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Column 606opening speech. The plain fact is that China is a dominant supplier, and it should be treated as such. If ever we needed encouragement to do so, it comes in a letter that my hon. Friend has kindly made available from the China International Convention Service Ltd. It said :
"The Chinese Ministry of Textile Industry (MTI) has recently worked out a development program for the 1988-90 period with emphasis on upgrading the products, development of new textile technology, strengthening technical renovation of existing factories, and improving key technology' the textile industry is given investment priority by the Chinese Government."
If ever there was a warning, it is contained in that letter from the highest authorities in Peking.
The high import tariffs imposed by Turkey and the problems that they cause to manufacturers have been highlighted. We should place those charges on the record, because I believe that they are almost unbelievable and illustrate the problem faced by exporters in Hinckley. If knitted outwear manufacturers in my constituency want to export to Turkey, they must first pay a basic tariff of 40 per cent., then there is the municipal tax of 15 per cent. of the basic tariff, then they face customs charges of 2 per cent., followed by a stamp duty of 10 per cent., topped up by an import premium of 8 per cent. That is followed by 5 per cent. wharf dues and a $20 per kilogram housing fund. All that comes to 122 per cent. I am supposed to go to my constituency and say, "Have a go at Turkey," when the Turks can sell to Britain without paying a cent. of duty. It is just not on. Another reason for maintaining a tough MFA is the change that will take place in German trading arrangements in 1992. Currently, East Germany, because of its obvious historic relationship with West Germany, has special trading rights to sell into West Germany. The deal is that East German goods shipped to West Germany cannot be exported to the EEC. After 1992, however, all goods from Germany will be exported throughout the EEC. That will create a new problem. First, we shall have a flood of cheap, politically priced goods from East Germany coming to all the EEC countries, including Britain. Secondly, other COMECON or east bloc countries will push goods which, will be underpriced, through the German bridgehead, and straight into Europe. Surely that is the best reason for keeping an effective MFA. I have looked at the gloomy side of the industry, but I should like to end on a more optimistic note. Because of the protection of the MFA, many manufacturers in my constituency are now gearing up with new equipment, new knitting machines and computer technology for design in fully-fashioned knitwear, despite the cost. One manufacturer that I visited the other day told me that he is now attacking the Italian high fashion market. Hon. Members will know just how difficult a market that is to penetrate.
The MFA is providing protection and manufacturers are moving with the times, but we must not be fooled. We cannot do away with the MFA in 1991 ; we must extend it. If we do so, normality in GATT will return. The MFA must be extended, and it must be effective.
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With reference to what my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) said, I was not asking for the Minister's resignation. The Minister is not responding.
Mr. Haynes : The Minister has not done a bad job over the years. I have been here and I have praised him on numerous occasions because of his efforts, but at the moment we have a problem and I want to talk to the Minister about it.
The Minister may be unaware that, yesterday I asked the Leader of the House whether he knew that we were to have a debate on the MFA today. I suggested to the right hon. Gentleman that this debate would probably be a talking shop for the Government. I was hoping for some action. The Department of Trade and Industry must take some decisions with a view to helping the industry, which is in serious difficulties. As I said earlier, in Mansfield and Ashfield we have lost 1,200 jobs in the hosiery and knitwear industry in a matter of weeks. That creates a massive problem for jobs. There are many reasons why there are difficulties. I will stick to basics, and I will not be technical and pour out statistics such as those that we have heard today.
The Government must face several problems. They must consider the present balance of trade. Imports are pouring into this country, espcially from China, Turkey Taiwan and Hong Kong, at the expense of jobs in our industry. The Minister must badger the Chancellor of the Exchequer because credit is out of control. When we regain control of credit, there will be a massive full stop and we will feel it in industry, not only in the hosiery and knitwear industry, but in other national industries as well. Jobs will be hit.
Earlier it was said that we were not looking for protection for the industry. However, the Government have a responsibility to British industry. What have the manufacturers and trade unionists done over many years? They have worked together to modernise the industry and they have helped to reduce manpower. However, because of that modernisation, and in addition to the other problems such as the balance of trade and dumping in this country, matters have become worse. We are now squealing at the Government to pull up their socks and do something.
Earlier I said that the Minister had done a fair job. However, we have a real problem, and he must understand exactly what is happening. With no disrespect to anyone else, it seems to me that the Minister is entering the negotiations without the proper advice. He should have people in his team from the industry and the trade union movement because they know what is happening in the industry. He would then get the right advice. It is all very well to say that the MFA runs out in 1991, and I have heard hon. Members appeal for an extension. However, I am worried about what will happen in 1992. If our industry is on the floor in 1992, it will not pick itself up again because of the competition across the water and around the world.
Column 608The Minister must recognise that he needs the proper advice for his negotiations. We are not looking for protection ; we are looking for fairness for the industries that the Government are supposed to be helping. The word "help" has been writ large by hon. Members on both sides of the Chamber today. That word stands out a mile because the industry is crying out for it and only one organisation can provide that help--the Government. The Government must not sit back as the Minister is sitting on the Treasury Front Bench. The Minister must give us some guarantees. He must provide the help that is needed if we are to save a marvellous industry that employs so many people. If nothing is done, the number of jobs in the industry will diminish. My constituency has suffered from pit closures, as has that of my hon. Friend the Member for Mansfield (Mr. Meale). Mining is no longer the leading industry in our constituencies. The hosiery and knitwear industry is way out in front, but slowly and surely it is declining just as the mining industry has declined.
The Government were responsible for the decline of coal mining. If they are not careful, they will be blamed for the serious decline in hosiery, knitwear and textiles generally. I appeal to the Minister to do the right thing. I understand that he can do that only if he has the right information and advice, which must come from those who work or participate in the industry.
That is really all that I have to say. I shall not go on and on like some hon. Members have done today. I do not intend to pour out statistics on this, that or the other. I appeal to the Government to help the industry and, at the same time, to help the British economy.
Mr. Graham Riddick (Colne Valley) : On the last occasion on which I took up the remarks of the hon. Member for Ashfield (Mr. Haynes), he tried to cross the Floor to beat me up. Our views today are probably not as polarised as they were during the passage through the House of what was then the Employment Bill.
I am pleased to have the opportunity for the first time since becoming a Member of this place last year to participate in a debate on the multi- fibre arrangement. My Liberal predecessor, Richard Wainwright, participated in the previous debate. He described the Colne Valley constituency as a traditional textile and Socialist seat. I am pleased to tell the House that the constituency is still definitely a traditional textile area. It is most definitely not a Socialist seat.
I sought to intervene during the speech of the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who spoke from the Opposition Front Bench, to refer to the privatisation of the water authorities. Unfortunately, he would not allow me to do so. I wanted to say that the chairman of Yorkshire Water has written to the Yorkshire and Humberside Association of Chambers of Trade to say that, if he were to hazard a guess, he does not think that prices will rise any more under privatised industry than if the industry remains in public hands. That is important to bear in mind when the statement comes from the chairman of that authority.
Most of the producers in my constituency tend to be involved in high- quality woollens and worsteds. That means that the MFA tends to have less impact on them than on those in other areas, including west Yorkshire. As many others have said, however, the importance of the
Column 609textile and clothing industries in the United Kingdom must not be underestimated. They produce sales of more than £13 billion per annum and employ about 500,000 people. It is clear that we are talking about a major and important industry. Therefore, our approach to the MFA must be considered, not ideological. Ideologically, I should like to see the arrangement abolished. That is because I believe in free and open trade between nations. By placing restrictions in the way of free trade, consumers usually suffer by having to pay higher prices. Secondly, the pace of necessary economic change can be impeded. Notwithstanding that belief, I and everyone must consider the world as it really is. There are several factors that would make it premature and unwise to press for the abolition of the arrangement once the current one ends. I believe in free trade, but that trade must be fair between countries. If we break down all barriers to imports into the United Kingdom, no purpose is served if we find that we are unable to export to other countries because of the trade barriers that they have erected. By the same token, we should not offer our markets openly and freely to countries that heavily subsidise their textile industries. That has been a common theme throughout the debate. I was reassured by the comments of my hon. Friend the Minister on that score.
Another important factor is that the MFA plays a useful role in keeping at bay the protectionists in the United States. I have no doubt that if the MFA did not exist, the American Congress would have erected considerable barriers to imports, which would have undoubtedly hit hard our country and less developed producer countries. A number of complicating factors surround the whole issue.
I was amazed by a pronouncement made two or three years ago by the then Liberal party. Like everybody else, I am somewhat confused as to what that party is now called. Where is the Liberal party today? Incidentally, the House may be amused to know that, last weekend, there was the ludicrous and hilarious spectacle of the leader of the SLD group on my local council of Kirklees attending the founding conference of the old Liberal party. Subsequently he was quoted as saying that he will remain leader of the council's SLD group. That proves what many of us have long suspected--that no Liberal feels at home in any one party but prefers to straddle as many parties, and therefore as many options, as possible.
I was amazed at the Liberal party's statement of two or three years ago that the current MFA must be the last. That is what was said by the party's official spokesman at that time.
Mr. Tredinnick : It is amazing if the SLD is against the multi-fibre arrangement. I am sure that my constituents will take a dim view of that. Will my hon. Friend elaborate, because I am not sure that I understand him correctly?
Mr. Riddick : It is always difficult comprehending Liberal party policy, but my understanding is that that party made crystal clear its belief that the current MFA should be the last, and that my predecessor, as the Member
Column 610of Parliament for Colne Valley, Mr. Richard Wainwright, argued strongly that that was the case. That argument was also made by the hon. Member for Yeovil (Mr. Ashdown).
Mr. James Lamond : I was present on that occasion. I advise the hon. Member for Bosworth (Mr. Tredinnick) to read the record of that debate, which bears out what was said by his hon. Friend the Member for Colne Valley (Mr. Riddick). He will also find that the hon. Member for Rochdale (Sir C. Smith), who, unfortunately, has not graced the Chamber with his presence, was bitterly opposed to the then Liberal party's policy--and not for the first time.
Mr. Riddick : It will not have been the first time that the hon. Member for Rochdale (Sir C. Smith) was the only Liberal Member of Parliament talking any sense. I wonder whether the Liberal party's approach to the MFA was a contributory factor to its being wiped out in Yorkshire in the last general election.
The main reason why I was so amazed was that it is unusual to find the Liberal party coming out with a clear and decisive policy on any subject.
Mr. Riddick : It is important that my constituents should be aware of the position taken by the Liberal party and by SLD Members on this important issue, for it is significant to the people of west Yorkshire. I am surprised at the intervention of the hon. Member for Ashfield, who usually likes matters to be understood as clearly as possible.
The matter to which I refer is not typical Liberal fudge but a policy which everyone can understand. I applaud the fact that the Liberals made it clear where they stood on the issue, even if it was the wrong stance. I believe that it was wrong for some of the reasons that I have already mentioned and because, if one gives notice to developing producer nations that the MFA will end in 1991, those countries are bound to prevaricate on reducing their own barriers to our textile exports.
Before leaving Liberal policy, I should mention the speech of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who unfortunately is not present. As he said, he made a constituency speech. At least he would appear to agree with the hon. Member for Rochdale in that he wants to keep the MFA, but he did not change the official Liberal policy or approach to the matter.
It is only right that such a debate should address an issue which the industry inevitably raises with politicians, and which has been mentioned frequently by Opposition Members--high interest rates and the value of sterling.
Column 611The industry, which is currently investing heavily and which is an important exporter, is hit if the pound appreciates and interest rates are high. But I defend the Government's current economic position. Inflation is the number one enemy of the textile industry as well as the rest of industry. Interest rates are the most effective tool for dealing with the current problem and for allocating the available resources to those people and industries who most need them and therefore are prepared to pay the high interest rates. The current high level of sterling reflects not only high interest rates but the high esteem with which the British economy is viewed by investors and market makers abroad.
With the enormous economic improvements that have taken place under this Government, the pound is destined to stay high and any future improvement in the British economy will again be reflected in the price of sterling. Indeed, because the Chancellor tried to feather-bed industry generally, he reduced interest rates too far earlier in the year and that has now led to a higher interest rate than would otherwise have been needed. Therefore, the textile industry will have to continue with its effort to improve productivity and competitiveness.
All is not doom and gloom. The CBI magazine, which I received this morning, forecasts that, despite all the problems facing British industry, Britain's economy will grow by 3.4 per cent. next year and manufacturing output will rise by 4.8 per cent. By no stretch of the imagination can those be described as disappointing production figures.
The textile industry has made enormous strides in recent years. Exports of wool textiles are at a record level this year and woollen exporters to Japan continue to make great strides. Exports to Taiwan and South Korea will have more than doubled during the past two years to some £25 million, which just goes to show what our industry can do when trade barriers are reduced and our industry is given the chance to compete on equal terms.
I am very impressed with the efforts which the industry is making in training--which I do not think have been mentioned in the debate--and getting into schools to tell youngsters about the opportunities it offers. For example, there is one manager for every eight operatives ; therefore, prospects are good. There has been increasing liaison with careers officers and a recent link with technical colleges in Huddersfield and Bradford so that existing operatives may receive extra training at those colleges. All those moves augur well for the industry's future, and indeed its training efforts were rewarded only recently when it received one of the Government's national training awards. I congratulate the industry on its efforts in training.
In my constituency, there are a number of very successful textile companies. One of the most dramatic success stories involved Drakes Fibres and F. Drake and Co. of Golcar massively expanding their production and export sales of polypropylene filament yarn. That was despite the unfair and illegal subsidy that the French Government made to one of their direct competitors and that, to its shame, the European Commission did nothing about. I wonder, incidentally whether the Minister has received a translation of the Commission's judgment in that case. He had not received one when the matter was last discussed in the House.
The EEC's role in these matters is becoming increasingly important. What steps is the EEC taking to stop unfair subsidies within EEC countries? I believe that
Column 612Italy still provides massive subsidies for its textile industry. What are the Minister's views on the EEC's ability to negotiate single Community quotas in the future? They could make Britain particularly vulnerable, as the concentration of United Kingdom buying power lies with five or six major retailers, headed by Marks and Spencer.
I shall ask my hon. Friend about Turkey, although, unlike Opposition Members, I do not blame him for all the problems that Turkish imports have created. Why has the European Commission so lamentably failed to do anything about the grossly unfair and highly subsidised imports from Turkey? Some people in the industry, as well as the hon. Member for Bradford, South (Mr. Cryer), who is not in his place, believe that the EEC has taken no positive action because Turkey is regarded as a particularly sensitive matter, both politically and strategically, and that we cannot therefore afford to upset the Turks. I do not believe that, because the EEC is allowing Mexico massively to increase its exports of acrylic yarns to this country. One wonders whether the EEC has the will to tackle these problems, particularly as Turkey and Mexico are outside the MFA. What steps has my right hon. Friend taken to tackle these problems? How can British textile exporters compete when they are faced by tariffs that in Brazil are as high as 105 per cent. and in Turkey 122 per cent.? I know that the Minister is totally frustrated and believes that he is in a straitjacket, since we are at the mercy of the EEC and the European Commission.
The textile and clothing industries have made it clear that they would be happy if we returned to the normal GATT rules and if they were allowed to compete freely in world markets. However, I agree with them that that cannot happen and that the MFA will have to remain in place until all artificial trade barriers are abolished and unfair Government subsidies removed. Until that happens, the MFA must remain.
Mr. Pat Wall (Bradford, North) : I thank those who sit on the two Front Benches and the Whips for organising this debate in such a way that all hon. Members who wish to speak on the subject will be allowed to do so.
Historically, the textile industry has been a barometer for the rest of British industry. What happens in textiles today will happen tomorrow in other industries. That happened during the 1975 recession. The present redundancies, lay-offs and short-time working are the result of the worsening position of exports compared with imports, the sharp increase in interest rates and the consequent gross over-valuation of the pound compared with the American dollar and other leading European currencies. The importance of those trends in the textile industry has, perhaps, been over-emphasised and I apologise for repeating them briefly, but the industry is the fifth most important in Britain. It accounts for a quarter of Britain's total trade deficit, but nevertheless is the fifth largest exporter. The textile industry has a special social significance. Some sections of it are located in the south, but in the main it is located in areas of high unemployment and social deprivation, where the problem of high interest rates is felt especially. Firms in prosperous areas that have more stable, established and growing markets may be able to deal with high interest rates for a while, but in areas such
Column 613as the West Riding of Yorkshire, which has experienced tremendous social problems since 1975, the battle of clawing money back, reinvesting in new methods and technologies and achieving higher productivity has not been easily won. Recent figures show that unemployment is falling faster in more prosperous areas than in the more socially deprived areas of high unemployment, but if there is a large-scale loss of textile workers' jobs there will be a complete reversal of the few gains that we have made over the past two or three years.
Since the 1975 recession, the industry has made considerable efforts to improve. Since 1980, productivity in wool and yarns has risen by over 40 per cent., by over 50 per cent. in carpets and over 70 per cent. in bleaching dyeing and raising. Since 1981, profits have risen from about 1 to 4 per cent. to 10 per cent. more recently.
I must emphasise that workers in the textile, clothing and footwear industries have made the greatest sacrifices. Employment has fallen by 46 per cent., but workers have increased productivity by about the same figure. The average earnings of most textile workers remain at £20 a week less than the average throughout manufacturing industry. The Government have abandoned manufacturing industry in favour of finance, and the Minister is faced with a difficult problem. It is generally accepted in the House that he has a genuine interest in manufacturing industry and is aware of its importance, but the party that he represents, especially the Cabinet, has abandoned manufacturing industry in favour of financial interests, which is crazy. Some 90 per cent. of trade on the world stock exchanges concerns not manufacturing, trade or goods and services but speculation. The value of our manufacturing exports worldwide is six times greater than that of service industries. It must be an obvious truth to anyone but the Government that manufacturing is the sole source of wealth in a modern society. The taking of raw materials, part-finished goods and machines, and the application of human labour, skill, nerves and imagination to make useful products or machines to create further products is the basis of society's wealth. We would not have dentists, a Health Service, supermarkets or nice restaurants if that wealth were not created in the first place by manufacturing industries. That neglect of manufacturing, which is highlighted in the textile industry, is the Government's responsibility. The textile industry's demands are modest. The industry is asking for an organised and orderly method of conducting trade and the multi-fibre arrangement provides that. It is not a perfect arrangement. It does not work entirely as it should, but it allows the important elements of the textile trade to operate. For example, textiles connected with house wares affect the world economy. Since the war, there has been a sharpening of the division of labour, but textile and clothing industries remain in the most advanced and technically developed countries and those countries that are attempting to emerge as advanced economies.
The industry has asked for the maintenance of the agreement which recognises the historic role of textiles in the more advanced countries and the needs of exploited workers in Asia, Latin America and other parts of the world. I support all those hon. Members who have spoken
Column 614for the continuation of the agreement and for the improvement of MFA5. They have asked that China be recognised for what it is--a dominant supplier to the textile industry.
Reference has also been made to dumping, particularly the dumping of Turkish acrylic products. I see that every day because I live opposite a mill which, for two years, has been prosperous and where the workers have had regular overtime. I believe that they worked far too much overtime, but they had to do so. For the first time in over two years, they are on short time as a direct result of the present situation.
The question of timescale is at issue. The Turkish acrylic yarn incident highlighted the Government's slowness to react. We debated that matter only a few weeks ago in an Adjournment debate initiated by my hon. Friend the Member for Halifax (Mrs. Mahon). We debated the wool textile industry in an Adjournment debate that I initiated in May. Well before that, the industry, the unions and hon. Members raised the issue in the House. However, when the damage has been done and the redundancies have been made, we are told that a meeting will take place and those involved might come to an agreement, but the net result of that meeting will be the fixing of a high level figure. When mills close and machines are removed, they are not easily replaced, just as, when shipyards are closed, they are not easily replaced. Thirty per cent. of British manufacturing industry was destroyed, but, when we moved into an easier market and a boom period, that could not be rebuilt overnight to meet the nation's needs and has thus led to the continuation of an increased volume of imports. We hope that the textile industry will be safeguarded in view of 1992 and its implications, not only in respect of imports from East Germany, but because Britain may become the dumping ground for the whole of Europe when a single tariff agreement is introduced. I support my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) in his plea for a social clause. I shall never be a little Englander and I have never been a strong supporter of import controls. However, I have travelled to Hong Kong, Taiwan, South Korea, Malaysia, Singapore, Thailand and Sri Lanka on many occasions and I have told the story in the House about the working conditions that I saw in the textile trade in South Korea. I went there in connection with the trade in housewares. I saw those lovely, hard-working people in South Korea. There were girls living in dormitories working 60 hours a week with two days off after 28 days. Those people are trying to form trade unions and obtain civil liberties and the right to vote. We should support the right of people to organise freely and form trade unions independent of the state so that they can obtain improved working conditions. That would be better understood by Korean, Taiwanese or Hong Kong workers than import barriers and import controls. They would understand something that offered them some improvement in their working conditions.
I strongly support my hon. Friend the Member for Bradford, West (Mr. Madden) in his demand for an accelerated investment programme in textiles and for improved training. Textile workers undervalue their skills. Their skills should be recognised and there should be a proper training programme. Young people should be attracted to the industry and given a sense of security.
Column 615As a Socialist, I look forward to the day when the textile, clothing and footwear industry is owned and controlled democratically by the working people who produce the wealth in it. I look forward to the day when they will be able to share in that wealth. I look forward to a world in which trade is not left to the market. The existence of the MFA and GATT and their effect on the Group of Seven bankers shows that the world market does not solve all the problems that face mankind. I look forward to a world in which trade is organised in a friendly and democratic way. That would be in the interest of all the peoples of the world and would help bring about an improvement in their standard of living.
I do not expect support from the Government for that. However, the Government defend the market economy and say that they stand in defence of British industry. As my hon. Friend the Member for Bradford, West said, industry pays plenty of money to ensure that the Conservative party is returned to power. It is for the Government to show that they can protect the interests of nearly half a million textile workers and their families in Britain and ensure that the industry looks forward to a secure future.
Mr. Henderson : With the leave of the House, I should like to respond to some of the points that have been made. It is interesting that Members on both sides of the House made it clear that the Minister has a reputation for being refreshingly frank during Question Time. I am not sure that the Minister welcomes such tributes from the Floor of the House, so I shall not labour the point. I know that the House is looking for the Minister to be equally frank in his response to the debate today.
I realise that the Minister might not be able to move the Chancellor of the Exchequer on interest rates or the rate of exchange, but I hope that he will put to his right hon. Friend the case for industry, and particularly the case for the textile and clothing industry. Industrialists and workers in the textile and clothing community believe that, apart from the details of trade, the main issue now affecting industry is the Government's macro- economic policy. I hope that the Minister will take the views expressed in this debate to the Chancellor.
The Minister's Department is directly responsible for trade regulation. I hope that he will provide clarity on trade issues. We have heard from the hon. Member for Macclesfield (Mr. Winterton) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) of the fears about the potential impact on their constituencies of a dramatic increase of imports from China.
We live in a changing world. Economies and growth rates change. Formerly, agricultural or semi-industrial countries quickly become industrial. In reviewing our trade agreements, whether the GATT, the MFA or the bilateral agreements flowing from them, it is necessary continually to examine developments in different countries. I hope that the Minister will make a statement on the terms of renegotiation of the bilateral deal with China and tell us when we may hear some details.
I have been impressed by the near unanimity in the House on the need for a renewal of the multi-fibre arrangement. The hon. Member for Macclesfield and my hon. Friend for Oldham, Central and Royton (Mr. Lamond) reminded us of that need. If I understood
Column 616correctly, even the hon. Member for Holland with Boston (Sir R. Body) recognised that, to have a future as a trading country, Britain needs to insist on fair trading agreements throughout the world. Hon. Members have recognised the need for regulations and fair trade. They know the alternative and that it will cause damage and devastation to industry and large parts of Britain. They know that unless we can conclude sensible and equitable arrangements on trade we will face the horrific alternative of beggar-thy-neighbour protectionism. Those hon. Members who have spoken, who by and large have a specific interest in the textile industry, must pass on to those hon. Members who have no axe to grind in respect of that industry that, if protectionism is allowed to apply to textiles, it will not be long before protectionism and beggar-thy- neighbour policies apply to other industries. In the long term, that is bad news for hon. Members who represent largely exporting industries. I hope that they will join us in putting pressure on the Minister and the Government to insist that there is an early commitment on MFA renewal. I hope that the Minister can give hope to industrialists who seek to invest and who believe that they have export markets to tap, but need to be given a guarantee of stability and security. Concern has been expressed about trade with Turkey. We have heard of the breach of the treaty of Ankara, which regulated trade between the EC and Turkey. My hon. Friends the Members for Halifax (Mrs. Mahon) and for Bradford, North (Mr. Wall) and the hon. Member for Batley and Spen (Mrs. Peacock) referred to matters affecting our unacceptable trade agreement with Turkey. If that country has ambitions to be part of the EEC, it must begin to behave to the minimum standards required within the EEC. It is unacceptable that the Turkish Government should provide investment grants greater than the level of investment. That must stop if equity is to be restored. It is unacceptable that there should be a range of subsidies that cumulatively amount to 122 per cent., as was mentioned by the hon. Member for Bosworth (Mr. Tredinnick).
Trade union rights are important. If there is to be fair trade, those who prepare and manufacture goods must have basic minimum conditions. Indeed, that was what President Reagan said when he reached an accommodation with the American unions. That must be a key issue for countries which hope to participate in our fair trading practices. I hope that during any future negotiations on the MFA the Government will insist on the insertion of such a vital social clause. I hope that the Minister will tell us what action he believes will bring about the regulation of our trade with Turkey. We have had a fairly full debate on the textile industry and its future priorities. I am pleased that that has happened while there are talks in Montreal about future trading relationships. It is also right to have such a debate at the mid-term of MFA4, when we can evaluate its impact on the real economy.
I hope that the Minister can give some hope, not only to hon. Members who have raised many points during the debate, but to the workers in the industry, the industrialists, the textile communities and the consumers of such vital products.
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Mr. Alan Clark : With the leave of the House, Mr. Deputy Speaker. I have been present throughout the debate other than for brief absences totalling three minutes 18 seconds. I have heard every speech, all of which have been useful and constructive. I shall do my best to reply in the time available to the points raised.
My prognosis of the conduct of the hon. Member for Leicester, East (Mr. Vaz) was correct. Following a rather disparaging, rambling intervention early in my opening speech, he departed for a social engagement. That, however, does nothing but contrast favourably with the conduct of his hon. and learned Friend the Member for Leicester, West (Mr. Janner), whose sense of self-importance is so great that he does not even sign his letters on this subject, but leaves it to his research assistant. I am sure that he whole House will join me in our wildly diffused sense of chagrin at the absence of Mr. Peter Bruinvels, who used to represent a Leicester constituency. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) made a number of cogent points. I welcome his statement that international trade agreements are essential to the prosperity of the industry. Indeed, it is within that framework that we are having this debate. All hon. Members accepted that, with the possible exception of the hon. Member for Leicester, East in his rather short and dotty intervention. The question of ramie was raised. It is
important--although it is not included in MFA4--and there is provision in the current arrangement for action to be taken against disruptive imports of ramie textile and clothing products. We have been monitoring the position closely and imports of such products into the United Kingdom at present are at a fairly modest level and not at a level at which distress has been expressed to us.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) made two important points. In an intervention, he raised the question of the inner limit for category 5 imports from China and he asked whether it is in the new agreement. It is, but for reasons that he will appreciate, I cannot give details at this minute. He and my hon. Friend the Member for Macclesfield (Mr. Winterton), who has, unfortunately, had to leave the House--
Mr. Clark : My hon. Friend raised the important question of cashmere supplies. I am aware of the concerns of the users of cashmere at the deterioration in the quality of cashmere supplies. We have established a system for taking up specific complaints with the Chinese authorities through our embassy, and the Community has taken up the issue in the recent negotiations. The Chinese Government have recognised the concern of cashmere buyers in the Community over problems with the implementation of commercial contracts including quality aspects.
The Chinese Government have undertaken :
"to endeavour in consultation with the organisations responsible for export of these products to find remedies for these problems, to ensure that the quality of the product is improved in order to meet the standards required by European industry and to enter into consultations in the event of difficulties in the provision and delivery of the products."
They also indicated a willingness to assist Community industrialists wishing to buy cashmere and other similar raw materials such as silk or angora in the future.
My hon. Friend the Member for Bosworth (Mr. Tredinnick) raised the question of Chinese underwear. That will be covered by the quota under the new bilateral agreement with China.
My hon. Friend the Member for Macclesfield also touched on the question of imports and how they are sometimes needed by British manufacturers. At intervals, we have had the curious paradox that an hon. Member complained about an anti-dumping provision when it affected an industry in his constituency which needed an import and yet that same hon. Member complained that other imports were not subject to anti-dumping provisions on the ground that they offered competition to manufacturers in his constituency. I do not deny that both those contentions are valid. They illustrate the great complexity of international trade and the need for vigilance and co-operation with industry and others affected and for close and continuing monitoring and scrutiny. My Department relies as much on hon. Members for that as it does on its contacts in industry. The hon. Member for Oldham, Central and Royton (Mr. Lamond) raised, among other points, the question of serious injury, as did his hon. Friend the Member for Bradford, South (Mr. Cryer). The question of criteria is difficult. I have said this on many occasions and I repeat it now. There must be some systematic evidence, above all of a fall in domestic production, which can be shown to be caused by rising imports from the "low-cost supplying country" in question. Factors to be taken into account include systematic evidence of falling employment in the domestic industry, falling orders and rising stocks. Those elements are undesirable in themselves and can occur separately and independently, but they must be attributable to rising imports from the "low-cost supplying country." That is the key phrase that encompasses the link, without which it will not be possible to establish injury.
That brings me conveniently to the question of polyester fibre anti- dumping. In the Commission we have discussed ways in which the problems of the users of polyester fibre can be overcome. Those discussions will continue in Brussels next week. The question of what is available from EEC sources is not entirely straightforward. As I have said, it is a classic case which shows the continuing conflict of interest that can arise at any time in relation to complaints about dumping. Hon. Members have been urging me to find ways to make it easier to take action against dumping by Turkey in the case where the Commission has taken action and imposed provisional duties. However, I am also urged to ensure that those duties are not confirmed because of the adverse effect on our own industry. I quite understand the reasons in each case, but hon. Members should realise that I often have to make difficult judgments in weighing the relative advantage and interest of their constituents in different sectors.
In that context, I should like to mention the constructive and sympathetic speech of my hon. Friend the Member for Holland with Boston (Sir R. Body). It was the only speech from the consumer side. He properly drew the House's attention to the fact that poor people with low
Column 619earnings are those most affected by small differences in the cost of clothing and apparel. That point was well understood. I shall stick to the point that I made when I opened the debate that although poor consumers may be the most affected, they would be even poorer if they were put out of work by the incursion of the goods that are affecting their standard of living and quality of life being provided to them at a lower cost.
Although this idea has never been systematically put to the test, I sometimes think that there are more people in this country than the Consumers Association credits who would not mind paying an extra 5p or 7p on the price of a tee-shirt or whatever if they knew that in so doing they were helping our domestic industry and their compatriots, their friends' and neighbours' prospects for employment and, indeed, the whole of British industry and the British economy. That point has never been properly surveyed. I fully appreciate the points made by my hon. Friend the Member for Holland with Boston that such consumer considerations impact most strongly on the poorer sections in our community.
Many hon. Members raised the difficult question of the social clause. I understand them to be arguing for sanctions against supplying countries that fail to meet adequate social and working conditions. It is true that the first article of the MFA states that a principal aim in the implementation of the arrangement shall be to further the economic and social development of developing countries. The Community pressed for that to be emphasised in the new protocol and that was done. To go further and introduce new restrictions where certain social conditions were not met would not, in the view of many, have been desirable. Social and working conditions are more likely to be improved by allowing a country to sell its goods than by preventing this. There are proposals for a GATT working party to examine the question of workers' rights in developing countries. The Government would be prepared to support an agreement to establish a working party. I must tell the House that, to date, all such proposals have been received with great hostility by the developing countries.
It is common sense to consider that--it is a view shared across the Chamber --China is becoming a dominant supplier, if it has not already attained that standing. That must be recognised at some point in the future, but I used those words because present Chinese exports to the United Kingdom do not account for more than 1.6 per cent. of imports. Therefore, in relation to the level of imports into the United Kingdom, China cannot presently be described as a dominant supplier. I have been urged by a number of hon. Members to comment on the future of the MFA. I have been impressed by the argument from my hon. Friends the Members for Colne Valley (Mr. Riddick) and for Keighley (Mr. Waller) and others that the importance of the MFA is not solely something to be assessed in a purely protectionist context
Column 620and that it has an importance that the less- developed countries appreciate. When I was in Pakistan I found it extremely easy to explain to my interrogators just exactly what the consequences to their economy would be were all restrictions on textiles to be removed, because they, along with many others on the border with China, would suffer acutely from a free-for-all.
The MFA has a genuine and salutary regulatory effect just as much on the less-developed countries as on the more sophisticated and adaptable economies of the Community and the OECD.
I cannot give a personal commitment that the MFA will continue after 1991. The House will appreciate that that is not solely a decision for me, and competence in this matter lies with the Community and the Commissioner who negotiates on our behalf. We have a commitment in the Uruguay round to examine the modalities. I said at the start of the debate that that is a pretty imprecise interpreter's word that can be construed in a number of different ways. The modality is for returning textiles to strengthened GATT rules. It must include looking at the future of the MFA, but that must be done within the context of considering that any such return must be progressive and must be accompanied by satisfactory liberalisation by all countries. I hasten to say that progressive is the opposite of instantaneous. That liberalisation should affect the less-developed countries as well as the newly industrialised economies. The rules must be strengthened and made more effective, especially those concerning safeguards on fair trade, intellectual property and market access.
Time and again hon. Members have drawn my attention to the need for fairness and the abuses that are put in the path of our exporters by other countries. I am grateful that my hon. Friend the Member for Bosworth (Mr. Tredinnick) cited, yet again, the outrageous fiscal obstacles that the Turks put in the way of our exporters. If it is of any consolation or comfort to the House, I can state that if the multi-fibre arrangement is to be discarded and if such an action is not accompanied by a satisfactory liberalisation and by a genuine strengthening of GATT rules and by proper discipline, I will not be the Minister who comes to the Dispatch Box and announces it. It being half past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
That, at the sitting on Wednesday 14th December, if proceedings on the Motion in the name of the Prime Minister relating to British Shipbuilders have not been disposed of before Seven o'clock, Mr. Speaker shall at that hour put the Question on any Amendment which may have been moved, and shall then put forthwith the Question on any other Amendments selected by him which may then be moved, and on the Main Question or the Main Question, as amended.-- [Mr. Garel-Jones.]