HL Deb 15 December 1980 vol 415 cc901-5

4.42 p.m.

Lord Trefgarne

My Lords, with your Lordships' permission I will now repeat a Statement being made by my honourable friend Mr. Parkinson in another place. I should say that my noble friend Lord Tren- chard had hoped to be here to repeat the Statement but unfortunately he is suffering from an indisposition which prevents him from doing so. The Statement is as follows:

"I need not remind the House of the important contribution made by the textile and clothing industries to the country's economy' and the concern this Government has for their problems.

"It was in recognition of this that—in addition to pressing for the strictest possible implementation of the arrangements relating to imports from developing countries—we earlier this year secured agreement of the European Community to the imposition of quota restrictions against imports, essentially from the United States, of polyester filament yarn and nylon carpet yarn.

"These quotas expire at the end of this year and we have been considering, in the fullest consultations with representatives of the industry and the firms affected directly or indirectly, whether we should seek their renewal.

"We have had to bear in mind the effect restrictions on these raw materials have had on users in this country and also the fact that, in the case of polyester yarn, the Commission has imposed anti-dumping duties on some half of US imports of this product. We have concluded that the balance of advantage does not lie in maintaining these quotas any longer. We shall not therefore be seeking their renewal for 1981.

"The Government are, however, extremely concerned at the damagingly sharp rise in imports of certain other US products and the problems this creates for particular sectors of our industry; and the wider problem, which these imports in a considerable measure reflect, of the impact of United States energy policies on a wide range of British industries, though notably textiles.

"The issue is one which has already been taken up with the Commissioners in Brussels and our Community partners at ministerial and prime minister level. The Government feel the time has now come for a concerted stand by the Community. At tomorrow's meeting of the European Council of Foreign Ministers I shall therefore be seeking agreement to a common Community approach which would in effect put the onus on the Americans to use some of the solutions available to them which will avoid the need for recourse to restrictive action on our side. A faster de-regulation of oil and gas prices is clearly desirable. There is a need for US industry to show greater restraint in pressing their advantages. We shall therefore seek a mandate from the Commission urgently to pursue discussions with the Americans over the whole range of problems and possible solutions and to report back to the Council. We shall also be seeking endorsement from the Council of a firm resolve to take anti-dumping action where this is justifiable—though I do recognise that dumping is in the main not a major element in the problem—and to impose provisional duties where the full process which would lead to final duties would take too long.

"A report on the outcome of the discussion in the Council will be made in due course".

My Lords, that concludes the Statement.

Lord Ponsonby of Shulebrede

My Lords, I thank the noble Lord for standing in and repeating the Statement made by the Minister of State in another place. The fact that the Government have decided not to seek a renewal of the quotas for polyester filament yarn and nylon carpet yarn for a further year after their initial imposition this year is a demonstration, if any were needed, of their ineffectiveness. The Government's mistake was to seek quotas in these two areas and not over the whole range of products in this area. As it is, the import of tufted nylon carpet which is outside the quota area has risen in volume terms by 931 per cent. in the first three quarters of 1980 compared with a similar period in 1979. That figure relates to imports solely from the United States of America. It also caused the loss of tens of thousands of jobs in the industries affected by these areas.

These are restrictions which are imposed by the EEC. Last year the Community agreed with us and imposed these restrictions. This year the noble Lord has told us that we are not going to seek their renewal. One wonders whether this is because other members of the Community do not agree with us any more about these particular quotas. But it must be said that this poses a very serious situation for us and the Government must seek negotiation by the EEC under Article 3 of the Multifibre Arrangement, which will place a duty on the United States to consult about the disruption of trade in the United Kingdom caused by their action.

I think one is bound to ask why this situation has arisen. Why can the US sell to us more cheaply than we can produce this particular yarn? It is basically because the US subsidise some of the raw materials, such as oil, used by the producers. Also it reflects the high level of the pound and the fact that US producers enjoy a protected market with a tariff wall of some 44 per cent. compared with some 13 per cent. in the EEC. The imposition of quotas in this particular area entitles the US to compensation by way of increased quotas in other areas or can lead to a retaliation by the US, and it would seem that in fact the Government have succumbed to some of these pressures.

I am bound to add that this Statement underlines the failure of the Government's policy towards industry. The Government's economic policy seems to be geared to the withering away of British industry. Industry needs to be sustained through this difficult period until it can again become competitive. Once it has been destroyed it will be impossible to re-create it. This is a serious Statement that the noble Lord has repeated, and I again thank him for it.

Baroness Seear

My Lords, from these Benches we also wish to thank the noble Lord for repeating the Statement, and we also regret the reason for the absence of the noble Viscount, Lord Trenchard. Unlike the noble Lord, Lord Ponsonby of Shulbrede, we do not regret the fact that the Government do not intend to apply for a continuation of quota. We do not believe that British industry is best maintained by a continuation of quota, and we recognise that cheap raw materials coming into this country can in fact be of great benefit to certain important sections of British industry. On the other hand, we are glad that the Government are prepared to press the United States Government on the subject of energy prices and the blatant subsidisation of gas and oil which goes on in American industry.

Of course, we on these Benches are entirely in favour of free trade based on genuine competition, but there is no genuine competition where the energy prices are so heavily subsidised. We only regret that the Government have not taken a much tougher line about the subsidisation of energy in commodities in the United States earlier, and we hope they will do their very utmost to bring pressure to bear on the United States.

We would also say how very glad we are that the Government are able to collaborate with the EEC in this regard, and would take the opportunity of pointing out to the people who do not believe that the EEC operates in the interests of this country that any pressure on the United States brought solely by this country would be likely to have very little effect compared with the effect to be had if the whole of the EEC work together towards bringing the United States to change their policy in this regard.

Lord Trefgarne

My Lords, I am obliged to the noble Baroness for that last observation, with which, of course, I wholly concur. The noble Lord, Lord Ponsonby, in his remarks, which by and large I also welcome, asked about the position of other members of the Community. Following on what I said to the noble Baroness, may I say to him that our Community colleagues have been very understanding about our particular problems and have brought no pressure to bear upon us. They are themselves, of course, subject to increases in imports from the United States in the textiles field.

Both the noble Baroness and the noble Lord referred to the main difficulty in this area; namely, the American subsidy, as we see it, of their energy costs. We estimate that the advantage to United States manufacturers of synthetic yarns and fibres as a result of energy policy there is in the range of 8 to 16 per cent. of their selling price. This is a significant figure, which is of course less for downstream synthetic products such as bedlinen, carpets, et cetera.

The noble Lord, Lord Ponsonby, also asked about nylon tufted carpets. We in fact asked for quotas to be imposed on synthetic carpets earlier this year, but our application was rejected by the Community. Since then we have been monitoring the situation very carefully. Imports of man-made fibre tufted carpets from the United States in the first 10 months of this year amounted to 7.2 million square metres, representing an import penetration of 9.8 per cent. This is only slightly higher than the import penetration at the end of last year. In absolute terms the amount of imports has reduced. So the figures the noble Lord produced are not in line with the ones I have in front of me. I am grateful, nevertheless, for what he has said.

Lord Davies of Leek

My Lords, while thanking the noble Lord for the Statement, may I ask whether he is aware that today this problem was dealt with in depth on the radio. Cannot there be some conference of the trade unions and/or the manufacturers in the textile industry? This industry has lost 100,000 people, and we in this country are living an existence more dangerous than that of a one-armed window cleaner. Cannot something now seriously be done about it? If we want to be strong economically and strong in arms, we cannot do it with this kind of underground subsidy of imports brought into this country.

Lord Trefgarne

My Lords, one needs to get this matter into perspective. In the first 10 months of this year United Kingdom exports totalled £3.84 billion while imports from the United States totalled £5.17 billion, an adverse trade balance of £1.3 billion, of which the textile figure was minute indeed, only about £160 million.

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