HC Deb 04 November 1988 vol 139 cc1327-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

2.30 pm
Mr. Alan Meale (Mansfield)

I have two main reasons for raising this debate. The first is the current state of the British knitwear, hosiery and clothing industries. These are interrelated and have all suffered severe decline in recent times. Those who work in the industry, manage, own or depend upon it believe that under the Government little seems to have been done to protect the industry.

Secondly, in recent weeks in my constituency in Nottinghamshire we have suffered the loss of a major knitwear manufacturing base, the Mansfield Knitwear Company, with the loss of at least 850 jobs. Many hon. Members will share my disappointment about that, yet the tragedy of this occurrence for the British knitwear industry is that this firm is the largest single knitwear manufacturer in the European Community. Why has this firm closed? Certainly it is not a major loss-maker. It had the most modern machinery, on a larger scale, of any such manufacturer in any of the member states of the EEC. By no stretch of the imagination was its work force overpaid or is its production level low. None of the blame for the closure can be laid at the door of the workers or the trade union that represents them. The industry in general has suffered primarily at the hands of the Government who, through their lack of commitment, have created a lack of confidence among employers, investors and markets.

Since 1980 these industries have suffered severe contraction. They have lost over 300,000 jobs, 52,000 of which were in the textile sector alone. As the Minister knows, these industries are not based in the prosperous south; rather they are found in the north and the midlands and are centred on what have become the declining areas that once housed the thriving industries of iron, coal and steel. The Minister is also aware that the industries employ mainly women—72 per cent. of the work force at the last count. He also knows that the industries are strategically and economically important because the textile and clothing industries represent approximately 16 per cent. of all manufacturing jobs in the United Kingdom. They have 10 per cent. of the 3 million workers employed in these industries in the member states of the EC.

In my county of Nottinghamshire the textile and clothing industries employ four times the number of people who work in the coal industry, despite the fact that since 1982 one in six jobs lost in the textile industry nationally have been lost in Nottinghamshire. Further, one in 12 of all jobs in these industries are in Nottinghamshire and Derbyshire. Two thirds of those jobs are in hosiery and knitwear and the rest are in clothing. That represents a sizeable chunk of manufacturing jobs, especially women's jobs. In all, it represents 15 per cent. of women's jobs, or 22 per cent. of all women's jobs in the counties' declining coal mining communities.

In Mansfield these industries represent 13 per cent. in total and 19 per cent. of all women's employment, and that is over 11,000 jobs. The decision to close Mansfield Knitwear was rightly described by Mr. David Lambert, the general president of the hosiery and knitwear union, as like amputating the torso of the industry at a stroke. Between 1981 and 1985 only 1,300 jobs in this sector have been created in Nottinghamshire.

Will the Minister give a lead to the industry to save it from complete destruction? Will he act to stop the disastrous flow of cheap imports into the United Kingdom? The latest trade figures show that in the first eight months of 1987 imports of jumpers were up by over 1.5 million. Will the Minister act to stop goods from such places as India, Indonesia, Hong Kong and Thailand being dumped on our shores at the cost of our industry? Will he act to help the industry recover from the general fashion switch away from knitted goods to enable it to have the confidence to return to viability? Will he act to combat employers who, while receiving Government grants for parts of their companies, shift other parts of their industries abroad, outside the EEC, to such places as Turkey, where labour costs are as low as £20 a week?

I say that because rumour abounds in the textile industry that Mansfield Knitwear was closed for exactly that reason. That can be seen from an article in the Financial Times of 23 September 1988 in which the newspaper's textile editor, Alice Rawsthorn, said about the Coats Viyella organisation, which owns Mansfield Knitwear: The group is also considering shipping knitting machinery out to Turkey, where labour costs are lower. Similarly, it may use Turkey as a base to spin acrylic yarn for knitwear. At the time, the journalist was writing an article about Mr. David Alliance, the director of the group, so her information would have come directly from him. Mr. David Alliance has already cost the Mansfield area dearly as, 18 months ago, he closed the Viyella factories in Mansfield and moved to Lancashire, with Government development assistance, despite the fact that it was a profitable company.

I hope that the Minister will ask the Government to review their decision of 30 September this year when they declined to give assisted area status to the Mansfield travel-to-work area. The loss of such a major industry as Mansfield Knitwear will have a severe effect on the community, particularly as Mansfield already has the worst unemployment levels in the midlands, with both male and female unemployment continuing to increase, despite two years' continuous decline in the rest of the country. The area now badly needs help to break out of its present position and can only achieve that with Government help.

I should be grateful if the Minister would consider the following approach in his deliberations: first, to issue a statement of confidence in the industry and to make public visits to the regions concerned; secondly, to call a summit soon of all those concerned in the industry to discuss a way forward; thirdly, for the Government to take immediate action to curb cheap imports of textiles and clothing, which are badly affecting home production; fourthly, to undertake an investigation into firms which are in receipt of Government grants and are moving some of their operations abroad; fifthly, to issue a statement to the effect that there will be a renewal of the multi-fibre arrangement before the implementation of the Single European Act in 1992 to safeguard home production; and, finally, that the Minister will liaise with his colleagues at the Department of Trade and Industry and, in the light of the recent closures, review assisted-area status for Mansfield and consider meeting a delegation in the area in the near future.

2.37 pm
Mr. Max Madden (Bradford, West)

May I, at the outset, declare my interest as a sponsored member of the Transport and General Workers Union whose textile trade group represents thousands of men and women working in the textile, clothing and knitwear industries.

May I also congratulate my hon. Friend the Member for Mansfield (Mr. Meale), on securing this debate. It is another illustration of the vigorous way in which he has sought to defend his constituents since he was first elected to that constituency in 1987 and of the way in which he has sought to advance and protect the interests of those of his constituents working in the hosiery and knitwear industries.

This is the second debate that has taken place in the House this week on the textile, clothing and knitwear industries. The first debate, which took place on Monday, was initiated by my hon. Friend the Member for Halifax (Mrs. Mahon). The fact that we have had two debates in a week underlines the crisis that is facing the textile, clothing and knitwear industries. I urge the Minister to recognise that that crisis is of major proportions and that there are prospects of redundancies of the scale that we saw in 1980–81.

Thousands of men and women are facing redundancy in the coming weeks. There are thousands who may receive an unwelcome Christmas present in the form of a redundancy notice. If they escape redundancy until Christmas, it will be a threat early in the new year.

The crisis is such that we must see positive Government intervention. Professor Silberston is now being commissioned to make a further inquiry into this sector of the industry, and we hope that he will have learnt from the serious errors that he made in his initial report. He seemed to listen to everyone in the industry to whom he talked, but he did not learn from what he was told. We hope that his next report will include a major recommendation that there should be a continuation of the multi-fibre arrangement. That is the unified demand of all in the industries. We hope that the Government will support the extension of the MFA, whatever Professor Silberston may report.

As my hon. Friend the Member for Mansfield said, we want urgent and decisive Government action to stem unfair imports, which are still penetrating British markets to an unacceptable level. I should welcome an assurance from the Minister that rumours circulating that the Government intend to privatise the collection of production statistics are untrue. If we are to have accurate and reliable information on production and other trade statistics, it is vital that the information is collected by the Government rather than by individual companies, many of which are not in a position to collect statistics. If we lose reliable statistics, our ability to combat unfair trade from overseas will be further worsened.

As my hon. Friend said, we need to see much greater willingness by the Government to act against British investors who are increasingly investing in low-cost production overseas at the expense of British companies and British jobs. We should be able to devise a way of preventing grant going to such companies. Tax penalties could be introduced for British companies and investors that are exploiting the advantages that exist in overseas low-cost production centres.

We must urge British employers to safeguard employment, especially in areas such as Mansfield. We know that Mansfield is suffering from high-level unemployment. In areas such as my constituency in west Yorkshire, unemployment levels are way above regional and national levels. We need a comprehensive programme of assistance for these sectors of industry. We must take concerted action to improve the overall image of the industries. That would assist recruitment. Within the past month I have met employers and trade union representatives in Bradford to discuss ways in which we can improve the image of our industry. There is an inheritance of redundancy and a reputation of bad working conditions with low pay. This background deters many young people from considering job opportunities and careers within these sectors of industry.

There must be major improvements in pay and conditions. Substantial improvements made must also be in the number of training places that are available and in the quality of training that is provided. During a debate on Monday I called upon the Government to organise a major national conference to discuss a range of urgent action that could be taken. The Government should convene such a conference. All employers, unions, local authorities and other agencies with an interest in the industries should be invited to frame an agenda for action and for assistance for the industries.

We heard today, as on Monday, about the importance of those industries as major employers and exporters and their major contribution to future growth and prosperity. They are no longer expendable. The men and women who create the wealth in that range of industries are crying out for the Government to acknowledge their importance to our country's economy. Certainly they are calling for positive and decisive Government action in reducing unfair exports and in the other areas I have outlined.

I hope that today we shall not have to record the same complacency that is so often evident when Ministers address the problems of the textile, clothing and knitwear industries. I hope that, for a change, we shall hear from the Minister positive suggestions for urgent action, which is long overdue and vitally important.

2.45 pm
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude)

I fully understand the reasons that have prompted this debate, because the knitwear industry is important in the constituencies of both the hon. Members for Mansfield (Mr. Meale) and for Bradford, West (Mr. Madden). It is also important in one part of my midlands constituency, so I am aware of the industry's difficulties and of its importance, too.

However, the message of gloom that comes out of the remarks made by both hon. Gentlemen is unnecessary and depressing. I do not intend sounding complacent, as the hon. Member for Bradford, West suggested I might, but the idea that the solution to all the problems lies with the Government is fallacious. If there is a problem with the industry's image, it is for the industry itself to address it. There are within it enough firms that are robust, innovative, enterprising, and investing for the future to address that problem, if it needs addressing, and to deal with it. I do not accept that it will be helpful if the Government intervene.

The hon. Member for Mansfield mentioned regional aid and suggested that my right hon. and hon. Friends in the Department should amend the assisted areas map to include Mansfield. The Nottinghamshire county council has asked for a meeting, and as such meetings take place frequently, I see no reason why one should not be arranged. I appreciate that Mansfield and neighbouring areas have unemployment problems, but the White Paper published earlier this year made it clear that the Government have no plans to change the assisted areas map in the lifetime of this Parliament. On a related issue, Nottinhamshire county council and Mansfield district council have been informed that Nottinghamshire and Derbyshire are among 22 counties and regions that appear to satisfy the eligibility criteria for European regional development fund assistance as industrial regions. We have cited the travel-to-work areas of Mansfield, Worksop and Chesterfield, as well as other parts of the counties, as the most seriously affected areas.

Mr. Meale

Does the Minister accept that the company that has just closed Mansfield Knitwear is the one that closed Viyella mills? It closed the Mansfield mills to move to an assisted development area. If we cannot be designated as an assisted area when we have the highest level of unemployment in the midlands, we shall continually face firms hopping from one side of the country to the other—and moving, in particular, away from Mansfield.

Mr. Maude

The hon. Gentleman has highlighted one of the problems of a regional policy of this kind. The west midlands which contains my constituency, suffered considerably in the early 1980s when it did not have assisted area status and a good deal of business left for other pastures. The hon. Gentleman is right to draw attention to the problem, but it is inherent in the system and cannot be dealt with simply by fiddling with the map to accommodate the changes.

There is certainly a possibility of ERDF assistance. We are still awaiting official Commission reaction to the proposal, but each individual council is free to contact the Commission to support its case, and I understand that Mansfield and Nottinghamshire are doing that. Mansfield is also in a priority area for European social fund purposes in regard to retraining.

To describe Mansfield and its surrounds as wholly depressing would be to give a mistaken impression. There is much good news. First and most important, Mansfield benefits, and will continue to do so, from the upswing in the national economy, and particularly from the growth in the east midlands. Moreover, rising prosperity in Nottingham and Newark is having a direct overspill effect.

The many small engineering firms in Mansfield and Sutton are finding their order books fuller than they have been for many years and are looking forward to a period of the same growth and expansion that we are now seeing throughout the country. The record-breaking performance of miners at Sherwood colliery and other pits in the area clearly show that rising productivity and competitiveness are the keys to the future of mining in Nottinghamshire. The hon. Gentleman will also be aware that public sector investment is taking place on a record level in Mansfield.

Mansfield is being given one of the most modern district general hospitals in the country with the redevelopment of Kingsmill, and at the same time the Victoria hospital is being virtually rebuilt to provide better local health care than ever before.

But the real hope for Mansfield's future comes from the growth of the private sector. As the hon. Gentleman will know, just outside the town in Sherwood forest, Center Parc is providing an increasingly successful tourist development, and the growth of the tourist industry generally is providing many new opportunities for other local businesses.

British Coal, through British Coal Enterprises, is giving support to many former miners who are seeking—successfully—to set up businesses of their own, and the managed workshop scheme developed by Mansfield Brewery is one of the earliest and best schemes in the country where a private company has used its own resources and spare capacity to help get new fledgling businesses off the ground.

Mr. Meale

That is wonderful news, which will be published in Hansard on Monday. But unemployment is still increasing, although the method of calculation has been changed more than 20 times. If all those good things are happening, why are firms closing down? Why is unemployment rising? Why, according to every report on the area, is deprivation worsening? Things are not good, and we need the Minister's help and direction.

Mr. Maude

Obviously at any one time firms are closing and firms are opening. That is part of the industrial process, no matter what Government are in power. It always has been, and it always will be. I accept that firms are closing in Mansfield, but if the hon. Gentleman wants to do Mansfield a service he would do well to help us to draw attention to the many positive developments. Like me, he wants to encourage businesses to develop in Mansfield, but if we are to do that we need to present a positive image for the town. I know that the hon. Gentleman can be relied on to help to do that, but he will not do it if he does nothing but preach doom and gloom and talks only about the decline of industries there. Many businesses are growing and setting up, which is thoroughly good news for the area.

The knitwear industry has contributed considerably to the development of parts of the country, but, as with any economic activity, competition invevitably develops from areas that introduce new techniques and make economies in manufacturing costs. The knitwear market is also especially susceptible to the unpredictable and capricious influence of the demands of fashion. The industry is facing difficulties and no one suggests otherwise, but that is occurring not only in this country but internationally.

I can give the hon. Gentlemen some good news. Recently when I was in Hong Kong I helped to take part in a promotion by Richard Shops, which had just opened some new shops there, of garments made in Britain. The idea that trade in textiles and garments is entirely one way—from the far east to Europe—is false. I have seen with my own eyes garments made in Britain being exported to Hong Kong.

This industry, like many others, is developing what it is good at. The hon. Gentleman knows that knitwear is included in the multi-fibre arrangement due to expire in 1991. The MFA is under consideration with many other trade issues in the Uruguay round of GATT, and multilateral negotiations are under way in Geneva. We have committed ourselves as part of the European Community to studying the modalities for the restoration to normal of trade in clothing and textiles but also to strengthen GATT's disciplines. We consider that a durable set of GATT rules for trade in clothing and textiles depends essentially on establishing the right conditions, which include a satisfactory safeguard clause against sudden import surges and a reduction in trade barriers in developing countries. We are particularly looking to the newly industrialised countries in that context.

Both hon. Gentlemen suggested that the solution to the problems of the industry is to erect barriers around the country and prevent any imports, especially cheap imports. The hon. Member for Bradford, West referred to the report by Professor Silberston and the fact that we have asked him to update it. Last time the Professor concluded that the effect of the MFA on British consumers was to increase the cost of clothes by 10 per cent. That should concern hon. Gentlemen. It affects every constituent and poorer people more than the better off. Protectionist arrangements, such as the MFA, make it more difficult for Third world countries that were seeking to industrialise and reduce their dependence on aid from the industrialised world to do so. Again, I should have thought that both hon. Gentlemen would wish to bear that matter in mind.

Mr. Meale

I am bewildered by that. The figures I have seen, for example, for women's knickers show that in 1984 a total of 1.5 million pairs of knickers were imported from China, which is the biggest exporting textile nation. Because there was no action under the MFA and no Government direction, the figure rose in 1985 to 7 million, in 1986 to 14 million, and in 1987 to 30 million. That is the result of a lack of action by the Government.

Mr. Maude

There is and always has been trade in clothes. In the past we have benefited enormously from trade in clothes. Industries in some countries are better at some products than are industries in other countries. All economic growth and development has come about because industries have specialised in doing what they are good at. The idea that we should erect barriers and prevent any clothes made elsewhere from being imported is absurd. It would not benefit British industry. The British industries that have remained least efficient are those that have been protected.

If industry is to become efficient and productive, as I know the knitwear industry predominantly is, it needs not more protection but to invest, develop and take its place in the world market. That is how we shall increase prosperity and I have no doubt that that is already happening.

Question put and agreed to.

Adjourned accordingly at one minute to Three o'clock.