CONFIDENTIAL
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FOR AN INCREASE IN THE DEPRECIATION ALLOWANCES ON TEXTILE MACHINERY, 11. IN ADDITION, THE TWO CONSULTANTS WHOM I HAVE APPOINTED TO ADVISE ME ON MERGERS BETWEEN MEDIUM AND SMALL SIZED FIRMS IN THE INDUSTRY ARE IN CLOSE TOUCH WITH THE 1.R.C. THEY HAVE SEEN MORE THAN SEVENTY FIRMS, AND ENOUGH PROGRESS HAS BEEN MADE TO ENABLE THE I.R.C. TO BEGIN DISCUSSIONS ON PROSPECTIVE MERGERS. 12. THE PROPOSAL TO REPLACE QUOTAS BY A TARIFF FORMS AN ESSENTIAL PART OF A DEVELOPING POLICY DESIGNED TO HELP THIS INDUSTRY TO SURVIVE AND COMPETE IN AN INTERNATIONAL ENVIRONMENT. I HAVE ALREADY ANNOUNCED DECISIONS ON THE STRUCTURE OF THE INDUSTRY WHICH SHOULD GIVE THE LARGE FIRMS THE STABILITY THEY NEED TO PROCEED WITH THEIR INTERNAL REORGANISATION AND INTEGRATION, WHILE ENCOURAG- ING A MUCH-NEEDED PROCESS OF AMALGAMATION AMONGST THE SMALL AND MEDIUM FIRMS. TO-DAY'S DECISIONS CARRY THE POLICY A CRUCIAL STAGE FURTHER. SUCCESSIVE GOVERNMENTS HAVE FAILED TO COME TO GRIPS WITH THE INDUSTRY'S BASIC PROBLEMS; AND THE INDUSTRY ITSELF HAS FAILED TO ADAPT SUFFICIENTLY TO CHANGING CIRCUMSTANCES. 1 HOPE THAT THE DECISIONS THAT I HAVE ANNOUNCED, PROVIDED THEY ARE ACCOMPANIED BY A CLEAR DETERMINATION ON THE PART OF BOTH SIDES OF THE INDUSTRY TO CARRY OUT THE CHANGES RECOMMENDED BY THE TEXTILE COUNCIL, WILL ENABLE THE LANCASHIRE TEXTILE INDUSTRY ONCE AGAIN TO TAKE ITS PLACE IN THE FOREFRONT OF BRITISH INDUSTRY.
STEWART
INTERNATIONAL TRADE DISTRIBUTION
COMMODITIES DEPT.
CONFIDENTIAL
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