HC Deb 08 May 1975 vol 891 cc1787-96

11.40 p.m.

Mr. Michael McGuire (Ince)

Yesterday, I led a deputation of union officials and workers from the Empress Mill in Ince to Courtaulds in Manchester to discuss further the proposed closure of this mill, which is the last cotton spinning mill in the Wigan area. After a discussion lasting two and a half hours, Courtaulds agreed to defer further the closure, as it had done previously following a similar meeting held in London on 5th March 1975. The company's decision was said to be … in anticipation of the Government taking the necessary action to help the North-Western texile industry". The need for such action becomes more urgent every day, and I am not exaggerating when I say that many more mills like Empress will be closing. Empress has become a symbol of the determination of the Lancashire textile workers, quite rightly, to resist closures of this kind. They are closures which are happening not because of bad industrial relations, or because of overpaid workers, or because the industry is not technically equipped to meet the challenge of fair competition. The closures which have taken place—and there were three only last week, with more to come—are the result of competition against which no industry can compete. If the car industry, for example, was facing the same kind of unfair competition, the Government would not have been as supine. They would have taken action long ago.

It is noteworthy that already voices are being raised in the car industry about the need to protect the industry from the threat posed by the importation of foreign cars, which have about 27 per cent. of the home market. The textile industry has to contend with a 60 per cent. penetration of the home market. No other industrialised country would allow such a degree of penetration.

If the North-Western textile industry is not to collapse completely, what is needed immediately is a 20 per cent. across-the-board cut in textile imports. Nothing less will do. If special pleading is to be made for certain exemptions, it will be better to do it in this way rather than to let the exemptions delay further the imposition of the 20 per cent. cut that we must have.

The Government's response to our plea for such a cut is based on the argument of retaliation by our trading partners. This suggests to me that they support the justice of the need for import controls but are worried about the consequences.

My answer is that other countries have taken action successfully to limit the import of textiles—which is why we are being flooded out with them—and they seem to have escaped the threat of retaliation. There is the practical example of our ban on the import of cheap coal, which a Labour Government introduced to protect the coal industry when it needed protection and which, incidentally, though relaxed slightly, was continued by the Conservative Government and still remains. The main suppliers of that cheap coal were America, which is still our greatest trading partner, and Poland. They did not retaliate because I believe that they saw the justice of the case. That is a practical example of an instance where retaliation did not take place because of the special nature of the case.

What I also find quite indefensible is the purchasing policy of the Government, which results in more unemployment. I refer especially to the recent decision by the Ministry of Defence to award a big contract to a foreign competitor, simply by not allowing the person responsible for placing the order to take into account the real cost of the order going abroad.

I do not want to deal with the so-called cheap imports because I know that my hon. Friends will deal with that aspect of the matter more fully. I should like to ask my hon. Friend the Minister what help other than import controls can be given to the Empress Mill. Can the mill qualify for help through the Department of Industry to help it modernise? Does the Chancellor's recent announcement of help, through Government grant, to get jobs in areas of high unemployment have any relevance to the workers at the Empress Mill? The rate of unemployment is already well above the national average, higher, for instance, than in Scotland or Wales. What help can the Minister offer here?

Since I intend to give my hon. Friends some time to participate I shall conclude simply by asking the Government what is stopping them from taking the necessary action. I believe that they have enough information already. I believe that they are engaging in delaying tactics, and we have had enough of that.

I want to repeat a warning which I issued a few weeks ago. I am getting sick, tired and weary of giving my loyal support to a Government which, for instance, is going to help the Leyland car workers but which stubbornly refuses to help the textile workers. Like the textile workers, I believe that the time for talking has long since passed. It is time for action. I pledge to the textile workers that I intend to carry that threat out to the ultimate.

11.47 p.m.

Mr. Mike Noble (Rossendale)

I must first thank my hon. Friend the Member for Ince (Mr. McGuire) for offering me time in this debate and say how pleased I am to see a Minister from the Department of Trade as well as a Minister from the Department of Industry present tonight. I deal briefly with two points.

The first concerns an article which appeared in The Guardian on 7th May. It was headlined "Textile imports down." Perhaps I may draw attention to some of the points made in the article. The first significant suggestion was that imports of grey yarn in the first three months of this year fell from £8.4 million to £5.3 million. It also stated that there was a similarly sharp fall in imports of cotton fabric of more than 25 per cent. from £42.3 million to £31.6 million. Thirdly, the point was made that imports of man-made fibre yarns, which showed a substantial overall increase last year, increased only slightly in this quarter. Clothing imports in the same period rose from £104.8 million to £110 million.

I contend that these figures give a totally false picture of the situation. We are dealing with a position where world prices are falling. We should be concerned not with imports on a cost basis but on a basis of volume. According to the British Textile Confederation, which I admit could not give me precise figures, although the volume of imports in cotton fell slightly, it went up in manmade fibres and went up considerably in clothing.

In addition, the home market itself fell, and the confederation suspects that the degree of penetration of imports increased despite a fall-off in value terms. For too long imports have been expressed in money terms rather than in volume. We have to hammer home to the Government the fact that it is volume which matters. Hon. Members from the North-West have seen mills closing and going on to short time in the last few weeks. The Empress Mill is purely a symbol of a general situation. In my constituency five mills declared short time last week and a further mill has announced closure, which will mean that another 80 workers will be out of work on 17th July. If the Minister says that there is a change in the situation as a result of those figures expressed in The Guardian, he must come to the North-West and examine the situation there.

The second point deals with a direct physical example of imports into this country. I have with me a garment produced in South Korea—a child's bootee set, with gloves, bonnet and jacket, sold to the wholesaler in this country for 39p. I challenge anyone to find a shop anywhere in this country where a similar set could be bought at anything near that price.

I go further. I have with me a list of prices from South Korea. It lists a lady's pullover sold to the wholesaler for 60p; a lady's pullover 59p; a lady's vest and skirt—actually, that is a pullover and skirt—£2.72. I assure you, Mr. Deputy-Speaker, that that garment is hand-made with leather and hand-crocheting.

In such circumstances, industry in this country cannot hope to compete. Indeed, I suggest that the very yarn used in this garment cannot be produced at the price at which it is being sold to the wholesaler. We must remember that that price includes the cost of transport.

It is easy to feel the indignation and anger of textile workers in the North-West, but difficult to portray it in this Chamber. However, I echo the words of my hon. Friend the Member for Ince. There are those of us from the North-West who believe that the Socialist Government were not elected to witness the decline and collapse of this great industry which has offered so much to the economic well-being of this country. We believe that we are not only witnessing the collapse of a great industry but that there is a grave danger that whole communities will in the industrial sense collapse with it.

The majority of workers in my constituency are in the footwear industry, which is in a similar position. Frankly, I dread returning to my constituency week after week and having to say to them, "I am sorry. At this date the Government are still considering the matter". There is the evidence. If action cannot be taken by the Government, action will be taken by Members in this Chamber against the Government which we so earnestly wish to support.

11.53 p.m.

Mr. James Lamond (Oldham, East)

Earlier this evening an hon. Member was unkind enough to say to me that he was fed up hearing about the problems of the textile industry. What made that remark even more unkind was that it was made immediately after I had spoken about the textiles industry on Second Reading of the Finance (No. 2) Bill. But I took it rather as a compliment to hon. Members from the North-West and others who have raised this subject quite frequently in the last few weeks because, when the hon. Member concerned said that he was fed up hearing about that industry's problems, he meant that we had been doing our job properly in bringing them to the attention of the House.

The Second Reading of the Finance (No. 2) Bill today had some bearing on the difficulties of the textile industry, because hon. Members spoke about the difficulties in this country stemming from the fact that there has not been enough investment in industry. The facts are—and I am glad to see two fresh faces on the Government Front Bench to hear what we have to say— that in the textile industry there can be no suggestion that there has been insufficient investment.

This subject has been debated over many years. More than 20 years ago, on 9th March 1953, there was a debate on textiles. The then hon. Member who led for the Opposition, as we were at that time, was my right hon. Friend the Prime Minister. He developed during that debate his considerable knowledge of the industry. Subsequently he wrote an important pamphlet called "Plan for Cotton" at the behest of the textile unions. In that he outlined a considerable number of proposals which he suggested would assist the industry. Many of those proposals have been carried out, including the investment he suggested and the working of a three-shift system. The mills in my constituency and elsewhere in the North-West are now working practically round the clock for seven days a week.

The technology of the industry moves ahead at a fast pace and to justify capital investment the machinery has to be worked out and written-off in the shortest possible time. The industry is now the second most capital-intensive in the United Kingdom. Only the chemical industry can boast a better record, and that industry is tied up in many ways with the textile industry. Investment has taken place. The unions have been eager to comply with what was necessary in the interests of the industry. They have agreed to shift working and they do not make excessive wage demands. There can be no question of placing the blame on the workers involved.

There are a number of reasons why the industry is in great difficulty. It is unfortunate that this difficulty has arisen at the same time as difficulties throughout industry as a whole, because people tend to get things mixed up and think that the general difficulty in industry is connected with our difficulty. Ours is quite different. It stems from three things—the general world recession, the cyclical recession which occurs every four or five years, and the flood of imports into the country.

I understand full well, because I have been on delegations to meet Ministers, the arguments against accepting the recommendation of the British Textile Confederation of a 20 per cent. across-the-board cut in imports. The argument against that is to do with retaliation. We must give attention to this economic argument. I do not think—and here I agree with my hon. Friend the Member for Ince (Mr. McGuire)—that there is such a great danger from this as might be supposed. Second, and this is important for Socialists, there is the argument that we would be in some way affecting the people who make a living from the textile industry in developing countries. This is an easy case to develop.

In the North-West—if I can speak for the North-West with a Scots accent like mine—there is considerable concern among the workers. The records show this. If my hon. Friends on the Front Bench are in any doubt about that I suggest that they read the speech of the Prime Minister in that debate in 1953 when he outlined the great concern that has always been shown by the working people of the North-West for their brothers overseas. They are concerned to see that they enjoy a decent standard of living. But at the same time they want to make sure that other countries do not export unemployment to us. They do not want to see the textile industry run down completely in this country so that there can be a few more millionaires in such places as Hong Kong.

12 midnight.

The Under-Secretary of State for Industry (Mr. Gregor Mackenzie)

My hon. Friend the Member for Ince (Mr. McGuire) has very rightly and persuasively brought to the attention of the House a matter which always deserves our closest attention. My hon. Friends the Member for Rossendale (Mr. Noble) and the Member for Oldham, East (Mr. Lamond) have effectively backed up my hon. Friend's contribution. By their speeches, my hon. Friends have shown the degree of concern felt throughout the North-West and other parts of the country about the textile industry. Perhaps it is significant that my hon. Friend the Under-Secretary of State for Trade, who is with me on the Front Bench tonight, has also heard these pleas. I am sure that he will bear in mind all the comments that have been made for consideration in future deliberations within Government circles.

I do not want in any way to understate the present difficulties of the textile industry. It is in the grip of a major downturn in the textile cycle. This downturn began in 1973 and steepened considerably towards the end of 1974. Unlike previous downturns, on this occasion the downturn has been experienced world-wide, and demand—opportunities for the United Kingdom textile industry—has been savagely reduced both in the United Kingdom and in export markets. I know of no country which is an exception to this, and the reduction in demand has been amplified by the difficult international economic problems resulting from the oil price rise and the inflation which is affecting all countries. World-wide, there is considerable under-utilisation of textile prodution capacity, and the United Kingdom is no exception.

The theme of the comments of all of my hon. Friends—and we are very conscious of this—has been pressing upon us the desirability of Government action to restrict imports. Government action to restrict textile imports has already demonstrated our preparedness to act whenever there is justification for doing so. Existing restraints on imports of cotton yarn, woven cotton fabrics and made-ups from low-cost suppliers were supplemented in 1972 by restrictions on imports of polyester cotton fabric and made-ups from the principal low-cost suppliers.

We have agreed to join the Community in seeking restraints on knitwear, woven fabrics and made-ups of most fibres and, in addition, on spun synthetic yarn from the main South-East Asian suppliers. We have acted to restrain imports of cotton yarn from Greece and Turkey and to continue the restrictions on cotton yarn from our traditional low-cost suppliers, principally India, Pakistan and Hong Kong. We have succeeded in negotiating with the other member States of the EEC a "burden-sharing" agreement, by which progress will be made towards an equitable distribution of the Community's imports of low-cost textiles, of which the United Kingdom is overwhemingly the major importer.

Where market disruption, or real risk of it, can be demonstrated, the Government will not hesitate to take prompt action under the GATT Multifibre Arrangement, which governs international trade in textiles. In order to provide additional information to help the Government consider what further action, if any, may need to be taken, we have introduced surveillance licensing on imports from all non-EEC sources of man-made fibres and virtually all yarns and fabrics manufactured from all the main fibres.

We are also considering the industry's request to extend these surveillance arrangements to include made-up articles and clothing. Many of these products are among the actual restraints which the EEC will be seeking to negotiate with the main low-cost Asian suppliers. But reports of potentially disruptive imports from other sources are among the factors being taken into account in determining the desirability and feasibility of extending the surveillance procedures.

The British Textile Confederation has represented to the Government that industry cannot sustain the high level of imports reached in 1974. It has, therefore, proposed that the Government should now take additional measures to cut the level of textile imports by 20 per cent. to avoid serious and irreversible disruption of the United Kingdom textile industry.

I assure my hon. Friends that the Government are giving careful consideration to this proposal, which has been well argued not only by the confederation but by my hon. Friends tonight and on other occasions when the opportunity has presented itself in the House. We are a major trading nation, much of the country's wealth derives from trade, and it is generally in our interests to act to maintain trade at the highest posible level. To cut imports could be contrary to our international obligations and could bring with it the risk of others cutting their imports from us. We must not forget that United Kingdom exports of textiles and clothing earned more than £1,000 million in 1974, nor must we forget that the Turkish Government have announced their intention to retaliate against our restrictions on imports of Turkish cotton yarn.

Nevertheless, I assure my hon. Friends that the Government are giving serious and urgent consideration to the proposals which have been made. My hon. Friend the Member for Rossendale gave dramatic examples of imports from South Korea. The prices he quoted were exceedingly low. If the industry can give prima facie evidence of this kind to the Department of Trade, my hon. Friend will deal with the matter as promptly as possible.

I have taken some time to review the general textile industry situation because it is necessary to consider individual cases such as the Empress Mill in the right context. I have been asked whether my Department would be prepared to consider giving a grant or loan to ensure the mill's continuance. The Government recognise, and always have, the valuable contribution made by Courtaulds—the owners of Empress Mill—to the restructuring and modernisation of the Lancashire textile industry. We have always had the closest contact with Courtaulds, but no request has come from the company for assistance to modernise the mill or make it viable. I emphasise that it is not only a question of import control. No plan has been put forward to me for the modernisation of the mill, which I am told is an old one which works on a single-shift basis. The Department of Industry can act only on the direct approach of the company concerned. I appreciate the efforts made by my hon. Friend the Member for Ince in his talks with the trade union movement and others with a view to a stay of execution, but my Department has received no direct application for a grant for modernisation.

The Department stands by to consider any proposals for the modernisation of textile mills. I assure my hon. Friends that we are deeply concerned about unemployment in the industry, and that the Department of Employment together with other Departments will help those who are unemployed. My hon. Friends can be assured of our genuine concern, and we shall take note of all the arguments advanced by them in the course of the debate.

Question put and agreed to.

Adjourned accordingly at ten minutes past Twelve o'clock.