American Synthetic Textiles (Imports)

– in the House of Commons at 6:20 pm on 15th December 1980.

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Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South 6:20 pm, 15th December 1980

In the absence of my right hon. Friend the Secretary of State, who is on a trade visit to Spain, I should like to make a statement about textiles and clothing.

I need not remind the House of the important contribution made by the textile and clothing industries to the country's economy and the concern that this Government have for their problems. It was in recognition of this that, in addition to pressing for the strictest possible implementation of the arrangements relating to imports from developing countries, we earlier this year secured agreement of the European Community to the imposition of quota restrictions against imports, essentially from the United States, of polyester filament yarn and nylon carpet yarn. These quotas expire at the end of this year and we have been considering, in the fullest consultations with representatives of the industry and the firms affected directly or indirectly, whether we should seek their renewal.

We have had to bear in mind the effects that restrictions on these raw materials have had on users in this country and the fact that in the case of polyester yarn the Commission has now imposed anti-dumping duties on about half of United States imports of this product. We have concluded that the balance of advantage does not lie in maintaining these quotas any longer. We shall not, therefore, be seeking their renewal for 1981.

The Government are, however, extremely concerned at the damagingly sharp rise in imports of certain other United States products and the problems this creates for particular sectors of our industry, and the wider problem, which these imports in a considerable measure reflect, of the impact of United States energy policies on a wide range of British industries, though notably on the textile and clothing industries.

The issue is one that has already been taken up with the Commissioners in Brussels and our Community partners at ministerial and Prime Ministerial level. The Government feel that the time has now come for a concerted stand by the Community. At tomorrow's meeting of the European Council of Foreign Ministers, I shall therefore be seeking agreement to a common Community approach, which would, in effect, put the onus on the Americans to use some of the solutions available to them, which will avoid the need for recourse to restrictive action on our side. A faster deregulation of oil and gas prices, for instance, is clearly desirable. There is a need for United States industry to show greater restraint in pressing its present advantages.

We shall, therefore, seek a mandate for the Commission urgently to pursue discussions with the Americans over the whole range of problems and possible solutions and to report back to the Council. We shall also be seeking endorsement from the Council of a firm resolve to take anti-dumping action where this is justifiable and to impose provisional duties where the full process that would lead to final duties would take too long. A report on the outcome of the discussion in the Council tomorrow will be made in due course.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The statement that we have just heard will be regarded by many as an admission of failure and a simple repetition of pious hopes. It will be greeted with dismay and alarm by many in the industry. It means, although the Minister of State used the phrase "damagingly high rise in imports," that after January 1981 we shall be impotent to deal with the threat from the United States. One is bound to conclude that the Government have given way to threats of retaliation by the Americans and have failed to get an agreement on renewal of the quota restrictions with our EEC partners. From January 1981 there will be no protection from imports of subsidised synthetic yarns from the United States.

It is all very well for the Minister to talk about strict control over developing countries, but our industry will lose thousands of jobs because of a lack of control over subsidised imports from one of the richest nations. The abandonment of the present inadequate controls is bound to give the impression that this country is a pushover whenever a country against which we have taken measures threatens retaliation. The statement contains no specific promise of action to take the place of the present admittedly inadequate quota.

Given that action through the EEC has so far failed to provide any reasonable protection against the slaughter of our synthetic fibres industry, how does the Minister expect the present initiative to succeed?

Specifically, will the Minister be pressing the Community to negotiate with the Americans under article 3 of the multi-fibre arrangement, which at least gives the EEC the right to require urgent consultation and places an equal obligation on the United States Government?

Secondly, what time limit will the Minister place on this initiative? He has had years to try to do something about it and has failed. He must realise that the survival of many plants and the continuation of many jobs depend on getting a change of practice by the American Government.

Thirdly, if the initiative fails—I hope that it does not—what action will the hon. Gentleman take? I give him one example. Over a two-year period, the import of nylon tufted carpet has increased by 921 per cent. What protection will there be if the initiative fails?

Fourthly, will the hon. Gentleman confirm that he will involve the textile industry and the unions in his consultations in Europe? He referred to this aspect in his statement, but may we have a statement on the results of the talks in the Council of Ministers immediately he returns from Brussels?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The hon. Member for Norwood (Mr. Fraser) asked whether we would take action with the Americans by invoking article 3 of the multi-fibre arrangement. We propose that the Commission should go to the United States to discuss the full range of textile problems with the new Administration. We do not rule out consultations under article 3. This would be the first time, with one minor exception, that article 3 had been used between developed countries. However, we do not rule it out, and we do not wish to tie the hands of the Commission in the wider range of discussions that would be possible under article 3.

On the time limit, we would wish the Commission to report back to the February Council. If the initiative fails, we have open to us a range of options under article XIX of GATT and elsewhere. We would consider those in the light of any failure. We would press a united Council of Ministers to give the Commission a mandate to ensure that it achieved some results. Of course, we shall keep in close touch with the industry and the unions, as we have to date.

The hon. Gentleman spoke about "dismay and alarm" in the industry at the decision. The decision has been taken after very careful consultation with the industry, and on the whole it has the industry's support.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The Minister said that if the initiative failed he would consider quotas under article XIX. Surely, the point there is precisely that the Americans can require compensation, and if we do not give it they can retaliate. Is not that just what the Minister is running away from in making the statement?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The hon. Gentleman is right in saying that if we use article XIX the Americans have the right to compensation. That is why we are not going for article XIX at the moment but are taking our new initiative. The other range of possibilities will be considered if the initiative fails, but the hon. Gentleman has properly highlighted some of the problems with that article.

Mr. James Molyneux:

If there is to be a time gap in the restrictions, is that not likely to be fatal for what little now remains of the Northern Ireland textile industry? Is not this yet another example of the handicaps imposed by our membership of the EEC, which effectively prevents our taking action to protect essential British interests?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I make no secret of the fact that we have carefully considered the problems of Northern Ireland. They constituted one of the reasons why it was with some reluctance that we decided not to apply for renewal. I do not believe that membership of the EEC hampers us in our dealing with the problems of the Northern Ireland industry. A Community-wide initiative with the Americans holds out better prospects for us all than an individual initiative by the Government of any one member State.

Photo of Mr Donald Thompson Mr Donald Thompson , Sowerby

What other imports is the Minister thinking of in these negotiations? For instance, is he thinking of wool textiles, manufactured garments and finished carpets? Will he be pressing for a reduction in American duty rates on these goods, or some of them?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

That is a most important point. We decided not to renew the quotas because the case for that was not, in its own right, a good one. There was another consideration. There would have been a certain loss and damage to the Yorkshire wool textile industry, because the United States Administration had already laid an order that would have taken effect from 1 January and would have resulted in damage to that industry. We had to balance the uncertain advantage of renewing these quotas, about which even the industry was unhappy, with the certain damage to the important industry of Yorkshire wool textiles—an industry that my hon. Friend the Member for Sowerby (Mr. Thompson) very ably represents.

Photo of Dr Shirley Summerskill Dr Shirley Summerskill , Halifax

Will the Minister bear in mind that there is very little time left to save the textile industry? This year alone, over 10,000 jobs have been lost in the West Yorkshire textile and clothing industries. Mills are closing down all the time. There is not time for the Minister to conduct protracted negotiations if he is to save what is left of this declining industry.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The hon. Lady is, in effect, saying that the non-renewal of two quotas that the industry says are of no assistance to it will undermine the textile industry. She, as a Yorkshire Member, ignores the fact that certain damage would have flowed from renewal. That is what this announcement is all about—the fact that quotas will not be renewed.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Is my hon. Friend aware that the two orders that he is ending have certainly damaged the British carpet industry, because it has been deprived of supplies of raw material that it otherwise might have had? However, does it not follow that the British carpet industry must be protected, and as soon as the quotas are removed?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

As my hon. and learned Friend knows, at the time when we applied for these quotas we applied for a further quota on carpets. That further quota was turned down because the import figures did not justify it. The level of import penetration of our carpet market is still less than 10 per cent. Indeed, in real terms the level of imports this year has fallen. So what was not a good case last year is no better now. But I agree with my hon. and learned Friend that if there has been a disadvantage coming from these quotas it has been for the manufacturers of carpets, who have been denied access to very competitive raw materials.

Photo of Mr Ken Woolmer Mr Ken Woolmer , Batley and Morley

Does the Minister agree that in view of the likely loss of jobs—100,000 jobs have been lost in textiles and clothing this year—it is not surprising that at least the workers in the industry are bound to be concerned about any possibility of a weakening of resolve in this matter? Will the Minister confirm two points? First will he ensure, as far as possible, that the consultations begin urgently and do not await the new American Administration taking office in mid-January, which we regard as far too long a wait? Secondly, will those discussions specifically cover wool textile exports to America, and will they deal with the question of carpet imports from the United States?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I have just dealt with the last point in reply to my hon. and learned Friend. We believe that if there is an advantage to the Americans the major advantage stems from their dual pricing of energy. That is why, in my statement, I set such store on pressing for speedier deregulation. We think that that would be a major contribution to helping our carpet industry.

On the question of urgency, certainly we wish to get on with the consultations as soon as possible, and we shall be discussing with the Commission making a beginning on them. But I think that the hon. Member would agree that any major decisions of this kind will probably have to await the arrival of the new Administration before real decisions are taken.

On the question of wool textiles, action would have been taken against our exports from 1 January. That action will now not take place.

Photo of Sir David Price Sir David Price , Eastleigh

Do I take it from my hon. Friend's statement that he and his right hon. Friends in the Government now agree with the general case made by the British chemical industry that the American energy cost and, above all, the price of their feedstock, which goes out as raw material to many industries, are below the economic level? If that is so, will he take it from me that many of us feel that making representations to the American Administration against that uneconomic practice is better done with friends in Europe than alone?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I agree with my hon. Friend. It is not disputed by anyone that an unfair advantage arises from the dual pricing policy. I believe that it is better eliminated by Community-wide action and in discussions between the Commission on behalf of the whole Community and the Americans.

Several Hon. Members:

rose

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. I hope that hon. Members will co-operate with me if I say that I believe that all the hon. Members who have been rising have constituency interests, and, therefore, I propose to call them, but they would be fair to the House if they were brief.

Photo of Mr Frank White Mr Frank White , Bury and Radcliffe

Is the Minister aware that, despite his opening comments, there is a real need for his Government to indicate to the industry what the Government's views are? Today's statement bears no relation to the needs of the textile industry in the North-West. It seems to accept that the industry is drowning but concludes that the answer is to remove the lifebelt in the hope that we may construct a lifeboat at some time in the future.

Does the Minister appreciate that the closure of 90 mills in our areas over the past 12 months, the redundancy of thousands of workers and the consequential problems caused to the communities need not have taken place if his Government had matched the aid given to the American, French and German textile industries? The Minister has appeared before us today as a Christmas Scrooge. He has given the textile industry in the North-West no hope whatever for 1981.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The hon. Member has a very strong reputation for being an honest man. As such, I am sure that he never fails to remind his constituents that the present Government are administering a series of agreements negotiated by his own Government in 1977. Those agreements, which do not expire for another two years, dictate the limits to the action that is open to us. If there is any criticism to be made, and if the protection is not sufficient, I hope that the hon. Member will have words with his right hon. Friend who negotiated on behalf of this country.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I fully appreciate the many visits that my hon. Friend has made to textile and clothing companies throughout the Northern region, as well as the North-West, but does he not accept that our industries are facing unfair competition, that the carpet industry in particular is being almost totally detroyed, that the bedding and sheeting industry, likewise, is now severely affected and that unless an interim package can be introduced by the Government tens of thousands more jobs are likely to be lost before any agreement is made between the British Government and that of the United States under the new President, Mr. Ronald Reagan?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

My hon. Friend is right in saying that there is a very great unfairness built into the American dual pricing of energy and that the elimination of that is absolutely essential. Where he and I marginally disagree in this case is that it is much easier to talk about the need to take far-reaching action than it is to get it agreed. But he and I have the same ambition: to do the best we can for our textile industry.

Photo of Jack Straw Jack Straw Shadow Spokesperson (Treasury)

Is the Minister aware that in the past 18 months he has presided over the most catastrophic period that the textile industry has known in 20 years? While the industry's output remained stable throughout 1975–79, it has dropped by one-quarter over the past 15 months, 62,000 jobs have been lost and some sections, such as man-made fibres, have been so badly affected by American imports that production in this country has been halved.

Given the consequences of deregulation of energy prices for the American domestic economy, particularly for domestic inflation, what serious chance does the Minister believe that any Administration, particularly the Reagan Administration, will have to secure the deregulation of oil prices? Is not the truth of the matter that American domestic pressures are such that no President and no Administration will be able to achieve that? If that is the case, should not the Government now be embarking upon contingency plans to ensure that effective countervailing action is taken against the imports in question?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I said in my statement that we shall be pressing the new Administration. Unlike the hon. Gentleman, I cannot predict what the policy of Mr. Reagan's Administration on energy deregulation will be. The hon. Gentleman appears to know; I do not. All that I can say is that at the moment there is an obvious unfairness, which is much resented by America's trading partners throughout the world. Unless some action is taken to remove that unfairness, further unfairness will be perpetrated to balance that and away we shall go on the beginning of a trade war. It is, therefore, in the interests of the new Administration, not only from the point of view of energy conservation but from the point of view of trade, to accelerate that deregulation. That is what we shall be pressing for.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. If I am to call those hon. Members who have been rising, I really must have shorter questions.

Photo of Mr Bill Walker Mr Bill Walker , Perth and East Perthshire

Will my hon. Friend confirm that in the event of our failing to get agreement in Europe we shall take unilateral action to protect our carpet and chemical industries?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

Unilateral action, although it is theoretically possible, would in fact be a way of buying short-term popularity but of doing very little good to our industry, because unless we can carry our Community partners with us they can order us to stop our unilateral action within six weeks.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

It is not the answer. The trouble with my hon. Friend is that he always finds simple short answers to very complicated problems. The answer to my hon. Friend is that we believe that we have a strong case and we shall press it hard on our partners.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

Is the Minister aware of the disastrous state of the tufted carpet industry in my constituency as a result of what has happened recently? I believe that his figure of 10 per cent. refers to the whole industry. The percentage in the tufted carpet industry is much greater. Can we expect some of the constructive Government intervention of which the Prime Minister spoke this weekend to revive that industry? Are Canadian imports also affected by the Minister's statement?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The answer to the second part of the hon. Gentleman's question is "Yes". They are affected. The answer to the first part is "Wait and see".

Photo of Mr Robert Banks Mr Robert Banks , Harrogate

Is my hon. Friend aware that his statement will be warmly welcomed by many companies in Yorkshire, not least ICI, in my constituency? Is he further aware that his positive initiative deserves the fullest chance of success and that that success is not made more likely by the sniping criticisms of Labour Members?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I thank my hon. Friend for his encouraging remarks. When arriving at the Dispatch Box, Trade Ministers rarely expect compliments from either' side of the House, and we are all the more grateful for them as a result.

Photo of Mr Thomas Torney Mr Thomas Torney , Bradford South

Is the Minister aware that textile workers in my constituency are looking at the situation with despondency, not despair, because the industry has been falling apart for years, due to unfair competition? It is ridiculous for the hon. Gentleman to talk about a concerted stand by the Community, because the Community will block any agreement on textiles in the same way as the French have done on fish. That is no consolation for my constituents who are unemployed or who are likely to become redundant in the next few months. Will the hon. Gentleman for God's sake take unilateral action in order to stop these unfair imports, and will he also subsidise our industry?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The answer is "No". I should point out that Community policy on textiles is supported throughout the Community. It is a Community-wide one. It was because we acted as a unit that we were able to obtain such a reasonable MFA last time. It is quite wrong to think that there is hostility to textiles everywhere in the Market except here.

Photo of Mr Robert Atkins Mr Robert Atkins , Preston North

Does my hon. Friend realise that a report issued today by the Local Authorities Textile Action Group, which represents 15 boroughs in the North-West, including the boroughs of Bury, Blackburn and Hindburn, as well as Preston, states that the United States threat, to which my hon. Friend referred; must be regarded as ultimately directed at the whole of the EEC, and requiring urgent corporate action"? Therefore, my hon. Friend has the strong support of many people in making his statement.

Photo of Mr Don Concannon Mr Don Concannon , Mansfield

Regardless of the effect of the announcement on the rest of the United Kingdom, is not the Minister aware that it will have a devastating effect in Northern Ireland? He said that the situation in Northern Ireland had been taken into consideration, but I do not think that he has given it enough consideration. The textile industry is now the basis of the Northern Ireland economy. Therefore, the hon. Gentleman ought to look at the Northern Ireland scene and give it special consideration.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

We gave careful consideration to the problems of Northern Ireland when coming to our decision. The basic question is whether we retain two quotas, about which the industry is divided, which have proved to be of marginal value and whether it is worth retaining something that is not making a real contribution to the industry at the certain expense of damage to other parts of the industry. We came to the conclusion that, frankly, it was not worth while, because the benefits arising from these two quotas would not really help solve the problems in Northern Ireland.

Photo of Mr Gary Waller Mr Gary Waller , Brighouse and Spenborough

Does my hon. Friend recognise that the carpet industry will greatly welcome the withdrawal of these quotas, which raised the price of raw materials and, therefore, represented the worst of all possible worlds? However, I hope that he will not underestimate the great damage that has been done to the British carpet industry by the import of American carpets, which are being advertised on an increasingly wide scale. Will he make as his absolute priority an approach to the new American Administration with a view to ending these unfair practices?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

It is absolutely agreed that the energy price differential is the basis of the unfairness in respect of carpets. That is why we believe that a Community-wide approach to the American Government, in order to tackle the difficulty that is at the heart of the industry's problems, is the right way forward. I thank my hon. Friend for his kind opening remarks.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

Contrary to what was said by the hon. Member for Harrogate (Mr. Banks), is the Minister aware that his announcement of the abandonment of the quota will be received with dismay by the workers at ICI Fibres in Doncaster? If thousands of jobs have been lost in the nylon fibres manufacturing industry, with even the limited protection that has so far existed, how much worse will the position be as a result of the complete abandonment of the quota in the period leading up to what the Minister hopes will be a meaningful dialogue with the Americans? Will the nylon carpet fibre industry survive that period?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I do not think that that issue would be settled one way or the other by the retention of these quotas, which is precisely why we decided not to renew them.

Photo of Mr Phillip Whitehead Mr Phillip Whitehead , Derby North

Is the hon. Gentleman aware that in the 18 months that he has held his job one in five textile workers in my constituency has lost his? In the discussions with our Community partners, which will begin tomorrow, how will he quantify the effect for us if there is no joint Community initiative? What are the likely effects on the textile and chemical industries in terms of further unemployment?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

A reply to that question would require the possession of an extremely accurate crystal ball, which I do not have. We intend to make a strong case tomorrow, because we believe that the action that we are proposing will be of much more value to the industry than any other action that we could take.

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

Everyone agrees that there should be effective EEC pressure. The hon. Member for Preston, North (Mr. Atkins) is quite correct, but people in Lancashire feel that the action has not been effective. Therefore, will the Minister at least tell the House what time limit he has in mind in respect of these negotiations? In fact, time is not on the Minister's side, nor is it on the side of the Lancashire textile industry.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

We recognise that this is an urgent problem. That is why I said that we expected a report back to the Council by February.

Photo of Mr William Whitlock Mr William Whitlock , Nottingham North

Is the Minister aware that there is a fear that out of the discussions between the Commission and the new American Administration there will emerge some kind of package deal, which will be marginally helpful to some parts of industry and absolutely disastrous to others—in other words, a smelly curate's egg?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I can only hope that the hon. Gentleman's prediction is wrong.