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Scottish Parliament: Research Briefings: RN 01-12 Borders Textile Industry

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Research Note RN 01/12
30 JANUARY 2000

BORDERS TEXTILE INDUSTRY

This note highlights some recent reports, and provides some background information relating to the following motion due to be subject of a Members Debate on Wednesday 31st January.

S1M-1579# Ian Jenkins: Borders Textile Industry—That the Parliament notes with regret the loss of jobs in the textiles industry at the Murray Allan mill in Innerleithen; supports the efforts of local agencies working together to assist employees who have lost their jobs, and urges the Scottish Executive to report on progress to deliver aid to the sector and to resolve the threat posed to the industry by the ongoing trade dispute between Europe and the USA so that textiles manufacturing can look forward to a permanent place in the Borders economy.

SOME KEY REPORTS AND DOCUMENTS

The Parliament debated the subject of skill shortages in the Scottish Borders on 10th January 2001.

A SPICe research note provided some background information for this debate (Scottish Borders Labour Force, RN 01/04 10th January 2001).

Members of the Enterprise and Lifelong Learning Committee reported back verbally on a visit to the Scottish Borders textiles industry as part of its inquiry into the new economy.

The Committee members also produced a written report in support of this. The report described some of the background to the Scottish Borders textiles industry in the following terms;

The textiles industry is crucial to the Scottish Borders, employing 50% of all Borders manufacturing jobs in 1997. It also makes a major contribution to the Scottish economy in terms of jobs employing a total of 33,900 in 1997, (some three times the size of the whisky industry), though some 5,000 job losses have been announced since then. Like the whisky industry it is heavily export oriented (accounting for 28% of output, even more in some subsectors) and often has a mutually beneficial relationship with the local tourism industry. Job losses in the sector have particularly hit the Scottish Borders over recent years. Part of the response from the Government has been the diversion of some £2m European Union 5b funding to the Borders and a £1.8m Scottish Enterprise Borders (SEB) “special allocation”. The SEB funding has generally focussed on assisting individuals facing redundancy by providing retraining and supported employment opportunities.

A Briefing Paper on the Scottish Textile and Clothing Industry was produced for Scottish Executive Enterprise and Lifelong Learning Department by DTZ Pieda in June 2000.

Abridged minutes of meetings of the Scottish Clothing and Textiles Forum are available on the Scottish Executive website, the most recent minutes relating to the meeting of 12th September 2000.

The Final Report of the Borders Working Party chaired by Lord MacDonald was published in March 1999.

Scottish Enterprise Borders and Scottish Borders Council led the development of the “New Ways” joint economic development strategy for the Borders, also in March 1999.

THE BORDERS TEXTILE INDUSTRY

In the Scottish Borders textiles is the largest industry within the manufacturing sector, employing 4,400 in 1998, compared with 7,800 in 19811. Over 2,000 jobs were lost in this sector between 1991 and 1998, with further redundancies continuing post 1998. According to forecasts produced in a report for Scottish Enterprise Borders employment in textiles is projected to stand at 2,700 by 2010 (see Figure 1 below taken from the above report).

Figure 1: Changing Employment Levels in Key Industries in the Scottish Borders, 1981-2010

[NOTE: Table here in original]

Source: CE/IER LEFM estimates

MURRAY ALLAN, INNERLEITHEN

The Japanese based Toyoboshi group includes two Borders operations Murray Allan and Clan Douglas with employment bases respectively in Innerleithen and Hawick (2). The two operations employ 270 people in the Borders. It is understood that just over 100 are employed by Murray Allan at Innerleithen. Murray Allan has two sites at Innerleithen one covering “washing, knitting and first make up”, and the second covering “clean make up, linking and finishing”. The first site is to transfer its operations to Mansfield Mill in Hawick, including warehousing. One large first stage knitting operation will serve both Clan Douglas and Murray Allan, with the initial garments transferred to Clan Douglas, and the second Murray Allan site at Innerleithen for finishing, and then back to Hawick for central warehousing.

45 people are anticipated to be made redundant in the company, 43 of these in the Borders and a further 2 in London. The jobs under threat at Innerleithen are the knitters, warehouse staff, and possibly some of the sales/design team.

MEASURES TO ADDRESS THE REDUNDANCY SITUATION

A temporary redundancy support centre under the Scottish Executive’s PACE (Partnership Action for Continuing Employment (3)) arrangements will be open to anyone who is under threat of redundancy or has been made redundant in the Innerleithen area. The team will operate from the Memorial Hall Innerleithen during February 2001.

In addition to early entry to National Programmes such as New Deal 18-24 and Training for Work Scottish Enterprise Borders identifies two initiatives specifically designed to help individuals affected by redundancy

Training for Tomorrow – a programme of labour market related training (for example has included driving lessons or computer training), available to those to be made redundant and implemented during their period of notice. Since October 1998 185 textile workers have participated in Training for Tomorrow, from a total of 1,097 participants on the scheme.

Borders Training and Employment Project - provides funding of up to £90 per job for 26 weeks for private and voluntary sector employers who create full-time permanent posts paying a wage of at least the National Minimum Wage and who wish to employ and train new staff. This project is brought in to play once an individual has been made redundant

Research Notes are compiled for the benefit of Members of Parliament and their personal staff. Authors are available to discuss the contents of these papers with Members and their staff but cannot advise members of the general public.


ANNEX 1 – RELATED PARLIAMENTARY WRITTEN ANSWERS

Ian Jenkins (Tweeddale, Ettrick and Lauderdale) (LD): To ask the Scottish Executive what action it plans to take, both specifically following the announcement of 40 job losses at Murray Allan in Innerleithen and more generally, to meet the need for investment in job creation, skills training, transport and telecommunications infrastructure in the Borders.
(S1O-2837)

Ms Wendy Alexander: Assistance will be provided to those affected through dedicated local action teams in accordance with the principles outlined in the Scottish Executive PACE framework. I understand that the company has pledged to co-operate fully with the PACE team. The economic needs of the Borders are being addressed by the New Ways strategy, which has made a number of significant achievements since its launch in March 1999. The Borders Economic Development Forum is leading the way in turning this good start into more jobs, more growth and more prosperity for the people of the Scottish Borders. Scottish Enterprise Borders has been allocated an additional £2.312 million in 2000-01 for its local action plan, the third year of additional funding, in recognition of the particular needs of the region. I intend to visit the Borders on 14 February to hear at first hand about the issues facing the area and the work under way to build on the successes already achieved.


Christine Grahame (South of Scotland) (SNP): To ask the First Minister how much of the £10 million aid package for the textile industry announced by the Minister for Small Business and ECommerce at the Department of Trade and Industry on 6 June 2000 has been allocated in Scotland.

(S1F-798)
Henry McLeish: The DTI package has not been allocated according to geographical area.

Christine Grahame (South of Scotland) (SNP): To ask the Scottish Executive, further to the answer to question S1W-9641 by Henry McLeish on 19 September 2000, how many times the Scottish Textiles Forum has met to date; what decisions have been taken further to the forum’s discussions, and what measures have consequently been implemented.

(S1W-12470)
Christine Grahame (South of Scotland) (SNP): To ask the Scottish Executive how often and on what dates the Scottish Textiles Forum has met since June 2000.

(S1W-12475)
Ms Wendy Alexander: The Scottish Textile Forum met on 12 June and 12 September, and the next meeting will be on 31 January. Minutes of these meetings are available on the Scottish Executive’s website (http://www.scotland.gov.uk/who/elld/tra_tex.asp). Subgroups of the forum have been working on producing an action plan document for the industry. Plans are also being developed for future support of the textile industry by the Enterprise Network. Further announcements on these developments will be made in the spring.


Elaine Thomson (Aberdeen North) (Lab): To ask the Scottish Executive what plans it has to address any future skills shortages and labour market issues.

(S1W-12848)
Ms Wendy Alexander: We plan to extend the remit of the new Scottish Labour Market Intelligence Unit, which we propose to rename Future Skills Scotland. We see Future Skills Scotland having a central role in identifying skills shortages to fulfil our pledge to have every Scot ready for the jobs of tomorrow. Scotland’s future prosperity requires the economy to achieve greater productivity levels than those of our competitors. To achieve this we need to clearly and accurately identify and communicate current and future skills needs at national and local levels. We need to ensure that employers appreciate and support investment in skills. Too many people are without the basic and specialist skills required for current and future business needs. Future Skills Scotland will have a leading role in ensuring that these issues are addressed to provide better matching of people to jobs.

Future Skills Scotland will set quality standards for LMI, identify skills gaps and shortages, and ensure that policy makers, education and training providers, and other users have ready access to intelligence on current and emerging skills issues. The enterprise network will manage the new unit to deliver a faster and superior job matching service across Scotland. Arrangements are in place to appoint a new Director in Scottish Enterprise who will head the unit.


S1W-10175 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive, with regard to the reports in the Scotland on Sunday and Business AM of a possible takeover of Dawson International by Prada, what representations have been made to the Department of Trade and Industry and what steps have been taken to safeguard jobs in the Borders' cashmere industry should any takeover succeed.

Holding reply by Ms Wendy Alexander (16 October 2000): I shall reply to the member as soon as possible.

Answered by Ms Wendy Alexander (29 November 2000): Company take-overs are a commercial matter for the companies concerned. The Scottish Executive will make representations about the employment consequences of company takeovers. Dawson management say that an offer has recently been made for the company but have not named them. In the event of a takeover the Executive will be entering very early discussions with the acquiring company to discuss their intentions, especially where there are concerns about future employment to establish whether public support would help in creating or safeguarding employment.


S1W-11175 - Dr Elaine Murray (Dumfries)(Lab): To ask the Scottish Executive how it provides assistance for the retraining of textile workers who have lost their jobs and whether it plans to increase support for retraining following recent job losses in the sector.

Holding reply by Ms Wendy Alexander (27 November 2000): I shall reply to the member as soon as possible.

Answered by Ms Wendy Alexander (30 November 2000): I refer the member to the answer given to question S1O-2590 on 23 November.

S1W-11174 - Dr Elaine Murray (Dumfries)(Lab): To ask the Scottish Executive what new steps it is taking to support the textile industry in the South of Scotland following recent job losses in this sector in Dumfries.

Holding reply by Ms Wendy Alexander (27 November 2000): I shall reply to the member as soon as possible.

Answered by Ms Wendy Alexander (30 November 2000): I refer the member to the answer given to question S1O-2590 on 23 November.


S1W-9642 - Phil Gallie (South of Scotland)(Con): To ask the Scottish Executive how many textile companies have closed down or gone into liquidation since the Scottish Textile Forum was established.

Answered by Henry McLeish (19 September 2000): The Scottish Executive does not maintain comprehensive records on company closures. However, the Executive is aware of two textile companies that have closed since the establishment of the forum on 12 June 2000. Two other companies have closed down one of their sites.


S1W-9641 - Phil Gallie (South of Scotland)(Con): To ask the Scottish Executive what positive results there have been as a consequence of the activities of the Scottish Textile Forum.

Answered by Henry McLeish (19 September 2000): The establishment of the Scottish Textile Forum on 12 June 2000 was welcomed by the textile industry, textile unions and public sector partners involved with the textile industry as a means of discussing priorities for public sector support of the industry. Scottish Executive press release 1687/2000 outlined 10 areas of support which the forum has been considering and I refer to my answer to S1W-9643 regarding progress.


S1W-9643 - Phil Gallie (South of Scotland)(Con): To ask the Scottish Executive how much new money has been made available to the clothing and textile industry since the Scottish Textile Forum was established.

Answered by Henry McLeish (19 September 2000): The extent of new financial support for the textile industry since the Scottish Textile Forum was established on 12 June 2000 depends on the demand from industry to initiate new projects eligible for support, rather than the availability of funds. A variety of projects, including those to support exports, training, marketing, innovation and e-commerce are currently being developed by the Enterprise Network and the textile industry, but it is too early to report on how many of these will proceed and how much public support they will attract.


S1W-9644 - Phil Gallie (South of Scotland)(Con): To ask the Scottish Executive what textile companies in the Borders have received Regional Selective Assistance in the last two years and what projects and outcomes have resulted from any such assistance.

Answered by Henry McLeish (19 September 2000): None, Regional Selective Assistance (RSA) has only been available to companies in the Scottish Borders since July this year, when the new Assisted Areas map was announced. The new map covers much of Hawick, Galashiels and Kelso, where a number of textiles companies are located. Under the RSA scheme, grants are typically paid in instalments linked to implementation of projects across a number of years. Accordingly, while discussions about RSA have recently taken place with several such firms, no grant has yet been paid out.


S1W-9314 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive who are the four champions of the textile industry referred to in its press release SE 1630/2000.

Answered by Henry McLeish (12 September 2000): I announced the names of the four textiles champions on 12 June in SE Press Release 1687/2000. They are Belinda Robertson (Belinda Robertson Ltd), Michelle Mone (MJM International), James Sugden (Johnstons of Elgin) and Jim Thomson (Hawick Cashmere Company Ltd).


S1W-9315 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive what the agenda is which it has been developing through the Scottish Textile Forum to suit the particular needs of Scotland referred to in its press release SE 1630/2000.

Answered by Henry McLeish (12 September 2000): The Scottish Executive's main agenda to support the textile industry was outlined in SE Press Release 1687/2000 of 12 June. The Scottish Textile Forum met today to discuss how this and the action plan announced by the DTI on 6 June can be developed further.


S1W-9316 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive how much of the £10 million textile aid package announced in June for the textiles industry was or will be invested in Scotland.

Answered by Henry McLeish (12 September 2000): I refer to the answer I gave on 5 September to question S1W-8931.


S1W-9247 - Mr Kenneth Gibson (Glasgow)(SNP): To ask the Scottish Executive how many full time equivalent jobs there were in each year from 1994-95 to 1999-2000 in each of the textile, footwear, leather and clothing manufacturing sectors.

Answered by Henry McLeish (8 September 2000): The number of employee jobs in Scotland in the textile, footwear, leather and clothing manufacturing sectors is shown in the following table. The leather and footwear sectors have been combined due to confidentiality.

[NOTE: Table in original]

Source: Annual Employment Survey, Office for National Statistics.


S1W-9246 - Mr Kenneth Gibson (Glasgow)(SNP): To ask the Scottish Executive what output was in each of the last five years for which figures are available in each of the textile, footwear, leather and clothing manufacturing sectors.

Answered by Henry McLeish (8 September 2000): Data on the gross output of manufacturing businesses in Scotland are available from the Scottish Production Database for the five years to 1997 as follows:

[NOTE: Table in original]

S1W-8931 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive, with reference to News Release SE 1630/2000 of 6 June 2000, how much of the new resources allocated to textile initiatives is to be allocated to Scotland, to which projects, and when.

Holding reply by Henry McLeish (17 August 2000): I shall reply to the Member as soon as possible.

Answered by Henry McLeish (5 September 2000): The package of support measures for the textile sector announced by the Secretary of State for Trade and Industry on 6 June did not allocate resources to particular parts of the UK. Resources will be allocated as the industry and support agencies come forward with good projects which meet the necessary criteria in the various initiatives. The Scottish Executive and Enterprise Networks are working closely with the DTI to establish how the Scottish textile industry can take full advantage of these new initiatives. The Scottish Textile Forum will also be consulted as these plans are drawn up.


S1W-8930 - Christine Grahame (South of Scotland)(SNP): To ask the Scottish Executive what the names are of the members of the Scottish Textile Forum (STF), what the dates were of any meetings already held or will be of any meetings planned and whether the minutes of STF meetings will be made public.

Answered by Nicol Stephen (17 August 2000): The members of the Scottish Textile Forum, which met for the first time on 12 June 2000 are:
Henry McLeish Minister for Enterprise and Lifelong Learning
Tracey White STUC
Gerry Skelton Transport and & General Workers Union
John Steel KFAT
Emma Harcus Scottish Trade International
Jim McFarlane Scottish Enterprise Borders
Helen Bottle Scottish Enterprise Borders
Julia Scott-Barrett Scottish Textile Network
Tony Taylor Scottish Textile Manufacturers Association
James Sugden Scottish Textile Manufacturers Association
Graeme Millar Scottish Consumer Council
Patrick Browne Scottish Retail Consortium
Robert Mather Heriot-Watt University
John Wilson British Apparel Textile Council
Ray Symons Department of Trade and Industry
Blair McNaughton Scottish Textile Manufacturers Association
Peter Brooks Scottish Textile Manufacturers Association
Prof. George Stylios Heriot Watt University
Colin Clarke CAPITB
Michael Bentley Textiles NTO
Hugh McNab Highlands & Islands Enterprise
John Mason Scottish Executive
Andy Bishop Scottish Executive
Claire Smith Scottish Executive

The next meeting is planned for 12 September and the Forum plans to meet quarterly thereafter. The views of the Forum members will be sought at the next meeting on whether to publish minutes of these meetings.

S1W-7403 - Alex Neil (Central Scotland)(SNP): To ask the Scottish Executive whether it will provide details of the work it and its agencies are doing to promote and develop the (i) optoelectronics industry, (ii) textile industry, (iii) dairy industry and (iv) food industry, and what was the relevant spend on each industry in each of the last three years and the current year.

Holding reply by Henry McLeish (14 June 2000): I shall reply to the member as soon as possible.

Answered by Henry McLeish (26 June 2000): These and other sectors are supported through a range of schemes and initiatives promoted by the Scottish Executive and its agencies, in particular the Enterprise Network. Scottish Enterprise has identified the opto-electronics and food and drink sectors (including the dairy industry) as priorities for cluster development and further details are available from the Scottish Enterprise website. I announced plans for developing public support for the textile industry on 12 June. Comprehensive information on the spend from public sources on these sectors is not held centrally and could be provided only at disproportionate cost.


S1W-6728 - Margaret Jamieson (Kilmarnock and Loudoun)(Lab): To ask the Scottish Executive what plans it has to bring forward a strategy to sustain and develop the textile industry.

Answered by Henry McLeish (25 May 2000): The textile sector is a vital part of many local economies in Scotland. Given the intense global competitive pressures on this sector, we are determined to do all we can to support it. I have therefore set up a Textiles Forum, bringing together the full range of expertise in the private and public sectors and in trades unions. It will be meeting shortly to discuss the way forward for all sectors of the industry. The approach in Scotland will build on the textile strategy document for the UK due to be launched soon.


1 Source Scottish Enterprise Borders.
2 Information supplied by Scottish Enterprise Borders
3 PACE provides a national framework to support local public sector agencies in creating and maintaining effective and flexible mechanisms for identifying and responding to potential redundancy situations.

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Scottish Parliament: Research Briefings: RN 01-12 Borders Textile Industry

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