TEXTILE INDUSTRY

HC Deb 05 August 1965 vol 717 cc1896-915

12.40 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

I am grateful to you, Mr. Speaker, for allowing me the opportunity to raise the subject of textiles, and particularly the cotton textile industry. Last time that you were good enough to award me one of these Adjournment periods, it was about six years ago on the subject of education and the claim of the National Association of Schoolmasters to a seat on the Burnham Committee. The Minister, now Lord Eccles, explained carefully that that was quite impossible, but within six months the Association was there. I am, therefore, hoping that my case today will receive equally rapid translation in action if not in words.

The President of the Board of Trade is negotiating, as he has to do, with foreign Powers because the agreements under which textiles coming from overseas to this country are limited by quota expire at the end of this year. What we have to consider is how, for the future, these imports should be limited. It is, I think, common ground that the President of the Board of Trade should now negotiate, or attempt to negotiate, a global quota instead of individual quotas with different importing countries, because if he negotiates merely with countries that are at present importers experience has shown that new countries pop up which have no traditional market in this country and rapidly acquire large business at the expense of those which have negotiated previous agreements.

How these negotiations should be carried on and what sort of stand the President of the Board of Trade should take has been set out rather conveniently for us by the right hon. Gentleman's colleague, the First Secretary, in his discussions with the Cotton Board two years ago. On 19th July, 1963, the First Secretary of State and the Joint Parliamentary Secretary to the Ministry of Labour, the hon. Member for Farnworth (Mr. Thornton), met the Cotton Board and reports of their meetings and what they said should be done have emerged.

The best way of dealing with this problem is to urge the Government to adopt the wise words of the First Secretary in the days when he had no cares of office and was free to examine the case dispassionately. The first point made by the right hon. Gentleman—and a very good point it was—was this. He said: It should be made plain that any chance of renegotiating our imports at 25 per cent."— that is to say, 25 per cent. absorption of foreign imports into a 100 per cent. market— while others"— that is, other industrial countries— took as little as 2 per cent. could not continue after 1965. Of course, we take more than 25 per cent. from abroad for the home market, far more than any other Western country takes. Although those countries paid lip service to increasing their proportions after the last G.A.T.T. conference, I do not think that very much has been done and I should like information about the extent to which they have honoured that obligation.

The First Secretary was adamant about that. He said: In any new agreements there would be no increase over our present levels unless others take much more. The importance of that is that rumours have leaked out that the President of the Board of Trade in his negotiations is adopting the position that there shall be a built-in increase each year from whatever basis figure he adopts for the global amount which shall be allowed into this country.

This is something against which, I believe, the industry and all members of the Cotton Board are adamant. They say that the figure that the President of the Board of Trade is already adopting, which is probably the 1964 or 1965 figure, is in any event too large and that there should be no question of there being any year-by-year increase in that figure at least until other civilised and Western nations take far more in the way of Asian imports proportionately than they do now and until our figure is down to 25 per cent. That was the First Secretary's advice then and I am sure that it is right.

The second thing that rather worries us is the rumour that in the global negotiations the idea of a ringed fence round the whole business is to be considerably diluted, since the global net is not to include anything but developing countries. This may be inevitable, but if it is I urge the Board of Trade to give us some satisfaction on the leakage that comes through developed countries.

Again, the First Secretary was strong on this point in 1963. It is said that he admitted that there was second-stage competition of Asian goods coming through other developed countries and that this was part of what he decribed as the Asian problem. If the global arrangements are not to cover developed countries, there must be strong provision, first, against substitution—that is, the practice by which certain Western countries buy Asiatic goods and then substitute their own goods for export to the United Kingdom at a figure far less than they would be able to but for that substitution.

The second thing is the problem of added value, which is familiar to the Board of Trade but is slightly complicated. What is feared if the global arrangements are not really global but apply only to developing countries is that Asian countries with a surplus of cloth can send it at any time for finishing to Western countries; and in this way not only would the quota restrictions be avoided, but there would be a substantial increase in imports from Western countries. Again, those Asian countries can sell at very low prices, as so often happens for currency reasons, to, say, countries like Canada or Eire and this would provide a low enough base on which to mount the 25 per cent. added value. These imports also would enter the United Kingdom duty-free.

To prevent that happening, the United Kingdom should either raise the content criterion from 25 to 50 per cent. for added value or adopt the E.F.T.A. rule that two out of three processes—i.e. spining and weaving or weaving and finishing—should be carried out in the country of last consignment. Otherwise, we visualise another loophole in the system, which we all wish to see made more comprehensive.

Again, at his meeting with the Cotton Board the First Secretary made a strange remark. I do not wish to take this up particularly, but it is rather interesting. He said that our obligations to India and Pakistan were far stronger than our obligations to Hong Kong which did not need help in the same way. It was "pretty affluent already". In my view, there should not be any discrimination. I wonder whether that is still the policy of the Government.

Then the right hon. Gentleman said—and how right he was—that the new agreements, or agreement, must provide for more satisfactory categorisation—again, a very technical matter, and I know that the Minister of State knows all about it. Most of the imports, certainly from Hong Kong, at present provide an efficient system of categorisation. Different sorts of textiles are broken down to over 30 different categories, and the Minister knows the reason for that from the point of view of the home industry.

Now the rumour is that the President of the Board of Trade has adopted the stance for the coming negotiations, not of increasing those categories, as the First Secretary suggested, but of reducing them to only a dozen and for allowing to Asian producers a considerable amount of swing between those categories. This would be taken very badly, I must tell the Minister of State, by the United Kingdom trade. The right hon. Gentleman also said, did the First Secretary, that the subdivision of quotas should be for short periods, that the periods at present of the quotas were too long; and again, the rumour is that the Board of Trade is hostile to this suggestion, which is a suggestion very much approved by the Cotton Board.

Then the First Secretary said—and this is a very important matter—that the Government—his Government, if they ever got into power—would study the effects of low-cost imports on the prices structure and make suggestions to mitigate their disruptive effects. This is, of course, not just quotas. This is a question of protection, and this was a matter which many spokesmen of the Labour Party, when in Opposition, adopted.

I must mention, in particular, the right hon. Lady the Member for Blackburn (Mrs. Castle), now the Minister of Overseas Development. She, either in the House or outside it, I forget which, put forward a very powerful suggestion when she was in opposition, which was, that to mitigate the disruptive effects of these very low prices a levy should be put upon them but, to satisfy the Asian producers that we were not doing this for selfish reasons, that the results of this levy, a countervailing levy, she described it, should be used for aid to those developing countries in other forms. This would be a means of reducing the disruptive effects of their exports to this country, but, at the same time, they would not as countries suffer, because the countervailing levy would be, as it were, ploughed back to them for general purposes of grants and aid. What has happened to that suggestion? I think it a good one. It seems to have not received now any sort of encouragement from the President of the Board of Trade.

The right hon. Gentleman met the Cotton Board on 27th May this year, when the Board strongly urged him to give further consideration to its proposals for dealing with price disruption. He said that though he could not accept any proposals which involved imposing a duty or levy upon imports from Commonwealth countries he would certainly consider any other measures which would help to avoid price disruption. Why cannot he not consider it now? Is it in breach of some undertaking?

When the surcharge of 10 per cent. comes off, as, presumably, one day it will, price disruption will cause havoc in the United Kingdom. The position is held at the moment by the surcharge, but the Government are pledged, and rightly pledged, to take it off—in a matter of months, as, I think, was the phrase used last January. What is to happen to price disruption then, if no sort of countervailing duty or levy is to be allowed to be placed on products of the Commonwealth?

Of course, I understand the reasons for this in the past, but when Nigeria, for example, is threatening to adopt a very anti-Commonwealth line in her negotiations for entry into the Common Market so far as the Congo basin treaties are concerned, which we hitherto observed, in so far as anyone can understand them, and if Commonwealth countries are to adopt a line very prejudicial to the former system of trade in the Commonwealth, in the way Nigeria appears to be thinking of doing, then surely our old feelings of obligation in this matter must be looked at again.

If there is to be no duty or levy, at least can we have some assurance generally on new anti-dumping legislation? Of course, everybody knows that the present system of anti-dumping legislation in the Board of Trade really does not work very well. It is too stringent. Can we have a system like the Canadian system, which is very effective for their protection? Although it is not specifically a textile matter, but goes generally throughout imports into this country, it would help the textile industry if we could have more effective antidumping legislation.

I shall truncate my remarks, Mr. Speaker, because, as you said we have to consider other persons wishing to speak, but my general worry is that the President of the Board of Trade is not starting his negotiations from a sufficiently firm stance. He and the Board of Trade have been lamentably weak, in our view, on recent textile matters. I asked a question about Malta, but perhaps the Malaysia problem is even worse. What has happened recently about textile imports from Malaysia?

After protracted negotiations between Her Majesty's Government here and the Government of the Malaysia, agreement was eventually reached on ceiling levels for imports from Malaysia of cotton textiles for retention in the United Kingdom in 1965. The quotas established are 9.8 million sq. yd. for piece goods and 7.6 million sq. yd. for made up goods. This is the most extraordinary thing of all, any outstanding contracts—this is in addition—entered into before 1st May, 1964, and not yet shipped, may be licensed outside the quota. Those outstanding contracts are simply enormous, about 4 million sq. yd. of piece goods and an estimated 23 million sq. yd. of made-up goods.

The Cotton Board was deeply concerned with that, the problem of outstanding contracts, in other negotiations in the past. It has now been conceded to this extent. In the past, only outstanding amounts under contracts covered by irrecoverable letters of credit—which were completely verifiable, and therefore there could be no jiggery-pokery—have been admitted in such cases, and none of the outstanding amounts in the Malaysian case were so covered by irrecoverable letters of credit and no valid reason can be seen why the normal arrangements should not have been gone through and why Malaysia has been given this enormous concession.

This is what worries the people of Lancashire and others engaged in the textile industry, that the Board of Trade is not adopting a firm line from the start. We all know that in multilateral negotiations of this sort one has to give in a little bit along the line so as to get agreement, but if one's initial stance is generally weak, as I think it has been, judging from the hints we have been given on such things as the increase in global quotas built into agreements, or the reduction in the number of categories, an absolute veto against any effective scheme against price disruption, and nothing about substitution or added value, and these sorts of matters, then I am not surprised that the Cotton Board does show some worry in this case.

In the past, the Board was bitterly attacked by a more militant group called the Textile Action Group, which thought that the Board was really—I will not say the stooge—too closely tied to the Government. In spite of that, it is now really very much worried and vocal on this subject. I think that that goes for all the members of the Cotton Board, including the trade union members.

We face the news today, which is inevitable and may be right, that four more cotton mills have closed as part of a very necessary reorganisation scheme. But all the reorganisation that is going on—and it is a good thing that it is—will come to nought if, when the surcharge is taken off, and when the present agreements run out at the end of this year, there is no firm feeling of confidence in the industry, which can be produced only by strong, global, effective protection against low-priced and often sweated Asiatic imports.

For some years now the cotton industry has faced the fact, and faced it well, that it is not entitled to any protection against what we may call European competition. It knows, and it now realises and faces the fact, that against foreigners, whose standards of living and whose social services and other things are roughly equivalent to ours, it must not expect any protection at all, and in this the industry stands in marked contrast to many other British industries, particularly the motor car industry. The cotton industry and other textile industries have done that. They have reorganised themselves, and they have fined themselves down very effectivedly, thanks to the reorganisation scheme put up by the last Government.

But all this money, and all this effort, will count for nought unless the industry can get what it was assured by the First Secretary two years ago that it would get, namely, a proper global system with some sort of provision against price disruption, some sort of assurance that there will not be the loopholes and the increases in the quotas which have been a feature of the past. I hope that the Minister will be able to make some announcement today, which will go some way to allay the fears of the Cotton Board and others engaged in the industry, that the President of the Board of Trade will be tough with those with whom he is negotiation who take such a derisory percentage of these imports compared with the enormous amount that we still enjoy.

1.3 p.m.

Mr. H. Hynd (Accrington)

Like the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), I represent a cotton textile industry constituency, or rather a constituency that was predominantly cotton textile, but which, unfortunately, is no longer so, and I find myself strangely in agreement with the hon. and learned Gentleman on this occasion.

I would not claim that the cotton textile industry is the most shining example of successful private enterprise, but it must be admitted that it has had very special difficulties. One is that while, as the hon. and learned Gentleman said, it is not afraid of competition, it has been subjected to unfair competition, and that is what it is afraid of. If it is fair competition, the industry is confident that it can be met, but it is this unfair competition which is so worrying, and which has caused so much trouble.

The industry has also been the victim of our very laudable desire to help underdeveloped countries. It is the victim of negotiations with foreign countries. It is tied up with foreign affairs, trade agreements, and all sorts of other things, and so no one can blame the industry altogether for the position in which it now finds itself.

The result has been disastrous to the whole of Lancashire, but the outcome of this disaster is quite surprising. The way in which the reduced industry has readjusted and readapted itself is not quite what we expected, and in this respect we can pay tribute to the co-operation of the textile trade unions. The way in which the textile trade union leaders have persuaded their members to adopt shift-working, to adjust themselves to new methods in the industry, and to adopt a new pay structure is quite creditable, and anyone who knows the difficulties of trade union leaders in persuading their members along such lines must admire the success that they have had.

I wonder whether the employers in the industry have shown similar enterprise, for example, in introducing the latest up-to-date sophisticated machinery. Once or twice I have had the opportunity of visiting textile mills abroad, and I have noticed that their machinery seems to be very much more up to date than what we often see in Lancashire. I know that in parts of Lancashire we have the latest machinery, but so many of the mills have the old Lancashire looms and the old ways of working, and I wonder why they do not get themselves up to date.

There is a tremendous amount of joint working between the two sides of the cotton industry on the Cotton Board, and I am delighted to learn that the Board is to continue, perhaps with some changes, and that the opportunity will be provided to both sides of the industry to co-operate in that way as well as in others.

As many of us in this House know from painful experience, the textile trade unions have been very active. A number of deputations have come to see us, and we who represent the cotton textile towns have also been very active, as the President of the Board of Trade knows only too well. Some of us saw my right hon. Friend only this week.

What is to be done about this problem? What can the Government do? What should they do? Most of us I suppose, particularly on this side of the House, would say that the ideal is complete free trade, that there should be no restrictions at all on imports or on exports, except, of course, for goods brought in here for finishing. We want as many of them as possible, on condition that they are re-exported. The trouble is that too many of them come here for finishing, and end up here, to the detriment of Lancashire goods.

Whatever views we may have about the theory of free trade, because of the special difficulties facing the cotton textile industry there is justification for special protection of some kind. I agree with the hon. and learned Gentleman's proposal for a global quota, because of the new countries that are now developing cotton industries and sending their exports to this country. Whether they are dumping is a matter for the Board of Trade to decide.

It is all very well to say that we should help developing countries, but cannot we sometimes help them by sending them goods instead of cash? Cannot we send them a lot of Lancashire manufactured textiles instead of sending them cash and credits with which they can buy Japanese textiles? This proposition has been put up more than once in this House, and I have never heard a real answer to it. We just cannot afford to let the cotton textile industry die, for economic, social and other reasons.

I hope that today the Government will be able to tell us something that will send a message of cheer to Lancashire. If there is any justification for Government help to private industry it is best exemplified by the cotton textile industry, for the reasons that have already been given. I ask the Minister to tell us whether he has any good news to give the House today.

1.10 p.m.

Sir Douglas Glover (Ormskirk)

I shall obey Mr. Speaker's injunction and shall not detain the House for more than three or four minutes. I congratulate and thank my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) for raising this very important subject on the Adjournment. I do not know whether it is the case, but I always sense that in its negotiations with the Lancashire textile industry the Board of Trade has a love-hate complex. That may be understandable, because for the last ten or 15 years it has lived in a sort of illicit relationship with the industry, and it may be that this atmosphere has permeated the Department.

The time has now come for us to take a stand. The industry has done more reorganisation and adaptation than any other in the country. It has contracted its production, without too much public display, from 7,000 million yards in 1913 to about 1,000 million today. It now employs only 7½ per cent. or 8 per cent. of Lancashire's working population.

All this has involved an enormous amount of upheaval. The buildings were designed for an industry seven times as large as it is today. That is why many mills do one process only. When they were built the industry was seven times as large as it is today. All these difficulties have now been pretty well sorted out, and owing to the reorganisation that has taken place in the last two or three years we now have a viable industry.

But this industry is entitled to expect fair trading. My hon. and learned Friend referred to the problem of substitution. Canada is one of the worst examples of this. It is true that the cloth that comes here from Canada is Canadian cloth, but it comes here at a price equivalent to that of Asiatic cloth, and is keeping out Asiatic cloth.

A global quota is necessary, but unless we have proper categorisation such a quota can cover a great deal of sin. If we have no categorisation, or a wrong categorisation, over a period of two years we could have a total offtake of poplin, completely killing the poplin side of the industry, because we were able to import it inside the global quota. Having lost the poplin side of the industry, two years later everybody would say that we did not want poplin on the quota because we did not make it here. If that process continued we should gradually drive the industry into extinction—simply because of wrong categorisation.

In those circumstances, I hope that the Minister of State will make it clear that the Board of Trade will be very tough in its negotiations with overseas countries, so that we can get this categorisation right. It is as important as the global quota.

1.14 p.m.

Mr. Anthony Barber (Altrincham and Sale)

I, too, will defer to the request of Mr. Speaker to be brief on this occasion, since we are already running late and I do not want to cut out other hon. Members who wish to speak on later Adjournment Motions. There is another reason why I agree. Most of the salient points with which the industry is concerned at present have been raised by my two hon. Friends and the hon. Member for Accrington (Mr. H. Hynd).

I congratulate my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) for raising this subject, and I also thank Mr. Speaker for having selected it for discussion in the first of this series of Adjournment debates, because it is of particular importance at the present time, for the reason given by my hon. and learned Friend, namely, that many rumours are floating around as to what has been happening in the past few weeks, and some of these rumours are hard and firm.

For example, I was told only yesterday that the President of the Board of Trade has now reached agreement with the main Commonwealth suppliers on the question of quotas of imports which are to apply from 1st January next year. Actual figures were given to me, but it is not for me to quote them to the House. Nevertheless, before we rise for the Summer Recess I hope that the Minister of State will be able to give us some firm facts and figures as to the intentions of the President of the Board of Trade as a result of these negotiations.

It would be irresponsible of me to seek to minimise the difficulties with which the right hon. Gentleman is faced, but if the information which has been give to me is correct there will be considerable disappointment among all those engaged in the textile industry. It is now generally accepted that the industry has nothing to fear from fair competition with those countries which have what might be called a Western standard of living, but there have been complaints, of the type already referred to by the previous speakers, about the loopholes that exist under which cloth from low-wage sources has entered the United Kingdom from European countries. Asiatic grey cloth has been finished in Europe and then passed off as European cloth. The practice of substitution has already been referred to. In the course of his recent negotiations has the President been able to do anything to stop up these loopholes?

Secondly, I hope that he will say something about the proposal, which has been under discussion for some time, for a returnable levy on cotton textile imports. I can see the difficulties of the proposal, but whatever its merits or demerits it has been put forward seriously. One of my hon. Friends mentioned that it had been put forward by the First Secretary when he considered the matter in the past. I am sure that the industry would welcome the views of the Government on the question.

I also hope that the Minister will be able to give us some assurance about the future of the industry in the United Kingdom. The re-equipment and rationalisation of the industry, which is going on apace, could result in a substantial saving in imports. I need not stress the relevance of this in our present economic situation, but the long-term plans of the industry will be carried out only if there is confidence in its future. In view of the way in which the negotiations with the overseas suppliers are reputed to have gone in the past few weeks I hope that the Minister will have something to say to show that the Government are confident that there is a place for a thriving United Kingdom textile industry.

1.19 p.m.

The Minister of State, Board of Trade (Mr. George Darling)

This rather thin House will agree that the speeches we have listened to from hon. Members on both sides leave us in no doubt about the anxieties which some hon. Members feel at the position of the Lancashire cotton industry. I hope that I can say something to alleviate them. The right hon. Member for Altrincham and Sale (Mr. Barber) said that "information given to him"—the hon. Member for Ormskirk (Sir D. Glover) said that "information given to him"—and the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) said that "rumours he had heard"—led up to certain views. The information given to me about the negotiations which are now in hand lead me to take a less despondent view than has been expressed.

The principal source of concern is that imports from nations whose costs or prices are liable to disrupt our domestic market are still going on. It is the problem of imports from those countries that we are concerned with, and the worries are perfectly understandable. Figures have been given, and we have to face the fact, that over 30 per cent. of our consumption is met by imports from developing nations. The great bulk of these imports come from Commonwealth countries and, therefore, enter free of duty. That presents a formidable and unique problem for the British cotton industry. It is something that does not apply to any other industry in the country.

Over the past decade, imports of cotton textiles from developing countries have grown by about 500 million yards. But these growing imports have not been the only source of difficulty, because over the same period our exports of cotton textiles have fallen by about the same amount. It would be quite wrong to suggest that the industry has lost all these exports through its own failings. The loss of exports owes a good deal to the closure of many of our traditional markets, especially those in the developing countries. In fact, one is going round in a circle.

Developing nations, with their growing textile industries and balance of payments problems, have wished to buy fewer cotton textiles from us. There are, therefore, widespread import controls against our exports of cotton textiles to them. At the same time, developing nations have wished to sell more and more cotton textiles to us. It is only too easy to underestimate the problems of adjustment which the situation has posed for Lancashire.

The industry has had help from successive Governments. Arrangements were made with India, Pakistan and Hong Kong in the late 1950s, and subsequently with other countries, under which limits were placed on the volume of imports that we would accept. Then there was the Cotton Industry Act, 1959, which provided Government help for scrapping and re-organisation. In all, the Government will have contributed about £25 million for these purposes. But the results of the efforts to restrain imports have not until now been all that the industry hoped for, and something else is needed.

As the hon. and learned Member for Darwen said, as one source of imports was restrained, new ones appeared. The effect has been that, since the first restraint arrangements were negotiated, imports of cotton textiles have continued to grow at a substantial rate. These imports occurred despite the acceptance by all but one of the parties to the G.A.T.T. Long Term Arrangement of a British "no growth" reservation. Hon. Members will probably know what I am talking about, but I have had to learn about it rather painfully over the last few months. Other countries are generally obliged to increase their cotton import quotas by 5 per cent. a year, and the average increase in the case of Britain has been well above that figure.

It is never easy to strike a balance between our obligations to British industry and the people employed in it, on the one hand, and to the developing nations, on the other. We cannot ignore the force of the pleas put to us by those countries to trade with us and to sell the things which they can make. It is unfortunate that, as in our own case, their first beginnings of industry are often concentrated upon cotton textiles and that the supplies of cotton textiles directed towards the developed markets are potentially enormous. That is why country after country has begun to supply cotton textiles to the British market, and our imports have continued to grow.

I can assure the hon. Members who have spoken in the debate that my right hon. Friend the President of the Board of Trade is taking a firm line and has decided that that continuing substantial increase can no longer be accepted. Britain has done her full share in buying imports of cotton textiles from developing countries. We have decided, therefore, that our objective shall be a total limit on these imports, and to hold the growth of imports to the growth in consumption of cotton textiles as far as that can be foreseen.

The Government have received advice and recommendations from the Cotton Board—we shall also take into account the advice that we have received today—and the President of the Board of Trade has had discussions with the Cotton Board. During the last two months, the Board of Trade has been having informal discussions—and at this stage they are informal—with the three major Commonwealth suppliers in Asia. On the basis of those discussions, we are on the point of putting our proposals into final shape for presentation to the generality of supplying countries.

I need hardly say that the advice from the Cotton Board differs from the views that have been expressed to us by the developing countries. We believe, however, that developing countries will accept that there is equity in our claim to have played our full part in buying their cotton textiles and that some firm limitation on our future commitments is only reasonable. To continue to accept large increases in imports would clearly, in the Government's view, cause disruption of the market and would threaten the existence of the British cotton industry.

That was another point which was expressed in the speeches that we have heard. We think it a reasonable view that those advanced countries where the proportion of consumption met by imports from developing nations is less than 10 per cent. are in less immediate danger of total disruption of their markets than we are. It is now for other countries to continue to increase the access that they give to those textiles. We shall be advancing that view in the discussions on the Long Term Arrangement which are due to take place in Geneva later this year.

The Lancashire industry is concerned not only about the volume of imports, but also about the price. We have made it clear that we exclude any idea that we should impose a duty or levy on imports from the Commonwealth. However, outside that, we are considering what other measures would help to avoid price disruption. We intend, anyway, to secure a practical degree of categorisation so that risks of disruption of the market for particular products will be lessened. I thoroughly agree with the hon. Member for Ormskirk (Sir D. Glover) that effective categorisation is tremendously important.

The hon. and learned Member for Darwen raised the question of imports from developed countries which will remain free from control. It is possible that attempts will be made to circumvent our controls on imports which could be disruptive by transhipment through uncontrolled sources. We recognise that there are real fears here, and we are urgently studying possible safeguards. The views that have been expressed today will, of course, be taken into account. There may be fears that, by leaving some sources uncontrolled, we shall transfer business away from developing countries who need foreign exchange to the developed countries who do not. It has been urged upon us that we should, therefore, put quotas on cotton textiles from all countries.

There is a great deal of force in that view, but I would say that it would be a major step to reimpose quotas on trade between developed countries and not something that we could lightly enter into as long as the 10 per cent. surcharge is with us. That type of sophisticated competition is very different from the low-priced imports that we have been talking about up to now. There is international recognition that imports which cause disruption can be the subject of regulation. But the idea that trade between developed nations, where social and economic circumstances are somewhat similar, can cause disruption is one that has some pretty wide implications. We recognise that there could be attempts to evade our controls on disruptive imports by diversion through uncontrolled sources to which hon. Members have referred. We want to look at all possible ways of dealing with this problem, including the views that have been expressed today, and this we are doing.

The hon. and learned Member asked how far other countries were honouring their obligations. The G.A.T.T. Long Term Arrangement generally obliges those countries to increase their quotas by 5 per cent. each year. As he probably knows, the obligation on the E.E.C. countries is 10 per cent., and there seems to be no doubt that they are honouring their obligations in this regard. The details for 1964 are not yet available, but we almost certainly expect that there will have been a substantial increase in E.E.C. imports of cotton goods during that year.

The hon. and learned Gentleman also asked whether we could do something about anti-dumping legislation, and mentioned the Canadian system. I am advised that we cannot adopt the Canadian system, as it is in breach of the G.A.T.T. rules and only continues because it preceded the G.A.T.T., which makes rather a difficult situation for us.

I come back to the Lancashire industry itself—

Mr. Barber

The hon. Gentleman said that informal agreements had been reached with most Commonwealth countries—

Mr. Darling

No.

Mr. Barber

Well, that some agreement had been reached, at any rate, with Commonwealth suppliers, as I understood him to say—and that, in due course, an announcement would be made. I put it to the hon. Gentleman that specific figures are being bandied about and are becoming widely known. I did not quote them here because I felt that to do so would be irresponsible, but I thought that the Minister might give them to the House. If he cannot do so, I quite understand, but I hope that he will say how soon we can expect an announcement because, as I say, these figures are becoming more and more widely known every day.

Mr. Darling

These figures are being bandied about in the informal discussions. Finalisation will have to come about by the end of the year, and we will try to give that information as soon as possible.

Reference has been made to the reorganisation that is going on in the Lancashire cotton industry. The 1959 Act has led to the scrapping of a great deal of plant and the installation of new machinery. Generalisations are always difficult and there is always a risk of being unfair, but I think that it is reasonable to assert that the re-equipment in the early stages was not matched by a parallel reshaping of organisation and structure in the industry.

Over the last two years, however, an active and more widespread reorganisation has got going, assisted by the interests of the big man-made fibre producers who have acquired in the industry some of the plant and machinery, and so on. They themselves are putting resources into it. The new machines are being effectively organised, particularly, I am informed, in the carding and spinning sections, but we are still relying far too much on imported machinery, especially in the weaving and warp knitting sections.

Nevertheless, production and distribution are being increasingly better planned, and there is now also a much greater emphasis on proper selling of the products. The Government believe that the impetus behind this reorganisation justifies the measure of greater certainty on imports which we intend to provide—the two must go together.

We must, however, be clear about the implications of all this. Productivity and shift working in the cotton industry has been increasing, as my hon. Friend the Member for Accrington (Mr. H. Hynd) has said, but the levels remain below those in some other countries with whom we have to compete. If the benefits of the new machinery are to be realised in terms of productivity and cost, it must be worked as long as possible and without over-manning. It is the machines that must do the work, because this is what productivity means.

It is true that the relations between employers and employed in the Lancashire industry are very good. In fact, there is an example here for many other industries. But we have to face the fact that the labour force contains a large proportion of older workers, and with the passage of time—and in some areas of Lancashire it will not be so long—there must be many retirements. There is a need, therefore, for managements and workers to continue to work together—as, indeed, they are now doing most effectively—to reduce manning and increase shift working.

I want to join with my hon. Friend the Member for Accrington in his tribute to the unions in this industry. We hear a lot in this House and in the Press generally about restrictive practices in the trade unions, and about how they do not co-operate in the introduction of new machinery, new methods, and so on. I am sure that the examples we bandy about represent a minority of the trade unions and a minority of British industry. Here, we have an industry to which none of this criticism applies, and in which the unions have co-operated fully in introducing four shifts, new machines and new methods. This should rightly bring higher wages to the workers, and enable them to get the fair deal they should have in return for the help they are giving in this reorganisation. Higher wages must be paid if the industry is to gain its share of new workers in competition with newer and other industries growing up in the North-West.

The Lancashire cotton industry is sometimes thought of as being old and clapped out, but if this impression is too widespread it is partly the industry's own fault. It has, perhaps, in the past been too keen to parade its own difficulties. It is now becoming a highly capitalised industry, in common with other textile industries, where the most advanced technologies can play their part. I am sure that we are right to give the industry this chance to shape itself for the present and for the future.

Mr. Deputy-Speaker (Dr. Horace King)

I am grateful to right hon. and hon. Members for the way in which they have so far co-operated in response to Mr. Speaker's appeal. We began the Adjournment debates 40 minutes late; we are now only 20 minutes late.