HC Deb 23 December 1981 vol 15 cc1015-20

12.4 pm

Mr. John Carlisle (Luton, West)

I am grateful to you, Mr. Deputy Speaker, for having granted me this debate at such a late stage. I am also grateful to my hon. and learned Friend the Minister, who is to reply to the debate. The issue is vitally important, not only to me and my constituents but to other hon. Members and, notably, to my hon. Friend the Member for Ealing, North (Mr. Greenway). Indeed, I am pleased to see him in the Chamber, and I think that he will try to catch your eye, Mr. Deputy Speaker, later. The hon. Member for Merthyr Tydfil (Mr. Rowlands) and the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) would have liked to have been here to discuss what is, to all of us, an important subject that requires an urgent remedy.

Only two weeks ago my constituency was pleased to welcome my right hon. Friend the Secretary of State for Industry. He visited the Electrolux company, which is directly involved in this matter. The number of vacuum cleaners and other electrical appliances imported into Britain has grown to such a proportion that jobs in my constituency and other constituencies are being lost. The European Commission has taken no action. The problem is not confined to vacuum cleaners. Many other electrical appliances, such as steam irons and food mixers, are flooding the market.

The matter was brought to my attention some time ago, but was brought home to me on 22 May 1981, when Electrolux declared 330 redundancies. The managing director said that those redundancies had been caused by the recession—which is understandable—and by the very high level of cheap imports. The company is holding its head above water fairly well, but there is no doubt that its future depends on the future level of imports of vacuum cleaners, mainly from Eastern Europe. Therefore, I am glad to have this opportunity to draw the problem to the attention of the House.

From an answer that my hon. and learned Friend gave me on 16 November, he will know that the level of imported vacuum cleaners in September this year was 104,522. Not all of those goods came from Eastern Europe and the general public would not consider all of them vacuum cleaners. Some are car cleaners and others are toys. However, of that figure it is estimated that 8,000 came from Eastern Europe. Therefore, about 100,000 cleaners came into the country. Indeed, the figure could be higher. That was the figure in 1980. Figures are not as readily to hand as they might have been, because of the Civil Service dispute. However, I regret to say that that figure is expected to increase. Those 100,000 vacuum cleaners could have been manufactured and sold in Britain.

The imported goods are often half the price of equivalent British-manufactured goods, but are of inferior quality. They meet safety standards, but there is no doubt in my mind or in the minds of many in the industry that the machines are being dumped on the English market purely in order to gain sterling. I appreciate that, given the present problems in Eastern Europe, particularly in Poland—where many of the cleaners come from—we should tread somewhat carefully. However, we have first-hand evidence that vacuum cleaners are among the many things that cannot be bought in Poland. Many of them are being dumped in Britain just to gain sterling.

The Association of Manufacturers of Domestic Electrical Appliances made representations to the Department. As long ago as November 1980, the then Minister, my right hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) informed me that the case had gone before the European Commission as being one of blatant dumping. I am grateful to my right hon. Friend for the amount of work that he did. However, that is more than 12 months ago. While evidence has been collated from various manufacturers, both at home and abroad, cheap imports have continued to flood into the country.

I must question a system whereby a blatant case of dumping is reported to the Commission and nothing can be done until the Commission reports. We are still awaiting that report 13 months later. I urge my hon. arid learned Friend to make strong representations to the European Commission. The long delay in bureaucratic decision making is costing my constituents their livelihoods and certainly removing profitability from an important company. It is sad that we are fighting the recession with one hand tied behind our backs. I cannot say too strongly that the delay is causing great distress in my constituency and elsewhere.

It is ironic that Sweden, which is outside the EEC, is now beginning to complain about a flood of cheap Eastern European goods. Sweden is the home of Electrolux. The problem is not confined to EEC countries.

I applaud the decision in April 1981 to pass the Trade Descriptions (Origin Marking) (Miscellaneous Goods) Order. It comes into operation on 1 January. Most of the cheap imported vacuum cleaners are being sold through mail order catalogues, which are an easy and convenient retail outlet. As the House knows, under the order goods sold in shops must have a display card showing their country of origin and the appliance must contain the information.

The anomaly—my hon. and learned Friend will remember the strong representation that was made in the House against the order—is that mail order catalogues are exempt. That includes textiles as well as electrical goods. I know that the clothing industry has made its objections. The anomaly allows cheap imports to enter Britain. In many cases they are described with English-sounding names. It is almost a case of deception. The housewife who buys the goods has no idea of their country of origin. She is able, having seen the country of origin, to return them, but the House will know that anyone who receives such a large package is unlikely ever to send it hack. It is a terrible crime that mail order catalogue operators are not obliged to put the country of origin in their catalogues where everyone can see it.

I understand the Department's concern that mail order catalogues are printed well in advance of the goods being sold. I also understand that the country of origin of the goods may vary. For example, many Polish machines are made using components parts from Italy. The parentage of some goods may be doubtful, but the anomaly can be overcome if the words "foreign made" are inserted in the catalogues. With the large amount of goods sold through that medium, it is important that the order is changed to allow either the words "foreign made" or the country of origin to be stated in the catalogue.

In conclusion—I wish to allow my hon. Friend the Member for Ealing, North to speak briefly—I ask the Minister to do two things. The first is to make the swiftest representation to the European Commission asking it to hasten its judgment on cheap imported vacuum cleaners from Eastern Europe. He must make the strongest representation. Jobs are being lost because of those cheap vacuum cleaners and we cannot allow the matter to continue.

Secondly, the Minister must give urgent consideration to the origin marking order, which is essentially a first class document that is much needed in the retail trade. The Minister must reconsider the exemption for mail order catalogues, because that is the easiest medium for cheap imported goods to Britain. My hon. and learned Friend must take those steps as soon as possible.

Mr. Harry Greenway (Ealing, North)

rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I must warn the hon. Gentleman that he cannot speak twice in the debate. If he speaks on this subject, he forfeits that right to speak on the subject that he has tabled.

Mr. Greenway

Does that mean that I shall lose my debate on the future of adult education?

Mr. Deputy Speaker

Yes. The hon. Gentleman cannot speak twice. If he speaks now, he is speaking on the Adjournment debate.

Mr. Greenway

Is there any other intervention that I may be allowed to make?

Mr. Deputy Speaker

The hon. Member for Luton, West (Mr. Carlisle) has finished his speech, as I understand it. The hon. Gentleman may intervene during the Minister's speech.

Mr. Carlisle

I did not wish to mislead you, Mr. Deputy Speaker, into believing that I had finished my speech I have one last thing to say.

Mr. Greenway

Before the hon. Gentleman reaches his ultimate point, I wish to say that I support him most strongly in his objection to the import of cheap electrical goods from Eastern Europe. I note that in 1978, 80,000 units were imported. In 1979, the figure was 110,000 units and in 1980 it was 152,000 units.

The firm of Hoover Ltd. at Perivale in my constituency has made strong representations to the EEC for action in the matter. On 29 July 1980 a delegation, which included representatives of Hoover Ltd., met the Minister. The factory was visited on 24 October 1980 by a representative of the EEC, to which a complaint had been submitted. Finally, in August of this year, the EEC said that some action against the dumping might be taken, but nothing is likely to happen for 12 months. Meanwhile, 1,100 jobs have been lost at Hoover Ltd. at Perivale. I am anxious to save the remaining secretarial jobs, which also go if the industry is submerged by the process to which my hon. Friend has drawn my attention.

Mr. Carlisle

I am grateful to my hon. Friend for his remarks. He emphasises the strength of feeling throughout the House and of those right hon. and hon. Members who represent the constituencies affected.

12.17 pm
The Minister for Trade (Mr. Peter Rees)

My hon. Friend the Member for Luton, West (Mr. Carlisle) has deployed a powerful case on a subject of great importance not only to himself but to other hon. Members. The House will agree that his contribution was embellished by the brief but telling intervention of my hon. Friend the Member for Ealing, North (Mr. Greenway). Both of my hon. Friends have a long, consistent and honourable record of concern about such matters. I know that the great company Electrolux operates in the constituency of Luton, West and Hoover Ltd. in Ealing, North. We share their concern about the impact of the present situation in those companies on employment in their constituencies. I do not underestimate the gravity of the problem.

However, I attempt at the outset to set the problem in some sort of perspective, not that I dissent from the statistics given. We are handicapped, because figures only for five months are presently available. However, for 1981, taking that limited sample, the monthly average number of cleaners imported from all countries was 61,000 compared with 69,000 in 1980. Imports from East European countries have also dropped from a monthly average of 10,600 in 1980 to about 8,000 for the first five months of 1981. That does not minimise the problem, but as we are debating such an important subject we must get the facts right.

Unfortunately, the import statistics do not distinguish between cylinder and upright cleaners, and I am sure that the House is well aware of the significance of that. It has been established that all East European imports are of the cylinder type. The breakdown of imports between those from EEC countries and elsewhere show that European Community member States accounted for 56 per cent. of cylinder and upright imports in 1981 while the East European cylinder models accounted for 13 per cent. As my hon. Friend the Member for Luton, West rightly said, some of the figures that have been bandied about in the press have included toy vacuum cleaners from Hong Kong, which does not present a realistic picture.

In 1980 vacuum cleaner sales in the United Kingdom were about 2 million units. Of those, about 61 percent. were accounted for by home-produced cleaners and 39 per cent. by imported cleaners. Therefore, it is not a question of home producers being entirely edged out of the market. They still have a solid share. However, I recognise that 39 per cent. is a considerable import penetration and we must consider the effect of that on our producers and on jobs in Britain.

During 1980 exports by British companies amounted to 848,000 cleaners, which is slightly more than the total imports. That is an encouraging factor, although I agree that it does not wholly mitigate the problem that my hon. Friend so eloquently presented. However, that occurred during a period when the United Kingdom market was contracting and, as a result, total penetration of the market by imports could be said to be increasing.

The Government are firmly committed to a policy of free trade, provided that it is on a basis—

Mr. Greenway

Before my hon. and learned Friend leaves the subject of imports, will he tell us whether he is aware that France and several other EEC countries have taken temporary action to stop the import of cheap electrical goods from Eastern Europe? My hon. Friend the Member for Luton, West (Mr. Carlisle) and I believe that such imports have broken the camel's back at Hoover in Perivale. Other countries have taken action pending a permanent solution. Is it not possible for the Government to take similar action?

Mr. Rees

I do not know whether it would be right for me to discuss the details of the French situation since it is not entirely comparable with ours. I shall come to the subject of anti-dumping in a moment, as I know it is of great importance.

The Government are firmly committed to a policy of free trade. In 1980 Britain exported goods all over the world worth £50,000 million. Therefore, we must be concerned about an open trade policy. Any attempt to prevent the importation of fairly priced goods could have severe retaliatory results for our successful exporters of vacuum cleaners and also in other industrial sectors. We must all remember that general principle. However, both I and my right hon. Friend the Secretary of State have constantly said that we are wholly opposed to all forms of unfair trade. The assumption is often made that goods that are cheap by British or Community standards are, therefore, unfairly priced. That is not necessarily so, although I am not prejudging the issue in the case under discussion.

One area in which there is great sensitivity is that of dumping. That occurs only when goods are sold on export markets at less than their normal value, which is less than the true cost of manufacture in the country of origin. When State trading countries are involved it is difficult to arrive at the true facts. There is usually no reliable information available on what constitutes a true domestic price and comparison is, therefore, difficult to make with similar products in a comparable market economy country.

The burden of complaints put forward by both my hon. Friends is that anti-dumping action has not been taken fast enough and has not been effective. It was explicit in their speeches that the final measures are now the prerogative of the EEC Commission. Indeed, the Community anti- dumping regulation is closely modelled on the GATT code. It was revised during the Tokyo round. Notwithstanding that the ultimate responsibility lies with the Commission, my Department has retained an anti- dumping unit to assist British industry in the preparation and presentation of cases to the Commission. I hope that hon. Members will not feel that the procedure is too complex. An information pack on anti-dumping is readily available to British manufacturers. About 4,000 copies have already been distributed, which shows that there is a good take-up. The unit in my Department is available to assist wherever possible.

Concern about cylinder cleaner imports from Eastern Europe was first expressed in 1980 at a meeting of the sector working party for the domestic electrical appliance industry. It is difficult to mount an effective anti-dumping case unless we have all the true facts. We cannot do it simply on a hunch or a prejudice. I am not suggesting that my hon. Friends or the great companies represented in their constituencies want to do that, but we must produce firm facts. It has been difficult to find the correct analogue.

I wish to pay tribute to the assistance given by the Association of Manufacturers of Domestic Electrical Appliances—AMDEA—which played a great part in airing the problem. The facts have now emerged. I wish to pay tribute also to the contribution of my hon. Friend the Member for Luton, West. He met my predecessor, together with the managing director of the Electrolux company in his constituency, and he earnestly deployed the facts. The facts have finally been elucidated and presented to the Commission, which is now satisfied that a prima facie case has been assembled. It announced the opening of a proper investigation on 25 September. Since then, it has conducted detailed inquiries, especially with three United Kingdom manufacturers, including the firm in my hon. Friend's constituency. The Commission has all the hard evidence that it requires. I hope that some conclusion will be reached early in the new year, which is only weeks away.

We can consider whether there is any way in which we can speed up the procedures, but against the background of the procedures agreed during the Tokyo round. A case cannot be levelled at my Department or at the Commission. We constantly consider whether improvements can be made as dumping is of continuing concern both for us and for the EEC.

My hon. Friend the Member for Luton, West raised the question of origin marking. The new origin marking order will come into effect on 1 January. It is a little premature to prejudge its operation. We must wait and see how it works. The matter was debated at length in Committee. It does not apply to mail order catalogues. However, the catalogues will have to contain two safeguards. First, there must be a clear statement that the goods will be origin marked when they are supplied to the customer. The customer will be under no obligation to buy after delivery if the goods are returned undamaged within a specified period. I appreciate that no one wants to return something that he has had through the post, which sometimes involves hassle and worry. My right hon. Friend the Minister for Consumer Affairs has explained that we must strike a balance between the legitimate interests of catalogue traders and those of consumers.

There are practical difficulties. There is a long lead time between the production of catalogues and their publication. There would be problems if catalogue traders had to mark in advance the country of origin. The products have to be marked, but I appreciate that for those who order through a catalogue it may be difficult to determine the country of origin in advance.

My hon. Friend referred to counterfeiting. There are firm measures that can be invoked to counter that activity.

We do not underestimate the dimension of the problem and the impact that it has had in my hon. Friend's constituency and in the constituencies of other hon. Members that have similar factories within them. I hope that it will not be felt that there has been any lack of concern in my Department. We are always ready to consider whether we can press for the sharpening of procedures in Brussels and we shall do so whenever possible. As for origin marking, I hope that my hon. Friends will feel that it is right to assess how the order works in practice. Our minds are not closed. If, with experience, we feel that the order can be improved, we shall do what is required.

I recognise that this is an important issue. The case against dumping has been advanced most eloquently and succinctly by my hon. Friends. I hope that adequate justice has been done to it, even though the time available has been rather short.