Multi-fibre Arrangement (Hansard, 27 October 1980)

§ 17. Mr. Woolmer
asked the Secretary of State for Trade what progress has been made in finalising the United Kingdom negotiating position in relation to the re-negotiation of the multi-fibre arrangement.

§ Mr. Nott
The Government consider it essential for there to be an effective successor arrangement to the current MFA, and that the arrangement should be the best deal it is possible to obtain for the British textile industry—taking account of British interests as a whole. We are continuing our consultations with all interested parties on the detailed provisions of our negotiating position.

§ Mr. Woolmer
Bearing in mind the devastation being suffered in textile communities and towns throughout the length and breadth of the country, does the Secretary of State acknowledge the deep anxiety felt in those communities about the current negotiations that are taking place? Can he confirm that the language which he has just used does not imply a weakening of resolve by the British Government to look after the interests of British workers and industry? Will he insist that it is not simply a question of an acceptable MFA but one which is at least as firm as the present arrangement?

§ Mr. Nott
I understand the deep anxiety felt throughout the House about the current grave situation in the textile industry. There is certainly no weakening on the part of the British Government in their resolve in regard to MFA 3. I can assure the hon. Gentleman of that.

§ Sir Frederick Burden
Does not my right hon. Friend agree that, while he must do his best to protect the British textile industry, one of the problems is that textiles are manufactured by countries which are undergoing development? This is one of the first products which many of those countries produce. Therefore, they are coming into competition in the textile world.

§ Mr. Nott
My hon. Friend is right. That is the major problem in arriving at the kind of satisfactory MFA 3 to which the hon. Member for Batley and Morley (Mr. Woolmer) referred. The MFA is a contract, if I can describe it as such, between the poorer countries, the low-cost producers, and the developed world. The question at issue is whether we can manage to negotiate another contract of the same kind. There were discussions last week on this subject, but that is the key issue.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I propose to call one more hon. Member from either side before calling the Opposition Front Bench spokesman.

§ Mr. Straw
As well as understanding the deep anxiety of the industry, does the Secretary of State understand that the industry—both management and unions—places a major part of the blame for its catastrophic decline at the door of the Government because of their complacent policies? When will the Government substitute positive action for sympathy in order to save the industry? Does the right hon. Gentleman propose to take any action to ensure that there is a Lancashire cotton, textile and allied industry worth saving before the MFA comes up for renegotiation?

§ Mr. Nott
Of course the textile industry places the major part of the blame on the Government for its problems, just as the textile industry placed the major part of the blame on the Labour Government for its problems when the Labour Government were in office. I remind the hon. Gentleman that 150,000 people lost their jobs while the Labour Government were in office. Therefore, this problem is not new. Several hundred thousand people have left the textile industry in the past 30 years. Of course, I realise that the Government are being blamed for many things, and all Governments will so be blamed for transitional difficulties.

§ Mr. Henderson
While praising my right hon. Friend's efforts in these negotiations, may I ask him whether he agrees that a root problem is the artificially low pricing policy on energy followed by the United States Government, which is affecting not only this industry but others, including paper? Can he confirm that he 22 and his right hon. Friends are seeking to do something about that?

§ Mr. Nott
My hon. Friend is absolutely right. There is a major problem with the low feedstock prices in the United States. It is not just in fibres that this is causing difficulty. As my hon. Friend said, it is also causing problems in chemicals, plastics and a range of European industries. I am now in the process of considering our response to the United States proclamation that they would retaliate against other parts of our textile industry unless we raise our quotas by the end of the year. These matters are now under consideration, but frankly I do not think that we shall make very much progress in discussions in the United States—if we decide through the Commission to discuss these matters with the United States again—until the American election is behind us.

§ Mr. John Smith
Why is it that when he is asked about whether the MFA will be renewed, the Secretary of State always uses the phrase that the Government are committed to a successor to the MFA? Is there any reason why he uses that particular form of words? Secondly, does he agree that one of the Government's objectives ought to be a recession clause in the MFA, whereby the capacity of this country to absorb imports was related to the strength of domestic purchasing power?

§ Mr. Nott
As I said in the last debate which took place on this matter on 30 July, all the trading arrangements that at present apply to textiles were negotiated by the right hon. Gentleman himself and his predecessor. They were not negotiated by me but by the then Labour Government. I am working within the trade framework which I inherited from the Labour Government.
I could use some other word rather than "successor". I cannot give any guarantee that there will be an MFA 3—[HON. MEMBERS: "Oh"]—simply because I cannot guarantee that the low-cost producers will put their signatures to a further agreement, and that is at the root of the whole MFA. The MFA does not exist unless it is a two-way deal. That is why I talk of a successor to MFA 2. Of course I realise that the matter is worrying. About 40 countries are involved in the MFA, and we need their agreement 23 for a successor. I know that the right hon. Gentleman appreciates that. With regard to a recession clause, I cannot be blamed for such a clause not being included in the MFA. If that is the fault of anyone, it is the fault of the previous Labour Government.