BRITISH TEXTILES (EXPORT MARKETS) (Hansard, 10 December 1947)

§ Mr. Sidney Shephard (Newark)
After the excitement of the last hour I want to draw the attention of the House to a subject of equal importance—the closed export markets. I noticed in the Press tonight that the President of the Board of Trade is now on his way back from Russia. I hope he has a treaty in his bag. Russia wants our machinery, and we want her timber and wheat, and it should not be beyond the wit of man to effect an agreement between our two countries. But Russia is not the only country with which we want to see freer trade, and in that respect I am glad to hear that the Paymaster-General is undertaking special duties as Britain's travelling salesman overseas.
A subject such as this cannot be discussed in half an hour and I shall be touching only that fringe of it and limit- 1154 ing myself to that part affecting the textile trade, including hosiery, lace and made-up wearing apparel. Of course, all industries today are coming up against that problem. Only yesterday there was in the "Daily Mail" a short article referring to a firm named Douglas (Kings-wood), Ltd., which said that dismissal notices had been served on 300 employees of that firm because of the freezing of foreign markets. This firm makes motor cycles. They said they had r, 1,100 motor cycles ordered by Denmark, and were prevented from making delivery because they could not get an import licence. Whatever the Minister may say in his reply, I look upon this Debate only as a curtain raiser, and I hope that before long the Government will give time to review the whole position.
The contribution which that textile industry is making to our balance of payments is very substantial. Out of exports of £912 million, £186 million were for textiles-20 per cent. of the whole, and a larger share than any other single group of industries. Further, that was despite the fact that the volume of exports of textiles in 1946, on which these figures are based, were only 45 per cent. of the 1937 figure. Had we been able to export the same volume of textiles in 1946 as we did in 1937 there would have been £300 million more sterling coming to us as a result of those sales. That would have gone, according to the Chancellor of the Exchequer, half way towards closing our adverse gap.
1155 That is a very ample reason why everything possible should be done to open the world markets, and that, of course, is not a matter for the manufacturer. That is entirely a Government responsibility. The industry can produce the goods and possibly produce them at the right price, but it cannot find the markets. That, as I have said, is entirely a Government responsibility. The position today is that many markets are closed and others are partially closed. Producers are beginning to get very worried whether they will achieve their 1948 export targets. I cannot give the House a better overall picture of the situation as it applies to this particular trade than to quote from the speech of Lord Hollenden to the Wholesale Traders and Hosiery Export Group. He said: The Government set the target figures but to reach them, it must give us entry into the desired markets. Where can we find countries willing to take British textiles? For all practical purposes the whole of Central and South America is closed, and no import licences axe given for consumer goods. Sweden and Portugal are in the same position. Switzerland offers little hope. It is true that U.S.A. and Canada are open and free to buy without restriction, but it is common knowledge to all exporters that in both countries there is definite sales resistance to our goods. South Africa, Australia and New Zealand have always been fruitful fields for British textiles, but their present economic position has restricted their buying power. The Colonies, always important markets for textiles, are still, as far as we can see, willing to buy, but on instructions from the British Government no import licences for textile consumer goods are being granted. Denmark, Norway and Holland are able to import little or nothing. The Danes say, 'If you cannot buy our bacon and eggs, how can we buy your hosiery and other textiles?' I could go round the world's markets and the picture would be the same. India is closed, so is Egypt and even Iceland. All this is common knowledge to every exporter and to the Board of Trade, and what we ask the President of the Board of Trade is, how are we to reach his export targets unless something is done and done quickly to open to British traders those markets now closed. I think that extract adequately makes out the case.
I have here a memorandum which was presented to the Export Promotion Department of the Board of Trade by the Hosiery and Knit Wear Export Group. That industry has been seta target of £21 million and is capable of achieving it if markets are open. It lists 36 countries, six of them are closed completely, ten of 1156 them partly open, but import licences are required, and that means that they are virtually closed. In the remaining countries most of them are only open for small quantities of specialised goods. It seems to me that it is about time that this matter was aired in the House. It is a gloomy picture wherever we look, and very depressing to producers trying to reach their targets. I hope that the Minister who is to reply is going to dissipate some of the fears and give an indication of what action the Government are taking in this matter.

§ Major Haughton (Antrim)
In support of what my hon. Friend the Member for Newark (Mr. Shephard) has said, I have prepared a statement which I have in my hand, showing the import regulations in force and the import duties which are levied on the importation of piece goods and fabrics in various countries. The facts are far too detailed and long to be debated at this time of night, but there are some general conclusions that can be deduced from them. I think we have to start with the fact that, although it is easy to set targets, the targets that have been set for export markets are impossible, because, for various reasons, it is impossible to obtain import licences to certain countries. My hon. Friend has decribed some of the barriers, which exist in the South American countries, Scandinavia, and Russia, which lands together amount to half the world. Since it is well nigh impossible to export rayon piece goods to any of those countries we have to turn our attention for the time being to the other half of the world.
Australia has a population of about 7,000,000; New Zealand a population of not more than 2,000,000; South Africa not more than 2,000,000 whites; and Eire not more than 3,000,000. If we add Southern Rhodesia, Ceylon, Newfoundland, Malta, British Guiana and the West Indies we have a market of people numbering—even if we take the whole lot together—not much more than that of one of the big cities of the United Kingdom. The new arrangements that have been made at Geneva—and I should like to pay a very warm tribute to what has been done there—will, of course, be of the greatest possible assistance to the export of linen goods to the United States. The last thing the business man wants to do at the present time is to emphasise—or 1157 over-emphasise—the difficulties and the frustrations that stand in our way, but I do think, in connection with these matters, that when the President of the Board of Trade sets export targets he should, at the same time, describe quite clearly all forms of difficulties, especially those which are not very familiar, that have to be overcome in the attainment of each and every target.

§ Mr. Osborne (Louth)
I should like to reinforce what my hon. Friends have said, and especially from this angle. We are being asked in the trade to export, especially to hard currency countries. On many occasions representatives of the Board of Trade have said to us, "We must concentrate on the countries controlled by hard currency." Yesterday the Assistant Permanent Secretary to the Ministry of Supply was speaking at Leicester, and he admitted that export targets had been fixed far too high. I understand that the President of the Board of Trade is reconsidering the targets he has fixed; but however they are altered, it will not help the manufacturer nor the worker, both of whom are doing their best, unless the Government will by their own action—which they alone can take—keep open markets where we can sell our goods.

§ Mr. Spence (Aberdeen and Kincardine, Central)
I think my hon. Friend the Member for Newark (Mr. Shephard) has done a great service to trade, and to industry generally, in raising this matter tonight. I am concerned with the export trade, and I can say how fully my own personal experience of the great difficulties we have today bears out what he told us. I should like to put one question to the Minister who is to reply. It affects markets vital to us. We made last year an agreement with the Argentine Government to buy meat for four years. At that time no collateral trade agreement was made. Our meat imports from the Argentine are between 35 million and 40 million tons a year. Surely, there was a market open to our goods that we should have kept open? If we are to take that amount of goods from that country, some sort of goods-for-goods, if not goods-for-cash, arrangement could have been made with that country?
That commercial angle of trade agreements should be reconsidered. So far as 1158 I can see, from research in the Library, that question has not been reopened. I hope the Minister will be able to reassure us on that point. There is a growing bank of goods awaiting export piling up in the factories in this country today, and in certain cases it is assuming alarming proportions. Capital is being tied up and in certain cases that accumulation of goods tends to decrease the incentives for output. It is vital to get these quantities cleared and I cannot too strongly urge the necessity for immediate action by the Government to open overseas markets awaiting our goods.

§ Major Peter Roberts (Sheffield, Ecclesall)
I regard what we have heard as the first rumblings of the thunder we are going to hear about export targets in the future. I should like to point out that the root cause of all this is that the ordinary exporter is only prepared to receive in payment for his exports either sterling which other countries have got or dollars. Other countries only have sterling to the extent to which they export to this country, and, therefore, the imports we are cutting down result in cutting down the sterling credits in France, Spain, Belgium, Switzerland and other countries. These countries are decreasing their business because sterling credits are not there for our exporters to receive in payment.
The other alternative which the exporter can accept is francs or pesetas or drachmas or the currency of the country buying our goods, and that is impossible at the present time because of the ridiculous rates of exchange. Francs, for example, are at the rate of 475 to 470 to the £. Their actual value is nearly 900 to the £ and no exporter is prepared to accept francs at 475 when their real value must go up to 900 within two or three years. The only money the exporter can receive is the sterling credits built up in this country.
I think the Parliamentary Secretary and Members on all sides should be thankful that this matter has been raised at this stage. This is only the beginning. It is going to roll on as the months go by, and if the Government cannot state now that they approach the fundamental cause in the question of payment for our exports then I am quite certain the tar- 1159 gets set for this next year will never be reached.

§ Mr. Bottomley (Secretary for Overseas Trade)
First of all, I would like to join in the comments made about the pleasure of listening to the contribution of the opener of the Debate. This is a common aim. We do want to endeavour to get our exports overseas so that the country as a whole will benefit. We are endeavouring to do that. Perhaps I may answer the points made as briefly as I can.
I do not think there are restrictions existing in the way we have been led to believe by comments made. Let us take the primary hard currency markets—Argentina, United States and Canada. In the case of the first, Argentina, we know that they did impose restrictions, as they are still doing. At the present moment there are talks going on as a result of which we hope to break down some of these restrictions. It would be impolitic for me to say anything more at this moment when the talks are going on, but we are in agreement on what we want to do. In regard to the United States there are no restrictions, therefore our manufacturers can get into those markets. You must have the quality and price of goods. Unless you can bargain with them on these terms, then in the ordinary way of business you do not get the orders.

§ Major Haughton
I do not want to take up time by interrupting but did the hon. Gentleman say there are no restrictions on imports of British merchandise into the United States?

§ Mr. Bottomley
I was answering the point made by the hon. Member on import licensing; with regard to import licences and restrictions imposed in that way, there are no such difficulties in the United States market. In regard to Canada, the quota limit has been fixed at 400 per cent. of the average trade figures in value for the period 1937–38–39. As far as other hard currency markets, such as Switzerland and Portugal, are concerned, restrictions do not exist. As far as Sweden is concerned, there have been talks, as hon. Members are probably aware, financial talks, and in connection with them we have been trying to drive a bargain 1160 so that some of the existing restrictions shall be removed. We are hopeful that we shall succeed in our endeavours, but for the moment I do not wish to go further than that.

§ Major Roberts
How are these goods to be paid for? The hon. Member has mentioned Switzerland, for example. How does he suggest that our exports shall receive payment?

§ Mr. Bottomley
Goods will balance goods. The Latin and Central American countries, as far as the hard currency areas are concerned, are being pressed continually to take textiles. At every opportunity we put on the pressure. We hope that this will help. As to some soft currency countries, such as Norway and Denmark, immediately after the war they had what might be called a honeymoon period, when they took everything. Later, they had to impose restrictions. Whenever we have talks with them, and a bi-lateral agreement comes up, no opportunity is lost to get them to let our goods into their markets.

§ Mr. Shephard
Will the hon. Gentleman deal with the Colonies?

§ Mr. Bottomley
Certainly; I will deal with that point now if other hon. Members do not object. The restrictions imposed in the Colonial markets were imposed as a result of the action of His Majesty's Government. This was taken so that goods previously offered to the Colonies could be sent to hard currency areas. I think that is sound business. It is realised that this has been a hardship, and we are looking at the matter again. We hope we shall be able to arrange for entry into these Colonial markets for a limited amount of goods.

§ Mr. Jennings (Sheffield, Hallam)
Why cannot business people be told more about these things?

§ Mr. Bottomley
There are contacts through the "Board of Trade Journal," and my colleague behind suggests there are other ways and means in which contact is made between industry and our Export Promotion Department. As far as cotton piece-goods and cotton yarn, and goods of that kind are concerned, there is an unlimited demand. That demand is unsatisfied only since Lancashire cannot, as yet, produce all that is required. Therefore the limitation is at 1161 present the total production of the industry. Lancashire is trying to put that right. Appeals have been made that there should be every endeavour by manufacturers and employees to try and produce more and more. I do not think we shall have any difficulties in that direction, and I believe that exports will rise and that we shall earn more dollars as and when production of some goods is pushed higher.

§ Mr. Drayson (Skipton)
Is the hon. Member suggesting that dollars are merely dependent on an increase in production?

§ Mr. Bottomley
Surely the hon. Member knows that if we can sell more of certain goods we can get more collars in return? With regard to other matters which were raised I think I have covered most of the points, unless any hon. Member thinks I have left some out. I believe I have covered the points about the different countries. I would like to say that at the Board of Trade—

§ Mr. Shephard
I would appreciate it if the hon. Gentleman would say a word about India, and whether it is closed completely.

§ Mr. Bottomley
I did not hear the hon. Member say that India was completely closed. There have to be limits at present to our trade with India although restrictions will not, obviously, be applied in the same way in all instances. We have to treat the soft currency areas 1162 and the sterling area in a different way from the hard currency areas in order to get raw materials and the food to keep us alive. I think I have covered already the question of the Scandinavian countries; we continually try to persuade them to take our goods. The period after the war, of course, was an exceptional one and they have since had to impose restrictions, but we shall not miss any opportunity of trying to break them down. I would like to say again that I am grateful to the hon. Member for Newark (Mr. Shephard) for having raised this question and I hope the answers will help to clarify the matter.

§ Mr. William Shepherd (Bucklow)
I just rise to say that I am amazed at the horrible complacency which has been shown by the hon. Gentleman who has made the reply to this Debate. In the face of a situation where our export trade is being strangled, and not even strangled slowly but quickly, it is, to say the least, regrettable that a Minister should stand at that Box and show none of the sense of urgency which should actuate him and his Department. If that is the attitude of mind which is to motivate this country in the face of the situation which is now developing, it will not be surprising if this country is in for a very dismal future indeed.
Question put, and agreed to.
Adjourned accordingly at Twenty-seven Minutes to Twelve o'Clock.