HC Deb 04 July 1984 vol 63 cc293-5
1. Mr. Haynes

asked the Secretary of State for Trade and Industry what is the level of import penetration in textiles for 1983.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

Forty-two per cent.

Mr. Haynes

Is the Minister aware that Portugal is breaching a number of agreements that had been made with the European Community and that that action is severely damaging British industry? Will the hon. Gentleman seriously consider informing Portugal that it will not be made welcome as a partner in the EEC unless it changes its attitude and lives up to the agreements that it has made?

Mr. Lamont

I am aware of that point. Yesterday, a meeting was held between the Portuguese and the Commission at which it was made absolutely clear that the Commission and the United Kingdom Government view seriously over-shipment of the restraint levels, especially from a potential member of the Community. It was made clear also that adjustment of the restraint levels that had been agreed for 1984 would be necessary to take account of those over-shipments. The Portuguese have outlined proposals for strengthening their export administration, which, it is hoped, will lead to better observance of the agreement. We shall watch this matter closely. Further consultation on this point will be needed later in the year.

Mr. Nicholas Winterton

I fully appreciate the point made by the hon. Member for Ashfield (Mr. Haynes) and the answer by my hon. Friend the Minister of State. Does my hon. Friend accept that, on the other side of the coin, great problems are being faced by British cotton spinners because of the imposition of value added tax on imports of raw cotton, which will impose additional costs on the spinners at a time when the industry, which is vital to our textile industry, is beginning a recovery?

Mr. Lamont

I note what my hon. Friend said. He knows that VAT is a matter for my right hon. Friend the Chancellor of the Exchequer. The changes announced by my right hon. Friend received full support from British industry.

Mr. Janner

Is the Minister aware that the textile industry in Leicester and similar places, which is so vital, is just starting to pick up again after a disastrous slump, and that import penetration remains a major worry for all parts of that industry? What steps does the hon. Gentleman propose to take to ensure that the arrangements are applied fairly to and by all countries?

Mr. Lamont

I agree with the hon. and learned Gentleman. Imports have increased alarmingly recently, but at the same time the domestic outlook for the industry is quite good. As the hon. and learned Gentleman knows, last year output increased by about 3 per cent. In some sectors, such as wool textiles, there has been a marked increase in exports. The hon. and learned Gentleman knows also that the degree of protection given to the industry is unsurpassed by any other industry. We shall ensure that the multi-fibre arrangement is rigorously observed.

Mr. Thurnham

Does my hon. Friend agree that a change in VAT legislation should help British manufacturers to compete more effectively against importers of finished goods?

Mr. Lamont

I agree with my hon. Friend, but there seem to be divided views on this matter. I believe that my hon. Friend's view accords more fully with that of the majority of British industry.

Mr. Ashdown

Is the Minister aware that a number of non-EEC importers are using false certificates of origin to evade the quotas? What steps has the hon. Gentleman asked Customs and Excise to take to verify that certificates of origin genuinely relate to EEC imports?

Mr. Lamont

If the hon. Gentleman cares to give me examples, I shall see that the matter is vigorously pursued. A number of instances have been investigated and, where a case has been proved, action has been taken.

Mr. Kenneth Carlisle

Is my hon. Friend aware that the textile industry is already our most protected industry? Does he agree that the overriding interest of the United Kingdom as a trading nation is to stand against protectionism, and will he ensure that that is done?

Mr. Nicholas Winterton

Sit down.

Mr. Carlisle

In addition, does my hon. Friend agree that with a Third world we have a duty to provide markets for some of the poorest countries?[Interruption.]

Mr. Lamont

If I may be allowed to intrude into the argument between the Back Benches, I confirm that, whatever the rights or wrongs of the situation, it is true that the textile industry is our most protected industry. There is also the serious point that our clothing industry, which, with the textile industry, is one of our largest employers and exporters, must have access to the best fabrics and to a choice of materials.

Mr. Shore

Is the Minister aware that 42 per cent. import penetration represents a marked increase since the Conservatives came to power, and that the trade deficit in textiles in the first quarter of this year represents an annual rate of £1,200 million compared with only £250 million in 1979? Does he agree that that shows a calamitous fall in output, competitiveness, efficiency and in the jobs available to British people in the textile industry? Does he further agree that the scheme for £20 million capital aid, described as "modest" by the British Textile Confederation, is derisory and that it is time that the Government produced a policy so that we may look forward to a thriving British textile industry in the future?

Mr. Lamont

I have already said that the rise in imports is a matter for concern. It is significant, however, that in the main the increase has come not from the low-cost countries but from the high-cost countries, with which we should be able to compete in design and quality if our industry is efficient. It is because our industry has so often been lacking in those areas that the increased deficit has developed.

I agree that the scheme for assistance to the clothing and textile industry and for investment in small firms in that industry is indeed modest, but we should recognise the many advantages of trading in this country for such firms. Compared with France, Belgium and Italy, we have much lower interest rates and inflation. That is an enormous competitive advantage for our industry.