§ 7.53 p.m.
§ The Under-Secretary of State for Trade (Mr. Michael Meacher)
I beg to move,That this House takes note of Community Documents Nos. S/139/77, S/183/78, R/3375/77 and R/513/78 (and the Supplementary Memorandum submitted on 21st March 1978) on Community Textile Policy.I am glad that we have an opportunity today to consider these documents which, together, establish the framework for trade in textile products over the next five years. They all arise from the multifibre negotiations which took place at the end of last year, and may be regarded as the practical outcome of those negotiations.
When hon. Members last debated textile policy during the debate on the Consolidated Fund Bill on 14th December, the EEC had not taken its final decision about renewal of the MFA. That decision was taken by the EEC Council of Ministers a few days later, on the 20th, when Ministers decided to accept the results of the negotiations and agreed that the Community should renew the MFA. In taking this decision, they agreed to some increase in the ceilings set in the negotiating mandate for cotton yarn and cloth in order to reach agreement with certain countries. To have done otherwise would have put at risk the whole package of negotiations. But before going along with that decision, we secured a useful reduction in the United Kingdom share of the cotton cloth increase, together with other important assurances from the Commission, which I shall come back to in a moment.
The decision to accept the new bilateral agreements was described by my right hon. Friend as a "historic turning point" in the fortunes of the United Kingdom textile and clothing industries. For the first time, we and our trading partners in textiles know where we stand for the next five years. And within this overall framework there are new rules to control the flow of imports which are an enormous improvement over anything that we have had in the past.
In the first place, there are many more bilateral agreements or other special arrangements with low-cost suppliers—28 to date, compared with only 14 previously. 1276 The coverage of these new arrangements will be much more comprehensive than in the past. In 1977, about 75 per cent. of our low-cost imports were covered by quotas. The new arrangements cover, either by quotas or by special safeguard provisions, about 95 per cent. of our low-cost imports.
§ Mr. John Roper (Farnworth)
Can my hon. Friend say how much of the remaining 5 per cent. is with State trading companies and therefore also covered in some way?
§ Mr. Meacher
My hon. Friend must have read my speech, because that point is covered in the next sentence. If we include the separate quotas that operate outside the MFA or the State trading countries, the coverage rises to 98 per cent. The arrangements with State trading countries account for a further 3 per cent. of the remaining 5 per cent. Virtually all of the United Kingdom's low-cost imports of textiles and clothing are subject to actual or potential control.
We have paid particular attention to the most sensitive products. These are a familiar list for hon. Members—cotton yarn, cotton cloth, synthetic cloth, knitted shirts, jumpers, trousers, woven blouses and woven shirts—and are all products where import penetration is high. All low-cost imports of these eight products are now restricted within global ceilings, both for the EEC as a whole and for each member State. The effect of these ceilings should be that import penetration will be virtually stabilised, because imports from new suppliers will have to be contained within the overall limits. This is a significant departure for the EEC and, because these eight products represent about 60 per cent. of our total low-cost imports, this should be of great benefit to our own industry.
In general, the quotas are based on actual trade in 1976. Trade in 1977 was, in some cases, lower than in 1976, and I know that some hon. Members are therefore concerned about the level of the 1978 quotas. I understand that concern, but I insist that there was no alternative to using the 1976 base line.
As negotiations took place during the latter half of last year, 1976 was the latest year for which complete EEC statistics were available. The 1977 statistics were not available until the beginning of 1277 April this year. To have chosen a base year before 1976 would have been contrary to the spirit of the MFA and on practical grounds it would not have been possible to justify using different base periods for different products or suppliers.
Documents S/139/77 and S/183/78 set out the quota levels for the member States for 1978. In the case of Taiwan, the quota levels for 1978 to 1982 are shown. Both documents were approved by the Council of Ministers on 7th February and both have now been published in the Official Journal. Our own notice to importers will be published in Trade and Industry on 14th April. I should also say that in the case of the regulation covering Taiwan—this is a more technical matter—where no negotiations took place because Taiwan is not a GATT signatory, the Taiwanese authorities have made representations to the Commission about the low level of some of the quotas. If any changes are proposed as a result of these representations, the Select Committee on European Secondary Legislation will, of course, have an opportunity to consider them.
§ Mr. Dan Jones (Burnley)
I completely agree with my hon. Friend that the new regulations are a valuable safeguard However, what steps have been taken to ensure that the safeguards are ironed out securely for the textile industry in future?
§ Mr. Meacher
My hon. Friend raises a key point. It is all very well to have a set of regulations, but we must be concerned about efficiency in implementing them and the prevention of loopholes and possible abuse. I assure my hon. Friend that later I shall turn to the whole issue of surveillance, the blocking of loopholes and the prevention of potential abuse. When I reach that stage in my speech, he will understand that the arrangements are extremely comprehensive.
§ Mr. J. Enoch Powell (Down, South)
Is this one of the cases where approval was given to EEC documents by the Council of Ministers before instead of after the documents had been debated in the House?
§ Mr. Meacher
This is one of the cases where the decision is taken by the Council of Ministers because it is felt to be in the interests of each of the member 1278 States that action should be taken as soon as possible. However, the Select Committee on European Secondary Legislation will have a full opportunity to examine the matter. As we are talking about the imposition of levels of quota that will benefit a particular industry, the urgency of the matter is sometimes overriding. This is not the first time that it has happened, but I do not believe that it has caused matters to be taken amiss by the Select Committee. It has an opportunity to make representations if it takes that view.
§ Mr. Meacher
I am grateful to my hon. Friend for giving the House that information. This is quite regular practice, as I have indicated, in the circumstances that I have outlined. It is not that there is any attempt by the Government in any way by sleight of hand to put through a measure before there is a proper opportunity to discuss it. When it is beneficial to the home industry for action to be taken more quickly, that is the procedure that has been followed. That is well understood by the Select Committee.
With one or two exceptions, the quotas are now all subject to dual control—that is, that an import licence is granted here only on production of a valid export licence issued by the supplying country. The exceptions are Taiwan, where the quotas continue to be import-administered: Malaysia and the Philippines, where export-administration will begin on 1st May; and Peru and Mexico, where export administration will begin on 1st July.
Another very important advantage in the new agreement is the introduction of more precise safeguard procedures which cover all products from bilateral agreement countries which are not subject to immediate quotas. These procedures are most often described as a "trigger mechanism", under which new quotas can be introduced following consultation if imports of unrestricted products reach certain specified levels compared with 1279 imports into the EEC in the previous calendar year. That is one of the most important aspects of the new agreement.
I mentioned earlier the assurances that we secured from the Council on 20th December. One was that similar procedures would be applied to countries which have not concluded bilateral agreements. This is an assurance to which we attach great importance because the ability to introduce quotas when imports rise above a certain level, whether or not the country concerned has entered into a bilateral agreement, is clearly a crucial element in the new framework, and clearly in respect of new suppliers. I know that that is a matter of great concern to the industry and to Members on both sides of the House. Therefore, I shall spell it out briefly.
As a result of their preferential relationship with the EEC, none of the Mediterranean suppliers was prepared to enter into separate textile agreements, with the exception of Egypt. Instead, the Commission secured a series of informal understandings. That is a word that is used in the technical sense. It is, perhaps, a term of art within the trade. In the case of Morocco and Tunisia, the Governments of those countries have agreed to a voluntary restraint on their exports of certain sensitive products. Similar arrangements have been agreed with the textile and clothing industries in Greece and Turkey. Discussions are continuing with Spain and Portugal in the hope that similar arrangements can be agreed with them. In the meantime, both countries have been notified of levels which should not be exceeded and have been warned of possible safeguard action. All these arrangements apply in the first instance to 1978, but the Commission intends to make similar arrangements in subsequent years.
§ Mr. Mike Noble (Rossendale)
My hon. Friend said that the Commission intends to make similar arrangements in subsequent years. Will he confirm that the arrangements will mean no increase in quota levels for these countries in subsequent years, and will not merely imply the creation of further informal understandings, albeit at a different level?
§ Mr. Meacher
The proposal is that the basis on which existing informal understandings are made shall be continned, 1280 although this is no doubt dependent on future negotiations. There will be the same basis for limitation as exists in 1978. The basis of restriction will remain the same. There is no suggestion that there will be an increase in future years, although, as I repeat, that is a matter for negotiation. The fact that it is not written into the specific framework of the MFA means that it is open to negotiation. The Commission has made it clear that it is not allowing non-signatory countries any easier conditions than those that apply to countries that sign the bilateral agreements.
§ Mr. Nicholas Winterton (Macclesfield)
What if the situation were changed and, for example, two of the four countries became signatories to the Treaty of Rome? What protection would the British textile industry have within that changed circumstance?
§ Mr. Meacher
If the hon. Gentleman is referring to Greece, Spain and Portugal, these are all countries where membership is being contemplated and arrangements are being made to that end. If they became members of the EEC they would have to abide by the same rules that govern existing member States, especially in terms of the abolition of quotas or tariffs and any special aids that they might now give to their industries. Such measures would have to be done away with as a result of the competition rules under the Treaty of Rome. That would certainly make a good deal of difference in terms of intra-Community trade in respect of those countries. We are talking about a situation well into the middle or late 1980s. If accession were to come about for those countries in the 1980s, there would be a transitional period, as there was for Britain, so we are talking of a period five, eight or 10 years on.
I was saying that because of the voluntary nature of these arrangements we have not published details in a notice to importers. However, I assure the House that a close watch is being kept on the level of imports from these Mediterranean suppliers, so that the Commission can be alerted in good time if the agreed levels are threatened. The Commission, for its part, gave an undertaking at the Council on 20th December that appropriate action would be taken promptly if it became necessary. That is an assurance to 1281 which we attach great importance and certainly intend to utilise if need be.
This brings me to the question of surveillance and the intervention by my hon. Friend the Member for Burnley (Mr. Jones). This is obviously a key factor in ensuring that the safeguards are operated satisfactorily. We shall need to know in advance when trigger levels are likely to be reached so that the safeguard machinery can be set in motion in Brussels.
To this end, our own surveillance licensing of non-restricted textiles is being brought into line with the new MFA product categories, and we plan to introduce an early warning system which will give us time to act. At the same time, a Community-wide surveillance system based on early information about actual imports is being set up which should help to draw the net still tighter.
This surveillance will be based on new nroduct categories which are common to all the agreements and other arrangements. These new categories—no fewer than 123 in all—are much more precise than the 60 categories which applied in the past. This will greatly reduce the amount of flexibility between quotas—that is the transfer of unused portions in the one quota to increase trade in another which has been fully used up—and it should also reduce considerably the scope for evasion. I hope that my hon. Friend is satisfied with what I think is a comprehensive answer to his question in terms of the new arrangements.
§ Mr. Max Madden (Sowerby)
Is my hon. Friend satisfied with the disparity that seems to exist within the Common Market between the delays that occur in submitting import data? I understand that it is 16 days for the United Kingdom, which is the quickest country, and goes up to 10 weeks for Italy. Can my hon. Friend foresee any standardisation in these arrangements to ensure that import information is passed much more quickly than appears to be the case today?
§ Mr. Meacher
We certainly intend to be as efficient as possible in passing this information to the Commission. One of the problems in textiles has always been the great delays in the information pipeline. As I indicated, we did not get the full figures for 1977 import levels until 1282 the beginning of April. There are considerable delays in getting information quickly. I think that the United Kingdom is rather better than other countries in this respect. Subject to our capacity to collect that information more quickly, we certainly intend to process it and to pass it to the Commission as quickly as we can. If my hon. Friend is aware of unreasonable delays in that respect, I hope that he will let us know.
§ Mr. Dan Jones
The Minister asked me whether I was satisfied with regard to the Mediterranean relationship. Frankly, I am not. I think that the agreement with the EEC is remarkable and must, if left to that device, be of immense good for the textile industry. But if the Mediterranean countries are allowed freedom, I believe that that could undermine that good effect. Are we prepared to take steps now to bring under control, in the same way as the EEC has done with other countries, the situation concerning the Mediterranean countries, or, put another way, is the EEC prepared to allow them to participate in the control of the Mediterranean countries?
§ Mr. Meacher
There are preferential agreements with the Mediterranean suppliers. That is the different relationship that they have with the EEC. I am not convinced that, because of that special relationship, the Mediterranean suppliers will be able to increase their exports beyond what is permitted to the normal bilateral signatories. In effect, we are concerned about the level of imports, particularly of cotton yarn and cloth, from a number of the Mediterranean suppliers. We have given this information to the Commission. I understand that it is at present carrying out consultations with the supplying countries. That is a term of art. It means that the Commission is making it very clear that it does not expect these levels to be exceeded. In certain Mediterranean supply agreements—for example, with Turkey—there are safeguard clauses which we can invoke if need be. We are examining ways in which we can close that gap in relation to other countries where there are not such safeguard clauses.
Another important element of the revised MFA—this is the last point that I want to make—is the introduction—
§ Mr. Winterton
Is the Minister aware that the figures quoted by his hon. Friend the Member for Sowerby (Mr. Madden) were based on a paper recently issued by Comitextil? If there is this tremendous disparity in the notification of this import data—for the United Kingdom 16 days, but for the Netherlands and Italy anything between six, eight and 10 weeks—how can Europe in the present situation efficiently implement a surveillance system and procedure? Will he look at this matter rather more seriously and perhaps take to a European table the fact that we in this House are dissatisfied with the length of time that it takes some of our European partners to supply the import data which is so vital to an efficient and effective implementation of a surveillance procedure?
§ Mr. Meacher
I agree about the importance of making sure that information is made available so that action can follow. If this is a paper by Comitextil, the remedy lies in its hands. These are the textile manufacturers of the EEC. If they stand to gain from processing this information quickly to the Commission, it is up to them to ensure that their Governments act quickly. I suggest that they put more pressure on their Governments. Certainly the United Kingdom Government cannot require or induce the Netherlands or Italian Governments to operate more quickly. We can indicate by our own example that it can be done by us in a shorter time than by them. I hope that the industries in those countries will put a lot of pressure on their Governments to act more quickly. It is mainly for them to do that.
Another important element of the revised MFA is the introduction of more precise rules of origin and of measures that will require documentary proof of origin to be produced at the lime of importation in respect of imports from all non-EEC countries. These provisions are the subject of the other documents on the Order Paper, R/3375/77 and 1284 R/513/78. Essentially, and at some risk of over-simplification, the former document sets out the new provisions and the latter modifies those relating to proof of origin.
The amended proof of origin provisions have been published in the Official Journal as Council regulation 616/78 and will come into effect on 1st May. It may help the House if I explain that the rules of origin determine the country of origin of a product. The proof of origin is the documentary statement of that origin which is presented to Customs. The combined effect, with some differences in detail between restricted and non-restricted sources of supply, will be that documentary proof of origin will need to be supplied by the exporter and produced by the importer at the time of importation in respect of all commercial imports of textile products of categories covered by the bilateral MFA agreements.
This is a very important point. Without rules of origin it would be possible, for example, for a country with a product under quota to evade the quota ceiling by shipping goods through a country where the same product was not subject to any restriction. The present origin rules lack precision and are open to differing interpretations. This will be avoided by the introduction of precise rules based on the concept that the origin of all textile products will be determined—with certain minor exceptions—by the carrying out of one complete process. For some products, the present origin criteria will be changed. The new rules will also apply to trade within the Community to determine whether goods traded between member States are of EEC origin and thus free from restriction, or of third country origin and thus susceptible in certain circumstances to restriction under Article 115 of the Treaty of Rome.
This is a complex subject. I have not attempted to give more than the barest outline of the purpose of the new regulations and how they will work. But we are satisfied that the combined effect of the revised origin rules will be to close the loopholes, to resolve the ambiguities in the existing rules and to ensure that the intentions of the MFA cannot be evaded by manipulation of the country of origin. If we have succeeded, as I think we have, that is an important point.
1285 The documents that are the subject of todays motion are the outcome of a years' hard bargaining and negotiating both within the EEC and outside it. They are proof of the Government's determination to remedy the defects of the old MFA agreements and to provide our textile industry with adequate protection. As I have already said, there are now agreements or other special arrangements with 28 low-cost suppliers. These agreements provide for over 400 separate quotas, covering 123 separate product categories. These quotas, together with the new safeguard provisions, mean that about 95 per cent. of our low-cost imports of textiles are now under control. If the separate arrangements for State-trading countries are added, this brings the coverage up to 98 per cent.
It is perhaps too early, after only three months' experience of arrangements that will last for five years in most cases, to come to any final judgment. I would not wish to claim that the results are perfect; I am sure that they are not. This is clearly no time to become complacent or to relax our efforts. On the contrary, vigilance must and will continue.
I again pay tribute to the determination and dedication of members of the textile lobby on both sides of the House who provided the Government with the determination that was needed for these negotiations. But I urge the industry to take advantage of the new arrangements and the valuable breathing space that they provide.
We have done all that we could to secure our objectives of adequate protection against disruptive imports and security and protection for those who work in our textile industry. I think that they, and we, must look now towards the textile employers to do their bit and start expanding and investing for the future, so that if demand picks up—as I hope it will—it will be British manufacturers who have the capacity to fill the gap. Much will obviously depend on the general economic climate about which my right hon. Friend has spoken so encouragingly this afternoon. But the Government have recognised the special difficulties facing the textile industry and have taken unprecedented steps to provide help. I have not mentioned the many other areas in which help is provided, such as Industry 1286 Act assistance, TES and other aspects, as these are mainly matters for my hon. Friend who will wind up this debate.
We have done our best to meet the objectives that we set ourselves in February last year. The documents before the House show our concern for the textile industry and those who work in it. We now look to the industry for a positive and determined response.
§ 8.25 p.m.
§ Mr. Cecil Parkinson (Hertfordshire, South)
First, I apologise to the Minister for missing the first moment or two of his speech. My own early warning and surveillance system failed me. I apologise for missing his opening remarks.
This is the first textile debate in which I have participated, but among my earliest memories is growing up in Lancashire and walking to school past textile mill after textile mill, most of which are now closed. I have had a continuing interest in the industry for a long time.
The background to the debate is well known to hon. Members. On 21st February last year, we had a debate on the state of the textile industry and in particular on the need to renegotiate the then existing Multi-Fibre Arrangement. That debate was marked by the bipartisan approach to the problems in the textile industry and the virtually unanimous agreement in all parts of the House that the Multi-Fibre Arrangement had to be renegotiated. With the full backing of the House, the Secretary of State for Trade went to the many meetings of the Council of Ministers pledged to improve and tighten up the existing arrangements. To give credit where it is due, the final agreement which we are now debating owes a great deal to the Secretary of State's determination and toughness. We pay him tribute for that.
I am sure that the right hon. Gentleman would be the first to admit that he was able to take such a firm line because he knew that he had the support not only of his own side but of the Opposition. He knew that he had the backing of a united House of Commons when entering the negotiations.
This is our first opportunity of discussing the long-awaited outcome of the renegotiations, which was finally announced in a characteristically anti-climatic fashion by a Written Answer 1287 in the House of Commons and by the issue of the series of documents that we are now debating. Only the EEC would choose to make such an important announcement about such an important arrangement in a series of complicated and convoluted documents. I am told that it is possible, if one reads and rereads the documents, to understand them completely. I certainly found them extremely hard work.
The satisfactory conclusion of the negotiations was an event of major importance. The impact of them will have a decided effect over the next four years on the livelihoods of many of the 830,000 people who work in the clothing and textile industries in the United Kingdom. The documents represent the conclusion of an important series of negotiations. I hope to explain why the outcome of the negotiations is satisfactory.
There are those who would argue, as John Madeley did in The Guardian of 8th February, that the increased clamour for protection by Britain against imports from developing countries appears to be out of all proportion to the damage that those imports cause to the British economy. Mr. Madeley put forward a detailed argument explaining why he holds that view. His argument, however, seemed to ignore the fact that, even after the renegotiations, the United Kingdom and EEC markets will remain more open to the exports of developing countries than any other comparable market—if there is a comparable market.
The Conservative attitude to the whole question of trade with the developing countries—and it is an extremely difficult question—was set out in a recent speech by my hon. Friend the Member for St. Ives (Mr. Nott). He was talking about the principle of the Multi-Fibre Arrangement and the idea of introducing orderly marketing of the exports of developing countries in the markets of developed countries. He said:In ths way"—meaning via arrangements such as the Multi-Fibre Arrangement—it is to be hoped that the developing countries can develop their infant industries without destroying the infrastructure of those industries in the developed countries. Developing countries must takes a realistic view of the rate at which imports can be absorbed where they compete, as they tend to, with traditional and 1288 highly labour-intensive industries in the developed countries.He might have added that when there is a fast-developing textile capacity all over the world and a world recession, as there is, the problems become even more acute.
This, then, was the basic aim of the renegotiations—to retain access to the EEC and United Kingdom markets for the textile products of other countries, but to do so in a way that would avoid the disruption—some would say the crucifixion—of the home-based industries. Under the new arrangements, the EEC will continue to be the world's largest importer of textiles with a rate of import penetration almost twice that of, for instance, the United States.
In introducing the debate, the Minister mentioned a number of the areas of the new agreement which commended themselves to him. On behalf of the Opposition, I should like to comment on a number of the changes and improvements which I see arising from the negotiations.
As a result of the renegotiations, agreements now cover larger number of countries and a larger range of products, and that is to be welcomed. Although they provide a growth rate overall of about 6 per cent. annually over the next five years, the growth rates will vary sharply between different categories of imports and different countries with minimal increases or none for the most sensitive items and for the most dominant suppliers. The global approach which is the feature of the agreement in some of the most sensitive products is to be welcomed.
We welcome the fact that greater opportunities will be given, in spite of the difficult economic climate, to the poorest, who will get better access to our market, although the price that has been paid is a cutback in the share of some of the more advanced countries such as Hong Kong and Korea. There will be a better chance even in very difficult times for the poorer countries, and the House will welcome that.
The new base levels for arriving at quotas, founded as they are on the 1976 levels of trade, are, we believe, much more realistic than the previous quotas, which tended to be based on the pre-MFA access levels. The Minister was made aware of that fact this evening by questions from both sides of the House. We realise, however, that arriving at a 1289 basis for fixing a quota was extremely difficult, and, although there will be reservations about the new basis, it is on the whole a great improvement on the previous one and is probably about the best that could have been obtained.
Like the Minister, we, too, welcome the introduction and development of an effective trigger mechanism. It is extremely important. Although it will be most difficult to operate in practice, as has been mentioned repeatedly to the Minister tonight in interventions, a trigger mechanism for products not subject to existing quotas is absolutely essential.
I welcome the new flexibility and the new proposals for licensing and control which the Minister discussed this evening. If the arrangements are to succeed—this point has already come out very clearly in interventions—it will be absolutely vital for member countries of the EEC to develop common means for monitoring the arrangements. That will not be an easy task. The Minister told us just how many countries are involved and the huge range of products. Frankly, reaching the agreement, difficult though it may have been, may have been the easy bit. Actually making it work will be extremely difficult administratively.
I welcome the fact that the Minister recognises this and that he recognises that the United Kingdom Government will have to press very hard if the arrangements are to work out in practice, as we hope they will, to make sure that there is the development of a consistent system of monitoring and surveillance and that consistent records are kept so that the agreement can be properly implemented.
I always think that it is a mistake to talk about "the textile industry because a number of industries are involved in textiles. The attitude of the various industries concerned seems to be very well summed up in a letter sent to me by the British Clothing Industry's Council for Europe. The sentence that I wish to quote is as follows:There is no doubt that the new regime is superior to the old in a number of significant ways.Even so, it will be no news to the Minister—he has had some of the criticisms already—that there are still criticisms, and I should like to mention just two or three of them tonight. I hope that the hon. 1290 Gentleman will try to deal with one or two of them when he replies to the debate.
As the House will be aware, there is fairly strong criticism of the absence of a recession clause in the agreement. Perhaps those negotiating it could not envisage our being in a recession which was deeper than the present recession, and perhaps it was not regarded as necessary, therefore, to build into the new arrangement a recession clause. However, I wonder how the Minister envisages that the problem will be dealt with in practice if the recession deepens and whether there are any contingency plans or whether Ministers have any ideas for dealing with the problems that could arise if the recession deepens.
§ Mr. Noble
Is the hon. Gentleman telling us that the policy of his party now with regard to a recession clause has changed? I recall that in the Statutory Instruments Committee, for example, the hon. Member for Worthing (Mr. Higgins), particularly when he was spokesman on trade for the Conservative Party, argued with me that his party could not possibly accept the idea of a recession clause.
§ Mr. Parkinson
What I am saying to the Minister is that there are criticisms throughout the industry. A number of criticisms have been made to us. I am pointing out just one or two of them.
One of the criticisms that has been made to us is that there is no provision for a recession clause. I just wondered—because, equally, the Minister must have considered this matter—whether the Government have changed their ideas, perhaps, about the need for a recession clause and what ideas the Government have about dealing with this contingency and raising it.
§ Mr. James Lamond (Oldham, East)
Surely the purpose of speaking from the Opposition Front Bench is not merely to wonder about the Government's attitude. On a simple issue such as this, it would be rather nice to hear a plain statement of the Opposition's point of view.
§ Mr. Parkinson
—and standing at this Dispatch Box is that it is our privilege 1291 to ask the questions. I know that the hon. Member for Oldham, East (Mr. Lamond), has like myself, sat through Prime Minister's Question Time and has come to the conclusion that there has been a reversal of roles and that the Government ask the Opposition questions and it is the Opposition's job to give all the answers. That is not the situation. It is the reverse. I am exercising the proper rights of an Opposition in asking the Minister some questions and making sure that the people we cannot mention, who have been brought here tonight, have something to show for their presence.
§ Mr. Parkinson
I thank my hon. Friend.
Another matter which has been raised with us and on which I should also like to have the Minister's comments is the question of suits from the COMECON countries and the basis on which the price clause will be operated. The clothing industry has told us that there are doubts about its value in the agreement because the price comparison is with the lowest price of garments from a third country—which could include developing countries like India and Korea. One would then be comparing the prices suggested by States with centrally planned economies with those of developing countries and not with those of developed countries. I wonder whether the Minister would comment on that.
§ Mr. Meacher
Perhaps I may do so immediately. On the question about a recession clause, there is a provision for a review if called for by either party after two years. I am not sure whether the hon. Member or his predecessor as a trade spokesman agrees with that. Perhaps he will say.
As for the price comparison for suits or clothing from State trading countries, the provision under Regulation 459/68 of the Community is that the comparison will be made with a product as near as may be to the product from the State trading country. Nothing compels that comparison to be made with a developing country's product. Certainly, under that regulation there is some easing as compared with the 1969 Act of this country.
§ Mr. Parkinson
I thank the Minister for those answers. The one about the basis for a price comparison will be particularly welcome because it has been raised with us by the clothing industry.
To repeat something I said earlier, there is real concern not about the terms of the agreement but about whether administratively it will be possible to make such a complicated agreement stick. I hope that the Minister in replying will say, a little more fully than his hon. Friend was able to do in his opening speech, just what plans the Government have for pushing ahead with making sure that proper administrative arrangements develop to make the agreement stick.
In the debates to which I first listened about the textile industry, one was bombarded with expressions of concern, and if one did not have textile interests in one's constituency could easily have been left with the feeling that the industry was a sort of gigantic corpse into which a few very earnest Members were trying to breathe a little life. Nothing, as we all now know, could be further from the truth.
It was of great interest to me to get reacquainted with the textile industry after a long absence from it. One cannot fail to admire the way in which it has responded to competition or to see the improvement in productivity, the way in which management has invested and installed new machinery and the way in which labour has co-operated with management in improved manning levels to ensure that the productivity which is vital to the industry's continued competitiveness is obtained.
One cannot help comparing this industry with a number of our other troubled industries, such as the motor industry. Far from adding to their problems, in the textile industry management and labour have combined to try to defeat them, to combat the problems that are being imposed on them. Many companies, such as British Leyland, seem to be seeking to add to their own problems and those that the world imposes on them.
The industry has responded to the challenge of competition. It has not merely demanded protection and the right to carry on in its own ways. It has modernised and it has improved productivity. The industry's production of nearly £10,000 1293 million-worth of goods a year is considerable. It represents a substantial proportion of our gross national product. Exports of £2,000 million a year, as were achieved last year, are also very impressive.
§ Mr. Madden
The hon. Gentleman has rightly been talking about competition. I wonder whether he is aware that the British Textile Confederation has issued to a number of hon. Members a communication in which it says:All the major political parties accept the need for restraints on textile and clothing imports and from countries whose wages, social conditions and trading patterns make competition with them totally unequal.Does the hon. Gentleman accept that as a fair summary of his party's position? He has been rather reluctant to answer a number of questions put to him, but, for the sake of the confederation and those who are guided by it, could he reassure us that that is the position of the official Opposition?
§ Mr. Parkinson
That is probably the most superfluous question that has been asked for a long time. The British Textile Confederation issued that document because the people who run it took the trouble to read last year's debates on the subject and the various statements that have been coming out continuously from my hon. Friend the Member for St. Ives. It was on the basis of what it read in debates in the House and statements by members of the Conservative Party, speaking for the party, that it said what it did. The answer to the hon. Gentleman's question is "Yes".
Although the agreement is not all that the industry desired, I am convinced that it was the best available and that the Secretary of State deserves congratulation on his part in obtaining it. I hope that the textile industry will take advantage of the new arrangements to increase its share of the home market and, working from that improved home base, improve its already very impressive export performance.
There can be no doubt that throughout the House we wish the textile industry well. As a result of this renegotiation, it now has the opportunity to plan its future in a rather more predictable market. It has the opportunity to go 1294 ahead with its plans for investment and for improving productivity against a more settled background. We on the Conservative Benches, and. I am sure, hon. Members throughout the House, hope that it will be successful in its attempts.
§ 8.49 p.m.
§ Mr. Ben Ford (Bradford, North)
I am very pleased that we are having this short debate on textiles. Like the hon. Member for Hertfordshire, South (Mr. Parkinson), I join my colleagues who are members of the all-party Wool Textile Group and members of the trade in congratulating the Government and the Ministers concerned on the persistence with which they have pursued these agreements to a pretty satisfactory end. As has been said, they are not 100 per cent. satisfactory, but I think that most people would agree that the Government have got about everything that could possibly have been obtained in the circumstances.
It is important that we have such agreements as these. As has been remarked, this industry employs 830,000 people. Only a few years ago, well over 1 million people were employed in the industry. The run-down has been largely as a result of cheap imports, which have undermined the industry. I believe that these agreements will provide a framework for a better order in world trade in textiles and clothing and that this will be an improvement on recent years. I hope that they will provide a framework which will re-establish confidence in the industry and enable us to offset some of the doom and gloom that have come from many of the Jeremiahs in the industry in the past.
I know that the Government are aware that there are certain areas of concern to people in the textile industry, and I will put two specific questions to the Government which I hope the Minister will answer when he winds up the debate.
First, will the Community press for Community action as soon as the EEC is entitled to ask for a quota on a product for which a country with which we have an agreement becomes a significant supplier?
Second, will the Government press for Community action as soon as a low-cost country, with which we do not yet have an agreement, becomes an important supplier of textiles and clothing?
1295 In connection with the last question, I bring to the attention of the Minister the low-cost wool cloth imports from Argentina. This matter is now causing great concern to the wool textile industry. The wool cloth is coming in from Argentina at ridiculous prices which barely cover the cost of the raw material, from wherever it may be obtained. There has been a dramatic increase in volume in the supply of this cloth between 1976 and 1977, and possibly tomorrow the Minister will find a motion on the Order Paper asking him to apply an immediate countervailing duty until such time as we can conclude other forms of agreement with Argentina. We hope that the Minister will take this one out of the basket and activate the trigger mechanism.
Grateful as it is for the agreements that have been arrived at, the wool textile industry merely requires an opportunity to trade in fair circumstances. It is not seeking protection for the sake of protection. It wants fair trading. I am satisfied and it is satisfied that it can do its job for this country.
§ 8.53 p.m.
§ Mr. Hugh Dykes (Harrow, East)
The House would feel it presumptuous on my part if I were to intervene at great length. I know that there are many hon. Members with much greater experience and knowledge, as well as obvious local geographical and constituency interest in various parts of the textile industry, and they have by definition, therefore, a prior right, I should have thought, to speak in the debate.
I intend, none the less, to intervene briefly, with the approval, I hope, of the Liberal Party spokesman on textiles, to make one or two points from the Community standpoint, and perhaps also one or two very quick points on the outlines and the framework of the agreements.
As my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) and the Minister have said, one would have thought that hon. Members in all parts of the House would welcome these agreements and the formulation of the textile protection regulations. I missed certain aspects of the very brief exchanges earlier, when the Minister was speaking and the hon. Member for Farnworth (Mr. 1296 Roper) intervened, but this is a debate concerning primary EEC legislation as opposed to the usual so-called secondary legislation—and even that is a misnomer—when we are considering directives.
Here, there is no absolute strict right on any national Parliament to consider these matters in the usual sense of processing legislation in the Community. However, that does not rule out what we quite rightly do in this House, which is to scrutinise all sorts of things, including elements of primary EEC legislation such as regulations.
With great hesitation, I disagree very slightly with my hon. Friend on one point which he made at the beginning. I do not think that these documents are particularly extra-complicated over and above anything that we see by way of national legislation.
§ Mr. Dykes
The hon. Gentleman is presumably an enthusiastic supporter of the textile protection regulations. It is no good his glibly and superficially saying that they are all bad and dismissing what the EEC does in that sense. That merely irritates sensible people.
I believe that these documents are as comprehensible as any legislation that we see in this country, particularly when one considers complicated schedules, technical elements attached to Bills, statutory instruments and all the regulations and orders issued by the Government as a result of primary national legislation. There is intrinsically no particular extra complexity in the documents, although the subject matter is itself very complicated. Indeed, I would say to hon. Members who try to single out Community documents and papers for extra special harsh treatment and judgment that if we considered the actual clauses of the regulations we would discover that they are couched in similar terms to domestic Bills.
§ Mr. Parkinson
The point I was trying to make is that I regard the agreement and the renegotiation as a momentous and important event. The House learned about it officially by way of a Written Answer to a Parliamentary Question. Four months after the event, we are now looking at a series of documents which in themselves are not ultra-complicated. But that still seems a slightly anti-climatic way 1297 of this House finally arriving at debating what was a very important renegotiation. That was the point I was trying to make.
§ Mr. Dykes
I am grateful to my hon. Friend. Of course I agree with him, but I think that that is more of an aspect of the complicated timetables and timing of these scrutiny debates, some of which are well ahead of any decision in the Community and others of which are, as in this case, well behind. That seems to be perfectly in order. I believe that the House is still coming to grips with learning about the different kinds of Community instruments emanating from the EEC. In this case, regulations are less familiar to us as bits of paper than are directives or other communications.
I should like to ask a couple of quick Questions. These are points that have been put to us by the trade association concerned with clothing, in particular, the European arm of that association. First, can the Minister say anything more about the position of special products from India? I gather that there are still slight question marks—at least, in the minds of some people in the industry—about this aspect. We understand that there will be specific quotas for some garments and a special trigger mechanism for others, but, again, some people consider this to be rather generous.
The price which the Commission has paid by way of quota size is substantial. For instance, I gather that, with regard to the expansion of category 8—woven shirts—imports from India alone have increased from 2,900,000 in 1975 to 8,500,000 in 1978. There is a very substantial expansion. That is one particular esoteric special example from one country only. If we take the generality of all the products from all countries, it is true to say that, although this is an agreement which to some extent by definition has a delimiting effect on trade, none the less it comes from a position in which there has already been a substantial tangible expansion of cheap imports into the Community in products of this kind. Many people in the underdeveloped countries have no reason to complain about the Community's reasonable attempt to create more orderly conditions when the domestic industries are under such an obvious threat.
1298 I would repeat the question with regard to the imports of particular products, especially suits from COMECON countries. Again, I believe that reassurance is perhaps needed on that score, and I hope that the Minister will say something more in his winding-up speech.
I conclude with two separate but related points. In this debate the Government have been praised, and, quite rightly, the Secretary of State has been praised, as have the Under-Secretary for his role in this and other Ministers in the Department of Industry in the sense that they were also involved. The House has praised itself for the united position that it has adopted on these agreements. However, the Community has not been praised except indirectly and perhaps by inference. It has not been praised openly.
I should have thought that this was one occasion when even those hon. Members, for eccentric reasons, are deeply sceptical about the verities of the Community and its importance to the member States in the future would have had some praise for the Community in view of the value of this achievement in the Community of getting nine member States to come together in these textile protection regulations. It is a remarkable feat in itself. I cannot understand why some hon. Members cannot feel able to praise the Community at least on this one aspect even though they criticise it on others. It irritates objective, neutral, sensible members of the public when they see a myopic attitude being adopted by certain hon. Members in refusing to praise what is a remarkable achievement by the Community countries.
Related to that, the industry has been very well organised in putting forward its collective arguments for additional legitimate protection along these lines rather than for some grotesque limitation of trade and in demonstrating that it believes genuinely in free trade. The industry has been successful in pressing for this protection in this country, in France, in Germany and in the other member States. The industries of those countries have themselves acquired a European dimension, therefore, at least in terms of consultation through the equivalent of a European trade association. It means that they themselves are well aware of the importance and relevance of the Community to its members.
1299 As a result of this achievement in these agreements, we all wish the industry well. We recognise that it has had an extremely difficult time in recent years and has faced the cruel blizzards of unfair competition from other parts of the world. It is now up to the industry to show that it can flourish when additional protection of a legitimate kind is provided, without going into regrettable limitations on fair trade and competition. I believe that the British textile industry will flourish enormously in this new regime.
§ 9.2 p.m.
§ Mr. John Roper (Farnworth)
In common with other hon. Members who have spoken, I welcome this agreement. It is an important and in one way an historical debate that we are having tonight, because over a long period I can remember taking part in debates in this House and elsewhere about the likely impact of Community membership on the British textile industry and whether it would be possible for us once in the Community to get additional protection.
I know that this is not a view that will be shared by all my hon. Friends, but this seems to me to be one of the areas in which Community membership has already paid dividends. As part of the European Community, we have been able, by persuading our partners to agree upon a negotiating mandate for the Commission that was in the interests of the British textile industry, to use much more muscle internationally in negotiations than would have been possible if we had spoken on our own. We have been able to influence the policy of the Community from within in a way that would not have been possible if we had not been a member of the Community.
There is no doubt that great credit must go to my right hon. and hon. Friends for the part that they played in the Council of Ministers in ensuring that the Commission's negotiating mandate was a tough one. However, tribute should also be paid to the Commission's own negotiating team for its work in carrying out that mandate.
I was interested to read what my hon. Friend the Under-Secretary wrote about the way in which the Commission had carried out its negotiating mandate. He said:For the most part, the Commission have kept very close to the terms of the mandate 1300 —closer, indeed, than might have been expected given the very difficult nature of the negotiations.This shows that the Commission is able, if given a proper negotiating mandate by the Council of Ministers, to act on the world scene in a useful and effective way in developing an effective framework within which our industries can operate.
§ The Under-Secretary of State for Industry (Mr. Bob Cryer)
Will my hon. Friend accept that in keeping the Commission negotiators to that mandate a great deal of credit should go to the British Government? Over a long period we exerted a great deal of pressure to maintain the strong negotiating position.
§ Mr. Madden
Before my hon. Friend gets too carried away, has he seen the Press stories this week reporting an EEC agency forecast that, by 1985, 1.75 million European textile workers would be redundant? Does my hon. Friend believe that this report is accurate? If so, does he not agree that we should be negotiating harder than we have been hitherto?
§ Mr. Roper
I was coming to that report. It was not from an EEC source; it was from an article in today's issue of The Guardian, written by Brij Khindaria from Geneva, about a paper being discussed by delegates to the textile committee of the International Labour Organisation, which is a United Nations agency and not an EEC agency.
I want to follow some of the discussion between my hon. Friend the Under-Secretary of State for Trade and the hon. Member for Macclesfield (Mr. Winter-ton) about the effectiveness of surveillance control. Quite clearly, particularly in the area of imports from the Mediterranean countries, surveillance control is very important. We are satisfied that the 16-day period for surveillance reporting in this country is adequate. However, the figures for the Netherlands—which is surprising, because this is usually an efficient and modern Administration—and Italy—which surprises me leas—both seem to be extremely alarming.
1301 Would the Minister reconsider the response given by the Under-Secretary to the hon. Member for Macclesfield when he suggested that it was up to Comitextil and the industry in the various countries to do something about improving the speed with which reports are made to the EEC in Brussels? The Community should consider this and see whether it is possible by regulation to have a more effective way of reporting the surveillance licences to the authorities in Brussels. I am not satisfied with the answer that we have had today, and I hope that this can be looked at not merely at national, but at Community level.
I return to the article to which my hon. Friend the Member for Sowerby (Mr. Madden) referred, which was reported in The Guardian. This was a paper submitted to the ILO textile committee meeting at present in Geneva. I hope that the Minister will say something about the background to this paper. Was it prepared in the light of the MFA renegotiation or prior to that renegotiation without taking account of the beneficial effects that the renegotiation will have?
The figures that are quoted, as my hon. Friend the Member for Sowerby said, are somewhat alarming and require further examination. If we look at the old Multi-Fibre Arrangement that existed between 1974 and the end of last year, we see that there were two serious defects. First of all, the basic level for import quotas and the annual rates of growth were appropriate for the importing countries in a period of substantial economic growth. They might well have been appropriate in the 1950s and 1960s. They were totally inappropriate during a period of depression.
Secondly, the old MFA was totally unable to cope with the problems of cumulative disruption—a situation in which import penetration is high and growing but the imports come from a wide range of countries and once we think that we have dealt with one, another source of supply comes up somewhere else, so that cumulatively it was disastrous for the textile industry in this country and in other European countries.
That is why the new agreements mark such a significant step forward in providing an effective framework within 1302 which textile industries in Western Europe can operate. As my hon. Friend the Under-Secretary of State for Trade—Member for Oldham, West (Mr. Meacher)—said, the fact that we now have 95 per cent. or 98 per cent. of our imports covered is one side of the matter, but perhaps much more important, or as important, is the fact that the system of control operates with a much finer mesh than was the case under the original MFA, covering 123 product groups as distinct from the 60 or so product groups that were covered under the old arrangement. There is the distinction between different categories of goods, ensuring that the future growth rates will be related strictly to the degree of import penetration in that particular commodity.
The other matter that is of very great importance here, and that extends this agreement beyond the 33 countries with which the Commission has reached bilateral arrangements, is that the trigger mechanism that has been introduced in the new agreement will, I believe, extend protection to new suppliers once they try to enter the market. This is very important, because of the cumulative disruption that we suffered under the old MFA.
Finally, I believe that one of the things that was right and was advantageous in the new MFA was the way in which the three biggest suppliers—Hong Kong, Taiwan and South Korea—were effectively squeezed in order to provide a larger share for the suppliers in poorer Third World countries. I think that this was right, although, like other hon. Members, I have received considerable representations from Hong Kong about the effect on that particular colony. None the less, if it is a trade-off between Hong Kong and India, the decision taken was the right one.
This is an important step forward in providing what has been described by Ministers as the most effective form of protection that the textile industry in Europe has ever had. I am not quite sure what Cobden is doing in his grave at this time when he contemplates what is happening, but, in general, Lancashire is, I believe, greatly relieved.
My hon. Friend the Member for Grimsby (Mr. Mitchell) said that Cobden would be against the Common Market. Cobden, of course, was responsible for 1303 negotiating the first of our important trade agreements with one of our Community partners, in the Anglo-French trade agreement of the 1870s. As I suggested earlier, this is an example of the success of the Community in influencing and determining the economic environment in which one of our industries, which has suffered considerable difficulties, can operate.
I am glad to see that the Community is now looking to see what can be done on a similar basis for the footwear industry. I hope that in the near future we shall have an opportunity to discuss the sort of proposals that it can bring forward in that area. This will give the industry an important breathing space. Let us hope that it will take advantage of it to maintain the jobs that already exist and to see a way of extending the important export trade that it has.
§ 9.15 p.m.
§ Mr. Cyril Smith (Rochdale)
I do not intend to speculate about Cobden, except to say that I believe that he has a worthy successor as Member of Parliament for Rochdale, a position which at one time he occupied.
With the exception of the rules of origin document which we are considering, S/183/78, most of the material in the documents before the House is, as the Minister said, already in operation. Therefore, we are now going through a rubber-stamping operation. I do not complain on that account, but it seems to me that we are in danger of becoming intoxicated and of displaying a spirit of euphoria about what has been achieved without understanding that there are some weaknesses in the system. It is the job of this House to draw attention to those weaknesses.
I do not wish to take any credit from the Minister for the work he has done or for what he has achieved. However, I know that he would take the view that the House would be failing in its duty if all that we did was to pat him on the back and say what a great job he had done without at the same time drawing attention to the worries and fears that still exist despite the agreements.
I welcome the Minister's statement that the Government must be ever vigilant when dealing with the textile industry. We have had quotations this evening from a 1304 letter written by the British Textile Confederation. Perhaps I may quote one sentence from that letter. It says:It is important to remember, however, that they"—that is, the new agreements about which everybody is getting so worked up—provide overall for increased and growing access to our market, although at a slower rate than in the recent past.It is important that we should remember that fact.
§ Mr. Nicholas Winterton
Will the hon. Gentleman concede that in regard to woven shirts the increase in imports from 1977 to 1978 was 10 per cent., which is a substantial increase in a highly sensitive area?
§ Mr. Smith
I agree with the hon. Gentleman. Later I shall be drawing attention to percentage increases which are greater than the percentage growth in the market. Therefore, that means that there has been greater import penetration into the existing market.
Although I compliment the Government and the Minister on the negotiations and the work which they have put in—it would be churlish of me not to do so—I believe that it is my job as a Member of Parliament to make it clear that things are not as rosy as they are being made out to be. Thousands of textile workers still face the dole or short-time working.
It is to the Government's credit that thousands more such workers would be queuing up at labour exchanges drawing unemployment pay if it were not for the existence of measures such as the temporary employment subsidy. Therefore, although we accept the agreements for what they are, we must all stress that vigilance is still very much required. We want the Government to protect the industry from unfair competition, and we are not entirely satisfied that that has yet been done.
The Multi-Fibre Arrangement is reasonable and passable, but there are already signs, as I have been told by senior men in the industry, that the new arrangements are not perfect and are not working entirely satisfactory. The agreement has not created the confidence which we were told it would bring about. For example, we find that there are no restraints on Japan. That may be difficult 1305 for the Government to do, but Japan is now sending textiles to this country. Therefore, it is not enough for the Front Benches to say that everything is all right—certainly the Conservative Front Bench spokesman took that view—and to pat everybody on the back. There is still cause for concern.
I have mentioned Japan. Turkish yarn imports also continue to cause concern, and they are not directly covered by the MFA.
§ Mr. Parkinson
I sometimes wonder whether the hon. Gentleman ever listens to anyone else's speech. If he did not hear us all express reservations, he cannot have been listening. There was none of the complacency about which he is complaining. Perhaps he had better listen a bit more in future.
§ Mr. Smith
I am delighted to hear that the hon. Gentleman is not as complacent as I thought he was. I assure him that I always listen to speeches that are worth listening to, especially when they are made by people who know something about the industry they are talking about.
I hope that the Minister can tell us what special arrangements have been made—and they are promised in the documents—to control the imports of Turkish yarn.
The documents mention bilateral agreements with a number of low-cost suppliers, but make no mention of Mediterranean associates, some of which are low-cost suppliers. I have already mentioned Turkey. Greece is another such supplier. It is essential to have a clear and effective mechanism for dealing with unfair or disruptive competition from within the EEC and its associates. This will be even more important if the EEC is enlarged to include countries such as Spain and Portugal.
There is considerable concern about Spanish imports. The industry claims to have clear evidence that, while Spain is sending goods into this country at a competitive price, customers, on the basis of complaints about quality, delivery date or something similar, can easily obtain credit notes from Spain which mean that they have the goods at a much lower rate than is shown on the original invoice. If Spain is to join the EEC, I hope that the 1306 Government will pay careful attention to this problem.
§ Mr. Smith
I am grateful to the hon. Gentleman for backing up the point I was making.
The Department's supplementary explanation of the document says that the agreement should provide the industry with greater protection. I hope that this is true, but we have not had much protection in the past. It is the level of improvement which matters and not just an improvement, because that could amount to very little.
In document S/183/78, the Department talks about growth rates being below 6 per cent., but since that is above the market growth of many products, some of which are often below 1 per cent., that sort of import growth could mean the end of the textile industry in 10 years or so. It is all very well for people to tell the industry to brace itself and get ready to meet the challenge of competition, but, if we continue to allow a growth of imports at a higher level than the growth of consumption, our industry will inevitably decline over the years. There is no room for complacency or self-satisfaction.
Document R/3375/77 deals with proof of origin. It is essential that we should try to preserve the principle that Community origin should be given only to products which have been truly and substantially processed within the EEC. 'That is vital. I hope that the Minister will insist on that when he next attends a meeting of European Ministers. We must insist that, if there is a certificate of origin from Europe, the goods must have been substantially produced in Europe.
There are bound to be loopholes in so complex a document. I hope, therefore, that it will be possible in negotiations for the right to be reserved to deal with anomalies or loopholes as they might arise, at least in the initial period. I hope that the Minister will be able to reserve that right.
In the accompanying notes with which hon. Members have been supplied, I 1307 note that Italy, France and Ireland require certificates of origin for goods subject to import restriction. I hope that the United Kingdom will follow those countries in requiring such certificates. Such a requirement would make available to the United Kingdom administrative delay procedures that some other countries are able to use effectively in times of stress and recession.
I draw to the Minister's attention the views of the British Chamber of Commerce about certificates or origin by saying that I hope he will insist that invoiced declarations by exporters are not acceptable as alternatives to certificates of origin except in rare cases—in other words, the MFA quotas that allow for uncertified invoice declarations will be regarded as the exception and not the rule—and that no precedent will be taken for introducing a method of doing away with certificates of origin.
There is much that requires to be done to give the industry the protection that it deserves. The tyre industry, for example, is not unconnected with the textile industry. As the tyre industry is now suffering, largely as a result of the dealings of multinationals in demanding that tyres used within the United Kingdom are produced outside it—certainly that applies to the cord that is used in making the tyres—there are serious problems for some sections of the textile industry. I have tabled a number of Questions about those problems. In addition, there is the denim that is coming in from the United States. Man-made fibres and a mixture of fabrics are also causing concern.
There is a need for anti-dumping legislation. Under the new agreement, we need to stop the bunching of imports so that many of the quota floods may be regulated. In other words, if it is possible for a large proportion of the quota to be taken at the beginning of the year, the market is flooded. That does not happen if the quota is spread over a year. It is to be hoped that something might be done in that respect.
I take the opportunity to commend to the British public the new pamphlet published by the Textile Industry Support Group called "Buy British". I hope that the public will buy British. The textile industry is a modern-equipped essential industry and it must be treated as such. The textile workers of Lanca 1308 shire and Yorkshire deserve better than they have had under both Tory and Labour Governments.
The Minister must make it clear in the EEC that we are seeking a fair deal for the industry. We seek that for the sake of sanity, fair play, honesty and those employed in the textile industry. When the Minister next attends a meeting of EEC Ministers, I hope that he will make it clear that that is exactly what Members representing textile constituencies intend to have, EEC or not.
§ 9.30 p.m.
§ Mr. Mike Noble (Rossendale)
I am pleased to follow the speech of the hon. Member for Rochdale (Mr. Smith), because he has played a constant role in the battle that we have had for textiles. He has always been present in our debates and has always pressed the industry's point of view on the Government. That contrasts with the official Opposition party.
I welcome the presence of the hon. Member for Hertfordshire, South (Mr. Parkinson) to our debate. We have seen a number of Opposition Front Bench spokesmen on textiles come and go. One of my colleagues mentioned to me that if only the British people would change their shirts as rapidly as the official Opposition change their spokesmen on textiles, the crisis in the industry would be over.
§ Mr. Nicholas Winterton
Is the hon. Gentleman aware that the hon. Member for Macclesfield can provide the alternative and the shirts?
§ Mr. Noble
One of our greatest regrets is that we have not yet seen the hon. Member for Macclesfield (Mr. Winterton) at the Opposition Dispatch Box in textile debates.
It was significant that a few weeks ago a previous official Opposition spokesman on textiles, the hon. Member for St. Ives (Mr. Nott), came to my constituency to address a meeting of Conservative trade unionists on the question of the official Conservative line on textiles. The 20 people who attended from North-East Lancashire, including the speaker, his associates, the party agent, the candidate and his wife and party officials, were disappointed that no line on textiles came from the Opposition. Tonight we can 1309 understand why. The hon. Member for Hertfordshire, South persistently refused to answer the simplest questions put to him by Labour Members.
The fact is that when the Opposition talk about a bipartisan approach to the textiles industry, we can identify the point where that bipartisan approach developed It developed on 21st February 1977, when the Government announced their policy on the MFA. The Opposition jumped on the Government's back because they knew that there were 14 textile marginal seats in Lancashire. That is the extent of their interest, with the honourable exception of the hon. Member for Macclesfield.
I wish to make some observations on the MFA. I begin by congratulating my right hon. Friend the Secretary of State for Trade, the Under-Secretary of State my hon. Friend the Member for Oldham, West (Mr. Meacher)—and the civil servants who were involved in the negotiations on the excellent job that they did in getting the Multi-Fibre Arrangement introduced.
I shall not sing a paean of praise for the Common Market. The fact is that the Government adopted a position and were forced to hammer it through the Common Market, at times in the teeth of substantial opposition. I should like to know from those who want to say that this is a Common Market achievement where we would have been had the Government been prepared to adopt the same kind of MFA Mark I as we had in the Common Market. We would have had nowhere near the number of restrictions that we now have. I think that my right hon. and hon. Friends deserve credit for that.
I want to comment, as other hon. Members have done, on some of the strengths and weaknesses of the agreement. Since this debate is on Community textile policy in general, I want to base most of my remarks on other aspects of that policy.
The Mark I agreement led to wholesale disruption in the textile industry in this country. It allowed a massive inflow of imports. The agreement was evaded, as far as we can tell, and as a result thousands of textile workers in the North-West and in other parts of the country were made redundant.
1310 The present agreement is a much improved version. It covers a much wider range of commodities and countries. It has an improved mechanism for dealing with significant suppliers, it deals with sensitive products on a global basis and it reduces the level of growth in those products to a considerable extent.
However, there is still considerable cause for concern about the agreement. The fact that it allows a measure of growth of textile imports at a time of recession means that it will be some time before the Multi-Fibre Arrangement Mark II begins to bite. We should bear in mind that, despite all that has been said about the agreement, we are still talking about the textile industry in the midst of a devastating crisis.
Last week a group of us met representatives of the industry—employers and trade unionists. The agenda included 19 items of crisis; 19 items that were bringing unemployment and continuing short time working; 19 items which meant that mills were closing, such as the Tootals Mill, in Bolton, the closure of which was announced recently. That is a situation that we are talking about. In that situation any increased growth of textile imports can be devastating.
One of the specific points about which we are concerned, and which is included in the agreement, is that it allows for a measure of bunching. That means that one can get more of a proportion of imports coming in in the early part of the agreement. That in itself is causing serious problems for the industry.
There are substantial dangers arising out of the informal understanding with the Mediterranean countries. Hon. Members have mentioned these countries already. I was pleased to note that the Minister said that action on Spain can be taken promptly. Some weeks ago I mentioned to him the fiddle involved in the import of Spanish yarn. Discounts can be obtained. I should like some assurances that the fiddle is being tackled and that those merchants who are offering large quantities of yarn for sale from the Mediterranean associates can be stopped so that we can end this damage to confidence.
My hon. Friend failed to clear up another question satisfactorily. These 1311 informal arrangements with the Mediterranean associates are on only an annual basis. I should like an undertaking, regardless of the negotiating position of Spain, Portugal and Greece and regardless of the pressure of retaliation from Turkey, that we shall have no more imports of textile products from the Mediterranean associates next year than we have this year. It is essential that the Government stand firm on this issue and that they demand action from the EEC.
A number of my hon. Friends mentioned the weaknesses in the surveillance and monitoring techniques in the MFA. Its value exists entirely in the effectiveness of these techniques. In Italy there is a delay of about 10 weeks before information is available. Given the nature of the textile industry, in which a sudden flood of imports can lead to massive disruption in a short time, that delay is seriously damaging.
I pause to mention that there is now a further Front Bench spokesman or attendant for the Tory Party in the Chamber. We welcome the hon. Member for Harrow, East (Mr. Dykes). The 10-week delay compares with the 16-day period involved in this country. There is still a suspicion of free cycling of imports within the Community. The textile unions believe that this is the reason why there is no effective surveillance in Holland. That absence of effective surveillance can result in serious damage to the industry.
What pressures can Ministers bring to bear on the EEC to correct this? The Minister's response that we can only persuade was not satisfactory. If the EEC claims that it is handling this problem on our behalf it must deal with the absence of an effective surveillance mechanism in the member countries.
On the whole the MFA is a substantial step forward. It provides much greater protection than the industry has experienced before. Not only Members of the House but people in the industry recognise that and welcome the stand taken by the Government. We must take action as soon as possible wherever there is a sign of disruption from new sources, and we must secure better control over the Mediterranean associates. We must also improve our surveillance techniques. That is the most urgent requirement.
Perhaps I may take up some of the points made by the hon. Member for 1312 Rochdale on dumping. Many of us are not satisfied that the new arrangements for dealing with the problem of dumping within the EEC are satisfactory. There is a strong suspicion that denim is being dumped in large quantities from Switzerland and the United States, and this is disrupting some of the major producers in this country. Urgent action is required.
There is also the problem of the imports of tyres and tyre cord. I have a letter from the Oldham Tyre Cord Company Limited, which is situated in the Oldham West constituency. That company has had a record of 28 years of all-out production. In the last few months production has been cut back and the company faces a serious crisis, with the possibility of closure. The company makes the point in the letter thatThe major cause of our problem has been the loss of sales of tyres by our customers the tyre manufacturers, resulting from the high level of import penetration. This is affecting them in two ways. Firstly, the importation of cars, which has increased substantially in the last 12 months, particularly from Japan, has resulted in the loss of a considerable part of the original equipment market. Secondly, the importation of tyres for the replacement market.They point out that this tyre penetration has gone up from 10 per cent. in 1973 to 20 per cent. in 1978. These figures do not include the tyres imported by multinational companies or in the name of rationalisation. The letter continuesA large proportion of these imports are from Eastern European countries at prices far below the United Kingdom manufacturing costs. This poses the question, 'do these cheap tyres meet accepted safety standards?'".I hope that my hon. Friend the Minister will take this matter up with the Department of Transport with a view to investigation. We have to come to terms with the position of the multi-national companies which in the last 12 months have been switching production around at the expense of British workers' jobs and British companies.
I wish to raise also the question of Government purchasing. During the last four years we have conducted in this Chamber—we have been supported outside by the unions and the employers—a substantial campaign to persuade Government Departments to buy British textile goods. Thanks to the pressure exercised by my hon. Friend the Minister 1313 and some of his colleagues we have had a major success. I believe that my right hon. Friend the Prime Minister himself made a recommendation to the effect that Government purchasing departments should buy British. However, there is a strong rumour that this directive to the public sector will expire in July. Perhaps that is the result of some kind of pressure from the Common Market—I do not know whether that is so. If that is the case, that in itself will pose a serious and critical problem for many sectors of the industry, particularly those which are producing for the Health Service and for other Government Departments. The whole question of that directive should now be reviewed. Its operation should be continued indefinitely if there is to be any chance of restoring confidence to the industry.
Let me deal now with the EEC policy for textiles across a wider front. I am pleased to see the hon. Member for Harrow, East on the Opposition Front Bench because he told us what a wonderful job the Common Market was doing for the British textile industry. Even my hon. Friend the Member for Farnworth (Mr. Roper), who ought to know better, was saying that the Common Market had done a grand job, and when my hon. Friend the Member for Sowerby (Mr. Madden) pointed out to him a newspaper cutting he said that that was concerned with the ILO and it did not matter. I have a document which conies from the European Communities—it is a Commission background report dated 5th April 1978, and part of it deals with the textile industry. It refers tolame duck industries".Is our textile industry a lame duck industry? The hon. Member for Hertfordshire, South said that our textile industry has a first-rate record in investment, labour relations, marketing, exporting and so on. Here we have the Common Market saying thatLame duck industries represent a threat not only to the trading efficiency and competitiveness of the Common Market but also to its unity, because, when demand falls in particular sectors, as for example with steel, textiles and shipbuilding, governments are tempted to bolster up the industry concerned with aid or even with import restrictions.There we have it. Textiles is lumbered as a lame duck industry.
1314 The document goes on to say that reorganisation is necessary, butis possible only if workers can be certain at the same time of effective regional conversion measures being taken—that is a bureaucratic phrase; it means "Go out on the dole, lads"—including the provision of new jobs and the retraining of the workforce.… The creation of such jobs will first require renewed investment in industry and services, together with an improved economic climate and the application of specific measures for regional development.There is a very powerful threat to the textile industry coming from the European Community. Whereas the article in The Guardian of today mentions a possible loss of jobs to the tune of 1.75 million in the European textile industry in the next seven or eight years, I have had a figure from a very reliable source—the trade unions within the textile industry—of 1.5 million in the next five years, throughout Europe.
We must ask whether the Multi-Fibre Arrangement is designed simply to create an opportunity to give the textile industry a decent funeral rather than a hasty burial. It seems to me that there are some sectors of the European Community that are determined to do the industry down.
I also have a copy of notes taken on behalf of the trade union delegation which met the Vice-President of the Commission, Wilhelm Haferkamp, who has special responsibility for external relations, when they went to discuss the prospects for the industry with him. Mr. Haferkamp said to the delegation that it was necessary, therefore, that the EEC must give up some of its traditional industries and that there had to be a programme of restructuring and a development of other industries. He said that whilst it had been hoped that a 10-year agreement would be achieved—he was talking about the MFA—only a five-year agreement had been possible. The five years obtained must be used for restructuring the industry. He said that it would be necessary to wait and see what happened in five years' time, but for the present we had to ensure that everything was ready for 1983. What does it mean to say "ready for 1983"? It means 1.5 million workers thrown out of work. We recall the words of Commissioner Vouel when he was talking about temporary employment subsidy and 1315 the subsidising of industries, and said that this might be better dealt with on some occasions by social measures and unemployment rather than propping up industries.
Our case, and the Opposition's case—if they mean it—for the textile industry is that the industry is efficient and modern and that, therefore, it should not need propping up. What it needs is some kind of protection against unfair competition.
I go further. Only a few weeks ago, during the debate on the black list mark I, or at about that time, I introduced into the Chamber a document which was a black list mark II. It was a document from the Common Market. It referred to the fact that certain grants, on the recommendation of the Commission, were to be withheld from certain sectors of the textile industry. I should like to quote a letter from a source of some influence and knowledge within the textile industry. I am not at liberty to give his name, but if any hon. Member wishes to see the letter, I shall be pleased to give it to him. He orginally sent me the black list. He said in his letter:As I understand it, the 'black list' is or was to be applied to any form of intervention by the Commission, whether it be for regional funding, social funding or European Investment Bank.He went on further to say:To me it is a negation of the democatic process that decisions, such as these—referring to the withdrawal of grants—could be taken and actions being implemented which could result in the elimination of small or large sectors of industry without concurrent provision for establishing or introducing new industries and work into the areas so affected.That has happened in Italy. In the man-made fibre industry, 3,000 jobs have gone. We know what has been meant by "providing alternative work". Of those workers, 600 have got jobs—making plastic flowers. I do not want to see my constituents in the textile industry condemned to manufacturing plastic flowers when they have been highly skilled workers in the textile industry. As the representatives of those people, of the unions and of the employers, we have a right to know exactly what is in the Commission's mind about a future strategy for the textile industry.
What I have said paints a black picture. Regardless of the success of the 1316 MFA, it is obvious that there are significant threats to the well-being of these industries. How can we ensure that they survive and that those workers who lose their jobs are adequately compensated? Some of my colleagues and I visited the British Textile Employers Federation in October and pressed strenuously for an industrial strategy. I am pleased to say that the employers have now come around to the union view that a shape is needed for the industry to take it into 1983, when the present version of the MFA runs out. That is due to pressure by the unions.
This industry must be planned in the interests of its workers. I would say to my hon. Friend the Under-Secretary of State for Industry—the Member for Keighley (Mr. Cryer)—that his Department has a substantial responsibility. It goes beyond a sector working party. The industry cannot be healthy when one major company controls such a large section, for example, of the spinning sector. That is a valid area for investment by the National Enterprise Board, where we should seek a planning agreement. I hope that the Minister will look at it in that way.
If the Common Market is planning the rundown of the textile industry to make 1½ million workers in Europe redundant—in other words, to lay the industry alongside steel and shipbuilding—those workers have a right to the same redundancy terms as are available in those other two industries. Some people have worked 40 years in the textile industry. What scope is there for retraining them? How can we retrain a Pakistani night shift worker who has difficulty in understanding English and consequently cannot get promotion in his own firm? They are not ciphers or beings to be manipulated by the Commission or any other gang of bureaucrats; they are people, and if they cannot get work they deserve the kind of compensation given in other industries.
The pamphlet to which the hon. Member for Rochdale referred exhorts us to "buy British". The reason is jobs. We should start shouting that message louder. In terms of quality, price and delivery, the British textile industry can compare with any in the world. It is time that some buyers from our big stores came to terms with that fact and decided to support this country as well as the textile 1317 workers have been supporting it for the last 25 years.
§ Mr. Speaker
Order. This debate will have to end at 11.30 and five hon. Members hope to catch my eye—apart from the winding-up speech. They can do so only if others will make shorter speeches and at most take less than 15 minutes.
§ 9.54 p.m.
§ Mr. Nicholas Winterton (Macclesfield)
I shall certainly heed your advice, Mr. Speaker, to ensure that all hon. Members who wish to speak can take part in this important debate.
I am pleased yet again to follow the hon. Member for Rossendale (Mr. Noble), who has entertained the House with a controversial and interesting speech in his normal manner. I find myself in considerable agreement with a great deal of what he said, with many of the proposals he put to the Minister and with many of his requests about how the textile industry in this country should proceed.
May I say very strongly from the Opposition Benches that if Europe is planning to phase out the European textile industry—I am naturally particularly interested in the United Kingdom textile industry—and make 1½ million people unemployed, or to try to direct them to other industries, I hope that the House will give a firm answer to that proposal tonight, saying that it is a non-starter. The British textile industry is a vital and strategic industry in this country. We believe that our industry must survive, just as we believe that the textile industries in other European countries must also survive in order to form part of the economy of Europe as a whole, and a very important part of that economy.
§ Mr. Roper
The hon. Gentleman is suggesting that there is a plot to undermine the European textile and clothing industry. How can that be consistent with the fact that the Commission and the Community have just negotiated what can be described, and has been described by the industry and Ministers, as the most effective protection the industry has ever had?
§ Mr. Winterton
I remind the hon. Gentleman, who, I know, plays a leading 1318 part in the European Parliament, that the statistic I have just quoted—that 1½ million persons might well be redeployed from the textile industry in Europe—was mentioned a few minutes ago by his hon. Friend the Member for Rossendale. All I can say is that I know that this matter has been raised and discussed because it has been raised in my presence, and in the presence of the hon. Member for Rossendale, by leading representatives of the textile industry in this country, who have regular contacts with their counterparts within the European Economic Community.
But, having said that and stated firmly that I would not be party to any agreement to reduce the size of the textile industry within the EEC, or within the United Kingdom as part of the Community, I agree with the hon. Member for Farnworth (Mr. Roper) that the Multi-Fibre Arrangement which has been negotiated is certainly the best agreement that the textile industry in this country could have negotiated. It certainly can be considered a considerable triumph for Europe as a whole to have negotiated it.
I pay tribute to all those—the Government and others—who have been party to the MFA, which, whilst I hope it will be good, is very much untried. How right the Minister was to say that we have yet to see how effective the MFA will be. Three months into the MFA is no time to judge this new agreement. Perhaps this time next year or the year after will be the time to judge just how effective it has been.
§ Mr. Dykes
I find myself in a difficult position, because there is no way in which the Commission or the Community is represented officially in this House. But I am sure that my hon. Friend would not wish to mislead the House into thinking that there is any proposal in the Community to, to use his phrase, phase out the British textile industry or employment therein. Simply because a Labour Member suggested that, quite irresponsibly, in a speech earlier, it would be wrong for my hon. Friend to follow up such an erroneous and misleading idea.
§ Mr. Winterton
I endeavoured to advise the House that that figure had been mentioned to me outside the Chamber—although it was raised by the hon. Member for Rossendale—by leading representatives of the British textile industry. I 1319 hope that it is no more than a story or a rumour, but it is always best that even a rumour should be scotched at the earliest possible opportunity. I have put my weight behind the argument that that rumour must never start. We have a duty to a vital and strategic industry.
I went on to pay tribute to the negotiations carried out by Europe as a whole in the renegotiations of the MFA, which overall has produced what has been described by hon. Members on both sides of the House as a very satisfactory agreement, a very useful package, which we most feverently hope and believe will be helpful to the British textile industry.
I should like for a moment to comment on a remark made by the hon. Member for Rossendale. I think that he was a little unfair to my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson), who opened for the Opposition, and to my hon. Friend the Member for St. Ives (Mr. Nott). Although I have not been elevated to the Opposition Front Bench, or even to the second echelon of Opposition Front Bench speakers on trade, employment or industrial matters, I believe that in a small way I have had some influence on my colleagues who have responsibility for these matters. I therefore think that the hon. Member for Rossendale was very unfair in saying that my colleagues in the House were advancing a particular policy merely for electoral reasons. I am delighted that I am joined in this view by my hon. Friend the Member for Pudsey (Mr. Shaw), who, together with my hon. Friend the Member for Bosworth (Mr. Butler), was instrumental in producing a paper which led my hon. Friend the Member for St. Ives to make the proposals that he made during the debate in February 1977.
Although I do not sit on the Opposition Front Bench, I hope that I have some influence on my colleagues, having taken a very serious interest in all textile matters. I feel that the hon. Member for Rossendale was somewhat unfair in doubting the sincerity of the proposals put forward by the Conservative Opposition in the House. Having said that, however, I remain deeply concerned about the position of the textile industry in this country, despite the renegotiated MFA.
1320 It has been mentioned that Tootal, a very substantial employer in the textile industry, has sadly been forced to make a number of redundancies. Only a few weeks ago in this House I raised a matter relating to Tootal, which had closed a mill in my constituency, although it had indicated two or three years earlier that the production in that mill was likely to continue in my town of Congleton well beyond the end of the century. But reorganisation and rationalisation of the industry have meant that the company pulled out production from Condura Fabrics in Congelton and moved it up to Cumbria, where it no doubts benefits the constituency of my hon. Friend the Member for Workington (Mr. Page).
This clearly shows that the MFA has not as yet had any marked effect upon textiles, and the very serious situation that we have been experiencing in recent years continues. Unemployment in the industry is going up. Mills are closing. Although investment has been made, we still face very unfair competition.
One of the main areas of importance is the monitoring of the surveillance which is all part of the MFA. As has been so clearly stated by a number of speakers in the debate, it is no good the United Kingdom having a 16-day reporting record if the Netherlands, Italy, Germany or France cannot supply the vital information in or about that time. The Netherlands at the moment is expected to have delays of about six or seven weeks, and Italy eight to 10 weeks, but, as the Minister said, perhaps that is not totally surprising. For the Irish Republic and Belgium the time is within four weeks, provided that special arrangements are made. For West Germany, 28 days is regarded as acceptable, and the delay for Denmark, 24 to 30 days, is also acceptable, as is that for France, 25 days. The United Kingdom is at the top of the league with 16 days. If we can do it, I do not see why the other members of the EEC cannot also achieve that result.
I share the view expressed by the hon. Member for Farnworth that we were a little disappointed in the Minister's reaction to this matter when he spoke for the Government earlier in the debate. I hope that the Minister will take note of this point and ensure, through the various bodies, organisations, committees and 1321 commissions that exist within the EEC that the countries which comprise Europe will tighten up on this matter and provide this vital data very much faster, in order that the surveillance can be effective.
This is an important debate. It is not only about the existing MFA and whether that will work. It enables hon. Members who serve textile areas to put forward their concern on behalf of the industry and to say how they see things developing in the future.
I very much share the views expressed by Labour Members about the performance of the industry and the extent of rationalisation that has taken place. My hon. Friend the Member for Hertfordshire, South paid tribute to the industry for its fine industrial relations record and its fine record with regard to exports. It is a major industry, but it has suffered for years from what I can only describe as unfair competition. We are not after protection for a lame duck industry. We are not after protection for an industry which has not rationalised or invested with the most up-to-date, technologically advanced equipment and machinery. We are not trying to protect an industry where the trade unions are on strike every other week. This industry has a fine record in all these areas. Tonight we are expressing our concern that the MFA, as it has been renegotiated, may not be sufficient to ensure the future of an industry for which I have considerable admiration and respect.
I am concerned about surveillance because that is really the linchpin of whether the MFA, as it has been renegotiated, will be successful. There are a number of other matters to which I could have turned my attention, particularly the quota coverage. The hon. Member for Rochdale (Mr. Smith) was right to highlight that and other matters.
However, it is worth repeating what the Minister said. About 86 per cent. of the United Kingdom's low-cost imports of textiles and clothing are now covered by MFA quotas. The figure would be increased, and is increased, to 98 per cent. if State trading suppliers and potential new quotas under the trigger mechanism 1322 are also included. It is perhaps also worth pointing out—again, this is where the EEC can take some credit—that the EEC has introduced a new product categorisation providing a sub-division of some 120 items compared with only 60 items under the previous arrangement. That means that MFA can be very much more flexible and that it will cover many more items which perhaps escaped under the old situation.
The hon. Member for Rochdale was absolutely right to refer to growth rate. I should like to mention the excellent document produced by the Textile Industry Support Campaign entitled "Why Buy British? Jobs! That's Why". It asks "What is the answer?" and summarises the key concerns as follows:Annual growth rate of our domestic market is less than one per cent. It is essential that the import growth rate be brought into alignment with the growth of the domestic marketThe hon. Member for Rochdale made that point and I believe that he was right to do so. It seems irrelevant, stupid and irresponsible if the MFA as renegotiated allows for growth rates of 6 per cent., 7 per cent. and 8 per cent.—in the case of woven shirts there is likely to be a 10 per cent. increase—between 1977 and 1978. If our own home market has a growth rate of only 1 per cent., we are further and further eroding our own home market, which is vital if our home textile industry is to continue to produce the fine export record which it has achieved in the past.
This has been a useful debate. I am pleased to have contributed to it. I hope that the strong stand which has been adopted in the past will continue in the future in order to guarantee the success and prosperity of the 800,000 people who work in this excellent industry.
§ 10.10 p.m.
§ Mr. Dan Jones (Burnley)
My first act in rising to my feet is to look at the clock. In deference to Mr. Speaker's appeal, I hope to conclude what I have to say in five or six minutes.
Partisan politics to one side it is always a pleasure to be called immediately 1323 after the hon. Member for Macclesfield (Mr. Winterton) in a textile debate. He has made a herculean effort to help the people concerned, and I follow his example in supporting the industry.
I at any rate congratulate the Government on their efforts within the EEC. I am not unaware that this achievement has been stimulated by members of the present Government. Full marks must go to them. They have done a splendid job and if they build on what they have achieved we can look forward to a greater period of industrial stability in the industry.
I want briefly to refer to the speech today of my right hon. Friend the Chancellor of the Exchequer, in the course of which he spoke of the future economy of the nation. It was significant to those of us who understand industrial economics as distinct from financial economics that my right hon. Friend was saying that the ability of this country to export in the future would be a very valuable contributory factor in preserving the economic equilibrium of the nation and that any failure to do so might return us to the situation from which we have just emerged of high inflation and the ugly possibility of even more unemployment.
I feel sometimes that our Ministers have the right aims in mind without quite knowing how to achieve them. I could go on for some time about the engineering industry, in which I worked, and about the lack of apprentices there. However, this is not the occasion for doing that. But I hope that all of us who have been involved in textiles for some time will pay homage to my hon. Friend the Member for Rossendale (Mr. Noble), who perhaps stole a little too much time tonight but who nevertheless for years has devoted a great deal of intelligent effort to this industry, and I feel that we should thank him for doing so.
I have certain misgivings about the Mediterranean countries, and I hope that the problem which appears to be arising there will be tackled in precisely the same way as that in the other low-cost countries. If we do that, we really have a better situation before us. If we do as well in this concord with the EEC as the EEC has done for itself, it will not be a bad job at the end of the day.
1324 We have heard references to the steel industry and to the automobile industry. They are industries which have been assisted financially on an extremely generous scale. I do not ask for a penny for the textile industry, but I should like to see a fairly substantial sum of Government money devoted to propagating the British textile industry with our major buyers.
I sometimes ask myself how much people like Harrods, Derry and Toms, Selfridges and others spend on British textiles and how much they spend in Switzerland, for instance, where they can get a fashionable name attached to their products. I hazard a guess that they spend more on the Continent than they do in this country for precisely that reason. That is why I urge the Government to spend money on propagating a cause which is fully entitled to it.
I have in mind the occasion in 1948 when my right hon. Friend the Member for Blackburn (Mrs. Castle) and the late Sir Stafford Cripps came to Burnley and begged the people to hold firm to textiles. At the time there was a great deal of foot-loose industry, but the people responded. I am loth to quote the old cliche that the nation's bread hangs on Lancashire's thread, because it rings a bit bloody empty now. But the people of that old Lancashire town responded to the appeal and turned their backs on foot-loose industry. Now it is time for the Government to appreciate that in a practical way and spend some millions of pounds on propagating the value of the British textile industry and its comparability with anything that can be done abroad.
That is the kind of contribution that the industry makes. It has helped the EEC in the MFA and it keeps a tight control on Mediterranean countries. It has spent money propagating the sale of British goods in line with the observations made by the Chancellor this afternoon. I am certain that it has a damned sight better future now than it had during the years when it was sustained under the sometimes intolerable hardships of the 1960s. The Government have started to do a decent job of work. If they continue, they will do a rich service to the textile industry, which has been of great value to this country.
§ 10.17 p.m.
§ Mr. James Lamond (Oldham, East)
This has been an extremely interesting debate. However, it seems that we discuss textiles either just before Christmas or on the evening after the Budget Statement—times when the remarks of hon. Members will receive the minimum publicity. Nevertheless, it is still important that we should have this debate.
It has been interesting to note the way in which one or two hon. Members have attempted to use the debate as a vehicle to lavish praise upon the EEC. The ears of my hon. Friend the Under-Secretary of State for Industry have been burning red with anger as he has listened to all the praise being given, unjustly perhaps, to other members of the EEC. I think that we could have made better arrangements operating on our own—
§ Mr. Lamond
Well, Mr. Speaker, I am quite prepared to hear you calling me to order, but I am rather surprised to hear the Under-Secretary doing so.
§ Mr. Lamond
The fact is that a very large proportion of the textile industry within the EEC is to be found in Britain. Therefore, as with the CAP, we have a particular interest in it because it affects us more strongly than any other member State.
I think that we could have struck a better bargain had we been outside the EEC. Of course, that is a matter for conjecture and no one will ever know the answer to that. We have achieved a new Multi-Fibre Arrangement which hon. Members have generally praised. But there are certain drawbacks. The hon. Member for Rochdale (Mr. Smith) has drawn attention to these, and almost every complaint put to us by the industry has been aired tonight.
I am sure that the Minister will say something about other Government measures to help the textile industry. I hope that he will mention the TES, which has 1326 been most useful to textiles particularly. I quote from the remarks of Mr. John Longworth, the secretary of the textile industry support campaign, who said recently that he could not stress too strongly that in his opinion the TES was the most effective preserver of jobs that had ever been devised. He did not write that without thinking about it carefully. We should all recognise the importance of that sentence in his letter to me.
I am very glad that the Government were able to announce recently the extension of TES for a further period and the strengthening of TES to include the new areas and to assist firms to which TES is available but which have exhausted it. All those things are very important for textiles. The Government should be thanked and praised for what they have done in that respect.
§ Mr. Nicholas Winterton
Is the hon. Gentleman able to tell the House how many jobs are supported by TES in the textile industry? From my researches in my constituency, I am amazed at the number of jobs in textiles and allied industries which are supported by TES.
§ Mr. Lamond
I should not like to put an exact figure on it. As has been mentioned by the Opposition Front Bench, the textile industry covers a multitude of industries, including garment manufacture and all the rest, but it must run into tens of thousands, if not hundreds of thousands, in the textile industry as a whole. It is, therefore, extremely valuable.
I want to say something about what I hope the Government will do in the future. They have exerted a supreme effort. They have obtained the MFA. They will not sit back. We are assured of that. There is much to be done in tightening up the surveillance and so on. I believe that the fair competition which is mentioned in the documents includes obtaining in the countries which compete against us the same sort of safety conditions, working hours and wages as we have in this country. For that purpose, in my opinion strong trade unions are necessary in all the competing countries.
I realise that so many countries are covered by the arrangement that it is impossible for our Government to see that the correct provisions are applied in those countries for the development of trade unions, but there is one country 1327 which exports a great deal to us—namely, the Crown colony of Hong Kong. I should like to draw attention to the fact that the Foreign Office has commissioned Professor Turner to prepare a study of labour relations in Hong Kong. Many of us are awaiting publication of that report with keen interest, as are many of the textile unions in this country. We want to see the opportunity given at least for textile workers in Hong Kong to be able to organise themselves in trade unions.
A number of papers have been prepared for submission to Professor Turner by organisations of one kind or another, including Chinese, in Hong Kong which are already trying to organise unions, and trade unions in this country have given him the benefit of their thoughts. In those papers they have revealed conditions which I think would be intolerable to most hon. Members. For instance, until recently no trade union was permitted to have a full-time organiser, and many possible trade union members in Hong Kong are fearful of joining trade unions and becoming organised in case they are labelled as trouble-makers and deported back to the Chinese People's Republic because of their activity. With threats of that kind hanging over their heads, there is great difficulty in organising trade unions. I hope that the Government will turn their attention to this matter.
With those remarks, and joining with my colleagues in congratulating the Government on what they have already achieved, I hope that they will have regard to what I have said and will study the matter more closely.
§ 10.25 p.m.
§ Mr. Max Madden (Sowerby)
Enthusiastic supporters of the Common Market, who in this House are often referred to as Euro-fanatics, have been extremely busy in this debate. I view membership of the Common Market in the same way as I view the man who was found bashing his head against a brick wall. Asked why he did it, he replied "It is so nice when I stop."
I think that the same can be said of the difficulties which EEC membership has imposed on the British textile industry. It is remark able in this debate how supporters of the EEC, when con- 1328 cronted with difficulties which membership has imposed on the British textile industry, try to claim whatever credit they think they can derive for the Common Market.
We all remember—and this applies to those who are listening to this debate—that the outcome of the Multi-Fibre Arrangement was secured not because of enthusiastic support by the Common Market but at the insistence over months and months by British Ministers who pressed the Common Market for a much tougher negotiating position than it was initially prepared to adopt. Therefore, in my view no credit can be given to the Common Market for the outcome of the MFA negotiations for Britain.
Equally, we must remember that the temporary employment subsidy, which has played such an important part in helping and safeguarding employment in the British textile industry, is being removed next year, again under pressure from the Common Market. That also must be seen as a serious setback to the British textile industry—a setback which has arisen as a result of pressure from the Common Market.
Finally, there has been mention in this debate, not for the first time, of the need for much more effective action on dumping. We must remind everybody that primary responsibility for taking action against dumping now rests with the European Commission and that Britain is no longer a free and independent agent on dumping matters. All these difficulties which have arisen as a result of Common Market membership must be seen clearly by all sides of the British textile industry, and I know that they are clearly recognised by many workers in the industry.
The British Textile Confederation, in a letter which it sent to many hon. Members, has been referred to several times in the debate. I should like to refer to a part of that letter which highlights the three main areas of concern felt by the confederation. The first is that in 1978 substantial growth of imports can take place before quotas begin to bite. Secondly, the confederation is concerned that the arrangements with the Mediterranean countries, including Turkey, Greece, Tunisia, Morocco, Spain and Portugal, offer a potential loophole. Thirdly, it is concerned about the effectiveness of the agreements, which are 1329 dependent on rapid monitoring of imports and rapid corrective action when necessary.
A number of hon. Members in this debate have expressed serious doubt and concern about the effectiveness of the current arrangements. I shall not dwell on those arguments. I hope that in replying to the debate my hon. Friend the Minister will be able to concentrate on what I believe should be the major issue flowing from it—namely, the question "What is the strategy for the European textile industry in the next 10 years?"
I believe that the MFA must be seen as an important foundation in that strategy, and I wish to endorse the remarks made by my hon. Friend the Member for Rossendale (Mr. Noble), who has saved me a considerable area of argument because he has pointed to the serious concern which exists. Whatever the source of the figures, it is beyond argument that there are leading and influential figures within the Common Market and the Commission who see a rapid decline of the European textile industry, with massive redundancies. Figures as high as 1 million, 1½ million and 1¾ million have been suggested.
We must recognise that Britain is the largest textile country in the Common Market. We have the largest share of the industry and the largest number of employees, and traditionally we have borne the largest amount of imports. Therefore our involvement, concern and interest in this matter are very much greater than exist in the rest of the Common Market countries.
There are often conflicting self-interest groups in the Common Market, and we must recognise that we face a prospect that is not faced by many other EEC countries. We must have the greatest concern and involvement in these matters, and I should like to hear from the Minister what position the Government will be adopting in the discussions on the textile industry which must inevitably take place in the foreseeable future.
My hon. Friend the Member for Bradford, North (Mr. Ford) expressed the concern that exists about woollen and worsted imports from the Argentine. In 1330 terms of quality, weight and design, these imports are coming in at anything up to 50 per cent. less than the cost of production in this country. I and the British woollen and worsted manufacturers would like to know what prospects there are of an early countervailing duty being imposed on these imports, which clearly are subsidised and represent grossly unfair competition.
In addition, what is being done about Japanese imports and the prospect of still more imports from that country? I understand that in the past few days China has signed a five-year trading agreement with the Common Market. What implication does this have for the British textile industry, what imports of textiles can we expect from China and, in return, what efforts are the Departments of Industry and Trade taking to ensure that we get some trade with China as a result of this agreement?
I should also like to know what success the Government are having in their extensive discussions with the Americans on reducing the effective 50 per cent. tariff which British wool exporters face when exporting to America. This very high tariff is extremely unfair and we can see no need for it. If the American desire for freer trade is genuine, we expect an early response from the American authorities towards reducing this very high tariff against British goods.
Arguments are often advanced by those who oppose selective import controls that these controls would deny the British people sources of cheap goods, including textiles and clothing. But many of us, when we see these supposedly cheap imported textile goods in the shops, find that they are not as cheap as they should be and we wonder where all the money is going.
Does the Minister accept that the time has come for an investigation, perhaps by the Price Commission, into the profit levels of importers, wholesalers and retailers who specialise in imported textiles and clothing? It would be extremely interesting to see the extent of British involvement in imports of this sort and the extent to which profiteering is taking place. It would be a helpful study. Is the Minister prepared to make representations to his right hon. Friends along those lines?
1331 Workers and management in the textile industry regard the MFA as a useful advance but are not sanguine or complacent about the protection it offers. They realise that it will be only as good as the machinery to achieve its objectives is capable of being worked. There are considerable doubts about the effectiveness of the existing monitoring arrangement, and there is great cynicism. It is believed that the British are the last gentlemen left in Europe, and certainly in terms of textiles and clothing. It is believed that we are the people who observe the letter of each and every agreement, the people who always say and do what we say we shall do, who do the decent thing and who at the end of the day always seem to come off worst in trading agreements.
The time has been reached when we must say firmly to our so-called European partners, and to many other countries with whom we have agreements, that we want agreements that stick, agreements that are mutually observed and agreements that everybody observes. There is growing hostility and cynicism without our textile industry about the extent to which many of those against whom we are competing are genuine and honest in these matters. There are many stories that every hon. Member has heard from textile manufacturers and textile trade unionists about the loopholes, devices and manoeuvres to which our competitors resort. They are prepared to sign the agreements and to say that they will observe them, but in reality, in day-to-day competition with us, they do not observe the agreements. We should be much more alert and aware of the problems.
To return to the European strategy, my hon. Friend the Under-Secretary of State must recognise that there is great determination among textile unions to take a much more aggressive and involved position than they have done hitherto. I look forward very much to that new approach. It is only in co-operation and joint action with European trade unions that we can get effective protection for our industry, which I believe is of paramount importance. I hope to hear from my hon. Friend what assistance he is offering the trade unions and the industry to ensure that that sort of move is initiated and that every possible support is 1332 given to those who wish to see an effective and realistic European textile strategy evolved, and evolved quickly.
§ 10.38 p.m.
§ Mr. Giles Shaw (Pudsey)
In following the hon. Member for Sowerby (Mr. Madden), I am conscious that in many of his remarks about the EEC I cannot share his opinion. That will come as no surprise to him or to other hon. Members.
It is somewhat sterile that in a debate on textiles in the light of the MFA we should spend so much time determining whether the EEC has played fair on the issue or whether we might have done better outside the Community. The facts are that we are within the Community and we are staying within it. The sooner we learn to abide within the Community and to fight hard from our own corner, the better. It is right that Labour Members have given due credit to the Ministers concerned in the negotiations for the stout ring that they held as regards the MFA. We shall be as good within the Community as the commitment of our Government seeks, and for no other reason.
If we can find good cause for saying to our partners in the EEC that there is a strong national interest that we shall see is protected, in the end good sense will triumph and we shall obtain protection for our national interest. As regards the textile negotiations, I feel certain that the strong effort put in first by the industry's representatives—I think all hon. Members recognise that the British Textile Confederation and, in my neck of the woods, in Yorkshire the wool textile delegation has been able to put a totally united view to the Department concerned primarily with the negotiations—has helped immensely to strengthen the hand of the British Government in their negotiations with our Community colleagues. Do not let us start casting aspersions about whether the EEC did us proud. The important thing is that we have arrived at the MFA negotiation, which is a stepping-stone to the future of the industries that we all seek to represent.
I come now to the major points in the debate. It seems that there are three major concerns for all hon. Members, and they cut across all party lines. The first is the anxiety about monitoring or surveillance procedures. This stems from a long history of doubt about whether 1333 the mechanisms currently available to provide the Government with the information they seek are sensitive enough to provide that information early enough for action to be taken which can prevent a difficult situation becoming critical.
I refer, for example, to the position on clothing imports last year or 18 months ago. It took a great deal of time before there was sufficient evidence available under the anti-dumping procedures to enable the case to be made. The Under-Secretary of State played a strong and excellent part, but he would be the first to admit that it took a long time for the information to be made available to allow the case to be made. By that time, many clothing companies had already suffered irreparable damage.
When we bring matters up to date and look at certain other textile import problems—the hon. Member for Bradford, North (Mr. Ford) raised the question of Argentine wool cloth imports, as did the hon. Member for Sowerby (Mr. Madden)—the question that we have to ask is, what is the minimum amount of information that the Department requires to make use of the powers that it possesses to prevent what appears to be a dangerous situation from becoming critical?
We are not interested in being able to prove beyond peradventure that it will cause damage. The causing of damage, in order to prove it, means irreparable damage. Therefore, we would have to prove to the Department of Trade that so many hundred jobs had been lost or that five, six or seven companies had gone bankrupt and the situation had become virtually intolerable.
I am sure that the Government recognise that that is asking for too much. What we have to establish with the Minister, and he with our colleagues within the EEC, is the minimum requirement of information that will enable the Government to use the powers at their disposal either to take countervailing action or, with the co-operation of the EEC, to start taking action throughout the Community. I think that the Under-Secretary of State in his reply might suggest the minimum terms required, because we cannot allow ourselves to wait and see companies go to the wall before action is taken.
1334 My first point is that monitoring and surveillance are all very well as a concept, but we need that concept defined in such a way that the industry can have some confidence that it is a practical solution to bankruptcy. If in the end bankruptcy has to come before we can provide countervailing measures, that is no good to any hon. Member.
Secondly, there is the question of opening other markets. Hon. Members have rightly suggested that we should look beyond the MFA, which is a useful and important milestone in the control of imports, to the more positive side of our trading initiatives. What steps can the Community take or can we take unilaterally to start to make other markets available to the United Kingdom's textile industry?
This country faces severe tariff barriers at the gates of many of the world's most important developing markets. Reference has already been made to the stringent tariffs on wool fabrics in the United States. It is ludicrous for the Prime Minister and President Carter to discuss the liberalisation of world trade if they cannot get down to some nitty-gritty detail as to where United Kingdom interests would be best served. I can think of no single change which would benefit the wool textile industry more than for some sensible concession to be made concerning the virtual 50 per cent. duty imposed by the United States on the importation of British manufactured wool cloth. I hope that we might get some indication that that kind of item is on the shopping list of discussion with the United States.
It is not only the United States, though that is easily the most developed market which denies access in competitive terms, but Brazil, with its 205 per cent. duty on cottons and on woollens. What steps are being taken by the Government to try to liberalise trade into South America? These markets must have a major part to play in the development of our wool textile industry. The South Koreans have an 80 per cent. tariff on imports into their country.
Those countries have in recent years exported a substantial amount to us. British consumers have certainly done more than their fair share to provide an adequate market for Korean merchandise. But, with an 80 per cent. tariff against us in that country, what chance do we have 1335 of making a reciprocal trading arrangement that makes competitive sense? These are the kinds of questions we should be asking ourselves in considering where we can open up new markets for our textiles. I suspect that it is only with new markets that we can look forward to a developing future for our industry.
I turn now to the need for flexibility in the management of our textile companies. I make no apology for standing four square behind the record of the wool textile industry in this regard. Through historical accident it has developed into a wide range of small manufacturing units, which allows them to be extremely flexible over design and type. In my constituency, companies which have been denied traditional outlets for their material have diversified rapidly into such things as billiard cloth or piano felt. One has become a large wholesaler of caravans in addition to the textile operation. These companies have shown great skill for diversity. It is no use this House taking views on the future of the industry without recognising that there will be no future unless there is flexibility in the management of the companies. They must be encouraged to be entrepreneurial, which was the reason for their creation.
Today's Budget and the changes that the Chancellor is proposing for small businesses are good stuff for the woollen textile industry because most of the companies are small businesses and many of them are family businesses. But flexibility of design and of marketing and a branching out into allied industry, if that is possible, are encouraging aspects which should be well understood in the industry.
In the context of the EEC documents, we must draw two conclusions. First, the MFA negotiations have been successfully concluded as a result of strong British Government and industry pressure backed up by hon. Members in this House. We cannot expect the Community to do our job for us. We must do it ourselves. But the MFA is merely a staging post through which the development of textiles is to proceed. What really counts is the second conclusion, namely, that the future of the textile industry will always be as good as the management and entrepreneurial flare of those industries.
1336 I fully understand the anxieties expressed about the numbers of jobs and about TES and other aids which are available to allow persons to continue to be employed in the industry. But those aids cannot guarantee that the industry's products are updated to meet the demands of the market or that the price of its products will be competitive enough to take business off the South Koreans or the Taiwanese. They certainly cannot guarantee that ultimately management is sufficiently quick on its feet to make the right decisions to ensure that truly competitive products are marketed. The industry's potential is crucial to the economic well-being of the nation.
This point was well taken in the 1978 progress report of the Wool Textile EDC, which made it clear that it wanted the Government tostrive for a substantial reduction in the US tariff on wool cloth … The Government should be prepared to negotiate on EEC textile tariffs only if US textile tariffs are included in the negotiations.It continued:The EDC welcomes the market entry scheme, but recommends that the Government reconsider the decision to put back on BOTB support for joint ventures.I would like to see a greater development on the exporting front to encourage this industry and to make certain that it can take advantage of any trading opportunities that can be created.
The impetus will come, certainly, within the Community if it provides a more stable base from which the home industry can regenerate itself. The structural position of the wool textile industry in particular is sounder today than it ever has been. The Section 8 changes have largely gone through. The shake-out—be it of unwanted plant, of poor management or, tragically, of additional employment—has already taken place. Certainly the wool textile sector is now better poised to take full advantage of marketing opportunities than at any time before.
What we really require is a feeling not only that the Government will act on our behalf on the MFA to prevent wholesale penetration from unfair competition—no one in the wool textile industry is frightened of fair competition—but that the Government will use their endeavours to see that other countries likewise start 1337 reducing their tariffs against imported woollen material.
§ 10.51 p.m.
§ The Under-Secretary of State for Industry (Mr. Bob Cryer)
This has been a thoroughly worthwhile and interesting debate. Many hon. Members have displayed a great deal of knowledge. For myself, particularly as a Member representing part of the textile industry in a woollen textile area, I have been very pleased to listen to the debate and all the valid points that have been made.
I welcome the Conservative Party's support for the MFA. I well recall, when I did not hold my present position as a pillar of the Establishment, that many Labour Members were pressing very heavily for a tough line on the whole of the textile industry, and that the Conservative Opposition were somewhat divided about the position. I am pleased that they appear to have moved some slight way in the direction of the Labour Party and the Labour Government.
The hon. Member for Hertfordshire, South (Mr. Parkinson) raised a number of points which I should like to answer. The first was the question of surveillance and making the agreement stick. I shall elaborate a little on the method of surveillance shortly, but certainly we want to ensure that the agreement will stick. We shall use our very best endeavours with the Commission to ensure that what the Commission has said it carries out.
One of the points that I made in an intervention was to the effect that certainly the Commission's policy and its implementation was to a significant degree brought about by the pressure from the Government. One recalls, for example, that in October last year the negotiations did not start because the Government prevented the Commissioners from embarking on the negotiations until it was made absolutely clear that the mandate would be adhered to.
I am not making any great praise of the Government. It is simply a question of fact that it is not something that the Commission has achieved by itself. The Commission achieved it only because we brought pressure to near on it to stick to the mandate to the end. It was certainly a very difficult job, both for the 1338 Ministers and for the civil servants, who, day after day and night after night, had to follow the negotiations, because clearly they were at second hand, and to keep a check on them in order to make sure that the mandate was being followed.
Therefore, certainly after that background, we have no intention of allowing the agreement to slip through our fingers.
On the question of the price clause, raised by the hon. Member for Hertfordshire, South, my hon. Friend the Under-Secretary of State for Trade, when he intervened, was taking the question on the basis of anti-dumping, not on a price clause. But only the agreement with Roumania contains a price clause. Suits from Eastern Europe are, of course, covered by voluntary price undertakings. It should be added that the quota on Romanian suits has been reduced from 384,000 in 1977 to 281,000 in 1978. We are not happy about the price clause, but it was introduced by the Commission very late in the negotiations with Roumania, with very little consultation. We are examining the position.
I was very pleased that the hon. Member concluded with the phrase that the industry now has an opportunity to plan its future. That is, in fact, an attitude that commands our support. We want a much greater element of planning in industry across the board. I very much hope that, in view of his attitude, the hon. Member will encourage firms such as Courtaulds, mentioned by my hon. Friend the Member for Rossendale (Mr. Noble), to enter into a planning agreement, because only in that way can we compete internationally with our world-wide competitors.
I was also pleased that the hon. Member for Pudsey (Mr. Shaw) took note of the measures to aid small firms and mentioned, quite correctly, that quite a large number of West Riding textile firms will benefit from these measures. Certainly I hope that firms right across the board will benefit, in both the cotton textile industry and the West Riding woollen textile industry.
On the question of monitoring and surveillance, I emphasise, first, that the Department of Trade itself carries out surveillance at present. But we expect that there will be three separate systems, comprising one of the Commission, one of 1339 the United Kingdom textile industry and what is termed a Whitehall system. The industry system is being formulated. The Commission system should be ready very shortly. The Whitehall system should be fully operational thereafter.
A separate Whitehall monitoring and surveillance system is necessary as an independent check on the other systems and as an objective basis for Government action. The surveillance system that I am talking about will be very sophisticated. It will be computer-based and will operate on the principle that "alarm bells" will start ringing when imports approach restraint levels. Information will be provided automatically.
The setting up of such a system from scratch is a complex task, but it is well under way. Until the system is fully operational departments will continue to monitor by manual calculation imports of sensitive products and imports from sensitive sources. Already the United Kingdom has alerted the Commission to some cases where the limits seem to be under threat.
We have indicated clearly to the Commission our concern that delays in statistics from some member States should not delay Community action. The Commission has shown itself sensitive to this problem and has indicated that it is considering ways of overcoming it—for example, by extrapolating from firm figures to cover the necessary period. We would very much welcome positive pressure from Comitextil to improve statistical information in all member States.
§ Mr. Giles Shaw
I trust that the Minister will forgive me if I suggest that what he has described seems to be a labyrinth of systems. Would the industry concerned—or the sector of the industry concerned in relation to textiles, be it cotton or woollen textiles—have some say in the threshold at which the alarm bells start ringing?
§ Mr. Cryer
The threshold has already been generally decided under the agreement. We have worked very closely with the industry through all the negotiations and are currently working closely with the industry in the establishment of the industry system of surveillance and monitoring. So basically the answer is, yes, we are working closely with the industry.
1340 While the hon. Gentleman is right in saying that there is a certain element of labyrinthine complexity to it, that is not entirely unknown within the EEC. As he pointed out, we are members of the EEC, and it looks as though we shall have to live with some of its disadvantages, some of which my hon. Friends have mentioned. It may be that we shall try to improve on them the whole time.
My hon. Friend the Member for Bradford, North (Mr. Ford) asked a number of questions. He asked whether the Government would press for the triggering of quotas. The answer is, yes, we shall. Where quota levels have been nearing the limit we have brought this to the Commission's attention.
My hon. Friend also asked whether action would be taken against non-bilateral-agreement countries. The Commission has stated that countries which have not signed a bilateral agreement will be subject to the same kind of safeguard procedures as those which have signed an agreement. We shall look to the Commission to fulfil this declaration to the full.
My hon. Friend also raised the question of Argentina. I know that the industry has expressed concern about the matter. It is a little complicated, in that import penetration for all types of wool cloth is only 4.3 per cent. and Argentina's share of the United Kingdom market is only 1 per cent. That could make it difficult to justify a request for consultations at this stage.
However, I recognise that the main difficulty for the United Kingdom market is caused by imports of medium weight worsted cloth. There are two main points on which we are taking action. First, a quota case is being made out for the medium weight worsteds. That is important, but we have to satisfy the Commission that the imports in a particular sector are damaging and intrusive when the general importation level across the board is so low.
There have been some complaints about a 25 per cent. export subsidy which the industry claims is being operated by Argentina. Officials have discussed this in detail with the industry and are at present considering whether a case can be made to the Commission for antidumping or countervailing action. So we are taking action on the matter. We 1341 regard it as important, but, as in all such cases, we must present a case to the Commission. The Commission cannot simply accept our claim: it must be substantiated. However, this is a matter of great concern. As a Bradford Member, my hon. Friend will know how important it is to his area.
The hon. Member for Harrow, East (Mr. Dykes) and my hon. Friend the Member for Farnworth (Mr. Roper) gave great credit to the Commission. I have answered them by explaining how we presented a very hard case and, I think, encouraged the Commission to adopt a firmer stance. But my hon. Friend and others also mentioned the ILO report quoted in The Guardian today. The hon. Member for Macclesfield (Mr. Winterton) mentioned the rumours which have been circulating. They cause great anxiety.
In October 1977, Mr. Christopher Tugendhat said:The Commission is examining ways in which the Community can assist the industry to restructure itself during the breathing space which a restriction on imports will create. Some of this restructuring can take the form of improving efficiency and of concentrating our textiles resources more on those parts of the industry where our competitiveness is good. Inevitably, however, restructuring is likely to mean an overall reduction in capacity, which means that some textile workers will have to be found jobs in other industrial sectors. The Commission recognises the difficulties of this and therefore intends to submit to the Council of Ministers as soon as possible proposals which will assist the textile sector to restructure. Among other things, these proposals will cover the co-ordination of the measures taken by individual member States, the intensified use of the Community's financial instruments and the promotion of appropriate scientific and technological research.I did not regard that speech as particularly helpful in the context of the reports and counter-reports and the rumours that the hon. Member for Macclesfield mentioned. It is not helpful if a Commissioner goes to Rochdale or anywhere else and makes speeches about "restructuring the industry" and "the pace of technological innovation". Those words send cold shivers down the necks of textile workers because they have heard them so many times.
I remember the cotton textile reorganisation scheme in 1959 which was going 1342 to clear up that industry in Lancashire. A little technological development and improvement was going to end all the industry's problems. Yet, thousands of lost jobs and hundreds of mill closures later, people are still making that sort of comment. It is not particularly helpful. The Commission has not yet put forward any formal proposals but I understand that it is proposing to recruit extra staff to undertake the work.
§ Mr. Roper
I asked my hon. Friend a specific question about the ILO conference, which has nothing to do with the European Economic Community. But will he please investigate that report—the British Government are a member of the ILO and are represented at its conferences—and make sure that we get some background information as to the basis for the report?
§ Mr. Madden
While doing that, will my hon. Friend also contact Mr. Tugendhat to ask him which industries he believes will be in a position to offer jobs to redundant workers, whether from the textile industry or any other industry?
§ Mr. Cryer
The point raised by my hon. Friend the Member for Sowerby (Mr. Madden) is an interesting one. One cannot speak of an industry in isolation, particularly with a total level of unemployment of about 1.5 million. Where people are threatened with restructuring, they like to see jobs available so that they can be restructured into some gainful employment. My hon. Friend's point is very relevant.
The main United Kingdom concern is that member States must be fully consulted by the Commission at every stage of the development of a Community policy. The Department of Industry considers that it is qute unrealistic to believe that, whatever restructuring takes place, the Community industry will be in a position, after the new MFA expires, to meet low cost competition without protection. The Department of Industry also considers that a very close watch will need to be kept on any Commission proposals for harmonisation of State aids in the textiles and clothing field which would 1343 inevitably reduce Her Majesty's Government's freedom of manoeuvre and could have serious implications for other sectors.
§ Mr. Dan Jones
The Minister will know the case that I submitted to the Department of Industry in October last year. It has shuttled between the Department of Industry and the Department of Trade during the months between. I believe it has been in the Minister's own hands. People could become unemployed unless some measure of assistance is possible under the legislation relative to small firms. Will the Minister have a look at it and let me know what is likely to happen?
§ Mr. Parkinson
Is the Minister aware that many of us share his reservations about this European grand design, global restructuring approach to various industries? But does he not see that it is a direct logical extension of his own Government's approach to sectoral planning and planning agreements? The logical outcome of his approach is the Christopher Tugendhat approach.
§ Mr. Cryer
The hon. Gentleman is stretching things a bit when he suggests that planning agreements are the basis for European-wide organisation of the industry. We have never even ventured towards that sort of activity, and the notion that, for example, because a nation State can plan its industry, a central bureaucracy should adopt the same logic and plan the whole of European industry, seems to me to be somewhat distorted.
The hon. Member for Rochdale (Mr. Smith) mentioned the drawbacks of the MFA, which are, of course, very real. They are accepted and understood, but, as he will also appreciate and understand, it was a long and difficult negotiating period. As I have explained, it meant that a large number of people were involved in pressing the Commission on a number of issues to retain the mandate, which, in our view, was extremely important. Inevitably, in a negotiating and bargaining situation, some parts are stronger than others. However, we understand 1344 that the MFA forms a very good framework, but that framework must be built on. There are still areas where action and constant surveillance and vigilance are needed.
The hon. Member asked about Japan. The Community decided not to continue its agreement with Japan because Japan is no longer seen in general as a low cost supplier. It is worth pointing out that the British Textile Confederation's pamphlet on the future of the textile and clothing industry does not regard Japan as in general a low cost supplier. However, Japan will be covered by surveillance. If, in fact, there is a degree of penetration which is causing concern, we shall have the information and will be able to press the Commissioners to take action.
The hon. Member for Rochdale also raised the question of Turkish yarn. Certainly imports from both Greece and Turkey have this year been rather higher than we would have wished. We have reported our concern to the Commission. The levels of imports will be closely monitored, together with an arrangement with Turkey which allows for appropriate safeguard action by the EEC if levels look like being exceeded. Incidentally, discussions are taking place within the Commission with regard to Greek imports, which are in a somewhat similar position.
Both the hon. Member for Rochdale and my hon. Friend the Member for Rossendale mentioned tyres and the production of tyre fabric. I know that this has caused a great deal of concern in the industry on two points. One is the question of the importation of low cost tyres from Eastern European countries, mentioned by my hon. Friend the Member for Rossendale. He also raised the point about safety standards. I shall certainly draw to the attention of my right hon. Friend the Secretary of State for Transport what has been said. Clearly, if there is any question whatever of safety standards being below those required, they should be examined.
With regard to the production of fabric, a large source of demand from Goodyear has diminished because Goodyear has decided to place 50 per cent. of production in Luxembourg. As hon. Members will appreciate, Goodyear is a multinational concern. We cannot require it to place 1345 its production in any particular mill in any particular area. Moreover, Luxembourg is a member of the Community. Therefore, we are not in a position to exert action over that particular source, as we would if it were outside the Community. This is a question which is causing us concern, but unfortunately we are in such a position that we can only persuade and argue but not require.
§ Mr. Noble
My information is that the request to Government Departments to buy British may lapse in July. Would it not be possible to re-examine any tyre purchases to ensure that tyres purchased by Government Departments, particularly such Departments as the Ministry of Defence, are manufactured entirely in this country?
§ Mr. Cryer
I was coming to that point. With regard to Spanish sharp practice, which my hon. Friend described, we are taking up the matter with the Commission and it is pressing the Spanish Government on this issue. This is also the case with the dumping of denim. We have asked the companies concerned to provide evidence, and we shall assist in the presentation of the case.
With regard to public purchasing policy, which this Government have emphasised, I am advised that an EEC public supplies directive comes into force on 1st July which is designed to prevent "national preferences" being given. As my hon. Friend will know, directives are not open to negotiation or argument. That is one of the difficulties which we must face in this situation. No doubt those people who are so fervently in support of the Common Market will have some ready explanation as to how we can get round that. At present that is something to which we are giving our undivided attention.
§ Mr. Winterton
May I suggest that perhaps the Government could have an informal agreement with Government and public bodies?
§ Mr. Cryer
The hon. Gentleman is suggesting that we should in some way circumvent an EEC directive. Of course, I am surprised that he should raise such a point. This is clearly a matter of concern to all of us. If the hon. Gentleman is suggesting a widespread application of 1346 planning agreements—Conservative Members seem to want to put planning agreements all around Europe—all I can suggest is that he concentrates on getting a few in this country first.
§ Mr. Roper
Is the directive to which my hon. Friend referred one to which the British Government have given their agreement? It has to be agreed in the Council of Ministers, and presumably it comes into effect only if the British Government have agreed with our Community partners that it should do so.
§ Mr. Cryer
It is a directive which has followed the usual procedures, and this is one of the difficulties that we currently face.
My hon. Friend the Member for Rossendale referred to planning agreements, and certainly the firm which he mentioned, which I take it is Courtaulds, dominates the industry. We would welcome a planning agreement with such a large and important firm.
On the issue of the EEC document, a lame duck industry and a black list, we are always grateful to receive evidence of these influences from my hon. Friend the Member for Rossendale in order to take them up as and where necessary. These matters are of course of concern to us and, if he will provide us with this information, we shall examine it with great care.
I agree entirely with my hon. Friend the Member for Oldham, East (Mr Lamond) about working conditions in Hong Kong and elsewhere. As international Socialists, he and I and all Labour Members are concerned for working men and women throughout the world, and we want to see the system of exploitation prevailing in so many countries eroded away, with conditions being brought up to the level enjoyed by work people in this country. It is only in those conditions that fair competition can be said to exist.
My hon. Friend the Member for Sowerby mentioned a five-year trading agreement with China. I understand that this agreement is of a very general nature and that no steps have yet been taken or are envisaged to apply it in any sector. If any steps were to be taken, they would, of course, have to be in line with the Community's policy in the textile sector, 1347 including the global import ceilings especially.
My hon. Friend also mentioned the United States tariff against our West Riding woollen industry exports. We are pressing the Commission to present a case, and it has done so in negotiations with the United States, to reduce the tariff, which is far too high, under the multilateral trade negotiations. This is under way. We are concerned because, although the West Riding woollen textile industry is doing reasonably well in America and is penetrating that export market surprisingly well despite the tariff, there is no question but that the tariff is still a severe hindrance and that we want to see it diminished.
Incidentally, I hope that my hon. Friends do not mind my use of the old-fashioned name of West Riding. I do not think that a Conservative local government Act should get rid of these names at a stroke, as it were.
My hon. Friend the Member for Oldham, East referred to the temporary employment subsidy. There is no doubt that it has been of enormous benefit to the textile and clothing industries, which are very important industries. They represent the third largest employer in the country, and this is frequently forgotten in our general discussion on industry. Some 160,000 jobs in the textile and clothing industries have been supported by TES since its inception, and this represents about 45 per cent. of all TES support.
Following a request from the EEC Commission that the scheme should be amended to ensure that textiles, clothing and footwear should not be given this degree of benefit and subsequent discussions with the Commission, the Secretary of State for Employment announced on 15th March that the TES scheme would be extended for a further 12 months but with special arrangements being made for the textiles, clothing and footwear industries.
From a date in May to be announced, new applicants for TES in these three sectors will be limited to assistance for not more than 70 per cent. of the total labour force in any establishment for the first six months and to not more than 50 per cent. for the second six months. From the same date, an interim short-time working compensation scheme will be in- 1348 troduce for these three sectors, which is intended to compensate for any loss of TES. The interim short-time working scheme allows workers who could have been made redundant to be put on to short-time working and receive 75 per cent. of their gross pay for each day's work lost. Employers will be fully compensated by the Government for the costs involved. This scheme will also be available to those firms that have already exhausted all their allowance under TES. That is one of the most important elements for the textile industry.
The Secretary of State for Employment on the same date announced the extension of the small firms employment subsidy to firms employing up to 200 employees outside the special development areas to the development areas, intermediate areas and inner city partnership areas, which means that firms are being given a real cash inducement to take on an additional worker, and the cash grant is for 26 weeks.
On those counts, TES is very important. When the right hon. Member for Leeds, North-East (Sir K. Joseph) makes remarks about excessive subsidies and excessive support, my heart quakes for the industries that have been given strong support by TES.
It has been said that this is no time for us to be complacent. On the contrary, our vigilance must continue. We regard the new arrangements that my hon. Friend the Under-Secretary of State has described as the beginning, not the end, of a policy that will provide a significantly better regulatory framework for imports from low-cost sources over the next five years. However, it is only a framework. True, it is in many ways much more comprehensive and precise than anything that we have had in the past, but it remains a framework. How effective it will be depends on the use made of it, and I assure the House that we shall make very strong use of it. Having negotiated it with sweat and blood, we are hardly likely to ignore it.
In particular, there is, first, the need for effective monitoring and surveillance. The Commission has accepted this, and so have we. In due course, there will be, both at Community and member State level, computerised monitoring systems which will be greatly superior to those that we have had in the past.
1349 Secondly, there is the need for speed once there is a clear case for action. The Commission has given an assurance that action, once called for, will become effective within three months. We shall be monitoring closely the speed with which action is taken.
Thirdly, there are the terms upon which new restraints and annual growth rates are agreed. We shall look to the Commission to show the same resolve in the many negotiations yet to come as it showed when negotiating the main agreements before Christmas. In all these areas we shall do our best to ensure that the new agreements are fully effective. We shall in turn, however, look to the industry to do its bit in making good use of the breathing space afforded by the new arrangements in order to become more profitable and more competitive.
There are various forms of Government financial assistance available under Sections 7 and 8 of the Industry Act 1972 for modernisation and rationalisation projects in development areas and nation-wide.
There is the selective investment scheme for bringing about major new investment projects which would not otherwise have proceeded as proposed, and the product and process development scheme to support the design and development of new products and new processes. We hope that our industries will take advantage of these schemes and the other more general forms of assistance with which hon. Members will be familiar.
In this way we hope that industry will place itself on a sounder footing for the future. The Government have worked hard to preserve the industry and to preserve jobs. We shall continue on our determined and vigilant course in the interests of working men and women in the industry, who are a vital part of the industry and whom we want to see, through all sections, bring prosperity to themselves and the country.
§ Question put and agreed to.
That this House takes note of Community Documents Nos. S/139/77, S/183/78, R/3375/77 and R/513/78 (and the Supplementary Memorandum submitted on 21st March 1978) on Community Textile Policy.