TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 199

increased imports from you. This poses a real problem of adjustment

for the British economy. It is of course a problem which must be

kept in perspective. The NICS still account for only 10 per cent

of the United Kingdom's manufactured imports. Our main adjustment

still has to be to competition from other OECD countries, and to

technological change.

10.

I would add that the problem of adjustment to changing patterns of

imports whether from the NICs or elsewhere can be solved only if

we in Britain improve the supply and use of our human skills. We must

increase incentives to acquire skills: this was a primary aim of the

Conservative Government's taxation reforms. We must act on other

matters which are not for Government alone.

For example, we must

make our education and craft training systems more responsive to

industrial needs. We must overcome resistance to flexible uses of

skilled manpower. The case for change in areas of this kind has been

cogently argued in the Finniston Committee's recent report on the

British engineering profession. Above all

Tod

as that Committee pointed

out we must change social attitudes towards industry, competition

and profit if our industrial future is to be secure.

Preferences and Import Restraints

11. All this is action for us in Britain to take, and for us alone.

But there are two important points which we ask the most advanced

developing countries to accept. The first is that trade between them

and the industralised West should be conducted on an increasingly equa

basis. I have already dealt with this as it affects access to the