§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Pavitt.]
Before I call the Secretary of State for Industry, I want to tell the House that in the last debate when we had about the same amount of time available, because that debate, in March, went on till midnight, 26 back benchers spoke in 205 minutes. That is an average of about eight minutes each. I have the names of 30 back benchers who want to speak today, so really short speeches are the answer. I propose to be influenced in my selection by the facts whether hon. Members did not catch my eye in the last debate or whether they spoke for a very short time.
§ 7.11 p.m.
§ The Secretary of State for Industry (Mr. Eric Varley)
I know that tonight we shall hear strong expressions of concern for the textile industry. The number of hon. Members who have indicated that they want to catch your eye, Mr. Speaker, bears that out. I also know that hon. Members who take part in the debate will be voicing their acute worries about the present difficulties of the textile industry and expressing the concern of their constituents.
The objective of the Government's textile policy continues to be a prosperous, internationally competitive industry without permanent special protection, but one which has effective safeguards against import disruption which jeopardises that objective, and one where there is equalisation of the competitive conditions faced by the United Kingdom industry and the 589 textile industries of other developed countries.
That is our policy objective. What we cannot do, and what we should not do, is to stop the process of change in the industry. The industry—unions and management alike—has recognised the need for change. In fact, the Textile Council's 1969 Productivity and Efficiency Study on the Lancashire spinning and weaving industry and the 1969 Atkins Report on the Yorkshire wool textile industry both recognised the inevitability of change and postulated smaller, streamlined industries for the future. Only in this way could viable producers, and more secure and better-paid jobs, be maintained. Both these studies recognised the facts that there were—and still are—too many weak units operating in many sectors of the industry.
The post-war history of the textile industry is one of continuing decline in the production of cotton and, to a lesser extent, wool textiles. This was bound to be. We could not expect to remain the textile factory of the world. But the change in the industry is not always downwards and the decline in these traditional sectors, taken over a long period, has not been accompanied by long-term—I stress "long-term"—widespread unemployment. The same period has seen a substantial development in the use of man-made fibres—in both the cotton and wool sectors—and expansion of knitting. Between 1966 and 1975 deliveries of man-made fibre staple more than doubled. This competition between fibres and between methods of production is a vital stimulus to the creation of a prosperous, internationally competitive industry.
Successive Governments, not least the present Government, have helped positively to encourage and assist this process of adaptation in the industry. The 1959 Cotton Industry Act provided £30 million of public money to reduce capacity and encourage firms to re-equip. The sum of £15 million is being made available to the wool textile industry for grants towards re-equipment and rebuilding. The scheme includes, with the full support of the unions, assistance for closing uneconomic mills and firms. Now, up to £20 million of public money is being provided to raise productivity in the clothing industry, through help for modernisation 590 and re-equipment. The industry also has its own investment. In this connection, there is the undoubted success story of the transformation that took place in Lancashire. With Government assistance—principally in the form of interest relief grants—over £80 million has been invested in that sector in recent years, and more investment is being made.
The Government have helped financially, and continue to help, in the process of change. But hon. Members have made the point, the force of which I fully recognise, that the intent of this financial support could be frustrated and all this could be money down the drain if other measures are not taken. Other measures have been taken. Governments have helped, and this Government continue to help, to regulate the pace of that change to what is socially and economically acceptable.
The need to give industry time to adjust has long been recognised. For some 15 years now there has been progressive modification of the traditional United Kingdom approach of protection solely through tariffs but with duty-free access for Commonwealth countries. Tariff protection against Commonwealth countries was introduced on 1st January 1972. For several years up to that date—in addition to tariff protection against non-Commonwealth suppliers—there had already been quota protection against cotton yarn, woven cotton cloth and woven cotton made-ups from the developing countries.
There was—and is—protection against virtually all textiles and made-ups from Japan and the Eastern bloc. In 1972 quota protection was extended to cover polyester-cotton woven cloth and made-ups from the principal Asian suppliers. Here I would add that the industry itself asked for restraints on polyester-cottons for three years only. That was the time it judged it would need to become fully viable and competitive in this newly-developed sector of the industry.
The GATT Multifibre Arrangement, in the drafting and negotiation of which the United Kingdom took a leading part, was concluded in 1973. This was a major advance in two respects. First, it allowed restraints against actual or threatened disruption to be applied against products of all fibres—not only cotton textiles 591 and clothing as before. Secondly, it considerably tightened the rules, which the United Kingdom on the whole had always observed, against unjustifiable restrictions.
One of our policy objectives was to equalise competitive conditions for textiles in the principal industrial countries. Because of our traditional commitments to the Commonwealth and our recognition—in our own political, strategic and economic self-interest—of our responsibilities to the developing world, the United Kingdom has found itself with a higher level of import penetration, especially in the case of low-cost cotton textiles, than other industrial countries.
The Government fully accept that the burden must be spread more evenly. Hon. Members will recognise that we cannot make foreigners import more textiles. The burden can be redistributed only by international agreement. This is why the Government, with the full support of the British Textile Confederation and the TUC, which describe it as one of the cornerstones of our textile policy, support so strongly the GATT Multifibre Arrangement, under which unjustifiable restrictions in the more protectionist countries have been removed.
Following the conclusion of the Multi-fibre Arrangement, the United Kingdom was successful in the autumn of 1974 in negotiating a burden-sharing formula with the Community. Our last act in 1974 was in respect of Greek and Turkish cotton yarn. The House will recall the very strong pressures for that action to be taken against the rapidly rising imports of yarn from Greece and Turkey. Hon. Members will also recall the industry's, and their, claims about the jobs that would be lost if we did not move against those imports.
Our policy is to encourage and assist adaptation to change, and to regulate the pace of that change to what is socially and economically acceptable. We want a coherent and balanced policy which recognises the industry's needs and at the same time takes account of the constraints of wider national interests and international obligations. The present situation and the measures we have taken must be judged against that underlying policy.
I do not want in any way to understate the present difficulties in the textile industry. It is in the grip of a major down- 592 turn in the textile cycle. Unlike previous downturns, this downturn has been experienced worldwide. My Department and I know of no country which is an exception to this. Demand opportunities for the textile industry have been savagely reduced. The collapse in demand for textiles and textile products is worldwide.
The problems of foreign textile industries are at least as bad as our own and in many cases are markedly worse. Early this year we had about 54,000 textile and clothing workers wholly or partly unemployed. That represents about 7 per cent. of the work force. In Germany, for example, 125,000 textile and clothing workers were out of work, which represents about 18 per cent. of the work force. In the United States there were 303,000 workers out of work, representing about 13 per cent. of the work force.
The United Kingdom is not alone in facing a high level of imports. For instance, our fair share of EEC clothing and textile imports would be approximately 23 ½ per cent. In 1973, the latest year for which we have comparable figures, we took 28 per cent. Germany also took more than her fair share, with 30 per cent. against 28 per cent. so did Benelux with 15 per cent. against 10½ per cent., and Denmark with 6 per cent. against 3 per cent. Only Italy and France took substantially less.
§ Mr. Cyril Smith (Rochdale)
I accept the Minister's figures. Is he aware that the figures he is quoting for 1973 are hardly comparable with those for 1975? If he accepts the trade suggestion to regulate imports according to the state of trade, the figures for 1973 would be acceptable. But those same figures would not be acceptable for 1975.
§ Mr. Varley
The only comparable figures we have are the 1973 figures. If the hon. Gentleman has more up-to-date figures we shall be pleased to receive them. I do not underestimate the difficulties. We have shown that this situation is not peculiar to this country. It is worldwide. There is a worldwide recession.
Since 1973 other Community countries have almost certainly increased their shares, and ours has probably fallen. Even so, with the exception of Australia, I know of no substance in the claims 593 which are often advanced that in the present textile recession other countries have taken steps to reduce imports specifically of textiles where we have not. On the contrary, the MFA rule that existing import levels may not be cut back has been generally honoured. Other countries have not cut imports.
Some hon. Members continue to urge that we should cut imports. They dismiss the possibility of retaliation by other countries. When I made that statement on 23rd July one of my hon. Friends said "Try it". We cannot know the consequences of cutting imports unless we cut them. But is it likely that retaliation will take place? Other countries would do something about it, as Turkey has acted against our chemicals, plastics and engineering goods. They would ensure that their home demands were met by their home production. Our exports of textiles and clothing, which in 1974 amounted to over £1,100 million, would be up against far greater problems than those caused by the present low demand overseas. Significantly much of the drop in our textiles deliveries this year has been caused by the fall in exports, and entirely so in the case of continuous yarn. The retaliation would not be confined to textiles. Other British industries would be affected, jobs in those industries would be endangered and some jobs might disappear.
We could cut back imports only by breaking our international obligations. The MFA proscribes this and only allows growth to be contained. If we break the MFA we shall seriously weaken and possibly destroy the set of international rules which the Government and the industry agree are basic to our textile policy.
Similarly, the General Agreement on Tariffs and Trade would allow cutbacks only if imports were still rising—which overall is not the case. Behind these rules lie the lessons of the 1930s when each country tried to build protectionist walls around its own prosperity and employment, and learned, at the price of the worst slump in history, that this was an illusion. We should learn some lessons from history.
I make one further point about import cuts. Some sectors of the textile industry are to an extent dependent on imported textiles. As a result of the pattern of import trade which has evolved over the 594 years there are, for instance, weavers and knitters who cannot obtain the type of yarn they need from British suppliers. It is well worth remembering that not all users of yarn were wholehearted in their support of import restraints against Greek and Turkish cotton yarn.
When I made my statement a fortnight ago the hon. Member for Mid-Ulster (Mr. Dunlop) said that there was a firm in his constituency whose life was dependent on cotton grey cloth from China and that 400 jobs were in jeopardy because of the paucity of the import licences granted for this material. The traffic is not always one way. An across-the-board cut in textile imports would cause supply problems for firms who work on imported materials and could have serious effects on the employment they provide.
Instead the Government have announced a substantial range of other aids within our overall policy of encouraging change in the industry and protective measures to regulate the pace of that change. In my statement on 23rd July I outlined a package of measures to assist the industries.
§ Mr. David Steel (Roxburgh, Selkirk and Peebles)
I understand the Minister's reasoning about the difficulties of import controls. Will he explain why the Government are not willing to accept the modest proposals of the wool textile industry, for example, on the labelling of goods sold in this country, especially in view of the Secretary of State for Trade's homily on buying British cars? Customers in the United Kingdom cannot tell whether they are buying British or foreign clothing as we do not stipulate the labelling of the country of origin.
§ Mr. Varley
I know that my hon. Friend intends to deal with that point. I am pleased that the hon. Gentleman could not fully agree with across-the-board import cuts. I think that I interpreted his remarks correctly. I know of his support for the developing nations. We realise that across-the-board cuts in textiles to the extent advocated in some quarters would damage the economies of the developing countries.
§ Dr. Keith Hampson (Ripon)
If that is so, why does the Department put restrictions on the imports of made-up clothing from the COMECON countries 595 but does not place restrictions on wool-predominant clothing from those countries? It is said that there is a need for restrictions, yet those countries are taking advantage of a loophole and swamping the United Kingdom with made-up clothing, including cheap suits, thereby undermining our wool-predominant market.
§ Mr. Varley
Historical obligations must be kept. My hon. Friend the Under-Secretary of State for Trade is prepared to deal with those matters in debate. We cannot take unilateral action on historical obligations without breaking the arrangements.
I was dealing with the package of measures to assist the industry which I announced in my statement of 23rd July. I announced the Government's decision to provide up to £20 million, under Section 8 of the Industry Act, to the clothing industry. If efficiency and productivity can be improved in this sector the whole textile industry would benefit. The Yorkshire woollen trade, for instance, has been losing markets because of the import of men's suits coming, in many cases, not from low-wage countries but from Scandinavia and Germany. There is certainly scope for recapturing this market.
Already we know of companies which are confident of taking advantage of the new scheme. It has been welcomed by the Chairman of the Clothing EDC as "strong and sensible action by the Government". The EDC is playing a major part in developing the scheme.
Within the limits on overall Government expenditure, the Industry Act is similarly available to help in other sectors. Whether there is scope—and the terms—will depend on the circumstances and will need careful working out with the industry's representatives. We shall be looking further into that in the weeks ahead. We are, for example, already in discussion with unions and management in the footwear industry about an industry scheme. The problems of footwear are in many ways similar to those of textiles. Again, I hope to be able to make a statement about the possibility of an industry scheme for footwear in the weeks ahead. Until the discussions are further advanced it is not possible for me to say what that assistance will be. 596 The British Textile Confederation has recently described the regulations restricting imports from Taiwan and the agreement with Hong Kong as more comprehensive in coverage than it dared to hope earlier this year. It has said that the agreement with Hong Kong appears to be as favourable from the British point of view as it could have expected.
I understand that the industry is concerned about imports from South Korea. The EEC negotiations with South Korea are now in their third session. With the agreement of the Community, we have asked for Article 3 of the MFA to be invoked. This will enable safeguard measures to be taken against sensitive imports from South Korea if the present session of negotiations fails to result in an agreement in the very near future. The coverage sought will be similar to that for Hong Kong and Taiwan.
§ Mr. Adam Butler (Bosworth)
What time limit is the right hon. Gentleman putting on these negotiations with Korea before implementing Article 3?
§ Mr. Varley
The discussions are taking place now and we hope that they will be concluded quickly. We hope they will be concluded satisfactorily but, if they are not, we shall have to take the action which we know the EEC can take in accordance with the Multi-fibre Arrangement.
On 23rd July I announced the extension of surveillance licensing to cover all clothing and made-up textile items and I said that we were considering extension to footwear. If surveillance points to new threats of disruption, we shall not hesitate to invoke the safeguards of the Multi-fibre Arrangement.
I also made plain on 23rd July our intention that the ceilings on duty-free imports from Portugal will be properly applied. In addition, I mentioned the anti-dumping powers on which my hon. Friend the Under-Secretary of State will have something to say when he winds up the debate.
I announced that Government Departments were being asked to ensure as far as possible that they get their requirements of textiles, clothing and footwear from British manufacturers and that the British manufacturers use British materials. I looked to other purchasers in the public sector to be guided by the 597 the same principle. I should like here to acknowledge the strong action taken by my right hon. Friend the Secretary of State for Social Services in issuing instructions in this sense to the regional health authorities. Again, on 23rd July I was able to say that we have under consideration preshipment finance which the industry in Scotland in particular is pressing for.
I want to recall the specific proposals for action which the British Textile Confederation and the TUC's Textile and Footwear Committee have put to the Government since the Prime Minister's statement on 23rd May. They met my right hon. Friend the Chancellor of the Duchy of Lancaster and put specific matters to him. We were asked to support a clothing scheme. We are supporting a clothing scheme to the tune of £20 million. We were asked to extend surveillance licensing to clothing and made-ups. We are introducing this on 1st September. We were asked to apply the ceilings on duty-free imports from Portugal. We have already acted on two groups of products. We were asked to urge the conclusion of restraint arrangements under the MFA. We have done this, and a number of agreements have been concluded.
We were asked to anticipate restraints on sensitive imports if negotiations dragged on unduly. As I have already told the House, we have already started this process and discussions are taking place with South Korea. We were asked to affirm our readiness to act against any new threats of disruptive imports. We are so ready to act. We were asked to ensure that Government purchasing was from British manufacturers. We have taken steps to that end. We were asked to extend surveillance licensing to footwear, and we are considering that request. We were also asked to extend preshipment finance to the textile industries. Again, this is under urgent consideration. The Government are taking steps on virtually all the specific proposals put to them after the statement of 23rd May.
§ Mr. Nicholas Winterton (Macclesfield)
Will the right hon. Gentleman tell the House what results have been produced from the import surveillance?
§ Mr. Varley
My hon. Friend the Under-Secretary of State will deal with 598 that when he winds up the debate. I have indicated that, although we have not gone all the way with requests for an across-the-board cut in imports, since 23 rd May we have gone virtually all the way with the representations made to us by the industry.
We fully acknowledge and understand the industry's difficulties and its great concern. We do not underestimate that. We know exactly the situation and appreciate the concern that is being expressed in the textile and footwear industries. Fundamentally, those industries are suffering, like many others, from the world recession, which the Government cannot by themselves cure. The immediate need is to shelter those who earn their living in the industry from the worst effects, which, whatever their immediate popularity, would aggravate the recession and so defeat the purposes of the Government and of the industry.
There is no disagreement between the Government and the great majority of the industry's leaders about our objectives and strategy. The Government have confidence in the industry's future and we want to support the industry. I believe strongly that the industry does needless damage to its own confidence by talking down the Government's ability to help the industry to strengthen its competitiveness and so provide secure and well-paid jobs. The Government have repeatedly demonstrated their will and ability to do both, and they will continue to do so.
§ 7.39 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
As a locum tenens at this Box, I shall be very brief if only because if I take long I shall be publicly rebuked by my hon. Friend the Member for Macclesfield (Mr. Winterton). I also feel that words on this subject have been spilt in this Chamber and elsewhere over and over again and that we want now fewer words and more deeds. I do not complain that the Government have provided so much time for discussion of this important topic during this Session. In that respect they have done the textile industry proud.
We welcome the new Secretary of State for Industry to these debates. If he looks after the textile workers as well as he has looked after the miners we shall do very well indeed. However, something tells me from the tone of his speech that the Secretary of State for Trade will not allow 599 him to do so. We shall be watching the right hon. Gentleman to the extent to which he shows himself to be independent of the Secretary of State for Trade in these maters.
But what has happened to the Chancellor of the Duchy of Lancaster? Many right hon. and hon. Members will recollect that in the Prime Minister's statement in May it was said that the Chancellor was to undertake overall control of this important operation concerning textiles. It was said that the matter was to be spread over more than one Government Department and that it was important that the operation should be coordinated. The Chancellor of the Duchy was the selected and chosen instrument. However, from that day to this we have not seen or heard of the right hon. Gentleman. There has not been a single word uttered about his duties. Was that announcement merely made to overcome a temporary local difficulty, in that it was made before the referendum? Where is the Chancellor? Is he still involved in this matter?
The Secretary of State did not emphasise the immediate crisis that the textile and allied industries is undergoing. Short-time working is getting worse. Mills are closing, but that was not emphasised by the right hon. Gentleman. I shall ask the right hon. Gentleman about short-time working because I regard underemployment as almost more serious than unemployment. In March the British Textile Confederation calculated that 150,000 men and women were on short time in the textile industry, whereas Her Majesty's Government's figure was 20,000. That is an enormous difference, but that may be because the figures are kept on a totally different basis, the Government's figures not including those who are on long unpaid holidays. That is my information, but I would like the right hon Gentleman to explain why the figures are so different and whether the real figure can be regarded as 150,000.
Secondly, as regards under-employment the Secretary of State did not mention any relationship between the textile industry and the announcement yesterday by the Secretary of State for Employment about his new employment premium. I have my own views about that creation, but we want to know whether it is con- 600 templated by the Government that it will be used in the textile industry.
The penetration of the home market is still a central issue in these debates. I am afraid that nothing that the Government have done or the Secretary of State has said has done more than to have a fringe effect. The Secretary of State repeated what so many of his predecessors have said—namely, attributing the trouble to the fall or collapse in world demand. That is by no means a sufficient explanation. According to all the reports, demand at home is unexpectedly good. What has happened is not that demand in the United Kingdom has failed but that demand has failed elsewhere. The foreign manufacturers who used to satisfy demand elsewhere are now satisfying demand in the United Kingdom. Therefore, it is deceptive to blame present conditions on the collapse of demand.
The Secretary of State has taken great credit for what must be described as the Varley package—namely his announcement last week, or the week before, of four or five measures. Like the Prime Minister's measures in May, they were directed to the wrong difficulty. The Prime Minister said that a great deal of public money was to be made available for modernising the industry, but everyone knows that on the whole the industry is pretty modern already. In the Varley package we have £20 million devoted to the clothing industry, but dishing out public money is not really what the textile industry wants. It is something that my colleagues and I think is entirely wrong in the present circumstances of public expenditure, even though it may assist some of our constituents. To dish out public money in such a manner means either borrowing, printing or taxing. As it is not essential to take such a course, I do not think it is right to do so.
It is said that by giving the clothing industry £20 million we shall help the textile industry in its present troubles. I beg leave to doubt that approach. On 31st July a distinguished expert in these matters, Mrs. Dorothy Slack, of the Department of Management Sciences at the University of Manchester, pointed out with considerable force that it would be a very long time before any of the £20 million had an effect on the textile industry, by which we mean spinning, doubling, weaving, finishing, dyeing and 601 all the other processes. That applies to man-made fibres as well as to cotton or wool.
Mrs. Slack explained that the problems of the United Kingdom cotton and allied textile industries are of a different nature socially, and not only technologically, from the clothing industry. She believes that the textile industry needs immediate and direct help if more closures and unemployment are not to come this winter, whereas the only effect of pouring this money into the clothing industry is at best medium and probably long-term. The social consequences of contraction in the textile industry are clearly serious and cause great domestic upset. It appears that in clothing the transition to other jobs is easier.
Labour turnover is high, and the basic problem in many sections of the clothing industry is a shortage of labour. It seems that the wrong instrument is being applied at the wrong time and in the wrong place to cope with the crisis that the textile industry faces between now and December. I hope that the Secretary of State will appreciate that although people are always grateful for £20 million, it seems to be extremely misplaced and misdirected if the object of the exercise is to save a couple more mills going out next week, which may well happen, given the great spread of under-employment and unemployment in the textile industry.
On the subject of dumping and retaliation, the Government—perhaps for the first time—face a real life anti-dumping application. We are always being told that nobody will bother to make these applications or that they do not take advantage of a Government which stands ready to assist. However, the Government are now faced with an application against not an Asiatic, African or Caribbean source, but against Italy. This relates to the Prato wool concern in relation to which there is no observable relationship between price and cost and which is opportunistic in its pricing. Prato has quoted prices which are impossibly low—and indeed much lower than the cost of production. This is an application from an EEC associate.
§ The Under-Secretary of State for Trade (Mr. Eric Deakins)
The hon. and learned Gentleman mentioned a number of factors and suggested that there is 602 dumping, but although his remarks may indicate unfair competition or subsidised competition, they do not indicate dumping.
§ Mr. Fletcher-Cooke
Then it is time they did, and it is time that the dumping regulations were altered. I am drawing attention to the fact that a fellow member of the EEC is able to set a price that is grossly opportunistic in character, with no observable relationship between price and cost. So much the worse for dumping regulations, and it is time they were changed. It is time that the initiative was taken not merely unilaterally by the industry concerned but by Her Majesty's Government in Brussels against a fellow EEC member. There should be much better machinery to deal with this situation. I am disturbed that this rare dumping application faces rejection on the ground that it does not qualify.
On the matter of retaliation, the Secretary of State mentioned Turkey. It is natural that countries will retaliate if they are singled out. The trouble with that example was that Turkey and Greece were singled out for special treatment. I am not saying that it was wrong but that it was invidious to the countries concerned. The more general form of protection does not involve invidious treatment. It is by no means proved that, if there is no retaliation against an individual country and if the displeasure is spread more widely, there will be retaliation. Australia banned some clothing imports over a wide area of origin. Other considerations are also involved. In many cases countries have imposed temporary bans or reductions to avoid the problems which we now face. I am told that the Australians have not suffered retaliation.
§ Mr. Edward Lyons (Bradford, West)
Does the hon. and learned Gentleman agree that the 10 per cent. import surcharge which was imposed a few years ago provoked some retaliation? One engineering firm in my constituency suffered retaliation in Sweden from the Volvo company which amounted to a loss of £100,000 in orders while the import surcharge remained in force.
§ Mr. Fletcher-Cooke
No doubt that was the case. However, that surcharge was imposed not to help an individual industry but to apply across the board. 603 Such a course would be much more objectionable. It may be possible to pray in aid the usual escape clauses, but in that case the surcharge was imposed in a clumsy illegal manner.
I would not regard the present problems as insuperable. I agree that there is a danger of retaliation, but I do not believe that it is as great as the danger of doing nothing. The danger of doing nothing at present will result in the end of the textile industry. Therefore, I suggest that the argument of retaliation is not sufficient when considering whether one should take some action or no action.
Burden sharing is a good concept and many of us have great hopes on that score, but we fear that it applies only to the element of our imports which is on the increase. In other words, it applies only to the situation where there will be a greater percentage of imports in the future, even though they may be regulated and even though the United Kingdom will not take many more imports. The increased burden will need to be shared, but this is a complicated matter and the existing degree of imports may not be affected.
It is difficult to say these things to one's constituents. The concept of burden-sharing should apply across the board to all imports whether they are increasing or existing. We must work to that end. I hope that the Minister in reply will say something about burden-sharing. I gather that Europe is to take in a number of Taiwanese imports, and I know that we have had similar imports in earlier years. If I am wrong on that point, I know that I shall be corrected. I hope that we will shall be given more information on the provisions which are before us and I hope that we shall be given a little more information on the EEC documents.
We welcome the debate and we always listen to the Secretary of State for Industry with pleasure. However, on the question of textiles he has not so far given us very much joy. The "Varley package" is similar to an egg, parts of which are good and other parts not much good at all. We look forward to what is to come later.
§ Mr. Deputy Speaker
Mr. Speaker has already made an appeal for brevity in 604 speeches. I should like to reinforce that appeal by pointing out that 30 hon. Members wish to take part in this important debate. There now remain 180 minutes before we reach the Front Bench speeches. A simple calculation shows that hon. Members will need to deliver their comments in six minutes to enable all to take part. My experience in the Chair leads me to believe that if an hon. Member wishes to do so, he can make his comments within a speech lasting only six minutes.
§ 8.0 p.m.
§ Mr. James Lamond (Oldham, East)
My right hon. Friend the Secretary of State for Industry has indicated tonight his appreciation of the difficulties facing the textile and footwear industries. It is a pleasure to welcome him here tonight, and I am sure that he will listen closely to what is said about the industries concerned.
He said that the difficulties in the textile industry are due to a world recession, and that is absolutely correct. But that is only one factor causing the present depression. There is also the cyclic depression which there has always been in the textile industry, and which is superimposed on top of the world recession. There has been considerable destocking by big clothing retailers and others which has affected the output required from the mills. There are, therefore, three elements, all of which have depressed the industry.
It is rather difficult to define the textile industry, but, taking the figures from the British Textile Confederation brief, one sees that there has been a drop of 47,000 employees in the textile and clothing industry in the 10 months between July 1974 and May 1975, equivalent to over 5 per cent. of the total number of employees in the industry. Many of these employees will never return to the textile industry, so that, even if there is an upturn in trade, there will be difficulty in recruiting employees to take advantage of it.
Textiles play an important part in the economy of the North-West of England. The North-West Region's share of the country's population in 1973 was 12.1 per cent., but the region's share of all unemployed workers in June was 16 per cent., so that already in the North-West there is 605 an unfair share of Great Britain's unemployment.
It is against this background that we are fighting the textile recession. This is another factor which leads hon. Members from the North-West who speak here tonight to express their feelings rather strongly.
On 23rd July 1975 we had a statement from the Secretary of State in which he made seven points. He has defended that statement tonight in detail. He mentioned that many of the points were raised at the request of the British Textile Confederation. I accept that completely, but what he did not mention was that the British Textile Confederation was also pressing most strongly of all for import restrictions. I am sure that the confederation regard this as the most important element of the package that we are proposing, but that element was omitted from the package announced by the Secretary of State.
In listening to the Secretary of State one would have thought that the demands of the British Textile Confederation have been met almost in full, and that they would be very happy about what was announced. In its Newsletter No. 22 of 1st August 1975, after describing the package, the confederation goes on to say that, following the Secretary of State's announcement,the BTC issued a statement which welcomed the measures but regretted that they would clearly have little effect in the short-term on the problems of the industry in the present recession.This is an important point which has not been fully grasped by the Department of Industry. We are looking for a short-term remedy. The proposals that have been announced will no doubt be beneficial in the long term, but in regard to the immediate desperate short-term position facing the industry the package really contributed nothing.
I still strongly support import control. The industry, which has always been reasonable—it has more bodies combining trade unionists and employers than most—has come forward with alternatives. The industry has racked its brains. Many of the 800,000 employees are staunch Labour supporters and do not want to embarrass the Government if they can avoid it. They want to put 606 forward proposals which they think will be constructive and helpful.
I know that the Amalgamated Textile Workers' Union has written to the Minister proposing alternatives to import control because it realises the Minister's difficulties. I sympathise and can see the overall picture on the grand scale in which import controls can only be detrimental to this country's trade at the end of the day. I accept that, and so do the textile unions in the long term. They have suggested, among a number of points, the setting up immediately of a textile purchasing agency.
This is an idea which was mentioned in a pamphlet entitled, "Plan for Cotton", written by the Prime Minister in 1953 or 1954. I suggest that the Secretary of State should examine this idea very carefully. I believe that it is more of a long-term solution. There would be some delay in setting up the agency, and some delay before the effects of it were felt.
Turning again to import controls, I believe quite honestly that the situation in this country generally will force the Government to change their policy on this matter. There are increasing demands for it. We are hearing them, for example, from the motor car industry, which is very disturbed indeed by the imports from a number of countries, including Japan. These matters will force the Government, perhaps quite soon, to change their mind on imports. I believe that they will grasp the point that we have been making.
In order to save the textile industry we want short-term measures to be taken. There is perhaps not enough pressure on the Government to carry out what we ask, but the pressure is growing, and in order to save industry as a whole in this country it may be necessary in the very near future to introduce across-the-board import controls similar to that mentioned earlier—the 10 per cent.
Those interested in the textile industry will be increasing their pressure on the Secretary of State to make sure that something is done. If import controls are introduced to help any industry—the motor car industry or any other—we shall certainly seize the opportunity to widen the gap that will be opened by that move and to make sure that textiles are given a chance to survive. 607 If the Secretary of State does not act, or if the Government do not act, the textile industry of this country will disappear in the very near future.
§ Mr. Deputy Speaker (Sir Myer Galpern)
I am most grateful to the hon. Member for Oldham, East (Mr. Lamond) for taking only eight minutes. If that example is followed it should be possible to give every hon. Member who wishes to speak the opportunity to do so.
§ 8.9 p.m.
§ Mr. John Davies (Knutsford)
I shall seek to emulate the hon. Member for Oldham, East (Mr. Lamond) in the matter of brevity. I have several interests in the textile industry and the footwear industry but I shall address myself solely this evening to that part of the business which is concerned with the Community instruments.
They are two exceedingly interesting instruments, although each of them is small in its individual effect. They are interesting for the very reason put forward in the report of the Scrutiny Committee recommending that they should be the basis of a debate on textile matters within the Community. Incidentally, I might point out to the Secretary of State that we would not be happy to feel that this general debate counted as discharging the House from its obligation to discuss the textile industry within the framework of the Community, which is a quite separate and wider subject. I hope that that view will be conveyed to the Leader of the House.
The two instruments are very interesting in that one is obviously an extension of the right of import in what is a traditional area of textile manufacture in a certain number of exceedingly poor countries, whereas the other—the Taiwanese one—is clearly a restraint on imports into the Community framed within the broad understanding and intent of the MFA, though not linked specifically to it.
These two contrasting instruments illustrate the contradictory problems which have faced Governments for many years. They have an obligation, from a humane and moralistic point of view, to absorb part of the textile outputs of developing countries which may constitute its prime employers. For that reason, the developed 608 countries have sought to find means of giving access to textile imports. On the other hand, they face the contradictory aspect that they are themselves greatly concerned about the size and content of their textile industries. In our own country, it has enormous importance and great traditions. It is still a very big employer. So we live in this tightrope atmosphere in dealing with the industry.
If we look at the various steps taken by successive Governments, we see that they have varied or continued the concessions. They have moved from a period in which they allowed greater imports to a period of greater restraint. This has been the perpetual pattern.
The illustration afforded by the two instruments is well worth bearing in mind because, although what the hon. Member for Oldham, East said must be correct that there is a real serious short-term problem, there is as well a long-term one. We must realise that it is not only industrial nations like ourselves but the developing countries which rely on this industry. Therefore, we must keep a sense of proportion.
The Secretary of State reminded us that the Multi-Fibre Arrangement which came into force last year has provided a vehicle for good developments. The Community, as the negotiating element in external commercial agreements, has the task of putting into effect the broad framework of that agreement in specific cases. It has been very slow in getting at it. I do not say that critically of the Community. The people with whom it is dealing are not themselves anxious in many cases to see this brought into urgent and immediate effect.
If anything longer term should be done by the Government, it should be to press and press the Community to bring these agreements to fulfilment. We are content to see what has been achieved with Hong Kong. It is a real step in the right direction. But on these agreements, as they are contrived, hang the real burden-sharing possibilities to which this country can look forward.
In reconciling the two diverse interests of the developing countries and of our own industry, our country has been hit very hard. We have been the great facilitators of imports of textiles from the developing countries, from our former Colonies and from our Commonwealth 609 partners. But we must look for a greater sharing of the burden, and that purpose can be achieved provided that the Community presses forward as quickly as possible the concluding of the various agreements that it needs to make throughout the world as a result of the MFA.
Therefore, if there is one message that I should like to leave with the Secretary of State it is that he should leave no stone unturned to ensure that the Community presses forward and thereby allows him to negotiate to secure a reasonable apportionment of the load that we have to bear with our colleagues and neighbours in Europe.
§ Mr. Deputy Speaker
The right hon. Member for Knutsford (Mr. Davies) undercut the hon. Member for Oldham, East (Mr. Lamond) by one minute.
§ 8.16 p.m.
§ Sir Geoffrey de Freitas (Kettering)
I should have liked to take up many of the comments of the right hon. Member for Knutsford (Mr. Davies) in discussing the Commission documents. However, in the few minutes available to me, I wish to concentrate on footwear, which also features in the title of this debate. I have no doubt that my neighbour the hon. Member for Wellingborough (Mr. Fry) will wish to do the same.
According to official figures, in my constituency there are approximately 59,000 people in paid employment. The biggest single industry is steel, employing 13,000. The other 46,000 are spread over many industries and services. But the largest group of 8,000 are employed in the textile and footwear industries, 5,000 of them in the footwear industry.
The National Union of Footwear, Leather and Allied Trades and the British Footwear Manufacturers' Association point out frequently that in the country as a whole during the 12 months between 1st June last year and 1st June this year more than 7,000 workers left the industry. The official unemployment figure in the industry on 1st June was 2,500. But that is not all, because one-third of the workers are on short time.
Kettering is traditionally a footwear town. It is the home of some of the famous names in the industry. It is also the home of the Shoe and Allied Trades Research Association, which is the 610 Western centre and probably the world centre for footwear research.
Naturally, any decline in this industry is of great importance to the people of Kettering and to its Member of Parliament, and there is a serious falling away of demand in the home market for British footwear. What worries the industry especially is imports—whether dumped or at artificially low prices—from Czechoslovakia, Poland and Romania.
In recent years, these countries have been exporting men's footwear. Now they are increasing enormously their exports of women's and children's footwear, again at artificially low prices. In the first six months of this year, the position was so bad that those countries' exports of women's and children's footwear at these artificially low prices—a new venture for them—were greater than the whole of last year. I ask what the Government intend to do about this problem.
The workers and manufacturers in my constituency fear that the capacity lost in the recession will be lost permanently and that, when there is more purchasing power, we shall not have the capacity to supply it, with the result that it will be a power to purchase more and more imported footwear.
I emphasise that at all times the footwear industry, both employers and workers, is confident that it can meet fair competition, as it meets it from the Common Market countries. It meets it because it is a competitive industry. But it cannot meet it when the competition comes from footwear which is dumped or imported at artificially low prices, as happens today with footwear from Czechoslovakia, Poland and Romania. These imports are a menace to our standard of living and to the future of our industry. What are the Government going to do about imports at artificially low prices?
§ Mr. Deputy Speaker
I know the hon. Member for Rochdale (Mr. Smith) was present when I made my appeal for brevity.
§ 8.21 p.m.
§ Mr. Cyril Smith (Rochdale)
This is our third debate on the textile industry this Session. I compliment the Secretary of State on being here. As far as I can 611 remember, he is the first member of the Cabinet who has had the courtesy to attend one of these debates, but that is the only crumb of comfort I can offer him in my speech.
The two Government statements in recent months have been pathetic, useless and ineffective. Successive Governments have stood by while the textile industry has bled. We had expected better from this Government, but they have followed the pattern set by their predecessors. The textile industry is highly modernised, has an excellent record of industrial relations and plays a full part in helping the economy with its exports. With a total work force of 900,000, it is the third largest productive industry in the United Kingdom. We are demanding that it should have at least the same consideration as is afforded to other industries which receive massive hand-outs and help from the Government.
I could quote import statistics at length, but I want to respect the Chair's wishes about the length of speeches. The Secretary of State quoted the 1973 import figures from India, but what about the 1975 figures? India exports 4,590 million tons of textiles to West Germany, 3,836 million tons to France, 1,000 million tons to Italy, 1,687 million tons to Benelux, 136 million tons to Ireland and 866 million tons to Denmark. Yet the imports to the United Kingdom total an astonishing 22,825 million tons. There is nothing fair about this situation. There is no spread over the other countries in Europe. It is this sort of situation that is causing great concern in the trade.
I am in favour of assisting underdeveloped countries, though I have some reservations about assisting those that seem to be proceeding on Fascist lines, but this is Father Christmas gone mad. It is time the Government stopped playing the rôle of Father Christmas in this way.
The hon. Member for Oldham, East (Mr. Lamond) referred to a letter sent by the textile unions to the Prime Minister on 29th July. I regret very much that the unions only saw fit to send a copy to Labour Members, but I have been able to obtain a copy from another source.
§ Mr. James Lamond
I apologise to the hon. Member. I received copies of the 612 letter from the unions in my capacity as chairman of the all-party textile group.
§ Mr. Smith
I withdraw the point I was making, accept the explanation and apologise to some of my union friends who are listening to me.
In that letter, the unions suggested that a textile purchasing agency should be established. That might be a far better way of spending the £20 million which the Secretary of State is prepared to make available to the industry than the way now proposed, which may prove to be money down the drain. The help will be too late by the time the industry is able to take advantage of it. The unions' idea is worthy of investigation and support. I very much hope that the Minister will be able to comment on it when he replies. Hon. Members concerned with this problem have called before for import restrictions and controls, and I do so again.
As a Liberal, one of my basic beliefs is in the philosophy of free trade, but free trade can succeed only if everybody is playing to the same rules. It cannot succeed if some countries are playing to one set of rules and other countries play to another set. Many people believe that the Civil Service has played a major rôle in persuading the Government against import controls. To many of us the Civil Service is like jellied eels—wet, soggy and slippery. I ask the Government to have the courage of their convictions in this matter. If we are to have free trade, we want fair trade, but we are not getting that at the moment.
§ Mr. Richard Wainwright (Colne Valley)
As Liberals we have always been against monopolies, and that is what the Italian manufacturers would establish if they continued with their disruptive trading tactics.
§ Mr. Smith
My hon. Friend has made his point well.
In a Government statement on 23rd July reference was made to dumping. Those of us who have been concerned with the problem of textiles over many years did not know whether to laugh or cry.
In 1966 I led a deputation of Lancashire mayors to the President of the Board of Trade. [HON. MEMBERS: "Were you a Labour mayor?"] No. By 613 then I had resigned from the Labour Party, but it was a Labour President of the Board of Trade, the right hon. Member for Battersea, North (Mr. Jay). Ten years later we are still pleading for the same remedies. Dumping 10 years ago was a problem just as it is today. It is time Ministers at the Department of Industry gave the impression that they are on the side of the textile industry on the question of dumping instead of on the side of the Civil Service. Can we not get our embassies abroad to play a part in helping us to prove dumping? We always feel that it is impossible to meet the criteria required to prove dumping.
I ask the Government to restrict imports. I am prepared to stand by that statement, whatever some of my Liberal colleagues may feel about it. [Hon. Members: "You are the Whip."] That is the advantage of leading and not having to follow.
Secondly, the Government should give serious consideration to the establishment of a textile purchasing agency as suggested by the unions. These steps are urgent. In my constituency in the last 14 days one cotton mill closure has already been announced. My constituency has a higher percentage of employees in textiles than any other constituency. For my constituents, the plight of the textile industry is a very serious matter. In the last three or four hours I have heard of more mills being put on short time over the next few weeks.
If the Government fail to act this time they will be judged to have followed the pattern of all previous Governments. They will be judged to have produced words but no effective action. The textile workers of Lancashire will be entitled to believe that this Labour Government have ratted on them. They will believe, rightly, that this Labour Government have proved to be the same shower as every Government that have gone before in the handling of textiles.
§ 8.31 p.m.
§ Mr. Thomas Torney (Bradford, South)
I only hope that the impression that I and some of my hon. Friends seemed to create in securing this debate by our little argument a couple of weeks ago will be similarly effective upon my 614 right hon. Friend the Secretary of State when we make clear to him that we are not satisfied with his refusal to introduce import controls. I believe that to be the view of all hon. Members, regardless of party, who have textile interests in their constituencies.
I am concerned with woollen textiles and to some extent with man-made fibres. It is with those that Bradford, part of which I represent, is predominantly concerned. Our predominant interest in those spheres means that we are facing short-time working, massive redundancies and threats of mill closures.
Textiles are the largest industry, almost the only main industry, in Bradford and similar areas in the West Riding. This means that when we are faced with redundancy, short-time working or mill closures the workers are thrown on the scrap heap. There is very little alternative employment to which they can turn, except for the service industries. I was involved in distribution before I came to this House and I am qualified, therefore, to say that service industries are absolutely dependent on the basic industries in an area because they provide the workers with the money to spend in the shops. What hope is there, therefore, of textile workers gaining employment in the service industries?
Various sectors of the textile industry are highly interdependent. My hon. Friends who represent Leicester constituencies know only too well how their constituents are affected when Marks and Spencer does not buy some of their knitted made-up goods. But my constituents in Bradford are also affected because we supply much of the woollen and man-made fibre yarns which Leicester uses for the made-up goods.
This is a convenient point to state something which might not have been seen by all hon. Members last week. It was the announcement by Marks and Spencer, one of the most loyal purchasers of British goods for its chain stores, that it is to cut its purchasing by 10 per cent. Other stores, perhaps not so loyal, might well follow suit. When that 10 per cent. cut filters down to the factories which produce the made-up goods and further down to the producers of yarn in Bradford, there will be more unemployment.
My right hon. Friend the Secretary of State must tell the Cabinet that there 615 must be a reversal of policy on import controls.
§ Mr. Douglas Hurd (Mid-Oxon)
Will the hon. Gentleman and his colleagues accept that the situation is more complicated than he has described? There is, for example, one section of the textile industry—the blanket industry—which is concentrated partly in his area of Yorkshire and partly in my constituency. The people concerned in that industry are worried about the prospects of import restrictions for the reasons given by the Secretary of State. They fear that retaliation will affect the flourishing export trade in blankets.
§ Mr. Torney
We all know that there is fear of retaliation. I should like the Government to find out just how much retaliation we are likely to get. We are not willing to accept a bland blanket statement that retaliation stops us having import controls. We want the Government to look deeper into the matter, and especially into the prices of suits that are being imported from Romania, Hungary, Poland, Czechoslovakia and East Germany. If they are woollen they vary between £8 and £10 per suit, and if they are made of man-made fibre they vary between £6 and £9 per suit. These are not fair prices.
Our industries are efficient. They have recently been brought up to date under the recommendations of the Atkins Report. They make some of the finest textiles in the world. We welcome fair competition. We can compete with fair competition. There is a lot more that I should like to say, but with an eye on the clock I shall sit down. However, I ask the Minister to take this matter seriously because the jobs of our constituents depend upon it. We want the Minister to do something about controlling imports. Never mind what was said about blankets. We want some import controls.
§ Mr. Deputy Speaker
I express the gratitude of all hon. Members who wish to take part in the debate.
§ 8.37 p.m.
§ Mr. Robert Boscawen (Wells)
I add my support to the concern expressed by the right hon. Member for Kettering (Sir G. de Freitas) about the position of the 616 footwear manufacturing industry and its work force. As I represent the headquarters of a large footwear organisation in Street in my constituency, hon. Members can imagine how important this matter is not only to my constituents but to people in other areas in the Southwest where there are factories belonging to this organisation. There are also many other people whose livelihoods depend upon the prosperity of this main manufacture in these areas in which they live.
It is clear that there has been a signicant rise in imports in recent years taking an increased percentage of the home market. I want to question, however, whether the Minister believes that this is the major cause of the trouble in the footwear industry. Looking at imports as a percentage of the home market, it is perfectly true that they have risen significantly in the past few months, but not by a great amount—I understand that 5.3 per cent. is the total increase in terms of footwear of all types imported into the United Kingdom during the five months January to May this year. I do not disagree that where there is dumping effective action must be taken. I do not accept that the Government have done nearly enough against what is being regarded as dumping by the industry from the COMECON countries. The agreement that they have achieved for a reduction of exports to this country from those countries of between 5 and 10 per cent. is not nearly enough.
However, that having been said, I wonder whether we are concentrating too much of our attention on the effect of cheap imports on the shoe manufacturing industry. Certainly the decline in its trade has stemmed from a reduction in home demand and from the destocking of the retail side of the industry and so on.
We must also look seriously at the competitiveness of this industry, especially in export markets. That is of crucial importance at present. Why, for example, does our industry find it extremely hard to sell shoes quality for quality in the United States and North America generally, where there has been a substantial fall in our exports in recent months? Does not this point to the fact that the recession in the industry has much to do with the general rate of 617 inflation in the country? Are not the underlying troubles facing the industry characteristic of much of what is wrong with industry in general in the United Kingdom? We would be foolish to disregard that factor.
Despite increased efficiency and productivity in the footwear manufacturing industry of about 2½ per cent. to 3½ per cent. over recent years, we have been pricing ourselves out of world markets for other reasons. This is a disturbing matter. I hope that the Minister will look at some of these points.
One disturbing factor is continued wage-induced inflation. Of course, that is not confined only to the footwear manufacturing industry. However, the effect of the latest measures will be very small. The industry employs a large amount of female labour—over 50 per cent. in many factories. Many other wage agreements were reached prior to the latest measures being introduced. Therefore, wage costs in the industry will continue to increase by about 20 per cent. in the next year.
Another disturbing factor is that, during a period of recession, costs rise substantially if an industry is unable to reduce its labour force. It is right that whole factories should not be closed as in the past, but we must recognise that this goes against the competitiveness of an industry in world markets.
Yet another factor which has increased the burden on different industries during recent years has been the amount of the "take" by the Government and local authorities. Right hon. and hon. Gentlemen on the Government side bear a considerable responsibility in that direction. They came into office over a year ago determined to squeeze more gold out of the golden goose of private enterprise almost to the point of choking her. That trend must be reversed. If we are to have healthy textile and footwear manufacturing industries the Government's "take" must be reduced, especially when those industries are under pressure from foreign competition. I hope Labour Members opposite will take that point on board.
It is true that the Government have recanted over corporation tax in relief on the replacement of stocks, but other costs are catching up. For example, the 618 increasing general rate demand is a very substantial item in those costs. Until this squeeze is mitigated we shall not see the recovery that we want in the footwear manufacturing and other industries.
I do not think that the solution lies in a massive cut in imports or in hand-outs and grants to improve research into efficiency and marketing. Of course, some of that will help. Neither does the solution lie in more bureaucratic imposition of improved standards for footwear and so on by the Department of Prices and Consumer Protection. The real solution lies in the Government giving more encouragement towards the entrepreneurial zest, of those who are determined to keep the industry going and who want to make it a success and in helping and co-operating with them and listening to their advice to a much greater degree.
§ 8.45 p.m.
§ Mr. Dan Jones (Burnley)
I have in my constituency footwear factories as well as textile mills, but in view of the time schedule that you, Mr. Deputy Speaker, have applied, I shall omit reference to footwear. Instead of the four points which I had proposed to make I shall restrict myself to two.
First, I shall deal with the human problem because in North-East Lancashire, of which Burnley is the centre, no fewer than 1 million people have been lost from the textile industry within a lifetime. In addition, in common with the rest of the textile industry, it has been probably the most stable industry in this country. If the rest of industry in this country had the same pattern of built-in stability as the textile industry, this country would have no economic problems. I want the Government to address themselves forcefully to this point. I mean it and I say this challengingly. It is very sad that people who have given so great a part of their lives should now be treated in this manner.
I turn to my final point on the subject of labour. There is a substantial number of people in the age group 55 to 60. Unless action is taken quickly these people will never return to any industry, never mind the textile industry. They have reached a point where, unless action is taken quickly, they will go into an industrial graveyard. There is much more that I should like to say, but I 619 must keep in mind the undertaking to which we have been asked to adhere.
My second point relates to the forms of remedy. Understandably, many of my hon. Friends believe that import restrictions could be the answer. I am mindful of the fact that the Prime Minister, together with the American President, entered into a contract. I could be wrong, but if the Prime Minister rats on that contract, his credibility in international relationships will be at an abysmal low.
§ Mr. Mike Noble (Rossendale)
Will my hon. Friend not agree that the Government entered into a social contract, that we are now in phase two of that contract, and that included in that contract were employees in the textile and footwear industries? Will he agree that so far we have not fully honoured our obligations to them?
§ Mr. Jones
If the Prime Minister believes that he can go back on his undertakings to President Ford, I give the firmest possible assurance that I should not persuade him to do otherwise.
There are four points that the Government can take up, three of which are fairly mundane. However, one is rather revolutionary but I should like to argue it. I am certain—and I speak from experience—that the directive to the publicly-owned industries to buy in this country could add a substantial contribution to the productive capacity of the textile industry. I am convinced of that beyond any shadow of doubt.
I also believe that there should be a ruthless examination of dumping in this country because my common sense, quite apart from my experiences, indicates powerfully that the second load would not be dumped if the first load had not been paid for. As a consequence, this matter needs to be examined.
I refer to the "burden sharing" scheme of the EEC. The Minister must take the textile trade unions and the British Textile Confederation into his confidence. During the referendum I wrote to a number of people who are vitally interested in the textile industry in relation to the EEC. I received assurances that membership of the EEC would be of substantial value to the United Kingdom textile industry. This has not 620 happened and, therefore, the situation needs to be examined.
I should like to bring to the attention of hon. Members a discussion between the chairman of the Retail Consortium, Lord Redmayne, who is well known to this House, and the British Travel News. Lord Redmayne was once a Conservative Member of Parliament and at one time was the Conservative Chief Whip. British Travel News asked Lord Redmayne this question:Lord Redmayne, you are the Chairman of the Retail Consortium. Could you briefly describe what the Retail Consortium is?Lord Redmayne replied:Yes, it's an 'umbrella' organisation for eight major trade associations in the retail trade. They are the Retail Distributors Association, the Co-operative Union, the Multiple Shops Federation, the National Chamber of Trade, the Mail Order Traders Association of Great Britain, the Retail Alliance, the Scottish Retail Federation and the Multiple Food Retailers Association.There is no reason why these people cannot be brought into consultation with the Government, the confederation and the textile trade unions in order to find out how much of their purchases could be diverted to British-produced goods.
No single point represents a panacea, but the four points I have put would make together a substantial contribution towards solving the problem. Tomorrow, we are to meet the biggest textile distributors in the country. Present will be representatives of the confederation and the textile trade unions, as well as hon. Members from both sides of the House. We shall be discussing ways and means of buying British textiles to a greater quantity than at the moment. But the truth is that our efforts have their distinct limitations. Unfortunately, the Government will not be represented at the meeting.
We believe, however, that this is a constructive approach and we mean to continue with it. I believe passionately that, at least for the next 12 months, my right hon. Friend the Prime Minister should appoint a Minister specially to deal with the textile industry. I believe that such an appointment would pay substantial dividends. Why should he not do so? The Government have set aside £20 million for assistance to the industry, and I believe that a Select Committee of the House could work with a Minister 621 for textiles in helping to monitor the work done.
I am convinced that if the proposals I have put were accepted we could, in the foreseeable future, bring about a situation much more satisfactory than the present one.
§ 8.53 p.m.
§ Mr. George Reid (Clackmannan and East Stirlingshire)
In six minutes, I can only hope to put a Scottish gloss on the arguments of hon. Members during this debate.
I listened to the Minister's opening remarks with a growing sense of dismay. There seems no real awareness in the Government that the recession in the textile industry is the gravest since the 1930s. There appears to be no real appreciation that the industry could suffer continuing and irreparable damage unless steps are taken to ensure its survival.
Many companies are currently working at a loss. Many firms are finding that their reserves are being eaten into, along with their capacity to resume normal working, and all that that implies in terms of impairment of funds for restocking, increased wages bills and working capital. With a reduced cash flow, even firms with relatively high liquid reserves, let alone those with large stocks and little or no liquidity, will eventually reach the point where they must close down.
The Minister's statement of 23rd July, apart from providing increased surveillance, will do little to help the industry. It is the largest single employer of labour in manufacturing industry, and I therefore find the Government's attitude astonishing. As a nationalist I sympathise with the people of the North of England. I am sure that the people of Lancashire, for example, will deliver their own judgment on the Government in due course.
I wish to make three quick points. First, I regret, as does the textile industry in Scotland, the fact that the Government have turned down the request of all sections of the industry to reduce imports of textile cloth for one year by 20 per cent. The Minister must know that that would mean a saving of £220 million on 1974 figures. Italy, in a comparable situation, introduced an import deposit scheme which was accepted internationally and by the EEC. It had a remedial effect and there was no retaliation. If it worked 622 there, why should it not work in this country?
Secondly, I want to look at a consequence of the channels of distribution in the retail industry in the United Kingdom being extremely highly developed. The United Kingdom market, therefore, is the first target of any foreign industry seeking an outlet for its excess products. We have seen that happen with Comecon products and imports from the Far East and Italy. But what of the increased surveillance measures which were introduced—some six weeks after action by the Irish Government? Will they work? Last year's experience showed that imports of some products were passing the ceiling without any action being taken. Trade organisations were told in September last that quotas were being exceeded in the second quarter. Let us hope that that does not happen now.
I also have certain qualifications about the MFA, and the flaws in it. Under that arrangement imports have to be given annual growth rates. I believe that there should be a recession clause under which growth rates can equal a nil situation or even a minus situation when the market shrinks, as in the present United Kingdom recession.
Thirdly, I want to comment on the knitwear industry in Scotland, which is of high quality, and exports 38 per cent. of its products by value and 31 per cent. by volume. This week I asked Scots knitwear manufacturers what they wanted from the Government. They said they do not want talk of more buildings, more machinery or more equipment. All of that is fine and they are perfectly efficient. They do not want subsidies to build up stocks because different colour permutations and volatile overseas buyers would make such action commercial folly. They do want direct Government assistance to help them to sell their products overseas.
The Minister will be aware that I have recently spoken about pre-shipment finance. A few months ago, the Government introduced changes in insurance cover by the Exports Credits Guarantees Department for the export of capital goods which take a long time to manufacture. Why should not similar assistance be given to exporters of finished textile products? The effect would be to enable manufacturers to get insurance 623 cover and favourable borrowing facilities for the purchase of raw materials such as yarn in anticipation of exports.
As a practical proposition, orders placed by a foreign purchaser in February may often not be required until the end of the following September. In the meantime the Scots manufacturer has to pay the spinner and make other purchases as well. On 23rd July last the Minister said that this was a serious matter. How serious is "serious"? Tonight he said he would give the matter urgent consideration. How urgent is "urgent"? If, as the Minister suggested, there are difficulties with the clearing banks, could not the House know what those difficulties are?
My party believe that the Varley package has been the wrong instrument applied at the wrong time in the wrong place. Tonight the Minister made noises of sympathy. He had better beware that he is not shortly uttering noises of condolence. He asked for time for the industry to adjust. He should not wait too long for an adjustment period or he may well find there is no industry left.
§ 8.59 p.m.
§ Mr. William Whitlock (Nottingham, North)
There can be no doubt that everywhere in the United Kingdom the textile industry faces a sharp decline, in which there are increasing redundancies, short-time working, factory closures, a lack of liquidity, declining order books, falling stocks and a failure to replace normal wastage in the work force by new recruitment. We are experiencing all those things in Nottingham in an acute form. It is no exaggeration to say that many firms are fighting for survival.
It cannot be said that the textile industry has priced itself out of the home market. I was going to quote figures, but in deference to the Chair's request for brevity. I shall not do so. It cannot be said, either, that the unions in the textile industry are being anything but responsible in their attitude to wage demands. It is evident that their attitude reflects a knowledge of the seriousness of the position of their industry and the fact that it is fighting for survival.
What is wrong is not the attitude of the firms or the employees but the problem of low-cost imports. Therefore, we must look as never before at that problem. I 624 hope that in spite of what my right hon. Friend the Secretary of State for Industry said we shall do so.
We in Britain have for too long unfairly borne the load of taking in imports from developing countries. That has belatedly been recognised, but not yet adequately recognised by EEC countries and others.
Some three years ago, when I was pointing out in the House that our ponderous anti-dumping legislation was much less effective than that of other countries, I urged the Conservative Minister of the time to thrash out an anti-dumping procedure which would be good for Britain and for British industries, and to use that as a base from which to thrash out possible future policies within the Common Market, rather than supinely to accept Common Market arrangements dictated by countries which had never allowed the penetration of their markets by foreign textiles in the way in which successive Governments had allowed it to happen here. But, alas, that Minister seemed to think that there was no great problem for the textile industry. We are suffering from that complacency today.
It is evident that the Government's proposals to help the textile industry have not been received with any marked degree of warmth within the industry, because their impact will be long term, whereas the difficulties of the industry demand help now, before it is too late. The Government are like a doctor preparing medicine for an ailing patient who may die long before the medicine starts to take effect. I want the Government to be more rapidly effective in their ministrations than they have been so far. I hope that that will happen.
One industrialist has written to me saying:We do not want this £20 million to re-equip. If the Government has £20 million of the taxpayers' money to give away to the textile industries, then the best thing it can do is to buy up second-hand machines from British plants which are re-equipping and break up that machinery rather than to allow it to be exported to other, low-cost countries who will then make textiles and send them back here and put our own people out of work.I do not know whether he meant that, but one can say that the kind of sophisticated Luddism which he was advocating was born of the same kind of bitterness and despair as that which motivated the 625 original Luddites who smashed up frames in Nottingham in the last century.
It can be said that the answer to the threat from abroad is to perfect new and more sophisticated machinery which will put us into a competitive position even to deal with imports from Korea. The managing director of one of the firms in Nottingham, whose goods bear a household name, has told me that his company is preparing to do just that. But two years are required to develop those machines. Therefore, a respite is needed for the industry until those new examples of British engineering skill and inventiveness emerge.
I hope that the Government will provide that necessary respite to enable the brave new dawn of the textile industry to break in this country rather than a dawn of increased bitterness and frustrated hopes.
§ 9.5 p.m.
§ Mr. Peter Fry (Wellingborough)
I hope that the hon. Member for Nottingham, North (Mr. Whitlock) will not mind if I do not refer to his remarks, in view of the shortness of the debate. I shall restrict my remarks to the footwear and leather industries, which are the main employers in much of my constituency.
Before looking at the present difficulties, it is only fair to point out that in recent years there has been a gradual reduction in the number of firms and employees. The traditional pattern of trade has been one of seasonal ups and downs, which have tended to make the shoe workers and employers a little more philosophical and less militant than those employed in some other industries, who seem to believe that the world owes them a living and that if the world will not pay for it the British taxpayer should. I hasten to say that my constituents are not like that.
If the work force of this industry is less militant than that of many others, it is also an older work force, It is still a matter of pride for many of my constituents to retire after 40 years' service with one firm. Lack of militancy, being philosophical about the ups and downs, loyalty and pride of service are little defence against the economic tide at present threatening worker and employer alike. The older the work force, the more 626 difficult it is to retrain redundant employees. The less militant the workers, the more likely it is that any Government will feel that the industry is expendable.
There is no doubt that at the moment a well-made pair of British shoes, fairly priced, is at a severe disadvantage at a time of high inflation when cheap and often dumped imports are being put on our market. The way in which the industry is spread around the country, with small pockets here and there, makes it very difficult for it to mount the kind of parliamentary campaign which other industries of similar size, such as shipbuilding, are often able to do, yet the needs and problems of this industry are just as real.
Although the industry is widespread, it exists in my constituency in towns such at Higham Ferrers, Rushden, Irthling-borough and Raunds, where there is no alternative employment. Severe recession in the industry can have only a disproportionate effect upon the lives of those communities. That is why I believe that the case should be put to the House.
The current position was briefly spelt out by the right hon. Member for Kettering (Sir G. de Freitas). It is sufficient to say that 10 million fewer pairs of shoes were made last year than in the previous two years. The prospects for this year are not good. Imports have increased from 17.8 per cent. of the home market in 1971 to 24.3 per cent. in 1974. Even with the cut-back in consumption this year, an extra 700,000 pairs of shoes came from abroad in the first six months of this year compared with the first six months of last year. Even where the Government have taken action over imports from the COMECON countries, imports are running at slightly above last year's annual level. So much for the promises made by the Government.
The effect has been a reduction in employment, which has been spelt out. The danger is that there will be a growing lack of confidence in our home-based industry. Not only will financiers in this country not feel it worth investing more money, but individual manufacturers will lose the hope to expand. There are many economic difficulties besetting the industry. However, we look at the threat of imports from Eastern Europe as one area where constructive action could be taken by the Government. 627 It is in the context of rising unemployment, increased short-time working and firms going out of operation that the proposed 5 per cent. to 10 per cent. reduction in imports from Eastern Europe should be considered. That amounts to 300,000 pairs of shoes, which is about two weeks' production of the largest firm in my constituency. My constituents know, even if the Government do not, that this reduction is totally inadequate to redeem the situation in the British footwear industry. Furthermore, the price at which leather shoes are being brought into the country—£1.66 per pair landed—can only mean increased competition at a time of ever-increasing prices for the home producer.
My constituents do not want to be featherbedded, they do not want to be nationalised and they do not want large Government loans. They want some protection against what they consider to be unfair competition. There are other reasons why they are in difficulty, as I have said, but they look to the Government to protect them against Eastern European countries such as Czechoslovakia with which we have had an unfavourable balance of trade for many years.
I should like to make a second suggestion. Some firms could improve their export potential, especially to the Soviet Union, which fails to produce anything like the number of shoes it needs. Recently the Government of Czechoslovakia were able to negotiate a contract for 32 million pairs of shoes. It has been estimated by the industry in this country that we could obtain an order for about 5 million pairs if currency were allocated for that purpose. Is it not possible for part of the global sum negotiated by the Prime Minister in the recent trade agreement to be specifically assigned to footwear? Such a step would be a shot in the arm for the British industry. If that much-publicised agreement is to be more than a few puffs from the Prime Minister's pipe, constructive action such as I have suggested should follow.
I make my plea on behalf of the industry because I believe that it has served this country well. I ask the Government not only to take the steps I have put forward but to realise that this 628 is an industry of small to medium-size firms. These firms are being crucified by the Government's economic and financial policies. Many of them would be only too willing to expand if they could. But they ask "What point is there? What hope is there when the Government are proceeding with a serious of economic and financial measures which are designed to drive us out of business?" If the small to medium-size manufacturers lack confidence, that will affect the level of employment and the amount of production in the footwear industry, and when that happens many more of my constituents will be out of work.
The good relations that have existed inside the industry between union and management should be recognised. It should be realised that the unanimity of union, worker and employer in the approach to the problems besetting the industry shows that there is a good future for a viable British footwear industry given a fair chance. My constituents ask for that fair chance. If the country is to overcome its economic problems by pulling itself up by its own bootlaces, let us at least see that the boots are British-made.
§ 9.13 p.m.
§ Mr. Bob Cryer (Keighley)
This is the second debate and the third statement we have had as the result of pressure from back-bench Members of Parliament. Meanwhile, in my constituency there are short-time working and closures. In my constituency especially that has been due to the import of acrylic yarn. The negotiations that are going on with Hong Kong, Taiwan and Korea are welcomed. But they have been going on for several months and in the meantime there are short-time working and closures.
The Wool Textile Record of 25th July stated that last month 16 mills closed producing 1,760 redundancies. The magazine states:If the Government ever needed proof that low-cost imports and a dilatory approach on their part are crippling the British textile industry, surely these figures, which do not take account of lay-offs and short-time working, provide it.Many people say that the West Riding woollen textile industry, which produces some of the finest woollen textiles in the world, is bleeding to death. We have the right to ask tonight when the Government 629 intend to take measures to ensure a viable textile industry.
Fred Dyson, the General Secretary of the National Union of Dyers, Bleachers and Textile Workers, raised this question publicly and accused the Government of inactivity. The Economic Planning Council of the Yorkshire and Humberside Region in February this year, commenting on a meeting of West Riding Members of Parliament, said:The Planning Council was bound to consider the future of the industry against their broad aim of raising the standards of living of the Yorkshire people; this meant higher average earning power and it was open to question whether it was right to encourage an industry with high average earnings when it would always, because of low-cost foreign competition, be unable to pay very high wages.That was a discussion that took place with Members of Parliament. At the time it was thought so ludicrous as to be totally out of court. However, a statement was made in the House during February. I ask the Government to repudiate the attitude expressed by a body sponsored by themselves.
We want an assurance that the people in the textile industry in general, and in the West Riding woollen and textile industry in particular, have a future. That raises the whole question of the Government's economic strategy. We believe that selective import controls would assist. We are not talking about import controls for every item brought into this country but about the use of an economic strategy. Given our present economic crisis that is something that should not be overlooked. If the Government will not consider that matter now it seems likely that they will be forced to consider it in future.
The Government say that if they receive an application about dumping they will consider taking urgent action. As my hon. Friend the Under-Secretary of State knows, the West Riding Worsted Spinners' Federation made such an application. Apparently it has been turned down. That application took an enormous amount of research and energy to produce. The application was made in November of last year but it was processed for several months. During that period the industry was facing severe difficulties. It does not encourage the industry when it finds that it has to engage in such difficult tasks when there 630 is not a great chance of convincing the Government at the end of the day.
On 23rd July my right hon. Friend the Secretary of State for Industry announced a grant of £20 million for the modernisation of the clothing industry. I am sure that that grant was welcomed, but what guarantee have the Government that a modernised clothing industry will use British cloth at the end of the day? Will there be strings attached to the £20 million, or will it be another dole out in the propping up strategy upon which the Government seem to me embarking so as to keep our creaking, ailing capitalist system moving along? We want to know that economic planning is involved and that we are not merely embarking upon a propping up operation.
It was earlier announced that surveillance would be kept on imported yarns. That surveillance has been extended to clothing. That is a help, but it is ironical that the information has not been passed on to the relevant bodies. It has been a help because the process has delayed imports. The level of imports has been reduced, and that has given some degree of help to the industry. When the announcement of import surveillance was made it was stated that information would be obtained so that informed decisions could be made as to when to impose selective import control. Has that information been obtained? Is import surveillance a facade, a sop to back benchers?
The Wool Textile Delegation has made several points and I shall briefly highlight three of them. It has produced a document for this debate and I am sure that it has been circulated to hon. Members on both sides of the House. The delegation wants protection from disruptive imports of acrylic yarn and clothing from low-cost companies under the bilateral agreements to be negotiated by the EEC under the Multi-Fibre Arrangement as a matter of urgency. Secondly, it wants instructions rather than exhortation to be given to Government Departments, State trading industries, municipalities, for example, that purchases of British made textiles and clothing are to be given preference over imports.
My right hon. Friend the Secretary of State mentioned that the regional health authorities had been given consideration. 631 That is a good beginning. Let us expand it. Lastly, I would emphasise the fact that the recognition of a viable, balanced textile industry does not simply comprise a collection of profitable firms but must include the necessary research, and educational and training back-up facilities. If there is a continued erosion of the industry, it will not be large enough to maintain those facilities.
It is clear that the Common Market is not providing the expanding markets which were claimed for it. It is also clear that much public money has been poured into textiles. It is time that action was taken to ensure the survival of the industry—and that, in the view of many of us, means import controls. The case for those controls has been made time and again.
Retaliation is a possibility, but our economic position demands the use of every possible strategy. The difficulty was recognised in respect of other EEC members who were asked to reflate, but no such request was made of us. This will result in a reduction in our standard of living by as much as 2 per cent. in the next year. This will have its effect on textiles. In these circumstances a determined economic plan is necessary or there will be no capacity to take advantage of the upturn in trade which eventually will arrive.
§ 9.22 p.m.
§ Mr. Marcus Fox (Shipley)
I wish to deal with that part of the textile industry with which my constituency is particularly concerned. I refer to worsted materials and to men's suitings. In my area that industry is a large employer of labour, but it is not likely to continue in that situation for long unless we take rather more action to deal with the situation than has occurred recently.
Apart from certain impressions which have been given in this debate, I must emphasise that the firms in my constituency which deal with these textiles are energetic, resourceful and independent. They do not seek protection as a be-all and end-all. They want to feel free to trade in whatever markets they find throughout the world. But they want to undertake that trade on a fair basis. They are not afraid of competition. I was involved in the textile trade before I became a Member of Parliament. I 632 know that the people concerned in the industry are hesitant to ask for import restrictions. They know what this would mean in respect of their export markets throughout the world. But there are other barriers which they face.
I am sorry that the Under-Secretary of State is not in his place because, whether he likes the phrase or not, I regard the present situation as dumping. I refer to the Prime Minister's words on 23rd May this year:Wherever evidence can be produced of dumping, subsidised exports or other forms of unfair trading, Her Majesty's Government are ready and willing to take vigorous protective action on behalf of those industries.…"—[Official Report, 23rd May 1975; Vol. 892, c. 1804.]What happened to that promise? I see no evidence of those words having been carried into action. That assurance is now a sick joke in the industry.
I am not so worried about competition from Scandinavia and Germany, but about competition from the Comecon countries. We know that more than 2 million suits will be imported this year into Great Britain. If that is not dumping, what is it? We also know that the production of wool in Poland amounts to only one-quarter of that country's own needs. What will happen if they send suits to this country at a selling price of, say, £9? That sum can hardly represent the true cost of production and it is a flagrant example of dumping and unfair trading. Undoubtedly, our home market is being plundered. In this situation many millions of yards of British cloth lie unsold in our warehouses. Consequently, because of the present situation our constituents find themselves out of work or on short-term working.
What do the Government intend to do about the situation? There are many precedents to draw upon. Italy recently introduced import deposits, and there was no outcry from its friends in the EEC. The United States has much better proposals to deal with dumping than any that we can think up. It is time that we took some action.
I am sure that by now the Government must accept that time is not on our side. The Secretary of State for Trade made this point on 23rd July, but I believe that today he has missed the point. What we need is action against cheap imports. 633 If the Secretary of State needs help, he can call on the assistance of Articles 12 or 14 of GATT. Other nations have used those provisions. Our European friends have various quotas available to them. Is it not time that we included in our system agreements in respect of outer garments of which wool is the dominant fibre? At the moment those are excluded.
I am sure that the debate will bring home to the Government the need for action. I ask the Secretary of State to forget his fears about retaliation. I should like to know, concerning bilateral trade, what we supply to Poland, Romania and Czechoslovakia that gives us cause to be worried?
I speak for all my constituents in the industry, including the trade unions. I am glad that hon. Members have paid tribute to the responsibility shown by the textile unions in particular, with their moderation and desire to see a profitable and viable industry in which they can continue to work. It is about time that this shoddy treatment of the textile worker by the Government was brought to an end.
§ 9.25 p.m.
§ Mr. Terry Walker (Kingswood)
I was very sorry that the Secretary of State, when opening this debate, did not say more about the footwear industry, because I am quite sure that it is of concern to many hon. Members on both sides of the House. The unions and the manufacturers in the industry are absolutely united about the need to control imports.
My constituency had a strong boot and shoe industry. Ten years ago there were a dozen factories producing shoes at a high rate. Now this has been reduced to one factory, and it has been on short time for nine months. Just recently we have lost one-fifth of the work force—roughly 200 people.
The factory in Ballymena in Ireland has been closed, as has another in Brynmawr, South Wales. There is a cold wind blowing towards us now, and we very much fear that the time will come when the footwear manufacturers will want to retract to places like Northampton and Norwich and will leave us completely on our own in the South-West. perhaps only as a depot, no longer manu- 634 facturing shoes, because of the problems involved.
I believe that we have a very short time in which to take action. If the present trends with footwear continue over the next three to five years, we shall see the collapse of the British footwear manufacturing industry and old jobs and skills will be lost for ever. More important than that, however, we shall be completely reliant upon our competitors from abroad to supply us with footwear.
Opposition Members have already mentioned the footwear imported from the COMECON countries. I remind the Front Bench that 50 per cent. of our shoes come from France and Italy. Imports from the EEC and Far East countries are rising, even now. The Government have taken action in respect of the COMECON countries. We can argue here whether that action was enough or whether it was ill-timed, but the fact remains that 50 per cent. of our imports come from the EEC countries.
It has been said already that the ill wind is blowing from the East, but what will the Government do about imports in general? Footwear is being dumped on the British market now. There is no doubt about that. I hope that when the Minister replies he will say whether we can, through the Commission, take action to control imports from EEC countries. Perhaps he will be able to deal with this point. If no action is taken, we shall be in the position of retracting totally within the next few years.
In the present economic crisis, I believe that a Labour Government should be encouraging British manufacturing industries. This was mentioned in the White Paper "The Attack on Inflation". It talked about import costs and said that we must do all we can to keep down costs and prices which are within our control. It also said that a big increase in import prices would impose on us a further reduction in our standards of living and that it would then take longer for our policies to achieve our anti-inflation targets.
We must reduce our reliance on imports by building up our own industries. We have been told already that if we take action with regard to import controls, it will bring retaliation. I ask the Minister from whom he expects the retaliation to come. We have heard my hon. Friend 635 the Member for Burnley (Mr. Jones) say that during the referendum campaign he went round telling people that it was in the country's best interests to stay in the Common Market. It struck me that he was perhaps having doubts. However, that is another matter. From whom are these retaliatory actions expected?
If we cannot have import controls, is it possible to agree quotas with other countries? If we do not do something, we shall find that British footwear workers will be on the dole and the day may come when we shall all be walking about in our stockinged feet.
§ 9.32 p.m.
§ Mr. Robert J. Bradford (Belfast, South)
As a Member of Parliament from Northern Ireland, perhaps I may add the voice of the Northern Irish people to the cry to the Government for action at this time of crisis in the textile and footwear industries.
I think that four actions are needed. Import controls are essential, as are price controls and the implementation of the dumping laws and of agreed quotas.
The Government seem to imply that the problem is a relatively grave one at present. When we look at the statistics, however, we discover that in the textile industry we now face a crisis. Perhaps I might use one statistic to prove my point. Our level of imports of shirts at the moment stands at about 53 per cent. The Japanese industry considers that it has a very grave problem when its percentage of imports stands at 7 per cent. That is the extent of the crisis, and until the Government face the reality of these statistics I fear that we shall get nowhere.
As for agreed quotas, there are undoubtedly protected markets in both France and Italy within the EEC. Neither country accepts its quotas of imported goods from the underdeveloped countries, and we suffer from the rebound of that unfair practice.
We have been told by the Government that certain imports from Portugal are now subject to import duty, and I understand that this might stand at about 10 per cent. However, the import duty is not applied to the shirt industry. Northern Ireland is responsible for approximately one-third of the total shirt industry in 636 the United Kingdom, and its future is very dim unless import duties are imposed upon products like shirts from countries such as Portugal. By the time dumping legislation is implemented, the problem will be beyond redemption.
Not only are we importing an undue proportion from Eastern bloc countries and the Far East. We are also importing ever-increasing amounts from the EEC. In 1973, imports of made-up goods from Ireland totalled £30 million, from France £11 million and from Italy £10 million. If the United Kingdom shirt industry and the general clothing industries go out of business because of unfair competition, we shall have to rely on imports and this will have a drastic effect on our balance of payments. The future of the textile industry is critical.
In Northern Ireland we have no alternative to offer the thousands of people who will lose their jobs in the man-made fibre, linen and shirt manufacturing industries if lack of action by the Government results in massive unemployment.
§ 9.37 p.m.
§ Mr. Alan Fitch (Wigan)
I am not generally in favour of across-the-board import controls for industry, but I am in favour of selective controls for industries like the two we are discussing tonight. Blanket controls lay the foundations of a siege economy, and I do not think this is the answer to our present economic difficulties. There is a case for selective import controls for the textile and footwear industries because they have proved unfair competition and dumping. Those are sufficient criteria.
In discussing anti-inflation proposals with the Government, the TUC mentioned that it agreed with selective controls for the textile industry. Selective controls that are imposed because of unfair competition or dumping would not be inconsistent with our membership of the EEC.
In my constituency I have footwear interests, but they have already been dealt with in some detail and at some length. I shall therefore not comment on them except to say that the steering committee which the Government recently set up is a very good innovation and is making progress in its investigations. It will be some time—perhaps not until the 1980s—before it can make a real impact on 637 the industry. We must have preventive action, and the imposition of import quotas is necessary to ensure that the industry is not annihilated by imports. The footwear industry could be made viable and profitable once we got rid of the unfair handicaps from foreign competition. To become competitive in the world markets, the industry must be in a position to attract investment.
I agree with the hon. Member for Wellingborough (Mr. Fry), who spoke about the possibility of opening up trade in footwear with the Soviet Union. The money discussed by the Prime Minister when he met Soviet leaders recently could be earmarked partly for this industry.
The recession in the textile industry has now reached its first anniversary. The current run of redundancies and factory closures began last August and there is at present no sign of any abatement. During this period in the North-West there have been at least 18 factory closures involving the loss of over 3,000 jobs.
In their efforts to end their plight all sections of the industry have combined—the unions, the employers, the Textile Industry Support Campaign and the British Textile Confederation—and they have all consistently argued that the only solution lies in effective measures to reduce the high level of textile imports which are draining away the industry's lifeblood.
There are serious doubts in Lancashire—and I do not like having to say this—not whether the Government are able to help the industry but whether there exists now the will to do so. I hope that my hon. Friend the Under-Secretary will say something to dispel that feeling. The textile industry is now highly capital intensive with modern machinery. It is efficient and it is an industry in which work is performed around the clock on all kinds of shift systems and where workers employed by the most efficient firms have had to suffer many weeks of temporary employment this year. In spite of its efficiency the industry is still suffering from unemployment.
I suppose that we should gain a crumb of comfort from the fact that the Secretary of State announced that in future all Government Departments would be expected to buy British textiles, and that is 638 a good move psychologically. In practical terms, however, it amounts to only about 2 per cent. of total textile consumption.
A lot of industrial capacity has been lost and many jobs have disappeared. The Government should take steps to halt any further closures. If they cannot see their way to affording assistance to the industry as such, they should consider the industry in the light of our national interests. Our national economic well-being rests upon the efforts of our industry. Unless the present rot in the industry is arrested we shall lose capacity which will not be replaced and which the country cannot afford to lose.
The hon. Member for Rochdale (Mr. Smith) mentioned the closure of a mill in his constituency. The Empress Mill, just 300 yards outside my constituency in the constituency of my hon. Friend the Member for Ince (Mr. McGuire), is also closing. The outlook for my constituents is very bleak. I therefore make a serious appeal to the Secretary of State to take urgent action.
We should like to see the Secretary of State for Industry in Lancashire. He might come on an unofficial fact-finding tour when he could talk to people at grass roots level. I am not suggesting that he does not understand the industry. I am sure that he does. But if he could get from the people of Lancashire, the textile and footwear workers, their gut reaction to the present situation it would be of great help to him.
I am pleased that the Government have allowed us time tonight to debate this important subject. However, merely debating a subject is not enough. We want action and we want it quickly.
§ 9.45 p.m.
§ Dr. Keith Hampson (Ripon)
We have heard so many figures and arguments not only in this debate but in all the others we have had that there is only one point that I wish to make. As an hon. Member who has a high proportion of the management of the wool textile industry in his constituency, I wish to urge the Ministry to get on with the job. We need urgent action. It is extraordinary, every time a statement is made, whether it be by the Prime Minister, the Secretary of State, or merely a statement in debate, how little seems to happen. 639 Most of the small firms within the industry have been hanging on, waiting for action. This is not a self-inflicted hardship. They are suffering from a staggering increase of imports, particularly in manufactured items such as clothing, especially from the State trading countries. That is undermining the market for hard cloth and it is feeding back down the process to the spinners, hence the redundancies.
Anyone connected with the trade knows that the pace of redundancy, layoffs and closures of small mills is picking up because there have been so many statements and debates, but each time nothing concrete has been done. I do not wish to mislead the House or the Minister when I say that we are talking about a matter of weeks.
Order books are in such a state in some of the major firms I know that unless action is taken it will not be long before half the industry ceases to be viable and very sizeable operations will go out of existence. We are not talking about satanic mills. They may look it from the outside, but they are full of the costly latest equipment.
A major spinning firm has written to me indicating that it has just started a large expansion programme of buildings and equipment, but it is now frightened for the future. It has ancillary costs of gas and electricity that are hitting it hard. Its order books are tightly stretched. Its fixed-price contracts have been eroded by inflation. The situation is extremely bad.
The Secretary of State did not give us any answers at all. He said that the Under-Secretary would deal with all the matters. I hope that we shall get answers because words and sentiments are not enough. They will not keep the industry viable until the cycle in the textile depression reverses. If it continues the industry will simply not be in existence. Certainly money will not make the world go round in this case. The Government churn it out through all sectors of the economy, but that is not the answer. There must be a different attitude and political will.
Money will help only the small firms which are being forced by legislation to put guards on their carding machines at a cost of £2,000 to £3,000 each. There- 640 fore, the cost to a small firm will be between £30,000 and £40,000. They have no future. There is no demand for their products. There are no profits to pay the sums of money specified under Section 8 of the Industry Bill. They are not eligible to receive any benefit because the cost is not in excess of £50,000.
That is the only section where money will help at present. We need political will and that is what I hope the Minister will give us.
§ 9.49 p.m.
§ Mr. John Garrett (Norwich, South)
I wish briefly to refer to the condition and the prospects of the British footwear industry. In my constituency, footwear workers are asking whether the Government consider their industry expendable in the interests of free trade and the unplanned market economy. In Norwich at present, 80 per cent. of the footwear workers are on short time. One announcement of redundancies follows another like nails being driven into a coffin. In the past few months, for example, the Kiltie Division of the Norvic Shoe Company declared 20 redundancies, the Bally Company declared 60 operatives and 28 office workers redundant, Edwards and Holmes announced 30 redundancies and Sexton's another 60 redundancies.
We are seeing one of the main industries in my constituency wasting away before our eyes. In January 1972 NUFLAT, the boot and shoe operatives' trade union, had a membership in Norwich of 6,480. In May 1975 the membership was down to 5,190, a fall of nearly one-quarter in three years.
Norwich is in the heart of the lowest wage area in the country with all too few alternative job opportunities in manufacturing industry. Many families depend solely on the footwear trade. The level of their concern can be seen from the fact that I was recently handed a petition asking for protection for the industry signed by 3,151 footwear workers, which must be 50 per cent. or 60 per cent. of the total footwear employees in the city. Norwich people are tolerant and slow to anger, but feeling is running very high in my constituency on this question, and so it should.
If one company employing 6,000 or 7,000 people in one of the great industrial areas of this country was going downhill 641 as fast as the Norwich footwear industry. I would bet that the Government would step in and save it with a great flourish. Because the footwear industry is organised in a large number of small units, however, the Government appear to be willing to let events take their course while emitting pious good wishes.
In the last week—this is an apposite comparison—the Secretary of State for Industry has published a consultants' report on the British motor-cycle industry. That report traces the decline of that industry, to a point where it is now probably irreversible, to a policy—if it can be dignified by the term "policy"—of what might be called defensive withdrawal. As foreign competition intensified, our motor-cycle producers withdrew first from one sector of the market and then from another. This progressive retreat meant that the British motorcycle industry was less able to take advantage of each upturn in the market. The industry grew smaller, weaker, less able to compete, stage by stage, until there was almost nothing left of it, and the cost of rescue by the Government now appears to be prohibitive.
I foresee the same process operating in the footwear industry. As it contracts step by step, it will be unable to expand again when the upturn comes because workers and resources will be permanently dispersed.
The British footwear industry is under attack from all sides—first from low-cost producers in the Far East, secondly from unfairly priced products from Comecon countries, thirdly from France and Italy, and now from Argentina and Brazil. Each one of those exporting countries is spreading its penetration into the various sectors of the United Kingdom market. Comecon countries, at first virtually confined to men's leather footwear, are now penetrating deeply into the United Kingdom market for women's and children's leather footwear. That, as in the motor-cycle industry, can lead to a process of continuous defensive withdrawal and ultimately to the collapse of the whole industry. That is the process we are now seeing.
The Norwich footwear industry suffers particularly from competition from France and Italy. One-third of the im- 642 ports of leather footwear into this country come from Italy, a country with a cost stucture not unlike our own. It is nothing short of amazing to me that Italian footwear exports are 10 times those of the United Kingdom, and French exports are four times higher than ours.
The footwear industry has a lot to answer for in letting this situation develop. There is little point in trying to apportion blame now, but it is pretty clear that the management of the British footwear industry is being beaten by Italian design, flair, innovation, quality and marketing.
Be that as it may, the Government still have a duty to assist the industry to regenerate and develop, not just to sit back and watch. Throughout British industry, managements have collapsed in the face of foreign competition leading to what has been described as the de-industrialisation of Britain, which is a fancy term for a weakening economy, men and women on the dole, loss of pride, loss of prosperity and loss of hope for the future. If our industries collapse, where shall we be? We shall be the paupers of Europe—a nation of producers become a nation of mendicants.
The footwear industry can be revived, developed, encouraged, persuaded and, if need be, forced to grow to prosperity only by Government intervention. There must be a development plan for the industry sector by sector and region by region. First, the industry has the right to protection by import controls, import deposits or pre-entry licensing. It is worth noting that Italy successfully cured its balance of payments deficit last year by imposing import deposits on manufactured goods with the concurrence of her Common Market partners. If Italy can do it, we can.
Behind the temporary protection against imports, the Government, manufacturers and unions should set about designing a plan for the growth of the industry, analysing its present strengths and weaknesses, setting investment, employment, production and export objectives, analysing the gaps between the present situation and those objectives, and then developing programmes of action for closing those gaps in a systematic and planned way. 643 The Footwear Study Group, on which I have the honour to serve and which is sponsored by the Department of Industry, can do valuable work in collecting the data on which a plan can be based. Once the industry has had its objectives set, the Government should use the Industry Act in a more constructive way than it has been used before to assist the industry in certain key areas of its development. For example, they could use that Act to improve management training, to assist a higher level of investment and the use of modern management techniques, to set up a co-operative export organisation—that is, buying footwear in this country and then exporting it through a network of overseas agencies—to set up a co-operative, design and quality improvement organisation, and to encourage market research and opportunity spotting at home and overseas.
There is a clear alternative in the case of the footwear industry. We can either face the progressive collapse and loss of the whole industry, which still employs 80,000 people, or we can go for a plan for growth. I hope that the Government will not let pass the opportunity to plan the regeneration of the industry.
In many ways the footwear industry is all British industry in microcosm. It points to the question, shall we be a manufacturing nation or shall we sink because we could not bring ourselves to think and plan our way out of decline?
§ 9.57 p.m.
§ Mr. Michael Morris (Northampton, South)
Northampton is also one of the centres of the footwear industry. The industry recognises that it is not the easiest of industries with which to deal. We recognise that shoes and footwear are among the necessities of life, that it is the prerogative of the developing countries that they should produce their own footwear at an early stage in their development and that all Governments have to balance the needs of the consumer in terms of the prices of shoes in the shops against the needs of the manufacturers.
However, there is still one major problem area and I make no apology for returning to it again this evening. It is the 644 problem of a particular aspect of the import situation. I, and the industry as a whole do not share the view of those hon. Members who wish to see an across-the-board import control. Certainly the manufacturers in Northampton do not want that. We are concerned that around 28 per cent. of the market is taken by imports. The industry has a deficit of approximately £60 million, which is a worrying figure.
Another worrying factor is those countries which manage to sell their shoes in this country at a price which is below—in some cases 100 per cent. below—the raw material cost of our shoes. As has already been mentioned by my hon. Friend the Member for Wellingborough (Mr. Fry), men's uppers are landed in this country from the Comecon countries at £1.66 and in Northampton the same article, using the same raw materials, works out at about £3. That is not, by any yardstick, fair competition.
The results are easy to see. In a space of four years imports have doubled from Comecon countries. Twenty-eight of our manufacturers went to Czechoslovakia to check whether manufacturers in that country were employing some marvellous new technique that enabled them to produce at such a low price. The report of our manufacturers was that productivity in Czechoslovakia is lower per man and per factory than it is in this country. There is no magic formula there.
We all know that these goods are in effect being dumped. The worrying feature of the debate—
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.