TRADE POLICY (MULTI-FIBRE ARRANGEMENT)

HC Deb 14 December 1977 vol 941 cc631-92

9.48 p.m.

Mr. Mike Noble (Rossendale)

At this time of the year, most people are turning their thoughts to the festive season. It appears from the empty state of the Opposition Benches that most right hon. and hon. Members, despite their constant declarations of interest in the textile industry and international trade, have gone off to stir their Christmas puddings and stuff their turkeys.

I have a recurring nightmare that my Christmas party will consist of an unending dialogue with my hon. Friend the Under-Secretary and my hon. Friends the Members for Sowerby (Mr. Madden), Nelson and Colne (Mr. Hoyle) Bury and Radcliffe (Mr. White), and Oldham, East (Mr. Lamond), because every Christmas, Easter and summer we have a debate of some kind about textiles, and tonight is no exception.

The subject for debate is not simply textiles; it is the Multi-Fibre Arrangement and international trade in general. At the outset, I must make it clear that although in previous years my hon. Friends and I have been critical of the Government's attitude towards international trade in the textile industry, that is not the case this year. We see my hon. Friend the Under-Secretary in the guise of Santa Claus rather than Scrooge.

For many years now we have campaigned to reach a satisfactory level of imports of textile goods. We do not come to criticise the Government; we come to praise them, because the situation now is almost satisfactory.

There are one or two points that I wish to press on the Minister, but no one can deny the fact that the Government have accepted the advice not just of the unions and employers in the industry but of my hon. Friends and myself. We have fought the good fight through the EEC and through the mandate that the Government accepted and the Community accepted subsequently. This has been pushed forward in a firm manner in the international negotiations that have taken place.

We are not the only supporters of that situation. Mr. Edmond Gartside President of the British Textile Employers' Association, speaking in my constituency and quoted in the Burnley Evening Star, said, This present Government is the first of either party for very many years which is doing a good job for textiles. He was referring not simply to the Multi-Fibre Arrangement but to the assistance that has been passed to the industry in other ways.

Before I talk about the Multi-Fibre Arrangement we must understand the situation that is facing the industry now. We are still in a critical position in the short term, and it will be some months before the Multi-Fibre Arrangement will have a substantial effect on employment in the industry.

The carded yarn situation is the most critical in the whole industry. In June, stocks of carded yarn were 65 per cent. up on normal levels, and by October had reached 73 per cent. above normal levels. We have a serious problem developing in that sector of the industry and a number of redundancies.

Within the cotton and allied textile areas alone we faced the loss of 3,000 jobs between October last year and October this year. My hon. Friend the Member for Nelson and Colne is at this moment fighting hard to preserve 350 jobs in the Courtauld factory in his constituency. The crisis continues.

Many textile employees may get a Christmas card from the Government saying that the Multi-Fibre Arrangement has been signed, sealed and delivered, but they will have to enjoy it during an extended holiday because we have extensive short-time working over Christmas. Had it not been for the temporary employment subsidy there would be many more of my constituents unemployed. This year at 30th September, 73,000 workers in the textile industry as a whole had their jobs supported by the TES. Thus, we are talking tonight about an industry that still faces a very critical situation and is dependent very much for the restoration of confidence among employers and workers on the successful renegotiation of the Multi-Fibre Arrangement.

We all know the background to the arrangement. The present arrangement, which expires at the end of the year, was negotiated between 1973 and 1975. It was seen by the Government as being the answer to the textile industry's problems, but it was a comprehensive network of controls and the quotas were established at a level that took no account of the recession that has since taken place in the domestic textile market. It is still a story of continuing growth of import penetration and unemployment among textile workers.

We see the present substance of the negotiations as being successful in dealing with the situation provided that one or two minor points are cleared up before the final signing next week. I understand that the present situation means that 25 or so bilaterals have been negotiated and agreed with the main supplying low-cost countries. I am sure that the industry would accept that the levels of imports are satisfactory, but a number of points remain to be settled.

For example, we now have no agreements with India, Pakistan, Brazil or Egypt. Certainly the first three of those countries, India, Pakistan and Brazil, are substantial and significant suppliers of textile goods to this country, and any relaxation of the mandate must be opposed at all costs. Mr. Christopher Tugendhat, a member of the European Commission—Opposition Members should recall him—speaking in Rochdale on 14th October, said: The Commission estimates that every thousand ton increase in the Community's deficit in cotton thread means a loss of 160 jobs in weaving. For every additional thousand ton deficit in cotton cloths there is a loss of 160 jobs in spinning and 300 in weaving. And every increase of a thousand tons in the deficit of shirts and blouses means 160 redundancies in spinning, 300 in weaving and 12,000 in manufacturing. It is against that kind of statement that we have to place the present level of imports from the countries in question, particularly Brazil, India and Pakistan.

With cotton yarn, for example, last year Brazil exported 265 tonnes to the United Kingdom, and this year until October it exported 697 tonnes. India exported 6,200 tonnes last year and by October this year had exported 3,844 tonnes. Pakistan exported 348 tonnes last year and this year until October had exported 374 tonnes.

In woven cotton cloth, last year Brazil exported 578,000 square metres to the United Kingdom. This year up till October it exported 1,195,000 square metres. Last year India exported 173,478,000 square metres of cotton cloth and this year until October 135,173,000 square metres. Pakistan last year exported 65,954,000 square metres and this year until October exported 58,893,000 square metres.

With figures of that size, even a relaxation of a fraction of 1 per cent. in the mandate would mean the loss of a substantial number of jobs in the textile industry in the North-West. What I must argue to my hon. Friend the Minister is that even the disappearance of the textile industry in the North-West would do little to resolve the problems in the economies of those three countries. Many people would argue that Brazil should no longer be counted as a developing country because it now has a sophisticated economy. The Government must make sure that the mandate that has been carried with 25 or so countries is maintained throughout the rest of the negotiations with the four outstanding countries. Only in that way can we avoid a substantial loss of jobs.

The second area of concern in regard to the Multi-Fibre Arrangement is the transitional arrangements, which, as I understand it, were not agreed by the British Government but were thrown in by the EEC. There are two elements to the transitional arrangements. For goods covered by the existing quotas, it is my information that the industry accepts that it is normal practice to allow these in against this year's quota, and it is not particularly concerned about this. But there is an entirely new element in the situation. Because of the network of controls proposed, covering a wide range of commodities and a wide range of countries, it is proposed in the transitional arrangements, I understand, that new goods shipped before the end of December this year and arriving before the end of March next year will not be counted against the 1978 quota.

If anything is designed to lead to the greyhounding of goods, as it is called, into this country, stirring up problems which, in the present critical state of the industry, could not be withstood, it is that recommended transitional arrangement. I must tell my hon. Friend the Under-Secretary of State that the industry and the Members of Parliament concerned are totally opposed to it, and we hope that he will oppose it with every fibre in his body.

Another problem will be created by certain anomalies which will develop. Many products—for example, Indian yarn—are currently subject to United Kingdom quotas. I understand that under the new arrangement they will become subject to EEC quotas. Does that mean that because a product is subject to an EEC quota it will have the three months' period of grace in which goods can be sent into this country without their being counted against the 1978 level? What will happen when these quotas change from being United Kingdom quotas to being EEC quotas?

Third, we are concerned about documentation. One of the problems with the original MFA was that, whereas we set up a fine network of controls, my postbag and the postbags of my hon. Friends soon showed that there was considerable evasion. We found examples of free cycling of textile goods within the European Community, and we found examples—recent examples, I should add—of manufacturers or importers in Paris offering for sale on the British market duty-free goods which came from alternative sources. Like the little boy behind the Dutch dam, my hon. Friend and his Department have put their fingers in the breach whenever this has happened, but very often before they managed to do that the damage was done. We want a system of documentation which will ensure monitoring of free cycling and ensure also that where there are new sources or new products the breach is filled immediately so that damage cannot be done.

That is how we view the MFA and the main problems which will arise—the four countries which have not settled, the proposed transitional arrangements, and documentation and control to ensure that the new agreement will not be evaded. I hope that my hon. Friend the Under-Secretary of State will give us some assurances tonight, and I hope also that my right hon. Friend the Secretary of State will carry with him to Europe a firm commitment backed by all of us concerned on this side of the House, by the trade unions and the workers involved and by the manufacturers, and will stand absolutely firm on these outstanding questions as well as on the Multi-Fibre Arrangement as a whole.

Mr. Doug Hoyle (Nelson and Colne)

Hear, hear. No surrender.

Mr. Noble

The debate is about wider trade matters, too, and now is an appropriate time to talk about some of these, because the textile industry is unique in only one respect in trade in that it is the first. In terms of import penetration, the textile industry has merely led the way in the present high levels of imports coming in. Many other industries are threatened. The footwear industry in my constituency has an import penetration now over 50 per cent. Much the same applies to the car industry, the electronics industry and so on.

The feature which many of these industries have in common is that they are based on high technology with easily transferable skills. In spinning and weaving, for example, Britain has often led the way in technology. In my constituency there is the research centre for Platt Saco and Lowell, which sells textile machinery all over the world and is making new discoveries. The Shirley Institute is renowned throughout the world for the work which it does in textiles.

We have led the way, but now we find that the technology is easily transferred and the skills involved are often easily obtained. We now find a situation in the Third world and developing countries in which low wages and high technology are undermining industries in countries of the developed world. We are not saying that there should be protectionism to prevent development in the Third world. The Lancashire textile worker has a tradition and history second to none in dealing with the problems of the Third world. It was the Lancashire cotton worker who embargoed cotton from the Southern States of the Union 110 years ago to assist the fight against slavery, and that tradition continues today.

However, some 80,000 people are finding that their jobs are threatened. That threat faces my constituents who are working in electronics, those in the car assembly industry and others—wherever there is high technology industry with a transferable technology and skills which can be readily acquired. The General Agreement on Tariffs and Trade, which was designed to deal with the problem of world trade, is totally outdated and increasingly discredited because countries evade the main philosophies of the agreement by reaching understandings, operating blackmail and making gentlemen's agreements in order to control in some way world trade outside GATT. All they are doing is coming to terms with reality, and it is GATT that needs re-examining.

Let us take, for example, the definitions of fair and unfair competition. The Secretary of State has said, about attitudes towards unfair competition, that today, in the mind of the developed world, unfair competition usually means competition that for whatever reason is of a kind that domestic production cannot meet. We must ask ourselves what that means. According to GATT it would mean if there was dumping, if there were Government subsidies or help, and so on, but it ought to include the circumstance in which the workers in indigenous industries are treated as nothing better than wage slaves, and that is what happens in much of the textile industry throughout the world.

I have here a report from the International Textile Garment and Leather Workers' Federation dated December 1974 and entitled "Multinational Co-Operation in the Trade Unions". It said of the textile industry: MNCs in the textile industries in Asia are either joint ventures or wholly owned by foreign companies. Some of the textile companies concerned are exclusively, or mainly, export oriented. That is obviously because there is no market because the workers cannot afford to buy the goods that they are themselves producing. It goes on: The majority of MNCs in the textile industry originate from Japan. Surprise, surprise!

It continues: But other such companies come from other Asian countries in search of markets and lower wage and other costs. The majority of workers in the textile, clothing and leather industries in MNCs in Asia are still not organised in trade unions. Indeed in some Asian countries workers in MNCs are not allowed to form trade unions or to strike. Even where unions are legally permitted, government policy frequently handicaps their growth. Sometimes the very absence of unions, or their being handicapped in the exercise of their functions, is presented as an incentive for investment by MNCs. That is absolutely disgraceful. If the workers of Lancashire were prepared to go hungry 110 years ago to free the slaves in the Southern States of America, today they want to see that fight carried to the under-developed and developing countries of South-East Asia, where people should enjoy the same rights and privileges as are enjoyed here.

There is another myth about multinational corporations. We are told that they take employment to these countries. Another report by the International Textile, Garments and Leather Workers' Federation, issued in March 1976, says: it is broadly accepted by expert opinion that MNCs do not provide a great deal of employment in comparison with the capital they invested. … The second reason why MNCs create relatively little employment is that their investment is usually highly capital-intensive. This certainly applies to the textiles and shoe industries despite the academic myth that these industries are labour-intensive. The recent example of the destruction of the hand-loom industry in Indonesia by MNC capital-intensive investment is illustrative of the damage that can be done in a relatively brief period by the MNC giants to industries that employ hundreds of thousands and upon which a whole way of life has been slowly built up over decades and even centuries. From 1969 to 1974 no less than US$ 1,156 million was invested by 97 foreign textile firms (mainly Japanese) in the Indonesian textile industry. This led to the slaughter of the Indonesian handloom textile industry which was reduced from 320,000 to only 50,000 workers. The cruel consequences of this flood of MNC capital was that no less than 250,000 Indonesian textile workers lost their jobs. Admittedly the modern MNC textile plants employed 70,000 new textile workers. But the net job losses were a huge 180,000 workers. That is the second myth about multinational companies which have been encouraged to go into these countries where they have destroyed employment. That example can be repeated in many of the countries in question.

Another myth is that these corporations pay better wages. Let us look at that. The same report says: One of the mighty myths about the MNCs is that they pay higher wages than domestic companies. If one thing is clear, it is that they tend to pay no more, and no less, than they are obliged to do by existing conditions in the countries in which they are established, including the strength of the local unions. The multinational corporations sometimes pay even lower wages than domestic firms.

The three arguments that have been put forward, not simply by hon. Members opposite but by free traders on this side of the House, are that if we restricted imports we should handicap the development of countries that badly need this sort of investment. However, that is not the situation.

Workers in those countries are facing the same traumatic experience of the industrial revolution as workers in this country faced 200 years ago. It has taken 200 years to build the labour movement in this country to its present strength. We should use our experience, strength and knowledge to make sure that those workers do not suffer and do not go through the same sort of experience as textile workers in my area suffered throughout the nineteenth century. We should help them leap into the twentieth century at a reasonable pace by their own goods and the goods that we are producing. The question is how we can do this.

The Secretary of State for Trade has argued recently that we need safeguard clauses in a new GATT which would allow more selective action to be taken in the face of disruptive imports. I concur with that. To use the words of one of my constituents, Mr. Tom Whittaker, the General Secretary of the Footwear Union, we need managed trading relations.

At present we have a situation—and this is particularly true in the textile industry—where a minor breach in the wall can bring a flood of imports and create such a catastrophe that industrial capacity is lost for ever. Is that to the benefit of workers throughout the world, to the country producing the goods or to the importers in this country who are making a swift killing? I approve of the idea of safeguard clauses being introduced into the GATT.

I would make a point that I have made repeatedly in the House. We also need a social clause attached to the GATT so that workers in developing countries can enjoy some of the advantages that our workers have. I know what the criticism is of this. It is that we cannot interfere in the internal Government responsibilities of these developing countries. I wonder what the workers of those countries would say if we asked them. They would not say "For God's sake, stay away. Do not bring trade unions in. Do not have social security systems. Do not have free collective bargaining." What they need is a sustained campaign by the nations of the West to ensure that free collective bargaining and trade unions are introduced, not simply as a matter of economic convenience for them but as a matter of political responsibility and for democratic reasons.

There can be no doubt whatsoever that there is a grave danger that democracy in the developing world will disappear. In many cases it has disappeared. All we are doing when we import cheap goods is propping up some tin-pot dictator who rules by terror. What we must do is make sure that democracy will flourish in these countries. The backbone of democracy—regardless of what Opposition Members may say—is a firm trade union movement. A fair measure of democracy is the size, structure and functions of the voluntary bodies and organisations and the non-State organisations in any community. The backbone of democracy in this country and in many other countries in the developed world is the trade union movement.

We accept that. Why can we not say that that should be a fundamental feature of the developing countries as well? By our helping those countries to raise their standards, not only will they buy more of the goods that they are at present exporting to us, but it will mean a more international control of multinational corporations, which are the great givers to charities and which make noises about democracy, but which are bleeding these people dry. This is a crusade that this country ought to take up.

I believe that we shall begin only when we can convince our Government, and probably the European Community, the United States and many other countries, that the fundamental rights that are enjoyed by workers here should be enjoyed by the workers of these developing countries.

I conclude by simply reiterating that with which I started. The textile workers, employers and trade unions in my own constituency and in the constituencies of my hon. Friends are looking to the Secretary of State for Trade to maintain a firm hold on the remainder of the Multi-Fibre Arrangement renegotiations. Our expectations are high. They are high because the Government have had the courage to stand up to the enormous pressures that have been placed on them, first of all in the EEC and later by the rest of the world. We applaud that courage. We ask now that between today and next Tuesday or Wednesday—whenever the signatures are finally put to the document—that courage should be maintained so that we can say to the workers in Lancashire that we are not bringing the goose home this Christmas, although the Christmas card is there, but at least the goose or the turkey will be there next Christmas, because we have established a secure and safe future for their jobs.

10.19 p.m.

Mr. Hal Miller (Bromsgrove and Redditch)

I am sure that the House is grateful to the hon. Member for Rossendale (Mr. Noble) for raising the very important subject of international trade policy and, in particular, the Multi-Fibre Arrangement. It is far too infrequently that we have the opportunity of debating these very serious matters.

However, I beg leave to doubt whether people who are not involved immediately in their constituency interests could follow the hon. Gentleman in the suggestion that vast benefits will accrue to the workers in Indonesia, Africa, India and other countries by denying them participation in international trade and by denying them an industrial revolution—and by denying them, in fact, the very possibility of trade union organisation that the hon. Gentleman was so ardently and eloquently advocating. It is a preposterous suggestion.

The hon. Gentleman's strictures about multinational corporations are apparently directed to foreign-based corporations. We hear little criticism of ICI or Courtauld no doubt because they are able to maintain some employment in the areas which are represented by Labour Members.

Mr. Noble

I have in my possession a list of multinationals involved in international trade, including Courtauld, Tootal, Carrington Viyella and ICI Fibres. I am critical of their attitude, not because their attitude is moulded by the strength of the trade union movement here but because they operate in countries in which high levels of profit are recouped and where trade union representation is largely reduced. I was critical of the Japanese multinationals which have moved into South-East Asia, into Malaysia and Indonesia.

Mr. Miller

I hear what the hon. Gentleman says, but his ideas about the Japanese are as outdated as his other ideas.

I wish to declare a past interest. [HON. MEMBERS: "Oh."] Labour Members appear to be objecting to my declaring a past interest. Some of them are not so nice about their past interests. They can confine themselves to present interests, but I declare a past interest in that for some years I was responsible for negotiating in Hong Kong certain textile agreements and for the operation of export controls. I attended the first United Nations Conference on Trade and Development, which became generally known as UNCTAD. Later I was a director of a textile manufacturing company in this country. [Interruption.] If the hon. Member for Bury and Radcliffe (Mr. White) wishes to intervene, I shall try to answer his inaudible mutterings. Obviously he has not the courage to put a question to me and, therefore, I hope he will keep quiet. I repeat that I was a director of a textile manufacturing company which from 1969 provided a steadily increasing amount of employment in the North-West. I was also employed until three years ago as a director of a textile importing company.

Mr. Noble

Oh.

Mr. Miller

I shall outline to the hon. Gentleman some of the benefits of that experience when I discuss the matter of import levels.

I wish this evening to address myself to the subject of trade policy and to illustrate my remarks by referring to the Multi-Fibre Arrangement. That arrangement was a freely-negotiated derogation from international trading rights under the GATT voluntarily entered into by exporting as well as importing countries. The hon. Member for Rossendale mentioned Pakistan, India, Egypt and Brazil —countries which subscribed voluntarily to the Multi-Fibre Arrangement.

I wish to point out that the EEC's negotiating basis is in direct contravention to some of the main principles of the Multi-Fibre Arrangement. The people of Hong Kong and their Government are particularly concerned about this derogation. The concept of disruption has been done away with in the EEC's negotiating mandate. We have moved to the concept of a global quota, which was familiar to EEC negotiators before United Kingdom entry.

I was interested to hear echoes in the hon. Gentleman's remarks of the well-known French approach towards a managed market. Those who are most opposed to the EEC now appear to be in favour of the principle of the managed market. But when we are considering disruption and the principle of "globalisation", let us remember that that embraces only 60 per cent. of trade and that the other 40 per cent.—a growing percentage—is accounted for by trade between developed countries.

Please do not let hon. Members from Lancashire imagine that because they have shut off imports from the developing countries they are to rejoice in the fruits of the market that is left. We have had the experience in Hong Kong of imports from America and Canada taking up that part of the cloth market in this country that we voluntarily gave up to protect the Lancashire industry. Do not let anyone say that since 1959 the people and the Government of Hong Kong have not demonstrated and carried the cost of a real understanding of the difficulties of which the hon. Member for Rossendale spoke. The people in Hong Kong share with him the very real disappointment that despite the 18 years of restraint we have tonight to hear once again from the hon. Gentleman that the Lancashire industry is in a stricken condition.

Do not let anyone lay responsibility at the door of Hong Kong, where restraint has been exercised over the past 18 years, allowing other newcomers to enter the market. I was surprised to hear the hon. Member for Sowerby (Mr. Madden) at Question Time earlier this week criticising Hong Kong when he knows that on his side of the Pennines Hong Kong is the sixth largest market for woollen textiles, and his comrade, the candidate for Huddersfield, was actually in the Hong Kong Government office asking whether there was a likelihood that exports of woollen textiles to Hong Kong from this country would be endangered if Britain went ahead in insisting on the agreement contrary to Hong Kong's interest under the Multi-Fibre Arrangement.

The derogation from the principle of disruption to which I shall refer later, is a most serious matter in international trade.

I wish to move now to the second derogation from the principle of the Multi-Fibre Arrangement, which explains the position of the developing countries specifically named by the hon. Member for Rossendale—namely, Brazil, India, Egypt and Pakistan. I refer to the cutback of trade levels for newcomers. It is a most curious concept. It is the analogy of the overflowing cup—that to prevent the cup overflowing it is allowed to be filled only to a certain level below the lip so that any later additions to it may not overflow the rim.

That is a direct derogation from the Multi-Fibre Arrangement and all its predecessors, which made strict provision for the roll-back to be employed where disruption had been shown. The situation was particularly severe in 1976. I refer to the levels that were adopted under the EEC negotiating position. It was a year when the United Kingdom economy was unduly depressed. I shall not go into the political reasons, but the economy was unduly depressed and the exchange rate militated against imports of any description. During that year the landings from Hong Kong were below those of 1975, which in turn were below those of 1974. That is a direct and specific derogation from the freely negotiated terms of the Multi-Fibre Arrangement.

Mr. James Lamond (Oldham. East)

I am following the hon. Gentleman's argument very closely, and I admire the spirited way in which he is putting it forward. However, I am sure that he would like to be fair. He said that imports from Hong Kong had fallen in the last two years. That is to be set against the background of a depressed market generally. As a proportion of total sales here, imports have beer increasing.

Mr. Miller

I shall point out why that is a totally inadequate basis on which to negotiate a five-year arrangement.

I am now coming to the need for a review of these arrangements in the light of market conditions. I think that the hon. Member for Oldham, East (Mr. Lamond) will agree that there is no logical, economical or political reason why the exports of one established trader should be cut back to make room for putative trade from countries which have not yet participated and have not established any manufacturing or trading capacity, which, indeed, may not come to pass.

Will the Under-Secretary of State tell us what will happen if at the end of the first year or the first period of this new five-year arrangement the vacuum that is left is not filled by imports from newcomers? Will it be redistributed among established traders for ensuing years or will it be given away to the developed countries?

I want now to move specifically from the Multi-Fibre Arrangement, to trade policy as a whole, to which, in all fairness, the hon. Member for Rossendale addressed himself at some length in an attempt to establish, as I said in my initial remarks, that a favour would be done to developing countries if they were confined to hand-loom operations and denied the benefits of technology, increased wages and better working conditions from investment in modern textile manufacture.

Mr. Noble

I said that the multinational corporations, according to the evidence, have not paid high wages. They have paid the rate that the market there will bear. With the massive unemployment situation there, they have paid putative wages. Yesterday in The Times, Mr. William Rees-Mogg quoted wages in Malaysia at two dollars a day. Does the hon. Gentleman recognise that bringing in capital-intensive industry, destroys rather than creates jobs? Does he also recognise that industries often move to areas where trade unions are banned or discouraged, where there is no free collective bargaining and no social security system, so that they do not have to pay the on-costs?

Mr. Miller

I listened to the hon. Gentleman with some care. I was a director of a large textile manufacturing company with factories in Nigeria and Ghana. Therefore, I have direct experience—

Mr. Noble

How many trade unions did they have?

Mr. Miller

They were certainly unionised—of the beneficial effects of investment. It is all very well for the hon. Gentleman to laugh. I am pointing out from practical experience the increases, if he will listen as I listened to him, in wages and employment that were brought to those countries by that kind of investment. I am proud to say that the first polyester fibre plant in Africa has now been opened by that company, with which, unfortunately, I am no longer connected. I am trying to show that those investments had a real effect on those economies. In fact, 10,000 jobs were created in Nigeria.

Before the hon. Gentleman gets carried away by the benefit of unionisation and wages, I should like to refer him to a recent report of the Low Pay Unit regarding conditions in the garment industry in this country. It points out that there is a 50 per cent. turnover in employment and that girls of school leaving age are paid totally disgraceful wages which may be below the take-home pay of people in Hong Kong. What are we protecting? [Interruption.]

Mr. Speaker

Order. Peace on earth and good will towards men—we are on the very fringe of it. I can hear the hon. Member quite well. If hon. Members listened carefully, they would hear him as well.

Mr. Miller

I should like to remind the hon. Members for Oldham, East and Rossendale that a large proportion of the textile workers in their constituencies, particularly those on night shifts, are Asian immigrants. The hon. Member for Sowerby would recognise that that is also the case on the other side of the Pennines.

Mr. James Lamond

rose—

Mr. Miller

I shall get on. The benefits of unionism and high wages are not all that apparent in some sectors of the industry in this country.

Mr. James Lamond

I have listened as closely as I can, and it is interesting to hear the other point of view put so well. I did not follow the point that the hon. Member made. I think that he said that I and others should remember that the night shift in the textile industry in our constituencies is, in the main, manned by Pakistani workers. I accept that but what is the hon. Member's point?

Mr. Miller

I was trying to say that the benefits of unionism and supposedly higher wages and protection for Asian workers have not necessarily been fully extended in this country. [Interruption.] If hon. Members have patience I shall continue. If people in developing countries with transferable technology and a comparable level of wages—as I have illustrated from Hong Kong—are able to produce a competitive and satisfactory product we must ask why this has not happened in this country.

The company with which I was connected set up a cloth manufacturing enterprise in this country in 1969. I am proud to say that it beat hell out of imports from India and Pakistan.

Mr. Noble

Name it.

Mr. Miller

I shall be happy to name the firm to the hon. Member later. From my experience I can say that when high technology is introduced in this country and is worked effectively it can easily compete with allegedly low-cost imports from developing countries.

Mr. Michael McGuire (Ince)

Give way.

Mr. Miller

I have given way many times. I am trying to come to a conclusion.

This is most important for the international trade policy of this country, for the North-South dialogue and for the future of our relations inside and outside the EEC. I was disappointed to hear the Secretary of State say in reply to questions earlier this week that there was an imbalance of trade with Hong Kong. He totally omitted to take account of invisible trade, I presume, when he accepted that that imbalance existed. Far less did he take account of any trade generated in Hong Kong as a centre for United Kingdom trading operations in the whole of the Far East.

But the important question is how developing countries are to develop. There used to be the category "least developed" or "less developed". Then we envisaged the gradation to "developing". This is all chronicled in the proceedings of UNCTAD. Now, lo and behold, these countries are supposed to become "developed". The hon. Member for Rossendale said that Brazil was a developed country. Am I to assume from that that he has no objection to trade with Brazil without quota as he has no objection to trade with the United States and West Germany, and perhaps with COMECON countries, although I do not know about that?

Does the hon. Member accept that a country may become developed and in that case should not have these safeguards imposed against it? Does he imagine that the future of our trading relationships in the world is to be governed entirely on the basis of the managed market, in which case it would be a great deal more honest if he said that there should be restrictions on Canada and the United States, both of which I know from my experience took advantage of Hong Kong's restraint to increase their exports of cloth to this country?

Mr. Noble

Does the hon. Member not agree that trade with Brazil in footwear and textiles should be conducted on the basis of reciprocal arrangements? Does he not agree that Brazil is seeking in the present negotiations almost to pose as a developing country, whereas in many respects, particularly in terms of technology, it is highly developed? Does he not think in those circumstances that if it wants an agreement on textiles it should offer us the same opportunities as it is asking of us?

Mr. Miller

I can see that, but the hon. Gentleman is still insisting on barriers to trade from Brazil. I am not shirking this question. Take Hong Kong as an example. It was a developing country, but it has moved up the scale to "more developing", and in some senses in its textile trade it is now a "developed" country. There are no barriers to United Kingdom trade with Hong Kong. It is the United Kingdom's sixth best customer for worsted and woollen piece goods. It is a very valuable export market.

I am astonished and depressed by the fact that the United Kingdom takes such a miniscule percentage of total Hong Kong imports. The figure is 5 per cent. There is no trade barrier. Hong Kong's imports from this country are roughly equivalent to four times our exports to China, to the total level of our exports to India, and to about two-thirds of cur exports to Japan.

We must answer some serious questions about that performance. The woollen textile industry has shown us the way. I suggest that in dealing with these difficult questions the criterion should be not import penetration but production as a whole. I know that Hong Kong has accepted for the past 18 years that these are difficult questions. Otherwise one is not taking any account of the United Kingdom proportion of production that is exported, and that would particularly apply to woollen textiles, as I have remarked more than once this evening.

What we have to grapple with is how "developing" countries are ever to become "developed". How are they to increase their proportion of world trade? All the evidence we have before us at the moment is that trade is increasing between developed countries, the most notable example being West Germany. The Minister responsible, according to a report in the Financial Times by-lined on 8th December, said that that country already accounted for a large proportion of trade in textiles inside the EEC. This is the question to which we have to address ourselves.

A notable contribution to that discussion has been made by the author of the Fabian Society pamphlet, Series 335, entitled "Import Controls—the Case Against". He develops a very coherent argument that intra-developed countries' trade is on the increase and that the barriers we are discussing this evening are all directed against the trade of developing countries. We are up against not only political and philosophical difficulties but very real economic and practical difficulties. That is why I very much welcome the opportunity that the hon. Member for Rossendale has given us this evening of making these remarks.

We simply have to come to grips with this problem, and I do not think that this insistence on the EEC derogating further from the Multi-Fibre Arrangement is at all helpful in the context in which I have been discussing it, although it is understandable from the point of view of the interest of the hon. Gentleman whose constituents are most immediately concerned.

The United Kingdom has traditionally been a trading nation, with a population too large to support by our own agriculture. We have to import raw materials and export finished products. I was listening to a Member of the Tribune Group saying that in the House in those terms last week. In this context it is extraordinary that we are now concentrating, apparently, on reducing the volume of trade. I cannot see how that can be in the long-term interests of this country.

It is highly significant that West Germany already has a higher share of imports of textiles from Hong Kong than the United Kingdom has, but the pressure is all from the United Kingdom and not from West Germany, although the job loss in West Germany has been higher in textiles than it has been in this country, and there are more jobs at risk. This is on the Germans' admission, because they have been redeveloping their industries and moving to a more capital-intensive form of textile manufacture, with an increasing share of intra-EEC trade, specifically in garments, as a result.

We had exactly the same experience in Hong Kong when conducting negotiations with the United States of America. The United States of America was always claiming disruption and loss of employment. What was happening was that the whole of the American textile industry was being re-located from the north-east down to the south-east, and we carried the can for that. We were restricted in order to facilitate that redevelopment. Despite the difficulties, with which I am very familiar and which I understand and accept, I ask Labour Members to try to grapple with this very real problem.

In conclusion, I would say that the consternation—it is not a word that I use lightly—created in Hong Kong by these, two derogations from the Multi-Fibre Arrangement by the EEC is very well founded. Already that example has spread to other markets. The United States has already pressed for renegotiation of its agreement with Hong Kong, although it was concluded only as late as September this year. Because the EEC derogation from the MFA has leaked out, Hong Kong is now being expected to renegotiate its agreement with America.

The Nordic countries have also taken up this challenge. I am not talking theoretically when I say that there is a real risk of spread. It is not confined to other countries with textile products only. That is the fear of Hong Kong and other developing countries which are watching the situation closely with regard to a spread to products other than textiles. Footwear and electronics have already been mentioned.

We must therefore ask ourselves where we in this country are leading world trade policy. I believe that it is the United Kingdom which is leading the EEC in this respect. I have always been a supporter of the United Kingdom's entry into the European Community because I believed that we would lead that Community towards adopting an outward looking policy for world trade.

Indeed, I remember the welcome given in this House to the conclusion of the Lomé Convention by the right hon. Member for Lanark (Mrs. Hart) and the good wishes that accompanied the success of that agreement. But it is no good wishing this theoretically. There are practical implications.

Just as Hong Kong always recognised the practical implications for the United Kingdom—it has accepted restraint since 1959—I am asking Labour Members to make a similar effort of imagination and to accept that there are very real consequences of wishing the Third world to develop and of trying to get the EEC to adopt a more outward-looking posture.

I therefore believe that we shall have to have a review of these arrangements after one year of operation in order to see what has happened particularly with regard to this notional allowance for trade from newly developed manufacturers who have not yet established any performance at all, and to see what has happened in respect of the increase in unrestricted trade from developed countries.

Those nice, cosy developed country trading relationships need to be brought under much closer examination. If the hon. Member for Rossendale believes in a managed market, I believe that the compass should extend to trade from developed countries to make certain that the restraint borne by the developing exporters is not taken advantage of by the developed exporters. That is the history of Hong Kong's whole trade in textiles since 1959, and it can be demonstrated to be so.

I am calling for a review of this arrangement to make certain that the restraint accepted by Hong Kong is not exploited by other developed countries. I am asking the United Kingdom Government to re-examine their trade policy in the EEC towards developing countries as a whole. Finally, the people of Hong Kong ask that the United Kingdom Government reflect on their responsibility towards the people of that still remaining Colony.

10.55 p.m.

Mr. David Young (Bolton, East)

I bring a simple message from my constituents in Bolton. In the town, during the past eight years, we have seen 50 mills reduced to 28 and we have had 6,000 people made redundant. However, having talked to both unions and employers, I know that they agree that this Government have done more to help the textile industry than any other Government in the past 20 years. But that does not alter the fact that most of the companies are keeping going on temporary employment subsidy, and that if we cut off TES, there will be thousands of redundancies in the textile industry.

I tend to argue—and I make no apology for doing so—that the skills of the British textile industry and its work force should be maintained against all comers. It is for that reason that I ask the Government to maintain the position that they have taken in negotiating extremely toughly on behalf of the British textile industry.

It may be easier in certain other areas, but in the North-West no Government for 20 years have provided sufficient diversification. It is easy to talk about closing down industries if there is somewhere else for people to go. We are fighting not simply for textiles but for many inherent British skills and for maintaining our technology.

I am not arguing essentially for soft-bedding. But I am told by the unions and managements that if recent levels of incoming goods from abroad continue, mainly from the underdeveloped countries, the textile industry in Bolton will go out of existence.

I ask the Minister once again to preserve British interests. In saying that, I repeat that I am not implying that there should be any soft-bedding. But there are many means of veiled support which go to other areas, and I have never felt that the way to aid underdeveloped countries was on the basis of their exporting on the balance of low wages.

I thank the Government for what they have done so far. I ask the Minister to continue with the action that he has started and to maintain his tough pressure, in the interests of my constituents in Bolton.

10.58 p.m.

Mr. Doug Hoyle (Nelson and Colne)

We heard an inspired speech from my hon. Friend the Member for Rossendale (Mr. Noble), and we have just listened to the intervention of my hon. Friend the Member for Bolton, East (Mr. Young). But, between their contributions, we had a most unusual speech from the hon. Member for Bromsgrove (Mr. Miller). I am only sorry that the hon. Member for Macclesfield (Mr. Winterton) was not present to hear it, because I am sure that he would have been disappointed and dismayed by the message being put across by his hon. Friend, as I am certain all Conservative voters in textile areas will be when they read his speech. It was a defence of a Colony, Hong Kong, which I do not regard as part of the developing world. It is an area which has had a lot of investment from many of the multinational companies. What it has not kept up with is the level of wages in the rest of the developed world.

I noticed, too, that the hon. Member for Bromsgrove did not mention the fact that trade unionism in Hong Kong is very weak. I was there quite recently, and I was shown two of Hong Kong's show pieces. One is a large electronics factory. The other is a large textile mill. I asked the managements of both factories whether they recognised trade unions. The managing director of the textile factory had to ask the general manager, and of course the answer was "No". In fact, they had no intention of doing so. In the textile mill, which was very modern, some of the safety conditions were a disgrace to any country in the world, and would not be tolerated here. I would have preferred the hon. Member for Bromsgrove and Redditch to argue for better conditions for workers in Hong Kong. I hope that next time he goes there he will look at some of the ways in which conditions could be improved. I feel very sorry for the workers who have to work in these conditions.

Mr. Hal Miller

I think that I lived in Hong Kong rather longer than the hon. Member visited there. I could show him weaving sheds operating to this day in North-East Lancashire, so that he could compare the conditions there with those in Hong Kong.

Mr. Hoyle

Indeed, I would be delighted to go to any mills that the hon. Member names in North-East Lancashire. He would not be able to show me conditions there that were in any way comparable with those in Hong Kong.

Mr. James Lamond

Would my hon. Friend make clear that it is not fair to compare the worst in North-East Lancashire with what we presume to be the best in Hong Kong, since it is used as a show piece?

Mr. Hoyle

My hon. Friend makes a very good point. I am delighted to look at the worst in North-East Lancashire because I know that area very well. In the mill I visited in Hong Kong they were weaving denim. My constituency has the largest manufacturer of denim in this country and that factory has just spent £500,000 on an air-conditioning plant alone. When I was in Hong Kong there was not a single extraction fan to be seen. These are the conditions that I am talking about. I would willing go with the hon. Member to look at any mill he names.

I have often joined the hon. Member in his fights and applauded hi actions in complaining about the import of Japanese cars into this country. How ever, he seems to apply different standards when he is considering the interests of the motor industry. He tells a rather different story then from when he is talking about textiles.

Mr. Hal Miller

That is a travesty of the truth. I supported Government aid to the textile industry and I supported Government aid to the motor car industry. What worries me in both cases is that good use is not being made of it.

Mr. Hoyle

I was talking about the hon. Member's campaign on imports.

Mr. Max Madden (Sowerby)

The answer to the dilemma of the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have gone from the Back Benches to the Opposition Front Bench during this debate, is that he represents a car constituency. His eagerness to tackle Japanese car imports flows from the fact that he represents a car constituency rather than a textile one.

Mr. Hoyle

There is a lot in that. I would rather see the hon. Member for Macclesfield on the Front Bench during a debate on textiles. At least he appreciates the difficulties faced by the textile industry.

The hon. Member for Bromsgrove and Redditch does not seem to recognise the facts. Listening to his speech one would not have known that in the three years 1973–76 3,500 textile factories closed in the EEC, that roughly 500,000 jobs were lost—or 15 per cent. of the labour force—and that many of those lost jobs were in areas where no alternative work was or is available. That is the sombre picture in the industry which we are discussing.

As regards the Multi-Fibre Arrangement, I join my hon. Friend the Member for Rossendale in saying that the Government have done a first-class job for the textile industry. We are proud of the job they have done. What it means is that if that effort is followed through and we have a new arrangement there will be a more secure future for our textile industry. All of us with textile interests are very pleased with what has gone on. We know only too well that over many years the textile workers have said that no Government begin to look after their interests and that, because of other exports from this country, they are the forgotten people. "Very often", they say, "Britain is prepared to accept textile imports because even if we lose our jobs there will at least be other British exports taking our place." Now, however, the Government have realised that something had to be done, since otherwise there would not be a textile industry to discuss.

My hon. Friend the Member for Rossendale was right to point out that in countries such as Hong Kong what is needed to protect the workers is a strong trade union movement. It is certainly not there at present; nor is there any sign of pressure being exerted to build up the trade union movement. We know that it is derided on political grounds, and that is one of the misfortunes in Hong Kong, but there is need for the trade unions to be developed there.

The idea of a planned import policy will find more favour on these Benches than it will with the Opposition, because we believe in a planned economy. We certainly need it, and we need it badly in the textile industry.

In giving praise to the Government for what they have done I must add, however, that there will be a difficult period in the interim before the new Multi-Fibre Arrangement comes in and before it is of benefit to the textile industry. There have been closures already. In my constituency there is the possible closure of 350 jobs before Christmas. It will be a bad Christmas present for those workers if they receive their notices. This is a multinational company, Courtauld, and there is another point to be made in this connection.

I realise that planning agreements are not the concern of the Department of Trade, but in the context of this debate it is right to point out that a planning agreement with a multinational company is essential, because we need to look not only at its policies for investment in this country, not only at its sales in this country and at its manpower requirements, but at its global requirements and its corporate plan. Especially in the case of a British multinational company, that is the sort of thing that a planning agreement would do.

In the factory to which I have referred, although we are having discussions with the company, we are reacting when the closure is almost imminent. If, on the other hand, we had had a planning agreement, the workers at Oakbank Mill, Nelson, would have been aware, before this critical stage, of what the Courtauld policy was. If they had been so aware, they would, I am sure, have been able to press on the management the steps which ought to have been taken to avert a catastrophe of this kind. No one can come to the House and say that the fault for any particular closure lies with the workers in the industry or that it has been due to labour disputes or lack of co-operation by the trade unions. Indeed, in the factory that I am now talking about nothing but praise for the workers is given by the management. If there is a fault it must be looked for elsewhere, in the marketing policy and management of the company, but certainly it does not lie with the trade unions there. That is why we need to look at the position.

I repeat that we need from the Government, if we are going to have the benefit of MFA, some help meanwhile for the companies which are finding things so difficult with the market as it is—not only in the United Kingdom but elsewhere—and with a flat economy. They need Government help, and the sooner we can resolve our policy on TES—I see that an Industry Minister is now in the Chamber—the better it will be for the textile industry. One of the calamities that could befall us is that, although we are now able to offer a better and rosier future, some of the companies that need help now may not be there, unless help is given, to receive the benefits of the Government's integration through the EEC in the MFA.

One thing is absolutely certain: if there is an upturn in world trade we shall again find that we have allowed our textile industry to decline so much in the recession that we shall have to fill the gap with imports.

Mr. Noble

Looking at this purely domestically, would my hon. Friend not agree that with the present level of stock the most vital thing to deal with the problems of textiles and unemployment is a substantial reflation in the Chancellor's next Budget?

Mr. Hoyle

I could not agree more, and we have argued for reflation of the economy.

I turn to another point that needs to be looked at. The Government should meanwhile be looking at Government contracts to see whether we cannot phrase in some Government contracts throughout many of the mills. I have been doing a survey on Government purchasing, and, while in many instances it is good, I was extremely surprised to receive a reply about something that we had thought was made in this country—prison uniforms. This is a small order. Increasing from 50,000 metres of imported cloth in 1976, we ordered overseas 480,000 metres in 1977. I should have though that these orders could have been placed with the British industry now.

We need a reflation of the economy, Government orders and a definite statement on TES or some alternative to it. I see that there is now some interference from the Commission on TES. I hope that new arrangements can be worked out and that help can be given to comparries when they have used up TES.

Mr. Noble

The Opposition do not want TES.

Mr. Hoyle

I know that some of my hon. Friends believe that the Tories do not want to know about any subsidies unless there is a specific case. The Tories agree to subsidies in certain instances and then there is a change of tune in relation to, for example, motor cars and textiles coming into the country. However, a different point of view is usually put forward by them.

We need help to carry us over the next few months. If that is provided, there will, thanks to the Government, be a better future coming. I must emphasise that we want companies that are in difficulty now to be able to hang on. We therefore need Government assistance extremely soon.

11.15 p.m.

Mr. Nicholas Winterton (Macclesfield)

I wish to make a brief contribution as an hon. Member representing an area which has considerable textile interests and as the vice-chairman of the all-party textile group. I hope that the hon. Member for Oldham, East (Mr. Lamond), who is chairman of that influential and hard-working group, will also be able to make a contribution.

I congratulate the hon. Member for Rossendale (Mr. Noble) on raising this important subject. I hope that it will not be considered unfortunate by my hon. Friends if I immediately criticise the few words that I heard my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) utter. A long-standing parliamentary engagement prevented me from being here at the beginning of the debate, but I feel that my hon. Friend was presenting a very unfortunate view which I do not endorse.

Mr. James Lamond

I hope that the hon. Gentleman informed his hon. Friend that he would be attacking him as viciously as he is.

Mr. Winterton

I commented as my hon. Friend passed me that I would be referring to his contribution, but I mentioned nothing about attacking him as I am not doing so. I am merely saying that on this side we do not hold the same views as my hon. Friend implied on the importance of the renegotiation of the MFA for the textile industry.

My hon. Friend the Member for St. Ives (Mr. Nott), the Opposition spokesman on trade, made an important speech on 21st February this year about the textile industry. I am delighted that he is present for this debate. It clearly indicates that the Opposition, unlike the Liberal Party, are concerned about textiles. It is a pity that the hon. Member for Rochdale (Mr. Smith) is not here.

Mr. Madden

The hon. Gentleman has referred to the speech of his hon. Friend the Member for St. Ives (Mr. Nott). Can he tell us whether that speech was polished up by the public relations agency with which his hon. Friend has been associated?

Mr. Winterton

I do not wish to make a direct comment on that matter. I made considerable representations to my hon. Friend, and I believe that some of those views appeared in his speech.

Mr. John Nott (St. Ives)

On a point of order, Mr. Speaker. May I refer to the intervention of the hon. Member for Sowerby (Mr. Madden)? As I have kept silent on the matter of public relations agencies for four weeks, would it be in order for me to ask you whether it is in accordance with the normal courtesy of the House for an hon. Member to put on the Order Paper a motion about another hon. Member and persistently refer inaccurately to that hon. Member—using invention and imagination to a quite astonishing extent—without first asking that hon. Member to whom he is referring whether what he intends to say on the Order Paper or in points of order to you is accurate? I am sorry to spring this on you. It has not seemed worth while to say anything for four weeks but this seemed an appropriate moment since I happened to be here for this debate.

Mr. Madden

Further to that point of order, Mr. Speaker. I am sure that you will recall that the matter to which I have referred was the subject of exchanges on two days between myself, my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and the right hon. Member for Penrith and The Border (Mr. Whitelaw) and others. It seemed then to be an extremely confusing situation. My endeavour in tabling the motion to which the hon. Member for St. Ives has referred was to elucidate the truth from the confusion that seems to pervade the Opposition on these matters.

Mr. Nott

If the hon. Gentleman had asked me. I would have told him.

Mr. Speaker

The answer to the point of order raised by the hon. Member for St. Ives (Mr. Nott) is that the motion is clearly in order, otherwise it would not have passed the Table Office. I can comment no further on the matter.

Mr. Winterton

I am not sure how my speech will appear in Hansard, when Hansard is printed. I am used to being involved in controversy, but on this occasion I appear to be the innocent party.

Mr. James Lamond

For the first time ever.

Mr. Winterton

Having perhaps lost my train of thought and my line of argument, I return to saying that we are basically debating textiles and the renegotiation of the MFA. Like one or two other hon. Members who have already spoken in the debate—and although it may sound strange coming from the Opposition Benches—I want to congratulate the Government. To an extent they have been sustained in their endeavour by support from Opposition Members. I congratulate the Government on their very firm attitude in the renegotiation of the MFA through the EEC.

Mr. Noble

Will the hon. Gentleman answer—

Mr. Speaker

Order. Perhaps I may remind the hon. Member for Rossendale (Mr. Noble), who, in his interesting speech, addressed us for 32 minutes, that other hon. Members are waiting for their debates to come and that he has made four interventions since his own speech.

Mr. Noble

Thank you, Mr. Speaker. I shall be brief.

We accept the hon. Gentleman's rôle in the fight that we have had for the textile industry. He has played a very honourable role. But it is significant that one of his hon. Friends in the House tonight has spent 30 minutes attacking the Government for their attitude towards the MFA. That hon. Member sounded like the Member for Hong Kong, not Bromsgrove. It is unreasonable for the hon. Gentleman to pretend that the Opposition have been anything but dragged screaming and kicking behind the Government on this issue. The Opposition have not shown the kind of support that the hon. Gentleman has shown.

Mr. Winterton

I am grateful for the hon. Gentleman's kind remarks about me and my rôle concerning textiles. However, I made it clear when I rose to speak that I did not associate myself with the remarks of my hon. Friend the Member for Bromsgrove and Redditch. I went on to say that I believe that my hon. Friend the Member for St. Ives, who is the shadow spokesman on trade, made a very positive speech on 21st February, indicating quite clearly the Conservative Party's policy on textiles. Perhaps to some extent the Government have been sustained in their policy by the fact that the Opposition have given them fairly strong support in the line that they have taken.

I am delighted that the Under-Secretary is present. He has played a major part in representing textile interests. I pay tribute to him for the strength that he has sustained in the attack through the EEC. I know that in the textile industry as a whole the work force, the trade unions and the employers are extremely grateful to him for what he has done and for what the Government have done in the very strong line they have taken in the renegotiation.

This is a very important debate. I was not present to listen to the speech of the hon. Member for Rossendale. However, the temporary employment subsidy was undoubtedly mentioned. I am a strong believer in market forces and a market economy. I believe in fair competition. For many years our textile industry has faced anything but fair competition. It has faced very unfair competition. For that reason, I support the continuation of the TES or an alternative. At Question Time earlier this week I put a supplementary question to the Secretary of State as to whether his Department was considering any alternative to TES, because, as we have heard in the debate, we shall shortly, perhaps, fall foul of our European partners in the application of TES in the United Kingdom. It is right and proper that in plenty of time the Department of Employment, and perhaps other Departments, should consider an alternative to this necessary assistance to the textile industry.

Many minutes ago—the hon. Member for Rossendale spoke for about 32 minutes and it looks as if I might be speaking for as long, but if hon. Members study Hansard they will see that I spoke for only half of the time that my speech lasted because of the interventions—I said that I wanted to quote from the excellent speech of my hon. Friend the Member for St. Ives. He said: By any standards the textile and clothing industries are of great significance for our country. In spite of the major reduction in employment which has taken place, we are still concerned"— I am delighted that my hon. Friend the Member for Bromsgrove and Redditch has returned to the Chamber because the point that I am making in quoting my hon. Friend's speech is important. My hon. Friend continued: with a larger employer than the whole of the coal and steel industries put together. Although I have not had time to do any sums, it is possible that we are talking about an industry which, employing 800,000 people, is larger in numbers than the motor industry and its allied trades. The industry is of great significance to our economy."—[Official Report, 21st February 1977; Vol. 926, c. 1104.] That clearly indicates that my hon. Friend, to whose presence tonight I pay tribute, is clearly aware of the importance of the textile industry to this country.

I think that the observations of my hon. Friend the Member for Bromsgrove and Redditch—I managed to hear only part of his speech—indicated that he was presenting a rather one-sided view and that he is not aware of the problems facing the industry. Unlike the motor car industry, which, sadly, has been riddled with industrial disputes which have caused many of the problems which face the industry, the textile industry has had an industrial relations record that is second to none. The problems that face the industry are not basically of the industry's own making but the result of unfair world competition. I take exception to the position that my hon. Friend adopted over the MFA and the textile industry—

Mr. Madden

You will never speak to him again.

Mr. Winterton

I do not believe that that is the case. A great deal depends upon the renegotiation of the GATT Multi-Fibre Arrangement. We have heard about the agreement that has been made with Korea and Hong Kong. Reference was made by my hon. Friend the Member for Bromsgrove and Redditch to the agreement with Hong Kong. However, those elements are only part of the renegotiation. We have a number of uncharted waters, a number of areas for which answers are not yet available. For example, there are Brazil, Pakistan, India and Egypt.

The most important countries are India and Pakistan. They already supply a heavy tonnage to this country each year. Any increase in the amounts that they send to us is likely to be extremely detrimental to the textile industry, especially the spinning yarn and grey cloth industries. They are in the main further north than my constituency of Macclesfield, in Cheshire, but I am not making a constituency speech. I have a great interest in the whole of the textile industry, which I believe is of vital strategic importance to the country. However, in making general points I should be wrong if I did not make one or two constituency points.

For example, Courtauld bought itself into my constituency, taking over George Swindells, a long-established family firm in my constituency. That happened some years ago. It took over the Adelphi and Clarence mills in Bollington, which is a village north of Macclesfield. It is with regret that I tell the House that those two mills are now silent. Courtauld took them over. I do not know why it did so. It may be that it was motivated by our capital taxation system. Perhaps it was because it wished to remove competition. The two mills at one time produced some of the finest spun cotton ever produced in the United Kingdom. They are now silent. They are no longer part of the textile scene. Many hundreds of very skilled, responsible, moderate workers have been forced to find alternative employment. Most of them, fortunately, have done so, but a number remain out of work. That is very hard on them and their families. As Courtauld has told hon. Members on both sides of the House, many of the problems have been caused by unfair competition from the developing world and other countries exporting subsidised goods to this country.

In the town in which I live, Congleton, in the south of my constituency, a large company, Tootal, took over Conlowe Ltd. and Condura Fabrics Ltd. Those two companies have now been closed or their operations have been transferred elsewhere. Tootal says that that has been done because of a bad recession in textiles and rationalisation, so often the excuse for that type of action. At Condura Fabrics 200 people are losing their jobs. Some are being found jobs by Berisfords Ltd., the largest ribbon manufacturers in the world, which is taking over the Condura premises, but that company is not finding jobs for all those who have lost their jobs with Tootal. The clerical staff are being transferred to a Tootal distribution depot in Longport, near Stoke-on-Trent, some miles from Congleton.

My town is losing 200 jobs that it can ill afford to lose. In the whole of the North-West many jobs have been lost not through inefficiency or industrial disputes but because the industry is suffering from unfair competition. It has rationalised and put in new equipment to enable it to compete as best it can with the Third world, which has the advantage of cheap raw materials and cheap labour.

The industry has had some protection under the MFA. I say to the Minister "For heaven's sake maintain the robust position which has been adopted to date. Do not concede to India and Pakistan, Egypt and Brazil. You will have the support of the textile workers—perhaps in the voting booths—if you sustain this strong attitude. You will be doing it in the interests not only of the textile industry but of the United Kingdom as a whole."

We are talking about an important industry. It is bigger than the car industry, about which we hear in the House time and time again, not only in debates but at Question Time. The textile industry does not feature often enough in the deliberations of the House. I only hope that the Government appreciate what is at stake and will sustain their very tough attitude in what remains of the renegotiation.

I want to show an across-the-Floor attitude. I think that I am the only Conservative Member to have signed Early-Day Motion No. 127, headed Textiles and the Multi-Fibre Arrangement", put down by the hon. Member for Rossendale and signed by a number of his hon. Friends. The motion reflects exactly what I feel. I hope that I shall not bore the House if I read it out, because it should be registered for the Minister to consider further. It says: That this House calls on Her Majesty's Government to re-affirm its unequivocal support for the mandate initially accepted by the EEC on the Multi-Fibre Arrangement renegotiations; reminds Her Majesty's Government of its declaration to take unilateral action should renegotiation be unsuccessful; and calls on the Secretary of State for Trade to make an early statement on progress made in the current round of negotiations. Since the tabling of the motion we have become aware of some of the details of the negotiations and the agreements that have resulted. They have been good, and I hope that the remainder will be good as well.

I should like to raise a matter that was mentioned to a number of hon. Members on both sides of the House when we recently met representatives of the British Textile Employers' Association here at the Palace of Westminster. It was pointed out to us that one of the disquieting features of the EEC bilateral negotiations has been the negotiations with a country in South America—Peru.

I hope that the Minister will be able to provide us with some information. Peru is the only producer of a particular growth of cotton called tanguis cotton. I am sure that the hon. Member is aware of this product, which has special properties of value to the knitting industry. Due to the inefficient management of the Peruvian cotton-growing estates, tanguis cotton is in very short supply, but the Peruvians have been successful in obtaining a special and substantial quota, in addition to that for the cotton itself, of yarns spun from this cotton. They are thus making their tanguis cotton available to other countries, and to this country in particular, in yarn form only.

Surely this is a form of trading blackmail, which I believe is a very unwelcome innovation in international trading. I raise that point at the end of my speech because, while I do not think it affects the overall situation, I feel that it is a trend that requires attention. I hope that the Under-Secretary will pay some attention to it when he replies to this important debate.

Once again, I congratulate the hon. Member for Rossendale on raising this subject. It has enabled me to say things that have been building up within my heart for a long time. I am very attached to the textile industry. What I say I do not say for party gain but because I think that the industry deserves our support, backing and understanding. After all that it has suffered in recent years it rightly looks now to this House and to the present Government, and a future Conservative Government, to do right in its interest—and I hope that right will be done.

11.37 p.m.

Mr. Max Madden (Sowerby)

It is no wonder that the hon. Member for St. Ives (Mr. Nott), who has been looking more and more glum during the debate, has chosen this moment to depart, because he is faced with the awkward task, at the end of the debate, of reconciling two irreconcilables, expressed, first, by the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have become the self-appointed spokesman for Hong Kong, and, secondly, by the hon. Member for Macclesfield (Mr. Winterton), who, as always in these debates—unlike the hon. Member for Bromsgrove and Redditch—has been speaking up for the British textile industry.

It is always tempting to take up the remarks of the hon. Member for Macclesfield, but on this occaison I shall resist the temptation. I shall even resist the more provocative temptation to take up the very strange contribution of the hon. Member for Bromsgrove and Redditch. In passing, I point out that not only will his contribution make very interesting reading for textile workers in the British textile industry; he will also have upset some of his former friends who own, control and run the British textile industry. He seemed to be laying the blame for many of the difficulties of that industry on the doorstep of those who own and control it. It was an indictment of private enterprise and the competence of those who run the industry. I am sure that it will make very interesting reading for textile employers.

Secondly, it was also a little cheeky. It certainly shows that the hon. Member has got a pretty good brass neck to lecture us about shortcomings, in terms of the pay and conditions of clothing workers, and to cite a document recently published by the Low Pay Unit. It may come as a surprise to the hon. Member for Bromsgrove and Redditch to know that a number of Labour Members contributed their first parliamentary pay increase to the Low Pay Unit to produce that publication. I believe that it was a very commendable report. It exposed the low pay and poor conditions that clothing workers, particularly in Leeds, have endured for many years. Much of that situation is due to the extreme loyalty that both textile and clothing workers have displayed over the years, as was pointed out by the hon. Member for Macclesfield.

However, none of these matters will divert me from paying my debt of gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for having initiated the debate. I am grateful to him for providing us with yet another opportunity to discuss the problems of the textile industry and for his well-documented well-argued and incisive speech, which said for all of us what needs to be said for the industry. Therefore, I hope—indeed, I promise—to be brief.

I am in the rare position, shared by my hon. Friend the Member for Rossendale, of expressing thanks to the Government Front Bench. I am also pleased to express my gratitude particularly to my hon. Friend the Member for Oldham, East (Mr. Lamond) for the contribution that he has made in recent years in trying to assist the textile industry, and especially for the part that he has played in ensuring the negotiating position that the Government have pursued in the events leading up to the renegotiation of the Multi-Fibre Arrangement, which reflects a tough attitude. If it had not been for the attitude demonstrated by the Government, the negotiating mandate pursued by the Commission would not have been as tough as it has been. That needs to be repeated often. Indeed, to underline the point made by my hon. Friend the Member for Rossendale, that approach is appreciated by those who speak for the industry. My hon. Friend referred to Mr. Edmond Gartside, President of the British Textile Employers Association, and I should like to echo the sentiments that he expressed.

I pointed out to the hon. Member for Bromsgrove and Redditch that the Common Market is not in the business of planning trade. It is the epitome of the philosophy, characterised in this House day in, day out, of the right hon. Member for Leeds, North-East (Sir K. Joseph). It is based on the philosophy of the free movement of capital and labour. It has nothing to do with planning trade.

As in so many other things, we are the victims of our Common Market membership as regards the textile industry and the renegotiation of the Multi-Fibre Arrangement. The Common Market has been negotiating on behalf of the British Government. The British Government have not had independence in these matters.

I should like to draw attention to the importance of the meeting of the Council of Ministers which is to take place on Tuesday 20th December. It appears that that meeting will be presented with extremely voluminous information about the bilateral agreements which have so far been reached between the EEC negotiating team and 25 textile-exporting nations.

I am concerned that precise information giving details of the quotas and what these agreements mean in terms of the British market is not available. I understand that, for some unknown reason, all this information is being processed through a computer in Bonn. I am not sure that the information has yet reached the computer in Bonn. However, I know that it is not available in London this week. Therefore, we do not know the precise terms of the agreements which have been reached. Still less do we know the precise impact that they would have if they were to form the basis of a renegotiated Multi-Fibre Arrangement. Understandings have been reached. On the basis of these understandings, I believe, agreements have been initialled. The Minister should give the House all the information that he has about the exact terms which have been agreed and his best estimates of their effect on the British industry and the British market.

I am pleased that agreements have been reached with Hong Kong, Taiwan and South Korea, because those three countries import the lion's share of textiles. I hope that that agreement will help to curb the effects of imports from those countries.

I share the concern expressed by other hon. Members about the failure so far to reach agreement with India, Pakistan, Brazil and Egypt. I understand that no agreement has been signed. This is an important grouping. It would be dangerous if any significant increase were allowed because virtually any substantial increase would lead inevitably to a further reduction in employment in the British textile industry.

I should like the Minister to confirm that an understanding has been reached in respect of the most sensitive products limiting the average growth under the bilateral agreement between zero and 0.6 per cent. This is an important aspect of the negotiations. The British industry and our constituents are entitled to clear information.

I share with other hon. Members concern about the transitional arrangements and their effects on the British industry. I share the concern about the sharing arrangements. There is an excellent case for trying to secure agreement with other members of the EEC for them to take a much larger share of textile imports which come to the Community.

There is a need to improve the surveillance arrangements which have existed and about which concern has been expressed. I should like an assurance that the anti dumping arrangements, which have been criticised time after time, will be secured and strengthened. I should like an assurance from the Minister that efforts will be made to improve documentation, which has been the subject of widespread concern in the industry.

There is a need for recession arrangements to protect the British industry, which, although it has been taking a large share of the market, at times of recession suffers more than other Common Market countries because of its historic levels of imports. It is important to have better recession arrangements than we have had in the past.

The hon. Member for Bromsgrove and Redditch referred to the importance of Hong Kong for wool and worsteds. I agree with him. I underline his comment about the excellent export record of the wool industry. But he neatly omitted to refer to the very unhappy situation that surrounds exports of wool to America. It is wholly unreasonable for the Americans to scurry around, as they were doing some weeks ago, trying to weaken our position in the renegotiation of the MFA yet justifying their own 50 per cent. tariff against British wool exports to America. I should like to hear from the Minister what success there has been in the recent efforts, aided by the new British Ambassador to America, to encourage the Americans to reduce that 50 per cent. tariff, a reduction which would greatly assist the British wool industry.

Mr. Nicholas Winterton

Does the hon. Gentleman not accept that America, in spite of its attempts to weaken our position in the renegotiation, is the first country, at the drop of a hat, to rush to put up tariffs to protect its own industries if they are in danger of being undermined by imports?

Mr. Madden

I entirely agree with the hon. Gentleman. Britain has been a soft touch on textile imports for a long time, and if we have a much tougher MFA in the future countries such as Hong Kong and other traditional exporters of textiles will be able to find other exporting opportunities around the world which will not have the harmful effects on the British industry that we have witnessed in recent years.

I make a last appeal to the British negotiators to stand firm in the talks on this matter on Tuesday. We can all understand the atmosphere in which those talks will take place. The negotiators will be confronted with an enormous amount of material which they will not have had much time to consider. There will be enormous pressure for agreements to be reached. Officials will be stressing the urgency of reaching an agreement. The negotiators are human beings, too, and there will be a great temptation for them to pack up their bags and get back to the Christmas festivities.

In Common Market tradition the clocks may be halted and 20th December may last for just 24 hours, but it might last for 48 or 72 hours. But I urge the British negotiators not to give in on Tuesday. Much rides on the outcome of that meeting. If necessary, I would urge them to tell those who have been negotiating on our behalf that what they have agreed is not good enough and that, if necessary, they should go back and negotiate further. If necessary, the Council of Ministers should meet in January. We should not readily agree to everything that is presented on Tuesday. We should stand up for the British textile industry as we have done up to now. That is important both for the country and for thousands of textile workers and their families, whose future security hangs very much on the outcome of the talks.

I therefore wish our negotiators success and urge them to be very tough and to get the best deal they can for the British industry.

11.54 p.m.

Mr. Fred Silvester (Manchester, Withington)

I have sat through the debate and, therefore, feel entitled to take part in it to deal with certain matters of deep concern. Although there are no textile mills in my constituency, Manchester shares a lot of the wealth of the industry and attaches much important to it.

It is important to remember that we are considering here not merely the problems of one industry but the problems of an industry which in the North-East is central to an area which has many problems. If we pull away the support which that industry has at the present time, the problems will not only proliferate in the textile industry but will run riot through the area and cause many difficulties elsewhere.

I underline the point made by my hon. Friend the Member for Macclesfield (Mr. Winterton) that it has been, and continues to be, the case that the Government's negotiations in this matter have had the support of Conservatives, and even of Liberals—although they are not here tonight—in Lancashire and the North-West. That support has been given freely and has continued. I do not think it helps the Government's position or our likely success if we ignore that fact.

I should like to say a word on behalf of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), who has come in for some stick tonight.

Mr. Hoyle

Deservedly.

Mr. Silvester

The hon. Member may say that, but my hon. Friend has made a point of considerable importance. Speaking, as he did, on behalf of the people of Hong Kong—if I may so put it—he drew attention to a very important point which will be relevant in the negotiations next week. A very harsh agreement has been made with Hong Kong. We think it a necessary one but the fact is that it is harsh. My hon. Friend's points were well made, and we do ourselves no credit if we fail to acknowledge the reciprocal effect of what we are doing. It will, however, be extremely damaging if the burden that we have imposed on the people of Hong Kong is thrown away and open to doubt, as it will be if we give way to India, Pakistan, Brazil and Egypt. Therefore, in asking the Minister, as others have done, to make sure that the negotiating position is not weakened in respect of those four countries, I think that my hon. Friend's warning, when he spoke of America and other countries also beginning to question again the agreements they have made, is well taken. If the position is weakened in respect of those four countries, we shall have done a great disservice to the people of Hong Kong and have opened the gates to a very unhappy season hereafter. Although we may not all agree with everything that my hon. Friend said, it needed to be said in the debate.

We are essentially dealing here with the immediate position. We are talking about the negotiations taking place next week. We are talking about the acute difficulties at the present time in the textile industry. We are talking about stock levels which are horrendous and getting worse. We have mentioned in passing the temporary employment subsidy. We have to recognise that that particular form of subsidy is in real trouble. I do not think that we shall be able to hold that line very long. It is no good beating the EEC about the head. It is quite likely that we are in breach of the EEC arrangements, and it is quite likely that the court will so find. It is also questionable whether that particular remedy is one which this country would wish to continue across all industry for very much longer.

It is a great mistake for us to regard this as the only way of helping the textile industry. I therefore ask that the Government, combined with the texile industry, while recognising that some form of subsidy and assistance will continue to be required in the present circumstances, should endeavour to find a way of doing it which is not a continuation of the TES.

We are particularly concerned with the period up to the time when the renegotiated agreement begins to bite. I ask the Minister, therefore, to have a word in the ear of his right hon. Friend the Secretary of State for Employment and ask him to get us out of our misery about whether TES is to be extended as soon as possible. I think it is extremely unsettling for the industry. Although I personally think that there are other ways of assisting the industry which would be better and endanger it less, an immediate or quick announcement is required to know exactly what sort of support the industry will get. The present situation is unsettling.

I wanted to make only those two points. In the longer term we shall have to face up to the problem mentioned by my hon. Friend the Member for Bromsgrove and Redditch. It is no good saying to ourselves that we can wholly regard imports as something against which there is permanent protection. That will not be the case.

Nor is it helpful for Labour Members to imply that the EEC is an enemy to us in this respect. In many respects we can regard the EEC as a friend. More and more we shall have to move towards picking up our textile trade from trade between developed countries, and in that context our membership of the EEC will be to our benefit. We should make sure that our industry is structured to take full advantage of that.

12.1 a.m.

Mr. Michael McGuire (Ince)

As constantly remind my colleagues, this is a debating Chamber. I want to pick up some of the points made in this debate. However much we may disagree, I would say to the hon. Member for Bromsgrove and Redditch (Mr. Miller) that we sometimes need a certain point of view expressed which we might possibly miss because the argument tends to flow in one direction.

I wanted to intervene only because I am sorry that the hon. Member did not give way. There seemed to be some secret signs of communication between him and my hon. Friend the Member for Oldham, East (Mr. Lamond). I do not know whether it was the flashing of the eyes or the lifting of the eyebrows, but the hon. Gentleman gave way a couple of times to my hon. Friend when I would have liked him to give way to me.

I wanted the hon. Gentleman to give way on his allegation—he said it was true—that there is a Low Pay Unit report which indicts the garment industry and which he said was absolutely shocking. I wanted to ask him who runs that industry. Who are the people running that industry who are paying those low wages?

Earlier in his speech the hon. Gentleman poured scorn on the efforts of trade unionists. I should tell the hon. Gentleman that what caused trade unionism in the first place was employers as bad as the people he was indicting.

I also want to comment on something said by the hon. Member for Manchester, Withington (Mr. Silvester). He was quite right to say it. He has no textile mills in his constituency. I think I am right in saying that there are few mills in Manchester. Nevertheless, the textile industry has a certain standing, not merely psychologically or emotionally, in Lancashire generally and certainly in Manchester.

If we allow that industry to be slimmed down any more the effect will not be contained within those towns where mills exist but will spread outwards and further demoralise a region that has taken more than its fair share of the hard knocks, largely through unfair competition. I seize that point because in my constituency there are tremendous social problems of industrial dereliction as well as unemployment.

Twelve months ago we were all lamenting the closure of the Courtauld mill in Skelmersdale. It closed prematurely and paid off the workers. Most hon. Members were in deepest sympathy with me and did all they could to sustain me—for which I was grateful—when Courtauld announced that closure in Skelmersdale.

The loss of 1,000 jobs in one fell swoop—300 had been lost earlier—meant that the male unemployment rate in Skelmersdale—now the biggest town in my constituency—was 23 per cent. I do not know the precise reasons, but Skelmersdale now has 17.6 per cent. male unemployment. Although I am glad that it has come down, it is still a terrific figure. We still have not recovered from the consequences of that closure and the demoralisation which followed it and other blows in Skelmersdale. We still have the same social problems to meet, and we get them in the rest of my constituency, which largely falls within the metropolitan borough of Wigan.

About 12 months before the closure of the Courtauld mill, we had the closure of the Empress mill. This is an indication of how Lancashire and the textile industry have suffered. The Empress mill was a cotton spinning mill, and Lancashire, the birthplace of the industry, once had 100 per cent. of the world's spinning capacity. We are now down to less than 1 per cent., and that little mill in my constituency, which was also owned by Courtauld, had added a little to that capacity. But it went.

In the community jobs were lost as a result. There was less money, and there was not the same opportunity for people to meet the cost of living. There was not the same money going to the local authority, Wigan metropolitan borough, but still there were the same social problems and the industrial dereliction. The effect was to demoralise one of the townships in my constituency, and in the Greater Wigan area today we have an unemployment rate of 9.6 per cent. which is well above the national average of 6 per cent. and about 1½ per cent. above the North-Western average. What is more, we are virtually surrounded by areas which receive all kinds of benefits, yet we get only assisted status benefit and, as I said earlier today, it looks as though we shall lose out on rate support grant.

These debates have come to resemble a continuous film show. When I was a boy, there were two separate houses—one at 8.30 and one at 10.30. Then came the continuous show, and people could not believe that it was possible to stay in all the way through, though I may say that the novelty soon wore off. Inevitably, people fell asleep after seeing the programme once, and after a time they would rub their eyes and say "This is where we came in."

That is my impression of these textile debates. This is where we came in last time. We seem to rehearse the same old topics. The difference this time, however, is that there is a sense of hope. Just before the House returned after the Summer Recess, about eight of us Labour Members—I think that a group of Conservatives did the same earlier—went round some of our spinning mills and weaving mills to get some first-hand knowledge of the views of people in the industry.

I gained the impression that there was a feeling that something would be done to arrest the decline and that the Government had taken a firm stand in this renegotiation and offered some hope to an industry which had become almost paralysed with fear. Until then, the feeling in the industry had been that there was nothing that could be done, that Parliament repeatedly debated the problems, but that the demands of the so-called poor or developing countries, collectively or individually, for a bigger share of our market were paramount, that we were a soft touch and that the inevitable end would be the total decline of the textile industry in Lancashire, bearing in mind that its work force is down from many hundreds of thousands in its heyday to about 80,000.

I am pleased to see that my hon. Friend the Member for Oldham, West (Mr. Meacher), the Under-Secretary, will be answering the debate. We could not have a man with a better and deeper understanding of the problems—unless it was my hon. Friend the Member for Oldham East. Maybe we should have a combination of the two.

In this period of hope we must not be carried away too much. There are still many things to battle for. I hope that when my hon. Friend winds up he will tell us some of the sticking points where he sees difficulties, and that he will urge caution on hon. Members with textile interests. I do not have many textile interests now—my mills have slipped away from me—but I take an interest because I believe that the industry is a matter of importance to the prosperity of North-East Lancashire as a whole.

I urge upon my hon. Friend the same message as he has heard from my colleagues—stick firm. No other developed industrialised country in the world has allowed the import penetration that we have allowed. I can see why the textile industry is the first industrial enterprise in which developing countries engage. People have to be clothed and so it is the threshold of industrial take-off. It is so attractive that any country in the world, once it is beyond the agricultural state and wants to get into industry, goes automatically for textiles. But there is no country in the world that has taken penetration as we have.

The hon. Member for Bromsgrove and Redditch made a stink about the problems of Hong Kong. I have been there, but I do not claim to be as knowledgeable as he is. I have great respect for the people of Hong Kong. They frightened me to death with their ability to work. Obviously, we have to play the game with them. We cannot impose pretty strict restrictions on them and let others play old soldiers. We cannot give others what we deny Hong Kong. Does the hon. Member think that it would benefit other countries if our capacity to produce textiles was eliminated altogether? I believe that they need a country that produces enough to take not only their textile products but other products that they are starting to produce and will produce in greater numbers.

The fact is that the Lancashire people, in particular, have a great tradition for looking after the interests of people from poorer regions. A classic example is the attitude of the Lancashire cotton workers of the time to the question of slavery in America. Their stand on this matter must have put them out of work and caused them and their families great hardship, but this sort of behaviour is a strong and honourable tradition.

The hon. Member for Bromsgrove and Redditch represents a motor car manufacturing constituency. Many of his constituents work in the industry. In the past, he has made statements about motor car import penetration and has asked the Minister to say how many British people are opting to buy foreign as opposed to British cars.

Without being critical of the motor car industry—I do not know too much about it—I believe that many of its problems are self-inflicted. But that cannot be said of the textile industry. Textile workers do not receive anything like the wages in the motor car industry, but their industrial relations record is an example to the nation. Yet, as I have said, they have constantly seen their industry whittled away simply because of the competition. Even if they were on half their present wages, they could not stand up against it.

Mr. Hal Miller

My point was that the people of Hong Kong and the industry there had always understood the difficulties in this country, and they had shown it once again by reaching an agreement entailing a serious cut-back, but they were concerned that if that gap were filled by developed countries or others without such a claim, the situation should be reviewed when the trade became better.

As for the analogy with the motor car industry, both industries, as I said in response to an earlier question, have had Government support which they needed to restructure, and part of that restructuring inevitably involves a loss of jobs.

Mr. McGuire

I am glad that the hon. Gentleman has cleared that up. I shall not pursue it further. I shall listen keenly to my hon. Friend the Under-Secretary of State. If it be possible to stiffen his resolve by repeating what he has heard about 40 times already, I add only this. We have confidence that he will not let the textile industry down when our representatives get round the table this coming Tuesday. The textile workers of Lancashire have every confidence in him, knowing that he will protect their interests.

12.17 a.m.

Mr. James Lamond (Oldham, East)

This debate opened some time ago with an excellent speech by my hon. Friend the Member for Rossendale (Mr. Noble), and I know from the wistful tone in which you remarked that it had lasted only 32 minutes, Mr. Speaker, that you greatly regretted having missed it.

Mr. Speaker

I was here for it, and for the speech which lasted 35 minutes.

Mr. Lamond

I apologise, Mr. Speaker. Obviously, your patience has suffered more than I had given you credit for.

It has been an extremely interesting debate, and many good speeches have been made, but I congratulate the hon. Member for Bromsgrove and Redditch (Mr. Miller), in particular, because he made it a real debate, which is somewhat unusual when we discuss textile matters. Our debates on the textile industry over the past few years have tended to be rather one-sided in that there has been unanimity across the Floor. I thought the hon. Gentleman's speech valuable because it cleared our minds a little. Had I been called earlier—I appreciate your difficulties, Mr. Speaker—I should have wished to launch into a lengthy analysis of the points that he made. I shall now refrain from doing so, but I must say that I agreed with the hon. Gentleman on several points.

For example, I support the proposition that we should try to get as great an extension of trade throughout the world as we can. That would be greatly to the benefit of workers everywhere, and in Britain in particular. That is one of the reasons why I was so concerned to support the deal we made with the Polish Government the other day, because it will make possible not only trade between us and the Poles but more ships in the world to carry the increased trade. I support that fully.

I also share a soft spot for the people of Lancashire. I knew when I saw the hon. Gentleman coming into the debate that he would be taking the line that he did, because I knew of his particular interest in the Crown Colony. It behoves all of us to take an interest, because it is a Crown Colony, and there is some merit in his argument about our unfair treatment that has been meted out to Hong Kong. I am not saying that the level of imports should be increased because of that, but within the levels that are being imposed or agreed Hong Kong could reasonably say that it has not been as fairly treated as it should be because of its special position. On that account I agree with him also.

The hon. Gentleman also suggested that the analysis that has been made of the difficulties—not only by hon. Members and trade unionists who have a lifetime in the industry but by employers and owners of the industry in Britain who have also had great experience—was not entirely correct. He suggested that we should examine the position again and that there should be more investment, that we should examine the technology of the industry, its organisation and so on. I think he will find that perhaps most of his experience of the industry has been outside the country, but there has certainly been great investment in the textile industry. It has moved from being labour-intensive to being the second most capital-intensive industry—second only to chemicals—in the country. There cannot be an argument on those grounds.

We have heard several references to the excellent industrial relations that exist in the industry, and, in passing, we might rightly say that the low wages of which the hon. Member and I and others in the industry complain may be due to the rather compliant attitude of the trade union movement in the textile industry. I could not follow all the argument of the hon. Gentleman about immigrants manning the night shifts in the main, but that is so. However, if he was saying that they are not union members he was wrong, because there is good trade union organisation among them and many play an active part as shop stewards and so on. I therefore did not think that his analysis was correct.

We cannot protect the long-term interests of the industry with the hope that we can get by with a continuing series of such agreements. At the end of the day we must liberalise trade.

My hon. Friend the Member for Rossendale mentioned some letters that he had received from Mr. Edmund Cart-side, President of the British Textile Employers' Association. Mr. Gartside is not alone in his opinions. We are now speaking about emergency action to try to prevent the annihilation of the industry. "Annihilation" is an emotive word but it is not mine. It was contained in a letter that I and other hon. Members have received from Mr. John Longworth, Chairman of the Textile Industry Support Campaign and Secretary of the Oldham and District Employers' Association. He said: It is now widely recognised that certain sections of the textile industries of the Western World are at risk of annihilation as a result of low cost exports—particularly from the Far East. I accept that analysis by those who have a fairly deep knowledge of the industry. I make no such claim for myself. I merely hope to represent people here but I want to see jobs for my constituents. That is my long-term aim. I recognise that the textile industry has diminished considerably during the last 70 years and that it is now a mere shadow of its former self as an employer, but I do not object to that. I should rather have the balance of diversified industry in my constituency that there now is than the position that prevailed 70 years ago when almost everyone in Oldham was employed directly in textiles or in the making of textile machinery.

I like the better balance that we have now, though, of course, I do not want it to diminish until it disappears completely. That would be the result if we had not had such emphatic and strong representations from the Government in the negotiations. I congratulate them, and I hope that they will be able to sustain their arguments to the point where they emerge successfully from the negotiations. I am sure that what they have done on behalf of the textile industry will be widely recognised by working-people and employers in the Lancashire textile industry.

12.26 a.m.

The Under-Secretary of State for Trade (Mr. Michael Meacher)

We have had a fairly extensive Second Reading debate on textiles, and it has been a passionate and rousing occasion in parts. I should like to express my gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for his generous tributes to the Government, and I should like to give credit to him for the diligence, perseverance and single-mindedness which he and other hon. Members have repeatedly shown in pursuing their campaign on behalf of the textile industry. I am entitled to make that statement since I am often on the receiving end of that campaign.

The British textile industry has some very good friends in this House to whom it should show considerable gratitude for their perseverance and effectiveness. I am pleased that my hon. Friend the Member for Rossendale quoted the statement of Mr. Gartside who has enormous experience in the Lancashire industry. My hon. Friend can take a lot of credit for keeping the Government up to the mark and is responsible for the interesting state of mind of Whitehall on this subject. It was put to me recently by a civil servant that the whole of Whitehall is decidedly twitchy about the subject of textiles. My hon. Friend can take a lot of personal credit for that excellent state of affairs.

The MFA is only the latest of a series of GATT arrangements regulating international trade in textiles and clothing. Like previous arrangements—the hon. Member for Bromsgrove and Redditch (Mr. Miller) was correct in what he said about this—it is essentially a bargain under which developing countries accept discriminatory controls against their exports in return for assurances of the growth of their exports to the developed market.

The arrangement came into operation on 1st January 1974 and it expires at the end of this year. By the time renewal came to be considered, it was widely accepted that in the economic circumstances that have developed, particularly the world recession which has hit the textile industry particularly hard, the arrangement did not give adequate protection to our industry or to the industries of Western industrialised countries. I need hardly stress the importance of the textile and clothing industry.

My hon. Friend for Nelson and Colne (Mr. Hoyle) spoke eloquently on the subject. As the hon. Member for Macclesfield (Mr. Winterton) pointed out, the industry employs 800,000 people. Although, as my hon. Friend the Member for Oldham East (Mr. Lamond) reminded us, that is not as many as it used to employ, the great majority are in assisted areas where unemployment is high. Since we are talking not just about employment but about the industry's importance to our national economy, it should be pointed out that its export, last year totalled £1,345 million—7 per cent. of our total export trade.

I think that the hon. Member for Bromsgrove and Redditch was an unnecessary Jeremiah in suggesting that if there was a cutback in countries such as Hong Kong, our industry, if given the breathing space to reorganise and consolidate, will not be able to take up any slack which is brought about by any reduction in countries such as Hong Kong. In fact, I am glad to say that our clothing exports to the EEC in the last year or so have been going very well. That shows the capacity of our industry, given the chance to compete very effectively.

I am sure that we—many hon. Members have emphasised this—certainly could not, and would not, stand by and allow these vital industries to be disrupted by the flood of low-cost imports which continues to come into the country.

In renegotiating the MFA we had two objectives. First, the growth rate in the existing quotas, which was 6 per cent., had been agreed at a time when expectations of growth for the textile industry were much higher than they are now, and it was important that the growth rate should certainly be reduced. Second, the existing agreement covered only 75 per cent. of our low-cost imports—still quite a high figure, but 75 per cent. and no more—and gave no protection against the problem of cumulative disruption. This occurs with the imports from a number of suppliers, often including new suppliers—I shall return to this point because it is important to the hon. Member for Bromsgrove and Redditch—but each possibly in themselves quite small matters but nevertheless, as a whole, becoming damaging to our industry.

After a great deal of discussion at the GATT textiles committee and with EEC member countries and the European Commission, it was decided that the best way to proceed would be for the importing countries to negotiate direct with the exporters to agree reduced quota levels and coverage, and only when this had been done would the MFA be renewed, if it was going to be renewed.

The next step, therefore, was to agree the negotiating mandate under which the European Commission would negotiate with the exporters on behalf of the nine EEC member States. We in the United Kingdom took the lead by pressing for a very tough mandate, and we refused to allow the negotiations to begin until we had satisfactory assurances on a number of sensitive areas, of what the quotas, for example, proposed for imports into the EEC as a whole meant in terms of the level of imports into the United Kingdom.

Satisfactory assurances on these points were achieved, following detailed discussions with the Commission, and the negotiating mandate was approved by the Council of Ministers on 18th October. Negotiations with the supplying countries began immediately afterwards.

I need hardly say that the negotiations proved to be extremely tough. I am sure that hon. Members would have expected that; we certainly did, as well. We are asking some of the exporting countries to accept very large, sharp cutbacks in the level of trade that they would have enjoyed under the old MFA. I hope that my hon. Friend the Member for Ince (Mr. McGuire) will accept that after these negotiations we shall never again be regarded, I think, as a soft touch, if indeed we ever were.

However, I say to the hon. Member for Bromsgrove and Redditch, about the essential point of his speech—I hope that he is the Member for Bromsgrove and Redditch and not for Hong Kong—that it seems to us to be impossible to provide for stabilisation or increased security for our own industry and for extra room for new countries coming into textiles as they industrialise, which may well be smaller and less rich than Hong Kong, without at the same time requiring some cutback from the larger, older, more established and richer supplying countries. It is impossible not to have some cutback. I think that the hon. Member is unfair if he does not recognise that that is inevitable—unless he is prepared to sacrifice Lancashire jobs or, indeed, textile jobs elsewhere in the country.

Mr. Hal Miller

I think that the hon. Gentleman will recall that I was asking him only for an assurance that there would be a review at the end of a period to see what had happened to the gap that had been left for newcomers and to see whether developed countries or which others had filled that gap, and, if so, whether there would be any redistribution. That is what I asked.

Mr. Meacher

It is British industry that will fill it if it is not taken up by new suppliers. I can give the assurance that it is our understanding that there will, if necessary, be a review. No one can foresee the state of the international economy. We do not know whether in two years there will be a deeper recession or a marked recovery. There will be the opportunity for such a review.

The Commission made it clear in respect of the cutbacks that we were demanding, that in the absence of a satisfactory agreement it would in the last resort be prepared to take unilateral measures to restrict low-cost imports. I am glad to say that by and large the exporting countries recognised that if an orderly trade in textiles was to be maintained their best interests lay in reaching an agreement with the Commission. As a result, the Commission has now reached agreement, or is expecting shortly to reach agreement, with 27 countries. Unilateral measures will also be taken against Taiwan, which is not a member of the GATT. The results of the Commission's negotiations are now being carefully examined by ourselves and the other EEC member States, and a decision on whether the Commission's recommendations can be accepted and the MFA renewed will be taken, as my hon. Friend the Member for Sowerby (Mr. Madden) said, at the important meeting of the Council of Foreign Ministers next Tuesday, 20th December.

I turn to our response to what the Commission has achieved. Our first task has been to consider whether the Commission has managed to reach agreement within the terms of the mandate. That is a little less straightforward than it might seem since the Commission has been negotiating on behalf of the whole of the EEC. It is necessary for as to consider the result of the negotiations as they affect the United Kingdom. The calculations—I can vouch for this—are extremely complex. We are dealing with nine EEC States, over 30 supplying countries and over 120 products. Although the Commission's negotiations with the supplying countries were going on right up to the last moment, even now all the details are not yet fully available. However, I think that the general pattern is clear. It is worth emphasising again that the fact that the Commission has initialled an agreement with a number of countries does not in any way bind the Council of Ministers, and that as of now the United Kingdom's position is fully reserved.

The new MFA will, in our view, represent an enormous improvement over the old agreement. I shall indicate why we take that view. First, the coverage will be a great deal more comprehensive. The present coverage of restraints is equal to only about 75 per cent. of low-cost imports of textiles and clothing by volume proportions. Bilateral agreements will increase that to 95 per cent. The coverage will rise to 98 per cent. if we include quotas outside the MFA which have been agreed with some Eastern European countries.

My hon. Friend the Member for Rossendale spoke of the desirability of a managed market. I suggest that what we now have is something that goes a long way in that direction.

Secondly, we have secured certain global ceilings for the eight most sensitive products so that in no circumstances will imports of these products rise above the ceilings laid down, even if new suppliers do enter the market. The eight products account for no less than 60 per cent. of our total low-cost imports.

Thirdly, we have more realistic base levels, which is of great importance as new quotas will be based on actual trade in 1976 rather than on quota levels, which in many cases were under-used. In some cases 1976 trade is below the level of 1977. Therefore, the quotas here represent a cut in existing levels.

Fourthly, a very important feature of the proposed new MFA is an automatic trigger mechanism to bring under restraint any products not yet under quota if exports to the Community or any member country rise above a certain level.

Fifthly, growth rates are substanially lower than in the existing MFA, particularly for the most sensitive products.

Sixthly, the number of product categories covered has been greatly extended, from about 60 to over 120. The products themselves have been defined more precisely in order to cut down the scope for evasion, and the amount of flexibility between products—so that, for example, an exporting State may transfer the unused proportion of a quota in one product to increase trade in another whose quota is fully used—has been greatly reduced.

All this amounts to a degree of protection going far beyond anything that our industry has enjoyed in the past, and I believe that it will provide it with a sound basis for its future development. By any standards, therefore, the new agreement is a great improvement over the old, but we need to consider to what extent the Commission has succeeded in keeping within its negotiating mandate and how far we are satisfied with the outcome of the negotiations. Here I shall be more critical.

With regard to the 27 countries with which the agreement has been reached, the Commission has been able to keep very close to the mandate. It has not been able to keep within it in every case, but I think, frankly, in the nature of things—given that there has been some very hard negotiating—it would have been surprising if it had been able to do so.

The departures from the mandate can fairly be described as small. Present information is that they should not affect those products of greatest sensitivity to the United Kingdom. In the case of the eight most sensitive products in Group 1, which account for over 60 per cent of total United Kingdom low-cost imports, the Commission has, with certain exceptions, kept closely to the terms of the mandate. The excesses range from nil on jerseys to 2.4 per cent on blouses. These are all provisional figures.

In the case of the 18 sensitive products in Groups 2 and 3 not subject to global quotas, preliminary indications are that the Commission has settled for growth rates of between 5 per cent. and 9 per cent. rather than the 4 per cent. to 7 per cent. laid down in the mandate.

I turn to a point that many hon. Members raised. There are four countries, which have been regularly named in the debate, with which the Commission has not been able to reach agreement within the terms of the mandate. They are important supplying countries, and agreement with them is necessary if the renewal of the MFA is to take place as planned. One of the factors which we need to consider, and which will be considered by the Council of Ministers next Tuesday, is whether we could justify giving something extra to those four countries in order to reach agreement. Every hon. Member who has taken part in the debate has expressed the strong view that there should be no departure from the mandate, that no departure is acceptable. That is the clear message, and I have a great deal of sympathy with that view. But we need to consider the consequences of such a stand. If we were to take such a stand we would have to ask the Commission to take unilateral measures against those four countries, and we would also need to carry the Commission and the other EEC member States with us in imposing measures more restrictive than we had been able to achieve by negotiation. That would be the meaning of such a stand.

This is one of the central issues to be discussed in the Council of Ministers, and no decision has yet been taken by the United Kingdom Government; nor, indeed, can it be taken at this point.

I want to emphasise the fact that whatever decision is taken the effect—this is not an unfair judgment to make—will be small, in the context of the agreements that have been successfully negotiated, and it certainly needs to be judged in perspective, in comparison with the improvements, which I have outlined, which the new MFA offers compared with the old one.

I now want to turn to some of the more specific points raised in the course of the debate. My hon. Friend the Member for Rossendale asked in particular whether when there was a transformation from United Kingdom into EEC quotas, it meant that the amount of the product coming into the United Kingdom specifically was any longer restricted. I can assure him that if there is such a transformation it will in no way affect the parcelling-out of the original distribution within the EEC. The United Kingdom position will be safeguarded.

Mr. Noble

My question was: will knitting yarn quotas transferred from this country to the EEC be treated as new quotas in terms of the transitional arrangement, which would allow them to be shipped before 31st December this year and to arrive before 31st March next year? Will they then not be counted against 1978 quotas?

Mr. Meacher

I understand my hon. Friend's point. I am sure that they will not be treated as new quotas; they will be regarded as a continuation of the existing quota. Therefore, the loophole to which my hon. Friend referred will not exist in respect of the interim arrangement. Where there is no quota prior to 31st December, if goods are shipped before 31st December and arrive before 31st March next year they will not count against the 1978 quota. That would not apply in the case of Indian yarn quotas.

My hon. Friend referred to the safeguard clause in respect of the multilateral trade negotiations. It is our intention to seek a selective application of article 19, which could certainly have an influence in respect of other countries, although it would probably have little effect now in respect of textiles precisely because of the very wide coverage of quotas under the new MFA; but it is our intention to negotiate that, and we are pressing for that as one of our objectives.

My hon. Friend also referred to the social clause in his remarks about the myth concerning the role played by multinational corporations investing in underdeveloped countries. I am sure that he is right when he says that people in those countries want better working conditions and more security, and in that context the social clause would work in their interest. But we have to negotiate with Governments—and when we ourselves have rightly taken a stand in respect of attempts to increase extra-territoriality, particularly in respect of American jurisdiction over its multinational corporations operating in this country, it would be very difficult for us to impose, albeit with proper and honourable motives, a similar infringement of sovereignty on other countries, particularly developing countries.

I refer my hon. Friend briefly to the point about the evasion of origin. This worries many hon. Members. There are strict rules to ensure that goods do not evade quota restrictions by being shipped via countries to which no quotas have been applied. I accept that this kind of thing can never be entirely eliminated, but we normally expect to be able to prevent its becoming a serious threat to our system of controls.

Two separate points are involved. The first is that evasion in most cases will be stopped by the application of the origin rules. Secondly, it will become more difficult anyway because of the extension of the MFA into more countries and products.

On the first point, all goods imported under the MFA will be required to have certificates of origin. We are constantly on the alert for cases of abuse of the certificate of origin system. I do not deny that such cases exist. But Customs and Excise has full powers to investigate where evidence is presented that indicates that abuse may be taking place.

On the second point, evasion of this kind will be more difficult, because of the arrangements under the new MFA. In the first place, far more countries will have negotiated bilateral agreements and more products will be under quota. Therefore, the scope for evasion will be much less.

In the case of countries which have signed bilateral agreements, the trigger mechanism would come into play before any significant damage could be done.

In the case of MFA signatories where there are no bilateral agreements, our intention—we have assurance from the Commission on this point—would be to impose quotas when exports reached levels no greater than those laid down by the trigger provisions of the bilateral agreements.

That leaves only countries which have not signed the MFA, and we would expect the Commission to deal with any quota evasion through them, which would also quickly come to light on a similar basis. In most cases this would involve invoking the safeguard clause in existing trade agreements.

When the detail of what I have just said has been carefully read, it will be seen that, to a large degree, we have an effective framework for checking evasion under the new MFA.

My hon. Friend the Member for Rossendale asked about goods in transit on the last day of the year. Under the GATT rules we are bound to allow into this country goods which are in transit at the moment that a quota is imposed. That is the nature of the predicament. Quotas in all the bilateral agreements negotiated by the Commission start from 1st January next year.

For the 75 per cent. of products at present under quota, that makes no difference, since products not covered by the 1978 quota will fall to be counted against that for 1977. For products not at present under quota—the extra 20 per cent. to which I referred—I agree that there could be a rush to beat the new quotas when they are imposed. To that extent, there is a loophole. Where there is clear evidence of this happening, we are certainly prepared to intervene with the country concerned. I should add that in the only case of this kind that has yet come to light, we have already done so.

At worst, this is a once-and-for-all operation. With barely two weeks of the year to run, the danger of disruption from this source is not great. If any hon. Members have evidence from their industrial sources showing or suspecting any use of this loophole, I hope that they will let us know quickly.

I was going on to refer to other points, but time is short.

Mr. Nicholas Winterton

Before the Minister sits down, may I remind him of the special cotton from Peru? Have his civil servants yet managed to give him any advice on that matter? I agree that, when compared with many of the matters that have been mentioned, this may seem a trivial point. However, as it is a form of industrial blackmail, I believe that it should be dealt with now so that, if it occurs in any other form in future, we can deal with it effectively. Has the hon. Gentleman had any information on this subject?

Mr. Meacher

I shall deal with that in a moment. First, I should complete my previous remarks.

I know that there has been a suggestion that "goods in transit" might be so loosely described as to offer continuous disruption in 1978. The term "goods in transit" is not a loose phrase. It is described specifically as "goods for which there is evidence of shipment prior to the cut-off date." It is not sufficient to place an order or state an intention to place an order. Our normal criterion is a bill of lading. I do not expect any significant evasion of the spirit of the law.

I have never heard of Peruvian tanguis. I am not sure that my officials have either. I shall investigate the position and write to the hon. Member for Macclesfield. Since the EEC claims that the global quotas for cotton yarn and cloth have not been exceeded, any extra for Peru must have been balanced by less for somewhere else. Presumably the situation means that there is a right to concede this to Peru and perhaps we extracted less of another product from Peru.

I hope that I have given the assurance that this is a valuable and important new deal. I do not deny that it is not in accordance with all our wishes but it provides a framework for world trade in textiles which offers enormous gains for our industry. I hope and believe that in the light of any modifications that might be agreed by the Council it will at least provide a structure for the regeneration for which our industry has sought for so long.