:
general change of system which might be required by our entry
into the E.E.C.
The effect of the new arrangement should be to reduce
imports from the developed countries which have benefited markedly
from the existence of quota restrictions on imports from the
developing countries. There is no reason to think that, with the
possible exception of India, the developing countries of the
Commonwealth generally will be able to export less to Britain over
a tariff of this amount than they would under a continuation of the
quota system.
So far as India is concerned, the Government will, when the
time comes to determine the level of aid to India after 1972,
take into account, against the background of India's general aid
requirements at that time, any adverse effects on her exports from
the tariff.
I turn to the question of financial assistance in the
industry.
The Textile Council proposed that firms in the
traditional textile areas should be offered the 40 per cent. rate
of investment grant which is payable in the development areas.
The Government have decided against this both on general grounds
of regional policy and because in present circumstances, including,
in particular, the position on public expenditure, we would not be
justified in singling out this industry for financial assistance
on such a scale.
The Council also proposed that plant worked on a multi-
shift basis should qualify for a higher than normal annual
allowance for depreciation. The Government attach importance
to any proposal which might increase the utilisation of new
/machinery
CONFIDENTIAL