Footwear (Profit Margins)

HC Deb 03 February 1949 vol 460 cc1816-8

16. Mr. Beswick

asked the President of the Board of Trade, in view of the excessive distribution of profits recently made by a firm manufacturing and retailing footwear, whether he will reduce the profit margins allowed in this trade.

Mr. H. Wilson

I have recently undertaken comprehensive inquiries into the costs and profits of footwear manufacturers, wholesalers and retailers. As a result, manufacturers' margins were reduced over a wide range of footwear last November and, as has already been announced, the margins for both wholesalers and retailers will be reduced later this month.

Mr. Beswick

Will my right hon. Friend take into account the action of this particular company in flaunting their profits and deliberately increasing their dividends from 25 to 32½ per cent., which is a great provocation in these days, especially to mothers who find great difficulty in providing their children with footwear?

Mr. Wilson

I have already explained that over a wide range of utility footwear margins have been cut by rates varying from 4d. to 11d. in the.£

Mr. Stanley

Would the right hon. Gentleman take into account the recent change in the situation where a certain number of boot manufacturers are now working short time, owing to the shortage of raw materials?

Mr. Scollan

Owing to high prices.

Mr. Wilson

The raw material position was giving us some anxiety a month or two ago, but it has improved considerably with the recent purchases in the Argentine.

Mr. Cooper

Is my right hon. Friend aware that in boots and shoes and hosiery the profit margins devised by his Department are greater than pre-war, and the result has been that additional handlers have come into the market, forcing up the price to the consumer?

Mr. Wilson

I would not deny that the profit margins in this industry, as in a wide range of industries, have been fairly generous, but they are being examined very carefully at the present time.

Mr. Wilson Harris

Could the right hon. Gentleman say what percentage of the real capital of this company is represented by profits distributed?

Mr. Wilson

I should want notice of that question.

Mr. Beswick

Will my right bon. Friend take into account that, whatever the real capital of the company is, it has been contributed to by the workers in the shape of lower wages and by the consumers in the shape of higher prices? No additional money is being found by the shareholders.