from Comecon countries which cannot be separately distinguished.

Source: Society of Motor Manufacturers and Traders.

Information is not available on new registrations of cars sold at £3,000 or under.

to it. However, the arrangement appears to be working to the satisfaction of those who negotiated it and the Japanese honour the commitments that they have made under that agreement. I have noticed the increase in the market for four-wheel drive vehicles, but they are included in the overall restraint figures agreed.

Is not the solution for British manufacturers to produce more four-wheel drive vehicles and to reduce the current waiting list, which in London is about 15 months?

The hon. Gentleman has a strong point. One disturbing thing that I have come across in my travels overseas is that the British four-wheel drive vehicle is more and more in danger of being priced out of the market. We must produce them more efficiently and have them available for delivery and not price ourselves out of the market.

Are cars from Eastern Europe dumped in the same way as footwear is dumped here? If so, will my hon. Friend take action about it? Further, since the Japanese take unfair measures to prevent the export of United Kingdom footwear to Japan, will my hon. Friend ensure that we can take equally unfair measures to prevent the import of their wretched cars, which are, after all, not particularly attractive items anyhow?

I do not own a Japanese car, but a growing number of people seem to find them attractive and good value. We are not complacent about cars from the Eastern European bloc, but altogether they amounted in the first four months of this year to 1·6 per cent. of our market. That is less than it was in both 1979 and 1978.

Following is the information :

Manufactured Goods

4.

asked the Secretary of State for Trade if he is satisfied with the balance of trade in manufactured goods between the United Kingdom and the European Economic Community.

If present trends continue, will we not end up doing an increasing percentage of our total trade in manufactured goods with our partners in the EEC, while incurring an increasing deficit with them?

It depends on which figure one likes to take. Some of the trends in our trade in manufactures with the EEC are encouraging. In the first quarter of this year, our export-import ratios rather improved. The total value of exports to the EEC grew in 1979 at nearly four times the rate of our exports to the rest of the world. The total value of exports increased faster than our imports from the EEC. It depends on which sectors one takes.

Does not my right hon. Friend agree that the problem of the balance of trade with the EEC, as with the rest of the world, lies in improved productivity, fewer strikes, harder work and better deliveries?

Will not the right hon. Gentleman admit that the Common Market has had an absolutely disastrous effect on our trade and that the Government's recent sell-out on the budget contribution will do nothing at all to improve our trading position, and that it will probably continue to get worse, and even more crippling until we get out of the EEC altogether?

Our balance of trade with Europe has certainly deteriorated since our entry, but our balance of trade throughout the world has deteriorated since our entry. I therefore do not think that the hon. Member can draw any deductions of the kind he does. However, nine out of our 10 leading export markets are now in Europe. Europe is now fundamental to our trading activities.

Yes, but the trading imbalance continues to grow, does it not? At what level of imbalance—if there is such a level—would my right hon. Friend think it worth our detaching ourselves from the EEC?

My own view of the EEC goes much broader than the balance of trade. I believe that our position in the Community is fundamental to the preservation of peace and to our influence in the world. That is the reason why I would certainly not wish to withdraw.

Balance Of Payments

5.

asked the Secretary of State for Trade what is his latest estimate of the balance of payments surplus on Great Britain's trade with non OPEC countries for the financial year 1979–80; how this compares with the trade balance with European Economic Community member States; and if he will make a statement

In the year ended March 1980, the United Kingdom had a visible trade deficit of £2·2 billion with the European Community and a deficit of £900 million with the remaining non-oil exporting countries.

I am grateful to my right hon. Friend for that reply. Is he aware that the balance of payments surplus of manufactures with the developing world is very substantial, standing at about £2·1 billion? Does he recognise the importance of the developing world as a market for British manufactured goods? Will he take steps to ensure that his colleagues in the Cabinet know of the importance of that, in view of the recent report of the Brandt Commission?

The House will be debating the Brandt report this afternoon. I entirely agree that the interdependence of the developed and developing worlds is crucial for everybody's future security and welfare. My hon. Friend is also right to say that at the moment we have a favourable balance of over £2 billion in manufacturing trade with those countries.

Multi-Fibre Arrangement

6.

asked the Secretary of State for Trade if he will negotiate a strengthened multi-fibre arrangement in 1981.

Mr.

The Government accept that a new multi-fibre arrangement will be necessary when the current arrangement comes to an end in 1981. The exact form and terms of the successor arrangement will be a matter for negotiation, but the Government will, of course, have the interests, and views, of the United Kingdom clothing and textile industries very much in mind in those negotiations.

Does not my hon. Friend accept that if he gave a commitment to the House today that the multifibre arrangement would be strengthened, those firms which are teetering on the brink and considering closure would hang on for a better trading climate?

My hon. Friend knows as well as anyone in the House that the present arrangement has two-and-a-half years to run. The industry must know that over this next critical period, its basic protection under the bilaterals which end in 1981 will be the existing arrangement. Of course we note what my hon. Friend says about the need to strengthen the new arrangement. I hope that he has noted that I said that this is a matter for negotiation and that in that negotiation we shall have the best interests of the industry at heart.

But since it has been clearly demonstrated that the present MFA, despite its enormous complexity, has done nothing at all to assist the textile industry, should not we look for something a little more radical from the present Secretary of State, for whom we have a high regard, than increased protectionism?

The hon. Member will know that the present arrangement was negotiated by his Government and that it has succeeded in its original objective of maintaining the level of imports from developing countries at around 12 per cent. It is unfair to his right hon. and hon. Friends to say that that agreement is not working, because to a considerable extent it is achieving the desired result.

Does my hon. Friend agree that it is not what is in the MFA that is important, but what is not in it? Does he not agree that the gentlemen's agreement quotas which have been given to the Mediterranean associates have been breached dramatically, thus undermining the confidence of our textile industry? Will my hon. Friend do something about that to make the next MFA much more robust?

My hon. Friend seems to specialise in making strong, but—I am afraid—not wholly accurate statements. The truth is that we have a range of agreements which are monitored extremely carefully. They are not breached as if they did not exist. The sooner my hon. Friend joins me in telling the industry that the arrangements that we negotiated on its behalf are being enforced, the sooner we shall restore confidence to the industry.

Will the Minister of State appreciate that the British textile industry is probably in the most parlous state in its history? I understand that mills are closing at the rate of one per week. In those circumstances, will he undertake to consider a recession clause or some other device to tighten up the operation of the MFA?

I agree that the fundamental mistake which was made by the right hon. Gentleman's Government was in conceding a continuing increase of the share of the market regardless of whether the market expanded. That was a mistake made by his Government, with which we are having to live. We hope that we can learn from their mistake.

Origin Marking

7.

asked the Secretary of State for Trade if he intends to legislate to extend origin marking.

23.

asked the Secretary of State for Trade if he intends to legislate to extend origin marking.

I announced on 21 May that I had issued a consultative document on the extension of compulsory country of origin marking of certain groups of consumer goods. The groups selected cover clothing, textiles, footwear, electrical appliances and cutlery. Those are the groups where two consumer surveys have shown that the country of origin marking is needed for genuine consumer reasons. In the light of the responses received from those likely to be affected by this action, who have been asked to comment by 31 July, I intend to prepare draft orders under the Trade Descriptions Act with a view to bringing them before the House this autumn.

May I say that unlike the answer to the last supplementary question which I asked, which was a very inadequate and inaccurate answer, I am very grateful indeed to my right hon. Friend for that excellent answer?

Does my right hon. Friend agree that it is right that the British people should be able to buy British and when they go into a clothing shop should know that the item that they buy is British? Does she agree that at present the origin of a particular garment is very much in doubt? Does she further agree that many British retailers, such as C & A and British Home Stores, do no service to this country by, as it were, apparently offering British-made goods when the vast majority of those goods are manufactured abroad?

I am always grateful for my hon. Friend's gratitude. The main purpose of the steps that I have announced is to protect consumers so that consumers in the market place can exercise their choice on the basis of adequate information being given. As my hon. Friend will know, branded goods already have to show the country of origin.

Concerning cutlery and Sheffield in particular, will the Minister consider making sure that the words "Made in Sheffield" are stamped only on that cutlery which is wholly made in Sheffield and not on that which is partly brought in from abroad?

This is one of the aspects of the problem of origin marking which we are discussing during the present consultations.

I recognise that origin marking provides useful information to the consumer. However, does my right hon. Friend also agree that all the origin marking in the world is no substitute for good quality, at the right price, delivered at the right time?

Will the right hon. Lady give to my hon. Friend the Member for Penistone (Mr. McKay) an assurance that where, for instance, blanks are simply plated in Sheffield, they will be subject to origin marking? Secondly, will the legislation extend to advertisements in colour supplements, which are a very big source of gaining consumer orders? If the origin marking provision does not apply to supplements and advertisements, it may well defeat the object of the exercise.

First, I can give the hon. Gentleman the undertaking that he seeks, which is that the main manufacturing process will determine the country of origin. As I have said, this is the subject of consultation.

Concerning advertisements and mail order catalogues, we recognise that there are some difficulties because these are outside the Trade Descriptions Act. However, if we become convinced that origin marking in advertisements and mail order catalogues is necessary in the consumer interest, we have no doubt that these difficulties will be overcome.

Product Liability

8.

asked the Secretary of State for Trade whether he will ensure that the additional cost to the consumer arising from new legislation to cover the provisions of the European Economic Community directive on liability for defective products will be fully explored before any conclusions are reached concerning the United Kingdom position on this directive.

The Government are carefully examining all aspects of the draft directive and will take account of all the implications in the negotiations with the Community.

Is my right hon. Friend aware of the varying estimates put upon the cost of this legislation, ranging from £200 million to £900 million? Does she agree that this will be quite unsupport-able both by consumers and by industry?

My hon. Friend is right to point out that the costs of this measure would be likely to be borne by consumers rather than by the companies concerned. I am certain that some estimates of the likely insurance costs have been greatly exaggerated. Insurance costs will vary between industry and industry and between company and company within the same industry, according to the risks involved. I understand, however, that the British insurance industry is confident that it can provide cover and that the cost of insurance, even for the more hazardous products, is not likely to have any significant effect on production costs.

Is the right hon. Lady aware that for the consumer who gets passed from retailer to wholesaler to manufacturer, with no one being prepared to accept the buck when a product has been bought, the implementation of the product liability directive would be the most major single advance that we could make at present? Will she—as I think she indicated just now—reject the wholly bogus arguments that are being put forward, that in some way this is so damaging that we cannot do it? Is it something that we must do.

As the hon. Gentleman will know, consumers' rights are now purely with the retailer. This should be made clear to them at every opportunity. The EEC proposed draft directive would put some of the responsibility, but not all of it, on to manufacturers.

In reply to the final part of the hon. Gentleman's question, I always reject bogus arguments.

In view of the potentially serious implications for all of British industry and commerce in this matter, will my right hon. Friend consider publishing the consultations of the Council of Ministers when it has considered this matter, so that there can be further detailed consultation? Will she assure us that there will not be any blind implementation of the EEC directive?

As my hon. Friend will be aware, the version currently being considered by the Council of Ministers is a revised draft. In view of the number of representations received, both from institutions in this country and from hon. hon. Members on both sides of the House, the Government must reserve their position until all the implications of the full effects of this revised draft are completely clear.

Bearing in mind that product liability has the backing of the Law Commission and of the Pearson Commission, following the thalidomide tragedy, will the right hon. Lady make a declaration of principle in favour of product liability, recognising, of course, that there are detailed problems to be sorted out?

I think that the hon. Gentleman already knows my views on this matter. Anything of benefit to consumers and which does not place a disproportionate burden on industry has my backing. What is important is to see that that balance is maintained.

Manufactured Goods (Imports And Exports)

9.

asked the Secretary of State for Trade what further representations he has received concerning the level of United Kingdom imports and exports of manufactured goods.

Has the right hon. Gentleman read the Bank of International Settlements' annual report, which is openly contemptuous of the Government's monetary policy and which underlines their attitude to the exchange rate of the pound, to the detriment of our exporters and to the advantage of our importers? Will he now change his priorities to make sure that British manufacturing industry is accorded the importance that it deserves?

I would not think of the BIS report as being my choice for bedside reading, and I have not read it. It is not alone in disagreeing with the Government's policies. But, in due course, I am confident that the BIS will realise the wisdom of the Government's policies and will then change its tune.

Is my right hon. Friend aware of the damage now being done by barter arrangements, both by individual firms and those imposed by Comecon countries, on orderly marketing and industry-to-industry arrangements?

I would much prefer that trade was conducted by settlement with money rather than by barter. However, if we were to opt out of the barter arrangement, I think that we would lose a great deal of trade. We are particularly well equipped in this country to handle it—probably better equipped to handle barter transactions than almost any other country.

Will the right hon. Gentleman re-examine the plight of the textile industry with regard to its need to export? Will he consider the bitter conclusions of my constituents employed by Courtaulds in Flint—that under the present Government it is becoming easier to import than to export?

I think that everyone in the House is deeply concerned about the present problems of the textile industry. I certainly am concerned. I understand that many of these firms have the most admirable, loyal, hard-working employees. They are very unhappy circumstances that we now face. But I remind the hon. Gentleman that the textile industry exports over £2 billion worth of textiles every year. It is a successful industry, although parts of it are at present in great difficulty.

Synthetic Fibre Carpets

10.

asked the Secretary of State for Trade what has been the increase in imports of United States synthetic fibre carpets since the decision by the European Economic Community Commission not to authorise a quota on such imports.

The Commission's decision was based on statistics for 1979. Imports of man-made fibre tufted carpets amounted to 2·3 million square metres in the first quarter of 1980, compared with 1·7 million square metres in the last quarter of 1979.

Does not my hon. Friend accept that the percentage of our market taken by North American imports broadly doubled in the first four months of this year compared with the whole of last year, that United States production is based on artificially low oil and feed stock prices and that the EEC Commission has agreed only to keep the matter under surveillance? Does not my hon. Friend agree that the Government would be fully justified if they were to go back to the Commission and claim that our industry was suffering a serious injury?

As my hon. Friend knows, we applied to the Commission for quotas on carpets. The Commission turned down our application. It was argued that import penetration on carpets had reached about 10 per cent., whereas it had reached about 25 per cent. on the two products to which it gave approval for quotas. I am sorry to tell my hon. Friend that there has been very little change in that percentage since the date of our original application. At present, I do not think that the Commission will accept our argument for import quotas.

Why did the Minister accept the Commission's decision, when it will clearly harm industry in the United Kingdom? Does not he realise that unemployment in the carpet industry is increasing and that it is having a knock-on effect on industries such as the jute industry, causing the closure of factories in my constituency?

When we applied to the Commission, we put those arguments strongly. We need the Commission's cooperation if we are to have quotas that will stick. Under free circulation, goods could come in from other parts of the Community. That is why it is essential to have the Commission's co-operation in fixing such quotas.

Do not my hon. Friend and the Commission realise that the protection given to yarn manufacturers will be worthless if carpet manufacturers are not protected? Does he not accept that yarn makers sell their protected yarn only to carpet manufacturers and that every carpet manufacturer is going out of business?

My hon. and learned Friend has made a good point. We strongly made that same point at length to the Commission. However, as the Commission realises the importance of acting only within the rules of world trade, and as a level of penetration of 10 per cent. is not thought to amount to serious damage, it refused to accept our arguments.

Does the Minister realise that the problem will get worse? Is it not clear that the United States Congress will do nothing about the dual energy pricing gap and that there is no chance of anything happening until after the presidential election? Instead of lamely accepting the Commission's opinion, is it not time that the Government challenged it, and argued the case for a very important British interest?

The right hon. Gentleman is a very impressive armchair negotiator. However, he did not have much to shout about when he did the job. We pressed the case very strongly. According to the rules of world trade, the case for carpets does not stand up at present.

Department Stores (Consumer Protection)

12.

asked the Secretary of State for Trade if he will consider introducing legislation to provide for a system of classification of large department stores according to the extent to which their trading practices afford protection to the consumer.

No, Sir. I agree that retailers should be strongly encouraged to adopt trading practices which protect the consumer. If, however, any system of classification is to be introduced—which would be difficult—it should be operated by voluntary bodies in the same way as the classification of hotels and garages.

I am grateful to my right hon. Friend for that reply. Is she aware that certain large stores automatically prosecute alleged shop-lifters, without making any effort to satisfy themselves that there was any intention to steal, and that that places respectable people—who may experience a moment of absent-mindedness or stress—in real danger? Should not such stores—notably the Army and Navy—be obliged to display a notice over every entrance, saying "Shopping at this store can be very dangerous to your health?"

The concern expressed by my hon. Friend is fairly widespread. However, this is a matter for my right hon. Friend the Home Secretary.

Will the Minister look at another aspect of the activities of large stores? Will not she consider the impact on imports into the United Kingdom that result from the range of their buying and marketing powers? Is it not a fact that, compared with France or Germany, there are so few sales outlets within the United Kingdom that it makes for easy import penetration of our markets?

Retailers are in the business of providing consumers with the widest possible choice at the lowest possible price, and at the best possible quality. That is their only role.

Reverting to the specific question asked by my hon. Friend the Member for Flint, West (Sir A. Meyer), does not my right hon. Friend agree that the trading practices of stores—particularly self-service stores—have directly resulted in a massive increase in shop-lifting? Does she not accept that there is no shop-lifting in banks and that if a store insists on inviting people to help themselves, it should not be surprised if they do so? Is she further aware that this practice not only causes expense to taxpayers and to the courts but a great deal of human misery, as numerous mistakes and wrongful prosecutions are made? Will she hold discussions with the Home Office and the Attorney-General to ensure that something is done?

Not for the first time, my hon. Friend has expressed a concern of which I am well aware. He will know of the considerable cost that faces the retail trade as a result of shoplifting. I do not think that this is a matter that I can properly discuss with the Lord Chancellor or the Attorney-General.

Christmas Cards (Russian Imports)

13.

asked the Secretary of State for Trade if he will use his powers under the Trade Descriptions Act to require that Russian Christmas cards be marked with their country of origin when being offered for sale.

Inquiries by my Department suggest that this trade is coming to an end. But I now put the USSR on notice that if the problem should persist I shall not hesitate to use the powers of the 1968 Act.

Will my hon. Friend accept that I welcome that statement and hope that it will prevent a country that suppresses religion from benefiting commercially from it? On reflection, does not my hon. Friend agree—particularly with reference to previous questions—that we should enact legislation to mark all goods with the country of origin and thus stop the evil practice of a disreputable and agnostic country?

I note what my hon. Friend has said. My right hon. Friend is about to make a statement on that question.

Should not the legislation apply with equal force to Easter cards as Christmas and Easter are both religious festivals in Britain? Is not the consumer entitled to know the origin of such cards—not only those from the Soviet Union—so that he may exercise any conscientious objections he may have about the persecution of religion?

I agree with my hon. Friend. I hope that he noticed the speech made last week by my hon. Friend the Member for Eye (Mr. Gummer). He and the hon. Member for Stalybridge and Hyde (Mr. Pendry), have made that point, together with my hon. Friend.

Air Passenger Safety

14.

asked the Secretary of State for Trade if he remains satisfied with current provisions for air passenger safety.

The safety of operation of British passenger-carrying aircraft is the responsibility of the Civil Aviation Authority and I am satisfied with the provisions by which the CAA is able to meet this responsibility and with the way the authority carries out its obligations in this regard. In respect of the air safety of foreign aircraft, this is a matter for the State of registry concerned, in accordance with the ICAO convention.

While I welcome that reply, may I ask whether my hon. Friend saw the statement that the CAA made last week to the effect that much of Britain's air traffic radar is as much as 25 years old, and that in safety terms it is incompatible with the future needs of London airport? What discussions has my hon. Friend had with the CAA about replacing that equipment as soon as possible? I accept that in May an order was placed with a Dutch company for £9·7 million of radar equipment.

I must emphasise the confidence that we have in the way in which the Civil Aviation Authority discharges its responsibilities. I have no doubt that the matters that my hon. Friend has raised will be carefully considered by the authority and that we shall take part in that consideration.

Carpets And Wool Textiles

15.

asked the Secretary of State for Trade what were the changes in the volume of exports and imports of carpets and of wool textiles for the latest 12-month period.

Based on weight, it is estimated that, in the year ended April 1980, exports of carpets decreased by 17 per cent. and imports increased by 38 per cent., compared with the previous 12 months. On the same basis, exports of wool textiles rose by 2 per cent. and imports fell by 2 per cent.

Does the Minister recognise the serious consequences that these disastrous trade figures have for the job prospects of textile workers in West Yorkshire? In view of the fall in output of the woollen industry by 6½ per cent. last year, and the 9½ per cent. fall in the output of the carpet industry, what specific measures will the Government take to help these vital industries to compete in the battle for jobs and markets? Will the Government ensure that the textile industry faces a future instead of a rapidly impending crisis?

There is a range of agreements under the multi-fibre arrangement designed to give a measure of protection to these industries. May I put some other figures to the hon. Member? Although, last year, import penetration was 21 per cent., we exported 23 per cent. of everything that was produced on the carpet side. Although we imported 23 per cent. of wool textiles, we exported 34 per cent. Therefore, we have a very strong interest in making arrangements which will work within the rules of world trade, rather than breaking those rules. Both these industries are valuable exporters as well.

While recognising that the Government have taken some action, albeit inadequate, against the United States to assist the British carpet industry, may I emphasise that the quotas that have been imposed against the United States are being breached by free circulation to other members of the EEC? I see the Secretary of State shaking his head, but it is true. What action are the Government taking to ensure that free circulation does not take place in accordance with the assurance given to the Government by the Commission?

Since we took office, we have under article 115 taken action about once every fortnight to prevent quotas from being undermined by free circulation. We watch the quotas very carefully and we monitor them. I have been in touch with the Commission already about the new rules under article 115 to make sure that they do not prevent us from taking action. I promise my hon. Friend that on a daily basis, we are taking action to prevent the quotas from being undermined.

Is the Minister aware that since the Tories came to office they have presided over disaster areas in wool textiles, carpets, cars, shoes, steel and everything else on the manufacturing side? In that same period they have encouraged the big banks to make £1,500 million in profits. Also, Ladbroke's has announced a 71 per cent. increase in its profits and Pleasurama Ltd. has just announced a dividend increase of 141 per cent.

I know that the hon. Member lives in a world in which everything that is bad began after 3 May last year. Very few people in this House believe that, and no one outside cares a fig for his views.

Footwear Imports

16.

asked the Secretary of State for Trade what is the current state of negotiations over quota imports of footwear from Eastern Europe.

Poland, Czechoslovakia and Romania have been voluntarily restraining their exports of leather footwear to the United Kingdom. We are pressing for the continuation of these restraints. Imports of rubber footwear are subject to quantitative restriction.

Is my hon. Friend aware that the home market has decreased by 10 per cent. this year, and that in Northamptonshire alone more than 70 out of 110 firms are now on short time? In these circumstances will he give an assurance that there will be no increase in the quantities coming from Eastern Europe in the current year? Will he make strong representations for a decrease in the light of the reduced home market?

As my hon. Friend knows, because we have regular consultations on these matters, the imports from Eastern Europe, although they cause trouble, amount to only 2½ per cent. of the United Kingdom market. We agree that there is no scope for an increase in those quotas and that is the point that we are arguing with the Commission.

Does my hon. Friend agree that that 2½ per cent. is 2½ per cent. of the market before the fall and that it has now declined? Is it not true that the shoes that come in from Eastern Europe are bought in at less than the cost of production, and are therefore dumped? Will my hon. Friend say whether he has the power to stop any further imports of shoes from Eastern Europe? If so, will he do so; and, if he will not do so, will he say what other industries he intends to sustain while he continues to sacrifice the footwear industry in this country?

The country makes about £1,200 million in exports to Eastern Europe. The House and the Government must decide whether they wish to continue that trade or to give it up. In my view, many jobs in British industry depend on those exports. The problem for the Government is to strike a balance, and we do that by ensuring that there are restraints on a whole range of products from Eastern Europe.

Manufacturing Industry (Exports)

17.

asked the Secretary of State for Trade if he is satisfied with the export performance of Great Britain's manufacturing industry.

Although export volume has held up very well, in spite of the lack of buoyancy in world trade, it is not part of my job to be satisfied or complacent.

Has not British price competitiveness dropped alarmingly against that of the Japanese, Americans and West Germans? Is not current Government policy of a strong pound and high interest rates working against British exporters? Will the Secretary of State agree that it is likely that this winter a major British company will go bankrupt unless policy changes are made?

Our competitiveness has been seriously eroded in the past two years, and the movements in world currencies, which have meant a strengthening of sterling, caused mainly by the security of North Sea oil, have produced that result. However, our export volume has stayed remarkably stable. It has held up very well indeed at a time when there is a lack of buoyancy in world trade.

In reiterating what the Minister said, should we not remind the British public and the Opposition that our export achievements as a nation have been magnificent, and that we have been unduly modest about them?

I agree entirely. There is no other major nation that is exporting as much as 30 per cent. of its gross domestic product.

Will the Secretary of State now admit that if interest rates continue to remain high, the pound stays overvalued, the rate of inflation remains high internationally, and industrial investment continues to decline, there will be no way in which British firms can restore their competitiveness in the next two years?

The best way to restore the competitiveness of British industry is for industry to increase its productivity and ensure that wages do not continue to outstrip production. Generally, industry must make products that the world wants to buy. There is no collection of policies that the Government could follow that would make these factors any less important.

Is my right hon. Friend aware that there has been much criticism of the Export Credits Guarantee Department over its operations in Zimbabwe? It appears that the ECGD does not give as advantageous terms to British exporters as those received by competing countries such as France and Germany.

If there are any complaints about the ECGD's facilities for Zimbabwe I hope that my hon. Friend will bring them to my attention. Generally, the ECGD has the highest reputation among British industry and throughout the world. If there are any particular problems, I hope he will let me know them.

Central Electricity Generating Board (Monopolies And Mergers Commission)

18.

asked the Secretary of State for Trade what are the terms of reference in the case of the reference of the Central Electricity Generating Board to the Monopolies and Mergers Commission under section 11 of the Competition Act 1980.

I announced the formal terms of reference for this inquiry on 3 June and have placed a copy in the Library of the House. The investigation will cover the efficiency and costs of the board in general, but the commission has been invited to pay particular attention to five areas which I believe deserve special scrutiny. They include internal cost control, purchasing policy, methods of stock control, plant maintenance programmes and planning and appraisal of new investments.

Will cost control cover possible cost differences in the price of imported coal? If so, will employment consequences for this country be taken into account?

I feel sure that the Monopolies and Mergers Commission will want to pay attention to every aspect of costs, including the availability of cheaper coal elsewhere, if that exists. The cost of electricity supplied in bulk to area boards by the CEGB is a large element in the final bill to the consumer, which has risen substantially in recent years. It is, therefore, important to establish that everything possible is being done by the CEGB to absorb costs and increase efficiency in order to keep prices as low as possible.

Order. I shall call the hon. Member for Derby, North (Mr. Whitehead) to ask a supplementary question. His question is next on the Order Paper and is almost identical.

Without having the benefit of seeing the main answer, may I ask the Minister to say why the public sector appears to be being treated more harshly in these referrals than the private sector? When will orders be drafted under the 1980 Act to allow restrictive practices in the private sector to be referred to the Monopolies and Mergers Commission?