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Oral Answers To Questions

Volume 15: debated on Monday 14 December 1981

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

Trade

Road Vehicles (Imports-Exports)

1.

asked the Secretary of State for Trade what were the values, in £ sterling, of imports and exports of road vehicles for each of the past five years.

With permission, I will publish the information in the Official Report. At current prices, exports of road vehicles increased by 33 per cent. between 1976 and 1980 and imports by 134 per cent.

Are there not tremendous opportunities for our vehicle industries if the Government will only change their policies to give much greater help to exports? When will the Government take action to help our exports surpass our imports?

The hon. Gentleman will be delighted to know that for the four months of the current year for which figures can be identified—January, February, September and October—we are showing a £13 million surplus in the business.

Is not the situation deteriorating terrifyingly? Will the right hon. Gentleman confirm that in the last year for which figures are available our deficit on visible trade with the European Community was £2 billion, of which £1·3 billion was accounted for by our deficit on motor vehicles? With his long-standing and reasoned opposition to the Common Market, will the right hon. Gentleman take action over that unacceptable state of affairs?

The figures that the hon. Gentleman quotes are broadly true, but they could just as well reflect on the fortunes of our abilities in the motor trade as on our membership of the Community.

Following is the information:

United Kingdom Trade in Road Vehicles, 1976–80

£ million

Imports cif

Exports fob

19761,4312,376
19772,1342,872
19782,7973,070
19793,9433,148
19803,3483,156

Source: Overseas Trade Statistics of the United Kingdom, sac (R2) Division 78 and equivalent coverage under SITC (R1)).

Channel Tunnel

2.

asked the Secretary of State for Trade what is his assessment of the likely reduction in demand for capacity at airports in the South-East as a consequence of the diversion of traffic through a Channel tunnel.

This has been considered by the air traffic forecasting working party, which states in its report that the most modest tunnel schemes are expected to divert well below a year's growth of air traffic. The promoters of one of the more ambitious schemes claim that as many as 3·9 million passengers a year could be diverted from air routes by the end of the century, but even then the effect on South-East air traffic would be relatively small.

Is not the demand for airport and runway capacity more a function of the number of flights than of the number of passengers? As the Channel tunnel is likely to divert traffic from short-haul flights, will the hon. Gentleman reconsider his answer, as the Channel tunnel might make some planned expansion in airport capacity unnecessary?

My answer to the hon. Gentleman's first question is "No". Demand depends on flights and passengers. There is no point in running flights if there are no passengers on them.

The fixed Channel link would probably draw some passengers away from the regional as well as the London airports, but the lead times for construction means that it is unlikely to have a significant impact during this decade. On the estimates provided by the promoters, the number of passengers diverted from air travel by the end of the century is likely to be very small in comparison with forecast air traffic demand.

Bearing in mind the importance and potential of Southend airport, will the Government maintain the principle of fair competition and not pour funds into the Channel tunnel project, when it may not be needed?

I and all my colleagues are acutely aware of the importance of Southend airport, but my hon. Friend should speak to my right hon. Friend the Secretary of State for Transport about the Channel tunnel.

In the light of that encouraging information, will the Minister tell the Secretary of State that, in the present state of the economy, the need to make progress in constructing the Channel tunnel is urgent, as, if it is not built soon, it never will be?

I shall ensure that the hon. Gentleman's remarks are drawn to the attention of my right hon. Friend the Secretary of State.

Consultative Council On Local Government Finance

4.

asked the Secretary of State for Trade if he attends meetings of the Local Government Consultative Council.

When necessary, I represent my right hon. Friend at meetings of the Consultative Council on Local Government Finance.

In which case, I sympathise with the hon. Gentleman. Will the amount of money that is likely to be spent next year by local authorities on consumer protection be more or less than, or about the same as it is this year?

Expenditure by local authorities on consumer protection is estimated at £47 million for 1982–83, and that estimate has been agreed with the local authority associations concerned.

British Airports Authority

5.

asked the Secretary of State for Trade whether he expects to bring forward proposals to privatise the British Airports Authority.

Is my hon. Friend aware of the view held by many Conservative Members, that early privatisation of the British Airports Authority will be in the interest of airline operators, airport operators and, above all, the personnel, who could buy shares if such privatisation were to go through? Does he recognise that implicit in that demand is no criticism of the general management of the British Airports Authority—indeed, quite the reverse—but that urgent action in this sphere would be greatly appreciated?

I am glad that my hon. Friend made those remarks about the management of the British Airports Authority, with which remarks I completely agree. I am aware of the strong feeling among certain of my hon. Friends, and I draw attention to the remarks of my right hon. Friend the Secretary of State in c. 42 of Hansard of 16 November, which says all that needs to be said at present.

If they had, it would not arise on this question, and if it did, it would not be me who would answer.

Is my hon. Friend aware that there is great scope for the use of private contract services in many of the activities undertaken by the British Airports Authority? Will he consider issuing a circular—as my hon. Friend the Minister for Health has done to health authorities—urging the use of private enterprise wherever possible?

The British Airports Authority already uses many private enterprise companies within the airports and draws substantial profits and benefits from the duty-free franchise. I shall ensure that its attention is drawn towards examining what more can be done in that regard.

Industrial Goods (European Free Trade Area)

6.

asked the Secretary of State for Trade if he has discussed with his European Economic Community counterparts the possibility of a free trade area for industrial goods in Europe.

The Community's free trade agreements with the EFTA countries already extend to nearly all the rest of Western Europe all the principal benefits of industrial free trade available within the Community itself. There are also preferential trade agreements with nonmember Mediterranean States. Greece will be fully integrated into the Community customs union in 1986, and negotiations for Portuguese and Spanish membership of the Community are in progress.

I am grateful to my hon. Friend for that full reply. Does he accept that the idea of a free trade area between this country and the remainder of the Community that excluded trade in agricultural products would be a non-starter? Does he further accept that even if such a project were available it would do nothing to solve the problem of British failure to compete in the industrial markets of the world?

I have noted my hon. Friend's judgment with regard to his first point, but I emphasise to him that in 1981 there is evidence of our increasing competitiveness in the export of industrial goods.

Does the Minister agree that the remarks of the hon. Member for Hint, West (Sir A. Meyer) were utter nonsense? Does he further agree that in his initiative with our partners in the EEC he should be working either for the abolition of the CAP, or for its combination with a common industrial policy, which would have the same aims for the weaker industries as the CAP has for the weaker agricultural countries? Will he take that initiative?

I have noted the hon. Gentleman's points. The responsibility for those areas lies mainly with my right hon. Friend the Minister of Agriculture, Fisheries and Food and with my right hon. and learned Friend the Chancellor of the Exchequer.

West Germany (Trade Deficit)

7.

asked the Secretary of State for Trade if he will take steps to discuss with the Government of West Germany the deficit in manufactured trade with that country of over £2,000 million in 1980 with a view to improving the balance of trade.

No, Sir. With Western European countries our trade in manufactures largely reflects competitive differences.

Since the Foreign Secretary has already stated that our deficit with Japan of about £1 billion last year is costing this country tens of thousands of jobs, should not the Government consider seriously the horrendous £2 billion deficit with West Germany—the greatest deficit with any country? Will they investigate particularly whether any of that deficit stems not from competitiveness, but from non-tariff discrimination?

The two situations are simply not analogous. Japan has a well-established resistance to taking imports, as a result of which only 3 per cent. of its economy is accounted for by manufactured imports, whereas West Germany has a more open economy, taking over four times that percentage. That is an indication that we are in a free trade position where it is up to our manufacturers to do as well as they can.

Does not that deficit show how wide of the mark was the hon. Member for Hint, West (Sir A. Meyer) in his intervention?

I am not sure upon what nuance the right hon. Gentleman is seeking to alight, but I am certain that my hon. Friend the Member for Flint, West (Sir A. Meyer) is right in saying that our trading role in Western Europe will be largely a factor of our competitiveness.

Does the right hon. Gentleman agree that, in line with his remarks, the EEC has been a disaster for this country? Does he further agree that now is the time to introduce import controls on exports of motor vehicles, electronics, and so on, particularly from West Germany? Would that not be of great benefit to British industry?

I am sure that the experiences of the EEC are a disappointment for those who had euphoric expectations. When we come to apply descriptions the word "disaster" will relate to those who seek to introduce trade controls and import restrictions.

Will not that deficit figure and others of an equally depressing character disappear rapidly when the term "strike command" becomes associated once again with the Royal Air Force rather than the Transport and General Workers Union?

World Trade

8.

asked the Secretary of State for Trade whether he anticipates any improvement in world trade by volume in 1982; and what prospects he sees for improving the United Kingdom's share therein.

World trade in manufactures seems likely to grow rather faster next year than in 1981. Whether we shall raise our share will depend on our ability as a nation to sustain and build on this year's success in reducing inflation and increasing productivity.

Will that stimulate the reaction of Western Governments or can it all depend on the hidden hand?

I hesitate to try to define exactly what my hon. Friend has in mind, but I believe that our future performance will be greatly affected by our efforts to return to being fully competitive in world trade.

Will the Minister explain what possible logic there is for a Government who profess to be keen to stimulate our exports cutting back drastically their assistance to the British Overseas Trade Board and to exporters trying to obtain markets abroad?

The right hon. Member is wrong in his assessment. It is necessary for all Departments of Government, in these times of economic restraint, to accept that resources available to them may be reduced. Nevertheless, it requires them to make the best possible use of those resources. With regard to the British Overseas Trade Board, there were areas where expenditure was not justified. We have sought to concentrate the resource s and to use them most beneficially in developing overseas trade.

Has not one of the most notable achievements of British industry in the past two years been the high level of exports made as against the expectations of, amongst others, the Treasury?

My hon. Friend is right, and our exporters deserve congratulations for doing distinctly better than was expected last year by the extra successes that they have registered.

The Minister talks repeatedly about being competitive. How does he explain that countries in Europe, such as West Germany with a Socialist Government, are far more competitive than we are with a Tory Government?

If the hon Gentleman studied the policies followed in West Germany he would realise how unsuitable his comments were. Our greatest weakness has been our loss of 50 per cent. in competitiveness in the period between 1975 and 1980. During 1981 we recovered that loss of competitiveness to the extent of 10 per cent. But we have to go on and be entirely successful in being competitive in world trade terms.

Multi-Fibre Arrangement

9.

asked the Secretary of State for Trade if he will make a statement on progress on the renegotiation of the multi-fibre arrangement.

11.

asked the Secretary of State for Trade if he will make a statement on the latest progress towards renegotiation of the multi-fibre arrangement.

As my right hon. Friend the Lord Privy Seal reported on 10 December, the Council of Ministers met on 8 December to consider further arrangements covering low-cost textiles and clothing imports. It resolved a number of points outstanding from the November Council. These decisions will enable the Commission to continue its full participation in the negotiations in Geneva on multi-fibre arrangement renewal, and also to open negotiations on future arrangements with the preferential suppliers.

Negotiations in Geneva are continuing.

Is the Secretary of State aware of the very grave anxiety and concern on both sides of the House and on both sides of industry about the lack of information on the decisions reached in the Council of Ministers in Brussels? Is the right hon. Gentleman aware, further, that there are fears that the quota base level may be set at the level of 1982 quotas, with a foreseen loss of 30,000 jobs if that happens, rather than 1980 actual levels of imports? Will the right hon. Gentleman now say what base level—is it 1980 quotas, 1982 foreseen quotas or somewhere in between—the Council of Ministers has decided to adopt as its negotiating plank in Geneva?

The hon. Gentleman will be aware that it has always been the practice not to reveal the detailed negotiating mandate that is in the hands of the Commission.

As for the issue of 1980 actuals or quotas being used as the basis for multi-fibre arrangements No. 3, the Community is operating upon 1980 quotas with the use of a surge mechanism to moderate any take-up in the under-used quotas.

Is the right hon. Gentleman aware that it is both undesirable and dangerous to base the anti-surge mechanism on actual import levels in 1982, because it gives every incentive to supplying countries overseas to maximise their exports to us next year by every possible means, and because any restocking then will benefit them rather than domestic suppliers? Will not the anti-surge mechanism be ineffective if quotas currently under-utilised are filled by 1982?

The Commission has been charged to interpret and table the anti-surge proposals specifically to try to mitigate the differences which the hon. Gentleman has understandably identified.

When my right hon. Friend continues the discussions on the multi-fibre arrangement, will he ensure that an import control clause is incorporated in the agreement to prevent unfair competition from foreign imports, which have affected British manufacturers seriously over the last few years and continue to do so?

Clearly, such action would have to come within Community competence, but I should like to consider what my hon. Friend has suggested.

Will the Secretary of State say again whether agreement was reached at last week's meetings on resolving the various issues before the negotiators? Is he aware that there is a widespread feeling in the House and outside it that no agreement has been reached on growth rates, quotas, and the various ways of avoiding problems?

Will the right hon. Gentleman say again whether the base level is, as he said, the 1980 quotas or whether the Government have accepted, against our advice, that the 1982 quotas should be used as the base level?

I have nothing to add to my first reply.

I congratulate the hon. Member for Batley and Morley (Mr. Woolmer) on his first appearance at the Dispatch Box, speaking from the Front Bench on behalf of the Opposition. I can tell him that the negotiations at Geneva are proceeding, and that today could be one of the most decisive days. There is little that I can tell the House, other than to await the outcome, especially of today's discussions.

I thank the right hon. Gentleman for his kind remarks, but I have to tell him that his answers are unsatisfactory. Will he say again whether agreement was reached at the Council of Ministers last week? If it was not reached, the right hon. Gentleman is in serious danger of grossly misleading the House.

I hope that the hon. Member for Batley and Morley will grow more charitable with experience in his new post. I believe that agreement was not reached. But the negotiations continue. I must remind the House that these negotiations are being undertaken on behalf of the European Community nations by the European Commission. It is one of the inevitable consequences that I cannot answer blandly for what is happening minute by minute and hour by hour in the negotiations, given the relationships that we have in the Community.

Has my right hon. Friend's Department made any progress on defining what is meant by a "recession clause" in the MFA, and is my right hon. Friend using that definition in the negotiations?

The Commission has the securing of a recession clause as one of its negotiating objectives. Again, it would not be consistent with precedent—and I do not intend to break precedent—to reveal the circumstances that the Commission counts as constituting a recession clause.

Japanese Light Vehicles

12.

asked the Secretary of State for Trade what is the level of penetration of the United Kingdom market by Japanese light vehicles.

Nineteen per cent. of the light commercial vehicles registered in the United Kingdom in the first 11 months of this year were manufactured in Japan.

Is such a high level in the interests of the United Kingdom economy as a whole? If it is not, what action will my right hon. Friend take, bearing in mind the action that the Japanese take against United Kingdom exports, especially of footwear?

The Society of Motor Manufacturers and Traders, which is responsible for the voluntary restraint arrangement that we have with Japan on these matters, has itself been involved in discussions with its opposite number in Japan. It has stated that the understanding that has resulted from its recent meeting should mean a sharp decrease in the Japanese share of the light commercial vehicle market.

Does not the right hon. Gentleman agree that we have now reached the stage with the Japanese, with all the hidden trade barriers that there are to exports from this or any other country to Japan, where we should tell the Japanese that we shall import one Japanese vehicle for every vehicle that they import from Britain?

I cannot think of a narrower, more unilateral approach to trade. The fact that the hon. Gentleman represents the soft Left reminds us how terribly difficult things must have become.

Will my right hon. Friend remind the House of the precise nature of the restraint agreement with Japan about the level of British imports of light vehicles?

It is an arrangement conducted between the SMMT and JAMA, its Japanese equivalent.

Is the right hon. Gentleman aware that the market of BTB Engineering Ltd., a firm in my constituency that manufactures light vans, has been adversely affected by the continuing and rising imports of light vans from Japan? What positive hope can he offer to the employees of that firm and many others in the country that make light vans? When will we get from the Government the same tough approach to imports from Japan as has been shown by both Right and Left Governments in France?

I cannot give the specific message to the hon. Gentleman's constituents that he seeks, but I can tell him that the SMMT has said that it is

"clearly satisfied with the outcome"
of the latest agreement. If one is obliged to have such trade restraints it is far better done in that way than by arbitrary Government quotas and tariffs.

Does my right hon. Friend agree that it is better for such agreements to be left to the industries to negotiate than for Governments to interfere, even if, as is the case with light commercial vehicles, one of our major manufacturers is a significant importer of Japanese products?

I am reluctant to give an off-the-cuff reply to the main part of my hon. Friend's question. I am not a great enthusiast of government by trade association, but any arrangement that involved the Government taking unilateral action could easily provoke counter-action under article 19 of the GATT, with serious and harmful consequences for our national economy. That is something that we have experienced.

With regard to the right hon. Gentleman's remarks to my hon. Friend the Member for Warrington (Mr. Hoyle), is it not crystal clear that the Japanese attitude to external trade is somewhat unilateral in character, in the sense that they have a low level of manufactured imports? Is it not also clear that, because our level of exports to Japan is so pitifully low, the scope for retaliation is necessarily limited? Will the right hon. Gentleman confirm that it is necessary continuously and relentlessly to put the maximum amount of Government pressure on the Japanese to get them to alter their attitude to world trade?

As a distinguished Scotsman, the right hon. Gentleman should not be too flippant about the ability of the Japanese to take harmful trade retaliation measures against us. The Scotch whisky industry is particularly well established in that market. Indeed, Scotch whisky is our largest single selling item in Japan. I believe that the most helpful way forward is to open up the Japanese market to our exports and for us to welcome Japanese investment in this country.

The Secretary of State may be right to reject the idea of a narrow. unilateralist approach to trade, and he frequently shelters behind the Commission's responsibility, but will he confirm that we are the most open market in the Community and that the French, Germans, Italians and everyone else in the Community seem much more capable of reducing Japanese imports, without facing any risk of retaliation?

It is a matter for genuine debate whether the United Kingdom is a more open market to the Japanese than is Germany.

Ussr (United Kingdom Exports)

14.

asked the Secretary of State for Trade what recent initiatives he has taken to encourage exports to the Union of Soviet Socialist Republics.

A number of initiatives discussed at the May 1981 meeting of the British-Soviet Joint Commission are being pursued, including co-operation in the energy and automotive sectors.

I commend those initiatives. Will my right hon. Friend confirm that trade between the two countries has consistently been at an imbalance of 2:1 in Russia's favour for about 20 years? A significant reason is that it is in our interests to re-export some Russian imports, but does my right hon. Friend agree that the time has come when we can say to the Russian Government, with legitimate concern, that if they do not take more of our exports, particularly machinery and goods. we have the right to review imports of what we regard as inessential goods, including, though not exclusively, vodka and caviar?

Leaving out the movement of diamonds, which benefits British firms, the trade balance is not too adverse to us. For example, we have a considerable surplus of trade in manufactured products. We are not significantly dependent on Soviet imports, except diamonds and precious stones. Our imports from the Soviet Union largely comprise raw materials, such as oil products and timber, and any replacement of those supplies would certainly take place at a higher cost to the economy and the consumer.

Can my right hon. Friend assure the House that the Government are being exceedingly cautious about trade with the Soviet Union at present, particularly on high-technology items that could improve the Soviet Union's military potential? Can she also confirm that if the Soviet Union sent even one man across the Polish border trade with the Soviet Union would be terminated?

We trust that Poland will be left to settle its own affairs without interference from any quarter. I cannot speculate on how the United Kingdom and other Western countries would react if the Soviet Union intervened. We very much hope that it will not do so. It is clear that Soviet intervention would have far-reaching consequences for our relations in every sphere. In line with the policy agreed after the invasion of Afghanistan, the United Kingdom is not processing export licence cases that would require the unanimous approval of our COCOM partners. There are limited exemptions to that policy; for example, equipment intended for medical use only.

Apart from what the right hon. Lady has already said, does any aspect of Russian foreign policy or Russia's denial of civil rights have any effect on trade policy?

The hon. Gentleman will be aware that the Government have made abundantly clear their view about the Soviet Union's appalling—I repeat appalling—human rights record, but I believe that trade that is genuinely to our mutual advantage should continue.

Can my right hon. Friend assure the House that the Government will not provide export credits to the Soviet Union for vast sums at massively subsidised rates, as did the previous Government, much to the detriment of the United Kingdom?

I can give my hon. Friend that assurance. We offer credit to the Soviet Union on the same terms as those offered by other OECD countries. There would be no sense in offering either worse or better terms or discriminating in favour of the Soviet Union. The agreement that ended in February 1980 is not to be renewed.

European Community—Japan

15.

asked the Secretary of State for Trade if there are further plans for co-ordinated European Economic Community approaches to Japan to encourage a more equitable and economically stable trading relationship with the Community; and if he will make a statement on the present position.

At the meeting of the Foreign Affairs Council on 8 December a list of requests for specific action was adopted. The list is being transmitted to the Japanese Government. It stresses the need for Japan both to open up her home markets and to moderate her exports in sensitive sectors. The Council will be assessing the Japanese response in February 1982.

As I have addressed the question to the Secretary of State in his communautaire role, I hope that he will not be as tetchy as he was last time. Is there any time scale on the request to the Japanese or any threat of retaliatory sanctions if they do not respond positively? With reference to the right hon. Gentleman's earlier remarks about Scotch whisky, may I remind him that he is here as a representative of the Tories and not of Suntory?

I am sorry that my tetchiness provokes such music-hall humour. I will do much to avoid that in future. The hon. Gentleman must not take the fact that I remind him that he belongs to the most communautaire party in the House as a sign of tetchiness. As to the time scale involved, I have said that the Council will be assessing the Japanese response in February 1982 and I cannot go beyond that.

Will my right hon. Friend continue, both directly and through the channels of the Community, to make it clear to the Japanese Government that we are anxious to see an expansion of open world trade, but that the continuation of such free trade depends on all countries opening their markets to one another and that if calls for restrictionism continue to grow it will be the fault of the Japanese themselves?

I am happy to give that assurance to my hon. Friend. The same points have been noted by the American Administration as well as the nations of Western Europe.

Will the right hon. Gentleman confirm that the less the Japanese import from other countries the more capital they have to export to other countries?

Yes. That is why I think that the two factors should be kept clearly in context.

Will my right hon. Friend accept that everyone wishes to encourage and support his efforts to liberalise Japanese trade? Does he agree that if we want to turn the recession into the most catastrophic international slump, the best way of doing so would be to endeavour to insist that every country's trade must balance exactly 50 per cent. with that of every other country?

Monopolies And Mergers Commission

16.

asked the Secretary of State for Trade whether he is satisfied with the powers of the Monopolies and Mergers Commission.

Does my right hon. Friend agree that the powers of the Monopolies and Mergers Commission would be better used in tackling public sector monopolies such as coal, gas, electricity and the British Leyland price ring—which maintains car prices in the United Kingdom at thousands of pounds in excess of prices on the Continent—rather than using its powers to determine who should run that over-large sweet shop in Knightsbridge?

I have a good deal of sympathy with what I think is the point that my hon. Friend is making, which is that the service to consumers, the prices offered by the public sector industries and the service that they render to the economy as a whole are far less satisfactory than the contribution made by the private sector. If that is my hon. Friend's point, I entirely agree with him. The Government have recently announced measures to strengthen the Commission's role in the external scrutiny of the nationalised industries' efficiency. The membership and staff are being reinforced as necessary. Existing powers to call for information are sufficient for all present purposes.

If the Minister is so satisfied with the powers of the Commission, might she also explain to it the difference between commercial danger and crises of identity, an example of which was raised in the House of Fraser and Lonrho merger?

I think that the legislation is sufficiently explicit for the Monopolies and Mergers Commission. The hon. Gentleman will be aware that the Commission has wide discretion in determining the criteria—

These are all matters for ongoing Government consideration. The Commission is an independent body and that is its main strength. It has wide expertise to call upon and the Government will not criticise individual reports from the Commission.

Does my right hon. Friend recognise that to some of us, at least, the criteria adopted by the Commission in considering the House of Fraser issue, and to some extent the Sealink reference, are rather worrying? Will she continue to ensure that she keeps an eye on the criteria that are adopted? Is she aware that some of us think that we are getting the wrong answers and that we may be asking the wrong questions?

I am not sure whether my hon. Friend is aware of the recommendations contained in the Liesner report of July 1980. The Government took a keen interest in the recommendations and they will continue to consider them. That matter will be part of the ongoing consideration of policy concerning the Monopolies and Mergers Commission and the competition policy that is involved. These are matters for continuing consideration and are dependent on the legislative timetable.

Is the right hon. Lady aware that, following the decision of her right hon. Friend on the inquiry into the acquisition of the House of Fraser, it was said that undertakings were expected to be given by Lonrho Ltd. to the Director General of Fair Trading? Since that time there has been considerable comment in the press and elsewhere to the effect that the undertakings have not been forthcoming. It is rumoured that some artifices are being adopted to try to avoid the recommendation and the Secretary of State's decision. Will the right hon. Lady make it crystal clear that the decision is meant to stick on all the parties to that effect?

I am much gratified by the right hon. Gentleman's knowledge of commentary and rumour. Any action that had to be taken would depend on the circumstances. I can give him the assurance that if necessary there would be recourse to the order-making powers under the fair trading legislation.

Spain (Balance Of Trade)

17.

asked the Secretary of State for Trade what is the United Kingdom's balance of trade with Spain in motor vehicles, castings and forgings.

In 1980 there was a crude deficit of £135 million on trade with Spain in motor vehicles and a surplus of £93,000 on trade in iron and steel castings and forgings. It is not possible to identify separately trade in either all castings and forgings or those specific to motor vehicle use.

Does my hon. Friend realise that the imbalance of trade in motor vehicles could be speedily rectified if the discriminatory Spanish import duties and export subsidies were removed, thus allowing the Metro, for example, to compete with the Fiesta? Will my right hon. Friend ensure that no further progress is made in the discussions on Spain's accession to the EEC until suitable undertakings are received from the Spanish Government on discriminatory import duties and export subsidies?

My hon. Friend is right to say that the present Spanish duties have an impact upon our car exports to that market. We have made the most vigorous representations to the Spaniards about this inequity. As my hon. Friend may know, there is a European Community-Spanish joint committee and we have today in Brussels sought to have this issue further discussed.

Is it the Government's policy in the negotiations over Spain's entry into the EEC to insist that there should be free trade in industrial products from the start of any long transition period or at the end of it?

The Government would like to see a transitional arrangement that was reasonably short and that had substantial tariff cuts from the beginning.

British Products (Counterfeiting)

18.

asked the Secretary of State for Trade what complaints he has received recently about counterfeiting of British products by overseas manufacturers; and what steps he has taken.

In the past six months we have received three complaints about the counterfeiting of British products by overseas manufacturers. We urge British companies to secure the greatest possible protection for their patents, trade marks and designs and we are prepared to back them in pursuing cases where patents, trade marks and designs are infringed. In many cases these efforts are successful, but I shall not he satisfied until the practice has been brought effectively under control.

Why is the Minister so reluctant to give maximum support to complaints by Smith and Welstood, whose heating stoves, which are manufactured at Bonnybridge in my constituency, are being counterfeited by unscrupulous manufacturers in Taiwan, who are using the counterfeits to undermine Smith and Welstood's position in the international market? If the international courts are unable or unwilling to take effective action against the pirates, will the right hon. Lady consider imposing import restrictions on Taiwan until such time as it stops illegal practices that are damaging to industry and that destroy jobs in Britain?

We very much sympathise with the dilemma of Smith and Welstood and other small companies. We have advised Smith and Welstood on how it might protect its rights. The company has yet to respond to our offer of a meeting to discuss how it might pursue its complaints. As the United Kingdom has no diplomatic relations with Taiwan it is not possible to make direct representations to the Taiwanese Government. However, the British Government have warned Taiwan publicly on a number of occasions of their deep concern about counterfeiting. It appears that the Taiwanese authorities are now taking these warnings seriously, because in August they introduced a series of measures aimed at stopping malpractices. These measures included a review of policy and of fines as alternatives to prison sentences, which may be made longer.

The Minister may be aware that 12 months ago the Prime Minister of Taiwan assured the Select Committee on Trade and Industry that prosecutions would take place if specific instances were provided by British firms. Is the right hon. Lady aware of successful prosecutions in Taiwan against counterfeiters?

I was not aware of the statement to which the hon. Gentleman referred. However, the number of cases brought to the attention of the Department has decreased significantly in recent months. I hope that that is the result of the successful resolution of such cases in Taiwan and the result of the measures to which I have referred.

Will my right hon. Friend outline the role of the Sheffield defence fund and its relationship with the Government? The term "Made in Sheffield" hitherto implied "Made in Sheffield" and not in a Sheffield elsewhere in the world. Is she now satisfied that the relationship between the Government and that fund is working well?

I am sure that my hon. Friend is aware, as is the whole House, that I laid regulations before the House to require country-of-origin marking in particular on such goods as those produced by the Sheffield manufacturers to which he is referring, and that those country-of-origin markings make the matter perfectly clear if blanks, for example, are produced in Taiwan or any other country, or in any place other than Sheffield.

Is the right hon. Lady aware that it is not enough to refer British companies to their legal rights in third countries and that she ought to make it clear to the Taiwanese Government that if they cannot control the export of counterfeit goods from that country to third countries, we most certainly can control the entry of Taiwanese goods, whether counterfeit or genuine, into Britain?

I have already said that the Government have publicly made it clear to the Government of Taiwan that we disapprove of counterfeiting. We have made public statements to that effect—not through diplomatic channels, because they do not exist—and the Taiwanese authorities have taken action. It now remains to be seen whether that action is appropriate and adequate. From the reduction in the number of cases, it would appear that it is proving to be successful. It is far too soon to make a judgment.

Overseas Development

Least Developed Countries

27.

asked the Lord Privy Seal if he will take steps to increase United Kingdom aid to the least developed countries.

It remains the Government's intention to continue to give priority to the poorest countries, including the least developed, in allocating aid. When the health of the economy improves, the Government hope that they will be able to do more.

Will there be any increase in British aid in real terms to these countries next year as a result of pledges made by the Government at the recent United Nations conference on this subject?

At that conference we pledged ourselves to the target of 0·15 per cent. of GNP but no specific time was given for it. We shall attempt to achieve it as soon as we can.

Is my hon. Friend aware that the best aid that we can give to the least developed countries is to provide a market for their goods in this country? In this regard, will he be particularly delicate with the least developed countries in respect of the multifibre arrangement negotiations, because they have not increased their markets substantially in this country, and if we are genuine in our desire to help them we must provide a reasonable market for their textiles here?

Yes, I take note of the points that my hon. Friend has made. They are points of which the Community, which is the negotiating body on this occasion, is well aware. It is a question more appropriate to my right hon. Friend the Secretary of State for Trade.

Are not double standards revealed in the Minister's answer? Will he confirm that in Mexico the Prime Minister approved a subsidy of £30 million to a British firm for a steel project in that country, which is not one of the poorest countries? Will he also confirm that she approved a grant of £150 million to the same British firm for a steel project in India without that project going through the normal procedures in the right hon. Gentlemen's Department? If that is so, how does the Minister justify the disgraceful fact that this money came from a much reduced aid budget?

It came from that section of the aid budget called the aid/trade provision, which was set up under the Labour Government, and it is doing exactly what that Labour Government wanted to do, which was to use a certain proportion, albeit a small proportion, of our aid to help our industries in Britain with orders that have to be subject to developmental appraisal.

Does my hon. Friend agree that one of the best ways to increase aid to the least developed countries is through the Commonwealth Development Corporation, which has considerably increased its dispersals to the least developed countries in the past five years? Is my hon. Friend yet able to tell us the conclusions of the interdepartmental review on the future of the CDC?

I agree with the first part of that question. On the second part, perhaps my hon. Friend would await the answer to his question later on the Order Paper.

Students (Underdeveloped Countries)

28.

asked the Lord Privy Seal what progress has been made by his Department in providing assistance through overseas aid to enable students from underdeveloped countries to be educated at British universities.

As my hon. Friend the Minister of State, Foreign and Commonwealth Office told the House last March, we are making additional funds available this year to restore to the levels of 1978 and 1979 the number of new awards available under our training programme for the Governments of developing countries. In 1980–81 there were about 3,900 new awards and in the current year the number is expected to exceed 4,600.

Were the Minister and his Department consulted over the amazing decision on overseas student fees, whereby foreign and Commonwealth medical students are being charged £6,000 a year this year, while students coming from the EEC or the French overseas territories are paying only about £900? In view of this ridiculous situation, will the Minister give an assurance that underdeveloped countries in the Commonwealth will continue to get increased aid to help their students to come to Britain?

Yes. The developing countries concerned are able to use part of their development aid for education. As I have just said, we hope to have 4,600 new awards this year. In 1980 there were over 14,000 students under the aid programme in Britain, which was exactly the same number as in 1978.

Does the Minister agree that his answer in regard to the multi-fibre arrangement and the difference in fees that have to be charged in Britain to students from the French overseas départments and the Commonwealth show that the House and the British Government have no control over either matter? Will he make representations about these matters to his right hon. and noble Friend the Foreign Secretary, bearing in mind that people in Britain are fearful of the extent of the erosion of the powers of this House by the EEC?

My right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs always reads Hansard in respect of the questions that I answer, and he will read the hon. Gentleman's very sage observations. My hon. Friend the Under-Secretary of State for Education and Science told the House on 23 November that the Government are committed, in common with other member States, to promoting student mobility within the Common Market. It is as a result of our membership of the Common Market that this has happened. I think that it is within the memory of hon. Members that this was not a matter of which I, and one or two others, including my right hon. Friend the Secretary of State for Energy, approved at the time.

Does the Minister accept that last year's decision by the Government to reduce the amount of money available for overseas students and the introduction of full cost fees have been disastrous for many students in underdeveloped countries? Does he not accept that, even if enlightened and humanitarian reasons should not prevail, in terms of our self-interest it has been a disastrous decision to introduce full cost fees and that we ought to reverse that decision and include more people from those countries in our educational institutions so that courses at universities in Great Britain will not have to close?

I do not think that the policy has been disastrous. There is no question of a return to the earlier general subsidy for all overseas students. If the hon. Gentleman would be kind enough to read what I said in my previous answers, he would understand that it has not been quite as disastrous as he has made out. Commonwealth students alone predominated by a ratio of 2:1.

Does my hon. Friend not agree that the matter to which my lion. Friend the Member for Southend, East (Mr. Taylor) referred is a preposterous situation that demands the collective attention of the Government to get it put right in negotiation with our Common Market partners?

Yes, it is a question for the whole Government. An interdepartmental group of officials are monitoring the impact of increased fees on overseas student numbers. It has done it for one year, and it is doing it for a second year.

Was the interdepartmental group consulted about the decision last week, when the home student fee was halved, thus doubling the subsidy to EEC students and increasing the differential, making the position far worse than that suggested by the hon. Member for Southend, East (Mr. Taylor)? Was the Minister consulted about the decision taken last week to increase the differential between Commonwealth students and EEC students?

India

29.

asked the Lord Privy Seal if, in view of the proposed purchase by India of Mirage fighters from France to a value in excess of £100 million, he will reduce the aid to that country by a similar amount.

My right hon. Friend will not be surprised that I am somewhat disappointed by his reply. Does he agree that where a country can afford to spend this amount on sophisticated weapons, particularly with our overseas competitors, the whole question of the need for aid is brought into doubt?

Can my right hon. Friend understand the irritation of my constituents, who, with a local male unemployment rate of 23½ per cent., are told that the Government cannot find the money to make Bridlington a development area, but find that the Government can grant large sums of money to countries that are spending massive sums on sophisticated arms?

Yes, I can understand the feeling of those people, but they should understand that, under article 51 of the United Nations charter, every country has the right to self-defence. India has bought Jaguar aircraft from Britain. The contract for the Mirage deal is still being negotiated; nothing has yet been finalised.