§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pendry.]
The worrying feature of the debate is that although consistently hon. Members have given firm evidence from the textile and shoe industries to both the present Government and the Conservative Government of specific cases of what in marketing terms are seen to be dumping, nothing has been done. Products have been landed here at a price with which no British manufacturer can possibly compete. He cannot even buy his raw materials at such a price. Yet consistently the Department of Trade says that it needs 12 months in which to investigate. That happened in 1972–73 in the case of the shoe industry. Then the Department admitted that there had been dumping, but by that time the Czechs had changed the designs, so we had to begin all over again.
If our laws to protect the textile and shoe industries are inadequate from dumping by Comecon countries, by Korea and Taiwan and others, let them be changed. I am sure that hon. Members would be quite willing to return from holiday in order to get the legislation through.
The shoe industry as a whole is independent-minded and proud. It has served the country well. Its relations with its workers and the standards of its products are among the best in the world. All that it and the textile industry ask for is fair and honest competition. They are not asking for major subsidies. It is up to the Government to take action to ensure that such a situation comes about. Let them either put the boot into the dumpers now or the boot goes into our own workers tomorrow.
§ 10.3 p.m.
§ Mr. Mike Noble (Rossendale)
Of all hon. Members, I am probably the only one with a constituency which has a substantial number of both textile and footwear workers. Both are suffering the problems that we have heard about tonight. In my maiden speech I said that there was immediate need for import 646 restriction. Regrettably, nine months later, I have to repeat that request.
I recall various ministerial statements. My hon. Friend the Member for Oldham, West (Mr. Meacher), then Under-Secretary of State for Industry, told us last January when speaking of the footwear industry,It is essential to place it on a sound long-term footing. The Government believe the footwear industry to have potential for development both in the United Kingdom market and abroad….The Government certainly do not consider this industry to be expendable."—[Official Report, 20th January 1975; Vol. 884, c. 1205.]On 20th March, speaking of textiles, my hon. Friend said:I was asked…whether the Government intended that the textile industry should remain viable and prosperous.…it would be unthinkable that any other consequence should materialise."—[Official Report, 20th March 1975; Vol. 888, c. 2028.]I recall the statement by my right hon. Friend the Prime Minister on 23rd May on the textile and footwear industries. He told us:We are determined to ensure that the worldwide recession in these industries, as in others, does not cause damage which would mean the loss of viable capacity which will be needed when the expected upturn comes in world markets."—[Official Report, 23rd May 1975; Vol. 892, c. 1805.]It is against statements like these that the Government's actions must be judged, and we have a right to ask what has happened.
Hon. Members have referred to voluntary restraints on imports of footwear from Comecon countries. They are welcome but insufficient. Hon. Members have also referred to the Government inquiry into the footwear industry. Again that is very welcome, but inevitably an inquiry will take time and it will produce results only if there remains an industry for it to work upon.
It is generally recognised on both sides of the Chamber that there is a need for restructuring of the industry. The retail side in particular needs examination in a situation where the British Shoe Corporation is responsible for about 50 per cent. of the total retail outlets so that there is a question of monopoly powers. Of course, as my hon. Friend the Member for Norwich, South (Mr. Garrett) has indicated, the industry must pay attention 647 to problems of design, management, marketing, exporting and other aspects. But none of these things will help in the present situation.
In the last 12 months, from July 1974 to March 1975 employment in footwear has fallen from 83,500 employees to 77,900; and of course the decline continues and is matched by a reduction of 26 per cent. in orders in the first part of this year compared with 12 months ago. In my constituency, where there is such a heavy concentration, particularly in one part, Rossendale, where over 40 per cent. of the people are employed in one industry, the effect is devastating.
We know the causes. They have been spoken of today. There is the fall in the general level of demand, but associated with it there is a continued rise in imports despite the recession and despite the voluntary restrictions by Comecon.
The situation in the textile mills is exactly the same, particularly in the cotton textile areas. There have been references to the closures at the Empress and Era Mills and closures are continuing. Part-time working, which is particularly severe in the industry, is also continuing.
In footwear, as in textiles, Government action has been too little, too late and too slow to take effect. We have had the situation with Greek and Turkish yarns, the Multi-Fibre Arrangement and promises on dumping and on surveillance and licensing, but these have not prevented and will not prevent further closures.
It is significant that on both sides the case has been argued for import restrictions. Tonight I am encouraged by one thing—the weakness of the Minister's case when he spoke of import controls. I felt that his case was transparent. We do not want to stop all imports. We want to see a level of imports of footwear and textiles which the industries can absorb in the present situation of recession. No one has made the point that the current deflationary policies of the Government are reducing overall demand without protecting jobs and without reducing the penetration of imports.
Great play has been made of the danger of retaliation. Quite frankly, I find this a much exaggerated claim. 648 Should we not bear in mind that the countries most likely to retaliate against selective import controls are precisely those with positive trade balances with this country which would therefore not be in a position to retaliate because to do so would affect them far more than us? Secondly, should we not also remember that only very recently the EEC recognised the special problems of the United Kingdom when it was giving us advice on reflation?
It has been said that selective import controls would create shortages. I believe that that is absolute rubbish in circumstances where up to 50 per cent. of the labour force is on short time, when unemployment is increasing and when mills are continuing to close. Where selective financial assistance has been given, the taxpayers' money will simply pour down the drain if mills are forced to close against the incoming tide of imports. We should also remember that the concentration of employment, particularly in Lancashire, in textiles and footwear will create a social problem of un-employment the like of which has not been seen since the 1930s.
We therefore repeat our demand for import controls in the knowledge that we are backed by both sides of both industries, textiles and footwear. We repeat it in the knowledge that we are backed by the economic committee of the TUC, and we repeat it in the light of the recent statement of my right hon. Friend the Prime Minister to Time magazine thatwe are not going to sit back and watch a remorseless increase in British unemployment. If the slump doesn't begin to improve quickly, we obviously reserve our rights to protect our balance of payments by various means.We on this side of the House, some Opposition Members, the whole industry, the TUC and many economic observers at home and abroad are expecting action on import controls. We say to the Government "If you want to save this industry—to use a Lancashire expression—if you are going to put your money where your mouth is, do it now."
§ 10.11 p.m.
§ Mr. Adam Butler (Bosworth)
I am glad to have been able to catch your eye, Mr. Speaker, because my constituents would not have forgiven me if I had not spoken in this debate. I suppose that one 649 in three of them is employed in textiles or the footwear industry. I think that I am also right in saying that I am the first Member in the debate to speak on behalf of the hosiery and knitwear industry, which is frequently forgotten in the House. Textiles do not start and end on either side of the Pennines. Those employed in the hosiery and knitwear industries total, still about 115,000 people.
The East Midlands is very much part of the textile industry. Perhaps it is our fault if that has been overlooked in the past, because we have tended to stand on our own feet and look after ourselves. I might say to the spinners of the North "You depend on us as much as you depend on the weaving side of the business." Up to now we have been thought to be prosperous. There has been thought to be a high level of employment in the East Midlands hosiery and knitwear industry. But that industry has had the fastest rate of increase in unemployment of any industry in the United Kingdom.
A figure which exemplifies that better than anything else is the fact that in the Leicester area, whereas a year ago unemployment was substantially below the national average, at 2 per cent., the latest figures show that it has escalated to 5.2 per cent., equivalent to places such as Scotland and the North of England, which we associate with a traditionally high level of unemployment. Nearly 9,000 people have lost their jobs in the first five months of this year. In my biggest town of Hinckley, and the surrounding conurbation, the unemployment position is the worst since the war.
Those are the facts. The rate of closures and the legions of redundant hosiery men tell their own bleak story. The Government have taken action, but if ever there were a case of too little and too late it is in respect of the hosiery industry. Every move has had to be squeezed out of the Government. Delays have occurred in the implementation of every sort of measure. Because the action was taken too late, it is much more difficult now to recover.
I think that the House knows, because I have spoken on the subject a number of times, that I advocate selective import controls on textiles. I have done so over the years, and I am not ashamed to do so again now. I welcome the Multi-fibre 650 Arrangement, but it is too late. If the provisions could have applied to the 1973 levels, that would have given the industry some respite, but the level of imports in 1974 was substantial—20 per cent. or 30 per cent. above that of 1973. If we take that as the base line, which I believe is the case under these arrangements, our industry will not benefit as it should.
I turn to the burden-sharing arrangement. Can the Minister say what the rate of increase in the different items specified in the various orders and under the various agreements will be for the United Kingdom? We know what the rate of increase into the Community will be.
I intervened in the Secretary of State's speech on the subject of South Korea. I understand that the right hon. Gentleman has to be a little evasive in his reply. But can the Under-Secretary let us know how long he is prepared to let negotiations with the South Koreans continue before he implements unilateral action under Article 3?
§ Mr. Butler
That is a welcome answer, which I appreciate.
The orderly marketing of imports—that is to say, the gradual increase over a previous base line—raises wider issues. There are many labour-intensive industries in this country. Will the Government look at their situation so that they do not face in three or four years' time the situation which is now faced by the textile industry?
The story of the foowear industry is much the same as that of the textile, except that the textile industry competes with unfair competition from low-cost labour countries. The footwear industry competes with goods from the Far East and subsidised exports from the Comecon countries. Those exports are subsidised as the Comecon countries need foreign exchange. The action taken to reduce the number of pairs of shoes imported by 300,000 is a fleabite. My hon. Friend the Member for Wellingborough (Mr. Fry) referred to a group of factories located in our two constituencies. He said that the cut was equal to a fortnight's production of that group. I am told that the 300,000 pairs of shoes are equal to 651 half an hour's production of the whole industry. The Minister must reconsider the matter and make significant cuts which will have an impact on the trade.
Reference was made to the British Shoe Corporation, which is responsible for the distribution of almost half the shoes sold. It imports half, or more, of the shoes which it distributes. We challenge its claim to the title of "British" Shoe Corporation.
The hosiery and knitwear industry and the footwear industry have characteristics in common. The vitality of both industries is accounted for by their excellent employee-employer relations. I confirm that from my constituency experience. On Friday I attended a combined meeting of 652 trade unions and employers, who presented me with the latest facts. That is one characteristic shared by these industries. Then, they are successful, efficient and modern enterprises which can take on the world's best firms.
My constituents do not complain about imports from the EEC. They say that that is fair competition and that they will take on the Italians and the French. But they say that they cannot take on the Comecon countries or some of the South American countries. That is unfair competition. These industries need more help from the Government. That help has been too little and too slow in coming. Now that the textile and footwear industries are faced with a crisis recession, will the Government act to put British jobs first?
§ 10.20 p.m.
§ Mr. Max Madden (Sowerby)
This debate coincides with a further deterioration in the crisis in which the textile industry has been locked for some months. The dimensions of the crisis have been described in detail so I shall not dwell on the facts.
We know that the industry is facing shrinking markets worldwide. We know that it is facing unfair competition from foreign imported textiles from both the developed and the under-developed world. We know also that there is a united call, and general consent from all sections of the industry, for the imposition of selective import controls. That call has been argued in all recent discussions in the House, and on all occasions successive Ministers have resisted it.
Ministers put forward two main reasons for resisting import controls. The first is that they believe that such controls are unnecessary because there is to be an early upturn in world trade. Secondly, they argue that they are undesirable because they would immediately result in retaliation from overseas markets to which we sell.
I voice the suspicion which exists within the textile industry and others about the early prospect of an upturn in world trade. There is a feeling of pessimism. The optimism expressed by the Government is not shared by many industries. In the knowledge that many people think that the upturn in world trade will be delayed, I shall dwell on the aspect of retaliation.
I hope that the Minister in winding up the debate will explain, for the first time, why the Government believe that if we imposed import controls they would have effects which other countries which have imposed import controls have not experienced. Australia, America and many other countries, including Italy, have imposed import controls and they have had beneficial effects and not retaliatory effects.
The industry and representatives of the industry are asked by the Government to put forward facts, figures and information to back up claims of unfair competition and dumping. All the facts, figures and information are known, and I ask the 654 Government how much more they need to know before they act. I ask the Minister, in turn, to give evidence and information in support of the Government's contention that there would be retaliation if we imposed import controls.
I and many of my colleagues believe that this argument which is often expressed by the Government has been over-exaggerated and played up for a variety of reasons. Many in the textile industry are beginning to suspect that the Government are refusing to act on import controls for textiles because, if they were to concede, they would have to concede the economic argument for import controls for other industries. If they were to do that, they would be conceding the whole case of their economic policy in the face of those who have been arguing an alternative economic strategy. The media are mesmerised by "Bennery". They would be better employed in examining "Leverage". We have heard from the official Opposition spokesman about the murky rôle played by the Chancellor of the Duchy of Lancaster in import controls—
§ Mr. Madden
Shadowy, certainly. We must again ask the Government exactly what has been the rôle of the interdepartmental committee which the Chancellor of the Duchy headed. We believe that the Department of Industry put forward a forthright and closely argued case for import controls and that the Chancellor of the Duchy, backed by the Department of Trade, smartly kicked out the proposals. Then came the Prime Minister's statement followed by the statements of the Secretary of State for Industry.
Let us have some honesty. Let us have some frankness from the Government about how they see the position of the textile industry in the years ahead. We should not adopt the piecemeal, ill-considered and unsatisfactory packages of the sort only recently announced. We need a planned approach to the textile industry. We need the sort of approach which has been expressed so clearly by my hon. Friends tfie Members for Norwich, South (Mr. Garrett) and Rossendale (Mr. Noble). We should use the provisions of the Industry Bill. We must begin 655 to plan properly for the industry. We need import controls as a matter of urgency. We need directives for all Government Departments to purchase British-made textiles. The present directives are unsatisfactory and can and will be breached. We need a series of regional and national conferences embracing all sections of the textile industry and involving Ministers and Departments. We need to set up a national purchasing agency. Such an agency would be of considerable assistance to the industry.
Clearly, the industry needs Government help and Government action. In particular, it needs import controls. If the Government reject the call which is being made by those in the textile industry they will live to regret their rejection. They will reject that call at their peril.
§ Mr. Deputy Speaker (Mr. Oscar Murton)
Hon. Members are doing reasonably well by making short speeches, but Mr. Speaker wishes me to point out that approximately 10 more Members are still desirous of taking part in the debate. The winding-up speeches will begin approximately 55 minutes from now. It is in the hands of hon. Members to be as brief as possible.
§ 10.27 p.m.
§ Mr. Nicholas Winterton (Macclesfield)
This is a very important debate. I shall speak on behalf of the textile industry, textile employers and textile workers. Macclesfield is known for its silk, for its clothing and for its textile machinery manufacturers. The Ernest Scragg undertaking is world renowned for its textile machinery. Something in excess of 80 per cent. of its production goes in exports which are so vital to the country.
I speak on behalf of my constituents when I say how disappointed I am with the Secretary of State's speech and with the statement made on 23rd July. They are totally irrelevant to the present needs of the industry and they demonstrate a total lack of understanding of the industry's real problems. There is a feeling within the industry that the Government have decided to write it off. I hope that in winding up the debate the Under-Secretary of State will prove that feeling to be wrong. 656 The cotton and allied sector in the North-West has been decimated as a result of inertia and failure by successive Governments to control imports into this country from developing nations. As we have heard already, the wool sector is showing signs of going the same way as the cotton and allied sector. The point has not been made so far, but the manufacturers of man-made fibres, the so-called glamour sector of the textile industry, are now finding themselves in difficulty. It is no longer true that they have the advantage over the developing countries because of their advanced techniques. Their techniques are in the possession of the developing countries, and those countries are using them to sell their products in this country. The total amount of man-made fibres moving into the United Kingdom in the first quarter of this year was 13 per cent. less than that which moved in during the comparable quarter of last year. If that is happening in man-made fibres, a growth sector of the industry, and if the growth sectors cannot compete with imports from low-cost producers, how can the traditional sectors, such as wool and cotton expect to survive?
The Secretary of State made the point that it was the down-turn in the textile cycle, the fall in demand, that was creating problems in this country. Let me point out one or two facts and statistics. Is the right hon. Gentleman aware that imports of shirts in June 1974 were 3.6 million but that in June this year they were 5.8 million? This is an enormous increase on an already very high figure. Does he know that the issue of quotas relating to Hong Kong for the first five months of 1975 was up by 130 per cent. on the first five months of last year, and that the total imports of shirts in the first half of 1975 was up by 11 per cent. against the very high level in the first half of 1974? These questions should be answered by the Minister in his winding-up speech.
I am delighted that an announcement is to be made about our negotiations with Korea, because a spinning mill is very shortly to open in that country which will have an output capacity of one-sixth of our total capacity in this country. It is vital that Korea does not unload cheap textiles into this country to the 657 detriment of the United Kingdom industry.
No wonder the inaction of successive Governments, particularly the present Government, has resulted in a figure of a million unemployed. Unfortunately, the Government seem to pay more attention to the needs of the developing nations than to those of the British people. By all means help the developing nations—the textile industry has set a very fine example in this direction—but surely not at the expense of the total extinction of a complete industry and of increasing unemployment during the most serious economic crisis we have had since the 1930s.
I draw the Minister's attention to the possible consequences of his policies. The first and obvious one is that we shall become completely dependent on the developing nations for our sources of supply. This is at present no problem, as there is a surplus of capacity on a world basis to supply all these needs. We have only to go back two years to 1973, however, when there was a world boom in textiles and supplies were difficult to obtain. At this time many developing nations were failing to honour contracts and to supply the United Kingdom's requirements. Large sections of the home industry had been eliminated by imports during previous slumps. The home industry was unable to meet demands from consumers in this country.
As soon as this serious recession is over, I suggest, the shortages will be even greater than before, and many United Kingdom consumers may be unable to purchase textile requirements of their own choosing. Even now the troubles in Portugal are an example of what can happen, Portugal being one of our larger suppliers of textiles. Because of the troubles, some supplies are not coming through and, through no fault of their own, manufacturers in this country are unable to meet their obligations.
How do the Government view the strategic implications of allowing two-thirds of our total textile requirements to come from abroad? We may soon, like Sweden, be in a situation where we cannot even clothe our Armed Forces, let alone the population as a whole. I am told that the Swedish textile industry can supply only 15 per cent. of the needs of 658 its armed forces, and that the Swedish Government have only just woken up to the strategic implications of allowing the textile industry to sink to this ridiculous level. They have now decided to pump money back into the industry to build it up again. I suggest that the Government will soon be in a very similar position unless action is taken.
The Government's policy, as set out in the Minister's statement of 23rd July, is totally irrelevant to the needs of the industry and will do nothing to reverse the trends which are taking place. To suggest that money is the answer, without a firm statement of Government intent to restrain imports—I use that word rather than suggesting cutting off totally—at a given level, is utterly reprehensible and an irresponsible use of taxpayers' money, particularly at a time of economic crisis.
Mills are closing. We heard that the Empress Mill in Ince and another in Rochdale are closing. A number of mills in Macclesfield are closing also. Time is short, and, unless the Government retract from their entrenched position with regard to imports, thousands of textile workers will be added to the mounting lists of unemployed, with dire consequences not only for the industry itself and those who work in it but for the survival of the present Government. Action is needed now, but the proposals of the Minister of 23rd July were long-term proposals. We need action in the short term.
I urge the Minister to take action. I urge him to ensure that all Government Departments buy British. It would be interesting to ascertain how many hon. Members present tonight are wearing British-made textiles. My shirt, my tie and my handkerchief are British made, in fact made in my constituency. My jacket and trousers were made in Northern Ireland. I am practising what I preach.
I hope that during the coming recess every hon. Member will continue to bring pressure on the Government and set an example by himself, or herself, buying British.
§ 10.35 p.m.
§ Mr. George Rodgers (Chorley)
I am sure that we are all grateful that time has been made available to discuss the plight of what is now a stricken industry. 659 I hope that the time has not been allocated simply to mollify us and to allow us to let off steam before the end of the parliamentary Session.
Tonight, the Department has been presented with proposals designed to meet a desperately serious situation, and upon them the success if not the very survival of this once mighty industry will depend.
I find it very difficult to comprehend why there is this lack of urgency about the plight of the textile industry. Possibly it is because, generally speaking, it is isolated geographically. In Lancashire, certainly, we find that the industry is concentrated in one region, unlike other great industries such as construction, engineering and motor manufacture which are scattered about the country, and people not directly associated with textiles are not aware of the gravity of the situation.
There are historic reasons for this. Originally, of course, it was a cottage industry, with the man doing the weaving and his wife the spinning. Indeed, I believe that the word "spinster" originated from the practice of employing unmarried women to help out with the spinning. Then the industry moved out by the rising streams from the Pennines, which were used as its source of power. Then, by extraordinarily good luck, it found itself sitting on top of the rich coal seams of Lancashire.
We have had the experiences of coal and cotton, both major industries in Lancashire for such a long period, now in a state of decline. We have seen the folly of successive Governments in deliberately closing down coal mines and then looking overseas for our sources of energy, and we know the consequences. There may be some solution in terms of energy. We have North Sea oil, or we shall have in the comparatively near future. But there is no textile industry to be found off the north-east coast. If the industry does not survive the coming months, it will never recover.
We find that communities in Lancashire are established round the mills. The prosperity of the people is interwoven with that of the local mill. If a mill is forced to close, very often a whole community dies. Within the life span of one person today, the industry has gone 660 into a decline and fall which is quite dramatic and unbelievable. Towards the tail-end of the last century, we had some 82 per cent. of the world trade in textiles. In 1913, Lancashire still exported four-fifths of its textile production. Now we see the folly of a situation whereby we are inflicting wounds upon our own community. The wounds are self-inflicted.
Since 1959, we have seen a grand slimming down of the industry. It was described as a formula for survival, and perhaps in 1959 that was justified. If a 20-stone man can be slimmed down to 10 stone, he is invigorated and the loss of weight is beneficial. But it is impossible then to take another 10 stone off him. That is the situation in the textile industry. It is paradoxical when we remember that it is the very industry which obeyed the text books of the great Right-wing economists, in that it is strike-free, it is a low-income industry and it has accepted all sorts of strange shift working and multi-shift working. People who have worked in the industry have tolerated a great deal. Yet these industries, as a consequence of that virtue, are being penalised.
We insist that the only solution for the problems of the textile industry is severe, calculated import restriction. It was suggested earlier that developing countries would be penalised by such action. Some, though not all, textile imports come from poorer countries. I strongly favour an increased aid programme to emerging nations, but this should be direct aid. It is scandalous that one sector of the community should provide an easy conscience for the rest of the nation by accommodating this problem. We should trade with developing nations and encourage a revised framework of trade with fair international agreements. Trying to deal with the problems of the Third World by creating unemployment in developed nations is totally unacceptable.
The home textile industry provides employment, directly or indirectly, to hundreds of thousands of people, many of whom live in areas of traditionally high unemployment. In some areas, 30 per cent. of those in employment are working in the textile industry. About 3,000 have been made redundant this year and 50,000 have experienced various periods of unemployment. This is against a background of 60 per cent. penetration of the home market by foreign textiles. 661 Two mills are to close in a matter of weeks, putting 600 people out of work. I have a lingering horror of unemployment. I was a schoolboy in the 1930s and I can still taste the misery of those days and the lack of dignity as well as income. I cannot forget or forgive those responsible. My attitude has not changed, whatever Government have been in office.
The propositions I am putting forward have the merit of simplicity. They have the support of the unions and the industry generally. We insist that cotton yarn be removed from the EEC liberalised list. We should establish a Government purchasing agency for yarn and fabric through which all buying would be conducted—it would cost little and could be brought into effect by the NEB. The introduction of severe import restrictions for textiles and a wide range of other commodities has become inevitable.
We have been told that the reason we should support the Government's anti-inflation measures is that they carry the seal of approval of the TUC, but that same body is also forcibly pressing for import controls. If its voice is valid in one area, it must be equally valid in others. It is the same voice advocating the same overall economic policy. The Government cannot be selective by approving the TUC's guidance on some aspects of policy and ignoring it entirely on others.
The use of import controls is an inevitable ingredient in our battle against inflation—better we use the weapon sooner than later, because later may be too late. We look to the Government for immediate and decisive action. It is not only the survival of the textile industry that is at stake.
§ Mr. Deputy Speaker (Mr. Oscar Murton)
The Chair understands the importance to hon. Members of speeches concerning their constituencies. I appeal again for speeches of six or seven minutes—not more.
§ 10.45 p.m.
§ Mr. Ian Percival (Southport)
The Government must surely have been impressed by the unanimity of view and multiplicity of examples presented from all parts of the House. If they are not moved to action now, nothing will ever move them.
In my constituency there are factories which are equipped with the very best 662 knitting machinery, administered by first-class management and manned by workpeople who are skilled, hard working, responsible and moderate in the return which they accept for their efforts. But those people are under-employed, and if we are not careful they will be unemployed.
There are two identifiable reasons for this situation. One is that in this sphere imports are being brought in at a price which can only be the result of sweated labour to a degree which would horrify us here. The second reason is that we are being called upon in this part of the industry—and I speak only of this part since it is the only part of which I have direct knowledge—to bear a wholly unfair portion of the burden falling on Europe. Will the Government not urge our European partners to share the burden more fairly?
There are answers to these problems and they will be found because they must be. Let it not be left too late before action is taken. The necessary steps must be taken now. My plea to the Secretary of State and the other members of the Government is this: for God's sake stop it now before these people of ours, and their machines, are thrown on the scrapheap.
§ 10.47 p.m.
§ Mr. Doug Hoyle (Nelson and Colne)
I hope that this debate will not be regarded by the industry as so many bromides, expressed while mills continue to close. Great play has been made about the two spinning mills which are to close in the near future. As the debate was beginning I received a telegram from my constituency which told me that Bairtex Ltd at the Black Corr Mill, Trowden, a special purpose mill established only four years ago, was due to close. The telegram went on to refer tobeef and butter mountains and wine lakes—why not Government-controlled buffer stocks for textiles?As it also says in the telegram "imports do kill" and they are putting on the scrapheap 81 people in a very tiny village in my constituency. There is no possibility of employment being found for these people in the near future. It is time the talking stopped and we had some action.
We listened carefully to the Prime Minister's statement and to that by the Secretary of State for Trade on 23rd July. But the industry is still demanding 663 acceptance of the fact that as long as imports take up 60 per cent. of the home trade there will never be a viable home textile industry, and we shall continue to hear about mill closures. It has been said that the only answer is import controls. But that means import controls not only for textiles but for footwear, for cars, for glass and for electronics.
We are arguing about the Government's economic policy. It is of no consequence to the people of Trawden who will be unemployed on 29th August to know that the battle is being waged against the orthodoxy of the Treasury. There is no doubt that in six months' time we shall get the selective import controls, but they will be far too late for those people.
In his statement my right hon. Friend the Prime Minister mentioned the Government purchase of existing stocks in this country. May we develop a little more the idea that has been put forward tonight about a Government purchasing agency composed of employers, trade unions and representatives of the Government, so that when the stocks are bought up there is close liaison with those responsible for import licensing in the Department of Trade? Moreover, may we have an assurance that when an application is made for an import licence it will not be granted if the material—either yarn or cloth—is available from the stocks? Such a scheme would materially benefit not only the industry, but employment in the industry and surely that is a very sensible thing to do.
If we talk about anti-dumping measures I must reiterate what has been said on previous occasions. Why do we not follow the example set by other countries? If there is a charge of dumping let us put the onus on the importer. In the meantime let the stocks lie on the quayside. When it is said to a manufacturer in this country that he must prove that dumping is taking place, he is often out of business before the ink is dry on the paper that is being prepared for the Department. The damage has already been done. The textile industry's complaint is that we act too little, too late.
In view of the time, I simply say that for far too long the textile workers of this country have given so much in time of war and peace, but they have received 664 little from successive Governments. Time is short. Unless meaningful action is taken along the lines that I have set out tonight concerning import controls, we shall not have many more debates on the textile industry, because there will not be a textile industry to debate.
§ 10.53 p.m.
§ Mr. Giles Shaw (Pudsey)
It is abundantly clear that the anxiety about the Government's measures announced in July was that they do not help the short-term problems of the industry. The industry clearly believes that some restrictions on cheap imports is the major problem. Given the downturn in the United Kingdom economy and the general restrictions in world trade, it is not surprising that attention should be riveted on this aspect.
Clearly the Government do not yet accept that there is a case for controls. The Department of Trade's natural fear about retaliation—as has occurred certainly in the cases of Turkey and Greece—is paramount over the Department of Industry which has responsibility for the maintenance of jobs within, and the viability of, the textile industry.
However, the Department of Trade must offset the benefit which it clearly sees to our export trade, by avoiding retaliation in the short term with the consequential loss to our export trade in future years if the wool textile and other textile industries collapse. We cannot have the benefit both now and later by pursuing the same policy.
Turning to the wool textile industry's problems I point out that I represent the constituency of Pudsey where the wool textile industry is extremely important
The main attack I make on the Government, with all the genuineness I can command, is that they have so far failed to grasp the need to maintain the existence of small specialist firms. Some spinners and weavers are large companies, but dyers and combers, fabric printers and top makers are usually small, and in some cases very small companies. These companies are particularly vulnerable at the present time. Yet they are essential as suppliers and processors to the whole industry—large companies as well.
We have in these smaller companies skilled manpower and expertise which, 665 once disbanded, can never be recovered. The Government must look again at giving guarantees, perhaps by funding under the Industry Act, to enable small companies to back their bank borrowings.
On investment allowances, much has been done with the £15 million allocated under Section 8 of the Industry Act to the wool textile industry. I understand that £6 million of that sum still remains. But, in view of the closures to which reference has already been made—at least nine companies are reported to have closed down in last month's issue of Wool Record and Textile World—severance pay and other benefits may use up the residual amount under the Industry Act.
The closure of small firms is a serious, rapid and growing situation. It is exacerbated by another element introduced by the Government—namely, the intention, through the Factory Inspectorate, to replace guards on carding machines, which was mentioned by my hon. Friend the Member for Ripon (Dr. Hampson). This will cost the wool textile industry £5 million with no return to the companies concerned and probably with a loss of productivity. I understand that to qualify for aid under the Industry Act scheme a threshold of £50,000 is the minimum level at which a claim can be made. Clearly that is too high. I ask the Government to consider lowering the threshold limit for claims under this section of the Act so that small companies can apply for funding.
A mill in Pudsey, owned by Clough Ramsden & Co. Ltd., closed last week. In a Press statement the management said:A further contributory factor affecting our decision has been the Factory Inspectorate's insistence on the full height side guarding of our carding machines which, although providing improved safety, would have involved us in crippling expenses for which there would be no monetary return.I further understand that aid is available to small firms in development areas to enable them to hold labour. Will the Minister consider gazetting West Yorkshire as a development area or possibly extending the scheme exceptionally to the textile industry?
I have drawn up for the Minister's considerataion a 10-point plan of action for wool textiles. 666 First, it is desperately urgent to reduce quotas of foreign fabrics and made-up garments, particularly from Comecon countries and Southern Italy, by firm negotiation.
Secondly, the Government should re-introduce the country of origin labelling regulations.
Thirdly, the Government should use the Price Commission to check against profiteering on profit margins of cheap imported materials.
Fourthly, the Government should set up a guarantee fund to help smaller industries to cover bank borrowings and to prevent the disbandment of skilled labour.
Fifthly, they should review the industrial aid under Sections 7 and 8 of the Industry Act to allow the cost of small schemes to be eligible for grants.
Sixthly, they should consider giving development area status to West Yorkshire.
Seventhly, they should encourage the ECGD to be more flexible in covering export costs—for example, travel costs, which are a high burden for small firms.
Eighthly, they should instruct, not exhort, State trading undertakings to buy British textiles.
Ninthly, they should consider setting up a joint committee representing the industry, the Department of Trade and the Department of Industry to monitor developments over the next crucial 12 months to ensure that problems are detected before they become critical.
Tenthly, they should consider expanding the Industry Act scheme into 1976 as it is due to expire at the end of this year.
I welcome the Government's recognition that the wool textile industry, which pioneered the industrial revolution in this country, is well able to withstand fair competition and fair pressure of economic difficulties. But when excessive competition and excessive economic circumstances coincide, the Government must recognise that special solutions are required. Those solutions are available if the Government act with urgency.
§ 11.0 p.m.
§ Mr. Raymond Fletcher (Ilkeston)
My only intention tonight is to transmit, 667 unprocessed, the views of my constituents to this House and to the Government. Everything that needed saying about the state of the industry has been said and everything that had to be demanded of the Government has been demanded.
In short, the debate has been a set of free variations on the basic theme of import control. I have no intention whatever of adding my own set of variations to that theme. However, I should like to refer to a town with which my hon. Friend the Secretary of State for Industry is familiar. I was there on Monday and the people of that town made one comment about the Government. They said "We have been getting a little fed up with the Government and we were totally fed up with the previous Government." I asked them what kind of Government they would like and they said "We would like a Japanese Government, because Japanese Governments break all the rules, they get things done and they are totally ruthless in the defence and pursuance of Japanese interests."
When I explained to the good citizens of Alfreston that this was not possible, they suggested a compromise, namely that through my European connections I might import a French Government into this country and seat them on the Government Front Bench. As everyone knows, French Governments are not only ingenious, but they are equally ruthless in the pursuit and defence of French national interests. That is one very strong opinion.
However, my right hon. Friend the Secretary of State for Industry in a previous incarnation in a previous Government once rescued my constituency from total collapse. He will recall the action that he took. There were once 16 coal mines in my constituency and all have now been closed. New industries, many of them related to hosiery and knitwear, were introduced into the area thanks to the efforts of my right hon. Friend in a more junior capacity. It is a great mistake to judge my right hon. Friend on his speeches. [Laughter.] I am speaking seriously and I cannot understand the hilarity at all. I ask my right hon. Friend to act now, as he did then—my constituents expect it. 668 The second point of view which I want to express relates to a statement made by Mr. Tom Richardson, the chairman of the Ilkeston District National Union of Hosiery and Knitwear Workers. I quote from an article in one of my local newspapers, the Ripley and Heanor News.The recent agreement with Hong Kong (restricting that country's imports to 1974 levels) is some measure of relief, for the signs were that the whole home industry was collapsing under the enormous pressure. That calamity may still occur and we would all do well to consider the implications of this on our society—for this is no paper bag or chocolate box industry—this is a part of one of the great staple industries of modern society.Everyone needs to be clothed—so are we moving to a position where we rely utterly for our clothing needs on countries so unstable as those mentioned"—he is talking of Hong Kong, Taiwan and South Korea—the one, a crown colony, operating on a tenuous lease, the other two surviving only by reason of an American presence.
My right hon. Friend will recognise those sentiments. They were once forcibly expressed in 1967 by those workers for whom he has been so rightly praised for doing so much. The miners said that in 1967 about the fuel policy a previous Government produced: how fatal it would be to be so dependent on foreign sources for a vital part of our energy supplies. The miners were ignored by the then Government because they dropped their aitches and had not been to Oxford and Cambridge. They happened to be right.
So with the hosiery workers. How well my constituents express themselves. I expect the Editor of The Times to replace me and find someone else from Ilkeston.
I shall not add a drop to the milligrammes of statistics which have poured into the debate. I merely ask the Secretary of State for Industry to act now, as he once did in a previous manifestation, to save, not only mine but all the other constituencies affected by the crisis which does not arise from the deficiency of the industry.
This is a good industry with good price levels and good labour relations. It does not suffer, except by attack from outside. When we talk of the outside world, let us dispense with odious sentimentality about the Third World. I owe no obligation to the 77 nations inside the 669 United Nations when they turn it into a general assembly of barbarians. I owe no obligation to them whatever. Charity, like industry and everything else, must begin at home.
I could say a lot more, Mr. Speaker, but I obey your instructions.
§ 11.7 p.m.
§ Mr. Jim Marshall (Leicester, South)
I wish to refer to the knitwear workers and I remind my hon. Friend the Member for Ilkeston (Mr. Raymond Fletcher) that some of us are in direct contact with the people who represent hosiery and knitwear workers and they will have to rely on newspaper reports of statements made by individuals.
§ Mr. Raymond Fletcher rose—
§ Mr. Marshall
Time is short and we must emphasise the difficulties which hosiery and knitwear workers are facing in the context of the textile industry and of manufacturing industry at large. When the Secretary of State was opening the debate, he indicated that the problems which the textile industry faced were similar and of the same order of magnitude as those facing British industry generally.
I have pointed out before the problems in hosiery and knitwear industry which is essentially centred on the East Midlands, and of the loss of jobs, which is twice the national average. Between December 1974 and May 1975, 7.2 per cent. of jobs were lost in that industry compared with the national average of 3.6 per cent. That is the difference between hosiery and knitwear and manufacturing industry at large. The life-blood of hosiery and knitwear is flowing away at 1 per cent. of its jobs per month. No industry can continue to suffer that. If it continues much longer, the closures taking place and the great personal hardships will be to no avail because the future viability of the industry will be beyond repair.
That is the difficulty facing the industry. I said that a large percentage of the hosiery and knitwear workers are in the East Midlands. One in eight workers in the East Midlands works in the hosiery and knitwear industry. The present unemployment figures in the East Midlands show the effects of the decline in the industry. The East Midlands has 670 historically been a low unemployment area. But if my right hon. Friend looks at places such as my own city of Leicester, where again historically the unemployment rate has been way below the national average, he will find that it is now much above the national average—5.2 per cent. compared with 4.7 per cent.—and that the increase over the past 12 months has been 160 per cent. If that rate continues I fear for the economic future of the city of Leicester in particular and of the East Midlands in general.
What can the Government do? They certainly must do something about the situation if the industry is to survive. I support all my hon. Friends who have urged the Government to introduce import controls. They can be introduced, but the political will to do so is needed. I believe that the Government's incomes policy will mean that within the next few months they will have to introduce selective import controls, because they are reducing consumption. People still have to pay the rent, to buy food and pay the increased gas and electricity charges which my right hon. Friend imposed some months ago. Therefore, there will be little money left to buy hosiery and knitwear goods. Demand for them will continue to decline. Let us introduce import controls now, while there is still an industry, rather than leave it for four or five months, when the industry may well be beyond repair.
I wish to make a suggestion which I hope the House will not dismiss as a political gimmick. In previous years old age pensioners and those on supplementary benefit received a £10 Christmas bonus. I agree with the Government's decision to do away with it, but if they continue to turn their face against import controls they must stimulate demand for home-produced textiles. One way would be to provide old age pensioners and those receiving social security benefits with, say, a £5 textile voucher. The right hon. Member for Down, South (Mr. Powell) smiles—
§ Mr. J. Enoch Powell (Down, South)
I was thinking of Charles II's law that corpses must be buried in wool.
§ Mr. Marshall
—but if that could be done at a cost of £40 million to £80 million, it would stimulate demand for British-produced textiles. I believe that 671 the net cost would not be great, because people would still be employed in the industry, paying income tax, and there would be a saving of the social security payments that would have to be made to them if they were put out of work because of the increased penetration of low-cost imports.
§ 11.14 p.m.
§ Mr. Ted Fletcher (Darlington)
I have a particular constituency interest in the debate, because the firm of Paton and Baldwin is an employer in my constituency. It has recently had to reduce its labour force by 240, and, in line with many other textile firms, it has been working short time for many weeks.
Darlington has always had a fairly high level of employment, even though it is situated in a development area where unemployment is normally twice the national average. The cut-back in employment in the textile industry, added to a further 250 redundancies in a large engineering firm, has meant that the town now faces unemployment levels that it has not known since the war.
In spite of the optimistic noises made by my right hon. Friends the Prime Minister and the Secretary of State for Industry, the textile industry continues to deteriorate. The Secretary of State has not addressed himself to the central theme of this debate—the universal demand from hon. Members on both sides of the Chamber and management and trade unions that the Government should introduce a measure of import control. It is suggested that the imports of textiles and clothing should be reduced by 20 per cent. in value for a period of one year. That is not a revolutionary proposal. No one suggests that it will solve all the problems of the textile industry, but it will lead to an increase in demand in the home market.
The Secretary of State is totally isolated from the House of Commons. A call for import controls has been made from both sides of the Chamber. It seems that the Minister and his colleagues listen more to the Treasury than to the voice of the House of Commons. I hope that as a result of this debate, and the call from both sides of the House for him to investigate the possibilities of a temporary measure of import controls, he will change his mind. 672 Even the Prime Minister seems to be afraid. Reference was made to his article in Time magazine, in which he said:we are not going to sit back and watch a remorseless increase in unemployment. If the slump does not improve quickly we will obviously resume our right to protect our balance of payments by various means.Unemployment in the textile industry is remorselessly increasing. Almost one-quarter of the work force is on short-time working. Thousands are being made redundant each week. Now is the time for us to consider the other means to which the Prime Minister referred. Do not let us be misled by the reference made by the Secretary of State to the fact that we should revoke our treaty obligations if we imposed import controls. That will not be the position. There are facilities for us to contract out of our international obligations. My right hon. Friend knows that there are escape clauses in those obligations. Countries with exceptional balance of payments difficulties are allowed to take unilateral action on imports under Article 12 of the General Agreement on Tariffs and Trade and Article 190 of the Treaty of Rome.
There are many precedents for that. Italy, for example, recently instituted an import deposit scheme as a result of her economic difficulties and balance of payments problems. That was accepted by her EEC partners. There is no reason why we with our tremendous balance of payments problems, should not take similar action. The Minister need not fob us off by saying that it cannot be done. It can be done if the Front Bench have the will to oppose the Treasury and listen to the House of Commons.
I therefore put forward a plea on behalf of my constituents. This is not only an economic problem. It is a human problem in terms of the people who have invested their lives in the industry, and who, after working for many years in the textile industry, have been thrown on to the scrapheap.
I add my voice to those of my colleagues on both sides of the House in saying this to the Secretary of State. Let us have some action. We shall not be satisfied in the long recess if action is not taken. Eight weeks must pass before we can discuss this matter again. We want action taken now. Our constituents 673 demand immediate action. I hope that the Minister will give us these assurances when he replies to the debate.
§ Several hon. Members rose—
Order. Before calling upon the hon. Member for Cheadle (Mr. Normanton), I want to express my gratitude to the House. The Chair has called 29 back-benchers in the course of the debate and, if I may say so, greatly daring, it shows the moderation of those who speak for these important industries.
§ Mr. Nigel Lawson (Blaby)
On a point of order, Mr. Speaker. We have just had three speakers one after the other from the Government side of the House, despite the fact that my constituents in Blaby are affected by the recession in the industry—
§ 11.20 p.m.
§ Mr. Tom Normanton (Cheadle)
We are coming to the end of what I feel sure everyone in the Chamber at this late hour will agree has been an extremely useful debate. It has given added emphasis to the statement we have made so frequently that there is unanimity to be found across party politics when we come down to the stark reality of the way in which the men and women of this country earn their daily bread.
I am, therefore, reluctant to be somewhat partisan, but many may have asked themselves in the course of the debate whether it is purely by accident, by bad management of the business of the House or by intent that we are debating the state of a major industry—the footwear and textile industry of Britain—at this late stage in the parliamentary programme, a programme which has been so heavily over-loaded by business, much of which has been at best irrelevant to the well-being of industry in general and textiles in particular and at worst inimical or downright prejudicial—a point which my hon. Friends the Members for Wells (Mr. Boscawen), Wellingborough (Mr. Fry) and Ripon (Dr. Hampson) made most effectively. I shall try to eschew party politics for the rest of my summing up.
To comply with parliamentary protocol I have to declare an interest. I have a 674 lifelong interest in textiles, both by way of private business and national and international industrial agencies.
The history of Lancashire textiles—and that is what many have been referring to though spreading the net much wider—is of a long series of stepped run-downs from a position in which this great textile industry employed, directly or indirectly, well over 2 million men and women to a mere fraction of that total today. Every step down has been the occasion for appeals to Government—whichever Government are in power—for action in areas in which Government only can and should operate to cope with the inevitable, inexorable rising tide of the influx of imports.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
I am having great difficulty in listening to the hon. Gentleman because of the loudness of voice of the hon. Member for Blaby (Mr. Lawson).
§ Mr. Normanton
First, going back a long time, there was the appeal for the repeal of the Ottawa Agreements. Governments resisted that because they felt that they had to stand firmly by agreements which had been entered into internationally, although they were agreements which were totally irrelevant to the industrial and commercial climate of the time when the appeals were made.
Secondly, the industry was driven by Governments to negotiate industry to industry, which was a scandal. It is a classic example in industrial negotiating terms of an industry having to negotiate unilaterally with its own commercial executioners.
Thirdly, Governments promised that they would help the industry if the industry would trim itself down to what they said was the right size. Three times that operation took place, but still the same comments come from Ministers. They still cannot state categorically that the industry is of the right size and must be contained at that size for the future.
Fourthly, the Government have been insisting repeatedly upon the industry itself investing capital and expertise in the redeployment of all those engaged in it. They have been fully supported by all who are engaged in the industry, whether it be employers or trade unions, thanks to the unique industrial relationship which 675 exists. I know that my colleagues would like to pay their respects to those trade union leaders who have given their service to the industry on a non-partisan basis.
Fifthly, Governments have promised action in the past on quotas and tariffs to deal with rising imports, but every time they have insisted upon the insertion of safeguards for the interests of foreign producers by guaranteeing annual increments regardless of the state of trade at home or in the world at large.
Sixthly, all Governments have refused to declare publicly what most if not all of us in the industry have felt—namely, that in pursuing and developing patterns for restructuring and development the textile industry is still deemed to be expendable. We are told repeatedly by different Ministers under different circumstances—basically the message has always been the same—that the industry must move into more sophisticated areas of technology such as jet engines, telecommunications, televisions, automotive products and the like, but how many faces have blushed with embarrassment when we have looked back over the past five or six years and considered the instructions and admonitions given to the textile industry over the past 20 years or more?
Against that background I want to be as constructive as possible. That would be strictly in conformity with the general spirit in which every right hon. and hon. Member has made his observations during the debate. Despite the interpretations which it is possible to construe of the representations made by certain sectors of the textile industry, it is not true that the two major industries of textiles and footwear seek feather-bedding or full protection. They have never sought such treatment. That is not the climate in which they wish to compete, because they are industries which are competitive by nature. They operate in a world which is textile-product oriented. Their market, and the background against which they operate, must be the world, and it is a competitive world. However, as my hon. Friend the Member for Northampton, South (Mr. Morris) has said, there is all the difference between fair competition and the kind of competition the footwear and textile industries have had to face, and particularly when trade is bad. The 676 cyclical character of the trade is such—this has always been so on a world basis—that when trade is bad anywhere it is inevitably bad everywhere.
Surely the objective of Government should be to create the right kind of economic climate and provide the right form of governmental machinery within which competition can operate fairly and effectively. First, I believe that the regulation of international trade in textiles must be by means of quotas and modest tariffs. However, in a weak market those quotas effectively guarantee an outlet for the products covered by the allocation. In other words, they give an effective guarantee to those who are supplying imported goods into this country. The home industry, whether it be textiles or footwear, bears the full burden of trade depreciations and recessions when they come.
We know that recently the textile industry, through its official channels, has demanded a 20 per cent. cut-back right across the board to deal with the current situation. I must confess that I cannot indict the Government for taking fright at such a demand and being extremely reluctant even to give it more than superficial consideration. But I am bound to admit that they recognise, as the industry recognises, that were that to be done across the board, it would be inappropriate and slow to act. What the industry wants is action which is urgent, immediate and effective.
I believe that there must be a genuine procedure for dealing with dumping. The Government deceive themselves, and are irresponsible if they succeed in deceiving the country, if they believe that the past and present machinery is any better than a farce or an insult to intelligent people who have to work for a living and do not write intellectual treatises in ivory towers.
Having taken part in many of the perennial ramblings with the Board of Trade and later the Department of Trade, when proof had to be produced, I recall a particular experience. An importer of Chinese textiles called on me and threw down four samples of cloth. He asked me, "How much?" He told me, "Name your price. I have millions of yards to sell. We want currency." That incident highlights one of the many factors with which our own industry has to compete.
§ Mr. Normanton
I did not. The Secretary of State will be aware that at that time Chinese cloth was under very strict control. The point is still valid, however. Whether the cloth comes from China or Pakistan or elsewhere, there is often in effect a two-price system with which our producers cannot hope to compete. It is fair, and not unfair, competition that we should ask our industry to challenge and meet.
The Department has always insisted on written evidence. That is like requiring John Citizen, when finding a burglar in his house, to hold out by law a declaration of guilt for the signature of the burglar. It is idiotic, fantastic and irresponsible.
§ Mr. Madden
Will the hon. Gentleman clarify the position of the Conservative Party on the issue of import controls? The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) indicated some support for import controls. Does the Conservative Party now join the Liberal Party in supporting selective import controls? If so, that policy seems at variance with what the Leader of the Opposition has said.
§ Mr. Normanton
I have no intention of spelling out tonight for the benefit of the hon. Gentleman or of the Government the precise terms of the policy of the next Conservative Government for textiles. I hope the House will be clear before I finish as to what I believe should be the basis of a textile policy that should be pursued.
Textiles and footwear fall into the same category. The procedures and promises of support against dumping are effectively not worth the paper from which the Secretary of State read his statement a few days ago, however well-meaning and honest his intentions are towards these industries.
Many right hon. and hon. Members have voiced a very special and particular fear which I do not think was voiced by the Secretary of State either in this debate or in the previous one. Britain and free Europe are moving into a new economic ball game and an era in which expansion of world trade means an increase in the flow of goods manufactured in State trad- 678 ing countries, where costing and pricing as we know it in the Western world is on a totally different basis. There is no such thing as a market price as we know it for a pair of shoes in Russia or Bulgaria. The price for that pair of shoes exported abroad to the free world is the price at which the Iron Curtain country producer can effectively sell. The cost of production is totally irrelevant to the transaction. This is the new ball game into which international trade is now moving.
Tonight we have been talking about shoes, footwear, shirts, cloth and yarn, and yet exactly the same is happening in high technology areas such as television sets, radios, semiconductors, cars, trucks and many more advanced technological products, a point which has been mentioned from both sides during the debate. What is happening to textiles and footwear today will happen to every major industry in Western Europe unless the right sort of policies are prepared now.
No Government should, however—I am sure that most, if not all. Members of the House will endorse this—protect its industry from incompetent management, from wilful or irresponsible behaviour of any sector of any industry, from the refusal of any industry to be technically dynamic or from a refusal of any industry or concern to face up to the world forces of fair competition. The textile and footwear industries do not fall into any of these categories, as every contribution from both sides of the House tonight has confirmed.
The House has tonight given a warm welcome to the GATT Multi-Fibre Arrangement, but the record of the Government's part in the negotiations with Brussels makes dismal reading. If every member State dragged its heels as Britain did prior to the referendum, the progress for the future of the Community would be very sad.
I hope that the Under-Secretary will reply to a number of points. I hope he will give an assurance to the House and a pledge to the textile industry to guarantee here and now a commitment to the extension and improvement of the Multi-Fibre Arrangement. The extension should be both in terms of time—that means beyond 31st December 1977—and in scope by the inclusion of footwear. It can be done. It is realistic. It is 679 certainly highly desirable. The improvement of the MFA should be by introducing an automatic regulating mechanism, to which I have referred, which would spread the burden of economic recession equally and fairly between foreign suppliers and domestic industry at the time it is needed most, when depression is there.
In another context the House must, I am sure, support the appeal of my hon. and learned Friend the Member for Southport (Mr. Percival) when he appealed for burden-sharing. Admittedly that is a fine-sounding phrase, but the Government must turn this into a reality within the framework of the EEC knowing that it will now command the full support of both sides of the House, not only in this House but in the European Parliament.
My hon. and learned Friend the Member for Darwen referred to the Government's proposal to help the clothing industry. This offer may have evoked gratitude from the EEC. My hon. and learned Friend referred to many other points but he particularly referred to the Government proposing to help the clothing industry. The Industry Act, to which I am solidly and irresistibly opposed—I am on the record as having opposed it in 1972—may be an excellent channel for pushing out taxpayers' hard-earned cash, but I would question whether the taxpayers will see much for their money. They are more likely to get Government demands for yet more money. The makers-up are not specially famous for their assistance in regard to the use of United Kingdom cloth, with one or two outstanding exceptions. This was a point made by my hon. Friend the Member for Macclesfield (Mr. Winterton).
The question the Government must answer is how they propose to spend their £20 million, what they expect to achieve, and whether it will make the textile industry more effective.
The right hon. Gentleman the Secretary of State hinted at further sums of taxpayers' money being considered for other sectors. What are these areas and commitments?
Lastly, we believe that it is the height of folly to ignore the consequences of the record and never-ending stream of 680 legislation and policy decisions of the Government. These policies have only one certain result—the debilitation of British industry and enterprise in general and of small and medium fibre business in particular.
The motto for this Government is "Too little too late." We ought to have more deeds, and less words and less legislation.
§ 11.42 p.m.
§ The Under-Secretary of State for Trade (Mr. Eric Deakins)
Until the last speech I should have said that this had been a well-informed debate and also—I do not exempt the last speech—a very serious one, because we are dealing with a very serious problem in two of our major industries.
Hon. Members on all sides have spoken from the heart, and, as the hon. Member for Nelson and Colne (Mr. Hoyle) and the hon. Member for Darlington (Mr. Fletcher) reminded the House, we have been concerned throughout with people, particularly the constituents of hon. Members who have shown here the feelings generally of people in the textile, clothing, hosiery and footwear areas of this country. There is hardly a constituent who works in these industries who has not been represented here tonight by the comments either of his own Member of Parliament or of some other hon. Member.
I want first to deal with a number of the specific points which have been put to me and then to go on to develop the theme of import controls, the Government's attitude to them, and the Government's reasons for the policy they have adopted. I should also like to deal with footwear, because I have had an important meeting today with representatives of the footwear industry.
The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) asked about the Government's temporary employment subsidy announced the other day. This subsidy is available to firms in assisted areas, that is, intermediate areas, development areas and special development areas. It will be open to firms in the textile, clothing and foowear industries in such areas provided that the number of workers involved is more than 50. 681 This could be an extremely valuable form of short-term assistance to the industry, but I am well aware of the fact that there are many parts of the footwear industry in particular, and the textile industry as well, I suspect, which are not covered by this particular geographical coverage.
I have been asked about origin marking. Foreign goods have to be marked with the country of origin if there would otherwise be a presumption that the goods come from Britain. A pair of ordinary shoes made in, say, Poland, do not at present have to bear any mark of origin to say that they have been made in Poland. But if, say, they were called "Hush Puppies" and had been made in Poland they ought to say so. This is the sort of matter for which the Secretary of State for Prices and Consumer Protection is responsible, and I shall undertake to convey to her the feelings of hon. Members who have spoken on this particular point.
Mention was made in several speeches of an Italian firm in connection with woollen textiles and an anti-dumping application. I intervened in the speech of the hon. and learned Member for Darwen on this point. It is a fact that, as an EEC member, we cannot take independent action against a fellow EEC member. We have to go through the normal machinery of the Commission. So far, we have had no application for an anti-dumping case against this firm in Italy. If the industry wanted to promote a case, it would have to go through the Competition Directorate in Brussels. That Directorate might not agree that selling more cheaply in one part of the EEC than in another necessarily constituted dumping. The competition would have to be shown to be unfair by EEC rules, and the United Kingdom industry would also have to show that it was adversely affected.
The hon. Member for Rochdale (Mr. Smith) and a number of my hon. Friends talked about the setting up of a textile purchasing agency, and reference was made to stock-building. The idea of a purchasing agency is a variation of the stock-building scheme which was examined in detail following the statement of my right hon. Friend the Prime Minister on 23rd May. After extensive consultation, the advice from the overwhelming 682 majority of the industry was that a stock-building scheme would be of no benefit, primarily because an increase in stocks could further weaken the market. The TUC's Textiles, Clothing and Footwear Section has not included stock-building, either public or private, in its own specific proposals for Government action.
I have been asked about preshipment finance. It is a fact that in the main the banks have ample funds available at present for credit-worthy customers and, generally, there should be no difficulty in obtaining finance for exports. There may be problems in obtaining finance for large-scale and expensive exports, especially of capital goods, and my right hon. Friend the Secretary of State for Trade has today in a Written Answer given details about a scheme to assist in this area. However, it is not intended that this scheme should cover normal exports of consumer goods.
The hon. Member for Wellingborough (Mr. Fry) asked about the recent agreement with the Soviet Union and whether footwear could not be a part of that to provide a bigger export market for our hard-hit footwear industry. I shall look into this matter and write to the hon. Gentleman about it. There are a large number of specific industry sectors set out in a Protocol to the agreement and in the terms of the Joint Commission that we have with the Soviet Union under our co-operation agreement. It may be that footwear is covered. But I will write to the hon. Gentleman about this.
§ Mr. Jim Lester (Beeston)
The hon. Gentleman may be interested to hear that the footwear industry has itself already started to move in this direction.
§ Mr. Deakins
I am grateful for that information.
My hon. Friend the Member for Keighley (Mr. Cryer) raised an important point about the agreements being signed at present with developing countries under the MFA on behalf of the Common Market. So far, there are three agreements initialled and in operation with Hong Kong, Pakistan and India, and the Community has issued a regulation on imports from Taiwan which will have the same effect as an agreement. There are many other agreements in train. In an intervention, I mentioned our attitude 683 to the potential agreement with South Korea. Negotiations are still going on today, for the third day running, in Brussels. I hope that there will be a satisfactory outcome by the end of this week. If not, we stand by all that my right hon. Friend said on 23rd July, ready with our Community partners if necessary to take appropriate action to defend our interests.
The hon. Member for Ripon (Dr. Hampson) and the hon. Member for Pudsey (Mr. Shaw) mentioned the guards for woollen carding sets. It is necessary to maintain the position. I am sure that the House will share the view that safety measures are the responsibility of the employer. Wool textile firms which are undertaking a project under the wool textile scheme which qualifies for assistance may add the cost of these guards to their project costs. But no assistance is given at present solely for installing these guards.
The Chancellor of the Duchy of Lancaster had talks with the British Textile Confederation on 12th June and agreed that we should give this matter further consideration, but I can give no commitment that the outcome will necessarily be favourable to the industry.
There have been demands from all sides for import controls. The attitude of the official Opposition on this matter is a little unclear. The hon. and learned Member for Darwen said he was in favour of temporary import controls, but the hon. Member for Cheadle (Mr. Norman-ton) was not so certain. The Government have to govern and it is not our responsibility if the Opposition have no policy.
To hear some hon. Members talk, one would think there was no protection for the textile and clothing industries in this country and that somehow they had been callously abandoned to their fate by this Government and previous Governments. These industries enjoy a far greater degree of protection from imports than any other manufacturing industry in the private sector. Imports of spun cotton yarn, woven cotton textiles and made-up clothing from most low-cost sources are subject to quantitative restrictions. So, too, are woven polyester-cotton products imported from Hong Kong, South Korea, Taiwan, Colombia 684 and Thailand. Last December the Government imposed restraints on cotton yarn imports from Turkey and Greece. Last month duties were reimposed on imports of woven outer garments from Portugal. And this is not a complete list of the restrictions which apply at present.
Within the terms of the GATT Multi-Fibre Arrangement, existing restraints on sensitive imports will be maintained and in some cases extended to cover textiles and clothing of all types of fibre. That is the pattern of the three agreements referred to in reply to my hon. Friend the Member for Keighley. After an admittedly slow start, better and more speedy progress is now being made in the Community's MFA negotiations with low-cost suppliers. For the first time so far as the United Kingdom is concerned these arrangements will bring under restraint wool products such as knitted sweaters and suits. Under the MFA, the industry will enjoy a greater degree of protection than it has ever had before and for that reason it has met with the approval of the TUC Textiles, Clothing and Footwear Committee which sees it as providing the basis for a long-term policy which will achieve both stability and confidence.
A number of hon. Members mentioned burden-sharing and I have been asked for detailed figures. The textile and clothing industries stand to gain from the EEC's burden-sharing arrangements which are now coming into play under the MFA agreements. Since traditionally the United Kingdom has been the biggest importer from India, Pakistan and Hong Kong, we shall face only a nominal ½ per cent. growth per annum for many items—substantially less than most other EEC members and substantially less than under our previous arrangements with these countries. Benefits from these arrangements will take some time because some countries in the Common Market, particularly France and Italy, have adopted a closed door policy to textile imports from developing countries and it will take time to prise open those doors, but that is the path on which we are set under the MFA.
Import controls have been the major theme in the debate and hardly one hon. Member has not said that he wants selective or general imports controls.
§ Mr. Deakins
I beg my right hon. Friend's pardon. The Prime Minister explained on 23rd May that we had decided against the industry's proposal for a unilateral, across-the-board cut of 20 per cent. on the 1974 level of textile imports. There has been some reluctance to accept the position, to put it mildly, and pressure on the Government to impose import controls is building up again, not merely from my hon. Friends, but from the Opposition side. I shall be interested to see how long it will be before the official Opposition are asking for these controls.
It might help if I briefly reiterate the main arguments against either selective or across-the-board import controls. My remarks apply not merely to textile but to many other industries. A first and obvious point is that they would be a very blunt and inflexible instrument. In some sectors cuts would be totally inappropriate and harmful to domestic interests. Many firms which rely on semi-processed imported materials would face supply problems, and the consequence would be a further loss of employment.
Secondly, textile imports have been declining as part of the world recession, and this downward trend had begun well before the British Textile Confederation made its proposal early in March. So far this year the volume of imports has been well down on last year. In some sectors the fall has been even greater than the 20 per cent. demanded by the BTC. If we had adopted the BTC proposals in March the overall volume of imports would not have been greatly lower than they were anyway in the first six months of this year, and the consequential benefit to employment would have been correspondingly small. Furthermore, import restrictions could well undermine progress which we hope will be made in the GATT mutilateral trade negotiations which are currently going on. It is in our interests to get trading nations to case trading barriers, especially the non-tariff barriers which many of our industries claim are keeping their exports out of certain overseas countries, and surely GATT is the best mechanism for doing that.
As a major trading nation we must have regard to our international obligations especially the provisions of the GATT relating to import controls under Articles XII and XIX. The first of these 686 articles allows the use of quantitative restrictions to safeguard the balance of payments. It is intended to cover general measures to meet a balance of payments crisis, and we should need, if we adopted action under this article, to impose a general pattern of import controls, not merely controls over textile imports. We could not possibly invoke Article XII in justification of selective controls intended to protect employment in a particular industry.
The appropriate article for that purpose is Article XIX. That enables the imposition of temporary quantitative restrictions on a non-discriminatory basis—no one has argued that it should not be non-discriminatory—if increased quantities of imports are causing or threatening serious injury to domestic production. Obviously there would be difficulties and disadvantages in having recourse to Article XIX. The first problem facing our textile and clothing industries is not that stated in Article XIX. The condition that difficulty must be created by increased quantities of imports is not met.
A second serious disadvantage to having recourse to Article XIX is that it would undermine the Multi-Fibre Arrangement. If at the beginning of the life of this arrangement a country such as the United Kingdom, with a major stake in textiles, were to step outside the framework, others which had accepted its obligations would feel cheated and the balance of interests which it represents would be destroyed.
There would be retaliation. I do not share the optimism of many of my hon. Friends that there would not be. There has been retaliation from Turkey. There have been many examples of retaliation between one industrial country and another, not merely over textiles. The chicken war between the United States and the EEC a few years ago is an example.
General textile import controls would affect both developing and developed countries. If we restricted imports from developed countries they could retaliate and affect most seriously and adversely our export performance. It is with those countries where we have a favourable—
§ It being Twelve o'clock, the motion for the Adjournment of the House lapsed, without Question put.