Textile Council (Dissolution)

Part of the debate – in the House of Commons at 12:00 am on 14th December 1971.

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Photo of Mr Frank Judd Mr Frank Judd , Portsmouth West 12:00 am, 14th December 1971

The Minster has rightly paid tribute to the work of the Textile Council and its staff and members. If we are paying honest tribute to a body of this kind, it is perhaps appropriate in this debate to look in a little detail at one of the recent experiences of the council before its demise. I refer to its report in 1969 entitled "Cotton and Allied Textiles: A Report on Present Performance and Future Prospects". That report proposed that a 15 per cent. tariff should be imposed on all cotton imports and that the present quota system should be continued until the mid-1970s while the industry adjusted itself to reliance on tariff protection alone.

As hon. Members will be aware, the real object of these proposals was to achieve a reorganised and revitalised textile industry able to provide secure and well-paid jobs for all those working in it. It was recognised that the industry required re-equipping and a multi-shift system to become more productive and that production and marketing needed rationalising to achieve greater profitability. It was argued that if this was to be achieved certain inhibiting factors had to be overcome, especially the lack of confidence in the future of the United Kingdom industry exacerbated by the rapid increase in imports and their disruptive effects on prices.

In answer to that last major report, the Government of the day announced that the present quota system would end on 1st January, 1972, and that a 6.5 per cent. tariff would be imposed on imports of yarn, a 15 per cent. tariff on imports of cotton fabrics and a 17 per cent. tariff on garments from Commonwealth countries, which was 85 per cent. of the full tariff. Tariffs against other producers except E.F.T.A. countries were to remain. Better depreciation allowances against taxation were agreed for new machinery.

To summarise the position of the Government of the day, in effect they were giving the industry 30 months in which to reorganise itself to compete with tariff protection. However, it is wise to look at an even more recent roduct of the council. In the final edition of its Textile Council Review, in June and July of this year, it indicated that the industry is, despite all this, now in grave danger because of its failure to respond to the incentives offered to it to re-equip and to restructure to meet projected productivity requirements.

In the report to which I have referred, an improvement in net trade was expected during 1970 by a modest increase in exports and a reduction in imports. Quotas were nevertheless only 70 per cent. filled in 1970. However, in the current year quotas are being filled completely and the improvement in the trade balance has proved in the end to be a flash in the pan. This has had an inevitable effect on employment. In the report, a reduction in the labour force of 8·5 per cent. per annum until 1975 was forecast. Until May, 1971, the reduction in fact had taken place only at the rate of 6 per cent. though more recently considerable redundancies have been reported.

At a time when unemployment in some textile towns is between 5 and 7 per cent., anticipated redundancies for which no special provision has been made are being made now to appear to be the consequence of rising imports when this is not the root cause.

I suggest that the new British Textile Confederation will be confronted with a real challenge as a result of certain ambivalences and contradictions in existing Government policy which have not been overcome in the past.

I hope that it is in order to refer briefly, in the context of these remarks, to a matter that we debated last week. I refer to the very enlightened policy of the Government in their Import Duties (Developing Countries) Order. The objective of that order, as we were clearly told by the Government, was to facilitate the development of the economies of the developing countries by encouraging them to develop the industries and exports which they were particularly well suited to develop.

We know when we look at the unemployment crisis in the Third World that it is no good doling out charity if we are denying the developing countries the opportunity to develop their production where they can do so. Nowhere is this more true than in the production of cotton textiles which involves fairly simple manufacturing techniques and skills. But although the Government introduced their other order last week, and although the Cotton Textile Council is going out of existence, new machinery is being introduced in a situation in which the Government are determined to protect the British industry with both tariffs and quotas although by doing this they may only delay its death.

If we accept this challegene of the consistency logically demanded by the Government's measures last week, we and the new machinery should be concerned to establish a coherent and consistent policy which will create alternative, viable industry in the areas which are dependent to such a large extent on the cotton industry in this country.

I was very encouraged to hear the hon. Member for Oldham, East (Mr. Lamond) say that trade union leaders in Lancashire believed that the answer lay in a diversity of industry in that area and not in delaying tactics which are bound to be self-defeating in the long run. Will the Under-Secretary therefore give an assurance that together with the new machinery there will be a real attempt not simply to replace old machinery with new but to ensure that a thorough policy is worked out with a long-term prospect rather than just buying a little more time on the basis of short-term improvisation?