§ Mrs. Kellett-Bowman
There is no country in the world that is allowing its textile industry to be massacred by imports coming in at well below the cost of production. Australia, Canada and Japan have taken action. The Germans, the Dutch, the French and the Italians are working closely together to see what can be done about severely restricting imports, whereas the United Kingdom Government have allowed the foreign share of the market in terms of fibre to rise from one-half to two-thirds. While the market has fallen by 26 per cent. our United Kingdom share of our own market has fallen by 50 per cent.
As my learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has pointed out this just is not playing the game. We are "carrying the can" for all other countries. It is not that we are less efficient than overseas producers. There has been massive investment in the industry over the past few years. The industry now uses every conceivable modern scientific technique, continuous shift working and so on. There is nothing more that we can do to help ourself. Only the Government can now step in to give us a new lease of life.
It is essential that there should be an immediate cut in imports under the provisions of Article 112 of GATT or Article 109 of the Rome Treaty on the grounds that the tremendous textile imports in 1974 are threatening our balance of pay 1992 ments, which is a valid reason for taking action. But it is not only imports which threaten disaster. The March Budget so reduced company liquidity that firms destocked on a massive scale, and the November Budget only partially put things right.
The Minister in his opening remarks suggested that destocking may have ended. I wish that I shared his optimism but, frankly, I do not. If we are to stop this destocking, if we are to improve company liquidity and if jobs are to be saved in intermediate areas of Lancashire, such as mine, these have to be given development area status so that they have the advantage of the regional employment premium, which in itself would save jobs because of the liquidity which it injects into firms. Company taxation must be cut if these firms are to keep their heads above water. It is too late to act when they have gone down the spout and the receiver is knocking at the door. The Government must act now if a total collapse of the textile industry is to be prevented.
§ 10.3 p.m.
§ Mr. George Rodgers (Chorley)
I believe that the essence of the tragedy of the textile industry is that decent and valuable people are unemployed or on short time without adequate income. Unemployment is always ugly, but it is particularly ugly and unpleasant when set against rising prices. Unemployment is morally and economically unforgivable, and those engaged in textiles, normally the most tranquil of people—too much so, perhaps—are now weary, as I am well aware, of having been tolerant.
Successive Governments have preached policies of wage restraint, improved efficiency, increased production and so on, and those who work in the mills have always responded. It makes me wonder about the social contract and how these people are expected to respond to it when they have met all its circumstances and conditions and then find themselves out of work as a consequence. It is simply beyond me. At this period in the turmoil in Lancashire we find that despite great endeavour the situation is black and will become desperate unless immediate action is taken to halt the decline.
We recognise the Government's problems. There is a reduction in demand. 1993 there is international competition, and we are a trading nation. I recognise, too, that the Government are reluctant to interfere with the structure of the market. I would that other nations were as fastidious. We are aware of the problems facing the Government, but we are determined that the events of the 1930s will never again emerge in Lancashire.
This debate should not be used merely to describe the situation. Those who have constituents directly involved in the misery have some constructive suggestions to place before the Minister, and I hope that we can expect constructive action from his Department.
Perhaps I may speak briefly of our attitude towards the developing nations. The intrusion of cheap cloth is not just from the developing nations. It is coming from developed Western countries, including the United States. I remain convinced that we have a moral obligation to the emerging nations, and the textile industry has a proud record in this regard, but there are many ways of providing aid, and I am not prepared to remain snug and comfortable in this place while others carry the burden of my virtue by becoming unemployed. The wherewithal to give support to the less fortunate countries must be found and acquired from a wider range of industries and individuals.
I was revolted to learn that during the recent growing season in the Community in Europe £19 million worth of fruit and vegetables were maliciously destroyed in order to maintain high prices. I think that that is an obscenity in a hungry world. There are other areas in respect of which we can provide support and aid, and I think that instances such as that must be terribly offensive to the developing countries.
To control imports of textiles it is necessary to insist on complete documentation at the port of entry. It is necessary to establish that the importer and possibly the Department accept responsibility for applying the quota regulations, rather than the present system whereby the home industry has to produce evidence of abuse.
I believe, further, that a global quota should be introduced which can be varied when conditions improve. When we apply quotas to a particular country, 1994 there are means of directing the goods through a third country and avoiding the regulations.
Above all, we need swift and effective action. In Lancashire, and Chorley in particular, the economy is not buoyant. For the unemployed textile worker there are few alternative sources of employment, and often when a mill closes, particularly in a rural area, a whole community dies.
I am prepared to abbreviate my speech. Most of what I intended to say has been said several times, and extremely eloquently. I appeal to the Minister to act, and to act immediately, to help those who have served the country so well in the past.
§ 10.9 p.m.
§ Mr. Robert J. Bradford (Belfast, South)
One of the disadvantages of coming into the debate at this stage is that most of the relevant data and the statistics have been shared with the House, but one of the advantages of coming in at this stage is that one can hightlight particular points which may not have been shared in depth during the debate.
I hope the House will forgive me if I state and return to the fact that alongside all the other areas in the United Kingdom drastically affected by this recession and depression in the textile industry Northern Ireland is in a state of crisis and takes its place side by side with the other areas represented by hon. Members on both sides of the House.
Northern Ireland accounts for one-third of the total value of man-made fibres produced in the United Kingdom. As the depression will involve the whole of the Kingdom there are great problems and great concern in Northern Ireland. There is great concern because we already have double the national average unemployment. Not only does that problem relate to the man-made fibre industry, but in a real way it affects manufactured goods.
I refer specifically to the shirt industry. Northern Ireland has one-third of the total United Kingdom shirt industry. I was impressed by the comments of the hon. Member for Rochdale (Mr. Smith). The hon. Gentleman referred to some of the housewives in his constituency whose wages are needed to 1995 balance the budget in their homes. He talked about the added income which was so necessary for the woman in his area.
I thank God that there is the opportunity tonight to get beyond the sectarian issues in Northern Ireland and to point out that the entire Province depends on a rejuvenation and stimulus within the textile industry. From Londonderry right through to Antrim and Belfast there are many thousands of men and women—particularly women—who are totally dependent upon the industry. It is vital that something is done very quickly for the home Kingdom and especially for Northern Ireland. It appears to me that the immediate but profound need of the textile industry is import restraint. We have heard that need expressed again and again by Members from both sides of the House.
Let us consider the volume of imports. In 1974 that volume represented £1,090 million. In the fourth quarter of 1974 two-thirds of the fibre supplied to the home market was supplied by importation. Those are crucial and startling figures. I ask the Minister to bear those two vital statistics in mind. There has been no real improvement in 1975. Some people have referred to a slight improvement in January of this year, but that, as much as anything, is a direct result of an exhortation to buy to beat inflation. The truth is that in 1975 there has been no real improvement.
There are many reasons for the lack of improvement, but among them are two of importance. First, we have been told by the British Textile Confederation that many of the large retailers—they are retailers responsible for approximately 50 per cent. of man-made textiles —are dealing almost entirely in imported goods. That is a crucial factor when we are considering the volume of imports. Secondly, we have been reminded repeatedly that we have an obligation to the developing countries. Surely the Minister's insistence upon that obligation cannot seriously be maintained in the light of the crisis in the home industry.
The access which imported textiles have to our home market must be made more difficult in the interest of the survival of the British textile industry. The confederation has said that the Govern- 1996 ment should reduce imports of manufactured textiles and clothing by £220 million. That represents approximately 20 per cent. of the amount imported in 1974. It also said that a strict surveillance should be kept on a quarterly basis to ensure that licences to import should be granted and renewed only to those who adhere to the restriction of reducing imports of manufactured textiles to 20 per cent. below the 1974 level.
I know that the Minister has a deep concern about this matter. I ask him to try to implement this sound and logical advice in the near future. What the BTC is saying is that a licence should be granted only on a quarterly basis if those firms were prepared to import a quarter of 80 per cent. of the present level of manufactured textiles.
An integral part of import restraint is prices control. Reverting to my original case about reducing imports by about £220 million, foreign importers could get around that by drastically reducing prices and so keeping volume at a distressing level. Also, the price of items coining into this country is so small compared to the cost of producing made-up goods that one of the only ways of stemming that importation is to insist that those who buy at a low price sell for a comparable profit. Many retailers are importing very cheap fabric and made-up goods, none of which appears in the shops at comparably low prices. They are always at fairly steep prices, much the same as British-made goods. Some price control should be imposed.
Last year, the chairman of the BTC said, in effect, "We are not afraid of fair and reasonable competition, but it is impossible to meet the kind of pricing which obtains because of foreign imports." That is a fair comment. We in Britain import well over 50 per cent. of the number of shirts sold here. In Japan, apparently, there is a crisis, because they have reached the phenomenal figure of 7 per cent. Yet we are talking about what we might or should do and what is possible under certain agreements. If the Japanese regard 7 per cent. as a crisis figure when ours is over 50 per cent. is it not ludicrous that action is not taken immediately to curb imports?
The cumulative effect of all these points is that unemployment will hit the United 1997 Kingdom severely. So far, the large corporations have tried to avert that tragedy by stockpiling, but we know from one corporation that within two months it will have reached its maximum, and the only alternative then is unemployment.
The Minister has said that EEC agreements will come to our rescue in about a year. It has been said categorically that within four months our industry could be absolutely flattened. We cannot afford to talk in the long term. We are thinking in terms of months ahead. The EEC agreement which has been offered as a possible solution is not, therefore, particularly relevant.
In conclusion, I make two brief points. I reiterate what has been said. We should 1998 buy British. We should stimulate demand for local products. The Government should set an example in this respect. The defence services, local government bodies, hospital boards, school boards, nationalised industries—the lot—should buy British. The Government should also encourage the community at large so to do.
I cannot believe that a Labour Government would betray the trust of the working people of this Kingdom and that they would be so insensitive as to retain various agreements while their own people went to the wall.
§ Mr. Speaker
I make an appeal for really short speeches, otherwise there will be many disappointments.
§ 10.21 p.m.
§ Mr. Jim Marshall (Leicester, South)
A great deal has been heard from hon. Members who represent constituencies in Lancashire, and rightly so particularly as over the past few months they have been leading the campaign at parliamentary level for the Government to take some action on the textile industry. We have also heard one speaker who represents a Yorkshire constituency and who drew attention to the problems in the woollen industry.
However, I ought to draw attention to the problems in the East Midlands, particularly in the greater Leicester area which, as the House probably knows, is the home of the hosiery and knitting industry. I remind the House that the difficulties being faced there are equally as grave, both in an economic sense and in the human context, as those of Lancashire and Yorkshire. I thought it incumbent upon me to draw attention to these problems today.
The point has been made in the general context, but it cannot be made too often. The textile industry is facing a crisis of cataclysmic proportions. We ought to make that point repeatedly. These difficulties have not appeared overnight. They have been coming upon the industry for years, and successive Governments have ignored exhortations from the industry and trade unions over many years.
I echo what was said by my hon. Friend the Member for Rossendale (Mr. Noble). It would appear from what my hon. Friend the Under-Secretary said that we are likely to be offered too little far too late. I urge the Minister, in common with everyone else, to convince the Department of Industry—and to convey our thoughts to the Department of Trade—that far more urgent and stringent action and controls are required than those we have hitherto been offered.
I can best draw attention to the problems of greater Leicester by telling the House—the hon. Member for Macclesfield (Mr. Winterton) smiles. I am not making a particular constituency speech. However, one family in three in greater Leicester has some link with the textile industry, and that fact bears comparison with any example in Lancashire. Thirty thousand people are employed in the tex- 2000 tile industry in greater Leicester. At present 60 per cent. of those are working short time.
Therefore, this is a national problem. As my hon. Friend the Minister knows, I conveyed these feelings to him months ago. This is the magnitude of the problem we face.
A further analogy with the woollen industry in Yorkshire is that the hosiery and knitting industry in the greater Leicester area is based upon small firms. The main factory, plus branch factories employs about 5,000 people, but two-thirds of the factories in greater Leicester employ less than 200 employees each. These people are accustomed to the cold draft of competition and to the ups and downs of the normal cycle of this industry. But they are at one on this matter. The employers and the trade union, which in this case is the National Union of Hosiery and Knitwear Workers, feel that they are being subjected to unfair competition from low-cost countries, particularly South-East Asia low-cost countries, and that their problems arise mainly from that unfair competition and not from the de-stocking process or the running down process to which the Under-Secretary referred, or the normal cyclical nature of this trade.
It is far deeper than that. They have been raising the question of unfair competition with the Department for many years and it is one I wish to reinforce. The point has been made quite well by the hon. Member for Rochdale (Mr. Smith) that it is always said that Britain is a trading nation and is dependent upon good trading relations with other countries. That is all very well in normal circumstances, but we are not in normal circumstances. The businessmen claim. and they are backed up by the unions. that they are facing unfair competition.
Other hon. Members have made the point that the consumer is not getting any material advantage from the import of low-cost articles. I have a letter but I will not quote the name of the sender in case action is taken against him by his colleagues. The person concerned is a hosiery and knitwear manufacturer in the greater Leicester area. He says:We feel that the damage is caused by wholesalers and retailers requiring a bigger margin. 2001 where they buy cheaply but retail the garments in question at a price comparable to a similar line of British manufacture, i.e. mark-up on our garments could be in the region of £1.00 per garment but a comparable imported garment benefits from a mark-up of probably £1.50 The British public are therefore not feeling the benefit of the reduced purchase price and this is not assisting the Cost of Living Index in any way but only adding to our balance of payment difficulties.I could continue to quote similar examples, but time forbids. There is also increasing evidence that there is a cartel of five importers bringing in all the knitted manufactured goods being imported into Britain from the three South-East Asia countries we have heard about this evening. The Under-Secretary might also like to know that two merchant banks have financed the setting up of factories in Taiwan with the deliberate intention of producing low-cost goods for import into Britain, and that they intend to get their capital back in two and a half to three years. They are therefore benefiting in two ways. They are getting their capital back quickly, and it is within that time scale that the Department of Industry would have to work under present legislation if it wished to prove dumping. I therefore ask my hon. Friend to investigate the evidence about the cartel and also about the activities of the two merchant banks which have been setting up factories in Taiwan.
There is also the effect that the downturn in the hosiery and knitwear industry has on allied industries. There is in Leicester a textile machinery industry which is dependent to a large degree on home orders. However, with under-capacity in hosiery and knitting there is a distinct lack of confidence about placing orders for new knitting machinery. That has meant a rundown in the work force in the machinery industry as well as in the hosiery and knitting industry itself.
I do not pretend that there is any easy solution. The unions in Leicester are trying to convince the public to buy British, and they are trying to convince the department stores to do the same. One well known Leicester store has decided to buy British goods and not the cheap imported variety. I shudder to think what effect that is likely to have on its profitability. There is a fair possibility that if that firm continues its present practice its profitability will 2002 decrease. Instead of action by individual firms, we need concerted action by all industry, exhorted by central Government, to buy British and have nothing to do with foreign goods.
My hon. Friend the Under-Secretary has so far offered far too little, too late. We need quotas and further strict limitations on the importation of knitwear goods. I urge my hon. Friend to introduce them as a matter of urgency.
§ 10.31 p.m.
§ Mr. Adam Butler (Bosworth)
I start by declaring that I have no interest in the matter. Although I was employed in the textile industry for about 17 years, I am no longer directly involved.
Like the hon. Member for Leicester, South (Mr. Marshall), I speak for what can be described as the forgotten county tonight. It is only now that we have had two successive speeches by Members representing Leicestershire. It might have been assumed from what previous speakers said that there was no such thing as the knitting industry. The hon. Gentleman has put over our case extremely well.
I am not ashamed to refer to my constituency directly, because my principal conurbation, the Hinckley urban district, has about 50 per cent. of those who work in it employed in the textile industry, and hundreds go each day from Coalville, for instance, into Leicester. We have a close concern in the future of the industry. Whole families derive their income from it.
The knitting sector is undoubtedly as seriously hit as any. Import penetration into the outerwear market in 1971 was slightly more than 20 per cent. Last year it was about 40 per cent. That picture is repeated for other commodities. About 60 per cent. of those employed in the industry are on short time.
The Minister has told us something of the action the Government have taken in conjunction with our Community partners. But what exactly is it? I believe that the hon. Gentleman only made reference to knitwear. We must press him for details of the understanding he has reached with our Community partners. What is the negotiating mandate which has been given? What knitted goods are covered?
2003 According to Wednesday's Leicester Mercury, a long list of other goods is covered, including underwear, but excluding certain types of socks. But will they be covered on a Community or regional basis? If the information in the Leicester Mercury is correct, why are certain types of underwear left out? Why should men's underpants be left out and not men's vests? It makes no sense to those in the industry.
May we have from the Minister further details than he has been prepared to give so far? Is it true that certain of our partners in Europe will be able to exercise restraint unilaterally on certain items? I think that socks and half-hose may be among the items covered. Although the position of the half-hose sector in Leicestershire is not bad, if our Community partners exercise restraint unilaterally trade will be diverted from them to this country. If that were to happen, will the Minister act quickly: the view of the trade is that what happened in the past will happen again, that is, that action will be taken far too late.
I have argued with Conservative Ministers on more than one occasion for a system of orderly marketing, that is to say, taking a level of imports at a given starting point and developing those imports at a regular increased rate which would not disrupt the industry. I understand that part of the "burden sharing "agreement invokes this principle. If it does, may we know the agreed growth rate which forms part of the understanding?
We need a justification for quota restrictions. Most people do not want restrictions to be imposed. But the justification for quota restrictions in the textile trade is the instability of its operation. The instability is due to the lack of control over the raw material and its pricing—whether natural or synthetic fibres—and a lack of control over wages in the exporting countries. Those two factors add up to the bulk of the cost in the hosiery industry at least, which is not as heavily capitalised as are some parts of the industry. Immense fluctuations can occur which cause great damage to the industry.
If we are to have quota restrictions the question arises at what base point 2004 should we start. The MFA when it comes into operation will take 1974 as the base point. That is too late. The Knitting Industries Federation, working as usual closely with the union, also agrees that we need a 20 per cent. cut, and I am glad that the Minister is to look seriously at this. I prefer not to take an absolute figure of 20 per cent., but to take as the base point the figure for 1973. That is fair, as I have been arguing this approach for three or four years. If we start in retrospect with 1973 we shall effectively achieve a cut of about 20 per cent. The value of that cut would be about £30 million on the import of knitted goods, which represents 7,000 or 8,000 jobs. In the knitting industry for which I speak these are worth saving.
I do not like quotas. Many hon. Members who have been calling for a "buy British "campaign must realise the effect that this would have on prices. But the unusual nature of the textile industry demands unusual actions. We must accept the principle of quota restriction. We must instigate an orderly increase in imports, with the added benefit which comes from our membership of the EEC, that is to say, with the burden sharing with our partners which will work to our advantage. I join with all hon. Members who have spoken in asking the Minister to take the necessary steps, without delay.
§ 10.38 p.m.
§ Mr. Max Madden (Sowerby)
Amidst the controversy about the Common Market a comment by Aneurin Bevan has been used repeatedly—" Why gaze in the crystal ball when you can read the book? ". In this debate the number and geographical extent of the voices raised have spelt out the serious crisis which faces the textile industry. The Minister should listen to those voices and pay regard to the evidence which is already on the table from the industry. That crisis is there to be seen by anyone who looks.
The industry is vast and complex. It is interdependent, which means that all sections eventually suffer from the afflictions of any one section. I am pleased, therefore, that we have heard voices from Lancashire, Yorkshire, Leicestershire and other areas. It spells out the great area of interest covered by the textile industry. The industry is fiercely independent and is not used to treading the corridors of 2005 power and hammering at the door of No.10. It has suffered difficulties and crises. It has always overcome them itself. It has been modernizes—manily at puplic expense. The workers have seen their jobs disappear.
Unfortunately, that reduction in jobs has not been favourably reflected in wage packets or conditions of work The textile industry is in need of great protection through import controls. It will not be happy with the message it has been given tonight by the Minister. I go back to my question: "Why gaze in a crystry knows and we know what is the position. Surveillance is not what is needed now.
The tragedy of the textile industry is that its misfortunes have coincided with a great argument over economic policy within the Government. The industry is calling for import control. At the moment there is an alternative economic strategy being argued by informed and articulate economists and politicians, the central theme of which is the need for an alternative strategy based on import controls.
I fear that the Government are loth to give the protection which the industry demands because if they were seen to give that protection it would be seen as a caving-in of their central economic policy. The message that should go out tonight to the industry is that for the first time the workers should organize themselves of such organization in the march that is to take place next week. The workers must exert political pressure. We can provide the spearhead, but the steam must come from the workers. I hope that they will organize to that end.
Textiles have proved that they are a special case. If action does not come it will mean the virtual death of the industry. I trust that the debate is not industry. a public relations exercise. If it is, the Government will bring upon their shoulders the wrath of the industry and its workers. We should not turn away from import controls. Other countries have adopted them—America, Australia Canada—without difficulties. We should follow that path. A decision to that 2006 effect should be announced soon after this debate.
§ 10.43 p.m.
§ Mr. H. Boardman (Leigh)
It was my intention to speak briefly in this debate. Having listened to the excellent and all-embracing contributions I propose to be even more brief and confine myself to putting two questions. Before doing that I want to make one point. It is ironic that, had the textile industry been asking for money from the Government, its case would have been met quickly. That is the sad thing about it money. It is simply asking to be allowed to compete on fair and equal terms in a competitive world.
The present situation calls for emergency measures. Can the Minister go further than he has done and, if he cannot say that the Government have emergency proposals to meet these conditions, can he tell us that there might be a temporary halt to the present flood of imports? I believe this to be crucial.
Secondly, how far and how quickly can we expect the member States of the bility for the underdeveloped countries? When the Common Market was being formed I said that I thought one of the points in its favour was that the member States would share the burden of textile imports. I hope that I shall not be disappointed. I think that the United Kingdom has carried the can for long enough.
Thirdly, do the Government, or any of their advisers, regard the textile industry as expendable? I ask that question because a story is current in my part of Lancashire that the Government are prepared to write off the industry. I want the Minister to say that that is not true. If the Government are to do any good for Lancashire tonight they must kill that rumour and go some way towards helping this stricken industry.
§ 10.46 p.m.
§ Dr. Keith Hampson (Ripon)
I appreciate the vigour and courage shown in many of the speeches of Government sup- porters,especially those which dealt the cotton and synthetics side of the industry. However, I should like to concentrate on the woollen and worsted 2007 industry, some of which is situated in my area.
The Minister's speech was lop-sided. It showed little appreciation of the great hardships experienced by the industry in Yorkshire, which is in the grip of the worst crisis for 50 years. The people of Yorkshire expect confirmation that the woollen and worsted industries will be preserved and that they will have a viable life.
In 1974 the United Kingdom imported 279,000 suits from Romania, 226,000 from Yugoslavia and many more from Czechoslovakia and Hungary. This means that 22 per cent. of all suits bought in the United Kingdom last year were imported from those countries. Although we all want free competition, how can we gauge a market price for the products of a society or system which has no market? These suits are entering the country dirt cheap, and this must be checked.
It is said that the problems of the industry are recurrent and that the downturn is cyclical. The industry needs special action, since it is not facing a normal cyclical downturn. The industry accepted these downturns in the past and did not run straight to the Government for help. However, the industry now needs help because it faces a special situation.
We know that problems arose with regard to commodities, the price of which shot up, when the people with fixed contracts could not make adjustments. Then we faced the problems of the wages explosion and thresholds. The woollen and cotton industries, enjoy good industrial relations but, since the social contract means nothing, militants in the industry's unions are demanding action from their leaders. One of those leaders lost a court case against Left-wing extremists two weeks ago. In two weeks' time the unions will be making a claim for a 35 per cent. increase, which will render the industry even less profitable and competitive, when cash flow is appallingly bad.
The textiles industry is the fifth largest exporting industry of the United Kingdom. It exports one-third of its production. One firm even exports 70 per cent. of its production. The chairman, 2008 however, says this is the worst crisis in his 52 years—and his firm at the top end of the market is doing relatively well. However, there is instability in the industry and the work force of that firm has been on short-time working for two to three months.
Almost 60 per cent. of the industry's work force of 100,000 is on short-time working. Many mills are now working a three-day week, which is something about which representatives of the present Government used to pour scorn on us. Now the three-day week is a reality. What do the Government intend to do about it? Many mills are closing down. The unemployment figures reflect that fact. However, I believe those figures hide the true situation, especially with respect to women. But this crisis is clearly of a unique kind because of imports. It is not just the Iron Curtain countries, but the Far East and Portugal, who have undermined the acrylic sector and cheap woollen end of the business. Mills in places like Dewsbury and Colne Valley in this sector find Portuguese goods undermining their costs of production by between 12 and 14 per cent. Last year, 4.5 million pairs of Portuguese trousers arrived, out of a total trouser operation in this country of 10.5 million pairs. By any yardstick, the industry is in a serious crisis. There is a downturn to 251 million kilos as against 287 kilos in 1973 in fibre consumption, which is the real test for the whole industry.
What do the Government propose to do about it? The future looks shaky for many people, especially when they face the prospect of the Industry Act and the capital transfer tax, which will cripple the small family business, and of the Employment Protection Bill which they fear will impose quite intolerable extra financial burdens upon them. The future on Europe has been uncertain, and, with all these imports coming in, something specific must be done.
Let us be clear about it. We are asking not for permanent protection but for emergency action on a short-term basis. But, even short-term, this is a fight to survive. We want emergency measures. There are examples in almost every other country. There is, for instance, the 50 per cent. deposit scheme operating in Italy which was got through GATT 2009 because of the Italian balance of payments crisis. Cannot we get the same or similar terms through Article 12 of the GATT arrangements? Let us remember that it is Italy which is flooding our own market, destroying the cheap woollen end by increasing her exports to this country from £7 million in 1973 to £15 million in 1974, which the mail order firms in particular are snapping up.
With sudden surges of imports seriously threatening our whole industry, there is a valid case for immediate action, and the Government will have to do more than promise "careful consideration ". The time has long passed for that.
The Minister spoke about the cycle turning up. When it does, what state will the industry be in when it is so weak already? We will find not only our domestic market undermined, but our main export markets, too. Our main market in Canada is closing to us because of Japanese competition. Although the Japanese are not exporting much to this country because of a bilateral argreement, they are pushing hard into other export markets of ours. They deliberately manufacture for stock and they have to get rid of massive stocks on a market which shows little activity.
So I do not see the future turning round this year or next year. Unless we support our industry now, it will be so undermined that, when the roundabout turns again and the market picks up, we will not have the size of industry, the rate of employment or the efficient firms to be able to compete effectively.
§ 10.54 p.m.
§ Mr. Michael McGuire (Ince)
At this late hour, like the last six or so hon. Members to have spoken, I shall speak only briefly.
The message which has gone out tonight from this House is that there is a crisis in the textile industry, and that we want immediate action.
I realise the constraints upon my hon. Friend the Under-Secretary, and I know where his heart lies, but I am not sure that the action proposed by him will do any good. It is rather like putting a plaster on the arm of a man who is bleeding to death.
2010 On Monday, 3rd March the Empress Mill in my constituency was to close. That really sparked off a situation which had been simmering for a long time. It was that the textile workers, for the first time, demonstrated they had traditionally not exercised any muscle. It is not true that the industry has always overcome its problems. What happens is that anyone who keeps losing a bit every time eventually comes down to nothing. The Lancashire textile industry is down to about a quarter or a fifth of the capacity that it had in its heyday, and it will go down more.
The hon. Member for Rochdale (Mr. Smith) was right, although he stole my expression. I believe that there is a "Bonga Wonga" mentality amongst our civil servants. They do not mind Lancashire cotton workers carrying the burden. They do not mind putting our workers on the dole. But it has to stop, and we want immediate action.
The first spark to set fire to this action was in Ince. For the first time, the textile workers said, "We have had enough. We demand action." Hon. Members who were with me on that day, including the hon. Member for Rochdale promised them action. I intend to see that they get it.
I suspect that the measures proposed will not be enough. I warn the Government that if they are not sufficient, we shall see that they are carried further.
Following the deputation, we managed to get a speedy meeting with Lord Kearton on the Wednesday. Again, I was accompanied by my hon. Friends the Members for Wigan (Mr. Fitch) and Westhoughton (Mr. Stott). We managed to get a reprieve for the Empress Mill at least until the Wakes holiday, which is the first week in July. I intend that reprieve to be permanent. I am sure that my hon. Friends and others on both sides of the House intend it to be permanent, too.
When we had that demo, somebody said, "Michael, this is Custer's last stand." I said, "It is not Custer's last stand, because we know what happened to Custer. It will not happen to the textile industry. If there are any scalps to hang from our belts, they will be the Government's." This is El Alamein on imports.
2011 I warn the Government that we want immediate action. This country is the softest touch in the world. My right hon. Friend the Secretary of State for Defence recently said that we have stopped being the world's policeman, that we shall stop being the world's protector, and that we shall trim our defence costs according to that philosophy because we cannot do it any more. I believe that we must also stop being the world's conscience.
We have been told that other countries have taken action and that that action has not seemed to impair their trade. We must take similar action.
I had a Question down about dumping. Proving dumping to our officials is like trying to box fog. It is impossible. Other countries do it far more speedily. I asked whether we should alter the rules to provide that, an interested party in the United Kingdom having made out a prima facie case, it should be the countries. or their agents, doing the dumping which should stand trial, not us. I have been told that that matter was given a lot of consideration, but that it will not be done.
We have been told about 20p shirts and £5 suits. I have not seen any when I have been round the shops. However, I have seen the labels, "Made in Hong Kong ". Those articles are the same price, if not dearer, as shirts which carry the tab, "Made in Great Britain ". Therefore, somebody is making a packet.
The result is that our workers are being put on the dole, the community is losing its purchasing power, and, because of the terrific mark-up on these imported goods, there is an added impetus to get more in to get more lovely lolly. That is the cycle.
I put down another Question to my right hon. Friend the Secretary of State for Prices and Consumer Protection asking what monitoring her Department does to prevent that kind of thing happening. I got the usual cotton wool answer from the Government—we must be frank ; we got the same treatment from the Tory Government as well—that nothing was being done about it. Again, I think that action should be taken immediately.
My hon. Friend the Member for Leigh (Mr. Boardman) said that if the textile industry was asking for money, it should get it. I am asking for money for the 2012 industry. Courtaulds and the other big manufacturers have hundreds of millions of pounds of stock. Governments all over the world, including the United States of America—do not let us blame the cheap producing countries ; these boys are clued up today as well—are assisting their industries with cash. We want the textile industry to be assisted with its cash flow crisis. There is a cash flow crisis, and it will get worse.
I tell the Government that we want immediate action. We do not want these investigatory procedures. which will cause delay to the extent that the 4 per cent. or 5 per cent. capacity that we have now will be whittled down to nought.
When we meet our colleagues from the trade union side next Tuesday, we want to be able to speak to them with the full confidence that action will be taken immediately to save the Lancashire textile industry.
§ 11.0 p.m.
§ Mr. John Cordle (Bournemouth, East)
I declare an interest in a family company with which I have been closely connected for the past 40 years. My constituency can claim no connection with the cotton industry, although its 2,000 hotels use a large quantity of textiles and we have one or two light industries in the making-up trade.
The hon. Member for Ince (Mr. Maguire rightly said that the message must go out to the Government that there is a crisis in the industry. A special emergency committee was set up a month or so ago. Many of us were exhorted to write direct to the Prime Minister about the crisis. I received an extremely courteous reply from the right hon. Gentleman, not only assuring me of his personal concern, but acknowledging that there was a crisis. Therefore, the fact that there is a crisis is well known in Government circles. In view of the letter I received from the Prime Minister. I regret that he has not arranged with his Secretary of State to be in his place to show his personal interest and concern. More is the pity.
There has been a unanimous view expressed in the debate. I cannot remember a debate in which there has been a 2013 greater degree of agreement. Like the hon. Member for Rochdale (Mr. Smith), I am baffled by the Government's attitude. Enormous hardship and anxiety is being caused in the industry, and particularly in Northern Ireland. In our firm we specialise in protective clothing for use in hospitals and hotels. Tens of thousands of nurses' aprons, dresses and industrial overalls used in this country have come from the Far East, Pakistan and India. This is causing most of the trouble. Products which sell at prices well below production costs in this country do not give us an earthly chance of securing contracts of any size. This will eventually create further unemployment.
It is an indictment on successive Governments that they have not faced the problems of the textile industry, specially on the clothing manufacturing side. There have been numerous debates, endless questions and numerous deputations, and still we make no progress. I shall join my hon. Friend the Member for Macclesfield (Mr. Winterton) next week in the demonstration in order to show my displeasure at the Government's attitude. I hope that the Government will take action and that imports will be cut to a minimum in order to revive confidence in the industry.
§ Mr. Deputy Speaker (Sir Myer Galpern)
Mr. Lamond. Order. Before the hon. Member begins his speech, may I point out that the House will notice that there is a desire on the part of hon. Members with constituency interests to take part. I would appeal to hon. Members to take three or four minutes only in which to make their salient points. Then they will all be accommodated.
§ 11.5 p.m.
§ Mr. James Lamond (Oldham, East)
I shall do my best, Mr. Deputy Speaker, to comply and I leave aside the rather lengthy and carefully prepared speech I have brought with me. Unfortunately, I have a feeling that it could come in handy later.
I welcome the presence of my hon. Friend the Member for Oldham, West (Mr. Meacher) on the Front Bench because he has knowledge of this subject and has been a good companion to me in Oldham for five years. He is aware 2014 of my kindly regard for him and therefore will not be unduly upset if I take him up on some of the points he made in opening the debate.
I do not think that surveillance will be of the slightest use. It would have been some time ago, but it is disgraceful that it is only being set up now. The Government have an organisation which always carefully surveys everything which happens, and it is not good enough to say that they are considering the question of quotas. We do not want them considered, but applied.
My hon. Friend the Under-Secretary would quickly jump to the Dispatch Box to defend civil servants, but I must ally myself with the sentiments expressed by the hon. Member for Rochdale (Mr. Smith) when he said that there is a feeling in Lancashire that civil servants have far too much influence on departmental policy. I do not say that is the case, but that there is a feeling in Lancashire that that is the case. The reason is the unwavering policy over many years on textiles.
Twenty years ago this month there was a debate in this House on the cotton industry, and the plans which were being made were, in essence the same plans as those mentioned tonight.
This is not a new crisis. It happens that three separate elements have arrived at the same point together. There is only one answer: quota restrictions, realistic ones which are placed so high that no one needs to worry about them ; and quota restrictions with no growth element in them. In the remainder of the few inadequate minutes I have to express the concern of my constituents I would ask my hon. Friend the Under-Secretary to carry that message to his Secretary of State. We know his difficulty. He cannot give us any more than he gave to begin with, because naturally he set out his stall at the beginning, but if I were in his position I would be welcoming the unanimous call of this debate because it strengthens his hand immeasurably when he goes to put forward the proposals he must advance to see that a fair deal is given to the textile industry.
There is no doubt that we have aided my hon. Friend this evening. I hope that he can carry out his aims and fulfil 2015 the wishes of the people he was elected to represent here.
§ 11.9 p.m.
§ Mr. Jim Callaghan (Middleton and Prestwich)
We have heard speeches this evening from many hon. Members who live in textile areas and who are concerned in the textile industry, like the hon. Member for Rochdale (Mr. Smith), who live among the mills and know that every five years we have a depression. We are witnessing a recession of unparalleled severity in the textile industry.
First, there is a downturn in the world economy. Secondly, and this the crux of the matter for us here, the United Kingdom is a soft option for the importing of textile goods. We are a soft touch. We have what I call an open door for textile imports. It is an ever-open door, and the goods are flooding through.
The effect of this open-door policy in our area is such that only last month 150,000 textile operators out of a total of 830,000 were put on short time. The hon. Member for Rochdale, and my hon. Friend the Member for Bury and Radcliffe (Mr. White), have spoken of the effect on unemployment in our areas. If this trend continues, it could be that we shall have 250,000 unemployed. In February, 8,000 workers were made redundant.
The competition which the United Kingdom textile industry has to face has assumed startling proportions. One of the things that it has to face is dumping. Let me take one example, that of shirts. Chief imports of shirts from Hong Kong, Korea, Portugal, Taiwan, Pakistan, India, Romania and Poland have flooded our markets and brought disaster to our textile industry.
Let me give one example of this disaster which I think serves to illustrate the fact that we cannot allow the present situation to continue. In the first nine months of 1974, imports of shirts from Pakistan rose by 243 per cent. compared with the same period in 1973. The increase from India in the same period was 276 per cent. What other industry in this country could put up with competition of that nature?
Our Customs returns show that from January to November 1974 more than 1 million shirts were dumped here from 2016 Romania and Poland at a cost of 20p a shirt. I do not know whether any hon. Member present has seen a shirt costing 20p, but I have not, which suggests to me that somebody, somewhere, is making a great deal of profit, and it is not the textile industry. In other words, shirts are being imported at a price lower than the cost of the cheapest raw material here, and the effect on our shirt industry is dangerous.
To date, 55 per cent. of our manufacturers have had to reduce their labour force. In six months, seven factories have closed, 28 per cent. of our companies have reduced their output by between 5 per cent. and 25 per cent., and 64 per cent. of our companies report that orders are down by 50 per cent. on last year. This is grim evidence of the parlous situation in the shirt industry, and what is happening here is being repeated in other sectors of the textile industry. Damage to our textile industry on this scale could within a short time produce unemployment on a disastrous national scale.
I should like to offer my answers to the problem. First, it is against this grim background that I call for across the board import restraints as an emergency measure. The object of the restraint must be to reduce the quantity of imports and to transfer a significant volume of orders from foreign to domestic sources of supply.
Secondly, we should aim to reduce imports by £220 million to a level 20 per cent. below that of 1974. Thirdly, importers and buyers should be warned of tighter Government controls. Fourthly, anti-dumping legislation should be introduced, and introduced immediately. Fifthly, the Government and public bodies such as the Armed Forces, hospitals, and nationalised industries should purchase textiles from British manufacturers from beginning to end. Finally, there should be a Government campaign to urge the British people to buy British textiles.
§ 11.15 p.m.
§ Mr. Bob Cryer (Keighley)
The seriousness of this subject is indicated by the pressure that there has been on Members to curtail their speeches so as 2017 to allow other hon. Members to participate in the debate. Although we are pleased that the Government have given time for this debate, many of us will have been disappointed by the way in which my hon. Friend the Under-Secretary of State presented his case.
Import surveillance means another exercise in gathering statistics. The danger in which the West Riding wool textile industry finds itself is well and graphically illustrated by yesterday's headline in a Bradford newspaper. It reads:Government gets grim warning. Textile trade gives ' slash imports ' SOS.But import licences will be freely available on demand. The Government have refused representations to cut imports by the 20 per cent. that is demanded. The Worsted Spinners' Federation submitted an application for action by the Department of Trade under the Customs Duties (Dumping and Subsidies) Act 1969 at the beginning of December last year. I understand that that application is floating around Brussels.
The West Riding spinners are facing grave difficulties in my constituency. Many mills are working short time. The notice from one firm reads:The management of this company is very sorry indeed to have been obliged to cut working hours…The reason for this sad state of affairs is the very large number of cheap acrylic garments which have been imported from abroad, particularly South Korea, Taiwan and Hong Kong…We carried on producing until the middle of January, hoping that the supplies of cheap garments and yarn would be exhausted, but this has not proved to be the case. Today we have 10 full weeks' production of acrilan yarn in stock at a value of £200,000 which is costing £600 per week to finance.That firm took over premises which were closed down recently because of the grave situation in the textile industry. Employed at those premises were 200 people. The result is that 200 jobs have disappeared. The firm was hoping to take over the factory and to restore the 200 jobs. Because of the danger of the situation there is no confidence in the industry. The firm to which I have referred has restored only six jobs. It is simply ticking over. That is the situation that I want to emphasise.
The acrylic industry is one of the youngest of the textile industries in the West Riding. It is only 15 years' old. 2018 There is a high level of investment. There has been continued investment through the textile aid scheme. However, the industry needs import protection to allow it to take advantage of the investment that has taken place. Mention has been made of the co-operation of the trade unions. Some people have said that they have been supine. Matters have improved since Jack Reel, one of the general secretaries, has gone to Europe. He should stay there for a long time.
The position is complicated by EEC membership. In answer to a letter that I wrote to the Department of Trade, enclosing a copy of the application of the Worsted Spinners' Federation for antidumping legislation, a reply was received from which it appears that the EEC has been investigating anti-dumping legislation as regards acrylic yarn from South Korea, Taiwan and Japan since 1973. That action will now be supplemented by another statistical exercise on the part of the Government.
Textile restraint negotiations with South Korea and Japan areexpected to begin quite soon ".It is clear to many hon. Members that our hands are too tied by the EEC. We must recognise our international obligations, but, as my hon. Friend the Under-Secretary of State has pointed out, the developing countries are responsible for far more of our imports than India and Pakistan. In any event, I would have suggested that our aid to developing countries would be far more reliable and healthy if it were based on a sound economy in this country.
The EEC is hanging round our neck. but I hope that the Government will act independently. I ask my hon. Friend—and I ask him urgently—to let us know the maximum period for which the import surveillance will operate before he is prepared to take action. Will it last two months, four months or six months? How long is he prepared to see surveillance continue before action is considered necessary? The industry is in such a position that four months might well see some grave situation developing in it.
In my constituency I am concerned about the Lancashire cotton textile industry because I have two mills in the area I represent that weave and spin cotton. I am also concerned about a large section 2019 of the West Riding wool textile industry and the man-made fibre industry. I hope that the Minister can give the assurances I seek. We can develop a good, efficient, well-managed and co-operative industry, providing that it is in a fair position to compete. That means some sort of import control, and import control introduced soon.
§ 11.20 p.m.
§ Mr. Roger Stott (Westhoughton)
I am grateful that I have been able to catch your eye, Mr. Deputy Speaker: I seem to have had some difficulty in doing so tonight.
I too am glad that the Government have granted time for this debate. It is remarkable that so many hon. Members have been prepared to stay here on a Thursday night on a one-line Whip when they could have been at home with their families. That shows the importance that we attach to the problems of the textile industry. I agree with the hon. Member who could not remember such unanimity before on both sides of the House on any issue. That is because we all feel very deeply about the present problems of the textile industry.
Like many other hon. Members who have spoken, I was born and bred in Lancashire. We do not need to buy a Lowry painting to hang in the living room: all we have to do is open the door and it is in front of us. We have lived in the cotton industry all our lives, We have seen it diminish from a huge industry employing thousands of people in Rochdale, including my mother and father, to a smaller more efficient industry.
There have been crises in the past. I remember when the hon. Member for Rochdale (Mr. Smith) was Mayor of Rochdale and organised the compaign of the borough mayors against the problems which the industry was facing in the 1960s. But the industry is now facing its worst and most serious crisis since the 1930s. That is why all of us here today are determined to put the case to the Government and to seek some action about it.
Like my hon. Friend the Member for Ince (Mr. McGuire), I attended the meeting at the Empress Mill which was a watershed of this campaign. I have 2020 never known the textile workers to come together to demand Government action. Sixty thousand people in Lancashire are now on short-time working. They just cannot understand why we continue to allow under-developed and developed nations to send their textiles to this country to dump them on our market, when they are facing short time, redundancy and unemployment.
In a letter sent to the Chairman of the British Man-Made Fibres Federation this month, the Secretary of State for Trade referred in particular to an "immediate obligation "to the developing countries to make progressive increases in their access to our own and other developed countries' markets. I do not know whether the Secretary of State believed what he said—I suspect that it was written by one of these civil servants—but if he comes to Lancashire and tells the people of Lancashire that, they will tell him where to go.
I know that the Under-Secretary has a great deal of sympathy with this matter because he represents a Lancashire textile seat. We cannot point the finger at Lancashire and say that we have a responsibility to take the goods of underdeveloped nations because we have to see that they are helped along. Of course we have. We in Lancashire have never said that we do not want to do that. Indeed, last century, Lancashire cotton textile workers chose the dole queue rather than spin and weave cotton picked by the American slave labour.
All that they and we are asking for is that this industry be given a fair deal—no money, just a fair deal to compete in the home market. I say with all the seriousness that I can muster that many hon. Members who represent Lancashire textile seats are here in this House because textile people put us here to do a job for them. It is our intention to ensure that we do that job. I hope that the Government will bear that in mind when they make any future decision. Whether in import controls or greater surveillance of dumping, immediate action is needed if we are to save the Lancashire textile industry.
§ 11.24 p.m.
§ Mr. Terence Higgins (Worthing)
This has been a remarkable debate. In the 2021 course of about four hours no fewer than 28 hon. Members have managed to speak. Undoubtedly all of them have exercised considerable restraint. In view of the tremendous constituency interest in this subject, it seemed to me right that there should be only one Front Bench intervention from the Opposition, and I have considerably curtailed the remarks I intended to make. I am sure that hon. Members will appreciate that this is in no way a reflection on the importance of the subject. On the contrary, it was because I was so anxious that we should have a good and wide-ranging debate that I thought it the right policy to adopt.
No one who has listened to the debate could have failed to be impressed by the depth of concern which has been expressed from both sides of the House. It is equally true that all of us understand very well that what is involved here are human as well as economic problems. That was brought out very clearly by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), with his experience of some 24 years of representing a constituency which is a major textile area. He adopted an analytical approach, whereas my hon. Friend the Member for Macclesfield (Mr. Winterton) spoke with great passion and feeling about the problems now confronting the textile industry generally. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) stressed the hardship involved, particularly in an area in which very often income levels are not very high, when short-time working becomes prevalent. I went to school in Lancashire and I well understand the scars of the 1930s, which still remain in many areas, and the problems which exist.
I want to reinforce, as briefly as I can, a number of the points that have been made and to raise some major issues before the Minister replies to the debate.
It is important to make the point that this is a debate on textiles. Therefore, it is not a debate simply on cotton—important though that is—and it is not a debate simply about synthetics. It is a debate about the woollen industry also. Indeed, it has been stressed that in many ways the situation in the woollen industry is more serious than that in the cotton industry. It has also been brought out very clearly that this is a matter which 2022 affects very many parts of the country, and not simply one side of the Pennines or the other. We need to bear that point in mind. That is also true concerning Scotland and Northern Ireland.
I want to stress the point made very fairly by the Minister in his opening remarks about the view which was taken by the previous Conservative Government. In speaking in an Adjournment debate on 27th November the Minister pointed out that in January 1972 the Lancashire industry had protection against lower priced cotton textiles by tariffs and by quantitative restrictions. He pointed out that both those forms of protection were continued even though it had been recommended that we should get rid of quotas. We may reasonably claim that the previous Conservative administration accepted the industry's case for protection in relation to a number of products. I shall not burden the House again with the details, which the hon. Gentleman very fairly spelled out.
I turn to the question of the multi-fibre market and international trade in textiles because this has occupied a very important and central part of our debate. The fact is that we are debating an industry in which the long-term trend, as my hon. Friend the Member for Lancaster pointed out, has been a very rapid decline over the years. Employment in the cotton textile industry has dropped from about 250,000 to about 80,000, and there has been a very rapid corresponding decrease in the wool industry. Nevertheless, about 930,000 people are still employed, but of those it is estimated that some 150,000 are on short-time. That obviously raises very difficult questions indeed.
A number of hon. Members have referred to the speech made by the Leader of the House in Blackpool last week, in which he said that the Government intend to maintain quotas on cotton goods and so on. That has aroused considerable antagonism in the industry, because the expression "maintain" can be used in two quite different senses. Many people take it to mean "maintain" in the sense of absolute levels, whereas it can be taken to mean "maintain" in the sense that some form of restriction will remain. This has been unfortunate and has been heavily criticised outside the House and in this debate.
2023 We are essentially faced with a threefold problem. First, there is the problem of world depression, particularly in this industry. We are also getting some of the side effects of the oil crisis. A number of hon. Members have pointed out that the United States, with a depressed market of its own, has cheaper feed stocks than we have, at about 20 per cent. of the United Kingdom price. That obviously puts United States manufacturers in a very strong competitive position.
The second point which must be taken into account is the depression in the United Kingdom market. Other points have been mentioned in the debate. My hon. Friend the Member for Pudsey (Mr. Shaw), for example, supported by the hon. Member for Bradford, North (Mr. Ford), mentioned the effect of the capital transfer tax on small firms in the woollen industry. This is obviously a very serious matter.
The main point of the debate, however, has been on the question of imports. Import controls, whether by tariff or quota, raise very important points of principle. There are two aspects which need to be considered together. I hope that the House will bear with me if I mention them both, because it is extremely important in the context of the textile industry that they should be considered jointly.
Considerable pressure is undoubtedly building up for general import controls both at academic level—this was mentioned by the hon. Member for Sowerby (Mr. Madden)—where the so-called Cambridge new school has been advocating it, and in pressure groups who are seeking to offset the effect of excessive wage claims on prices, demand and employment. The motor industry is a case in point. It would be a serious mistake to adopt a policy which would effectively bail out those who have broken the social contract with the inevitable result that even higher wage claims and prices would lead to even stiffer demands for import restrictions. That would have a serious effect on our overall economic and competitive position.
The danger would be that we should start a trade war with a dangerous outburst of protectionism and that would have an extremely serious effect on our exports to Japan, for example. A lot of mention is made of Japanese imports to 2024 Britain, but we should stress the importance of our exports of woollen goods to Japan. I must point out that these remarks do not apply only to the textile industry, but to the question of import controls generally if we were to adopt a protectionist stance. The danger of retaliation in those circumstances is very great. There is the danger of inflation.
As I said, there are two aspects which must be considered together. The second is that if one accepts the general principle I have been advancing one must also recognise, as many hon. Members have tonight, that the competition must be fair and equitable. The important question is whether, to return to this particular case, the import of textile goods is fair and equitable. I think that the case against dumping is clearly very strong.
In the Adjournment debate in November the Under-Secretary said at column 590 that cheap textiles were not the same as dumped textiles. It is important to distinguish between the two. Of course, it could be that cheaper textiles are dumped, and I think that I carry the Under-Secretary with me on that. The question of dumping has been at the core of the debate this evening. The position over textiles has been recognised under the aegis of GATT and, in terms of special arrangements, as being in a unique position.
Many hon. Members have stressed the excellent labour relations which exist in the textile industry and have emphasised that labour costs have not risen all that fast. In my earlier remarks about the social contract I perhaps should have said that the general view in the industry is that wage claims have not been in excess of the rise in the cost of living, and therefore the social contract, to that extent, appears to have been observed. That is in marked contrast to the general position where prices have risen by about 20 per cent. and wages have risen by about 30 per cent. over the past year. This is because the textile market has been depressed.
Average earnings in the industry are being affected by short-time working. The industry has become a victim of the social contract. This is a feature which should be brought out—[Interruption.] Yes, it has to do with the social contract. The overall impact must be taken into account. 2025 I am making a valid point. If our overall competitive position is eroded, this industry is badly hit.
§ The Under-Secretary of State for Trade (Mr. Clinton Davis)
The hon. Gentleman has prayed in aid the social contract. Will he tell the House what the alternative is?
§ Mr. Higgins
I am trying to stick to the point, which is relevant. I will not seek to debate the counter-inflation problem.
The next point concerns the effect which Government action has had on the cash flow of firms in the textile industry. No one will dispute that the present cash flow position in the textile industry is perilous. This has had an adverse effect on the industry.
I want to say a few words on the question of prices, and I should like the Minister to reply to these points. Hon. Members have referred to the 20p shirt and the £8 suit. It has been pointed out that these have not been a great gain either to the less developed countries or to the consumer. I was not quite clear whether hon. Members were arguing that they would have rather seen the low price of the imports reflected in the price in the shops—[Interruption.] That is a point on which the Minister may care to comment. We need to establish the pricing position of a number of these imports. This is an area in which the Government could make further investigation.
As regards the point made by my hon. Friend the Member for Ripon (Dr. Hampson) about Comecon, a number of hon. Members have pointed out that the imports coming from Comecon countries have had a disruptive effect. Imports of made-up suits were referred to. The Prime Minister, after returning from his recent visit to Russia, published a document showing that many of the items to be sent to Russia were textile machinery and would be supplied at a rate of interest of 7 per cent., which is substantially lower than anyone in Britain can obtain. So under the Prime Minister's arrangements the importers will have the advantage of inflation protection.
As regards the position of the Comecon countries, the points made by hon. Members are justified. How are the Government to establish whether dumping is 2026 taking place when the country from which the goods are being exported has no market economy in the ordinary sense? We are right to be concerned about imports coming from these countries. The Comecon countries account for about 32 per cent. of our imports of suits.
Concern has been expressed about imports from Asia. My hon. and learned Friend the Member for Darwen, argued that competition here was unfair. Despite what the Minister said, we must consider carefully whether the procedure to cope with dumping is implemented as rapidly as is necessary when a genuine case has been established. In this connection I wish to relate my remarks to the question of imports from Asia and EEC associate territories.
On 28th November the Secretary of State wrote to one of my hon. Friends a letter in which he discussed the various arrangements for anti-dumping legislation, and said that the only anti-dumping application made in the past year or so by the United Kingdom textile industry was that on credit yarn from the Far East. He said that that case was being handled. If there has been only one application in that period, is that fact not more likely to reflect the difficulty of going through the procedures and establishing whether dumping has taken place, rather than the extent of dumping?
The time has come to reappraise carefully the procedures on allegations of dumping. A number of Labour Members have mentioned specific proposals, but should we not take further action, in the light of the Minister's letter and the considerable complacency on the subject?
The bon. Member for Keighley (Mr. Cryer) made a typical speech on the subject of membership of the EEC, albeit rather shorter than usual. We want to be absolutely clear what the position of the textile industry is. The British Textile Confederation, for example, recently made clear that it believes that continued British membership is in the interests of the country and of the textile industry.
§ Mr. Higgins
I have already had to cut my speech right down. I turn to the question of the multi-fibre arrangements 2027 and the burden-sharing arrangements. It is vital that we press ahead with them as rapidly as possible. How does the Minister see the timetable? We are in a better position to have influence in these matters if we are members of the EEC, and if it is known that we shall continue as members, than if we do not make it clear that we intend to remain members.
It is true that the Community has adopted an attitude towards imports from the less-developed countries which is perhaps not as favourable as we have shown. But I am sure that we can encourage the Community to share the burden, as it is called, of these imports from overseas.
There is no doubt that the proposals for burden-sharing and the MFA should help provide considerable relief, whether to part of the industry or to the industry as a whole. A number of my hon. Friends, particularly my hon. Friend the Member for Lancaster, have said that the position is critical and that they have been told that it should be resolved within two to four months. Is the Minister's appraisal of the urgency of the need for action the same as that expressed by many of my hon. Friends? If not, there may be a gap between now and the implementation of the MFA. Many hon. Members have stressed that that could create a dangerous position, given the overall situation in the industry.
I hope that on this and many other subjects that I have not had time to mention the Minister can give us a forthcoming reply, because there is no doubt that the concern of the House on the subject has been very great.
§ Mr. Higgins
I promised to sit down at exactly a quarter to twelve, and that is what I propose to do.
§ 11.45 p.m.
§ Mr. Meacher
As all hon. Members who have been present will agree, this has been a remarkable debate. We have heard a large number of speeches from hon. Members on both sides of the House which have been deeply sincere and, indeed, passionate. It has been a sombre debate, well-informed and good-tempered, although I recognise that that is because the mood of anger and great determination has scarcely been suppressed.
2028 I appreciate, as I am sure do all hon. Members, the central importance in the debate of the request that has been made to the Government by the BTC. That has been the whole focus of the debate, and I entirely accept that action to be taken by the Government must centre round their consideration of that application. I have listened carefully and I know that all my hon. and right hon. Friends in Government will read carefully all that has been said, but I cannot add to what I said in my opening speech.
I have taken note—as has my hon. Friend the Under-Secretary for Trade who has been sitting by me throughout the debate—of the strength of feeling throughout the House, the common realisation that this is the most serious crisis the textile industry has faced since the 1930s and the common desire that action be taken which will be swift and effective. The message is entirely clear because it has been so eloquently expressed and is universal. The only slightly discordant note was when the hon. Member for Worthing (Mr. Higgins) unwisely brought in some connection with the social contract.
In the time remaining I will try to be as helpful as I can by replying to some of the detailed points raised. I was asked —and this is absolutely central—whether the Government intended that the textile industry should remain viable and prosperous. I say at the outset that it would be unthinkable that any other consequence should materialise. I can certainly say for the Labour Government—and I am sure it would be true of any other Government—that it would be absolutely unthinkable, and our consideration of the material that has been put before us is in that context.
Hon. Members should not underestimate the significance of what I said about the import restraint regime that has been established for textiles. It shows the determination of successive Governments to ensure that the textile industry is protected. The view has been forcefully expressed throughout the House that it is not enough. We shall take due note of that view, but a considerable framework of protection exists.
It is unthinkable that the Government should not intend the industry to be viable and prosperous because of the 2029 enormous contributions it makes to our balance of payments position. The industry's exports are worth £1,100 million a year, so the viability and prosperity of the industry are a key part of the Government's strategy.
I want to make clear—because it did not seem to be clear to one or two speakers—that we have not refused or implicity rejected the BTC application. What I said and what I meant was that we are considering the application. The Government have not reached a decision but are considering it. It would be premature to make any assumption about the results of the comprehensive inquiry which the Government are making.
The hon. Member for Worthing mentioned dumping at some length. The basic definition of dumping is selling abroad at prices below the fair market price of the same or similar product in its country of origin. There are special arrangements for assessing dumping from the State trading countries, Comecon or others, or in cases where exported goods are not also sold in the country of origin. There is also provision for the imposition of a provisional charge of duty, where this is expedient, while a full investigation is being carried out.
Anti-dumping measures are intended for action only against dumped goods which are causing or threatening material injury. I do not for one moment deny the material injury which exists in the textile industry. Anti-dumping measures are not designed, intended or appropriate for dealing with competition from low-priced but not dumped goods. There is a technical distinction and it is one to which the Government, or any Government, are bound to hold. The Department of Trade has received only one antidumping application from the textile industry in recent months and that related to acrylic yarn from the Far East. There have been no applications in respect either of cloth or made-up goods.
I ought to refer to a letter which my hon. Friend the Under-Secretary sent to my hon. Friend the Member for Keighley (Mr. Cryer) dealing with a dumping application made to the EEC which illustrates some of the problems which can exist. My hon. Friend said in his letter: 2030Acrylic yarn from South Korea, Taiwan and Japan is already subject to an antidumping investigation by the EEC Commission as a result of an application in 1973 by Interlane, the European manufacturers' organisation.We can appreciate that where there is that degree of delay in the processing of applications, industry does—at least as regards its application to the EEC—feel that the situation is not being treated with the degree of urgency required.
§ Mr. Bruce Grocott (Lichfield and Tamworth)
Is it the case that in view of the application to the EEC it is not possible for us to consider an application for dumping in this country at that time?
§ Mr. Meacher
I believe I am right in saying that that is correct. Where the issue does not relate to imports coming specifically to this country and where it applies to imports going equally to other Member States, the matter is dealt with by the Commission.
My hon. Friend the Member for Rossendale (Mr. Noble) made a powerful and moving speech. One point on which he touched was that of the regulator. The regulator mechanism has been described by him and a number of other hon. Members as a much-needed objective. I do not necessarily disagree with that as a general objective. It is also a medium-term objective. What we are rightly concerned with at this stage are short-term objectives.
Much was made of the papers sent to my Department by the Lancashire cotton industry on 14th October last year. I should like to correct one misunderstanding. What was sent was a statistical analysis designed to produce an early-warning indicator of an onset of recession, using changes in the level of spinners' stocks which it was suggested my Department might use as a reliable ground for action to restrain imports. That may be appropriate if we are at an early stage in the downturn. I hope hon. Members would agree that at this stage a regulator of this kind is not appropriate. What we are concerned about is short-term action.
My hon. Friend the Member for Bradford, North (Mr. Ford) made a strong appeal on behalf of the wool textile industry in which he was supported by the hon. Members for Pudsey (Mr. Shaw) and Ripon (Dr. Hampson). Let me say a 2031 word on woollen imports from Hong Kong.
In 1974 we exported woollen fabrics and yarn valued at £148 million, while the value of our imports was only £23 million. Hong Kong was not of sufficient importance as a supplier to appear separately in the overseas trade accounts. Wool imports, although not negligible, were below 9 per cent. of sales on the domestic market. I therefore do not have immediately available the figures of imports from Hong Kong. However, the restraints that the EEC is now negotiating with Hong Kong and with other main South-East Asian suppliers will include knitwear, woven fabrics and made-ups other than cotton, in addition to spun synthetic yarns. This will include spun acrylic yarn imports, which are causing considerable concern.
§ Dr. Hampson
These are the import figures: Hong Kong—£86 million, EEC—£68 million, EFTA—£51 million, remainder of imports—£56 million. Hong Kong dominates the figures.
There is also concern that the MFA is being delayed by the Government, who want less strict constraints than those which the industry has already agreed with the Commission.
§ Mr. Meacher
As regards the last point, that is not the case.
I should like to deal with the question of surveillance import licensing and its relevance to imports from developed countries. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) raised the question of the policing of imports from Portugal. The Government have decided to extend surveillance licensing of imports to apply to all countries other than EEC members, and this includes Portugal. The products covered include virtually all yarn and fabrics manufactured from all the main fibres.
In the course of a powerful and well-informed speech my hon. Friend the Member for Bury and Radcliffe (Mr. White) raised the question of the Portuguese cot blankets. The matter was raised with me many weeks ago when my hon. Friend the Member for Rossendale brought a delegation from John Barnes. At that time the same samples were produced in my office. I should 2032 like to know whether the suggestions I then made were acted on. Did they pursue the matter of the alleged copying of a United Kingdom design with the Office of Fair Trading? Did they pursue with the Secretary of State for Prices and Consumer Protection the question of retailers' margins under the Price Code? It is not a case of import controls or nothing. Although I do not deny the importance of this matter, there are other steps which are relevant to our problems that can be taken.
The question of woven cloth was raised by a number of hon. Members. In the course of a slightly knockabout but passionate speech, the hon. Member for Rochdale (Mr. Smith) mentioned woven cloth from the Mediterranean Associates. Imports of woven cloth from Algeria, Libya, Egypt and Jordan are controlled. Imports from Turkey, Greece and the other Mediterranean Associates are not restricted but are subjected to surveillance import licensing. Therefore we are able to see whether these imports are beginning to build up. However, that is not the case now.
The hon. Member for Macclesfield (Mr. Winterton) raised the question of the level at which import restraints were to be imposed in the case of Greece and Turkey. This is still being negotiated. I cannot yet mention the final details.
I should now like to refer to the point made about the growth rate of 6 per cent. under the MFA. The industry knows that when we considered its case last autumn, these imports of cotton yarn were increasing at a rate of hundreds of per cent.—not just 6 per cent. The level of the imports of cotton yarn in 1974 was lower than the level which it insisted last autumn would inevitably be arrived at in the United Kingdom by the end of the year. The hon. Member for Macclesfield misunderstood the position. I do not believe that the industry was unaware either of the original phasing-out intentions, which were negotiated under the previous Conservative Government, or of the provisions of the MFA which require the phasing out.
I also think that what the hon. Gentleman said about my right hon. Friend the Leader of the House was false and that when he looks at the fuller position he will realise that my right hon. Friead 2033 in no way misrepresented the position, which was well represented —
It being Twelve o'clock, the motion for the Adjournment of the House lapsed without Question put.