HC Deb 05 December 1990 vol 182 cc298-300
9. Mr. Vaz: T

To ask the Secretary of State for Trade and Industry if he will make a further statement on Government plans to assist the textile industries.

Mr. Sainsbury

My right hon. Friend is seeking to improve the protection of intellectual property and to strengthen the rules and disciplines of the GATT in a way that will benefit the textile industries.

Mr. Vaz

Is the Minister aware that the British textile industry is in a deep crisis? Is he further aware that in the past six months, 3,500 jobs have been lost—including 85 at the Corals factory in Leicester last Friday? Is not the Government's policy of high interest rates and their failure to tackle import penetration having a dramatic effect on the future of the industry? Will the Minister, as a matter of urgency, convene a meeting with the employers and the unions to fashion a strategy to save that vital industry before it is too late?

Mr. Sainsbury

My many discussions with employers and unions, and my many visits within the industry, lead me to believe that the hon. Gentleman's description of the textile and clothing industry does not bear much resemblance to reality. He says that the industry is in a deep crisis, but its exports this year are 16 per cent. up on the same period last year and it is investing heavily. Naturally, we all regret job losses, but the hon. Gentleman must recognise that many of the reductions in employment are the consequences of the very investment that we all want in the industry.

Mr. Latham

As an unashamed Tory protectionist, may I press my hon. Friend about the textile industry in Leicestershire and also the multi-fibre arrangement? Will he make it absolutely clear that in no circumstances will Ministers allow the MFA to be phased out unless there are satisfactory alternative provisions under the Uruguay round?

Mr. Sainsbury

I assure my hon. Friend that not only are we determined, as has always been the case, to ensure that strengthened rules and disciplines and better market access accompany the phasing out of the MFA, but that the benefit of those strengthened rules and disciplines and of the tariff reductions in other countries should come into effect when the Uruguay round comes into effect, which we expect to be at the beginning of 1992. The MFA will be phased out over a longish period—just a little less than 10 years—so there will be benefits to the textile industry from the beginning.

Mr. James Lamond

Now that the Minister has made it clear that the MFA is to be abandoned in the talks in Brussels and that the GATT rules are unlikely to be strengthened in the way the industry wants, will he take it from me that it is no use trying to suggest that criticism of the Government comes only from Opposition Members, when employees and employers alike have written condemning the Government for their lack of interest in retaining the textile industry, particularly the spinning end of it, in Britain?

Mr. Sainsbury

I sometimes wonder where the hon. Gentleman has been for the past four years—Glasgow, perhaps. If he has only just discovered the commitment that was made not just by Britain, and not just by the European Commission, but by all the contracting parties to GATT that—as part of the Uruguay round the—MFA would he phased out and textiles, like all other commodities, would be brought within the general rules of world trade, I wonder how much interest he really has in the industry.

Mr. Tredinnick

Is my hon. Friend aware that despite considerable improvements in production processes in the textile industry in Leicestershire, there is still a belief throughout the county that a 10-year multi-fibre arrangement is essential? Will he comment further on the threat to British markets of illegal subsidies in India and Pakistan, which is of particular concern?

Mr. Sainsbury

I appreciate my hon. Friend's concern for the industry. A good example of the benefits of the Uruguay round is that newly industrialised countries that have been using subsidies, in our view improperly, have agreed to phase out those subsidies in the event of a successful outcome of the Uruguay round. That will be of great benefit to the textile industry and to industry generally. That is one reason why we are determined to obtain a successful outcome and a commitment to phase out the MFA is an essential part of that.

Mr. Henderson

The textile and clothing industry trade association, the Apparel, Knitting and Textiles Alliance, has expressed in a letter to all Members of Parliament its profound concern that the Government are trying to weaken the EC's position in the GATT and the MFA talks. Will the Minister today, in taking the robust line to which he referred earlier, allay those concerns by giving a clear commitment that any phasing out of the MFA will be conditional on a safeguard clause and new regulations on anti-dumping, the protection of intellectual property and reciprocity in terms of open markets in countries closed by excessive tariffs?

Mr. Sainsbury

I hope that we can be assured that the Opposition share our view that our economy and, indeed, that of the world, would benefit from a more open trading system—a view which the hon. Member for Nottingham, North (Mr. Allen) clearly shares. I therefore hope that they will support our objective of a successful outcome to the Uruguay round, which requires that we deliver on the commitment to bring trade in textiles within the general rules covering all other trade. As we have always said, that must be accompanied by strengthened rules and disciplines in the GATT system covering matters of the kind to which the hon. Gentleman referred.

Mr. Waller

Will my hon. Friend ensure that the United States Government are left in no doubt about our attitude to the protectionism that they afford to their textile industry? Does he agree that tariffs of well above 30 per cent. not only act as a severe barrier to our exports but lead to the diversion of trade into our markets, which are far more vulnerable to dumping and other unacceptable practices?

Mr. Sainsbury

I assure my hon. Friend that I personally, my right hon. Friend the Secretary of State and all those negotiating on our behalf have made it clear to the United States that we regard it as unacceptable for a country such as the United States to shelter an industry behind tariffs as high as those to which my hon. Friend referred and that we also regard as unacceptable the offer that the United States has made so far for reducing textile tariffs.