§ 11.5 a.m.
§ Mr. Gordon Matthews (Meriden)
I beg to move,That this House welcomes the increase in British exports in 1963 and, since economic growth in the United Kingdom depends on a continuing increase in exports, notes with approval the wide range of services to exporters provided by Her Majesty's Government; and calls upon Her Majesty's Government to ensure that British exporters continue to receive all possible assistance.When the subject of exports was debated on 24th May last year, reference was made to the recent rise in exports, to the achievement of the exports councils, and to the substantial improvements in insurance facilities offered by the Export Credits Guarantee Department and other Government services. If one moves in well-informed circles one still hears tributes to the services provided by the Government. Only a few days ago I heard some very nice oral tributes from Mr. Alfred Townsend, Director and General Secretary of the Institute of Export.
He said that the volume and quality of Government services had greatly improved; there was better liaison between the Foreign Office and the commercial side of the diplomatic service. The time-lag in reporting information, which is to a certain extent inevitable, was being reduced. Claims were being speeded up and considered more sympathetically. Officials concerned were more willing to deal with unusual claims. In fact, it is claimed by many that the services provided in this country are better than any other in the world, and certainly far ahead of those in the United States.
Recently we had the Treasury Economic Report for 1963 which indicates the rapid extension of exports, and, more recently still, provisional figures 740 from the Board of Trade showing that the figures for March are an all-time record of £373 million. This is extremely encouraging news. Great credit is due to the men and women who have designed the products which we are exporting and produced them, particularly the men and women who have sold them in remote parts of the world, and the distributors, people concerned with dealing with Customs and insurance forms and the rest of it; particularly those people, in some remote and small offices, in small factories in the Black County, for example, who have to cope with applications and in foreign languages and all the rest of it. They deserve a special tribute. Last, but not least, there are the civil servants, at home at the Board of Trade and in foreign countries, who have stuck so loyally to their difficult job.
That is the rosy side of the picture. On the other side of the balance sheet we have the fact that the United Kingdom share of world exports in manufactured goods is still declining; that imports are increasing, and unless we do something pretty drastic about this the deterioration in the balance of payments situation will hamper our efforts. There is still a need to strengthen our competitive position. So the question arises, what more can the Government do to assist our exports?
In February we had the Plowden Report, which most of us welcomed. It recommended the making of all the overseas services into one career service. I think it clear that the previous fusion of the Foreign Office and the commercial services led to a steady improvement, and it is hoped that the application of the same principle to the Commonwealth Relations Office and the High Commissions will lead to a more commercially-minded outlook on the part of the officials concerned, especially at the top level among the ambassadors and high commissioners. I suggest that the Treasury would do well to permit more flexibility in the manning of some of our foreign services, and allow a "float" of, say, 10 per cent. of the manpower in order to permit more overlap of facilities for the training and initiation of new officers, and to enable officers to remain longer in post.
There is still a need for improvement in the quality and enthusiasm of some 741 of our commercial attachés and trade commissioners. There is still a need for more effective co-operation with the private services provided by the Federation of British Industries and some chambers of commerce and various British bodies abroad. The question is, what can we do about it? Will my hon. Friend consider, for instance, setting up a Commonwealth Export Council, similar to one in the Western Hemisphere, and another in Europe?
I wish to refer now to the E.C.G.D. Most of us welcomed the recent publication by the Central Office of Information of a booklet describing the development, principles of operation and the numerous facilities of the Export Credits Guarantee Department. One realises that here there has been an impressive growth, when one bears in mind that in 1947 insurances provided by this Department represented only 8 per cent. of British exports insured and that today they cover 25 per cent. I suggest that the main reason for this continuous and steady growth is, first, the increased scope offered to insurers in the shape of the risks that are covered and the percentage of loss which is guaranteed. Secondly, I give credit to the fact that there has been a progressive reduction of premiums and, lastly, to the deliberate effort to sell credit insurance. This is also partly due to the fact that we are changing from a sellers' to a buyers' market, and longer credit is demanded, and as a result there are greater risks.
This, I think, is proved by the fact that the number of policies has increased so tremendously. I am told that the figure has increased six times in 16 years. In 1947 there were 1,780 current policies; today there are over 9,500. This proves the need for some kind of cover of this sort. I think that we need to go further and insure overseas investment against political risks, as is done in the United States, in Germany and in Japan. We need to protect private capital from non-business risks and by so doing remove what I suggest is the greatest deterrent to foreign investment.
I should like to define what I mean by non-business risks, non-commercial risks, and I wish to refer to a document prepared by the Birmingham Chamber 742 of Commerce which has looked into this question very thoroughly. The chamber defines non-commercial risks as being risks which would be involved by civil war, a change in the political colour of the Government, or constant financial crises resulting in the asset being destroyed, confiscated or prevented from working properly. The risks covered by the schemes operated in the United States and by the Japanese and German Governments include confiscation and nationalisation, war or the inability to convert earnings to the currency of the investing country. It seems to me that here there is a considerable field for an extension of the principles of insurance in relation to capital development.
May I now refer to the needs of finance for current trading? The lack of finance is a quite considerable difficulty with many small manufacturers. In the Midland areas such manufacturers have difficulty in that an exporter has to justify his position to his own bank. It seems that there is a need for some simple form of insurance to cover an exporter when he has completed his order so as to enable him to re-use his credit on presentation of the necessary delivery certificate.
I suggest to my hon. Friend the Minister of State, Board of Trade, that he might care to read an article which appeared in the magazine Export in February this year entitled "Plugging the Gap in Export Financing". I shall quote one or twp of the passages from this article. It says:Financing exports is a problem of making export borrowing as easy and competitive and profitable as borrowing for home trade.I think the House will agree with that thought. I t goes on:But credit insurance has done nothing to deal with the questions of speed of turnover and recouping of profit, nor does it enable a borrower for an export transaction to borrow on a basis which matches that available for the home trade…a time of boom, when ample financial resources ought to be available for the development of exports, is the very time when exports tend to be neglected in favour of the quick turnover and profit available at home or in other boom countries.This is important, because many of us are addressing our minds to the possibilities of developing our trade in underdeveloped countries where the risks are 743 rather greater. The writer goes on to say:Whilst the risk has been taken out of the exporter's business, it has not been taken out of the lender's business.He concludes with this recommendation:Would it not be possible to give to a lending bank a completely unconditional guarantee in respect of money which it lent to an exporter on a completed export transaction, provided that there was an instrument to identify it which certified that moneys-worth had in fact passed and that a debt existed with a foreigner?I urge my right hon. Friend to inquire into this suggestion to see if something can be done to extend insurance in this direction.
Now I refer to what I consider to be the seven deadly excuses of manufacturers who are not in the mood to export or to try to do so. I have had much experience moving around small factories in the Midlands discussing problems of exports with various traders. Although it is gratifying to know that many of them are making big efforts to increase their trade, the problem seems to remain and many do not seem inclined to do so. There are seven common excuses which they make. The first is the inadequacy of information. Anybody who has taken the trouble to look around will find there is perhaps almost too much information.
We have the Board of Trade Journal, an excellent publication. We have the Export Services Bulletin, and comprehensive booklets produced by the Board of Trade such as, "How to Export", by Michael Shanks. There is almost everything we want to know in that booklet. We have the E.S.B. services pamphlet published at the beginning of the year. Much information is turned out by the Central Office of Information in film shows and so on. In addition, we have commercial attachés in foreign countries who are always ready to provide information. The excuse about inadequency of information is just not on.
The second excuse we hear is that of financial risk. This is not a real obstacle to exporting. In this we find there is only one suggested excuse which has any merit. That is the complaint that the E.C.G.D. is of little help in covering bad risks; but who wants to take on a 744 bad risk? I do not think that has any bearing on the subject.
The third excuse is high taxation. This is rather nonsense when we compare our position in Britain with that of other countries. It is interesting to note, as I have done, from the Barclay's Bank Review for February 1964, the British tax burden compared with those of other countries, including local authority taxes and social security contributions. We find that Britain bears a burden of 29 per cent. of the gross national product based on 1958, whereas in Western Germany it is as high as 34 per cent., in Austria 33 per cent., in Finland, in Norway and France 32 per cent., and in Sweden 31 per cent. On these comparisons, I do not think we have anything to grumble about on the burden of taxation.
No. 4 excuse is the complexity of the forms which exporters have to fill in. With modern education there should be no difficulty in this connection, especially if proper use is made of the specialised services available, not only at the Board of Trade but through local chambers of commerce and other agencies.
Difficulty No. 5 is that of foreign languages and translations. This difficulty is more apparent than real. Translations can be obtained without difficulty from the Institute of Modern Languages or chambers of commerce with an excellent 24-hour service. The same remarks apply to the difficulty about converting our weights and measures system into the Continental system. I do not attach much importance to this excuse.
The sixth is, "I am in too small a way of business to undertake exports" and, in many cases, "We make only components." To manufacturers who say that I recommend a look at the "Piggy-back" scheme sponsored by the Federation of British Industries, the National Association of British Manufacturers and the Institute of Directors. Perhaps the Board of Trade could consider setting up an export clearing house with a Government staff responsible to the Board of Trade. This could be allied to a national exports assistance register similar to that at present operated by the Institute of Directors.
745 The last excuse, which I think the most important and the only one which has any validity, is that the demands of the home market are so great that the manufacturer finds that all he can do is to cope with that demand, let alone the export market. I remind manufacturers who find themselves in that position that the home market cannot be allowed to absorb all our national energies. Our overseas trade is vital to our continued prosperity. What would the home trade do if there were a decline in our balance of payments position and we were unable to pay for the raw materials we have to import?
There is only one answer to that. We have all to do our share in supporting the export drive. If we lose our trade now it may be too late in a few years to get our toe in the door. There is still far too much complacency among certain sections of manufacturing industry, and far too many lame excuses offered for not "having a go" at the export market. Until we can convince the manufacturer that it is in his long-term interest to have a go, we shall not get him to do anything effective.
We may get him to play about with exporting for a year or so and then give it up, but that is no good to anyone. It has to be a continuous sustained effort. To succeed, a manufacturer must be prepared to commit himself to such a sustained and continuous effort. He may not make quite so high a rate of gross profit as he would on the home market, but I should remind him that it is just that little extra profit which, being marginal, adds proportionately more to his final net profit.
I have confined my remarks to the range of services provided by the Board of Trade because this is in line with the terms of my Motion, but I am tempted to refer to the most important service of all, the conduct of tariff negotiations. I ask my hon. Friend, what are Her Majesty's Government doing to liberalise international trade? What is being done to reduce barriers to trade in agricultural and other products? What is being done to help developing countries to expand their trade?
I appreciate that negotiations on the Kennedy Round will not begin until 746 next month and probably there is little to be said about that at present, but it is important that we should maintain a proper sense of proportion in this debate The E.C.G.D. and the E.S.B. are important ancillary services. What matters most is our policy in overseas trade, the skill of our negotiators, and the willingness of our businessmen to have a go in this export business. Those who have a go deserve special medals of credit.
It is a waste of effort as a general rule to flog or to entice an unwilling horse such as many manufacturers appear to be. The best policy is to concentrate on the good exporters. That is being done, but it should not deter us from continuing to make an effort to persuade as many manufacturers as possible to participate in the export trade. I am certain that the best results will be obtained only when a company is persuaded in its long term interests to export.
§ 11.27 a.m.
§ Mr. H. Rhodes (Ashton-under-Lyne)
The House is indebted to the hon. Member for Meriden (Mr. Matthews) for using this occasion to provide an opportunity to the Hen se to discuss the export trade. Some of us, particularly in the trade to which I belong, are getting rather tired of exhortation and being told what to do and continually being sniped at as though we were not already conscious of our obligations, duties and opportunities in the export field.
I have in my hand the Wool Textile Bulletin for 1963. If any industry has taken its opportunities since the war it is the wool textile industry. The average from 1950 to 1959 ran at £162 million in foreign currency. In 1952 it dropped to £150 million on account of the recession, but this year we have got back to the position of £166 million. Before coming to certain matters regarding the wool trade, I wish to say a few words about the international picture. The December Bulletin for Industry, published by the Treasury, prophesying what was likely to happen in 1964, said that in all probability world trade between manufacturing countries in the Western world would decline.
On Wednesday of this week the Secretary of State for Industry and Trade drew our attention to the magnificent performance that we had put up in 747 trading with those nations whose manufacturing industries were highly developed. I say this to draw attention to the contradictory evidence that we get at various times about the likelihood of the trend in export trade.
Anyone intelligently interested in this subject naturally follows the matter up and discovers where the figures are available which support such conclusions as these. I should like to know where the figures are available on which we assess our decline in world trade, say during 1963. So far I have found it difficult to establish a reasonable breakdown by manufacturing commodities which are circulating in world trade. I might be recommended to go to G.A.T.T. and get the Review of International Trade. The last figures G.A.T.T. issued were for 1962. They are broken down in a very vague way. For instance, textiles, including clothing, are bracketed with passenger cars. How can that be of use to people who are trying to do some intelligent thinking on the subject? The greatest increase was in manufactures as a class, which supports the contention of the Secretary of State for Industry and Trade. I do not quarrel with that. The figures are these: textiles and passenger cars, 28 per cent.; other manufactures, 31 per cent.
We can agree that the Americanisation or Westernisation of the economic world is proceeding apace. The advantages which we enjoyed in the nineteenth century are now lessened considerably because of the ease of communications throughout the world in respect of information on technology, research and development. Consequently, there is a lessening of the advantage that we have had and ultimately, if not in the present day, we shall have to fight harder for exports backed by technology.
This is what I want to draw the attention of the House to, and I want to say what we could do about it. It is reasonably easy for a highly technologically supported industry to launch out and get export trade throughout the world. The newer industries—the silicone, the nylon, the terylene, the hot strip rolling processes, the float glass processes; one could recite a whole bunch of them—go ahead because they are new. They go ahead because they are wanted through- 748 out the world and the technological advance of other nations may not have kept pace with ours. They look after themselves. They are doing extraordinarily well.
But there are groups of our industries which are desperately holding on to what they have got in world trade and which need to be supported by a different type of energy from government from that which we have had up to now. Government is taking more and more initiative in these things. Government is persuaded that planning is a necessary adjunct, not only for the home trade but for the export trade as well. That is why, in the wisdom of the present Leader of the House, N.E.D.C. was set up and 17 industries, including my own, were put on a list for investigation.
The wool trade was one of the first to say, "We agree to co-operate. We have been accustomed to exporting since medieval times. We have been accustomed to changing our pattern of manufacture and we wish to co-operate with the Government." The trade has been accustomed to change. From the time when this country's only cash crop was wool, to the time when we manufactured it for our own use in exports, right up to the present day, vast changes have been taking place.
When I first started my own little business, as it was then, in 1921 and looked at what some of the manufacturers in my own area were doing, I visited one of them who specialised in red flannel. Unfortunately, he had a warehouse stacked full of beautiful red flannel, stuff which he had normally exported to America, and all the temperate zones, even Russia. When I asked him what he was doing with the stuff, he said, "Eh, lad, they will come back to red flannel petticoats before they have done". They never did. I thought that they never would, but that is what he said.
He was one of the few chaps in the trade who stuck to his opinions, through thick and thin, despite the logic of progress. He ended up in the bankruptcy court. He was one of the comparatively few people in the wool trade who did. The rest changed their ground. They changed the type of manufacture so that they were able to take advantage of demand throughout the world. This has gone in our industry through the years and I hope that it will continue in future.
749 Many of the 17 industries which are in the category which was reviewed by the N.E.D.C. need a change of emphasis in the support we give them. There is no question that unless we are able to maintain a high ratio of exports to our national income we shall fail to progress. I have said that hitherto we have had an advantage in technology and that that advantage is lessened now. I want to repeat something which I have said often in the House. There are one or two things which should be done now that the administrative machinery is nicely oiled and working in the N.E.D.C. Somewhere between the Board of Trade, the Treasury and the N.E.D.C. we want a new scientifically based, permanent organisation which will do the job of work which I want it to do.
Firstly, world trade should be assessed in every manufactured and semi-manufactured commodity that we make and the figures kept up to date and furnished to every single industry affected. Our share in the world trade in those commodities should be assessed. When we have the world figure we should have our own share in the commodity assessed and a rating given to it. If world trade in the commodity is rising, our share must rise too, because if it does not we are not taking our proper place as a manufacturing nation.
If our share in a manufacture is high now and world trade in that commodity is declining, the full weight of all our technical resources must be turned on that industry so that it can be enabled to be more competitive. I spoke yesterday on this subject and indicated how this turning-on can be applied. I should be out of order now if I referred to it further.
The technological resources must be turned on so that we can hold our own. That is what the wool industry and many of these 17 industries would appreciate. If our share of world trade is declining in a manufacture where world trade is also declining, we should consider the Japanese attitude, for example, towards the cotton industry. They are getting out of it as fast as they know how, although they have a large share in world trade, because world trade in the commodity is declining and will continue to decline. They are safeguarding their own home industry by the very method of tech- 750 nological application to the investment which is going into that industry. They are doing this by means of automation. If our share of world trade is declining in a manufacture where world trade is declining too, we should decide what its importance is to the home trade or get out.
Again I thank the hon. Member for Meriden for giving us an opportunity to say something on this subject. I end on the note that I hope that the Minister will pay regard to this trend in world trade and the necessity for technological resources being turned on to those industries which are finding it difficult to hold their own. I am perfectly certain that the Minister will do this and that he is aware of the implications of these problems. I hope that when he replies to the debase he will give us some encouragement.
§ 11.44 p.m.
§ Sir Edwin Leather (Somerset, North)
I am particularly grateful to be called in the debate, immediately after the hon. Member for Ashton-under-Lyne (Mr. Rhodes). It is a good many years since I had the pleasure of following him in a similar debate and I find myself in the same happy predicament as I was in then in that I cannot find anything about which I can disagree with the hon Member. The House knows of his contribution to the wool trade and the export trade, and it is always the richer for what h e tells us. I particularly agree with him as I understood him, I hope correctly, when he spoke about obtaining statistics from the United Nations and G.A.T.T. and finding motor cars lumped in with textiles, and crockery with machine tool and wondering how on earth anybody can come to any conclusion about these things.
I should also like to pay tribute to my hon. Friend the Member for Meriden (Mr. Matthews) for raising this important matter and for the cogent way in which he did it. I must also offer a personal apology. I am in the position in which one sometimes is on a Friday when one's duties in the House and in the constituency conflict. I am sure that my hon. Friend the Minister of State, Board of 'Trade will forgive me if I have to leave for that delightful county which he and I both praise in the House, truly God's own country in the heart of the 751 West, before he delivers his final remarks.
§ Sir E. Leather
The hon. Member for Ashton-under-Lyne emphasised the matter of people taking out all sorts of odd statistics to come to a false conclusion. We have suffered very much from this in this country. In the last few years in particular there has been a positive passion to dig up obscure statistics to try to prove that dear old Britain is a dreadful state and everybody else is so much better than we are. This is complete nonsense.
We know perfectly well why Britain's share of the export trade went up enormously in the years following the war, and with, the best will in the world, we know that it was not entirely because the hon. Member for Ashton-under-Lyne was concerned with the Government of that day. It was because there was a vacuum in world markets, because the whole of European industry was in devastation, because Japan was not in the business, and because our biggest and most obvious rivals as exporters, the United States, were kept out of a vast percentage of world markets because nobody had the dollars to pay for the goods.
Therefore, in the years when recovery began in Europe and Japan and the dollar shortage came to an end. Britain's virtual monopoly of markets like those in Australia, New Zealand and South Africa was bound to fall—it could not have done anything else. Once German industry and Japanese industry in the middle part of the 1950s got back on their feet, very largely with the help of American finance, a policy with which we in this House consistently agreed, it would have been fantastic if their share of world trade had not expanded extraordinarily rapidly. Therefore, to use these kinds of figures to prove that there is something wrong with British industry is nonsense.
I elaborated this point in the House on Wednesday, and I must say to the hon. Member for Ashton-under-Lyne, although we are absolutely at one with each other on the point that he made, that when it comes to making this sort 752 of point and digging up obscure and dubious statistics to try to spread gloom and despondency, and when it comes to over-simplification and sensational headlines to "out" Fleet Street, there is none of us in the business who can compare with the Leader of the Opposition. His predatory mental gymnastics in this field sometimes leave one gasping with astonishment. They are always used to try to show that there is something radically wrong in this country, and it is not true.
My hon. Friend the Member for Meriden started with the question of the Government's export services. I, too, would like to say that I believe that they are not only good but that one could make an unanswerable case that they are the best in the world. For the first time in the many years that I have been in this House. I do not need to declare a vested interest because I no longer depend upon the good will of the Export Credits Guarantee Department to earn a living. There is no reflection in this—it just happens that I have changed my mode of living. But I was involved in a very large way with that Department for 20 years. It has moved with the times and has been as flexible as humanly possible. It has been advanced in its thinking. There have been occasions even when my only criticism has been that it has gone almost too far in doing things which private enterprise in general and the City in particular ought jolly well to have done for themselves. It has done a good job and it is worthy of that tribute.
The story of the British export industry, too, is a magnificent story. Because it is never quite good enough is no justification for turning occasional monthly statistics from G.A.T.T. and the import-export figures and so on—which happen to bob up too much for comfort, as, of course, from time to time they do and always will—into the kind of stuff that gets into the Press and certain speeches that lambast the export industry and tell the business community that it has failed. It is not true.
My experience of 20-odd years in this business is that, of course, there is some good and some bad. That is precisely what one would expect. But where British export industry is good it is the best in the world. I should like to give 753 one specific illustration, again from personal experience. I also happen to be privileged to be the president of an institution known as the Institute of Marketing and Sales Management. Some few weeks ago, I had the pleasure at a dinner in the City of presenting the annual marketing award to Mr. Donald Stokes, the managing director of the Leyland Company. Many years ago when both Donald Stokes and I were very junior, I sold him his first export credits policy—and a rare lot of old rows we had about it in those days. I can well remember that in the first year for which he was responsible for that company's exports, 16 or 17 years ago, they were a little over £1 million, and I was happy to be told by the Leyland Company this morning that they are now rapidly approaching £100 million.
I was in the United States not long ago, and when talking to the president of one of the big lorry companies there I asked him about his exports. He said, "It is very difficult with us. Last year we finally pulled out of Europe altogether. We closed our export offices in Europe". I said, "This is very sad news—why?" He said, "You are an Englishman; haven't you ever heard of Leyland's? That's why."
It would be out of order to pursue it too far, but it is not unfair to say that one cannot help suspecting that some of the violent opposition in Washington to the sale of buses to Cuba might not be unrelated to the fact that Leyland's have run their American competition completely out of Central America, too. This is a magnificent story and there are many other companies—one thinks of people like Sir William McFadzean and Lord Rootes—who have not only made tremendous impact in their own companies but have devoted a tremendous amount of their time to trying to help others and the country generally.
There is nobody in this House, not even the Leader of the Opposition, not even my hon. Friend, or the Board of Trade who can tell those kind of British industrialists how to run their export business. They know their jobs backwards and they deserve every kind of praise that we can give them for the success that they have achieved. There are many others. Those are a few names which come to mind from those 754 whom I know personally. But I still think that there must be great room for improvement, and, having handed out bouquets, it would be ridiculous to be complacent and to think that that is the end of the story.
I should like to make one specific suggestion to my hon. Friend in relation to the Export Credits Guarantee Department in particular and to the export services, the exports promotion branch and those other activities of the Board of Trade which have been justly praised and which on balance, by and large, and in general, make very few mistakes and do a useful service for the country. With great respect I believe that the men in those jobs, devoted civil servants as they are—and I hope that no one will misunderstand my presentation of this point—would be in a position to do an even better job if they would bring even more vigour and imagination to their jobs, and they had a change of status.
I should like to see E.C.G.D. not run as a department of the Board of Trade. This would be one of those rare cases when one could put one's hand on one's heart and say that the greatest step forward in progress and enterprise that could be taken in this regard would be that E.C.G.D. should be nationalised taken out of a Government Department, made a Crown corporation, a nationalised industry, if necessary, but given additional flexibility. There have been many times over the past years when E.C.G.D. has got into difficulty, and it has nearly always been because for a period, and sometimes for a good long period, it has been short-staffed. In particular, there have been many occasions where senior executives were working under tremendous strain.
§ Mr. R. Gresham Cooke (Twickenham)
Would my hon. Friend agree that it is a fairly autonomous body and that, whatever position it might take up, it must be responsible to Parliament? Is it not vital that hon. Members should be able to ask Questions about its conduct and so on?
§ Sir E. Leather
It is autonomous to a certain extent and I should like to see it even more so. However, I think I am right in saving—unless changes have been made in the last few months—that, 755 particularly on questions of establishment and salaries, it is not at all autonomous. If it needs a new executive in a key job it must go through the whole Civil Service procedure and argue, perhaps for months, before the official can be appointed. It cannot possibly hire a Dr. Beeching, although there may be times, the present may be one of them, when—and in saying this I do not in any way wish to detract from the job the senior civil servants who run it are doing—a great deal of additional dynamism could be brought in if it could say, "We want a top man to be paid around £15,000 a year; let us hire him". It is in the nation's interest that that should be done, but under the present set-up that is impossible.
I am sure that the Board of Trade is able to produce at least four reports in which extremely learned men have looked at this sort of problem and have said, "Oh no. It is far too radical a change to make. It is not at all a practical change to suggest". No doubt those statements can be supported with at least 50 reasons to show why certain changes would not be desirable.
Committees of eminent people from many walks of life have been set up. We have just had one on the subject of the turnover tax, which is related to the subject we are discussing. I am sorry to have to tell the Minister of State that I am still unrepentant and that, although I have great respect for the three gentlemen who wrote the report, I do not agree with them. The reason we always get completely negative reports when inquiries are made into these spheres is simply that we ask the right questions but we always ask the wrong people.
If one wants to ask questions in this context—when one wants answers which will be imaginative, radical, new and encouraging—with the best will in the world I am sure that one should not ask, for example, a lawyer. Equally, one should not ask a retired civil servant. Above all, one should, for goodness sake, never ask a chartered accountant. Chartered accountants are trained over many years, at great expense and trouble, to bring all their mental equipment to prefer to be precisely wrong rather than approximately 756 right. This is why we always get negative answers to these questions, because we always ask eminent senior people who will give sound and solid answers but who are not the sort of people who could conceivably be expected to give an imaginative or radical answer and say, for example, "By golly, that is something good."
If my hon. Friend the Minister of State asked the people involved in the export trade—salesmen, for example—he would get radical answers to the very same questions to which he now receives negative ones. What he wants is a few more knock-about comics like me, people like Donald Stokes and people who have spent their lives selling, for this is a selling problem and any company which wants to succeed does not put a chartered accountant or lawyer in charge of its sales. It puts salesmen in charge, men who may not be considered eminent in the way we normally use that term, but men who can bring to bear the necessary salesmanship which we need, without being too precise, too cautious and always having to look at all the precedents.
I must comment on the small exporter, and on this issue I am probably still in a minority. One of the few decisions my friends in the E.C.G.D. have made with which I disagree on principle has been the campaign to encourage the small exporter to get into direct exports. I am sure that this is wrong, although I appreciate that there are cases, one can quote them, where a small man starts, with the encouragement perhaps of the Board of Trade, gets into the export business and either does well and grows and grows—in which case, by definition, he quickly ceases to be a small exporter but becomes a big one—or, which more than often is the case, he either remains continually small or burns his fingers and chucks the whole thing, usually having done more harm than good in markets abroad.
The small man is all too often encouraged to take on something he does not understand. The small one, two or three-man business cannot afford the overheads of an export sales manager, being able to send him travelling throughout the world, to undertake market research, let alone product research, and to tackle the job properly. Unable 757 to do these things, the small exporter goes in to the export market in a small way and, even if he succeeds, is often so swamped with orders that he cannot fill them. Perhaps he does not have the capital to fill his orders, and the dissatisfied customer says, "Those rotten English exporters. We got going with someone who appeared all right but he collapsed and we are now fed up". One hears that kind of story all too frequently when travelling abroad.
This does not mean that the small man should not export. If he is capable of doing so he most certainly should, but I still profoundly believe that he should use the facilities of the export merchants, and there are hundreds of them in this country, some of whom are extremely good. A man with a business employing, say, 50 people in the Midlands is not and cannot be capable, so long as he is in that position, of running a successful world-wide export business. However, if he walks into the centre of, say, Birmingham he will find one of a dozen experienced export merchants whose business it is to do these things.
If the small man were encouraged to put himself in the hands of these merchants instead of rushing about trade association meetings, getting involved in committees and all sorts of things he does not understand—probably to the detriment of the running of his business—he would get further ahead. The Government services would be doing him a better turn in persuading him to take this action, rather than trying to encourage him to do something which, by the very nature of things, he is not equipped to do and which, if he partially succeeds, he will have succeeded in doing more by good luck than by good management.
The term "export clearing house" has been used, and I should like to pursue this idea in view of a proposal which I know, and which my right hon. Friend may be aware, is now on the Minister's desk in this connection. I should prefer to use the term "export exchange", because we are rather good in this country at running exchanges. We are almost the only people in the world to succeed in running them properly. We have the Stock Exchange, which has 758 been repeated throughout the world, and Lloyds, which is virtually an insurance exchange— although no one has ever succeeded in copying that. We have many others, including the Baltic Exchange, and in Plantation House and Mincing Lane we have deals being made covering a wide range of products. These exchanges have been carried on extremely successfully for many years, and I suggest that it would be only an extension of a very old, tried, and profoundly successful pattern, which we understand well, to explore the question of an export exchange.
My hon. Friend the Member for Meriden referred to the vast amount of information which circulates through the Board of Trade Journal. One of the most depressing things when one goes abroad is, when visiting our consuls and trade attachés, to be told by them, "We have fired umpteen inquiries back to England but nobody in business there has bothered to pick them up." This does happen. The reason is that there is a gap between, on the one hand, the Board of Trade Journal and the vast amount of information which is being flogged about, and, on the other hand, the busy little man in his factory, running his business.
It is possible, and I would urge my hon. Friend the Minister of State to explore it, that one could start off with the Baltic. The Baltic Exchange has widened its activities in a number of completely new fields in recent years. So far as I know, it has on every occasion done it successfully. If one could widen the principle and start an export exchange, into which the Board of Trade, the F.B.I. and such people could feed this vast mass of information which comes to them, it would be found. I think, that at a number of the bigger and more enterprising merchant houses of this country would be willing to co-operate, would be willing to take seats in this exchange. One might thus gradually be able to build the hub of this wheel which is at present missing. It would be greatly to the benefit of the country's export trade, and through it we could utilise the undoubted talents of British merchants, many of whom have been languishing in the last few years because they have been able to adjust themselves to the radical changes in trade.
759 If the Board of Trade would consider the problems of the small exporter, and would consider looking at the basic organisation of E.C.G.D., in a corporate sense rather than as a purely Government Department, and if it would explore the idea of an export exchange, I think we might make some progress in this direction. The points made by my hon. Friend have been most valuable, but I implore my hon. Friend the Minister of State, when he goes back to his office, if he is going to set up a group of chaps to study those problems, to let them be studied by exporters and salesmen, not by terribly worthy people who, we know perfectly well, will tell us that nothing can possible be done.
§ 12.12 p.m.
§ Mr. Peter Emery (Reading)
I also should like to start by congratulating my hon. Friend the Member for Meriden (Mr. Matthews) on bringing this matter before the House. I think it ought to be before the House more often than in fact it is. I realise that in a week in which there has been the Budget debate and there have been no Divisions it is not easy to fill the House on the Friday, but I am sorry that there is not a larger attendance in the House today for this debate.
Perhaps the Motion which my hon. Friend has moved might well be criticism for not paying greater attention to some of the work outside the Government service, work which is done voluntarily for British exports and exporters. I am sure it is not an unfair criticism. I do not mean it to be. Nor, indeed, do I wish in any way to subtract from the praise which ought to be given to the Board of Trade and other Government Departments for all that they do nowadays to assist at every turn—I think that is the right phrase, at every turn; because certainly ten years ago a considerable amount of criticism could correctly have been levelled at civil servants in their dealings with inquiries on exports and aid to exports, but I quite honestly believe that that is not so today.
However, the Federation of British Industries and many chambers of commerce, the London Chamber of Commerce, the Birmingham Chamber of Commerce, organisations in North 760 America such as the British Canadian Trade Association, the British Australian Trade Association—these bodies are in fact contributing very largely to assist us in ensuring that the rest of the world gets to know about British exports, and I am certain that it is only right and proper, in a debate such as we are having today, that recognition should be given to the work of these bodies.
I am very fortunate in having had only last week some of the closest connections in dealing with foreign buyers that is possible. I have just had the pleasure of organising the European Federation of Purchasing Conference, the fourth biennial conference, here in London, and over 220 foreign buyers from 17 different nations were gathered for this conference, the first time it has ever been held in London. I must say that the Board of Trade at that time gave the European Federation of Purchasing every possible help and assistance. The Prime Minister kindly consented to open the conference and the President of the Board of Trade not only was host to those overseas buyers at Lancaster House, he came and made a brilliant speech in three languages—or part of it in three languages; there was not a very great part of it in French and German—at the Guildhall. I am pleased to be able to report to the House that all our overseas guests who were in London were able to go back with a very much better understanding of what British industry is able to do.
There are three things arising from the conference I should like to mention. One was the work of the Board of Trade Regional Controller in the Midlands, at Birmingham, who was most helpful in organising a tour of the Midlands for some of the buyers who were over here; and secondly, the co-operation of British firms in laying on tours in order to be able to let some of those overseas delegates at the conference really see what was hapenning in their firms and also in their purchasing departments; and particularly a number of enterprises round London went to great trouble to lay on a welcome for those people—G. A. Harvey, Kodak, Smith's, the National Coal Board, the Central Electricity Generating Board, Foster Transformers, and some small companies.
761 They all went to a lot of trouble to give a good welcome.
But one of the things which struck me was this. Here I may be, perhaps, somewhat critical. We had gathered here in London 220 foreign buyers. Surely, the best thing possible would have been to have got them to as many parts of British industry as possible. I pay tribute to the work which the Government did in their hospitality, but I was suggesting that I could attract a number of those buyers to extend their tour in the Midlands, and perhaps to Manchester, if the financial cost, the very small financial cost, perhaps of travel, but of hotel accommodation for one or two nights, would be borne by the Government.
This brings me to the Overseas Business Visitors Scheme. We in this House know that the C.O.I. and the British Council spend considerable amounts of money in the cultural field, in the journalistic field, in bringing to this country people who we hope will be able to benefit by getting to know what is happening in Britain. Surely nothing could be more important than bringing to this country industrialists who ought to be able to know what we are producing, and who might then—perhaps this is wrong, but I am in business and I see nothing incorrect in it—perhaps be able to repay our hospitality very much more quickly through the knowledge they would gain of British industry. I am informed—I should like my hon. Friend to confirm this when he speaks—that only £25,000 is voted for business visitors' schemes. That is a fantastically small amount. As I tried to illustrate in my earlier example about the European Federation of Purchasing Conference, I am certain that we could have attracted twice as many people, at a cost of perhaps only £5 or £6 per head, to go for two or three days round various parts of British industry. They were here; we did not have to bring them here. They were keen and interested.
It seems to me that the trouble is the Treasury—I am sure it is the Treasury; I am convinced that it is the Treasury and not the Board of Trade. The Treasury must be pressed to make sure that we do not lose opportunities like these and to ensure that a very much larger sum of money is put under the control of the Board of Trade 762 to encourage business visitors to come here.
§ Mr. Gresham Cooke
Does my hon. Friend know whether the £20,000 includes money for tours by technical journalists? If it does, it is a very tiny sum indeed.
§ Mr. Emery
I cannot be absolutely sure, but my information is that technical journalists come under the Central Office of Information and are not included in this sum. This sum is purely for overseas businessmen. There are a number who come through the C.O.I., but nothing like enough industrial journalists. I see that we are to have the pleasure of having an ex-industrial journalist, the hon. Member for Sheffield, Hillsborough (Mr. Darling), respond on behalf of the Opposition. I am sure that I have his support when I say that we should be encouraging many more.
I hope that we may get the Board of Trade thin king about industrial tourism. I should like that phrase—industrial tourism—to come into use. By that I would envisage our attracting businessmen to on a tourist basis what British industry can provide. If my hon. Friend the Minister of State could lend his support to this, it would be of immense use not only to his Department but from the point of view of the country's financial position.
I would draw attention to a meeting which took place before that of the British Federation of Purchasing in London last week. The first International Committee of Purchasing was formed. It is interesting that a Canadian was elected as the first chairman, a Frenchman was appointed as acting secretary general and the permanent secretary general, who will take over in September, will be an Englishman.
What is this body to do? It is only a committee to start with. Fifteen nations hive agreed to become founder nations of it. The committee will be working towards simplifying tariff procedures and quotas and obtaining internationally acceptable terminology about sales, trading and shipping and, indeed, all the problems which go with buying. There is to be a committee to co-ordinate and send out information about new products and processes, and there will also be committees on education, quality control and reliability.
763 I hope that the Board of Trade will get to know about the work of the committee and lend it its support. Not only internationally but in Europe. Great Britain has always played a very leading part. It is interesting that for the second time in the eight years of the existence of the European Federation of Purchasing Committees an Englishman has been elected chairman of Council. This is the way Europe looks to us on the side of the science of purchasing. We are able to give a considerable amount to assist our European friends in this matter.
I turn to one aspect of the export market. I wish to make particular reference to the steel industry. Often the record of the steel industry in its export procedure and with regard to the amount of money which it earns through exports is not fully understood by the British public. I hope that the hon. Member for Hillsborough, who represents a steel constituency, will support me in paying tribute to what the steel industry has done.
British steel exports are now at a record high. In 1963 they were 4.4 million ingot tons, worth about £184 million. It is interesting to know that these figures are rising. In 1937-38 the export was 2.26 million ingot tons; in 1955 it rose to 3.36 million ingot tons; and between 1955 and 1963 the figure has risen by another 1 million to 4.47 million ingot tons. These are the direct exports When one turns to indirect exports, one finds that another one-fifth of Britain's steel output is exported indirectly through the steel using industries. This means that 40 per cent. of the steel industry's total output goes abroad in one form or another.
It is also interesting to see that the share 'of total exports of steel and steelbased goods has made a growing contribution to the country's export drive and now accounts for over half of the total United Kingdom exports. The share by value of the iron and steel producing and consuming industries has risen from about one-third pre-war to 54 per cent. I am sure that very few people realise that. When one considers this in relation to the balance of payments, the value of direct iron and steel exports alone pays for all the United Kingdom imports of iron and steel making materials and products. Between 1961 and 1963 there 764 was a surplus from iron and steel sales which averaged £76 million a year. This is without taking account of the value of the steel content of indirect exports, which again make another 20 per cent. of our total figure.
I was very pleased to see my hon. Friend the Member for Somerset, North (Sir E. Leather) casting the necessary doubts upon and, indeed, undermining the sort of statistics that we see in "league tables", in which Britain is always put at the bottom by the Socialist Party. He was a little milder than I would be about this. Most of these "league" tables are sheer hypocrisy, used entirely for party political purposes, and the sooner the people realise it the better. But now let me quote a "league table" of my own, having said how much I dislike them. It is interesting to see that the international comparisons with the other two major steel producing areas of the West show that the British steel industry has done well—in fact, exceptionally well—in competitive exports.
British steel exports between 1952 and 1963 were up by 75 per cent. The figure for the Coal and Steel Community—this is not considering its internal trade—was up by 55 per cent. while the United States figure was down by 46 per cent. In all this, our trade with Western Europe has jumped by 45 per cent. over the last two years. I am sorry to have been so long in dealing with the record of the steel industry in export markets, but I have done so for a set purpose. It is a fine record, and it is one which must continue. I believe that there is the greatest possible chance that this will not be able to continue, however, if the Labour Party gets back into power.
It is part of the Labour Party's dogma to renationalise the steel industry. It is a bland and simple statement, but right hon. and hon. Members opposite do not say how or where or when they are going to do it. They refuse to give any direct statement about the method by which they will carry this out.
§ Mr. Speaker
Order. Perhaps the hon. Gentleman could remind himself of the terms of the Motion to which we are addressing ourselves.
§ Mr. Emery
I thank you for helping me to remind myself, Mr. Speaker, 765 because it is the question of the exports of our iron and steel which is so important to the country. It is in order to ensure that these exports are allowed to continue, that the industry's fine record shall not be interfered with, that I believe that the steel industry has the right to know exactly what its future would be under a Socialist Government. It is exactly to be able to fulfil the wording of this Motion—the support of the Government for increasing exports—that I think that the hon. Member for Hillsborough, who represents a steel constituency, has not only the duty to the House but to the country to tell this fine exporting industry what its future is to be.
§ Mr. Speaker
Order. I have warned the hon. Gentleman once. I do not propose to repeat it. The Motion is directed towards Government assistance to British exports. The hon. Gentleman cannot translate that into how the running of the steel industry should be organised.
§ Mr. Emery
I apologise if I am stepping a little further than the Motion. It is of the greatest importance that all industries shall be encouraged by the Government into playing a further part in the export trade and it is towards that line that my arguments have been particularly directed.
Having made my point, I will plough on to another aspect of the export trade which I think needs deep thought by the Government and their encouragement. The Plowden Report on the unification of the Commonwealth and foreign services must be considered by the Board of Trade to ensure that when the unification comes into existence next year the commercial side will have every consideration and understanding and will not be overlooked and neglected.
At the moment, the commercial side of our overseas delegations is on a very good and proper footing, and one presumes that it will continue along these lines under the unified service. I ask for an assurance that every consideration will he given to ensuring that, from the inception, there is no major alteration on the commercial side and we continue to obtain the sort of services we are now getting for our exporters overseas.
766 I would pay tribute to the work the Government are doing on trade fairs. We have had a brilliant example of this at the Barcelona Fair. This has now brought in about £20 million in export orders and is an illustration of the excellent co-operation and co-ordination between the export councils, the F.B.I., the Government and industry. Are the Government giving enough thought to a proper centre in London for running industrial exhibitions? We have had many reports about this and about various sites, including the Crystal Palace, but there still seems considerable uncertainty among those running trade fairs in this country, which match those put on overseas. I would like an assurance that this consideration is being expedited more quickly than in the last three or four years.
Has my hon. Friend seen the F.B.I. booklet Export Promotion? If not, I would be delighted to send him a copy. It refers to one aspect which I find somewhat worrying. Dealing with export publicity, it says:It is often claimed that about one-third of all the C.O.I.'s output is economic, industrial or commercial in content and the assumption is therefore made that the proportion of the output of the Government's Information Services in the field is roughly the same. We question, however, whether in certain important markets, the Information Services are geared to handle this kind of industrial and commercial output. In some posts which arc important commercially but not politically, the information services are so weakly staffed that it must be almost impossible for them to handle the industrial and commercial information flowing to them from the C.O.I.That seems a very moderate but rather damaging judgment by the F.B.I., and I realise that the booklet was published at the end of 1963. Can my hon. Friend say anything about that criticism? Have the Government been able to strengthen the position of the information services in these areas?
Lastly, I want to pay tribute to the men and the firms who do the export work. They are the ones who find business. It means weeks and months away from home. It means long hours of air travel and longer hours of waiting at airports at most ungodly hours to make connections. It means arriving at 5 a.m. for a business conference at 8.30 after perhaps six or seven weeks of travelling. And always they are selling 767 Britain and the quality of the goods we have for export. Their task has never had sufficient emphasis, and the work done and risks taken by British industry, often with no firm assurance of profit, deserve equal credit.
I have the instance of a firm in my constituency, Huntley and Palmer, which spent a great deal of money attempting to open up a new Commonwealth market. It had been successful and contracts had been signed, new packages commissioned and printing in the foreign language undertaken. I was shown the labelling and the new packaging all ready. Before the first order was delivered, a complete change of the Commonwealth Government concerned brought about a cancellation of every order. It might be said that insurance should have covered that, but the firm was not insured on this occasion and its loss was considerable. However, it is still willing to pursue an even more active part in trying to win orders overseas.
Some of these companies go to remarkable lengths. Huntley and Palmer has an overseas packaging department and on its premises are the largest water tanks I have ever seen. They are there to be filled with biscuits. The shipment of export orders is undertaken in water tanks which can then be sold in Indonesia and other countries where deliveries are made.
The ingenuity of certain firms in the search for export business is amazing. If there is one clarion call which should go out from the House today it is our thanks to the individuals and to the firms for work pursued in obtaining the orders which keep this country in a stable balance of payments position.
§ 12.42 p.m.
§ Mr. George Darling (Sheffield, Hillsborough)
I should like to join with other hon. Members in thanking and congratulating the hon. Member for Meriden (Mr. Matthews), not only on having chosen this important subject, but on the constructive ideas which he has put forward. I agree with the hon. Member for Reading (Mr. Peter Emery) that it is rather unfortunate that the hon. Member for Meriden should have chosen this subject for Budget week, because to some extent it is the second debate on exports which we have had 768 this week. I agree that on the figures which have been presented to us during the last few months it is possible to paint a rather rosy picture of our export position; but there is another side to that picture. We are losing our share of world markets and I think that it will be generally agreed that our imports are running too high for a healthy balance of payments.
I support the attack of the hon. Member for Reading on the complacent attitude of far too many British firms to their responsibility to the nation for developing their export trade in the best possible way. I also agree with him about the work which the Government can do to help and that the first thing with which they have to concern themselves, as they are doing, is the liberalisation of world trade. One hopes that the tariff negotiations in which the Government are now concerned and those coming along will be successful in those directions.
I hope that I shall be able to keep myself within the bounds of order when I say that I agree with the hon. Member for Reading that the exports of the steel industry are running at a very high level and that everybody in the industry should be congratulated on what is being done. What the hon. Member for Reading was saying was patently obvious—that within our present industrial organisation, which of course will continue, the steel industry is tremendously important for the kinds of things which we make in this country. Steel goes into almost everything we make and certainly into the machines which make the things we make, and steel is also exported in its unfinished form.
But while all this is perfectly true, if I can keep within the bounds of order for two sentences more, I should like to say that it is under public control, since 1932, that the steel industry has often done a first-class job. Many of its leaders say that the important thing needed in order that the expansion of the industry can continue is that public control should be retained and that the issue of ownership is not terribly important. We disagree on the last point, but I discuss these steel questions in a steel city and it may be that the workers, technicians and managers in the industry take a different view from that expressed by the hon. Member for Reading.
§ Mr. Peter Emery
As the hon. Gentleman probably knows, I am married to a person from the steel city of Sheffield and my contacts with the industry, while perhaps not as wide as the hon. Gentleman's, give me the entirely opposite view.
§ Mr. Darling
Thank you, Mr. Speaker.
The hon. Member for Meriden repeated seven excuses given by manufacturers for not going into exports. I agree with practically everything he said about those excuses. We hear them in Sheffield when we are dealing with smaller firms, some in the cutlery industry, but some in other industries using steel for their manufactures. These do not enter the export trade as they should. Many of the smaller firms, toolmakers, agricultural toolmakers and so on, and some of the cutlery firms, do a first-class job in exports under great difficulties, but many of them operate on too small a scale to be able to afford the overseas sales costs—market research, sending salesmen overseas, examining overseas prospects and so on. If their export trade is at all sizeable compared with their total output, they also take a great deal of financial risk which the complacent firms, perfectly satisfied to live on what they can get out of the home market, do not take.
I agree with the hon. Member for Reading that firms which go after exports and take the trouble and carry the expenditure, sometimes with no certain hope of any reward, do not get the recognition and the praise which they deserve from the whole of the community which they are trying to serve. The Government have not done enough, over the last 10 or 12 years anyhow, to help the smaller and medium firms to get together and to set up co-operative selling arrangements overseas in which many of them could play an important part. There is no earthly reason why groups of more or less similar firms should not work together to pool reserves to develop export markets and then take the chance of which of their products the overseas customer will take out of the pool.
This has to be organised by somebody. Many firms—not only in the in- 770 dustries about which I have been talking, but small and medium-sized firms throughout the country—have perhaps neglected to stimulate the job themselves, but I do not think that they have had sufficient help from the Government to persuade them that they can work together for their mutual good by developing these co-operative activities.
One of the points made by the hon. Member for Meriden was the difficulty of people not being able to speak foreign languages. I have always believed that this country's education system was not only lopsided and socially undesirable, but that the neglect to teach languages in state schools was an absolute disgrace, and I hope that with the changes which have come about recently more and more people in British industries will be capable of speaking, two, three, and even four languages.
In spite of the small attendance in the Chamber today it seems that I have been given the job—and the hon. Member for Reading insisted that I should take it—of expressing the views that we on this side of the House hold about the importance of exports to our national economy and to the social well being of this country. If, for the purposes of the record, I stress some of the things that are so obvious to hon. Members present, I hope that they will understand why I am saying them.
Hon. Members on both sides of the House are agreed that exports and the continuing expansion of our export trade are the key to our whole national prosperity. As my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) said, we all pay lip-service to the crucial importance of exports, and in some respects over the last few years the Government have done something to help the development of our overseas trade, particularly in the field of fiscal policy and in the improvement of such services as those provided by the Export Credits Guarantee Department. But, despite everything that has been done to stimulate the expansion of exports, the plain truth is that the situation today is not very satisfactory.
The recent N.E.D.C. Report on Export Trends provides the evidence for our disquiet. I agree with the hon. Member for Reading that sometimes the league tables can be misleading, but this 771 one is straightforward. The Report says:From 1953 to 1961 the volume of United Kingdom exports of manufactures grew less than half as fast as world exports, by 3.2 per cent. per annum as compared to 7.6 per cent. per annum.That means that Britain's share of world trade is falling. Perhaps that would not matter so much if our internal economy was working perfectly well and we had nothing to worry about with our present level of export trade. But our share is still decreasing, and exports from this country are not sufficient to maintain the prosperity that we all want to see, and certainly not sufficient to ensure that living standards in this country rise as we wish them to do.
The picture is not wholly bad, and nobody should try to paint it as such. In some trades—tractors, buses and trucks for instance—in the steel industry, and in our trade with some countries, we are more than holding on to our share of overseas trade. In some cases we are increasing it. But, taken overall, the position is not satisfactory.
I think that before we go any further in any assessment that we make of our share of world trade, or consider measures that ought to be taken to improve it, we ought to make public—I do not mean merely by speeches in this House but in every possible way—why it is that we must have a high level of exports; why a continuing expansion of exports is so vitally essential to our economy and to the social welfare of our people.
The first and most obvious fact is that in these Islands we do not possess any indigenous materials, apart from coal, a little low grade iron ore. limestone a few basic chemicals—but not enough to supply our needs—some wool, hides, a small amount of timber, and a few barrels of oil. This severe limitation of our national resources means that we cannot expand our industries unless we start with a big expansion of imported materials. We have to import almost all the oil that we use, all our cotton, most of our wool, timber, and wood pulp, a large proportion of iron ore and all our other metals ranging from aluminium to zinc, a large proportion of basic chemicals, rubber and about half our foodstuffs. We have to pay for that colossal import bill, 772 which is bound to get bigger as our industries expand and our living standards improve.
The first change, therefore, on all our trading activities and on our whole economy is exports. If we cannot sell our manufactured goods abroad on an ever-increasing scale, we shall have to slow down our industrial development simply because we cannot pay for the raw materials which our industries require. This is at the core of our balance of payments problem, and the prime reason for the stop-go measures of the past twelve years which have had such an adverse effect on our economy.
I am putting the problem in its simplest form and neglecting all the qualifications that might be made about invisible exports, overseas investments, sterling balances, and so on, which I agree must be taken into consideration, because, when we are trying to impress industrialists, commercial people, employers, trade unionists and workers of the importance of exports, I think that we have to put the problem in these simple terms.
We have to aim at a level of export expansion which will pay for all the raw materials and foodstuffs that we have to bring in to meet the needs of an expanding economy and the rising standard of living.. This is the same figure that we need if we want to go on maintaining our share of world trade, which some people suggest will continue to increase at a rate of between 5 per cent. and 7 per cent. a year for many years ahead. We have to increase our exports at a rate of about 8 per cent. a year, and, cumulatively, this means that we have to double our export trade in about ten years.
I am convinced that that is what we need for the purposes which I keep on stressing, namely, to make sure that there our industrial economy continues to expand and that we can pay for the improvements in living standards which we all want to see. We must increase our exports, not only to make sure that real wages rise in this country as they ought to be rising, but to pay for the expansion in our public and social services; to pay for the building of schools, hospitals, roads, and the other things which we put under the heading of public welfare. This calls for an annual rate of increase in our exports of 8 per cent.
773 I am sure that nobody will say that that will be an easy task, but that is the target that we have to set before ourselves and before our industries. I think that to begin with we have to say, as the hon. Member for Reading and other hon. Members have said, that those firms and associations which provide assistance to firms who constantly strive to sell more and more of their products abroad deserve, but far too seldom receive, all the thanks, congratulations, encouragement and recognition that a grateful public can give them. But we should always bear in mind that encouragement and recognition are not, perhaps, enough, because the efforts of many firms in many of the industries which I have examined, when they succeed in expanding their exports on a fairly large scale, are not always happily reflected in the balance sheets—at least not at first—since the increasing competition which they have to meet often means that they have to cut their profit margins to the bone in order to get a foothold in overseas markets.
I recently congratulated the chairman of a large Sheffield engineering firm for winning a contract to erect a steel plant in Finland, about which I am sure the hon. Gentleman knows something. He said that it was not praise that he needed but sympathy, because to get the contract the price had to be cut to the bone and he was convinced that there would not be a pennyworth of profit in it at the end of the day. However, he needed the contract to keep his plant going. He did not wish his incredibly good band of highly skilled workers, who do the specialised job of erecting steel plants, to be dispersed, and he was willing to take risks to keep things going.
This is one of the facts which must be faced. In many cases the profit margin in an expansion of overseas trade may become quite unattractive, but if exporters can improve their efficiency and sales methods, and can establish themselves, their prospects should improve.
I come now to the Government's part in all this. I will not go over the ground covered by the hon. Members for Meriden and Reading, who put forward some of the ideas on which I proposed briefly to touch, and their expert assessment of those ideas and the arguments which they used to support them. I could not 774 attempt to match what they said. On the Plowden Report on the Reorganisation of Foreign Services, it has been said that associated with this we should make some arrangement to bring into the commercial services overseas far more people with experience in industry who are properly trained to do the job that they have been sent to a particular country to do. If they happen to be doing a good job in, say, the Middle East, they should not lose the prospects of promotion by being kept off the ladder of movement and not sent somewhere else. If a man is doing a good job in the Middle East, taking that as a hypothetical example of an area in which a man may work well and he kept there, he should not lose the increments in pay and the promotion in status which he otherwise would have had. We must recognise that people in the foreign service can do a satisfactory job in certain areas because they know those areas, have been associated with them and know the language and the people in them but would not do as good a job elsewhere. Yet, because of the promotion system, they are moved about.
I remember talking to a person in the consular service who was located in an area in North America. He had just come from the Middle East. I said, "Why have you been moved to North America?". He said, "I think that it is because I speak Arabic and modern Greek and I have recently made a survey of trade prospects in that part of the world. The survey is not quite finished, but I have been moved on I have been promoted". That kind of thing should be stopped.
I agree with the hon. Member for Reading that we should give far more hospitality to people like industrial journalists and representatives of trade associations and arrange for more of them to come to this country and to see what we are doing. Many of the industrial groups which would benefit if any trade flowed from these contacts cannot afford the hospitality, certainly not on the scale on which it should be provided. The hon. Member for Reading asked me to give him my support on this point. I can do so from my own experience. Whenever I went abroad as an industrial correspondent and reporter, the period for which I could stay abroad as the guest of another country was 775 usually longer than in the case of comparable people coming here. The hotel accommodation was always good. The opportunities for moving round were often very much better than those given in this country. We do not bring enough visiting journalists to this country.
I remember making a short visit to America—not to the United States or Canada, but a little further south. I spoke to fellow correspondents and reporters who were nationals of that country. They asked me what opportunities there were to come to this country and to see what was going on. I had to tell them that, unless their own newspapers, radio service, or whatever it might have been, sent them, they had very little opportunity to come here.
I do not want to go over all the proposals put forward for a Commonwealth Exports Council, for improving the Export Credits Guarantee Department, and so on. I agree that the situation today involves greater risks for exporters and therefore they get involved in longer credit, and so on. But in considering what assistance the Government can give to get, for instance, large capital contracts, I have the Durgapur steel mill in mind. In reckoning whether the credit terms which the country concerned in this case, India, required were satisfactory, we should think how much Britain should pay to keep a hold on the market. I know that the Minister of State will understand that point without my developing it, because he will have the Durgapur problem in mind.
However, when tenders were asked for the second steel mill, I understand that the credit terms for which India was asking were unacceptable on ordinary methods of calculation. I would not quarrel with that, because I have seen something of the terms. But should the Government also take into consideration, over and above the basis of the ordinary calculation or risk, when the payments will be made—and if they are ever to be made, what the period of time will be—whether it is desirable not to shut Britain out of a market like this and to allow another country to come in? I understand that there was very little difference between the Japanese and British tender prices, and that the Indian Government would have preferred the 776 second mill to have been made by the consortium which built the first. But Japan is now in, and I should say that the prospects of developing any further trade on those lines with Great Britain are pretty grim.
Therefore, when the Government are called upon to provide credits of this order, they should take account in their calculations of this point: how much are we prepared to pay in difficult circumstances to hold on to a market?
The hon. Member for Somerset, North (Sir E. Leather) is apparently associating himself with the chairman and general manager of a very enterprising concern, and I get the impression that if we left it to him, with the help of this enterprising chairman of Leyland's, everything would be all right, provided that the enterprising chairman was there by his side. It is all right to paint that kind of complacent picture. Of course, Leyland's have done a magnificent export job and ought to be congratulated, praised and recognised, but if one travels through West Africa one does not see as many Leyland trucks as one would wish to see. One sees a large number of Mercedes Benz trucks all over the place.
Why have we found it difficult to develop this kind of trade in West Africa? This is the sort of problem with which, I am sure, a Government Department ought to concern itself even before any requests are made by the firms concerned for assistance. I agree that there should be some kind of Government information service, some kind of Government organisation that is constantly keeping these problems under review. This is a point which was made by my hon. Friend the Member for Ashton-under-Lyne.
I was going to say something about costs and prices, but we can leave that matter for another occasion, although we have to bear in mind that it is no use the Government trying to give credit assistance, or any other kind of assistance, to firms which themselves have not done as much as they should have done to keep down costs and prices to a competitive level.
I was also going to mention, in case no one else came round to it—and apparently no one has today—how labour costs and trade union practices come into this picture. However, we 777 can leave these matters for another occasion. All the industries in the country must be cost conscious and must do everything possible to keep down costs and prices. On the trade union side, given good management—and good management includes the positive developing of good labour relations—I do not think that any industry in the country would have any difficulty in getting trade union co-operation—I am talking, of course, about industries involved in the export trade, and so on—for the introduction of new methods, automation and new techniques, provided the labour relations were satisfactory.
Given this public appeal and public explanation for the demand for a continuous expansion of the export trades, I do not think one would have any difficulty at all, if the publicity were conducted in the right way and if there were good will and the right spirit of co-operation in industry, in getting the trade unions and everybody else to play their part in what we want to achieve.
There are two other points I wish to discuss. The quality and design of our products have to be right, and then there is the question of delivery dates, although I am sure that the hon. Gentleman will know all about that problem. Quality and design depend not so much on the kind of help that our designers of products could get from, say, the Council for Industrial Design but on finding out what the customers want. I am convinced that in very few of our industries is sufficient market research being carried out. There is also insufficient product research, as the hon. Member for Somerset, North said.
This is a matter in which the Government could help, not so much in financing market research, although some Government help in that direction might be desirable and useful, as in bringing together the firms which, on a proper overall assessment of world markets, could work together on specific market research projects—firms not necessarily in the same industry but where the research job being done would cover a wider range of products than those of one industry and where the firms could work together, financing, or partly financing, the project.
It should not only be research such as goes on now into traditional markets 778 and into the prospects of the traditional products that we sell in these markets. I am quite convinced that there must be a market in the United States for a lot of British products not at present being sold there. How can we find that out? I do not think that there is any point in asking the agents of the firms, who may be located in New York where the market does not exist—the market may be in the Middle West or in the South— to try to find out by reading the trade papers and so on. It can only be done by a market research project undertaken where it ought to be undertaken and perhaps on a pretty big scale, including more than the industries which are perhaps primarily concerned.
The job may have to be spread, partly to share the cost but also to find out what the wider opportunities are for British manufactures in overseas countries. As I say, my hon. Friend the Member for Ashton-under-Lyne wanted to take this further and have a permanent organisation which would look at the prospects for world trade. I think that this is a good idea, but when we break down the global figures to help individual industries I am sure that we need an additional approach. Market research is only one of the jobs that need to be done.
I think that our industries, not only for the purpose of developing their exports but for other reasons—in order to take advantage of new ideas, new techniques, new methods of production and so on—need some kind of organisation. Call it a little "Neddy" if we like, because this seems to be the new idea. I believe that one of the big mistakes which our industrialists made in years gone by was to kill or fail to support the industrial development councils which the Labour Government tried to set up. They may not have had the right terms of reference to begin with, but at least these councils were a very useful proposal based on experience. Bodies such as the highly successful Cotton Board were taken as the basis for those development councils.
As I say, I think it was a mistake that those development councils never really came into being because had they been established industry by industry 779 they could, I believe, have been of immense assistance in the field of cooperative activities about which we have been talking in this debate.
As I have said, I came armed to meet not only the criticisms about the steel industry but other criticisms as well. I think that the most important purpose of the debate is not so much to talk about the help which the Government can give—that is something of great importance in the technical working out of what we want to achieve—but to try to impress on everyone in the country, particularly those engaged in industry and the selling of our products abroad—management, workers, technicians, salesmen and the rest—that, unless we can obtain a continuous and high rate of expansion in our export trades, the things that we want in this country, the better prosperity, the better sharing of it, the improving of the standards of our people, the development of our public services in the way we want to see them developed, cannot be achieved because they have to be paid for out of the country's prosperity, and without an expanding export trade we are not going to have that prosperity.
§ 1.20 p.m.
§ Mr. R. Gresham Cooke (Twickenham)
I should like to join with my hon. Friends and other hon. Members who have congratulated my hon. Friend the Member for Meriden (Mr. Matthews) on moving this Motion. I should like to congratulate him also on his interesting and fruitful speech and on his good fortune in the Ballot. I once won the Ballot about six years ago. I have conscientiously gone in for it ever since, but I have never won a place. I am wondering why that is, and I have come to the conclusion that Meriden must be a favoured and fortunate part of the world.
As has been stressed, this is a most important subject for the nation as a whole and I am shocked by the emptiness of the benches opposite. Only one hon. Member has taken part in the debate from the other side of the House, apart from the Front Bench speaker and I understand that he is leaving us at the end of this Parliament. Where are the representatives of the great trades 780 unions whose vital interest in exports is so obvious to all? Why are they not here to give us the benefit of their advice? I was glad that the hon. Member for Sheffield, Hillsborough (Mr. Darling) mentioned that before we can export we must bring in a large number of imports. This is exactly the stage we are going through at the moment with rising production and an import bill which has gone up considerably in the last month or two. That is an explanation of what I believe to be a temporary disturbance of the balance of payments position. As we get greater imports we should be able to export more and to put that position right.
I was glad that the hon. Member for Hillsborough appealed to the trade unions to say that if the question of exports were put fairly and squarely before them, they would respond. It must be emphasised that in our production costs the greatest factor is still wages—
§ Mr. Gresham Cooke
Yes—and we want their co-operation in keeping down wages to a more reasonable level, so that we do not have increases on too large a scale in the next few critical years.
§ Mr. Darling
It is quite obvious that I made my speech a bit too soon. I came armed to deal with this argument, which is quite wrong. Wages costs are not an important factor in the general level of costs in this country.
§ Mr. Gresham Cooke
My experience in industry is that wages costs are about 30 per cent. or 40 per cent. Generally speaking, they are the biggest single factor in industrial production costs.
I have worked closely with the export services of the Government over many years and I have never "knocked" them. They have done a fine job and I appreciate it. I believe that the Board of Trade and the Foreign Office give us export services which are comparable with the best in any other country in the world. I do not propose today to speak from the point of view of the large companies—the top twenty—who can look after themselves. I want to say something about the medium and smaller companies.
781 There is a fantastic supply of information available to the medium and smaller companies, if they care to get hold of it. I do not agree with the hon. Member who said that we require a great deal more market research. I believe that the results of a good deal are already available. Let us look at the Export Service Bulletin which is published every week and is available all over the world. I will give a few quotations from it. In New South Wales, Australia, there is a large order out for transformers. Burma wants stationery and newsprint. Formosa wants rubber fender bumpers for use in Keelung Harbour. I am amazed at the number of things required. Formosa also wants apackage beating unit, without tub, for heating flax pulp to make cigarette paper…capacity 1,000 lbs. of stock at 6 per cent. consistency.Malaysia requires catgut sutures for the Ministry of Health at Singapore. Germany requires hi-ft equipment and also household linen and mattresses. Anyone who has slept on a Continental bed will remember the extremely uncomfortable eiderdown. Apparently they want some exporter to provide sheets and blankets to make the Continental bed comfortable once again, and I hope that some British manufacturer will take that up.
In the Lebanon they require car roof racks and batteries, knitting wool and so on. One hon. Member asked what about the United States of America. The Rohr Corporation of H. Street, Chula Vista, California, wants a large supply of blueprint paper, machine tools and twist drills, up to 75,000 dollars a year. They give their specifications in Room H.25, Export Services Branch, 35 Old Bailey, London, E.C.4.
§ Commander Anthony Courtney (Harrow, East)
I am interested in the reference by my hon. Friend to Continental eiderdowns. From personal experience I suggest that Continental friends are only too anxious to get back from our blankets and sheets to their eiderdowns. Has not my hon. Friend got it precisely the wrong way round? Should not we encourage manufacturers to produce Continental eiderdowns for export to the countries concerned?
§ Mr. Gresham Cooke
My hon. and gallant Friend is very well covered. I am not so well covered and I find, when on the Continent, that in the winter I am always too cold and in the summer I am always too hot.
We learn from the Export Service Bulletin that Mr. Ray Sanders, of 11145 East Rincon Drive, Whittier, California, is visiting this country at about the beginning of May and would like to contact manufacturers of women's knitted short-sleeved and sleeveless blouses in cotton and terylene mixture, and men's knitted short-sleeved shirts in cotton and terylene mixture, suitable for golf. It states:Mr. Sanders is reported to have been importing women's knitwear for a number of years and he makes selling trips into the eleven Western States. He has connections with country clubs and fine stores in that area.Obviously, there is a great opportunity.
If any manufacturer takes up these orders and goes overseas, he should take with him the Board of Trade Journal which has a list of addresses and telephone numbers of trade offices and commercial counsellors all over the world. It is a very valuable document. He should take Hints to businessmen about most of the main countries of the world, which gives information about currency and points about trading and banking practice and details of climate, clothing and so on. When he calls on the overseas trade commissioners in the Commonwealth and our commercial counsellors in foreign countries he will of course be able to secure introductions to agents, and may get the names of three or four agents in any particular line of business in which he is interested. It is then up to him to select the best man. I do not say that the information supplied by the Board of Trade or these commercial counsellors is always perfect, but at least he is certain to meet people and get started.
The Export Credits Guarantee Department, which does not provide finance but gives insurance for credits, has been greatly improved in recent years. The resources of the Department have increased from £500 million to, I think, £1,500 million. There have been reductions in premiums, the last one being in 1961. This is a very valuable Department and any manufacturers of heavy equipment can, I believe, obtain 783 credits over five years. I was amused to note that in the United States and in certain European countries there was criticism of our giving too long credits to Russia. Up to recent years the criticism has always been the other way. Now we are being criticised for being over-generous.
There is the Board of Trade Exhibition Advisory Committee which carries on a useful service and helps to promote exhibitions overseas by providing stands and so on. I was once a member of that Committee. In fact, I was invited to become a member by the Leader of the Opposition when he was President of the Board of Trade in the last Labour Government. I think that was the best thing that the Leader of the Opposition ever did. In my day the Committee had only £60,000 to spend. I was surprised to see that in recent years it has had over £800,000 to spend, and that is a great improvement.
I commend particularly the enterprise of the Board of Trade and Foreign Office at present in giving assistance to British and foreign exhibitions overseas. Ambassadors and commercial counsellors are giving receptions to support British exporters at those exhibitions. I hear that one ambassador is arranging a private show of British motor cars at one embassy, and invitations are being sent to 3,300 people. That is all most desirable and very commendable. It shows that money and effort are being devoted to the support of British exports.
The Government have managed to persuade certain other countries to give up their export subsidies. West Germany and France have given up theirs. I believe that Japan will be doing so shortly, or may have done so, and perhaps my hon. Friend the Minister of State will be able to tell us about this.
The tours of technical journalists in this country through the Central Office of Information are very valuable. I have helped to entertain these journalists on one or two occasions. I hope that more can be done, because I have no doubt that such tours have widespread results not only in the countries from which the journalists come but in other countries. The other day I took home an Italian journalist who had had an interesting 784 tour round electrical and atomic plants in this country. I was interested to discover that not only was he the editor of a scientific paper in Milan but he wrote articles for other scientific papers and even American papers. Therefore, the information gathered must spread around the world.
I have three positive suggestions to make which I hope may be acted upon. My first relates to the Export Credits Guarantee Department. It gives protection against commercial risks normally up to 85 per cent. of the price of the goods being sold. It also covers political risks if required. It has very excellent information on the credit side. In the London office there are tens of thousands of credit rating of firms all over the world, which is a great help to exporters.
But is the Department too cautious about the credits it gives on the commercial side? Are the credits generous enough? I have had an instance brought to my attention where it gave a credit of only 50 per cent. instead of the usual 85 per cent. because it thought the customer was not very credit-worthy. The firm concerned had to bear the remaining 35 per cent. or had to produce a side draft, which is impossible. In the event, the transaction went through perfectly well in the ordinary way. I think that the Department might be a little bolder and take on the whole 85 per cent. cover. It is dealing with immense sums of money—hundreds of millions of pounds—and I think it might give full cover for risks in every part of the world.
The men in the field are generally very excellent. They send back information which is circulated throughout industry. But I am not sure that the information is always acted upon either by industry or sometimes by the Board of Trade. Suggestions about alterations in tariffs or certain trade arrangements that might be entered into with other countries are sent to the Board of Trade but I am not sure whether they are always taken up. I know that the Board of Trade has its own difficulties and has to negotiate these things with other Governments. However, I suggest that the positive suggestions sent back by the men in the field should be actively followed up.
785 My last suggestion concerns public relations. A business friend of mine who has recently travelled in Asia tells me that wherever he went the Germans were particularly active, pushing themselves and their wares, and that the German commercial counsellors and German exporters always manage to get themselves in the very middle of the photographs taken when industrial tours are arranged. Our trade commissioners, perhaps in the British tradition, are a little more diffident. I feel that they must be pushful and push themselves and their exporters into the middle of the picture. I had an instance given to me of a trade commissioner in Ceylon who was rather diffident. All over the world we must push our public relations.
Many people think that the Germans are very heavy-handed and flat-footed. But they are experts at public relations. Their public relations, as my hon. and gallant Friend the Member for Harrow, East (Commander Courtney) will confirm, are extremely good. They are cleverer at it than we are.
Lastly, with regard to business itself, the export director, or the top man in the firm if it is a small company, should try to visit overseas territories at least price every two years and if possible once a year. It is disheartening to agents when they are not visited regularly every year or two. If one visits them one discovers all kinds of peculiar things which have been happening—bad debts, and so on. These things would be discovered if executives in British industry chased up their agents.
I was fascinated to hear the list of seven deadly export sins, or, rather, the lack of export sins, produced by my hon. Friend the Member for Meriden. I am fascinated by the potential exporter who says, "I am too small and make only components." This attitude with regard to components is ridiculous. Components are among our very best exports. About half the cars made in Europe are full of British components. Electrical components, transmissions and automatic transmissions, made in this country, are in cars produced in Sweden, France and Italy. If one is a components manufacturerer, one has a fine chance of following up the main manufacturers and getting into the field.
786 As for being too small, one of the best and most successful exporters to the United States was a very small maker of birdcages who has now become a very big one.
I pay tribute not only to the Government services, which have greatly improved in recent years and are performing a very fine function, but also to those of our manufacturers who have done so much for us in the last few years. I am only sorry that there are not some trade unionists here to take part in our debate and listen to what has been said.
§ 1.40 p.m.
§ Colonel Sir Harwood Harrison (Eye)
I join in congratulating my hon. Friend the Member for Meriden (Mr. Matthews) on his good fortune in the Ballot and for having chosen this subject. I also congratulate him on his speech. My only criticism is that it was far too short for an opening speech on a Friday. We should have liked to have heard him at greater length. I say this because, on 18th July, 1952, I moved a Motion on exports when, unfortunately, because I was No. 2 in the list, we had only a short debate. My party had been then in office for under a year and my Motion was phrased in more critical terms. I am delighted that my hon. Friend has been able to frame his Motion in terms which take account of the great results the Government have been able to achieve in the eleven and three-quarter years since I moved that Motion.
I wish to call attention, not particularly in a party spirit, to the complete absence of the Liberal Party from this debate today. I do so because members of both my party and of the Labour Party in East Anglia were recently subjected to a very vicious, ill-informed attack in the local Press because when a Liberal hon. Member moved a Motion on a Friday we had not taken part in that debate. The letter to the local paper was signed by a Liberal in that part of the world. I imagine that he does not understand how the House of Commons works. There are many other occasions when we make interventions or speak. We may not have been called by Mr. Speaker on that occasion, and it does not necessarily mean that we were not interested in the subject.
787 I wish to say how glad I am that my hon. Friend the Member for Taunton (Mr. du Cann) is present and will probably take part in the debate. We are glad, not only because we like him personally, but because of his great experience in commerce, which must stand him in good stead when he deals with trade problems. We congratulate him because in his commercial life he has proved successful in building up a business. We also pay tribute to him because when during the Easter Recess the rest of us were in our constituencies or elsewhere he was in North Africa in connection with a £25 million contract. I do not think he will claim that he alone brought home that contract, but no doubt he was instrumental with commercial business men there in obtaining it for this country.
I am very much in agreement with all that has been said from both sides of the House today. I wish to refer to a point made by the hon. Member for Sheffield, Hillsborough (Mr. Darling). I am not surprised that he has now left the Front Bench opposite, for he has been there for a long time today. He referred to the need for more use to be made of people in commercial Government posts. I am not quite sure whether he went so far as I should like to go on that. He rather gave the impression that he would like to see someone from the Board of Trade or the Foreign Office who is good in his post remaining in it.
I should like to see from time to time in these commercial posts abroad, representing the Foreign Office or Board of Trade, someone from industry, either a junior executive who has proved himself or a trade union organiser or leader. He should go there for a short time, perhaps three years, as a commercial attaché. Such a movement would help a great deal in getting both sides of industry here to understand these problems more, and it would be useful also to foreign countries to have a practical man on the spot. Perhaps that idea might be followed up.
Because of the buoyancy of our economy and the progress—never enough, but at least good progress—of exports, the Chancellor of the Exchequer has to find only an extra £100 million and not £450 million as he 788 would have had to do if the economy had not been so buoyant. That is due to our export trade. I do not want to make a party point of this, but it is wise to remember that firms in private enterprise contribute to the export trade. It so happens that those which are nationalised do not make a direct contribution to export trade.
It is therefore a little worrying to some firms, perhaps not the bigger ones which know it all very well, when we have statements such as the Leader of the Opposition made recently that there is a lot of dead wood in the boardrooms of many companies and that he and his party when they come into office would like to sweep it away. I taxed the right hon. Member about this, but I did not get an answer. One may get rid of directors only by controlling 51 per cent. of the shares at the annual general meeting of the company. So this would mean nationalisation by the back door.
I wish to direct attention to the political side of the problem of exports, difficulties when there are changes of government, revolutions, or changes of the constitutions of countries. They can have most unfavourable effects on our exports. Of some of these matters I speak from personal experience. Revolutions have taken place in Iraq and we in this country have suffered loss of trade thereby. Countries in the Commonwealth are rightly coming to full independence. They naturally want to be prosperous and to have new industries developed there.
Three months ago, when I was in Nigeria, this fact was brought home to me. More and more of the trade in Nigeria is going out of the hands of British merchants. It is going into the hands of Africans. This is inevitable, and the African Government in Nigeria wish British firms, among others, to set up factories in their country. An example which was quoted to me when I was there was of the well-known electrical manufacturers, Pye of Cambridge, which, in conjunction with a local firm, is establishing a factory in Nigeria.
I wonder whether we have given enough attention to the importance of these countries which want us to establish factories in them. It is not always a loss for us when a British firm 789 establishes a factory overseas. It means an expansion of ideas and new schemes can be tried in those countries. It adds overall to the well-being of the firm concerned. I recommend my hon. Friend to see that there should be no holding back or reluctance about British firms establishing factories in the Commonwealth or in foreign countries. I have not visited Brazil, but I am told that there is a great lack of British cars in that country because our manufacturers have not built a factory there. That would be practically the only way of selling our cars in Brazil.
Three months ago I visited South Africa. I was very perturbed when I read in the Sunday Press last week specious articles about how easy it would be for us to give up our trade with South Africa and the suggestion that we would get it back somewhere else. We would not get back what we lost. We might get back as much volume, but we would lose the increase in trade. I cannot say to the House too strongly that I found South Africa to be very much on a boom. It is a vigorous, pulsating country in its trade. Most hon. Members do not approve of its policy of apartheid, but I believe that too much may be made of this colour aspect, when far worse conditions exist in many countries which do not practise democracy as we understand it but with which we have good relations and are prepared to trade. It would be a bad day for South Africa and this country if we did anything to interefere with the flow of trade between these two great countries.
§ Commander Courtney
Would my hon. and gallant Friend agree that in South Africa many of our principal competitors, particularly the French, the Germans and the Japanese, are waiting on the doorstep to take whatever we may let go for political reasons generated in this country or elsewhere?
§ Sir H. Harrison
My hon. and gallant Friend is right. This is always so: if we let anything go, other foreign countries which perhaps do not have our scruples are willing to step in. South Africa is a great country. We have a large trade with it. I would like to see a visit paid fairly soon by one of our Ministers to South Africa, the visit to be concerned particularly 790 with trade. Such a visit would show that we appreciate the two-way trade we have with South Africa.
I turn now to a country outside the Commonwealth which I have visited under very sad conditions. I want to show what effect politics have on a country. I refer to the Congo. It was with great difficulty that I reached Leopoldville. I do not know what would have happened to me if I had not been very kindly looked after by the British ambassador and his staff in Leopoldville. The whole place was pretty well pandemonium.
I represent a small light engineering firm which used to have a trade of £60,000 a year with the Congo. It was not a large trade, but it was a useful trade for a small firm to be doing with one country. Nearly all this trade has gone by the board since freedom, if it can be called such, came to the Congo. The conditions of trade there are appalling at present. The difficulty is to get import licences. Much corruption is involved in getting them. The Prime Minister had to send M.P.s away from the capital because so many of them have gone into the import trade. It is the only capital that I can remember where I have been refused permission to go inside their Parliament because I am a Member of Parliament and it had been closed. The Congo is a rich country which for political reasons now requires about £33 million from world sources just to keep it ticking over. It is making no contribution. We lose our trade.
A few years ago it was regarded as rather non-U to trade with the Eastern bloc. Fortunately, owing to the great skill of the Foreign Office, our present Prime Minister, and my right hon. Friend the Member for Bromley (Mr. H. Macmillan), our relations with Russia are so much better politically that our trade is now flowing with Russia and the other Eastern bloc countries. We want fair conditions of trade, but I believe that this trade should be encouraged. I am delighted that we are taking part next month in an agricultural show at Moscow and that the Russians have had a team over here buying agricultural stock.
Fifteen months ago I was fortunate enough to visit the World Fair in Seattle. 791 I would like to congratulate our consul-general in Seattle and others who made the British stand so good. It showed England under Elizabeth I and the modern pulsating country we are today. Too many Americans, perhaps from listening to their grandparents' tales of what England was like when they left it for the States, believe that we are purely an agricultural country. Some Americans come over here and see the Changing of the Guard and go to Stratford-on-Avon and the other tourist showpieces but do not see our industrial cities. They get a false impression of Britain. We are a great industrial nation, and the more everybody knows this the better.
This week my right hon. Friend the Secretary of State for Industry and Trade reminded us of the great amount of export trade between us and other industrial countries, between us and the Common Market countries, and between us and other countries in E.F.T.A. We must not be jealous if those countries send industrial goods and machines to us. There is plenty of room for a free interchange, because we may produce one article better than they, and vice versa. I know from my commercial experience that some Italian machines are better than some British machines. Therefore, we should not think it wrong to import such machines, because, on the other hand, some British products and machines are better than Italian ones.
I join my hon. Friend the Member for Reading (Mr. Peter Emery) in his tribute to British salesmen abroad. The prospect of flying all round the world, being received by one's agents in other countries, and seeing other countries, sounds exciting. Most salesmen who go, however, realise that it is a tough job if they are to do their work well. I pay tribute to both directors and salesmen who go for British firms.
I have suggested previously that, good as our official representatives—our consuls, commercial attachés, and so on—are, there still seems to be too much of the slogan—"Sell British". It would be better if they concentrated more on trying to sell certain known goods and gave the name of the manufacturer. After all, we are very proud of many of our great firms. It should 792 not be too difficult for the Board of Trade to draw up a list of 2,000 or 3,000 leading British firms which make goods of a high standard quality. If this were done, our official representatives abroad could name anyone on the list and say to an enquirer, "We would like you to buy the goods of this manufacturer". One thinks particularly of motor cars, where one make may be more acceptable than another in a given market.
Do we still need the dual rôle of the Commonwealth Relations Office and the Board of Trade representatives in Canada, for example? I have seen both at work and I make no criticism of them, but is there not a duplication?
Nationalised industries play an indirect part in our exports. We do not export many of their goods. But the great part that they play is in the transport of the goods from the factories to the foreign countries. Here I recommend to all what my right hon. Friend the Minister of Transport is doing to improve the roads from the centre of the country where the factories are situated to the docks, because a tremendous amount of time can be wasted on transport, and 10 per cent. of the cost of the goods that we sell represents the cost of conveying them from the factory to the ships. I welcome the Harbours Bill which is now before Parliament and which will enable improvements to be made in the docks and in the handling of goods. All these things are very necessary if we are to have our export trade flourishing at the highest level.
The smaller firms have been mentioned in the course of the debate and I believe that it is not as difficult as is generally supposed for a small firm to export if it gets the opportunity. It does not always have to go out to find the markets. I am connected with three firms. One which I have mentioned already does an export trade all over the world and the smallest of these firms obtained its first export order worth £500 the other day. I left the handling of the matter to the secretary and sales manager who had no knowledge of or experience in the export trade. I told them that if they had any difficulties with shipping documents or anything else they should refer back to me, but they were able to carry on very well 793 entirely on their own. I do not think therefore that, with the help given by the Board of Trade, it is too difficult for a small firm to export its goods.
Usually when we debate exports we think of industrial goods, big or small, but it should be remembered that we have a good export trade in our agricultural products. This trade consists not only of the high quality stock which is bought all over the world but of a great many of the ordinary things which we produce on our farms. These now go to export to a considerable figure. I pay tribute to those in the agricultural industry who, in addition to helping to feed our people, are playing a large part in our export trade. There are also the allied trades handling barley and malt and other products for worldwide export. I hear constantly not only from the bigger firms but from quite small ones in my constituency that they are filling export orders. They should be encouraged all the time.
In Suffolk a group of 80 men has been formed from firms which are exporting. They pool their ideas and help each other. I believe that it is easier for firms belonging to different trades to pool their knowledge of how to export than for people in the same trade to pool their resources, because in the latter case the pull of competition is often too great. The pooling of general knowledge of how to export and of knowledge of the conditions in the importing countries and how goods should be packed can be invaluable at regional level.
No one has done more than the Board of Trade to encourage the formation of these groups. I pay tribute to the Export Credits Guarantee Department of the Board of Trade. I was fortunate enough to be invited by the Minister of State to go and see the Department recently. Possibly as a result of that visit I have been able since then to advise two firms to consult the Department. I do not know what the results will be. They may or may not obtain credit but I feel that because I had visited the Department I was able to tell them, for instance, who to ring up there and by that means to help them.
The hon. Member for Sheffield, Hillsborough (Mr. Darling) said in reply to my hon. Friend the Member for 794 Twickenham (Mr. Gresham Cooke) that labour was not a considerable item of cost in exports. I will not argue about that but I would make the point, which I think is not generally known to the public, that industry is bearing an increased burden in rates which have been removed from the householder and the shopkeeper. About £45 million extra is being found in rates by industry, and some firms feel that assessments are sometimes unfair.
I would refer to two firms in my constituency, Munton & Fison, a small private firm which is highly efficient and which exports a good deal of its production, and I.C.I. I read in a magazine that, efficient and highly mechanised as is I.C.I. in my constituency, this smaller firm is being rated at £130 per employee whereas I.C.I. pays only £30. There is a disparity here, as there may be elsewhere, in rate costs, but I appreciate that this is hardly a matter for my hon. Friend the Minister of State. It is more the concern of my right hon. Friend the Minister of Housing and Local Government. These are costs which fairly recently, to the benefit of the ordinary citizen, have been taken up moderately willingly by industry, and it should not be forgotten that industry is making a big contribution towards the cost of running education, the police, and other local services.
I congratulate my hon. Friend the Member for Meriden again on drawing attention to this subject which is perhaps one of the most important to be brought before the House. As has been said, we cannot debate it too often because always some new ideas come from someone. I am sure that no one would be more glad than the Minister of State to consider suggestions made in the debate. If one out of six suggestions is good and is a move forward I am sure that under this Government it will be put into operation.
§ 2.8 p.m.
§ Commander Anthony Courtney (Harrow, East)
I join in thanking my hon. Friend the Member for Meriden (Mr. Matthews) for submitting the Motion to the House today and particularly for its wording, which enables us to discuss not only the services now provided by the Government for British exporters but also to speak about the future and to make 795 certain recommendations and suggestions where we think that these services either fall short of present requirements or are not yet adapted to provide for future conditions which some of us foresee.
Hon. Members on both sides of the House have drawn attention to the country's vital need to export. This is a truism which nevertheless needs to be repeated more and more in the House and outside. If that were not so we should not have such a thin attendance on both sides today to debate such an important Motion. Many hon. Members have paid tributes, with which I naturally associate myself, to the documentation and the services provided for British exporters by the Board of Trade. Others than myself have much more experience of the utility of the Board of Trade Journal which I receive and read every week but which has little application to the rather specialised range of exports in which I am interested.
I greatly appreciate the progress which has been made over the last eight years in the sponsorship by the Board of Trade of British sections of foreign exhibitions and of British exhibitions in foreign capitals. I can well remember the very great difficulty which a small group of us had some eight years ago in Poland in persuading Her Majesty's Government to participate officially and formally in the Posnan Exhibition, and now we know how successful that has been in bringing British exports before the public in Poland.
I think it would be right in discussing the services provided by British commercial representatives abroad to suggest that in the experience of many of us there is a variation in quality, as is only natural, of these functionaries and officials. They vary from the wholly admirable to the somewhat ineffective. I should like to associate myself with the suggestion made by my hon. and gallant Friend the Member for Eye (Sir H. Harrison) that the Minister might look a little more closely at the appointment of a few commercial guinea-pigs, as one might describe them, to perform commercial functions, coming straight from industry or commerce in this country with specialised commercial experience, to see what sort of a fist they made of it, and perhaps, as 796 has also been suggested, some competent and experienced trade union representative who might with his industrial experience make a considerable contribution to the promotion of our exports in a foreign capital. Perhaps, too, we should look more, having patted ourselves on the back in what we are doing, to the advantage which is gained by other nations which compete with us in the same field, and take a leaf out of their books in the methods which many of them employ to promote their exports abroad.
I should like to tell the House of a small experience of a firm with which I am connected by virtue of the fact that it has a French associate which enabled us to put in a rather complex technical inquiry in a certain East European capital through the French and the British commercial sections of the respective embassies. The single representative of this firm went along to the British commercial counsellor, who greeted him with the greatest courtesy. He stated his requirements. The commercial counsellor sent for his assistant and they looked up various books and documents. He then said, "The Foreign Trade Corporation you require is so and so, the telephone number is this, the address is that, and I think that the head of the department concerned whom you should ask for is Mr. X." Having all the information, the representative went away gladly.
Before, however, calling on Mr. X of the Foreign Trade Corporation, he paid an identical call on the French commercial counsellor where he was again greeted, this time with the utmost Gallic courtesy. The French commercial counsellor sent for his assistant, they looked through various books and documents, and the French commercial counsellor said, "I think this is the Foreign Trade Corporation to which you should refer. Here is the telephone number and the address, and you should get in contact with Mr. X". And he said, not as an afterthought but as a part of the routine, "I will send my Mr. Y along with you because he knows Mr. X personally and speaks the language." I suggest that there is a moral to be drawn from this small and, I assure the House, quite true story.
Perhaps we are not close enough, we are not earthy enough, in our dealings 797 with commercial representatives in foreign capitals. It will be seen from the experience that I have just related of relations in East Europe that I am speaking primarily from my own experience which is in trade with the Soviet Union, the People's Republic of China, and the Socialist countries of Eastern Europe.
Here, perhaps, there is a moral to be drawn from the activities and success of another of our great competitors—Western Germany. It is surely no coincidence that the fact that Germany now possesses—I hope that my hon. Friend will correct me if I am wrong—something like three times the financial gold reserves of this country, and has a very flourishing export trade particularly in Eastern Europe far greater than our own. This is a market in which the Germans have operated for many years, long before the war, a market which they consider their own and a market in which, I believe, we are falling behind relative to the West Germans.
May I describe one technique that the Germans carry out in these markets, from which again I believe that we should draw experience. It is what I would describe as a group approach by which a number of German industrialists, or representatives of German industrialists, often composed of competing firms and this is the important point—go to one of these Socialist countries with trade concentrated in one Ministry of Foreign Trade and negotiate a contract as a group. It may contain bankers, representatives of insurance companies, shippers—anybody that they think may have a contribution to make which is germane to the particular contract which they are negotiating. As often as not, more often I would say than is our own experience with individual firms, the Germans are collectively enabled to sign a contract. They then go back to their hotels and fight out the conditions and the sharing of the proceeds of that contract, having undertaken collectively to carry out the terms which they have signed.
I turn to the broader field of exports, to the Comecon countries who are themselves inter-connected economically now, as the House will know. Here, I think, it is only right for me to declare 798 my interest, in that I advise to the best of my ability certain British companies and groups of companies in their affairs appertaining to exports to the countries which I have mentioned.
We have an Export Council for Europe doing excellent work. We have a Dollar Export Council whose achievements are renowned throughout the commercial world—throughout the whole world in fact—which is, of course, associated with the name of Lord Rootes. We have a Middle East Advisory Council, although the last adjective I heard about that body—I do not know it, its members or what its activities are—was "moribund". Perhaps my hon. Friend will be able to enlighten me and correct me on that point if he can. We have the possibility of a Commonwealth exports council, which, I feel, would be well worth looking into, to meet the same sort of problems as have been successfully faced, I shall not say solved, by the Export Council for Europe and by the Dollar Exports Council. Yet in dealing with the Comecon nations we have no concerted effort at all to co-ordinate knowledge, efforts, and market research in this very important potential field of our export trade.
I shall not suggest—and I am sure that the Minister would correct me if I did—that this East-West trade forms any significant portion of our export turnover at the present time, but I suggest that the potential is quite immense and that we should be first in prosecuting the possibilities of these tremendous markets, particularly in Soviet Russia and the People's Republic of China. We have no centralised organisation. We are subjected to a policy—and I hope that my hon. Friend will not take offence at this—of laissez-faire in a rather extreme form by having to deal individually—individual salesmen, negotiators and firms—with these massive monolithic ministries in the Socialist and Communist countries.
I wonder if hon. Members have ever had the experience, as I have, of sitting behind a table facing the light, as one always does in these circumstances, with six granite-faced Muscovites sitting opposite and representing every branch of expertise of the subject being discussed. Those of us who are somewhat robust rather enjoy the experience. 799 Others—and this applies to the representatives of smaller firms—are often daunted and in some cases wish they were home with mother. This goes on until one manages to get one of the Muscovite faces opposite to crack open in a smile; and then everything is all right because the whole thing is on a personal basis and the discussion can proceed in human terms.
I recall a remark made to me by one of these Muscovites. In quite good English he said, "Commander, I do not like poor capitalists". The same man on another occasion said to me, "Commander, I think you are pushing my leg". I am trying to point out that the inability to focus our market research and sales export efforts in these difficult and complex markets is putting us at a grave disadvantage in our trade with the Communist countries.
How many times has the representative of a small business come away from one of those countries having wasted a lot of time or severely burnt his fingers? Had he been properly briefed by a centralised organisation before going he might never have gone, and that applies both ways—not only to the man who goes there and gets his fingers burnt but to those who are more successful yet find that they have taken on something much bigger than they can manage, in which case they too often retire from the fray, leaving behind an unfortunate impression for the whole of British industry in the country concerned.
This laissez-faire attitude has been the basic reason for the steady erosion of reciprocal rights between the exporters of this country and certain countries I have mentioned, particularly Soviet Russia, in past years. If any hon. Member would like a little light reading I would refer him to the Temporary Commercial Agreement of 1934 which was made between the British Government and the Union of Soviet Socialist Republics and which. I believe, is technically still in force. That agreement lays down a degree of reciprocity which is quite laughable to anyone who appreciates the present situation.
This erosion of our export opportunities extends not only to physical exports—and, after all, the terms of the balance of trade between Britain and the Soviet Union are sufficient evidence 800 of that—but to our invisible exports. Why is it, for example—if most-favoured-nation facilities really exist and if true reciprocity obtains—that we should have a very distinguished Soviet bank in London, the Moscow Narodny Bank, which does first-rate business, while there is no equivalent banking organisation from this country in Moscow, nor is there one envisaged?
Shipping services should be on an entirely reciprocal basis. Anyone who goes into this matter in the slightest detail realises how heavily the dice are loaded against the few companies which are able to run ships into Soviet ports. When one considers banking and insurance, the Black Sea and Baltic General Insurance Company Ltd. is admirably served and staffed in London and does good business, but I know of no British equivalent in Moscow or of one being established there in the near future.
The same can be said about pure trade representation. There are about 100 Soviet trade representatives in this country—they are covered, of course, by the Temporary Commercial Agreement to which I referred—while there are perhaps half-a-dozen similar representatives on the commercial counsellor's staff in Moscow. I do not wish in any way to appear invidious, but I must mention the services which are rendered to this country by that commercial counsellor in Moscow. From the experience of myself and many colleagues, I can assure the House that we should pay tribute to the extremely hard work and great enthusiasm which he puts into an extremely difficult job.
While this situation exists—and on this issue I must press my hon. Friend for a reply—and a great trading nation like Russia insist on buying at f.o.b. and selling at c.i.f., how can we expect normal reciprocity arrangements to operate? This is another sign of the erosion of these facilities, and while I admire the Russians immensely for their trade techniques, I suggest that we should consider methods by which to correct the present position. It is never too late to start, but I see few signs of Her Majesty's Government beginning to do so.
I turn to the problem of trade with China. Some of the difficulties to which I have drawn attention in regard to 801 other countries are magnified in this case to the point of ad absurdum. One particular case history is worthy of many hours of study by the Plowden Committee. Much may spring from two events which will take place this year. The first is a British exhibition to be held in November under the auspices of a reputable body, the Sino-British Trade Council, which is composed of representatives of the Federation of British Institutes, the London Chamber of Commerce, the Association of British Chambers of Commerce, with special expertise provided by the China Association. The exhibition was negotiated and arranged some time ago and I am sure that we all hope it will be a resounding success.
The second event, negotiated subsequently and to take place before it, is another exhibition of British goods, this time of mining and construction equipment which is to take place in June. As was set out in a Parliamentary reply, that exhibition is being sponsored by an organisation known as the British Council for the Promotion of International Trade, a body which was referred to in that Parliamentary reply as being Communist-controlled. It is, in fact, a body which has operated steadily since it was first instituted in Moscow at the Moscow Economic Conference of 1952. I believe that it was described by the then Foreign Secretary, in November, 1953, as being a Communist-front organisation.
I urge my hon. Friend to go into this case with the Plowden Committee because no less than 50 reputable British firms, because they have no other outlet or means of showing their wares and specialised equipment in the People's Republic of China, require the services of this Communist-controlled organisation. This is something worthy of the Government's close attention. I would like to know how these 50 highly reputable firms—many of which are known to most hon. Members, at least by name—intend to pay the B.C.P.I.T. for the services rendered by that organisation.
I remember that in the days when I had close connection with the Forty-eight Group some years ago a figure of one-quarter of 1 per cent. on contracts was mentioned. That may have been overtaken by events—I do not know; 802 but I should like to know where some of this money goes to. The Communist-controlled organisation which makes the money doubtless applies certain of the sums earned to political purposes. Could it possibly be that there is some faint, distant relation between these funds earned in China and Communist candidates in the Greater London Council elections? I do not know, but it would stem that someone has to pay for all this, because I cannot believe that those candidates could be possibly financed out of the profits of the Daily Worker.
The root of the trouble, I believe—and I hope that my hon. Friend will deal with this point when he winds up—is that these 50 firms who make use of these particular and suspect facilities have not been provided by the Government with an alternative outlet which would have enabled them to do the same thing commercially in Peking which they are now able to do only in these particular circumstances. That is what I think m} hon. Friend should apply his attention to in dealing with this extremely unfortunate matter.
Here may I make a practical suggestion? It is many years since I made the proposal that we here take a leaf out of the German book. I have already spoken about the group approach, I have spoken about the excellent German public relations, about the results they get in the specialised East European markets. They have in their organisation a body known as the Ostausschuss or Eastern Committee which has existed for many years past and which is composed of industrial specialists in those East European markets. It has teeth, this organisation; it has the confidence of the Gem an Government; it is composed not oily of men who wish to do business with those countries but of men who have successful experience of dealing and negotiating in those markets.
I would commend this possibility once again to my hon. and right hon. Friends' attention in view of the manifest loopholes which exist in their present organisation, and of the bodies which they have set up to deal with the far less complicated situation in other markets such as those of Western Europe and the Americas. I think it should be possible 803 after these years of experience which British industry has had in dealing with those East European markets to find a body of reasonably young executives, of experienced directors and managing directors, quite a small number of people, who have sat behind those tables in Moscow, facing the light, who have dealt with the Russians and the Poles and the rest of them, and the Chinese, and who have come back with contracts which they have fulfilled on time and which have been repeated. I believe that we have not yet tapped that expertise, that great body of experience, and I believe that my hon. Friend should give serious attention to the possibility of doing so.
One word on the question of the export possibilities of the nationalised industries which were mentioned in passing by my hon. and gallant Friend the Member for Eye. I do believe that we have built up in our nationalised industries a wealth of experience and technique which itself is a saleable commodity, and this is also being shown in the exports of the Atomic Energy Authority—for example, of certain fuel elements, isotopes, and other atomic by-products of the great work which is now going on under the direction of the Atomic Energy Authority. It is my view that as yet our exporting services have not perhaps caught up with a possibility which we should exploit more and more.
I return for one second to the example of the exhibition in June in China. There we shall have mining and construction groups in a country whose basic raw material—vast resources of it, countless millions tons of it—is coal. In our country we have perhaps the most highly developed coal industry in the world. Surely there is a great volume of expertise and technique which we could usefully sell to the Chinese? Is it not also significant that a great part of those 50 firms which are exhibiting at Peking are themselves connected with the coal industry? And yet because of the sponsorship of this exhibition, even if we had the machinery to do so, the actual techniques which go into the Central Electricity Generating Board's coal-fired power stations and in the gas industry in the slagging gasifier and other modern techniques cannot be even offered to the Chinese. There is something wrong there, 804 and I do think the Government should look at it.
A final point, on exports in relation to defence. This may sound an odd one, but I think there is something here to which we should also look. This country at the moment is committed to the defence of Malaysia, where, on the one hand, we are spending millions of pounds annually, and it takes the great bulk of our naval, air and military resources. At the same time in Malaysia, independent as it is, we are, as I understand it, in terms of open and pretty free competition with great commercial rivals, the French, the Japanese and the Germans, none of whom has our defence commitments, none of whom has to spend a penny on defending the country in which they are doing business in competition with ourselves. Is it not right in principle that we should perhaps direct our thoughts to suggesting, ever so delicately, to the Government of Malaysia that, in respect of our defence commitments, there might be some slight quid pro quo in the commercial sense? I drop that thought in passing—because I have an acute sense of the lack of married quarters for the Royal Navy in Singapore. But that is by the way.
The question of exports, the question of facilities given by the Board of Trade to our exporters, is a vital one. In the markets to which I have drawn particular attention, in the Socialist countries of Eastern Europe, Russia, and China, it has a special political importance of its own, quite apart from the comparatively small financial contribution which it makes to our whole balance of payments position. I believe that for political reasons alone we should place more emphasis on those markets than we do. It involves the creation by commercial means of a confidence which does not exist in any other sphere, least of all the political one.
I do commend to the House the terms of this Motion which my hon. Friend the Member for Meriden has moved and I would ask my hon. Friend the Minister of State to look into the points which I have raised, and thank my hon. Friend the Member for Meriden once again for the opportunity of discussing this important matter today.
§ 2.38 p.m.
§ Mr. John Cordle (Bournemouth, East and Christchurch)
It was not my intention to take part in this debate when I arrived in the House this afternoon, but I should like to say that I recognise the importance of the Motion and the extremely valuable contribution which my hon. Friend the Member for Meriden (Mr. Matthews) has made in moving it. I especially commend the last part of the Motion, which saysand calls upon Her Majesty's Government to ensure that British exporters continue to receive all possible assistance.I should like to refer to that in a moment or two.
Earlier, my hon. and gallant Friend the Member for Eye (Sir H. Harrison) dealt with the question of trading in Nigeria. The small amount of experience I have had myself in that country and elsewhere on the West African coast led me to be specially interested in what he had to say about it. He referred especially to the British exporter losing out to other traders. I could not agree with him more when he says that once we have lost our orders and contracts we shall have the greatest difficulty in getting them back, and in many cases we shall lose them altogether. That is true for probably one or two reasons of which I hope my hon. Friend the Minister of State will take note.
I have found that our competitors in these fields since independence has been given to the new States have been able to offer extremely advantageous extended credits to buyers. This often puts us at a disadvantage. If we are to hold some of the large contracts which are being placed in civil engineering and textiles, better facilities ought to be offered through the Treasury for extended credits where possible. The help that the Board of Trade could give to the trader in this respect would be invaluable.
The British businessman does not take easily and quickly to a new mode of business which seems to have arisen in these countries where so much bribery is offered to secure a contract. This does, unfortunately, go on. I have known countries get away with orders which have been held for 20 or 30 years by the United Kingdom, because they have been able to offer some inducements for 806 those orders. We find that the Israelis, Germans, French and Dutch are in many cases taking away orders and contracts which we have held for many years.
My hon. and gallant Friend the Member for Eye also dealt with the question of documents and forms. The small trader and the man just beginning to find his way in exporting to developing countries is befogged on many occasions by numerous forms and documents which prevent him from making further endeavours to secure export business. If some service could be set up to help him reduce the amount of such work, it would be invaluable, and exports from small traders would grow. I know of an organisation which has had to set up special departments for this, and they have been informed, especially by the Board of Trade, how the necessary procedure should be followed.
The question of exhibitions was touched upon by my hon. and gallant Friend the Member for Harrow, East (Commander Courtney). Last November in Nairobi many of my compatriots were shocked to see a large mobile exhibition arrive to undertake a special rôle in exhibiting merchandise from one of the Continental countries. I gather that it was sponsored by that country and was able to take vast orders during the three weeks in which it operated. I commend this to my hon. Friend the Minister of State. Perhaps he will ascertain whether the United Kingdom could provide our exporters with such mobile exhibitions which could tour the east and west coasts of Africa and thereby increase the possibilities of retaining and increasing our exports. I believe that the market on the west coast of Africa particularly is well worth pursuing. I would urge our traders to get their travellers and agencies working hard so that we may benefit from the business which is becoming more and more available.
§ 2.45 p.m.
§ Dame Patricia Hornsby-Smith (Chislehurst)
For this week's record export figures I pay tribute to our exporters and to the Government for the help which has supported and encouraged the effort. I have in my constituency a small highly industrialised area, and I was very proud to learn from the then President of the Board of Trade a few years ago that it 807 had one of the highest export potentials in the country. The firms there include some with nationally known names. Many of the 30 companies in the area are imbued with the export drive idea. I refer to the organisations in the Cray Valley. Most of them have been established within the last 30 years. We have there telephone manufacturers, paper mills, electrical appliance manufacturers and many other industries which are not only extremely keen but extremely successful in making their contribution to our exports.
Without any dobut, these industries have continually to change their range and, in many cases, their markets. It is not sufficiently realised—I make no excuse for repeating a point which I made earlier in the week in another debate—that for many of our exporters the very fact that they have responded to the appeal to invest and set up companies in Commonwealth Territories has meant that they have either to find new markets or to adapt their production at home. Often in setting up subsidiary companies in the Commonwealth they have deprived themselves not only of the market in that country but of markets in other countries adjacent to that in which the new subsidiary is located.
I think particularly of Australia, where at least four of the companies in my constituency have subsidiaries and now the output from the Australian subsidiaries supplies not only the Australian market but also the markets in the nearer Southern Hemisphere territories, which now go to swell the Australian export figures. The deficiency has somehow to be made up within the production and export figures of the companies in my constituency.
These companies have gone out for increased orders in non-Commonwealth territory. Many of them have tremendously expanded their exports to Europe. They have seen to it that, far from losing ground, they have increased their exports. They have had to seek new markets and not merely sit back and complain because markets which they had hitherto had in Commonwealth countries have been lost to their subsidiaries abroad.
It is very difficult to generalise about our manufacturers. The best are magnificent and fully alive to the vital 808 importance of export trade to this country. We are probably more vulnerable to export trade than any other country in the world. We cannot feed ourselves like the giants on either side of us, the Soviet group and the United States, can do, or even like our great Commonwealth countries can do. We must export not only to feed ourselves but in order to provide all but one of the raw materials that we need to keep our industries going. The best are doing a first-class job. They recognise the need to send top level executive people out and to maintain proper service arrangements for their commodities and proper supervision of their trading and exporting.
But a great number of companies are perfectly satisfied to leave the tough work of exporting, with all its competition, to the other fellow and live solely on the expanding consumer market at home when they could export if they wanted to. I contend that such people are living on the backs of those who go out and export because, unless this highly successful and gallant band of exporters was winning trade abroad and providing the wherewithal to buy our raw materials, the companies content to stay at home could not produce their commodities at all.
These companies leave others to do the tough work of competitive selling abroad in a world which today has many more competitive sellers than ever before. I pay tribute to those industries that have, during the last 15 years, shaken up their ideas and have realised that it is not just enough any more that people had always bout ht British and that we once reigned supreme in certain commodities, but that we must go out and match the best that any of our competitors can offer.
I recently had the privilege of visiting the British Wool Federation at Bradford and seeing several of our outstanding worsted companies. It was a joy in some of them to see the finely laid out export departments where foreign buyers are welcomed. These firms had gone to great pain and trouble to conduct market research into the type and quality of cloth which would sell in various areas abroad.
I remember seeing a rather shiny-looking substance which looked as if it 809 might be a satinised synthetic but which was 100 per cent. worsted. It looked so shiny that one might have thought that it had been rubbed along these benches for many years. However, I was assured that in many countries that is how they like the cloth. I congratulate those firms which have had the enterprise to study those territories in which they hope to sell. So often, the requirements in such places are quite different from the designs and qualities which some of us would want. Indeed, sometimes they are of a type and quality which we here would not be seen dead in. Would that all the other companies that make good cloth goods joined in the challenge and made their contribution to our foreign export trade.
A lot of brickbats are thrown at us over Commonwealth trade. I should like to see a new Ottawa Conference with some pretty straight talking. I get a little tired of the perpetual criticism of this country. I am thinking of a particularly scurrilous article by a distinguished Canadian recently which gave the impression that the mother country is always letting the Commonwealth countries down and that it is really rather impertinent of us to expect them to consider our position from time to time.
We must bring home the fact that the whole pattern of our trade has very substantially changed with the Commonwealth countries, not least because we have gone out of our way to invest in them and to aid their industrial growth and development by encouraging great British companies to establish plants in their midst. In no country have we made a greater contribution than that provided by the 500 or so great companies which have established subsidiaries in Australia and which are making a remarkable contribution to that country's rapid industrial growth.
But, at the same time, the Australians still have the same Ottawa outlook—that they send us food and raw materials and take manufactured goods in return. They used to, but now they make many of these manufactured goods themselves. Yet there is the most unholy uproar if any suggestion is made which might limit or in any way impose any shrinkage of their exports to us of major commodities like wheat, fruit, minerals and wool. They tend to forget how wide and varied 810 are our exports. If one quotes a specific case where we have suffered great damage to our exports, they shrug it off and say, "It was only £500,000. What are you fussing about?"
While I was out there New Zealand suddenly put a total embargo on the import of glass. A famous British company, which had been exporting glass to New Zealand for over 100 years, found itself up against that complete embargo and therefore unable to export any of the glass which had been ordered in New Zealand. In the same way one of the many manufacturers in my constituency, responding to the call for more Commonwealth trade, sent his staff to Australia and New Zealand, obtained orders and went into production for them. But before the goods could be exported an embargo was put on at only 48 hours notice.
Cannot we persuade some of our Commonwealth partners to recognise how much damage this sort of thing does to good will and to export and import relations between our countries? Great companies here respond to the call for Commonwealth trade and have every wish and desire to expand it. While they might resent but accept such brusque notice from some foreign Powers, they do not expect to get it from members of the Commonwealth in imposing import embargoes on goods which they manufactured in good faith in response to orders.
It is no answer to be told—as I was told when I complained about the severity of these embargoes and the fact that they have been given with no warning—by a senior member of the Australian administration, "Heck. It just shows how efficient we are." It does a great deal of harm to those who would other wise be anxious and willing to build up and expand Commonwealth trade.
We have also been told that our selling efforts in Canada are not as effective as they might be. It should be recognised that whereas America sells Canada five times as much as she buys from her, this country buys twice as much from Canada as Canada buys from us. Yet we are accused of failing in our export efforts and our export drives. It should be emphasised that the Mother Country has many commitments right round the 811 world and that strenuous efforts have been made by this small island of 55 million people not only to set up and expand United Kingdom companies in the great old Dominions, but to invest great sums in the newly independent countries whose industrial potential we are anxious to build up so as to provide a better standard of living for them. That is something of which they as partners in the Commonwealth can be as proud as we have every right to be.
We still get complaints—I heard them in Canada and Australia—about the servicing of the plant and vehicles which we export, and there are still criticisms about the time it takes to get spare parts. The Canadians and Australians say that our spare parts and other services for vehicles which we have already supplied do not match the services provided by other European countries.
I do not know to what extent that was responsible for the experience of myself and my two colleagues on the Australasia tour last year. My two colleagues were the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), who in his pre-Parliamentary days worked in one of our great engineering groups, and my hon. Friend the Member for Rye (Mr. Godman Irvine), who is an engineer. One of our bitterest and most disappointing experiences came when we visited that great, imaginative and highly successful project, the Snowy Mountain Scheme, and saw the small participation of the United Kingdom in these contracts. Everywhere we went—and we spent three whole days going round the project—we saw vast hoardings to say that the Americans had built this, the French had built that, the Italians something else and that the turbines had been supplied by the Swedes.
We felt that we had the know-how and the experience and knowledge to justify a much greater participation, and I am still baffled about why we have taken so little part in this highly publicised project in Australia to which every foreign visitor and every trade delegation is taken. The entire World Power Conference, which was meeting in Melbourne while we were in Australia, was taken to see the project and I cannot stress too strongly how imaginative and inspiring it was and how little the United Kingdom was participating.
812 Again and again we asked why our participation was not greater. In one case we were told that rival European companies had been prepared to send their top experts for six weeks before even tendering or making proposals about the type of plant which should be provided and that we were not so keen to send such experts as far as Australia. If that is true, there may be very good reasons for it. Our manufacturers have contracts around the world and there are times when there is a limit to the number of top men who can be sent to spend such a time on a given project. But there has been nothing like the Snowy Mountain project since the Tennessee Valley Scheme and it is a great pity that we did not somehow secure greater participation.
We saw one vast electric power station after another in which the turbines were Swedish. I do not know whether my hon. Friend can confirm or deny it, but there was some suggestion of a hidden government subsidy to enable the Swedish companies to cut below the economic prices quoted by others. If so, that would be in conflict with international agreements. In work in which Britain has been well to the fore in scale of manufacture and technical knowledge, we should make every endeavour to find out why we are not more important participants in such a scheme in our own Commonwealth.
I was invited by the Daily Telegraph to write about the tour. As a very small part of the article, I mentioned our disappointment. I do not think that I have ever had ruder letters, even from outraged constituents, than I had from some of the manufacturers in question. I replied to all of them, asking one specific question. I did not deny that they had undertaken and fulfilled vast contracts in other parts of Australia which were not nearly so publicised as the Snowy Mountain project. I was aware that the commissioner of the Snowy Mountain project was in this country during the autumn before last to place contracts for five or six of these giant new power stations. During February and March of last year I asked all these manufacturers whether they had been asked to quote. Not one of them has replied or told me yea or nay.
If there is some way in which we are not making our impact, I hope that 813 with the aid of my hon. Friend's Department we shall be able to project for great Commonwealth projects goods which I am sure we can make as well as our competitors can. We can, if we wish, service as well as our competitors can, and I believe that it is important to ensure that we are associated with these great projects.
Might not great exporting companies offer a bonus and go out of their way to try to persuade more of their executives who go abroad to learn to speak an additional language? One does not see Japanese or Germans arriving in this country expecting to continue to speak German or Japanese. They do not visit Latin-America without being able to speak Spanish. With the tremendous competition that exists today, we are too insular and we set too little store on the importance of speaking to a man in his own language about his commodity.
On that aspect I should like to congraluate the Institute of Directors which is making its contribution to this drive by running intensive courses for this purpose. Two of my colleagues who are taking the courses tell me that they are killing ones, and that they have never worked so hard in all their lives.
We have heard from hon. Gentlemen opposite that it would be the intention of a Labour Government to have a discriminatory form of tax which would provide a bonus for exports and impose penalties on non-essentials at home. We have had reports of similar schemes for taxation aid to exports before, and in every case they have been criticised not only as not being in the best interests of our economy as a whole, but as being very much in conflict with our obligations under international agreements by providing, in whatever form one calls it, a hidden subsidy.
One blushes to think of the fun and games that there would be in working out what would happen to that great industry of whisky. Presumably it would be regarded as a non-essential at home, so there would be a penalty on it, but as one of our greatest exports it would earn a bonus abroad. By the time two was put on and a half was taken off, the tax collector would not know where he was.
To refer to a point made by one of my hon. Friends, what progress has been made on the proposal for a great export 814 centre in Great Britain? I have taken an interest in a very courageous but modest-sized export centre in the West End. It was set up with the intention of providing central showrooms for small companies which could not afford the considerable expense of maintaining an entire showroom on their own. It has been highly successful, but it is on a smaller plane than the project for a site at Crystal Palace or at Osterley.
When we get people either from the Southern Hemisphere or from across the Atlantic doing one of these rapid tours, it is important that we should realise that one can fly by plane 10 times the distance between capital cities in America faster than one can sometimes go from London to Manchester by British Railways.
It is important that we should provide facilities in London not only for specialised exhibitions but also so that a prospective foreign purchaser can come here and see a range of our top-line commodities within the 48 hours that he is prepared to stay instead of having to make a whirlwind tour of Bradford, Leeds, Manchester and Glasgow as well as London, in which inevitably he misses some of the companies which might have the commodities that he wants.
I should be grateful if my hon. Friend the Minister of State could give us some information about the pilot schemes and suggestions made about the development of the Crystal Palace as a specialised exhibition centre, which we sorely need in London, or possibly as a permanent sales boutique. Has any progress been made in fulfilling what is I believe a very great necessity in this country?
Overall, we have every reason to be proud of the work which those who are prepared to export do. If we can push a little more those who have been able to sit back during a boom time of consumer trade at home, we can achieve an even stronger exports position and hold our own with our competitors anywhere.
§ 3.12 p.m.
§ The Minister of State, Board of Trade (Mr. Edward du Cann)
Having been charged by the Secretary of State for Industry and Trade with responsibility for our overseas trade, I am delighted to have the opportunity to reply to this debate. I am delighted to accept the Motion which my hon. Friend the Member for 815 Meriden (Mr. Matthews) moved with such great skill.
Perhaps I can begin by making several points very shortly. First, I hope that I may be allowed to thank my hon. and gallant Friend the Member for Eye (Sir H. Harrison) for the very generous and courteous things which he said about me personally, which I greatly appreciate and value. Secondly, my hon. Friend the Member for Reading (Mr. Peter Emery) said that this had, perhaps, been a small debate. It seems to have gone on for a fair time. But whether it is a small debate or not, I welcome it. No fewer than 10 hon. Members have taken part in it. I think that it has been a thoroughly constructive and good debate.
It does not matter very much that the House has not been full to the brim during the time we have been considering this very important subject. We have had a serious and useful debate, and the Government will certainly bear in mind the many constructive suggestions that have been made. I will do my best to answer as many of the points raised as I can and perhaps I can also, en passant, as it were, say certain general things on the subject of exports.
I have already congratulated my hon. Friend the Member for Meriden on his constructive speech. I should also like to congratulate him, as everyone else has done, on his good fortune in the ballot. He seems to have more luck than anybody, winning ballots one after the other. However, there must be averages in these things. I never won a ballot and I do not suppose that I ever will. I dare say that some of my hon. Friends feel the same.
I am pleased that during this debate tributes have been paid by speaker after speaker—officially for the Opposition by the hon. Member for Sheffield, Hillsborough (Mr. Darling) and, I think, by every one of my hon. Friends—to the services rendered by the Board of Trade and to the men and women who work in it. This debate will be studied by our commercial people overseas, who often have extraordinarily difficult and hard work to do, sometimes in circumstances of personal difficulty, away from home and parted from their families, and so on. I am perfectly certain that they will
816 read what hon. Members have been good enough to say about them with pleasure and appreciation, and perhaps on their behalf I could say "Thank you" for what has been said, and deservedly said.
Tributes have also been paid to the work being done in the export field by representative bodies in private industry, such as the F.B.I., and London Chamber of Commerce, the Birmingham Chamber of Commerce and others. I was glad to hear the tributes which were so deservedly made. Perhaps it would be right for me to say a word in general terms about what we conceive to be the duty of the Government. First and overall, I believe it to be the creation of conditions under which trade can flow freely throughout the world through international negotiations. It is the Government's duty to do everything possible to remove the barriers to world trade.
Britain's interests depend on a growing volume of world trade. This is our policy and we have been active in it. Successive Governments have played a considerable part in the negotiations in the G.A.T.T. for reductions in tariffs. The latest round of these discussions, mentioned, I believe, by the hon. Member for Hillsborough, will, of course, be the Kennedy Round where the proposal is for a multilateral cut of 50 per cent. This is the scale of such negotiations. The last was the Dillon Round. It took, I believe, 15 months to complete, and in that context and remembering that the Kennedy Round is the greatest of them all, and certainly the most complex, it would be quite wrong to expect any easy or quick solution to the problems now coming more clearly to the fore as a result of the negotiations currently taking place between nations and communities.
On the other hand, I want to tell the House that the Government will continue to play a leading part in these negotiations. We shall go into them with a minimum of reservations, and we are determined to make them a success. Tariffs are not, of course, the only barriers to world trade, and as tariffs are reduced so the other barriers will inevitably become of increasing significance. Whatever the constitution of barriers to world trade it remains our intention, our aim and our policy to 817 do our utmost to ensure that trade moves as freely as possible in the world as a whole.
The second responsibility of the Government, I suggest, thereafter is to provide, if I may quote a phrase which has been used several times in the debate, the best possible services in the world to support the brilliant work which our exporters are doing. I suppose that the question which arises immediately is the degree to which these are supplements to the ordinary services provided, as my hon. Friend the Member for Somerset, North (Sir E. Leather) said, by the City of London. The point is that they should supplement them and not supplant them. The ordinary banking, insurance and merchanting services have an enormous part to play and are, indeed, playing a fine part. But there is work which the Government can and should do, and I propose to go through it in some detail.
After that, I think it important to remember and to make the point that there can be no substitute for selling. It is not the Government's job to sell. It is the Government's job to create the conditions and to support, but not to sell. There can be no substitute for initiative, enterprise, personal visits and the like. A number of my hon. Friends who have spoken, not least my right hon. Friend the Member for Chislehurst (Dame Patricia Hornsby-Smith), talked about the work of British exporters in the world as a whole. All of us travel a great deal abroad from time to time and have an opportunity to see at first hand the work which the people abroad are doing. Many tributes have been paid to British exporters. I join in those tributes.
When we see some of the people who are abroad and talk to them and see the way in which they spend several months at a time abroad, and when we realise how hard they have to work, I believe, as I think the hon. Member for Hillsborough said, that the whole nation should unite in paying a tribute to them. It is right that in this House we should record our thanks, gratitude and admiration.
The hon. Member for Hillsborough and my right hon. Friend the Member for Chislehurst rightly spent some time in talking about exports and the need for them. I will not rehearse in detail 818 what they said, except to repeat that our whole standard of life now and in the future—as was indicated by the National Economic Development Council—depends on continued and increasing exports. The hon. Member for Ashton-under-Lyne (Mr. Rhodes)—who has had to leave the debate and was good enough h to explain the reason to me—said that we shall fail in our performance it exports do not rise. My hon. and gallant Friend the Member for Harrow, East (Commander Courtney) said much the same thing.
My right hon. Friend the Member for Chislehurst was so right in her strictures on those manufacturers who selfishly prefer to remain in the home market. But, as she said, if we do not have an increase in exports we shall not have any home market at all. How much I agree with her. Some of my hon. Friends have pointed out the difficulties following the development of new industries where Britain has enjoyed traditional markets—not least in the Commonwealth—industrialisation in other countries and shifts in demand, about which the hon. Member for Ashton-under-Lyne spoke so amusingly in the context of red flannel. My hon. and gallant Friend the Member for Eye and my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle) also described the position in Africa. It is certainly clear that it is much harder to export now than it has ever been. There is very fierce competition from the Continent of Europe and other industrialised nations, with protectionism. Some times in its worst and most evil form, at a time when the United Kingdom has been urged continuously to open her own markets wider to the manufactured goods from the developing territories—as we have done. We have set a fine example, and if we can encourage more industrialised nations to set a similar example, the problems of Common wealth developing countries would be much mitigated. There is no doubt that it is harder to export. But the need is there and it is vital. Without it all our plans for the present and the future will fall away.
We have heard a number of interesting suggestions about ways in which the Board of Trade—apart from its 819 usual services of which I will speak—could help. They will be considered. The hon. Member for Ashton-underLyne—his point was taken up by the hon. Member for Hillsborough—talked about trends of service. I should like him to know that I am thinking about this. That is being seriously considered. It is I think open to certain difficulties. I visited a caravan firm a few months ago and the managing director, an able and engaging man who began his business with nothing said "You may be interested to know that when I had the idea of starting this business I considered the export possibilities. I went to the Board of Trade to ask what were the export possibilities. They told me that they were nil, after having considered the matter carefully. But I have since built up a thriving export business, despite what the Board of Trade advised". So I am not certain that scientific analysis of trends necessarily matters so much as expertise, determination and sheer guts.
My hon. and gallant Friend the Member for Harrow, East, spoke of the potential for East-West trade. Exports to the Soviet bloc currently represent about 3 per cent. of the United Kingdom total exports. There are difficulties in this situation. There is obviously the difficulty of negotiation between a free market economy on the one hand and a State economy on the other. But we have begun talks on liberalisation and as the House will know, on the instructions of the Secretary of State I signed a trade agreement with the Czechs only a few days ago. We hope to continue negotiations, and to conclude them successfully, with certain other Eastern bloc countries as time goes on. I wish to make clear to the House, as an illustration of one of the difficulties, that while we recognise the potential for selling in these countries, we are not prepared to accept consumer and manufactured goods in this country at prices which would be damaging to the United Kingdom market or make life difficult for our own manufacturers. I hope that the House will think it right that we should stand firm on this point of principle. I do not believe in protection. I do believe in fair competition but not in "dumping".
820 Regarding Russia, Mr. Patolichev is over here at the present time and I do not think that there is any doubt that our trade with Russia for the last five years has been a success story. In 1959 United Kingdom imports from Russia amounted to £63 million. Last year the figure rose to £91 million. Exports over the same period rose from £35 million to £64 million, so that our total is up by 60 per cent. since 1959. There is a severe imbalance. Russia is selling about twice what she is buying from us and we want to see that imbalance rectified. I feel, as was said by my hon. and gallant Friend the Member for Harrow, East, that the joy of trade is in the better understanding which so frequently follows successful commercial negotiations. I do not doubt that we shall be negotiating a new trade agreement with Russia. Discussions are in train, and I hope that it will not be too long before we are able to sign a new protocol. There is a great deal of talk about this and we are still continuing with the discussions.
I wish to say a word about the United Kingdom export performance. We may take pride in this since the March figure of £391 million is an all-time record. I want to talk about the trend. I think it is the trend that matters so much more than the figures for individual months. Exports have been increasing during the past two years. There have been pauses and hesitations, but the general tendency has been clearly upward. In 1963 the 8 percent. increase achieved was one of the biggest year-to-year increases in the last decade. The House will remember that our exports of £4,080 million were an all-time record. The latest figures show a continued strengthening in exports. In the first quarter of 1964 the value of exports was 9 per cent. more than in the first Quarter of 1963 and there is prospect of further expansion.
We certainly need a greater expansion of exports as all hon. Members have agreed, but it is right to recognise the very real achievement of our exporters at this time in a highly competitive world situation. We are going well enough, but I want the House to understand that both in regard to export performance and Board of Trade services, whether they are good or not is not the point; certainly if we can find 821 ways of improving the effort we are most anxious to take them. My hon. and gallant Friend the Member for Harrow, East asked in that context whether we thought we could learn from other countries. I want him to know that certainly if there are opportunities for us to learn from other countries we shall take them.
My hon. Friend the Member for Somerset, North has fled from London to Somerset and I cannot blame him for that. He and my hon. Friend the Member for Meriden asked particularly about the question of an export exchange. Early in 1962 the Board of Trade set up a Working Party to examine this kind of problem. It produced a Report in February, 1963 which was published in the Board of Trade Journal and made a number of recommendations. The British Export Houses Association representing 300 firms has I understand taken steps to implement where appropriate some of the suggestions it made. A joint liaison committee including the British Chambers of Commerce and the F.B.I. has been set up to consider common problems. My hon. Friend the Member for Somerset, North was right in saying that this matter has been drawn to my attention in correspondence. We are certainly willing to explore the matter and to keep an eye on the progress made. The best arrangement, if it is feasible, will be a private amalgam of exporters rather than a Government-sponsored body; but we shall watch progress.
The subject of Durgapur was raised by the hon. Member for Hillsborough. The difficulty is that India needs enormous sums of economic aid to enable her to carry forward her development. Her needs go far beyond anything which we can do alone. This has relevance to the remarks made by my hon. Friend the Member for Chislehurst. In India we certainly play our full part in giving her a very large amount of aid, much more than to any other country. In the last five-and-half years we have granted India 19 loans under Section 3 of the Export Guarantees Act, 1949, to a total value of £206 million, all on very generous terms.
The problem is that there are limits to what we can afford. I do not think it would be reasonable to suggest that we can hope to finance every scheme 822 for a major industrial development. Nonetheless, prestige is involved, nonetheless we want to help our friends where we can. The general spirit of the thinking behind the remarks of the hon. Member will be noted.
My hon. Friend the Member for Meriden, my hon. Friend the Member for Chislehurst and the hon. Member for Hillsborough, spoke about languages. I simply say how much I endorse their remarks. It is vital that our people should speak the languages of the people into whose countries they are travelling. I think we are better at this than we used to be, but there is still scope for improvement.
I come to more of the detail of the Board of Trade's services. First I wish to speak about the Export Services Branch with particular reference to the amusingly, well-put point of my hon. Friend the Member for Meriden about the seven deadly sins of people who do not export. The Board of Trade in London is the central pool of Government knowledge and information for exporters. We have au Export Services Branch at Hillgate House in the City of London. In 1963 that office of the Board of Trade received 325,000 letters and interviewed 5,000 businessmen on the widest variety of export inquiries imaginable. Its statistics and market intelligence library is one of the finest of its kind in the world. A booklet describing its work was recently issued and we sent a copy to 27,000 manufacturers in a series of direct mail campaign letters.
I think my hon. Friends will agree that that part of the Board of Trade is doing a great deal. It obtains information from many sources, not least from the commercial officers in 200 posts in the principal cities of the world. My hon. Friend the Member for Reading (Mr. Peter Emery) asked if the acceptance of the Plowden Report would mean that standards would be reduced in any way in the commercial offices. I can assure him that in no circumstances shall we allow that to happen. Indeed, our whole aim is continually to improve the services.
I was asked a number of questions about commercial officers. I know that many hon. Members have knowledge of their activities. We are always asked about the commercial experience of these people. There are snags in effecting 823 the kind of liaison we should like to effect when putting commercial people into these posts. I will not rehearse them in detail, but I draw the attention of the House to paragraphs 247 and 248 of the Plowden Report.
I want to say some general things about commercial experience. The number of commercial officers is being substantially increased. This will help with the question of overlaps, which has been mentioned. We want to see people settled in a particular place for as long as possible, subject only to the obvious difficulties of posts which are hard climatically, and other personal matters which the House can very well appreciate. There is no doubt that in general Plowden will take us a stage further forward. The Foreign Office and the Board of Trade are in close consultation about all of this.
In relation to knowledge of commerce, I want the House to know that revised and improved commercial training courses have been started at the beginning of the year. Four weeks of the course are devoted to comprehensive instruction on exporting at the City of London College. So, although it may seem that it would be better to pluck out a director of I.C.I. and set him down in the Island of Trinidad, I am not sure that is right. I think there are great advantages in the system we have at the present time.
While I do not believe that any body of men like commercial officers would pretend that every one of their men was perfect, any more than any one of us would claim that every Member of the House of Commons was a perfect human being, at the same time we feel that we are providing them with the facilities that they need. Certainly we shall be supporting them as strongly as we can. I know that many of them do extraordinarily good work in many corners of the world.
We have nine Board of Trade Regional Offices and in 1963 export officers in the regions paid over 20,000 visits to firms to talk about export matters of various kinds and to give practical help and encouragement in order to develop an interest in exports among those particular firms. They support and encourage export clubs. Indeed, the range of information available to the Board of Trade is very large. It can advise about export possibilities for pro- 824 ducts and how to establish them in overseas markets. It can identify the most likely countries where a market may exist. It has a great deal of information about market prospects, business conditions, local production and imports, local tastes and peculiarities—my right hon. Friend the Member for Chislehurst said something on that subject—trading methods, other foreign competition, and so on.
The Board of Trade probably has the most comprehensive collection in the world, outside the Bodleian, of foreign trade directories, lists of importers, records of the commercial status of overseas firms, and so on. It can give precise and up-to-date information about tariff and import regulations of overseas countries, including details of Customs duties, for example, import licensing and quota arrangements, certificates of origin, Consular invoice and fee requirements, trade and merchandise marks, food and drug regulations, and so on. I make no apology for giving the House that great catalogue, because I think that the first of the "seven deadly sins" was the deadliest, the worst and the least excusable of all.
As to agents, often the major problem for an exporter is to find a good agent. Here again, the Board of Trade can help. We can always ask the appropriate overseas commercial officer to make suggestions about likely agents, and the overseas officer can always consult agents personally as to their interest in the product.
Whatever the Board of Trade does at home, whatever its great range of activity—libraries, catalogues, visits, and so on—I repeat what I said earlier. I say it again now when I am boasting about what the Board of Trade does. There is no substitute for personal visits by businessmen overseas.
I turn now to the Export Service Bulletin mentioned by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). He said that it was published weekly. In fact it is published daily and the examples my hon. Friend gave illustrated the wide range of subjects it covers. It certainly provides highly detailed up-to-the-minute information about export opportunities overseas, such as, as my hon. Friend indicated, foreign buyers seeking United 825 Kingdom sources of supply, overseas agents looking for United Kingdom principals, contracts put out to tender by overseas Governments, municipalities and similar bodies, information about openings abroad in connection with public utility works, and Heaven knows what else. Besides that, there is a regular service of economic reports and market reports. It seems to me almost right to describe that document as being an exporter's "must".
§ Commander Courtney
What evidence has my hon. Friend of the actual volume of business which is produced through the issue of this export guide?
§ Mr. du Cann
I am sorry to say that we have no specific and definite statistical evidence, for reasons which my hon. and gallant Friend will appreciate. The Board of Trade obviously does not take any part directly in contracts or in work that might result in them, but one can check in some degree through letters of appreciation and these we find are numerous and specific. In other words, the question we have to ask is whether it is doing the job or not and the answer is obviously that it is doing a very useful job.
My hon. Friend the Member for Bournemouth, East and Christchurch asked about the mobile exhibition which came from Western Germany. I am advised that it was not a great commercial success. We think that while there might be advantages in mobile exhibitions of some kinds—I do not suggest that there are not and I do not want my hon. Friend to think that we have a closed mind on the subject—in general we have found the greatest success in the kind of work we are doing with fairs and exhibitions in general.
My hon. Friend the Member for Reading and my right hon. Friend the Member for Chislehurst raised a point in relation to a permanent exhibition centre in London. I am advised that the F.B.I. has accepted a recommendation for a permanent exhibition centre at Crystal Palace and that it is considering ways of raising the finance required. On present estimates the centre would be likely to cost a great deal of money—about £12 million. My hon. Friends will realise that this is a matter in which I take a personal interest but they will not expect me to go into detail 826 now. The Government certainly recognise that the question of a major exhibition centre is a most important matter.
On the question of exhibitions and fairs in general, raised also by my hon. and gallant Friend the Member for Harrow, East, my hon. Friend the Member for Reading and my hon. Friend the Member for Bournemouth, East and Christchurch, not only do we publish lists of the major trade fairs regularly in the Board of Trade Journal, but also in a more positive sense we encourage British industries to participate in selected overseas fairs. We go to a great deal of trouble to draw the attention of British industries to these fairs and I think that we have some success in so doing. I hope to make available to the House within the next few days our detailed programme of official participation in international trade fairs for 1964–65.
§ Mr. Cordle
Could my hon. Friend tell us why we are not taking part in the New York World Fair and whether or not we shall be missing possible markets in that direction this year?
§ Mr. du Cann
We are not taking part in the Fair for reasons which I will describe more fully to my hon. Friend in a letter, simply to save time now, but they are good reasons and when he has heard what I propose to say in a few moments he will appreciate that we are not missing opportunities. There are great opportunities for us in the United States. It is now our largest single market. I agree with what has been said in the debate about our not selling as much there as we might do, but there are technical reasons and I think that on balance we are wise not to take part in the Fair. There is no complication about it, but I believe that the right decision was made.
As I was saying, I shall make available shortly to the House the detailed programme for 1964–65. In broad terms, the British Government will themselves be showing or assisting British industries to show in no fewer than 40 major events throughout the world. I divide the programme into four parts. First, there is the official and substantial assistance that we shall be giving to British industry in its efforts to organise British fairs abroad. Barcelona has already been referred to as 827 a great success. We have great hopes for the success of the British exhibition in Australia in September. As my hon. and gallant Friend the Member for Harrow, East will know, we are supporting the Sino-British Trade Council exhibition in Peking later this year. I am looking forward, after we have won the General Election, to going there myself if my right hon. Friend the Secretary of State does not go, as I know he wishes to, and I can talk him out of it.
The second type of Board of Trade assistance to industry takes the form of British pavilions or sections at existing international trade fairs. In the current financial year, we shall be at Budapest, Poznan, Tel Aviv, Vienna and Accra. That answers the question that I was asked about West Africa.
The third type is the joint venture scheme. This is a pump-priming device designed to encourage industry to test overseas markets by taking part in composite displays. We run it for a period of time, and I think that it is a thoroughly satisfactory idea. Last but by no means the least form of the participations which I have tried to describe under this head, is the setting up of commercial informations stands, under the Board of Trade umbrella, as it were, at a number of selected fairs.
There is no doubt that fairs are a very useful means of trade promotion for many but not for all industries. It is with other industries in mind that we have embarked on an extensive programme of British Weeks overseas and of assistance to departmental and other stores in overseas cities willing to mount suitable all-British promotions. There has just been a successful British Week in Brisbane, a similar week takes place in Perth in May and a further British Week in Canberra in August. The campaign in Australia will culminate in the British fortnight in Sydney in September which is to be staged in conjunction with the all-British exhibition which I have mentioned.
Nearer home we shall be arranging with the assistance of the Export Council for Europe a major British week at Dusseldorf in May, a similar week in Copenhagen and other Danish cities in September. Without doubt the Export Council for Europe has done a 828 great deal of work, and I should like to record Her Majesty's Government gratitude.
Our store promotion campaign covers over 13 such events in the United States and one major promotion in France involving over 40 stores in Paris and in the provinces. I am sure that the House will agree that a great deal of hard work is going on in this regard.
As to publicity, I hope that hon. Members will forgive me and that the C.O.I. will forgive me even more if I do not go through in detail the work which is done in the publicity field. It is simply prodigious. The F.O., the C.R.O. and the Colonial Office staff maintain over 100 information offices in 70 countries overseas and a further 20 overseas offices receive and use our information material. The whole object of the exercise is to create a favourable climate of opinion to the United Kingdom. When one looks in detail to what the C.O.I. produces—and I have not time to go into this with the care that this work merits—it is really quite staggering.
One-third of C.O.I.'s total output is concerned with industry, science and commerce. Over 2½ million words a year in the form of industrial news items and feature articles are issued overseas for use by the Press of the world; 170,000 prints, 100,000 blocks and matrices, 4,000 programmes a year recorded by C.O.I. on disc and tape, 1,000 industrial stories are filmed annually for use in regular television and newsreel services. Over 100 films a year acquired from British industry, over 21½ million copies of nearly 100 titles of officially produced booklets and graphics in more than 13 languages. Five and a quarter million copies of four official magazines in 17 languages distributed overseas each year, roughly a third of the contents concerned with industrial, scientific and technological matters. Over 200,000 copies of some 400 different publications produced by industry, including mail sheets and calendars distributed every year. It is an immense amount of work.
Then we come to the Board of Trade Journal, a little nearer home, and mentioned already by my hon. Friend the Member for Harrow, East. Services to the exporter occupy half the average 60 829 pages of each issue of the Journal. There is no doubt that the information given in the Board of Trade Journal is remarkably comprehensive. We will be publishing a supplement on Italy in the near future and possibly others on Commonwealth countries. I was interested to observe a recent British Institute of Management survey which ranked the Journal second out of 38 periodicals from which firms obtain commercial information. I am not surprised at the value which the Journal is recognised to give and I have always regarded it, long before I came to the Board of Trade, as an excellent publication.
I turn to the subject of the small exporter, and I agree with my hon. Friend the Member for Somerset, North that there is much to be said for inexperienced small exporters using export merchants. To comment on E.C.G.D. in particular, its scheme does not seek to entice small exporters away from the export merchants but only to supplement these services by providing an easy introduction for the small exporter to credit insurance; that is, for those who wish to act on their own initiative. I am satisfied that in that way it has served a useful purpose.
My hon. Friend suggested that we should turn the E.C.G.D. upside down, make it a public corporation and take other steps. There are, perhaps, arguments in favour of making such radical changes, but there are equally strong arguments against, not least the need to keep E.C.G.D.'s policy in line with the general economic policy of the Government. There is also the need for finance to be immediately available, perhaps to meet large demands. If that were not so it would need a much larger reserve, which would mean higher premiums and which would not necessarily command the support of even so dynamic a character as my hon. Friend the Member for Somerset, North.
While on the subject of premiums, my hon. Friend the Member for Twickenham referred to reductions and suggested that the last was made in 1961. That is not so. We made two reductions last year. One was of about 8 per cent. in January on short-term rates and the other was a general 10 per cent. across the board reduction in April. 830 To comment on the E.C.G.D. in general, I was asked whether it was too cautious. I have never regarded it as such. One of the problems we all have in this House concerning E.C.G.D. is that we see only the difficult cases, those which come to light, perhaps as a result of constituents having written about them or, from my point of view, those which turn up on my desk as Minister in immediate charge. I regard E.C.G.D. as being flexible and I hope that I carry the House with me when I say that the job it does for the British export industry is superb.
We must remember that the proportion of exports covered by E.C.G.D. in 1953–54 was only 12.6 per cent. In the first quarter of 1964 it was over 25 per cent. Its services can, therefore, be well appreciated and understood. The business insured in the year just ended was £1,160 million, an increase of 19 per cent. over the previous year's figures.
We recently published a book on the activities of E.C.G.D. Some hon. Members have received a copy—those who took part in an earlier debate we had on the E.C.G.D.—and a copy is in the Library. Other hon. Members who want a copy will be supplied if they contact me. The E.C.G.D. is always ready to try to make its facilities more widely known. They are nationally advertised and it is remarkable to think that in 1963 officials from the Department's 16 branch offices made over 30,000 calls on exporting firms. Over 13,000 of them were on uninsured firms and were designed to introduce and explain the facilities available.
I hope the House will agree that there is a common thread running through everything I am saying. We have these services and as hon. Members have said, they are the best in the world. However, we are always ready to improve if we can find ways of improving, and that is why I am grateful for the constructive suggestions made during this debate.
I want to say one further word about the work of the commercial officers. When they come back to the United Kingdom on leave they do not just go on leave. During 1963, for example, 108 overseas officers on leave in the United Kingdom undertook 1,320 duty days, large y devoted to talks with interested manufacturers. I hope my 831 hon. Friends think that this is a wise policy. An officer comes back here, and he goes round to see manufacturers known to be interested in that country from which he has come.
I have touched on recognition of good exporting, Ministers touring factories, group discussions, public speeches. I have a regular programme of what my hon. Friend the Member for Somerset, North calls "knockabouts"—private interviews with leading industrialists—and at these interviews one can keep in touch with industry generally. I have perhaps four or five of these meetings a week—something of that order. At these interviews one has the opportunity to talk about export problems.
Examples of good export performance are brought to our notice and are acknowledged by official congratulations from myself on behalf of the Government; the Honours Lists have continued to include a number of awards to industrialists in recognition of their services. There were, for instance, some 17 names in the 1963 Birthday List, and 23 in the January, 1964 List. I hope the House will approve these arrangements.
I have spoken of various tours which commercial officers make, but there is one exercise I should specially like to draw to the attention of the House quickly. It was launched a very short time ago. Two teams of officers stationed in the United States visited the United Kingdom and talked to nearly 1,000 firms about selling to that country. Before they came over they prepared some 15 market surveys, and I think that is another example of the work which ought to be done.
As to Ministerial visits, during 1963 the Board of Trade Ministers, as my hon. Friend will remember, made major visits to the Middle East, Russia, Canada, America, Japan, and a large number of shorter visits were paid. Recently they visited the Caribbean and part of South America—the Secretary of State has been to Spain—Israel and 832 Turkey. I myself, as my hon. Friend was good enough to point out, have just returned from a visit to the Maghreb countries. Visits were also made in the last few months to the United States and to Europe.
I regret that I do not have time during this debate to answer all the remaining questions which were put to me, but I can assure my hon. Friends that the points which they have made will certainly be given our close attention. We shall do our utmost to bring the maximum number of V.I.P.s to visit Britain. It is not only a matter of money, I can assure my hon. Friend the Member for Reading. We will encourage outward missions whenever possible. I should like to draw particular attention to the work we have already tone in the simplification of export documents. Export councils we believe in. I have often paid tribute to the work done by so many businessmen in that regard. Considering the future of the Western Hemisphere and what an export council could do, we may need to set up a number of smaller bodies. As for a Commonwealth export council, I have already suggested that I think the Commonwealth countries too diffuse for one single council. It may be better to have several smaller councils.
I should like again to thank my hon. Friend for what he has said in this Motion, and for what he said in his speech, and to say that I will willingly and gratefully accept that Motion. I congratulate him again on all he has been good enough to say today.
§ Question put and agreed to.
That this House welcomes the increase in British exports in 1963 and, since economic growth in the United Kingdom depends on a continuing increase in exports, notes with approval the wide range of services to exporters provided by Her Majesty's Government; and calls upon Her Majesty's Government to ensure that British exporters continue to receive all possible assistance.