§ Motion made and Question proposed, That the sitting be now adjourned.—[Mr. Dowd.]
§ 10 am
§ Judy Mallaber (Amber Valley)
I welcome this opportunity to debate a national strategy for the United Kingdom textile and clothing industry, and I thank Madam Speaker for recognising its importance by allowing us to discuss this. I know that we were in competition with some of my colleagues from the east midlands, who sought an Adjournment debate on the economy of that region. Given that textiles and clothing are the region's second largest manufacturing industry, today's debate will go some way towards meeting their request.
I was privileged to succeed by hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas) as chair of the all-party parliamentary clothing, textile, footwear and carpet group. In November 1998, he initiated a debate on the industry, and there have been several since then, including a memorable one in which we paraded in hats of the finest quality, which were made in Luton. That was most enjoyable, and generated considerable publicity for the industry. Such publicity is one of the aims of today's debate.
Those all-party group members who tabled an early-day motion last week and sought today's debate did so because the industry has reached a watershed—it is make or break time. As I speak, 200 more workers in my constituency are being made redundant in a Courtaulds factory that is closing down. The industry and its employees are experiencing difficult times. Marks and Spencer, of which we will no doubt hear more in this debate, has even killed off St. Michael.
On a more positive note, an industry report produced over the past year now offers a strategic way forward by providing the opportunity to retain a strong, though changing, clothing and textile industry. Department of Trade and Industry Ministers gave a lead by encouraging industry partners to produce that report, and I applaud them and the DTI staff who helped to produce it. Once consultation on the report is complete, all parts of the industry must work together and act urgently on its recommendations. We cannot afford to let those recommendations rest. The Government must provide support so that the industry can move forward, and I hope that today's debate will help that process. We must grasp the future now, or accept continuing decline in the industry as inevitable and unstoppable.
The report's executive summary says that:the industry is currently facing the biggest challenge in its history. Low labour-cost suppliers are securing an increasingly large share of world markets, state aids are distorting competition and sourcing patterns on the UK High Street are changing.2WHThe industry must respond quickly to the changing circumstances. If it does so, it will slow the pace and scale of its contraction and increase the chances of maintaining critical mass.The consequences of failing to respond quickly are obvious: continuing job losses, continuing decline and no future for an industry that, in my view, ought to have one.
I shall return to the document's details in due course, but the main message of today's debate is that the textiles industry is important to the UK economy and can remain important, even though it may change. The industry itself, its commentators and all levels of Government must stop writing off the industry. They must accept and believe that it is not just a sunset industry and that action can be taken. This morning, I took part in a programme on Radio Derby. It tried to concentrate on doom and gloom, but fortunately some of the other people taking part, who were involved in preparing the report, are looking for a way forward although they face job losses in their own companies and unions. We should not talk down the industry, but accept that while it has problems, it also has a future. That has implications not only for the industry, but for government at all levels.
I should like to make a few comments about the importance of the textile and clothing industry and the problems that it faces. I shall then say more about the strategy document and highlight a few of its recommendations, including the action and support that are being requested from Government and public agencies. I can only touch on the issues involved, which are highly complex and cover a wide range of areas. No doubt others will want to discuss some of those issues in more detail. Several other hon. Members would have liked to have been here today, but unfortunately had other commitments. I am sure that they will take part in the continuing debate in the months ahead.
My main point concerns the importance of the industry. It is still the eighth largest manufacturing industry in the United Kingdom, and we should not just ignore it on the assumption that it is going down the Swanee. It has a future. The entire sector of clothing, textiles and footwear has sales of more than £17 billion and employs about 306,000 people. It employs more people than agriculture, motor vehicle manufacture and the chemical industry, and is bigger than the coke and nuclear fuel sector and the rubber and plastics sector. Although people in the industry do not necessarily begrudge the help that is given to farmers and aerospace, they point out that they need help as well. Generally—although not always—they are hoping not just for a handout, but for assistance, on the basis that other industries with fewer employees are receiving it. The document's recommendations are a starting point in enabling that to happen.
Of the 306,000 employees in the industry, 160,000 work in the textiles sector and 119,000 in the clothing sector. The industry is of particular significance in certain regions. A quarter of its jobs are in the east midlands, and it is vital to the local economies of towns and cities such as Leicester, Mansfield, Sutton-in-Ashfield and those in the Amber Valley area. It accounts for a quarter of all manufacturing jobs in Nottinghamshire and Leicester. I am sure that other hon. Members will refer to sectors of the industry that have a proud history in their regions.
3WH Nobody can have failed to hear the screams of anguish in recent months and years as jobs continue to disappear. Import penetration is high. Although many imports come from countries with very low labour costs, many come from those with high investment. When the mayor of my local council—who was himself recently made redundant from Stevenson's dyeing works—visited China to look at the textiles industry, he was amazed by the level of investment and the capital equipment, which is often way ahead of ours. However, one of the Japanese companies that he visited was considering moving to Indonesia, where it would benefit from high capital investment and low labour costs. Both are significant.
Pressure also comes from high street retailers. By seeking ever lower prices, they encourage bigger manufacturers into cheap offshore supply strategies, while smaller companies are left to flounder. Courtaulds, which has just closed its factory in my area, mainly supplies Marks and Spencer, and said that the problem is caused by overseas competition—although some of that arises from its own overseas production. It is a complex matter.
Between September 1998 and September 1999, more than 36,000 textiles and clothing workers lost their jobs—more than 690 workers for every week of the year. Other hon. Members will, rightly, want to discuss in this debate the strong pound, international trade, tariff barriers, and what should be done in the various trade talks that are to take place. While those are important elements of the problem, it is of longer standing than that. Since 1994, more than 1,300 clothing companies and 468 textiles companies have ceased to exist, and the problem predates that by a long way.
Facing up to the challenge of cheap imports and a shrinking market has not been easy. Under-investment in technology, innovation and training has made closure the only feasible outcome for several companies, including some of those that I mentioned. This is a traditional sector, but it has to adapt to today's knowledge-led economy. That is possible; the opportunities exist. We can have a clothing and textiles industry in the future. It may be different, but the industry can adapt. However, many of the companies are small and medium-sized enterprises, and they need help to develop and access the resources that exist.
The textile and clothing strategy group is a mixture of the British Apparel and Textile Confederation, industrialists, retailers, academics and union representatives; that is a broad range. Its report is now being consulted on, and I understand that the group has received a number of suggestions for fleshing out its recommendations. The report makes 51 recommendations and aims to find a way forward. The prime aim is substantially to improve the industry's ability to compete successfully in the global marketplace, and the report puts great emphasis on the need for the industry to adapt. Innovation, diversification, training, marketing, exporting and networking are all cruical to competitiveness.
The report says that it does notseek to protect the domestic industry from the winds of change.4WH It recognises that there are some aspects of textile and clothing manufacturing in which the UK will never be competitive, but it also recognises that the industry has tremendous strengths and that there are great opportunities in areas such as technical textiles, designer wear, dyeing and finishing, branded clothing, capital intensive manufacturing and high-value niche markets. The trick is to try to find the sectors in which we can compete and to build on them. Forward-looking companies have been able to do that. One of the companies in my constituency, Guilford Europe, realised some years ago that it would not be able to compete in high production, high turnover, very low-cost manufacturing of clothes, so it decided to diversify. It studied the market, changed its production line and moved to producing fabric for cars. It is now doing well; it is a successful company. It is possible to achieve that, although other companies will not find it so easy. We have to consider how we can assist them.
The report contains recommendations aimed at manufacturers, training providers, support agencies, employers' federations and others, including the Department of Trade and Industry. The main focus is on what the industry should do, but it also needs strong leadership and support from all levels of government. Most companies operating in the sector are small and medium-sized enterprises. Many simply do not have the personnel and resources to implement such changes on their own, and several of the employers' federations are in a similar position. The report contains a range of recommendations but puts a fairly heavy onus on the federations and other parts of the industry. That needs to be combined with Government support.
I will give an example. One recommendation is that the British Clothing Industry Association and other trade associations should introduce proposals to strengthen their marketing skills. The sector needs to work collectively, but many small and medium-sized enterprises do not know where to start, as they are not used to working collaboratively. We are always told that one advantage of the Italian industry—one European industry that seems to have flourished—is that its members are more prepared to work collaboratively. That may or may not be true, but we should investigate it and learn from it. To be effective, companies will need marketing help from public agencies, as well as the trade organisations. An individual company cannot necessarily employ its own marketing manager; it will need assistance to be able to do that.
Again, there are positive examples. My hon. Friend the Member for Wyre Forest (Mr. Lock) is sorry that he cannot be here today. As he represents Kidderminister, he is the carpets Member, and we have added carpets to the name of our group, I need to mention the carpet industry. He wanted to celebrate the success of some of his local companies, such as Tompkinsons, Brintons and Victoria. The companies that have invested in new plant and considered niche marketing have been successful. Unusually for the industry, they have collaborated on a marketing strategy, bringing in marketing advice. They have been able to do that themselves and have even won marketing awards for their work. Other companies are likely to need more help. Once the recommendations have been fleshed out and the report is final, everyone in the industry must pay attention to the detail.
5WH Assistance will be needed to implement some of the recommendations. The Department of Trade and Industry has a role to play in the transfer of technology. Too many companies can fall by the wayside because they do not know how to diversify or how to begin to find the expertise. I do not know enough about how DTI industry funding works to know what assistance can be given, but I know that it will be given only if it raises the industry's standing. It is no good a company coming along and saying, "Gives us a handout—but we won't work with anybody else."
The report highlights the fact that in 1998 403 United Kingdom firms received small firms merit awards for research and technology—SMART awards—and only 12 were in the textile and clothing industry. We must discover whether that was because they did not apply, whether, as some companies say, the barriers are too fierce or whether there is a prejudice against the textile industry because it is considered to be an industry of the past. Because of the industry's regional nature a number of the recommendations will need local implementation. Government must play a part in ensuring that Departments, officials in regional government offices and regional development agencies get the message that we believe that the industry has a future, albeit a changing one.
There are too many stories of companies not necessarily getting the help to which they are entitled. I have only just heard from business link about one such company in my constituency, so I have not yet been able to investigate the report fully. It is D&E Textiles, a computer-aided cutting company—at the cutting edge, one might say—which is seeking to expand. It is an area that is entitled to receive regional selective assistance. Business link was giving the firm assistance to do that, but it was turned down. The company wants to expand, but it was told that this was not viable. It is viable. The firm is seeking to expand and it needs more equipment. It is now trying to get another type of grant and has been told that, because it was turned down the first time, it is clearly not eligible the second time. There may be reasons for that and I intend to investigate, but there are too many tales of insufficient enthusiasm for taking up the industry's needs, and that message must be taken down the line.
We know from companies that have taken steps themselves how the report's recommendations can be implemented. I have mentioned some. There was also an example in the constituency of the hon. Member for Tiverton and Honiton (Mrs. Browning). At the Knowledge 2000 conference a couple of weeks ago, addressed by the Prime Minister, delegates heard at first hand of a success story from Eric Newton of Heathcoats at Tiverton. He said that, by implementing the points in the report, he has maintained employment levels, trebled output and added value to his product.
The recommendations cover a range of areas, including capital investment, training and skills—the Department for Education and Employment may need to consider that. E-commerce and supply chain issues are also increasingly important, and not simply in relation to shopping on the internet. I understand that 80 per cent. of transactions would be business to business. Present mechanisms in the industry that bring suppliers and retailers together do so face to face. E-commerce should be able to speed up that process and 6WH make the supply chains work better, as has happened in, for instance, the automobile industry. There is a role not only for the industry but for Government agencies to help in the development.
There is a great deal of work to do. The industry needs a major culture change. The report clearly says:The textile and clothing industry recognises that ultimately its destiny is in its own hands.Nevertheless, other organisations have an important role to play, including Government organisations, both nationally and regionally, academic organisations, trade associations, unions and others. The industry will call for additional financial assistance in some of those areas and, at the very least, we must ensure that sufficient information and assistance is available to enable companies to access any funds to which they are entitled.
Other recommendations in the report include the setting up of a fund specifically to assist innovation within the industry. As the SMART programme does not seem to have been very effective, perhaps the Department of Trade and Industry will consider imaginatively whether a special programme for the industry could be tied in with its innovation fund to assist with technological innovations.
One recommendation in the report that should be considered very seriously and carefully is the proposal that the Government should make funds available on a sectoral basis. People in the industry get upset when they see other industries apparently receiving funds that they cannot access. It is not clear to me that they receive those funds on any different basis but, at the very least, the matter should be examined. We hear many stories of how the industry in other European countries is able to access different taxation regimes and different methods of applying the rules. I am sure that my right hon. Friend the Minister will say that it is difficult to make funds available on a sectoral basis outside the areas covered by current programmes, and I know that there are problems, but there must be methods by which we could be more innovative in ensuring that funds are available to help the industry to operate better and to move forward.
If all the recommendations are to be implemented, a culture change is necessary in the industry, with a partnership between all sectors. The industry has not always been good at that and we should examine the record of other countries that seem to have had more success to see how they have achieved it.
The textile and clothing industry can have an important future. There would be more of a public outcry if any other industry as large and as important to the economy as the textile industry were losing so many jobs and so quickly. The report lists many things that can be done and its production is greatly to the credit of the industry and the Government. It will encourage the industry to look forward to a period of social partnership in which those recommendations can be implemented. That will be painful for some companies that are unable to compete. They will suffer continuing job losses, which will be horrible for some of our constituents, many of whom have been made redundant from one firm after another and have had to trail around different companies. However, the future can be positive. We must acknowledge past job losses and do what we can to stem them, but we must also be positive and talk up the industry.
7WH UNESCO has agreed that the area on the border of my constituency and that of the hon. Member for West Derbyshire (Mr. McLoughlin) should be a tentative site for world heritage status and that is likely to be confirmed within the next few years. It is based on the Derwent valley and the pioneer development of the textile factory system through harnessing water power from the River Derwent. The area was the cradle of the industrial revolution. Our tourism industry is now based as much on our industrial heritage and the magnificent mills built by the Arkwrights and the Strutts as on our beautiful countryside. It is wonderful to celebrate the innovation and brillance of those pioneers who started the textile industry.
However, that should be seen as not only our industrial heritage but an example of how progress can be made and how the textile and clothing industry can flourish into the future. It will not remain the same and there will be much pain along the way—indeed, that is happening now—but we must do what we can to ensure that the industry has a future and is not written off as a sunset industry. We should act on the report's recommendations and work together at all levels to enable the industry to have a future.
§ Mr. David Tredinnick (Bosworth)
I congratulate the hon. Member for Amber Valley (Judy Mallaber) on securing this important debate. Many hon. Members wish to contribute, so I shall not detain the Chamber long.
In the previous Parliament, I spent the best part of a year in this Room—which was then the Grand Committee Room—as I was a member of the Committee that sat for three days a week discussing the Channel Tunnel Rail Link Bill. In mapping the route through Kent, we examined the fate of endangered species. We considered whether deer could jump railway lines and whether mice could get beneath them. At the risk of being accused of flippancy, I suggest that the textile, hosiery and knitwear industry may be another endangered species. May I remind the Chamber that since the Government came to power, 25 per cent. of the industry has disappeared? That is a ghastly position. Last year, on behalf of workers in my constituency, I presented Parliament with a petition, which the Government did not even acknowledge. I raised the petition again at Question Time, when a Minister apologised for the Government's failure to give a response and promised to examine the matter, but nothing has happened, so my confidence in the Government's ability to solve or reduce the problem is not great.
That is one of the fundamental problems with the Government: they put too much emphasis on presentation and spin and not enough on substance. I spoke to the hon. Lady earlier and she suggested that I might be sceptical about the report. Indeed, I am. One Minister described it as a task force. A task force went to the Falklands, but I do not think that many ships will be sunk on the industry's behalf. Rover at Longbridge gets all the perks. I do not begrudge it that, as many workers in my constituency are employed by the motor 8WH industry. However, the Government seem to have forgotten the hosiery and knitwear industry which, unlike Rover, does not get tax breaks or rate reductions, as I discovered from personal research.
The Government must show that they take the matter seriously in their repsonse to the report. We do not want words and spin or a Mandelson version of the matter: we want the Government to take action and tackle specific areas.
I shall not summarise the report, as I wish to give other hon. Members an opportunity to contribute. Indeed, I know how frustrating it is to attend these short debates and not be called to speak. In 1987, I made my maiden speech on the problems created by the importation of cheap Chinese underwear. That was not an easy speech to make, but it attracted the atttention of "Yesterday in Parliament": indeed, that thought crossed my mind before I made the speech.
A key issue in the report is the importation of cheap foreign clothing. The Government are not enforcing the law, but they should, as many such products are coming in illegally. I agree with Paul Gates of the National Union of Knitwear, Footwear and Apparel Trades—KFAT—who told me that it was essential to clamp down on illlegal imports. Many companies in my constituency that have gone to the wall as a result of cheap imports would not have done so if we had taken a more robust attitude. We should not ignore obvious solutions in our search for new strategic solutions.
The report does not cover dye works in great detail and does not examine the problems that they have had to put up with as a result of new environmental standards. Several dye works in my constituency have gone to the wall as a result of new regulations imposed by the National Rivers Authority. At least two of them have gone to the wall because Severn Trent Water would not invest in new equipment to get phosphorescent and other complex modern dyes out of the water. The Government should examine the water companies' treatment of such companies.
The hon. Lady referred to the importance of niche markets. Bodycotes is a wonderful company in my constituency making high-quality underwear. "More underwear," hon. Members may say. I am not obsessed with underwear, but we make a lot of it in Hinckley—that is a fact.
One of the first things that I did when I was selected as a candidate in 1986 was to go to Hinckley Makes It. It was amazing to see the factory girls modelling all the underwear made in my constituency. It was a great credit to them that they were prepared to go on the stage at the Concordia theatre once a year to show the town what was made there. It was a great show, which I commend to my colleagues.
§ Charlotte Atkins (Staffordshire, Moorlands)
Perhaps the hon. Gentleman is offering a few tips to Marks and Spencer, which might become more profitable if it followed the example of the company that he has mentioned.
§ Mr. Tredinnick
I thank the hon. Lady for her support. The Marks and Spencer black hand has cast its shadow across my constituency too.
§ Mrs. Angela Browning (Tiverton and Honiton)
I am concerned that the complaints made to Marks and 9WH Spencer at its annual general meeting came from a lady of about my age. I must say that, despite the fact that I purchase underwear from Marks and Spencer, it may not be a selling feature for women of my age to model underwear for that shop.
§ Mr. Tredinnick
My hon. Friend is ever charming. However, we had better not get into an old-fashioned sexist style of debate, because with new Labour in the room that may not be appropriate, and I do not want to be drawn into speaking for too long.
Marks and Spencer is a major problem. Another problem that we have had in my constituency is that an Italian managing director stripped out and moved an old-established company, Pex, to Romania. I had to support the workers at a sit-in at the plant—[HoN. MEMBERS: "Oh."] Yes, that gives me some old Labour credentials, although I am a Tory. I do not want anyone to mistake my political allegiances, and especially not the Minister. I went down to the picket line because there was a lot of yarn in the factory. The Pex workers knew it was there, and they were owed some money. All credit to them that they held out against the bogus managing director, and protested against what he had done to their company. They got some recompense, and jolly good luck to them.
The Chancellor should help the industry; there should be support for high-tech machinery investment. Rate relief is also important, but there is much that companies can do for themselves. They say that God helps those who help themselves, and I sincerely believe that. Companies have much to learn from modern technology. Computer-aided design is coming down in cost and increasing in capability all the time. Companies must keep their eye on that. We now have e-commerce and the new development of selling on the internet, to which the hon. Lady alluded in her speech. I have said to many companies in my constituency, "For goodness sake, think about selling direct. You can get a website up and running for £500." That area is developing at such a pace—one's friends and one's children's friends are spending a lot of time on the internet—and it is a great way of adding to market sales without a lot of extra cost.
This is an important debate, and I welcome it. I hope that the Government will take some action. The great danger is that they will merely put a spin on the matter.
§ Mr. Kelvin Hopkins (Luton, North)
I have relatively little claim to speak on behalf of the clothing and textiles industry, because in my constituency it is not large. None the less, during my first year in the House a small hat-making company closed there. It was not a traditional hatting company, but one that had invested in modern machinery; a high-tech hat producer. However, it still closed. That was a harbinger of harder times, because other companies in the textile and clothing industry in Luton have closed since then, although none of them was in my constituency.
Textiles are an example of a problem in manufacturing in general. I refer to manufacturing in general because I am a member of the all-party manufacturing group and want to promote the interests of manufacturing to ensure that Britain retains a substantial manufacturing sector. I do not have time to go into the arguments now, but manufacturing is vital to our future.
10WH The problems in our manufacturing industries stem essentially from overseas competition. We have a substantial trade deficit in manufactured goods. In 1999, we had a £6 billion trade deficit in manufactured goods with the European Union alone, a substantial component of which was in textiles. The United Kingdom textiles and clothing industry is a special case even within the manufacturing trade deficit. Between 1990 and 1998, the growth rate of all United Kingdom industries was smaller than the overall economic growth rate, but at least industry in general grew by 1.9 per cent. However, the textile industry reduced by 2.5 per cent. each year during that period. Indeed, in 1998, textile output fell by 7.6 per cent., which contrasts with an increase of 2.3 per cent. in 1994. Those years are significant and are reflected in the trade statistics. There has been a massive deterioration in the trade balance in textiles and clothing.
I shall consider specifically the textile industry because it probably provides the best example of the two groups in Government statistics. Between 1994 and 1998, the total trade deficit in textiles increased by a staggering 35 per cent.; it increased by 53 per cent. with the EU alone, and by 25 per cent. with the rest of the world. Those statistics are very significant and show the effects of dramatic changes in the exchange rate.
Sterling appreciated by 27 per cent. relative to the deutschmark between 1995 and 1998. There was a 33 per cent. appreciation in the euro-ecu-sterling exchange rate between 1995 and this January. Textile and clothing manufacturers have to face such extremely difficult competition. Interestingly, the pound appreciated by only 4 per cent. against the dollar and by 17 per cent. against the yen in that period, and Japan has had its problems. It is significant that the trade balance has deteriorated more in relation to the EU than with the rest of the world. That is directly related to the differences in exchange rates. The exchange rate with Europe has deteriorated significantly more than that with the rest of the world.
Exports are constantly emphasised in the trade debate. Of course, exports are important. There was a surprising 2.8 per cent. increase in textile exports between 1995 and 1998. However, imports are the problem; they increased by 22 per cent. during those three years. Imports are seriously damaging domestic markets. The problem is one of price competition and exchange rates. The Government must address the exchange rate problem for the sake of the textile and clothing industries as much as for the rest of manufacturing. Indeed, the statistics show that those industries are much more sensitive to price competition than other areas of manufacturing.
We have a so-called strong pound. I do not like the term "strong"; I think that "inappropriately overvalued" is more appropriate. The pound has not changed very much compared to the dollar, but there is an incredibly shrinking euro, and the evidence hits us between the eyes. I am not a great enthusiast of the euro project, but I was astonished at the depreciation in the euro after its foundation. There will be a serious exchange rate problem for the foreseeable future, and the Government must address it.
As I have said, we had a £6 billion trade deficit with the EU last year, but a few years ago we were in balance. That must be a result of exchange rates. Following the 11WH exit from the exchange rate mechanism, we witnessed a substantial fall in our exchange rate relative to that of the euro zone, and a dramatic improvement in trade and manufacturing. I return to the fact that even textile production expanded in 1993–94, although it later fell catastrophically.
Will the Minister ask his colleagues, including his right hon. Friend the Chancellor, to examine the exchange rate problem? It is serious, and cannot be solved without addressing the macroeconomic difficulties facing the industry. This is a fine report on national strategy, but it does not draw sufficient attention to the exchange rate problem or to the macroeconomic problem. I hope that the Government will look at those matters in the near future.
§ Mr. Phil Woolas (Oldham, East and Saddleworth)
I congratulate my hon. Friend the Member for Amber Valley (Judy Mallaber) on securing this debate. I also congratulate the authors of the report. This strategy document on the United Kingdom textile and clothing industry is a consultation document, and I am sure that the contents of this debate will be fed into that consultation.
I congratulate the authors on producing an example of social partnership working at its best. It involves employers from across the sector, as well as the trade unions. We should thank the three trade unions involved for their positive and progressive input into this debate. The secretariat of the report is the Department of Trade and Industry. We should not be too critical of the DTI, but recognise its important leadership role. However—[Laughter.] I shall come to the howevers in a moment. I have a few brief points to make.
Many myths surround the industry, and my hon. Friend the Member for Amber Valley highlighted a few of them. However, she was wrong in one crucial historical respect. The cradle of the industrial revolution was not Derbyshire but Oldham, where the textile industry was very important. That industry has declined over not only the past three years but the past 100 years, with the shift to overseas production.
One of the myths being perpetuated is that overseas competitors have the advantage over us only because of unit labour costs. That is not so. There is a disparity in labour costs across the world, but some of the highest investment value, the best technology and the best matching of design with knowledge of markets and production techniques comes from what we patronisingly call the third world. In fact, there is a shift of production from India to Mauritius, just as there is from the United Kingdom to Morocco. This is a global industry, and if we base our strategy on the belief that our only disadvantage is labour cost, we cannot succeed. We cannot dismiss labour costs as an issue, but nobody should base a strategy on that alone. Thankfully, this document does not do so, and marks a turning point in that respect.
The second problem in the industry, which relates to the supply chain, is outlined on pages 20 to 22 of the report. The supply chain in this country is upside down.
12WH Our manufacturers do not have customer knowledge, market research skills or the ability to match design and customer demand. That knowledge lies in the retail sector, and the retailers wield the big stick in the United Kingdom. I refer especially to Marks and Spencer. There is no doubt that the UK industry requires Marks and Spencer to succeed, because 16 per cent. of the retail industry goes through it.
M&S has traditionally been criticised for reducing its UK supplies, although it should get some credit, because no one has focused on British Home Stores and other companies that use nothing like the same amount from UK sources. Nevertheless, M&S carries the most clout and it does not and has not worked in partnership with manufacturing suppliers. It has used its market position to dominate them, so at the stroke of a buyer's pen or a telephone call to Morocco, it can move production, and hundreds of UK workers lose their jobs.
§ Mr. Ted Rowlands (Merthyr Tydfil and Rymney)
I underline the strength and power of my hon. Friend's case by saying that, in my constituency, three factories are closing as a result of such decisions.
§ Mr. Woolas
That is a sadly familiar story and I look to my right hon. Friend the Minister to respond to it. There is a section in the document on M&S.
My hon. Friend the Member for Amber Valley mentioned the lack of take-up of regional selective assistance. The document states that there has been a lack of take-up of RSA by textile and clothing companies and that there is anecdotal evidence that some officials administering RSA are not convinced of the merit of supporting investments in the sector. That is within my right hon. Friend's power to change.
On public procurement, the document recommends a partnership, and we should consider it. We do not need unfair competition; what is needed is a partnership of suppliers and purchasers to take advantage of UK products and our excellent skills in a sector in which we are world leaders.
§ Charlotte Atkins (Staffordshire, Moorlands)
I, too, welcome the national strategy for the United Kingdom textile and clothing industry. The consultation document has much to offer the industry. Most importantly, it recognises that the industry holds its destiny in its own hands. Although trade associations, unions, universities, colleges and the Government have vital roles to play, the industry realises that to survive it must make itself globally competitive.
As my hon. Friend the Member for Amber Valley (Judy Mallaber) said, the textile and clothing industry is still a significant employer. However, the industry is clearly approaching a watershed and there is a danger that further contraction will lead to the loss of a critical mass. The industry must and will take initiatives to put it on a more competitive footing, but that must be underpinned by more Government support if the industry is to survive this critical period of adjustment.
My constituency is typical of many textile industry areas. Most of its textile and clothing firms are suffering badly from the strength of the pound, although none 13WH would blame the pound for all their ills. For example, Leek Dyeing and Finishing, which has been operating successfully for 16 years, last week announced that it is going into receivership. The combination of having to move premises, the lost orders resulting from a flood, and the strength of the pound make its products uncompetitive compared with imports from the far east. That was enough to push it under. However, it had invested in good equipment and premises, so with luck the business will be sold as a going concern, with the loss of only a few jobs.
Those firms that are busy have played to their strengths. Marling of Leek, with nearly 200 employees, is the biggest supplier of webbing in Europe. It makes safety harnesses, straps to secure lorry loads, climbing equipment and so on. It sells its webbing products at half the price that they could command a year and a half ago. At the same time, the price of yarn has risen. It is being stung at both ends. The firm has protected itself by becoming part of a bigger group, through which it markets its products. The company also recognises the value of investing in its work force. Under the Japanese-style Kaizen system, employees are rewarded for their ideas. If their innovations are introduced into the production system, the employee reaps some of the benefits. Thus, staff are empowered to involve themselves in the productivity and long-term viability of the company.
Selectus in Biddulph employs 230 people. It used to control the Velcro brand name in the UK, but now merely manufactures Velcro under contract from the company. Instead, Selectus is concentrating on its traditional ribbons business. Traditional outlets for its products have declined, so it has to find new outlets and ways of adding value to its output. As a Marks and Spencer accredited company, it still supplies stores, but instead of clothing, it is focusing on good design for packaging. As the far east catches up on design and quality, Selectus sees its future in developing new products and keeping ahead of the game through constant innovation and attention to the demands of the market and its customers. Like other companies, it has been hit by the strength of the pound. However, it protects its production volume by trading in foreign currencies. That may hit short-term profitability, but surviving this transitional period will protect its markets.
What does the experience of such local companies tell us about the future of the textile industry? In most areas of the textile industry, constant investment is required to remain internationally competitive. Such investment not only allows manufacturers to produce goods at lower unit costs but enables them to innovate through the development of new products and new processing techniques, so it is vital that the industry is fully aware of the funding streams to support innovation. The Department of Trade and Industry has an important role in ensuring that the industry is properly informed.
The UK textiles and clothing industry needs strong and relevant skills to compete successfully. However, there is a widely held perception that the industry is in decline—that it is low-tech, and does not offer good career prospects or good pay. If companies are to be successful, they must recognise training as an investment, rather than a cost. My local further education college in Leek is demonstrating the way 14WH forward. It has developed a high-tech textile design centre offering training, design packages, and technology to improve cutting techniques and overall efficiency and effectiveness. As many FE colleges are suffering the effects of long-term underfunding, financial backing is necessary to ensure the viability of such centres. If textile companies are to attract the bright recruits that are needed to develop the industry, there is no alternative to projecting a new image of the industry within schools and colleges. That must be backed by the relevant local skills councils and by regional development agencies.
There is a small window of opportunity to empower and invest in the industry. The industry has a bright future, but only if we face the challenges ahead and create the necessary partnerships to succeed. The creation of a national strategy for the UK textile and clothing industry is an excellent start.
§ Mr. Terry Rooney (Bradford, North)
It is a pleasure to speak again in an Adjournment debate on the textile industry. It is the sixth such debate since I have been a Member of Parliament, and I congratulate my hon. Friend the Member for Amber Valley (Judy Mallaber) on securing it.
I was amused by the comments of the hon. Member for Bosworth (Mr. Tredinnick), who referred to tax relief, rate relief, financial assistance and support, sit-ins and picket lines. If we had heard that during the first 10 years that he was in Parliament, the industry might be more grateful.
As I come from Bradford, I am steeped in the textile industry. I must have lanolin in my skin. My family has given 90-odd years' service to the textile industry and, sadly, suffered 25 redundancies. My family's history is the history of the textile industry. There have been some famous names in Bradford, but some of them have gone. Dawson, Pringle, Hields, Parkland, Listers, Woolcombers, Salts and Illingworth Morris were giants of the textile industry, but they are no longer, for reasons that are many and varied.
The textile industry is worth £27 billion, but 40,000 jobs have been lost in the past 12 months. That sounds bad, and it is, but in the 1981 recession 50,000 textile jobs were lost in West Yorkshire alone. That recession ripped the heart out of the industry, which reeled for a long time. Over the decades, the industry had many knockbacks and troughs but, unfortunately, very few peaks. Governments have had a role in all that. If at certain times in the past three or four decades the textile industry had been given any support at all, it would not be in the mess that it is in now.
A great deal has been said about support overseas. It is true that the money that is still being poured into the textile industry in Germany, Belgium and Italy has a direct impact on what is happening in this country. In Germany and Belgium, money is funnelled in through regional and state governments. Perhaps there is a lesson for us there. If we had elected regional assemblies, we might be able to indulge in the same practice. In Italy, support has gone primarily to the industry's design and marketing side, which is a major weakness of the British industry. It can make superb products but its design and marketing have never been what they should be.
15WH The textile industry is not looking for handouts. It wants fairness, not favours; but, in fairness to it, the Government delivered body blows to it in the 1990s. Being a low-paid industry, it has always mirrored closely the assisted area status map and the objective 2 map. In the mid-1990s, large areas of the industry were removed from the objective 2 map. In 1993, assisted area status was removed from Bradford and given to Hastings, a decision that only compounded the felony. The industry does not want the Government to tie one hand behind its back. However, by way of a tribute to my right hon. Friend the Minister, I must say that Bradford is delighted to be on the assisted areas map once again. It will put that to good use.
In addition to losing assisted area status and being removed from the objective 2 map, there was the fiasco of the sell-out by the previous Government on the multifibre agreement. That was another body blow to the wool industry in particular. The right hon. Member for Henley (Mr. Heseltine), who concluded the Uruguay round of the general agreement on tariffs and trade in 1994, famously sold out the textile industry to obtain a deal on agriculture by signing an agreement that meant that British textile exports to the United States started with a 37 per cent. tariff, which decreased by 1 per cent. each year for 10 years. So when it is next reviewed in 2004, there will still be a 27 per cent. tariff—and these are supposed to be two free-trade nations. It is a joke.
The industry is wondering what to do next. Only this week the Government announced that they would give BAe £500 million. Previously they gave money to Jaguar, Rover and Ford. What the textile industry wants first and foremost is political support from around the world. Secondly, it wants support for its design and marketing sector. Thirdly, it needs support for trade fairs and other operations abroad. The industry needs to get its own act together. Last November, I visited the trade high commission in New York. I was told that last year its trade office received only 192 inquiries from the United Kingdom about access to the biggest market in the world. I find that frightening.
Regional development agencies have a role. An economic package is being put together in Yorkshire to identify deficiencies in the industry and help to reverse them. Much is said about the training requirements of the work force, but the greatest training requirement in the textile industry is, frankly, for management, in order to provide more foresight into where markets are and how to deliver them.
§ Dr. Brian Iddon (Bolton, South-East) s
In the northwest, 60,000 jobs are still dependent on the textile industry. I come from Bolton, which is synonymous with textiles, as both Crompton and Arkwright lived, worked and invented in the town. There are now three textile industries in the north-west. Everybody knows about the traditional cotton industry and there is also the clothing sector, on which 500 companies in the Greater Manchester area alone are dependent. There is also a growing third sector, called the technical textiles sector, about which I want to be upbeat.
16WH The European market for technical textiles is around 21 per cent. of the entire textile market and it is growing at 5 per cent. per annum. That is true all over the world. The technical textile sector needs investment, and I plead with the Minister to support it. Traditional industrial textiles represent 43 per cent. of the sector; transportation, including automotive uses, 23 per cent.; civil engineering textiles, 10 per cent.; medical textiles, 10 per cent,; and protective clothing, 2 per cent.
The north-west is probably the UK centre of the industry. The aerospace industry is concentrated in the north-west. It uses many lightweight materials, including carbon, aramid and glass-fibre reinforced composites, which are all structured using textiles produced in the north-west. Some of our oldest companies—such as Andrews Textile Industries of Bury, which started out making laundry blankets in the previous century are now some of the world leaders in the sector. That company now makes filtration fabrics, also a growing market. Medical textiles are also important. Smith and Nephew, Johnson and Johnson, Setons and Vernon Carus are all leading health care companies, relying more and more on the development of technical textiles in the medical context.
It may surprise right hon. and hon. Members to know that the modern motor car contains 20 per cent. by weight of textiles. It is a growing feature of the automotive industry, important for lightness, fuel consumption and so forth. That all shows how many leading players there are in this growing sector in the north-west.
I also wish to be upbeat about the clothing manufacturing sector. Indeed, the largest and most modern knitting facility in the UK is in Bolton, my home town. It is called Swordward and it manufactures football strip, using the most modern technology anywhere in the world. It satisfies a performance and fashion-conscious market that changes not only between seasons but, as shown by top clubs such as Manchester United, mid-season.
In Yorkshire, the woollen industry has got its act together and started a centre of excellence based in Huddersfield. I am pleased to announce this morning that the cotton industry in the north-west has also got its act together and on 1 March this year, at Bolton institute in my constituency, a centre of excellence was created by Professor Dick Horrocks, dean of technology. It involves many companies and organisations throughout the north-west. It has a business plan and needs more than £141,000 to see it through the first two years of the pilot project. So far it has raised £71,000. I look at the Minister and ask for help with the pilot project. It hopes to keep going beyond the initial two-year pilot stage. It will provide a great impetus to developing the north-west textile industry. My congratulations go to the Bolton institute, to Professor Dick Horrocks and to all the people, including the unions, who played a role in establishing that centre of excellence.
I would have liked to have said much more, but I know that time is short.
§ 11.4 am
§ Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)
We have had an important and timely debate this morning. Some hon. Members have tried to 17WH catch your eye, Mr. Deputy Speaker, and some have succeeded and kept their comments brief, which shows how important our debate is and how many different interests there are around the country. I congratulate the hon. Member for Amber Valley (Judy Mallaber) on securing the debate. I pay tribute to her work as chair of the all-party parliamentary clothing and textiles group. I should also like to highlight the importance of the document that we are discussing this morning.
Textiles are very important in the area that I represent, but the sector has been badly bruised over the past couple of years. Thousands of jobs have been lost at household names like Pringle, Laidlaw and Fairgrieve and at many other smaller operators. My constituency and that of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) contain three of the five travel-to-work areas in the Scottish borders. They feature in the top 10 travel-to-work areas in the UK in terms of dependency on the textile industry. We therefore keep a careful eye on the sector.
Few industries know the blast of global competition quite like textiles, whether it is importing yarn, competing with imported goods or exporting the finished goods around the world. As the hon. Member for Amber Valley pointed out, the report recognises that ultimately the industry's destiny lies in its own hands and the authors donot seek to protect the domestic industry from the winds of change.Those comments would find an echo in the Scottish borders. Changing ownership is one aspect of the current world situation that causes a great deal of concern.
My hon. Friend the Member for Roxburgh and Berwickshire recently visited Hong Kong where he met the Fang brothers, who have just taken over Pringle, one of the most significant employers in Hawick and the Scottish borders. That is a substantial change of ownership from the previous ownership under Dawson international. The announcement has generated a great deal of optimism, but until we know the final details, there is still uncertainty. I hope that the Government will make it their job to monitor how ownership of the whole sector is changing in a fast-paced world.
I should like to focus briefly on the cashmere industry, which is particularly significant to the area I represent, to the Scottish economy and, indeed, to the UK economy as a whole. A constant theme throughout this morning's debate has been the success of the textiles industry, and I wish to echo that. Cashmere is a good example: it is a huge export earner and one of the high value niche products highlighted by the report. A year ago the cashmere sector was in the middle of the so-called banana war, with thousands of jobs at risk from the unilateral action of the United States Government on tariffs. We got through that. There were difficult times but most businesses have recovered.
One key recommendation in the report that will be welcomed throughout the area is the need for a level playing field. Manufacturers in my part of the world desire that above all else. I draw specific attention to the recommendation thatpriorities for trade liberalisation should be prepared by the leading trade associations…Effective mechanisms should be established for ensuring an ongoing dialogue between trade officials and industry representatives to agree how these priorities should be pursued.18WH There is a great deal of anxiety in the cashmere sector about the multi-fibre arrangement. Local cashmere producers believed that cashmere products would see the end of quotas only at the final stage of the multi-fibre arrangement in January 2005. They have become extremely alarmed about the possibility that quotas might end as soon as 1 January 2002. With businesses planning investment and product development over a long period, that shortened time scale would be extremely damaging for the sector. Mr. George Peden, the chairman of the Scottish Cashmere Association, has been in correspondence with the Department and was told on 22 February that there can beno cast iron guarantee on the final exclusion of cashmere from the stage three re-integration list.In other words, cashmere could be back in full competition as soon as 2002.
Could the Minister confirm that that is the case or perhaps give us a basis for optimism? The letter acknowledged that the Department would fight a hard case to ensure that the United Kingdom strongly opposes any proposal that category 5—cashmere jerseys—should be one of the categories that are reintegrated. What steps are the Commission and the DTI taking to ensure that reintegration, and therefore the lifting of quota limits, does not take place until 2005?
The most important thing that the Government can bring to the debate is a level playing field, not least with a prospect of an end to quotas at some point. We must be confident that the policing of the World Trade Organisation rules will be rigorous. As has already been said, we must remember that China has not always been the best at sticking to existing rules.
Uncertainty is a killer for business. Cashmere survived the massive blight of the banana war. It cannot afford the uncertainty created by the prospect of the early lifting of quotas. I hope that the Minister will not only pay tribute to the sector and recognise its strengths, but take steps to remove that uncertainty.
§ Mrs. Angela Browning (Tiverton and Honiton)
I congratulate the hon. Member for Amber Valley (Judy Mallaber) on securing this debate. Just over a year ago, on 27 January 1999, I introduced a one-and-a-half-hour Adjournment debate on the textile industry on the Floor of the House. Many of the concerns that hon. Members expressed then have been exacerbated by the number of factory closures in the UK textile industry and by the trend to move offshore, which continues apace. We are all worried about that.
It is interesting to note that not only retailers are now purchasing abroad; the manufacturers who supply those retailers, who are often in partnership with their key retailing customers, are relocating as part of a bilateral agreement between two sectors and two companies. That is worrying. It is not simply a matter of UK retailers shopping the world, as they are entitled to do; there seems to be a trend towards moving the manufacturing source in conjunction with the retailer. Marks and Spencer, which has been mentioned many times this morning, is a classic example of that.
In the debate on 27 January 1999, the then Minister, the hon. Member for Leeds, West (Mr. Battle), told me: 19WHthe bottom is not falling out of the industry. We are stabilising the industry.—[Official Report, 27 January 1999; Vol. 324, c. 277.]Clearly that is not the case. The industry has not stabilised. We should welcome any advance information that the Minister can give us ahead of the Government's response to this important and timely document about the role that they can play in ensuring the industry's stability, a year on.
I want to draw hon. Members' attention to one or two issues raised in the document, which makes it clear that this is not a complacent industry. The industry is not sitting back at a time of crisis for many of those concerned, saying that somebody must do something. It is engaged—hence the document—with others in looking for solutions and does not look to others to solve the problems. The hon. Member for Amber Valley and others have flagged up areas such as innovation and marketing, in which the industry has recognised that it has a role to play. Perhaps the Minister will give us an idea of the Government's thinking on how they can contribute, particularly in relation to the World Trade Organisation talks.
One section of the document refers to exports going to markets outside the European Union. It says that such markets often face tariff barriers, but duties and other barriers remain high in many markets, including in the south American countries, which have been opened up, the Indian sub-continent and elsewhere in Asia. The World Trade Organisation must be involved in that. In the debate on the Floor of the House, the Secretary of State for Trade and Industry said that, despite the debacle in Seattle, the Government would be a key player in the EU to bring the talks back on course and make progress.
It was interesting to note that the industry wants the Government to help to initiate bilateral agreements. Some time ago, I suggested to the Minister—I cannot remember whether the suggestion took the form of a parliamentary question or a letter—that the Government could advance bilateral agreements not only in this but in other sectors. I received a rather negative response. He must realise that we cannot sit back and wait until the American elections have finished and World Trade Organisation talks are cranked up again; the Government must take the initiative. As the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) said, the problem with cashmere, which was debated in January of last year, was resolved through a Government initiative. Although cashmere is important, it is not unique in the textile industry, and others would like to see progress made through such Government input. I hope that the Minister can reassure us in that regard.
The report raises other issues that affect the Government, including regulation, which is dealt with in paragraph 9.4. All manufacturing sectors are subject to additional regulatory burdens. According to the British Chambers of Commerce, regulations cost business nearly £10 billion in just under three years and recurring costs amount to £2.4 billion a year. However, there are further costs that will affect this sector. I have received representations about one particular cost, which prompted me to debate the textile industry on the 20WH Floor of the House last year. John Heathcoat, a successful company in my constituency, is extremely concerned, as are others, about the proposed climate change tax to which it will be subject. There are other, smaller manufacturers in my constituency, but John Heathcoat is a global player.
Parliament has been lobbied many times in respect of that tax, and the Government have modified the Chancellor's original formula. However, it is clear that, having invested capital in more energy-efficient plant, the industry will not reap the benefit because the formula will impose additional costs through the tax. I flag up the matter because clothing manufacturers such as John Heathcoat, which incorporates a dyeing facility, use a lot of energy. Energy is a significant component of manufacturing costs. Responsible companies that have invested money in consuming energy in as lean and efficient a manner as possible deserve that the Government rethink the climate change tax, particularly now, when the industry is under great pressure.
The document refers to a disparity in how regulation is implemented in the UK and in other European Union countries. The Dutch have implemented their version of the tax in a flexible way, so that their core industries, which are high energy users, are not damaged. The Dutch are not unique. We all accept that the environment is an important component in considering costs and raising taxes. None the less, it is extraordinary to note that, having reached our Kyoto target many years ahead of the target date, the Government intend to place additional punitive burdens on industries. Those industries are seeking the Government's help and support, and many of them can demonstrate that they have met their environmental responsibilities.
The Minister should not be complacent about paragraph 9.4 of the document, which identifies the burden of regulatory costs, or about the fact that the UK implements them disproportionately. It refers to the impact assessment—which is usually carried out before the implementation of secondary legislation—in terms of the cost to business, and suggests that it has resulted in legislation being modified. Can the Minister say where the impact assessment has taken into account the cost to business and cite specific examples of how the sector has been assisted by that?
The contribution of my hon. Friend the Member for Bosworth (Mr. Tredinnick) was consistent with the representations that he has made on behalf of the industry throughout his parliamentary career. Having not been in the House when he made his maiden speech, I was somewhat surprised to discover that it was on the subject of Chinese underwear. No doubt that was an important threat to the UK market at the time.
I again congratulate the hon. Member for Amber Valley on securing the debate. All hon. Members have spoken with great knowledge and clarity.
§ The Minister of State for Trade (Mr. Richard Caborn)
I congratulate my hon. Friend the Member for Amber Valley (Judy Mallaber) on giving us the opportunity to debate the industry again. We have had such debates on many occasions. I remind hon. Members that had it not been for a meeting in November 1998 between 21WH representatives of the industry and the then Minister responsible, my hon. Friend the Member for Leeds, West (Mr. Battle), the debate would not be taking place against the background of the report.
Some of the comments of Conservative Members were a bit rich, given that during their 18 years in power they did nothing for the industry. In respect of the contribution of the hon. Member for Bosworth (Mr. Tredinnick), if there had been a strategy for wiring up the industry, e-commerce and other information technology equipment could easily have been used. As it is, it is probably one of the worst sectors in terms of the development of communications and information technology systems. He was right to say that e-commerce and business to business communication are vital. The industry will find progress difficult, because the foundation was not laid in the past, but we are determined to ensure that it takes place.
The underlying theme of the debate was that partnership and consensus are emerging against the background of the report, which is a well-informed piece of work. That is pleasing, and is a far cry from the days of adversarial industrial relations. The hon. Member for Tiverton and Honiton (Mrs. Browning) referred to paragraph 9.4 of the report. That paragraph also states:An example of good practice in this area was the introduction of the National Minimum Wage.That is telling in respect of the progress that the industry has made in developing on a consensual basis. If a little consensus had emerged in previous years, when Governments of her party were in power, the industry's structural weaknesses could have been addressed more effectively.
I shall begin by clarifying the status of the document. It is currently being circulated in draft form as a consultation document. It contains the initial views of the textile and clothing strategy group, which has circulated it in order to seek the views of a wide range of interested parties who could be affected. So far, about 40 reponses have been received from individuals, companies, university representative bodies and other interested parties. I understand that the textile and clothing strategy group intends to revise and amend the report in the light of those comments, and will publish the final version later in the spring.
As the group is still at the consultation stage, it would not be wise for me to give a detailed response now, but I can give an assurance that Ministers from my Department will respond to the finalised recommendations. Indeed, we have kept in close contact with the group in the course of our work. As has been said, the DTI has been involved in the secretariat. All parties will welcome the professional job that it has done, for which I am grateful. My right hon. Friend the Secretary of State for Trade and Industry and my hon. Friends the Ministers for Small Business and E-Commerce and for Competitiveness have all attended meetings of the group. They will meet the group again to discuss the recommendations once they have been finalised. That shows how seriously the DTI ministerial team takes the report.
The textile and clothing stategy group comprises representatives of a cross-section of those who have leading roles in the textile and clothing industry. It 22WH represents a powerful parternship. Large and small manufacturers are represented on the group, as well as trade associations, universities, trade unions—whose positive role in relation to the report has been referred to today—retailers and DTI officials. The textile and clothing strategy group is an industry-led body; it is not a Government body, although DTI Ministers have actively encouraged the group's work and have provided it with a secretarial resource. I stress that the group is industry-led because, together with DTI colleagues, the industry must identify the issues that face it, and take the lead in addressing those issues. That does not mean that the Government do not have an important role to play.
To put the report aside for a moment, DTI Ministers have been impressed by the spirit of partnership displayed by the various participants—the industry, trade associations, retailers, unions and academics—in trying to resolve difficult problems. The report stated, as I have, that it would be premature to respond to individual recommendations, because they are currently only provisional, but I want to make some general observations against the background of the report.
I hope that industry will be receptive, and that bodies such as the regional development agencies, to which reference has been made, will be influenced. Those business-led boards, in English regions where the textile industry resides, have given serious consideration to that sector of the industry to ensure that it is part of the regional industrial strategy and wealth-creating base. Once the report is finalised between the various parties and the Government, hon. Members who have a vested interest should ensure that such concerns are factored into regional development agency strategies to maximum effect. Higher education, the development of regional selective assistance—in which RDAs have a major input—and the development of training and skills councils, for which RDAs have the major strategic responsibility, are relevant in that regard. Innovation is also relevant, and our policy on clusters of innovation will unfold during the next few weeks. The report can inform the debate on the development of economic strategies and wealth creation.
On cashmere and the multi-fibre agreement, we are in dialogue with the industry but a definitive position has not been reached. As the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) acknowledged, we are taking a robust approach. if there are interested parties in his constituency who want to raise the matter with my Department, we are more than happy to receive them. If he wants to contact me afterwards, I shall provide more detail.
In response to the comments made by the hon. Member for Tiverton and Honiton, the World Trade Organisation set up the multi-fibre agreement, which was signed under the previous Administration. Its implementation is being discussed with regard to cashmere. The Government will take a strong brief on the matter.
I also agree with hon. Members who raised the issue of Marks and Spencer. It is crucial that the atmosphere of partnership created by this document be taken on board. M & S could be said to have been arrogant with the supply chain, instead of working in partnership to 23WH promote development in a wider context, which might have prevented some of the damage that has been done to the industry. That is the moral of the story and—