Textile Industry

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

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 5:55 pm, 20th March 1975

This has been a remarkable debate. In the course of about four hours no fewer than 28 hon. Members have managed to speak. Undoubtedly all of them have exercised considerable restraint. In view of the tremendous constituency interest in this subject, it seemed to me right that there should be only one Front Bench intervention from the Opposition, and I have considerably curtailed the remarks I intended to make. I am sure that hon. Members will appreciate that this is in no way a reflection on the importance of the subject. On the contrary, it was because I was so anxious that we should have a good and wide-ranging debate that I thought it the right policy to adopt.

No one who has listened to the debate could have failed to be impressed by the depth of concern which has been expressed from both sides of the House. It is equally true that all of us understand very well that what is involved here are human as well as economic problems. That was brought out very clearly by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), with his experience of some 24 years of representing a constituency which is a major textile area. He adopted an analytical approach, whereas my hon. Friend the Member for Macclesfield (Mr. Winterton) spoke with great passion and feeling about the problems now confronting the textile industry generally. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) stressed the hardship involved, particularly in an area in which very often income levels are not very high, when short-time working becomes prevalent. I went to school in Lancashire and I well understand the scars of the 1930s, which still remain in many areas, and the problems which exist.

I want to reinforce, as briefly as I can, a number of the points that have been made and to raise some major issues before the Minister replies to the debate.

It is important to make the point that this is a debate on textiles. Therefore, it is not a debate simply on cotton—important though that is—and it is not a debate simply about synthetics. It is a debate about the woollen industry also. Indeed, it has been stressed that in many ways the situation in the woollen industry is more serious than that in the cotton industry. It has also been brought out very clearly that this is a matter which affects very many parts of the country, and not simply one side of the Pennines or the other. We need to bear that point in mind. That is also true concerning Scotland and Northern Ireland.

I want to stress the point made very fairly by the Minister in his opening remarks about the view which was taken by the previous Conservative Government. In speaking in an Adjournment debate on 27th November the Minister pointed out that in January 1972 the Lancashire industry had protection against lower priced cotton textiles by tariffs and by quantitative restrictions. He pointed out that both those forms of protection were continued even though it had been recommended that we should get rid of quotas. We may reasonably claim that the previous Conservative administration accepted the industry's case for protection in relation to a number of products. I shall not burden the House again with the details, which the hon. Gentleman very fairly spelled out.

I turn to the question of the multi-fibre market and international trade in textiles because this has occupied a very important and central part of our debate. The fact is that we are debating an industry in which the long-term trend, as my hon. Friend the Member for Lancaster pointed out, has been a very rapid decline over the years. Employment in the cotton textile industry has dropped from about 250,000 to about 80,000, and there has been a very rapid corresponding decrease in the wool industry. Nevertheless, about 930,000 people are still employed, but of those it is estimated that some 150,000 are on short-time. That obviously raises very difficult questions indeed.

A number of hon. Members have referred to the speech made by the Leader of the House in Blackpool last week, in which he said that the Government intend to maintain quotas on cotton goods and so on. That has aroused considerable antagonism in the industry, because the expression "maintain" can be used in two quite different senses. Many people take it to mean "maintain" in the sense of absolute levels, whereas it can be taken to mean "maintain" in the sense that some form of restriction will remain. This has been unfortunate and has been heavily criticised outside the House and in this debate.

We are essentially faced with a threefold problem. First, there is the problem of world depression, particularly in this industry. We are also getting some of the side effects of the oil crisis. A number of hon. Members have pointed out that the United States, with a depressed market of its own, has cheaper feed stocks than we have, at about 20 per cent. of the United Kingdom price. That obviously puts United States manufacturers in a very strong competitive position.

The second point which must be taken into account is the depression in the United Kingdom market. Other points have been mentioned in the debate. My hon. Friend the Member for Pudsey (Mr. Shaw), for example, supported by the hon. Member for Bradford, North (Mr. Ford), mentioned the effect of the capital transfer tax on small firms in the woollen industry. This is obviously a very serious matter.

The main point of the debate, however, has been on the question of imports. Import controls, whether by tariff or quota, raise very important points of principle. There are two aspects which need to be considered together. I hope that the House will bear with me if I mention them both, because it is extremely important in the context of the textile industry that they should be considered jointly.

Considerable pressure is undoubtedly building up for general import controls both at academic level—this was mentioned by the hon. Member for Sowerby (Mr. Madden)—where the so-called Cambridge new school has been advocating it, and in pressure groups who are seeking to offset the effect of excessive wage claims on prices, demand and employment. The motor industry is a case in point. It would be a serious mistake to adopt a policy which would effectively bail out those who have broken the social contract with the inevitable result that even higher wage claims and prices would lead to even stiffer demands for import restrictions. That would have a serious effect on our overall economic and competitive position.

The danger would be that we should start a trade war with a dangerous outburst of protectionism and that would have an extremely serious effect on our exports to Japan, for example. A lot of mention is made of Japanese imports to Britain, but we should stress the importance of our exports of woollen goods to Japan. I must point out that these remarks do not apply only to the textile industry, but to the question of import controls generally if we were to adopt a protectionist stance. The danger of retaliation in those circumstances is very great. There is the danger of inflation.

As I said, there are two aspects which must be considered together. The second is that if one accepts the general principle I have been advancing one must also recognise, as many hon. Members have tonight, that the competition must be fair and equitable. The important question is whether, to return to this particular case, the import of textile goods is fair and equitable. I think that the case against dumping is clearly very strong.

In the Adjournment debate in November the Under-Secretary said at column 590 that cheap textiles were not the same as dumped textiles. It is important to distinguish between the two. Of course, it could be that cheaper textiles are dumped, and I think that I carry the Under-Secretary with me on that. The question of dumping has been at the core of the debate this evening. The position over textiles has been recognised under the aegis of GATT and, in terms of special arrangements, as being in a unique position.

Many hon. Members have stressed the excellent labour relations which exist in the textile industry and have emphasised that labour costs have not risen all that fast. In my earlier remarks about the social contract I perhaps should have said that the general view in the industry is that wage claims have not been in excess of the rise in the cost of living, and therefore the social contract, to that extent, appears to have been observed. That is in marked contrast to the general position where prices have risen by about 20 per cent. and wages have risen by about 30 per cent. over the past year. This is because the textile market has been depressed.

Average earnings in the industry are being affected by short-time working. The industry has become a victim of the social contract. This is a feature which should be brought out—[Interruption.] Yes, it has to do with the social contract. The overall impact must be taken into account. I am making a valid point. If our overall competitive position is eroded, this industry is badly hit.