§ Question again proposed.
§ The Secretary of State for Trade (Mr. John Biffen)
I beg to move, to leave out from "That'' to the end of the Question and to add instead thereof:this House acknowledges the difficult trading conditions facing the textile, clothing and footwear industries; notes the measures which the Government has taken to give these industries a wide range of protection; and believes their future is best assured by these measures and the pursuit of realistic policies designed to lower the rate of inflation and maintain access to export markets.At the outset of the debate there was a call for brevity, and above all for brevity from the Front Benches. The right hon. Member for Lanarkshire, North (Mr. Smith) made a commendably brief speech, which lost nothing on that account. I hope that I shall emulate his example. The right hon. Gentleman understandably said that part of the problem derived from the Government's general economic policy and that another part derived from the specific trading situation that faces the footwear, textile and clothing industries.
I turn to the general economic background. The hon. Member for Ormskirk (Mr. Kilroy-Silk) intervened earlier and reinforced the right hon. Gentleman's observation that there was anxiety about the minimum lending rate and about the exchange rate. Clearly no comments that I make can in any way indicate the next moves, but it is worth placing on record that the minimum lending rate has come down by three percentage points from its previous high level. It now stands at 14 per cent. There is real concern and anxiety that it should be reduced further in so far as that is consistent with the prudent financing of the public sector borrowing requirement. The House should take note that the minimum lending rate now stands above the retail price index. In so far as the minimum lending rate is an anticipatory figure, it is interesting to note that the retail price index is on a declining path, and the Treasury 986 forecast that it will stand at 11 per cent. by the autumn of this year. That evidence can be reinforced by the fact that the current inter-bank lending rate is less than 13 per cent. Although no comments, commitments or hints can be given, the evidence speaks for itself.
§ Mr. Joel Barnett (Heywood and Royton)
May I try to decipher what the Secretary of State said? Is he saying that the Government's policy on the minimum lending rate is to ensure that the exchange rate falls?
§ Mr. Biffen
What I said was absolutely clear. I do not need to trespass upon the time of the House by elaborating further.
I am happy to turn now to the question of the exchange rate, because that has featured more in our debates than has MLR. In the 22 months since we took office there has been a tremendous increase in the exchange rate. However, the extent to which that position has adjusted in the recent past is not quite realised. The exchange rate of sterling against the dollar rose from May 1979 to a peak in October 1980, and showed an increase of 17 per cent. Since then, it has fallen back by 8 per cent. Therefore, half of the increase has now been adjusted.
The same is not necessarily true of the exchange rate against a basket of currencies. It rose 19 per cent. between May 1979 and February this year. There has been some fall-back, but nothing as dramatic as that against the dollar. I quote the dollar because on the evidence of the right hon. Gentleman, a great deal of debate has been about the American position relative to British textiles.
Oil is a major factor in determining our exchange rate. A number of hon. Members have observed that it is widely believed that MLR also contributes. The position that I have outlined for MLR can also be taken in the context of the exchange rate. We all know, and have experienced, the difficulties caused by an appreciating exchange rate. But let us never conceal from ourselves that there are also problems for industry in a depreciating exchange rate. We have only to look across the Channel to see the present German experience with the deutschemark. On 20 February the Financial Times quoted Count Lambsdorff as saying to the German Bundestag:However a survey of 14,000 companies by the Chamber of Commerce makes clear that the weaker mark has not necessarily brought across-the-board competitive advantages. The currency's weakness had led to increased energy and raw material import costs, squeezing profit margins.I make that point because it must be set in the balance so that we do not proceed with too exaggerated ideas about the consequences of alterations in the exchange rate.
§ Mr. Robert Sheldon (Ashton-under-Lyne)
Is it not a fact that price disadvantage does not affect capital exports as much as it affects textile exports? The textile industry is more sensitive to the consequences of cheaper imports and dearer exports.
§ Mr. Biffen
I am not denying that. I am trying to put the matter into a wider context than it normally secured. I turn to the industries themselves.
§ Mr. Biffen
Yes. I am discarding many of the departmental pearls in the interest of brevity, as many hon. Members wish to speak. I hope that the hon. Gentleman is not too disturbed by that. He will have his opportunity to speak later.
§ Mr. Heffer
Before the Minister discards too much of his speech, will he outline exactly what he means in the amendment, which refers to the wide range of protection that the Government have given to the industry? How has that so-called protection helped the 1,500 workers at Courtaulds in Aintree who are about to lose their jobs? How is it helping the Dunlop workers in Walton, some of whom are also facing redundancy? What help is being given by the Government? Is it not the Government's overall policy that has led to the position where consumers are unable to buy the product, resulting in wholesale redundancies and a reduction in the work force?
§ Mr. Biffen
I am a good-natured person, and I have accommodated a fair speech within my speech. I shall try to deal with those points as I discuss the industries themselves. I hope that the hon. Gentleman will not think me discourteous if, in the interests of the House, I quite reasonably try to limit myself in time and make my speech in my way.
I turn to the industries identified in the motion. In all parts of the House there is an understanding of the difficulties that have confronted the footwear industry, partly relating to the exchange rate and interest rates, partly to the level of domestic demand, and partly to the challenge of imports. The question of imports has featured largely in industry debates. About 50 per cent. of the low-cost imports are under various restraints, either formal quotas, Government-to-Government voluntary restraint arrangements, or inter-industry agreements. The Department of Trade's anti-dumping unit is ready to advise the footwear and textile industries whenever they feel that a case can be made, and that there needs to be representations to the European Commission, which has authority in these matters. I wish to emphasise what has been emphasised by my predecessors, namely, that we believe that the European Commission anti-dumping staff should be expanded to enable them to operate more effectively.
Yesterday I had the opportunity to meet the footwear economic development committee. Its chairman, Mr. Spencer Crookenden, and several members of his committee pressed upon me the importance that they attached to both the minimum lending rate and the sterling exchange rate. I am sure that they are valid arguments. I have taken them on board.
§ Mr. Michael Morris (Northampton, South)
Is the Department doing any preparatory work, for a change, especially in relation to India and Pakistan, whose exports to Britain rose to more than 60 per cent. last year?
§ Mr. Biffen
We should be happy to entertain any representations from the industry on that point. If my hon. Friend wants to contact me about it, I shall see what can be arranged.
I turn to the textiles and clothing industries. In a sense, they inevitably dominate such debates. The difficulties for those industries are similar to those that I outlined for the footwear industry—a low level of domestic demand, problems of exchange rate and minimum lending rate, and imports. The textile industry is not homogeneous. Very often the import controls can cause problems for certain aspects of the industry. There is not a united and singularly identifiable view of the interests of the textile and clothing industries in relation to trade regulations.
988 I shall give an example of that so that the House can take it into its judgment. I am not doing any more than that. There was much discussion about the necessity of imposing quotas on polyester filament yarn and nylon carpet yarn, and temporary quotas were introduced in February 1980. We should bear two points in mind. First, those quotas created problems for United Kingdom manufacturers who use those products as raw materials. Secondly, and perhaps more significant, former President Carter, in September 1980, threatened to double almost United States tariffs on wool textiles if the quotas were maintained. That is one of the facts of international trade life. If we are not prepared to acknowledge that, we are taking a dangerously narrow view. I am glad that I have the nodding acquiescence of the hon. Member for Colne Valley (Mr. Wainwright). I am sure that he will agree that, notwithstanding that we share that anxiety, there is no doubt that there is a widespread concern in the House about the role that imports have played in causing acute disruption in the British market in the past.
§ Mr. Kilroy-Silk rose—
§ Mr. Bob Cryer (Keighley)rose—
§ Mr. Jack Straw (Blackburn)rose—
§ Mr. Barry Sheerman (Huddersfield, East)rose—
§ Mr. Biffen
If I have a choice, I give way to the hon. Member for Huddersfield, East (Mr. Sheerman).
§ Mr. Sheerman
Given that we face an American policy that allows the import of crude oil at $35 a barrel and then sends it out as man-made fibres at $15 a barrel, should not the new President be confronted by the Government in the strongest terms in their opposition to that policy and in opposition to the policies that go right against the American ethic of free trade, including the export of oil?
§ Mr. Biffen
First, I find it extremely odious that the hon. Member for Keighley (Mr. Cryer) should refer to his hon. Friend the Member for Huddersfield, East as the softest touch. That was a quite unnecessarily offensive comment and the hon. Member for Huddersfield, East falsified it by the argument that he advanced. With a new American Administration, one has the chance of making fresh representations. However, the word "confront" is not necessarily the most useful one when negotiating to try to secure a change in pattern and a change in behaviour.
I shall say a few words about the United States, a few words about the European Community and, finally, a few words about the multi-fibre arrangement.
§ Mr. Kilroy-Silk rose—
§ Mr. Biffen
No, I shall not give way. The new United States position is that oil prices have been deregulated. That is something for which we are grateful. It is a move in the direction that is generally congenial to sensible and balanced trade between our two countries.
§ Mr. Biffen
The next area for movement must be in respect of natural gas. The position not merely of the United Kingdom Government but of our sister nation Governments within the community is well-known in Washington. On 24 February, in The Times, the United 989 States trade representative, Mr. Brock, was reported as saying that he was fully aware and "most sympathetic" to Britain's fibre import problems. He continued:We intend to work in the direction of decontrol of natural gas and we hope to take other steps that might prove to have greater short-term benefits.This is an issue that is in the grip of Congress and does not lie within Presidential authority. Nevertheless, our position is clear. We are able to use such advantages as are conferred by a new Administration to persuade them, as the hon. Member for Huddersfield, East says, of the inherent logic of what we are suggesting.
The Department of Trade anti-dumping unit is cooperating with the industry in preparing for the Commission a case on bed linen. Relations with the United States are causing more anxiety in the textile world than traditional arguments concerning the multi-fibre arrangement and many of the low-cost producers. The motion refers to the textile and clothing industries, yet 40 per cent. of our imports come from the European Community.
I am aware that there is anxiety that certain national aid schemes are being proposed within the European Community that might add to the competitive disadvantage for British manufacturers. That is true of Belgium, France and Holland. I am sure that the House will be gratified to know that under article 93 of the Treaty of Rome action is being taken against the Dutch proposals. I am sure that those who watch these developments as vigilantly as the right hon. Member for Salford, West (Mr. Orme) will be keen to maintain our national position.
§ Mr. Tony Marlow (Northampton, North) rose—
§ Mr. Cryer rose—
§ Mr. Straw rose—
§ Mr. Marlow
Does my right hon. Friend agree with me that one of the underlying problems that industry generally, and particularly both these industries, suffers from is our membership of the Common Market? Having a stronger currency because of our North Sea oil, we have a completely different trading environment from that of other countries in the EEC. We are locked into this institution. Their objectives may be different from ours. We have no trading policy of our own and we are unable to look after our own industries so long as we combine in that institution in the way that we do at the moment.
§ Mr. Biffen
My hon. Friend argues with great force and persuasiveness on these issues. If the Opposition wanted to use a Supply day to question the basis of our membership of the Community they would have made that explicit in the motion. It is a substantial side-wind that my hon. Friend is bringing into the debate and I shall not be buffeted by it.
§ Mr. Cryer rose—
§ Mr. Biffen
No, I shall not give way. I have been tolerably fair by the House, in the interests of those who wish to contribute to the debate.
We are proceeding to the enlargement of the European Community. It is important to have satisfactory transitional arrangements for textiles during the negotiations for Spanish and Portuguese membership. This would 990 be preferable to depending purely on the general safeguard article in the Treaty of Accession, as in the arrangements concluded for Greece by the Labour Government.
I turn to the renewal of the multi-fibre arrangement. The right hon. Member for Lanarkshire, North said that this was not an occasion when he expected detailed consideration of the current arrangements or the prospective replacement arrangements. The Government have received many representations about what the new arrangements should contain. Some have been from the industry and its spokesmen, such as the British Textile Confederation and the British Clothing Industry Association. Others have been from groups with quite different interests but which have a right to be heard, such as the Consumers Association, the Retail Consortium and organisations committed to Third world economic development. Many of these submissions have been very valuable, and we hope that they will continue.
We have received a good many inquiries about the British Government's objectives in the negotiations. The Government's position on their broad aims is perfectly clear. My right hon. Friend the Prime Minister has said that we want an effective and vigorous arrangement, and that is what we intend to get.
When we come to specific issues—there are many of them—we must not lose sight of the fact that the United Kingdom is one party of many to the negotiations. The first stage will be to establish a common position within the European Community. In these complicated negotiations, we must, if we are to get the best possible deal for the United Kingdom, be prepared to negotiate flexibly, taking advantage of opportunities as and when they occur. I do not believe that the House will wish me to lay down rigid and detailed negotiating objectives, still less to reveal them publicly. However, the House has made clear on a number of occasions the major areas of interest. Today's debate is but one of several occasions when the problems of the textile industry and the multi-fibre arrangement have been discussed.
Views have been expressed about the working of the basket extractor mechanism, about the distribution of quotas between low-cost supplying nations and, perhaps most clearly of all, about the desirability of a recession clause.
§ Mr. Biffen
There are certainly substantial technical difficulties in devising an effective recession clause. My predecessor observed to the House in July 1980, when answering a question from my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), that a recession clause in MFA III would be a central matter for negotiation. Nothing in the intervening months diminishes the force of his remarks.
There are many more specific matters to which our negotiators will have to address themselves in the coming months. I do not propose to take any more of the time of the House. We shall go into the negotiations determined to secure a good and effective arrangement and to obtain the best possible deal for the United Kingdom as a whole.
The House has before it an Opposition motion. It is the privilege and the obligation of the Opposition to oppose and to raise the level of controversy. However, for all the complaints about the trading arrangements that are central to the debate, the multi-fibre arrangement is an inheritance 991 that the Opposition provided when in Government. The measures of unilateral control that could be sought under article 19 of the General Agreement on Tariffs and Trade were used but once by the Opposition when they were in power for four years. Let us be under no illusion. The difficult problems in this industry are being used for shameless opportunism, which is the hallmark of the hon. Member for Norwich, South (Mr. Garrett) and his colleagues on the Front Bench.
§ Mr. James Molyneaux (Antrim, South)
During 1980 about 4,000 jobs were lost in the textile, clothing and footwear industries in Northern Ireland, and a large number of employees are now on short-time working. Employers feel that the short-time working compensation scheme is of very little assistance to them in providing real jobs as opposed to phoney jobs. It is regarded as an alternative form of payment of dole money by the Government. Employers and employees would favour a return to the temporary employment subsidy, which they say was of real value in avoiding both redundancies and closures.
Those same employers, employees and, indeed, former employees, cannot be blamed for asking, when vast sums of money are being made available to British Leyland, British Steel and De Lorean, whether it is too much to expect that very limited assistance might be given to traditional and relatively small industries in Northern Ireland to assist them in their temporary difficulties. At the risk of embarrassing the Government Front Bench, perhaps I might add that in the changed circumstances, and in the light of some fresh thinking in the past week, they might take this point on board. If I might make a simple request to them, perhaps we might be allowed to have sight of the new spring guide.
On 30 July 1980 I entered a plea on behalf of the textile industry in Northern Ireland. Since then the giants—Courtaulds, ICI and British Enkalon—together with many smaller companies, have slipped badly, some of them, I am afraid, past the point of no return. In that debate I stressed the urgency and importance of shaking ourselves free of the EEC restrictions on our ability to defend our national interests.
As one who has always been opposed to the Common Market, I might give a gentle fan to that side wind to which the Secretary of State referred earlier. It is true that the very limited February 1980 restriction permitted by the EEC Commission has proved to be inadequate. The right hon. Member for Lanarkshire, North (Mr. Smith), the spokesman for the Opposition, rightly said that the more recent approach to the American Administration has also been abortive. As he further said, the up-to-date position with regard to the American Administration is also very unsatisfactory because it is clear to all of us that they have no intention of limiting their exports—dumping might be a better term.
We on this Bench have consistently reminded the House, and I hope hon. Members will forgive me for devoting not more that two minutes to this topic, that the greatest single burden on the Northern Ireland economy as a whole is the high cost of energy. On 15 January 1981, at column 1524, my hon. Friend the Member for Armagh (Mr. McCusker) reminded the House that the cost differential between the two parts of the kingdom was between 25 and 35 per cent. I must put again to every right 992 hon. and hon Member this question: how would they feel if energy costs in their constituencies were 30 per cent. higher than those in neighbouring counties?
The House will be accustomed to Ministers seeking to justify the denial to Northern Ireland of one very important United Kingdom asset, namely, North Sea gas. Hitherto the excuse has been that the remit of the British Gas Corporation did not extend to Northern Ireland and therefore the corporation was under no obligation to provide supplies there. That may have been regarded as sufficient excuse for successive Governments and successive Ministers who were determined to pursue a do-nothing policy. Admittedly they were motivated in that do-nothing attitude, an attitude which perhaps requires very little motivation, by the belief that there would be great difficulty in finding the financial resources to meet the cost of a pipeline to Northern Ireland.
After the passage yesterday of the Gas Levy Bill that feeble excuse has been blown out of the water by a member of the Government, the Under-Secretary of State for Energy, who rejected an Opposition amendment on the ground that it would have the effect of permitting the British Gas Corporation to retain £130 million profit which it did not really need. He reinforced the point by saying that the corporation would be investing no less than £4,000 million, presumably in the three years covered by the Gas Levy Bill.
All that raises the question why the British Gas Corporation, with all this money at its disposal, could not in the past have found the trivial sum required for a gas pipeline to Northern Ireland. However, we are at the point today where the attitude of the British Gas Corporation is no longer our concern. The ball is now firmly in the court of the Treasury. It is widely known that some Whitehall Departments disclaim any responsibility for Northern Ireland affairs, for understandable reasons. The Treasury is not among them. Like the Foreign Office, the Treasury keeps its finger in the Northern Ireland pie.
Like the citizens of Great Britain, we are all forced to join the Inland Revenue club, and we are denied the right to resign if our subscriptions are thought to be out of all proportion to the benefits derived. In the matter of North Sea gas, the Treasury will benefit to the tune £1,300 million during the three years covered by the Gas Levy Bill.
I promised to be brief, and I end by making a simple plea to the Secretary of State. I put to him the not unreasonable request that he will put to his friends—and he is not without friends and contacts in the Treasury—the simple request that we should not be denied one-thirteenth of that vast sum for the provision of a pipeline to enable industry and the citizens of Northern Ireland to have access to energy on the same terms and at the same cost as the rest of the United Kingdom. If the Secretary of State cannot give us some real hope in that regard tonight I shall have to advise my right hon. and hon. Friends to vote, for quite separate reasons, for the motion put forward by the official Opposition.
§ Mr. Nicholas Winterton (Macclesfield)
I am profoundly sad, because we are debating the plight of industries that are of strategic importance to this country. I am also profoundly sad because successive Governments have ignored the appeals and requests of industries that have invested when Governments have asked them to 993 invest, have always had an excellent history of industrial relations and have a work force that is loyal to their respective industries, unlike practically any other industry in the country. I am also profoundly sad because tonight I shall be voting against my Government on their amendment; if the amendment is carried and if there is a second vote, I shall then vote against the Government again.
The Government fail to appreciate the problems of the textile, clothing and footwear industries in certain regions. Need I remind my right hon. Friend that the textile and clothing industry is still one of the major industries of the country, despite the massive redundancies of recent years? Need I remind my right hon. Friend—whose speech gave me a slight glimmer of hope, but not enough to persuade me to change my decision—that the industry employs approximately 650,000 people? The cotton and allied sector, with which I am particularly concerned as chairman of the cotton and allied group in the House of Commons, employs 44,000 people.
I ask my right hon. Friend to compare those statistics with the statistics of the coal mining industry, which is to benefit from a substantial Government handout in the near future. That industry employs 230,000 people and is receiving special Government consideration. I understand that it is likely that the package could involve a reduction in coal imports. I hope that the British Government—not the English, Welsh, Irish or Scottish Government—will give the same consideration to the British textile and clothing industry.
May I remind my right hon. Friend that more than 100,000 jobs were lost in 1980 in the textile and clothing industry, and 20,000 jobs were lost in the cotton and allied sector? That is 30 per cent. of the total employed in that sector.
Most of the remaining mills are working well below capacity. Many are on a three-day or four-day working week, while others which previously worked multi-shifts have cut out weekend and night shifts. These are all capital-intensive units which need maximum throughput to spread their overhead costs. A major overhead in the most recently equipped mills is the interest charge on capital borrowed to buy new plant and equipment. That is why I was delighted that the right hon. Member for Lanarkshire, North (Mr. Smith) raised so forcefully the subject of interest rates.
The most recently equipped mills and those which have bought the most costly automated equipment are the most vulnerable if, because of a severe decline in demand, they cannot run their plant to maximum capacity. If, because of the recession and the shortage of cash in people's pockets, there is no demand, these mills can get no return on the massive investment that has been made. Textiles are second only to chemicals in the amount of investment that has been made in them in recent years. The record of employers in the textile and clothing industry is something of which the industry can be proud.
All mills have standing charges which are so high that they are making substantial losses whenever they cut out shifts or work less than a full week, which is the order of the day at present. It follows, therefore, that if there is no change in Government policy many more factories and mills in the North-West, Yorkshire, the Northern region 994 and Northern Ireland—here I follow the remarks made by the hon. Member for Antrim, South (Mr. Molyneaux)—will be forced to close.
I cannot emphasise too strongly that the most efficient mills in the world are included in the list of those that are now on a reduced working week. I refer to the Majestic mill in Oldham and Unit 1 in Atherton, which was visited by my right hon. Friend the Prime Minister before she bacame Prime Minister. In my capacity as chairman of the all-party group I seek to acquaint myself at first hand with what is going on. I went to Lancashire in the Christmas recess and visited Holdsworth Brothers at Bolton, Highams at Royton, Caledonian Textile Engineering Co. at Burnley and William Reed and Co. Ltd. in Nelson, in the constituency of my hon. Friend the Member for Nelson and Colne (Mr. Lee). All those mills have invested huge sums of money at the request of the Government; they have shed their work force without industrial dispute; and now, because the Government refuse to act in the national interest to provide fair competition for a strategic and important industry, thousands of people are being put out of work. I find that unacceptable.
Moving on to the temporary short-time working compensation scheme, I follow again the remarks made by the hon. Member for Antrim, South. I believe, sadly, that the scheme is of little value. It has done nothing to preserve business, since the main beneficiaries are the operatives and the Government. Firms lay out money for as long as 12 weeks to pay compensation to operatives. They save the cost to the Government of unemployment benefits and the administration of those benefits which employees would claim if there were no such schemes. Employers have used the scheme so far because it has helped them to keep their labour force together in the hope that trade would soon improve. I regret to say that this is now seen as a forlorn hope, both by me and by the industry. In any case, the modified scheme introduced by my Government of 50 per cent. of wages for stopped days is now of doubtful value to many employees because they can receive more when they are out of work than they can by remaining in work. That is a very sad state of affairs.
It surely should be possible for the Government to speed up payments to firms so as to do less damage to their cash flow. More importantly, they should devise a better scheme, but, best of all, they should go back to 75 per cent. which was the percentage prior to the new scheme.
In the end, nothing but increased production will save the industry, and I am sure this will be taken on board by my right hon. Friend. I see an increase in production as one of the ways in which the country can regain its economic greatness. This can be brought about, first, by an improvement in the general economy. Secondly, effective control is needed to protect the textile, clothing and footwear industries from unfair competition. If necessary we should use non-tariff barriers. There is no point in my right hon. Friends on the Front Bench, telling me that we are members of the EEC and must abide by the Treaty of Rome. Look at what the French, the Germans and the Dutch are doing. My right hon. Friend said that we were likely to take the Dutch to the European Court for what they are doing, but how long will it take to progress that case and how much damage will be done in the interim?
Thirdly, there must be a decrease in interest rates and in the value of the pound so that our highly efficient textile exporters have a reasonable and fair chance to trade on the 995 world markets. Finally, I propose that the Government should introduce an energy package so that the industry and people of our country can have the advantage of our great natural resources.
It is nonsense for my right hon. Friend to keep on claiming that we have a massive array of import controls. The controls are there on paper, but they are set at too high a level; they are not being tightened during a period of recession, and many of them are exceeded. In 1980 over 70 ceilings or trigger levels were exceeded, some of them, I accept, only marginally, but many of them substantially.
It is not without much consideration that I shall vote against my Government tonight in the Division Lobby. I believe that hon. Members do themselves no service if they lack credibility with the people whom they seek to serve and to represent. I have long believed that the textile and clothing industry has received less than justice from successive Governments. I shall not, in fact, be voting for the Opposition. I shall be voting against my Government. I deplore the fact that the Leader of the Opposition was seen strutting at the head of a large demonstration in Glasgow at the weekend. The right hon. Gentleman, when Secretary of State for Employment, presided over a more than doubling of unemployment in this country.
Sadly, it is perhaps a reflection on all political parties that we seek to use the unemployed for political purposes. I deeply regret it. This is something that has been gnawing inside me for some time. I am not prepared to be party to it any longer. For that reason I am going into the Division Lobby against my Government and for the Opposition motion. If the substantive motion as amended, is then voted on, I shall vote against it. [Interruption.] I say with some respect to my hon. Friend the Member for Preston, North (Mr. Atkins) that he may consider this a laughing matter. If, however, he was one of the 100,000 in the clothing and textile industry put out of a job, I am sure that he would not be smiling on either side of his face—
§ Mr. Robert Atkins rose—
§ Mr. Winterton
I am not giving way. My hon. Friend is a prize interventionist from a sedentary position. I feel deeply about this matter. It is wrong that either side of the House should have chosen on this subject to apply a three-line Whip. We represent the regions of this country and the constituencies in the regions. I believe that such a general debate as we are now holding should enable hon. Members to express their views forcefully to the Government of the day and then to be able to carry their views into the appropriate Division Lobby, rather than be carried into the Division Lobby dragoon-like, as a party like sheep and goats to the slaughter. I am concerned that we should be seen in the House to represent those who elected us. For that reason, I have made my decision.
§ Mr. Ben Ford (Bradford, North)
It is right that I should compliment the hon. Member for Macclesfield (Mr. Winterton) on the resolve that he has expressed. It is difficult to go against one's party. In the end, however, one's constituents must be properly represented.
From my vantage point as chairman of the all-party group for the wool textile industry, I can confirm to the Government and the public the deep anxiety, even anger, that is felt in all parts of the House over the steadily deteriorating position of textiles in the British economy. I took the chair at a series of meetings held in the Grand 996 Committee Room of textile, clothing and footwear workers, where a deep feeling of hurt and frustration was evident. "What" they asked "do we do if we lose this job? There are no others to turn to". I warn the Government that the ground is growing increasingly fertile for those wishing to sow the seeds of dissent and social unrest.
Earlier this week I received from the Secretary of State for Industry a reply to a parliamentary question in which I asked why Government funding in the textile industry had not been at the level of funding of the steel and motor industries in the light of the greater job loss in textiles between 1970 and 1930. The reply was:The Government cannot be held responsible for the policies of the previous Administration or for their results. Our policy is to create an economic climate in which all industry can succeed without assistance from the taxpayer.It went on to say:In the case of both public and private sector businesses, loss of jobs is not a yardstick for determining whether the taxpayer should be asked to provide assistance".—[Official Report, 24 February 1981; Vol. 999, c. 346.]I regard that answer as unworthy. It tries to blame the previous Administration. I blame all Administrations, over many years, for ignoring the textile industry in favour of the powerful battalions. The workers in textiles have done everything possible to co-operate in creating a viable situation. They have been among the lowest paid for many years. They have joined in with rationalisation schemes, alterations in hours of work and so on. Yet they have one of the best records regarding loss of time due to industrial disputes. How have they been rewarded? The answer is, by the loss of 262,000 jobs between 1970 and 1980—as many as in steel, coal and motor vehicles put together. I took those figures from The Sunday Times of 15 February 1981.
When we consider the amount of money that has been available to these industries for enhanced redundancy payments alone, is it any wonder that the textile workers are bitter? Let us hear something from the Government about unilateral action in the interests of maintaining a viable industry, along similar lines to France, Italy and the Federal Republic of Germany. Let us hear something about the price of energy to industry, and also about the price of water, which has increased by 72 per cent. in two years to the wool textile industry.
How can large users of water, such as top makers, remain competitive in those circumstances? Interest rates should be brought down to help save smaller firms such as the one which, it was announced yesterday, is closing in a township in my constituency. It has taken a Conservative Government to suit the condition to the name of the town—Idle.
§ Mr. Thomas Torney (Bradford, South)
Does my hon. Friend agree that such is the situation in his city and mine, Bradford, and throughout those parts of West Yorkshire where wool textiles is the main industry, that if the Government do not take some action, instead of simply making the excuses that we have heard from the Minister today, the area will be a ghost area for employment? Mills are closing regularly. Thousands of workers are being thrown on to the scrap heap of unemployment with no hope of getting alternative work.
§ Mr. Ford
I thank my hon. Friend for underlining the point that I am attempting to make. My colleagues on the Opposition Benches have been, and will be, illustrating in detail the local effects of the Government's policies. I shall 997 be content with quoting from the leading article in the February issue of "Wool Record and Textile World", which states:The Budget will show once and for all whether Mrs. Thatcher and her Government have grasped the realities of Britain's industrial situation or whether their many critics are right in their more frequent and more vehement contentions that the Thatcher policies will prove disastrous and result in the destruction of our whole industrial base. It is astonishing that this Government's actions should have been so inimical to the interests of private industry because it claims to stand for all the principles which private industry incorporates—enterprise, initiative, independence and so on. Their treatment of the textile industry has been appalling in its inadequacy and there is every justification for the chairman of Allied Textiles saying in his annual review that 'We see no evidence of the political will necessary to secure the future of any significant capacity for the production of textiles and clothing in the United Kingdom'.It is unnecessary for me to add any further comment. I had intended to make a detailed case for national economic planning and to urge the Government to consider it. I have never considered the Treasury a suitable instrument for economic planning. It is necessary for us to know where we are going if the Government are pretending that they will bring about industrial reconstruction. We must know what they mean, what they intend and where the textile industry will lie in that industrial reconstruction.
I address myself to the Opposition Front Bench. I call on the Leader of the Opposition to appoint a senior Front Bench spokesman on national economic planning and to ensure that he has the facilities to gather around him the best brains in the country so that when we take over the Government we have a plan to work to. It is no longer feasible to carry on in Government on an ad hoc basis. Resources are finite and we have to identify and allocate them according to priorities. It is equally important that if we have a plan for progress it is communicated to and understood by the people that it covers such things as rent, profits, and interest as well as incomes, because then we are much more likely to produce a consensus where all are working towards the same end—a fair, just and humane society.
§ 5 pm
§ Sir Frederick Burden (Gillingham)
For most of my business life I was engaged in the clothing and textile industry. Therefore, I may have an advantage over some of my right hon. and hon. Friends. I do not think that rhetoric or exaggeration will help the textile industry in any way. We must accept—I have seen it for many years—that the textile and clothing industry has experienced increasing difficulties. Those of us who have been engaged in the industry know that among the bankruptcies and closures in this country, clothing firms are high on the list.
We must accept that for many years Britain had advantages in markets throughout the world, through imperial preference. We controlled the industries in those countries and our products were able to enter with great advantages over products from many other countries. Unfortunately, that has ended and imperial preference no longer exists. The clothing industry is labour-intensive and is not an industry in which high capital resources are required. It lends itself to production in emerging countries and we find it difficult to compete with countries with low 998 labour costs. The prime example is Hong Kong. A wide range of exports from that country have spread throughout the world because Hong Kong has become efficient in manufacturing clothing right across the board. It is extremely difficult for us to compete with low-cost countries except in high quality garments, for which there has been a falling demand. The clothing industry will have continuing difficulties.
Since the war there have been increasing lower priced imports—especially since synthetics were introduced—from eastern European countries and other areas such as Portugal. Those imports have imposed considerable difficulties on our industry. Recently there have been considerable increases in imports from America—carpets are an illustration. American carpets have been sponsored throughout the United Kingdom by the large and powerful retail groups. The Americans have produced keenly priced high fashion carpets. We recognise that fashion is an important factor. I pointed out in an intervention that since 1978 the Americans have radically increased their trade in knitted fabrics. It was a trickle then, but it was worth £17 million in 1979, and it is growing at an alarming rate.
Fashion changes have added to the difficulties of the textile trade. The traditional dress of the British man was a tailored suit, and he kept quite a few of them in his wardrobe. Now it is unusual to find more than one suit, or perhaps two, in the average man's wardrobe. The remainder is made up of casual wear, which has not helped the woollen industry, and must have reduced considerably the demand for men's woollens throughout the world. I emphasise that woollen textiles from this country are still of high quality. The Government can help. We must remember that the woollen textile industry has relied in the past to a considerable extent upon stock holders and distributors. They buy from the mills and hold heavy stocks, very often of fashion woollens. The fact that they have to hold large stocks means that the high rate of interest has reduced the size of the orders that they would normally place. I ask my right hon. Friend to consider that carefully. In piece goods, especially, many factories require a stock holder, and in fashion stock holding the rate of interest is an important factor to be taken into consideration. The Chancellor of the Exchequer could help the whole of the textile industry by making a reduction in the interest rate in the Budget.
Some of the highest tariffs against British woollens are, surprisingly, in countries with which we have traditionally had great trade relations. It is discomfiting to find that the tariff on British woollens going into Australia is 35 per cent., with a severe quota. In New Zealand the duty is 45 per cent. with a quota in addition. In the United States, the import duty on woollens is 45.5 per cent. Although we may have had no lever in the past to bring a more reasonable attitude to our exports of textiles to America, the fact that the Americans are increasing their exports to us should give us an opportunity to open negotiations with them to give us better opportunities to sell our textiles and clothing in the United States.
Those are countries in which we are at a disadvantage. But there are other countries that penalise our exports of textiles, especially woollens, with duties as high as 100 per cent., yet they sell their textiles, finished and unfinished, to this country without any comparable restriction.
My right hon. Friend could do the textile industry in this country a great deal of good if he would consider the 999 instances in which other countries, by exporting on a very large scale to this country, are also giving us opportunities of the sort that I have suggested.
I have one comment to make on the speech of my hon. Friend the Member for Macclesfield (Mr. Winterton). It is easy to talk about giving the textile industry and the clothing manufacturers the sort of handout that has been given to the miners.
§ Sir Frederick Burden
My hon. Friend would serve his purpose much better if he would use less rhetoric and less exaggeration. If I misunderstood him, I apologise, but certainly I thought that that was what he meant. I have been in the industry nearly all my life. If he had been in the industry for as long as I have, he would realise that it would be impossible to subsidise hundreds of small factories manufacturing clothing and also to subsidise to the same extent those engaged in the textile industry.
I hope that my right hon. Friend the Secretary of State will look at the position in the textile manufacturing industry, where we are competing with overseas countries that are exporting to this country on a considerable scale. The position is not quite the same in the clothing industry, because of the conditions to which I have referred. Given the right opportunity, I am sure that our woollen manufacturers can hold their own, but we have also to take into consideration the fact that there have been changing fashions and that the overall demand for men's traditional wool textiles is not as great as it was several years ago.
§ Mr. Cyril Smith (Rochdale)
The hon. Member for Gillingham (Sir F. Burden) will, I hope, forgive me if I do not take up his remarks. I hope he will also forgive me if I say that I found the speech of his hon. Friend the Member for Macclesfield (Mr. Winterton) more entertaining than his speech, if only because I agreed more with the hon. Member for Macclesfield than with him.
Last week, with many other hon. Members, particularly Opposition Members, I met deputations of textile workers—perhaps ex-workers would be a better word—from the North of England. Those from my constituency were certainly ex-workers. When I met them here in the House, I had to tell them that in my view the Government had virtually written off the textile industry, certainly in terms of being willing to give practical assistance to it. I had to tell them that in my view the present Government are as pathetic as the Labour Government in regard to willingness to help the industry. I also told them that, while I was quite sure that we would continue to receive from this Government—as from the Labour Government—a great deal of noise in support of the industry, it was not likely to materialise in real help.
As I listened to the Minister's speech this afternoon, it seemed to me that we were being given all sorts of reasons or excuses as why nothing could be done but little indication as to what was to be done or what the Government thought they might be able to do.
I shall not rehearse all the problems of the industry. Suffice it to say that in the past 12 months we have lost 1000 over 100,000 jobs. In my constituency of Rochdale, unemployment has risen from under 6 per cent. to over 14 per cent. in 12 months. In the cotton industry and the allied textile industry we have lost 20,000 jobs in one year—a 33 per cent. reduction in the labour force in one year. We have had all the usual closures, bankruptcies and liquidations. I am sure that the House has heard about them before and will continue to hear about them.
The latest closures are those in Courtaulds, especially in the city of Liverpool, and in Northern Ireland. I understand that many of those closures are due to an energy policy that is not particularly helpful to the industry or conducive to its success. In short, what the House is talking about is a pathetic mess. One hopes—although with little optimism—that the debate will produce a promise of Government action rather than the crocodile tears that we often get in these debates.
I have not missed a textile debate in this House since I was elected in 1972. In 1966, when I was the mayor of Rochdale, I led a deputation of Lancashire mayors to the then President of the Board of Trade, the right hon. Member for Battersea, North (Mr. Jay), so the problem has obviously existed for 10 or 15 years, and we have not made a great deal of progress in that time.
The reasons for contraction are well known to the Government. To be fair, some of them, quite properly, were mentioned by the Minister in his opening speech. There is the general world-wide economic depression. There are also the high interest rates in the United Kingdom.
Perhaps I might at this point urge the Government to look at some of the special interest rates that other countries in the EEC are offering people at the present time. I can produce evidence to the Government, for example, to prove that the Belgian Government, in an attempt to attract one company, recently offered capital loans at 2 per cent., not only for buildings and plant but also for working capital. That example shows the difference between two countries in the EEC in the way in which they deal with interest rates.
§ Mr. Richard Wainwright (Colne Valley)
My hon. Friend has mentioned subsidised industry in the Common Market which is working to the detriment of our own textile industry. Is he aware that woollen manufacturers in the Prato district in Italy are given substantial capital subsidies to enable them to compete directly with their Common Market partners, ourselves?
§ Mr. Smith
I am grateful to my hon. Friend for that intervention, which substantiates the point that I was making. I know of his deep concern about the woollen industry, especially in the woollen mills of Yorkshire. I am sure that note will have been taken of his point.
A further reason for contraction is the high value of the pound, which has affected the margins of some of the most efficient and aggressive exporters. There is also the high level of imports, to which reference has been made. We know the problems and we know the causes of them. We want to hear what the Government propose to do about them.
The same story is absolutely true of the footwear industry. In the Rossendale Valley alone—close to my constituency geographically—three factories and 1,000 jobs have been lost in the last 12 months. I know that that is a source of great concern to the hon. Member for 1001 Rossendale (Mr. Trippier), who will no doubt be hoping to catch your eye, Mr. Deputy Speaker, in order to say something about it.
§ Mr. D. A. Trippier (Rossendale)
I am grateful to the hon. Member for mentioning my constituency and for the context in which he has mentioned it. There is not only the problem of the unemployment which has arisen in my constituency. There is also the problem of potential unemployment arising from the fact that so many people are on short-time working. The temporary short-time working compensation scheme is totally inadequate to deal with the problem.
§ Mr. Smith
I am grateful to the hon. Gentleman for his intervention. I was about to say that 43 per cent. of textile mills in the North of England are now using the temporary short-time working compensation scheme. That scheme is less attractive than it was, now that it is related to 50 per cent. as opposed to 75 per cent. As the hon. Member for Macclesfield has indicated, it is even less attractive to companies.
I declare an interest, Mr. Deputy-Speaker, in that my company in Rochdale has been waiting for approval under the scheme since 5 December. During those three months, my company has been financing the money that the Government promised to repay to us. I have tabled a question as to the reason for the delay. I have also asked how many companies in the North-West are waiting for approval. There are scores of them. I was told recently by Ministry officials that the queue for approvals is so great that they cannot cope with the numbers. It is taking weeks and even months to get them through.
That is some indication of the state of trade, but it is also an indication that the Government are not giving sufficient attention to the problem. They have made a mess of the scheme by reducing the figure to 50 per cent. But even if they will not increase it above 50 per cent., they can at least try to ensure that the scheme is being administered efficiently, so that it does not take so long to arrive at conclusions, and so that companies can get back the money that they are paying out. Incidentally, while the firms are paying out the money it is saving the Government from having to find the money for unemployment pay.
I hope that the Minister will tell us whether the 50 per cent. can be increased, whether the period to which the scheme applies can be lengthened, and whether there can be a speeding up, particularly in the North-West, of the time that is being taken to deal with applications.
The footwear and textile industries do much for exports, and have tried to help themselves by exporting. The footwear industry in Lancashire exported £2 million worth of goods to North Africa in recent months. The textile industry has sold £2,000 million worth of exports. So we are not just talking about saving industries and jobs; we are talking about saving exports too.
The hon. Member for Macclesfield referred to Unit 1 at Atherton. That company invested £6 million. Yet it is companies like that which are now facing closure or short-time working as a consequence of the Government's policies. We are not talking about inefficient mills or mills that have failed to invest. We are not talking about an industry with a long record of bad labour relations. We are 1002 talking about companies that have invested and exported, and an industry that has a superb record in industrial relations.
The hon. Member for Macclesfield rightly said that we tend to be a soft touch for imports. Every year ceilings are exceeded. Indonesia is an example. Last year, over 5 million garments came into this country from Indonesia. The Minister agreed a quota of 2 million, but that was twice the 1979 amount from that country which four years previously sent nothing to the United Kingdom.
As the hon. Member for Macclesfield said, it is worth noting that in 1980 over 70 ceilings, or trigger levers, were exceeded. We want to know what the Government are doing about that. May we have an assurance that the amount by which they were exceeded in 1980 will be deducted from the quotas of those countries in 1981 so that what they sent in last year over the levels will be deducted from what they are allowed to send in this year? That would be perfectly proper, and it is the way that I am sure other Governments would react. Some of the excesses were minor; some of them were not. But together they have a major effect on the industry as a whole.
It has been said that the textile and clothing industries employ 650,000 people. The coal industry employs 230,000 people. I see that a Minister from the Department of Industry is present, so perhaps he will perform the same sort of U-turn for the clothing and textile industries that he performed for the coal industry. Even though we employ three times more people, we are prepared to settle for one-third of the help. That is surely a fair basis on which to seek Government intervention. Textile workers are upset when they read of people in other industries—car, coal, and steel—getting redundancy payments of £15,000, £16,000 or £20,000. Yet textile workers, with the same length of service in an industry which has the same health dangers as the mining industry—a lot of textile workers suffer from byssinosis—are being declared redundant and receiving redundancy payments of £2,000, £3,000 or even less.
I understand the Government's problem, and I understand, too, that some industries are publicly financed and others are privately financed. But the workers are entitled to demand and expect fair play from any Government. There is nothing fair about a situation in which one redundant worker gets £15,000 and another with the same length of service in another industry with less muscle gets about one-fifth or one-sixth of the amount.
We therefore await with eager anticipation the Government's U-turn on economic policies. We need lower interest rates. We need short-term finance help to keep the industry going. We need a curb on imports. We need a control of energy charges—not a deliberate increase, as this Government perpetrated through athe gas industry. We need the EEC's import controls on low-wage countries to be fully enforced. We need new quotas at lower levels as soon as possible, and we want to ensure that those quotas, when renegotiated, are negotiated in relation to domestic demand.
The industry welcomes the origin marking order, but we believe that it should be much tighter. I hope that the Government will consider the possibility of tightening it up to cover such things as the origin of the main fabric to be used, forcing mail order catalogues to show the country 1003 of origin, and stronger enforcement, including marking the source of origin at the time of manufacture and not at the time of retail sales.
I hope that, even at this eleventh hour, the Government will make sure that the industry has fair play. That is all that the textile industry has ever sought. It has never sought protection or to be treated in a better or more generous manner than any other industry. All that it has ever sought, in the 15 years during which I have been associated with it, is to have fair play and justice. That is what we seek from the Government today, and that is what we hope to hear from the Minister tonight.
§ Mr. D. A. Trippier (Rossendale)
It is a pleasure for me to follow the hon. Member for Rochdale (Mr. Smith). I spent many happy and interesting hours with him on the town council in Rochdale, the town where we were both born. I also had the doubtful privilege of fighting him in 1972 in the Rochdale by-election, when he did not just beat me but metaphorically sat on me. which was the most painful experience of my political career. I agree with everyting that he said today.
I remind the House that approximately 50 per cent. of the work force in my constituency is employed in the textile and footwear industries. That makes it unique—certainly in the North-West, and, as far as I know, in the rest of the country. The decline in the textile and footwear industries did not begin in May 1979. There has been a steady erosion over a long time, certainly since the last war. Indeed, many people would say that it was a longer period. Both industries have suffered from unfair import penetration, and both have been the recipients of Government largesses in the form of subsidies or compensation schemes.
§ Mr. Straw
It is true that there has been a long-term decline in output and employment in the industry, but does not the hon. Gentleman agree that what has happened in the past 15 months is on a quite different scale from the gentle decline that the industry suffered earlier? By way of illustration, I would point out that the output of the textile industry remained stable—an index of 100—during the period of the Labor Government, while it has collapsed by 25 per cent. during the 18 months of this Government.
§ Mr. Trippier
I do not deny for one moment that the situation has deteriorated during the 21 months that this Government have been in office, but it is a little hypocritical for Labour Members to attack the Government when they were instrumental in negotiating the multi-fibre arrangement under which we are currently operating. Opposition Members often say that the then Opposition—the Conservative Party—supported the negotiations. The fact remains that the people who negotiated the multi-fibre arrangement were Ministers of the Crown. Only Ministers of the Crown—members of the Government of the day—sit round the table at the time.
§ Mr. Trippier
The hon. Gentleman must appreciate that Ministers of the day have a responsibility to persuade the European Parliament and the Council of Ministers to 1004 negotiate on their behalf. Successive Governments have a lot to answer for for the way in which they have let down the textile and footwear industries since the war.
I emphasise that the textile industry is twice as big as the coal industry. It is more than twice as big as the car industry. It accounts for 10 per cent. of all manufacturing employment.
Many in the industry say that the renewal of the multifibre arrangement after 1981 is academic because the industry may not survive until then. That is not right. The renewal of the MFA and the bilaterals is crucial for the textile industry after this year. More to the point, a commitment to strengthen the MFA, which we did not have from the Secretary of State for Trade today, is essential. A recession clause must be built in in order to restore confidence. That is not just a central point for discussion; it is vital. We must fight tooth and nail for it in the Council of Europe.
Britain has the largest textile industry in Europe. It is under the most pressure. There is no confidence in the industry. One of the major reasons is the dithering attitude of the present Government. Early on, Ministers from the Departments of Trade and Industry failed to give a firm commitment that we would right for a tough successor. Eventually it came from the Prime Minister herself. We are grateful for that.
Debates such as this place hon. Members like myself in a dilemma. I despair of the Government's attitude and I deplore the Opposition's hypocrisy. The textile industry has been in decline for more than 20 years. Opposition Members would do well to remember that Labour Governments have been in power for two-thirds of that time. Textile mills in my constituency closed under Labour Governments just as they are closing under a Conservative Government. Both parties have a lot to answer for.
The current position is disastrous. Production has fallen dramatically. The fall accelerated in 1980. Output in textiles for the last quarter of 1980 was 22.1 per cent. down on the same period of 1979. That is certainly disastrous. At least 200 mill closures occurred in 1980 and others have occurred since.
Hon. Members who have spoken with such passion, including my hon. Friend the Member for Macclesfield (Mr. Winterton) and the hon. Member for Rochdale, do not really know what it is like to lose a job, as many of the textile workers in Lancashire, Greater Manchester and Yorkshire have lost theirs. They must feel as if their world is caving in. Opposition Members should not laugh at that. They should encourage us. They recognise that they do not have a monopoly on compassion.
Many textile workers suffer double injury when they lose their jobs, because frequently both husband and wife are employed in the same mill. Sometimes their daughter will also work in the same mill—on the switchboard, for instance. That applies particularly in Greater Manchester and Lancashire. They must be wondering what they did wrong. They have not been on strike within living memory. They have not negotiated irresponsible wage settlements. They have worked hard in a noisy and often unpleasant environment, and yet they are proud to work in an industry manufacturing essential goods.
Many textile workers in my constituency are suffering the indignity of short-time working. The potential unemployment figures are disastrous. What needs to be done? The Government must introduce an entirely new 1005 scheme of temporary compensation for short-time working—a scheme that will last for 12 months. No one would be happy with such a scheme, but in the absence of a constructive alternative it would be a means of holding the work force together. It would also make economic sense. It is better to pay for shor-time working than to pay unemployment benefit.
The Government must reduce the minimum lending rate by at least two points as quickly as possible. Faced with diminished demand and high interest rates, how can companies be encouraged to invest in new machinery and sustain high stocks?
The Government must recognise that there is a minimum base that must be preserved and protected under a recession clause. It should not be assumed that an annihilated textile industry would allow the British consumer to continue to enjoy cheap textiles at the low prices operating today.
Members of the Lancashire Footwear Manufacturers Association, the headquarters of which is in my constituency, produce about 25 million pairs of footwear per annum. The employee strength is about 7,000. About 4,000 people are employed in the vicinity of Rossendale, in 21 factories. A year ago over 5,000 people were employed in 24 factories in the same area. That means that there has been a loss of 1,000 jobs and three mills in the last year.
The footwear industry in North-East Lancashire is in danger of collapse if there is a further contraction in the number of factories. Further contraction will mean that suppliers of components such as leather and heels will not be viable. The Government should take dramatic and urgent steps to rectify the high imbalance in footwear imports. Efforts should be made to stimulate home trade by reducing interest rates and stabilising the pound.
It is suggested that in order to keep the footwear industry at its present level and strength the Government should impose immediately across-the-board import controls on footwear from all sources, amounting to 50 per cent. of current estimated imports either in terms of value or pairs.
I have always been fascinated by the skilful footwork of Ministers whenever textiles and footwear are mentioned at Question Time. Every time I press for a commitment for the textile or footwear industries Ministers bob and weave. They talk about "orderly marketing arrangements" and "effective restraints". We have been told that Ministers would try to make an effort to persuade the Italians to stop using child labour in the manufacture of shoes. Ministers are brilliant at not being specific, as my right hon. Friend the Secretary of State was in his opening speech today. He said nothing. My right hon. Friend is a skilled politician.
When asked for an opinion on a book that had just been published, Abraham Lincoln, an equally skilled politician, once saidPeople who like this sort of thing will find this the sort of thing they like".I am still in the dark about the Government's view on the textile and footwear industries. Worse, those industries themselves are still in the dark. I look to the Secretary of State to shed some light when he replies,. Otherwise, I shall be unable to support the Government in the Lobby tonight.
§ Mr. James Lamond (Oldham, East)
The debate is already settling into a fairly well-worn pattern. A cautious attack on the Government is made from the Opposition Front Bench. It was cautious because my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) is always mindful that the day will come when positions will be reserved and he will be on the Government Front Bench facing a similar debate. Back Benchers on both sides of the House then proclaim the need for assistance to the textile industry. Hardly one, if there ever is one, has a kind word to say about the Government's policy, whether it is a Labour or a Tory Government.
Will we go through that again today, or are we considering something a little more different? I think that there is a difference, and the Government would be well advised to note it. The motion that we are debating says:This House deplores the worsening crisis in the textile, clothing and footwear industries".The crisis is worsening and its effects are being felt throughout the North-West, for example. The number of unemployed in the North-West region, announced earlier this week, was 338,000 men and women, the second largest number in any region in the United Kingdom.
The crisis in the textile industry is taking place mainly in an area that is already heavily hit. In other words, there is a crisis within a crisis, because there has been a continuing crisis in textiles not for 20 years, but for 50 years. The number of people employed in textiles has been falling for 50 years. That number is now one-tenth of what if was 50 years ago. Because of the gradualness of that decline an opportunity has been available to take up the people who are being made unemployed, but now the speed of the crisis is overtaking the ability of people in that region to find new employment.
The Secretary of State for Trade tried to support the Government's amendment, which says that:this House acknowledges the difficult trading conditions facing the textile, clothing and footwear industries".That is acceptable enough. Of course the Government must acknowledge those conditions. They are as plain as plain could be. There is nothing objectionable in that part of the amendment, but it then says that the Housenotes the measures which the Government has taken to give these industries a wide range of protection".That is more questionable. I know that the Government can say that protection has been afforded to the textile industry, and Ministers have said that it is well protected, but the crisis is such that as soon as the debate was announced I was deluged by briefs—as I am sure other hon. Members have been—from employers' organisations, trade unions and many others. Many of them have been read out today. There is no harm in that, because it is good that opinions that have been received are reinforced in the House. I am sure that the Minister has received them. That is an indication that there is much concern that there is not sufficient protection for the industry.
I do not blame the Government for that. The multi-fibre arrangement was negotiated when there was a Labour Government, but we objected to it then. We are entitled to continue that objection. Two years may be a long time, but the Government must recognise their responsibilities in view of the dreadful situation facing the industry. If the debate helps to sharpen their minds on that point, it will have been valuable.
1007 The Minister talked about the anti-dumping legislation. It was bad enough when it was operated from this country, because there were many complaints about the delays. Speed is of the essence when one is concerned with dumping operations. If there is some delay in dealing with dumping, the damage is done before it is revealed for what it is. That has been made worse because the matter is now dealt with at Common Market level. The industry is again complaining that that is not good enough for it. Therefore, the second part of the amendment falls on the ground that there is not sufficient protection either by the anti-dumping legislation or through the multi-fibre arrangement.
I should have liked to dwell for some time on the Government's policies, the effects of which are falling particularly hard on the textile industry. One point is particularly applicable to textiles that are sold in shops. The destocking in this industry is directly attributable to the high interest rates charged in this country, because no shop, no matter how large or small, can afford to carry stocks for which it must borrow money and pay high interest rates. Stocks in shops may sound a small matter. They are not normally considered to be all that important unless the clothing industry is directly concerned, but when one realises the many millions of pounds worth of goods that are normally held in stock, one realises that when those are run down that represents a long period during which there is no demand for fresh supplies. The industry has felt that strongly.
The hon. Member for Macclesfield (Mr. Winterton) said that he would vote against the Government. I have looked at the motion and at the amendment. I do not think that it makes any difference to the textile industry which of them is carried tonight. I recognise the bravery of the hon. Gentleman. It is always brave to vote against one's own Government. However, the Government should not judge the seriousness of our feelings on whether we vote for or against their amendment.
The Government should take into account what has been said by all hon. Members, never mind the vote, and carry it into the new negotiations. They should not set aside the textile industry because it happens to be less militant than some others. They should not reward its loyalty by giving it unfair treatment compared with that given to other industries which may be more militant. It is not a good lesson to teach workers that the more militant they are, the more attention they will get and the more help they will receive from the Government. If the Government want to pursue a policy that will unite this country they must demonstrate to these workers who have never taken an aggressive attitude to the community as a whole that that will pay off for them.
§ Mr. John Farr (Harborough)
I shall take up some of the points mentioned on both sides of the House. I am speaking as joint chairman of the all-party knitting industries group. The East Midlands region, which I represent, has the highest concentration of employees dependent on the clothing, textile and footwear industries. It is 10 per cent., or 150,000 out of a total work force of 1.5 million.
I am concerned about the wholesale decline in employment in hosiery and knitwear. Since June 1979 the number employed in hosiery and knitwear has declined from 110,000 to 94,000 in November 1980, a decline of 14 per cent., coupled with a tripling of short-time working. 1008 Hand in hand with that decline in jobs has gone rising import penetration, from 15 per cent. in 1968 to 34 per cent. now for textiles, to 39 per cent. for knitted outerwear and no less than 84 per cent. for knitted shirts.
There has been a combination of circumstances, many of which the Government can remedy. If I receive a meaningful undertaking from the Minister tonight I shall support the Government, but unless I receive a meaningful reply to the points that I shall raise I shall not be in the Lobby with the Government tonight.
I have the greatest confidence in the ability of the hosiery and knitwear industries to survive and thrive if overseas competition is fair. I recently visited various firms in Leicestershire. I was impressed by the speed and efficiency of the workers and the 100 per cent. co-operation between management and workers. I am not prepared to accept a situation in which our home industries continue to be undermined by unfair foreign competition; nor am I prepared to accept a Government who do not make it crystal clear that there will be a continuing, large and permanent hosiery and knitwear industry in Britain.
Regrettably, on 3 February my hon. Friend the Member for Loughborough (Mr. Dorrell) stated:When I came to the House I was a director and shareholder in a clothing company manufacturing in Britain. I am convinced that there is no future for most of the British textile and clothing industry.No fewer than 650,000 people are employed in that industry in the United Kingdom, out of only 3 million in the whole of the EEC. I am not prepared to see such an investment written off.
§ Mr. Stephen Dorrell (Loughborough)
May I add my next sentence but one:I find it difficult to support a policy that undertakes the negative part of that job"—by which I meant the job of restructuring British industry—and insists that imports come in if they are more competitive hut does not provide the prospect of alternative jobs for the people and assets that are made redundant."—[Official Report, 3 February 1981; Vol. 993, c. 455.]My speech has been widely reported in Leicestershire. I have a great deal of sympathy with the points made on both sides of the House about interest and exchange rates. However, it is pointless to have an industrial policy that does not recognise the need to concentrate investment in those industries that provide the best prospect of secure jobs, the highest wages and the highest return.
§ Mr. Farr
I am grateful to my hon. Friend for his lengthy intervention. Most of us recognise that such a future lies with the textile and knitting industries, given a proper Government attitude.
I said earlier that we were suffering from a combination of circumstances, such as the high level of MLR, which in turn has given us a high value of sterling. The Government must reduce MLR, which will have the tandem effect of reducing the value of sterling. Both are artificially high. The high level of MLR has made companies shed jobs and machines. Companies are now disappearing, and the decline must be halted. The lobby that came to the House a few days ago gave me a list of no fewer than five companies in the Leicester area that have either substantially reduced the number of their employees or gone out of business since 1 January.
I briefly mention the other points on which the Government should tonight make a robust statement. I am 1009 not satisfied with the way that negotiations are being conducted by the EEC over United States imports. Through the availability of cheap energy, American imports are coming into Britain in much greater proportion than to other EEC countries. Other member States do not feel the same need for urgent action.
I want the Government to take a positive attitude in the multi-fibre negotiations. In the new MFA there must be recognition of the change in economic circumstances. We also need proper transitional arrangements over the enlargement of the EEC. The origin marking order shortly to be considered by the House should also be amended to include the origin marking of the contents of mail order catalogues.
The Government can take action. They have the power to arrest the decline of an old industry of which we are proud. The problems come partly from the world recession, but the Government can and should help in many ways. I hope that they will assure us of their help tonight.
§ Mr. William Whitlock (Nottingham, North)
I am pleased to speak after the hon. Member for Harborough (Mr. Farr). We are joint chairman of the knitting and hosiery industries group.
I echo the sadness expressed by the hon. Member for Macclesfield (Mr. Winterton) about what is happening to the textile industry. The industry has been established in the East Midlands for over 400 years and employs one in eight of every worker in productive employment, yet every day factories are closing and jobs disappearing. The feeling is growing that the Government are happy to see the industry disappear.
I shall not deal with such esoteric matters as the exchange rate and MLR. Apart from the consequences of Government policies, one could talk for hours about the many other unfairnesses that the industry has to face—fiddling, the bending of international rules, quota dodging, fraudulent labelling, the protection and subsidisation of textile industries in other countries, and dumping. There is a need to secure a fair deal for Britain in the renewal of the MFA. Additional problems will face us with the enlargement of the EEC. Because the Government appear not to see the need for urgent action over such matters there is great despondency, particularly in the East Midlands. That despondency was heightened when the Secretary of State for Industry told us on 10 July that our competitors were not competing unfairly.
In December the hon. Member for Harborough and I visited two Ministers with representatives of the knitting and hosiery industries to discuss the growing threat from America. The Americans subsidise and protect their industry by artificial energy prices and by lowering their import quotas. They are therefore able to send goods here at prices lower than those for goods from Hong Kong, Korea and Portugal. That behaviour is unfair, and the Americans should be dealt with under the appropriate MFA and GATT provisions. The Minister for Trade conceded that there was identifiable unfairness. However, he told us that if these suggestions were implemented it would be the first occasion on which a developed country had been so treated and that he therefore could not contemplate such action.
§ The Minister for Trade (Mr. Cecil Parkinson)
I said that if we were to try to have an MFA-type arrangement with America it would be the first arrangement under the MFA with developed countries and the first step towards a managed world trade in textiles.
The Reagan Administration have been in power for barely a month. They have deregulated oil and have said that they regard the deregulation of gas as an important priority and that they will make other proposals that will be of more immediate assistance to the United Kingdom textile industry. To get an Administration to say that in their first month in office is quite an achievement. I hope that the hon. Gentleman agrees.
§ Mr. Whitlock
It does not seem to me to be a very great achievement. Instead of a forthright denunciation of American unfairness there has been a nice cosy chat between representatives of the EEC and the American Administration, at the end of which the Americans have agreed to pass on our fears to their own industry. The American industry already knows about our concern in these matters. Last year, representatives of the Knitwear Industries Federation went to America and saw their counterparts and told them all about it. The American producers said that they believed that they were making progress in our markets because they had better production methods and their goods were of better quality. The people from the federation were astonished and annoyed, because they knew perfectly well that, in the main, our production methods were better than those of the American textile industry and that the goods that we produce were better than those produced by the Americans. When the American textile producers hear of our polite approach to the Administration there will undoubtedly be complete indifference to what we have to say.
The Government must stop pussyfooting around and, instead, fight for a fair deal for the industry. Nothing less than a declaration today of the Government's intention to do just that will satisfy the Opposition at the end of the debate. Let us not have yet one more debate that brings no hope to the industry.
§ 6.1 pm
§ Mr. Peter Fry (Wellingborough)
As chairman of the all-party footwear group, I am delighted to be able to take part in the debate, not least because even in this debate the footwear industry tends to think of itself as the forgotten industry which not too many people get worked up about. The reason may be that it is not a militant industry. It is not always going on strike, demanding more and more, or trying to hold anybody to ransom. It is an industry which, over the years, has put in good solid work and made a great contribution to our national economy.
As was mentioned earlier, the footwear industry, too, is in a state of crisis. The county of Northamptonshire is probably the home of the men's footwear industry in this country. Since January 1980, 20 per cent. of the jobs in that industry have disappeared. This means that for the first time—I include the time of the Depression—the vision of very high unemployment is stalking my constituency and those of my colleagues. Those of us who represent that part of the world are entitled to say that we do not believe that any Government have really done all that they can to assist this industry.
The problems that have arisen have certainly not been due to high prices and high inflation. In the past year prices 1011 in the footwear industry have increased by some 7.9 per cent., compared with public sector increases of 20 per cent. to 30 per cent., which these firms have had to pay. That says something about the efficiency of the footwear industry, and rather more about the efficiency of the public sector, particularly over the past 18 months.
We have not heard much tonight about one major problem confronting the industry, namely, the fact that although we have a Government who believe in fair trade and believe that the best thing to do is to reduce the barriers, our footwear exporters find that 75 per cent. of the world's markets are closed or partly closed to them. That is something that they should expect the Government to do something about.
§ Sir Frederick Burden
Will my hon. Friend be more specific about the position with regard to the export of shoes to America? Northampton used to do a great deal of business in exporting shoes to America.
§ Mr. Fry
One of the major problems in relation to the whole of North America is, of course, the high value of the pound. I was attempting not to go over ground that other hon. Members had covered. I accept that the high value of the pound and high interest rates are factors in this matter. I was trying to pick out one or two aspects that are peculiar to this industry for the Government to do something about.
One of the great strengths of the industry is that its trade union has always been a responsible one. I saw the union delegation when it came to see us last week and I accepted its four-point programme, which I shall put to the Government tonight. First, it asks for a further reduction in minimum lending rate. We have been into that already. Secondly, it, too, would like a review of the temporary short-time working compensation scheme, and particularly a restoration of the 75 per cent. payment for a 12-month period. Thirdly—and this is very important indeed—it wants the Government to influence the EEC so that the Commission moves for the removal of barriers to United Kingdom exports. Fourthly, it asks for incentives to companies pursuing export markets.
What is significant about those four points is that they have no reference to imports. It is a very responsible trade union. If we are to try to respond to the work force of this country and to get its co-operation, let us put on record how responsible these people have been and let us respond to what they say. I say bluntly to the Government that I believe that those demands are modest. Indeed, they are too modest. I reiterate the cry of my hon. Friend the Member for Rossendale (Mr. Trippier), who asked for a degree of control on imports.
Even more, I remind my right hon. Friends that there is a footwear EDC, which is putting forward proposals to assist the industry in this difficult period of transition. Help is needed to increase productivity, to improve marketing techniques, to improve design, and to encourage exports, but a degree of financial backing will be required if the development council's plans are to be achieved. The question that we must ask ourselves tonight is whether this can and should be done.
When the Government had an economic and industrial policy that I could understand I had some doubts whether that kind of policy could be pursued. I must tell my right hon. Friend the Secretary of State for Trade that after his interview last Sunday morning I am not sure what the 1012 Government's industrial and economic policy is. I believe that we are in new territory and that some of the things that could not be done a month or so ago are perhaps more possible today.
§ Mr. Marlow rose—
§ Mr. Fry
If my hon. Friend does not mind, I shall not give way, as other hon. Members wish to speak.
I believe that my constituents are entitled to ask certain questions. If the Government are pouring out massive help to bankrupt industries such as British Steel, what about a bit of modest help to the footwear industry? If its employees are to be made redundant, can they not have some of the generous payments that are made to those in the public sector? Above all, if we are to cut back on imports of coal, what about imports of footwear and textiles?
I do not believe that those are excessive demands. They are the reasonable requests of people who are worried about their jobs and who see no reason why they should be threatened.
I must say that I, too, am in something of a dilemma in terms of how I should vote tonight. I do not like the Opposition motion, because I do not believe that all of the problems are due to the Government. On the other hand, I do not agree with the Government amendment. I believe that this is one of those occasions on which hon. Members have to look into their hearts and decide whom they represent. I believe that my first responsibility today is to my constituents. They have kept faith with me through four or five very tough elections, and I intend to keep faith with them tonight. I must tell my right hon. and hon. Friends that unless I get some assurance that the points that some of my hon. Friends and I have raised will be pursued by the Government, I shall follow my hon. Friend the Member for Macclesfield (Mr. Winterton) into the Opposition Lobby tonight.
§ Mr. Edward Lyons (Bradford, West)
I shall be brief, because I appreciate the demands of my colleagues.
First, I should like to refer to Bradford. There, unemployment is up by 82.2 per cent. since May 1979. In West Yorkshire and Humberside unemployment has doubled in the same period. One can visit a block of flats, and the only people who are working will say that they expect to be made redundant any time. Asian workers are particularly numerous in the textile industry. Therefore, they suffer particularly heavy casualties from the holocaust that is hitting the textile industry in my area.
It is against that background that I wish to make my remarks. It should also be borne in mind that while the water workers and the miners have received wage increases well above double figures, the General and Municipal Workers Union in the textile industry in my area has just agreed a 5 per cent. increase and the work force there has a good work record.
I want to confine my general remarks to the question of the United States. The United States is undertaking, and has done so over the last two or three years, a determined export drive into European markets. The damage is enormous. America is not subject to quotas, or really to the MFA. The developing countries are entitled to ask, as indeed they do "Why should we restrict our exports to 1013 Britain and to the EEC, not for the sake of the domestic industries, but to make a holiday for the United States?" That is what is being said.
Why is it a holiday? It is not only because of the low value of the dollar in relation to the pound but because American industry is highly protected. It is a result of energy policies that are unfair compared with what happens in Europe. It is also because America has economies of scale.
America, which is the richest nation in the world, is keeping out imports from underdeveloped countries by tariffs that are far higher than ours. It is not taking its fair share of imports from developing countries. It is leaving us to do that. That is not fair to the developing countries, nor is it fair to us. Therefore, the Americans must do more.
I know that in the Tokyo round America agreed that from 1982 it would cut those high tariffs by about 5 per cent. In fact, the American Customs and Excise have now come up with a wonderful proposal in respect of many categories of clothing, namely, to change their classification from non-ornamental to ornamental clothing, whatever that means. The effect will be to double the tariff. That proposal will come up for discussion in March and April. If America succeeds with that proposal to reclassify clothing imports, it will mean that American tariffs will be far higher than they are now. The degree of protection will thus be far greater.
It therefore follows that the EEC and Britain must take a more determined attitude to the United States than they have taken so far. That is one matter that the Prime Minister ought to raise today and tomorrow in America in her talks with President Reagan. It is not consistent with the attitude of the United States as a world leader or as a country that is supposed to care for other countries and their problems or for its allies in Europe that it should adopt the harsh attitude that it is now adopting.
In those circumstances, the message from the Government tonight ought to be—loud and clear—that they will have a bash at America in order to make it fully aware of the damage that its policies are causing. America should be told that it should seek to remedy that damage.
§ Mr. Michael Morris (Northampton, South)
I have been in the House for seven years. During that time I have tried to stress the importance of the footwear industry to this country. I recognise that we are not winners, but, equally, we are not losers. The footwear industry is one that this country needs.
I want to put three or four points to my right hon. Friend. First, I want to re-emphasise the fact that 75 per cent. of export markets are in one way or another restricted to us. Frankly, I find it laughable when the Japanese tell us that for religious reasons they will not allow shoe imports, while at the same time they proceed to dump roller bearings on to our market, with an adverse effect on Northampton and the other towns that are central to that market.
Secondly, some of my hon. Friends have mentioned Europe. Most of us who over the years have been involved in anti-dumping work know that the time that the Department of Trade took in the past was a great deal longer than the EEC takes today, certainly in respect of footwear. None of us should now forget that 53 per cent. 1014 of footwear exports go to the EEC and that if we pull out of the EEC, as some of my hon. Friends suggest, the footwear industry will suffer.
I do not believe that any Government have ever had a proper strategy to meet the import problem. We have had a series of ad hoc arrangements as the problems appeared over the horizon. I want to look at one particular market—Poland and COMECON, particularly Poland. Have we not done enough for the Polish economy, when we built 24 ships at a cost of £40 million to the taxpayer and all that Poland put in was £25,000? That is all that Poland put in up front.
Is it not incredible that, imports having gone down by 4 per cent. in volume last year, blow me down, we find that Poland has increased its exports to Britain by 12 per cent.? Yet we are supposed to have some restrictive agreement with Poland and the rest of COMECON. That increase is not even compensated for by other members of COMECON. For example, exports from Czechoslovakia are up by 6 per cent. If, as reported, the Poles could do better selling their leather, why do we not advise them to sell it on the open market and not dump their shoes on us?
Earlier on, in an intervention, I mentioned the situation in India. That problem is coming over the horizon. Today, India's exports are up by 69 per cent. to more than 3 million pair. That is the next problem. My right hon. Friend, who is new in office, should begin to look at that problem now rather than wait for two or three years.
§ Mr. Marlowrose—
§ Mr. Marlow
I am grateful to my hon. Friend for giving way. I am happy to agree with virtually everything that he has said, apart from the small point on Europe, where, of course, our imports from Italy are greater than our total exports throughout the world. Whatever the reasons for our present problems, does not my hon. Friend agree that the problem is not one of industrial relations, as the footwear industry has consistently been league champion in the labour relations first division—[HON. MEMBERS: "Reading".]—and where our union NUFLAT is an example to all as a modern, moderate and effective union, doughty fighters on behalf of the membership, while at the same time strike-free, responsive and co-operative—
§ Mr. Morris
Northamptonshire has lost 20 per cent. of its employment. We understand the Government's macro-policy. Indeed, I believe that the industry supports it. The industry understands the fight against inflation and wants to support the Government. What it does not understand is the Government's energy pricing policy. It believes that it has a role to play. If it is to succeed, it needs to be unshackled. It needs to know that the Government will support it, particularly in regard to import penetration. It wants to believe that it forms a part of the Government's industrial strategy.
§ Mr. Lawrence Cunliffe (Leigh)
I shall speak as rapidly as possible. The House will agree that the position of the textile industry as a whole is lamentable. The industry has declined over the last 20 to 25 years. It has been totally ignored by successive Governments, who 1015 have treated its problems with no urgency, even though that was absolutely imperative if the industry was to survive over that period. Ultimately we have seen—I am sure that it is a matter of great concern to all of us—the decline about which I have spoken.
The real issue which divides the House this evening is that the Government's indifference and inaction, along with their ruinous economic policies and impotent industrial strategy, have played a positive role in accelerating the decline of the industry. That is our major point.
It is no use the Minister lecturing us today about strong exchange rates and so on. My constituents think not about exchange controls but about their inability to get away from the numbers of people outside the labour exchange. That is the exchange that they understand. When I became a Member of this House, 13 textile mills were open and flourishing. Since then, five have closed, six are on short time and two are struggling and have been forced to consider taking immediate action to stave off further bankruptcy and decline.
For many years, a dedicated and loyal labour force has accepted the technical innovation that is imperative if the industry is to progress. The amount of investment has been tremendous. Textile industrialists have invested £2,000 million. The industry has an impeccable industrial relations record. I could dot the i's and cross the t's, but I wish to be brief. Political parties and Governments must realise that these industries are fighting for their very lives. It would be a gross betrayal and an act of criminal folly if the Government were to fail to recognise the industry's plight and if they were to ignore the pleas for help and for constructive intervention.
The Prime Minister now says that she is in favour of constructive intervention. Such intervention could be used to help these industries, which have not had a fair crack of the whip in the post-war period.
§ Mrs. Elaine Kellett-Bowman (Lancaster)
There can be no workers in the world who less deserve to be thrown out of work than the textile and shoe workers. Throughout the years their conduct has been a model which should have ensured not only their survival but their prosperity. Shoe factories and mills have steadily modernised and brought themselves up not only to European standards but to the best world standards. The men and women in those factories and mills have adopted every possible improvement in manning practices and technology in order to keep them up to date. As Spencer Crookenden said, they are suffering badly from the exchange rate and the high level of the minimum lending rate. Textiles also suffer from those two things. Despite their fantastic efforts to modernise and adapt, no fewer than 200 mills closed inl980. Between January and November, 97,000 jobs were lost.
Yesterday's results from Carrington Viyella—which has modernised to an extraordinary degree—throw the textile industry into even deeper gloom. As many of my hon. Friends have said, 43 per cent. of those working in the industry are on short time. However, short-time working does not by any means work smoothly in every case.
On Monday a firm in my constituency wrote to me and said that it had experienced delays of up to three months in securing approval for a short-time working scheme and 1016 delays of over five weeks in receiving the money after approval had been granted. Admittedly, I received a letter today which said that it had received some of the money, but part of the amount remains outstanding from October. That is clearly of extreme importance when one considers the industry's cash flow position and the high level of interest rates. I should be grateful if my right hon. Friend would exert pressure on his colleagues to improve matters substantially.
Despite all these difficulties, the industry still employs 630,000 people and has an output worth £9 billion. However, output fell by no less than 20 per cent. in the final quarter of the year compared with 1979. Despite the world recession and the strong pound, textile and clothing exports exceeded £2,000 million in 1980. That is a very creditable record.
Within the figures there are worrying signs. Although for 1980 as a whole the volume of textile and clothing exports fell by only 5 per cent. compared with the pevious year, the fall accelerated alarmingly in the last quarter of the year, to 20 per cent. Some of the factors involved in that fall are common to all exporting industries, namely, high interest rates, the high rate of sterling and the high cost of energy, which many hon. Members have mentioned.
Some factors are peculiar to the textile industry and affect both exports and the import penetration of the home market. In particular, there has been a great upsurge in the number of imports from the United States of America. I agree with my hon. Friend the Member for Macclesfield (Mr. Winterton) that textiles are getting a jolly sight worse deal than coal. It is aggravating for those of us who come from the areas of the textile and shoe industries to see that coal miners are managing to keep coal out when we cannot keep textiles and shoes out. No one would complain if imports were fair, but they are not. The American home market is greatly protected by high tariffs which give the Americans a much larger share of the market than they would have on merit. It means that they can take full advantage of the economies of scale that are denied to us.
By far the most serious problem has been the artificially low price of energy to American textile producers. That has enabled them to seize an unduly large share of the United Kingdom market. Even if that advantage were to cease today, the enervating effect of squeezed margins and accumulated losses in the United Kingdom's textile industry would have a continuing effect, since once factories such as the Courtaulds' Lansil factory in my constituency close—which closed with a loss of 665 jobs,—they are unlikely to reopen. Those that remain open are weakened thereby. Unfortunately, there is no chance of the unfair energy pricing for gas changing immediately in the United States of America, because that would require legislation, which would take months to achieve.
There is no chance that the American textile industry will voluntarily—I stress that word—curb its exports to the United Kingdom unless it can be frightened into doing so. We are about to embark on renegotiation of the MFA, which the United States wants just as badly as we do. However, the developing countries rightly say that their restraints on exports to the EEC have not benefited European producers, since the slack has simply been filled by imports from the United States. That is the last thing desired by Britain or by the developing countries. The United States has a clear interest in seeing that the agreement is negotiated. Unless the United States 1017 moderates its present cut-throat policies, the renewal of the MFA and its bilaterals could be put at risk. At present imports from the United States are the main threat, but that must not lead the Government to overlook for a moment the importance of renewing the MFA this year.
I hope that my right hon. Friend has read the booklet "Textiles into the 80's", which some colleagues and I put before him as a policy for the textile industry. Low-cost countries are by no means always genuinely developing countries. That point is made in the booklet. They have taken almost 30 per cent. in volume of the United Kingdom's textile and clothing market.
If the market were growing, that would not be so serious. However, the market is not growing. Indeed, sales in this sector fell by 4 per cent. during the last quarter. It is only fair that, if developing countries wish to have an increasing share of our home market when it is expanding, they should be prepared to accept a decrease when our market is contracting.
A growth recession clause, relating imports from the developing countries to the state of the home market, should be included in the MFA. I was slightly reassured when I heard the Secretary of State say that nothing had changed since July, when his predecessor promised to make this a central matter for negotiation. I agree with my hon. Friend the Member for Rossendale (Mr. Trippier) that this is not only central but vital. The situation has worsened considerably since July.
I believe that the Secretary of State has a genuine interest in the problems of the textile industry. However, he did not entirely show that interest today. He knows that the damage done in the course of many years cannot be undone overnight. I beg him to take the toughest stand possible with the United States of America about the MFA. When there is an upturn in demand there will then be an industry that is still capable of taking advantage of it.
Some factors relating to the origin marking scheme have been worrying the textile industry. It is important that the material should also be marked with the country of origin and not just the garment. I do not like the Government's amendment to the motion. The first and last parts of the amendment make sense. However, I do not like the wordsnotes the measures which the Government has taken to give these industries a wide range of protection".Not nearly enough protection has been given. Far tougher action needs to be taken.
However, I agree that the pursuit of realistic policies that are designed to lower the rate of inflation and to maintain access to export markets is important. For that reason alone, I shall give the Government one more chance. However, the next time that we debate the textiles industry I shall go into the Opposition Lobby if we are not faced with a much more satisfactory position.
§ Mr. Stanley Orme (Salford, West)
The debate is a direct response to the TUC-organised lobby of workers from the textile, clothing and footwear industries. It has once again shown the House the importance of the issue. It has highlighted the fact that the Government's policies are completely bankrupt.
1018 During the short debate we heard criticisms of the Government from both sides of the House. My hon. Friends the Members for Kettering (Mr. Homewood), Stockport, South (Mr. McNally), Batley and Morley (Mr. Woolmer), Ince (Mr. McGuire) and Keighley (Mr. Cryer) have sat here throughout the debate. Only time has prevented them from making a contribution in support of the Opposition motion.
In his opening remarks the Minister referred to high interest rates and the strength of the pound, but he did not say what he intended to do about them. Those factors, together with high energy costs, on top of a depressed home market, have led to redundancies and closures on a massive scale. Investment in those industries has been reduced. During the 1970s all three industries invested heavily to meet the challenge of the 1980s. That financial and human capital is being steadily destroyed as a direct result of monetarism.
Major companies are making savage cuts. Total employment in the textile and clothing industry is more than 700,000, compared with 420,000 in chemicals, 389,000 in metal manufacture and 695,000 in vehicles. Reference was made to short-time working and redundancies. In the list of the level of short-time working, textiles is fourth and clothing and footwear fifth. For redundancies in 1980, unfortunately, the textile industry is top of the league—an unfortunate league indeed.
Between January and November 1980, 97,000 jobs were lost in textiles and clothing alone. Courtaulds has just announced the loss of 1,550 jobs at Aintree, and more than 300 jobs are to be lost at Carrickfergus. The blame for that has been laid firmly at the feet of the Government. Last year, 200 mills closed. The clothing industry has been equally hard hit, spelling the end of the small clothing manufacturer and opening the door to imports.
There are 66,000 workers in the footwear industry of whom 6,000 lost their job in 1980 alone. There were 800 redundancies in January this year. This month 17,000 workers in the footwear industry are on short-time, and 1,200 jobs at Norvic were recently saved by the intervention of my hon. Friend the Member for Norwich, South (Mr.Garrett) and my right hon. Friend the Member for Mansfield (Mr. Concannon).
The previous Labour Government was the first Government to take the footwear industry seriously. They set up the footwear study group—a committee of Labour and Conservative Members, manufacturers, traders, trade unions and civil servants. The group proposed a scheme of assistance to which the Labour Government responded immediately by making an initial £4.5 million available. That was fully taken up and led to many modernisation projects in the industry. The present Government have made no further funds available. We have heard the pleas from the Minister's hon. Friends this afternoon for more assistance for the footwear industry. That industry has been scaled down. What is the Government's current position in relation to the industry demand for more capital? Will they provide a small sum to help the industry survive and, not least, to improve design? The footwear economic development committee says that it will now concentrate on improving productivity, marketing, design and exports. What help will the Government give to its efforts?
I turn to imports in the textile industry. It is worth noting that in 1980, in volume terms imports from the developed countries exceeded those from under-developed 1019 countries for the first time in our history. That answers the claim that Britain is being flooded with imports from the Third world. It shows clearly that the major problem is imports from the EEC and, not least, the United States.
The problem of United States imports has dominated the debate. It was the only major country to increase its exports of textiles to Britain in 1980. Yet it has a highly protected home market, and is subsidising industry through artificial pricing of natural gas and feedstock. We acknowledge that the Government have raised the control of American imports with the EEC Council of Ministers. Their attempts to obtain an agreement have failed dismally. The matter will be raised again—we assume, at the meeting of the Council next month. It is imperative for the future of our textile industry that a satisfactory conclusion is reached at that meeting, and that we are not fobbed off with promises of more discussions.
If the Council of Ministers once again fails to agree EEC-wide controls of textile imports from the United States, the Government must take unilateral action immediately to secure a future for our textile industry. The Government must ensure that the multi-fibre arrangement works in the interests of British industry, and that a recession agreement is negotiated at the earliest opportunity.
Investment is a key factor. Other Governments in Europe—for example, Belgium and France—have recognised that and are investing heavily to save their industries. That is direct Government intervention by EEC countries. The Government must not allow the investment of the 1970s to go to waste, as it will if the trends of the past two years continue. The future of our industries can be secured only be a high and continuing level of investment. The Government must act now to prevent any further cuts in equipment and manpower and to stimulate innovation.
The Government should ensure that the trade unions are involved in the planning and use of Government aid. The guidelines for aid must be strengthened so that, wherever possible, British machinery and equipment are purchased. An immediate step that the Government could take to prevent a further decline would be to strengthen the temporary short-time working compensation scheme, which would at least prevent the departure of skilled labour from the industry in the way that is happening now.
Textiles, clothing and footwear have been among the worst affected by the Government's decision to reduce regional aid and to remove areas in the North-West and Yorkshire from assisted area status. That is absolutely criminal. It is clear that regional aid must be extended, with a greater input of funds and the restoration of assisted area status to those areas in which the industries operate. It is obvious from the debate that urgent action is needed to save the textile, clothing and footwear industries.
We have heard this afternoon about other industries, such as the coal, steel and motor industries, which are vital to the economy of the nation, but the wide debate that has taken place in the House this afternoon, reflecting a large number of constituencies represented by Members on both sides of the House, has underlined the importance of our textile, clothing and footwear industries.
What we are asking the Government, what we are saying to the Minister, and what my right hon. and hon. Friends have said clearly during this short debate, is that we want action. We want a clear commitment from the Government to maintain viable textile, clothing and 1020 footwear industries. My right hon. and hon. Friends have advanced constructive proposals. We want to see Government action. We want to see action on behalf of the three industries. If the Government do not take action, and if nothing is done at the March meeting of the EEC Ministers, it could spell disaster for the industries. I ask my right hon. and hon. Friends to vote against the Government.
We want to hear from the Secretary of State some clear policies and an outline of the way in which the Government will deal with the issue. If the Government are changing course, they must do so for the textile, footwear and clothing industries.
§ The Secretary of State for Industry (Sir Keith Joseph)
I rebut straight away the allegation that runs as follows: if only Ministers were better informed about the clothing, textile and footwear industries. That is one allegation that can be rebutted. Ministers are intensely and acutely aware of the industries' problems.
§ Sir Keith Joseph
It was made by my hon. Friend the Member for Macclesfield (Mr. Winterton), who explained to me that he had to go elsewhere.
Ministers are constantly and legitimately bombarded by the industries, their managements, their work forces and by the trade unions concerned. Hon. Members on both sides of the House art: validly and constantly emphasising the problems of these industries. I pay tribute to the sincerity and passion with which the case is made for better treatment for the industries. The one thing that we are not short of is information.
I hope that the House will understand that in a debate covering no fewer than three major industries and with only 17 minutes in which to reply I shall not be able to answer every issue that has been raised. However, I undertake to write to all those whose points I shall not have time to answer.
Secondly, I shall have to generalise in meeting the main arguments. I shall refer to all those who have spoken, but I shall not refer specifically to the arguments advanced by the hon. Member for Bradford, North (Mr. Ford) and by the hon. and learned Member for Bradford, West (Mr. Lyons). I recognise the force of their feelings and general arguments. Equally, I shall not refer specifically to the strong, brief but none the less effective speech of the hon. Member for Leigh (Mr. Cunliffe). I acknowledge the value of the speech of my hon. Friend the Member for Gillingham (Sir F. Burden), who has great experience.
Ministers working on this range of subjects are helped because the Parliamentary Private Secretary to my hon. Friend the Minister of State, Department of Industry happens to be my hon. Friend the Member for Nelson and Colne (Mr. Lee), who is an extremely articulate representative of that constituency and leaves Ministers in no doubt about the problems of the industries in Nelson and Colne.
Before taking up the general argument I turn to the questions asked at the beginning of the debate by the hon. Member for Antrim, South (Mr. Molyneaux), who spoke of energy prices in Northern Ireland. The Government recognise that there are problems. Electricity prices in Northern Ireland are already subsidised by the taxpayer. 1021 Subsidies have been applied to keep industrial electricity prices to within 7 per cent. of the level in the rest of the United Kingdom, and a working party has been considering electricity prices in Northern Ireland. Energy prices in Northern Ireland are the responsibility of my right hon. Friend the Secretary of State for Northern Ireland.
In the 15 minutes that remain I shall try, while recognising the intensely strong feelings on both sides of the House and the impact of all the factors that have been identified upon the jobs and lives of those who work in the industries and on their households, to put the arguments in a slighly different framework, without in any way flinching from the Government's share of responsibility.
§ Sir Keith Joseph
That is what I shall try to set in a proper framework.
In these industrial matters there is a division of responsibility. The Government have general and particular responsibilities. The general responsibility is to reduce inflation—which we are seeking to do with some success—and to reduce interest rates. The Government dearly want to reduce interest rates. We want to create conditions in which interest rates come down, and come down sharply. However, we inherited a runaway spending momentum from the Labour Government. Until we achieve a better proportion in terms of what we spend, and therefore what we have to tax and borrow, interest rates will not come down as much as we all want.
There may even be a connection, though experts argue with each other about it, between interest rates and the exchange rate, which hon. Members on both sides of the House have correctly identified as a crucial factor in current trading conditions. We recognise that the Government have a responsibility for creating conditions in which inflation and interest rates fall. We recognise that we must get energy prices right. The House knows that at the NEDC meeting next week there will be presented the task force's report on energy prices, to which the Government will have to react.
As I have said, the Government have a responsibility to create the right framework for industry, and that could lead me to talk about nationalised industry charges. The Government have responsibilities for all these general pressures upon industry, upon the economy and upon individuals, but we cannot control the world recession, which is one of the important factors affecting the three industries that we are discussing.
In addition to the Government's responsibility to the economy in general—the pressures that I have mentioned have an effect on every other industry, as well as on clothing, textiles and footwear—there are special responsibilities that successive Governments, including this one, have accepted towards these three internationally highly competitive industries. These include the responsibility to open doors for our exports. As my hon. Friends the Members for Wellingborough (Mr. Fry) and for Northampton, South (Mr. Morris) have emphasised, our footwear industry is desperately blocked by so many of our natural export markets being closed. My hon. Friends have no reason to doubt that Ministers are trying as hard as they can to negotiate, in private discussion and 1022 in public negotiation, to open the closed markets. We want to open them, and I recognise the strength of feeling in the industry until we succeed.
The Government have a special responsibility to negotiate and to operate as well as they can the inherited regulatory framework. The industries are protected to a greater extent than any other industry in our economy. The Government are a free but fair trade Government. We recognise that we do not have a fair trading world, but it is in our interests to make it as fair as possible and to trade as much as possible in the philosophy of free but fair trade. I do not think that anybody can question the vigour with which my hon. Friend the Minister for Trade has sought, first under the guidance of my right hon. Friend who is now the Secretary of State for Defence, and now under that of the new Secretary of State for Trade, to protect the network of protective arrangements that we inherited from our predecessors, and which we have greatly expanded. The textile, clothing and footwear industries, so far as they come from State trading or developing countries, are massively protected, though not always 100 per cent. effectively.
It is against that background of Government responsibility, general and special, that I come to the next factor in the argument. Home demand for clothing, textiles and footwear has been pretty stable over the last 18 months, surprisingly enough. We do not have the latest figures. The consumption of footwear has increased. Textiles sales have fallen, but sales of clothing are stable. Exports have gone up, rather than down. Imports have not risen significantly. What has caused output to slump so sharply is the massive destocking that has taken place under general economic pressures—interest rates, inflation and the other factors of world recession to which I have referred.
§ Mr. John Smith
The right hon. Gentleman knows that there has been a huge increase in imports of certain products from the United States. In the event that the United States refuses to do anything about it, as seems likely, what will the Government do to assist British industry?
§ Sir Keith Joseph
In general, imports in these industries have been stable. Some have fallen, while some, including those from the United States, have risen, but, overall, imports have been stable.
Our clothing, textile and footwear industries are still by far the largest suppliers of our home market—70 per cent. of the home market is supplied by our own manufacturers. Two-thirds of imports come from developed countries. I identify in particular the United States because it has featured a great deal in the debate. There is no doubt that American energy prices provide the background for what is unfair competition. Labour Members, with great braggadocio, demand that we confront the new President, President Reagan, and insist upon a change in energy prices. May I ask the House whether that is a more likely way to get results than the negotiations that we have initiated through the EEC with the new Administration and which have already resulted in a fairly hopeful response from the new American trade secretary? That will be followed up.
Only one-ninth of our market is supplied from developing countries. Although the vast bulk of the exports from developing countries are subject to restraint, 1023 I accept that these exports can have a devastating affect upon narrow sectors and individual firms in our markets. Yet the House cannot doubt that there is now a much more massive and comprehensive system of regulation than the Government inherited, thanks to the activities of my right hon. and hon. Friends at the Department of Trade.
The House should remember that these exports are from developing countries which are our markets as well as our competitors. They are the very countries to which the Opposition want us to give more help but the very countries which they wish to stop from trading with us. There are firms and work forces in many parts of the country that rely upon the earnings of those developing countries, which have to export clothing, textiles and footwear to us in order to buy the products of other parts of this country.
§ Sir Keith Joseph
No, I do not have time to do so.
I want to emphasise not only how widespread the network of protection is but also that it is effective. My hon. Friend the Member for Macclesfield made the charge that the Dutch will be able to introduce massive aid for their textile industry and that it will take this country three years to block it. I should like to tell the House, in the absence of my hon. Friend who has to be away, that that is utterly untrue. The EEC has already blocked the Dutch proposed trade support scheme.
The hon. Member for Rochdale (Mr. Smith) and my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) showed understandable chagrin because coal miners are seeking higher redundancy pay or because steel workers get higher redundancy pay than textile workers, but I fear that the logic goes the other way. If the industry cannot afford higher redundancy payments than it is paying already, and if any extra redundancy pay has to come from the taxpayer, the more that is paid out by the taxpayer in, say, steel and coal, the less there is for any other public spending.
I have spoken openly and without denial of the responsibility of the Government. I turn now to the industry—
§ Mr. Gary Waller (Brighouse and Spenborough)
Among those things for which the Government have no responsibility, does my right hon. Friend agree that one of the heaviest hammer blows to the industry has been the high rates that local authorities have imposed on companies in the textile industry, particularly in West Yorkshire, bearing in mind that many areas in West Yorkshire went Labour at the last election, imposed supplementary rates and are now imposing higher rates for next year?
§ Sir Keith Joseph
That is absolutely true. I am glad I gave way to one hon. Member opposite and to one on my own side.
I accept that industrial relations in the industries concerned are excellent and that there has been massive investment in many parts of these industries. Nevertheless, I note, and I hope the House will note too, that the contrasts within these three industries are vivid. Firms are closing next door to firms that are booming.
§ Several hon. Members rose—1024
§ Sir Keith Joseph
How can that be, against the background of the conditions that have been described? The answer is that a combination of design skills, marketing flair, management flair and modern technology can produce triumphant success. In all the gloom, there are dramatic success stories.
I was asked whether the Government cared. Of course the Government cart: about these three industries. We would be mad not to care.—[HON. MEMBERS: "YOU are".]—but we cannot guarantee the size of the industry. The coal industry, to which many hon. Members have referred, has shrunk over the past 20 years to one-third of its former size. Textiles, clothing and footwear are not the only industries that are having to adjust to changing conditions. We cannot guarantee the size of the industries, because so much depends on their management.
The Opposition's motion is opportunistic and hypocritical. They negotiated the framework which we are administering far more vigorously than they ever did. I ask my right hon. and hon. Friends to reject the motion and to support the amendment.
§ Question put, That the original words stand part of the Question:—
§ The House divided: Ayes 239, Noes 299.1027
|Division No. 87]||[10.00 pm|
|Beith, A. J.||Tellers for the Ayes:|
|Sandelson, Neville||Mr. Stephen Ross and|
|Steel, Rt Hon David||Mr. David Penhaligon.|
|Aitken, Jonathan||Kilfedder, James A.|
|Atkinson, David (B'm'th,E)||Lloyd, Peter (Fareham)|
|Baker, Nicholas (NDorset)||McNair-Wilson,M.(N'bury)|
|Bennett, Sir Frederic (T'bay)||Major,John|
|Butler, Hon Adam||Mills,lain (Mericden)|
|Chapman,Sydney||Mills, Peter (WestDevon)|
|Clarke, Kenneth (Rushcliffe)||Moate, Roger|
|Clegg, Sir Walter||Morrison, Hon P. (Chester)|
|Dean, Paul (North Somerset)||Nott, Rt Hon John|
|du Cann, Rt Hon Edward||Page, John (Harrow, West)|
|Dunn,Robert(Dartford)||Page, Rt Hon Sir G. (Crosby)|
|Emery, Peter||Patten, Christopher (Bath)|
|Fenner, Mrs Peggy||Pawsey, James|
|Fookes, Miss Janet||Pink, R.Bonner|
|Fowler, Rt Hon Norman||Price, SirDavid (Eastleigh)|
|Thorne, Neil (llfordSouth)|
|Townsend,CyrilD, (B'heath)||Tellers for the Noes:|
|Wakeham,John||Lord James Douglas-Hamilton|
|Waller, Gary||and Mr. Robert Boscawen.|
§ Question accordingly negatived.
§ Question,That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
§ Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
§ That this House acknowledges the difficult trading conditions facing the textile, clothing and footwear industries; notes the measures which the Government has taken to give these industries a wide range of protection; and believes their future is best assured by these measures and the pursuit of realistic policies designed to lower the rate of inflation and maintain access to export markets.