Textile Industry

Part of the debate – in the House of Commons at 5:55 pm on 20th March 1975.

Alert me about debates like this

Photo of Mr Keith Hampson Mr Keith Hampson , Ripon 5:55 pm, 20th March 1975

I appreciate the vigour and courage shown in many of the speeches of Government sup- porters,especially those which dealt the cotton and synthetics side of the industry. However, I should like to concentrate on the woollen and worsted industry, some of which is situated in my area.

The Minister's speech was lop-sided. It showed little appreciation of the great hardships experienced by the industry in Yorkshire, which is in the grip of the worst crisis for 50 years. The people of Yorkshire expect confirmation that the woollen and worsted industries will be preserved and that they will have a viable life.

In 1974 the United Kingdom imported 279,000 suits from Romania, 226,000 from Yugoslavia and many more from Czechoslovakia and Hungary. This means that 22 per cent. of all suits bought in the United Kingdom last year were imported from those countries. Although we all want free competition, how can we gauge a market price for the products of a society or system which has no market? These suits are entering the country dirt cheap, and this must be checked.

It is said that the problems of the industry are recurrent and that the downturn is cyclical. The industry needs special action, since it is not facing a normal cyclical downturn. The industry accepted these downturns in the past and did not run straight to the Government for help. However, the industry now needs help because it faces a special situation.

We know that problems arose with regard to commodities, the price of which shot up, when the people with fixed contracts could not make adjustments. Then we faced the problems of the wages explosion and thresholds. The woollen and cotton industries, enjoy good industrial relations but, since the social contract means nothing, militants in the industry's unions are demanding action from their leaders. One of those leaders lost a court case against Left-wing extremists two weeks ago. In two weeks' time the unions will be making a claim for a 35 per cent. increase, which will render the industry even less profitable and competitive, when cash flow is appallingly bad.

The textiles industry is the fifth largest exporting industry of the United Kingdom. It exports one-third of its production. One firm even exports 70 per cent. of its production. The chairman, however, says this is the worst crisis in his 52 years—and his firm at the top end of the market is doing relatively well. However, there is instability in the industry and the work force of that firm has been on short-time working for two to three months.

Almost 60 per cent. of the industry's work force of 100,000 is on short-time working. Many mills are now working a three-day week, which is something about which representatives of the present Government used to pour scorn on us. Now the three-day week is a reality. What do the Government intend to do about it? Many mills are closing down. The unemployment figures reflect that fact. However, I believe those figures hide the true situation, especially with respect to women. But this crisis is clearly of a unique kind because of imports. It is not just the Iron Curtain countries, but the Far East and Portugal, who have undermined the acrylic sector and cheap woollen end of the business. Mills in places like Dewsbury and Colne Valley in this sector find Portuguese goods undermining their costs of production by between 12 and 14 per cent. Last year, 4·5 million pairs of Portuguese trousers arrived, out of a total trouser operation in this country of 10·5 million pairs. By any yardstick, the industry is in a serious crisis. There is a downturn to 251 million kilos as against 287 kilos in 1973 in fibre consumption, which is the real test for the whole industry.

What do the Government propose to do about it? The future looks shaky for many people, especially when they face the prospect of the Industry Act and the capital transfer tax, which will cripple the small family business, and of the Employment Protection Bill which they fear will impose quite intolerable extra financial burdens upon them. The future on Europe has been uncertain, and, with all these imports coming in, something specific must be done.

Let us be clear about it. We are asking not for permanent protection but for emergency action on a short-term basis. But, even short-term, this is a fight to survive. We want emergency measures. There are examples in almost every other country. There is, for instance, the 50 per cent. deposit scheme operating in Italy which was got through GATT because of the Italian balance of payments crisis. Cannot we get the same or similar terms through Article 12 of the GATT arrangements? Let us remember that it is Italy which is flooding our own market, destroying the cheap woollen end by increasing her exports to this country from £7 million in 1973 to £15 million in 1974, which the mail order firms in particular are snapping up.

With sudden surges of imports seriously threatening our whole industry, there is a valid case for immediate action, and the Government will have to do more than promise "careful consideration ". The time has long passed for that.

The Minister spoke about the cycle turning up. When it does, what state will the industry be in when it is so weak already? We will find not only our domestic market undermined, but our main export markets, too. Our main market in Canada is closing to us because of Japanese competition. Although the Japanese are not exporting much to this country because of a bilateral argreement, they are pushing hard into other export markets of ours. They deliberately manufacture for stock and they have to get rid of massive stocks on a market which shows little activity.

So I do not see the future turning round this year or next year. Unless we support our industry now, it will be so undermined that, when the roundabout turns again and the market picks up, we will not have the size of industry, the rate of employment or the efficient firms to be able to compete effectively.