HC Deb 16 July 1986 vol 101 cc989-93
8. Mr. James Lamond

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of negotiations on the multi-fibre arrangement.

9. Mr. Madden

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of negotiations on the multi-fibre arrangement.

Mr. Butcher

The European Commission is conducting the negotiations on renewal of the MFA on behalf of the Community in accordance with the mandate approved by the Council of Ministers on 11 March. I am confident that a protocol of extension of the MFA will be negotiated by the end of July, when the present arrangement expires. In parallel, the Community has reached provisional agreement with a number of supplier countries on the renewal of bilateral agreements. My hon. Friend the Minister for Trade is keeping in close touch with the industry and other interested parties as the negotiations progress.

Mr. Lamond

Has the Minister been receiving the same sorts of letters as I have from concerned employers, who point out that the end of July is fast approaching, that there are well substantiated rumours that Britain continues to weaken our position with regard to the MFA, and that there is a threat to the fragile recovery of the textile industry and to the investment that has been going on and, as a consequence, to many hundreds, if not thousands, of jobs in the industry? If there is no truth in those rumours, will the Minister make that plain, and, if there is, will he do something about it before the end of July?

Mr. Butcher

I am pleased to have the opportunity to make it very plain to the hon. Gentleman that there is no weakening of our position. The current position on the mandate is the position that we wish to see delivered as being in the best interests of the United Kingdom industry. My hon. Friend the Minister for Trade and his officials, particularly the officials where daily contact is concerned, keep in constant touch with the position in the industry, particularly when we are monitoring things such as the sensitive products, where there is the greatest or changing threat. Therefore, I think that I can reassure the hon. Gentleman that, on almost a day-to-day basis, we are alive to the interests of our employers. Even allowing for the fact that, there is some limited further liberalisation of trading generally in those products, we feel that we have managed to produce a situation that recognises all the various interests.

Mr. Madden

Despite the fawning subservience of the Prime Minister to President Reagan and all things American—perhaps, indeed, because of it—is not the prospect that as America will have a much tougher regime against textile imports, British textile firms will face increased competition from imports diverted from America? What contingency plans do the Government have to deal with that challenge, or will the Government sit back as they have done over the past six years and see 500 textile workers' jobs a week disappear? What will the Government do really to help an industry that has done a great deal to help this country's economy?

Mr. Butcher

I hope that the hon. Gentleman will agree that it would not serve British interests to air publicly our evaluation of the efficacy or otherwise, or the strengths and weaknesses, of the Americans' recently negotiated position in bilaterals. With regard to the Americn situation, if changing circumstances permit a reappraisal of the way in which we pursue our bilaterals under the general protocol, that is something that we shall have to bear in mind. My understanding is that recent American bilateral agreements have been complex. It has been difficult to generalise about their effects, but, taken overall, they should not, in our view, cause us to reconsider our position at this stage.

Mr. Bowen Wells

During the renegotiation of this seriously protectionist measure, which is against Government policy as I understand it, has my hon. Friend been able to make any progress in phasing out the MFA over the next three years, so that our industry may know that it is coming to an end and be able to make itself more efficient, in order to compete and expand in the real world rather than the protectionist world?

Mr. Butcher

There is no doubt that three or four years ago the British textile industry had a very hard pounding, but there is equally no doubt that it has decided to come out fighting. The situation is not as gloomy as some Opposition Members would have us believe. With regard to the overall question of protection, we have said that there must be a continuation of the MFA, but under new terms. We have particularly said that, in the case of countries that indulge in one-way trading practices, for example, it would not be wise for us unilaterally to disarm. I cannot go along completely with my hon. Friend in the purist approach. I understand the philosophical basis of his argument, and I take his point.

Mr. Spencer

Is my hon. Friend aware that in my constituency the trade was horrified to learn that the alliance wished to dismantle the MFA altogether? Is he aware that any such action would cost thousands of jobs in Leicester?

Mr. Butcher

I believe that you, Mr. Deputy Speaker, curtailed the use of a waterborne metaphor by an hon. Member earlier, but I can only say that in my view the alliance is well and truly in the drink on this. No doubt in the north-west in particular a number of local and general election campaigns will be dominated by the thoughts of some alliance spokesmen in the House.

Mr. Donald Stewart

Despite the talk of protectionism, is the Minister aware that the MFA has been virtually the only protection for our textile industry in recent years and that the entire industry throughout the United Kingdom looks to the Government for ultimate support in preserving the arrangement so that the industry can fulfil its potential in terms of export orders.

Mr. Butcher

I believe that the textile industry is now a highly professional, well-managed industry and that the skills of the work force are being properly used. If current attitudes continue, I see no reason why those companies that have not done so should not begin to increase their market share. The MFA is not a crude form of protectionism. It must also recognise the interests of consumers who, it could be argued, in some sectors have been paying higher prices than necessary for certain textile goods. That is why, as I have said, MFA policy is a matter of balancing interests. We believe that we have got the balance about right.

Mr. Fatchett

The Minister will no doubt have received many representations and requests from the clothing industry for a strong multi-fibre arrangement. Will he ignore the Liberal call for a weak or non-existent MFA? Will he also tell the Liberals how many jobs would be lost in the clothing industry if the arrangement were abandoned? In the negotiations, will he take account of the recent increase in clothing imports?

Mr. Butcher

I take the hon. Gentleman's latter point on board. He is correct to point out that the industry is still a huge employer, with hundreds of thousands of employees. In my view, it is extremely dangerous to tinker with the future of those people, but it is for the alliance to decide whether it wishes to withdraw the policy that it has proposed.

Mr. Meadowcroft

Is the Minister aware of the report by City Analysts de Zoete and Bevan? It states: There seems to be no evidence therefore that MFA distorts, helps or hinders the progress of UK clothing imports … If the reason for MFA is protection it seems to us to be doing a pretty poor job and is probably irrelevant". Does the Minister not agree with that analysis?

Mr. Butcher

This is clearly a serious development and the public have a right to know what the sinister de Zoete and Bevan faction is doing within the Liberal party.

Mr. John Mark Taylor

Does my hon. Friend agree that the MFA is a considerable European success as a defensive mechanism against unfair competition and that there could be more avenues for co-operation to defend the European market against unfair competition, including Japanese motor cars?

Mr. Butcher

One of the themes of the MFA and the Community stance to it is that we should be more helpful to countries which are free and fair traders and less helpful to one-way traders. Similarly, we should try to skew whatever room to manoeuvre he have in liberalisation towards the poorer countries. I believe that that is a correctly balanced approach.

Mr. Gould

As these crucial negotiations from our point of view are entirely in EEC hands, what assurances can the Government give the House and the industry that there will be no further weakening in the EEC negotiating mandate, which already falls far short of what is required to protect jobs in this vita] British industry? Will the hon. Gentleman repudiate clearly and directly not only the siren voices of the Liberals but those of Conservative Back Benchers, and make it clear that he is ready to take further steps to ensure that the negotiating mandate is not further weakened?

Mr. Butcher

I said earlier that the British position is four square behind the current structure of the mandate, and we see no reason to amend that from now on. That is the best signal that the House can send to the Commission and the Council of Ministers.