HC Deb 17 October 1968 vol 770 cc580-3
Q4. Mr. John Fraser

asked the Prime Minister what discussions he has recently had with commerce and industry about furthering import substitution policy; and if he will make a statement.

The Prime Minister

This matter has been discussed at recent meetings of the National Economic Development Council.

Mr. Fraser

I recognise the advances which have been made in import substitution, but does my right hon. Friend agree that the level of finished manufactures is still far too high, and that is it about time public industry took a hand, particularly in the development areas, working along the lines of the Italians?

The Prime Minister

My hon. Friend is right in expressing concern about the continuing high level of imports, though there has been some slight improvement in the recent trade figures, while exports have been rising continually. The problem is not only consumer goods, including consumer durables, but also capital goods. That is what the E.D.C.s and the Ministry of Technology are trying to deal with by increasing alternative supplies from this country.

Mr. Boardman

Will the right hon. Gentleman ensure that the Government exercise their existing powers to prevent dumping where, as in the case of some footwear, a clear case has been established?

The Prime Minister

The Government have full powers to deal with dumping, and indeed in this present Session further action is being taken to see that our powers are more effective. It is important, under these procedures, for the industries concerned to make a case to the President of the Board of Trade who can then take action.

Mr. Swain

Does my right hon. Friend agree that further Government encouragement to industry to burn more coal would be one of the best methods of import substitution?

The Prime Minister

Coal, and of course when available North Sea gas, carry a substantial import substitution effect as long as they are on a competitive basis.

Mr. Godber

Will the right hon Gentleman acknowledge that there is a tremendous opportunity for import substitution in agriculture in this country? Will he give an adequate stimulus to that and control the dumping of imports which is doing so much harm to this industry?

The Prime Minister

The right hon. Gentleman is obviously on one of the central points of this problem. He will know of action taken during the Recess by the Government in respect of cheese, and there are other products which are causing concern. We are very alive to the problem caused by the failure of the Common Market to admit us to their own system. We are very much alive to the problem of subsidising exports to this country of agricultural products which are a long way below the cost of production and below the Common Market agricultural policy fixed price.

Mr. George Brown

May I ask my right hon. Friend whether he really understood the point made by my hon. Friend the Member for Derbyshire, North-East (Mr. Swain), which is not that coal has to make its mark competitively with other fuels, but that in those areas where the coal industry is contracting other industries should and could be brought in, which will enable us to compete with some of those industries from outside and therefore build up import substitution? Have the Government plans to do this?

The Prime Minister

My right hon. Friend, who has put a gloss on my hon. Friend's supplementary question, himself had a distinguished record in the matter of the future development of a fuel policy, including not only the provision of alternative industries in coal mining areas where closures have created a problem but also in providing for those coal miners—especially the older ones—who do not secure alternative employment. When I stressed the need for competitive prices and conditions what I had in mind—as my right hon. Friend will understand better than anyone else in the House—was that it must not be forced on industry at a price that makes export trade uncompetitive. As my right hon. Friend knows, we have taken steps to subsidise coal consumption at the taxpayers' expense in respect of electrical production.

Mr. Lubbock

Is the Prime Minister aware that firms which salvage scrap metals, textiles and paper and are import-saving to the extent of £100 million a year are being crippled by the Selective Employment Tax? If he wants to save imports will he ask his right hon. Friend the Chancellor to reclassify these industries as manufacturing industries?

The Prime Minister

The hon. Member exaggerates the problem of S.E.T. in this field. This was a serious problem before S.E.T. Throughout the past ten or twenty years, even in wartime, we have had the greatest difficulty in getting a full collection and use of paper and other products which, I agree with him, could make a significant impact on the import problem.