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House of Commons

Friday 12 January 1990

The House met at half-past Nine o'clock


[Mr. Speaker-- in the Chair ]


Student Loans

9.34 am

Mr. Max Madden (Bradford, West) : I beg to present a petition signed by Mr. David Bond, deputy president of Bradford college student union, and by 1,000 students and other citizens, which calls for rejection of the government's proposed student loans scheme. The petitioners submit that any proposal to introduce the payment by students of tuition fees, either partially or in full, with student loans will further limit access to higher education and increase student poverty. The petitioners include students who, because of accommodation shortages, are forced to take lectures in corridors and to sit on the floor. They hoped that, following the boycott by the big banks of the student loans scheme, it would be scrapped. They still hope that the Government will decide to abandon it, and call upon the House to reject any proposal to introduce the payment by students of tuition fees and of student loans.

To lie upon the Table.

Broadcasting (Deaf People)

9.36 am

Mr. Barry Field (Isle of Wight) : I beg to present my first petition since being elected a Member of this House, on behalf of Mr. Hampton, of Freshwater, who is the Isle of Wight's project director for the deaf. The petition is signed by 186 of my constituents. There is no fate worse than death for a politician other than that of knowing that he cannot be heard. The petition

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asks the Government to include in the Broadcasting Bill proper provision for the deaf in television broadcasts. It must be possible with today's technology to make available a special channel carrying teletext subtitles, to help increase the viewing pleasure of the deaf. The petition reads :

"Wherefore your petitioners pray that your House will ensure that legislation be passed placing an obligation on television channel operators to make their programmes more accessible to deaf people by using teletext subtitles, sign language or other means, and to reach complete coverage by a fixed date."

To lie upon the Table.

NHS Reform

9.37 am

Mr. James Wallace (Orkney and Shetland) : I beg to present a petition signed by many of my constituents, relating to the Government's proposals for the future of the National Health Service. A number of the signatures were collected at meetings at which considerable concern was expressed about those proposals, not least in respect of the future of the Health Service--which should be free to all, irrespective of income.

The petition urges the Secretary of State for Health to drop the proposals contained in the White Paper and in the National Health Service and Community Care Bill, which it is feared will do nothing to improve the provision of health and care services at the level that we have come to enjoy and value.

To lie upon the Table.

Multi-fibre Arrangement

Mr. Speaker : In view of the large number of hon. Members who have indicated that they wish to participate in the debate, I propose placing a 10-minute limit on speeches made between 11.30 am and 1 pm. I hope that all hon. Members who are called between those times will bear that limit in mind in the interest of other hon. Members. Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Dorrell.]

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Points of Order

Mr. Bob Cryer (Bradford, South) : On a point of order, Mr. Speaker. I should like to inquire whether you have received an application from a Government Department to make a statement about the serious case of rabies which has been discovered in northern France at Rouen, close to the coast. I raise this matter because it is proposed that barriers are removed in 1992. The nation wants to know that we will be protected from the spread of this serious disease. Britain is one of only two countries in the Common Market that are rabies free.

Mr. Speaker : I have not been told that there will be a statement, and I probably will not be informed about it before 10 o'clock.

Mr. Barry Field (Isle of Wight) : On a point of order, Mr. Speaker. I am aware that a problem with the acoustics in the House has been drawn to your attention. I just presented a petition on behalf of the deaf and I had great difficulty in following last night's debate. Before Christmas constituents drew my attention to the fact that the background babble that was all too evident in the radio broadcasts of our proceedings seemed to have completely disappeared from the television broadcasts. Since the introduction of television to the House something must have happened to the general acoustics in the Chamber.

Mr. Speaker : I do not know about that. If the hon. Member feels that that has happened, he should draw that matter to the attention of the Select Committee on Televising of Proceedings of the House. The sound from the microphones at the back of the seats was raised with me last night. There appears to be some diminution, and I am having the matter investigated.

Mr. James Lamond (Oldham, Central and Royton) : Further to the point of order, Mr. Speaker. It was extremely difficult to hear yesterday. I know that there is a babble of background noise, but I noticed that when I listened to a Minister on the radio this morning, her voice came over much more clearly than it would have done in the House. That is wrong. We cannot wait until the completion of the television experiment before the microphones are looked at, because we cannot do our work properly.

Mr. Speaker : This matter was raised yesterday with the Leader of the House and it is certainly being investigated.

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The Future of the Multi-Fibre Arrangement

9.41 am

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood) : It is a sign of the importance that the House attaches to the textile industry and to the multi-fibre arrangement that we have had seven debates in 21 months on this industry. It has produced a pile of paper, and I have here the Hansard record of those seven debates in xerox form. Many good points have been made in those debates by Members of Parliament either representing their constituency interests or taking the wider view of the importance of a good textile industry to this country and the European Community. Two of the debates have been on the multi-fibre arrangment. One, on 9 December 1988, was a full five-hour debate--as this one will be today--and, more recently on 9 November 1989, my hon. Friend the Member for Wyre Forest (Mr. Coombs) made some valuable points on an Adjournment motion. I set out at some length the Government's position on the negotiations in the European Community on the MFA. Unfortunately, no Opposition Members were present. I am delighted today to see a good attendance on both sides of the House for this important debate.

In the debate on 9 December 1988, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) laid particular stress on the need to have a competitive exchange rate. He returned to that point repeatedly and made it the focus of his conclusion. I hope that he will therefore welcome today the fact that we are meeting against the background of a level of sterling that is 10 per cent. lower or thereabouts than we were talking about in that debate.

I hope that the hon. Gentleman will agree with me and with the Government's position, that the most vital need now is control of costs, especially wage costs, that the priority given to counter-inflation policy is most important and that the current exchange rate gives the industry every conceivable opportunity to compete successfully and well in the markets of the world, which is what I hope both sides of the House wish it to do.

Mr. Cryer : Surely the Minister will not criticise the textile industry for wage rates. It has a long record of co-operation in changes in working practices and in low wage rates compared with retail and manufacturing industries.

Mr. Redwood : I did not say a word of criticism of the industry-- indeed, I am going to praise it. I said that I hoped that both sides of the House would agree that the most important thing for British industry--the textile and other industries--is good control of all costs, especially wage costs because they happen to be an important part of costs. I am not saying that I want low wages ; I am saying that I want high wages and high productivity, and that wage increases must be earned by increases in productivity.

Mrs. Alice Mahon (Halifax) : People in Halifax, for example, who face the second highest poll tax outside London, will have all these extra costs to meet. Is the hon.

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Gentleman saying that, if inflation continues to rise, it is up to these reasonably low-paid workers to make a sacrifice?

Mr. Redwood : I am saying that I am seeking political agreement about the priority of bringing down inflation, which is the best guarantee we all have that our living standards might rise rather than fall. I hope that the hon. Lady agrees that wage increases should be earned by improvements in productivity. One of the welcome features of the industry's performance to which I wanted to refer was the fact that, in the past 10 years, the industry has increased its productivity by an estimated 45 per cent. on industry figures. That welcome improvement increases the industry's chances of competing successfully in the world economy. The world economy does not stand still--productivity is rising among our competitors as well. We want higher wages paid for by higher productivity.

Mr. Archy Kirkwood (Roxburgh and Berwickshire) ; Leaving aside the important issue of wage rates, the Minister said, before that little series of exchanges, that he thought that the exchange rate level was a matter of some satisfaction. Irrespective of any given level at any given time, one of the most difficult features that the industry faces is the fluctuation in short-term exchange rates. Do the Government have plans--for example, in contemplating the exchange rate mechanism--to stabilise exchange rate levels?

Mr. Redwood : I said that I hoped that the present exchange rate gave some comfort and pleasure to the hon. Member for Newcastle upon Tyne, North, who urged a lower exchange rate during the previous debate. Of course the Government wish to see general economic stability. They are giving priority to their counter-inflation policy, which depends upon firm monetary control and all the disciplines which are well known. My right hon. Friends the Prime Minister and the Chancellor have clearly set out the conditions for prospective entry into the exchange rate mechanism. I have nothing to add to or subtract from their statements.

The industry employs some 480,000 people--about 2 per cent. of total employment--so it is important.

Mr. Greville Janner (Leicester, West) : How many did it employ a year ago?

Mr. Redwood : If the hon. and learned Gentleman cares to contain himself a little, I shall come to the issue of job changes. The industry is also an important exporter, exporting some £3.6 billion of goods in 1988, and there have been further improvements in 1989, according to the figures that we have seen to date. I welcome that, and I welcome the recent statement of the director of the National Wool Textile Export Corporation, who said :

"We can start 1990 with something to celebrate"--

I hope that we will hear about that in this debate-- "and will maintain our efforts to ensure export earnings continue to rise". I welcome that statement. I am sure that there are many in the industry who see the broadening export opportunities in a variety of markets and who will pursue them in their interests and those of the economy at large.

The industry is doing many important things. I welcome its approaches to improving and expanding training, the way in which it is welcoming and embracing new technology and its development of new products.

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These are all essential to successful manufacturing industry, as any of us who have worked in it know only too well. I welcome the progress being made. These things will be the cornerstone of continuing and improved industrial success in textiles, concentration on good management, design, innovation, new techniques and new technologies.

We have been living with the multi-fibre arrangements since 1974. I know that some hon. Members will think that only the MFA provides any protection against job losses ; yet since 1974, employment in the industry has halved. There is no evidence, therefore, from the current figures that the MFA of itself has successfully protected employment. The industry went through a major reduction in employment in the 1970s because of difficulties largely created by Labour's economic policies.

Mr. Keith Vaz (Leicester, East) : The figures that have been supplied by the Department of Employment show that, over the past 10 years under this Government, one job has been lost every hour in the textile industry. Is the Minister saying that, if the multi-fibre arrangement were abolished, the decline in jobs would be arrested? Or will he accept the views of industry that the reasons why we have had one job loss every hour under this Government are the high level of interest rates and the Government's failure to support the industry exactly as other Governments in other countries have supported their textile industries?

Mr. Redwood : This Government have given a great deal of support to the industry in the past five years. It has been support such as the Opposition most value, which is regional support and aid. The Government have given over £300 million. However, the factors that I have already described this morning are far more important for the preservation and growth of employment opportunities. The important factors are competitiveness, product design, innovation and exporting.

Mr. David Tredinnick (Bosworth) : Does my hon. Friend accept that the multi-fibre arrangement has made it easier for companies to go through a transition to recapitalise? Although they have suffered losses, those losses would have been far greater had the arrangement not been in place. That is the case for continuing with this measure, which is giving the industry a real chance to break into the future.

Mr. Redwood : I should be interested to see evidence to prove that case. There has been a major reduction in jobs since 1974, and the House should remember that under the patterns of trade in textiles, two thirds of all imports of textiles come not from MFA countries, but from developed countries and especially from other member states of the European Community. This Government have represented the industry strongly against unfair trading practices, against dumping and against other practices that the industry has brought to our notice. I can reassure my hon. Friend that the Government will continue to do so within the EC and general agreement on tariffs and trade rules, as he would expect me to say, and as he would expect the Government to do.

The MFA has resulted in bilateral restraint agreements with 23 low-cost countries, where quotas have been imposed. I remind the House that it is the European Community which is the participant in the multi-fibre arrangement, and it is the European Community and the Commission which handle the GATT negotiations, so the

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whole of our debate today must be about the actions of negotiators who are working on behalf of all 12 member countries in the MFA and GATT.

Mr. Nicholas Winterton (Macclesfield) : Well, get stuck in.

Mr. Redwood : My hon. Friend asks me to get stuck in. Stuck in to what? The point of this debate is for the House to have a chance to express its views and I am sure that my hon. Friend will not be backward in coming forward to express his views and those of his constituents to the Commission, which will be handling for this country these important negotiations in GATT. I welcome the opportunity that this debate affords for all my hon. Friends and Opposition Members to make their points strongly and forcefully on behalf of the industry, and I hope that some hon. Members will also remember the consumer, so that this debate can be seen in the Commission before it handles the negotiations.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : We are here to make the points very forcefully. There is much concern in the industry about the Minister's rather languid approach which we have seen here today, and anxiety that sufficiently forceful representations will not be made within the European Community and then within the GATT negotiations. Will the Minister tell us specifically what action he has taken in response to the South Koreans giving £2.5 billion--$4 billion--to their textile industry? If we are to compete on an even playing field, such matters must be taken up vigorously, not in the languid way in which the Minister is presenting the case today.

Mr. Redwood : There is nothing languid about my dislike of restrictive practices in foreign countries if they are messing up our domestic industries. I can assure the hon. Gentleman that I shall fight like a tiger for British industry if I think that it is being damaged by malpractices elsewhere. We are investigating that point at present in relation to the Korean subsidy, because it would be damaging if state aids of the wrong kind were being given in Korea to compete against industries in the European Community, which has a self-denying ordinance.

As the hon. Gentleman will know, we are not allowed under EC rules to undertake any state subsidy or programme of subsidy for individual industrial sectors. That is right, and it is also right that we need to ensure that similar rules apply throughout the world trading system. An important part of the GATT round is to make just such points. This country will urge EC negotiators to ensure that market opening is done on a multilateral basis and that it takes into account not just quotas or tariffs, but state aid and other methods of market higgling which are being practised in some countries.

Mr. Frank Haynes (Ashfield) : The Minister knows as well as I do that a number of countries have applied to join the European Community and that some of those countries are dumping here like hell. Why do the Government not get round the ports and do something about it? The Minister has responsibility for British industry, and that is why we are clobbering him today. He must do something about it.

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Mr. Redwood : I did not quite hear those remarks because they were not at the hon. Gentleman's characteristic volume, but I noticed that he was referring to Turkey. He is right to believe that the Commission negotiations are considering whether the Turks are making sufficient progress in opening their own market in return for the offerings being made by the European Commission. I can assure the House that Ministers are vitally concerned that there should be fair, reciprocal measures of market opening in those countries to which privileges are being extended by the European Community. We are interested in broadening trade across the world, and there must be give and take in the negotiations.

The history of the GATT negotiations in the Uruguay round and the run-up to that will be familiar to many hon. Members who were in the House for the previous debate. I want to remind hon. Members of what was said at the ministerial meeting at Punta del Este, which has become the famous text in all this, and which was read out to the House from the Dispatch Box by my predecessor, the then Minister of Trade in 1988. He said that it had been agreed to formulate "modalities" and would permit eventual integration of the textile sector

"into GATT on the basis of strengthened GATT rules and disciplines."--[ Official Report, 9 December 1988 ; Vol. 143, c. 588.]

My hon. Friend the Member for Plymouth, Sutton (Mr. Clark) had a little difficulty in getting his tongue round that phrase and I think that the House had a little difficulty in interpreting it on first listening or on first reading. The idea is that the GATT round is concerned with trying to bring the textile industry, along with other industries, within the GATT rules and procedures. That is a balanced process. It means not only market opening measures, but strengthened disciplines against those who do not play by the rules.

The Government believe that we need a stronger GATT. The successive GATT rounds have kept open much of the world's trading system and have enabled the world to avoid plunging into protection such as destroyed jobs, incomes, hope and prosperity in the 1920s and 1930s. It is important that GATT rounds succeed and continue to open the world trading system rather than shutting it down or damaging it. In the GATT round, the European Commission is seeking first a reduction in barriers to European Community exports. That is an important task and I am sure that the textile industry above all would agree with me in saying that there are still many barriers to exports around the world that our textile producers would like to see reduced. This Government are encouraging the European Community to do just that in the negotiations.

Secondly, the European Community seeks effective defences against the damaging imports to which several hon. Members have already referred and which, I suspect, will be mentioned at great length in the subsequent debate. The Government welcome any evidence that can be brought to their attention of malpractices in the world trading system, which can then be routed on to the appropriate authorities. Thirdly, the general aim of the European Community, along with the other GATT participants, is to expand GATT negotiations to cover new areas. This GATT round is especially ambitious, because it is trying to bring into

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play both agriculture and services, and there are many potential gains for British trade if we can achieve the right balance of results in these difficult GATT negotiations.

The lesser developed countries, which obviously need to agree to the whole GATT package--just as the European Community needs to agree to it--are majoring on the importance to them of the multi-fibre arrangement. We, in our turn, are saying that other safeguards and provisions need to be written into the resulting negotiations to make a success of the GATT round as a whole.

The European Community has set out a number of objectives on textiles. It is seeking a more efficient safeguard mechanism, better disciplines on unfair trade, the sensible protection of intellectual property, equitable access to raw materials and much more market opening by all countries, including the lesser developed countries. If those countries wish us to remove our protection, it is only fair that we should expect them to reciprocate and allow access to their markets.

We must also address the question of transition and the wider issues arising from the round as a whole, which the European Commission will have to judge nearer to the termination of the negotiations to establish whether the package makes sense to the European Community's trade patterns as a whole.

The specific points on which I would welcome comment, and which are relevant to the negotiations are, first, the way in which any phasing out of the multi-fibre arrangement would be conducted. Would it be on the basis of the existing restrictions? The European position is yes ; the American position is no.

Secondly, what arrangements would be necessary for any possible phase-out of the multi-fibre arrangement? We must take account of the relative sensitivity of individual sectors and the impact on employment, as well as the effect on customers and on the general economic good.

Thirdly, how long should any transitional period be? That is a subject on which we still have a chance to influence the European Community's position. Fourthly, what kind of link should there be to stronger GATT disciplines as a whole, and how should those disciplines be developed? Fifthly, how far should the European Community go in demanding market opening by others?

The Government commissioned the Silberston report to give an independent view of the impact of changes in the textile sector. I am sure that hon. Members will have read that report and it would therefore be wrong to go into detail concerning its conclusions, but I can tell the House that we are now looking at consultation replies. Some of the conclusions of the report are important. It suggests, for example, that prices of textile products would fall by about 5 per cent. and that, although the fall in yarn prices might be a little lower, that would benefit some textile producers, as yarn buyers. The total gain to consumers is estimated in 1988 prices as about £980 million, and the figure would be more than £1 billion now. That would have a particularly beneficial impact on low-income consumers who spend proportionately more of their income on textile products.

Dr. Keith Hampson (Leeds, North-West) : Does not my hon. Friend agree that the central thrust of that report is that the MFA, with all its faults, is better than no MFA with no international agreement on safeguards? I have to tell my hon. Friend that in many of our constituencies it would not be politically acceptable if it were thought that the Government were ready to sacrifice a major regional

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industry and the sort of people employed in it for the hypothetical calculation and theoretical conjecture of the Silberston speculation on price wars.

Mr. Redwood : I hoped that I had already assured my hon. Friend that the European Community negotiating objectives include safeguards and protections against unfair trading practices of exactly the kind to which he refers. That must be an important part of the negotiations. Silberston concludes that there would be a net gain to the economy from a phased withdrawal of the MFA.

Mrs. Elizabeth Peacock (Batley and Spen) : We have all read the report carefully. The House and the country must be aware that, although there would be a net gain to consumers, it is no help to a household to have a reduction in its outgoings if the head of the household has lost his job.

Mr. Redwood : I agree that, in the long term, job losses in the textile industry have been a terrible thing, and I would not wish matters to get worse, but I have already explained that job opportunities depend on competitiveness in the widest sense. It is important to job prospects in the textile industry that we should get decent access to a wide variety of overseas markets for the high-quality products that we now produce. That can be achieved through market opening measures in GATT. There is therefore an offsetting gain if the right kind of negotiation in GATT results in the right kind of deal. Other gains would also accrue, given the increased purchasing power in the economy from the £1 billion reduction that Silberston says would be available.

Mr. Max Madden (Bradford, West) : Professor Silberston suggests that there should be a trade-off for these consumer benefits and gives a figure of 33,000 textile jobs. Does the Minister accept that that is a realistic estimate, because many of us believe that Professor Silberston's estimates of the consumer benefits are much exaggerated while his estimates of job losses are extremely optimistic?

Mr. Redwood : Professor Silberston gives a range of figures from 16,000 to 33,000 and makes no calculation of offsetting job gains from the considerations that I have mentioned. We are talking about forecasts in a very uncertain world, and in practice the outcome would be influenced by a wide variety of other factors connected with the industry's competitiveness, growth rates in the world and so on, which would make the resolution of that question extremely difficult.

A variety of consumer groups have written in or made public statements to the effect that they favour the abolition of the MFA. The Consumers Association seeks "a decent burial" for it. The Consumers in the European Community Group thinks that we are paying too high a price for protection, and the Retail Consortium is in favour of liberalised procurement to give more choice to customers. Manufacturers naturally have opposite concerns, and I am conscious of the need to press on, because I know that my hon. Friends will want to put the manufacturers' case to me in representing their constituencies.

I must refer to the European Community textiles and clothing agreement with Russia, which has been tagged to the debate. It is not part of the MFA but is a response by the European Community to the dramatic changes that

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are taking place in Russia and eastern Europe. It is part of the policy of the British Government and the European Economic Community to encourage moves to democracy and liberalisation in eastern Europe and Russia by making some changes in the restrictive trade arrangements that currently apply.

The European Community has negotiated a measure allowing market opening on both sides, although still limited by restraints. That provides a number of export opportunities, which I hope the British textile industry will not only welcome but will wish to exploit. Similar considerations may soon apply in the case of Poland and Hungary, and I am open to hearing views on that question during the debate.

The House may remember that, at the end of the last long debate on the MFA in 1988, the then Minister for Trade, who is now the Minister of State for Defence Procurement, said clearly that he would not be the Minister to announce the ending of the MFA without the necessary protection and safeguards. That is certainly true, because my hon. Friend is no longer Minister for Trade, the post is now held by my right hon. and noble Friend Lord Trefgarne. The Government's position remains the same. Transitional arrangements must be clear and negotiated satisfactorily, and to discuss that question is the purpose of our debate.

10.8 am

Mr. Doug Henderson (Newcastle upon Tyne, North) : I echo the Minister's words. The number of hon. Members present this morning gives us a good idea of the importance of the multi-fibre arrangement to hon. Members on both sides of the House who represent constituencies throughout the country. The Opposition welcome the debate because it gives us the opportunity to put the strong views of our constituents on many aspects of the issue. It gives us the opportunity to monitor and, it is to be hoped, to influence the Government's involvement in the EEC and GATT talks on the multi-fibre arrangement and related items.

The debate also gives hon. Members the opportunity to examine the Government's record in defending and promoting the interests of a great industry that has been central to the industrial development of many regions in this country for more than two centuries. I become angry when I hear from some sections of the business community, and often from those sections that seek to provide finance rather than make things, that textiles and clothing is an obsolete and dying industry. Those of us here today who represent textile areas will be aware that the textile industry is neither obsolete nor dying and that, given the right climate and the right support, it could be very competitive.

Mr. David Young (Bolton, South-East) : Does my hon. Friend agree that the success of the textile industry depends also on the Government wanting to represent the industry's interests in the councils in Europe and on their playing their part in reducing interest rates to help the industry to modernise and become more efficient when it encounters foreign competitors who often receive more support from their Governments?

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Mr. Henderson : I am grateful to my hon. Friend for raising those points and I wholeheartedly agree with the general direction of his comments.

The workers and managers in the textile and clothing industry are aware that in many areas they have adopted the most modern and efficient equipment available. Those methods were adopted with the understanding of the work force and through consultations and negotiations. That is a great credit to the work force. It has happened at a time when many thousands of jobs have been displaced. The industry is the fifth largest industrial sector in the country. It has an annual output, together with footwear, of more than £5.6 billion per annum. Annual investment in 1988 was £479 million. The industry still employs, as the Minister said, more than 480,000 people, often in regions with high unemployment--areas such as Scotland, the north-west, parts of Yorkshire and, increasingly, the east midlands where there are many problems.

Job losses in the industry have now reached an unacceptable level. In textiles and clothing, 22,000 jobs were lost in the 12 months to September 1989. When I visited the Scottish Borders yesterday, I was told that even at the high value end of the market, there are many difficulties, jobs have been lost and there is much short-time working.

There has been a steady stream of job losses in Yorkshire and Lancashire in companies such as Courtaulds, Coats Viyella, Smith and Nephew and Hunsworth Dyeing. In the east midlands, the knitwear industry is heavily dependent on the outcome of the negotiations on the multi-fibre arrangement. That area has perhaps suffered more from job losses in the past 12 months than any other area in the United Kingdom. More than 5,000 jobs were lost between June 1988 and June 1989. Since then, the hosiery workers union in that area has noted further job losses in famous and important companies such as T. W. Kemptons.

Mr. Vaz : My hon. Friend will know from his recent successful visit to Leicester, where he met leaders of the hosiery and knitwear workers, of the grave concern in Leicestershire about the decline in employment in the industry. Does he agree that one of the most effective ways in which the Government can help the industry is to give Leicester assisted area status? Does he join me in rejecting the arguments put forward by the Minister for Industry in a Leicestershire debate a few weeks ago, when he said that he was not prepared to alter the maps of assisted area status and that he did not believe that the level of unemployment in Leicestershire justified that status?

Mr. Henderson : The Opposition Front-Bench team is reviewing what happens to an area that has a heavy concentration of a particular industry, but is not currently within an assisted area. That issue will be reviewed as part of an overall review of regional policy.

Mr. Janner : Is my hon. Friend aware that this week the Government announced that they will introduce a research programme centred in Leicester for £7.3 million, stretching over three to five years? Does he agree that while that is welcome, it is extremely late, and by the time the research produces results there will scarcely be an industry left to take advantage of them? How can that fit in with the plans that my hon. Friend is discussing with his Front-Bench colleagues?

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Mr. Henderson : When I visited Leicester some months ago, that point was made to me by workers and managers in the industry, and that matter is under review by the Opposition Front Bench. We welcome the announcement made by the Government earlier in the week, but it comes very late and is too little.

The trade deficit in textiles, to which reference has been made, is a key issue. That deficit has become increasingly alarming. It amounted to nearly £4 billion in the 11 months to November 1989 and it constitutes one fifth of our deficit in manufactured goods. Our ability to control our deficit in textiles is a major part of the overall problem of controlling the deficit in manufactured products. The deficit should not only be a concern of those who work in the textile industry or who live in areas that are heavily dependent on textiles. We should all be concerned about the deficit and it should certainly be the concern of the Minister and the Secretary of State for Trade and Industry.

Our overall economic situation has greatly damaged the industry. The Apparel, Knitting and Textile Alliance which represents a broad range of interests in the industry, has stated :

"High interest rates are leading to a cutback in capital investment. The industries have, at the same time, been adversely affected by currency instability, not least the after-effects of the excessively high level of sterling up to mid-1989."

When I visited Bradford earlier this year, the Yorkshire Wool and Textile Association complained about the same dangers. Courtaulds has also made representations about the damage that is being done to the industry in Lancashire and we have already heard about the representations that have been made by east midlands industrialists. The overvalued pound from 1987 to the autumn of 1989, as I stressed in last year's debate on this subject, made the task of exporters particularly difficult. Many argued then, and many argue even more strongly now, that the problem is not just related to an overvaluation of the pound, and I note the Minister's earlier comments on that. If we consider the problem over 10 years, it is not simply one of overvaluation. The problem involves the rapidly fluctuating exchange rate, which makes forward pricing of exports very difficult and makes the cost of purchasing materials from abroad difficult to assess. Continuing high interest rates cause industrialists to postpone investment decisions because of the cost of borrowing and the impact on high street demand.

The Minister said that the main issue affecting the industry was costs. One of the most important cost factors for any industrialist in the textile and clothing industry is interest rates. Today, German textile manufacturers can borrow for 8 per cent. The Americans can borrow for 8 per cent., the French for 10 per cent., and the Italians for 12 per cent., but a textile manufacturer in the United Kingdom will not be able to borrow for less than 15 per cent. and that makes a huge difference to his cost profile.

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