28/5/11
BRITISH TEXTILE POLICY BACKGROUND NOTE
TEXTILE COUNCIL STUDY
HMG's present textile policy is based largely on the recomm-
endations of the Textile Council's Productivity and Efficiency
Study which was undoubtedly the most comprehensive and self-critical
examination of its problems that the industry has undertaken.
The
Study suggested that a viable, though much more compact, industry
could develop by 1975 if the Government would establish more stable
market conditions (notably by ending duty-free entry for Common-
wealth cotton textiles in place of the existing quotas, which in
the Council's view would not in the long term give the industry the
confidence or the incentive to undertake the investment needed to
make itself more competitive) and would provide additional incent-
ives to re-equipment; and if the industry would improve its effic-
iency by modernisation, more multi-shift working and vertical
integration. At the same time it forecast (Graph A attached) that
employment would fall from 125,000 in 1968 to 75,000 in 1975, and
that the number of mills (Graph B attached) would fall from 715 to
some 300. The recommendations were endorsed by most of the industry's
forward-looking leaders.
28/4;
THE 1969 POLICY
2. In accepting most of these recommendations the Labour Govern-
ment made it clear that its purpose was to foster an industry ableto
stand on its feet in an international environment. The tariff on
Commonwealth cotton textiles was set at about the level of the Common
External Tariff and of the existing UK tariffs on man-made fibres.
The Government did not accept the Council's recommendation to phase out
quotas after the tariff's introduction, mainly to help sell the new
1.
CONFIDENTIAL
/tariff