(a) to encourage investment and industrial development in
(e)
(f)
the UK;
to protect employment; and
to enable the industry to remain efficient and provide a firm base for the expansion of exports.
COMMENTS ON THE INDUSTRY CASE
The case falls short of what we would look for to justify seeking new import restrictions. Current import penetration at
13 per cent is about the same as that into the Six. On the industry's own estimate, removal of the quotas would still leave at least 72 per cent of the market for the domestic industry in 1975. The effect of ending the quotas on numbers employed (34,360 in June 1973) would not be very large; it is estimated that 700 jobs would be lost in 1974 and 1975 in addition to 1900 which are likely to disappear anyway by the end of 1975 because of the expected increase in uncontrolled imports.
The industry's argument that it needs protection for all stages of production has less force when applied to the first production stage (yarn) than to following ones; removal of restrictions would give the weavers a wider choice among suppliers of cheap yarns, with subsequent benefits in the production and use of cloth. And while the industry has claimed the need for protection against artificially low pricing policies followed by some suppliers, the examples it quotas are either no longer in operation or not applicable to yarn.
Against the foregoing, there are a number of reasons for accepting the need for continuing protection and for us seeking to secure the further period of quotas for which the industry has asked. While the cotton spinners have had notice that quotas will not be retained permanently for sectors of industry which cannot in the long run survive without them, a transitional period of
three years to reach full liberalisation does not seem
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