§ 78. Mr. Bottomley
asked the President of the Board of Trade if he will make a statement about the decision to license the import of synthetic rubber from the United States of America.
§ Mr. Low
As far as the balance of payments permits, the Government's policy is to allow our manufacturers a free choice of materials. Synthetic rubber has technical advantages over natural rubber for certain uses; at present it is also considerably cheaper. It is important that the United Kingdom rubber industry, which makes a big contribution to exports, should not be at a disadvantage, either technically or on price grounds, with their competitors on the Continent, who have in the past been allowed readier access to dollar supplies than United Kingdom manufacturers, or with those in North America where there is of course complete freedom of competition between natural and synthetic rubber.
The Government have accordingly decided to authorise the import in 1956 of 70,000 tons of synthetic rubber of which 50,000 tons is in the form of GR-S, the main general purpose type which is competitive with natural rubber. This amount represents the estimated requirements of United Kingdom manufacturers for 1956.
I am naturally aware of the importance of rubber to the Malayan economy and to the sterling area's balance of payments. But United Kingdom consumption of rubber in relation to total world production is comparatively small. Even if we felt justified (which for the reasons I have 162W explained above, we do not) in denying United Kingdom manufacturers any access to supplies of synthetic rubber, it would have at most a marginal effect on the market for natural rubber which reflects the supply and demand position in the world as a whole. This is especially true at the present time when it seems that world demand for rubber cannot be met without a considerable increase in consumption of synthetic rubber here or elsewhere. It makes no difference to the amount of natural rubber sold where this increase in consumption of synthetic takes place. It might however make a serious difference to the exports of the British rubber manufacturers if they were denied access to imported synthetic rubber whilst their competitors used it freely.