The UK textiles industry once led the world, but now firms face fierce competition from overseas producers, as Nik Wood explains.

The recent problems at Marks & Spencer have delivered a mighty blow to Britain's textiles industry.

The high street giant's decision to source more of its clothes from overseas has already resulted in hundreds of workers losing their jobs at companies which supply M&S.

Two factories run by Daks in Scotland are now threatened, and 8,000 jobs could be at risk after Marks dropped William Baird, a long-time supplier.

With M & S having a 16% share of the clothing market - in some areas such as knitwear that rises to about 30% - its buying strategy is clearly hugely influential.

From the days when 90% of its clothes were made in the UK, it is now looking to import half from abroad.

Struggling with the Far East

This development comes as the textiles sector was already struggling because of the strong pound and the loss of markets in the Far East.

In November, the Knitwear, Footwear and Apparel Trades union (KFAT) estimated that 41,000 jobs had been lost in the past year - the equivalent of one textile factory closing every day.

Those sort of losses had long been predicted by the unions, who organised a march on Parliament in 1998 to call for more government support.

"Taxpayers' and European money has been ploughed into farming and other sectors. But none of these has suffered as badly as textiles, clothing and footwear," said Bas Morris of KFAT.

"Indeed, farming has actually increased employment in the last three years. It's time the government took another look at its priorities."

Victorian values

It's a far cry from the Victorian era, when the industry was the country's biggest employer and the world's largest producer.

Boosted by cheap raw materials from around the empire and innovations like the spinning jenny and Crompton's mule, Lancashire, Yorkshire and the Midlands were world centres for cotton, wool and knitwear respectively.

It was said Oldham had more spindles than the rest of the world put together.

Peter Booth, from the Transport and General Workers' Union textiles division, says the UK's dominance reflected its place in the world.

"It had access to the materials and to the markets," he explained.

But competition from other countries gradually increased, and although in the 1960s, there were still 1.5m people working in textiles, the flood of cheap imports soon began to take their toll.

Cheap imports

China, Bangladesh, Vietnam and lately Morocco have all been able to offer labour costs which are a fraction of those in the UK. In just 12 months in the early 1980s, 200 mills shut down.

In the past five years, imports have risen by 40%, and import penetration into the UK market is now 57%. Despite wages which are on average 20% lower than other manufacturing sectors, British businesses are finding it more and more difficult to compete.

Thriving jeans sector

There have been bright spots, such as the development of a thriving jeans sector in Preston, which grew from the large number of Asian workers laid off when the mainstream industry declined, but even it has found the going tough.

Textiles is still the fourth largest manufacturing employer in the country, providing work for more than 340,000 people.

But companies have seen their share prices tumble, and the sector now accounts for little more than 0.25% of the FTSE All-Share index.

Yet while decisions by Marks and Spencer are now having a serious impact on the industry, there are those who think the store has had a positive influence over the years, making British textiles more creative, efficient and responsive.

Those are traits it will need to maintain if it is to stay a UK manufacturing force into the next century.