WOOL TEXTILE INDUSTRY (LEVY) (Hansard, 11 July 1957)

§ The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)
I beg to move, That the Draft Wool Textile Industry (Export Promotion Levy) Order, 1957, a copy of which was laid before this House on 24th May, be approved. I think. Mr. Speaker, that it would be convenient to consider this and the following Order together.

§ Mr. Speaker
If the House pleases.

§ Mr. Erroll
The purpose of the latter Order is to increase the yield of the Research Levy from about £155,000 to about £200,000 and to make some minor alterations in the range of persons liable to pay the levy so as to bring it more into accord with the present conditions and current developments in the industry. We are also taking the opportunity of making this a consolidation Order, and it will replace earlier Orders on this levy.
The money is required to provide for additional capital expenditure by the Wool Industry Research Association and to meet increased costs since the levy was introduced. The Wool Textile Research Council also wishes to increase its grants to other bodies carrying out research. As hon. Members will know, the Board of Trade has to satisfy itself about the case submitted by the Wool Textile Delegation, which represents about 85 per cent. of the industry, and which has in this case asked for the increase in the rates of levy. We are so satisfied. We know that it is also supported by the great majority of the firms in the industry, and, I would add, by the organisations of employees in the industry, although I think it would be only fair to mention that the support is not completely unanimous and that a very small number of firms and organisations expressed objections. However, in our opinion there was not sufficient objection to justify refusal of the request made by the Wool Textile Delegation.
The first of the two Orders increases the yield of the parallel Export Promotion Levy from about £115,000 a year to about £200,000 a year. This is to meet increased costs and to build up the promotion of sales in North America. It is 618 also proposed to introduce sales promotion campaigns in the other export markets and to exhibit at certain important trade fairs and exhibitions.
As a result of statutory consultations, as with the other Order, we have found a large majority of firms in favour of the increase. It was also supported by organisations of employees in the industry. As with the other Order, there were a very small number of objections, but we do not feel that they were sufficiently serious to refuse the request of the Wool Textile Delegation. Accordingly, I hope that the House will see its way to approve the Orders.

§ Mr. IL Rhodes, (Ashton-under-Lyne)
I am glad to have the opportunity to speak about these two Orders because we in the Opposition have a high regard for the wool textile industry which is so important to our exports. As I am personally engaged in the industry and have been so engaged all my life, I am proud to have this opportunity. The Order dealing with the export promotion levy is designed to increase the amount of promotion that we want to do. We want to do more in the North American countries, the United States and Canada, because it is there that we earn our dollars. We who are engaged in this industry convert a sterling area commodity into dollars and last year we exported to Canada and the United States £42 million worth of goads.
We have the highest record in exports of any manufacturing industry, and anything that is introduced in the House which has to do with expanding our exports is of great importance to us. This is a good industry and one well worth while looking after. We do not come to the Board of Trade on any slight pretext. It is only when we have something serious to say, as the Parliamentary Secretary will have found in his experience, that we ever come to any Government Department to ask for assistance. We have asked for the good offices of the Board of Trade in collecting this levy for us so that we can use it as we think best.
I have the greatest faith in those who operate the National Wool Textile Export Corporation. They are a first-class body of business men who are selfless in their desire to see an expansion of worsted and 619 wool exports for the whole of the trade. Throughout the years that I have had experience with them I have always found them keen and energetic and never neglecting to further the interests of the trade.
We in the trade also want to do a little more in terms of taking part in various fairs and exhibitions. We have not done quite enough in the last year or two. As the Parliamentary Secretary has said, there has been some division of opinion about the importance of fairs and exhibitions in the promotion of overseas trade. Our industry is composed of firms which are small in comparison with large-scale industry elsewhere. The majority of the firms employ from 10 to 500 employees and the specialities produced by these small firms are peculiar to their own individual traditions.
Naturally, therefore, there is some contention as to whether exhibitions are of use or not but I would remind sections of our industry which may not be as enthusiastic about the promotion of our goods as are some others that if it were left to individual firms to do it, in all probability very little would be done. It is only by securing a levy of this kind that the money can be guaranteed, because this promotion is a heavy responsibility.
We in the industry are proud that the Board of Trade has chosen the wool industry along with the aeronautic industry, the atomic energy industry, and the tourist trade to represent Britain in the exhibition of world trade in New York in April next year. We are also proud that we have the backing of the Board of Trade for a curtain-raiser in Brussels next year for anything that there may be in the future by way of a European Common Market. We are proposing to spend about £50,000 on one exhibition there in furtherance of our trade. The Parliamentary Secretary will be aware of the success that we had in Frankfurt last year and this year, and how, as a result, we have expanded our sales, despite increasing competition in Germany from elsewhere during the last two years.
I should like to stress at this juncture that the Board of Trade, and the economists who advise it, should not pay too much attention to those who think that 620 the old-established industries in this country can be jeopardised or be expended in favour of the newer, more fashionable industries which are in the news today. It may interest the House to know that when the Parliamentary and Scientific Committee paid a recent visit to the National Physical Laboratory and we saw there "Deuce" and "Ace", the great new electronic computers and we asked the head of the department how long it would be before other countries could imitate and make computers of the same size and be ready to put them on the market, he said that our lead was about three years. If that is the case, in view of how good imitators such people as the Japanese are, it can be assumed that in a few years' time what are considered today to be new and exciting industries may be in a position similar to that of some of our old-established industries in having to resist competition. I ask the Parliamentary Secretary to convey to everybody in the Government who has anything to do with the problems we are confronting in the older industries, that we must fight for every bit of trade we have got, and that it does not matter whether we are old industries or new. On that basis we in the wool textile industry are playing our part.
There is another activity supported by the levy, that is, the protection of our trade in countries where our interests may be threatened by tariffs or quotas. Nowadays the way in which we export our woollens and our worsteds means that we cannot accompany every consignment ourselves, as was done in the days of my great-great grandfather. Then they used to take their woollens from our district on the deck of a sailing ship and they slept on top of the bale, with their heads sticking out from the tarpaulin which covered them. And they had a way with them, because I understand that many complaints were made in New York about the way in which folks from our district used to look after their own interests.
We can no longer do it as individuals because the trade is on far too big a scale, so somebody has to do it for us, and that is the Wool Textile Corporation for which this levy is required. If it were not for the Wool Textile Corporation there perhaps would not be as energetic an opposition as there is to the present imposition that the United States has inflicted on our trade.
621 The services of people overseas, which cost money, have been brought in during the last year or two on account of the American quota. We regret that quota very much. As soon as there is 5 per cent. of the domestic manufacture imported the tariff goes up from 25 per cent, to 45 per cent., which puts our fine products at a disadvantage. The Japanese, who have imitated our more plain manufactures, find it easier than we do to get their cloths into the United States market because they are more straight-forward to make and the finer and more craftsmanlike cloths we produce are longer in the making. Thus the quota is filled, and cancellations of our orders takes place.
Another thing I want to mention is that many people in the industry have been trying to persuade the wool technicians and the Export Corporation that it might be a good thing if we started promotion for home sales. If the Parliamentary Secretary has been in on any of these negotiations or talks with the industry, I dare say he will have found that this has been mentioned. Personally I am against it. I think we ought to concentrate all our activities in promotion for some years ahead on the export market. It will take us all our time and it will take all the money we have to do that, and to do it properly. The disadvantage we happen to be in is that ours is the only textile which is subject to a 10 per cent. Purchase Tax on the piece. It would be a pity if the money we are raising for this promotion scheme were diverted at some future time to the promotion of home sales, because we suffer a disadvantage through that taxation.
The levy is straightforward, we welcome it, it is needed. I think that we shall need more, and perhaps it would have been as well if the levy had been cast a little higher for this job, bearing in mind the way in which the value of the £ seems to be declining over the years.
I have not a great deal to say on the research side. I wish I could be as complimentary as I have been on export promotion but, unfortunately, I cannot. I have had experience of this business for a long time now and my interests in the textile industry have spread beyond the narrow confines of the wool textile industry itself. I believe that the time has come when there should be a recasting of the methods employed in 622 research into the textile industry. For instance, there is too much duplication of effort. We find that research associations are spending small amounts on the same jobs, because there is not enough liaison. The original conception of research, as outlined at the time when the Department of Scientific and Industrial Research was set up, may need a new fillip and an altogether new idea.
I believe that complacency has set in and that it is likely to become even more pronounced. I shall not oppose the Order because the money is needed if this is the course on which we are set, but I do not think it is the right one, so I appeal to the Government to look at it again. There could be more liaison, the money could be used better if one job common to the whole range of the textile industry could be done in one place, backed by adequate money, and the research stations could carry on with the day-to-day work they do for the firms they serve. As I say, we do not oppose the Order, but I have taken the opportunity to draw attention to something which is likely to be an urgent need in the future.

§ Mr. Douglas Jay (Battersea, North)
I want to ask the Parliamentary Secretary a question which arises from what my hon. Friend said. We all deplore the action which the United States Govment propose or threaten to take to put new obstacles in the way of our woollen exports which are of such value.

§ Mr. Speaker
The hon. Member for Ashton-under-Lyne (Mr. Rhodes) was very careful not to exceed the bounds of order, but I was very restless when the quota was mentioned, because it is certainly not comprehended by the Order.

§ Mr. Jay
I thought that as the Order referred to export promotion it was permissible to ask the Parliamentary Secretary questions arising out of that.

§ Mr. Speaker
I do not think that the American quota is export promotion.

§ Mr. Jay
I do not want to press the point, but the quota is liable to frustrate the export promotion to which the Order refers. I wanted to know from the Parliamentary Secretary whether the Government would press this point to carry out the purpose of the Order.

§ Mr. Speaker
That was answered earlier today.