rose to move, That the Grand Committee do report to the House that it has considered the Wool Textile Industry (Export Promotion Levy) (Revocation) Order 2008.

The noble Baroness said: The order has been laid before Parliament under Section 9(9) of the Industrial Organisation and Development Act 1947. Since its introduction at the request of the woollen industry in 1950, the wool textile industry export promotion levy has provided funds to the National Wool Textile Export Corporation—NWTEC—to promote the export of wool textiles. The statutory levy is collected twice a year from about 100 wool processors and suppliers of fibre. The levy currently raises approximately £186,000 per year, which accounts for just over half of NWTEC’s annual income. The average levy payment per company is about £1,868 per annum.

In view of the Government’s aim to reduce bureaucracy by removing outdated and unnecessary legislation, and following representations by some companies in the wool industry that wished to see the levy ended, the Government undertook a consultation in 2007 to determine the future of the levy. We consulted NWTEC, trade associations and other stakeholders, including the trade unions, but most importantly the companies that pay the levy. The overwhelming majority of those who responded to the consultation wished to see the levy ended. Having taken full account of the outcome of the consultation, Ministers have decided to end the levy. Closure of the levy will allow businesses in the wool industry to determine for themselves how they spend their money on overseas marketing. That will bring them in line with other textile and manufacturing sectors.

NWTEC and the Confederation of British Wool Textiles have been encouraged to work together and with other related bodies to develop an alternative voluntary funding arrangement to promote the wool textile sector overseas, if that is what the industry wants. Although the majority of those who responded wanted an immediate end to the levy, my colleagues decided that a reasonable period of time should be allowed for NWTEC and CBWT to put an alternative arrangement in place. Over the past few months, NWTEC has been making progress on this front on a voluntary scheme to start in 2009, timed to coincide with the end of the payments that they will receive from the levy collected for the period up to 30 September 2008.

It is intended that the revocation order will come into force the day after it is made, but it will have the effect that the Wool Textile Industry (Export Promotion Levy) Order 1970 shall not impose on any person any charge in respect of any period after 30 September 2008. All money due up to that date will be collected and disbursed to NWTEC as normal. Therefore in the current financial year, NWTEC will still receive its traditional payments derived from the levy. I commend the order to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Wool Textile Industry (Export Promotion Levy) (Revocation) Order 2008. 27th Report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)

I thank the Minister for introducing the order, which is relatively uncontroversial. Given that it seeks to cut regulation, primarily regulation of small businesses, I have no difficulty in supporting it.

To put it into perspective, the levy currently raises about £190,000 a year, which accounts for just over half of the National Wool Textile Export Corporation’s annual income. The average levy payment is just under £1,900 a year. Under the order, the corporation will see its budget cut by half. The department has stated that UKTI will work closely with the corporation to continue the promotion of wool exports.

I have a couple of questions for the Minister. Will that funding shortfall need to be made up from the budget of UKTI? If so, will her department be providing UKTI with an increase in its budget? Does she believe that voluntary arrangements in the industry will cover the shortfall? Is it proposed simply to cease to make the expenditure at all? Removing unnecessary regulation from business and allowing firms to target their export promotion funding themselves could well be sensible steps. However, what measures, if any, has the Minister thought necessary to make to ensure that overseas promotion of the British wool industry remains focused and coherent?

Only 44 per cent of the 91 current levy payers responded to the department’s consultation. Does the Minister believe that any steps could or should have been taken to encourage greater participation? As a matter of interest, can we expect similar revocation orders for export corporations for other industries in future? Having raised those relatively minor questions, as I said, we shall not stand in the way of this measure. However, I look forward to hearing the noble Baroness’s comments.

I join in the thanks to the noble Baroness for producing the order. The presentation, justification and consultation process were extremely clearly set out. I congratulate the civil servants who were responsible for conducting this exercise. I shall be interested to hear the noble Baroness’s response to the questions asked from the Tory Benches. However, this is a sad commentary on the decline of our wool textile industry. Whether the drop in the exchange rate will result in an increase in wool textiles, only time will tell, but it looks as though we are coming close to the end of what used to be a major industry in our country. If you wanted a commentary on what has happened to our manufacturing sector, it is reflected in this order.

I thank noble Lords. As regards the shortfall, my understanding is that we do not yet have a clear view but there is expected to be a shortfall. It is up to the industry to decide how it will market the product. As regards the demise of the industry, it has changed a lot and is very much a niche industry with its own ways of marketing. Therefore, perhaps it is not so necessary to have a common marketing strategy because it targets a certain type of high value-added market overseas and I guess that companies are reasonably well aware of where their markets are. Therefore, we did not see the need to make up the sum through UKTI funding, although it will be available to assist them if it is needed.

I am afraid that I do not know whether there are expected to be revocation orders for other export promotion entities. In fact, I am not entirely sure that many still exist. However, I shall endeavour to find the answer to that and write to the noble Lord. I have a breakdown of who was consulted and who responded, which I would be happy to read out, although I think that 44 per cent is not a bad response rate for consultations overall. The main people who were consulted were obviously the companies themselves, who are the users of the entity. One hundred and sixty-three questionnaires were issued, 91 to companies which currently pay the levy, 42 to companies which are liable to pay but fall below the threshold, which might account for some of the non-responses, and 30 to representative bodies. Three trade unions were involved. About 61 responses were received by the closing date. These are available on the website. We believe that represents a reasonably full view of the sector and the responses formed the basis on which the decision was taken. I am very grateful to the noble Lord, Lord Razzall, for his compliment to BERR officials, which I am sure they will take kindly. I should perhaps convey my other responses to noble Lords in writing. I commend the order to your Lordships.

On Question, Motion agreed to.