§ 5.29 p.m.
§ Lord BARNBY rose to call attention to the present plight of the textile industries; and to move for Papers. The noble Lord said: My Lords, unemployment has a high priority and topicality for everyone. This debate has no political partisanship, and it is approached from that angle. The position today, as authoritatively stated, is that 150,000 textile industry workers out of a total of more than 948 850,000 are either unemployed or underemployed, and this in an industry that has historically been high in the export league. It is at the present moment suffering from imports on a scale which is producing a crisis. Imports are on a scale which, it was asserted, at Ministerial level, in a pivotal section of the industry, spinning, amounted in 1974 to 26 per cent. of the industry's consumption while the year before the figure was only 14½ per cent. It is authoritatively stated that if the total imports of textiles of all characters are taken into account the figure would probably be above 50 per cent. of the total internal consumption.
Representations have been made by the industrial associations to Government Departments. Every kind of information has been given. Perhaps the most authoritative is that of the British Textile Corporation, which, may I remind your Lordships, embraces the whole of the textile interests, all the associations constituting it and also the trade unions that constitute the industry. It is also the representative body of British textile industries in the Comitextile, which is the all embracing organisation in the European Community which received such strong endorsement by your Lordships yesterday. I can perhaps best indicate the state of the industry by quoting Alan Clough, the Chairman of the British Textile Corporation, who currently says:
Recession in the British textile industry is greater than in any time since the 1930s. There is now grave danger that the industry will suffer irreparable damage unless steps are taken to secure its survival.
§ There was in the latter part of March a two-day debate in the other place with over 30 speakers engaging themselves on the plight of the textile industry. There was extracted from the Government an assurance that the Government stand for and desire a viable textile industry. That debate included a comprehensive speech from the Parliamentary Under-Secretary, who obviously was fully seized with a great deal of information that had been fed to him. There has been no lack of action by the industry in acquainting the Government with the situation. Indeed, I would go further and say that, arising from the discussion which the BTC had with the Secretary of State, very properly, questions of many characters were asked 949 by the Minister and he has been furnished with information which, there can be no question, is fully meeting all the points of concern which he raised. The situation is certainly critical and it calls for action—action, not words.
§ The points we ask for I come to right away: first, that there shall be a 20 per cent. reduction across the board on all textile imports that occurred in 1974; secondly, that licensing surveillance, which has been imposed by the Government on a portion of the industry, shall be extended to all apparel and manufactured garments of all kinds; thirdly, that negotiations under the MFA (that is the Multifibre Agreement) shall be energetically pursued by the Government so that there can be a more swift effect in the near and medium term following negotiations. I would add a subsidiary point applying only to the wool textile industry. The Government should act swiftly to get the European Community to exercise its available authority to make sure that the irregularities which are alleged affecting wool textile imports from the region known as Prato shall be corrected. They concern social services and need to be corrected. I read in a newspaper only yesterday that the Government are to take action under this head, and I hope the Minister can today assure us that such is the case.
§ May I remind your Lordships that the large textile industry is divided under three main heads: cotton textile, wool textile, and synthetic fibres. Formerly these sectors were distinctive but now they are obviously co-ordinated. We are fortunate today in that I see from the list of speakers that we are to hear from the noble Lord, Lord Hale, who speaks with that long authority he has of the Lancashire cotton trade; the noble Lord, Lord Rhodes, who has spent all his life with the wool textile industry and is reinforced by his great experience as Lord Lieutenant of Lancashire. We are also to hear the noble Baroness, Lady Hornsby-Smith, who has long been associated with that giant in the textile industry, Courtaulds, and she certainly can speak with authority about their products. I am glad to see, too, that the noble Earl, Lord Shannon, is to contribute because his knowledge of research associations gives him intimate experience 950 relating to the efficiency of the textile industries.
§ May I ask the indulgence of the House to refer to a personal matter to assert that I speak with some knowledge of the textile industries. I have been associated with the textile industries all my life, a long life. I have seen many recessions or depressions. The first I can remember occurred in 1908 when I was in the United States of America managing the family firm. Then there was the depression following the so-called Knickerbocker Trust panic. There was fear that the Democratic Party would take off the duties. It was only as a result of the Election 1908, when William H. Taft was elected as President in the United States, that there was confirmation of the Republican McKinley duties which restored activity and prosperity to the industry. Again, I remember 1926 in this country when we had returned to the gold standard. At one stroke sterling was raised by 15 per cent.—to the disaster of the export industries, and of course textiles were high on that list that time. To come to more recent times, the 1930's were a terrible experience. The position was restored only by the imposition of the McKinley duties.
§ I have nostalgic memories of going from Yorkshire to Lancashire by train, looking out of the window and seeing cotton textile mills sprouting up like mushrooms in the first decade of this century. As examples of the depression of this great industry, the noble Lord, Lord Hale, could tell us that today these cotton textile mills are being used as warehousing for mail order houses, for raising broiler chickens and so on. The decay of the cotton textile industry has been tragic. I remember that before 1914, 80 per cent. of the wool textile machinery in the United States was of Bradford origin. Today, those exports are not 5 per cent. Those are very nostalgic memories and I hope that the House will pardon me for referring to them.
There is a temptation to refer to a wealth of figures. I shall not do so but will content myself with quoting the Chairman of the Wool Textile Industry, which is the central organisation for the whole of the wool textile industry in England, Scotland, Wales and Northern
Ireland. Mr. Roy Strouddel, speaks, therefore, with authority when he writes:
The outlook from the point of view of the wool textile industry is indeed very gloomy. The majority of people see a worsening situation before any improvement, which, as most firms are working on short-time today, is very serious. The import situation only exacerbates the situation. As you know, as soon as trade turns down, there is a drift of trained employees away from the industry, and as the pipeline will be absolutely empty, because of destocking for liquidity reasons, when the upturn comes the industry may find itself in difficulties in meeting the demand, thus sucking in more imports. So we need this temporary restraint on imports in order to try to hold the position at no worse than it is at present.
I hope this will mean that the noble Lord, Lord Lovell-Davis, who is to reply to the debate and who, as an industrial archaeologist, has deep experience of the origins of industry will at least be sympathetic towards the textile industries. I hope, also, that he may be authorised today to give us some encouragement and expectation of what I asked for earlier in my remarks.
§ That the industry is efficient is shown by its achievements in research and by its exports of the machinery of all characters that it requires; and it is an industry that requires very wide characters of machinery. The wool textile industry is the recipient of a unique investment grant system, and the Government hope that it will be increased. However, may I remind the noble Lord, Lord Lovell-Davis, that any industry requires great courage to invest more freely in that industry in a period when inflation is of the order of 20 per cent. Profitability must be assured.
§ May I remind your Lordships that historically the industry has been on the horizontal rather than the vertical scale. This means that all sections of the industry must be viable; it is no good letting pressure produce such decadence in any one section that it is not able to make its contribution to the whole chain. Active home demand is essential for effective exports. This is a crisis. There is need for Government action without timidity, exacting to the fullest extent the possibilities of our rights under the Treaties. My Lords, God helps those countries that help themselves. I beg to move for Papers.952
§ 5.45 p.m.
§ Lord RHODES
My Lords, I am proud to follow the noble Lord, Lord Barnby, this afternoon and to congratulate him upon being successful in the ballot. May I congratulate him, too, on the way he has put over the case for the textile industries. We have been associated with this industry all our lives— although in my case not for so long as the noble Lord, Lord Barnby. In all probability, he was in a section of the industry which considered itself to be the aristocrat of the trade, while mine was a little more lowly! However, over the years both of us have had a great affection and love for the industry and for the people who are in it. They are the kind of people who put the kettle on when you go in. not when you are coming out! That, I think, expresses the sentiments of both of us towards this industry.
The noble Lord can go back further in time than I can, and he has said that he has seen many ups and downs. So have all those of us who have been associated with, and who have had to earn their living in this industry. I can say that I am still interested in the industry and that I am able to declare an interest in it. Nevertheless, today I am in the position of being able to look at this industry in a more objective manner than I have ever been able to look at it before, and I can say without equivocation that the situation in which we find ourselves today is far more serious than anything that has happened since the turn of the century.
The first major blow that it had was in the 1920s when the blazingly cheap textiles from the Far East began to pour into our markets all around the world. The decline in the wool industry did not come for a considerable time after that, because of the craftsmanship that has to go into the wool fabric—craftsmanship which cannot altogether be measured in terms either of technique or of anything else, except the hands of the person who is working on the cloth. It was a long time before the Japanese mastered that craftsmanship, but eventually they did so and during my time at the Board of Trade I saw a reversal of the amounts we were exporting to the United States of America— Japan taking the larger quantity from us, and Britain exporting the smaller quantity which had previously been exported by the Japanese.
953 Having said that the crisis is deeper than I have ever seen it before, may I go on to praise those who are working on this job in the Department which used to be called the Board of Trade. We have people there who understand this job inside out. They have all the statistics; they have all the information from sources all over the world. They are trying as hard as they know how to do something about it. What they can do about it I will come to in a short time. But I know that they are in turn desperately seeking the opinions of people who have an objective view, and perhaps this afternoon they will get views which may prove of use to them.
When I started in textiles they were very unsophisticated. There were the natural fibres— wool, cotton and silk — and then the man-made fibres came in. But all the time consumer choice has been growing, advertising has been growing and every time the trade cycle has hit the wool and cotton and man-made fibres industry the disturbance has been more violent. The factors are different now. We not only have a recession all over the world; we have some very severe self-inflicted wounds in terms of the contribution to inflation that we are foolishly making throughout the country in one form or another.
It is not raw materials alone which cause the upsurge in prices, but of course a succession of wage demands, and increases in prices to the manufacturer having to be taken into his costs. Raw materials used to be looked after by the commodity exchanges, and manufacturers had to protect themselves from the ups and downs by using these exchanges. But now we have inflation breeding inflation, surplus money buying surplus goods, leading to the time when our people have been buying consumer goods, just as a few years ago we were buying consumer durables on the basis of "Get your money spent". We do not yet know what the true level of textiles will be, but it will not be long before we find out. However, there is one thing that is certain; that is, that we cannot allow this industry to be decimated any more, because if it is the trouble that we have experienced in our balance of payments at the hands of OPEC will be equalled by the trouble we shall experience if the textile industry is allowed to be run down.
954 It may be said that if cheap goods come in that is bound to bring down the cost of living, but the question arises: do we allow free imports of clothing to come in at low prices, which in theory reduces the prices here, or do we curb imports in order to keep a reasonable figure of employment in the industry? We are worried about how much we shall upset our trade partners. It is only natural that we should be thinking about these things, but times are very strange. We have never experienced anything like this in our history. Countries with sophisticated machinery— more sophisticated probably than ours— who have surpluses at the present time are exporting surpluses overseas. New phenomena are emerging every month.
Take the case, my Lords, of the manufacturers in America shipping their polyester fibres over to this country on a scale never known before. They have not put up their oil prices since OPEC began, 12 months last November. Polymers made from the oil are at the same, or nearly the same, price as before OPEC increased theirs. They are now shipping polyester fibres and products made from it at a rate that is causing disruption on a large scale.
What has been done? The Government have set up surveillance committees and the trade as a whole is grateful for that. The licensing of man-made fibres and of all yarns and fabric imports from countries not in the EEC is under consideration. But, as President of the Clothing Export Council, let me say that it is not going far enough and I know that the need is there for the surveillance of made-up goods, knitwear and clothing. I agree entirely with what the noble Lord, Lord Barnby, said, that the textile industry as a whole depends for its existence on a viable making-up industry. Every measure of people that we have had in this industry over the years has left its mark, and I noticed in reading the Hansard report of the debate which was held in another place on 20th March that Mr. Meacher, who was replying for the DTI, was accusing textile manufacturers in this country of buying yarns and cloth from abroad and he implied that the textile industry should put its own house in order. May I say in answer to that question that it is impossible for a viable textile industry to do without all kinds 955 of fabrics to make up a range, and this is no exception.
If we do not take action at a time like this, disparities and distortions will grow. We know that the industry and the retailers need access to world textiles to give variety and to enable them to obtain fabrics which are no longer available in this country. But it is the extraordinary imports which the textile industry is subject to at the moment, when countries all over the world with surpluses are directing their exports to the easiest market in the world; that is, this country. We must do something about it, but the question is: what are we to do? What are the alternatives?
In 1964 we had an import surcharge; in that year we started building up a structure of agreement between one country and another so that there would be a voluntary curtailing of exports to this country. This was largely successful. But those figures have been exceeded tremendously over the last couple of years. While it may be said by the Minister that imports into this country have declined somewhat during these last three months, may I point out to him that they are running at a sufficiently high figure to ruin the textile industry here. There is a large amount of textiles coming in at a time when our own production is low and it is hitting us at a very difficult time. Alternatively, do we adopt Italy's import deposit scheme of last summer? Or, do we impose quantitative restrictions, as we did soon after the last war?
It is suggested that action by the EEC or the United Kingdom will produce counter-reaction all over the world. But it is my belief that industrialists in other countries would rather see a steady viable market for their goods here than a situation of "boom and bust" that we are now facing. It may be that Government can assist by making bilateral arrangements, such as the United States has already made with many countries in the Far East. But I am coming to the conclusion that time is running out; we have to act. We have to decide which of the methods brought to your Lordships' notice best suit the circumstances, or whether it would not be better to have a 20 per cent, cut right across the board. Action is imperative now.
956 Take it from me, my Lords, as an old-timer in this industry, do not hesitate— curb what is coming in now. The industrialists overseas will make no trouble. But it will give heart to those textile people in this country who are looking for some action to be taken, and to those technicians who at the moment are wondering whether they will be better off employed by periphery countries who are setting up textile industries with Arab money. This is not alarmist; it is fact. I meet them every week. Think about the human aspect, the economic common sense of what we are saying, and I have no doubt that the Government will come up with some action. Unless they do, the industry cannot survive.
§ 6.2 p.m.
§ The Earl of SHANNON
My Lords, I too, am indebted to the noble Lord, Lord Barnby, and his good luck in securing this debate this afternoon—a debate on a painful subject in more ways than one. I am most diffident in intervening in a debate where there are so many noble Lords with far greater knowledge of the industry than I. However, at this point I must declare my interest in industrial research, as well as my membership of a research requirements board of the Department of Industry.
My Lords, I appreciate the concern of the previous speakers. I also understand what I believe to be the attitude of the British Textile Confederation. But I think that basically that is a negative attitude, although to ask for restrictions, as a previous speaker has pointed out, is a course to which we have been driven and which is now absolutely essential. In this debate I should like to take a slightly different, and I hope slightly brighter, line of argument. Although speaking mainly about the textile industry, I would remind your Lordships that many of the arguments I am trying to deploy will be applicable to our other traditional industries. I begin with a quotation from the preamble to the report of the Working Party for the Formation of the Federation of European Industrial Co-operative Research Organisations. It is as follows:It is to their established, traditional industries that the countries of the European Economic Community as elsewhere, must continue to look for the production of the bulk of their industrial output and for the employment of the majority of their national working population in industry.957 Politicians forget this at their peril. Unfortunately, as we have seen, too many of them seem to be utterly immune to, and unaware of, their peril.
To return to the textile industry in particular, perhaps we should for a moment pause and consider how and when it was created. Unlike the noble Lord, Lord Barnby, I tend to go back much further, though I assure your Lordships not with personal recollection. You do not, as this country did, establish a large and important industry unless in one way or another you have an edge on your competitors. We are reminded particularly in this House of the very early days of the British textile industry in that the great Officer of State who presides over your Lordships' House was sat upon a sack of wool to remind him upon what England's prosperity in those days depended. It was on the export of wool for weaving, largely to the Low Countries, I understand. In those days this country was an exporter to other countries of raw materials for processing. Textiles in those days and for many centuries was a cottage industry, but we established a great industry out of it. How? Not by doing the same thing as our competitors, or perhaps by just having more cottages in which to do it. We did it by using our brains and technology, resulting from and contributing in a large way to the industrial revolution.
Nowadays, machinery has world-wide availability and we are back attempting to compete on a level basis with other countries which have lower labour costs and overheads. It is highly creditable that our traditional textile industry has done as well as it has in the recent past. I think we have in our hands the long-term solution that we have always had. As before we should use our capability for innovation and development. I am not suggesting that we shall come up with another spinning jenny. Also, as I have mentioned, any new development that is around the world is available to our competitors in a comparatively short time. Developments here with our own inborn innovative capacity will give our industry a lead for a while, by which time we hope we will have gone on to the next stage. This is the edge we had before, which we still have and which we should use now.
It is a fact of recent modern history that there can be no great national industrial 958 presence in any particular industry on a world scale without the home Government's support and assistance. This is not always necessary in just straight cash. I appreciate that from a political point of view there are no votes in research. In industrial research, especially in traditional fields, Ministers appointed to look after the matter tend to have a comparatively short Ministerial life. They are usually comparatively junior in the hierarchy, and often are unaware, on appointment, of the details of a particularly complex subject. They have to get down to learning about it. If they do well, all too often and all too soon, their Party leader says, "There's a bright chap; let's move him to the Foreign Office". If he does badly, he is probably sent to the Back-Benches again to give someone else a chance, and the cycle starts again. Is this the way to treat the one great aspect of our national capability which made our industry great in the past, and will continue to do so?
My Lords, I count as traditional industries those which have been with us for some time, are established and produce the bulk of the national output, and supply employment for the bulk of the labour force. Traditional industry accounts for over 90 per cent, of our national earning power in world markets. Our Government spend about £1,000 million per annum on research and development. Less than £10 million is spent in assisting research and development in those often considered unglamorous areas of traditional industry, which nevertheless are the areas which supply the bread and butter on which we all live.
I have deliberately given very rounded figures. I know there are many qualifications. Much money is spent on defence and other necessary things. But I would impress on the House not the detail of the figures, but the gross, incorrect imbalance of Government assistance, not just in matters of percentages, but in orders of magnitude. This practice has been common to many Governments over many decades, and has caused much of the economic trouble we are in today. Of course it is a great temptation politically to spend any such money as may be available on short-term projects with immediately visible and preferably exotic 959 results; but these are not the things which earn us our bread and butter.
My Lords, recently there has been a great improvement in the situation in the establishment by the last Administration, fortunately continued by the present Administration, of the Research Requirements Boards for industry, where people with understanding of the industry can advise on where public money is best spent in this sphere. The only real trouble still being experienced is that these Boards are on far too short a rein when one considers the sums they have for this most valuable investment, as opposed to sums which I suggest are squandered elsewhere with far less potential. I am not suggesting just a small increase in assistance for our traditional industries, assistance aimed at the one area in which we can, will, and do still succeed. I am suggesting an increase in the order of magnitude of under 1 per cent, from where the real returns come. Such assistance would go towards encouraging those companies who arc trying very hard to produce results. It would go towards developing new machines and new processes which, although they may soon become available worldwide, will be developed here, giving the United Kingdom industry a lead in time. Such assistance would be used also to ensure that existing machines and processes are used to the maximum efficiency by our industry.
Noble Lords may say, "That's fine, those are great generalisations". But let us become a little more interesting. With your Lordships' permission, perhaps I may give the House a few small examples of what is going on. These examples may be unexciting, but I think your Lordships will agree that they can, and no doubt will, make a great contribution to the industry and to the nation. Here I must become a little diffident once again in speaking before those noble Lords with such great knowledge of the industry, but perhaps they will bear with me.
My Lords, in manufacturing large quantities of textiles, and sometimes not even very large quantities, one can have tremendous difficulty with colour variation in the dyeing. Modem systems of instrumentation to monitor and control the dyeing processes and to check the 960 colour of the treated fabric will reduce the variations, thus reducing the scrap and improving the value of a consignment. Work is also being done on the development of lightweight nonwoven fabrics, having satisfactory textile characteristics. Many of these new fabrics are under consideration, and could very easily result in a lead to this country.
Then there is development on the very humble aspect of the more efficient techniques for drying. Much of the textile industry involves wetting, drying, wetting, drying and so on, the cycle being repeated with great use of energy. Incidentally, in many other industries, the cycle is often different— heating, cooling, heating, cooling. Here, again, a little unglamorous but intelligent research could well reduce costs, and make a considerable economic advantage for the industry concerned. There are developments in systems for making garments, to shortcircuit the cycle thread flat sheet probably by weaving, cutting, stitching together and making a garment. One can either consider thread to the garment in one cycle, or perhaps thread/shaped piece/stitched together into the garment, and the savings in such work will be obvious. Most probably it will be achieved by knitting techniques. We made stockings this way and lady's tights. Why not make other garments this way?
My Lords, there is one little example which may interest the House. On the Continent, some ladies underpants are being currently marketed which basically consists of a short length of knitted tube open at one end, and joined at a short distance in the centre at the other end. This is a very elementary minisack garment, relying entirely on its stretch to adapt itself to the proper shape in wear. How much better would this be, and also other garments, if produced from thread into a fully-fashioned garment in one operation; not just the current minisack which is a rectangular tube which relies on stretch to achieve the proper shape, but from thread to one fully-fashioned seamless garment in one go. This is being done; I have seen it done in this country. It needs a little more work on it yet, but how advantageous will that be to our industry when we have got it right.
There is also work currently in hand on producing textiles from polymeric film, 961 not from spun thread but from film, and such might be the work being done on fibrillated polypropylene which is being done here at present. All these are unexotic mundane things but, nevertheless, commercially they are very exciting prospects. They are taking place here, at the Shirley Institute, the Hosiery and Allied Trades Research Association, Wira, Lambe Industrial Research Association in Northern Ireland; and much other interesting work is being done in companies, universities and other institutions.
I give these examples to show how we still have an efficient industry. How much more so if we adopt a really intelligent attitude to proper assistance to one area where we can really succeed. It is in the energetic exploitation of the innovative field where we have excelled in the past—and are doing not so terribly brilliantly at present—where the real future of our traditional industry lies. It is not, I suggest, only in restrictive market practices. However, in this instance, through necessity, I support those who request such restrictive action now, as no future, however bright, is of much interest to an industry if it does not see itself living to enjoy it.
§ 6.24 p.m.
§ Baroness HORNSBY-SMITH
My Lords, I should like to add my congratulations to the noble Lord, Lord Barnby, on his very timely introduction of the debate today. No man has given more years to the textile industry and with such distinction. Many years ago, before I was elected to another place, I worked for a company of which he was far and away the most knowledgeable director. I am happy to find myself in consort, and in agreement indeed, with that doughty Lancastrian, Lord Rhodes, and am indeed proud to follow the illuminating and expert diagnosis of the enormous amount of research that the industry does. At different periods of my life I have spent 11 years associated with the textile industry.
§ Lord RHODES
My Lords, may I intervene — Yorkshireman, not Lancastrian; since last April a Greater Manchestonian.
§ Baroness HORNSBY-SMITH
My Lords, I am sure the noble Lord probably prefers the earlier citation to the new one, but I apologise if I wrongly described 962 him. I must declare my current interest, in that I was privileged to succeed the noble Baroness, Lady Burton of Coventry, as adviser on consumer affairs at Courtaulds when she retired last year.
My Lords, long before we had even thought of a motor industry, and electricity, let alone radio, the textile industry was the spine of British exports, as the noble Earl, Lord Shannon, so graphically outlined, and my only protest is that he beat me to the allusion about the Woolsack. I think it is important that in this debate we should emphasise the complete unaminity of both sides of the industry on the desperate need for prompt and effective action if we are to rescue it from a quite disastrous recession. Lord Barnby mentioned that up to February there were 150,000 people on short time, and according to figures given in the other place in that month 8,000 were made redundant. I wonder whether, when he comes to reply, the noble Lord can tell us the end of March figures in relation to the industry.
Last year, textile imports totalled 528,000 tonnes at a cost of £1,090 million. In the fourth quarter, imports rose to two-thirds of the fibre supplied to the home market. I understand that the limited restrictions imposed on foreign fibres and fabrics this month, but not on garments, have not been anywhere near sufficient to halt the industry's bleeding. My Lords, it is not a crepe bandage we want; we want a tourniquet— fast, effectice, and enough to restore to the industry its rightful share of its own market circulation.
There are massive imports coming into this country at very distressed prices, often well below cost. The huge buying capacity of major retailers in Great Britain, and the wide spread of the merchandising community, makes the United Kingdom a soft option for imports, and indeed many of the underdeveloped countries seem to think that to pour their surpluses into the United Kingdom is an inalienable and unstoppable right. Because our market is so highly organised and concentrated, we are quite obviously the Mecca for the overseas salesman. In a dozen calls in London he can obtain more orders from the great chain stores than probably 1,000 or more visits in France, or even, strangely enough, in the 963 United States, where the local store buyer is God and large-scale centralised buying is nowhere near as highly developed as it is in our great chain stores here.
Britain is the first stop for countries with excess textiles to dump. As the noble Lord, Lord Rhodes, said, even the United States has been off-loading man-made fibres, yarns and fabrics into this country, though mercifully their prices are not quite as cut-throat as those from the Far East. Thus, while our home demand, after a pre-Budget spree, tapers off, while retailers limit their stocks to the minimum and manufacturers are keeping their workforces only part-time employed on stockpiling of fibres, fabrics and garments which they cannot at the moment sell, the imports sail merrily in. In some cases, they have increased disastrously in recent months. In only a few have they dropped off.
It is just not good enough to preach to this great industry about our immediate obligations to the developing countries, or even for some people to suggest that by having these cheap goods we are helping to cut the cost of living. In some of the underdeveloped countries, in fact in the average of the Far Eastern countries, their wages are one-fifth of ours. I would warn your Lordships that the quarterly sterling value of imports is not a true guide to the present crisis, as countries are unloading supplies here at savagely uneconomic prices. Imports of man-made fibres have been cut in price on average by as much as 25 per cent, over the last six months. Acrylic spun yarn, which was 164p a kilogram last June, was reduced to 98p in December. So to compare the value of imports with the value of imports does not give a true picture of the bulk of imports coming in. And this at a lime when costs here in wages, raw materials, rates, electricity and transport have soared.
In the last three months of 1974, the price of fully fashioned women's jumpers dropped by 29 per cent. Some years ago, as chairman of a Courtaulds knitwear group and facing fierce competition from the Far East, I brought home some samples because we still had the occasional person who said, "From the Far East? Junk."I threw them at the experts and said: "Right, boys, take them apart and let me have your considered view 964 on the comparison with what we produce."As one of them put it: "They are made on the same machines. They are made of the same fibres, and although quite possibly they have pinched their designs, nevertheless they are as good as we are able to make."As one put it: "If we gave our garment companies the fibre for nothing, we still could not make at that price, not in competition with wages of £10 a month."
In recent years, desperate for foreign currency, the Eastern European countries have joined in the rush for our market. They will sell a suit ex-factory for under £5, although their own people may have to pay £40 for it in the market. When that suit gets here—I am thinking of one particular example—it is sold for £12.99. A £12 suit may be cheap to a civil servant or railwayman who, in his job, has no foreign competition, but it is a season ticket to unemployment for the textile worker losing his livelihood.
I believe that the Department of Industry and the Ministry of Employment are not unsympathetic and are certainly well aware that this great industry is having a raw deal. The Board of Trade, I suspect, and the Foreign Office are the ones who ignore the red light and forecast gloom, retaliation and resentment from our customers abroad when anyone mentions tariffs or quotas. But I have never found that America, Australia, or Canada wait until a home industry is on its knees before they help it. I can remember protesting in Australia because the second largest company in my constituency, who had fulfilled a very large export order they had won and had got it on the ship, were suddenly faced with a total embargo which came on within 48 hours. When I asked the Minister of Commerce in Australia whether this was not a bit tough, he smiled at me beautifully and said: "Dame Pat, that just shows how damned efficient we are." The textile industry is asking our Government to be just as smartly efficient. At the same time, as the noble Lord has mentioned. Italy and Finland have taken action. Why cannot we take action to help ourselves?
In the long term we are not going to increase our trade with the under-developed countries if we have escalating 965 unemployment, if we ruin a great industry like this, because we shall not be in a position to sell the exports in order to find the money to buy our imports. Whatever is said about free trade, it must not be one-sided and at the expense of putting a quarter of the textile industry out of work.
The EEC has recognised that the United Kingdom get the major quantity of these dumped surpluses and the Government are, I know, negotiating what is aptly termed a "burden sharing" programme with the Member States of the Community to restrain textile imports to past levels, plus a growth factor. But in the formula that I have seen we shall still carry the biggest load for the next year or so. This will be too late and too little. We are accustomed to, and tolerant towards, imports in this country, but I think it is about time that perhaps we more firmly launched a programme in these difficult times to "Buy British".
The British textile industry, with all its ramifications, is our fourth largest exporter—it is no small industry that you can write off—and it seeks to remain so, but it can only do so on a flourishing home market of which it must have a greater share. With a worldwide textile recession, every order is going to be harder to win. At this moment, investments are being postponed or cancelled, and many firms are eating up their cash reserves in order to keep their people even in parttime work. Unless something is done quickly many firms will close, and some will go bankrupt.
Our strength in the industry, as the noble Lord, Lord Barnby, pointed out, has been in the balance of the industry, capable of undertaking all the different and varied textile processes. Shatter any part of this complicated edifice, and you can destroy the textile industry in this country. If one interlocking section goes, vast capital investment—and it is a very capital intensive industry—will be sold for scrap, and the foreigner will step in and the industry will not easily recover. The British Textile Confederation is not asking for an embargo, only for an across the board cut of 20 per cent., as has been outlined by other noble Lords, by value on 1974 figures of all textile imports— fibres, fabrics and garments.
The Chancellor of the Exchequer has given grave warnings to this country, and 966 we simply cannot allow this great industry, with its thousands of textile employees, to be sold down the river. Nor can we afford to lose the enormous capital investment that there is in this great industry. I believe that this debate, on behalf of one of our oldest and greatest industries, cuts right across Party lines, and I beg the Government to implement their much publicised aims to sustain employment and reduce short-time working by prompt action to save the textile industry.
§ 6.38 p.m.
§ Lord HALE
My Lords, on Sunday morning I heard a knock at my door. It was barely noon and of course I was not out of bed. But I hurried down to receive a very welcome visitor, a man who for 21 years has been a member of the Royal Academy and one of the best raconteurs that I have ever met. I told him shyly that I was in a state of advanced pregnancy on two speeches about textiles for today, and that I was apprehensive about the result because I had not touched the subject for so long in deference to the two Members for Oldham, who were both friends of mine and who I wished to leave unhampered by observations from me. So he talked to me about his father's early days in the old Satanic mills, of the loss of life in his family, of the toll that was taken in this industry. We talked of the malign fate that had condemned this, the greatest of our industries, to constant and repetitive recessions.
I say to the noble Earl, Lord Shannon, that these were never minor difficulties; they were facing competition all the time from goods that could be sold in this country in competition with ours at prices less than we had to pay America for the cotton. The margins were immense, and every Government interference seemed to be disastrous. I recall my first visit to Oldham in 1937 as a carpet packer when the ivy was growing on the walls of the mills, when 90-odd shops in the main street were closed. Although we had a diversity of industry, that was a crisis that was, to some extent affecting them all. It was a city, a great borough, suffering under the magnitude of a disaster that I do not think was ever realised by people who lived in the South of England.
One Government interference— and until recently all Governments have been 967 pretty well as bad—was to arrange an organised diminution of production by paying compensation for the cutting out of machines. Textile manufacturers were compensated for putting a large number of machines— naturally, quite old ones— permanently out of action in this country. But the Government forgot to order them to be destroyed and they went out to Hong Kong and Shanghai at scrap metal prices to help to build the competition there. We have suffered a good deal from the economy, but the textile industry has worked very hard. In Oldham we make the best textile machineries in the world. It seems almost an anomaly that we are exporting textile machinery abroad. Of course it would not seem an anomaly if the great firm of Platts were in Devonshire and the cotton industry were in Lancashire. It was certainly an anomaly when the man-made fibre industry began to create itself far away from the textile mills, so that it took employment from Oldham which had to be replaced from the Midlands.
I will not quote figures today, because I want to discuss cotton. Textile is a word that now has no meaning. I have studied until I was almost scatty the figures in the various tables. In some, textiles include boots and shoes; in many they include clothing; in all they include man-made fibres, mixtures, cloths, polyesters, rayons, nylons and so on. I used to find that I was often a lone voice in representing this industry, but the noble Baroness, Lady Hornsby-Smith, gave me immense pleasure with her speech, one of the greatest I have heard. I used to think that there were more Members for Hong Kong than for Oldham!
By God! my Lords, I think I have a right to be proud of the part I personally took in War on Want with Harold Wilson, Fenner Brockway, and with Richard Ackland. As one of the pioneers, I have always said, "Let us support the poor nations ".But you do not support them by permitting low-paid labour to be exploited in Hong Kong. Pakistan is a country of immense disaster and suffering. Let us give to them all we can. But we have taken into Oldham a large number of Pakistanis who are employed in the textile industry and working well. We have managed to absorb them, despite their being perhaps 968 the most difficult of immigrants because so few have mastered our language. But we have absorbed them quite happily and without any controversy.
We are paying in oil subsidies to Pakistan, which are being distributed from the Arab oil countries to the tune, we are told, of hundreds of millions. How can anyone argue that by permitting an absolute continuation of cutprice textiles, and putting our people out of work, that we are helping the cause of "War on Want" or any other cause? We would soon be in a position where we should have to look after ourselves entirely. Suppose 60,000 people in the cotton sections had lost their work before this crisis mounted. They always come like a small cloud in the sky that seems rapidly to grow—60,000 out of about 620,000 in Great Britain over the last year or two. That is the price we had to pay.
One of the economic reasons we must face now in the restricted market is that although the production of cotton yarn has substantially increased per head, every time they increased production they put some of their fellows out of work, because there is a limited sale, and the more you produce is an argument that has never worked in my knowledge of textiles. I was instructed by a Labour Government to appeal to the workers to work harder in 1950. I would not. I said what would happen when the foreign politicians appealed to their wokers to work harder—French, German and other textile producers. All you get then is a crisis of over production. All these elegant, charming, economic rules work only where there is a possibility of a rapidly expanding market and organised production and development. I recall the time when textile workers were striking against using the products of slave labour from America — the long cotton famine, the long history of distress of the Irish strike breakers who came and were fully absorbed in the population of Oldham.
I wanted to mention a single event in 1966.I was the guest of the Master Cotton Spinners of Oldham who were celebrating their 100th anniversary. It was one of those occasions that cannot happen in many places. Every trade union leader was there as a guest, and the MCS had prepared a history of the textile industry, 969 with all the strikes and troubles that confronted it in the 19th century. Over the previous 30 or 40 years, they said, not an industrial disturbance worth mentioning was listed at all. There may be a case for saying— and some of them say it — that sometimes the militant gets the benefit and the quiet industrial hardworking man is overlooked, as the nurses were overlooked when Members of Parliament a few years ago were saying, "The nurses will not go on strike." At that time I was conducting a single-handed campaign in which I was trying to say "You are driving them to the point when they will strike. There is a point of no resistance."
A great event in the textile industry recently was the formation of the British Textile Confederation and, unlike the rival contestants' propaganda on the Common Market, it represents all sections of the industry. It even has as associate members great firms like Marks and Spencer, a firm which has done more for British cotton than any other because in almost every department it sells quality as reasonably as quality goods can be sold. The Confederation has conducted a propaganda campaign which is neither partisan nor in any narrow sense political, but which is a forceful, able discussion of the real problems of the industry and its possible remedies. I do not know whether it was part of its doing that the debate took place in the House of Commons in March.
Here I am in some difficulty because I understand that the rules of this House preclude my quoting by name the Members who spoke in that debate, and I think I am even precluded from quoting from the Minister's reply, because I do not think a reply to an adjournment debate would classify as an official Government statement. I shall say only that the Member for Oldham West was the Minister in charge of the debate, and I believe that all who spoke commented on his sincerity, on the work he had tried to do and on the help that this Government were at long last trying to give. Certainly one knows the problems and the arguments. GATT provides for textiles to receive exceptional provisions. There is an anti-dumping law, but it is all too difficult to define or clearly to expose. There are sections in the Common Market Treaty which provide for special provisions and the Government 970 can boast that they have initiated a whole series of measures, not perhaps drastic but probably as much as they could do for the surveillance of imports. An agreement, a reasonable and proper one, under the Common Market which would be helpful in this matter—if we stay in— would be for the sharing of production and for the control of excessive imports such as have been coming in from Turkey.
I should have said that Pakistan is not the menace at all today. That country is not even producing its quota. The imports are coming from developed countries outside the Common Market. One of them, Turkey, which is now in the Common Market, was pouring in cotton yarn to excess until it was stopped. Much of it comes from countries behind the Iron Curtain and, as the Minister said, there are textile employers who are importing cheap goods while at the same time trying to sell their own goods, and because of the lack of a really adequate marking system, there are imports being sold without any clear indication of their foreign origin and, indeed, at prices which are outrageous in relation to what the importer has to say. Some very unhappy things have been happening.
The Minister was asked— because the whole matter has always been raised in textile debates— what are the Government doing about their own buying? How much are they buying abroad? The Minister said, I am sure honestly, that the total amount of Government buying was only about 2 per cent, of total production; and about 95 per cent, of that, we believe, is bought in London. The British Textile Confederation has some doubts about this and the villains of the piece have always been the Ministry of Defence. The British Army is constantly clothed in foreign textiles and I would have thought that it was a special case for special treatment. The Confederation has supplied us with some very odd letters — for example, the Ministry of Defence buying from Sweden webbing made in Portugal. Why? I imagine that the noble Lord who is to reply to this debate has seen these letters.
The governor of a prison in Cumbria, either through the Home Office Purchasing Department or direct, and it looks like direct, has been returning, by chance, cones to a British industry which should have been returned to an importer in 971 Pakistan or India. Why? I have made a brief list of some headlines showing what has happened. I have got them from the House of Commons Library and they all come from The Times, which I do not regard as a terribly reliable newspaper, but at least one can quote from it with a certain amount of feeling of not breaking any obvious rules. The headlines really tell the story since January. On 21st February we read:8,000 face lay-off in textile industry.On 6th March:Textile workers planning one-day strike over rising cotton imports.On 6th March the great firm of Courtaulds were being persuaded not to close down one of their great factories in Lancashire for another few months to see whether action could at last be taken to enable the factory to continue. Incidentally, they received large subsidies when they went to Lancashire and nobody doubts that they are a very great and able firm. On 22nd March came a headline telling of textile jobs vanishing:Fall of 1,600 during month in cotton and allied industries.On 13th March:Gravity of cotton prices impressed in Brussels: Euro cotton, the Community cotton textile indexing in Brussels.Then there followed the two-day textile debate in which, as the noble Lord, Lord Barnby, said in his admirable speech, 32 Members representing varying textile constituencies sought to take part in a four-hour debate. The debate had to be specially extended. It was something I had never known in my time in the Commons. Thirty-two Members from all parts of the country took part. Some of them were interested in the hosiery trade. There were Members from Yorkshire and Lancashire, and some from the Southern counties. In every branch of the industry the recession was being felt. That was something new, and it was then that the Government announced their policy of surveillance, which has given much satisfaction. They have now agreed to establish their policy of surveillance of imports from Portugal, which looked like one of the immediate problems, until recently never foreseen or experienced.
On 4th April the Under-Secretary of State for Industry wrote to The Times. 972 begging people in the industry to refrain from importing millions of yards of cotton textiles because they were cheap. On 12th April Mr. Benn went to Lancashire and somewhat tactlessly said that he was very greatly impressed. One would have thought that the debate with 32 Members might have impressed him quite a lot. Mr. Benn, said The Times, was very shaken by the strength of argument on the textile case. On 18th April we got just what we expected. Under the headline "Chagrin" it was stated:The Minister of Defence has recently engaged an official on a three-year contract in Hong Kong to ensure quality control over all the Ministry's purchases from textile plants.I ask the Minister: why do we want a full-time purchaser of Hong Kong textiles for the Army, the Navy and the Air Force? How can we need a full-time official on a three-year contract if all that is being bought is a modest proportion of 2 per cent. of our total production? How can it work out like that? I shall ask the Minister, and shall go on asking him, until we solve the mystery of whether The Times is mistaken or whether the Ministry of Defence is misguided.
My Lords, I apologise for having taken so long. I also apologise in advance to the admirable noble Lord, Lord Lyell, who is due to follow me, for the fact that when the Whips shuffled the list of runners and jockeys for this debate they overlooked the fact that I have to be on my feet again the moment the noble Lord, Lord Barnby, sits down. My doctor has given me some advice about my physical condition, and if I leave the House for three or four minutes I hope that the noble Lord will excuse me. I have listened with very great pleasure to all of the debate; I thought that the noble Baroness—always a great speaker—was at her best, and that she put the argument with great and undoubted force.
§ 7.4 p.m.
§ Viscount ECCLES
My Lords, I intervene for only a few moments, because a number of noble Lords who have spoken in this very interesting debate mentioned certain matters which occurred when I was President of the Board of Trade. I should like to refer to them, and then make one point about the speech made by the noble Earl, Lord Shannon. The noble Lord, Lord Barnby, certainly deserves our thanks.
973 In the 1950s, the moral issue of whether we should restrict imports from the developing countries—and particularly our ex-Colonies—was very much in our minds. Many of those countries had millions of people on subsistence level, and they constantly said to us, "Don't give us money. Buy our goods. Give us something that will employ our people". When one looked at that the matter could not stop there. We also had to look at the state of our own textile industry, and we came to the conclusion that it had a large obsolete element in it. Therefore, we put up a great deal of Government money. I introduced the scheme whereby the surplus spindles and looms were effectively scrapped and there was a subsidy for re-equipment. Unfortunately, at that time the textile cycle went against the full success of that experiment. But it undoubtedly left the industry in a condition where it was possible for very big structural changes to take place.
It is commonly recognised that Courtaulds led the way in a vertical rationalisation of a large section of the industry, right from the raw material to the spinning and all those processes through which the fibre has to go, on to weaving, and then, finally, to garments. I do not doubt for one moment that Courtaulds and several other large firms in the industry are now, on a fair competitive basis, efficient. But I think circumstances have changed since the 1950s. Then we did not have to worry—or, at least, to only a minor extent—about textile imports of the higher-grade goods and things coming from other advanced countries. I think we foresaw that this might happen, and another piece of legislation which I introduced at that time was the anti- dumping Act. It seems to me that that Act is not working, and this is one of the matters I wish to put to the noble Lord who is to reply. It is perfectly true that under the anti-dumping Act it is the aggrieved party in this country who must make the case and ask the appropriate Department—I suppose it is the DTI today—to take action and stop the imports. A certain number of cases are well-known to noble Lords in which action has been taken in the 17 years or so since that Act was put on the Statute Book.
But if the facts are as we are told they are—and we have heard from noble Lords 974 this afternoon that large volumes of textiles are being sold in this market, below the price at which they are sold in their home markets—I do not quite understand why the textile trade here has not been able to make out an effective case for action. We must ask why this is so, because the machinery is there if the trade and the Government use it. I know that it is sometimes rather difficult to get the full facts, which are generally disputed in the exporting country, regarding the cost of the goods about which we are complaining. But it seems to me from what I read in the Press—and certainly from what noble Lords have told us today —that there cannot be much dispute that there is a great volume of materials now coming into this country in respect of which the anti-dumping Act could be used.
My Lords, I wish to turn for a moment to the very interesting speech made by the noble Earl, Lord Shannon. He described a large number of possible techniques in the manufacture of fabrics and garments and of weaving where he thought that further research would be useful. It is very sad that in the textile machinery trade our designers have not produced the machines that we hoped they would, from the Shirley Institute or any other source; at least, not the looms. For a long time we have had to import looms of foreign design. I am afraid that that is not unique in British industry. It is in design where we have fallen behind so much. I hope that the noble Earl's friends can somehow produce better results, either with Government money or with money from some of the very big firms—and they are still very rich—in the textile industry. Firms like ICI and Courtaulds would be only too pleased to put up some money for that kind of development.
What I noticed about the noble Lord's speech was his omission; because the real weakness in British textiles for so long has been in the design of the fabric and the garments. It is there where we can compete but do not compete. Most textiles are bought by women, and women buy—and all credit to them—largely by feeling the fabric and by the look of it. Their colour sense is developed, as is their fashion sense. I think the noble Lord's speech was rather typical of what is happening. There is no mention of the 975 artist. It is the artist who has been so lacking. I remember a good case—and I am sure that my noble friend Lady Hornsby-Smith will be familiar with it— where the Italians were scooping the beachwear trade, bathrobes and so on. All you had to do was to get the towelling, dye it the right colours, and then design the right kind of beach clothing. There was an enormous market; everybody was going to Spain for their holidays. But we did not have the designers to do it. That may make a vast difference to the volume of sales. Therefore, in looking to the recovery in textiles, as I do, your Lordships will know that the textile cycle is very short-timed and is always going up and down and, by timing, we should be just beginning to come out of the trough. I do not know whether the noble Lord who is to reply will give us any evidence of that. But let us always believe that the design of the final garment is one of the main things in a modern textile industry. The fashion papers go all around the world. Every-body, everywhere, knows what are the trends in fashion. We have had some good designers, especially of clothes for young people, but we have a long way to go if our designers are to be the first and to capture the world. If that were done it would be almost the biggest single step which the British textile industry could take.
§ 7.15 p.m.
§ Lord LYELL
My Lords, we must all be grateful to the noble Lord, Lord Barnby, or perhaps to his luck in the draw. Certainly he has given us the opportunity of discussing, and perhaps pleading for, the textile industry which affects us all in that our clothing and our home comforts are almost entirely dependent on it. After some notable speeches, I think it behoves me to be brief; nevertheless there are a few points which I should like to raise and one or two minor questions which I am sure the noble Lord who is to reply will be able to answer for us.
The industry has shown a famous ability to survive even during the recession currently affecting all of us; but it has seen nothing like this since the 1930s. As we have heard from several previous speakers, notably from my noble friend Lady Hornsby-Smith, the industry is united in 976 its plea to the Government for what is well-deserved help. With approximately 150,000 on short time out of a total 900,000 employed in the industry, the situation merits action. I have read in speeches in other places that there is up to 80 per cent. short-time working in the wool industry, with some equally fearsome digits in other sectors, in man-made fibres and in cotton. I see no reason to doubt these figures; and it is all the more serious as the industry is concentrated in Lancashire, North-West England and Yorkshire.
I believe that 23 per cent. of the working population of Lancashire and the North-West is involved directly in textiles. We find in various towns in Lancashire an even greater preponderance of work-people involved in textiles. I am told that 40 per cent. of the population of Nelson and 30 per cent. of the people of Rochdale are involved directly in textiles. We can see that the economy of the whole area is much dependent on the industry. Textiles employ 9½ per cent. of the total industrial employment in the United Kingdom, so it can be seen that we are not just discussing an inefficient and backward cottage or peasant business; we are discussing the third largest manufacturing industry in the United Kingdom.
My Lords, the consumer in the United Kingdom is very fortunate, both in apparel and in furnishings. I believe we cannot find better value anywhere else in the world. As has already been said, retail efficiency is legendary in the United Kingdom. I believe there are about 20 large organisations accounting for approximately 90 per cent. of the sales of textiles in whatever form, and there are mail order houses and large chains of retail stores providing immense value and quality on a nationwide basis. However, I feel that we ought to direct our attention to the sources of production. Approximately 40 per cent. of our domestic consumption must come from overseas, as the industy here does not have the productive capacity to fill the gap and this would be uneconomic. Imports of textiles into the United Kingdom cost us approximately £1,100 million in 1974. At the present time, they are still rising and they comprise about 55 to 60 per cent. by size and weight of all textiles consumed in the United Kingdom. Here I am including 977 woven fabrics and fully made-up garments and clothes.
There is always the possibility that the United Kingdom is the victim of dumping. I do not believe that there is a substantial amount of it; but we have already heard of the appearance of various suits in the United Kingdom at between £5 and £8, coming mainly from Eastern Europe. This does not assist the stability of world trade. Another example is the nearly 1 million shirts imported from Eastern Europe at a cost in this country of approximately 20p. While we welcome cheaper shirts and suits in the shops, these are clearly examples of dumping. This is something that we hope the Government will look into and something that we deplore.
We should also bear in mind that the retail trade has had its own difficulties throughout the last 15 months in the rapidly rising costs of both financing itself and its stocks. Who is to blame the retailers if they want to take advantage of such low-cost products as we have been hearing about? I have already mentioned the good fortune of the United Kingdom consumer, but there is some obligation to support home products when this is possible. One of the few remedies that we can consider is to reduce imports. Any method of doing so is liable to cause difficulties for ourselves, for our overseas suppliers and for world trade in general.
The General Agreement on Tariffs and Trade does allow us to take action, particularly when our balance of payments is in a poor state. At the same time, we cannot export our problems to weaker nations than ourselves. First, the United Kingdom is a trading nation, and to take precipitate action can, and will, invite retaliation against our exports, which could have unfortunate effects on other industries within the United Kingdom. I have heard that restrictions on the import of textiles from two foreign nations have already caused difficulties for our trade in a third country. Secondly, reducing imports from weaker and developing nations will adversely affect their ability to buy our goods as well as harming world trade.
But I do not consider that we owe a living to the citizens of these nations, for example, Hong Kong, Taiwan and South Korea. The textile industries situate 978 there can afford to purchase the world's best textile machinery, as we have heard in a notable speech by the noble Earl. Lord Shannon. British textile machinery and research is world-wide, and often we find these nations exporting their products having used our technology and machinery, which is perfectly fair. They export their goods at what, to them, is a realistic cost, but I am afraid that it is not necessarily a realistic cost to us. There comes a time when protests have to be made to these countries. Often, such protests are not heeded and trading relations worsen. Sadly, this is beginning to happen already between the United Kingdom and one or two other nations with whom we have very close and warm economic and political relationships. Regrettably, it is often difficult, if not impossible, to obtain all-round agreement when not just two, but several nations are involved.
We are members of GATT and Article XII should allow us to take some effective action. I also understand that there is a certain Regulation of the EEC which empowers the United Kingdom Government to protect themselves against either unfair competition or circumstances where an industry is placed in danger or is threatened. The Government should invoke either Article XII or this particular Regulation to protect our very necessary and vital textile industry. My views are not entirely shared by the textile industry; nevertheless, it is important that we hasten our discussions with those countries whose textiles we buy. The EEC Council of Ministers in October 1974, permitted the import of textiles into member countries, as well as into the United Kingdom. Thus there is no reason why the United Kingdom should continue to be thought of as a "soft touch". It seems that the EEC are not altogether happy with the agreement, and the arrival of textiles from third countries in the United Kingdom is steady, while the overall market here and overseas has dropped by 25 per cent.
There are different methods of reducing imports. Italy was permitted to operate a fierce system of import deposits in 1974, and it seems that this was relatively successfuly in protecting their balance of payments. I cannot see that we need to go to such extremes at present; but if the current recession in the United 979 Kingdom textile market persists, we do not have the capacity to be as generous to our overseas friends as in the past. In another place there was a notable and fascinating debate on this subject about a month ago which I read carefully, when the Government said they were setting up import surveillance. This is unlikely to meet the objections of the industry, since first it does not cover clothes or made up garments, and it gives the opportunities for dumping, as we have already seen, in these sectors. Secondly, it does not apply to the EEC. There may be problems here with our partners in the European Economic Community.
In conclusion, I ask the Government to use their best endeavours speedily to assist the British textile industry. This industry fears no competition, it does not seek to shut out imports, but it seeks fair and even-handed treatment, whether or not such treatment is meted out to our exports elsewhere. Never before has the industry been so united; never before has the industry been so determined, so efficient, so lean and competitive. Trade is mutual, it is a two-way or even three-way, traffic; but our customers must be able to buy from us just as they must abide by the GATT. Even so, there is room for firm action from the Government in saying to our foreign textile producers that we simply cannot tolerate the crippling of our textile industry, just as we seek to play fair with theirs. We shall ask our overseas friends what remedies they suggest to mitigate the arrival of their textiles here. I am confident that the Government must take a firmer line; at least a 20 per cent. rundown on the 1974 levels of all textile imports is a starting point. We cannot permit the health of our textile industry to decline any further. May I say, my Lords, that I welcome my noble friend Lord Barnby's luck in the draw this afternoon and seek to ask the Government what they can do for the future.
§ 7.26 p.m.
§ Lord LOVELL-DAVIS
My Lords, whether or not we can take much pleasure from the debate we have had this afternoon, there is no denying the necessity for holding it—and we must be obliged to that great and, if I may say so, venerable expert on the textile industry, 980 the noble Lord, Lord Barnby, for initiating the debate. His experience and mine compare almost as "greatest to least", but although I have not worked in the industry, several members of my family have. It may seem a dismal qualification, but my maternal grandfather, once the manager of the Midlands Lace Company in Nottingham, started his own company after the First World War, and, when the lace industry collapsed, lost most of his money and never recovered from the blow.
I can to some extent appreciate the depth of feeling of my noble friend Lord Hale in looking back on the history of the industry. What happened to my grandfather may have played some part in forming the interests I have always had in the history and fortunes of the textile industry. It is an industry which, from its booming early days at the very start of the Industrial Revolution—when Richard Arkwright, it was said, was able to leave his successors an inheritance greater than the then National Debt—has passed through stormy seas, leaving in its wake churned-up social conditions, wholly changed regions of our country, great fortunes—and often, as my noble friend Lord Hale said, much insecurity and misery. And one has to face the fact that right up to the present day it has continued to navigate, perhaps at times uncertainly, through treacherous waters.
The textile industry's level of activity is mainly determined by demand, but on this occasion there are conflicting pressures on demand, which are particularly severe on our textile industry. The noble Lord, Lord Rhodes, has indicated some of them. Although consumers' expenditure on clothing declined by only 1 per cent. in 1974, and the index of retail sales (at constant prices) by clothing and foot-wear shops, which dropped last autumn, had recovered in January and February, this continued high level of demand has not been reflected in orders for our textile industry to replace goods sold in the shops. Retailers, concerned with their own liquidity position, are trying to keep their stocks at lower levels than in the past. Their cutback in ordering is magnified at each stage in textile production so that by the time the final stage is reached in spinning the yarn or manufacturing the man-made fibre the cumulative effect is considerable. At the same time, the 981 industry's own liquidity problems prevent it from manufacturing for stock as it has done in past textile cycles. The down-turn in demand is compounded this time because, as the noble Lord, Lord Rhodes, said, the textile cycle has turned down world-wide; and because virtually all countries are facing difficult economic problems, the result is substantial underutilisation of capacity throughout the textile industry here and in other countries.
This lack of new orders has had its most serious effect on employment. The British Textile Confederation have estimated, as the noble Lord, Lord Barnby, said, that 150,000 people out of a total workforce in Great Britain of 830,000 were affected by short-time working in February. These figures, also quoted by the noble Baroness, Lady Hornsby-Smith, of 150,000 people on short time in February, were the industry's own estimate made by the British Textile Confederation. The BTC have not carried out a further survey, but they consider the picture has not drastically changed. The latest official figures show that about 30,000 employed in the textile and clothing industry were on short-time working during the week ending 10th March. I recognise that this figure probably excludes many part-time married women, for example, who will not have registered with the Department of Employment, and also workers in many firms are excluded who are working three weeks in every four. There were just under 2,000 redundancies in the textile industry during February, according to the provisional official figures. The British Textile Confederation's estimate of 8,000 redundancies covered the period of six months up to February.
Against this background, the level of imports is seen by the textile industry to be of crucial importance. It should be recognised that the position of imports varies significantly within the industry. Total imports in 1974 were valued at some £1,153 million, whereas total exports were £1,121 million, giving a trade deficit of £32 million. But this figure is reached by taking into account an adverse balance on clothing of £171 million, on woven cotton fabric of £78.5 million, and a credit balance on woollen fabric of £93 million and on man-made fibres of £62 million. The import figures for January and February this year, com- 982 pared with home production figures, show import penetration falling in man-made fibre and yarn production and in the Lancashire cotton and man-made fibre spinning. In other sectors imports show an increase; for example, in woven clothing, knitted fabrics and knitted clothing.
The British Textile Confederation have told us that the high level of imports reached in 1974 can no longer be absorbed by the United Kingdom market without serious disruption of the British textile industries. They have therefore proposed to the Government, as we have heard this afternoon, import restrictions designed to cut by 20 per cent. across the board the level of imports in 1974. This has been the central issue of this debate and it is the issue to which the Government are giving serious and thoughtful consideration, for it raises major and difficult implications for Government policy. The arguments which the BTC have put forward in their proposal, on many of which noble Lords have commented, are well-reasoned. The BTC consider that the British textile industry is particularly vulnerable to imports, because our distribution and retail industries are so highly developed, as the noble Baroness, Lady Hornsby-Smith, has already pointed out.
The BTC have considered the dangers of the temporary restraints they advocate, and they do not believe that their proposal would lead to shortages, seriously restrict competition, or have any marked effect on retail prices. Moreover, because of the United Kingdom industry's particular circumstances, they believe that the risk of retaliation by other countries is slight. Noble Lords have also commented on the important economic and trade policies at issue here. We are a major trading nation, as the noble Lord, Lord Lyell, pointed out, and all our efforts to date have been to encourage our trading partners to sustain world trade at the highest possible level.
Noble Lords will not need reminding of the importance placed by the Chancellor of the Exchequer in his Budget Statement on the growth in world trade in 1976. Nor, I think, can the risk of retaliation be too lightly considered in view of the action I believe the Government of Turkey are proposing to take against our exports of a number of products—for example, polyethylene, 983 dumpers and electrical equipment—in response to our restriction of imports of Turkish cotton yarn. The Prime Minister has said that import controls, as a general policy, would be bad for Britain precisely because they would help to get world trade spiralling further downwards. The BTC's proposal, therefore, raises difficult and far-reaching implications for Government policy. However, we are giving it the most serious consideration and have not yet reached a decision on the proposal.
My Lords, the record of Government action to contain textile imports is an impressive one. The protection in the 1960s against low-cost suppliers of cotton yarn, woven cotton fabrics and made-ups has been steadily expanded to include in 1972 non-cotton textiles; namely, poly-ester-cotton fabrics and made-ups. It will be extended substantially this year under the Community restraints on knitwear, woven fabrics and made-ups of most fibres and, in addition, on spun synthetic yarn from the main South-East Asian suppliers. We have acted to restrain imports of cotton yam from Greece and Turkey—my noble friend Lord Hale referred to imports from Turkey—and we propose to continue the restrictions on cotton yarn from our traditional low-cost suppliers, principally India, Pakistan and Hong Kong. We achieved agreement in the EEC Council of Ministers last October with other Member States on a "burden-sharing" policy, which will progressively ease the pressure in the United Kingdom as the other markets in the Community are opened up to more lost-cost textile imports. Burden-sharing will operate as bilateral agreements are concluded with the developing countries. Our growth in import quotas will be severely limited. In cases where we are the major importing country in the Community, our growth will be 0.5 per cent. Other Community countries can expect to take growth rates ranging up to 500 per cent.
The Government remain prepared to take prompt action under the GATT Multifibre Arrangement provisions where there is a threat of market disruption, whenever there is a justified case for doing so. The surveillance licensing we have announced on imports from all non-EEC sources of man-made fibres and virtually all yarns and fabrics manufactured 984 from all the main fibres on 20th March has been welcomed by the industry. This will provide additional information to help the Government consider what further action, if any, may need to be taken. In reply to a point made by both the noble Lord, Lord Rhodes, and the noble Baroness, Lady Hornsby-Smith, this applies to the USA as much as to any other exporting country. The noble Lords, Lord Barnby and Lord Lyell, referred to the extension of surveillance licensing.
We are considering the industry's request to extend these arrangements to include made-up articles and clothing. Many of these items will, in fact, be included in the actual restraints now being negotiated with the main low-cost Asian suppliers. The industry is on the point of finalising its suggestions for extended surveillance licensing, which we will then be in a final position to consider. I can assure the noble Lord, Lord Barnby, that the Government are energetically pursuing with the other Member States of the Community the negotiation of bilateral agreements under the MFA with our main developing country suppliers. We regret the delay, but I can tell the noble Lord, Lord Barnby, that the first agreement has now been reached. Agreement with India was reached at 2.35 a.m. last Saturday. It is our intention that all these bilateral agreements should date from 1st January this year. The noble Lord, Lord Barnby, also referred to the social security advantages of the Italian manufacturers of Prato. I can tell the noble Lord that the European Court has ruled against the Italian scheme. We are following this matter closely. The ending of these advantages will be of benefit not only to the wool industry but to all sections of the industry which compete with Italian manufacturers.
Nor does the Government's concern for the industry end with the subject of imports. We have done much to encourage investment. Under the wool textile scheme we had received 100 applications by the end of March 1975, representing investment plans in new machinery and buildings of £39 million to which the Government will contribute £7 million under this scheme. These applications represent £15 million of investment by the industry in the last financial 985 year, and a similar amount of investment is scheduled for this financial year. Following a review of progress of the scheme by the woollen industry's "Little Neddie" we have improved its details. It continues until the end of 1977 and we have set aside £15 million for Government assistance. We welcome this evidence, as does the noble Lord, Lord Barnby, that the industry is increasing its capital expenditure substantially despite the present unfavourable state of the market.
I welcome the emphasis which the noble Earl, Lord Shannon, has given to the contribution which the textile research institutes make to the efficiency of the industry. He has referred to the system of research requirements boards in giving support to research. This system has been in operation for only a relatively short period, but it is proving effective in achieving the kind of results of which he has spoken.
The Clothing Economic Development Council, following a review of prospects to 1977, concluded that increased productivity in the clothing industry is vital to enable it to become a high wage industry and to overcome increasing shortages of labour, as well as reducing costs and strengthening its competitive position. For this purpose it noted the need for a higher rate of investment than previously prevailed. The Council has developed a complex set of proposals aimed at achieving these ends. These were recently submitted to the Department of Industry and are being given detailed consideration. In other sectors of the industry, particularly Lancashire, referred to by the noble Lord, Lord Lyell, companies are taking advantage of the 1972 Industry Act facilities. Substantial investment, in excess of the average figure for all manufacturing industries, is taking place.
I know that the textile industry holds very strong views on what it regards as the difficulties it faces in proving dumping cases compared with the ease it considers some other countries have in doing so. The noble Baroness, Lady Hornsby-Smith, has mentioned specific instances of dumped imports from the Far East. It is important to differentiate between dumping as such and low-cost selling. "Dumping" means exporting a product at prices below those obtained for comparable sales on the exporter's home market. 986 Low-cost selling is not necessarily the same as dumping. But I call on the industry to present their case to the Department of Trade. I feel as bewildered as the noble Viscount, Lord Eccles. Why is there no effective case for action? The noble Lord, Lord Lyell, has said there may be less dumping than is thought. This appears superficially to be the case. The Department of Trade has received only one anti-dumping application from the textile industry in recent months, on acrylic yarn from the Far East, which was already subject to antidumping action by the EEC Commission on behalf of Member States. The Commission had obtained undertakings on price levels from the supplying countries in 1973. There have been no applications from the United Kingdom industry in respect of either cloth or made-up goods. The Department or the Commission can act only in response to an application on behalf of the industry affected, containing reasonable evidence—not proof, my Lords—of dumping and material injury.
The noble Lord, Lord Rhodes, referred to the appeal made by my right honourable friend the Parliamentary Under-Secretary of State for Industry on 20th March to those major textile companies which import large quantities of textiles. The industry itself imports some tens of millions of yards of cloth and thus has the opportunity of holding back substantial amounts of cheap textile imports. There may be difficulties, as Lord Rhodes said, but I welcome the call by the British Textile Employers' Association to its member firms to ensure that the industry itself eliminates any potentially undesirable buying practices. My noble friend Lord Hale referred to Government purchasing policy. As he indicated, total Government purchases are but a small percentage of total United Kingdom textile products, perhaps 2 per cent., and the great bulk, 95 per cent. or more, is purchased in this country. I am pleased to be able to tell him that the official referred to in The Times is a civil servant who is taking up a two-year appointment in Hong Kong concerned with quality assurance for a variety of goods, including textiles, purchased locally for the use of the Hong Kong Garrison.
The Government are strongly urging the industry and its customers in the retail sector to come together to plan their 987 production needs to ensure that when the demand comes the goods are there manufactured in the United Kingdom. The important point is to achieve much closer co-operation, and this we are trying to encourage. Noble Lords have been rightly concerned, as are the Government, about the viability of our textile industry. Despite its decline in the traditional Lancashire sector, which has been counter-balanced, to an extent, by growth in warp and weft knitting and synthetic filament fabric weaving, our industry as a whole is the second biggest in Europe. As other countries have shown, the textile industry has a good potential for growth.
My Lords, I know that the present economic situation is a difficult one: I know that the industry is looking to the Government to do more, and I also know that it is vital for the industry to invest to ensure that it is ready to take advantage of the upturn in the textile cycle when it comes. There are some encouraging signs of an upturn, although even two or three swallows do not yet make a summer. But I can assure your Lordships that it is central to the Government's thinking that the textile industry should remain viable and prosperous, and it is to this end that we are developing our policy.
§ 7.47 p.m.
§ Lord BARNBY
My Lords, this debate has brought into contemporary prominence the massive size and the great distress of the textile industry. There have been speeches of significant importance and that will have contributed largely, I hope, to recognition of what this debate was intended to ask for. If there are two points arising from the several most interesting speeches, they are these. First, we heard a most interesting speech from the noble Earl, Lord Shannon, who speaks with such technical experience. Anybody who reads his speech will be impressed by what is being done technologically in connection with this industry. Secondly, I am particularly glad that the noble Lord, Lord Hale, emphasised the angle of industrial relations in the textile industry. As I told your Lordships, all my life I have been associated with the wool textile 988 industry, and over those long 60 years I can testify that in that industry we have always enjoyed a relationship between employers and workers which is significant in the industrial life of the country. That point has been brought out by Lord Hale today as a great contribution to the achievements of this industry.
I was interested in the reasoning and reflections of the noble Viscount, Lord Eccles. His was a contribution which will cause us all to reflect. I am grateful also to my own Front Bench for supporting this debate. Of course, the hope of the exercise was that we should extract from the noble Lord, Lord Lovell-Davis, an actual decision by the Government that what we ask for is to be granted. I suppose we must be satisfied with his assurance that the matter is receiving the Government's consideration. The reply was disappointing to that extent. There may be—indeed, he said it —contributory reasonings for this position.
The noble Lord mentioned the case of retaliation; but under Article 12 of GATT, surely there can be no discrimination because, as I am sure the noble Lord, Lord Jacques, will agree, there can be no other leading country with a textile industry that has a more significant balance of payments deficit than this country. Therefore, there is no discrimination, because we are well in the lead so far as that is concerned!
The noble Lord, Lord Lovell-Davis, has dealt generously with the circumstances surrounding the causes of this debate. We must hope that the peril of the position which has been voiced by all speakers today will be recognised by the Government and that there will yet be action along the lines which have been suggested. In conclusion, having had the privilege of starting the debate, may I thank all of those noble Lords who have taken part in it for their contribution and for the part they have played in, I hope, extracting the assurance from the Government that shortly there will be action along the lines that the peril of this great industry requires. My Lords, I beg leave to withdraw this Motion.
§ Motion for Papers, by leave, withdrawn.