HC Deb 27 February 1985 vol 74 cc326-9
11. Mr. Latham

asked the Secretary of State for Trade and Industry what is the latest position regarding the negotiation of an extension of the multi-fibre arrangement.

Mr. Norman Lamont

The European Community will need to express a view in the GATT textiles committee in July of this year, on whether these restrictions should be extended, modified or discontinued. My right hon. Friend the Minister for Trade has been consulting interested parties before deciding what line the United Kingdom should take.

Mr. Latham

Is my hon. Friend aware that right hon. and hon. Members from Leicestershire and the east midlands will insist that this essential arrangement for knitwear and textiles be extended and that we shall want to see him pressing hard in the Common Market for an effective and realistic marketing policy?

Mr. Lamont

I note what my hon. Friend has said, and I am sure that my right hon. Friend the Minister for Trade will as well. We take representations made by the knitting industry seriously. We have consulted trade bodies in the past few months.

Mr. James Lamond

Has the Minister seen the letter from the "Think British" campaign, which expresses deep anxiety lest the Silberston report be accepted by the Government and the multi-fibre arrangement be scrapped? Surely the Minister will not give any credence to that report when he realises that 67 per cent. of textiles in Britain are now being imported.

Mr. Lamont

The hon. Gentleman says that we should not give any credence to the report, but, with a sector that has been as protected as the textile industry—

Mr. Nicholas Winterton

Rubbish.

Mr. Lamont

Despite what my hon. Friend the Member for Macclesfield (Mr. Winterton) says, it is difficult to deny that textiles have been the most protected sector of British industry. It is plainly right that we should have some independent assessment of the cost to the consumer and to employment of that industry. It must be right to ask that question.

Mr. Winterton

Does my hon. Friend agree that the textile and clothing industry is the fourth largest employer in the country, having at one time been the largest, but having been decimated by unfair competition during the past 50 years? Will he accept the view expressed by the hon. Member for Oldham, Central and Royton (Mr. Lamond) and take on board the one recommendation from the Silberston report that makes sense — that the MFA be renewed in 1986? The rest of the report's recommendations are based on utterly unconvincing arguments and, according to the whole of the industry, on no sound evidence. Will my hon. Friend guarantee to continue the MFA?

Mr. Lamont

My hon. Friend is a strong advocate of the textile industry and has a strong constituency interest in it. I am sure he agrees that we must examine these matters from a wider, national point of view. We must consider the cost to the United Kingdom as a whole. I agree that the United Kingdom textile and clothing industry is a substantial employer — it accounts for 10 per cent. of employment in manufacturing industry. We must take account of that, but Professor Silberston attempted to answer and qualify whether gains to employment elsewhere, outside my hon. Friend's constituency, could have been greater if there had not been such protection.

Mr. Winterton

And he came up with no evidence.

Mr. Lamont

It is sensible to ask and examine that question.

Mr. Robert Hughes

Is the Minister aware that even Professor Silberston said, as a modest estimate, that 40,000 jobs would disappear if the MFA was phased out? Is he aware that his failure to give a firm commitment to renew the MFA causes great lack of confidence in the industry? Is he further aware that an extension of the MFA is wanted unanimously by employers and employees?

Mr. Lamont

The hon. Gentleman must not leap to the conclusion that we have formed a decision on this matter. He misrepresents the Silberston report. I agree that it said that jobs would disappear in textiles, but it also said that other jobs would be created elsewhere in the economy as a result.

Mr. Winterton

But it did not say where.

Mr. Lamont

Professor Silberston said that prices in the United Kingdom would be 5 per cent. lower and that prices of imports would be 5 to 10 per cent. lower.

Mr. Winterton

But he gave no evidence at all.

Mr. Lamont

Such price reductions would help to create jobs. Any Government with the national interest at hear must ask and examine that question.

Mr. Kenneth Carlisle

Does my hon. Friend recall that when the multi-fibre arrangement was first introduced it was for only a short time to allow the industry to become more modern? Does this not show that protectionism defends the inefficiencies of an industry and prevents it from becoming efficient? In addition, is not the MFA a direct attack on the consumer, adding to costs and high prices?

Mr. Winterton

Crass ignorance.

Mr. Lamont

I am glad to see that this issue arouses strong emotions both ways. I think that Professor Silberston demonstrated that many jobs in the textile industry would have disappeared, even with protection, because of increasing productivity and because so much of the competition for our textile and clothing industry has come from within the Common Market. That is where the greatest increase of imports has come from, not from the low-cost countries.

Mr. Gould

Has the Minister paid sufficient attention and given sufficient weight to the powerful, expert and conclusive criticism from all quarters of the methodology and conclusions of the Silberston report? Will he take this opportunity to dispel the strong impression that the Government do not care about the future of the textile industry? Will he repudiate the Silberston report and make it clear that the Government's policy is to negotiate a new and fully effective multi-fibre arrangement?

Mr. Lamont

The Government care about the textile industry and were responsible for the negotiation of the last round of the MFA. I have said to my hon. Friend the Member for Macclesfield (Mr. Winterton) that we recognise that it accounts for a large number of jobs, but it is legitimate and right for a Government to attempt to quantify the cost to the customer and the United Kingdom economy of that continuing protection. The hon. Member for Dagenham (Mr. Gould) has said that everybody criticises the methodology of the Silberston report. He is wrong. Some people, such as Samuel Brittan in the Financial Times two weeks ago, criticise it because it underestimates the cost to the economy and to the consumer. We have to take those things into account.

Mr. Bowen Wells

I congratulate my hon. Friend on his robust defence of the consumer in opposing protectionism by measures such as the MFA. I look forward to his negotiating an agreement that will see the end of that in a few years. When and how will he take into account the opinion of the House before he comes to a view in his Department before going to Brussels in June?

Mr. Lamont

I am grateful to my hon. Friend, and obviously the opinion of the House is important. I hope that, through the usual channels, we can arrange a debate so that opinion on this matter can be expressed. I am grateful for what he said about protectionism. I am sure that he will have noticed the contrast between what hon. Members have been saying in the past few seconds and what they were saying 25 minutes ago about protectionism in the United States.