§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]9.33 am
§ Mrs. Angela Browning (Tiverton and Honiton)
I am grateful for the opportunity to speak about the United Kingdom textile industry, because of a meeting that I had in the Christmas recess with the management and union representatives at John Heathcoat, a very important company in my constituency.
Let me begin by putting into context the company's importance in my constituency and the contribution that it makes to the UK textile industry. In the early 1800s, John Heathcoat invented the revolutionary plain net-making machine and he set up a company to manufacture net in 1808, moving down to Tiverton in 1816 following problems with the Luddites in the midlands. That is the end of the history lesson.
The company is well established and has been in my constituency for a great many years. It is a private company, with all the share capital residing in the Tiverton area. That gives it the freedom to move quickly to get new products into the marketplace. It has a varied manufacturing base, with weaving, warp knitting—both industrial and apparel—weft or jersey knitting, and dyeing and finishing.
Last year, the company had a turnover of £37.8 million and achieved a pre-tax profit of £3.9 million. Although still profitable, the company, along with most in the manufacturing industry, is finding the present situation difficult and is doubtful that last year's profit figures will be matched this year.
The company continues to reinvest heavily in new machinery and techniques, and over the past five years has averaged more than £2 million a year in capital investment, all financed through its own resources. It currently provides 550 jobs in the south-west, spread across all levels of operative administration, technical and senior management. It operates 24 hours a day, seven days a week. It has products that people want to buy and keeps its work force fully employed.
John Heathcoat operates mainly in niche areas of business and runs its own research and development unit, focusing on customers' needs and the solutions that they require, with a degree of confidentiality that many other companies find it difficult to match. Among its products are woven fabrics for car airbags and toothed load-transmission belts; parachute fabrics for the Ministry of Defence and other countries; geotextile mattress fabrics; sailcloths—its sailcloth was on Lisa Clayton's 258 "Spirit of Birmingham" for her single-handed round-the-world trip; specialist seating fabric for the new Mercedes smart car; and fabrics using knitted spacer technology, now extensively used in cot mattresses to help to provide airways for the baby if it rolls onto its face. A development of that technology is now being trialled for intimate apparel.
Heathcoat is one of the largest producers of bridal and dress net in Europe and supplies those fabrics globally. Heathcoat net fabrics are used by the Kirov, Bolshoi and National ballet companies. Its industrial warp knits are used in hose reinforcement in high-temperature and high-pressure hose manufacture and in protective garments for chainsaw users.
The company has deliberately chosen to invest in and make products for a wide variety of niche markets. It is not merely producing mass products that might have competition from the far east; it has deliberately invested in producing quality, value-added products that are needed both at home and abroad.
The company's jersey fabric is used for a wide range of garments sold in the larger UK retail stores and it has an export trade in specialist fabrics for riding wear. It also produces fabrics for career wear—uniforms—used by banks, building societies and retail outlets, and apparel for use in hostile working environments, including fire-resistant and acid-resistant treated fabrics.
As well as providing an in-house service, the company's dyeing and finishing unit offers a commission dyeing service to other manufacturers and converters selling to the major UK chain stores.
Last year, 45 per cent. of the company's turnover was direct export. It has been very successful and has not rested on its laurels or been overtaken by commercial or scientific developments; rather, it has been involved in innovation in this country's textile industry. It has also paid attention to its environmental performance, being sensitive to the area of great natural beauty in which we in Devon are privileged to live. Last year, the company achieved accreditation to the international environmental management system ISO 14001—becoming the first textile company incorporating dyeing and finishing processes to achieve that accreditation in the UK. All staff on site received environmental awareness training as part of the programme.
On the quality side, the company has been registered to ISO 9002 since 1989, and is currently working to achieve ISO 9001—design and development aspects for quality systems—which it hopes to achieve this year. For many years, the company has enjoyed a good working relationship with its recognised union, the Transport and General Workers Union, with which the company works closely to ensure that it remains at the forefront of technology and achieves the best productivity commensurate with its chosen role in niche markets. At my meeting at the beginning of January with unions and management, I was worried that such a company should be concerned for the future of the industry.
Last week, the Prime Minister was asked about job losses at Wrangler jeans by the hon. Member for Falkirk, West (Mr. Canavan), who suggested that the crisis facing the entire clothing and textile industry in this country was 259 due mainly to high interest rates and the high value of sterling. That view has been commented on by the British Apparel and Textile Confederation, which said recently:Whilst the recent fall in interest rates is to be welcomed, it will be at least six months before its benefits begin to flow through into the economy and thus into the industry. The damage had already been done with the high interest rates we have had to endure over many months.
§ Mr. Patrick McLoughlin (West Derbyshire)
Does my hon. Friend accept that, as regards niche markets, exports are important for the industry as a whole—particularly in the east midlands? We accept that there are problems with sourcing by major retailers, but the industry has managed to capture a number of niche markets. My hon. Friend mentioned a firm in her constituency, and a number of firms in the east midlands have also looked at those niche markets. That is why the export market is particularly important to the textile industry, and that is why it is particularly vulnerable when we have high levels of sterling.
§ Mrs. Browning
My hon. Friend is exactly right. The strength of sterling has led to exports becoming increasingly difficult, and that has been compounded by economic problems in some of our major markets. In addition, imports have become cheaper.
Over the first six months of 1998, exports of clothing and textiles were 20 per cent. down on the comparative period of the previous year. At the same time, consumer confidence in the UK market has been dented. At a time when UK manufacturing industry is having to contend with increased costs, it has also had to contend with social legislation, including the working time regulations and the national minimum wage. The British Apparel and Textile Confederation has stated thatimported products become that much more attractive and may be the only way in which to provide the necessary margin for manufacturers and retailers alike".That is a very worrying statement. The TGWU estimates that 500 jobs are being lost in the industry every week. If one looks at the pattern of job losses in the last six months of 1998 alone, one sees that there has been an acceleration.
§ Mr. Lembit Öpik (Montgomeryshire)
Will the hon. Lady acknowledge that that is exactly the problem for some very respected companies, such as the one that she has mentioned and Laura Ashley in my constituency which, through no fault of its own, has found itself having to downsize simply to stay afloat?
§ Mrs. Browning
Indeed. That trend is gathering momentum, and that is why it is good to have an opportunity to debate the matter on the Floor of the House. I have a long list, covering two whole sides of A4, of the job losses in the past six months in the industry. These are spread throughout the country, but particularly affect the midlands, the north of England and Scotland.
§ Mr. Ian Bruce (South Dorset)
Has my hon. Friend given any thought to the level of interest rates in the UK? I am sure that the Minister will remind the House that interest rates in the UK are at their lowest for a long time. 260 Is not the real problem that while in the rest of Europe interest rates are at 3 per cent., our interest rates are at more than 6 per cent.? In fact, we are increasingly seeing the level of the euro go down and the level of the pound go up. The Government must intervene, and not simply leave it to the Bank of England.
§ Mrs. Browning
My hon. Friend points to an important aspect of why the industry is under pressure. However, there are other aspects where the Government could clearly intervene to assist the industry, and I hope to cover some of those in my speech.
The job losses that have been identified—of which the unions are well aware—must be put into context. We are talking about 500 job losses, on average, a week, in an industry that employs just over 350,000 people. It is interesting to focus also on the contribution that the industry makes to our national economy. The manufacture of textiles and apparel contributed £7 billion to the output of the UK economy in 1997. It is an important industry, but it is not just the individual companies that we need to look at. The Government must take a more active role in the industry, as it is has a national dimension that is very important to our economy.
I wish to quote from an article in The Observer last September, which looked at what was happening in some of the bigger companies:The exodus from textile manufacturing in the UK has, of course, been going on for decades. And in recent years, all of the main quoted textile companies—Courtauld Textiles, Dewhirst, Coats Viyella, William Baird and Claremont among them—have closed down factories in Britain and opened new ones in Morocco, Indonesia, Sri Lanka and other countries with much lower labour costs.Earlier in the year, Dawson, which makes Pringle sweaters, closed two factories with the loss of 720 jobs. Burberry and Aquascutum, which have lost sales in Asia, have brought in short-time working and redundancies. Coats Viyella, one of the country's biggest manufacturers, has seen its share price sink like a lead balloon, and faced a further humiliation last week as it was forced to abandon the planned demerger".The rate at which textiles production is moving overseas varies from company to company, but there is a trend for the removal overseas of companies manufacturing in this country which is very concerning. The article continued:
Dewhirst, one of Marks and Spencer's oldest suppliers, has told analysts it will have 60 per cent. of production abroad by the end of the year, rising to 70 per cent. by the end of next year.Hon. Members will no doubt have focused on the fact that Marks and Spencer has made some public statements about where it will source its apparel and clothing from, but it is important to understand that that that does not necessarily mean that the company is saying that it has decided to source from abroad, and not from the UK. Marks and Spencer, like many other retailers, is now faced with a situation where its sources of supply—people with whom it has had producer-supplier relationships for many years—have upped sticks and moved. Marks and Spencer and other companies must now choose—do they stick with those people they know, albeit that they are now producing abroad, or do they seek new suppliers within the UK?
§ The Minister for Energy and Industry (Mr. John Battle)
What about Heathcoat?
§ Madam Speaker
Order. The Minister must not intervene from a sedentary position. It makes it very difficult for the Hansard reporters.
§ Mrs. Browning
I will give way to the Minister if he wishes to make a point at this stage.
§ Mr. Battle
I apologise, Madam Speaker. I simply said to the hon. Lady that her whole case was based on the grounds that there were no suppliers, but she spelt out that Heathcoat was doing very well. In her conversations with the industry, was she not advised that real damage was done to the supply chain if Members of Parliament talked down the industry and pretended that it had all gone?
§ Mrs. Browning
I am disappointed that the Minister should intervene in such a manner on my opening speech. Will he listen to me? I am not making party political points. I am speaking on behalf of a successful company that is concerned about its industry. It is no good the Minister's taking one company in isolation. I do not want the management and unions from Heathcoat to have to tell me that they will put the work force on short time working or close. If companies in my constituency see a trend developing in their industry, they will want to intervene, and they will seek my help. What is happening in the textile industry must be apparent to the Minister. We want companies such as Heathcoat to keep working seven days a week, and that is why I have initiated the debate.
§ Mr. Battle
§ Mrs. Browning
I have given way to the Minister already, and he will be able to respond later. Perhaps he should hear the rest of my speech before he intervenes.
§ Mr. Battle
§ Mrs. Browning
I am too generous to the hon. Gentleman.
§ Mr. Battle
I come from Leeds, so I know something about the textile industry, and I speak on it with some passion. During the period when the hon. Lady was a Minister, my constituency alone lost more jobs every week than the numbers she is referring to today.
§ Mrs. Browning
We are not talking about former Conservative Governments. The Government, and the Minister, have been in office for nearly two years. As he has chosen to conduct the debate on that level, I shall do what I did not intend to do, and read out the list of job losses for which the Government have been responsible. Is the hon. Gentleman seriously telling me that it does not matter, and that he would rather talk about the situation that pertained two, four or 10 years ago? He should be addressing today, tomorrow and the next 10 years.
In June 1998, Pringle in the north-east lost 280 jobs. In June 1998, Pringle in Scotland lost 245. On 30 June in Scotland, Dawson lost 600. In July, William Baird, in the north-east, lost 25 jobs. On 1 July, Todd and Duncan in Scotland lost 50 jobs. On 30 July, Morley and Kemp in the east midlands lost 37. In August, in the north-east, Textillion lost 100 jobs. Also in August, SR Gent in south 262 Yorkshire lost 50 jobs. On 8 August, Dawson lost 720 more jobs in Scotland. On 22 August, Dewhirst in Scotland lost 120. On 21 September, William Baird in the north-east lost 450. The Minister may laugh if he wants.
Last October, Praxis Tailoring in the north-east lost 15 jobs. In October, JPS Ltd. lost 200 jobs in the north-east. I am half-way through my list, and I have reached only last October, when Kangol in the north-east also lost 200 jobs, Karrimore in the north-east lost 35 jobs and William Sugden had 35 job losses, also in the north-east. On 14 October, Rieter-Scragg had 97 job losses in the north-west. On 16 October, Textillion had a further 240 job losses in the north-east. Slimma lost 103 jobs in Scotland on 21 October. On 22 October, 10 jobs were lost at Woolmart in Yorkshire. On 23 October, the Jerome Group in Yorkshire had 50 job losses.
On 6 November, FII had 130 job losses in the west midlands. On 6 November, Desmond and Sons lost 225 jobs in Northern Ireland. On 10 November, Coats Optilon had 61 job losses in the north-east. On 11 November, Umbro lost 70 jobs in the north-west. Edward Hall Bleachworks on 13 November lost 70 in the east midlands. On 14 November, C and J Clark had 120 job losses in the west midlands. In the north-east, 260 jobs were lost on 19 November at William Baird. Dewhirst lost 600 jobs across the country on 27 November. On the same day, Laura Ashley announced 100 job losses in Wales.
On 2 December, Courtaulds announced 1,220 job losses across the country. On 18 December, Chamberlain Components had 24 job losses in the east midlands. On 22 December, Dawson lost 300 jobs in Scotland. On 22 December, Sherwood lost 300 jobs in the east midlands.
The trend has continued in 1999. We do not want to hear a Minister telling us that that has nothing to do with the Government. All those job losses occurred during the Government's stewardship. I am asking the Minister—politely—to hear what the industry is saying. What can he and the Government do to stop a clear trend that is alarming companies such as John Heathcoat in Tiverton? Those companies are worried not about this week, but about the next few years.
What does the industry want? Heathcoat wrote to me:We need the Government to help promote the UK textile industry.I welcome the Minister's initiative in setting up an industry-led group. However, the Government must do more than hold meetings and sit around tables talking. The Department of Trade and Industry has agreed to support only 19 overseas events to assist United Kingdom exports. That compares badly with the Department's support for 31 last year. At a time when exports are being hit by the strength of sterling and the problems of the far east, it seems ironic that the DTI should provide less support to help companies expand into export markets.
§ Mr. Phil Woolas (Oldham, East and Saddleworth)
The point about overseas exports is important, but does the hon. Lady agree that the number of companies attending those exhibitions and trade fairs is more important than 263 the number of events that occur? I welcome her call for more DTI support for our industry, but we should be clear about that point.
§ Mrs. Browning
I do not have a breakdown of those figures, but concern has been expressed by the industry's trade body, the British Apparel and Textile Confederation. If the Government are doing better than the confederation believes, it is surely incumbent on the Government to communicate better and to ensure that the trade body knows what they are doing. The confederation is expressing public concern about the support coming from the Government this year, in comparison with that given last year. If that concern is unfounded, there is clearly a lack of communication.
The industry wants a level playing field. We speak often of level playing fields, but they are vital. They make the difference between winning and not winning contracts. The industry want a level field at home and abroad.
Heathcoat of Tiverton is based in an area that would not be immediately identified as having a large textile manufacturing sector. There is an industry in the south-west, but the area is less well known for it than the north, the midlands and Scotland. If the Government intervene domestically to support the industry, through grants or in any other way, it is essential that they should do so in a way that is fair to companies such as mine in the south-west. It would be quite wrong to address the crisis by putting support into companies or regions that would disadvantage other companies in the textile industry in another part of the country.
§ Rev. Martin Smyth (Belfast, South)
Other Governments of divers compositions have helped particular companies to the detriment of other companies in the same industry. The Minister must listen to the hon. Lady's warning.
§ Mrs. Browning
That is quite right. If the Government are to intervene through regional or sectoral aid, it is vital that they do not set one domestic company against another simply because of geographical position.
The Government can assist companies such as John Heathcoat in another way. I mentioned a level playing field and we all know of the difficulties that companies in all industries encounter when tendering for contracts. As someone who worked in the Ministry of Agriculture, Fisheries and Food for three years, I am well aware that within the European Union there is always concern about how hidden subsidies are used to give an unfair advantage when companies from different states are tendering for the same contract.
At my meeting with John Heathcoat, I was concerned to hear about one problem that the company brought to my attention, which involved a contract with the Ministry of Defence for supplying the RAF coverall. I have written to the Minister's colleague, the Minister for Defence Procurement, about that issue and I will outline the company's experience—it is well established in the niche market of supplying that product—and the difficulties that it encountered when tendering for that contract. I shall read a letter from the company, as it includes various 264 registered trademark names, which I hope that hon. Members will follow if I put them into context. The company writes:We have been supplying approximately 10,000 metres/year of this fabric"—it is supplying Ballyclare Special Products, which produces the RAF coverall—woven from Nomex (DuPont) Aramid fibre.In September we responded to a new tender from Ballyclare for 30,000 metres/year over the next three years.Last month"—that is, in December, just before Christmas—Ballyclare were informed by the MOD that they had not been successful. The contract had been awarded to a German company called Freutcher, who will apparently commission garments to be made, part in Sarajevo and part in Tunisia. The garment tender price was claimed to be 5 per cent. lower than Ballyclare's quotation.However, Freutcher's tender is based on Conex (Teijin fibre) which is priced lower than Nomex, and is a fibre which we are informed that the MOD has not yet fully evaluated.Ballyclare contacted the MOD before submitting their tender to enquire whether they should offer an alternative to Nomex. The response was negative, they should only submit based on Nomex.Ballyclare is extremely annoyed with that scenario simply because it has discovered that the German company's tender was based on an alternative fabric. The letter says that the company is
very aggrieved … as with Conex being cheaper yarn it is likely that we could at least have matched the competitive tender. We have now lost valuable business at a difficult time for the textile manufacturing industry, putting jobs at risk in our weaving unit.As I wrote only 10 days ago I do not expect a reply yet, but I draw that matter to the Minister's attention because there is room for Government intervention if one set of rules are applied to one company and another set to others—in that case a company supplying the main supplier—and if that results in United Kingdom jobs being put at risk because the contract goes to a German company. I do not expect the Minister to give me an answer today, unless he has one, but I hope that he will encourage his right hon. Friend the Minister for Defence Procurement to look into the matter and take a personal interest in how such important contracts are lost, as that clearly proves that we do not have a level playing field. That is a genuine case for Government intervention.
The Government could also be making representations on behalf of the industry in another area, which has been flagged up in the newspapers in the past few days. Owing to the banana war, which hon. Members will have read about, the situation with the United States is now serious. I will not go into too much detail, but as a former Agriculture Minister I am only too familiar with the banana trading arrangements of the Caribbean countries and competing south American countries, which all want to export their bananas to the European Union. There is a banana war between the EU and the United States over World Trade Organisation regulations, and the US is threatening 100 per cent. tariffs on EU exports as a reprisal because it cannot get its own way. The tariffs will target cashmere knitwear and printed cotton.
A statement from the industry reads:For the cashmere industry, this threat is not far short of a disaster, as the early part of the year is when US buyers place their orders for delivery from June onwards. Cashmere spinners in 265 Yorkshire and cashmere spinners and weavers in the Borders of Scotland are already having orders cancelled and job losses are imminent".That is the result of the stalemate, and those of us who take an interest in the matter have been following the WTO talks daily. Perhaps the Minister can give us an update. As I understand it, yesterday's talks were deferred, yet again. The Government have a role here. They can intervene at the highest level. I would like to think that the Prime Minister will speak to President Clinton about the matter.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
The hon. Lady will understand that people in the borders are as concerned as she is. It is to be hoped that my hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) will catch your eye, Mr. Deputy Speaker, and will be able to develop the arguments from the point of view of south-east Scotland. People in the borders rightly believe that the United Kingdom Government have given the United States international support, which was justified at the time, but their reward for such support is a tariff that is damaging our industry today, here and now. Factories in Hawick are closing because the delivery dates for their garments will be caught by the 100 per cent. tariff. It will bankrupt those businesses if they knit the garments and then have to pay the penalty.
§ Mrs. Browning
The hon. Gentleman speaks as a representative of people working in that industry and knows far better than I do the impact on his constituents. I endorse his comments. He is right. The Government can legitimately intervene in such issues and I should like to think that the Minister will assure the House from the Dispatch Box that pressure will be brought to bear on the United States at the highest level—at prime ministerial level. If we in this House believe in anything, it is in free trade—well, we Conservatives certainly do. We do not like tariffs and barriers. If Labour's new-found devotion to free market philosophy is genuine, the Prime Minister will not hesitate to pick up that phone, speak to the President and ensure that the barriers are brought down—and not merely in a few months' time when it suits everyone to sit around a table for yet more talks, because we need action in a hurry.
John Heathcoat in my constituency is not a sunset company. I hope that I have clearly demonstrated that it has not rested on its laurels. However, the company is worried and I hope that the Minister will understand that it is not asking me to make representations to the Government with a begging bowl in my hand asking for largesse. I have highlighted several issues in which the Government can rightly intervene and assist the industry.
The managing director of Heathcoat wrote to me saying:
We are prepared to make our own way in the market; that is our job and we have the managerial skills and trained workforce to do that, so we do not want to appear to the Government to be coming begging for handouts, that is most definitely not our style.We do not however want to find ourselves disadvantaged in our efforts by assistance or other grants being made to our competitors in Europe or the UK.We have a good record of investment and training, and have always been prepared to stand on our own expertise and entrepreneurial skills, and have an excellent record on both Environment and Energy savings. What we are looking for is a policy to 'talk up' the textile industry at Governmental level to 266 dispel the view that exists in the country (and regrettably in some areas within the industry) that all is lost, that textiles is a sunset industry and all we can do is wait while it dies a lingering death.This cannot be the case, the country cannot afford to lose the jobs that the Textile industry provides, and we feel that we should get at the very least moral support from the Government for those companies that have not joined the race to low cost countries and have decided to keep their manufacturing facilities, and the jobs that go with it, within the UK.We do run a research unit which is continually looking at new uses for textiles and at new processing methods, but we find that the amount of paperwork involved in obtaining a grant and the work necessary in preparing it is burdensome to say the least. We should not have to employ consultants to show us how to best prepare cases for Brussels, we should get Government encouragement and help to do this ourselves.I have already given the House an example of the difficulties that the company encountered in tendering for one EU contract. Although I am discouraged by the Minister's intervention and his brickbat approach, I hope that he will give us a substantive reply to the debate that will address the practical aspects of legitimate Government intervention so that John Heathcoat can continue for hundreds of years as one of the leading textile companies in Britain within a vibrant sector that can hold its head up high.
§ Mr. Phil Woolas (Oldham, East and Saddleworth)
I start by offering the hon. Member for Tiverton and Honiton (Mrs. Browning) the traditional congratulations on obtaining this morning's debate; I do so genuinely. Many hon. Members on both sides of the House have been campaigning for the textile industry, some for 20 or 30 years. I welcome the hon. Lady's initiative and agree with much of what she has said.
The company in her constituency has clearly taken initiatives and found a niche market, but nevertheless finds the industry fiercely competitive. I would correct the hon. Lady on one point, and I hope that she will recognise my good intentions in doing so. She spoke about the scale of the industry and its importance to our economy, and mentioned a figure of £7 billion in output. That figure represents the total exports of the clothing and textile industry. Its total output is some £27 billion.
The textile industry employs between 350,000 and 370,000 people. It is bigger than the car industry, the chemical industry and the agriculture industry. Although I am not calling for direct subsidy for the textile industry, on many occasions I strain at the leash to do so because of factors with which hon. Members are familiar. It is a hugely important industry, as the Government have recognised in their action plan—an initiative that has been welcomed by the House.
I chair the all-party parliamentary clothing and textiles group and I know that there are disagreements regarding the cause of the problems. Interest rates and the high value of sterling have been mentioned. Ministers, industrialists and the unions recognise that there is a six-month delay in the effect on orders, and subsequently jobs, as a result of problems in the industry, which were prevalent in the latter part of 1998. However, those problems cannot be attributed entirely to interest rates and the high value of sterling. The trend has continued for 100 years. The clothing and textile industry—particularly the production of finished garments—is labour intensive and that makes it susceptible to overseas competition on labour costs.
267 We are a genuinely all-party group. If any hon. Member present is interested in joining, let me say that there is no subscription and we are very friendly bunch. We have a regional make-up, and the south-west is extremely important. We agree that the UK textiles industry cannot compete on labour costs. The minimum wage has not yet been introduced, so it has had no effect, despite what some people in the industry say. However, even at the low level of £3.60 per hour, it is irrelevant in terms of overseas competition as, in Morocco, for example, that sum is equivalent to the weekly wage.
§ Mrs. Browning
I am grateful to the hon. Gentleman for allowing me to put it on the record that although the industry is concerned about the minimum wage, John Heathcoat does not pay below the minimum wage, so it is not an issue for that company.
§ Mr. Woolas
I recognise that our best companies pay above the minimum wage. That argument supports the action plan as it shows that companies such as Heathcoat are successful not on the basis of suppressing labour costs but as a result of high investment and high skill input.
We cannot attribute all the problems in the industry to interest rates and the high value of sterling, although both factors are now moving in the right direction. However, there are long-term trends and we need to address them. The action plan for the clothing, textile and footwear industry and the carpet manufacturers and unions has been greatly encouraged by the Government, and attempts to provide an analysis and find a way forward.
Let me say a few words about Marks and Spencer, as a great deal of nonsense has been written and spoken about that company. There is no doubt that the predominant position of Marks and Spencer causes problems for suppliers in the clothing industry. It is an extremely powerful operator within the market. In some cases that can be good, as Marks and Spencer has saved many jobs by continuing to source from the United Kingdom. However, other factories have closed, some would say at the whim of a Marks and Spencer buyer making a telephone call and moving an order overseas.
Marks and Spencer has recognised that its change not only in senior management but in emphasis from buyers to marketing is extremely important. The action plan encourages partnership between retailers and manufacturing sectors. To be fair, Marks and Spencer has made that point to its furnishing and clothing suppliers. British manufacturers and retailers should work together to use their unique advantage over overseas suppliers—the ability to respond quickly.
As chair of the all-party group, I am conscious of always wearing clothing that has been made in Britain. As I have said before, Mr. Deputy Speaker, everything you can see and everything that you cannot see that I am wearing is made in Britain. [Horn. MEMBERS: "Prove it."] I shall not respond to that invitation, as I am sure it would not be allowed.
My tie is of modern stain-resistant fabric made and developed in the United Kingdom. It is a good example of a niche market, of high research input and a quick response by a United Kingdom supplier. The relationship 268 between manufacturers, suppliers and retailers, which is part of what the action plan addresses, is an extremely important development.
§ Mr. David Tredinnick (Bosworth)
Is it not a fact that Marks and Spencer often requires small suppliers to supply only Marks and Spencer, and that that brings problems?
§ Mr. Woolas
I agree. The buying policy of Marks and Spencer might be understandable from the company's narrow point of view, but it is very damaging to the industry because it inverts the market. Suppliers find that they have to put all their eggs in one basket and that is dangerous for any business. I therefore recognise the importance of the hon. Gentleman's point.
The action plan offers us a consensus on the way forward to ensure that Government support for the industry is effective and fast, and the regional strategies that have been developed are part and parcel of that process. However, in our debate today, there have been no calls for direct subsidy; indeed, I note that the hon. Member for Tiverton and Honiton fell short of calling for direct subsidy, although she dropped some strong hints about protectionism, which surprised me given her party's views on that matter. I genuinely believe that the action plan is in the best interests of the industry, but we must recognise that competition on labour costs will never be a way forward and I am pleased about the hon. Lady's remarks about salary levels in the company that she used as the basis for the debate.
I should like to emphasise the points that have been made about the dollar banana affair and the trade war over cashmere. The UK clothing and textiles industry is, in many ways, an amalgamation of small specialist industries. We find a rich history and heritage and a very high skill base in all parts of the United Kingdom and in all parts of the industry—whether lace in Nottingham or cashmere on the borders and so on. I know that my hon. Friend the Minister has visited the industries in many of those places and is familiar with them. It is not his fault that he is from Yorkshire, although I must choose my words carefully because Saddleworth is in real Yorkshire—it is still in Yorkshire, as far as we in Saddleworth are concerned—but Oldham is not. The two areas—Oldham's cotton industry and the wool industry in Saddleworth—offer a good example of my point.
The cashmere industry is one of our finest export industries. It is impossible to overstate its importance to areas in the east midlands, Yorkshire and the Scottish borders where the industry has been built up over hundreds of years. The danger for the cashmere knitted industry lies in the fact that it is seasonal. During the next two or three weeks, trade fairs will take place—I think that the first is next week—at which clothing goods will be sold for sale in United States stores during the coming year. If we lose that business at those trade fairs over the next month, the danger is not merely that we shall lose the business this year, but that it will inevitably go to China, because there is nowhere else in the world that does such work. If the business goes to China this year because of cost, and despite the efforts of US retailers who have protested against their Government's action, it is difficult to envisage how we can win it back.
The UK-made brand of cashmere knitted goods is very powerful and US consumers want to buy it. The trade war is a matter for the European Union, the United States and 269 the WTO, but I realise that my right hon. Friends the Foreign Secretary and the Secretary of State for Trade and Industry are aware of the situation. I urge Ministers to do all they can, urgently, because if we cannot change the decision, there will be factory closures during the next few weeks.
Although the future of the industry is not guaranteed even if the action plan is implemented, its implementation remains a necessary criterion for that future. Looming on the horizon are two important matters. The first is the renegotiation of the multi-fibre arrangement, which is of huge importance. I do not expect my hon. Friend the Minister to give us details of the UK's approach, but I want to flag up the matter to underline its importance. The second is the European regional development fund money. At present, we have Retex money and objective 2 funding, and there is a correlation between objective 2 status and many aspects of the UK clothing and textile industry. We need to ensure that, in deliberations about European regional development fund money, the clothing and textile industry is given due consideration. I welcome this morning's debate. Although I disagree with some of the points made by the hon. Member for Tiverton and Honiton, I hope that all hon. Members in the Chamber are united on the importance of promoting the industry.
§ Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)
Like the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), I congratulate the hon. Member for Tiverton and Honiton (Mrs. Browning) on securing the debate and bringing this important matter before the House. I am especially grateful for the opportunity to participate in the debate, not least because of the significance of textiles to my area in the Scottish borders. In that area, as in many other parts of the country, there has been a gradual decline over several years in the number of jobs in the textiles sector. In the late 1960s, in an area with a population of 100,000, about 14,000 jobs depended on the industry; two years ago, the number of jobs was down to about 5,000. However, the textile industry still represents 50 per cent. of manufacturing jobs in the Scottish borders and in certain towns—not least, where I live in Innerleithen—96 per cent. of jobs are dependent on textiles. In the much larger town of Hawick, the figure is 88 per cent., which is still a large percentage.
Over the past couple of years, we in the borders have not needed to seek out troubles. There has been a range of job losses, in farming and electronics but, especially in textiles. Companies such as Claridge Mills, Ettrick and Yarrow Spinners, Laidlaw and Fairgrieve, Gardiners and, in the constituency of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), Pringle have all suffered significant job losses and some of the smaller companies are now closed. That is a roll call of some of the finest names in textiles in Scotland, perhaps even in the United Kingdom, and people are concerned about what the future holds for the industry, especially during the next few weeks and months.
The downward trend in textiles is understood. We have had a useful debate about the pressures on the industry, some of which, as was pointed out, have existed for more than 100 years. In each part of the country, there are successful businesses that are doing extremely well because they have turned themselves into world leaders, by adopting good business techniques and focusing on 270 world-class products in niche markets. In my constituency, that process is assisted by the Scottish college of textiles, which has done much work on advanced and applied textile science and technology. The college has now successfully merged with Heriot-Watt university and we hope that its expertise and capability will be enhanced.
Although there have been job losses during the past 20 or 30 years, there have also been successes. Companies such as Lochcarron, currently based in Galashiels, have built themselves up and are now significant employers. During that period, the strength, resilience and development of the cashmere business in our area have been very noticeable. Although problems have been exacerbated by the recent levels of the pound and interest rates—perhaps, in due course, there will even be an effect caused by our non-participation in the euro—people understand that those are large issues on which there is legitimate debate. However, in the borders, people are perplexed about why a trade war between the United States and the European Union should have such a potentially devastating impact on our area—indeed, no one can understand it.
The banana war, as it is called, has nothing to do with the borders. It may relate to important principles of trade between the EU and the United States, but British and Scottish borders traders have been very fair competitors over the years. Whereas so much devastation has happened in our area as a result of outside factors involving decisions by companies in the middle of America or elsewhere to close huge factories, the current problem has nothing to do with economic trends. It seems to us that it is the result of pure spite and retaliation, which should have nothing to do with our area.
I should like to highlight the dependency of the borders on the cashmere sector. It is a highly successful sector. It has allowed itself to develop into premium-pricing areas. Cashmere from the borders features in all the top areas. In Tokyo, on Madison avenue, in London and Paris—you name it—Scottish borders cashmere will be in evidence. The cashmere sector employs 2,500 people, which is almost half the remaining jobs in textiles. It is estimated that there are £20 million-worth of exports a year to the United States alone. Fifty per cent. of EU cashmere exports to the United States come from the United Kingdom. It is estimated locally that as much as 90 per cent. of United Kingdom cashmere production comes from the borders.
As the hon. Member for Oldham, East and Saddleworth (Mr. Woolas) has said, the catastrophe looming in the industry arises because now is the buying season. Now the important decisions are being taken by American buyers about what they will stock in their shops in the next few months. While we hear much about how quickly trade wars can be stopped, the United States buyers are looking now at what prices they will be paying this spring or autumn. As they see the doubling of prices that they may be expected to pay, they look to local producers to share that pain. Some businesses that are very dependent on the United States for their business are contemplating either losing the business because they are no longer competitive or taking on absolutely massive risks by insulating the prices for their buyers.
The borders is only a small area of 100,000 people. Compared to some of the major conurbations in England and Scotland, it may not seem significant, but we have 271 seen in so many sectors in the last while the devastation of small communities across the Scottish borders. People cannot comprehend why this particular trade development should put so many more jobs at risk. I am the first to acknowledge that some extremely complex negotiations are going on. I have been pleased at the way in which the Department of Trade and Industry and other Departments have been keen to brief me and my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) on developments.
When I was across in Washington recently with the Select Committee on Scottish Affairs looking at inward investment, the British ambassador arranged for a meeting between me and members of the United States state department. We have had access to people to make our points in various parts of America, Britain and Brussels. I am under no illusions about the complexity of the arguments. However, we find that the confidence is going out of the industry by the day, and people are worrying about what the future holds.
We are not clear about what happened this week at the WTO. To all outside the arcane negotiations, it appears to have been a complete shambles. That is something that we in our part of the world cannot afford to sustain for much longer. I hope that the Minister will be able to update the House on the industry dispute and reinforce the efforts that he, his Department and other Ministers at whatever senior level are doing to ensure that this trade war, which has absolutely nothing to do with the Scottish borders, is ended before it ends jobs in the Scottish borders.
§ Mr. Terry Rooney (Bradford, North)
I recognise the pressure on time so I will try to be brief. I congratulate the hon. Member for Tiverton and Honiton (Mrs. Browning) on securing this debate. It gives us an opportunity to talk about an important industry. I am from Bradford, which used to be the wool capital of the world. I am not sure what description is applied to it now. It has been devastated by what has happened to wool textiles in the past 20 years. My mother, father and two brothers have spent their working lives in textiles. Between them, they have 91 years' service, but unfortunately they also have 23 redundancies. Every reason for problems in the textiles industry has caused a redundancy in my family. I speak passionately, from personal experience of the problems.
My hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas) said that there had been 100 years of decline in the textiles industry. Unlike him, I cannot go back that far, but I can look back at significant factors that have affected the wool textiles industry in the past three decades. I am afraid that the management of the industry have a lot to answer for over many years. They failed to be bright and proactive.
In the 1960s, managers decided that the industry could survive if it reduced its labour costs by importing labour from the Indian subcontinent. That would be the solution. There was no investment in plant, machinery, new products or new buildings. They simply reduced costs by bringing in labour from overseas. That obviously failed.
In the 1970s, the answer was seen to be mergers. They did not often involve redundancies, but dozens of smaller companies merged without cohesion, co-ordination or 272 management plans for the future. Companies were merged simply to create bigger groups. In the 1980s, for whatever reasons, the industry suffered the most severe recession that it had ever seen and in West Yorkshire we lost 50,000 jobs. The list that the hon. Member for Tiverton and Honiton read out was impressive, but the county of West Yorkshire lost 50,000 jobs in that recession. That produced at last a hard-headed look by the industry at itself, its future and where it could go. As other hon. Members have commented, that refocus resulted in the industry going for the high added value markets, especially Japan and the United States. That brought other problems, to which I shall return.
After the recession there was serious investment in the industry. Sadly, in recent years that investment has fallen off, but in the late 1980s and early 1990s we began to see a plan of action. The hon. Member for Tiverton and Honiton mentioned the Transport and General Workers Union. It is what I have always called the National Union of Dyers, Bleachers and Textile Workers, which was subverted by dubious means into the monolith known as the TGWU. The textile workers section headquarters is in Bradford and always will be. It is about 100 yards from my constituency office and the general secretary is the greatest guy in Britain.
Three issues have had a long-term impact on the industry in the past 10 years. One is the multi-fibre arrangement and the previous Government's failure actively to enforce it and promote its future. The second is the Uruguay round of the general agreement on tariffs and trade. The textiles industry was sold out by the previous President of the Board of Trade, the right hon. Member for Henley (Mr. Heseltine), in order to reach an agreement for agriculture. The consequence of that was an agreement by the free traders of the previous Government that exports from Britain to the United States would have a 37 per cent. tariff imposed on them. So much for the free traders in Washington. The tariff would be reduced by 1 per cent. a year for 10 years. So the next time GATT is up for review, we shall start from a 27 per cent. tariff on exports to the United States.
The third issue was assisted area status. My hon. Friend the Member for Oldham, East and Saddleworth mentioned objective 2, but assisted area status has always had a bigger impact. In 1993, my city of Bradford had that status removed in order that Hastings, Yarmouth and places like that could get it. That had a massive impact on the possibility of helping textiles companies in temporary difficulties by giving them regional selective assistance. Many companies went to the wall that could have survived if they had received assistance for a temporary period. We want to live not in the past but in the future, but we need to know and understand how we got to the present position, so that the same mistakes are not made again.
I point out to my hon. Friend the Minister for Energy and Industry—who, as I said last month, was born in the same hospital as me—that we still face the problem that the Governments of Germany, Belgium and Italy are giving significant, illegal support to their textile industries. Either we take that illegal step, or we stop them taking it. I do not care which, but if our industry is to compete, it must do so on the same basis as theirs. In Germany, support is given through the lander, the local government, and is semi-hidden, but everybody knows it is going on. It is not fair; it is not right and it must stop. 273 I support what my hon. Friend the Member for Oldham, East and Saddleworth said about the action plan for the industry. I hope that all sides in the industry seek to make that work. We need a much more focused effort on design, sales and marketing because our products are good, but other aspects have not always been as good. We need to sort out the supply chain and get all the links talking to each other so that they understand each other's needs and problems.
Our textile industry is a fine industry with superb products. We need to promote and sustain this £27 billion industry and its 350,000 jobs. We need not only to look to the future but to learn from the past.
§ Mr. David Tredinnick (Bosworth)
Twelve years ago, I made my maiden speech on the hosiery, knitwear and textile industries. I went to consult the leaders of those industries in my constituency and asked them, "What are the key points that I should make in the Chamber?" They said, "You must refer to the import of cheap Chinese underwear." I need hardly point out that that was a difficult speech to write.
I have lived and breathed the issue since then, and today I want to highlight the problems in Leicestershire, where the industry is very important and accounts for 9 per cent.—35,000—of all jobs in the county. The problems are exacerbated by the fact that three quarters of companies in the industry employ 25 or fewer people, as my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) pointed out.
The key point that I want to make to the Minister is that high interest rates have had a devastating impact on the local economy, which has contributed more than anything else to companies' difficulties. I know that interest rates have come down, it was too little, too late. It was too late for companies such as Ray Allen Ltd in my constituency. In my constituency, many of those companies have been downsizing.
The Minister said earlier that we were talking down the industry. That was an outrageous remark. I have come to the debate to articulate the industry's problems and tell the Government how serious those problems are. The Minister should remember that, when the previous Government left office, we had a stable economy with low interest rates.
§ Mr. Battle
Will the hon. Gentleman give way?
§ Mr. Tredinnick
The Minister will have an opportunity to speak in a moment. He knows that he took over when the economy was in a much better state than it is now and that interest rates have caused the key problems.
The hon. Member for Oldham, East and Saddleworth (Mr. Woolas) and others referred to low-cost competition. [Interruption.]
§ Mr. Deputy Speaker (Mr. Michael Lord)
Order. Time is limited and the Minister will have an opportunity to respond in a minute. Sedentary remarks are not helping the debate.
§ Mr. Tredinnick
Low-cost competition from overseas is a devastating factor, as are problems with the 274 multi-fibre arrangement and possible trade sanctions caused by a dispute about bananas, which were referred to earlier. We had to worry about straight bananas and bent sausages in the previous Parliament, and they are back again.
The Minister must take on board the fact that manufacturers in my constituency blame the Government and hold them to account. We look forward to his response.
§ Mr. Tim Boswell (Daventry)
It is a customary courtesy to thank and congratulate the hon. Member who opens an Adjournment debate, but in this case, it goes beyond a mere formality. I am very grateful to my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning), as the whole House should be, for introducing the subject, and for the doughty way in which she stood up for her constituents' interests.
In no sense are my remarks intended to derogate the major contributions that have been made by hon. Members from all parties, who knew what they were talking about, including the hon. Members for Oldham, East and Saddleworth (Mr. Woolas) and for Tweeddale, Ettrick and Lauderdale (Mr. Moore), my hon. Friend the Member for Bosworth (Mr. Tredinnick) and the hon. Member for Bradford, North (Mr. Rooney). They were an eloquent bunch and explained the industry's problems.
The opening contribution of my hon. Friend the Member for Tiverton and Honiton was helpful in that she set in context the particular problems of one major player and reminded us, as did other hon. Members, of the industry's complexity and wide geographical distribution. As one hon. Member pointed out, the industry directly employs more than 350,000 people, so it counts for us all.
We know that the industry is rich in tradition—it can well claim to have founded the industrial revolution—but it has modernised itself, particularly in the past few years, with a heavy investment programme and radical changes of attitude. It is extremely encouraging, for example, that 60 per cent. of wool production is exported. The problem is that having reformed itself, the industry is now frustrated.
We were disappointed by the Minister's earlier remarks. He can redeem himself in a moment. I make him an offer: we will not run down the industry—we do not seek in any way to do so—if he will not fall into the trap of complacency in dealing with the industry's problems. Megaphone diplomacy about the past, and even the present, is nowhere near as important as a constructive attitude to the future.
The present position is not a happy one, which is demonstrated by representations that my hon. Friend the Member for Tiverton and Honiton and I have received. The British Apparel and Textile Confederation says tactfully that the economic situation is very difficult and points out that exports in the first six months of last year were 20 per cent. down on the comparable period of the previous year. The Confederation of British Wool Textiles says that there are no signs of any improvement and 1999 will clearly be another traumatic year for the industry.
Surveys show that last year, when consumer demand was comparatively buoyant and rose by 3.3 per cent. in the first half of the year, employment dropped by 4.3 per cent. That is the absolute figure and does not take account of short-time working. There is a difficulty.
275 A possible trap for the industry is that it will pursue niche markets. Of course it is important that every industry should target an appropriate market, but I hope that the Minister and anyone listening to the debate will not feel that the answer to the industry's problems is to select a particular sector and disregard all the others. Two areas of clear excellence in this country are bespoke tailoring and designer clothes. From my days in education, I have links with Central St. Martin's college. It is great to go to its student shows, particularly when one remembers that previous students have been called Galliano and McQueen. However, that is only a small percentage of the industry. When selecting markets, Savile row and the catwalk are all very well, but underpants matter too.
That brings me naturally to Marks and Spencer, which is the major player in the industry, and other important and well-known brand names. Those companies face severe commercial difficulties at the moment, arising from flat domestic demand, which has led to overstocking. That leads to a sales and sell-off culture, which has repercussions as people hold back their purchases for the best opportunity and can yet further depress prices. I am sure that companies represented by interests in the UK and people who know the industry well will devise strategies for trading through that, but there is likely to be a further shift abroad of parts of the supply chain and a reduction in UK employment.
The Government cannot duck their responsibility for the problems arising from the exchange rate. The exchange rate is coming down at last, but it has added to problems which have been further compounded by the weakness of the south-east Asian economies in particular.
As the hon. Member for Bradford, North reminded us, we must remember the industry's potential. In the White Paper on competitiveness, the Government acknowledged that import pressures will increase further when the existing quotas are phased out in 2005. Several hon. Members mentioned the specific and immediate problems arising from the banana war and its impact on the cashmere industry. It is reasonable to ask the Minister and his colleagues at the highest level to be as robust as possible in standing up for British interests.
I must mention the internal solutions that the industry is seeking with the assistance of Government. The White Paper conceded that, despite all the efforts that have been made recently, productivity is still higher in Europe than in the United Kingdom, but the textile industry wants to do something about it. Like other hon. Members, I especially welcome the efforts made by the social partners on both sides of the industry to develop an action plan to make the industry more productive. That may include some requests for Government help and, in particular, export promotion. We can argue endlessly about who did what, but the point is that there is a strong interest in expanding the British footprint in that sphere.
We need to keep a careful eye on our European competitors in order to produce a level playing field. As the hon. Member for Bradford, North said, either we can do more or they can do less, but it needs to be on a fair basis.
A point that has not been flagged up as clearly as it should have been is the need for a constructive, industrywide approach to staff training, development and 276 retention. I know that the Minister met representatives of both sides of the industry on 24 November to talk about the action plan, and it will be helpful if I leave him time to tell us where we have got to with that.
The innovation and excellence of the industry, and its determination to modernise itself and to fit itself for international competitive trading conditions, could come to nothing if sensible general economic policies are not pursued. If the industry is suffering now, before the national minimum wage has come into effect or, indeed, before the working time directive has come fully into effect, the implication is that there will be further pressure on the industry later. The same is true in respect of further taxes which are building up on business generally.
What we ask of the Government is realistic intervention—yes, we will use that word—to help the industry to overcome its internal difficulties and to fit itself for the future. Above all, we ask for a sensible macro-economic policy which will steer this industry and others in the right direction. The Government have their responsibilities to the industry and more generally, but nothing can compensate for the failure of economic policy, a failure already apparent in the difficulties that the industry, despite all its efforts, is facing.
§ The Minister for Energy and Industry (Mr. John Battle)
I thank the hon. Member for Tiverton and Honiton (Mrs. Browning) most sincerely for raising this topic on the Floor of the House. My regret is that we cannot speak about textiles all morning. We should have debated the topic much more when I was in opposition. I regret that I shall be able to respond to only a few key points.
My own experience of the textile industry in my city of Leeds goes back some years. Between 1981 and 1996, when interest rates peaked at 15 per cent., 9,000 textile jobs were lost in my city alone. I speak with some passion and anger about the fact that Opposition Members have woken up late to the problem because, as my hon. Friend the Member for Bradford, North (Mr. Rooney) explained, the devastation of the textile and clothing industry caused by Government policies over the past 20 years is incontrovertible.
I welcome all the speeches and interventions made today. Serious points have been made, and in the few minutes that I have I should at least touch on one or two of them, especially the threat to the cashmere and textile industry in the borders, Yorkshire and elsewhere. The industry is affected by the trade dispute between the United States of America and the European Union over bananas—arcane though that may seem to many of us. We are doing all that we can to resolve that dispute. I assure the House that intense negotiations have taken place.
I understand that the World Trade Organisation is meeting formally again tomorrow to pick up the threads of the conversation. In the meantime, the European Union, the US and the Director General of the WTO are in negotiation. I assure the House that the Government are raising these matters at the very highest ministerial and governmental levels, with letters and other exchanges being used to keep up the pressure. We will not resile from keeping up the challenge to ensure that our industry is not jeopardised.
277 Of course we are supporting exports by the textile and clothing sectors. As for trade fair arrangements, in the new 1998 round, 45 clothing bids—or 62 per cent—were successful, not 19. That is higher than the average for other industries, so the hon. Member for Tiverton and Honiton might concede that we are making a considerable effort. As my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas) said, it is the number of firms that take part that is important, and more than 700 firms will benefit. If the sponsors' predictions are correct, more textile and clothing firms will be supported in 1999–2000 than were supported in 1988–89. We are keen to promote exports and are doing all we can—that is a fact, not a party political point.
Let me put the debate in context. Of course I am not complacent. I accept that the industry is under pressure—I see that in my own city—but I could have read a list of success stories to the hon. Member for Tiverton and Honiton. The picture is patchy, but in contrast to what happened over the previous 20 years, the bottom is not falling out of the industry. We are stabilising the industry. Our macro-economic strategy is reducing interest rates and getting sterling down to a competitive level. Our general economic policy is stabilising the conditions for the textile and clothing industry, and there are successes.
The company that the hon. Lady mentioned is a success story that should be celebrated, and I welcome her efforts in that regard. Other successes include Desmonds and Brinton's which has made carpet tiles for the new Hong Kong airport. There are also examples of innovation—for example, knitwear companies are using new computer technology. Some companies are using new technology to refresh and regenerate old manufacturing processes. That is precisely the way they must go if they are to be able to compete in intensely competitive global markets.
278 Textiles were mentioned in a positive light on the news at 6 pm the other day. Last September, a company called Autofil put money into the purchase of a £20 million factory near Nottingham. It makes yarn for car seats, and 70 per cent. of its sales are overseas. The directors said:it was quite a gamble but despite the strong pound and talk of recession it seems to be paying off.The BBC news bulletin stated that for a company like Autofil
official statistics are largely irrelevant…trading conditions are tough but well managed companies with good products can still prosper and that's a big difference between this economic down-turn and the last recession.The Government are taking action, as shown by my Department's funding for 25 innovation projects in this sector, such as that at J. W. Whiteheads in Bradford, which is doing research into the development of new yarns and technologies. Reuben Gaunt in Yorkshire is improving the strength of yarns during weaving. Skills and training projects are backed by the centres of training and excellence, some of which were mentioned. Mention was also made of Kidderminster college, and work is being done at colleges in Leeds to ensure that the proper skills and training exist to take the industry into the next century.
On the supply chain, we are working with the apparel and textiles challenge to bring the retailers, buyers and designers together to integrate the various parts of the industry so that it works more efficiently.
That is some of the action that our Government are taking and will continue to take. We shall support regional selective assistance. In the past few years, £9.6 million has been allocated. Attempts have been made to call the industry together, not for a talking shop, but to draw up an action plan, which belongs to the industry and the trade unions working together to develop and deliver it—
§ Mr. Deputy Speaker
Order. We must move on to the next debate.