International Trade

Lord Purvis of Tweed Excerpts

Thursday 23rd January 2014 Lords Chamber

[Lord Purvis of Tweed (LD)]

It is a pleasure to follow the noble Lord’s theoretical and practical contribution to this debate, and I welcome the opportunity given to us by the noble Lord, Lord Harrison, to speak on this issue. I wish to pick up on a couple of points that the noble Lord, Lord Davies, mentioned and to discuss two export sectors that are of considerable significance to the Scottish and UK economies. I want to focus, in particular, on rural Scotland. For skilled workers in difficulties in the recession that has taken hold in the manufacturing sector in rural Scotland over the past few years, there are two shining lights, but both need support from the Government.

I should like to address some areas where removing barriers to international trade will allow whisky exports to continue to grow and will also allow opportunities for the Scottish textiles sector. Unlike other noble Lords, I have no interests to declare in this debate, other than to point out that my title of “Tweed” relates to the river rather than the cloth, although, incidentally, the latter was named after the former nearly 200 years ago. These are iconic products. “Iconic” is an overused word but I think it is appropriate to describe these two Scottish products—whisky and textiles. They are of the highest quality in both product and brand, and they have a heritage that is surpassed hardly anywhere in the world. They continue to represent key areas of employment and domestic economic activity, and are areas known for their innovation and creativity—the noble Baroness, Lady Wheatcroft, mentioned innovation and technology. I am not resting on their laurels; they are of significance for the economy.

Some 35,000 jobs are supported by the Scotch whisky industry, including 10,000 directly related to production. In textiles—medical textiles and pioneering research for technical textiles—Scotland in many respects leads the world. Often, as I indicated, the jobs are in rural and remote Scottish areas, where there is little alternative employment. Jobs supported by the whisky industry include those in packaging, tourism, logistics, maltsters and cereal suppliers, and this industry shares many of the attributes mentioned by my noble friend Lady Miller. We are often told not to mix grain and grape, but I think that in this context we share many priorities.

Scotland’s textile sector remains a key employer in many parts of Scotland, including the one close to my heart in the Scottish Borders. The sector currently employs in the region of 9,000 people across 600 businesses manufacturing textiles, apparel and leather products. For nearly 1,000 years, woollen and woven goods have been exported from the Scottish Borders. Most noble Lords will have worn Scottish textiles and most will have partaken of the occasional dram. Thankfully, few will have drunk counterfeit whisky, but perhaps more will have worn textiles that were either cheaper and poorer-quality products purporting to be Scottish or were otherwise based on traditional Scottish designs but were manufactured in areas where the quality is poorer and the labour conditions even worse. We do not need to go far back in history to find the awful example of the incident in Bangladesh. Such poor labour standards in manufacturing textiles can make us proud of our standards in the United Kingdom.

That leads me to my first area of concern. It is in our economic interests to protect these exports. The current round of negotiations for the EU-US Transatlantic Trade and Investment Partnership, or TTIP, referred to by the noble Lord, Lord Harrison, gives the UK and its EU partners the opportunity to address some of the areas where support is needed for these sectors.

Scottish textiles, and in particular woollen and woven goods, require protection to maintain brand standards. The mislabelling, and therefore mis-selling, of goods that are not made in Scotland is a continuing concern for the sector and it is an area where the Government can assist in providing support. Clear labelling of the country of origin for manufactured textile goods is of significant importance given that some retailers in the UK—even in Scotland—and around the world sell woollen or cashmere products that claim to be Scottish or from Edinburgh or the Highlands, or they purport to be of a Scottish design and therefore give the impression that they are manufactured in Scotland, whereas they are actually manufactured in other countries, typically China, Pakistan, India or Vietnam. By ensuring that the Government use all the powers available to their offices and agencies around the world, and by encouraging domestic prosecuting authorities, whether it is the Lord Advocate in Scotland or the authorities in England and Wales, we can support and protect this important British product by making sure that customers are aware of what they are buying. .

The Scotch Whisky Association, regrettably but necessarily, has to use considerable resource in pursuing legal challenges around the world against those mislabelling and mis-selling Scotch whisky. The reality for many textile companies is that they do not have the reach or the resources to do this. Therefore, I should like Her Majesty’s Government to explore how they can use their trade representatives around the world to look at how more support can be offered to ensure that there is aggressive and proactive policing of those undermining Scottish exports.

In the latest round, EURATEX, the European trade body for textiles, and its American counterpart, the American Apparel and Footwear Association, sent a joint letter in December to Michael Froman, the US Trade Representative, and Karel De Gucht, the Commissioner for Trade, which said that,

“design, creativity and innovation are at the core of our companies’ strategies and we rely on the authorities to clarify and improve coordination mechanisms on Intellectual Property Rights … in order to better safeguard our companies’ creativity. Maintenance of an appropriate framework of intellectual property protection and effective enforcement of intellectual property rights is vital for individual brands and companies in the context of the T-TIP”.

It would be helpful to hear the Minister’s thoughts on the protection of intellectual property rights.

I do not expect the Minister to respond to that today but it would be most helpful if he would meet myself and representatives of the Scottish Textiles and Leather Association to discuss this and associated issues as they are fundamental to creating the conditions in the world and in the emerging markets for this sector to flourish.

These exports are of real significance already and the opportunities are huge. Scotch whisky leads the way for British food and drink in overseas markets, accounting for about 25% of all UK food and drink exports. The Scotch Whisky Association informs me that 40 bottles of Scotch whisky were shipped overseas each second in 2012. For many Scots that is both a tragedy and something to be proud of. Exports have increased by 87% in the past 10 years and the value of Scotch whisky exports increased by 11% to almost £2 billion in the first six months of 2013.

The Scottish textile sector remains an important contributor to the economy, with an annual turnover of £950 million, and exports of Scottish textile products are valued at £295 million. In fashion and interior textile design, Scotland operates in more than 100 markets worldwide, with major emphasis on the USA, Japan, Russia and Europe. Therefore the trade negotiations and promotion that the Minister will carry out is of fundamental importance to this sector.

Finally, touching on the point made by the noble Lord, Lord Davies, about crippling tariff regimes, there are continuing barriers for Scottish woven exports. Noble Lords may be interested to know that in exporting a lambswool sweater from the Scottish Borders to the USA, a 16% import tariff is applied. That means that a sweater manufactured for $50 in the Scottish Borders, with a fourfold retail mark up plus a 16% tariff, will cost the US customer $232. That is a crippling tariff regime. While it is less for cashmere at 4%, both are above the average tariff rates that are currently being negotiated. I know that my right honourable friend Michael Moore has been pursuing this issue since he was first elected but we have an opportunity with T-TIP to have it addressed.

There are opportunities for both whisky and textiles in the emerging markets of Africa, South America and central America. Opinion formers and fashion and creative leaders in those markets should wish to be associated with these high-quality products. With the continuation of the Britain is Great campaign, with our brand reputation around the world increasing in value and with the support of the UK Government, we can make sure that barriers are lifted, opportunities are increased for whisky and textiles and the vulnerable rural areas, where many of these jobs are so important, can look forward to a positive future.