HC Deb 08 December 1971 vol 827 cc1305-12
The Secretary of State for Trade and Industry (Mr. John Davies)

With permission. I wish to make a statement about cotton textile imports.

Following a recommendation from the Textile Council in 1969, the then President of the Board of Trade announced the decision to rely principally for the protection of our own cotton textile industry upon a tariff from 1st January, 1972. An order putting a tariff on cotton textile imports from the Commonwealth preference area has been laid before Parliament. It was recognised at the time that this arrangement might be subject to adjustment if we joined the Common Market; though the common external tariff approximates to the level we propose to introduce. Moreover, it was made clear that, although this decision meant ending the general quota system when the tariff came into effect, recourse to quotas might be resumed if total imports rose above present levels to the extent of causing disruption of our own production of particular products.

It was always foreseen that there would be contraction in our own industry, but that contraction is taking place in substantially changed circumstances both as to the worldwide state of the industry and as to the domestic situation where the level of unemployment causes great concern.

The voluntary restraints upon the export of textiles to the U.S.A. agreed with certain Asian countries undoubtedly place an added weight on exports elsewhere and notably to this country whose imports as a proportion of consumption are far higher than those of any other major industrial country.

In all the circumstances, I have come to the conclusion that not only for the benefit of our own industry but also because of the stability this will give in the British market for our traditional suppliers, I must retain in 1972 the present general system of quantitative restrictions in addition to the tariff. I am fortified in taking this step by the indications I already have of the build-up of orders for next year and by the knowledge that in the rapidly changing situation affecting this industry I might not otherwise be able to take action quickly enough to forestall disruption.

This decision has been the subject of discussion with the Governments of countries that have been our main suppliers with a view to demonstrating that nobody's interests would be served by a surge of exports into our market in 1972 originating from a very wide range of sources. Whilst regretting the inconvenience our decision may cause them, we appreciate their understanding of our problem. We have asked those who currently administer restrictions at the point of origin to continue to do so, whilst making it clear that should they find that impracticable we shall undertake the task from here. All imports of currently restricted cotton textiles from the countries in question will continue to be restricted, and I must stress that we will not be prepared to license excess shipments in 1971 in anticipation of 1972 quotas. No assurance can be given that licences will be issued for contracts entered into from today unless the Government are satisfied that the orders can be accommodated within the quotas for 1972. Fuller details of these arrangement are being issued to those concerned. The arrangements, moreover, will make the adaptation process to the E.E.C. easier.

The Government underline that the object of this action is to avoid a situation of major disturbance arising next year that might occasion damage both to our own industry and to that of our main suppliers.

Mr. Harold Lever

While making it clear that the Labour Party maintains unchanged its attitude to the liberalisation of trade, and particularly to the important principle that the advanced countries must systematically bring down the barriers to the importation of the industrial products of the less developed countries, a principle from which we will never depart, I am bound to welcome the right hon. Gentleman's statement. [Laughter.] There is nothing here to amuse anybody but the most thoughtless hon. Members. I am bound to welcome, not without regret, as a transitional measure what the right hon. Gentleman has said, because the alternative would be the rapid and total collapse and disruption of the Lancashire cotton textile industry, particularly at a time of high unemployment in an area where the Government appear to have done singularly little to provide alternative employment.

The right hon. Gentleman rightly said that we have borne a disproportionate share of these imports. In order to preserve the principle of advancing the interests of less developed countries, will he take steps internationally to bring into being the kind of disciplines which will allow this increase of exports from less developed countries to take place at a digestible pace because all advanced countries bear their proportionate share? Will he also take steps to see that this matter is raised at the talks which are presently commencing on international money and trade questions which will precisely cover this area? While adhering to the principle of protecting the interests of the less developed countries, may I ask whether the right hon. Gentleman will take steps to see that this is done on an internationally agreed basis so that this trade can proceed and increase without creating the kind of politically and socially unacceptable conditions which would prevail in the Lancashire cotton textile industry if this action were not taken for the time being?

Mr. Davies

I understand very well the points made by the right hon. Gentleman and will certainly take them into account. He will be aware, as I am, that the long-term agreement affecting textiles comes to an end in September, 1973. There is, therefore, much room for discussion on an international basis of the very points which he has raised and of which I take due note.

Mr. Fletcher-Cooke

Is not the real change in the situation the fact that the United States of America have imposed fresh barriers upon the products of these developing countries and that, unless we also take defensive action, the whole lot will come in here?

Mr. Davies

That is partially true, and I mentioned it in my statement. The American action is indirectly affecting us in the sense that it affects non-cotton textiles; but undoubtedly that puts the weight in our market and we have to respond to it.

Mr. J. T. Price

Is the Secretary of State aware that, without any equivocation, the important statement which he has just made will be warmly welcomed in Lancashire by Members like myself who, for the last 10 or 15 years, have been warning successive Governments that Lancashire was not only going down in its traditional industry, but was facing complete disruption by the diabolical practices being used to flood this country with the surplus exports of the underdeveloped parts of the world? Without entering into any of the considerations which my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) mentioned at the Box, which he is entitled to mention, may I draw the right hon. Gentleman's attention to the fact that this is a matter of such gravity that, whilst we welcome his statement, we would have welcomed it even more if we had had an assurance from the Government that in future they will go to the General Agreement on Tariffs and Trade, the organisation to which we are a party, and draw attention to the kinds of practices which are being used to disrupt completely not only our home market, but those markets overseas which have been traditionally of interest to us? Therefore, it is not only a matter for us of the improvement in the prospects of those who have invested large amounts of capital into what is left of the Lancashire industry, but that, in the last 12 months, we have lost 60,000 jobs, which is more than the number lost by U.C.S. and Rolls-Royce and other parts of the country which have had greater attention paid to them by the Government. I welcome the statement, but hope that the right hon. Gentleman will take further action to arrest the decline which has been going on for so many years.

Mr. Davies

Whilst not being entirely clear whether that is a dissociation from the view expressed by the hon. Gentleman's right hon. Friend—

Mr. J. T. Price

The right hon. Gentleman must make what he likes of it.

Mr. Davies

—I must point out that the recommendations which were acted upon by the Labour Government in 1969 were the recommendations of the industry itself expressed through the Textile Council on behalf of both sides of the industry. It would be difficult, therefore, to say that this was an arbitrary act of Government taken despite the industry's views.

Mr. Normanton

Whilst thanking my right hon. Friend most sincerely for the statement which he has made and stating quite categorically, on behalf of those members of the industry concerned whose delegations I have been leading to his junior Ministers, himself, and the Prime Minister, may I assure him that this news today will be received with great approval and pleasure in Lancashire. May I ask, however, whether he is prepared at an early date to take into account not just the question of G.A.T.T. and cotton, but to consider whether the time is opportune for man-made fibres to be brought either into the context of G.A.T.T. and its extension or into a separate agreement along similar lines?

Mr. Davies

The answer which I must give my hon. Friend is that I do very much take account of the various representations which are made to me. However, it would be very wrong and not the wish of the House that the decision should be taken as a sign that there is not yet much to be done in the restructuring of the textile industry, which remains a serious requirement. Regarding man-made fibres, I should point out that it is not from the areas to which I have been making reference today that there has been any surge of imports into this country.

Mr. Joel Barnett

Whilst I should think that most hon. Members, certainly from Lancashire, will be delighted that the Minister has accepted the case made by both sides of the House, will he recognise—I do not in any way wish to appear churlish—that, given the existing level of quotas, 55 per cent. of our total consumption is still imported? This compares very badly with the level of imports taken by the E.E.C. and the United States. Given that level of quotas, we have still had a greater number of mill closures and unemployment than for a very long time. Will the right hon. Gentleman therefore consider very carefully the question of a lower level of quotas and negotiations with the E.E.C. and the United States with a view to getting them to bring up their levels very much nearer to ours?

Mr. Davies

I have said, and I repeat, that our own, I think, unblemished situation in this regard should be used as a basis for wider discussion with other countries. At the same time, there is a dangerous implication in what the hon. Gentleman has said, namely, that we have done all that we should do in the restructuring of our textile industry. I do not think that this is the case, and I do not think that it is the view of the industry.

Mr. Bray

In common with hon. Members on both sides of the House who have a constituency interest in the textile industry, I warmly welcome my right hon. Friend's statement. May I endorse the point made by the hon. Member for Heywood and Royton (Mr. Barnett) about quotas? Finally, may I ask my right hon. Friend whether he will extend his decision to include footwear, which may come up for discussion later this evening?

Mr. Davies

No, Sir. It is not my judgment that the situation in the footwear industry is parallel with that in the textile industry, but this matter will be further discussed during the debate this evening.

Mr. Dell

Can the right hon. Gentleman say what estimate he has made of the effect on imports from underdeveloped countries of the Commonwealth of this combination of quotas and tariffs, and also what effect he expects this to have on imports from developed countries, which may now be in a better position than the under-developed countries? Can he say, in particular, what estimate he has made of the effect on India, which was going to be the main sufferer under the previous decision, and is likely to suffer even more under the Minister's new decision?

Mr. Davies

My judgment is that the effect on India will not be damaging. It is for that reason that I underlined the importance, from India's point of view, of there not being a major disruption by a surge of imports into this country next year. Undoubtedly the situation of India would be damaged by such a surge coming from, broadly speaking, new major suppliers in Asia. My judgment is that India will not be damaged in her export programme to this country during the next year.

Mr. Blaker

Can my right hon. Friend say to what figures the quotas will be related, what his assessment is of the effect on Hong Kong which is our largest dependent territory, and, also, what the views of Hong Kong are about his proposals?

Mr. Davies

The Government have been in discussion on this matter with the authorities in Hong Kong, and further discussions will take place with them next month. My judgment is that they will be better served, or at least as well served, in the course of next year by a more stable situation in this market than they would be by an extremely disturbed situation. The quotas for 1972 will be on an identical basis to those for the current year.

Sir G. de Freitas

Will the right hon. Gentleman, in connection with the question asked by the hon. Member for Rossendale (Mr. Bray) about footwear, consider listening to the wise words of the British Footwear Manufacturers' Association, and in this matter of the U.N.C.T.A.D. preferences apply E.E.C. rules, which they want?

Mr. Davies

As I said in my statement, adaptation to the E.E.C. arrangement is a matter for separate discussion. I think that the British Footwear Manufacturers' Association listened to the wise words of my right hon. Friend the Minister of Trade when he spoke to them the other day.

Sir G. de Freitas

But they still want E.E.C. rules.

Several Hon. Members


Mr. Speaker

Order. We must move on to the other business.

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