§ 7.1 p.m.
§ Mr. Cyril Osborne (Louth)
I beg to move,That this House, conscious of this country's need to export at least 30 per cent. of all it manufactures in order to pay for the 50 per cent. of the food and nearly 100 per cent. of the raw material requirements which it must import, and recognising this country's inability to compel the foreigner to buy British when cheaper or better articles are offered and being aware that labour costs in this country are high because nine-tenths of the world lives at one-fifth of our standard, urges Her Majesty's Government to make better known to exporting firms the facilities offered by the Board of Trade as an additional help but not as a substitute for the higher quality at lower price goods needed to secure the necessary bigger share of world exports if mass unemployment and real hunger in this country are to be avoided.
§ Mr. Speaker
It may be for the convenience of the House if I indicate now that I do not intend to call either of the Amendments: to leave out from "import" to "urges" and to leave out from "exports" to the end and to adddeprecates the continued increase in overhead charges imposed on industry engaged in the export trade, requests an investigation into why prices have not been reduced, urges Her Majesty's Government to take the initiative to have established an International Fair Wages and Conditions Standard, and appoint a Ministry of Production and Economic Planning.
§ Mr. Osborne
After the dramatic importance of the debate on Northern Rhodesia, it may seem to this rapidly thinning House that exports are rather small beer. On the other hand, I take a different view and believe that, important as Central African affairs are to this House, exports are just as important, and I am sorry that so few hon. Members are staying to take part in this debate.
I should like first to congratulate the Board of Trade on the excellent services it has already provided in order to help exporters, especially the small exporter. On the whole, the big exporter can look after himself. He knows his way about the world and does not want a lot of help. It is the medium and the small men who need the excellent services provided by the Board of Trade.
I have only one criticism to offer my right hon. Friend the President of the 583 Board of Trade, and that is that whilst he criticises businessmen for not selling their wares aggressively enough abroad, the Board of Trade itself does not sell its services aggressively enough to our businessmen. It merely says "Here are the services; if you want them, come and get them." But a small businessman is not very well informed on these matters. The Board of Trade does not sell its services aggressively enough, and I wish it would do more.
I want also to congratulate the Government on the excellent services provided in various departments overseas—not only by Board of Trade representatives, but also by commercial counsellors whom one finds from time to time in various parts of the world.
In October, when I went from Hong Kong to Canton to attend the trade fair there, I felt a little nervous about going into Communist China for the first time, and I was greatly helped by our commercial counsellor in Peking, who was returning from leave. At the trade fair I was immensely impressed at the way in which this servant of our country knew the economic advisers in China, knew his way around, and was helping British businessmen at the fair. For those things we should like to say "Thank you". I am sure that all exporters are grateful for what is being done, but like Oliver Twist, we want a little more.
The first thing to do, if we can, is to make the nation export-minded. At the moment, there is a kind of cynical apathy towards the problem of exports. I am not complaining about this House, because it is not my place to do so, but it is just as though it was typical of the whole nation. When we were discussing Northern Rhodesia the House was crowded. Now that we are discussing exports there is only a handful of the faithful present. That reflects the attitude of the nation towards exports.
Amongst businessmen, and workers, too, the attitude is, "Well, it does not affect me, so why should I worry?" It seems that the only interest in the public mind today is whether Spurs will win the double—the cup and the championship.
§ Mr. Osborne
And, no doubt, about that too. No one worries to the same extent about our bread and butter which come from our exports.
I remember so well, some twelve years ago, listening in this House to Sir Stafford Cripps. I had a very high regard for him. I remember him warning the House time after time that either we export more or we go hungry. But the tragedy is that the people say, "We have not worried about exports and we have not gone hungry. We have never had it so good." It is difficult to make them worry about exports when things seem so good to them.
There is a general refusal to face unpleasant economic realities. Some of my hon. Friends and some friends of mine in the City have tended to blame the trade unions and the workers. I want to put the blame squarely where it belongs—on both sides. In the City column of The Times on Monday, we had this exemplified by the opening paragraph of an article by the City editor, in which he said:The industrial share market continues to confound most prophets by improving steadily in spite of the unfavourable economic background. Last week's brisk price rally after the brief reaction engendered by the F.B.I.'s review of business trends testifies once again to investors' willingness to ignore bad news.It is not only the workers who are not interested—it is also the capitalists, the shareholders. It is useless talking to the Stock Exchange, in the terms of my Motion, about the threat of mass unemployment or hunger. These people just do not believe it. In today's Daily Telegraph, that newspaper's City editor says:Buying continued by those who are prepared to turn a blind eye to balance of payments problems and narrowing profit margins.No wonder the whole country is not a bit interested in the seriousness of our economic situation. But this concerns not only what I call the capitalist shareholders. I was rather surprised that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) put down an Amendment to cut out the two salient points of my Motion. If I am allowed to refer to the Amendment—
§ Mr. Osborne
I understand that the plea of the hon. Member for Stoke-on-Trent, South is that we should not call attention and should turn a blind eye, like the shareholders, to two important facts. One is that we cannot plan our exports. We cannot have a Ministry of Planning to see that our exports are sold, because no Government of any kind can compel the foreigner to buy British goods. We may have excellent exports in price and quality, but we cannot make foreigners buy them.
To give him a reminder, perhaps the House will allow me to say that in the coal industry we have an example of a trade which has been helped by Governments over the last fifteen years as no other industry has been helped. But no Government can make the foreigner buy British coal. Before the First World War we exported about 100 million tons of coal a year. By 1939 that figure was down to just under 40 million tons. In 1954 it was down to 13 million tons. Last year it was down to 3.4 million tons.
No economic planning can make the foreigner buy British coal for two simple reasons. First, there has been the development of oil as a fuel, and secondly. there has been the greater development of the European coalfields. To use economic planning as escapism from the unpleasant realities of our economic situation is most unfortunate. The question is what can the Board of Trade do to help? Within reason, the Board of Trade can still urge better salesmanship of our products. We can do what the former Prince of Wales, now the Duke of Windsor, suggested to English businessmen on his return from Argentina, as long ago as 1921—"Let the bosses go out to the export markets and make decisions on the spot." The Board of Trade could continue to urge along those lines, but I warn my right hon. Friend that not even the most aggressive salesmanship can continue to sell shoddy goods at high prices. No American type of aggressive salesmanship can always hoodwink foreign buyers. They want the best quality goods at the lowest prices and with good delivery dates.
Two weeks ago I was surprised to read in the Sunday Times an almost blistering 586 attack on the motor trade by Sir Miles Thomas, who should know what he is talking about. Sir Miles gave examples of the shoddy workmanship of British cars being exported. I have been surprised that since then no one in the motor trade has refuted what Sir Miles said.
§ Mr. John Hall (Wycombe)
I think that the shop stewards of one of the major motor car firms did oppose and deny Sir Miles's allegations.
§ Mr. Osborne
I should have thought the manufacturers themselves could have done it instead of leaving it to their workmen. I take it that there is a good deal of substance in what Sir Miles Thomas said. That type of thing has to be tackled and tackled strongly.
Secondly, will the Board of Trade vigorously defend British exporters' interests in overseas markets? I know that it is difficult, but I want it to be done. My right hon. Friend could warn those countries who are discriminating against British goods that we shall adopt reprisals if driven to do so. People who will not buy from us will not sell to us. It should be said very plainly to them.
I will quote from a letter which I received yesterday from a director of a company which sells over 50 per cent. of its total production abroad and the chairman of which has spent more time abroad than he has at home—not recently, but over the last twenty years. He is personally known to my right hon. Friend and is, I believe, to see him tomorrow morning on this very issue. He writes to me:There is another problem that has arisen in Venezuela. We have an outstanding account in that country and we are now notified that our local agent has been paid in local currency but there is no sterling available with which to transfer this money owing to us out of the country. This again is something which we manufacturers can do nothing about—it is entirely up to the Government Departments to give us assistance.In The Times yesterday there was a little photograph of my right hon. Friend with the Venezuelan delegation which he was entertaining. I want my right hon. Friend to use his charm and his power to get them to pay for the goods which we have sent their country. That is something on which it is reasonable for the trader to expect the Government to help him. 587 The same man complains about the American forces in Europe ceasing to buy British goods. That is natural and inevitable. I cannot see how that can be altered.
There are other quotations from the letter. The first concerns South Africa:I understand that the quota for the last quarter of 1960 was 40 per cent. of the goods imported during the qualifying period. For the first quarter of 1961 the quota has been reduced to 25 per cent.What is the British exporter to do? The quota has ben cut, originally to 40 per cent. and now to 25 per cent. Will my right hon. Friend do his best to see that that quota is restored as soon as possible?
Then my correspondent refers to Ceylon:You may know that their Ceylon Government Gazette Extraordinary, No. 12274 of 1961, dated 25th January, 1961, prohibits the import of certain goods…except under licence and it has apparently been made plain that no licences will be given.Is the Board of Trade aware of that? Can it help? I understand the difficulties of Ceylon, but to shut out our traders completely from a traditional market seems hard.
Then my correspondent says about Jamaica:Licences…have been held up since December and it has been impossible to get any. It is freely stated that the Government are going to review the whole situation of licences and there are rumours to the effect that it is the intention of the Government"—that is, the Jamaican Government—to protect the two local—factories so that items—will only be allowed in on quota, and at that the quotas will be very very small.We are doing a lot to help in Jamaica in one way and another. Is the Board of Trade protecting us as far as it can in that important market?
Lastly, my correspondent refers to Southern Rhodesia—and it is strange that this should follow the debate which has just finished. He says:We have very good reasons to believe that application is being made to the Government for increased duties…there, in order to protect local industry.No one complains that local industries are being established in various parts of the Commonwealth, and all the trader asks is for a fair crack of the whip in the trade that is left.
588 My friend asks this final question:I shall be glad to know whether our Government can put some pressure on to see that our markets in these places are kept open and not closed.That is a fair request. I hope that I shall get a good answer to all my questions, but I hope for a good answer to this question especially. Next May, British industry is holding a large fair in Moscow when it is hoped that we shall do a considerably increased trade with the Soviet Union. What is the Government's attitude to overseas fairs? Will the Board of Trade do its best to support them? Permanent showrooms, where there was someone to take orders at once and transfer them, would be a good way of helping smaller exporters who cannot afford to keep men overseas.
I next ask my right hon. Friend about the treaties he made from time to time with the Communist countries. Here he has a direct responsibility. The Board of Trade has power to influence the schedules that appear in these trade agreements. I confess a vested interest here, because I am interested in the consumer industry—although, for obvious reasons, I have never executed an order with Iron Curtain countries.
§ Mr. Osborne
So that I can be like Mr. Khrushchev and can claim to have clean hands and a pure heart. That is a perfectly good answer.
The next time we reach a trade agreement with China or Russia, I plead with my right hon. Friend to strive to get a greater proportion of consumer goods included in the schedule. Obviously, the Communist Powers want to spend all the money they can on capital goods and then they use those capital goods to produce more of the consumer goods that we want to sell, thus driving us out of world markets. While the makers of capital goods want to do all the trade they can, we should ask for a minimum of consumer goods to be included in every schedule.
While on that issue, I want to press my right hon. Friend about the unsatisfactory answer which I received from one of his colleagues the other day. Earlier last month there was a cry from Moscow that British industry had sent 589 to Moscow knitwear goods, textiles, which were shoddy and useless. That protest was broadcast throughout the world, and it did our workers and our manufacturers a great deal of harm. It was a shocking advertisement for British industry.
Because I have interests in the trade, I tried to find out where those goods came from. On 10th January, the Daily Mail said:Mr. Ian Mikardo, director of the firm which arranged the ordering and shipment of women's dresses described by the Russians as 'shoddy'"—and it is a horrible thing that it should be broadcast to the world that we are producing shoddy goods—told me yesterday: 'My company acted in a purely consultative capacity. We didn't make the goods.'If people are to play with industries about which they know nothing, they ought to be responsible for seeing that good and not shoddy goods are sent out. They cannot turn around and say that it is nothing to do with them.
I ask my right hon. Friend to do all he can when he makes trade treaties to induce the Communist Governments to ensure that orders go through proper trade channels. It is outrageous that our trade should be spoken of in this way throughout the world's markets.
§ Mr. Jack Jones (Rotherham)
Can the hon. Member tell the House who made the goods? They did not make themselves and the gentleman whose name has been mentioned did not make them. Can we be told what textile factory did make them and under whose direction and ownership that factory is?
§ Mr. Osborne
As was my duty, I went to the trade's export committee and there saw the manager who for a long time was unable to trace where they had been made. They had not been made by any recognised or reputable firm. It is a great pity that they should have been allowed to go out of the country without reputable firms knowing what was going on, so that the whole of British industry got a bad name in the world's markets.
§ Mr. F. A. Burden (Gillingham)
Would not that position be rectified if purchasers from overseas, the Russians included, placed their orders through long-estab 590 lished confirming and buying houses in this country, when the trade operatives who know the style of particular goods are not only able to place the orders, but are able to ensure that goods of the highest quality are despatched?
§ Mr. Osborne
That is the point I was trying to make. When I put my Question to my right hon. Friend, he said that he did not have direct responsibility. Of course, he does not. The Russians buy through whom they like. All I am asking is that my right hon. Friend should ask the Russians not to put their orders through political camp followers.
§ Mr. John Hall
This is an interesting case. The same complaint was made about a very large consignment of shoes which was sent to Russia. It was done by direct contract with one of the internationally known shoes manufacturers in this country and was a total consignment of about £150,000. The value of the shoes about which complaints were made was about £140, so there was not much substance in the complaint. I imagine that if my hon. Friend examined this case he might find that the same could be said about it.
§ Mr. Osborne
If that be so, it is a great pity that the whole of British industry should be smeared.
§ Mr. Michael Shaw (Brighouse and Spenborough)
The phrase "shoddy textiles" has been used in this connection and I would be grateful if my hon. Friend the Member for Louth (Mr. C. Osborne) would make it clear that the word "shoddy" refers to the quality as distinct from the material of the textiles out of which the articles were made.
§ Mr. Osborne
It was not the fabric which was wrong.
The Daily Mail went on to say:The Soviet newspaper, Economic Gazette, claimed that part of the order was shoddy, said 1,500 knitwear suits had been rejected, and alleged: 'Many of them were not sewn properly and were soiled with oil.'Had these orders gone through normal channels, the normal channels would have seen that that did not happen. That is what men are in business for, and I beg my right hon. Friend not to shelter behind the excuse that he cannot make the Russians buy that way. He must induce them to put their orders through 591 proper channels and not pay what seemed to me to be extra commissions to men who at one time were saying how wicked it was that profits should be earned at all.
Is it possible for my right hon. Friend to encourage standardisation of products so that we can sell them abroad more easily? Can we standardise products at home so that they are the same, or nearly the same, as those used in Europe, Asia and other great markets? For example, I am told that last year the value of our exports of T.V. sets was less than £1 million. I am also told by responsible people in the trade that if we made sets using 625 instead of 405 lines it would be possible for sales to reach £100 million a year—and that is an estimate of a responsible firm. Is it possible for my right hon. Friend to use his influence with the manufacturers, the B.B.C. and others so that we are not standing apart from the rest of the world? I am advised that last year the Egyptians wanted 15,000 television sets but that they wanted them with the 625-line system. They came to this country, but we did not have the facilities for producing the sets quickly, so the order went to Germany. If we could have standardisation of that type, it would help not only in that, but in other trades.
Will my right hon. Friend use his influence with the Foreign Office to see that commercial counsellors abroad are given rather better status among the diplomats? In some places—not all—the commercial counsellor is regarded as the poor relation, with a rather lower social status than the others.
I also ask that the Board of Trade should work more closely with our ambassadors who are prepared to help industry. I give some examples of what I have in mind—and I am prepared to gives names and addresses afterwards, although it would not be wise to do so in the House. Last autumn, the British Ambassador in Rome suggested that about 10 electronic equipment buyers of the technical director level who would be interested in buying British electronic process control equipment should visit this country. The suggestion was passed to the Board of Trade, who passed it to one or two associations for comments. But because the comments of the associations were not as enthusiastic as the 592 Board of Trade thought they ought to be, the Board of Trade told our representatives in Rome to let the idea drop.
Luckily, our Ambassador in Rome said that this was too good a chance to let drop and himself got in touch with British traders who could help, and it was left to private industry to get these Italian buyers over here. Whoever turned down that idea in the Board of Trade—[An HON. MEMBER: "Sack him."] Yes. I think that I would sack him; it may be the Minister himself, but I am not in a position to say. When an ambassador is in a position to help business, it is a great pity that someone in the Board of Trade should say that the idea is not worth pursuing.
Recently, an English exporter of toy mechanisms, some of the parts of which come from Germany, asked the British Consul-General in New York for instructions about how to contact possible customers in the United States. I am told that he got a dusty answer. He was told to refer to his trade association in this country, which he had already done without success. He was also advised to go to the New York Toy Fair which was to be held some months later.
This British manufacturer got his German partner—since certain parts were made in Germany—to contact the German Embassy in Washington. Within nine days he received from the German Embassy a list of a number of possible American buyers, and the firm is now doing business worth hundreds of thousands of pounds a year. It seems ridiculous that things like that can happen. I ask my right hon. Friend to look into it.
When all is said and done, when the Board of Trade has done all it can to help, the solution to the problem lies in the hands of our manufacturers. The Board of Trade cannot do the job for our manufacturers and exporters. Our problem is how to drive, or to induce, the medium-sized and smaller businessmen away from the soft, easy and productive home market into the difficult, worrying and less profitable export market. How can we induce or compel our manufacturers to do that? Do what it will, the Board of Trade cannot do the manufacturers' job for him.
593 Whenever I talk to possible exporters, they say: "It is all very well you preaching to us. Make it worth our while to do it and we will export". That is the answer. They say: "Give us an export subsidy". I say: "That is not possible because of G.A.T.T., and other arrangements". Therefore, I ask my right hon. Friend to use his influence with the Chancellor of the Exchequer to see that Income Tax and Surtax, which bears so heavily on the younger executives—and it is no good anyone saying that they do not—are brought down, and brought down substantially. Men do not go into business for fun but to make money. If we take too much money from them they will not make the extra effort required. I would like my right hon. Friend to say to the Chancellor of the Exchequer: "If we had Income Tax and Surtax with a top level of 15s., and a starting rate for Surtax a good deal higher than at present, that would be of considerable help to us".
I am reluctantly driven to say this, because I have been against it up to now. It is high time that we joined the European Common Market. We ought to get rid of all the quotas, tariffs and protection which British industry enjoys and let the cold wind of competition blow through our industries. Let us have competition. The quickest way to get that is to join the European Common Market. If we do that, I am confident that both labour and capital will pull up their socks and produce the goods at the right price.
§ 7.34 p.m.
§ Mr. Ellis Smith (Stoke-on-Trent, South)
In any observations that I make I cast no reflections whatever on the staff of the Board of Trade. In my view, they can feel satisfied with the work they have done during the last fifteen years. It is one of our duties to give credit where it is due, and I have no hesitation in doing that this evening. I did not take the criticism of the hon. Member for Louth (Mr. C. Osborne) seriously, so I will not comment on it.
In the proposed Amendment which, in accordance with Standing Orders Mr. Speaker has decided not to accept, a number of constructive proposals were made, and I propose to state the case, believing that sooner or later this country will have to accept most of them. I am 594 prepared to wait until that happens, but, unfortunately, we shall pay dearly for waiting if we wait much longer.
The first matter to which I draw the attention of the House is the constant increase—for which the Government and other authorities in the country are responsible—in the overhead charges on the export industry. I bear the marks of the years when we suffered from the economic lashes of world competition to such an extent that it affected us for the rest of our lives. I have not time this evening to go into details about that, but I want to avoid a repetition of those days, and one way to achieve that is to direct attention to the seriousness of this country continuing to increase the overhead charges of the export industry.
Let us consider the constant increases in the charges which arise from National Insurance. I am sorry to have to say this, and never in my younger days did I believe that I would live to make this comment, but this country has been left behind in the attention which we give to those who are sick through no fault of their own, and to those who are unemployed and disabled. There was a time when, based on a careful study of world events, we could say that this country led the world in many respects. Now, unfortunately, because of the reduction in the value of money due to devaluation and inflation, benefits have not kept pace with the changing values. Consequently, we have been left behind, and we are now probably one of the worst industrial countries in the world in our treatment of the sick, the unemployed and the disabled.
I said that many years ago in this House, and very few accepted it. I did not blame them, but what I was saying was based on a careful study of a number of documents pablisihed by the International Metalworkers Federation, the International Labour Office, and other organisations of that Character. Since then, Mr. Harry Douglas, Who represented the Trades Union Congress in the case that was presented to the Chancellor of the Exchequer a few weeks ago, has said the same thing but in a more up-to-date way. His statement was used by the Press in reporting that delegation, and this is now accepted by almost the whole trade union movement.
The first point to which I want to direct attention is that this responsibility 595 should fall on the Exchequer and not on the employer or the individual employee. It is time that the Government recognised this. The country ought to bear the responsibility for looking after people who are unemployed, sick and disabled. We ought not constantly to increase the burdens on industry and, as a result, increase overhead charges. The result is that we cannot meet the competition—or we shall not be able to do so for years to come—from those countries which spread the burden over the whole of their people by imposing a charge on the Exchequer rather than upon individual industries.
We should request an investigation into the reason why prices have not been reduced. I do not associate myself with a tendency which exists to make statements which are not based on facts. At a General Election it is the duty of people in a democracy to say things which are based on facts. One may be permitted to put a personal interpretation on them according to one's environment and social class; but that is different from making political capital to the detriment of the country to the extent to which that was done in the recent General Election. On that occasion Government supporters rightly prided themselves on the fact that prices were stabilised, but they did not explain the whole matter, as I wish to do tonight.
If anyone differs from what I have to say they need only go to the Library and ask the assistance of the staff there to furnish them with official statements in which will be found the basis of the case I propose to make. May I take this opportunity to pay my tribute to the staff of this House, the numbers of which have increased during my time as a Member. They are more courteous than ever and because I appreciate that, I believe they deserve credit for the work they do.
It is not good enough to say that prices have been stabilised; they should have been greatly reduced. If internal prices had been reduced in accordance with the change in world prices, the cost of living would have been greatly reduced long before now. This would have improved the competitive position of our export industry and might have prevented a situation made difficult by claims for increases in wages.
596 I constantly read that excellent publication the Board of Trade Journal which I think has been greatly improved recently, especially as regards the statistical information contained in it. If one analyses the statistics, one comes to the conclusion that during the past twelve years commodity prices have been greatly reduced. I wish to ask why the commodity prices have not been reduced for British productive industry. The export industry starts, as it were, with one hand tied behind its back. Before any raw material goes into productive industry the charges for it, in relation to world charges, are already too high. This is because those importing raw materials are better organised than anyone else in the world. A study of the prices prevailing between 1930 and 1935 would show that in proportion to the growth of the trade associations with a grip on the importation of our raw materials there is the beginning of a changed relation between world prices and prices in this country. That is why I am surprised that the Board of Trade has not agreed to an investigation into this matter. We owe that to the British export industry.
The people about whom we complain should be taken to task for the policy which they have been pursuing. I suggest that the Government should take the initiative and work towards a standard of international fair wages and conditions. When I say that we feel very strongly on this matter I am not only speaking for myself. I speak for the International Confederation of Free Trade Unions which has recently passed several resolutions suggesting that if world trade is to be stabilised, if there is to be fair trading between one country and another, we must have some basis of fairness in order that competition may exist on a fair basis.
We have already established this in Britain. Most municipalities and Government Departments ensure that in their contracts there is a fair wages clause and that the conditions imposed by the tendering firm are fair. The International Confederation of Trade Unions thinks that if we are to hold our own in the world, sooner or later we must achieve this on an international basis. I am making these suggestions because I think that the Board of Trade in particular and the Government in general ought to give consideration to 597 this problem or else, sooner or later. Britain will be encountering further difficulties.
In this country we have established a relatively high standard of living, although not as high or as fair as I should like. We have a 44-hour week and there is bargaining between representative organisations engaged in productive industry. Today we must safeguard what we have achieved in the past so that we may use our past achievements as a basis for further progress. Unless we embark on an international policy of this character, it is only a matter of time before the world begins to undermine the standards which we have established.
Some of my hon. Friends with whom I have discussed these matters say, "You cannot compare our country with the United States." I admit that readily. We are concerned to safeguard our present position so that we do not drift towards worsening standards, and to that extent I agree with what was said by the hon. Member for Louth. I believe that in the International Labour Organisation, in the United Nations and in our diplomatic negotiations we ought, wherever we can, to endeavour to support the idea of international fair wages and conditions.
I wish now to make a few observations based on that excellent publication, the National Institute Economic Review. This is the foundation upon which we should give the present situation our careful attention this evening. It sums up in a few words the present situation. It is this that makes the debate so important, and why I think it should receive attention after it has been reported.
The January issue of the National Institute Economic Review states:Britain's economic growth in 1961 will inevitably be checked by the weakness of payments. If Britain is to achieve a faster and steadier rate of growth, it will be necessary for her to make major changes in her external economic policy. The whole object would be to make a rapid growth possible: to convince industry that it will take place in future years would require a major initiative from the Government.I strongly support those observations. In my view, we have to work as quickly as we possibly can towards a large, lasting increase in the volume of our exports. I stand on good ground because, as an individual, I have been saying this for 598 fifteen years, and I have been prepared to support constructive proposals which would have put us in a far stronger position. We have lived to see the day when what was said then is now proved correct, with the exception that we have not et made the basic changes which the National Institute is asking should be made. In saying that, I am supported to a certain extent by even the Federation of British Industries and by many big electrical organisations, such as English Electric, Associated Electrical Industries, General Electric and all those who do not play marbles but who are responsible for large-scale production, based upon the skill which they have inherited as a legacy and handed down from one generation to another of the most highly-skilled and best-informed men, both mathematically and geometrically, in the world. It is for them that I am speaking, and I am very pleased to have that privilege. In accordance with their outlook, which is now receiving increasing support, we need to plan in order to obtain the best results from our resources, from our manpower and from our skill and our organisations. We have to work towards that more and more.
In saying that, I do not want anyone to think for a moment that I belittle British achievements of the past fifteen years. I believe that Britain and especially those engaged in productive industry were responsible for a miracle of achievement during those years. I speak of this with pride, but also with a touch of bitterness, because I would not be worthy of the name of man if I did not entertain thoughts of that kind. But I cannot forget the way in which the Americans treated us in 1940 when we were nearly down and out, when standing across the Channel was the greatest military machine up to that time, when we had to retreat and then pawn and sell our securities in America, even Courtaulds, and because the Americans thought that we were down and finished they charged us the market values of those days. We had to compensate the Courtauld shareholders who owned the securities at a value above the pre-war value before we reached the depths that we did. In addition, we cannot forget the way in which they treated Lord Keynes, and all that that meant. He has now gone to the grave, but he is remembered by 599 those of us who were privileged to be closely associated with him for what he did mainly in late 1945 and early 1946.
Therefore, we can speak about this, having now pulled through and having reached the situation that we have with a touch of pride, coupled with a touch of bitterness, at a moment when we are approaching our problems in a realistic way, having brought this about by the experience that we have gone through. It is remarkable that our people have pulled through in the way they have. I consider that it represents a miracle of achievement and entitles us to take the initiative in world affairs more than we have done during the past fifteen years. Instead of being on our hands and knees begging for crumbs from some people, like we have done far too often, we should be approaching our problems in the world international conferences. Remembering our achievements and what the world owes to Britain when we were standing alone and when we held that great military machine at bay, we believe that we are entitled to a greater voice in world affairs.
It was because of this that I put the following Questions to the Prime Minister. I asked him:If he will consult other heads of Government with a view to preparing for a World Economic Conference early in 1961; and if, at this Conference, he will make proposals for an expansion of trade and the building of economic co-operation throughout the world.My second Question was:If, at the forthcoming meeting of Commonwealth Prime Ministers, he will propose an expansion of Commonwealth economic cooperation and a Commonwealth approach to the need for increased world trade.I do not differ from the views expressed by hon. Members, like the hon. Member for Louth when he talked about the Six and the Seven. I say, however, that during the past few years we have been apt to pay too much attention to that and too little to the need for developing Commonwealth economic relations. I believe that there is a great potentiality in the Commonwealth if we would set out to organise the Commonwealth and develop a policy in accordance with what we owe now to the rest of the Commonwealth. In two world wars New Zealand, Canada and Australia came 100 per cent. to our 600 assistance and I believe that there is more than ever enormous good will in the Commonwealth.
Our relations with India are now better than ever they were. In tonight's previous debate there was a lesson to be learned in the way in which we have dealt with India, and I believe that there would be a great response to our expansion of trade and economic co-operation if we were to approach our problems in that way.
My final point is this. Russia has already offered to build Canada a number of motor manufacturing factories. I have before me the Globe and Mail of 11th January, which states:The Soviet Union is ready to set up subsidiary plants in Canada to sell Russian cars.Had I more time I should like to develop the lessons to be learned from this, because here is a basis for economic co-operation and expansion of trade between Canada and Russia. Here we have laid out a number of statements made by several members of the Canadian Government showing the prospects and possibilities. I am not for a moment speaking critically of them, but it is necessary for us also to adapt ourselves to the problems which will arise from now onwards in order that we may hold our own in world affairs.
I have further evidence for the case I am stating. I happen to have been associated with some of the most public-spirited men and women who have a great record in the export of their products. I give some examples from their experience. One of them states:In regard to…Sydney, we do not think there is any chance of getting an order from them for cups, as we understand that they have changed over to Japan for their supplies. They are obtaining cups from Japan at a much lower price than you can quote or any other English manufacturer can quote.Here is an extract from a letter from Canada:The market is presently well saturated with Japanese cups and saucers at very low prices, and we feel that we will be running into more competition as time goes on.The representative of a certain company which I shall not name, said:A firm, as much as told us that its stores will not be buying much English ware this year.In North Staffordshire approximately 60,000 of our people are engaged in the 601 pottery industry. We manufacture in quality and, relatively speaking, in price the finest and best value crockery in the world. All the Board of Trade officials and Ministers admit that that industry has a very fine record in exports. I think it could have a much better record. That is why I am calling attention to it. I believe it needs more and more support from the Board of Trade. I do not utter one word in reflection upon those responsible for the relationship between the Board of Trade and the industry at present. All I ask is that they should be given more authority and more power and that their relationship should be based on more modern policy in order that together better results can be obtained.
Here is another example. I have been associated with two or three men who run a family concern which is one of the oldest in the City of Stoke-on-Trent. The sons, who were well informed and well trained, are broken-hearted because, year after year, they had to contend with Japanese competition in Canada and America. As a result of that disappointment, after working year after year producing the best possible ware and carrying out an enlightened policy in labour relations from which they got the best results, they found that they were fighting a losing battle. They have now sold out broken-hearted, and that is the tendency which exists.
For that reason I have made my constructive proposals. I believe that we owe to those who are carrying on day by day and accepting great responsibility in industry an examination of their problems in order that our country may adopt a more enlightened policy and so that we can hold our own in world trade instead of carrying on as at present.
§ 8.5 p.m.
§ Sir John Barlow (Middleton and Prestwich)
In view of the very short time available, I feel sure the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) will not wish me to follow him in any detail.
We are all grateful to my hon. Friend the Member for Louth (Mr. C. Osborne) for raising this important question tonight. We hear too little of it in this House of Commons. I should like to emphasise a most important point which he made at the 602 beginning of his speech. That is the great efforts which the Board of Trade is making in the direction of helping exports. When one travels in many Commonwealth and other countries one nearly always finds most enthusiastic, efficient representatives of the Board of Trade. They cannot hear our debates here. They see us only in a very fleeting way, but I hope that sometimes they realise how much we appreciate their efforts.
Likewise, we greatly appreciate the efforts of my right hon. Friend the Minister of State, Board of Trade, who has travelled a great deal in the last few years. When he comes back from his travels he goes to the appropriate association or chamber of commerce and tells it what openings there are for that organisation. One cannot over-emphasise the importance of exports. Truly, they are the life-blood of industry, and, in fact, of the whole country. Without them we could not exist for very long. We should neither work nor eat, so we would very soon perish.
As most hon. Members know, I have been connected with the export trade for very many years—for about forty years. One thing which stands out in my experience throughout the whole of that time is the constant change that has taken place. Exports never stand still and markets do not stand still. Requirements change and people's ideas of the goods they want also change. Forty years ago our greatest export industry by far was the Lancashire cotton textile industry. At that time, it was run more efficiently and better geared for exports than any other industry in this country has been either before or since—I think it probably true to say of any export industry in the world.
It amazes me how little is made now of the experience and "know-how" of those Manchester merchants who knew the world fairly well. I wish to give a very few figures to show the size of that industry at that time and what it contributed to the wealth of the country. Just before the First World War, its production, roughly speaking, was 8,000 million yards a year, of which 83 per cent. was exported at a value of well over £100 million. In value, that probably could be multiplied by at least five today. There has been no other industry 603 in any part of the world which has had anything of comparable size and efficiency.
That gradually diminished through Far Eastern competition until, just before the Second World War, production had dropped to less than half, roughly 3,700 million yards, of which 46 per cent. was exported at a value of £54 million a year. I am informed that the production of cotton textiles last year was in the region of only 1,400 million yards. That is about a sixth of what it was forty years ago. The exports, on balance, were negligible. We imported a certain amount of cloth and exported probably a very similar yardage.
The thing that strikes me is that the great experience which exists in Lancashire, in Manchester and the Manchester Chamber of Commerce, is largely unused today, although it could be adapted to other consumers goods and would be most valuable. I remember that in my early days in the cotton industry we would get our cables in at about ten o'clock in the morning. Then we would telephone to the manufacturers saying what our requirements were for that day and they would meet us on 'change. If we were fortunate we would buy the goods and, if not fortunate, we would wire back that we wanted a higher price. Within minutes of the time that we placed our order the manufacturer would cover his yarn for the right delivery, the right price, and so forth. Likewise, within a matter of minutes the spinner would cover his cotton requirements in Liverpool on the future's market.
There can be no other great industry in which everything was tied up so quickly and so efficiently as that business was at that time. We would get our goods with perhaps three or six months' delivery, according to the requirements and the type of goods. They would go through the Manchester warehouses and be packed and sent off. Many people thought that there were great profits in that trade. I assure the House that that was far from the fact. Most of the Manchester goods exported at that time attracted a gross profit to the merchant of from 1 to 4 per cent., according to the type of goods and the size of the order. Enormous busi- 604 ness was done at a gross profit of 1 per cent. out of which salaries, rates, rent, etc., had to be paid. The business prospered greatly until the Far Eastern competition began, against which it was impossible to compete.
Now many countries are making their own textiles. It is the fashion. As soon as a country emerges to freedom, it wants to set up its own factories. One of the first things—it is comparatively easy—is a textile mill. As I said a short time ago, the export business is constantly changing. Manufacturers and merchants always have to be on their toes to see what is required and provide it. Many goods were bought by the merchants and exported as principals—that is, we might export goods to Calcutta, selling them the day we bought them. They would be taken up by the dealers and after perhaps three months' credit they would be paid for and the business would be completed.
In other markets the goods would be shipped on the merchant's own account, and he would take the risk of selling them when they arrived. It is a strange fact that goods were worth much less on arrival in Calcutta than they were before shipment in Manchester, because the logic of the Indian was that once goods were in Calcutta they obviously would have to be sold there at a price and they could not be shipped elsewhere.
Each market had its "know-how". There is a different technique in almost every market. Credit varies in every market. All those things were known to the Manchester merchants of the day. I am only sorry that much of that information and knowledge is not being taken up by people who want to export for the first time today.
The three essential things in exporting are price, quality and delivery. Price is a matter of competition. It must be reasonable. I have sweated through the markets of Calcutta, Singapore and Shanghai and I know only too well the impossibility of selling anything if it is not the right price. It must also be of the right quality, otherwise a merchant does not get a repetition of the order. Design changes periodically. It is never static. That necessitates a visit by a manufacturer or special people who know designs and can make suggestions. 605 Delivery is also most important. It seems to have been largely overlooked since the last war. Generally speaking, if goods were not deliverd on time and the market price went against the manufacturer, they were immediately cancelled and the merchant got an allowance. Nowadays people do not seem to have any regard for the sanctity of contracts and the time of delivery. I was brought up to believe that delivery was as important as price and that one must conform to the promises one made.
Delays do an enormous amount of harm. I give as an example the harm which the tally clerks' strike in London caused a few months ago. Many merchants suffered in this part of the country, but few people know of the way in which the trouble has spread it ripples over the waters and how far the difficulties and drawbacks from the strike have spread.
I will give one instance. There was a small shipment of umbrellas to be shipped from Liverpool at the end of August. Owing to the strike in London, the ship did not reach Liverpool on time. The letters of credit were dated only to the end of August, so cables had to be sent out to try to get an extension for the letters of credit. Owing to difficulties in the market to which the goods were going, which was Ceylon, it was difficult to get an extension and the goods were delayed a month or two later. When they arrived the monsoon season had passed, for which the goods were particularly required.
For that reason, the recipient in Colombo either had to hold the goods over for another year, which he did not want to do, or sell them at a cut-throat price. That very small instance shows the loss and difficulties which arose out of the unauthorised tally clerks' strike in London. I am sure that it could be multiplied thousands of times.
Another way of getting business is by investment overseas, especially in the Commonwealth. Forty years ago, when this country was rich, vast investments were made and as a result a great many orders of all kinds came to this country —for factories, railways and other things, as well as for consumer goods. Now the amount of money which we can invest abroad is somewhat limited, but there are many cases where factories 606 are being built by experts from this country—by companies which are supplying the "know-how" and sending experts out. They manage the concerns locally until the local people have a grasp of the methods and the situation. That can be a valuable invisible export, which should be encouraged.
We are told that both America and Germany are giving guarantees against political risks. If that is so, would it not be wise for the Board of Trade to consider similar methods here? It is very much more attractive for an investor to invest overseas if he can be sure that political risks will not arise and prevent him not only making a profit, but probably recovering his capital as well.
A Question was asked yesterday about the profits of the Export Credits Guarantee Department over the last few years. I appreciate that it is difficult to give a reply, because it is a never-ending credit and there are claims years after the credit is made. However, I have heard that substantial profits are normally made over the years and, at a certain time, are paid back to the Treasury. If that is the case, would it not be wiser to accumulate those profits and extend the terms of credit, or give better terms for existing credit? If the commercial and industrial communities have paid too much for the credit, they have a right to benefit from it in some way, either by extensions or by a reduction of the rate.
I wish to refer for a moment to the European market. I am told that, of the exports of heavy electrical plant, the amount sent to Europe is very low. During 1957 to 1959 the export of turbines, generators, large transformers and switch-gear to the E.F.T.A. and Common Market countries amounted to only 4 per cent., whereas it amounted to 72 per cent. to the Commonwealth countries. I urge the President of the Board of Trade to try to remedy that situation. It would appear that the European countries are determined to keep this type of goods out, just as America was some time ago. It is most important that my right hon. Friend should use every effort to allow these goods to go to those countries on normally competitive terms. We do not ask for favours.
What is the answer to all this? I have little faith in exhortation. People go into 607 business to make a decent living. They want reasonable help or incentives. I will not go further than that. For example, because of the low level of income at which one pays Surtax, there is little incentive for an able young man to travel the world, in search of business, which is very hard work, as those who have done it know. Again, I urge the President of the Board of Trade to consider this matter and see what he can do about it.
Early in the war an export board of important businessmen was set up. It was then vital that we should increase our exports to pay for the goods which we required from America. As far as I know, that board came to an end shortly after the war and there is no counterpart today. It might be well worth while considering setting up a similar body. Great firms, like I.C.I. and Unilever, have their own fine distribution organisations all over the world, but there are smaller firms which are not familiar with the export markets. On the other hand, there are many merchants who want to get new business, and if there were someone to encourage them to come together it might be very valuable.
The Crown Agents place in this country a large number of orders from the Colonies and, I think, from some other countries. It has been said—I do not know with what truth—that they do not always place the orders which they might place in this country and that it has been known that they have almost diverted British orders to overseas manufacturers. I wonder whether we may have an answer to that point. I presume that the Board of Trade has a great deal to do with the Crown Agents, although I do not know which Minister is directly responsible for them.
With the constant change in the type of exports, we must be on our toes. It is a question of brain, not brawn. In the old days we lived by exporting consumer goods. The quality of those goods must be improved by our brains the whole time. Motor cars may be worth £600 or £700 a ton, aeroplanes £30,000 a ton and atomic plant perhaps much more. We must educate and help the technical and mechanical brains of this country to create the things which newly emergent countries will not be able to produce for years. I feel sure that this 608 is only too well known to the Board of Trade, but it is something which we should all endeavour to do.
Last, but not least, do we tell our workmen, enough about exports? Would it not be a good thing sometimes to send workmen's representatives to some of these markets to try to sell goods? Do the people responsible for the tally clerks' strike realise for one moment the tremendous harm which they have done to this country and to themselves? We must take these people into our confidence and to teach them. This has not been so necessary in the past, but it is vitally necessary today.
§ 8.25 p.m.
§ Mr. Robert Woof (Blaydon)
It is as well that the hon. Member for Louth (Mr. C. Osborne) was lucky in the Ballot and has selected this subject for discussion, because at some time this House will have to discuss the problems of the export trade at greater length and in much more detail. I am sure the House listened with deep interest to the thoughtful and well-reasoned speech of the hon. Member for Middleton and Prestwich (Sir J. Barlow). He focussed attention on some valuable matters which are of concern to all of us.
In approaching the pressing problems of trade, I must confess that I have not any special knowledge of economics or of any systematic treatise for curing economic illness. I have often thought that the object of theoretical economists was to make such subjects as depressing and difficult as possible. But it seems to me that there are some things in economic movements which are vital for an understanding of our immediate future. It does not take a monopoly of wisdom to understand that the foundation of economic thinking today is a view of the world picture which has changed completely since nations were trying to rebuild their economic systems after the war, when there was a brisk demand for all kinds of goods and for any quantity of them.
Whatever political doctrinaire theories we may have and whatever we may think of the present economic situation, we must acknowledge that among the chief problems of the controllers of industry is the one to decide what forms of production shall take place.
609 Together with this and other matters that are vital to the conduct of successful business, it is essential to find the means and the market to sell goods that factories are capable of producing. Therefore, for obvious reasons, this is a matter not simply affecting individuals but one on which millions are dependent for their livelihood and wellbeing. Consequently, the Motion represents a medium for developing and expanding trade in general and thereby improving the opportunities of increased employment for British workers.
In the United States of America economic distress is most striking in the old industrial areas of West Virginia and Pennsylvania, where whole mining communities are badly feeling the effect of depression and displacement as a result of mine after mine closing down as a consequence of increased competition from oil and natural gas, which has proved to be the precursor of so much misfortune.
In the circumstances, with which we are all familiar, it is not surprising to learn that the United States will make an effort to expand its foreign trade, especially when President Kennedy's recent State of the Union Message exposed the need for emphasis to be placed upon economic expansion. We know that this has not been made easier by what was accepted as the economic policy of the Eisenhower doctrine. If the American Administration realises, as it does, the failure to secure anything like full use of available productive resources and the need to reverse the restrictive policy of not making the best use of economic resources, I would unhesitatingly say that a similar policy should be applied to Great Britain.
The hon. Member for Middleton and Prestwich referred to the distant past when Britain obtained a long lead over her competitors which enabled us to have the pick of the world's markets for our wide and growing range of products at a time when the rest of the world was not in a position to take advantage of the new methods of production. The striking contrast of the impact and movement of present-day demand presents a quite different perspective with much potential commercial rivalry. Yet in spite of all the mounting complications in international 610 affairs and the growing confusion, it is realistic to strive all the time to improve our export trade, particularly when we see many industrial leaders trying to seize the growing opportunities of East-West trade, which could be a very good thing for the country rather than a disadvantage.
The rate of East-West trade appears to be rising steadily. The analysis of United Kingdom trade for the ten months ending 31st October last year shows a total value of exports to the U.S.S.R. of £31,317,104, to China of £26,083,166 and to Poland of £12,374,290.
What is most striking of all is that in the same period there was a total of £128.6 million representing West Germany's trade with the Soviet Union, China and their satellites. One can hardly fail to ponder and give much thought to such an expansion of German trade, emerging as it has done in spite of political and ideological conflicts, memories of a devastating war and as a consequence of what was once recognised as the world's most comprehensive blueprint of a master plan for world conquest. As the volume of the East-West trade is now three times more than it was ten years ago—its importance is now beginning to be appreciated—notwithstanding the fact that many big orders were placed with British companies last year, the trade is capable of expanding above its present level.
The hon. Member for Louth referred to the British Trade Fair to be held in Moscow in April. It is now recorded that about 620 British firms will be exhibiting their wares. This is recognised as an important beginning, but I think I would go further than the hon. Member for Louth. I think that a great market like this should have a permanent trade exhibition, representing all British products. In fact, this exhibition should not remain in Moscow, but should be mobile. It should be taken to Leningrad, into the Ukraine and even into Georgia, because the Russian buying agencies are based on the Republics and are not all centred in Moscow.
In these times, it is not strange to hear and to read of an increased consumer market in the Soviet Union. The Soviet Union wants textiles, household equipment and good shoes of our own making. I think one hon. Member who interjected 611 when the hon. Member for Louth was speaking said that 200,000 pairs of shoes were sent to the Soviet Union between June, 1959, and September, 1960. I see from the prospectus of the Trade Fair to be held in Moscow that the British Footwear Manufacturers' Federation is to have quite a display. It is to be hoped, in view of what one hon. Member said, that this display will prove to be of much better shoes than the shoddy shoes sent to the Soviet Union earlier.
§ Mr. John Hall
I do not think that should be allowed to pass without comment. There is no question of shoddy shoes having been sent to Russia. Out of a total order of £150,000 worth of shoes, the only complaints represented a total in value of about £140, and when the Soviet authorities investigated the complaints they found that there was no real substance in the complaints printed in Russian papers. The trouble was due to the misuse of shoes for purposes for which they were never designed.
§ Mr. Woof
I thank the hon. Member for Wycombe (Mr. John Hall) for his intervention. I thought the hon. Member for Louth was drawing attention to what another hon. Member had said about shoddy goods going to the Soviet Union.
We are led to believe that the progress of Soviet industrialisation has created a demand for machinery and electrical equipment. There is a tremendous market for tractors, of which the British makes, we are given to understand, are the best and cheapest in the world. All that is required to get consumer goods into this market is, first, the British firms should have the same credit facilities as are granted for trade with other countries.
While the Anglo-Soviet Trade Treaty of May, 1959, negotiated a five-year agreement, it did not fix any target. What it did, however, was establish the framework within the agreement within which a two-way trade traffic could develop. We realise, of course, that there has been some distinct improvement and progress made since this agreement was drawn up, but much more will have to be done if British manufacturers are to fulfil this potential trade. All the evidence—and 612 as far as I am aware no one will deny it—is that while the Russians have adapted themselves as hard bargainers, they are, nevertheless, fair and good traders in paying up for the goods they receive.
In China we have another great potential market for British goods. It is a fact that a great deal of the world trades with China today. Even America, in spite of her opposition to China, did indirect trade with China last year of over £60 million through Hong Kong and Japan. This trade to China is much larger than our own, and as millions of Chinese agricultural workers today are still tilling the land by hand with wooden ploughs it would appear that there is tremendous scope for British agricultural equipment there, particularly our own small British tractors.
The restrictions on trade to China through pressures, so that our traders are not allowed to supply what are called strategic goods, do sound ridiculous today. Everyone knows that these restrictions are outmoded by the performance of guided missiles and their allied relationships, and unless we move into the Chinese market soon we shall probably find to our dismay that other countries will monopolise this market to our exclusion and disadvantage. It is obvious that a policy of restriction has not weakened the links of the Eastern bloc. We know that the Soviet Union has marked a swift transition from the age of primitive methods of production which it endured for centuries to this age of mechanical and giant power, jumping most of the earlier and intermediate stages passed through by Great Britain and the United States.
In these times of strain, uncertainty and frustration it is always tempting to think of final solutions which could be found. There is no easy way, I admit, to fulfil the combination of requirements. Only by a great deal of hard work shall we be able to move into tranquil waters. I want to make it quite clear to the House that I have no interests whatsoever to declare, as I believe that the whole purpose of economic activity lies in what it can contribute to human happiness and the satisfaction of a better life.
Therefore, as we need an expanding economy with increasing markets, it seems 613 to me that Sir George Bolton, Chairman of the Bank of London and South America, sounded the right note when he said at the American Chamber of Commerce in London on 8th February that it was his belief, with the advent of the Kennedy Administration, that the climate was right for America to liberalise its thinking on trade with the Soviet bloc. He expressed the view that large benefits were to be obtained from the expansion of trade with Russia and the satellites and that there was a growing feeling among genuine friends in America that the continuance of the present policy would prove to be harmful to American interests in the long run. The knowledge and experience of so prominent a person deserves our sober attention.
Without attempting to injure reason by confining my mind to the authority of belief, I have tried to be as objective as the tangle of present affairs will allow. As Shakespeare said:Thoughts are but dreams till their effects are tried.We should endeavour to pursue a course of action based on thought which we hope will be effectively translated into the language of facts.
I firmly believe that progress in the further development and expansion of East-West trade would contribute to greater stability in international commerce. It must be a medium for the achieving of human satisfaction and human confidence. According to our own interests and aspirations, it will enable us to guide and control a constructive and progressive civilisation in which the worst catastrophes can be averted, labour can be put to good use and all difficulties overcome and in which, we hope, peace throughout the world will prevail.
§ 8.48 p.m.
§ Mr. F. A. Burden (Gillingham)
I propose to talk about exports generally. I am sure that we are all grateful to my hon. Friend the Member for Louth (Mr. C. Osborne) for moving the Motion and giving us this opportunity to discuss it. I hope that the hon. Member for Blaydon (Mr. Woof) will forgive me if I do not follow him in his remarks at any great length, but I should like to take his point that we should develop our trade with China considerably.
614 I assure the hon. Member that those of us who are interested in exports, would develop trade as much as we possibly could with any country from which we could obtain proper payment facilities. The difficulty with China is that she has no foreign exchange with which to pay, and, as far as I know, she has not applied for any credit to be given to her by Her Majesty's Government to enable her to pay British manufacturers who might trade in China.
Many hon. Members will remember that three years ago we received a trade deputation from China. Hon. Members saw the delegation in the Palace of Westminster. I asked them if they had any currency facilities with which to pay for the goods they wished to buy from us. They made it perfectly clear that what they wished to do was to barter goods with us, and these were goods which we already take from our Commonwealth countries. We therefore would have had to deny our custom to Commonwealth countries, which already buy from us in large quantities and which have the necessary credits and which are tied to us by strong traditional loyalties, in order to trade with China upon a barter basis. That just is not on and was not on then. If we are to do business with China credit arrangements will have to be made. I am sure that Her Majesty's Government will be very willing to help to make financial arrangements so that British exporters can obtain currency for the goods which they export.
I believe that the whole export problem revolves around changing fashions and requirements. We have largely to look at our export situation and potential in the light of the changing requirements of capital goods overseas and the growing reluctance of a great many foreign countries to buy from us many of the consumer goods which they have bought in the past and which they themselves are manufacturing.
I should like, first, to deal with heavy industry—principally the engineering and electrical industries. British engineering companies have a long tradition, dating back to the extension of the Industrial Revolution, of sales from this country to other countries, and that tradition has persisted despite the intervention of two world wars. Today, engineering products account for 615 about 30 per cent. of our total exports. Many engineering companies sell abroad more than 50 per cent. of the total goods which they produce. Our exports of consumer goods are, unfortunately, in decline in many of the countries to which exports of capital goods are increasing, but it is true to say that today the order books of the engineering and electrical industries are very reasonably full.
Before we consider the possibilities, it is desirable to examine the trend of our exports in relation to those of our principal overseas competitors. I take, particularly, the exports of the United States, Western Germany and the United Kingdom between 1956 and 1959. The share of the United States declined, and the United Kingdom just about held its position. However, there was a very great increase in exports by Western Germany. Also—this is not realised in many quarters—the engineering exports of France increased over those four years by no less than 22 per cent., and there has also been an increase, though not to such a marked degree, in engineering product exports from the Netherlands, Italy and Japan, these covering a whole range of machinery and electrical goods and apparatus. During the same period 46 per cent. of our exports went to Commonwealth countries. The United States has attained a dominant position in Canada, obviously because of the geographical situation of the two countries and the advantages of selling so much more close to home.
One of the very important features about Britain's situation is that in 1959 India was our best customer. It is a very happy thought that India has attained that position. It is a position for which we should be all the more grateful, because it shows that, despite our long period of rule there, that country still has for us strong trade associations with us. These ties exist although we are divided from India by race, colour, language and, in many cases, religion. The Indians have emphasised their close ties with this country through the wonderful manner in which they have received our Sovereign during the past weeks. That very fact also augurs well for an even greater increase in our exports to India.
616 The economy of the Common Market is rapidly expanding. Britain and the United States have not established the share in those countries which we might have expected, and which we certainly hoped for. It is in the Common Market countries that the very considerable growth of French exports of machinery and electrical apparatus has taken place, and it may well be that it is this which lies behind much of the resistance to our efforts to join the Common Market. It may be that the French anticipate that they would have far greater difficulties in selling in the Common Market countries if we were to go in with them on an equal basis.
We have made some progress in the European Free Trade Association, but in 1958 and 1959 we did not make as much progress in the member-countries as did West Germany. Here again, there is a lesson to be learnt. In 1959, West Germany sent no less than 29.7 per cent. of her exports to E.F.T.A. countries, while only 27.3 per cent. went to the Common Market countries.
West Germany is, therefore, very interested in retaining her position in E.F.T.A., and this might well encourage her, on a basis of quid pro quo, to consider, even more favourably than she has in the past, our entry into the Common Market. There is no doubt that she is very sensitive to the development of E.F.T.A., and I am sure that my right hon. Friend the Minister of State will take note of that, as will my right hon. Friend the President of the Board of Trade, in the negotiations that lie ahead.
In 1959, the Common Market countries took 14.3 per cent. of our machinery exports. The curious thing is—and again, this presents opportunity to negotiate with the Common Market from strength—that West Germany also took quite a considerable amount of our exports of machinery and electrical apparatus. I believe that the picture is encouraging. Even in the United States, where there is great domestic strength, British exports have made progress. In 1959, we said in the United States more than we did in 1957 and 1958. Obviously, there may be difficulties in the South American markets and these will probably increase still more before they ease. We just held our own in those markets from 1956 to 1959.
617 Much has been said about Iron Curtain countries tonight, and in looking for opportunities to export it is no good merely considering certain little areas and casting our eyes hopefully to small divisions. We must also look at the whole field of exports throughout the world. There is, obviously, opportunity in the Iron Curtain countries. The supremacy in them of West Germany is being challenged now by the United Kingdom and France. I believe that the figures for 1960 and 1961 will show a considerable improvement in our position in those countries.
The hon. Member for Blaydon referred to the opportunities in the Soviet Union, and there is no doubt that, as a result of the 1959 trade agreement, there will be considerably greater opportunities there, as more opportunities will result from the 1960 trade agreement with Poland. The sales of British machinery and electrical goods to most of the Communist countries will improve. It is interesting and noteworthy to observe that in 1959 the United Kingdom exported more machinery and electrical goods to the U.S.S.R. than did any other country outside the Communist bloc. That shows that many of the peregrinations of my right hon. Friend have been carried out to very considerable advantage, particularly his visits behind the Iron Curtain and to Russia. He is an extremely good salesman. He has great charm and he knows his subject. He is out to get business on reasonable terms.
There is no doubt, however, that we must face the fact that West Germany has made remarkable progress in recent years. She has overtaken Britain as the world's second greatest exporter of industrial and electrical machinery and is very closely challenging the United States for the first place. How has Germany achieved this? I would remind the hon. Member for Blaydon that there is no evidence that she has done so by skullduggery, or endeavouring to evade fair trade conditions. If we look at the figures we find that the Germans have not entered in any great strength into markets where there is a great deal of political uncertainty. She has not given long-term credits in very many instances. We find that her sales effort has taken place on a broad front with special emphasis on the more industrialised and sound countries. Those are the countries 618 that West Germany has exploited and they are mostly countries which have the ability to pay.
There is a great opportunity for Britain in E.F.T.A. in the years ahead. That opportunity should be developed to the full. Our sentimental and traditional ties, and our long association with the Commonwealth countries have brought preferential treatment to the sale of British goods. There, too, lie great opportunities. Probably our best ambassador is Her Majesty, who has done so much in the past few weeks in India. Wherever she goes the Queen stimulates affection for and interest in this country which can only bring benefit to our exporters and manufacturers. It should be Government policy to invest more public money and so encourage private investment in the Commonwealth countries.
At the same time, industry should mount a parallel sales effort in these countries. I refer particularly to Canada —where, above all, it is needed—and to Australia. Both those countries are becoming highly industrialised and the need for capital goods is increasing the whole time. I believe, however, that one has to face the facts. Profits are likely to be particularly thin in these countries during the early years. Our manufacturers must accept a policy of growing with the countries to which they export. That applies particularly to Canada and Australia, where, I am sure, there will eventually be a pay-off.
Our performance in the United States of America has been creditable, considering some of the domestic discriminatory action by the late American Government. The Americans are bound to favour domestic production, to a reasonable extent, as we expect to do here, but I hope that my right hon. Friend will do all he can with the American authorities to make sure that, when contracts are put out and we tender at competitive prices and can undertake the jobs, we get more favourable consideration than we have had in the past.
There should be closer association between this country and many American manufacturers. A tie-up between the right type of British firm and American firm should be encouraged by the Government. American industry is constantly extending its chain 619 of affiliated overseas subsidiaries and it is possible to sell British machinery to the American principals of those overseas associates, which could be a considerable source of dollar earnings.
I refer again to the opportunities in the Outer Seven. In present circumstances, the Common Market obviously poses a difficult challenge, but here again, even while we are out, it is possible to get the thin end of the wedge into those countries. It is still possible for some English companies, where long runs can be expected and the cost of tooling can be borne, to set up factories within the Common Market. Where only short runs can be expected, and the cost of tooling would be too high, there are still opportunities for exporting, provided that there is a drive behind the effort.
The possibilities are substantial in Eastern Europe, where agreements have been made and where the standard of living, which in some of those countries is still very low, is constantly rising, although it is not as great as it is in the Commonwealth or E.F.T.A. countries where the high standard of living obviously provides great opportunities. Let us not lose sight of the fact that in all the Communist countries every evidence implies that there is a movement upwards and that the emphasis in those countries is on expanding heavy industries and the number of machine tools. In the U.S.S.R. the growth in standards of living in future will have an important impact on world trade.
We must look to the opportunities in the Far East and in the Arab States. Economically, those countries are even less advanced than the countries of Eastern Europe, but there is this urge towards industrialisation and, because of their lack of background of industrialisation, there is still an opportunity to create whole factories under consortia of companies making bids for production of whole factories and production units. That will involve the closest co-operation and loose financial ties among companies working together in the same sphere, but not exactly on the same lines, in this country.
The Government can also help by giving exporters advice and credit facilities, and, indeed, in some cases by helping to arrange them. They can obviously 620 help by increasing the status of the British trade commissioner in some countries, as my hon. Friend said, and by creating in those countries a good market research department which is readily available to British exporters.
At home, we ought to look at the whole question of taxation. It is essential that if possible, taxation should be reduced, to leave more cash in companies so that it can be more rapidly ploughed back into more modern plant, which, in turn, would help us to produce machinery for export at cheaper prices and enable us to use both our manpower and finances more economically
Such a policy would enable many of our manufacturers to carry on their developments with their own resources. I believe that most manufacturers would be only too willing to replace their machinery much more quickly than they do if there were a more generous policy of depreciation allowances.
I believe that the German recovery has taken place largely because of the lenient view taken by the German Government of that aspect. Not only can plant be written off more quickly, but apparently the German Government have recognised the consequences of inflationary pressure in replacing machinery. In that connection the devaluation of assets is authorised for depreciation and taxation purposes. That happens also in France, Sweden, Belgium, the Netherlands and Italy. The Governments of all those countries are more liberal than the Government of the United Kingdom.
At home, the relaxation of controls, followed by the imposition of fierce controls on consumer goods at a later date because of the play of the economy, does little to help manufacturers of capital goods. We cannot base the expansion and modernisation of engineering industries, or any other industry, on exports only, with a home market that fluctuates widely. It is extremely difficult to plan ahead in those circumstances, and all the time manufacturers feel that they have to hold back their finances and production on a tight rein when they might be increasing capital equipment and extending their production.
In capital goods, as in consumer goods, what I would call "fashion" must be taken into consideration. We 621 must all the time endeavour to improve and alter the design of our engineering and electrical goods. It may not be possible to quite the same extent as with consumer goods, but it should be tried, because I think that we must accept that many of the countries to which we send capital goods have the ability to copy our designs. If we do not move with the times and bring in constant improvements and use all our technical resources—of which we have plenty—to the full we shall lag again in our exports of machinery and like commodities. We must all the time aim to improve.
I intervened for a few moments in a debate a week ago and said that a lot of the trouble in our motor car industry, particularly in America where there has been a fall back, was due to the failure of British car manufacturers to realise that the motor car of today is largely a fashion article. Mr. and Mrs. Jones buy a model because it is something new and because Mrs. Jones likes the look of it. Other people take the same model. When they are thinking of a replacement the Joneses, who started the fashion, will not buy another English car which looks and works like the one that they had orignally.
I do a considerable business with America in consumer goods. I believe that there is an opportunity for a great many small firms in this country to increase their exports there and to other countries, if they take advantage of the buying houses to which I referred, where there are trained people who are constantly looking for new sources of supply. They are prepared to assist potential suppliers from this country to equip themselves to sell to firms in America and other countries. There should be an opportunity for a very considerable increase in our export trade and I hope that more and more small manufacturers will take advantage of the existing facilities. I know that they exist in the Board of Trade, and my right hon. Friend would be only too happy to bring them to the notice of manufacturers.
But when all these things have been taken into consideration no Minister or Government can impose exports from this country on other countries, nor can they create them. In the final issue it depends on hard selling by exporters of 622 the right products at the right price, with reasonable delivery dates.
§ 9.17 p.m.
§ Mr. Jack Jones (Rotherham)
The hon. Member for Gillingham (Mr. Burden) made a better finish to his speech than a start. He said exactly what needs to be said. Industrialists in this country must realise that they are in keen competition with the rest of the world. The hon. Member for Louth (Mr. C. Osborne) should be congratulated on two things. He has brought to the notice of the House the need for intensive thought on this tremendous problem, and he has called attention to the fact that there exists uncertainty and a feeling that things are not quite so good. We have been told we never had it so good, and people who are told too loudly that everything is all right are inclined to an attitude of laissez faire. They believe what they are told and then suddenly someone like the hon. Member for Louth, or other people who are in industry and know what is required, begin to say that that story is not quite what it seems.
This country is beset by tremendous problems, which have the effect of bringing hon. Members on both sides of the House closer together. The industrialist wants the problems solved because he wants to prosper. He needs more trade and, therefore. more profit. If he prospers those who produce the goods will also prosper. We cannot go round the world telling people that we want more trade. The period of exhortation is finished. We must get down to it; double up; look sharp and be quick. I get into serious trouble because I go about telling people about the situation in industry, while the hon. Member for Louth is congratulated on lowering his golf handicap. Those sort of things just do not add up.
Neither does it add up to anything when people like the hon. Member for Gillingham exhort the engineering industry to do better. He said the industry was doing remarkably well but, of course, he wants it to do better and to get a share of the additional trade which was "pinched" last year by the Italians. People forget what is going on. Last year, relatively speaking, Italy produced more steel than any other nation under the sun. These things matter. And the Italians did not stock their steel. I refer to the question of exports 623 and engineering, because the production of steel is involved and we cannot tell the steel workers, the mineworkers, the shopkeepers and everyone else that we want everything of a higher quality at lower prices and then put £85 million on the Stock Exchange in terms of hire purchase as has been done in the last twenty-four hours.
Bill Smith in Ebbw Vale or at Richard Thomas and Baldwin looks at yesterday's paper and says to himself, "They are selling out this concern". He does not know why, except that somewhere somebody who has put nothing into the concern will be getting something out of it. So the lads at R.T.B.'s say, "Why should I trouble? It must be all right. We can put an extra charge on every ton of steel which I help to produce. They must be certain they are going to sell it, otherwise they would not do what they are doing". The hon. Member for Louth by raising this question has given some of us food for thought, and, indeed. an opportunity of passing out a few observations on what is going on. With regard to shipbuilding, until this year the Scandinavian countries have ordered ships from Britain every year since I was a child. I have looked up the records and, for the first time in British history, I cannot find one ship ordered by Scandinavia this year.
§ Mr. Kenneth Lewis (Rutland and Stamford)
The hon. Member knows perfectly well that if he would persuade the trade unions in the shipbuilding industry to deal with various restrictive practices, which are worse in that industry than in any other, we should be building and selling more ships than we have ever done.
§ Mr. Jones
I am glad the hon. Member tells us that there was a strike in the shipbuilding industry. If the people who own the shipbuilding industry did away with the causes of strikes they would not happen. No one could have been more ready to admit restrictive practices in the trade unions than I have. No one has been taken to task more than I have for talking about their misdeeds, but people who have never picked up a spanner or a hammer should not glibly talk about restrictive practices in the shipbuilding industry and blame all that has happened on to one strike. It is easy for an hon. 624 Member to jump up and assume that there would not be this problem if someone had not had a demarcation strike in Liverpool or somewhere else. This problem goes much deeper than an old strike in an odd industry.
Reference has been made tonight to India. India is a great customer, and it became a great customer because it was free to expand and to obtain of its own volition a better standard of life. That freedom was given by this party when we were in Government. We take pride in that.
Reference has been made also to the question of trade with Russia. We have heard all this nonsense about not sending out a tractor because the Russians might pinch the manganese steel off a tractor and put it in a tank. All that nonsense has gone because the Russians can make all the steel that they want quicker than we can.
Then there is Eastern Germany. The hon. Member for Louth is not the only person to get around the world. I have been in Germany forty times since the war and behind the Iron Curtain five times in the last three or four years. I saw a youth of 18 in the Stalinstadt Steel Works in control of twenty-eight miles of conveyor belting. Six blast furnaces had been built in nine months. Political and civil prisoners there and everyone else were working, and when I say working I mean working. They work, or else. They have no problems about raw materials, no Stock Exchange and no fiddlers. It is straight from weaver to wearer. I know there is the odd black-sheep, but he does not last long, not so long as in this country. As soon as he is found out he is "got shot of". but as soon as one in this country is found out he is emulated and asked. "How did you do it?" and "How can we do it tomorrow?"
Let us get down to the facts of the situation. There are unlimited raw materials such as coal from Poland and iron ore from Korea. I used to wonder what the Korean War was about, but then I found that 70 per cent. of the iron ore is produced there and they are producing as I have never seen it produced in my life before. The German does not turn a screw on a thread more quickly than the British worker, but at the end of the day he has screwed a few more. 625 That is the secret. There is not this laissez faire there, nor the attitude, "You have never had it so good" or "It is quite all right". We must accept the blame for this.
Of course, the trade unions have not been as good as they might be, but can we be surprised when they see millions of pounds changing hands in one takeover bid in a minute? How can one expect young folk to go into the factories and work as hard as their grandparents did when they see their grandmother having to pay an extra bob for a medical prescription? These things have an effect on the morale of the British worker. An hon. Member opposite can shake his head, but this is true. We know because we are closer to them. I do not spend all my spare time as welfare organiser of a vast organisation without knowing what I am talking about. I get to know the men's opinions.
My time is getting short and I must come to a close. I suggest to the hon. Member for Louth and all his friends that the next time they go to China, the next time they go to Moscow, to Leipzig or Dresden, the next time they go to Manchester even, they should take with them a good, decent, qualified trade union official and let him loose among the other fellows. Let him go out and advocate better wages and conditions among their competitors. That may sound alarming, but there is something in it.
The textile industry has been referred to. I was the Member for Bolton for five years and when I talked to textile workers about having to go on a three-shift system—
§ Mr. Jones
I am sorry, I have not time to give way. I promised to end my speech in a short time. The hon. Member can ask me a question outside later and I will give him to two o'clock in the morning to do so.
When I talked about a three-shift system they believed the idea was made, but the Japanese textile workers are running around on roller skates with a belly full of rice as a reward. Like those in my industry, they are working round the clock. These things need thinking about. It is not such an easy matter as going to 626 the gentlemen of the Board of Trade, with all their charm. The President of the Board of Trade cannot will one penny of export trade to any industrialist.
Reference has been made to the lack of knowledge of employees. I happen to be the editor of a magazine in the steel trade, amongst other things. I am constantly telling people, in editorials and otherwise, that there is only one way for us to survive. That is by producing in fair competition a better article of higher quality at a cheaper price and with a better date of delivery. We do this sort of thing, but what do the employers do? The honeymoon is over. The after-war boom is finished. The balloon has been blown up and is about to burst. They will have in their hands what is left when the balloon has burst—a deflated balloon.
I could speak for a long time, but I promised not to do so. It is vitally necessary for the trade unions to take a vast interest in these matters. The leaders of the trade unions should do more in telling their people what is involved. Shop stewards and individual officials in various branches of trade unions should do that. In addition, the employer should tell the employee the state of the order book and why it is as it is.
Employers should tell employees about the state of the order book and the bank book. The employees would be very interested in that and in the state of the expense sheet. If that were done there would he mutual satisfaction at the fact that at long last employee and employer had got together with the common interest of preserving this great nation of ours as we would have it.
It is a great job. Politicians cannot do it. We can walk into the Lobbies, but walking into the Lobbies or even changing the Government will not win an order for one million motor cars. I see directors of steel firms—not my firm, but other firms—riding round in Volkswagens and complaining about trade not being so good. I see business men riding about in American cars, and they talk about trade not being as good as it should be, with the demand for steel beginning to fall by the wayside.
The hon. Member for Louth has done the House and the country a service. I 627 only hope that he will take the matter further by pressing the Leader of the House to give us more time to debate this problem, the solution to which would be the salvation of our country.
§ 9.31 p.m.
§ The Minister of State, Board of Trade (Mr. F. J. Erroll)
I am very glad to have the opportunity of taking part in this valuable debate, which has been initiated by my hon. Friend the Member for Louth (Mr. C. Osborne). His wide and comprehensive Motion has enabled us to have a far-ranging, discursive and interesting debate. I shall not attempt to answer or state the Government's point of view on the many wide-ranging points which have been made, because I particularly want to refer to that part of my hon. Friend's Motion dealing with the services provided by the Board of Trade for exporting firms. I want to make some comments on the efforts of our exporters in general.
I should like, first, to thank my hon. Friend the Member for Louth and my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) for their very kind and generous references to Board of Trade officials overseas and at home. I am sure that they intended to include in their references the commercial officers in our embassies abroad. They are in the front line of our export drive. I am sure that many of them will read the speeches in today's debate, and what hon. Members have been kind enough to say about them will be much appreciated.
My hon. Friend has said that it is the manufacturer's job to do the exporting. I wholeheartedly agree. The Government cannot possibly do the exporting for private manufacturers. It would probably be a disaster if we attempted to do it. Therefore, we have to draw a fairly strict line in deciding what the range and extent of our export services should be.
Our services are designed to assist manufacturers to do their own job and to do it well. However, there is one task which is essentially the Government's. It is our job to work for the removal of international restrictions on the free flow of trade. We have made considerable progress in the fifteen years since the war, as even the hon. Member for Bolton, 628 West (Mr. Holt) will be prepared to admit.
I was, therefore, very interested when my hon. Friend the Member for Louth quoted correspondence concerning restrictions on trade with Jamaica, South Africa and Ceylon. I have been able to find out a little more about the subject matter of the complaints and difficulties. In all three cases the countries concerned are having to restrict imports on balance of payments grounds. We can make no quarrel with that. If a country runs into balance of payments difficulties, we believe that it is only reasonable that it should have the opportunity to try to put things right.
All we say is that there should be no discrimination between one exporter and another. If discrimination against British exporters arises, then we take the matter up as vigorously as we can with the Government concerned. However, from a quick reading of the complicated cases which my hon. Friend put to me, I think that there is no discrimination against British exporters in these cases. They are being treated in the same way as exporters in other countries, although we still retain the general 10 per cent. preference on all our goods going into Ceylon.
§ Mr. C. Osborne
Then we may take it that the restrictions in these three countries are only temporary, and that as soon as the balance of payments problem is over we shall get more quotas to export there.
§ Mr. Erroll
We hope that with the removal of the balance of payments difficulties they will revert to a greater measure of freedom, although we cannot guarantee that they will do so as quickly as we would wish. It must be remembered that we maintained restrictions on our imports for a number of years on balance of payments grounds and that there were those who thought that we could have lifted them rather more quickly.
The task of the Board of Trade is to provide certain services to help exporters and would-be exporters. We do this, with the help of a world-wide coverage of representatives, from our headquarters in London. Taking together our commercial representatives and the Board of Trade Trade Commissioner Service, we 629 have about 200 posts overseas which are constantly sending us trade and commercial information which they think is of value to potential British exporters. All this is examined, sorted out and collated in our Export Services Branch at the Board of Trade headquarters in London and goes out both to our regional headquarters in the principal industrial centres of the country and through, the medium of the Export Service Bulletin. People who subscribe to this Bulletin are able to obtain all the information which we have gathered.
Those are general services. We also provide a service for the individual would-be exporter. As soon as we learn what he wishes to sell, we try to help him to decide the market which he would like to try first. My hon. Friend the Member for Gillingham (Mr. Burden) referred to a number of important markets and industries. Whenever a firm approaches either one of our regional offices or our headquarters in London, we try to discover what sort of product they are making and which product out of their range they wish to sell, and, as a result of the information which we possess in London, we suggest the market which would be most suitable for them.
We also try to put the firms in touch with suitable agents in the country concerned. This is one of our biggest jobs. We do not merely give them a list of names of people from the telephone directory, or anything like that. We provide them with a short list of people or agencies whom we have good reason to believe would prove to be satisfactory.
§ Mr. Burden
Is my right hon. Friend's Department in close touch with the London buying houses and does he obtain from them lists of the buyers, their arrival times and the commodities which they are buying in this country? If that information could be disseminated through my right hon. Friend's Department, it would be of great value.
§ Mr. Erroll
I should like to look into that point. I cannot give my hon. Friend an answer on the spur of the moment.
The Export Services Branch is in a position to give information about tariff and import regulations and, not only agents and representatives, but also new export opportunities and many other de- 630 tails. This service is constantly used by industry on an increasing scale. These are direct services provided by the Board of Trade.
There are, however, a number of other operations which might be called joint ventures between Government and industry. There are, for example, the export councils. The Government give a grant in aid to the Western Hemisphere Exports Council, formerly the Dollar Exports Council. There is an Export Council for Europe and there is the Advisory Council on Middle East Trade. These bodies are mainly composed of leaders from industry and they serve a valuable purpose in focusing attention on the opportunities for British exports to the markets concerned.
Then, we help in arranging for outward trade missions. From time to time, we give financial support to missions organised by national bodies such as the F.B.I. We are always prepared to consider providing further assistance in suitable cases. There are also outward missions which do not receive financial help from the Government. One, organised by the London Chamber of Commerce, went to Poland on 14th February, a few days ago. It will get all the benefit we can give it of our services in London and Poland so that it may spend its time there in the most valuable way.
I must mention particularly the whole series of missions which are being arranged by the Export Council for Europe in conjunction with ourselves. The Council is embarking on a series of visits to Switzerland, Spain, Sweden, Austria, Portugal, Denmark, Italy, Norway and France. Ten further missions will be carried out in May and June covering other countries in Europe with which the Council is concerned. That will help to show my hon. Friends that we are taking the great opportunities in Europe extremely seriously and we hope that British exporters will take advantage of what the members of the Council learn.
We are arranging, also, for important business visitors to come to this country. Sometimes, we entertain them here, and that is our sole contribution. Sometimes, in suitable cases, we pay their fares from their own homelands, so that they may come over here to see what we are making 631 in Britain, to meet British organisations and, we hope, to place business with us. Last year, for example, visitors of this sort came from Finland, Mexico, Portugal, Switzerland, Tunisia, Colombia, Guinea, Japan, the Sudan and the United Arab Republic. The scheme, which is an expanding one, has been well received, particularly by exporters in this country and by industrialists. We shall shortly be seeking Parliamentary approval to increase the financial contribution which Her Majesty's Government will be able to make towards these useful visits next year.
I had intended to refer to the possible value of ministerial visits abroad, but in view of the very kind things which several of my hon. Friends have said about my own visits I feel that there is little for me to say about this, except to point out that we in the Board of Trade do not think that we have a monopoly of selling Britain abroad. I try to keep track of where my ministerial colleagues may be going abroad and, when the occasion is suitable, I ask them to put in a word for British exports wherever they may happen to be. My hon. Friend the Economic Secretary to the Treasury visited Denmark recently. My noble Friend the Minister of State, Scottish Office, made a useful export promotion visit to Sweden last September, and my right hon. Friend the Lord Privy Seal made a fine address to the Brussels Chamber of Commerce about a fortnight ago.
There is one respect in which I feel that our services can be substantially improved. My hon. Friend the Member for Louth and the hon. Member for Blaydon (Mr. Woof) referred to exhibitions and particularly to facilities in Moscow. We have repeatedly pressed the Soviet authorities for permission to arrange a Moscow shop window, but so far they have not seen their way to providing the facilities that we require. However, the Moscow Fair, which is due to start in May, should be a great success. This justifies me, perhaps, in saying a few words to the House about our policy for overseas fairs, as it is a matter in which many people are greatly interested. We have been giving a good deal of thought to this matter at the Board of Trade, particularly with the help of our Exhibitions 632 Advisory Committee, which consists of businessmen with a wide range of experience in these matters. Perhaps I am stating the obvious, but the real object of a British manufacturer showing his goods at a trade fair overseas is to enable him to sell his goods. But exhibiting at a trade fair is only one aspect of selling, and the firm which decides to exhibit must be prepared to follow up with a steady and consistent sales promotion campaign.
Our trade fairs overseas are organised in several different ways, but the most valuable one for our exporters is the specialised trade fair, of which there is an increasing number in Western Europe and other highly industrialised countries. There is also a growing tendency for trade fairs to be organised abroad, particularly in the newly developing countries, in which the selling aspect gets overshadowed by a sort of international competition in industrial prestige. This can be a very expensive development, with relatively little to show for it afterwards.
Nevertheless, we realise that fairs of this kind, with all the exhibitors from one country grouped together in a single national pavilion, suit the needs of a number of countries, particularly those in the less industrially developed parts of the world. I can assure the House that we have no intention of remaining aloof from occasions of this kind, even if the sales prospects are not always very obviously attractive. The Government have in the past provided assistance for firms wishing to take part in specialised fairs, and we intend to do more. We are also planning to assume larger responsibilities for national pavilions at trade fairs of the type which I have just described.
§ Mr. Erroll
Yes, financial responsibilities.
We shall not try to go everywhere, but we do intend to make certain that what we do we shall do well. Our belief is, and all the information we get from industry confirms this view, that the specialised trade fair is the one which today offers the best sales prospects. We want to interest firms in these and similar fairs on a long-term basis. While there are many British firms which regularly participate successfully in such fairs, I feel 633 that a good deal more needs to be done and we want to give firms all the help we can in this direction.
Our usual method of providing assistance is to obtain space at the fair and relet it to the firms in each industry willing to participate. In this way, we can get an effective British display, and we can be fairly precise about the extent of our financial commitment. We can also provide additional services in kind for such a group display. When an overseas fair is being organised on the basis of national pavilions, we are prepared to put up a Government pavilion and let off the space at reduced rates to British firms willing to exhibit. Individual firms and industries are thus saved a good deal of work and expense.
I want to mention one other category of fair, and this is an important point—the all-British fair overseas. Such a fair can have a great impact on a market, such as the one which was so successful in New York last year. This fair and the one in Moscow have both been organised by private enterprise organisations, but they do depend on really massive support from industry. There is a limit to the number of fairs which industry can man up and pay for, and I think that we shall be wise to continue on the present basis, which, broadly speaking, results in one such fair a year being held in markets where we want to make a special effort.
There are also—and this is another important aspect—the so-called "British Weeks", which, incidentally, usually last for more than a week, but which are events which can be very useful in bringing our products, particularly consumer goods, to the notice of the buying public. We already give some assistance to these events, but we have decided that we should do more to help to meet these needs.
So the House will see that exhibiting British goods abroad really comes under four separate headings. There are the specialised fair, the national fair, the British fair and the British Week. We plan to do more in all these fields, and this will cost more money, but we are satisfied that it will be money well spent. In 1956–57 our total expenditure was £68,000. In the current year, with Supplementaries, it will be no less than £333,000, but we still do not feel this 634 is enough and, therefore, proposals will shortly be laid before Parliament seeking to increase next year's provision by about £200,000, making a total of no less than £530,000.
§ Mr. Erroll
If we find that there are justifiable demands which even with a Vote of that size we cannot meet I can assure hon. Members we shall have no hesitation in coming to the House and asking for more.
§ Mr. Osborne
May I ask just one more question? These four classes of fairs are fairs for a temporary period. Is there any hope of our having a permanent establishment where the exhibitors could have their representatives taking orders straight on the spot throughout the year? Would my hon. Friend think about that?
§ Mr. Erroll
Certainly we can think about it, but I would say that industry has not shown very much desire for that type of permanent trade centre. There has been one running in Mexico City for some time. The real difficulty is to keep it manned up and looking fresh. That is a very practical difficulty, because one has to have a person standing by the exhibits for many days at a time with no real work to do. However, we would not rule that out if there were any general demand for it.
My hon. Friend the Member for Louth talked about the importance of industry learning to sell, and he said one trouble was that the Board of Trade was not selling itself and was not selling its services. We do not mind having criticism, but I would point out to him that we are doing our very best to sell the services we offer to exporters. We have made considerable efforts during the last year.
My ministerial colleague's, if I may start with them, have helped me a great deal in this way—and the President of the Board of Trade, also, of course—by making speeches in many different parts of the country on the importance of exports and on the services which the Board of Trade can provide. We have not limited this selling effort to Board of Trade Ministers. In fact, Ministers have made no fewer than 50 speeches in provincial centres.
635 That is all very well for all those people Who go to listen to ministerial speeches or who read them. What about the firms who are immune to that type of appeal? We have started a direct mail campaign of several hundred letters a week to all the firms in the country employing 25 or more people in manufacture. This means that about 30,000 circular letters will he sent out over a period of nine months pointing out the existence of the Board of Trade export services and inviting those interested to fill in a reply-paid card. The response to this has been out of all proportion to what is normally expected in a circular letter campaign of this sort.
§ Mr. Douglas Houghton (Sowerby)
Will the Board of Trade tell those firms something about the export credit facilities about which little is known and on which some complaints are made?
§ Mr. Erroll
Certainly. About 32 per cent. is the rate of replies, and every firm which replies is sent a copy of the booklet, "British Government Services for Exporters", which includes a section on export credit guarantees.
Every reply-paid card is followed up as quickly as possible by a specialised export officer from the regional headquarters. If he finds that there are export problems with which he cannot deal because they are too intricate or specialised he immediately notifies his opposite number in the local office of the E.C.G.D. who goes along and deals with that complicated subject. The direct mail campaign is, I suggest, being a very distinct success in bringing to the notice of every potential exporter in the country what the Board of Trade can offer in the way of export services.
We have a great range of leaflets and pamphlets which are distributed on a wide scale. There is the "British Government Services for Exporters", of which we have distributed nearly 120,000 copies since the first printing. There is the pamphlet, "Going Abroad on Business", of which 150,000 copies are distributed by passport offices, banks and travel agencies and 100,000 more are being printed. These are free publications. There is an excellent wall map of the world entitled, "Information for the 636 British Exporter", of which a second edition of 20,000 copies have been distributed and 10,000 more are being printed to meet requirements. This is also free.
There is "Help for the British Exporter in Canada and the United States", which is being distributed on our behalf by B.O.A.C. and the Cunard Steamship Line at the rate of 50,000 copies a year. We also run a series of "Hints to Business Men", covering about one hundred countries and detailing business conditions in the countries that the businessman intends to visit. There is also a pamphlet describing how trade fairs help exports.
This wide range of pamphlets and literature enable those who are prepared to listen and have a go to find out all they need to know. We are doing our best to encourage export mindedness. We have taken various steps recently to make clear our appreciation of those who make outstanding contributions to our export trade. Our day-to-day work in our various offices is on a very considerable scale. The Export Services Branch, for example, deals with 1,000 inquiries a day. In addition, large numbers of firms are visited by our regional export officers and regional representatives of the Export Credits Guarantee Department. At least 3,000 personal calls or visits are made and received each month.
I shall try to answer the question whether we could do more. We are proud of what we are doing, but we are always glad to receive constructive criticisms because we want to improve the services that we provide. We have met an enthusiastic response from the F.B.I., the N.U.M. and from chambers of commerce which are forming export groups and clubs all over the country.
Individual industries have also set up export groups and committees. The trade union movement also plays an active part in the campaign. It has given support to the Export Council for Europe and the Western Hemisphere Exports Council, and through the N.P.A.C.I. and the Regional Boards for Industry and their district committees. It has contributed to the valuable discussions on matters affecting exports.
637 The Motion before the House is a long one, but the operative part, or "punch-line", is clear and unequivocal. It says:That this House…urges Her Majesty's Government to make better known to exporting firms the facilities offered by the Board of Trade…I have tried to tell the House what some of these services are and what we are doing to make them better known. The Government, without committing themselves perhaps to the exact wording of the Preamble, are glad to accept the terms of the Motion and they appreciate the continuing interest that hon. Members take in the facilities provided by the Board of Trade.
§ 9.58 p.m.
§ Mr. F. H. Hayman (Falmouth and Camborne)
Unfortunately, the time available to me has passed and I am unable to speak to the Motion on National Parks in my name:
[That this House, while appreciating the progress made in the last eleven years in connection with National Parks, is of the opinion that time has shown the need for amendment of the National Parks and Access to the Countryside Act, 1949, in a number of respects, particularly in regard to the financial arrangements for National Parks and the further strengthening of the Act against the forces which tend to destroy or impair them; and urges Her Majesty's Government to introduce amending legislation accordingly.]
But I would seek your indulgence, Mr. Speaker, and say that it is a very important subject.
§ Mr. Speaker
Order. I called the hon. Member on the Motion before the House 638 and National Parks are out of order on that Motion.
§ 9.59 p.m.
§ Sir Harmar Nicholls (Peterborough)
In the remaining minute or so I should like to add my congratulations to my right hon. Friend the Minister of State, Board of Trade, and his Department on all that has been done on the tactical level. My right hon. Friend's explanation of the Department's contribution on that level was absolutely first class, but I think that it is on the higher strategic level that the Government can make a further, great contribution. As tax collectors and those who have to do the taxation, they can help medium-sized firms to enter the export market. A concession on tax is a matter which should be taken into account by my right hon. Friend and his Department.
§ Question put and agreed to.
That this House, conscious of this country's need to export at least 30 per cent. of all it manufactures in order to pay for the 50 per cent. of the food and nearly 100 per cent. of the raw material requirements which it must import, and recognising this country's inability to compel the foreigner to buy British when cheaper or better articles are offered and being aware that labour costs in this country are high because nine-tenths of the world lives at one-fifth of our standard, urges Her Majesty's Government to make better known to exporting firms the facilities offered by the Board of Trade as an additional help but not as a substitute for the higher quality at lower price goods needed to secure the necessary bigger share of world exports if mass unemployment and real hunger in this country are to be avoided.