TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 53

CONFIDENTIAL

In any event, any extension of boundaries of the assisted

areas at the present time would seriously limit the Government's ability to resist the claims of the many areas who believe their circumstancos warrant a higher measure of priority and would at the end of the day produce no more

mobile industry and morely dilute the assistance over a wider

area of the country.

CONCLUSION

22 The only quick way of helping Lancashire without an

international row or heavy penalties for our overseas trade

generally would be some action on purchase tax. No practicable

action on the import front can reduce the present level of

imports. Action to contain imports would also raise real difficulties without necessarily meeting the real problems;

though it might well have psychological effects in Lancashire

and would at least go a long way to meeting what the BTEA aro

actually asking for. I think that officials should press

ahead with their study of the options in this regard.

In doing so, we should keep in mind the need to maintain pressure on

the industry to get itself up-to-date as well as its right to

reasonablo safeguards against market disruption.

PW RIDLEY

CT Division

22 October 1971

MT Rm 1107 Ex 198

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