HC Deb 06 November 1979 vol 973 cc367-76

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham]

10.17 pm
Mr. Geoffrey Dickens (Huddersfield West)

My constituency of Huddersfield and the surrounding district provide the finest wool-worsted materials in the world and have done so for generations. The textile and related clothing industries together represent one of Britain's major industrial sectors. With sales of over £8,000 million a year, they are a vital branch of our manufacturing industry. Their exports total over £2,000 million a year. These two industries employ 750,000 people—more than the British Steel Corporation and the National Coal Board added together.

The industry has undergone a major degree of restructuring, and includes the largest fibre and textile company in the world and four of the six largest textile companies in the European Economic Community, in addition to several thousand small firms.

Employment in the textile and clothing industries is important in most areas of the country, but is particularly concentrated in several regions and towns. In some of these areas, such as Huddersfield, these industries are the largest employers. A number also suffer from above-average unemployment, so the role of the textile and clothing firms is of particular significance to them. Sixty per cent. of all those employed in the industry are women.

The textile industry has an excellent record of innovation. It is exploring new ways of promoting effective use of design in very competitive markets. Its research establishments have a worldwide reputation and the Industry has developed new high technology uses for textiles.

For most of the past decade, productivity in textiles has grown much faster than it has in British manufacturing industry as a whole, reflecting constructive co-operation between management and the trade unions. Large sums have been ploughed back into investment by textile and clothing companies—over £2,100 million since 1970. Recently one of the most modern spinning plants in the world came into production, and in Huddersfield confidence has been expressed by many extensions to local mills.

In industrial policy, the British textile industry has played a major role through the European Textile Association in influencing the European Commission's thinking. However, growth of exports to many markets is stifled by high tariffs, import surcharges and import bans. While the Tokyo round of the GATT multilateral trade negotiations will bring about some gradual reduction in the high tariffs of the United States of America, these will remain in many cases two to three times higher than our own. Exchange rate uncertainties do not help.

Britain, together with other member States of the EEC, provides by far the largest market for textiles and clothing from developing countries. Like almost every industrialised country, the EEC has found it necessary to control the growth of these imports in order to prevent severe damage to its textile and clothing industries. Industrialised countries have made clear their belief that their economic, social and strategic structures would be irreparably harmed by the disappearance of these industries.

The United Kingdom has been a major influence in establishing a system for promoting the orderly growth of developing countries' textile and clothing exports to the EEC. This is the GATT multifibre arrangement, known as the MFA, which began in 1974 and was renewed in 1978. Experience has shown that, without effective application of such an instrument, disorder in world textile production and trade results.

Mr. Barry Sheerman (Huddersfield, East)

Does not the hon. Gentleman accept that, although one might have an orderly international community on the face of it, with rules and agreements, some countries in Europe and elsewhere interpret the rules in a less than gentlemanly way? As Britain is a member of the European Community, it always worries me that, although we read of rules by which all member States have agreed to abide, when it comes to the application of the spirit of those rules we see a very different kind of practice. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) has said elsewhere today that in this matter some people seem to be playing cricket while others are playing rugby league. When we—

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. The hon. Gentleman cannot make a speech on this subject. He is intervening.

Mr. Sheerman

I was intervening, Mr. Deputy Speaker, to point out that the hon. Gentleman is quite right when he talks about a system of rules, but where he is wrong is in not recognising, perhaps, that these rules are being interpreted in a different spirit elsewhere in the Common Market, and we are not getting a fair deal when it comes to the relationship that counts. When we try to export—

Mr. Deputy Speaker

Order. Mr. Dickens.

Mr. Dickens

I accept that rules are interpreted differently. Under the MFA, particularly favourable treatment is given by the EEC to imports from the poorest developing countries. They are also assisted by the fact that a considerable proportion of their textiles and clothing are allowed to enter the EEC duty-free—a privilege that no other country in the world allows on such a scale.

What has the industry the right to expect from a British Government? We must try to ensure that the Government do not allow the EEC Commission to deviate from the stated conviction about the economic, social and regional importance of the textile and clothing industries. The EEC must make clear its determination not only to renew the MFA when it expires at the end of 1981 but also to continue its present policies based on effective application of the MFA.

The textile industry is looking for continued Government support in ensuring that Community application of the present MFA and GATT rules is firm and consistent. The industry looks for Government support in attacking the unjustified barriers which are closing many overseas markets. Negotiations for the entry of Spain, Greece, and Portugal to the Community must not encourage these countries to run away with their textile ambitions in Europe, supported by their Government aids which give them unfair advantages.

When companies from another country are suspected of dumping cheap goods in the United Kingdom, we must consider the immediate suspension of the textile imports from that nation while investigation takes place Other countries do this, but our investigations go on for months while the dumping is accelerated, thus undermining our industries. We must also be on our guard against misleading origin descriptions and not hesitate to detain goods at the docks whenever cheating is suspected.

We have the quality in the United Kingdom textile industry to compete with the rest of the world, but only if that competition is on fair and equal terms. I call for a full-scale debate on the future of the textile industry.

10.27 pm
Mr. Ben Ford (Bradford, North)

I congratulate the hon. Member for Huddersfield, West (Mr. Dickens) on having secured an Adjournment debate on this serious and important matter. I join him in urging the Government to provide time for a fuller debate, because there are many complex aspects of the problem which need to be discussed in public.

The wool textile industry is in a serious situation. More than 7,000 jobs have been lost in the industry this year. However, I wish to emphasise that the position is not irrecoverable. The Government should renounce the attitudes emanating from the EEC Commission which seem to indicate that the textile industry in the Community is expendable. It is not expendable. I hope that the Government will state their intention to maintain a viable textile industry and particularly a viable wool textile industry.

The Government should encourage a drive to modernise the clothing industry. It can be done. The wool industry's research association has run pilot projects with model factories. In one case, an 80 per cent. increase in productivity was achieved.

I believe that the Government can encourage this modernisation by tax remissions on productivity schemes. They would be of great help in encouraging the home clothing industry to use British cloth. The Government should restore regional assistance to those parts of West Yorkshire which lost them recently.

Mr. Bob Cryer (Keighley)

I endorse my hon. Friend's argument. My area has been downgraded from intermediate area status. He and I know that the Conservative-controlled Bradford authority has made strong representations, with other local authorities, for regional aid to be maintained at its maximum because of the textile industry's difficulties.

Mr. Ford

The industry, the trade unions, local authorities and Members of Parliament are united in wishing the Government to assist the textile industry. This is a strategic industry. It must not be allowed to fail because of unfair competition or lack of Government support.

10.31 pm
The Under-Secretary of State for Industry (Mr. David Mitchell)

I congratulate my hon. Friend the Member for Huddersfield, West (Mr. Dickens) on securing the Adjournment debate. He argued the views of his constituents and the industry in a forthright manner. His prime interest is in the wool industry. He has made vigorous representations elsewhere to me about it. He has given me the opportunity to deal with the textile industry as a whole. There are understandable anxieties about the future of that industry.

I hope that I can put the issues into perspective and answer some of the questions raised by hon. Members. I have no working knowledge of the textile industry, but I have made it my business to visit some of the textile areas and to seek to understand the problems. I have visited Bradford, Rossendale and garment manufacturing areas in Birkenhead.

The textile and clothing industry has a total labour force of about 800,000. It is our largest production industry after engineering and construction. However one measures the industry—by employment, output or exports—it is among the most important for our economy. Its role is proportionately larger in those areas where it is concentrated, particularly in Northern Ireland, Lancashire and Yorkshire.

In recent years industries in the United Kingdom have had to adapt to inevitable changes. Difficulties in the textile industry include the impact of the growing use of man-made fibres, changing production techniques, capital re-equipment, increase- ing efficiency of machinery—although I have been disappointed on my tours to see the relatively small amount of British-made machinery—the loss of export markets, the rapid expansion of competing industries abroad and the general economic climate.

In spite of those difficulties, the textile and clothing industry remains a major contributor to our net United Kingdom output. Last year its turnover was £9,300 million and exports totalled over £2,000 million. The industry should be congratulated on that achievement in view of the difficult trading conditions.

In a time of difficulty such as our textile industry is experiencing, it is important to apply all the available resources effectively to achieve the best possible results. The commercial and marketing policies required to solve the problems and to take advantage of opportunities can be exercised only by individual firms. The Government's aim is to provide, as far as possible, the right economic and trading conditions to enable firms to make the best use of their resources and to operate profitably.

I am alive to the importance of the wool textile industry to the economy. As part of the textile industry it provides employment for about 70,000 people, the majority of whom are in West Yorkshire, and this year it expects to make exports of £400 million out of a production of £1,000 million.

The importance attached to this industry has been clearly emphasised in recent weeks by members of local authorities in West Yorkshire and trade associations of the industry, actively supported by Members of Parliament representing their constituencies, a number of whom have come to see me.

I have recently spent some time in Bradford and Rossendale looking, learning and listening. I have been learning about the industry and the difficulties facing it. I recognise that its labour force has been falling and the size of its home market has been reduced by changing patterns of demand from the traditional wool fabrics to lighter fabrics of cotton and man-made fibres. The changes in the style of clothing in recent years away from the worsted suit and flannel trousers have also led to a substantial contraction of the industry's principal outlets in the clothing industry. Import penetration in both clothing and fabrics has increased, and that has had its effect on making the industry's home markets so much more difficult and competitive.

We are discussing an industry which is described as being in dire straits and in need of assistance which, it is suggested, should come from the Government to solve all its problems. I do not believe that that is entirely the right role for the Government. The causes of many of the problems are outside Government control and certainly outside their competence. Where the industry brings to our attention difficulties which are proper matters for the Government to deal with, we shall consider them fully and seriously in order to see whether we can assist.

Mr. K. J. Woolmer (Batley and Morley)

Will the hon. Gentleman give way?

Mr. Mitchell

If I do not cover the point before I have finished, I will give way to the hon. Gentleman if there is time. Where the industry brings to our attention difficulties which are proper matters for the Government to deal with, we shall consider fully and seriously how we can and should assist. But many of the questions raised relate to commercial problems, and it is for the industry and individual companies to adapt to changing commercial conditions and to produce commercial solutions.

The industry starts from a sound base with £100 million invested in response to £23 million from two section 8 schemes on rationalisation, plant, buildings and machinery. All that has helped production.

I was glad that my hon. Friend the Member for Huddersfield, West drew attention to the co-operative nature of the work force in the industry. Indeed, on my visits I have been impressed by the good industrial relations which exist, particularly in the firms I visited in the wool industry.

Mr. Sheerman

£45 a week?

Mr. Mitchell

I suggest that, if it had not been for the high degree of worker interest and participation in the success of the companies for which they work, the industry would not be in the relatively sound position that it is in today. I regret very much the reduction in jobs—

Mr. James Lamond (Oldham, East)

The industry has had no help from the Government.

Mr. Mitchell

The industry has spent £100 million on modernisation and rationalisation as a result of the Government putting in £23 million under section 8 of the Industry Act.

We regret the necessary reduction in jobs over the last 10 years, but the industry has recognised that either it produces more with fewer people or the industry itself with all the jobs in it is at risk.

The industry believes that, as a result of this investment, its plants are as modern and well-equipped as those of its main competitors. It also has what are probably some of the lowest labour costs in Europe. A recent survey of total labour costs per operator hour in the textile industries of the EEC put French costs at between 10 per cent. and 20 per cent. higher than those in the United Kingdom, Italian labour costs 42 per cent. higher and German, Belgian and Dutch costs more than double. The industry should therefore be well placed to compete in home and export markets. One factor that has to be taken into account is the productivity that can be achieved with modern machinery and equipment, and the industry is now much better placed in that regard. I echo the robust statement on the quality and reputation of the industry made by my hon. Friend the Member for Huddersheld, West.

I know that trading conditions are difficult and that there is a decline in demand as changes in customer preference work through. We need to see a new emphasis on marketing and salesmanship, as well as on production.

Competition is of two basic kinds—fair and unfair. In fair competition we should win, and if we lose on grounds of higher productivity, better marketing or quicker change in response to fashion elsewhere, that is not a matter for the Government. The Government have a role in seeking to create the industrial climate in which industry will be able, and have the incentive, to respond more quickly to market changes and forces. That is why we had the substantial changes in the Budget earlier this year, which were designed to get rid of the tax sickness from which much of our economy has been suffering. The industry in conditions of fair competition could, should and, I repeat, can, hold its own.

All competition is not automatically unfair, and we must take a balanced view. For the convenience of the House, I divide unfair competiton into that from developing countries outside the EEC and that from within. If there is unfair competition from developing countries outside the EEC, there is the machinery for protection via the MFA.

Mr. Cryer

It is not working.

Mr. Mitchell

I share the concern of hon. Members at the lack of speed with which the Community reacts. We have made our concern known to the Commission. When cases of dumping are brought to our attention, they can be countered by provisional anti-dumping duties.

Regarding unfair competition from within the EEC, the Prato enterprise has caused considerable concern. As chairman of the all-party committee, the hon. Member for Bradford, North (Mr. Ford) has expressed concern. Action can be taken with the competition directorate of the Commission. In this case, we have taken the case of Prato to the Commission and it is being investigated. The industry produced evidence in some detail to show that the pricing policies of certain manufacturers in the Prato region needed explanation. It appeared to be a case which, in former times, would have been a good candidate for antidumping investigation. As the concept of dumping does not exist in a customs union, the matter was put before the Commission.

We are pressing for the examination to be carried out urgently and we look for suitable action from the Community to deal with any breaches of the Treaty which are revealed. I understand that some manufacturers in Prato have let their United Kingdom customers down this year by failing to maintain delivery dates. Some of our woollen manufacturers have been able to step into the breach successfully and it is hoped that the United Kingdom woollen manufacturers will be able to exploit that competitive weakness to their commercial advantage in the future. If, in other cases of unfair competition, we are given good evidence, we will be prepared to take that to the appropriate quarter to seek redress. We cannot proceed on the basis of hearsay.

My hon. Friend expressed concern about the new members to the EEC. He mentioned Greece, Spain and Portugal. I understand that concern and I appreciate the problems. In co-operation with other States we shall seek to secure safeguards. We have some safeguards as regards Greece in the five-year transitional period. We expect at least comparable safeguards in relation to Spain and Portugal and we shall seek to avoid disruption to the trade as a result of their joining the Community

My hon. Friend raised the important point about barriers to our exports. We cannot be too protectionist if we wish to avoid other countries in their turn erecting barriers to our trade. World trade opportunities are not in our gift but, as an objective in our discussions on the pattern of orderly marketing to follow the current MFA, we will bear the matter in mind. I know that it is very much in the minds of hon. Members.

Mr. Nicholas Winterton (Macclesfield)

What about the United States?

Mr. Mitchell

I am trying to cover all the points, and if I was not interrupted so often I would have the opportunity to deal with more of them.

My hon. Friend raised the problem of origin, referring to misleading information in that connection. If that information is in the form of labels on cloth, for example "Made in Huddersfield, Japan", which misleads the consumer, or if it is by way of wrong description of mixed wool and other—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at thirteen minutes to Eleven o'clock.