HC Deb 10 June 1974 vol 874 cc1211-3
9. Mr. Michael Latham

asked the Secretary of State for Trade what general advice his Department is giving to British exporters about difficulties caused by the Italian import surcharge.

Mr. Deakins

Details of the import deposit scheme were sent to subscribers of the Export Intelligence Service on 7th May, and were also published in Trade and Industry on 9th and 23rd May. General advice was likewise published on 6th June.

My Department has also given advice to individual firms in the light of their particular problems.

Mr. Latham

I thank the hon. Gentleman for that reply and for the advice that has been given by his officials to my constituents. What is his Department doing to get this unfortunate and discriminatory measure removed as soon as possible?

Mr. Deakins

We have made our views clear through the Council of Ministers of the EEC. At the same time, we understand the severe difficulties imposed on the Italian economy by the tremendous rise in oil prices in the past six months. We must hope that the measures currently being taken will enable the import deposit scheme to be ended as quickly as possible in the interests of a further expansion of world trade.

19. Mr. Kenneth Clarke

asked the Secretary of State for Trade what representations Her Majesty's Government have made to the Government of Italy about their new import deposit scheme.

Mr. Shore

These measures have been discussed at meetings of the EEC, OECD, and elsewhere, where the views of the United Kingdom Government have been put.

Mr. Clarke

Does the right hon. Gentleman agree that the main danger is that other countries which do not have Italy's grave problems will nevertheless follow their lead, and "beggar-thy-neighbour" policies will be adopted by developed countries trying to pass the results of their balance of payments problems on to their trading competitors? If the right hon. Gentleman agrees with that, will he give an assurance that there is no question of the British Government's contemplating equivalent measures to deal with their present balance of payments situation?

Mr. Shore

There is a grave danger this year, probably more than in any year since the war, that if nations begin to restrict their trade for balance of payments reasons in the face of the incredible oil deficit, which virtually the whole of the developed world faces, this could produce a downturn—indeed, a slump. It is therefore absolutely essential that nations should not follow the example of the Italian Government—although I understand their very special difficulties— in pursuing policies which restrict trade. I can give the hon. Gentleman the assurance for which he asks in respect of this country for at least this year.

Mr. Skinner

Is it not a fact that when any of the States within the Common Market finds itself in extreme financial or other difficulties it tends to do its own thing, and that that applies not merely to Italy, with its import deposit scheme and import surcharge scheme, but to France and some of the other so-called giants of the Common Market? Will my right hon. Friend bear in mind that he should not be dogmatic in his replies about what Italy has done, because in the not too distant future he may well have to adopt physical and financial controls which may be similar in effect?

Mr. Shore

I said that I was not considering this matter primarily in the EEC context, because I do not believe that the Common Market provides a substantial enough forum for solving major international trade and monetary questions. My answer was couched within the context of the international trading community as a whole, in respect of which we have to restrain ourselves this year in the interests of all.

Mr. Tugendhat

Will the right hon. Gentleman pay particular attention to what the hon. Member for Bolsover (Mr. Skinner) has said? The oil situation is only one factor affecting the Italian economy. What marks the Italian economy off from other European economies is the extreme rate of price inflation, the avariciousness of its trade unions and the lack of profitability of its industry.

Mr. Shore

No doubt we can all produce our own list of reasons for marking the Italian nation off from other countries. But the avariciousness of Italian industry and Italian capital——

Mr. Tugendhat

Trade unions.

Mr. Shore

—not just of Italian trade unions, and the great internal political difficulties of the Italian State, are important factors which affect the whole situation.