§ 11.24 a.m.
§ Mr. Ronald Bray (Rossendale)If the British footwear industry was one which by lack of initiative, bad management, poor labour relations or a poor end-product was failing in its purpose to provide footwear I would not be supporting it this morning in my debate on its future. The simple facts are these. The industry is in general efficient and well-managed and it offers a wide range of footwear to the world in different styles and in different price ranges. It does not object to equitable competition. Like many other British industries, it welcomes fair competition. But to get the issues into perspective I shall quote a few detailed statistics and I express my appreciation of the assistance given to me by the British Footwear Manufacturers Association for supplying me so readily with many of the statistics.
In 1967 the industry produced 190.1 million pairs of shoes. Two years later it had reached a total of slightly over 200 million pairs. But by last year output had fallen to 192 million. In 1967 the industry was exporting 13.3 million pairs but we were importing 53.9 million pairs. We therefore had an adverse balance of slightly over 40 million pairs of shoes. Last year, in spite of strong competition from all over the world, we were able to increase our exports to a total of 20.4 million pairs of shoes, but imports increased also and they reached the level of 79.4 million pairs placing 59 million pairs of foreign shoes on the British market. In five years, therefore, shoe imports increased by 50 per cent. Sales on the domestic market expanded by only about 21 million pairs. This meant that imports accounted for 31.6 per cent. of the market, compared with less than 25 per cent. in 1967.
I now turn to the extremely critical situation which is revealed by production and import figures published by the Customs and Excise for the first quarter in 1972. If the trend that they reveal is allowed to continue the majority of British footwear manufacturers could be faced with bankruptcy. Their profit margins are already cut to the bone, and in the debate we had on the Rossendale footwear industry on 5th July, 1971, I 1806 said that the margin of profit on turnover was about 2 per cent. in that area and the returns on capital were between 7 and 7½ per cent. No firm could get fat on that.
I do not think it is out of order to refer to consumer protection as it applies to quality and suitability of certain types of footwear. British manufacturers have consistently maintained that it is essential for the public to be able to know the country of origin of shoes and other articles of footwear. Recent and exhaustive tests carried out by the Shoe and Allied Trades Research Association have indicated that large numbers of footwear samples coming into Britain are not up to standard, however attractive they may appear. The customer cannot determine the quality of footwear until it has been worn and tested for a certain period of time. The result is that a similar style of inferior quality can come on the market at either a substantially lower price or within an appreciably higher mark-up for the importer.
If we add to this the recent additions to the already extensive list of countries which are currently inundating—I did not say dumping—this country with footwear we find an increase in imports from 22,656,000 pairs valued at nearly £14½ million in 1971 to a total of over 29,603,000 valued at over £18½ million in the first three months of 1972. That means an increase of 31.8 per cent. in numbers in the 12-month period, and 29 per cent. by value, a fantastic figure. Imports into this country from Brazil have increased from 10,000 pairs in the period January-March, 1971, to 170,000 in the same period this year. Comparable figures are: Italy, from 3,706,000 to 4,748,000; Czechoslovakia, 379,000 to 615,000; and Spain, 722,000 to 985,000.
I could go on almost indefinitely. It is no help to any industry in this country that imports of that type should be perpetuated. I calculate that the output per person in the British industry, whether on production or staff, is about 2,000 pairs a year. If the ratio of imports in 1967 had been maintained through to 1971 and 1972, we should have been able to increase the number employed in the industry, if the same level of efficiency was maintained, by 13,000. Instead, I was told in a Written Answer on 4th May that there were 3,771 redundancies.
1807 Along with the decline in numbers of people employed, there has been a decline to slightly over 500 in the number of firms manufacturing footwear or engaged in the industry. When I asked a Question about the issue of industrial development certificates to the industry I was told that over the period of five years only one firm in 13 had received an IDC. We do not know whether this was for expansion or whether it was for the replacement of old buildings.
What will be the future? All the best people these days use consultants. We heard about this in the debate on the steel industry on Tuesday. The footwear manufacturers brought in consultants to obtain an assessment of demand up to 1980. Their assessment is that the requirement for footwear in this country will increase by one-third in that period. Compared with 1971 production, this means that about 83 million more pairs of footwear will be bought by British people in this country over the next seven or eight years. That is a very tasty morsel for the importers, unless British firms are given the opportunity to compete on an equitable basis. We could say that we are giving away to other countries between 35,000 and 40,000 jobs which could well be used here, with a high degre of import-saving.
It is time we reviewed the masochistic policies the Government inherited from their predecessors. My right hon. Friend the Minister for Trade showed extreme courage in bringing in quotas and import tariffs for the textile industry. There is a great similarity between the textile industry's needs and those of the footwear industry. A precedent has been set. Let us see whether it can be followed.
I recently asked my right hon. Friend to tell me the countries from which we could obtain footwear in the United Kingdom. He replied:
Footwear can be imported without restriction from all Commonwealth countries"—I do not take issue with that—and also from all foreign countries except those comprising the Eastern Area. Imports from EFTA countries, the Irish Republic and developing countries benefiting from the United Kingdom's generalised system of tariff preferences are eligible for a nil rate of import duty…Imports from all other sources are dutiable at rates ranging from 4p to 20p per 1808 pair or 5 to 10 per cent. ad valorem. Our trade relations with most of these countries are subject to the provisions of the General Agreement on Tariffs and Trade, the European Free Trade Area Convention and the Anglo-Irish Free Trade Association Agreement. Apart from detailed schedules for origin rules and duty rates in the Anglo-Irish Agreement, there are no specific references to footwear in these agreements."—[OFFICIAL REPORT, 9th May, 1972; Vol. 836, c. 357.]In other words, the industry in this country is open to competition irrespective of low wage rates elsewhere and the opportunity to obtain currency by subsidised exporting. That is the challenge which is being forced on the industry. I have already said that it welcomes fair competition, and it will continue to do so, but this cannot be considered as fair competition. It can be seen that I have gleaned from numerous Questions that we are just holding open house to all firms which wish to import by virtue of well-intentioned agreements and negotiations which we entered into over the years but which are now rebounding to our detriment.I am not against helping the developing countries. I am all for it, but I fail to see why they should be helped at the expense of British employment and the British economy generally. My right hon. Friend's first step should be to advance to 31st December this year the UNCTAD agreement whereby footwear becomes exempted. Strong consideration should be given to a tariff, and a quota based upon 1967 figures should be applied.
It is not asking too much that the Government should provide the right climate for British footwear manufacturers to produce footwear on equal terms for British people. The Government should also provide the environment in which discerning footwear users in other parts of the world can take full advantage of the availability of good-quality British footwear at competitive prices.
§ 11.39 a.m.
§ Mr. William Whitlock (Nottingham, North)Whilst I cannot completely support the hon. Member for Rossendale (Mr. Bray) in all that he said I can support his general case, and I congratulate him on having raised the difficulties of this very important industry. I share his concern for the future of the 1809 British footwear industry, an industry which is of great importance in the East Midlands.
I have sympathy with the hon. Member also because he comes from an area whence came an old friend of mine who was a shoe designer. He came to Leicester and became the General Secretary of the National Union of Boot and Shoe Operatives. As the hon. Gentleman very well knows, the footwear industry has a record of labour relations which is second to none. I do not think that there has been an official strike on the manufacturing side for well over 50 years. The man to whom I refer, and who died tragically in his early forties, was Richard Gregson, who came from the hon. Gentleman's constituency.
In reply to Questions put by the hon. Member a while ago, the Minister gave the information that in 1971 British footwear products enjoyed some 83 per cent. of our domestic retail trade. I find that a rather surprisingly high figure, though I am glad it is as high. Nevertheless, I find it very upsetting that Continental footwear, particularly French and Italian, commands such a large percentage of our domestic retail trad. I see that in 1971 the French and Italians together exported to this country no fewer than 13.6 million pairs of shoes, and that over the last five years their total export to the United Kingdom has been 45.6 million pairs.
I do not believe that the reason is that the Continental products are of better quality, though perhaps the British industry has been somewhat at fault, in slipping behind in design appeal, and in allowing, by lack of salesmanship and promotional activities, British women to believe that French and Italian footwear is superior in quality and fashion.
But I agree that the great threat to our own footwear industry comes from cheaper imported footwear, and it seems to me that the footwear manufacturers can blame for this state of affairs the main retailers. A very large percentage of footwear sold in our shops is sold through multiple shops. I should say that more than 80 per cent. of the footwear sold here is sold through the outlets of two huge combines. One is the British Shoe Corporation, moulded together by Sir Charles Clore, which in 1810 eludes Dolcis, Manfield, Freeman Hardy and Willis, and a number of other retail outlets. The other combine is that brought together by Sir Isaac Wolfson.
On our High Streets everywhere we find a number of names of footwear firms all of which are really one concern. The impression is given that there is a great deal of competition in the trade, whereas there is really very little competition. Again, because of the great number of firms operating the impression is given that there is great diversity of consumer choice, whereas there is very little such choice because in the main the products on sale in those shops are very similar. They may have a different presentation in one shop from another. or a different label, but they are largely the same product. Even in the private shops the goods are in many cases produced in the factories of the main multiples.
With an almost monopoly position on the retail side and the ownership of a percentage of the manufacturing side has come rationalisation of manufacturing and the closing of British footwear factories. The closing of the factories has come about because it is more profitable to sell in all those retail outlets cheaper foreign footwear than it is to employ British craftsmen to make better shoes. In these days of injection moulding much of the craftsmanship is disappearing, and this injection moulding process enables some of the countries to which the hon. Gentleman has referred to produce that cheaper kind of footwear without the need for the craftsmen whom we have had for so long.
I therefore feel that the squeeze on the manufacturers and the difficulties which the hon. Gentleman has outlined and stressed come largely from the monopoly multiples in the retail trade, which have almost a stranglehold on the manufacturing side. I hope that the hon. Gentleman, along with the representatives of the manufacturing side to whom he has referred, will look very closely at that position, and that the Minister will also be able to deal with what is virtually a monopoly situation.
§ 11.46 a.m.
§ Mr. Arthur Davidson (Accrington)I, too, congratulate the hon. Member for Rossendale (Mr. Bray) on raising this 1811 issue. In doing so, he has done a service not only to the footwear industry but, what is as equally important to me—and, I am sure, to him—to North-East Lancashire as a whole. Whilst Rossendale is perhaps the centre of the footwear industry in North-East Lancashire, it is by no means the only area which has many people working in that industry. Many of them work in my constituency, and also in the constituency of Burnley.
Whilst I do not wish to widen the debate, nor would I be permitted to do so, I may say that one of the problems in North-East Lancashire is that if an industry declines, if a factory closes, there is a marked tendency—and over the years the tendency has probably been more marked there than in any other region—for young people to leave the area and see work elsewhere, perhaps in the Midlands or in the South-East. As a result, North-East Lancashire has developed a distorted age structure. It has too high a proportion of old people, and a shortage of what I would call the people of working age. The obvious result is that the area tends to become debilitated.
As the Minister will know, I am due to meet him the week after next to dicuss the position of North-East Lancashire and, in particular, a factory closure in my area involving some 300 people. I certainly do not expect him to comment on that matter now, but one of the results of the decline of basic industries such as footwear and textiles upon which North-East Lancashire has depended for so long has been an extra need for help to bring in alternative industry.
One of the matters on which I would like to draw out the Minister, although I do not expect a definite answer now, is whether, because other areas in North-East Lancashire have now become intermediate areas, North-East Lancashire should not become a full development area. For a long time the reason why we have given intermediate area status was to attract new industries through special inducements. Now that the rest of Lancashire has been given intermediate status—I do not complain about that: I am not so parochial—the special reasons for coming to North-East Lancashire do not exist.
1812 One of the problems that North-East Lancashire has to face is the challenge from the new central Lancashire town, which I am rather surprised to discover, contrary to what we have been told, is also to be given intermediate area status. We were always led to believe, even those of us who were not hostile to this new town, that the old areas were to have intermediate area status and special help which was not to be given to the new town because it would act as a magnet and draw away young people, further debilitating the old areas in Lancashire.
Returning to the main theme of the debate, the footwear industry, I was interested to hear the hon. Member refer to what he called a consumer protection issue. He was right to do so. While I welcome the modest measures in the new Trade Descriptions Act, of which I was a sponsor, I have always felt that the Act should have gone a little further. I would like to see it made obligatory for all goods which enter this country unmarked and which could lead people to believe they were made in Britain to have a special mark put upon them. In North-East Lancashire, and of course elsewhere, people believe that when a product has no mark on it it is made in this country. They also believe that when goods are made in this country they are of a higher quality. This is not always the case, but it is frequently and is certainly so in the footwear industry. If such an order were introduced it would assist people to know what they were buying.
I have always been anti-protectionist and would not argue a protectionist case here, but if the British footwear industry is to survive it must be guaranteed a fair share of the home market. As with the textile industry, so with the footwear industry; one of the reasons for its decline is that it has over the years lost more and more of the staple home market, which has led to the need for special assistance.
§ 11.55 a.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)The whole House will be grateful to my hon. Friend the Member for Rossendale (Mr. Bray) for raising this subject and for the constructive manner in which he has again initiated what has been a fairly wide-ranging debate on this important 1813 subject. He speaks with considerable authority on this subject and his constituents are very much concerned with the industry. I am likewise grateful to the hon. Member for Nottingham, North (Mr. Whitlock) and the hon. Member for Accrington (Mr. Arthur Davidson) for contributing to the debate.
May I say first to the hon. Member for Accrington, who rather widened the debate into general regional policy, that it would probably be inappropriate in this debate if I were to indulge in a long dissertation upon boundaries and the status of certain areas. I understand his point and I look forward to discussing the matter with him. We shall also be discussing this in the light of the Industry Bill now going through the House and the White Paper on regional policies. I am however grateful to the hon. Member for alerting us to the sort of points he will be making.
This is an important subject. As my hon. Friend has said, there are approximately 100,000 employed in it and in 1971 it had an output of £294 million. We should not overlook the substantial export element in the industry which in 1971 amounted to £36 million or about 12½ per cent. of output. There has been a fairly substantial rise recently in exports.
My hon. Friend touched upon some of the difficulties being encountered by the industry in the debate he raised before the Summer Adjournment in July last year, and again today he has drawn particular attention to the impact of our trading policy on the industry. The manufacture of boots and shoes has traditionally been an industry with relatively small firms. While there are some larger enterprises this is still the broad picture today. The industry is concentrated in a number of traditional areas and the constituencies of my hon. Friend the Member for Norwich, South (Dr. Stuttaford) and of my hon. Friend the Member for Rossendale are good examples. Hon. Members opposite will realise that it is very much a localised industry. In these areas it is a source of particular local pride as well as being a large employer of labour.
I endorse everything that has been said by the hon. Member for Nottingham, North about the excellent industrial relations that have prevailed for a long time 1814 in the industry. Would that others would emulate! This industry like other industries has seen changes in recent years. There have been changes in techniques. materials, working conditions and in the market and its demands. This has called for adjustments in traditional ideas of what to make and where to sell it.
In this industry as much as in any other, flexibility—I do not refer to the goods themselves—is needed above all in the mind of management at all levels. Change is a fact of industrial and commercial life and the greatest rewards always go to those who welcome what change has to offer. This means identifying the best market opportunities and specialising in meeting them. There is a marked trend in British shoe production towards higher quality. British craftsmanship married to modern techniques and good quality materials commands respect in the home and export markets. Above all, design must never stand still. This is most important because the product is more and more a fashion product. As my hon. Friend said, the market for footwear is highly competitive at home and abroad. There is no substitute for unremitting attention to the needs of the market and specialising in meeting them.
The hon. Member for Nottingham, North devoted his speech primarily to the question of multiple retailers or distributors who are concentrated in small or very large groups whereas the manufacturers are dispersed. The implication of his speech was that this caused competition difficulties and put burdens on the manufacturer and involved consequent difficulties for the consumer. I note what the hon. Gentleman said. Retailers are influential and they have perhaps rationalised faster than the manufacturers.
§ Mr. WhitlockThe problem is that the retail multiples, in taking over retail firms, also took over a fairly large portion of the manufacturing side, and it was on the manufacturing side that rationalisation had taken place and British footwear factories closed because cheap, foreign footwear was being sold in British shops.
§ Mr. GrantI appreciate that. A certain degree of rationalisation must be expected in an industry whose history has been so diverse and diffuse. However, there is a greater variety of retail outlets 1815 —multiples, independents and mail order firms—than perhaps the hon. Gentleman suggests, which is in the interest of the consumer. The hon. Gentleman perhaps exaggerated a little about the damaging nature of monopolies. However, I understand his point and we shall certainly consider it. We have power to deal with excessive monopolies.
My hon. Friend the Member for Rossendale devoted his speech to our trading policies. Successive British Governments over many years, have pursued policies designed to expand world trade. It is of vital importance to the United Kingdom, with its high dependence on exports, that other countries' markets should be open to us. The hon. Member for Accrington indicated that he accepted this. These liberal trade policies have not been pursued without reasonable regard for the domestic industry, and they create opportunities for that industry to export.
There is a big opportunity coming up. Britain's entry into the European Economic Community next January will lead to the progressive dismantling of tariffs and should stimulate trade in both directions. It will soon give British footwear manufacturers entry on equal terms to a market of another 200 million people —or 400 million feet—which represents a lot of shoes.
§ Dr. Tom Stuttaford (Norwich, South)Does my hon. Friend agree that the EEC countries have greater protection from UNCTAD and that we should come into line with them so that we may compete equally with them?
§ Mr. GrantMy hon. Friend has slightly anticipated what I was about to say. I shall come to that aspect of the matter in a moment.
The British footwear industry, with its long tradition of craftsmanship and quality and its experience of selling in overseas markets, is well placed to take advantage of this potential demand. Equally there are footwear industries in the Six—and my hon. Friend the Member for Rossendale cited some of them—which already have very good markets here and will be intent on expanding them.
1816 My right hon. Friend the Minister for Trade was, I know, impressed when he met members of the British Footwear Manufacturers Federation during their export conference last December. It was an extremely interesting conference at which there were people from the Six concerned with the trade. They applied their minds particularly to the prospects and challenge of British entry into the EEC. I believe that the majority of the industry has taken the realistic attitude that, while there may be some initial problems of adjustment, there remain good long-term prospects, particularly for firms which respond positively and make the most of these new opportunities.
I should like to quote what Mr. Tusa, who was then the president of the British Footwear Manufacturers Federation, said at the conference when he referred to West German competition:
West Germany will be a tough nut to crack but we have cracked much tougher nuts in the world, and I assure you we are going to do it when the time comes".That shows the right spirit; it is the spirit in which the industry is approaching entry to the EEC.I turn to the question of UNCTAD and the generalised system of preferences. I know that those in the footwear industry were apprehensive about the adoption of that system. I and my colleagues received a number of representations, and we understood that they were genuinely felt. There was a debate in the House on this matter as recently as 8th December to which my right hon. Friend the Minister for Trade replied. Perhaps I can usefully reiterate what we have said with regard to the safegards of our scheme.
The United Kingdom has given the developing countries an opportunity which they should use. But we have reserved the right to withdraw or modify these tariff preferences if we find that imports benefiting from them are causing or threatening to cause serious injury to a British industry producing like or directly competitive goods. I assure the House that we shall deal quickly and flexibly with requests from industry for safeguard action. We would not wait until a flood of imports had caused serious injury. We can and will act if the footwear or any other industry shows that serious 1817 injury is threatened. But we must have the evidence. Therefore, the industry should continue its close contact with my Department. I am sure that it will alert us as fully as possible to any dangers in that respect.
My hon. Friend referred to the question of advancing the date of the UNCTAD scheme. I am not sure that I fully understood his point but, if he wishes to know why we shall not adopt the EEC system of tariff quotas until early in 1974, I am advised that this is because we first require the necessary legal powers and administrative machinery. We decided that it would be better to arrange for these when we aligned with the EEC.
My hon. Friend also implied that damage was already being caused by unfair competition from imports. I must make clear that the fact that imports are cheap is not in itself a sufficient ground for complaint. I think the majority of consumers would share that view. But if there is firm evidence of unfair competition I shall be glad to examine it. As my hon. Friend will know, the Customs Duties (Dumping and Subsidies) Act, 1969, empowers my Department to take action against dumping if it is causing or threatening material injury to British producers and if it would be in the national interest to do so. As far as I am aware, no application has been made in the last two or three years for an anti-dumping order.
My hon. Friend the Member for Rossendale and the hon. Member for Accrington referred to the Trade Descriptions Act and the problems of marking. The old orders under the Merchandise Marks Act, 1926, lapsed because of a provision in the Trade Descriptions Act, 1968, that they should continue only for a further three years. They were regarded internationally as non-tariff barriers to trade, and their continuation would have been contrary to our support of GATT and EFTA recommendations that compulsory origin marking should be kept to a minimum. My Department has power to make new orders, but only in the interest of the consumer, not simply to protect the industry.
The Trade Descriptions Bill now before Parliament should go some way to meeting the industry's desire for origin marking since if a United Kingdom firm's name or mark is applied to imported 1818 goods it will have to be accompanied by a conspicuous indication of origin. Its basic purpose——
§ Mr. BrayIs my hon. Friend aware that there are definite instances in this country where British footwear manufacturers put "British made" on their products and the retailers advised them that that was unacceptable?
§ Mr. GrantI must confess I have not had before me specific examples of that. I shall be glad to look at them if they are brought to my attention.
The basic purpose of the Bill, as I was saying, is to ensure that the use of a United Kingdom name or mark in imported goods will not mislead the consumer into believing that the goods are of United Kingdom origin. Certainly any misleading use of a United Kingdom name or mark would be just as well countered by the use of the word "Imported" as by a precise indication of origin, and it cannot, therefore, be said that the purpose will be less fully served.
My hon. Friend also made reference to industrial development certificates and indicated that only one footwear manufacturer in 13 had been granted IDCs over the last five years. I think he probably had in mind the figures I gave him in an answer to a Question on 5th May. These showed that in that period industrial development certificates issued to footwear manufacturers for schemes of 10,000 sq. ft. and over totalled 42, and I take it that the point my hon. Friend was making was that he wished there had been more. I hope he was not implying by his one-in-13 formula that new building development in the footwear industry had been held back by the IDC policy.
§ Mr. GrantI am grateful, because I wanted to assure my hon. Friend that in the footwear industry the IDC policy operates on exactly the same terms as it does in any other industry. Perhaps my hon. Friend will look at the White Paper on our regional policy, which indicates not only a change in areas but, as the hon. Member for Accrington knows very well, also a liberalisation and relaxation of IDC policy.
§ Dr. StuttafordWould my hon. Friend agree that there are many shoe factories not in development areas but in other areas which also need development, and that some of the factories may have to close because of foreign competition and cheap labour and that IDCs are being refused, so that it is not possible to offer alternative work to the men discharged from the shoe factories? Yesterday a manufacturer in Norfolk came to see me because he had been refused an IDC. Would my hon. Friend agree that this is quite wrong? If we are to close shoe factories because of foreign cheaper labour and foreign competition we must give alternative employment to our people.
§ Mr. GrantYes, although I think it would be dangerous if I got into a debate on regional policy in general. I have resisted the temptation to get into such a debate now. Nevertheless IDC policy has to be seen in relation to the broader industrial consequences to the country rather than in relation to just one particular industry. In order to sustain regional policy we need the stick as well as the carrot, and the stick is IDC policy. We have to have regard to the fact that there are many areas, I say with great respect to my hon. Friends, which have greater difficulties and more difficult levels of unemployment than his area. Therefore, it is naturally important that we should encourage through our IDC policy firms which wish to expand to expand in the first instance in development or assisted areas.
Having said that, I may add that I am sure my hon. Friend the Member for Rossendale will be very pleased to know that we find ourselves able, as he will know from the White Paper, to liberalise and relax our IDC policy, and this will be helpful for certain limited diversification in his area as in other areas as well. Certainly I do not believe that the footwear industry need feel that it is unduly impeded by reason of our IDC policy.
My hon. Friend also referred to the decline in employment opportunities in the industry and the lack of development generally. While I think I have made it clear that I do not entirely accept his diagnosis, the steps we have taken in international trade terms, as I think is 1820 clear to him—and I would like to emphasise to the House the Government's latest package of measures designed to stimulate industrial development and regeneration—should have a twofold effect on firms in the footwear industry. First of all, directly, there are the new incentives to investment in the form of tax allowances and regional development grants. Secondly, indirectly, the measures we have taken in recent months will be a boost to consumption generally and that in itself will, I believe, stimulate demand for footwear, and footwear of good quality, to which increasingly the industry must direct its mind.
I know that this industry has its problems and its worries. My hon. Friend and hon. Gentlemen opposite are prefectly right to draw attention to them. Equally the industry has great qualities and very great potential. I believe the industry is in good heart, as I know from what I saw of its conference last year, and I am confident that, with its traditions and high reputation and with the encouragement and help of our present policies, it will be able to face the challenges which lie ahead. I believe a successful future is well within its grasp.