asked the Secretary of State for Trade what action he proposes to take on the report of the Interim Action Committee on the Film Industry.

I expect further reports from the Interim Action Committee on the setting up of a British Film Authority. Meanwhile we have begun consideration of the committee's proposals and I shall make a statement as soon as possible.

When the Secretary of State considers these proposals, will he bear in mind one peculiarity of the report. Although it seeks a united authority for the whole of the film industry, it does not answer the question for which the Minister should be responsible because it leaves out the British Film Institute and that side of the industry. Is not that matter worthy of further consideration?

I shall take into consideration many factors, including the Government's commitment in respect of a British Film Authority. I remind the hon. Member that this is an interim report and that further reports will be made in due course.

Will my right hon. Friend look urgently at the question of the Children's Film Foundation, because its work is recognised internationally? It appears that, whilst it is waiting for a final report, it will be faced with considerable difficulty. Will my right hon. Friend look at its particular problem now and wait no longer?

I shall certainly consider that in my general consideration of the problems of the film industry.

asked the Secretary of State for Trade what proportion of the line of credit offered to the Union of Soviet Socialist Republics by the Government in 1975 has now been taken up.

The total value of contracts placed under the Anglo-Soviet Credit Agreement is now £441 million. This represents approximately 46 per cent. of the £950 million.

Is the Minister aware of the concern in the chemical industry that this and other lines of credit offered by Western countries are being used to finance the setting up in the Soviet Union of chemical factories on the basis that they will be paid off by selling their products back to the West at prices which no doubt will be politically fixed? Does he not think that this is an undesirable practice? Will the Government take a lead in the EEC and OECD to work out guidelines for the Western countries to limit this practice?

Buy-back arrangements are increasingly an aspect of trade, particularly with Eastern bloc countries, but they are not confined to them. It is for the commercial judgment of individual companies to decide whether to enter into contracts with the USSR and other COMECON countries when considering all the conditions that are attached to these contracts.

asked the Secretary of State for Trade how many officials in his Department are engaged wholly on matters related to import substitution.

Import substitution is an inseparable part of work by officials on both external and internal commercial policies; none has it as his sole responsibility.

Does the Minister think that that is good enough at a time when import penetration is making itself felt in areas such as commercial vehicles and components, where we have previously been able to resist it? Does he not think that the time has come for a rigorous attack to reduce imports in order to maximise the gains from exports?

I agree that we should have a rigorous attack in the form of major import substitution. That is a major part of our industrial strategy. The sector working parties have prepared home and overseas market sales objectives, and I am glad to be able to say that we are beginning to discuss them at individual company level, which is where the real decisions are made.

asked the Secretary of State for Trade what progress has been made towards implementation of the Sandilands Report on inflation accounting.

The Inflation Accounting Steering Group, set up by the Accounting Standards Committee with financial assistance from the Government, is continuing its task of preparing a current cost accounting standard. Meanwhile, the ASC has issued interim guidelines recommending that listed companies include in their accounts a supplementary statement to show the effect of inflation on their results.

Does the Minister agree that publication of the Sandilands Report, the Morpeth Report and now the Hyde guidelines on inflation accounting has led to public confusion? Is he aware that the Morpeth Committee continues to do its work notwithstanding that its proposals were rejected by the Institute of Chartered Accountants? Will his Department give a lead in clarifying the situation?

I should have preferred to see more progress than has been made so far. The Hyde guidelines will prove to be of value, albeit within a limited scope. I do not take quite so gloomy a view as the hon. Member for Ashfield (Mr. Smith) about the progress that has been made.

asked the Secretary of State for Trade whether he has received a report from the Society of Motor Manufacturers and Traders on its latest talks with the Japanese automobile industry.

The main talks between the United Kingdom and Japanese motor industry associations open in Tokyo tomorrow. The Government attach importance to the achievement of a satisfactory outcome.

Is the Secretary of State aware that the Japanese motor car industry was unable to live up to its undertakings last year? In the event of that proving to be the case this year, will he indicate what action he is prepared to take to ensure that the limit is observed?

I am aware of the situation last year. Unfortunately, it was contributed to in substantial measure by the British motor car industry and its failure to produce sufficient cars during 1977. I do not propose at the moment, just before the negotiations in Tokyo take place, to issue threats of what action might be taken. I merely emphasise the importance of these talks being successful. I made that clear to Mr. Ushiba during his visit to London.

As we imported more cars from than we exported to the Common Market, does not my right hon. Friend believe that British motor car manufacturers need to talk to people other than the Japanese? This again demonstrates the problem of imports cancelling out exports.

The main duty of British motor car manufacturers, as of many other industries, is to produce good products and to sell them.

Is it not encouraging that the Japanese motor car industry is obtaining British components, mainly from Lucas? Will the Secretary of State tell us about Mr. Ushiba's visit and his sincere efforts to assure the EEC that the Japanese wish to be good trading partners in the world community?

I am aware that the Japanese motor car industry is making some purchases of car components from this country. I very much welcome that trend, as I welcomed the visit last year of Japanese car manufacturers to investigate our components industry. But the figures are still very small and in no way compensate for the very large imports of motor cars into this country.

Will my right hon. Friend confirm that, had the Tories' advice been taken regarding Meriden, the Japanese penetration of motor cycles would have been even greater? Will he also confirm that the Government did well not to take the advice of those civil servants and others who wanted to get rid of Meriden?

The Government's position on Meriden is sufficiently well known without my re-emphasising it this afternoon.

asked the Secretary of State for Trade what representations he has received about the Green Paper on company reports, Command Paper No. 6888.

By Friday 3rd February my Department had received written comments from 86 organisations and individuals, representing a wide range of interests.

Instead of giving in to pressures from the Stock Exchange, will the Government press ahead with new legislation to introduce a greater degree of public accountability for companies to prevent a repetition of public scandals, such as SUITS, whose ex-chairman has been trying to keep in with the Government by having lunch with the Chancellor of the Exchequer during his recent visit to Glasgow?

I thought that my hon. Friend would allude to SUITS. There is no question of the Government giving in to pressures from the Stock Exchange. The Green Paper on company reports, coupled with the White Paper on proposed changes in company law which we have put to the country, indicate the Government's thinking. I think that my hon. Friend would, by and large, support those proposals.

Before the very wide-ranging proposals contained in the Green Paper are implemented, will the Government ensure that there is either a reclassification of companies or that small businesses are exempted from the requirements?

I cannot give such an undertaking, because the consultative process on which we have embarked has only recently concluded and we have not yet considered the totality of the views put to us. I suggested some little time ago the idea of a three-tier arrangement, which I thought had generally found favour, but the details remain to be worked out.

Will my hon. Friend confirm or deny the report in The Guardian this morning that the CBI is opposed to the proposals in the Green Paper? Will he assure the House that, despite that opposition, the Government will insist on more disclosure of what companies are about since it is clear that their annual reports conceal more than they reveal? It is the democratic right of the public at large and of the workers within industries to have access to far more information than they have hitherto had.

The whole thrust of the Green Paper was designed to ensure that there would be greater accountability. I do not propose to comment on specific proposals, because we have not had sufficient opportunity to consider the views of those who put forward various recommendations and observations The CBI's views will certainly be given the attention that they deserve.

asked the Secretary of State for Trade when he now expects to publish his White Paper on airport strategy.

asked the Secretary of State for Trade whether he will reconsider the provision of a new London airport at Maplin, in view of the worsening conditions at Heathrow for travellers and of the increasing problem of aircraft noise for nearby residents.

The White Paper on airports policy, which was published on 1st February, reaffirms the decision to abandon Maplin and sets out the Government's conclusions on the way in which London area air traffic should be accommodated between now and 1990.

Last week, when making his announcement, the Secretary of State said:

"Our policy … envisages the provision of a fourth terminal at Heathrow".—[Official Report, 1st February 1978; Vol. 943, c. 456.]

First, I congratulate the hon. Gentleman on his recovery after his accident and wish him well.

Is the Secretary of State aware that the idea put forward in the White Paper for the development of Biggin Hill as a kind of mini-Heathrow is nonsensical? It may have been suitable for a war-time fighter station and in peace time for club flying, but is it not out of the question, on environmental grounds alone, for it to be developed as a first-class airport?

The hon. Gentleman exaggerates slightly the role attributed to Big-gin Hill in the White Paper. The intention is that it should be used as a centre for general aviation, and it is suitable for that purpose.

Does my right hon. Friend agree that, unless a positive decision about another London airport is taken rapidly, we shall soon have such slum conditions at Heathrow that it will be virtually impossible to attract travellers? It is because people want to travel to Heathrow that it is grossly overloaded at present.

My hon. Friend will be aware that by the end of this year I hope that conditions at Heathrow will have been greatly improved by the provision of additional capacity. I certainly appreciate the difficulties caused by the present congestion at Heathrow. This emphasises the importance of the programme for diverting traffic to Gatwick, about which I made an announcement last April and which is referred to in the White Paper.

Will the Secretary of State explain why Blackbushe has been excluded from the section headed "General Aviation", bearing in mind that the CAA has always given Blackbushe its support as one of the big six general aviation airfields and there is no other airfield with hard runways in this part of England that could possibly replace it?

The position about Blackbushe is to be determined, in the first instance, by its owners in consultation with the local authority. I am afraid that there is no other comment that I can make on that today.

Is the Secretary of State aware that many people feel that the decision has already been taken about the next major London airport and that that decision is that it is to be Stansted? Is he further aware that many people feel that the Department of Trade has been determined for a long time to make Stansted a major airport in spite of public inquiries which have come out against that decision?

I am certainly aware that many people think the decision has already been taken. I suppose that it was inevitable, when there are proposals in the White Paper that Stansted should take 4 million passengers, that people should assume that the decision has been taken. In fact, the options set out in the White Paper for the provision of services after 1990 are genuine options and there is no intention in the White Paper to foreclose this decision.

Will my right hon. Friend repudiate any suggestion that Stansted is to be the third London airport? Will he make it clear that many of us who are concerned about the development of air traffic in the London area generally, and are concerned also about Heathrow and Gatwick, think that it would be much more sensible for much of that traffic to be dispersed to the provinces?

I emphasised to my hon. Friend on Wednesday, and it is emphasised in the White Paper, that in the White Paper we state three options. Everything possible will be done to divert traffic from the South-East to the rest of the country. One of the steps towards achieving that will be the concentration on regional airports. Nevertheless, no one should exaggerate the possibilities of diversion from the South-East. Therefore, it is necessary for us to study the three options as rapidly as we can as trends in traffic become clearer.

Is not the only real option for a major airport, taking us into the 1990s, from Stansted, a green field site? Is it not the case that if we are to have the necessary airport capacity in the late 1980s and 1990s the planning for a greenfield site has to start very soon? The Government have avoided this issue.

I do not believe that the Government have avoided any issue upon which it is important to take decisions now. There are the three options of Stansted, a military airport, or, as the hon. Gentleman says, a green field site. But, despite the forecasts that have been made, which are the best that we can now make, the traffic trends are not sufficiently established for us to commit the enormous expenditure that would be involved at this time.

asked the Secretary of State for Trade what evaluation he has made of recent measures proposed by the Government to prevent the dumping of steel products in the United Kingdom; and if he will make a statement.

The measures approved by the Council of Ministers for the European Coal and Steel Community as a whole are being implemented by the Commission. I am satisfied with the progress in the imposition of provisional antidumping duties, and I am following carefully the Commission's negotiations with the major supplying countries.

Will the Secretary of State expand on that answer?

I will do so at considerable length if the hon. Gentleman wishes. As the hon. Gentleman is no doubt aware, the Community has decided that in the first instance provisional duties can be placed on imports on the application of member countries where the price of those imports is below minimum reference prices established by the Commission. This is regarded as being, for the most part, an interim situation. During this interim period the Commission will be negotiating with our major supplying countries on the price of supply and the quantities of supply. We hope that in two or three months the position on that matter will become clearer.

Will my right hon. Friend say what usful information has so far emerged from the system of surveillance licensing, especially in special steel, which was introduced about six months ago?

Surveillance licensing has the simple effect of telling us what licences are being applied for. We made clear when introducing the system that we did not expect it to have exactly the value which those who made representations to us thought that it would have. Nevertheless, we thought that on an experimental basis we should introduce it. We introduced the system, and we are now getting that sort of information which is being studied. The system which has been set up by the Council of Ministers as a result of the decisions of December and January will greatly help the steel industry of the United Kingdom and of the Community to sustain itself in the present time of very great difficulty.

Is it not a fact that the reference pricing system was very unstable at the end of last year? Is the Minister satisfied that Commissioner Davignon has been able to achieve order within the European steel industry, let alone deal with competition from outside?

Yes. One of the problems with the reference pricing system last year was that the prices tended to be undermined by the prices of imports. One of the purposes of these negotiations with major suppliers is to ensure that there is a reasonable relationship between the minimum reference prices and the prices of imports. I hope that that will be achieved. There are at the moment problems about certain products manufactured in the United Kingdom because those prices are higher than the typical prices within Europe. I have discussed that with Commissioner Davignon and I hope that some way of dealing with the problem will be found.

asked the Secretary of State for Trade what steps he is taking to fulfil the Prime Minister's wish to see invisible trade prospects improved.

My Department offers a wide range of services to invisible exporters and is actively assisting the invisibles sector in identifying and pursung opportunities for improving overseas earnings.

Has the Secretary of State noticed that most of the service industries which make such a good contribution to the British balance of payments are in the private sector, demand little by way of Government assistance, and are not very heavily trade unionised? Will he tell us what conclusion he draws from that? Does he agree that what those companies need is a fair deal from the Treasury over taxation policies vis-à-vis our European competitors?

I note that those parts of the economy are in the private sector. I am delighted that they are doing well and are increasing their earnings. No doubt the hon. Gentleman's remarks about the Treasury will be conveyed to it. I wish to give the invisible earnings sector of our economy every encouragement. I think that we are now doing so.

Will my right hon. Friend confirm that for tourism to succeed it needs hotels that are subsidised to some extent by Government money—both now and in the past—and that most tourists come to see the public institutions which are catered for and financed by the taxpayer?

I think that tourists come to this country for many reasons. They come to see the beauty of the country and to see the many buildings in the public and private sectors. I shall encourage them to continue to do so.

Is the right hon. Gentleman aware that our shipping industry is probably amongst the largest contributors to our invisible balance of payments? Does he think that to give ships away to COMECON countries and to persuade India and other countries to take ships under our aid programme will help the invisible earnings of this country in future years?

The hon. Gentleman's supplementary question is again based on the assumption that if we do not build these ships they will not be built. That is not the position. It is a factor in world shipping—a factor of which we shall have to take increasing note—that many developing countries are building their own fleets. Unfortunately, most of them are building their fleets not in this country but in other developing countries as well as in their own shipbuilding yards. That is a factor of competition of which we shall have to take account. The question of the relationship between the developing world and the more developed sections of the developing world must occupy our thoughts. Indeed, it is part of the negotiations in other respects which will take place in the multilateral trade negotiations. There is no chance of this development being avoided.

asked the Secretary of State for Trade whether he is satisfied with the Government's progress in promoting free and fair international trade.

asked the Secretary of State for Trade whether he is satisfied with progress in the present round of multilateral trade negotiations.

The Government's policy is to work for the maintenance of the open world trading system, though one adapted to the realities of the present economic situation. The success of the multilateral trade negotiations is a central element in this policy, and I am glad to say that the major participants have agreed to enter the substantive phase of the negotiations on the basis of a number of working hypotheses relating to the various matters at issue. I hope that it will now be possible to draw the negotiations to an early and positive conclusion.

Will the right hon. Gentleman expand that answer in layman's language? Can he say simply what initiative the Government will take in the mulilateral trade negotiations in Geneva that might combat the growing trend towards protectionism in the Western world and lead to a further liberalisation of world trade?

I think that the hon. Gentleman will be able to understand the answer when he reads it, even if he did not understand it when he heard it. The initiatives which the Government are taking in respect of these negotiations have been incorporated in the mandate of the European Community which will be negotiated at Geneva. They include such matters as a reduction in tariffs on a harmonising basis, a selective safeguard, which we think is essential in the world as it is so as to enable selective action to be taken, and a break in the phasing of tariff reductions. Those are the main elements in the negotiating mandate.

What proposals has the right hon. Gentleman put forward for the reform of Article XIX of the GATT in these negotiations? Can he confirm, with regard to the CAP, that there will be no inhibitions whatsoever on the British Government in discussing that either in the plenary or the committee sessions?

With regard to Article XIX of the GATT, we have proposed a selective safeguard; in other words, a safeguard which can be operated on a discriminatory instead of a non-discriminatory basis.

Does my right hon. Friend accept that the very existence of the EEC and its protective habits are contrary to this philosophy of free trade? Will he therefore seriously look again at this matter of the CAP, which in itself is the embodiment of protectionism?

Sometimes I hear that the EEC is protectionist, and sometimes I hear that it is too devoted to free trade. It is sometimes difficult to choose between the two. I think that the EEC operates in world trade in the way that most individual participants in world trade do, which is to help its industries, and it is not untypical that the agriculture industry should be assisted. It is not so easy to get agricultural products into the United States, as many suppliers of agricultural products sometimes find.

Does the right hon. Gentleman agree that non-tariff barriers are probably a much greater cause of growing world protectionism than tariffs themselves, and in particular the subsidisation of declining industries, such as shipbuilding, and political pricing? Do the Government agree with the draft guidelines which have been produced on non-tariff barriers, and will they be supporting them in the negotiations which are going on in Geneva?

There are no firm guidelines on non-tariff barriers. Various informal documents are being circulated, and these are the subject of discussion. Obviously it would be useful to make an advance in dealing with non-tariff barriers. The hon. Gentleman will realise that there is probably no aspect of international trade in which it is more difficult to make progress, because of the difficulty of surveying what is happening and ensuring that people are adhering to the rules laid down.

Why do not the Government use these negotiations to help in reforming the CAP, which is the most extreme form of protectionism in the world?

Relative forms of protectionism in agriculture might be more difficult to establish than my right hon. Friend assumes. I hope that some progress in dealing with the agriculture issue will be possible and that some greater access will be permitted, and that we shall be able to do something about trade in third markets, but I think that it would be wrong to exaggerate the possibilities created by these negotiations for changing the CAP.

asked the Secretary of State for Trade when he next proposes to meet the Chairman of the British Airports Authority.

My right hon. Friend and I met the Chairman of the British Airports Authority on 31st January. I have no plans for a further meeting in the immediate future.

Before my right hon. Friend and my hon. Friend again meet the Chairman of the BAA, will they study with care the history of the Stansted affair in the 1960s, and in particular the Roskill Report, which utterly and completely demolished the arguments of the air traffic lobby for the development of Stansted as London's third airport on environmental, planning and noise grounds? Will my hon. Friend discuss with the Chairman of the BAA the possibility of giving an undertaking that a capacity of 4 million passengers will be the final upper limit on development at Stansted and therefore a safeguard for the future?

My hon. Friend is asking, by a more roundabout route, the question that he asked my right hon. Friend in another respect, and I give him the same answer without actually rehearsing it.

Is the hon. Gentleman aware that there will be a welcome for the general proposition in the White Paper that the large cities which create the traffic are the places where the airports should be located? Will he confirm that unless and until the present Government or any other possess powers to direct foreign airlines to use specific airports there is no point in thinking about a third London airport unless and until the Government propose to close Heathdow, which presumably they have no intention of doing?

I do not think it would be right to assert that all large cities must of necessity have an airport.

I did not say that.

What we are proposing in the concentration of resources assists not only the national airports strategy but the development of regional air traffic.

If I may ask the question that I asked last week, does my hon. Friend recollect that the Secretary of State said that the decision to devolve responsibility for Scottish airports to the proposed Assembly was taken not on technical grounds but on political grounds? Do the Government think that such a decision should bow to political considerations rather than to technical considerations which are completely against it?

I think that the basis upon which the Government determined their policy in Scotland was dependent to some extent upon the views that were expressed in this House, and to some extent on the view that the Scottish devolution Bill was likely to become law, and that it was appropriate in those circumstances—

Give the Assembly a job.

for the—

Just give it something to do.

My hon. Friend cannot stop his belligerence on this issue from spilling over into trade questions. This is a matter for the Scottish Assembly, and I believe that is right.

Can the Minister indicate whether any discussions have taken place about the experiments of take-off and landing techniques which took place at Heathrow last year? Will they be extended to Gatwick? Also, is there a possibility of an interim report, in view of the implications for all areas that are subjected to high noise levels?

The experiment has taken rather longer than we originally thought. I assure the hon. Member that a statement will be made as soon as possible.

When the Minister next speaks to the Chairman of the British Airports Authority, will he discuss the way in which 25 million to 40 million passengers using Heathrow get to and from the airport? Will he bear in mind the present heavy use of the traffic infrastructure?

If the hon. Gentleman is referring to interlining between Heathrow and Gatwick—

No, I am not.

this is a matter which is attracting the attention of the British Airports Authority at present. I hope that the new Underground link will assist materially access to Heathrow, but we shall have to keep the matter under close review.

asked the Secretary of State for Trade what figure he estimates for the trade deficit with other EEC member States in the second half of 1977 com pared with the first halt and the first and second halves of 1976.

In the four half-year periods beginning with the first half of 1976, our crude trade deficits with the rest of the EEC have been £1,041 million, £1,100 million, £1,017 million and £985 million respectively.

Now that the trend in trade with the EEC is going the other way, will the Minister note that the anti-EEC forces have become silent and we do not hear so much about the persistent uncontrollable deficit within the Community? [HON. MEMBERS: "The hon. Gentleman must be joking."] Does he agree that these figures show that the EEC deficit is declining, just as deficits are declining elsewhere? All this is happening against a background of a higher ratio of trade with other EEC member States.

There has been an improvement. Whether it can be described as more than marginal is a matter of opinion. The size of our trade deficit with the EEC is still about £2 billion a year and there must be a considerable improvement in that figure.

Does the Minister agree that invisible exports play a very important part in our trade balance with the EEC and with other countries? Does he also agree that supervision of the securities market and other City institutions might play a large part in the balance? Should we not have a debate in the House on new methods of supervising the securities market and other City institutions before any agreement finally is reached between the Department of Trade and the Governor of the Bank of England?

The matter of a debate is for the Leader of the House. This issue is certainly an important factor in trade with the EEC and it is worth worrying about that over the past four years a surplus on invisible trade with the EEC of £374 million has turned into a deficit of £160 million.

Will the Minister agree that in so far as these deficits occur—running at £1½ billion on manufactures with other EEC countries—we are using North Sea oil revenues to subsidise and develop the manufacturing industries of our major competitors?

It would be foolish to believe that if this country were to leave the EEC tomorrow this large deficit would disappear. Any change would be a matter for conjecture. We also have a large deficit with the rest of the world—£1·6 billion last year. My hon. Friend's argument would apply to that as well.

asked the Secretary of State for Trade whether he is satisfied that hotel accommodation outside London will be adequate for the number of overseas visitors anticipated during the current year.

Yes, Sir. According to the latest figures from the national tourist boards, an average of one hotel bed in two outside London was empty in the first eight months of last year.

I note the Minister's apparent satisfaction. Is he aware that there is growing concern in the hotel industry that the shortage of hotel accommodation in and out of London will soon prove a restriction on tourism? In certain areas, including my constituency, hotels provide a major source of employment. The United Kingdom is alone in the EEC in not providing industrial building allowances or the equivalent for hotel building. There is considerable suffering in these areas from that failure. When will the Government stop discouraging the expansion of hotel accommodation?

The Government in no way discourage the expansion of hotel development. The hotel development incentive scheme is a major factor in that respect. On the matter of capital allowances for hotel building, in the Finance Bill debates last year the Minister of State indicated that Treasury Ministers believed that on equity grounds the case was unanswerable. They said that there was no case in equity for treating commercial buildings differently from industrial buildings. This is a matter of financial priorities. Therefore, it is a matter for the Chancellor of the Exchequer.

On Merseyside, and particularly in Liverpool, there is a lot of good hotel accommodation available. Will the Minister do his best to ensure that as far as possible tourists are directed to Liverpool? [HON. MEMBERS: "Oh."] I said "as far as possible". Is he aware that we consider Liverpool to be the Athens of the North? It is a fine artistic and cultural centre and the people are extremely friendly. Will the Minister take all these points into accouunt when he is discussing the subject of hotel accommodation and questions involving tourists coming to this country?

I am glad to tell my hon. Friend that my right hon. Friend the Secretary of State entirely agrees with him, except that he wishes that tourists could be directed to Birkenhead. On the question of encouraging tourists into the development area to which he refers, under Section 4 of the Development of Tourism Act 1969 project assistance is confined to the development areas. To that extent, we are already increasingly encouraging tourists into these areas. We shall continue to do so.

asked the Secretary of State for Trade what further representations he proposes to make to the Japanese Government concerning the level of import duties on United Kingdom products.

asked the Secretary of State for Trade what further representations he proposes to make to the Japanese Government concerning the level of import duties on United Kingdom products.

I take every opportunity of making representations to the Japanese Government about barriers to imports, including import duties. Negotiations on these matters are now taking place in the context of the multilateral trade negotiations.

Is the Secretary of State aware that the modest reduction in duty announced by the Japanese Government just before Christmas has been widely welcomed by all those who want to increase trade with Japan? However, there has been considerable disappointment about the fact that the reduction on biscuits and confectionery did not materialise. Does he agree that duty rates of 35 per cent. and 40 per cent. are not conducive to increasing trade in these commodities? Will he make the strongest possible representations to the Japanese Government on this point?

I agree entirely. I hope that the modest reduction in the duty on whisky will help, and I agree that it was disappointing that nothing was done about confectionery and biscuits. We shall press this matter hard in the multilateral trade negotiations.

Will the Secretary of State recognise that, in view of the enormous balance of trade surplus of the Japanese, the reductions offered so far are minimal? He should be able to persuade the Japanese Government to make a meaningful reduction, particularly on the heavy duty lines such as biscuits and confectionery.

I agree entirely. The position created by the Japanese surplus is very serious. I shall press this matter upon the Japanese Government and Mr. Ushiba in discussions in this country, Europe and the United States, and I hope that they will take the necessary action to rectify the position.

Is it not true that import duties and other trade restrictions have been used for years by Japan and other countries to protect and develop home industries? Is it not time that we adopted similar measures?

As a matter of fact—this is part of the problem—the difficulty in Japan is not just a matter of import duties or formal tariff barriers or non-tariff harriers. The difficulty is the attitude towards purchasing, which has had the effect of helping to build up Japanese industry and its export capacity. It is no use imagining that protective policies necessarily create viable industries. Unfortunately, there are too many examples of the contrary in this country—industries that have had protection but have not benefited.

In my right hon. Friend's discussions with Mr. Ushiba, was anything said about quartz crystals?

I did not mention that industry, nor did Mr. Ushiba, in my discussions with him.

asked the Secretary of State for Trade if he will now introduce surveillance licensing of imports of cutlery.

I am considering this.

Is my hon. Friend aware that his interest in and concern for the cutlery industry is much appreciated in Sheffield? What progress is being made with the special study of the industry that the Government requested and in which the industry is co-operating?

I am grateful to my hon. Friend for his expressions about my concern for the industry, which is strong. I hope to make an announcement very soon about surveillance licensing, but we have to clear the matter with the EEC Commission first. On the question of the study, we are doing our best to ensure completion of the necessary documentation by the industry, and we in the Department will ensure that this is processed quickly so that we are in a position quickly to take firm decisions.

Is it not a fact that there has been a severe contraction of the cutlery industry mainly based on Sheffield? Is not this as much a European problem as it is a British and a Sheffield problem'? What contacts is the Minister having with the EEC? Is not the culprit still South Korea and its cheap stainless steel flatware?

We have made an application to the EEC Commission in respect of temporary import restraints for stainless steel tableware where the level of imports is more than 80 per cent. The Commission was not willing to proceed, first because some member States were removing their traditional quotas as part of the Community's offer to the multilateral trade negotiations; secondly, because a number of United Kingdom manufacturers are themselves substantial importers of cutlery; and, thirdly, because the import levels are already so high and there is no evidence that the industry could provide for the lower end of the market.

Is my hon. Friend aware that it is possible to comb whole towns in this country and not be able to buy a British knife, fork or spoon but be faced with imports from France, Korea and Hong Kong? Will my hon. Friend expose those United Kingdom manufacturers who are household names and who are engaging in the import of cutlery which British people may well be buying oblivious of the fact that they are competing with home industries?

My hon. Friend makes a very fair point. There is very considerable concern about United Kingdom manufacturers who are damaging the prospects for the home industry by substantial imports. Their name is well known. I am glad to say that the industry is beginning to organise against them and in defence of the indigenous home industry.

asked the Secretary of State for Trade what recent discussions on air services between the United Kingdom and Australia have taken place at ministerial level.

I held discussions on air services, among other things, with Mr. Peter Nixon, the Australian Minister of Transport, on 23rd January during his visit to this country.

Is it correct that the plans recently submitted by Qantas and British Airways for a further reduction in the minimum fare between Britain and Australia are quite likely to be introduced shortly but that the application by Laker Airways for even lower fares is likely to be postponed indefinitely? As the Department of Trade is now a self-confessed fan of Freddie Laker, can the Minister take any steps in the reasonably near future towards encouraging Laker to start this service, for which there is a very sizeable potential market?

The hon. Gentleman has apparently misunderstood the situation. The Australian Government are currently involved in a civil aviation policy review, which will not be determined until the end of March. My understanding is that there will be no advance in the provision of services of either kind until the Australian Government have made up their minds on this issue. Mr. Laker's application to the Civil Aviation Authority was adjourned sine die precisely in order to enable the lines of Australian policy to emerge.

Is not Singapore a vital part of the route to Australia for the new Concorde service? Just what steps are the Government taking to oppose the ridiculous moves by Malaysia to vent its spite on Singapore Airlines by preventing Singapore Airlines from flying Concorde between Singapore and London?

We are engaged in discussions and negotiations with the Malaysians. To try to hot up the situation along the lines the hon. Gentleman suggests would do nobody any good.

asked the Secretary of State for Trade when he now expects to complete his consultations prior to bringing forward proposals for an extension of industrial democracy.

My right hon. Friend the Prime Minister announced at the meeting of the National Economic Development Council last week that he will be meeting both sides of industry to follow up the discussions that have already been held. The timing of our proposals will be influenced by the outcome of these further discussions, but they will not be unduly delayed.

Why, when the Prime Minister constantly disowns the idea of confrontation, do the Government insist on their proposals for statutory industrial democracy in the face of implacable hostility from the Confederation of British Industry? Is it because the Government's attitude remains one of total deference to the trade union movement?

It is because my right hon. Friend the Prime Minister does not wish to seek confrontation that he has taken upon himself this effort to see whether any sort of consensus is possible, and in that connection he will be meeting the CBI in approximately five minutes.

Does the Secretary of State agree that in any legislative proposals which may be introduced by the Government it is important to bear in mind the interests of those who are not members of trade unions as well as the interests of those who are members of trade unions? In that connection, will he remember that the number of non-unionists in this country exceeds the number of union members by more than 1 million?

It is certainly necessary to bear in mind the interests of non-trade unionists.

asked the Secretary of State for Trade if he will make a statement on the recently promulgated European Community textile industry protection regulations and on the effects he estimates these will have on the United Kingdom industry in 1978.

I would refer the hon. Member to my answer to my hon. Friend the Member for Sowerby (Mr. Madden) on 10th January.

Is the Secretary of State aware that the EEC is to be congratulated on the progress of the negotiations so far? Will he, however, consider the problem of imports of wool cloth from the Argentine, which is of grave concern to the wool textile industry?

I am grateful to the hon. Gentleman for his congratulatory remarks. Imports from Argentina have been the subject of discussions between the industry and myself and my Department and, indeed, the Community. There is a trigger mechanism within the agreement which will help in this respect. However, I hope that the industry now takes the opportunity of investing and is not too concerned with minor problems that continue to arise.

asked the Secretary of State for Trade if he will consider long-term credits on favourable terms to Vietnam for the purchase of agricultural machinery from Great Britain; and if he will make a statement.

ECGD is prepared to consider applications for cover for sales of agricultural machinery to Vietnam on normal commercial terms, though it will always consider matching exceptional terms offered by other credit insurers.

Would not this provide jobs for our engineers? Is my hon. Friend aware that Vietnam also wants to buy machinery for mining and for chemical, engineering and other industries? Are we dragging our feet because of the American trade veto?

We are not dragging our feet because of the American trade veto. Vietnam is a major market which has considerable long-term export potential but which is now in considerable difficulties because of reconstruction and the lack of hard currency. As I have said, we will match exceptional terms provided by other credit insurers. We will go further than that and we are prepared to consider use of the aid trade contingency fund—that is, using a small proportion of the bilateral aid programme to give higher priority to the commercial importance of developmentally sound projects where no aid allocation is available or where it has been fully used.

Is the Minister aware that the country will note the Government's enthusiasm for providing export credits to Vietnam and their ban on export credits to James Mackie of Belfast, which wishes to keep its employees employed?

There are totally different considerations involved.