§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
11.48 pm§ Mr. Michael Latham (Rutland and Melton)At a slightly earlier hour than one had feared, I am glad to welcome my hon. Friend the Parliamentary Under-Secretary of State to this short debate about the desperate plight of the Leicestershire knitwear industry. As my hon. Friend is an east midlands Member himself, I am sure that he will be knowledgeable. I hope that he will also be sympathetic. I am also pleased to see my hon. Friend the Member for Loughborough (Mr. Dorrell) in his place. As a Government Whip, he is not allowed to speak in the debate, but I know of his longstanding commitment to those of his constituents who work in the knitwear industry.
My hon. Friends the Members for Harborough (Sir J. Farr), who is unwell, and for Bosworth (Mr. Tredinnick), who has a prior commitment away from the House, and the hon. Member for Leicester, South (Mr. Marshall) who, sadly, has had a close relative suddenly taken ill, have all sent me good wishes for the debate and strong expressions of support for the Leicestershire knitwear industry. Any Leicestershire Member who seeks to catch your eye, Mr. Deputy Speaker, will have my permission to speak. This is a united cause for us all because the largest industrial sector in our county is the knitting and clothing industry which currently employs 33,000 people in 490 companies. Alas, that number seems to be diminishing daily.
Last Tuesday here in Westminster, Leicestershire Members met representatives of employers and trade unions. I do not overstate it if I say that they were desperate. They are not given to exaggeration—I have met them many times in nearly 16 years in the House—but some of the most famous and honoured industrial names in the county—firms such as Corah, and Kemptons, which also has a factory in Grantham—and many others have experienced major closures, receivership or significant redundancies. The trade union, the National Association of Hosiery and Knitwear Workers, has been notified of 3,500 job losses in Leicestershire between June 1988 and 1989, but there have been many more since and the true figure is much higher. The industry's leaders stressed to us last week that the position had never been worse. Leicestershire Members cannot accept such grave damage to one of our most basic and honoured local industries. We have to raise our voice in concern, as we are doing in this debate.
As the industry sees it, the main problem is economic, with the pound and interest rates too high. As a result, imports flood in, exports are penalised and British jobs are lost. I know that my hon. Friend the Minister of State cannot do much about those problems because they are basic economic questions. The pound has fallen recently, which I welcome, and I hope that interest rates will be cut in the Budget, even if taxes have to be raised.
However, my hon. Friend the Minister for Trade can do something about the trading environment. There must be a renewed multi-fibre arrangement after July 1991. The existing MFA should be toughened and better enforced. Why does it take so long to restrain sudden surges of imports? Why should countries that are not EEC members and have only applied to join, such as Turkey, he given 968 zero tariffs to export to EEC countries such as Britain when Turkey has a 125 per cent. duty against our imports? What about the United States of America with its 30 per cent. duty? The Americans exclude textile and clothing imports from their generalised scheme of preferences. Why cannot the EEC act much more speedily and much less bureaucratically to enforce ceilings which should limit duty-free quantities under the EEC's own generalised scheme of preferences?
Why did we, as part of the EEC and as a trading and manufacturing nation, boot the ball so effortlessly into our own goal by making it difficult to know the country of origin of manufactured goods? It would be highly desirable and it is still possible under EEC rules for all retailers to declare the true country of origin of their knitwear and hosiery so as to provide such information to customers. Mail order catalogues could play an important role by allowing housewives or other home shoppers to know the real country of origin of the goods that interest them in the catalogues.
All Leicestershire Members regularly visit knitwear factories in the county or related operations, such as yarn throwsters and machine manufacturers, or go to see the splendid work that is done in our local education institutions, such as Leicester polytechnic, which is a world leader in knitwear technology. When we go round such factories, we do not see an obsolete sunset industry. Instead we see modern technology, bright and imaginative design, high standards of production and a very responsible and mostly female work force with excellent industrial relations. It is certainly not highly paid, but it has moved well with the times, especially over the past 10 years. But now it is in an utterly dejected state, with many of its finest firms fighting for their very existence.
The Minister has seen the brief prepared by the Leicester and District Knitting Industry Association because I provided it for him last night. I beg him to appreciate the crisis that is overwhelming this vital industry in Leicestershire and to take action with other Ministers to help it now. I invite other Leicestershire colleagues to share the experiences of their constituents with the Minister in the remainder of this short debate.
§ Mr. Greville Janner (Leicester, West)I thank the hon. Member for Rutland and Melton (Mr. Latham) not only for raising this matter tonight but for kindly giving time to his colleagues from Leicestershire to comment. As he said, this is a concern that we share, for the knitwear and hosiery industry in Leicestershire provides work for fewer of our constituents than it did and is in a bad way.
In the 19 years that I have been in the House, this traditional and essential industry has never been in a more desperate plight. I join the hon. Member for Rutland and Melton and other Leicestershire Members in calling on the Government to step in and help the industry before it slides away into total disaster.
In the past, mainly the badly managed companies have gone under. When Kemptons, a respected, well-managed and first-class business in my constituency, went into the hands of the receiver, we knew that the time had come for urgent action. I hope that it will be forthcoming.
§ Mr. David Ashby (Leicestershire, North-West)I am grateful to my hon. Friend the Member for Rutland and Melton (Mr. Latham) for raising this vital issue. Like most hon. Members who represent Leicestershire constituencies, I have in my area a number of companies involved in the knitwear industry and I well know their problems. Unfortunately, I was not able to attend the meeting that was held in the House with other Members last week, but I am grateful for all the information that I have been given following the meeting, and I have been able to understand more the problems of the firms.
As my hon. Friend rightly said, the problem is essentially one of cheap goods, low wages and undercutting our industry—in all, amounting to unfair competition. The only solution lies in the renewal of the multi-fibre arrangement. I implore the Minister to examine that agreement and—remembering our partners in the EEC—renew it, because that is essential for our industry.
We must look after this industry. It is ailing and it needs all the help that it can get. It is essential for the agreement to be renewed to give it that much-needed help.
§ Mr. Keith Vaz (Leicester, East)I, too, thank the hon. Member for Rutland and Melton (Mr. Latham) for giving us time in his debate. I also pay tribute to the speech earlier today in another debate of my hon. and learned Friend the Member for Leicester, West (Mr. Janner). This is certainly a Leicestershire day in the House.
The House will recall that on 30 June 1988 I initiated an Adjournment debate on the Leicestershire textile industry. Then, as now, I paid tribute to the work of the employers in Leicester and to the National Union of Hosiery and Knitwear Workers, whose members, like hon. Members on both sides, are united in the defence of the industry. Indeed, the last time we spoke in a similar way was in a debate on policing, again initiated by the hon. Member for Rutland and Melton, and that resulted in 51 extra police officers being allocated to Leicestershire.
This is indeed an industry in crisis. The number of job losses nationally in the past six months has been 2,800, and locally 1,500. In the last year, the industry has lost over 7,000 jobs—more than 10 per cent. of the entire industry—4,000 of them in Leicestershire. As other hon. Members have mentioned, firms that were household names—Kemptons, Corah and many others—have suffered because of the damage.
The damage is due, first, to the high interest rates that are currently the policy of the Government; secondly, to the current level of the pound; and thirdly, and most important, to the extremely high level of imports. It is impossible for manufacturers in my constituency and in the city of Leicester to compete with the current high level of imports.
Only two weeks ago the Minister came to my constituency to visit J. & S. Garments. He saw the way in which manufacturers are attempting to compete with the high level of imports. It is impossible for them to do so. Productivity, output, job losses and the preparations that must be made for 1992 are clear signs that the industry is in deep trouble.
The industry demands assisted area status, and I support that. It demands renewal of the MFA in1991, and I support that. If this trend continues, in 10 years' time 970 there will be no textile industry in Leicestershire. The industry goes back to the 16th century and its history has embellished the social fabric of our county. I urge the Minister to act now.
§ 12 midnight
§ The Minister for Industry (Mr. Douglas Hogg)I congratulate my hon. Friend the Member for Rutland and Melton (Mr. Latham) on having secured this Adjournment debate which gives him the opportunity to explain to the House the concerns that he and other Members representing the county of Leicester have about the knitwear industry. I am afraid that he flattered me in one respect. I am not the Minister for Trade within the Department for Trade and Industry. My noble Friend Lord Trefgarne is the Minister for Trade, and I shall ensure that he has every opportunity to understand the anxieties expressed in tonight's debate.
It is never possible to hear news of any factory closing or redundancies occurring with anything other than a deep sense of regret. However, I must say that it is not useful to suggest that the solutions to the industry's problems lie with the Government. The truth is that many and probably most of them lie beyond the control of Government and are inherent in the nature of the industry being undertaken. All are the product of external circumstances, for example, weather and fashion, and beyond the control of Government.
It is interesting that in rather a useful paper produced by the Knitting Industries Federation dated 4 April 1989 the 10-point plan pays considerable attention to the steps that the industry should take. I agree that many of the solutions lie primarily within the control of the industry.
I shall consider the state of the knitwear industry in Leicester and the effects that the downturn of the industry is having on the local economy. I understand that the 1987 census showed that about 34,755 people were employed in the county's textile industry, which is equivalent to about 9.6 per cent. of the working population. Clearly there has been a substantial number of redundancies between November 1988 and October 1989. The figures given in the House tonight have not been wholly consistent and are not wholly compatible with the figures before me, but let us not fall out over such matters. A substantial number of redundancies have occurred.
I am aware of the redundancies that have occurred at Kemptons. As my hon. Friend the Member for Rutland and Melton said, Kemptons has a factory in my constituency. Curiously, the redundancies have not yet shown up dramatically in the unemployment figures. Until October 1989 unemployment continued to fall. In October 1989 the percentage unemployed in Leicestershire was 4.5 per cent. compared with 5.6 per cent. at the same time last year. That represents a fall of nearly 5,000 during the same period. In the Leicester travel-to-work area, unemployment was 5 per cent. compared with 5.9 per cent. the previous year, a reduction of 2,308. It is interesting to note that jobcentres are still advertising vacancies in the knitwear industry locally and that there is a particular shortage of workers with skills to offer.
Although one would not wish to minimise the impact of recent closures on the families of those concerned, it seems that vacancies exist at least for the more highly skilled workers and that there should be good prospects for finding employment. Those facts are also relevant to the 971 proposal by the hon. Member for Leicester, East (Mr. Vaz) that Leicester should be given assisted area status. There is no prospect of that, for two reasons. First, we have made it plain that we have no plans to change the map within the lifetime of this Parliament. That remains our policy. Secondly, and much more substantively, I am afraid that the unemployment figures do not even begin to justify making Leicestershire an assisted area. For example, the unemployment rate in the Leicester travel-to-work area is 5 per cent. That is far below the average rate in development areas, which is 11.9 per cent., or the average rate in intermediate areas, which is 8.3 per cent.
§ Mr. JannerThat is an unfair way of putting what is already a difficult case for the Minister. The travel-to-work area includes areas where there is no unemployment as well as areas such as Braunstone in my constituency where there are still vast numbers of unemployed people. We are talking about unemployment in the hosiery and knitwear industries and so far the Minister has offered no help.
§ Mr. HoggI was dealing with a specific point made by the hon. Member for Leicester, East who asked that Leicester or Leicestershire should be given assisted status. There is no possible justification for doing that. An important criterion, although not the only one, is the level of unemployment and, with 5 per cent. in the Leicester travel-to-work area, there is no possible justification for making Leicester part of an assisted area. I do not want to arouse expectations about that because it will not happen.
I shall now turn to the multi-fibre and GATT arrangements. Those matters were touched on by hon. Members and are extremely important. In general, the Government do not believe that it is helpful to increase trade barriers as that only invites other countries to retaliate or follow suit. Generally, it diminishes trade and as a trading nation it is in our best interests to expand rather than to restrict trade.
§ Mr. VazOther Governments are assisting their textile and hosiery industries. It is a question not of fair competition but of unfair competition because other Governments are subsidising their industries.
§ Mr. HoggThat is not a reason for derogating from the general principle that I have outlined. It is a reason for toughening the GATT provisions, and I shall shortly turn to that. The hon. Gentleman's intervention did not make clear whether he was referring to subsidies in the European Community or without it. If there are subsidies in the European Community, I should be grateful if the hon. Gentleman would bring them to my attention.
§ Mr. HoggIt is not a textile company by any standard. That is not even a helpful point for the hon. Gentleman to make to support his case. If the hon. Gentleman has any evidence of subsidies within the European Community that is relevant to the textile industry, he must let us know, because the Commission would like to investigate.
Like their predecessors, the present Government have recognised the special problems faced by the United Kingdom textile and clothing industry. Under the MFA, a wide range of textile and clothing imports from major low-cost suppliers are restrained. Let me mention in passing, however, that the main part of the problem is 972 caused by the fact that the countries concerned are low-cost countries, many of which have much lower wage costs than ours. That is the essential difficulty, and we should not blind ourselves to its importance.
As a major derogation from GATT, the MFA has always been seen as a temporary arrangement, designed to give industry in developed countries a breathing space in which to adjust to new competition. GATT Ministers are generally already committed by the Punta del Este declaration—made at the start of the Uruguay round of multilateral trade negotiations—to phasing out the MFA on the basis of strengthened GATT rules and disciplines. That, I believe, is the way forward. Exactly how it will be dealt with is the subject of negotiations that will continue throughout the round, but the European Community has repeatedly made it clear that the phasing out of the MFA must be accompanied by a reinforcing of those GATT rules and disciplines.
It is our firm objective to achieve, in particular, a more effective safeguard to protect against sudden surges of imports, to improve provision to deal with unfair trade and intellectual property rights, and to provide greater access for our exports to developing-country markets—particularly the more developed ones—through a reduction in their own tariff and non-tariff barriers. The Commission also maintains—and this is generally accepted in GATT—that there must be a gradual transition towards the full integration of the textiles and clothing sector into GATT. That would give industry a further period in which to adjust; the length and nature of that period is, however, a matter for negotiation.
It would be wrong for me to try to persuade the House that the MFA will be extended permanently, for that is not the case. The plain truth is that this aspect of trade must be brought within GATT, but, to the extent that it is necessary, GATT rules must be strengthened to provide more safeguards in the respects that I have identified, and also to allow a proper period of transition.
§ Mr. LathamI hope that we can get one point absolutely clear—that there can be no question of British Ministers allowing the MFA to expire until new Uruguay rules are firmly in place.
§ Mr. HoggMy hon. Friend makes a powerful point, but it must be resolved within the context of the negotiations in GATT. In the end, it will be a GATT decision. British Ministers will urge the case as best they can, but the decisions will be made in GATT, and—as my hon. Friend will appreciate—we do not have an automatic or self-evident veto.
Meanwhile, there are steps that we can all take to assist the industry—and, primarily, that the industry can take to assist itself. I shall not go into much detail, because the hour is late, but there is scope for further research and development. There is, indeed, scope for collaborative ventures in which the Government are prepared to play a part. I am somewhat disappointed that there are not more applicants for assistance in that regard, and I should like to think that further applications will be presented for appropriate schemes.
We can also do a certain amount to improve the industry's competitiveness—for example, through the consultancy initiative. We have also participated with the working groups in an effort to expand exports and encourage improvements in design.
973 We have to look forward to the time when the industry will be working within the general GATT rules and trying to make itself more competitive by focusing its efforts on those parts of the market where Britain has an obvious lead. To suppose otherwise is to peddle an illusion. I know that neither my hon. Friend the Member for Rutland and Melton nor the hon. Member for Leicester, East wishes to 974 do that. It is a serious problem, but it will not be solved by peddling solutions that do not achieve that purpose. It can be solved only by trying to make the British industry as competitive as any in those sectors where there is a reasonable prospect of survival. I invite hon. Members to agree that that is the way forward.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past Twelve o'clock.