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10.11 am

Mr. Phil Woolas (Oldham, East and Saddleworth): I start by offering the hon. Member for Tiverton and Honiton (Mrs. Browning) the traditional congratulations on obtaining this morning's debate; I do so genuinely. Many hon. Members on both sides of the House have been campaigning for the textile industry, some for 20 or 30 years. I welcome the hon. Lady's initiative and agree with much of what she has said.

The company in her constituency has clearly taken initiatives and found a niche market, but nevertheless finds the industry fiercely competitive. I would correct the hon. Lady on one point, and I hope that she will recognise my good intentions in doing so. She spoke about the scale of the industry and its importance to our economy, and mentioned a figure of £7 billion in output. That figure represents the total exports of the clothing and textile industry. Its total output is some £27 billion.

The textile industry employs between 350,000 and 370,000 people. It is bigger than the car industry, the chemical industry and the agriculture industry. Although I am not calling for direct subsidy for the textile industry, on many occasions I strain at the leash to do so because of factors with which hon. Members are familiar. It is a hugely important industry, as the Government have recognised in their action plan--an initiative that has been welcomed by the House.

I chair the all-party parliamentary clothing and textiles group and I know that there are disagreements regarding the cause of the problems. Interest rates and the high value of sterling have been mentioned. Ministers, industrialists and the unions recognise that there is a six-month delay in the effect on orders, and subsequently jobs, as a result of problems in the industry, which were prevalent in the latter part of 1998. However, those problems cannot be attributed entirely to interest rates and the high value of sterling. The trend has continued for 100 years. The clothing and textile industry--particularly the production of finished garments--is labour intensive and that makes it susceptible to overseas competition on labour costs.

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We are a genuinely all-party group. If any hon. Member present is interested in joining, let me say that there is no subscription and we are very friendly bunch. We have a regional make-up, and the south-west is extremely important. We agree that the UK textiles industry cannot compete on labour costs. The minimum wage has not yet been introduced, so it has had no effect, despite what some people in the industry say. However, even at the low level of £3.60 per hour, it is irrelevant in terms of overseas competition as, in Morocco, for example, that sum is equivalent to the weekly wage.

Mrs. Browning: I am grateful to the hon. Gentleman for allowing me to put it on the record that although the industry is concerned about the minimum wage, John Heathcoat does not pay below the minimum wage, so it is not an issue for that company.

Mr. Woolas: I recognise that our best companies pay above the minimum wage. That argument supports the action plan as it shows that companies such as Heathcoat are successful not on the basis of suppressing labour costs but as a result of high investment and high skill input.

We cannot attribute all the problems in the industry to interest rates and the high value of sterling, although both factors are now moving in the right direction. However, there are long-term trends and we need to address them. The action plan for the clothing, textile and footwear industry and the carpet manufacturers and unions has been greatly encouraged by the Government, and attempts to provide an analysis and find a way forward.

Let me say a few words about Marks and Spencer, as a great deal of nonsense has been written and spoken about that company. There is no doubt that the predominant position of Marks and Spencer causes problems for suppliers in the clothing industry. It is an extremely powerful operator within the market. In some cases that can be good, as Marks and Spencer has saved many jobs by continuing to source from the United Kingdom. However, other factories have closed, some would say at the whim of a Marks and Spencer buyer making a telephone call and moving an order overseas.

Marks and Spencer has recognised that its change not only in senior management but in emphasis from buyersto marketing is extremely important. The actionplan encourages partnership between retailers and manufacturing sectors. To be fair, Marks and Spencer has made that point to its furnishing and clothing suppliers. British manufacturers and retailers should work together to use their unique advantage over overseas suppliers--the ability to respond quickly.

As chair of the all-party group, I am conscious of always wearing clothing that has been made in Britain. As I have said before, Mr. Deputy Speaker, everything you can see and everything that you cannot see that I am wearing is made in Britain. [Hon. Members: "Prove it."] I shall not respond to that invitation, as I am sure it would not be allowed.

My tie is of modern stain-resistant fabric made and developed in the United Kingdom. It is a good example of a niche market, of high research input and a quick response by a United Kingdom supplier. The relationship

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between manufacturers, suppliers and retailers, which is part of what the action plan addresses, is an extremely important development.

Mr. David Tredinnick (Bosworth): Is it not a fact that Marks and Spencer often requires small suppliers to supply only Marks and Spencer, and that that brings problems?

Mr. Woolas: I agree. The buying policy of Marks and Spencer might be understandable from the company's narrow point of view, but it is very damaging to the industry because it inverts the market. Suppliers find that they have to put all their eggs in one basket and that is dangerous for any business. I therefore recognise the importance of the hon. Gentleman's point.

The action plan offers us a consensus on the way forward to ensure that Government support for the industry is effective and fast, and the regional strategies that have been developed are part and parcel of that process. However, in our debate today, there have been no calls for direct subsidy; indeed, I note that the hon. Member for Tiverton and Honiton fell short of calling for direct subsidy, although she dropped some strong hints about protectionism, which surprised me given her party's views on that matter. I genuinely believe that the action plan is in the best interests of the industry, but we must recognise that competition on labour costs will never be a way forward and I am pleased about the hon. Lady's remarks about salary levels in the company that she used as the basis for the debate.

I should like to emphasise the points that have been made about the dollar banana affair and the trade war over cashmere. The UK clothing and textiles industry is, in many ways, an amalgamation of small specialist industries. We find a rich history and heritage and a very high skill base in all parts of the United Kingdom and in all parts of the industry--whether lace in Nottingham or cashmere on the borders and so on. I know that my hon. Friend the Minister has visited the industries in many of those places and is familiar with them. It is not his fault that he is from Yorkshire, although I must choose my words carefully because Saddleworth is in real Yorkshire--it is still in Yorkshire, as far as we in Saddleworth are concerned--but Oldham is not. The two areas--Oldham's cotton industry and the wool industry in Saddleworth--offer a good example of my point.

The cashmere industry is one of our finest export industries. It is impossible to overstate its importance to areas in the east midlands, Yorkshire and the Scottish borders where the industry has been built up over hundreds of years. The danger for the cashmere knitted industry lies in the fact that it is seasonal. During the next two or three weeks, trade fairs will take place--I think that the first is next week--at which clothing goods will be sold for sale in United States stores during the coming year. If we lose that business at those trade fairs over the next month, the danger is not merely that we shall lose the business this year, but that it will inevitably go to China, because there is nowhere else in the world that does such work. If the business goes to China this year because of cost, and despite the efforts of US retailers who have protested against their Government's action, it is difficult to envisage how we can win it back.

The UK-made brand of cashmere knitted goods is very powerful and US consumers want to buy it. The trade war is a matter for the European Union, the United States and

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the WTO, but I realise that my right hon. Friends the Foreign Secretary and the Secretary of State for Trade and Industry are aware of the situation. I urge Ministers to do all they can, urgently, because if we cannot change the decision, there will be factory closures during the next few weeks.

Although the future of the industry is not guaranteed even if the action plan is implemented, its implementation remains a necessary criterion for that future. Looming on the horizon are two important matters. The first is the renegotiation of the multi-fibre arrangement, which is of huge importance. I do not expect my hon. Friend the Minister to give us details of the UK's approach, but I want to flag up the matter to underline its importance. The second is the European regional development fund money. At present, we have Retex money and objective 2 funding, and there is a correlation between objective 2 status and many aspects of the UK clothing and textile industry. We need to ensure that, in deliberations about European regional development fund money, the clothing and textile industry is given due consideration. I welcome this morning's debate. Although I disagree with some of the points made by the hon. Member for Tiverton and Honiton, I hope that all hon. Members in the Chamber are united on the importance of promoting the industry.

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