§ 9.21 p.m.
§ Mr. Cyril Smith (Rochdale)
I am delighted to have the opportunity to raise on the Floor of the House the problems of the textile industry. In passing I must say that it is a great pity—indeed disgraceful—that the only way I find it possible to raise the problems of the textile industry is by way of an Adjournment debate.
We have days in this House devoted to Ireland, to Scotland, to Wales and even to London, but in my two years as a Member I have yet to find a day devoted to Lancashire or any other province of this country. There ought to be some facility for hon. Members to raise regional problems of the Floor of the House other than merely in an Adjournment debate. We are fortunate tonight in having a little more time than usual, because normally this debate would have to be disposed of within 30 minutes.
574 The history of the textile industry is well documented. It is my view and that of the industry that one problem is that it has suffered from an abundance of reports and studies. Unfortunately those reports have been largely academic and they have done nothing to provide stability for the industry as a whole—an industry which desperately needs long-term planning opportunities.
I want to stress that I am speaking of a major industry. The textile and clothing industry employs approximately 900,000 people, many of them in the North of England and Scotland. In Rochdale, textiles provide 30 per cent. of the total employment. The industry is a major exporter, exceeded only by machinery, motor vehicles and chemicals. It is the fourth in line in terms of its exporting potential and ability.
In addition to its exports, the industry provides a technological proving ground for textile machinery makers—another large exporting industry. The products of the textile industry, particularly from Lancashire, Scotland and even, we must concede, parts of Yorkshire, find their way to virtually every market in the world.
Despite that background, for many years the picture within the textile industry has been one of contraction. I believe that the time has now come for the Government—I speak in no political sense; I would be making this plea whatever the political complexion of the Government—to adopt a realistic approach and to decide upon a minimum size for each section of the industry, which would then be protected against attacks from any source.
For example, the contraction of the industry has meant that in 15 years the labour force in cotton and allied textiles has been reduced from 240,000 to 88,000 and the spinning section has been reduced from 17½ million to 2.7 million spindles. That is why I take the view that the industry has now reached what must be its minimum size, particularly if we are to have any concern for the industrial balance of our economy. We now need from the Government action to stabilise the industry at its present level.
The present position in the industry is well known to the Minister. I am not always given to flattery, but I say that the position is well known to the Minister 575 because I know that he is held in high esteem by all in the industry, and certainly by industrialists in other parts of the country who are also concerned with the textile industry. I suspect that the Minister will agree with me that the present situation is serious, but the threatened future situation is even more serious. I am also sure that the Minister is not unaware of Early Day Motion No. 67 which demonstrates concern about the textile industry by a number of hon. Members, not merely myself.
In my constituency approximately 700 people are working on short time. Most of them have been on a four-day week. The present Government, I remind the Minister, have been particularly proud to announce more than once from the Dispatch Box that they have done a great job in bringing the four-day week to an end. Ministers have accused the Conservatives of being responsible for the four-day week.
In my constituency, however, and in many parts of Lancashire, the four-day week has not been eradicated. Indeed, the number of workers on a four-day week is increasing constantly. Even worse, some mills in my constituency—I visited one of them on Monday—have been closed all week, for five days. This is particularly worrying because we are now close to Christmas. Because of the local nature of the industry there are many instances when a man and wife work in the same mill. Therefore, when people are "played off" for one day a week or for an entire week the tragedy within the family is extremely serious.
I am sure that it is not necessary for me to remind the Minister that figures supplied by the Department of Employment relating to the number of people on short-time working are not a true reflection of the situation. This is because married women, who pay the lower contribution for the stamp, do not register for unemployment benefit. Therefore, the figures produced by the Department relate to people who are in receipt of unemployment benefit or who have registered for it, whereas there are in addition hundreds of married women who are not included in the statistics provided by the Department. The figure in Rochdale at the moment is 700 and it has been as high as 1,400. The Department's 576 figures, while correct in terms of fact, present a false picture. I consider that this is a disgraceful situation.
I raise the matter on the Adjournment in order to pose a straight question to the Government through the Minister. I want to know what the Government propose to do about the matter. I hope the Minister will not say that the industry should put its own house in order. I have heard all that before.
In 1966, when I had the honour of being Mayor of Rochdale, I led a deputation of Lancashire mayors to the then President of the Board of Trade, the right hon. Member for Battersea, North (Mr. Jay). Our object was to protest about short-time working. The answer we received was that the industry should put its own house in order and invest in machinery and so on—an old hat argument. The industry has invested in new machinery and it has contracted. If any further substantial contraction takes place, it will be not because of the industry's shortcomings but because of Government inaction and a failure to control cheap imports, often produced by sweated labour and sometimes directly subsidised by foreign Governments.
Of course it is not difficult to see the reasons for the present short-time working. The first is the high level of imports from so-called developing countries, supplemented by increasing imports from the EEC Mediterranean associates. I am well aware that my politics invite the accusation that the Liberal Party has at least helped to take us into the EEC, and we do not apologise for that. The textile industry has always favoured Britain's entry and has been able to increase its markets considerably as a consequence. But if in the end I have to choose between membership of the EEC and the best interests of my constituents, I will choose the latter.
Imports of cotton and man-made fibre cloth and made-up goods in 1973 totalled 1,200 million square metres, or 57 per cent. of our home consumption. The figure for the first six months of this year shows imports accounting for up to 60 per cent. of home consumption.
The textile trade cycle has turned down rapidly throughout the world. That slump began to hit some Far Eastern countries before it hit Great Britain and 577 consequently those countries aimed to take a greater percentage of our market in order to shift their goods. We do not object to that, but we do object to those goods being brought here at ridiculous prices.
I understand that the Department has been kept well aware of the growing number of quotations at prices barely even covering the cost of raw materials. No industry can compete against those prices, no matter how efficient it might be. We have details of subsidies and assistance given by the Turkish Government to its growing textile industry, and the Department knows of financial assisttance to new textile developments in Greece and of subsidies to textile exports from Brazil. The Department was advised 12 months ago of impending increases in imports from Turkey.
We are sick and tired of civil servants in successive Governments ignoring such advice. We are fed up with their demanding proof of dumping from the industry when we all know that it is increasing. I have six letters here which have been circulated to Rochdale textile mills this week by various Turkish concerns offering yarn at less than the cost of raw materials in this country. If the mills concerned went to the Department, the civil servants would say, "Give us proof of dumping."
The industry wants to see and feel and believe that just for once the civil servants are on the side of our textile manufacturers instead of constantly appearing to be on the side of the textile importers. That is not something peculiar to the present Government; it has gone on for the last eight or 10 years, and we are fed up with it. Turkish imports have increased from 30 metric tons in 1972 to 2,680 in the first eight months of this year. That is what the industry is up against.
I should be interested to know why the Department chose to ignore the warning given to it by the Textile Industry Support Group about what was happening with regard to Turkish imports. That warning was given to the Department 12 months ago. So far it has been ignored completely, and I should like to know why. I have said that Turkey has been circulating letters, but we know more. It has had agents in this country, 578 men touring Lancashire in the past three weeks and men plying from factory to factory for business for Turkish yarns. The Department must be well aware that this is going on.
A great deal has been made in the Press of the recent formula agreed within the EEC under the GATT multi-fibre arrangement for sharing the burden of cotton and allied imports. That picture has been over-simplified. All that the formula does is to spread more fairly between the members of the EEC any future increases in textile imports from the developing countries. It does not share out the existing burden. For example France and Italy, which at present allow only a fraction of their home consumption of cotton-type textiles to be imported, will be expected to take a larger percentage annual increase from India and Pakistan. We, however, are expected to take increased imports from places like Yugoslavia, Turkey and Greece.
Substantial as the imports from Turkey are, they represent only a small part of our total imports. But let me remind the House of what happened in the case of Portuguese imports. I warn the House and the Government that unless action is taken the same can happen in relation to Turkish imports. The United Kingdom industry warned the Government of the day about the long-term build-up of imports from Portugal under EFTA arrangements. Those warnings were ignored, and Portugal today is the biggest source of yarn imports.
I appeal to the Minister and, if I may do so without appearing rude, insist that the Government do not allow history to repeat itself in relation to Turkey and Greece. I hope that even at this late hour it will be possitble to take some action concerning Portugal. I am pleading for action, and I hope that the Government will act now.
I should like to make two or three suggestions. The first is that existing quota controls should continue without relaxation. The second is that quotas should be reintroduced wherever they have been discontinued for the Mediterranean associates—and we should certainly not drop cloth quotas, as I understand may be suggested in 1975. Thirdly, quick action should be taken on textiles coming in at low price levels, which can be explained only in terms of dumping or subsidies. 579 Warnings should be issued immediately to importers that such low-priced imports will be stopped. Indeed, price monitoring of the type used in Belgium ought to be considered so that those whose prices fall below established norms have to justify them rather than that the home industry has to prove dumping.
Finally, probably most important is the need for a regulator to cope with the textile trade cycle. I understand that the industry has already submitted ideas to the Minister about this. That must not, of course, be an excuse for doing nothing. Existing statistics prove the need for action now, and when such statistics in a regulator-type of system give early warning of a downturn in the trade cycle controls should be introduced, just as I agree that when they show an upturn we can have some relaxation.
I should like to think that, as a consequence of this debate, a truly effective plan for the textile industry will be devised. We do not want any more costly reports. They are of value only to people who think in terms of the inventions of Arkwright and Crompton and whose idea of the textile industry has not progressed since that day What I am pleading for is a vital industry, a well-equipped, modern industry, for wonderful working people who earn their living within the industry. I believe that we should fight as strongly in the EEC for textiles and for our right to exist within the textile conurbations of Lancashire as the present Government have fought for agriculture during the past two or three weeks. As regards dumping, for example, we should let it be seen that we are on our own soil instead of giving the impression that we do not want to do anything.
To summarise, we have had enough. The time has come for action. I appeal to the Government to prove that they are as serious about full employment as they plead. Under-employment is as big an evil as unemployment. To put it shortly and in my own Lancashire tongue, I plead with the Government to get their finger out and let it be seen that actions speak louder than words.
§ 9.42 p.m.
§ Mr. Frank R. White (Bury and Radcliffe)
A popular television western series is appearing currently, called "Alias 580 Smith and Jones". Hon. Members now have the Lancashire equivalent of Smith and White. Just like our cowboy counterparts, the hon. Member for Rochdale (Mr. Smith) and I intend to get our man.
The hon. Member clearly and concisely placed before the House the overwhelming case for some measure of protection to be given to the textile industry to prevent the present incidence of cheap import dumping on the British market. I am grateful for the opportunity that the hon. Gentleman gave me to join him in his Adjournment debate.
I should like to make one or two points that he has covered already. As a Member of only four weeks' standing, I have the strong impression that when one raises the question of textiles a feeling develops—"Oh, them again". It seems to me that some hon. Members are rather fed up with textiles and, therefore, do not treat the industry with the respect or concern that it deserves.
The hon. Member has stated that manpower levels over the past 15 years have dropped from 240,000 to 85,000—a 66 per cent. reduction. Which other major British industry has faced such a labour contraction? Which other major British industry has faced the challenge not of cuts in home consumption or of great changes in new technology but of the pressure faced by any industrialised nation from the growing industries of the developing countries of the world? Furthermore, the industry in this country faces these problems without adequate protection, or with delayed, ineffectual action to help it.
The industry, and myself, accept that there is a need to help the emerging nations. But at what price? Is the price to be the complete collapse of the home-based Lancashire textile industry? I wish some people would clarify that. If that is so, the person responsible for taking that decision will have to explain it to the management, to the unions and to the operatives of the industry. I will not take that responsibility on my shoulders. I will not accept it or the thesis behind it.
There is a balance to be achieved—a balance of support for developing countries and a balance to protect our home-based industries. The spinning side of the textile industry informs me that even on full production it could not fully meet 581 home demand and, hence, the remainder would, of necessity, have to be imported. But, as my hon. Friend stated, that should be a controlled situation, not the present free-for-all that merely makes a bingo lottery out of people's livelihoods.
On the question of textiles, I submit that some hon. Members are a little two-faced. I asked hon. Members to sign Motion No. 67 in respect of the textile industry. Some of them said that they had no textile industry in their constituency and believed in supporting the underdeveloped nations, and therefore, we in Lancashire should have to put up with the situation.
If what is happening in Lancashire were to happen in their constituencies, without doubt they would ask me to support protection for their industries. Their zeal for assisting developing countries would develop a strong correlation to the length of the dole queue. My hon. Friend and I, together with other hon. Members who wish to take part in the debate, base our support on the practical balance that has already been indicated.
I emphasise the need for action. As my hon. Friend said, the industry itself has been warning the Government for months about the impending situation in textiles. It has given warning about the impending import dumping that is now a reality. Sales and business contacts have fed information through the normal Government channels giving ample warning of the impending influx, particularly from the Mediterranean associate countries of the EEC. Action could, and should, have been taken at least six months ago.
The only reply to the warnings has been a request for facts and statistics, and justification upon justification. It is my belief that the only relevant fact concerning the effects of cheap import dumping is the number of textile operatives on short time or laid off completely from work, the number of mills working below capacity, or the number of mills that have been closed down.
I do not want to hear about "concern". I do not want platitudes from the seat of the pants of Ministers and officials. I want action—action as outlined by my hon. Friend, or some practical alternative that will give continuity of employment to the textile operative and a production floor to the industry. This 582 is a basic requirement, and it is not beyond the wit of this Government to meet that basic requirement. Textiles need it just as much as agriculture, just as much as the aircraft industry.
Above all, the art of government is meeting people's needs. Our need in Lancashire at present in the textile industry is continuity of work and security of work. From that work family standards are built, and on that work community life depends. Lancashire has never let this country down. Is the country now prepared to let Lancashire down?
§ 9.49 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
The only point on which I disagreed with the hon. Member for Rochdale (Mr. Smith), who initiated this valuable debate, was his statement that this problem had been going on for 10 years. To my certain knowledge it has been going on for 23 years. It has been going up and down, and the same arguments have been adduced in this Chamber all the time.
I think that this crisis started about July. It started on imports mostly from two countries—Turkey and Taiwan. The subsidising of Turkish imports is obvious, and it is monstrous that Turkish imports should come in under the umbrella of the European Economic Community, which is dedicated and devoted to the principle that there should be no subsidies and that competition should be free, fair and without subsidies. As the hon. Member for Rochdale said, unless the European Economic Community can police its ideology, which is that of no subsidies, one has to think again about the effectiveness of the European Economic Community in producing the situation of fair competition to which it is devoted.
The second country, which is particularly threatening my constituents, is Taiwan. We have no Commonwealth obligation there, nor any European obligation. I do not understand, and nor do my constituents, why there should be such a sudden increase—threatening the livelihood of those employed in the large India Mill in my constituency—of imports from that country of very cheap labour and without any claim on the market of this country.
I have given the Minister no notice of this question, but I should like him to explain why there should be a sudden 583 upsurge of Taiwanese imports, not only of cloth, but of made-up garments, at a time when the other ends of the trade are threatened from other countries. We have to take a firm line, and all the hon. Member for Rochdale said about the attitude of his Department is only too well attested by the experience of 23 years. Over and over again his Department says to the industry, "Prove it up to the hilt."
The truth of the matter is that it is only his Department that has the machinery for proving it. The trade has to make out a prima facie case. The trade can say, "We believe from the figures that these imports must be subsidised," but the 99 per cent. proof can come only from Departmental officers in the field in these countries. They alone can get the evidence.
Now, after 23 years, the Department turns upon the trade and says, "We will not move. We will remain neutral until you prove it before us as if we were an impartial judge." Instead of that it should be the champion and advocate of the Lancashire textile industry.
§ 9.53 p.m.
§ Mr. James Lamond (Oldham, East)
All that has been said in the debate so far seems to make very good sense. First, I echo the point made by the hon. Member for Rochdale (Mr. Smith) that there are seldom opportunities in the House to discuss the affairs of the North-West, which is an extremely large region which returns almost 80 Members of Parliament to the House, more than, for example, Scotland, although it receives much less attention than Scotland.
On many occasions there have been requests for a debate on the Strategic Plan for the North-West which we have not so far been able to debate. I should not say that I accept all that is contained in that plan, but certainly we deserve the opportunity to debate it. However, we are concerned tonight with the textile industry which plays a big part in the life and work of the North-West. I have many constituents who are engaged in that industry.
I cannot say that there is widespread unemployment in my constituency—the figures disprove that. In fact, the latest figures show that, relatively speaking, the 584 position is quite good. What is causing great concern, however, among employers, trade unionists and employees throughout the area is short-time working. Combined with that there are difficulties about unemployment pay. Because of the shifts that have been worked, including weekend working, people have found great difficulty in obtaining their just unemployment payments.
A fortunate coincidence is that the Minister who is to reply to the debate not only comes from the North-West but shares the honour with myself of representing one of the most important metropolitan county boroughs in that area, and I am sure that we shall have a much more sympathetic ear tonight than possibly we have had for many years. About three years ago I had an Adjournment debate on this subject. We made some headway on that occasion because I and others were pleading for the quota system to be retained.
I want to make this clear about the textile industry. No fault of any kind can be laid at the feet of management or the employees in the industry for the state it is in at present. The trade unions have co-operated to the utmost with the employers in the modernisation of the industry. It is now the second most capital-intensive industry in Britain, second only to chemicals. Shift working has been accepted in an attempt to make the industry viable, but it is facing competition all the time from developing countries whose wage rates are far below those paid in Oldham and the North-West—and wages are not all that high in this country.
I visited Hong Kong this summer and looked at a textile factory there. It was not modern. It was not capitalised in the same way as our factories are. But the wage rates were running at about only one-quarter of the rates paid in the North-West. We cannot face that kind of competition.
I appreciate, as do my constituents, that we must do our utmost to help developing countries. We feel, as my hon. Friend the Member for Bury and Radcliffe (Mr. White) said, that the trade is being asked to carry an unfair burden. I know that there are those of my hon. Friends who feel that perhaps we should not protest so much, but I say to them that if every 585 industry had been asked to carry the burden that the textile industry has carried their outcry would be as loud as ours.
I shall be brief, because the chance of fate has enabled us to have at least a little time tonight. I hope that the Minister will take careful note of the remarks of the hon. Member for Rochdale and others. There is good sense in what they said.
I am not so bitterly critical of civil servants as some hon. Members were, but I know that it has been very difficult for employers to supply proof of dumping in this country. A constituent of mine, Mr. Frank Johnson, a shirt manufacturer, whose case I have mentioned before, has told me that he knew that a subsidy was being paid to Pakistan shirt manufacturers, because their shirts were coming into this country at prices lower than the material alone from which he made shirts was costing him. Mr. Johnson had to go to Pakistan at his own expense to collect the evidence, which he brought back and showed to the civil servants here. They then accepted it and cleared the position.
That evidence demonstrated that vouchers were being given to shirt manufacturers who were exporting to this country. These vouchers were being sold on the Pakistan stock exchange and quoted there. They enabled Pakistani importers to import from other countries. Written evidence of this was not acceptable in this country until Mr. Johnson went to Pakistan and proved it to the hilt.
We should expect a little more co-operation from our civil servants. I am not as bitingly critical of them as some hon. Members are but there is something in what has been said. I hope that the Minister, my hon. Friend the Member for Oldham, West (Mr. Meacher), will listen with a very sympathetic ear.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dunn.]
§ Mr. Mike Noble (Rossendale)
I am grateful for the extended number of contributions which have been permitted in this debate and I congratulate the hon. 586 Member for Rochdale (Mr. Smith) on selecting a subject which is so close to the hearts of Members from the North-West.
The industry is modern and in contrast to the image that people living in the South have of textiles. I worked in the industry for some time and I know that its problems are not restricted to the North-West. It is spread throughout the nation, with a firm like Coates in Glasgow, substantial textile activity in London and a great deal of cotton textiles in East Anglia, but it is in the concentration in the North-West that the biggest problems are being felt.
Mention has been made of the efforts by the people in the North-West, joint efforts of both management and unions, to deal with these problems. I do not think there is another industry which could boast of such joint co-operation between management and employees to ensure survival.
We have a very modern industry. It is the second most capital intensive industry in the country, operating the most advanced technology and with the most advanced management attitudes. I helped to train management at one time and I know that it is aware of and concerned to utilise the most up-to-date techniques. It has an open mind on new developments, yet it feels helpless in the face of the crisis created by imports, and it feels bitter, quite rightly, at being let down.
There is also a crisis of confidence in recruitment. Very few parents feel able today to advise their children when they leave school that they can be confident of a long and successful career in the textile industry. One of the most difficult tasks at the moment is to ensure that it gets the right quality of recruits. Of course, the unemployment statistics in no way indicate the extent of short-time working and the loss of income in families where in many cases both husband and wife depend on the textile industry and both are put on short time.
The industry has never asked for privilege. It has accepted sacrifices, going back to the days of the American Civil War. In recent years in many ways the Lancashire textile industry has provided many of the funds for development in the under-developed countries. But while 587 we do not ask for privilege, we do ask for fair treatment of imports. It might be appropriate if marks of origin were restored to imported goods.
The hon. Member for Rochdale indicated the decline in the number of jobs in the industry over the years. The industry is concentrated in an intermediate area into which the Government are pouring funds, but that money will go straight down the drain unless they do something about the import problem.
It was said at the end of the war that Britain's bread hung on Lancashire thread. Lancashire responded to that situation. I suggest that, now, Lancashire's thread hangs over the Government's head, and I hope that the Minister will respond. I know that he is concerned, and I am sure that he will take urgent action on imports.
§ 10.5 p.m.
§ The Under-Secretary of State for Industry (Mr. Michael Meacher)
This has been an important and valuable debate, for which the whole House is grateful to the hon. Member for Rochdale (Mr. Smith). It is an important subject, not least to my constituents in Oldham, West, whose ability and skills in the textile industry are second to none—not even to the hon. Member for Rochdale. His speech was spirited and forceful and for the most part a balanced one.
There is one matter on which I wish initially to take issue with the hon. Member. He seemed to imply that Governments and civil servants have done little for Lancashire in the past. I deplore the unnecessary and derogatory manner in which he spoke of civil servants. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) suggested that the problem had been going on for 23 years and not only for 10 years.
I begin by setting the hon. Member for Rochdale's demands for instant action by the Government in their proper context, which is the record of the present Government and other Governments in assistance that they have given to the Lancashire textile industry.
With our encouragement, the Textile Council produced a thorough-going study on the Lancashire spinning and weaving industry in 1969. This productivity and 588 efficiency study recommended that a tariff be imposed on cotton yarn, cotton cloth and made-ups from the Commonwealth. The study foresaw that after a transitional period the quotas which had been in operation for many years could be abandoned and reliance on tariffs alone accepted. But in the light of changed circumstances, in particular our imminent accession to the EEC, it was decided in 1971 to retain the previous quota system as well.
Thus, on 1st January 1972 the Lancashire industry had protection against all lower priced cotton textiles by a tariff and against their unlimited access to our market by continuing quantitative restrictions.
I would also recall that the previous Conservative administration accepted in 1972 the industry's case for protection on woven polyester-cotton fabric and made-ups, and introduced that autumn quantitative restrictions on these textiles. This introduced for the first time the principle that in certain circumstances quota protection might be given to non-cotton as well as cotton textiles. This principle was last year embodied in the so-called Multi Fibre Arrangement on International Trade in textiles in the GATT under which safeguards can be introduced against disruptive imports of any textiles.
§ Mr. James Lamond
Will my hon. Friend concede, however, that those measures were taken as the result of action in which he and I engaged, which literally forced the Conservative Government to take action? I hope that tonight's debate will have the same effect on the present Government.
§ Mr. Meacher
My hon. Friend is entirely right to draw attention to the effect of lobbying pressure. The pressure which is being mounted now is similarly being taken fully into account.
When we returned to government last February our objectives were to ensure that the British textile industry was able to compete on equal terms with its European competitors and that developing countries were given greater access to the Community market for their textile exports. Therefore, we pursued vigorously a Community textile policy which would equalise the incidence of textile imports into each member country from the 589 developing countries and at the same time give those developing countries greater overall access to the Community market.
I am pleased to say—the hon. Member for Rochdale alluded to this—that the Council of Ministers approved on 15th October that Community textile policy of burden sharing. I believe that we are now on the road where, over the years ahead, we can expect the other Community member countries to catch up with us in the access that we have ourselves given in the past to developing countries and, equally important, where developing countries now have a greater total market to go for than the United Kingdom market alone. Therefore, it is in their interests as well as in ours.
I draw attention to the fact that I confirmed again only last Monday in answer to my hon. Friend the Member for Wigan (Mr. Fitch) that the Government are committed to seeking a further derogation from the EEC's Common Liberalisation List allowing them to maintain quantitative restrictions on imports of cotton yarn throughout 1975 and 1976, though it is liberalised by all the original members of the Community. That is a record of considerable concern to the textile industry, and I do not think that that record should be gainsaid.
I turn now to the immediate problem facing the industry, which is imports of cotton yarn, especially the significant rise in imports of cotton yarn from Greece and Turkey. Again, the Government have been freely accessible to the industry on this issue. My noble Friend Lord Beswick and I met representatives of the industry about it in July. We invited the industry to keep in constant touch with us. This it has done, and on 12th November my Department received a case from the British Textile Confederation proposing specific action on imports of cotton yarn.
We are considering that case, and I emphasise that that is not some handy bureaucratic catch-phrase designed merely to bury the issue. We are considering it with great urgency, and, in the spirit of open Government I should like to share our thoughts on the matter with the House.
In reaching their decision, the Government have a number of courses of action open to them. The hon. Member for Rochdale accused Turkey of dumping cotton yarn in the United Kingdom 590 market. Should the Government therefore impose an anti-dumping duty? We have received both from hon. Members and direct from the industry evidence of the low prices of Turkish yarn. This evidence is valuable. But it does not of itself set out a simple and straightforward case for anti-dumping action.
United Kingdom legislation, which is based on the principles of the GATT, requires us to go into the detail in order to establish fair market prices in Turkey and Greece and to satisfy ourselves that the dumping is causing or threatening material injury to the United Kingdom industry. We can establish a fair market price by reference to the domestic prices in those markets, to the costs of production or to the export prices to third countries. Here again, I regret that the hon. Member for Rochdale saw fit to attack civil servants who are obliged to interpret the international rules and, in my belief, have done so in a proper spirit. Cheap textiles are not the same as dumped textiles, and the hon. Member for Rochdale is being too cavalier in merely quoting low-cost textiles and assuming that there is an anti-dumping case.
As hon. Members and the industry know, it is not easy to establish a case for anti-dumping action. But this is being pursued with vigour, and I know that we shall receive as much information as is available. Once we have this information, we shall decide whether it is sufficient to warrant immediate antidumping action.
An alternative is the imposition of quotas on imports of Greek and Turkish yarn. This alternative has to be considered against the background of the Mediterranean Associate Agreements to which we are a party through membership of the EEC. The fact that safeguard clauses under these agreements have not been used before creates its own problems. Nevertheless, I assure the House that the imposition of quotas on imports of Greek and Turkish yarn remains a valid alternative course of action open to the Government.
As the House knows, we are committed to seeking a derogation—I have already mentioned this matter—from the Common Liberalisation List for imports of cotton yarn from presently controlled sources for 1975. As the industry knows, 591 the original intention was to set quota levels for 1975 at 150 per cent. of the 1973 levels. I stress 1973 levels, because some have mistakenly thought that the basis was for 1974. In this instance, too, we must consider the possibilities for lower growth than the original 150 per cent. proposal envisaged. But I must emphasise that the GATT multi-fibre arrangement that governs international trade in textiles requires some measure of growth for all parties.
We are urgently reviewing the courses of action open to us. The question whether we restrict imports may seem simple, but its simplicity hides a number of underlying conflicts that the Government have to try to reconcile in reaching their conclusion.
I shoud like to spell out some of them. In the spinning sector of the industry we are talking about a total employment of 34,000 persons—that is what the debate is wholly about—who, by the of September, had produced 124,000 tonnes of yarn. Of that, almost half—60,000 tonnes—was cotton yarn. In crude terms, therefore, we are talking about 17,000 jobs. Not all of these are at risk because a major proportion are in the vertical groups in the industry.
Leaving United Kingdom exports out of consideration, at the end of September the industry's share of domestic consumption was 70 per cent. That is on the spinning side. It is against that background that we should note that imports from Greece and Turkey at 4,700 tonnes amounted to only 6 per cent. of domestic consumption. However, having put that into some perspective, I should equally insist that I am not complacent about what is at stake.
Of the numbers employed I know that 2,500 are taking a significant cut in their wages through short-time working and lost overtime. Several of my hon. Friends have forcibly remarked on that fact. I am aware of the concern in the industry that short-time working will lead to further mill closures, some of which will be permanent. I am also aware of the lost production in the industry resulting from these lay offs and of the damaging effect of the atmosphere of confidence which is needed for new investment.
In assessing the rôle of imports, it is difficult for the Government to isolate it 592 from other factors affecting production, employment and investment, particularly the downturn in the textile cycle in the United Kingdom and Europe, which is getting under way, lost export markets and the specific difficulties of our economic position. Firms cannot now afford to produce for stock on the levels that they have done during past downturns of the textile cycle. In addition, other production methods and the continuing impact of synthetic and artificial fibres have reduced the total market for cotton yarn. I believe that we must take account of this competition between fibres and between different methods of production as a proper stimulus to the creation of a prosperous and internationally competitive textile industry.
The Government must also take account of the interests of consumers, particularly at a time of high inflation. Consumers wish to buy good quality textiles as cheaply as possible. I think that it is undeniable that British consumers are better dressed at cheaper prices than consumers in any other industrialised country. This must be due partly to allowing the world's textile manufacturers access to our market.
It is also a fact of life—I lay considerable emphasis on this—that developing countries will continue to turn as the first step in their industrialisation programme to the production of textiles, and as the first stage in textiles to the spinning of cotton yarn. That is why this particular sector of the industry is so vulnerable. We must also remember that in Lancashire today there is healthy competition between the textile industry and other industries for the skills of the working man and woman. The unemployment rate in the Lancashire textile belt at 2.2 per cent. is below the national average of 2.7 per cent.
§ Mr. Meacher
That is a perfectly fair point, and clearly the comparisons need to be adjusted to take account of it. I hope that my hon. Friend will accept my 593 promise on this. We cannot argue that in the Lancashire textile belt there is an over-high rate of unemployment, as there is in other parts of the country, but I do not take that as a reason for complacency.
I turn now to our longer-term policy for textiles. In the longer term the industry's route to success must surely be through investment—high investment, high productivity and high real wages. It is here that the Government are entitled to ask the industry: "What have you done in the past years to take advantage of the protection you have had?"
In this respect I am impressed by the role of the textile trades unions. The Lancashire industry has a record of labour relations which is by any standard excellent. The unions' attitude to modern machinery and shift working has been entirely co-operative—they are all for it. Indeed, they have been criticised by their union colleagues in Europe for their willingness to agree to night-shift working. But most importantly, they will agree to shift working only where the machinery in the mill in question is sufficiently modern. I applaud this because we must have more investment in new machinery.
There are many mills, both in the big groups and amongst the independents, who have followed a policy of high investment. But at the same time there seems to me at present to be too many spindles—more than half a million out of a total of 2½ million—working on a single shift. Even a few old-fashioned inefficient firms are too many in an industry where weak sellers have disproportionate effects on the price in the market place to the detriment of efficient firms in the industry.
Competition within the United Kingdom market has resulted in a slimmer, more modern, more competitive industry and imports have played a major rôle in driving out the inefficient firms, the weak sellers. Imports have proved a constant spur to the search for efficiency. But I accept that there is a limit to this role where they become disruptive, even to efficient producers.
I repeat the Government want to see a prosperous internationally competitive textile industry. They do not see per- 594 manent quota protection as the way of achieving this objective. The industry should see protection as a means of present security to enable necessary investment to be made for the future.
I do not need to catalogue the facilities available under existing Government policies to assist investment by industry In my Department's constant and continuing discussions with the industry we will discuss how we can ensure that sufficient investment is made. If these discussions identify inadequacies in present Government policies, then I will certainly consider what further policies we might need to promote the necessary investment that we must have in the textile industry.
I would inform the hon. Member for Rochdale that I intend to continue the liberalisation for woven cotton fabric set out in the Mediterranean Associate Agreements with the EEC. There is no threat of disruption of these products on the horizon. In the period January to September 1974 we imported 223 tonnes from all the Mediterranean associates. This is considerably below the quota provision made for them and it compares with total imports of woven cotton fabric from all sources of 58,235 tonnes in the same period. However, if this situation changes and there is disruption or a threat of disruption, we shall certainly take the necessary safeguarding action.
In answer to the hon. and learned Member for Darwen, I understand that the position with regard to our imports from Taiwan is that we imported only 4.5 tonnes of cotton yarn in 1973 and 9 metric tonnes up to 31st August this year. All cotton polyester-cotton yarns, woven cotton and woven polyester-cotton cloth from Taiwan, are under the control of quotas.
§ Mr. Fletcher-Cooke
I follow the hon. Gentleman's statistic about the cotton yarn, but contrary to what he said the debate is about the Lancashire textile industry generally. I know that I have given him no notice of my intention to raise this matter, but could he not say something about the quota of cloth and of made-up garments from Taiwan? That is what is worrying my constituents.
§ Mr. Meacher
As the hon. and learned Gentleman says, he has given me no notice of this, and I would not wish to 595 give an incorrect answer. But I will certainly write to him on the point.
I have listened to a valuable debate with great care. Hon. Members will understand that I cannot anticipate the Government's decision, but I hope that anyone who may be importing yarn in 596 excessive quantities at low prices will recognise that there is no assurance that the present terms of entry to this market will continue.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-seven minutes past Ten o'clock.