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CONFIDENTIAL
continuing low efficiency and rising imports; the
structural shift away from cottons to man-made fibres
(MMF); and from woven to knitted fabrics, the relative:
failure of firms to contain prices.
In sum, what we
are witnessing is in effect the decline of the
traditional Lancashire system.
Where do imports fit in?
7. The Textile Council regarded the substitution of
quotas for tariffs as an essential part of the policy
for stability in the British industry. What has
happened to imports since 1968. In 1969 and in 1970
they fell, both absolutely and as a share of the
market. (Significantly there was little corresponding
improvement in British industry.)
8. Cotton Textiles
They have risen in 1971 but this rise has to be
kept in perspective; it will be seen (Annex A
tables 1 & 2) that, in comparison with the base year
used in the report of the Textile Council that imports
(as a % of apparent consumption) are the same for
woven cotton cloth and only slightly higher for cotton
yarn. The rise in imports of cotton textiles has in any
case been within the limits of the current restrictive
arrangements.
Bunching and upsurge was expected
(indeed this was the justification for providing
as recently as
-in the Finance Bill
relief from the tariff for the first three months of 72)
and can be traced to the roll forward of unused 1970
quotas plus the (expected) full use of the 1971 quotas.
MMP
9 These increased fairly significantly in 1971
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