HC Deb 01 February 1984 vol 53 cc260-1
13. Mr. Burt

asked the Secretary of State for Trade and Industry if he will make a statement on the prospects for the textile industry.

Mr. Norman Lamont

I welcome recent reports of improved company results and higher figures for both output and employment, which suggest that the textile industry is pulling out of the recession. If firms are able to meet the demands of their customers in terms of quality, design, price and delivery, I think that the prospects for the industry are brighter than they have been for some considerable time.

Mr. Burt

I welcome the positive aspects of my hon. Friend's statement, but note that the industry has been badly hit by the recession. Much needs to be done. Will my hon. Friend give special consideration to those in the knitwear industry and those in exports, who have radically improved their position in the past 12 months? I echo the call of my hon. Friend the Member for Macclesfield (Mr. Winterton) for an early response from the Government to the British Textile Confederation's "Plan for Action". Does my hon. Friend believe that the statement that he issued echoes the fact that the industry is doing its best to pull out of the recession? I ask the Government to support that effort.

Mr. Lamont

I note what my hon. Friend said. One of the reasons why we were delayed in responding to the British Textile Confederation's "Plan for Action" was that we wanted to consider it with the representations from the knitwear, footwear and clothing industries, which are related to each other. A number of companies in the knitwear industry have had good results. There are some first-class companies in that industry. They can do well, and they need encouragement.

Mr. James Lamond

Is the Minister aware that the industry does not believe that it gets much protection from the multi-fibre arrangement and that it is very concerned because it appears that China intends to expand its exports of textiles by an amount equal to the present total production of the Common Market?

Mr. Lamont

I know that people complain about the MFA, but it is one of the most complex and elaborate arrangements of protection that we have. No fewer than 600 quotas are imposed on different products. We do not hesitate to impose quotas on other products that show any surge above agreed levels.

I am aware that there is concern about China. The hon. Gentleman will know that we are negotiating new arrangements with China. The negotiations are not yet concluded. In the meantime, quotas were imposed on particular products for 1984. However, I note what the hon. Gentleman says.

Mr. Waller

Does my hon. Friend agree that the export performance of the British wool textile industry has been remarkable in recent times, especially in prevailing world conditions? However, does he accept that the continuation of that performance depends on a satisfactory home market? Will he bear that fact in mind during the forthcoming negotiations with countries which may erect substantial barriers against our exports?

Mr. Lamont

I agree with my hon. Friend that the industry has been a successful exporter, especially to the United States, despite some rather unwelcome measures taken by the United States. We do not welcome what the United States has done. I note what my hon. Friend said.

Mr. Williams

The Minister may express optimism about the future of the industry, but is he aware that profitability is still so low that most firms cannot afford to install the latest machinery, incorporating microtechnology, which is essential to their long-term survival?

What does the Minister have to say to the man-made sector of the industry, which points out that, despite employment in its sector falling to a mere one third of the level when the Government took office, all the productivity gains have been eliminated by the Government's policy of high interest and sterling rates and high energy costs?

Mr. Lamont

The right hon. Gentleman must not underestimate what is happening in the textile industry. It is true that profitability does not compare well with industry in general, but there have been some striking company results — for example, Vantona-Viyella and Illingworth Morris. Courtaulds profits have risen by no less than 100 per cent. Textile output in the third quarter of 1983 was 3.6 per cent. up on the previous quarter, and 3.2 per cent. up on the previous year. — [HON. MEMBERS: "What about jobs?"] In September 1983, textile employment was 2,000 up on June 1983, so we are beginning to see a recovery.