asked the Secretary of State for Trade when he plans next to meet representatives of the shipping industry.

There are frequent contacts at both ministerial and official level with the General Council of British Shipping which represents the United Kingdom shipping industry. I next plan to meet the Council on 4 April.

When the Minister next meets the Council, bearing in mind the military and commercial threat posed by the heavily subsidised Soviet shipping fleet, will he tell it what plans he intends to put in hand to effect better competition between British ships and Russian ships and, particularly, whether he is considering a quota or surcharge arrangement similar to that in the United States?

The hon. Gentleman may be aware that my hon. Friend the Under-Secretary of State has raised this matter frequently in the context of the European Community. Partly as a result of his efforts, the Transport Council recently took a decision to monitor all liner carriers on certain trade routes serving the EEC.

When my right hon. Friend meets the Council will he raise the question of the cost of pilotage in the Port of London, which seems to be a great deal higher than elsewhere? Will he also consider asking the Council whether it could put proposals to the Port of London Authority to rationalise the whole question of pilotage on the River Thames?

That matter is under consideration in the context of the Merchant Shipping Bill which is in Committee. I shall bear in mind what my hon. Friend has said.

Will the Secretary of State find out from the General Council of British Shipping what its policy is regarding fines which are levied on master mariners who break the anti-pollution regulations? Will he see if he can obtain from it some general agreement about its policy and then come to the House and make a statement?

The whole question has been discussed between the Council and my hon. Friend the Under-Secretary of State and the Department. I understand that it will be debated in the Merchant Shipping Bill Committee, perhaps tomorrow. I shall read with great interest the contributions hon. Gentlemen make on the subject.

Does the Secretary of State know the current relationship between the charges levied by the shipping cartel and the actual costs of operating the ships? If he does not know, will he undertake to report this to the House as soon as possible?

My hon. Friend is inviting me to launch myself into a complicated area between the shipping interests and the shipper interests. The question will have to be more finely defined before I can give a helpful answer.

asked the Secretary of State for Trade what representations he has received about the workings of the multi-fibre arrangement.

I keep closely in touch with both sides of the textiles and clothing industry about the workings of the multi-fibre arrangement and related issues.

Is the Secretary of State aware that the success of the MFA will have to be judged against the outcome of the Tokyo round? Does he really believe that the present proposals of the Commission, which will result in textile tariffs in the Unted States being at least 35 per cent. higher than those in the EEC, can possibly be justified?

The multi-fibre arrangement is working well and will maintain itself in operation until 1982. I hope that it will be continued beyond that, because I think that it is necessary for the industry. I have only recently received the latest interim reports from the Commission on the multilateral trade negotiations. Since there are over 2,000 items in the United States tariff scale alone, I am having it carefully evaluated. I do not wish to express an opinion on the worth to the Community, as opposed to the United States, of these offers until I have had a fuller opportunity to analyse them properly.

Has the Secretary of State any further news about action being take to control textile exports from Mediterranean associates such as Portugal, Turkey and Malta especially in the context of outward processing? Can he say whether, when the time comes to negotiate the agreement, efforts will be made to include China?

In answer to the first part of my hon. Friend's question, agreements were reached with the Mediterranean countries for different periods of time but on a basis which I think was satisfactory, particularly since much better safeguard mechanisms have been introduced into them. Discussions between the EEC and China have begun. Obviously in these negotiations the British Government will not only have regard to our commercial interests, but will wish to ensure that the outcome is consistent with the multi-fibre arrangement.

Does the Secretary of State accept, either wholly or in part, the complaint made by Hong Kong that although its quota has been reduced for imports into this country, ostensibly in the interests of the home producers, the shortfall has been made up, not by the home producers, but by importers from other countries?

It is always difficult to pin down these matters completely. Our judgment is that part of the gap created by the reduction of imports from Hong Kong has been made up by the home producers. The quotas bit quite heavily on Hong Kong, as they did on some other countries. I am afraid that that was an unfortunate necessity in the achievement of the multi-fibre arrangement.

Has my right hon. Friend had any representations from the British Textile Confederation about the Tokyo round? Is he aware that the BTC regards the current offer by the United States as being unfavourable to the textile industry? Will my right hon. Friend bear that in mind when he is considering this matter?

I have received recent representations from the British Textile Confederation. I value the opportunity of corresponding with that organisation and discussing these matters with its members. The American offer is under discussion in the Commission. Recent discussions have taken place and I am in the process of evaluating them in the context of textiles policy and of the MFA negotiations.

Has the Department of Trade seen the annual report from the Leicester and District Hosiery Manufacturers Association which I sent to the Under-Secretary and which is critical of the operation of the multi-fibre arrangement? What steps are the Department taking to improve monitoring the effectiveness of that arrangement?

I have not seen the report, although I understand that it has been sent to my hon. Friend the Under-Secretary. My impression—and indeed it is more than an impression, it is a justified conclusion—is that the monitoring of the multi-fibre arrangement is working reasonably satisfactorily. But if detailed points are brought to my attention which I feel are justified I shall not hesitate to raise them with the Commission.

What is the legal position of the quotas? Is the Secretary of State aware that many textile companies in the country foresaw that when the multi-fibre-arrangement was renegotiated the total quotas would be more or less fixed until the end of the period but now, with enlargement and the Chinese question, they see the quotas as being movable? Is there no fixed limit on the quota? There is some uncertainty about this problem.

My understanding is that there are fixed quotas under the bilateral arrangement. Of course, the Mediterranean associates are in a different position because they are regarded as preferential countries in relation to the Community. If any other countries were to be brought within the scope of the multi-fibre arrangement, that would raise the question of whether there should be an increase in the global amounts.

asked the Secretary of State for Trade when he expects to restore medium-term Export Credit Guarantee Department cover for Chile, in view of the fact that only £25 million outstanding debt to the United Kingdom remains unpaid.

asked the Secretary of State for Trade if he will make a statement on the restoration of the Export Credit Guarantee Department medium-term cover for exports to Chile.

Some £20 million of the £50 million claims paid by ECGD in respect of defaults by successive Chilean Governments is still to be recovered. This is not an inconsiderable sum and I am not prepared to authorise the resumption of ECGD cover for new medium-term credits.

Is the Secretary of State aware that that reply will cause grave disappointment to British industry? Does he agree that £20 million is an insignificant sum in relation to Chile's foreign trade? As the Secretary of State knows, the delay in the overpayment is because of technical arrangements related to the"Club of Paris ". Does he agree that the expansion of the Chilean economy as a result of following policies which the Secretary of State may not find congenial to his own ideas has resulted in an increase in the industrial market? This is available to industrialised countries in the West but it is being absorbed by our economic competitors and denied to our industrialists because of the Secretary of State's policy.

There may well have been an improvement in the external side of the Chilean economy in the last year or so. None the less, the House should remember that serious problems remain, including the high rate of inflation, unemployment, the external debt service and the possibility of an international trade union boycott. In those circumstances, there is need for some caution, given the commercial nature of ECGD's operations.

Is the Secretary of State aware that many Birmingham firms are being prevented from doing any trade with Chile because of the intransigence of the ECGD? Is a political decision involved? If it is, is the Secretary of State aware that America and Russia make these credit facilities available?

I gave the reasons for my decision in an earlier answer. The hon. Lady may have made a mistake. So far as I am aware the Soviet Union does not give cover, but I shall inquire into that. I remind the hon. Lady that ECGD cover is not withdrawn for business in terms not exceeding six months' credit. That cover is freely available. Some countries give cover and some do not. Amongst those which do not give medium-term cover are Belgium, Denmark and the Netherlands.

I understand the Opposition's desire not to allow morality to intrude into the money-making process, but does my right hon. Friend agree that all who love freedom and democracy hope that the present regime in Chile is temporary? Does he agree that it would be unwise for anyone to make a substantial investment in Chile?

My hon. Friend has broadened the question. I shall confine myself to the original question.

When I was a junior Minister at the Treasury I received formal representations from the then Labour Opposition that we should engage in trade with Chile on an entirely non-political basis, in view of the longstanding friendship between the Chilean and the British people. That was the position of the official Labour Opposition when we were in Government. What has changed, apart from the regime, to alter that attitude?

My hon. Friends might think that the fact stated in the latter part of the hon. Gentleman's question justifies their change of attitude.

asked the Secretary of State for Trade what discussions he has had with the Trades Union Congress to secure agreement on co-operation between it and the Confederation of British Industry with a view to increasing Great Britain's overseas trade.

The TUC and CBI already co-operate in the promotion of exports through their membership of the British Overseas Trade Board and the National Economic Development Council, which is very much concerned with the achievement of higher exports and import substitution.

Is the Secretary of State aware of the general feeling that in the next 12 months we shall experience a more difficult time in overseas trade, that our prices will rise, and that we shall be less competitive? Should not the TUC try to do something to persuade the workers that it is important for the country to increase productivity and to achieve better delivery times overseas so that we can increase trade?

The hon. Member is absolutely right to draw the attention of everyone in industry—trade unionists and management alike—to those important factors. Together with the CBI the TUC is a sponsor of the Export United Campaign which is dedicated to increasing the awareness of everyone in the country of the export trade which will increase jobs and prosperity. I make it a practice to take a leading trade unionist on every trade mission that I attend abroad. That helps to create a wider measure of understanding.

Does not my right hon. Friend think that, in view of the importance placed on import substitution by the TUC and in the joint statement by the TUC and the Government, it is now time that at least one of the 7,000 people employed in his Department should spend his entire time grappling with the problem of import substitution?

I understand that a great deal of effort is made by a number of people, but not on a full-time basis. I am always willing to look at suggestions for the improvement of the working of the Department. I shall examine the suggestion. My hon. Friend should recognise that more than the Department of Trade is involved. All the sector working parties under the industrial strategy are under an obligation to maximise the scope for import substitution.

Has the Secretary of State had any discussions recently with representatives of small businesses, especially since small exporters, though individually small, collectively represent a significant part of our export trade?

I think it extremely important to maximise the opportunities for small businesses in the export trade. This may be an area which has not been given sufficient attention in the past, and that is why I am happy that we now have the market entry guarantee scheme, which is specifically designed to encourage small firms to engage in exports.

In addition to pursuing efforts on the export drive with the TUC and the CBI, will my right hon. Friend discuss with the TUC and CBI the need to reduce imports of products which we produce equally well in this country, and to this end will he consider having a"Buy British"campaign in the near future?

As I said to another of my hon. Friends earlier, we place high importance upon import substitution, since every exercise in import substitution is as valuable as the achievement of a further export contract. We believe that the best way to do that is to engage the attention of all the sector working parties in the industrial strategy, and there are some good examples of that—some in the footwear trade, for instance—which are having success.

asked the Secretary of State for Trade what are the prospects for an improvement in 1979 in the trend of United Kingdom exports of motor vehicles and motor vehicle equipment.

The Society of Motor Manufacturers and Traders forecasts that in 1979 the number of cars produced for export will increase by 5 per cent. to 520,000, and the number of commercial vehicles by 9 per cent. to 185,000. Forecasts for motor vehicle equipment are not available.

I thank the Minister for those figures. Can he explain the reasons behind the contrast in recent times between the relative success of vehicle equipment and accessories exported and the disappointing performance of motor vehicle exports? Does he think that the situation will be better this year? Secondly, in view of the shocking press which the motor vehicle industry has had in foreign newspapers recently over industrial unrest, and so on, is the Minister now satisfied that on delivery dates, keeping to specification and quality control, our reputation overseas will be better this year?

I should certainly like to give the hon. Gentleman a full assurance on all those counts. He will recognise that this is a complex matter. There are extremely detailed consultations and procedures, in particular between the Department of Industry and the four production companies in this country. But I am confident that the latest forecasts represent a significant upturn and a considerable improvement on 1978, which I agree was a disappointing year.

Does the Under Secretary of State recall an answer which he gave a few months ago to the hon. Lady the Member for Coventry, South-West (Mrs. Wise) about trade with the EEC in passenger motor vehicles, in respect of which in 1970 there was a crude surplus of £5·4 million and in 1977 there was a crude deficit of £750 million? Does the hon. Gentleman have the 1978 figures?

I do not have the 1978 figures, though I take the point which the hon. Gentleman makes. I am concerned about the high level of tied imports from the EEC by the American multinationals in this country, which last year, I think, accounted for 11 per cent. to 12 per cent. of all our imports. I hope that all of them, and Ford in particular, will increase their production of cars in this country rather than in the EEC.

Will the Under-Secretary explain to my hon. Friend the Member for Banbury (Mr. Marten), and to hon. Members on his own side who would like to turn the EEC into a free trade area, by exactly what mechanism that would enable the British balance of trade in motor vehicles to be dramatically improved?

My understanding is that the European Economic Community is already a free trade area. The real issue is whether that works to our advantage or disadvantage in the medium term.

asked the Secretary of State for Trade what reply has been made to the representations made to the EEC by his Department on behalf of the British metal fastener industry about the dumping of steel by certain European steel producers.

None as yet. The Commission requires detailed prima facie evidence of price breaches. This is hard to come by, but the industry is excepted to assemble this evidence soon.

I am sure that my hon. Friend will recognise that that is a disappointing answer. Will he take on board that it is now four months since representatives of the British metal fastener industry came to Westminster and explained in detail to hon. Members on both sides of the House what was being done by European manufacturers of metal fasteners with the aid of dumped steel manufactured by Western European—that is, Common Market—steel manufacturers?

I appreciate the long time lag in this matter. There is a significant issue. The real problem is that the steel used in the production of wire rod from which metal fasteners are made is not subject to the Davignon mandatory minimum prices and the wire rod itself is subject only to guidance prices which are not legally enforceable. The only provision which is possible in these circumstances is to tighten up the guidance prices for wire rod, and this means, in particular, providing more precise definition of the guidance prices for various sizes and specifications of material, whereas at present there is only one guidance price which is too crude. It is this which the industry is pressing for, and we are strongly supporting it.

Does my hon. Friend realise that assurances have been given from the Dispatch Box that, all in all, the Davignon agreement was working well but that it now appears that there are whole areas of steel, special steels and other steels, to which Davignon does not apply and there do not appear to be any satisfactory arrangements at all? Will my hon. Friend arrange for a document to be circulated to interested Members or for something to be put in the Library showing the real facts and figures, showing where Davignon applies, where it does not apply, what dumping of steel is going on from the Common Market and what dumping is going on from outside the Common Market, so that we may realise where we are?

I shall be only too pleased to try to provide information setting out the position not only under the Treaty of Rome but under the Treaty of Paris. The problem is that Davignon measures apply only to ECSC-Treaty of Paris goods, whereas metal fasteners are covered by the Treaty of Rome, which does not allow the Commission to recommend or fix prices. That is the basic problem with which we are saddled. But I shall certainly try to give my hon. Friend and others the necessary information.

asked the Secretary of State for Trade if he will make a statement on the latest position concerning duty-free quotas for paper and carton exports from Norway to the United Kingdom.

The quota for uncoated mechanical printing and writing paper has been increased by 2,730 tonnes to 34,705 tonnes, and the quota for miscellaneous paper and board has been increased by 670 tonnes to 2,427 tonnes.

Does that amount to the increased maximum? Secondly, should we not be trying to exercise a rather more liberal policy towards our old EFTA friends in these matters?

It does not amount to the permitted maximum, which is 5 per cent. under the EEC-EFTA agreement of 1972. It amounts to about 2 per cent., which was the agreed increase for this year, agreed at the end of last year. Taking into account the state of the British paper industry as well as the requirements of United Kingdom users and also our treaty obligations to our EFTA partners under that agreement, we believe this to be the maximum which we could afford consistent with our commitments to our own industry. I should add that Norway does better than any of the other EFTA countries, because about 84 per cent. of all its paper sendings to this country come in duty-free.

asked the Secretary of State for Trade whether he will make a statement on the proposal for an EEC coastguard service.

The European Parliament has sent forward proposals to the Commission for the establishment of a Community coastguard service further to the common policy for the conservation and management of fishing resources. The Commission has not yet put any proposals to the Council of Ministers.

Do the Government see any need for any EEC coastguard service?

As to the specific purpose for which this is designed, that is really a matter for my right hon. Friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland. I am sceptical about the need for search and rescue to be mounted through an EEC coastguard service. I think that the job is very well done as a national service, and I believe that this would be an excuse for added costs and unnecessary duplication.

Can the Minister tell the House that he will be vigilant on this matter and make sure that he does not allow boats of any proposed EEC coastguard service to enter British waters? If he does, it will mean that he is finally handing over the fish stocks of Britain to our EEC partners.

This is a matter for my right hon. Friends. I do not have responsibility in that area.

Does not the Minister accept that the EEC provides a useful framework, particularly on the control of pollution? Will he keep an open mind on these matters until the Government have had a chance to study the proposals fully and perhaps to seek the views of hon. Members representing coastal constituencies?

Naturally. I will await any specific proposition that is advanced. Nevertheless, I am sceptical about whether the EEC has a role in relation to anti-pollution measures. This is a matter where the EEC certainly has a role to play through enforcing agreed international solutions.

asked the Secretary of State for Trade when he expects next to meet his EEC counterparts.

I regularly attend meetings of the EEC Foreign Affairs Council when trade matters are discussed. I expect to attend the Council on 2 and 3 April.

When the Secretary of State next meets his EEC colleagues, will he discuss with them the threat posed to the paper and board industry by the demands of the United States for concessions in the last round of the GATT negotiations? Is he aware of the serious threat that would be posed to employment if the market was flooded with low-priced competition from the United States in a period of slack domestic demand?

The hon. Gentleman raises an important issue which has concerned us during these discussions. I regard the tariff cuts proposed by the United States as excessive. I also regard as excessive the extent to which the Commission proposes that the Community should accede to those demands. That is something upon which the British Government will make their views very clear during the next meeting of the Council of Ministers.

How does my right hon. Friend justify the fact that, whereas about 40 per cent. of our total trade is now done with the EEC, less than 1 per cent. is done with India?

That is a very wide ranging question, and Mr. Speaker would call me to order if I attempted to answer it at any length. Our policy is to do as much trade as we can with as many countries as we can. We bear in mind that India is now the tenth largest industrial country in the world.

Why are the Secretary of State and his colleagues in the EEC prepared to take a robust attitude to negotiations with the United States on the question raised by my hon. Friend the Member for Northwich (Mr. Goodlad) earlier, but not in regard to textiles and the multi-fibre arrangement?

I do not see how it is possible for the hon. Gentleman even to mount a case that the Government have not been vigilant about the textile industry. This Government have done more to create circumstances in which the textile industry is protected from low-cost imports than any other Government have ever done. That industry now has wider protection than ever before in the history of the industry.

I agree with all that my right hon. Friend has said. Is he not aware that it is the impending agreement that is causing concern, and that the United States will gain considerably if they are successful in their proposals at the Tokyo round?

As I think my hon. Friend knows, these negotiations are not yet complete. I listened very carefully to the representations made by the industry. Where cuts in tariffs might assist the textile industry, these have to be balanced against cuts in our tariffs. It is a very fine calculation, but I assure my hon. Friend that I bear the interests of the industry very much in mind.

asked the Secretary of State for Trade what recent discussions he has had with the chairman of the British Airports Authority.

Department of Trade Ministers have frequent discussions with the chairman of the British Airports Authority.

What suggestions, if any, has the Minister made to the chairman to improve the industrial jungle at London airport, which makes life for passengers almost always inconvenient and frequently a nightmare? It is the worst possible advertisement for Britain. Specifically, has the Minister received assurances that, should it ever snow again in this country, the farce of last January will not be repeated?

As to industrial relations affecting the British Airports Authority, the situation has been extremely good. There have been very few strikes and little industrial relations trouble. The British Airports Authority has put forward proposals, which are currently being considered, for a greater degree of industrial democracy on the board. I welcome that. The difficulties during the winter months are not unknown, and this kind of situation has developed at other airports. However, I know that it is a matter which the British Airports Authority is urgently considering.

Has the Minister had discussions with the chairman of BAA about the Government's intention, unveiled last year in the White Paper, to bring terminal developments under general planning procedures? When may we know what the Government's final decision will be on this matter?

Totally new terminal developments are already under planning procedures. The application for a fourth terminal at Heathrow is currently the subject of an inquiry and, indeed, an application for planning permission has been submitted by the BAA in respect of the second terminal at Gatwick. I do not know what the hon. Gentleman is talking about.

asked the Secretary of State for Trade what was the United Kingdom's current account surplus in the most recent month for which figures are available.

In January there was a current account surplus of £1 million.

In view of the substantial and increasing benefits from North Sea oil, why was the surplus so low?

I would always wish that the surplus was higher, although the hon. Gentleman will notice that the surplus for 1978 was £254 million. It must be the job of everybody to increase our manufacturing performance so that we improve these figures.

Will the Minister confirm that one of the reasons why the surplus is not as good as it should be is that we have a £2½ billion trade deficit with the Common Market? Are we not further bothered by the fact that it arises out of our contribution to the Common Market budget, which is roughly £20 for every man, woman and child? That is affecting the invisibles also and worsening the situation.

My hon. Friend is correct to draw attention to this situation in regard to invisibles. With regard to the United Kingdom contribution to the Community, he knows the figures and the stance which my right hon. Friend the Prime Minister has taken and which he intends to pursue at the highest level within the Community.

What is the effect of the current exchange rate, coupled with rising unit labour costs, on industrial competitiveness? What is the Government's present policy with regard to the exchange rate? Will they seek to maintain the exchange rate at about the present level, or will they seek a gradual reduction in order to assist exporters?

The hon. Gentleman invites me to enter a very delicate area of economic policy. He really should address this question to my right hon. Friend the Chancellor of the Exchequer.

Is the Secretary of State aware that a spokesman of the Scottish CBI is reported today as having said that the advent of a Tory Government would do nothing to improve Britain's trade position?

I am pleasantly surprised that such good sense comes from the Scottish CBI.

Can the Secretary of State say how it is possible for any Government to get their forecasts of the current account surplus so hopelessly wrong? Only 18 months ago the Chancellor of the Exchequer predicted a current account surplus of over £1,000 million. A year ago in the Budget the Government predicted a surplus of several hundred million pounds, but now we are just breaking even. Now that the Secretary of State has fairly recently taken over the job from his predecessor, will he be giving better advice to the Chancellor of the Exchequer on the future direction of our overseas trade and will the forecasts be rather better than in the past—certainly those for the coming year?

I do not know how far my predecessor was responsible for the advice given to the Chancellor of the Exchequer. Obviously these are matters which are extremely difficult to forecast. I do not think that getting them right or wrong is the prerogative of any particular Government. My main concern as Secretary of State for Trade is to improve our trading prospects as best I can. I am more concerned with doing that than with getting figures correct.

asked the Secretary of State for Trade whether his Department has now formed a view as to the optimum size of the third London airport; and if he will make a statement.

The advisory committee on airports policy was established to advise on these matters. I understand its current view is that a new airport should have the potential to be expanded ultimately to include two runways and to handle around 50 million passengers a year.

Do the Government accept the view which appears to be emerging from the advisory committee on airports which was set up by the Government? Is not the swift formation of that view by the advisory committee rather a marked contrast to the calculated vagueness of last year's White Paper?

It would be quite wrong for me to prejudge the consideration of these matters by the advisory committee and by the study group on South-East airports. They have put forward this view, but of course it will have to be the subject of a consultation document in due course which the Government will have to approve in principle.

The Minister's Department cancelled Maplin and the Channel tunnel, but does the Minister appreciate that British Rail is now trying to reincarnate the Channel tunnel? Will not this have a bearing on the need for a third London airport, and when will the Government make a decision on the Channel tunnel?

I think not. The hon. Gentleman will no doubt address his question on the Channel tunnel to my right hon. Friend the Secretary of State for Transport.

Since the Government White Paper last year was quite clear about the fact that a third London airport would be needed sooner or later, is it not better to get on with that as quickly as possible instead of planning to enlarge Heathrow and Gatwick, thereby increasing the suffering of people living round those airports?

The extensions at Heathrow and Gatwick were spelled out in the White Paper. They are inevitable, as, indeed, is some expansion at Stansted and Luton. The fact is that we must deal with the short and medium term as well as the long term. As to long-term development, I believe that it is absolutely right to have a proper basis of consultation, so that people who have a direct interest in these matters will have an opportunity to have their say as a result of which they cannot allege that the man in Whitehall knows best.

asked the Secretary of State for Trade what is the value of British exports to China for the latest 12-month period for which figures are available; and what are the prospects for increasing trade during the next 12 months.

The value of United Kingdom exports to China for the year ending December 1978 was £91,093,000. Following the signing of the economic co-operation agreement during my right hon. Friend the Secretary of State for Industry's recent visit to China, there are excellent prospects for a considerable increase in our trade with China, not only over the next 12 months, but increasingly in the longer term.

Is the Secretary of State aware that the announcement of increased prospects of trade with China is welcome? Will he say exactly what orders have been placed? What is proposed in terms of the line of credit? Will that involve any buy-back arrangements?

The agreement that was reached by my right hon. Friend was an economic co-operation agreement, which creates the framework for our future commercial relationships with China. During his visit, leading representatives of British industry made significant progress towards achieving contracts, although I do not think that any were signed. We have made arrangements for credit under ECGD. The question of buy-back arrangements is always a problem when dealing with State trading companies, and that will have to be resolved in the context of each individual contract.

It is true that an agreement has been signed which spells out economic co-operation for the future, but will my right hon. Friend now confirm that, because not one hard contract has been signed between the two countries, the view taken by the technical representatives who were in China is that those contracts are never likely to be signed and that the co-operation agreement is not worth the paper that it is written on?

I do not think that my hon. Friend does a great service to British industry, and to the great efforts that are being made to secure contracts in China, by statements of that kind. I refer him to the views of the publicly-owned industries, particularly the National Coal Board and the British Steel Corporation, which have very high hopes of increasing trade with China.

Will the Secretary of State give an assurance that the official export credit arrangements for exports to China are at least as favourable as those in relation to exports to the Soviet Union, bearing in mind that the latter is hostile to us whereas China is not?

I do not want to enter into arguments as to the relative merits of trade with the Soviet Union and China. However, I can tell the hon. Gentleman that the Government have expressed their willingness to support credit of up to £2·5 billion until 1985.

asked the Secretary of State for Trade what further considerations he has given to the creation of tourism development areas, as distinct from industrial development areas; and if he will make a statement.

As my right hon. Friend announced in a written answer on 22 November last year, we shall be reviewing the areas eligible for tourist project assistance in two or three years time. In principle, I favour tourist development areas, but we would need additional funds to launch them.

Is the Minister aware that the acceptance of the principle will be welcomed, whether or not extra funds are provided or present funds reallocated? May I take it from that that he accepts the proposition that tourism has different requirements from manufacturing industry and that one of the main problems on the British tourist scene is the decaying tourists towns around our coastline, many of which are not in development areas? Does he think that his proposals will help those areas or those who want to invest in those areas?

I am glad that the hon. Gentleman accepts the proposed increase in public expenditure that is involved here, even if not in other areas. As I am sure he will know, we have extended the coverage of section 4 assistance to the intermediate areas which, for example, will take into account Blackpool, South-port, Morecambe, Colwyn Bay and Skegness. Many of them are the sort of towns that I believe the hon. Gentleman had in mind. For the rest of the country, two-thirds of all tourist disbursements by the English Tourist Board is in respect of publicity, promotion and research, none of which is territorially limited.

Does not my hon. Friend agree that there is extra need for tourism to be extended from London and the Home Counties to some of the remote areas, especially those areas that have pockets of unemployment? Falmouth is an example, as indeed, are many parts of Cornwall, Scotland, the North-East and elsewhere.

That is why in November 1974 this Government launched the tourism guidelines, precisely to concentrate the attractions of tourists to those areas which have great natural beauty and untapped tourism potential but which at the same time have the greatest economic need in terms of higher unemployment.

I very much welcome the Government's change of attitude on this subject. But is it not quite absurd to pump public money into places where tourists simply will not go and where they will not even be seen dead in? Since the Government appoint the tourist boards, why not let the Government fix the public expenditure limit and then let the tourist boards decide how best that should be applied, because they know more about it than Ministers and civil servants?

There are many parts of the country, particularly in Scotland, Wales and the West Country where, far from wishing to be seen dead, people wish to spend their holidays, and be seen very much alive, for as much of the year as they can. As to fixing public expenditure and leaving the decision to the tourist boards, we make an allocation to them and it is up to them how they spend their money. We have guidelines, but we listen to the advice of the boards with regard to the construction or changes in the guidelines. That is one of the reasons why we have this modification in policy.

asked the Secretary of State for Trade what further representations he has received about the reorganisation of Her Majesty's Coastguard since the debate on 22nd January.

Representations have been received about future manning levels at three coastguard stations on the North-East coast and at two stations in Cornwall.

Has the Minister yet had a report of the meeting at Seahouses on 3 March, which he agreed to arrange during the debate that is referred to in the question? Is he aware that, after detailed explanation from senior coastguard representatives, all those present, representing the fishing industry and other boating interests, expressed unanimous opposition to the proposed reduction in watch keeping by regular coastguards?

I am aware of some reluctance to accept these changes on the part of a number of people who feel that they will be adversely affected by them. But, when they are seen to be working in practice, I believe that that reluctance will disappear. What we must concentrate our minds on is a rationalisation of the coastguard service so that it can best undertake the task which it is required to perform, particularly in its expanding role dealing with the Channel navigation information service, anti-pollution, the monitoring and reporting of cargoes and so on. Unless we apply our minds to a rationalisation process, I do not believe that we shall get the best out of the coastguard.

asked the Secretary of State for Trade what are the shares of United Kingdom passenger and commercial vehicle registrations taken by imports in January and February of the current year as compared with the same two months in 1978, and with 1978 as a whole.

Imports accounted for 52·3 per cent. of new car registrations in February compared with 47·6 per cent. in February last year and 49·3 per cent. in 1978 as a whole. For new commercial vehicle registrations, imports accounted for 18·7 per cent. in February. This compared with 21·6 per cent. in February last year and 21·4 per cent. in 1978 as a whole. I shall give the remaining information requested in the Official Report.

I thank the Minister for those figures. Does he agree that those increased imports show that there is now one effective European car and vehicle market? Will he therefore enter into discussions with his Common Market colleagues to discuss the future pattern of trade in those vehicles?

For many years, there has been a free trade area within the Community, which applies to the motor vehicle industry in the wider sense as it does to other products. I do not think that there needs to be discussion at governmental level. We must make sure that our own companies take full advantage of the opportunities that are offered and that we get a benefit in terms of international specialisation within this wider market.

Does not my hon. Friend agree that over the past few years the import penetration of cars and commercial vehicles indicates that we need to regulate our international trade in manufacturing products over a much wider range, in the same way that we regulated our textile affairs through the multi-fibre arrangement? Will it not be necessary to extend that sort of quota coverage to retain some manufacturing development and ability in this country? Does not that mean that we must take a strong stand on this matter within the Common Market?

As my hon. Friend is well aware, in textiles the multi-fibre arrangement consists of about 30 bilateral arrangements between the EEC and low cost producers that are mainly in South East Asia. As for car production, he will be aware that about 70 per cent. of our imports come from the EEC. That is a completely different matter. As he knows, what he is suggesting is completely outwith the Treaty of Rome.

Apart from the Treaty of Rome, is it not the case—

How can we ignore it?

—that we have an enormous surplus in motor car components? Can we expect other countries to continue buying our motor car components as at present and in increasing quantities if we talk about placing import restrictions on motor vehicles from other countries?

The hon. Gentleman is right to say that the motor vehicle industry has a substantial surplus in its balance of trade. However, my hon. Friend would point out—I do so on his behalf—that the surplus has decreased from £900 million in 1975–76 to £400 million last year. That is a substantial drop, and it means that we must have a strategy that will not only hold the present position but restore our former position.

asked the Secretary of State for Trade what was the number of patent applications filed by individuals in the last year before the bringing into operation of the Patents Act 1977, compared with the most recent 12-month period operating under the new Act.

The expense of collecting all the information requested would not be justified and, in any case, the new Act has not yet been in operation for 12 months. Samples indicate that the proportion of applications where the applicants were individuals was 26·8 per cent. under the old Act and is 25·4 per cent. under the new Act.

Does the hon. Gentleman agree that there has been a decline in the number of registrations since the new Act came into operation? As it is the maternity award of modern British industry, is it not time that something was done to ease and encourage the registration of new inventions?

It is far too early to make such judgments. The Act has not yet been in operation for 12 months. I believe that the Act will operate to encourage and facilitate a quicker use of the new procedures that are available. That will be to the advantage of all concerned.

asked the Secretary of State for Trade what are the views of his Department on the common fund which will be discussed at UNCTAD V.

We hope that further progress towards agreement on the structure of a fund based on international commodity agreements will be achieved before UNCTAD V, in the negotiations which resume today in Geneva.

Does my right hon. Friend agree that it is very much in the interests of Britain to bring stability into international commodity markets? Will he give an assurance that Her Majesty's Government will on this occasion pursue a constructive policy with a view to achieving agreement in UNCTAD V unlike our rather dismal performance in UNCTAD IV?

I can confirm our commitment to the establishment of a fund. I have no doubt about the political importance of securing an early agreement. Equally, we must ensure that the fund is set up on a basis that will usefully assist commodity agreements without undermining the financial responsibilities of producers and consumers and without disrupting commodity trade. I hope that we shall be able to bring the negotiations to a conclusion.

The right hon. Gentleman has expressed his hope, but what positive and specific steps is he taking to promote it?

I have given positive instructions to those who are representing the United Kingdom at the discussions. There are some complex matters, especially the financial magnitudes involved. If there is a willingness to reach agreement not merely on the part of the United Kingdom but on the part of other countries, I believe that it can be done.

I am pleased that my right hon. Friend has acknowledged the need to make progress. I agree that it would not be appropriate before UNCTAD V to publish the entire negotiating posture of Her Majesty's Government, but will he be able to publish something of the difficulties that he believes have to be solved before this progressive measure may be implemented?

I am sure that my hon. Friend will agree that that might be difficult as the negotiations start today. I am always willing to answer the questions that hon. Members table. Where financial negotiations are involved, I believe it wiser to let our negotiators have a freer hand.

asked the Secretary of State for Trade how many ships have moved from British flag registration in the last four years.

During the period 1975 to 1978 inclusive 760 vessels were removed from the United Kingdom register. After taking into account 314 additions, the net loss was 446.

That reflects the restriction of and contraction in world shipping trade and registrations but does the hon. Gentleman accept that a number of companies are concerned about potential restrictions on their right to transfer ships abroad? Has he had the opportunity of examining the correspondence from Sea Containers Incorporated, which has 21 ships registered in this country and which says that it will no longer register ships here if any restrictions are introduced?

It is not right that the hon. Gentleman should use a certain line of correspondence to try to deflect the Government from what is obviously a sensible policy in clause 31 of the Merchant Shipping Bill, in respect of which the Tories were soundly defeated.

asked the Secretary of State for Trade what is his latest estimate of the likely growth in United Kingdom exports from 1977 to 1980, taking into account the probable effects of the Iranian revolution.

No official forecasts have been published covering the period to the end of 1980.

Does the Minister agree that, in view of what happened in Iran, where we have £750 million worth of exports at risk, the majority in manufactured goods, and also in view of the fact that other OECD countries have an even bigger stake in their exports to Iran, this is bound to have a ripple effect on world trade? Therefore, would we not be prudent to lower our estimates of what is likely to be the increase in world trade in the foreseeable future?

That is entirely fair comment. Iran accounts for about 2 per cent. of our total exports. Other countries have deeper involvement in the Iranian market and therefore stand to lose more. It explains why the ECGD has withdrawn cover from new Iranian buyers. I am encouraged by the resumption of oil production on 5 March and also by the fact that the governor of the central bank of Iran stated that his Government intend to honour their commitments.

What is our total accumulated ECGD commitment to Iran?

There are good commercial reasons in the interests of British industry why the commitment of the ECGD in any market is kept confidential.