HC Deb 03 February 1955 vol 536 cc1249-53
11. Mrs. Castle

asked the President of the Board of Trade whether he will make a statement on the result of his recent discussions with representatives of the Lancashire cotton industry about the increase in the imports of Indian cloth.

14 and 15. Mr. K. Thompson

asked the President of the Board of Trade (1) what proposals he has for enabling the Lancashire cotton industry to continue the economic production of cotton cloths in face of the competition from cheap goods produced in India, Hong Kong, and Japan;

(2) if he is aware that Indian cotton cloths are available in large quantities in this country at prices which are 25 per cent. below the production costs of the most efficient Lancashire mills; and, in view of the threat this represents to the principal industry of Lancashire, if he will make a statement.

24. Mr. H. Hynd

asked the President of the Board of Trade to make a statement about increased imports of Japanese and Indian textiles; and the effect of the Japanese trade agreement on our overseas markets.

Mr. P. Thorneycroft

Total imports of cotton grey cloth have fluctuated over recent years. In 1954, they amounted to 236 million square yards which was slightly higher than the average for the previous six years. While no exact figures are available, it is estimated that about one half of the total cotton grey cloth imported in 1954 was for re-export after processing.

Production of cotton cloth in the United Kingdom in 1954 was at about the same level as the average annual rate since 1948, and average employment in spinning and weaving in 1954 was higher than in 1952 and 1953. Moreover, although no precise figures are available, it is estimated that in 1954 the United Kingdom industry's share of the home market for cotton cloth was well over 90 per cent.

In the case of imports from Japan, these are limited by quota and are almost entirely for re-export after processing. Imports from India are admitted free of duty in accordance with the Indian Trade Agreement, 1939, and there is no quota. In the case of Hong Kong also, there is no import duty or quota.

I have given careful consideration to the need for introducing further restrictions on imports of cotton grey cloth but in the circumstances to which I have referred I do not consider that at this stage the slight increase which has taken place in imports justifies such action. I recognise, however, that circumstances in our complex cotton textile industry may change rapidly, and that safeguarding action may have to be taken if the situation appears too threatening.

Mrs. Castle

Whilst appreciating the difficulties of this problem, might I ask the right hon. Gentleman if he is not aware that Lancashire is gravely concerned at her mounting difficulties, and believes that this Government have written off the cotton industry as no longer of any importance? Does he not agree that the least he can do to help Lancashire, in face of this growing competition, is to press the Chancellor for the abolition of Purchase Tax on all textiles?

Mr. Thorneycroft

Nothing that this Government have said or done would justify any allegation that we have written off the cotton textile industry.

Mrs. Castle

I think so.

Mr. Thorneycroft

The second part of the hon. Lady's supplementary question should be addressed to my right hon. Friend.

Mr. Thompson

Will my right hon. Friend take note of the fact that those who really speak for Lancashire are endeavouring to avoid introducing political controversy into this problem, and the hon. Lady would help if she followed that example? May I ask my right hon. Friend if he will give the closest attention to the trends that are taking place at the present time in the Indian cotton imports, and take with alacrity whatever action proves to be necessary when he finds the opportunity to do anything? Will he further take note of the opinion in Lancashire that the Indian imports are made possible at the cheap rate because of the advantageous terms on which the Indian mills are able to buy their cotton?

Mr. Thorneycroft

Of course, I have all these matters very well in mind. At the same time I have to recognise that the Lancashire cotton textile industry commands over 90 per cent. of the home market today—

Mr. Thompson

Not the export market.

Mr. Thorneycroft

—and in those circumstances I have to consider very carefully any action I might take upon the import side. However, I have said in my answer that this is a changing situation which I have under observation at present.

Mr. H. Wilson

Whilst the Japanese Trade Agreement, the Raw Cotton Act, and the present system of Purchase Tax are sufficient proof of what my hon. Friend the Member for Blackburn, East (Mrs. Castle) has said, is the right hon. Gentleman not aware that almost weekly now we are receiving reports of cotton mills closing down or going on short-time? Is the right hon. Gentleman not aware of the very serious apprehensions in Lancashire that this may be the prelude to another cotton recession, and while we all recognise the grave difficulties, especially about controlling Indian imports, will the right hon. Gentleman have another look at the position, bearing in mind particularly the point that his hon. Friend has made about differential prices of raw cotton as between Indian and Lancashire producers?

Mr. Thorneycroft

What I have to bear in mind are the total imports of foreign grey cloth into this country. The fact is that the increase in imports of foreign grey last year was less than 1 per cent. of the total cloth production of Lancashire. I have, therefore, to consider these matters carefully. I agree that the situation may change—it is inherently one that can—and I have it under review.

Mr. Hynd

Is the right hon. Gentleman aware that he did not answer the latter part of Question No. 24 about the effect of the Japanese trade agreement on our overseas markets? Will he also say a word about the allegation that Japanese goods are coming through Hong Kong as Commonwealth goods?

Mr. Thorneycroft

So far as the effect of the Japanese trade and payments agreement on overseas markets is concerned, the hon. Gentleman must realise that there is very little, if anything, that the United Kingdom Government can do to protect Lancashire in third markets, because what third markets purchase is a matter for the Governments in control of those third markets. With regard to the point about goods coming through Hong Kong, I have answered Questions on previous occasions. If I found that preference was being extended in a case where it was not justified under the existing rules, I should be happy to look into the case.

18. Mr. H. Wilson

asked the President of the Board of Trade what representations the Minister of State, Board of Trade, made to the Indian Government about Indian imports of Lancashire cotton goods and Indian cotton exports to Britain, respectively; and whether he will make a statement on the position.

19. Mr. Fletcher-Cooke

asked the President of the Board of Trade whether the Minister of State was able to persuade the Government of India, during his recent visit to Delhi, to relax the restrictions upon the import of British textiles into India.

Mr. P. Thorneycroft

My right hon. Friend discussed both these points fully and frankly with the Government of India. He emphasised the great disparity between the free entry granted by the United Kingdom to Indian cloth and the high level of duty imposed by the Government of India on United Kingdom textiles.

My right hon. Friend told the Government of India that evidence available to us indicated that the existing level of their duty is preventing trade. They expressed doubt about this but reaffirmed their earlier statement that they would consider the level of duty in the light of the actual figures of imports from the United Kingdom in the period since the relaxation of the quota. These figures are not yet available.

Mr. Wilson

The figures given by the right hon. Gentleman a few minutes ago were global figures covering imports of all overseas-produced cotton. Does he not agree that the imports of Indian cotton have been on a far greater scale than those of other overseas-produced cottons? In those circumstances, will he return to the charge and make clear to the Indian Government that we have no desire at all to impose protectionist quotas on Commonwealth imports into this country—that is very important—but that, nevertheless, we should like to see a little fairer treatment with regard to the movement of cotton in both territories?

Mr. Thorneycroft

When my right hon. Friend was in India he was at great pains to point out the problem created for us by the very high rates of duty in the Indian market. He left the Indian Ministers in no doubt as to our feelings on the matter.

Mr. Fletcher-Cooke

Did the President's right hon. Friend also explain to the Indian authorities that this situation of gross inequality of trade cannot continue, and that we shall be obliged reluctantly to take reprisals unless some of our good textile products are allowed into India? Will my right hon. Friend take the opportunity of the presence of the Indian Prime Minister in this country to rub that in?

Mr. Thorneycroft

We take every opportunity of bringing home to the Indian Government our views about the disparity of treatment between the two markets. I am sure my hon. Friend would not wish to circumscribe me as to the reasons for or nature of any action that I might take.