TEXTILE, CLOTHING AND FOOTWEAR INDUSTRIES (Hansard, 23 July 1975)

§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)
My Lords, if it is to the convenience of the House I shall repeat a Statement being made by my right honourable friend in another place. It is as follows: "With permission, I would like to make a further statement about help to the textile, clothing and footwear industries.
"Firstly, we have decided to provide up to £20 million under Section 8 of the Industry Act 1972 to raise productivity in the clothing industry, through help for modernisation and re-equipment. It will be available to all sectors. This is a medium to longterm measure which will help the whole textile industry, which depends on the clothing industry for a significant proportion of its domestic sales. Details will be announced shortly, after final discussions with the Clothing EDC.
"Secondly, we are ready to explore with other sectors, the scope and need for schemes under the Industry Act, which are suited to their particular circumstances, provided the financial resources can be found. Discussions
348 have already begun with the footwear and jersey fabric industries.
"Thirdly, public purchasing Government Departments are being asked to ensure that they get their requirements of textiles, clothing and footwear from British manufacturers and that they use British materials. I hope that other purchasers in the public sector will, so far as possible within present constraints, be guided by the same principle. It would be against our interests as an exporting nation to violate the international rules about discrimination. Nor can the Exchequer be expected to accept grossly unfavourable terms for domestic products.
"Fourthly, we stand ready to invoke the safeguards provided in the GATT Multi-Fibre Arrangement, where imports of textiles or clothing cause or threaten disruption. Consistently with the MFA, the European Commission is negotiating bilateral arrangements, covering the Community as a whole, with the principal supplier countries, to prolong, and in some cases extend, the existing restraints on the more sensitive products. The Community have just completed negotiations on these lines with Hong Kong.
"Extended restraints on Taiwan will be published shortly. If other negotiations cannot be brought to a speedy conclusion, we would be entitled to propose that the Community use the provisions in the MFA which allow importing countries to take their own safeguards.
"In the case of footwear, Poland, Roumania and Czechoslovakia have undertaken that their exports to the United Kingdom of men's leather footwear will be at a level between 5 and 10 per cent. below that of comparable exports in 1974. We are keeping the position on footwear under careful review. "To consider action in good time, we must know about potentially disruptive imports. The Government's fifth measure is accordingly to apply to all clothing and textile imports from non-EEC sources the surveillance licensing which is already in force for some manmade fibres, yarns and fabrics. These are not import controls; licences will 349 be issued on demand. This extended surveillance will take effect from 1st September. The administrative arrangements will be announced as soon as possible.
"Sixth, anti-dumping powers. An industry which thinks it has the makings of a case for use of these powers should not hesitate to come immediately to the Department of Trade, whom they will find very ready to give advice and help and to take vigorous action where dumped imports cause or threaten material injury. Cases have to be properly investigated; but where there is a good case and an imminent threat of injury we have powers to take provisional action for up to six months.
"Finally, the ceilings on duty-free imports from Portugal will be properly applied. Honourable Members will know that customs duties have been reimposed from 15th July on woven outergarments.
"The immediate difficulties of these industries spring primarily from the worldwide decline in demand for their products. Our aim is to assist a constructive response to change and to avoid change at a pace which causes undue social hardship. The range of measures I have announced shows the Government's determination to see textile, clothing and footwear industries which are profitable and competitive so as to provide secure and well-paid jobs."

§ Lord ABERDARE
My Lords, I thank the noble Lord, Lord Beswick, for repeating that Statement. I welcome the fact that the Government have taken some further action to help the textile, clothing and footwear industries. No one has been more insistent in asking for help for these industries than my noble friend Lord Barnby, and I am sure that he will be gratified to know that the Government are taking this action. I am not qualified to comment on the different kinds of proposals in this Statement, but may I ask, in general, whether the industries concerned are satisfied that these measures are sufficient to help them through their present difficulties? May I ask in particular 350 whether his announcement about public purchasing, the fact that Government Departments are being asked to find their requirements of textiles from British manufacturers and to use British materials, is consonant with the EEC Treaties.

§ Lord WADE
My Lords, on behalf of my colleagues on the Liberal Benches, I should like to join in thanking the noble Lord for repeating the Statement. It is quite a lengthy Statement but we have been waiting for it for a long time. At the outset, I would agree with the words at the end of the Statement: The difficulties of these industries spring primarily from the worldwide decline in demand for their products. Obviously, the best solution would be an increase in worldwide demand; but that is not going to happen overnight.
May I ask three questions? First., I welcome the proposal to raise productivity, but would the noble Lord agree that it is going to take some time for that to take effect and that it would not necessarily help a firm in danger of early closure? Secondly, there is a reference to dumping. I think it is generally understood, and has been long understood, that anti-dumping is an exception to the general rule about increasing international trade and in that event definite measures must be taken. What I should like to know is what evidence has been collected or is being collected of actual dumping; because if there is actual dumping it seems to me that these proposals, including surveillance licensing, would not necessarily suffice. Thirdly I notice a reference to GATT and the European Commission, but I think there is a point that may not have been covered by the Statement. As I understand it, in the EEC where there is an increase in imports from non-EEC countries adversely affecting a particular member country, it is permissible to ask the EEC to instruct the Commission to work out a project to ensure that imports are more evenly spread among the EEC countries. I should like to know whether Her Majesty's Government have taken any steps along those lines.

§ Lord BESWICK
My Lords, may I thank noble Lords for what they have said about the Statement. I join with the noble Lord, Lord Aberdare, when he pays tribute to the energy shown in 351 this matter by the noble Lord, Lord Barnby. I was asked about the EEC and whether they would agree. So far as restrictions are concerned, they have been worked out with the EEC. So far as the clothing scheme is concerned, they have been consulted and we have every reason to believe that they will agree. I was asked by the noble Lord, Lord Wade, whether it was not true that the scheme under Section 8 would not take effect immediately. As I said in the Statement, this would be a medium to long-term measure. Everyone must accept that to re-equip and modernise must be of benefit in the longer term.
I was asked about surveillance licensing and whether it is a fact that the case must be proved so far as dumping is concerned. That is true: but the surveillance licence would not necessarily result in anti-dumping measures. That is not the purpose of it. The purpose is to enable us to get information about the volume of imports; and on that information we could ask for restrictions to be exercised through the EEC. I was asked whether there was information about dumping. I did not refer to any evidence we now have; but I said that if those industries who consider they are victims of dumping would bring information, action would be taken if the case were proved. The difficulty is that many think they are being penalised or suffering from dumping, but when the case is examined the evidence is not sufficient to justify the kind of action asked for.
I was asked by the noble Lord, Lord Wade, whether it was a fact that, through the EEC, action could be taken to share the burden of excessive imports. That is precisely what is being done in the case of the Hong Kong agreement which was concluded this morning; it is an exercise in burden sharing.

§ Lord ABERDARE
My Lords, I am sorry, but the noble Lord has not answered either of my questions. I asked whether the industries concerned were broadly satisfied and, specifically, whether the instruction to Government Departments to buy British was consonant with our EEC obligations.

§ Lord BESWICK
My Lords, so far as the EEC reference is concerned, I am afraid that I put that against another 352 question. The Statement was carefully worded so far as buying British goods was concerned. If we bought British goods that were clearly over-priced in relation to available goods from abroad there would be difficulties. If the noble Lord will read the Statement, I think, he will find that I have covered that. He asked whether the schemes would be welcome to the industries. I have every reason to believe that they will. So far as the clothing scheme is concerned I am certain that the firms will expect to have had more money; but for the rest they will be satisfied.

§ Lord BARNBY
My Lords, in the past I have frequently pressed the Deputy-Leader on these matters. I am sure I can rejoice to be able to feel that he has given some gratification to the industry. It is progress; and particularly on the one point on which continual pressure was made, that of surveillance. But while it is an encouragement, it falls far short of what the industry so badly needs—immediate short-term help. Under that head they had pressed for the 20 per cent. surcharge across the board. I now take it that is not acceptable to the Government. Turning to the imports, which the noble Lord said would be subject to surveillance, will that apply to garments of knitted fabrics as well as those of woven fabrics? The noble Lord said that some progress had been made under the Multi-Fibre Agreement regarding Taiwan. Is it to be understood that will be shortly extended also to other East Asiatic points like South Korea, Singapore and so on?
Regarding the point made by the noble Lord, Lord Wade—which I took to mean the anxieties and difficulties which are being caused by the importation of apparel made up in the EEC which have an origin further to the East—that seems to fall under the question as to the effect on the EEC, asked by my noble friend the Deputy Leader of the Opposition. The grant given to the garment industry will be helpful; but that is in a separate category from the pressures that now exist. Surveillance does not necessarily meet the immediate problem of employment and the hazard of firms shutting down, but it puts into the hands of the Government the opportunity of taking further action under licensing. I understand that is what the Government have in mind; while they have not granted the surcharge, they have agreed to practise 353 the surveillance, giving the opportunity of prompt action on the near range instead of the long range to which the other parts of the Statement referred.

§ Lord BESWICK
My Lords, it is the fact that there are negotiations in progress now with some of the Far Eastern countries. I mentioned a Statement would be expected shortly about Taiwan. The Statement about Hong Kong will be made within the next few days. Negotiations are also in progress between the EEC, South Korea, Mexico, Brazil, Colombia, Singapore, Malaysia, and Portugal on behalf of Macao. As a result of those, it is expected that most of the existing United Kingdom measures on woven cotton and on some synthetic textiles will be retained with some new ones on synthetic yarns, fabrics and knitted products. I will let the noble Lord know later about woven garments.

§ Lord RHODES
My Lords, we welcome this Statement by the Government. The Government were harshly criticised by sections of the trade when they said that the Government had written them off. This is not true. I understand the implications of this because of the international obligations that we have under GATT. We should not lose sight of the fact that we are in a difficulty as members of the EEC, in that it takes so long to get nine Governments to agree to a proposal. The Minister mentioned two countries where agreements have been entered into by us. He mentioned others with whom negotiations are taking place. When these problems arose, and the impact of cheap textiles from the Far East, in particular, and from Portugal was felt, the Americans dealt with this in a month. They made arrangements with all these countries in a month prior to 1st January this year. We have now taken seven months to come to terms with these exporting countries. I should like the Minister to tell us which countries have made these arrangements, not just the ones that are under negotiation.
I welcome the Statement on surveillance. If surveillance is extended, it will go some way towards relief. It must be imposed at once. But that is a long way down the list. The decision to give £20 million to the clothing industry is another 354 example of the Government stepping in and having to do something as a result of public pressure. It may be a long time before any benefit comes through, and firms may have gone out of business by then. Number two on the list referred to exploring other means—anybody can do that. Public purchasing is something else which may take a long time. This is another example of our slackness in allowing our currency to be eroded. I made a lengthy journey through Lancashire last Friday and saw mill after mill where they were meeting competition. The price of the finished fabric is no more than what they are paying at some of those mills for the raw material that they are using. Who can compete with that? It means that there is despair in some places. I am sure that the measures which have been announced will be welcome; but there is enough anti-dumping evidence if it is properly marshalled.

§ Lord BESWICK
My Lords, my noble friend asked me what had been done by this Government and others. There are now quantitative restrictions on imports of spun cotton yarn, woven cotton textiles and made-ups from most low cost sources, and on woven polyester cotton products from Hong Kong, South Korea, Taiwan, Colombia and Thailand. In the case of Hong Kong and Taiwan, restrictions are now being extended to most knitted and woven textiles and clothing of all fibres. Most textiles from Japan and the State trading countries are also restricted. In December this Government also imposed restraints on imports of cotton yarn from Turkey and Greece. As my noble friend says, much has been done, and I can now also say to the noble Lord, Lord Barnby, that surveillance licensing will include both woven and knitted clothing.

§ Baroness HORNSBY-SMITH
My Lords, I also welcome the Minister's Statement. I agree with the noble Lord, Lord Rhodes, that the £20 million is of less importance at this crucial moment of time than is the surveillance and efforts against dumping. There are many factories working part-time, not because they are short of capacity or machinery, but because dumped goods are taking 355 some of the markets from them. I particularly welcome the Government's emphasis on buying British for Government orders because this is a very wide field, including the whole of the Services, the Armed Forces, the police, the hospital services and all the care services. This policy could make a very real difference to certain sections of the textile industry.
Regarding surveillance, may I ask the Minister whether consideration has been given to reviewing the very great difficulty that exists, under the present terms and formulae, in establishing what constitutes "dumping" from a controlled economy country? It is practically impossible in such cases to establish the same commercial price analyses as are carried out in other countries where there is private enterprise and competition and where overall prices are not centrally set by the State. Is the noble Lord aware that the Australian Government amended their dumping regulations precisely to meet the circumstances of dumping from controlled economy countries, where these commercial comparisons of prices are not possible?

§ Lord BESWICK
My Lords, I thank the noble Baroness for what she has said about the policy with regard to public purchasing. In addition to the fact that such purchases cover a wide area, I should like to think that the lead given by the Government and public authorities might well be followed by private individuals in their own purchases. It is, after all, the sum total of private purchases which constitutes the kind of trouble that we are currently facing. If we can bring home to people the fact that there is a need in our present economic situation to consider first and foremost the purchasing of British goods, that could help.
The noble Baroness drew attention to the difficulties involved in deciding what constitutes dumping from countries with a closed economy. The difficulties to which she referred are precisely those which make it difficult for me to outline the methods used for deciding what is or is not being dumped. I have already mentioned the restrictions that exist regarding certain of the countries concerned, and it is probably fair to say that this is a matter which has been decided so far in relation to an increase- 356 ing trend of imports. It is difficult to prove dumping in their cases.

§ Lord BARNBY
My Lords, sums have been mentioned by the noble Lord. May ask him to bear in mind that even 20 per cent. of Government industry and 15 per cent. for the whole of the wool textile industry are derisory amounts compared with those given to other industries, whose exports are not so very much larger but are subject to what is being discussed today in the Bill before your Lordships?

§ Lord HALE
My Lords—

§ Baroness SUMMERSKILL
my Lords, am I right in believing that so many of these problems arise from the fact that these garments are produced by women in the East, whose labour is exploited? There is gross underpayment of these women, and this is a matter which should be raised in this year, when women in this country are to receive equal pay. I should like to know whether the discussions have ranged widely enough to cover this important fact of the under-payment of workers who produce the goods we have been talking about.

§ Lord BESWICK
My Lords, the noble Baroness raised this point earlier. It is a very real point and perhaps it is something which could be raised under the auspices of, for example, the International Labour Office. But, so far as I am aware, it has not arisen in the EEC negotiations on restrictions in this immediate case.

§ Lord HALE
My Lords, could my noble friend—

§ Baroness SUMMERSKILL
My Lords, might I just ask, arising out of that answer—

Baroness WARD of NORTH TYNESIDE
My Lords, surely the noble Baroness can continue her speech?

§ Lord SHEPHERD
My Lords, your Lordships are always tolerant of noble Lords who have particular interests, past or present, in these matters. I would only say to the House that we have now been concerned with this Statement for 27 minutes. We have intervened in a very important debate, and one needs to be 357 fair not only to those who wish to take part in discussion on a Statement but also to those who wish to take part in a debate. I really should have thought that we ought to be moving on—but "fair do's". Perhaps we might allow my noble friend Lady Summerskill to put a very short supplementary point and also allow my noble friend—I hope he is still my noble friend—Lord Hale to put a short question. After that, I think we should return to the debate.

§ Baroness SUMMERSKILL
My Lords, I just wanted to put a short supplementary question. Having seen these women working in the Far East, I should like to ask my noble friend whether dumping is not directly due to the fact that these goods are the product of this sweated labour. Surely, until some other international authority takes action—and perhaps Britain might take some steps in this direction—we shall continue to have dumping in this country and in all European countries.

§ Lord BESWICK
My Lords, the accepted definition of "dumping" is when goods are sold in a foreign country at a price below that at which they are sold in the home country. Although my noble friend referred to the employment of female labour, it is not entirely due to that, I am afraid. However, this is something about which I will make further inquiries to find out what is being done under other auspices.

§ Lord HALE
My Lords, is my noble friend aware that this is the most important Statement I have heard in relation to the cotton textile industry for a very long time indeed? Will he recall that it embodies suggestions I have pressed upon Labour Governments for 25 years, including the utilisation of the purchasing power of Government institutions, such as the Army, the Navy and so on? While I accept what the noble Lord, Lord Rhodes, says, although this is not a magic wand it at once creates confidence. Is it not a demonstration of the fact that within the Common Market we can take unilateral action which we could not take effectively before we were in the Common Market? Would the noble Lord confirm that at the meeting of the Common Market Ministers, fixed for 20th November, the British Government will give the fullest support to further 358 attempts to limit unfair competition within the Common Market area?

§ Lord BESWICK
Yes, my Lords. I give that undertaking. We shall do whatever is possible, as representing the United Kingdom, in the Common Market deliberations. I am happy to think that we have given some satisfaction to my noble friend with this Statement, because I know how deeply he feels about the industries concerned, many of whose interests he represented for many years in another place.