§ 4.36 p.m.
§ Sir Geoffrey de Freitas (Kettering)
I am grateful to hon. Members, in all parts of the House, for making their speeches much shorter than they intended so that I should have this last Adjournment debate. We started off this morning with the difficulty of a great number of statements from the Front Bench and then we lost 23 minutes on a Royal Commission. I am all in favour of ritual and ceremony, such as when we have to attend the opening of Parliament and go to the House of Lords, but I regarded that lost 23 minutes as a reflection on us, as it is simply inefficient.
The British footwear industry is an important industry. It produces 200 million pairs of shoes a year and it is the biggest boot and shoe industry in Europe. It employs about 115,000 workers, more than half of whom are in the East Midlands, where the industry has been established for a long time.
We in this country are great buyers of boots and shoes. The average man or woman buys 4.3 pairs a year. Britain is 1976 the second highest consumer in the world, the United States being the first. It is reckoned that about half the shoes bought by women are bought because of changes of fashion and not for reasons of replacement. However, it is not about consumption but about exhort and the industry that I wish to speak this afternoon.
Our industry is built on a firm base. There is a very good and enterprising combined association and employers' organisation and there is an excellent trade union. This has brought about remarkably good relations in the industry. Except for the General Strike, there has not been a large scale stoppage in the industry since 1895.
We also have the world's leading research establishment, the Shoes and Allied Trades Research Association. It is established in the heart of the footwear industry in my constituency in Kettering. Last month, Her Majesty the Queen visited the establishment and, I understand, was most interested in what she saw. Certainly, the work of this Association, which includes laboratory research and consulting services on practical problems, as well as being an arbiter on complaints by the general public against the industry, is recognised all over the world. When I visited the establishment I was fascinated to see the trials. Because of the achievement of this research organisation and of the go-ahead nature of the industry, a fact which I cannot over-emphasise, we have taken the lead in many techniques of manufacture. The industry is a credit to this country. The industry has a good record for exports, especially on the leader side as opposed to the rubber side. This half year exports are 19 per cent. up in value on those of last year and they will probably amount to more than £15 million by the end of the year.
Our exports go to three different places in quantities of roughly equal value, one-third to Europe, one-third to North America, and one-third to the rest of the world, including the Commonwealth. When we ask the industry, "Where are you likely to extend your exports most?" the answer is, Europe. The industry's journal for May said this:Europe is our best potential area for expansion, and advantage has been taken of the reducing E.F.T.A. tariff. Although the E.E.C. external tariff on footwear is higher 1977 than ours, some inroads have been made there, but until Britain enters the Common Market progress will be limited.As to the other part of Europe—Eastern Europe and the U.S.S.R.—the industry recognises that there are great possibilities, but of course the quota system of trade makes it almost impossible to forecast what is likely to happen.
What can the Government do to help? The first point is, of course, through our Ministries. The basis of everything is that it is the duty of the Board of Trade at home and the Diplomatic Service abroad to foster our export trade. I know from what I have seen in missions abroad that trade promotion is interesting, and even those who join a mission and who are not interested in trade, when they get there, and if they get the right leadership, become very interested in it. I want my hon. Friend the Minister of State—I am most grateful to him for coming here this afternoon—to urge his hon. and right hon. Friends when they visit foreign countries and travel abroad—and I hope, indeed, that Members of Parliament will do so also—to make a point of visiting the commercial sections of our high commissions and embassies to show how important they regard it, and to emphasise to the British business communities the fact that they exist.
Secondly, I ask him, when the Government are making trade agreements, not to regard this industry as something which is expendable in negotiation in order to gain some advantage in the export of capital goods. I take three illustrations from three countries. I understand that trade negotiations are going on with the Irish Republic. We must not accept the severe quota restriction we have on our exports to Ireland, of only 165,000 pairs a year. I know it is more than the 1966 quota which is only 20,000. It was stated in a very curious way as 40,000 pieces.
I suppose we must accept the fact that logically footwear for two one-legged men counts as much as footwear for one ordinary mart. However, the fact is that the quota is ridiculously small and we should not take it. Then, Japan. The Foreign Secretary is going to Japan in the autumn, I believe. We must not accept their present total quota of a few thousand pounds worth of footwear imports for 1978 the whole world. That is how Japan shuts out our exports. In Canada there is an enormous tariff, higher than the United States', and in our discussions with Canada we must remedy that.
Thirdly, in the Kennedy Round there are rumours that some of the countries at Geneva have asked all footwear to be excluded. I hope that we can have an assurance that we will not give in to that.
Fourthly, I wish that the Government could find some way of financing consignment stocks. E.C.G.D. cover for capital goods is admirable. It was good, and it has been improved, and I am grateful for that, but it should also cover consignment stocks up to £50,000 worth of stock. One cannot expect the average exporter from this country to be able to carry that in the United States, for example, without long-term low interest assistance.
Fifthly, there is the problem of the working of the docks. I shall not stress this because I know that the Government are well aware of the shortcomings in the docks, but the position must be improved. It is not only good in itself that it should be improved, but it will also prevent the inefficient exporter from blaming his inefficiency in shipping on the chaos in the docks. It will be good in itself, and it will also get rid of the excuse for inefficiency. It is a great industry and in exports it is a tremendous help to us.
Mr. Speaker, raising as I do the last Adjournment, I hope that you will have, as I hope I shall have, a pleasant Recess.
§ 4.46 p.m.
§ Mr. Peter Emery (Reading)
I congratulate the right hon. Member for Kettering (Sir G. de Freitas) on speaking about this industry in the able and sensible way that he has done.
I have one question to pose, which, I think, underlines what the right hon. Gentleman said. The industry believes that its greatest export expansion potential lies within Europe. Many of us who are associated with Europe know that in the negotiations for trade between E.F.T.A. and the E.E.C., many of our friends in E.F.T.A. expect us to take a lead. We are, after all, the largest partner in E.F.T.A. I hope, therefore, that in respect not only of footwear, but of other items, the Government will make 1979 every effort, in individual agreements with the E.E.C., to try to ensure that E.F.T.A. trade within the E.E.C. is expanded. I believe that footwear is an excellent example of the need for greater co-operation between the two trading areas.
§ 4.47 p.m.
§ The Minister of State, Board of Trade (Mr. Edward Redhead)
It is appropriate that my right hon. Friend the Member for Kettering (Sir G. de Freitas) should have chosen this very important topic for this last Adjournment debate before we depart for the Summer Recess, because his constituency is one of the principal footwear centres.
I should like to express my appreciation of the very constructive way in which my right hon. Friend has approached this matter, and also my appreciation of the fact that he has had but a limited time in which to deploy the various points to which he alluded. He will, likewise, appreciate that my reply will have to be somewhat abbreviated, but if it is I hope he will not think that I am treating the points that he has made with anything less than the full consideration which they justifiably deserve.
I join my right hon. Friend in acknowledging the tremendous importance of the footwear industry to the country's economy, and the value of the quite significant contribution which it makes to our export earnings. I also join him in paying tribute to the industry for the undoubtedly remarkable technological advances which have taken place in recent years, which speak very highly for the progressive and forward-looking character of those who are engaged in it, on both sides.
In particular, I join my right hon. Friend in paying tribute to the good labour relations which exist within the industry. They are a credit to the manufacturers both management and workers. I also pay tribute to the part that is played by the trade and research establishments of the industry, to which my right hon. Friend rightly drew attention.
It is a matter of pride that the British footwear industry is among the most up-to-date in the world. This position has been created by modernising plant and equipment, a readiness to experiment and to introduce new techniques—setting 1980 an example which could well be followed by many other industries with the same commendable zeal. If this were to be followed it would, considerably ease many of our current economic problems.
Here it has been the means whereby production has risen despite a diminishing labour force. As my right hon. Friend said, in 1964 production reached the prodigious figure of 202 million pairs. My right hon. Friend spoke particularly about the contribution of the industry to exports. He rightly said that there has been a significant improvement in recent years—over £;14 million worth of exports of footwear in 1964 compared with £12.7 million in 1963. I am happy to say that all the indications are that exports are still rising.
But it is never my purpose, with the responsibilities that I hold today, to encourage anybody to believe that he can look with complacency upon his existing performance. I am sure that those in the footwear industry are not complacent, because these exports, after all, represent only a little more than 6 per cent. of the total production of the industry, and could be considerably improved. What has been achieved is the contribution of a comparatively few firms. I understand that one group in the industry, representative of only 18 per cent. of total production, was responsible for 52 per cent. of our 1964 footwear exports. If this example could be widely emulated we might soon see a welcome return to the position that obtained before 1960, when we were net exporters instead of net importers of footwear.
Early this year additional Government finance was made available for the encouragement of exports, in a number of ways which were announced by my right hon. Friend the President of the Board of Trade. I am glad to acknowledge that the British Footwear Manufacturers' Federation has been quick to take advantage of these new facilities, and, in particular, has taken advantage of the financial assistance which has made possible the market surveys undertaken by the Federation's overseas manager.
Financial assistance is also currently being arranged for inward missions and for participation in overseas shoe trade fairs. I am glad to note and acknowledge the contribution which the industry hopes 1981 to make in the way of exhibitions to be held in the near future in Gothenberg, Dusseldorf and Chicago. I hope that the industry will respond to the progressive lead which has been given by the Federation in this connection.
The difficulties that exist in connection with exports are admitted. I acknowledge that the barriers which have been erected—tariff barriers and others—are formidable. I also acknowledge that to the extent that the Government can assist the industry to overcome some of those difficulties it is their duty to do so. Nevertheless, I am certain that the industry can and will regard these obstacles as a challenge rather than as a deterrent.
My right hon. Friend has referred to some of the assistance that is available, and to the fact that the industry has been glad to avail itself of it. He has drawn attention to a number of factors which affect the performance of the footwear industry. He touched upon the question of the Common Market. The industry acknowledges that it is to Europe that it must look for the most significant potentialities for increasing its exports. I also note the point made on this by the hon. Member for Reading (Mr. Peter Emery).
Hon. Members will not expect me to dilate upon the question of this country's position in relation to the Common Market. The Government's point of view has repeatedly been made clear. Indeed, it was made clear by the Prime Minister only yesterday, when speaking from this Dispatch Box. It is only necessary for me to say that it remains our objective to see established in Europe a wider market embracing the United Kingdom, the countries of the Community, the members of E.F.T.A. and other European countries. I am glad to feel that the industry has been able to take advantage of the facilities that are available through E.F.T.A.
My hon. Friend also referred to the need to consider the possibilities of exports to Eastern Europe and to urge other Ministers to lose no opportunity in trade discussions of pressing for more generous admission of British footwear. That, let me assure him, is not absent from our minds. I am sure that my hon. Friend will be gratified to know that I recently visited Poland and made a particular point of the possibilities of our own footwear industry to supply some of 1982 Poland's needs. I have heard since my return of an order that has been placed for British footwear, the quantity of which I do not know, and I was encouraged to know that the Polish authorities have been persuaded to look in our direction for the possibilities of expansion.
My hon. Friend urges me to make a point of seeing the commercial sections of our posts when visiting countries overseas. Let me assure him that in all the visits I have made in the prosecution of my tasks I have made a particular point on every occasion of seeing them.
§ Sir G. de Freitas
I appreciate that my hon. Friend does that. My point is that he will ask his colleagues not connected with the Board of Trade at all to do the same thing.
§ Mr. Redhead
In that connection, may I say that I have had the advantage of special conferences with all other Departments that have any connection with trade at all outside the Board of Trade, and that is one of the points that I have stressed with my Ministerial colleagues.
§ Mr. Redhead
Yes, even if they have nothing to do with trade.
I cannot comment on the subject of Irish quotas, but I would ask my hon. Friend to bear in mind that the situation is very much in our minds at the moment. He will appreciate that there are currently negotiations with the Irish Republic and, on my hon. Friend's point in that regard as it affects footwear, I can assure him that that is one of the points which are going to be pursued in the course of those discussions.
He touched also upon the Kennedy Round and urged that we should do whatever we can to rebut the attempt on the part of some participants, as he alleges is the case, to exempt or except footwear from the operation of any tariff reductions that may be negotiated under the Kennedy Round. He will appreciate, first, that we have no control of the exceptions lists put forward by other participating countries, but it will be borne in mind that every one of those lists of the main countries has to be justified in those discussions on grounds of overriding national interest. I can only ask 1983 my hon. Friend to accept that his point will be borne in mind in the examinations of such exceptions lists which are now going on.
He made reference to the E.C.G.D. cover for consignment stocks. In answer to a Question from the hon. Member for Louth (Sir C. Osborne) on the 8th July, I explained that it is not possible to extend bank guarantees to cover the financing of consignment stocks abroad. Bank guarantees were designed to facilitate the provision of finance where a contract of sale has already been entered into. It does not apply to goods held on consignment. I hope that the industry will still look to E.C.G.D. for facilities and for the very much wider facilities that have recently been provided, and that they will avail themselves to the fullest extent of the facilities that are there to assist them in expanding the export trade.
I am sure the hon. Gentleman will appreciate that I cannot in the time cover all the points to which he made reference, but they will all be studied with great care and consideration. I would not, for example, wish to dilate on the subject 1984 of dock delays, except to say that we accept that they are a very serious problem.
In view of the statement made by my right hon. Friend the Minister of Labour earlier, my hon. Friend will appreciate that the Government are now possessed of the very important and far-reaching Devlin Report, and he will be also aware that a "little Neddy" has been set up to consider the whole process of transport from factory to ship. These are very, very important studies warranting the fullest and most careful consideration which, accordingly, the Government will give to them. In so far as the footwear industry is involved, I hope that my hon. Friend will feel a sense of satisfaction that that serious consideration is to be given.
I thank my hon. Friend for his contribution, and I assure him that his point of view and his observations will be borne very much in mind.
§ Question put and agreed to.
§ Adjourned accordingly at Five o'clock, till Tuesday, 26th October, pursuant to the Resolution of the House of 3rd August.