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Mr. Henderson : I am grateful to my hon. Friend the Member for Halifax (Mrs. Mahon) for that contribution, which clearly reinforces the points that have been made about concern in the industry. Industry does not complain only about macro-economic policy-- Mr. Graham Riddick (Colne Valley) rose --
Mr. Riddick rose --
Column 567Industry wants to know about other issues relating to it. It wants to know whether the Government will stand firm in the GATT talks on arrangements for the textile industry and whether the Government will take a firmer stand on that than they appear to do on some other issues. It will also want to know whether the Government will give the industry confidence by announcing that they will support the renewal of the multi-fibre arrangement in 1991. I know that the Minister has made some soundings on that, but there has been nothing stronger.
Mr. Tredinnick : On a point of order, Madam Deputy Speaker. My hon. Friend the Minister for Trade gave way almost a dozen times during his speech, so is it not reasonable that the Opposition spokesman should give way as many times as my hon. Friend?
I must make it clear that the Opposition recognise that for a trading nation such as the United Kingdom it is important that we encourage the maximising of free trade. Employers and unions in the industry are clear that we can have free trade only if we have fair trade. We cannot have fair trade with countries that have a trade surplus that is maintained on unsustainably low exchange rates ; with countries such as Brazil, which maintains excessively high tariffs, keeping out products not only from the EC but from the less developed of the developing countries ; with countries such as Turkey, which retains an array of Government subsidies; or with undemocratic regimes that are reinforced by unacceptable low wage economies. In case some of my hon. Friends representing Yorkshire constituencies are in some doubt, and even if they recognise some of the characteristics to which I have referred, my comments were not intended to be in any way a reference to the city of Bradford. The industry demands to know the Government's view on trade. Do they accept that until we have fair trade we must have regulated trade? Do they accept that without a multi- fibre arrangement we would face unilateral action, as the United States has already threatened, we would face anarchic instability in markets as employers identify, and we would face an outbreak of beggar-thy-neighbour protectionism? The general president of The National Union of Hosiery and Knitwear Workers, Mr. David Lambert has written to me this week stating : "Companies are now taking investment decisions, both to buy new machinery and to create a skilled labour force, and to do this, they need the confidence that there will be a market for their products after 1991."
Can the Government give both unions and employers the confidence to invest? Can they give them hope beyond 1991? Will the Government assure us that they will take advice from sources other than Professor Silbertson, to whom one of my hon. Friends has referred? Many of us believe that taking advice from Professor Silbertson is a bit like the three little pigs taking advice from the big bad wolf. The current trade talks in Montreal are important and it is vital that we refer to them in this debate. Will the Minister state some of the Government's priorities in those talks?
The Minister knows that under GATT rules selective action to stem a surge in imports is outlawed. That is as
Column 568true for textiles and clothing as it is for other goods. The industry argues--this point was identified by the hon. Member for Batley and Spen--that selective action is necessary. The industry has cited the case of the surge in the importation of knickers from China, which could not be stopped without a more widespread application of restrictions which would act indiscriminately against other suppliers.
Will the Government support the need for a safeguard clause in the Uruguay round? The inclusion of a social clause is also important, although it is not a matter for the Uruguay round. It relates more directly to the negotiations on the next multi-fibre arrangement. Surprise, surprise, the United States Government have recently reached an accommodation with the American labour unions on a social clause. Countries that deny basic workers' rights in their industries, such as the right of free association and minimum conditions, are now denied access to the American market. Imports from Chile and Paraguay have been recently knocked back because the United States Department of Trade recognises the organisation of industry in those areas. China is not included.
The Minister will be aware that the United States Government have now asked GATT to set up a working party to consider the wider applications of that social clause. The Minister will also know that the Government are never slow to second any other proposals from President Reagan. Industrialists in the defence industries tell me that that is particularly so when American manufacturing industry stands to gain. Will the Minister seek the support of the Prime Minister for the insertion of a social clause in the GATT talks?
Mr. Henderson : For that I apologise, Madam Deputy Speaker. If the Minister does approach the Prime Minister, he will be able to tell her that he has the support not only of the House but of the British Textile Confederation, the Knitting Industries Federation and the British Clothing Industry Association.
Other matters are important in the review of the multi-fibre arrangements. One important issue is to find the means of monitoring new technological developments. One way for a producer to increase access to markets is to export a new fibre that might be outside the terms of the previous MFA. I always thought that ramie was something that happened in a bar-room brawl at the Scottish Conservative party conference, but I can assure the House that ramie is also a new fibre that comes from China. Ramie was not included in MFA4 and I hope that the Minister acknowledges the damage that the import of such products does to economies such as our own. In future talks on the MFA. I hope that he will consider supporting the establishment of a committee to examine new technological developments.
Column 569The renegotiation of the bilateral agreement with China is another important issue. Under previous agreements. China has enjoyed the privilege of not being classed as a dominant supplier. Therefore, it has greater access and a larger quota growth than countries such as Hong Kong and South Korea. Circumstances have changed, however, and China is now the second largest volume supplier to the EC. Its economy is rapidly industrialising and the Chinese will soon be able to penetrate our markets even further. Do the Government accept that China should now be put on a similar standing to the dominant suppliers, such as South Korea? Do the Government accept that, as a consequence of its new standing, China's rate of access to our markets would then be reduced?
Such measures are not necessarily only in the interests of European manufacturers. A strong case can be made to support the fact that a tightening of the regulations with China would do much to help the less developed of the developing countries. Our Government could make an important contribution towards that aim.
The impact of 1992 worries many in the industry. Those familiar with the quota system will know that the EC agrees a quota and that it is then divided among EC countries, essentially on a historic basis. Many industrialists have already identified that, after 1992, it will be almost impossible to allocate quotas to a particular EC country. They fear that countries with an over-valued currency will suffer from a surge of imports from other EC countries. Those with the most over-valued currency would be flooded with the full impact of any particular EC quota.
Others are alarmed that outward processing, which has existed in Europe for a considerable time, will be exacerbated after 1992. Some countries will have an arrangement to outward process which will then allow the re-export of such products to another EC country. We must tackle those issues as we approach the second half of MFA4. Other concerns will undoubtedly be raised by my hon. Friends and by Conservative Members. Time denies me the opportunity--
Mr. Riddick rose--
Mr. Riddick : I shall not make the point about water that I wished to make earlier. The hon. Gentleman has rightly asked the Minister a number of questions about how he will approach some of the important issues. If the hon. Gentleman were a Minister in a Labour Government--I know that that is most unlikely--would he consider breaking international agreements to help our textile industry? That has clearly been advocated by one or two of his hon. Friends.
Mr. Henderson : I do not believe that any of my hon. Friends have suggested that we should deliberately break international agreements. What my hon. Friends have advocated--and what a Labour Government would do--is a tougher stance in negotiations, particularly with EC countries, when we are preparing the EC agenda for MFA or GATT talks.
Column 570I know that my hon. Friends will wish to reinforce some of the points that I have already made. I do not wish to dwell on Turkey, but perhaps that will be taken up later. I also hope that special assistance for the United Kingdom industry and dumping will be considered later.
The people, especially in the textile areas, will want to know whether the Government are prepared to bat for the British textile industry. They will want to know whether the Government will give the industry confidence for future investment by announcing today their support for the introduction of MFA5. They will want to know that, in any future review, regulations of trade in textiles and clothing will plug existing gaps. They will want to know whether help will be given to the least-developed of the developing countries ; whether the Government will stand firm in the GATT talks and whether a sensible modification of the bilateral agreement with China can be achieved. Most of all, they will want to know that the Treasury will listen to what it is told about the damage to industry as a result of high interest rates and high exchange rate policy.
Mr. Nicholas Winterton (Macclesfield) : I congratulate the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on the general tenor and tone of his speech. It might well have been me speaking nearly 18 years ago because I have taken a strong interest in this important industry throughout the time that I have had the honour to serve in this House.
I commence my speech by quoting the statistics that the hon. Gentleman gave earlier because they are extremely relevant and I hope that they will weigh heavily with my hon. Friend the Minister and all members of the Treasury Bench. The trade deficit in textiles for the first nine months of 1988 widened to a staggering £2,562 million, more than a quarter--some 26 per cent.--of the total national current trade deficit. I have opened with those remarks so that we may put into context the true importance of the United Kingdom textile and clothing industry within the United Kingdom's economy.
Our whole economic growth is jeopardised because of the serious imbalance in trade with the rest of the world. I urge my right hon. and noble Friend the Secretary of State for Trade and Industry and my right hon. Friend the Chancellor of the Exchequer to pay careful attention to what is said today by hon. Members on both sides of the House so that this very important sector of our manufacturing base can be given the support and understanding that it needs to compete fairly with the rest of the world.
The trade imbalance which was used as the reason or, should I say, the excuse a few days ago to force up interest rates still further could be brought down again by simple steps to help an industry which provides employment for 482,000 people. Again, I take up the statistics referred to by the hon. Member for Newcastle upon Tyne, North. That industry exports about £3.5 billion worth of goods every year, it invests more than £550 million a year, and its competitiveness has increased by more than 40 per cent. since 1980. That is a fine record which has been seldom equalled by any other sector of manufacturing industry in the United Kingdom.
Those statistics paint a picture of a healthy and thriving industry which has the ability and the products to compete
Column 571in the market place throughout the world. It would be foolish and short-sighted not to seize the initiative to allow the textile and clothing industry to move forward into the future with the confidence that led to exports to Japan soaring by more than 50 per cent. in the first six months of the year--a fact that has not been referred to so far today. That confidence is making textiles and clothing the United Kingdom's greatest export to Japan, which is arguably the most quality conscious and demanding market in the world. That has been achieved by the clothing and textile industry, and we should be proud of it.
Clearly the industry's products and the efficiency cannot be blamed for today's trade imbalance. Where does the problem lie? On the export front, where the industry has achieved a great deal, the strengthening of sterling has made it difficult to maintain the pace of advance. That point was made by the hon. Member for Newcastle upon Tyne, North and by others in interventions today. At home, the effect of higher interest rates is likely to depress consumer and retail demand for home-produced quality goods. The weak US dollar has materially increased the competitiveness of imports, particularly from those countries in the far east whose currencies are linked to the dollar.
The cumulative effect of currency changes over the period 1985 to 1987 make the US dollar 62 per cent. more competitive than sterling. It made the Chinese currency 112 per cent. more competitive, and the currencies of South Korea, India, Pakistan, Malaysia, Thailand and the Philippines between 50 and 100 per cent. more competitive. In short, high interest rates and strong sterling are not just hard on British householders ; they create a positive penalty barrier for British manufacturing industry. I know that my hon. Friend the Minister for Trade shares my view that at the end of the day manufacturing industry creates the wealth which allows the country to prosper and provides the resources for the infrastructure which our people demand. For the sake of future confidence in the textile and clothing industry, I hope that my hon. Friend will speak as a matter of urgency to the Chancellor of the Exchequer on that point. The question of what rate we should set for our exchange rate was raised earlier between the Opposition Front-Bench spokesman and my hon. Friend the Minister. I believe that it is counterproductive to have high interest rates which could drive more British manufacturing industry into liquidation and out of business. At the end of the day, that would mean that we would have a bigger trade imbalance because we would need to import more to fulfil our market requirements. We must have a less blunt weapon to tackle inflation than merely the use of interest rates. Industry can cope with high interest rates or high exchange rates, but it finds it almost impossible to deal with both. The mandarins in the Treasury should have a real understanding of manufacturing industry. If they really wanted British industry to expand, they should not have phased out capital allowances in 1984. I said that at the time and most of industry supported me and industry is saying that even more strongly now, although it is sadly too late in the day.
The position is very difficult. Despite the possible impact of reduced confidence and high interest rates on investment decisions, I know that because of his considerable contact with the industry my hon. Friend the Minister for Trade is aware that the textile and clothing industry is determined that the drive for continually
Column 572improving competitiveness must be intensified. Confidence would be strengthened if more determination was shown by the Government and by that body across the Channel--the European Commission--and our negotiators in Europe to use our rights in the existing trading agreements fully. They should act properly to counter disruptive import surges and resist the progressive opening of our markets to countries that remain firmly closed to us or distort trade by subsidies to their domestic industry.
I am not arguing for protectionism. I am arguing for pragmatism and common sense. We simply cannot afford to allow the United Kingdom to become the world's dumping ground for cheap textile products. It is useless to improve the efficiency of our manufacturing industry if we end up by subsidising industries in other countries. It is no secret that Turkey is one of the areas of greatest concern to our manufacturers. Despite the Ankara agreement that it would phase out import tariffs and abolish subsidies to its producers, Turkey has not yet made sufficient progress down that route.
Some hon. Members may not be aware of the information that I discovered through a series of parliamentary questions that were answered almost a year ago. I found out that our textile exports to Turkey face basic tariffs of between 10 and 40 per cent. There are also hidden tariffs in the form of municipal taxes, customs charges, stamp duties, import premiums, wharf dues and even housing funds. The practical implications are that exports of synthetic filament yarn from this country to Turkey face tax barriers of nearly 40 per cent. The export of wool cloth faces nearly 80 per cent. tax barriers. Cotton cloth faces 77 per cent., knitted outer wear faces taxes of 122 per cent. and men's suits are barred by tariffs of 87 per cent. However, not one of those products imported from Turkey into the United Kingdom faces any tariffs.
When he replies, I hope that my hon. Friend the Minister for Trade will direct some remarks to those grotesque inequalities and tell us what the Government will do to put them right. That is not our idea of fair trade. That is not an open market. It is surely protectionism at its worst.
My hon. Friend the Minister for Trade has already reminded the House that Turkey is not a party to the MFA, but that does not relieve his Department of the duty to do better to protect our domestic industry from unfair competition. Turkey does not have merely a foot in the door of our markets ; it has a hob-nailed boot firmly on the throat of many British textile and clothing manufacturers. If Turkey is to remain convincing about its intention to join Europe in our single market of the future, let us have a clear sign from the Turkish Government of their willingness to trade freely and fairly with the United Kingdom.
I shall balance what I have said by drawing attention to a problem that is faced by one of our major textile employers. I refer to Coats Viyella and its India Mills, which are in Darwen, Lancashire. I am advised by the company that for the past 18 months it has been battling with the European Commission over the introduction of a dumping duty on polyester staple fibre from, among other countries, Turkey. In its letter to me--I suspect that the company has written to other hon. Members--the company explains that it buys from Turkey "for one of our spinning units, India Mills, a melt dyed polyester staple fibre, as there is no readily available source
Column 573from within the Community. We have tried to buy the fibre from Hoechst of West Germany and I quote from their telex of 29th June 1988."
The telex is headed "Polyester Spun Dyed Colours" and reads : "We are aware of a growing interest in such an item and are conducting a feasibility study into the matter. However, such a product requires new plant to separate from existing lines. Whatever the outcome of this study will not affect our short term position of only being able to offer black."
That is signed by a representative of Hoechst UK.
The letter from Coats Viyella adds that the company is loyal to European fibre suppliers, with 94 per cent. of its total synthetic requirements being purchased within Europe and 89 per cent. from within the European Community. The letter continues--and this is the other side of some of the arguments that have been advanced this morning--
"We find that the imposition of this duty puts the UK (and for that matter, other European) spinning and weaving industries, on less than a competitive footing with imports of spun yarn and fabrics of polyester, where in many cases no duty is levied. The confirmation of a permanent duty on coloured polyester fibre will have dire consequences on our business, putting at risk 650 jobs solely at India Mills. There is then the likelihood of a knock on effect through to weaving and finishing."
The letter is dated 28 November.
The managing director of India Mills, Mr. Stephen Isherwood, wrote to me on 6 December in these terms :
"I write to inform you that for the first time for over 10 years, almost the entire work force (650 persons) at India Mills will be laid off for the whole of the week commencing 12 December." I want fair competition for the textile industry. Where British manufacturers or other European manufacturers no longer produce a particular product, it is important that the MFA and the other agreements should be flexible enough to allow manufacturers to import from whereever they wish to fulfil their contracts and orders. Having taken an interest in the textile and clothing industry for many years, I believe that MFAs have brought stability to the world market for textiles. They have enabled the United Kingdom textile and clothing industry, although it has so often been at a competitive disadvantage, to plan confidently for the future. The arrangements have allowed industries in the developing world, about which many of us are concerned, to invest and to grow securely. They have played an important role in saving our industry from collapse and in enhancing the economic prospects of many other countries. We would be foolish to abandon a scheme of such proven worth and to ignore its proven benefits.
The textile and clothing industry does not dispute that the return of textiles and clothing to the normal rules of the GATT must be regarded as the ultimate long-term objective, but such a step is not a practical proposition now or in the foreseeable future. Any return to the GATT rules cannot be contemplated, in my view, until two basic conditions have been fulfilled. First, the circumstances which in the first instance gave rise to the MFA and to its subsequent renewals must not continue to pose the threat of disorder. Secondly, the return to the normal rules of the GATT must be made only as part of a general move towards genuine liberalisation of the world textile and clothing trade, involving a better balance of rights and of obligations.
Column 574The MFA has not acted as a protectionist barrier as some within the consumer industry would have us believe--far from it. Instead, it ensured that an orderly growth of penetration into our domestic market has taken place.
In 1985, we imported 205,000 tonnes of textiles and clothing products from MFA countries. In 1986, we imported 248,000 tonnes. By 1987, these imports had risen to 331,000 tonnes. Imports increased by 62 per cent. over that period. It seems that this year there will be a further 10 per cent. rise on last year's figure.
I and the British textile and clothing industry remain committed to making the MFA work in future. I hope that my right hon. and hon. Friends on the Treasury Bench will give an assurance that its value is properly appreciated and that it will be retained for the foreseeable future.
I take advantage of the platform that is provided by the debate to deal specifically with an issue that is causing considerable concern to the textile and clothing industry. Adulterated cashmere products are being delivered to our quality clothing sector by Chinese producers. I hope that my hon. Friend the Minister is aware of this. The textile trade with China is covered by letters of agreement, which have been honoured for many successive years. They guarantee a given quality and quantity of cashmere. Recent changes in the economic system in the People's Republic of China, which reflect an appreciation of the need for competition in the market, have created difficulties for our cashmere users. The result is what can perhaps best be described as teething problems within the new system in the People's Republic. Companies in the United Kingdom have complained about sudden rises in prices in China for raw cashmere. I have no objection to that because the market must determine the cost to industry, but in this instance the charges levelled were in breach, so it seems, of agreed contracts.
I hope that my hon. Friend the Minister will be able to investigate the problem and the allegation that a considerable tonnage of Chinese cashmere has been doctored with sheep's wool or man-made fibre as part of a new production process. If the allegations are true--we have strong reason to believe that they are--neither the Chinese producers nor our clothing manufacturers stand to gain by besmirching the reputation of cashmere quality. Perhaps the long-term future for cashmere lies in finding a strain of cashmere goat that can be farmed in Britain on some of the redundant farmland that arises from the disruption of the dairy industry that is caused by the introduction of milk quotas. I am only sorry that my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food is no longer in the Chamber to hear me. I am aware of the important responsibilities that my hon. Friend carries within the Ministry. Perhaps British cashmere is currently a dream. I say that with regret because one farmer in my constituency is breeding cashmere goats, and in seeking to expand that business she is coming up against the bureaucratic machine in Brussels that insists on charging levies on goats imported into this country for breeding, for the purpose of producing cashmere wool. I hope that my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food will check with his Department what is the position and ensure that in future negotiations any goats imported into the United Kingdom for the purposes of breeding for cashmere production will be exempted
Column 575from any form of Community levy. I hope that the Minister will be able to give me that assurance before the end of the debate. I hope that the Government will act to defend the interests of one of the United Kingdom's most stalwart and robust manufacturing industries. It has an unrivalled industrial relations record, whichever of the several unions concerned has been involved. They have co-operated for more than 40 or 50 years in the industry's rationalisation. There has been no major strike, the unions realising that the industry is up against stiff competition. They have co-operated and shown an example that should be followed by unions in many other sectors of British manufacturing industry.
I hope also that at the end of this debate the textile industry will receive clear messages and reassurances from the Minister that not only will the MFA continue but that the industry has the Government's understanding and support.
Mr. James Lamond (Oldham, Central and Royton) : It is always a pleasure to follow the hon. Member for Macclesfield (Mr. Winterton), as I often do in debates of this kind, because he is so forthright in his views. I recall that 14 or 15 years ago, he and I formed the all-party cotton and textile group, which is still in existence, although its meetings are almost as cyclical as the industry itself. I say that it is a pleasure to follow the hon. Gentleman, but it is also rather worrying, because, as we share many friendships in the industry, he probably receives the same briefs and letters as I do. When he speaks before me, I grow anxious in case he quotes from the material that I intend introducing into my speech.
I agree with everything that the hon. Gentleman has said, with the possible exception of his remarks about the breeding of cashmere goats--about which I admit to knowing nothing, because it is one of the very few activities not carried on in Oldham, Central and Royton. I cannot say whether the hon. Gentleman is right in his comments on that subject, but I support all his other views.
At the beginning of the debate we heard the Minister confirm, as we usually do, the industry's importance. With more than half a million employees, it has more than coal mining, steel and shipbuilding put together. One can throw in the car manufacturing industry as well, and still the textile industry's employees outnumber them. The term "textile and clothing industry" covers a wide field. It is difficult to discuss it as one subject, because while one part of the industry may be having a successful time, another may be teetering on the edge of disaster. Bearing that in mind, it is not surprising that the Minister receives many letters, because one section or another of the industry is usually suffering.
Mr. Lamond : The Minister is correct. I confess that I had not realised that he was so sensitive. If it helps his morale, I shall drop him a line when manufacturers write to me saying that they are having a good time. I shall certainly pass on any such letters. So far, I have not received any.
Mr. John Longworth is the secretary of the Oldham and Rochdale Textile Employers Association Ltd. and a
Column 576good friend of mine, though he is certainly no Labour man. I should not like to say that he is a Tory either. He informs me that the past four years have been reasonably good. I believe that that must be so, because I am not receiving the same number of complaints as I usually do. However, what are reasonably good years for employers may not be reasonably good for employees.
The industry has been profitable and there has been investment. I remember being in Oldham two years ago when Courtaulds announced its considerable investment programme of three or four mills there. Unfortunately, now that that investment has been made, the installation of new machinery and improved methods have increased production and profitability, but not the number of employees. In fact, there has been a decrease, and it was always planned that there should be.
The argument deployed, which I must accept as being reasonable, is that, had that investment not been made, even more people would have been made redundant. It is difficult for the trade union movement to accept that because it has seen a decline in the industry, not just in the three or four years that the present Minister has been in post--I do not blame him for that--but for 50 or 60 years. That has in some respects been advantageous, because Oldham has for many years worked at attracting other industries to the area, and it did so earlier than other towns, where a decline in traditional industries did not occur so quickly. Oldham can now boast several computer-based industries, and so on, and we are grateful for that.
The fact remains, however, that there has been a downturn in Oldham's textile industry over the past few months. As recently as this week, Courtaulds has issued short-time working notices in nine of its Oldham mills. The notices will not come into effect for a fortnight, but it is unlikely that there will be any drastic change during that time, with the result that employees will be on short-time working, which for them is unacceptable. Mr. Peter Booth, the national secretary of the Transport and General Workers Union textile group, will be seeing what the Government can do to help in that respect.
Earlier, my hon. Friend the Member for Ashfield (Mr. Haynes), in a typically fiery intervention, attacked the Minister and, if I read correctly between the lines--it is not often that one has to do that in respect of my hon. Friend--he seemed to be calling for the Minister's resignation unless he takes positive action. I do not support my hon. Friend's call. For as long as we have a Tory Government, I am happy that the hon. Gentleman should remain in his post. I admire his style at the Dispatch Box, particularly at Question Time. There is a refreshing honesty and candour in his style that is not often found in any Minister of any party when at the Dispatch Box.
We are all aware that although the Minister tries hard to conceal it, he is not in the forefront of admirers of the Common Market and its bureaucracy. From time to time we tease him about going back to his old ways before he was a Minister. He is sophisticated enough not to be caught by that trap, but we know that in his heart he is a staunch defender of British industry in his negotiations in the Common Market.
I should not be at all happy to see the Minister replaced, unless it was by the hon. Member for Macclesfield. I have often wondered about that. Perhaps it is because the hon. Gentleman specialises in one industry, but he speaks about that industry in the most honest and straightforward
Column 577manner. If I thought that he would get the Minister's job I should certainly support him, but he may have blotted his copybook in other ways. He may be too forthright to be considered for the job. However, that is by the way. The Minister is here, and I should like him to note that our exchange at the beginning of the year about Turkish imports, and the subsequent correspondence that I sent him, which was not entirely complimentary to him and his Department, did not carry my condemnation as strongly as that of the employers who wrote to me asking me to convey what they thought.
I received a letter dated 5 December from Mr. Edmund Gartside, who was very concerned and made complaints about the Government's action. Mr. Gartside is prominent in the textile industry. He was chairman of the committee that dealt with Brussels on behalf of the industry, and I think that at one time he was president of the British Textile Confederation. He has certainly held high office. He is the chairman and managing director of Shiloh plc, which is based in my constituency. He wrote :
"As you know, there was a distinct deterioration in the market earlier this year which caused the closure of five cotton spinning mills and widespread short time working in our sector of the industry, including one of our mills."
One of the mills owned by Shiloh, which is a very good firm, was forced to close. Its employees and ex-employees are so loyal that when I advised elderly ladies and gentlemen about their right to sue their former employers because they had been refused lump sum compensation for byssinosis, they would not sue the firm because they thought so highly of Mr. Gartside and the firm where they had been employed. That is the employer who wrote to me about the disastrous effects on the industry. Mr. Gartside continued :
"This was caused in my view by the very high level of imports in 1987 which on the yarn side represented a 22 per cent. increase on the previous year. We warned the United Kingdom Government that this would have a devastating effect on confidence and employment in the industry, but Mr. Alan Clark, in answer to your questions"-- that is my questions--
"in the house last January said that there was no evidence of any disruption, despite the fact that I and others in the industry had given firm evidence of a downturn in sales and increasing stocks as early as the last quarter of 1987.
Mr. Clark said in answer to your question on the 13th January that if the industry produces evidence of serious injury it will enable me to take action to reduce the volume of imports from Turkey'. Despite five large mill closures and short time working, Mr. Clark has still taken no action, and if this is not evidence of serious injury, I wonder what is.
The plain fact is that the industry is being decimated, not only by the volume of imports, but by the absurdly low prices of these imports which are heavily subsidised to the extent of between 30 per cent. and 40 per cent., not only from Turkey but from other sources also."
Mr. Gartside continued at some length : "I hope you find the above information useful in representing the industry's case in the debate later this week and I assure you the situation in the industry is now getting very serious. Let us not forget that this government did nothing to prevent the destruction of half the industry (the Lancashire sector) in the early 1980's. The revival was very much due to the fact we had inadequate capacity when there was a mini-boom." I remind the House that I am reading, not from something from a trade union or in a Left-wing journal, but from a letter from Edmund Gartside, one of the best employers in the industry. He concluded by saying :
Column 578"Now it seems hellbent on destroying a further large slice of the industry, and possibly eliminating it entirely, as we cannot possibly compete with subsidies of 30-40 per cent. The Government knows these subsidies exist, but deliberately turns a blind eye to them." Perhaps that criticism was a little harsh, especially of the Minister, but I am passing on the real feelings of those whose lives and employment prospects are tied up with the industry. I hope that the Minister will take them seriously.
I shall not speak for too long because other hon. Members, by their anxiety to intervene, have demonstrated a great interest in the debate, but I wish to make about four short points.
There is no doubt that the overvalued pound is having a considerable effect on the industry. I received a letter from Mr. Longworth, to whom I referred earlier, in which he said : "The industry is entering another difficult period, as we forecast last year. Already there has been some short-time working and mill closures. The spinning industry and the knitting industry have been particularly affected. Five cotton spinning mills closed recently, also acrylic spinning mills in Yorkshire have closed. A large clothing unit in Oldham announced its closure".
That is a firm on the other side of the industry. I shall not name it, but it has recently closed its unit in Oldham, where is had employed 400 workers. It had been established in Oldham for a considerable time. Perhaps one of the reasons for that closure was that it was a major supplier to Marks and Spencer. I understand that Marks and Spencer, an excellent firm for which I have the highest regard, for many years had a policy of buying as much of its clothing stock as possible from British sources. I think that it used to say in its advertising that nearly 99 per cent. of its products were British and that the only country from which it imported goods was Israel.
The feeling in the industry, as expressed to the media, is that Marks and Spencer is increasingly moving to overseas sources. That may be due to the pressure of competition, and I can understand that because other large multiple stores, such as British Home Stores and Littlewoods, carry a tremendous amount of imported clothes, such as suits from Czechoslovakia and Romania, and shirts from Hong Kong. I enjoyed what the Minister said about Hong Kong and absolve that country from criticism because it operates a very fair system and does not close its markets to us.
That is a very important development. If a large store such as Marks and Spencer is moving towards buying from overseas sources, the Minister--or somebody in his Department--ought to consider what can be done to minimise it.
Mr. Longworth then said :
"The MFA, with all its imperfections, has helped to prevent even more closures and it is essential therefore that it should continue and be renewed in 1991."
I accept that.
When we debated the multi-fibre arrangement it was thought unlikely that it would be renewed in 1991, but I urge the Minister to look at what has happened in the meantime. I agree with the hon. Member for Macclesfield that it is essential. The MFA does not restrict trade. It helps to bring about its orderly development. It provides for the expansion of imports from certain developing countries. The trade unions support it, provided that the competition is fair, and provided also that a social clause is obtained that is similar to the one that the United States is considering.
Column 579The overvalued pound is hitting our exports. It is difficult to sell abroad. Moreover, foreign countries have much easier access to this country because their goods are cheaper. I refer especially to those countries whose currency is tied to the American dollar, including a considerable number of poorer countries. High interest rates cannot be divorced from the difficulties that face the industry.
The Chancellor of the Exchequer may think that high interest rates provide an effective method of cutting inflation, but I have yet to see proof of it. The right hon. Member for Old Bexley and Sidcup (Mr. Heath) was right when he said that to use high interest rates alone to check inflation was rather like using only one out of a bag of golf clubs. Surely there is a more sophisticated method of controlling inflation than continually increasing interest rates, which have an enormous effect on many other aspects of life, including manufacturing industry, which is still the lifeblood of this country.
The United States' protectionist policy is a danger to our textile industry. If the United States closes its doors to us that is bad enough, but it also means that other countries, including China, which are looking for markets in the United States, will divert their products to this country, among others. In our previous debate it was said that China had great plans for expanding its production. It will perhaps amount to as much as the production of all the EEC countries.
Another rumour, or story, is circulating in the north-west. Only the other day I learnt that a United Kingdom machinery manufacturer is selling machinery to the Chinese on condition that the Chinese importer gets a 30 per cent. grant from the United Kingdom Government. On top of that, it will be receiving a soft loan from the United Kingdom for, I understand, 20 or even 30 years at well below commercial interest rates. The Government should look into that. We cannot expect to sell textile manufacturing machinery and then be surprised if foreign countries manufacture textiles with that machinery and try to export them and sell them here. We should examine all the implications of such a policy.
I am sure that the Minister has read Mr. Peter Booth's press release. He is the national secretary of the Transport and General Workers Union textile group. In that press release of 10 November he referred to the anxieties of both employees and employers, and said at the end :
"We would also support the call for a summit meeting of all concerned in the industry to determine a better way forward. It is also important that all Members of Parliament with textile and clothing interests in their constituencies raise their collective voices in support of the industry."
We can reasonably claim that we do that.
Mr. Booth continued :
"They should act now by joining our call for selective import controls and exert pressure on the Government to bring sterling down to a fair trading level. At the current level of redundancies we are witnessing a return to the situation of the early eighties where over 300,000 textile and clothing workers lost their jobs and a large part of the industry closed its gates for the last time."
We do not want a return to what happened then. I know that the Minister does not want that. I look to him to take action to ensure that we do not.
Several Hon. Members rose--