27. There are a number of respectable arguments in favour of going ahead with liberalisation, and refusing to modify the Crosland safeguard formula. Not the least of these arguments is that we would have kept our word; we announced the imposition of the Commonwealth tariff on the clear understanding that comprehensive quantitative restrictions would be terminated. We should thereby ensure that the momentum of the shake-out in the industry was maintained, and that it was slimmed down to a more sensible size by the time of EEC entry. Quota controls are not in the interests of the consumer; nor, since they arrest the transfer of national resources from the less efficient to the more efficient sectors of industry, are they in the interests of the economy gnerally. On the other hand, the EHC would clearly dislike the UK to permit disruptive developments to take place on the import front in the year preceding our entry into the Community; and UK Ministers may feel that the political pressures on them to alleviate the situation in Lancashire, particularly having regard to the employment prospects in the area, are now so great that the Government must be seen to be taking action, of one kind or another.
28. The most extreme form of action and the one which would be
most welcome to Lancashire would be a continuation of quotas, but at a lower level than hitherto, in addition to the introduction of the CPA tariff. This would be so flagrantly in contravention of the Long Term Arrangement, and such a blatant breach of our undertaking to the developing Commonwealth that the introduction of the CPA tariff would be accompanied by a liberalisation of their cotton textile trade, that officials feel obliged to advise Ministers against this course. No other major importing country has ever cut the size of its quotas.
29. Another possibility would be to let it be known that we should monitor imports in 1972, with a view to taking restrictive action at a later stage if certain sectors appeared to be seriously threatened by imports. It would be necessary to set-up
15.