DRAFT LETTER FROM THE MINISTER FOR INDUSTRY TO THE CHANCELLOR OF THE EXCHEQUER
I am sorry to have to approach you at this stage with
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another proposal for inclusion in the Finance Bill, but we
have an awkward problem over the transition at the end of
this year from quotas to tariffs on imports of cotton textiles
from the Commonwealth Preference Area to which the only
practicable solution is a small amendment to the Import Duties
Act 1958.
Briefly, we need powers to relieve from duty for a few
months early in 1972 imports of cotton textiles from developing
countries in the Commonwealth Preference Area (and also South
Africa) which are shipped under quota in 1971 but do not arrive
here until 1972. Unless we can give such relief, we fear, for
the reasons set out below, an unnecessarily heavy bunching of
imports during the transition period which could not only cause
serious disturbance to the market to the detriment alike of
domestic and overseas suppliers but also lead to severe and
embarrassing pressure from Lancashire for the reimposition of the
quotas which we are about to remove.
Unless we can take steps to minimise it, we expect this
bunching to result from a double upsurge of imports in 1971
and early 1972, firstly because exporters in the Commonwealth
Preference Area will make sure that the whole of their 1971
quota arrives in the UK before duty-free entry ends at 1 January
1972 (normally shipments carry over for two months or longer
into the following year), and secondly because there will
probably be an initial scramble for market shares on the part