TEXTILES

§ The Under-Secretary of State for Trade (Mr. Michael Meacher)

I beg to move, That this House takes note of Commission Documents Nos. S/1882/76 and S/12/77 on textiles. Most of the documents we are to consider today relate to bilateral restraint agreements which the EEC has concluded under Article 4 of the GATT Multifibre Arrangement—the MFA. I should like to concentrate on this very important instrument, which has governed international trade in textiles since the beginning of 1974.

As hon. Members will recall, there have been special arrangements for textiles since the early 1960s, when the exceptional problems of the textile industry were first acknowledged internationally. These earlier arrangements, to which the United Kingdom was a party, related only to cotton. But as the industry became less preponderantly based on cotton, and as it became clear that the other sectors were subject to essentially the same risks as the cotton sector, the present MFA covers not only cotton but also wool, man-made fibres and knitwear. Hence the "Multi" in its title.

One of the MFA's principal objectives is to ensure the orderly and equitable development of international trade in textiles. In other words, a balance had to be struck between the interests of the importing and the supplying countries. The underlying bargain in the MFA is that supplying countries accept the continuation of discriminatory restrictions against themselves, while in return importing countries undertake not to cut back 1090 existing trade levels, to guarantee a minimum rate of liberalisation of restrictions which can be justified under the MFA, and to phase out restrictions which cannot be justified.

Under Article 4 of the MFA, the EEC —which signed on behalf of all the member States—has now concluded 13 bilateral agreements—with India, Pakistan and Hong Kong, which were considered in detail in the Standing Committee on Statutory Instruments last year; with Macao, South Korea, Singapore, Malaysia and Japan, which have already been discussed briefly in a debate on the European Community last June but which we are considering again today; with Brazil, Colombia and Egypt, which we are to consider today for the first time; and with Yugoslavia and Romania. Unilateral restrictions have also been imposed on Taiwan, which is not an MFA signatory.

These 13 agreements mean that we are now able to restrict imports of sensitive products from all the main low-cost suppliers. As a result of the agreements concluded so far, there are for the United Kingdom no fewer than 89 quotas which cover three-quarters of our imports from the countries concerned. Most of these quotas allow us to maintain our previous quotas on cotton products, and to extend them to other fibres and to knitwear. In terms of coverage, therefore, there is no doubt that the textile industry enjoys a greater degree of protection than in the past. There are safeguard provisions in the agreements and in the MFA itself which allow new restraints on products which have come under threat since the agreements were signed.

§ Mr. Nicholas Winterton (Macclesfield)

Will the hon. Gentleman advise the House what progress his Department has made in negotiations with India on the question of that country importing into this country, under a handloom classification, shirts which were undoubtedly machine-made? Is not this undermining the already serious position of the United Kingdom shirt industry? What is the state of the negotiations that the hon. Gentleman's Department is having with the trade department of the Indian Government?

§ Mr. Meacher

The hon. Gentleman is over-eager. I assure him that I shall deal fully with that point, but I do not intend to bring it forward in my speech. He can interrupt me towards the end of my speech when I touch on it. Whether the shirts were hand-made is an issue. We ensured that a proper sample was examined very closely by the Shirley Institute to ascertain to what extent there might have been evasion of the concession made in that respect.

We have made good use of these provisions to protect some of our most sensitive products —such as in the case of knitted shirts from Macao, Thailand, the Philippines, and India. Further consultations are also being sought on knitted shirts from Pakistan and on jackets and blouses from Macao, jackets from Malta and undergarments from Spain.

Our scope for action is not limited to the MFA. We have always made it clear that we are ready to consider selective action where this is justified, and in the last two years restrictions have been introduced on suits from certain East European countries and on shirts and undergarments from China. We keep a close watch on all imports of textiles and clothing, and in the last case I have mentioned—undergarments, or pyjamas, as it was, from China, for which there was a significant contract in train for perhaps more than 1 million pieces— we introduced a control before the industry had noticed that there was a problem.

§ Mr. Max Madden (Sowerby)

Will my hon. Friend take this opportunity to tell the House what stage his Department's investigation has reached into the complaint made by the Clothing Manufacturers' Federation against the dumping of clothing in the United Kingdom by East European countries which was officially 1092 recognised by his Department last September but was originally lodged in March last year?

§ Mr. Meacher

My hon. Friend must be telepathic, because I was about to mention that point; it is dealt with in the next paragraph of my speech. The fact that quantitative restrictions exist does not prevent us from taking action where we are satisfied that goods are coming in at dumped prices. There are quantitative restrictions in respect of East European suits, but we are now talking about the question of dumped prices.

During the last few months the Department has been investigating, at the request of the Clothing Manufacturers' Federation, the prices of suits from Eastern Europe. This is one of the most complex cases which we have had to deal with for a long time. Six countries have been involved and the range of materials and of styles has been very large. I assure the House that it makes it extremely difficult, within the constraints of the legislation, to effect a case which will, if necessary, stand up in court. However, I am happy to say that we are now in the ultimate stages of the investigation and are on the point of concluding discussions with the exporting countries. I therefore hope to be in a position to make an announcement this week which will substantially, I believe, ease the concern of our clothing industry.

I think it is fair to say, therefore, that within the framework of the MFA, and outside it, we have done more than most people realise to protect our industry. But, as the Member of Parliament for a textile constituency, I am the first to insist that there are no grounds for complacency. Despite all our efforts, the textile industry is going through a very bad time at present and it faces increasing import penetration, which is rising inexorably as the existing low-cost suppliers expand their production, often using the latest technology, and as new suppliers appear on the scene. Import penetration in textiles and clothing has risen from 17 per cent. in 1973 to 24.7 per cent. in the third quarter of 1976. Imports are still increasing at a much faster rate than domestic consumption. That, I believe, is a clear reason why we can have no complacency about the present situation.

Against this background the MFA, as it was negotiated to come into force in 1093 January 1974, has provided a valuable framework. But the Government are well aware of its deficiencies.

First of all, as we have seen only too clearly over the last two years, the MFA does not provide adequate protection for our domestic industry during a recession. The importing countries receive a guaranteed annual growth rate of 6 per cent. in good times and bad. This means that the brunt of the recession is borne by the domestic producer. A second, related point is that, leaving aside the highly cyclical nature of the industry, long-term growth prospects now seem considerably less rosy than when the MFA was negotiated. The 6 per cent. minimum growth rate is far too high in relation to the prospective growth of the domestic market. Consequently, we are getting levels of import penetration in particular sectors which are, frankly, unacceptable, and with more in prospect unless the MFA provisions are changed.

Another serious weakness, which I know many hon. Members are concerned about, is the base level at which the quotas are fixed. As I said earlier, part of the MFA bargain was that there should be no cut-back on previous trade levels. This principle is an understandable one, but in practice it has worked to the serious disadvantage of the importing countries. The reason for this is the protracted bilateral negotiations which took place between the EEC and its supplying countries. These were difficult negotiations which inevitably took time to complete, and trade during the negotiation period build up so that the base levels, when the agreements were eventually signed, were fixed at artificially high levels, as I am sure everyone will agree.

A further weakness of the present MFA is the lack of an adequate safeguard to deal effectively with new suppliers of sensitive products. At the moment these have to be picked off one by one, as in the list of supplementary restraints I mentioned a moment ago. This permits a degree of control, and I do not underestimate it, but it is an unsatisfactory and cumbersome way of dealing with a constantly recurring problem.

I have described what I regard as the main shortcomings in the present arrange- 1094 ments. There are others. Hon. Members will want to know what we propose to do about them. I know that many people have felt and still feel that the immediate and best answer would be imitation of the kind of action which Canada has taken recently on clothing imports. Nevertheless, I believe that there are significant differences between the Canadian situation and our own. I do not rule out such action, but I say merely that we have to take account of the special situation of Canada.

First, we have a considerable degree of protection against a sharp increase in imports through the 13 MFA bilateral agreements. Canada was not protected in this way and, as a result, imports rose very rapidly—in volume terms by 52 per cent.—in the first half of 1976, whereas in the case of the United Kingdom the figures for the whole of 1976, and not just for the first half, were increases of 13 per cent. for clothing and 14 per cent. for textiles. The Canadians have also taken action under Article XIX of the GATT, which means under the GATT Code that they face the risk of retaliation or demands for compensation. Both these are written in the code.

Another problem in imitating such action at present is the effect that this would have on the renegotiation of the Multifibre Arrangement. As hon. Members will know, the present MFA expires at the end of this year, and the participating countries must decide whether to renew, modify or terminate it. I have said a great deal about its shortcomings. None the less I am convinced that a suitably strengthened MFA would provide the best hope of reconciling the legitimate interests of the importing and the exporting countries. I know, too, that this is not only my view but is that of the industry itself.

§ Mr. James Lamond (Oldham, East)

If my hon. Friend is saying that "suitably strengthened" means that he will remove all the faults that he has just catalogued, I am sure that that will be acceptable to the House. But can he say whether the Government will go all out to see that the faults to which he referred are removed from the new agreement?

§ Mr. Meacher

My hon. Friend the Member for Oldham, East (Mr. Lamond) also appears to be reading my speech. I 1095 am just coming to the objectives and the way that we intend to proceed in these discussions. we intend to take action which we believe will substantially affect the deficiencies which now exist in the MFA.

These objectives are, first, to secure modifications to the MFA which will enable us to protect our producers against cumulative disruption—that is, individually small increases in imports from a large number of sources. Under the present MFA, these new suppliers have to be dealt with one by one. We are now proposing a new safeguard measure which will allow the introduction of a single quota to deal with all disruptive or potentially disruptive imports-of a sensitive product—that is, one where import penetration rates are very high.

Secondly, we want to change the MFA rules so that growth rates can be adjusted downwards to take account of the circumstances and prospects of the domestic industry. The Community has now accepted the principle that growth rates should vary in inverse proportion to the rate of import penetration. In other words, when import penetration is high the growth rate would be reduced accordingly. The mechanics of such a system—and these are proposals—would probably involve some kind of sliding scale which would be operated by the Community.

§ Mr. Mike Noble (Rossendale)

In view of the fact that my hon. Friend has said that he hopes to achieve growth rates varying inversely to the import penetration, will he say whether he envisages a situation where there is a negative growth rate on imports?

§ Mr. Meacher

The range of the sliding scale is again, I stress, under discussion. We have to discuss this with our partners in the Community before we have the substantive negotiation in Geneva when we have to get agreement within the wider membership of the MFA. I do not rule out the possibility that the level could go down to zero, but it is a matter which we have to discuss and agree. We have to bear in mind that it is not every country in the EEC, let alone the developing countries, which would be prepared to accept that. But it is one of the proposals to move towards zero growth, and there is no reason why at 1096 this stage we should rule out such a possibility.

§ Mr. Giles Shaw (Pudsey)

The hon. Member for Rossendale (Mr. Noble) has raised a crucial point. Surely it is not much use the Minister suggesting that a formula can be found unless it can be applied and can offer total protection at a time of major disruption. Is it the Government's intention to try to achieve the kind of negotiation that the Minister has just outlined?

§ Mr. Meacher

The kind of framework that my hon. Friend mentioned is our objective. We want protection at high levels of import penetration, and it is our intention to get complete protection.

There are many proposals on the table at present. A further proposal to link the scale to the level of domestic prodution. as well as to import penetration, is also being considered, as is the possibility of applying lower growth rates to the dominant suppliers.

We are also considering the base levels at which the quotas themselves are to be fixed, and here there are two important proposals, One is to allow variable reference periods in exceptional cases where the importing country is in difficulty. At present this right extends only to exporting countries. The other is to fix the reference period to the start of bilateral negotiations. This would avoid the present MFA.

§ Mr. Madden

Would my hon. Friend agree that there is a suspicion in the British industry that, pending bilateral talks, exporting nations have sought to increase their imports to the United Kingdom in order to build a favourable framework for the negotiations? Is it not impracticable to phase the base periods on the bilateral agreement figures? Would my hon. Friend be prepared to revise the whole of the base year period for renegotiation of the MFA, and go back to a period of five or 10 years ago? This would give a much more realistic figure and would take account of the disproportionate amount of import penetration that the United Kingdom has borne during that period.

§ Mr. Meacher

I appreciate my hon. Friend's fears. I do not believe, how-ever, that it is consistent with the bargain 1097 that is the basis for the MFA to get an agreement for the base line for estimating quotas which could go back five or 10 years. The level that exists at the end of the negotiation would be going too far in the other direction, but we could not achieve an agreement to go back as far as my hon. Friend has suggested. We are concerned that there might be a time limit placed with regard to the bilateral negotiations to prevent the kind of forestalling which I have described and which might involve a reference to the most sensitive products. The length of time which we could go back is a bargaining point, and I hope that there will be a considerable improvement on the position as it now stands.

§ Mr. David Walder (Clitheroe)

Is the Minister saying that it would be possible to have an arrangement which took account of our special difficulties even if that arrangement was not the same as the one entered into by our EEC partners?

§ Mr. Meacher

The new arrangements would be made on our behalf by the EEC. To that extent they would apply across the Community. Special regional provisions can be made on quotas, and of the 89 quotas which now exist 66 are EEC and 23 are regional quotas applied specifically to the United Kingdom.

§ Mr. Noble

Would not my hon. Friend agree that within the existing framework there is a possibility of a rolling forward or rolling back of imports? Will he clarify whether the statement he has just made could be overcome by a country taking its quotas in advance rather than a forestalling situation? The present situation allows a greyhounding of further imports into this country.

§ Mr. Meacher

In so far as there is a time limit for negotiations or an accounting period for the estimation of quotas, it is the start and not the conclusion of negotiations which would deal with forestalling, and the rapid build-up of trade would be prevented. That is the proposal we are anxious to explore within the Community and later in the negotiations.

I should point out here that it is the EEC and not the United Kingdom independently which is a signatory of the MFA. Our first task, therefore, has been 1098 and remains to agree a common line with our Community partners, and all the points I have mentioned are proposals which are being discussed in Brussels. No final positions have been adopted and, of course, I cannot at this stage guarantee that the various proposals that I have outlined will be finally agreed in Brussels or later in Geneva. But we shall continue to press vigorously for our main objective—better safeguards and flexible growth rates. I know that these objectives are very closely in line with both sides of our industry. We have kept in close touch with them and have examined all the ideas and suggestions they have made. I very much hope this dialogue will continue in the coming months.

At the opening of the MFA renegotiation in Geneva last December, the Community made a strong statement in favour of renewal of the MFA but with major changes. More specifically the Community drew attention to five main problem areas—cumulative disruption, high import penetration, disruptively low prices, forestalling during negotiations and the base levels for quotas.

That statement was supported by Canada, Austria and Australia. But the Americans, and most of the developing countries favoured renewal of the MFA without change. The Community is now working on a detailed negotiating mandate to convert the Geneva statement into practical proposals. I can assure the House that we are pressing our Community partners to draw up negotiating directives which reflect as far as possible the objectives we all want to achieve.

In the meantime, of course, the present MFA and the bilateral agreements concluded under it will run until the end of this year. The bilateral arrangements which will replace those we are considering today will obviously depend on the outcome of the renegotiation, and some modifications will no doubt be necessary. It is too early to say at this stage what these modifications might be, and I should now like to deal briefly with those documents which relate to MFA agreements. Some of these relate to the formal conclusion of the agreements themselves and others to the licensing arrangements for products which are subject to quotas.

Imports from the eight countries concerned—that is, South Korea, Macao, Singapore, Malaysia, Japan, Egypt, Brazil 1099 and Colombia—together amounted to £116.3 million in 1976, or only about 7.3 per cent. of our total imports of textiles and clothing. About half of this total came from South Korea.

The agreements provide for 19 Community quotas and, in addition, six quotas for the United Kingdom alone. The range of products covered varies from agreement to agreement depending on the pattern of trade with the particular country, and covers the most sensitive products in each case. Cotton and spun synthetic cloth, where the current rates of import penetration are over 60 per cent., are restricted from South Korea, Malaysia and Japan, and cotton cloth from Brazil is also restricted. Imports from Malaysia and Brazil are down on last year, significantly so in the case of Malaysia, and so also are imports of synthetic fabric from South Korea. The penetration levels remain high, however, because of imports from our large traditional suppliers—for example, India.

On the clothing side, there are quotas on a wide range of products from South Korea, including woven and knitted shirts. blouses, trousers and jeans, suits and jackets, raincoats and knitted sweaters. The annual EEC rate of growth for these products varies between 2.5 per cent. and 9 per cent. and is distributed among the member States according to the Community's burden-sharing formula. This allows those member States which have in the past been traditionally large importers to take a smaller share of the Community's growth, down to a minimum of 0.5 per cent. The United Kingdom benefits from this sharing of the burden as far as our big traditional suppliers are concerned. For example, in the case of Hong Kong we have the minimum growth rate on seven out of 20 quotas. Where the traditional trade has been smaller, however, we have to take a larger share, as in the case of South Korea. There is one exception, however, which is knitted sweaters—one of our sensitive products with an import penetration level of 34 per cent.—where we have the minimum figure of 0.5 per cent. growth rate.

§ Mr. Nicholas Winterton

On the subject of burden-sharing within the EEC, how long will it take before the United Kingdom as a substantial importer of textiles is in the same position as, for 1100 example, Italy? Will it not take a quarter of a century before such a burden-sharing is to our advantage?

§ Mr. Meacher

It will take some time, but I cannot confirm the period of time stated by the hon. Gentleman because it depends on the terms of the renegotiation of the MFA, on the modifications of existing bilateral agreements and on the extention of those agreements to other countries.

There are four other countries in relation to which we hope to achieve bilateral agreements. I refer to Thailand, Mexico, Hungary and Poland. No doubt in time there will be others, too.

The other smaller agreements provide for quotas on men's shirts from Malaysia and trousers and jeans from Macao and Singapore. In addition, under the consultation provisions in the agreements we have secured an additional restraint on knitted shirts from Macao and we are seeking the same from Singapore. Consultations are also taking place with Macao on men's jackets and women's blouses. There are no restrictions on clothing from Brazil, but we are watching the situation closely as imports are increasing. We do not import any clothing from Egypt.

South Korea is by far the most significant of the eight suppliers. As a result of the agreement, 86.5 per cent. of our imports are now restricted. But hon. Members may recall from the previous debate on this agreement at the beginning of last year that emergency restrictions had to be introduced on some products during the latter part of 1975. Unfortunately, this did not prevent a large build-up of trade, which means that the quota levels in this agreement are higher than we would have wished. As I have already said, this problem of protracted negotiations and forestalling is not adequately catered for in the present MFA, and we are giving very serious thought to improved arrangements in our discussions about the renegotiation of the MFA.

There is one further point about these agreements. As I mentioned earlier, restrictions which predated the MFA but which did not justify inclusion in the bilateral agreements had to be phased out by 31st March 1977. The United Kingdom therefore instituted a programme of gradual liberalisation on the 1101 majority of products, by which I mean those that are not sensitive. A notice to importers was published in the journal Trade and Industry on 11th February giving details of a number of restrictions which have now been removed with effect from 1st January this year. These include previous restrictions against South Korea, Macao, Singapore, Malaysia, Japan, Brazil and Colombia. For certain sensitive products, such as cotton yarn from several sources and cotton handkerchiefs from South Korea, restrictions will continue until the end of March. I wish to stress that we are currently discussing with our EEC partners what arrangements might be made to continue these restrictions after that cut-off date.

I should now like to turn briefly to the other documents listed on the Order Paper, which fall outside the framework of the MFA. First, let me mention the jute agreements between the EEC and India and Bangladesh. The Scrutiny Committee has recommended that the United Kingdom should not give its assent in Brussels to the draft regulations until they have been debated. I hope, however, that after today's debate these two agreements can go forward for formal conclusion in Brussels. Jute is a very important product for both India and Bangladesh and features in the integrated programme which received broad acceptance at last year's UNCTAD conference in Nairobi. In providing for annual growth, which will be distributed among the member States, the Community is recognising the problems of the jute producers and is also fulfilling its obligations under the Joint Declarations of Intent with India and Bangladesh. At the same time, the Community's own jute industries are protected by the continuation of export restraint on the part of India and Bangladesh.

The remaining documents relate to the EEC-Portugal interim agreement and four other measures relating to tariff quotas and origin rules. In order to ensure that hon. Members have a full opportunity to debate this matter, I shall leave that topic to my hon. Friend the Under-Secretary of State for Industry to deal with in his reply later this evening.

§ Mr. Michael Marshall (Arundel)

I understand why the hon. Gentleman 1102 wants to leave this matter to his ministerial colleague, but I am anxious to know the relationship on these matters between the Departments of Trade and Industry. I understand that the Department of Industry appears to have some prime responsibility, although a number of hon. Members are not clear about the situation. Can the hon. Gentleman help the House?

§ Mr. Meacher

We try to make a distinction between the two Departments that is reasonably sensible and practical. In regard to the domestic industry, as in the case of jute in Dundee, it is my hon. Friend who has signed the explanatory memoranda, but in the case of specifically trading matters—the great majority of cases—I have signed the explanatory memoranda. I should be the first to insist that the connection between the two is extremely close, and we operate a close liaison.

I wish to draw attention to a further regulation providing for Community tariff quotas in 1977 for imports of certain hand-woven fabrics of cotton and silk from eight developing countries, including India, Pakistan, Bangladesh and Sri Lanka. This is an important matter which was mentioned by the hon. Member for Macclesfield (Mr. Winterton). Difficulties have arisen with imports of certain made-up goods, notably shirts, of cotton handloom fabric. These are not included in the tariff quotas, which are both small and provide for automatic reintroduction of duty once the ceiling is reached.

I am pleased to say that a note verbale was handed to the Indian representatives in Brussels earlier this afternoon, informing them that the Community intends to introduce immediate surveillance measures and intends to take action if the levels of trade in 1977 look like exceeding certain reference levels. I assure the House that the effect of this demarche in Brussels will be that for woven cotton shirts and blouses of all types imported into the United Kingdom from India—again, this is a sensitive matter—trade in 1977 will be significantly below 1976 levels.

§ Mr. Nicholas Winterton

Has the Minister yet received any report from the Shirley Institute on the samples which he presented to it? This is an 1103 important matter for a sector of the textile industry—namely, the Shirt, Collar and Tie Manufacturers' Federation.

§ Mr. Meacher

Yes. We have had provisional results following the institute's examination. The institute looked only at a small sample, and there can be no question of deciding scientifically how accurate the results are when related to the vast quantities of imports that we are talking about. The sampling showed that there were indications that some of the products may have been mill-made and not hand-woven. I stress that that is an expert view and that the experts believe that it was extremely difficult to come to a clear view. Perhaps I should say no more about that.

There are 19 specific documents which are the subject of today's motion. They illustrate many aspects of Community activity relating to textiles. Before I conclude, I wish to return briefly to the general picture and prospects. It is clear from what I said earlier about the MFA that notably the United States and inevitably the developing countries are opposed to the changes we want and that a hard and difficult negotiation lies ahead. I would not seek for a moment to duck that. I emphasise that what I have said are our firm intentions and that proposals are far from being accepted within the Geneva ambit.

I give the House an unequivocal assurance that the Government fully appreciate that the outcome of this negotiation is of vital importance for our textile and clothing industries, which provide employment for around 800,000 people. We are determined to secure international arrangements for textiles which provide adequate protection against disruptive, low-cost imports so that those employed in these industries can feel secure in their jobs and so that management will regain sufficient confidence to invest for the future.

§ Mr. John Nott (St. Ives)

I am glad that the House has the opportunity today of a wide-ranging discussion on textiles because, although there have been a number of Adjournment debates recently on the special problems of the industry, it is some time since the House had the chance to discuss textile policies generally. I 1104 welcome the debate, and would like to take the opportunity it presents of outlining in reasonably specific terms where the Opposition stand in our attitude to this vitally important industry.

I shall, perhaps, do so in rather wider terms than did the Minister in the hope that management and employees, including the trades unions, in the textile industries will feel that not only are we aware of their successes—and we have not heard much of those today—but that we are also conscious of their anxieties and problems. I would like us to be able to assist the industry wherever we can, as long as that is possible without adverse repercussions elsewhere.

I trust that the House will grant me some licence in that, unlike most hon. Members present today, I have not been associated with textile industry for a number of years. I am a parliamentary newcomer to the subject. Nevertheless, I want to set out, fairly briefly, the background against which I believe that we ought to formulate our policies. We on the Conservative Benches are anxious to strengthen the Government's hand in the negotiations on the Multifibre Agreement. As the Minister has said, they will be hard and difficult. I see it as our function to help the Government keep their nerve, and support them wherever it is possible for us to be of assistance.

May I say that I do not wish to make any partisan points during the debate. I trust that, since we shall, quite shortly, be changing places on the Front Benches, the bipartisanship which will flow across the House today will continue when the two Ministers opposite are sitting on these benches.

By any standards the textile and clothing industries are of great significance for our country. In spite of the major reduction in employment which has taken place, we are still concerned with a larger employer than the whole of the coal and steel industries put together. Although I have not had time to do my sums, it is possible that we are talking about an industry which, employing 800,000 people, is larger in numbers than the motor industry and its allied trades. The industry is of great significance to our economy.

The figures that I have been given show that the industries represent about 1105 11 per cent. of manufacturing employment and about one-fifth of all female employment in the country. They are of staggering size. I do not believe that a policy of benign neglect would be an appropriate one when we are likely to see, in any event, a much higher level of unemployment generally over the next decade. One of the problems I find, as a newcomer to this subject, is that the textile industries comprise such a wide variety of skills, technologies and products—woollen and worsted cloths, cotton and man-made fibres, hosiery and knitwear—that it is difficult to treat the industries as one in a debate of this sort. I have been warned, and I have taken the point clearly, that I must refer to the textile industries, in the plural, in view of the wide variety of skills and products involved.

§ Mr. Albert Roberts (Normanton)

There is also ready-made clothing.

§ Mr. Nott

Indeed.

My hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) and I—rushing from Westminster within a week of our appointments, and we seem to have held these appointments for a remarkable length of time—visited three textile companies in the Oldham, Manchester and Shipley area only to receive a barrage of criticism from the rest of the industry because we had not visited them. We are slowly getting round the textile factories. I visited some of the jute industry's factories in the Dundee area last weekend and we plan further excursions of this kind. My hon. Friend the Member for Hertfordshire, South who, unlike me, is not a newcomer to this subject, and I were extremely impressed by what we saw. We saw modern mills, some with the very latest equipment. The more I see of the textile industries the more impressed I am, although, clearly, I have not been shown some of the worst examples in the industry which, no doubt, exist.

With the accession of the United Kingdom to the EEC and the responsibility for international trading arrangements moving to Brussels the textile industries find themselves to be only a part, and a small part, of the United Kingdom Government's obligations. In some respects this makes the task of the 1106 Department of Trade rather more difficult. Nevertheless, it is in our national interest that these industries should be allowed to develop through the forces of free and fair competition, and that they should have their problems duly recognised in the negotiating of interim agreements.

I wish tonight to refer to a few successes because we have heard too little of them in this House. I have often sat on the Opposition Benches and heard tales of woe about the textile industries —tales of closures, contraction and unemployment. All of this has happened but the truth is rather different. On the whole, there are many excellent aspects of our textile industries. Labour relations appear to be excellent. The industries have been major investors in new plant and machinery. The increase in output per head, as far as I am able to deduce it, has grown at double the rate of manufacturing industry generally, and has been more than five times greater than that in, say, vehicle manufacturing. These are all successes of the industries, and they should be recognised in the House.

It is the recent achievement in export markets which seems to be the most encouraging feature of all. Last year, over £1,500 million of products were exported. Although the industries have taken some nasty knocks in the worldwide recession, with a more stable economic environment and sensible EEC trade policies they could take off and produce a very large favourable trade balance over the coming years.

So I believe that, whereas some people have regarded these as declining industries, we have every reason to believe that they are growth industries, and we must treat them as such and not always assume that they are beset with disasters, difficulties, closures and the kind of problem that we hear so much about in Adjournment debates—although that is not to say that such debates are not desirable and necessary when particular problems arise.

I give two examples. Courtaulds is the United Kingdom's sixth largest exporter and the largest textile exporter in the world. It will increase its exports to the EEC by 120 per cent. this year. An announcement last week said that the British knitwear industry had exported 1107 50 per cent. last year above the previous record year. These examples could be repeated many times over among these large and diverse industries.

This achievement is not just happening in Europe. Many of our companies are beginning to establish major footholds in the markets of the Far East and Japan. It is vitally important that anything we do under the MFA, anything we do in import restraint, and anything we do to encourage more orderly marketing in this country, should not damage the position of our exporters and their prospects in overseas markets.

It would be wrong to suggest, however, that major difficulties do not exist. They clearly do. In recent years the United Kingdom industry as a whole has suffered considerable decline due to overcapacity, not only in this country but in the world generally. As new textile industries have become established in the new and developing world, with a plentiful supply of low-cost labour and cheap raw materials, the pressures on our domestic producers have intensified.

In designing the correct trade policies to encourage our own industries, we have to recognise two prime factors. First, orderly markets in the developed world—the United States, Europe and here— free from dumping and unfair competition, are as much in the interests of the developing countries as they are in ours. Secondly, the major structural changes which have taken place in the textile and clothing industries over the last decade or so are only now just beginning to bear fruit. The results of those changes must not be jeopardised by irresponsible trade policies.

The growth of economic nationalism has meant that trade has not been free for many generations. Although it has been an ideal established by some academics and some Whitehall Departments in the past, those academics and Whitehall Departments—we all know who they are—have not had their theories subject to the disciplines of the ballot box, but I think that all of us have noticed a change in emphasis on the part of the Department of Trade in recent months, and the Government have some credit for that. We welcome it and believe that it is right.

1108 It is within this context that we on this side of the House will support the Government and give them every help we can in renegotiating the multifibre arrangements, but not just in that, but also in arriving at more effective antidumping procedures and policies with GATT. The multi-lateral negotiations will be coming up in the autumn the Tokyo round, and in arriving at arrangements, through multi-lateral negotiations, involving fair competition, fair pricing and fair access to our markets. We will give our support.

Most of the hon. Gentleman's speech concerned the renegotiation of the multifibre arrangements. I will be specific and say what I think, from a necessarily quick study of the subject. But I am glad to say that I have had the help and advice of many of my hon. Friends—and now, at this critical moment, I have forgotten their constituencies; but they include one of my hon. Friends from the Manchester area, my hon. Friend the Member for Macclesfield (Mr. Winterton), one of my hon. Friends from Yorkshire, my hon. Friend the Member for Pudsey (Mr. Shaw), and my hon. Friend the Member for Bosworth (Mr. Butler)—the "knitwear" Member—who in particular have spent considerable time trying to keep me on the straight and narrow path.

First, I think that the MFA should be renegotiated to cover a longer period of time. Although the hon. Gentleman did not refer to this point, I take it to be the Government's position that they want to renegotiate the new MFA to extend for at least five to 10 years in length. He did not give the Government's view, but we feel that it must cover a much longer period than the original arrangements. It is also very important that there should be a speedy conclusion to the negotiations in order to prevent the build-up of imports which occurred on the last occasion.

Secondly, if there is to be a longer period for the renegotiated MFA—say, five years or more—in consequence of that length of period, it will be important to build into the new MFA flexibility clauses, should changes in economic conditions render the original agreement inoperative or ineffective. It will be difficult to work out a formula, but I suggest that a starting point could be that the growth factor might be varied in the 1109 light of certain specified economic conditions.

Thirdly, the base period for any MFA should be lengthened. I suggest that it should be two years, or more possibly. Perhaps we could take an average of two or three years, and deal with the problems raised by hon. Members opposite on that basis. It is what the hon. Gentleman referred to as a longer reference period. I think that he was, perhaps, suggesting an averaging out process, or something of the kind. I believe that this would provide a more realistic basis upon which to determine the size of import quotas.

In addition, it might be possible to allow the various textile sectors themselves to determine which base period would be appropriate for the calculation of import penetration. I have no doubt that the Government will, presumably, accept from particular sectors of the industry their own proposals for variable base reference points for different sectors. Clearly, one base reference arrangement would not be suitable to cover all sectors.

Fourthly, I think that it is vital that there should be a commitment to move rapidly towards equality of the burden-sharing arrangements among our EEC partners. I think that the Minister was really referring to burden sharing within the Community when he was talking about the state of the domestic market and a sliding scale relating to import penetration. Although the MFA clearly is a Community negotiation I imagine that he, in referring to a sliding scale relating to import penetration, was looking to different burden-sharing arrangements within the Community itself. I think that there is a strong belief—clearly correct: we share it —among our textile industries that they have been forced to carry more responsibility within the Community for the developing nations than is actually fair given the state of the market.

My figures, which are obviously on a different basis from that of the Under-Secretary, show that textiles imported into the United States in 1976 amounted to 15 per cent. of domestic consumption and the figure for the EEC as a whole was 35 per cent. If we look at the cumulative effect of imports at all stages, from man-made fibres through fabrics to 1110 garments and other made-up goods, the figure of import penetration in the United Kingdom in 1976 was 66 per cent. The Minister's figure was much lower, but I think he was referring to the cotton and allied textile area. He said 24 per cent. but I was not sure to which area of the market this figure related. I am sure that there is no need to disagree about figures. I have the figure of 66 per cent. It is vital that the new burden-sharing arrangements within the EEC should be fairer and more equitably based.

Lastly, on the Multifibre Arrangement, it is very important that the Community should choose an appropriate global policy for textile imports. This is another reason for agreeing with the Minister, namely, that we must provide against cumulative disruption. That is very important.

I shall leave the subject of the MFA now, since I know that my hon. Friends will wish to fill in the details. Some may disagree with me on points of detail, but this will ensure that we have a more useful debate.

I move on to anti-dumping procedures, which are very relevant to the problems of the textile and clothing industries. Problems have been caused with many products, not least clothing products from Iron Curtain countries. The Minister referred to Romanian suits, I believe. Both sides of the House must agree that our anti-dumping procedures should be made more effective, simpler, and be speeded up. In pursuit of that objective we recommend the following points. The Minister has referred to some of them at Question Time but he did not touch on them today.

First, the burden of proof concerning costs has to be shifted from the manufacturer or the industrial sector affected in this country to the exporter in the exporting country. As I understand the position, this is effectively what happens in many of our competitor countries in the EEC. I see that the Under-Secretary is nodding his head.

§ Hon. Members

No.

§ Mr. Noble

He is shaking it.

§ Mr. Nott

There is some dispute as to whether the Under-Secretary his nodding his head or shaking it. I think that he is disagreeing rather than agreeing.

§ Mrs. Elaine Kellett-Bowman (Lancaster)

Is my hon. Friend aware that North America, Australia and New Zealand to a large extent put the burden of proof on importers? Could we not follow their example?

§ Mr. Nott

I should prefer to see a change in the burden of proof required in anti-dumping procedures rather than see this country using a whole panoply of non-tariff harriers which are, alas, used by some of our friends and allies on the Continent. It is very easy to foul things up at ports or airports, to make sure that perishable produce lies around for long enough to make it useless. This is not a procedure which any Government or any Opposition should do anything other than condemn. It is better to look afresh at our arrangements for antidumping rather than resort to this kind of device, which is greatly detrimental to international trade.

§ Mr. Noble

Has the hon. Gentleman looked at this question in the context of GATT, and what GATT has to say about dumping?

§ Mr. Nott

Although there was some disagreement about whether the Minister was nodding or shaking his head I could read in his mind that he, too, was thinking of the precise terms used in GATT on this point. Of course, I shall look more closely at GATT, but I must confess that GATT has many interpretations, as most countries in the world would agree. I take the point of the hon. Member for Rossendale (Mr. Noble) about GATT, and I do not think that the Under-Secretary needs to make the point because it is a valid one.

§ Mr. Meacher

In the case of America, importers are required to state the domestic prices from the supplying country on their documents, but that is for the purpose of customs valuation, and even in that case it does not prevent the need for a full anti-dumping investigation where there is an allegation of dumping.

§ Mr. Nott

I understood that, and where there is a prima facie case of dumping, the first problem faced by the Department of Trade is that of obtaining the necessary information to prove the case under the GATT rules. That was my 1112 second point, which the Under-Secretary has already made, that we need to put on shipping documents details of prices in the domestic market and manufacturing costs, so that this information is more readily available to the Department of Trade.

I was, however, making another point, that we also have to look at switching the onus of proof from the domestic purchaser who is adversely affected by a prima facie case of dumping to the exporter overseas who is sending the goods to this country.

§ Mr. Nicholas Winterton

I should like to support the point which my hon. Friend was making, although he has not yet made it sufficiently strongly to educate the Minister on this matter. Does my hon. Friend agree that if the domestic prices are indicated on documents coming into this country the Department of Trade could make them available to the trade, and it would then be up to the trade or a particular section of industry to lodge a complaint of dumping with the Department? In other words, the industry would be able to act very much faster than at present, before the real damage was done. It is the fact that the damage is done before action can be taken that is creating so much havoc in the present situation.

§ Mr. Nott

I must look at the record tomorrow to make sure that my hon. Friend was saying what I meant to say, but I none the less thank my hon. Friend very much for his assistance. It sounded correct to me.

The records and information will gradually build up over a period if information is contained in documents in the way the Under-Secretary described as happening in the United States. We consider that, if the information can be built up, sectors of the textile industry will themselves be facilitated—this was the point made by my hon. Friend the Member for Macclesfield—in taking appropriate action and bringing the appropriate information forward to the Department.

There is also a case for imposing tougher control on political pricing. I need to look further into this, but in the case of the COMECON countries, where the Government are supporting the most disastrous trade deals negotiated by the former previous Prime Minister, there is 1113 a case for being far tougher on political pricing and subsidy pricing where it arises in countries of the Far East, some of which subsidise exports to this country.

Finally, when responsibility for triggering anti-dumping procedures moves to Brussels later in the year—I speak personally here—I see no question of a future Conservative Government standing idly by if the Commission fails to act in a determined and speedy way. I have picked my words with care, and I mean what I say. I believe it to be out of the question that any Government here could be expected to stand idly by if the Commission failed to take action. That is a practical statement of the situation, and I am just as aware as the Minister is of the Treaty of Accession.

§ Mr. Meacher

The hon. Gentleman has made an important point. Will he explain precisely what action is meant by "would not stand idly by"? Under the Act the powers go entirely to Brussels.

§ Mr. Nott

I am well aware that the powers go to Brussels. The Under-Secretary of State can interpret however he wishes the words "standing idly by". I cannot possibly give an example till a particular flagrant case of dumping in this country arises for which no trigger is readily available through the Commission arrangements. The hon. Gentleman has made the point that technically, under the Treaty, responsibility for these matters moves to Brussels in July, but I hope that he will not pose in white raiment. His own colleague, the Minister of Agriculture, has—I must say that I do not support it—not exactly abided by the terms of the Treaty in what he has done with regard to the pig subsidy. I hope that the hon. Gentleman will not, therefore, suggest that the Government do not on any occasion contemplate acting unilaterally, since they did so only a short time ago in a way which I should not support.

§ The Under-Secretary of State for Industry (Mr. Bob Cryer)

I hope to reply far more fully later, but may I make clear now that it is intended that we retain an anti-dumping unit here in the United Kingdom and that we shall assist the Commission? We have informed the Commission to that effect, 1114 and it welcomed it. It will not, therefore, be just a total transfer to the EEC.

§ Mr. Nott

I thank the hon. Gentleman for that. I was aware that the Department of Trade intends to keep its antidumping unit here.

Despite the criticisms made of that unit, I should add that I hear many good words said about it, about its skill and its professionalism, and I am glad that we shall be retaining a unit at our disposal. I must add that I should not expect the unit to remain after July the same size as it is now. It would be only too typical of our bureaucracy if, when responsibility for these matters moves to Brussels in July, instead of diminishing it increased in size in order to give better advice to Brussels. Let us be clear that when our positions are reversed the first question which I shall wish to ask is "What was the size of the unit before the transfer of responsibility to Brussels, compared with the size after transfer?" I hope that the bureaucracy is forewarned of an impending, not unreasonable, question on that subject.

Finally in regard to the GATT, could the Under-Secretary of State for Industry tell us whether it is intended that textiles shall be included in the Tokyo Round? I assume that they are to be, but there seems to be some confusion about it. If the United States could be persuaded to reduce its tariffs against, say, our wool textiles, that would be of major benefit to our industry. The ad valorem duties and specific duties on some wool textiles in the United States rise as high as 50 per cent. against our goods. It is vital, first, that in the multilateral trade negotiations in Tokyo textiles are included and, second, that the Government use what I regard as their strong negotiating position in the multilateral negotiations to persuade the United States to be reasonable in the renegotiation of the Multifibre Agreement. I regard the multilateral negotiations as crucial.

I apologise to the House for having taken so long, and I conclude in this way. Improved international trading arrangements along the lines of the Minister's comments, which, I believe, were welcome, are vital, but they are only part of the necessary policy. Many of our textile industries depend on small manufacturing units, many of them managed by 1115 families or by small teams of people, and to survive in textiles calls for substantial entrepreneurial skill and willingness to take risks. It must be our policy to establish as soon as possible a climate within which such companies can flourish.

I must put it to the Government—this is my only critical point so far—that they must change the pattern of capital and wealth taxation in this country. The burden which the Government's legislation imposes upon small companies in the textile industry, whether through the Health and Safety at Work Act, the Employment Protection Act or the Price Code, all add to costs and frequently require resources which small companies cannot produce. The health of our textile industries and their contribution to the United Kingdom economy cannot be restored unless the climate for small companies is improved and incentives for enterprise are brought back through all ranges of income. It is all very well for us to discuss trading arrangements today, but these fundamental economic and political points are equally as important to the industry.

We on this side believe that, given the right trading environment in the form of a strengthened MFA, the textile industries have a sound and prosperous future and can continue to make a major contribution to our economy in terms of their export performance, their industrial relations and the employment which they offer in the regions of the United Kingdom. These industries can make a unique contribution to improving the country's standard of living, and it should be the object not just of our trading policies but of our taxation and economic policies also to ensure just that.

§ Mr. Mike Noble (Rossendale)

The hon. Member for St. Ives (Mr. Nott) made an interesting and entertaining speech, despite his fairly obvious handicaps, the first of which he himself admitted, namely, that he is relatively new to the world of textiles and the textile industry. I suppose that one should congratulate the hon. Member for Macclesfield (Mr. Winterton) on having taken his hon. Friend round on such a rapid guided tour. I always find it of interest when someone comes new to the world of textiles and is forced to cast off the image of dark 1116 satanic mills, cloth caps and clops, and recognise that this is a highly capitalised industry with all the excellent features that the hon. Gentleman described.

The hon. Gentleman's second disadvantage was that the clothes of his political statements had already been stolen by my hon. Friend the Under Secretary of State. I congratulate my hon. Friend on having made the most important statement on the textile industry that I have heard in this place since I became a Member in October 1974. I assure my hon. Friend that the people who work in the industry in my constituency, the trade unions and the employers will regard his statement as a substantial step forward and will be giving every possible assistance to the Government in the renegotiation of the Multifibre Arrangement.

It has become almost habitual to come to a textile debate with a loaded shotgun, and I assure hon. Members that I had both barrels loaded and carried a good stock of cartridges. In the circumstances, however, I have to put my shotgun away, because my hon. Friend, in outlining the renegotiating posture being adopted by the Government, included everything—or almost everything—that the Labour Party textiles group has been asking for over a long time.

Technically, we are here debating a series of documents relating to the existing MFA, and I think it fair to say that in many ways, in the view of many in the industry, the existing arrangement has become somewhat discredited. I was a little concerned and bewildered during the opening part of my hon. Friend's speech to hear him describe the arrangement in what I regarded as too glowing terms. For example, The Guardian on 7th February pointed out that imports of textiles last year reached a peak of £1.66 billion—in other words, they were more than one-third up on the previous year, and that in spite of the existence of the arrangement. However, I can assure my hon. Friend that my fears were dispelled by the later points he made about the MFA. The weaknesses of that arrangement have been well documented in the Chamber today and at other times.

The biggest weakness has been that the arrangement included a growth factor which could not possibly be accommodated by our textile industry. Whether 1117 that factor was 0.5 per cent., 6 per cent. or somewhere in between, at a time when domestic consumption was falling the inevitable result was that mills were closed and workers were thrown on to the dole. It was based on the wrong year. If we could have used 1973 for the base year or used an average of the figures from 1970 to 1975, the figures might have been realistic. But to base it on a year when imports were greyhounded in to establish levels on which to negotiate meant that the levels of imports into the country were far too high.

The third major weakness was that insufficient account was taken, in the burden-sharing arrangements of excessive levels of imports into the country. We have seen the effects of this. We know the effect on jobs. The Amalgamated Textile Workers' Union last year carried out a survey in the North-West of redundancies and of the temporary employment subsidy in the spinning and manufacturing industries. The survey revealed some startling figures. It showed that 74 textile firms received the subsidy in 1976 on behalf of a total work force of 12,364, or 21 per cent. of the total employed in spinning and manufacturing in the North-West.

The survey showed that on 20th August 1976 there had been 394 applications involving altogether 32,287 workers, which suggested that within the textile industry alone, of all the industries in the North-East, successful TES applications accounted for 38 per cent. of the labour force covered. The survey showed that the region's textile firms had announced redundancies which had already affected, or which would affect this year, 5,184 workers in the spinning and weaving industries.

The hon. Member for St. Ives says that we should be talking about a success story in textiles rather than a grim and dismal story. I suggest that he hesitates before arguing that case among textile workers in the North-West who for the last 16 years have seen employment in the industry almost collapse.

It is important to point out that, given the heavy concentration of the textile industry in some towns, the closure of a mill can affect a single family income by wiping out its earning capacity for four people—father, mother and two children. 1118 Mill closures have a devastating effect on the community. Although the level of employment changes considerably in textiles whenever someone loses a job, there is still a tremendous cultural feeling for the industry, which generates a far wider feeling than perhaps many other industries. My hon. Friend the Member for Ince (Mr. McGuire) could possible describe this more graphically than anyone as a result of the closure of the Empress Mill and of Courtaulds at Skelmersdale.

We regard the current agreement, reached two years ago, as a beginning. It reminds me of Don Revie. He tried to plan the England team, coached the players and made plans, but somehow the ball always went into his own net. What he did not realise was that, while we were playing a system developed by Sir Alf Ramsey, the Continentals had gone beyond that. That was why the ball went into our net. Similarly, I sometimes think that when we stop up one import source, the developing nations find an alternative way of getting goods into the country.

Many workers and employers in the industry feel that, despite the framework of controls, in some way or other they are sometimes evaded. I describe a feeling; I have no proof. A business man who manufactures children's and women's clothing visited my surgery one Saturday morning. He described the decline of his firm over the last 10 years, particularly the last six years, and the way in which he was convinced that controls were being evaded and more and more garments were finding their way into the country. I asked him to give me some photographic or documentary proof. if he does, I shall pass it on to the Minister.

What do we look forward to in the rest of the agreement? In his opening statement, my hon. Friend mentioned many of the things we want. The most important point he made was about the negotiation of a recession clause. In the debate on 28th January 1976–I hope that the hon. Member for St. Ives has been converted to this view—his predecessor as spokesman, the hon. Member for Worthing (Mr. Higgins)—

§ Mr. Nott

Not quite my predecessor.

§ Mr. Noble

Well, his predecessor but one. I cannot keep up with the changes 1119 in the Opposition. When I asked for a regulator in that debate, the hon. Member for Worthing said: I understand the hon. Gentleman's observation that the textile industry cycle may not coincide with the general economic cycle. But unless he proposes to say that when the two do coincide he would not advocate the policy of restricting imports because of the dangers of retaliation, his argument does not stand up."—[Official Report, Fourth Standing Committee on Statutory Instruments, 28th Jan. 1976; c. 41.] The hon. Member for Worthing was refusing to accept the idea of a regulator. I am pleased that my hon. Friend the Under-Secretary said that this was included in our negotiating mandate. I can assure him that the textile unions with which we have worked will be delighted to hear that.

§ Mr. Madden

My hon. Friend has pointed to the divisions of view about textiles expressed quite often on the Opposition Benches. Can he recall, as I do, one notable occasion when the hon. Member opening for the Opposition expressed firm support for import controls, which were strongly denounced by the hon. Gentleman who closed on behalf of the Opposition in the same debate?

§ Mr. Noble

I can recall that. I am trying to recall who was the hon. Gentleman opening.

§ Mr. Charles Fletcher-Cooke (Darwen)

I can tell the hon. Gentleman.

§ Mr. Noble

It was the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) who opened that debate. He is perhaps more experienced in the difficulties of the textile trade than the majority of his colleagues, and he is well known for speaking his own mind. It was regrettable, however, that while he did not need to convince us, he could not convince his hon. Friends.

The other important point which was mentioned was the idea of a global quota which would stop import penetration, or what my hon. Friend the Under-Secretary described as cumulative disruption caused by cheap imports. What my hon. Friend did not say was at what level the Government thought that a global quota should be fixed. I assume that this global quota will be on a product-by-product basis. If, for example, we fix the level at 40 per cent.— that has been recom- 1120 mended by many of my hon. Friends and by organisations outside—on a specific subject and we leave the margin to be competed for among developed countries, as opposed to low-cost producers, some sectors of the industry might be unable to make up the shortfall because the industry itself had collapsed in that section. In these circumstances, as my hon. Friend the Member for Bury and Radcliffe (Mr. White), who, until his recent promotion, always took part in these debates, has said, the capacity has gone.

§ Mr. Nicholas Winterton

Is the hon. Gentleman aware that these global quotas, certainly from next July, will have to be negotiated on an EEC basis and not purely on a United Kingdom and other country basis?

§ Mr. Noble

I have always been of the view that, since we had the MFA, any global quota would have to be negotiated through the MFA anyway. Nothing has changed there: it is the dumping which will change in July. If the hon. Gentleman is talking about the burden-sharing arrangement, that is rather different. We must remember that we should have to be flexible on the global quota if there should be circumstances in which the British industry could not meet the demands of the home market.

There is one point which has been presed from this side which my hon. Friend did not mention. I would once again draw it to his attention. All of us who have been involved in textile debates over the last two and a half years must be aware that from time to time we have been criticised as being opposed to the Third World, the developing countries. Nothing is further from the truth. The textile worker in general and the textile worker in Lancashire in particular has an honourable record towards the Third World and has helped to provide substantian growth in those areas.

However, when the Lancashire textile industry disappears it will be of no assistance to the Third World. The amount of the textile industry left now is such that the complete disappearance and handing over of all that productive capacity would not help those countries much.

When we talk about fair competition, we feel strongly that we are not comparing like with like. We can talk about 1121 raw material costs and so on, but in this country we are talking about the work of a highly sophisticated labour force, enoying the rights of union membership and collective bargaining and at certain times enjoying, if that is the right word, social security benefits and unemployment pay. That all creates on-costs for employers, which many of our competitors do not have to meet.

That situation is recognised by the International Clothing and Leather Workers Federation and by the unions in this country, and the only way that we can effectively help the Third World is by raising their standards towards ours. As long as the multinational corporations, so many of which exploit the workers of South-East Asia, are allowed to go on doing so without the reasonable restrictions imposed by trade union membership and collective bargaining and without the on-costs of the social security systems that we have, that wide gap between British or European workers and those of South-East Asia will remain.

Therefore, we believe that there should be a social or labour code attached to these international agreements. Until that is done and until the workers in Malaysia, South Korea, Taiwan and so on have the right to organise freely in unions and those unions are recognised by the employers, thereby improving workers' conditions, we shall continue to have this wide disparity and will have to fall back on some kind of restriction.

There is evidence that, although economic development has been brought to many Third World countries, it has not necessarily brought massive, substantial or even reasonable improvements in living standards. The multinationals have moved in to replace the basic industries with modem and highly technical industries and have created unemployment. Whereas a few people in South-East Asian countries may have benefited, there has been a substantial growth of unemployment and the majority have failed to benefit. I hope that at some stage in the discussions in the EEC the question of a social code attached to the MFA or the GAIT can be considered.

The Minister mentioned the United States. I have been extremely perturbed about the possible attitude of the United States to these negotiations. I was there 1122 fore heartened to note an article in The Times today headed US likely to support changes in fibres pact". It said: Indications that America may be prepared to agree to changes in the Multi Fibre Arrangement —which is due for renewal at the end of this year—have emerged after meetings between the United States textile industry organisations and President Carter. This has heartened leaders of the United Kingdom textile industry, which wants the EEC to adopt a tough stance in the forthcoming talks in Geneva on the future of the MFA by insisting on a fundamental renegotiation of its provisions. I believe that the framework outlined by the Minister is a substantial and fundamental renegotiating stance. If the attitude of the United States is softening, that is an important factor in the negotiations when we move on from the present stage to the international stage. I am encouraged by the Minister's statement, as I am sure my constituents will be who work in the industry.

I wish the Government good will and strength to their elbow in the forthcoming negotiations. They must not back down. It is not only a political gambit which is involved, although that may have attracted the hon. Member for St. Ives on his recent tours. It is the lives and the livelihoods of my constituents and the constituents of my hon. Friends that are at stake.

§ Mr. Nicholas Winterton (Macclesfield)

I am in considerable agreement with much of what the hon. Member for Rossendale (Mr. Noble) has said. He mentioned Mr. Revie and Sir Alf Ramsey and talked about the England football team having a strategy about 10 years out of date. On a slightly different front, only last Saturday, when England played France at Twickenham, we had 90 per cent. of the game but lost the match by 4 points to 3. It is significant that we lost to France, a country which, in any international trading arrangement and certainly within the EEC, ensures on all possible occasions that the arrangement suits it. The French take whatever action is necessary to ensure that their national interests are paramount.

Unlike the hon. Member for Rossendale, I congratulate my hon. Friend the Member for St. Ives (Mr. Nott) on the 1123 tremendous interest that he has taken in textiles since he took over that portfolio. His first outside visit was to the textile industry and that is significant. There is among the Opposition a deep concern about the industry which my hon. Friend clearly displayed when he went to Bradford, Leeds and Manchester as shadow spokesman for trade just after his appointment.

Since then, my hon. Friend has been elsewhere, including Dundee to examine the jute industry, and has had regular communication with all sectors of the textile industry, including the unions. I was present at a lunch in Manchester when he met union representatives of the textile workers. It is therefore most significant that both my hon. Friend and his number two, my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) have been taking a keen interest in this industry.

My hon. Friend was right to say that this is not an industry in demise or one with no future. We believe that it has a great future. Some of his statistics clearly show that the industry as a whole is potentially a major exporter—something of vital importance to the United Kingdom.

If I may be a little parochial for a moment, my constituency has many important textile interests and has made a major contribution to our exports in many respects, particularly narrow fabrics and specialist sectors such as tie manufacturing. A company in my constituency dyed and finished the material used in Princess Anne's wedding dress which shows that we can do whatever is required even at the very top end of the market.

We on this side of the House have been in regular contact with a variety of textile organisations and interests—the British Textile Confederation, representing both employers and trade unions; the British Textile Employers Association; the Textile Industry Support Campaign, which again is representative of both sides of the industry; the Clothing Manufacturers Federation; the British Clothing Industry's Council for Europe, because we know that from July Europe will be very important to the industry; and the Shirt, Collar and Tie Manufacturers Federation. In my constituency I have been in regular touch with the 1124 Macclesfield Textile Manufacturing Association, which represents a number of large and small companies.

The major importance of this debate is undoubtedly that we can express views about the renegotiation of the Multifibre Arrangement. I want to deal with this under a number of headings. The first is that of global quotas. Adoption of the global quota system would mean that there would be effective control over imports from all low-cost sources, including both established suppliers and any new sources that may emerge in the future. There is a significant precedent for the global quota approach—I am sorry that the Under-Secretary of State for Trade has left, because he knows a great deal about this—in the long-term agreement for cotton textiles—I hope that the Under-Secretary of State for Industry is well aware of this agreement, which preceded the Multifibre Arrangement. Global quotas should be applied to all low-cost suppliers, including the EEC associates and Lomé Convention countries. This is vital if there is to be a real future for our industry.

The second heading is that of orderly marketing. This concept was the raison d'ôtre of both the long-term agreement and the Multifibre Arrangement. To achieve this ideal it is essential to ensure that the policy of burden sharing is applied to developed countries and that access to the markets of the developed countries should be equitably shared among the developing countries. The latter should be effected by a redistribution of existing quotas, not by the creation of new quotas.

My next heading is that of price disruption. This phrase was purposely avoided by my hon. Friend the Member for St. Ives, but it is very meaningful to those who work in the industry. This has long been recognised as one of the most pernicious aspects of the imports problem, since the very low prices of much imported merchandise depress the market price available for such part of the market as is left for United Kingdom manufacturers and producers. The Swiss long ago recognised this problem by introducing a system whereby imports were not allowed into the country at a price lower than 90 per cent. of that for comparable textiles produced in Switzerland, so there is a precedent. The Belgians have also 1125 operated a scheme whereby the granting of import licences was conditional on the price not being potentially disruptive.

Canada has taken unilateral action. On 29th November of last year the Canadian Ministry of Industry, Trade and Commerce announced that imports of clothing in 1977 would be held to the 1975 levels. There had been an increase in imports in the first seven months of 1976 of 52 per cent. over the previous year. The Canadian Minister said that many domestic garment manufacturers had been closed and others were on short time. This emergency action, he said, was taken under Article XIX of the GATT and Canada planned to consult trading partners.

Likewise, unilateral action has been taken by Australia. During 1975, the Australian Government took emergency action under Article XIX of the General Agreement to slow down imports of a number of products. Among the imports affected were motor vehicles, footwear, carpets, and steel sheets and plates. Australia also introduced tariff quotas on imports of certain textiles.

The Australian actions were discussed in the GATT Council on a number of occasions from June 1975 onwards, and concern was expressed by the representatives of many countries. Consultations were initiated between Australia and a number of its trade partners and were still in progress at the end of the year. With respect to textiles, however, Australia was able to lift some of its restrictions early in 1976. In February it announced in GATT that it had abandoned the selective import quotas on textiles which it had applied against several Asian countries in 1975 in favour of a global quota system applying to imports from all sources.

One other example is that of Finland. So there is precedent for countries both within the EEC and outside taking urgent action to protect their industries.

The MFA itself includes unduly low prices as one of the key factors in causing market disruption. What is now required is strict control over disruptive prices, which are quite frequently quoted to the detriment of the exporting country, since they result in depressed earnings; and a revised MFA is the ideal international instrument to give effect to this. 1126 Mr. Benedict Meynell, the chief EEC negotiator, has in fact stated that price disruption is one of the problems that a modified MFA should be designed to counter.

The Minister pre-empted some of what I wanted to say in that he talked about a recession clause. It is important to talk about this openly and frankly. Experience has shown that United Kingdom producers bear the brunt of any recession which takes place in world trade, since the full availability of quotas, possibly negotiated at a time of relatively good trading, has given a virtual right of access to a substantially diminished United Kingdom market. The revised MFA should contain a flexibility clause or regulator which would effectively cut back imports during a time of recession.

I move on quickly to the heading "growth factors". The degree of growth to be allowed in any quota should take full account of the degree of import penetration already effected. This has been made quite clear by hon. Members on both sides in previous textile debates. Where this is above a level that could be regarded as consistent with the sustained viability of the home industry, no growth should be allowed. Growth factors should, in fact, be applied so that the concept of orderly marketing, which is so vital to the industry, is facilitated by not only allowing zero growth in cases of high import penetration but by promoting burden sharing amongst importing countries, particularly within the EEC, and a more equitable sharing of export markets among the developing countries having regard to their varying stages of development and established access to the markets of the West. This question formed the last part of the speech of the hon. Member for Rossendale.

In an intervention the hon. Member for Sowerby (Mr. Madden) rightly stressed the importance of the base period. It is vital that the base period for determining quota size should be applied to a fully representative period in order to prevent a build-up of trade by exporting countries as an exporting device. I know that the hon. Member for Sowerby has many examples that he will be able to quote to the House later.

Next, the newly-negotiated MFA, provided that it satisfies the requirements that 1127 I have just drawn to the attention of the House, should run for a period of at least five years. I was delighted that my hon. Friend the Member for St. Ives stressed this matter in his excellent speech. That will allow for better forward planning by the industry.

I shall refer briefly to dumping. Inevitably this subject must form an important part of the debate. It is fully recognised that the major problem facing the United Kingdom textile industry is low-priced imports that are to an extent a result of low production costs, which in turn reflect low living standards in the exporting countries. The hon. Member for Rossendale brought this fact to the attention of the House.

Dumping, and subsidisation—I quote Malaysia and Pakistan as good examples of assisted exports—play a sufficiently signicant rôle to merit serious attention. The total impact of price disruption is of such magnitude that no single contributory factor can be ignored. Past applications under the Customs Duties (Dumping and Subsidies) Act have been characterised by a madly frustrating attitude on the part of civil servants charged with administering an anti-dumping code recognised by the GATT. Much time has been wasted and orders have been lost. No doubt the hon. Member for Ince (Mr. McGuire) will tell us later that while existing procedures h