§ 11.42 p.m.
§ Mr. Terry Walker (Kingswood)
This debate highlights the short-time working in the footwear industry in my Kingswood constituency. This is a very important matter, and it is not confined to my constitutency. It concerns many other parts of the country where footwear is the main industry. Three of my hon. Friends—the hon. Members for Northampton, North (Mrs. Colquhoun), Rossendale (Mr. Noble) and Norwich, South (Mr. Garrett) have asked to be associated with the debate, and I shall allow time so that they can contribute to it.
We in Kingswood are particularly concerned about the present crisis in the industry, for after a long period when coal mining was our main occupation we developed a strong boot and shoe industry, in Victorian times, and it was a great rival to Northampton for the title of the principal home of the industry. In Braine's "History of Kingswood 1193 Forest", published in 1891, many factories were mentioned, but as well as employing many hundreds of people they involved a host of other people who worked in smaller workshops throughout the constitutency, and even in their own cottages and homes, producing materials that they took to the works once a week. At that time Kingswood and Northampton were the centres of the boot and shoe industry, and there was great rivalry between them.
Up till the turn of the century many of these manufacturers produced in a small way, but at about that time there was an amalgamation of some of the small manufacturers, in which a company now known as G. B. Britton and Sons came into being. As smaller manufacturers faltered, Britton's advanced. When the changes in fashion came in, with lighter and more flimsy shoes being produced, the Kingswood firms started to go out of business, but Britton's was well to the forefront, with moulded-tread shoes, after the Second World War. Tuf made a considerable impact on the market.
By then, almost all of the smaller manufacturers were in great difficulty. Kingswood watched many of them go out of production and eventually out of existence. It was a sad day when the Ward White group of Northampton took over Brittons, because Brittons had been the jewel in the crown of the footwear industry in Kingswood. That meant the end of the old war between Kingswood and Northampton, a war that Kingswood had lost, because Brittons was gobbled up. That was a measure of our decline.
I hope that I have shown why Kingswood is so worried by the present position in the industry. Brittons employs about 600 manual workers, most of whom are now on a four-day week. There have been redundancies in South Wales. The redundancy notices posted on 3rd January in Braemar sent a cold wind through Kingswood, because we know that, geographically, we are next to the factories there. Forty-four per cent. of the labour force in the footwear industry is now on short-time working. The South-West and South Wales have 9,000 workers in the industry.
The increase in the volume of imported cut-price footwear, if allowed to con- 1194 tinue, will cause irreparable damage to the economic survival of the home footwear manufacturing industry. The first repercussions are now affecting the industry in our area. Short-time working in the industry is running at a level 20 times higher than in manufacturing industry as a whole. It is a great problem, which makes us very fearful.
Both the manufacturers and the trade unions have for some time been calling upon the Government for immediate quota restrictions on imports, many of which enter the United Kingdom at prices which bear no relation to the costs of production. In this respect the manufacturers and trade unions are at one about what should happen. This is a great strength of the argument we are putting forward all the time.
We can no longer be a free market while others have restrictions. There is an element of dumping on our market. Other countries already have restrictions, and, therefore, if there is to be dumping anywhere it will be on the United Kingdom.
All who work in the industry or are associated with it in any way agree that it is in a serious position. It is realised that getting anti-dumping duties imposed may be too slow a process. I think that it would be too slow in the present crisis. Quota restrictions must be imposed now.
We also believe that a broad-based inquiry must be instituted by the Government. The study carried out by the Department of Industry gave us only the position, and not the answer. Many of us already knew the position. I pay tribute to it, but it is by no means the answer. The Government must make up their mind. The real question is whether the footwear industry is expendable. The industry has lost 20,000 workers over the past 10 years. If the present trend is not reversed there will be redundancies, factories will close, men and women will lose their jobs, skills will disappear, and we shall be completely reliant upon imports from abroad. Not only Kingswood, but the rest of the country will be affected.
When 10 years ago my right hon. Friend the Secretary of State for Industry represented the part of Kingswood that I represent there were many more factories and many more people working in 1195 the industry. The figures given to me by a trade union indicate that the number of union members in the footwear industry has halved in Kingswood. That is something that cannot go on for another 10 years. I do not think that it can continue for more than a few years. The rest of the country will be affected, as well as the traditional homes of the footwear industry.
I impress upon the Government the need for action now. There is no reason for delay. The position is well known, and is appreciated by all who are taking part in the debate. I hope that when my hon. Friend replies he will give the workers and the manufacturers in the industry a definite assurance of their position now. The present position is so critical that we cannot allow matters to be delayed further. Even now many people in the industry suspect that the action that we implored to be taken so long ago might be too late. I impress upon my hon. Friend the need for action now.
§ 11.47 p.m.
§ Mr. Mike Noble (Rossendale)
I shall be brief in my comments on the present situation. I shall concentrate on the situation in Rossendale, although the debate is about short-time working in Kingswood.
My hon. Friend the Member for Kingswood (Mr. Walker) said that the problem was not peculiar to his constituency. I have the latest figures from the Lancashire Footwear Manufacturers' Association concerning short-time working in an area including my constituency. On 31st December, 50 per cent. of the women and 43 per cent. of the men employed in the footwear industry in Rossendale were on short-time working, and had been for some time. Indeed, some factories in the area have not recovered from the three-day working week of last year. Some of them have had scarcely any full-time working since that time.
The situation is not just one of short-time working. Rossendale is not a wealthly area. Many families depend upon two incomes to sustain them. On a situation in which 50 per cent. of the women and 43 per cent. of the men are unable to take home a full wage we can 1196 imagine the position that will face such families when the weekly bills have to be paid.
Shortly before Christmas there was an Adjournment debate on textiles. The textile industry is the second most important industry in my constituency. There is a close association between the footwear industry and the textile industry. There is a situation in textiles matching that in footwear. I hope that the Minister, when considering the measures which are necessary to meet this crisis, will bear in mind not just that we have relations with other nations which are exporting footwear to this country but that we represent the constituencies involved. I ask my hon. Friend to consider the desperate circumstances which face so many of the families who depend for their livelihood on footwear.
§ 11.50 p.m.
§ Mr. Robert Boscawen (Wells)
I am grateful for the opportunity to intervene briefly in this debate. I, too, have the headquarters of a large footwear organisation, perhaps the largest in the country—C. and J. Clark—in my constituency. As many hon. Members will know, it has been on short-time working for a considerable period, which has affected the whole of the West Country, where it has factories. This short-time working is having a harmful effect on town and country areas.
I congratulate the hon. Member for Kingswood (Mr. Walker) for raising this subject. As he said, there is an ill wind blowing from the east which affects the industry. The Comecon countries have undoubtedly been exporting to this country for a considerable period at prices below the cost of production. There has been a lack of faith on the part of those countries, in that they have not let this country know that they intended stepping up the export of shoes in 1974. They did so, and last August the industry made strong representations to the Department, asking it to do something about the situation. The industry is disillusioned about applying for anti-dumping legislation. It wanted something quicker to be brought in—something in the nature of a quota system which would operate at once. We now learn that the quota system is not possible.
We are disappointed that the Department is not able to operate a quota 1197 system. We believe that anti-dumping legislation is far slower, more cumbersome and less likely to be effective in a reasonable time. We ask the Minister to expedite any measures that he is able to take. Many families are suffering. I ask the Minister to do something now. All representing this industry will be extremely grateful.
§ 11.53 p.m.
§ Mr. John Garrett (Norwich, South)
I thank my hon. Friend the Member for Kingswood (Mr. Walker) for giving me time to speak in this debate. I shall concentrate on a few strategic issues which those of us who have constituency interests would like to see in the Government's mind. The British footwear industry is suffering a slow and steady decline in employment. It is wasting away in the face of foreign competition. It is easily forgotten by Governments. The Government may think that the industry is expendable in the cause of trade policy. However, the industry's case for protection against imports from Comecon countries is overwhelming.
The industry has also borne the brunt of imports from the Far East. I hope that the Government will insist that all the industrialised countries should bear their fair share of imports from these countries. However, the industry faces bigger problems than that of low-cost imports.
By far the greatest volume of imports comes from Italy. I am told that Italian footwear out-sells ours here because of superior design and marketing. I also understand that French and Italian footwear out-sells ours throughout the world, although their costs are broadly the same. I call upon the Government to institute a broad inquiry into the nature and cause of the decline in the British footwear industry.
Some of the questions I want answered are: what is the future of the industry if present trading conditions continue? Who is doing the importing, and why? What can the Government do to help the industry to replace imports from Italy? How can exports be promoted? Do we need a State-supported British shoe export corporation? Is the ownership of the manufacturing industry now too concentrated or too dispersed? What is the effect on the industry of the dominance of the United Kingdom retail trade 1198 by one large corporation? What can the Government do to rebuild the industry through trade, employment, economic, taxation and regional policies? Can the Industry Act be used to help the whole industry, rather than regions of high unemployment, as has been the case in the past? These are the crunch questions that have to be answered soon if action is to be taken in time to revive, let alone save, the British footwear industry.
§ 11.54 p.m.
§ The Under-Secretary of State, Department of Industry (Mr. Michael Meacher)
I thank my hon. Friend the Member for Kingswood (Mr. Walker) for the very constructive manner in which he opened the debate. I shall not be able, in the time available, to answer all the points put to me by my hon. Friend the Member for Norwich, South (Mr. Garrett), but I shall try to sketch the essential position.
In the last decade this most important industry has undergone a considerable change. Employment has fallen by about 22 per cent., or about 20,000 employees, though production has remained steady due to improved productivity, for which workers and management in the industry deserve great credit. I am happy to say that this fall in employment has not caused general hardship because most of the lost jobs were in areas where other work was readily available. At no time over that period did registered unemployment in the industry exceed the minimal figure of 2.2 per cent. In the assisted regions of Great Britain, where jobs are less plentiful, employment in the industry actually rose by about 300 between 1963 and 1973 and in Northern Ireland it went up by about 1,000. I shall return to the immediate employment situation later.
As in most other developed countries, shoe manufacturers have to face increasing competition from imports from low-wage countries. Demand in this and other developed countries is rising only slowly. But with the emergence of strong industries in low-wage countries, world trade has been rising at 20 per cent. every year. As a result, imports into the United Kingdom went from 18 per cent. to 32 per cent. of consumption in the 10 years to 1973 and the trade deficit deteriorated from about £7 million a year to about £50 million.
1199 Many of these imports are of types like wellingtons, some sports shoes and footwear with textile uppers where, for many years, we have met only a small part of our own needs and have relied on overseas suppliers. The consumer has benefited from low-priced goods. But there has also been import growth in the staple British production lines—what might be termed everyday footwear. Here, import penetration between 1963 and 1973 rose from 11 per cent. to 25 per cent.—a serious increase.
It is against this background that I turn to the immediate problems of short-time working and redundancies which are troubling hon. Members. I share their concern. The effects are particularly unhappy in those localities where the industry is a major employer. These difficulties spring from a combination of causes, but mainly from a falling off in demand at home and abroad. At home the most recent figures show that apparent consumption in the three months to September 1974, the latest period for which figures are available, was about 3 per cent. higher than a year before. However, retailers and manufacturers, faced with rising costs and expensive money, have been keeping their stocks as low as possible. Like most other industries, they are having to husband their cash so as not to put their livelihood and that of all their workers at risk. So production has been cut back. That is the basic problem.
Production for export has also been affected by the state of trade. Demand in America has fallen. Australia has placed restrictions on footwear imports. We have made vigorous representations to the Australian authorities about the effect on our trade, as I think the United Kingdom Federation has done on behalf of British manufacturers. In these circumstances, rising imports of footwear with leather uppers at very low prices from Eastern Europe, especially from Czechoslovakia, Poland and Romania, are causing particular concern. The Government have reached a definite decision that some action must be taken to prevent them from further aggravating the fall in orders and loss of jobs from which the industry is suffering.
Of course, in deciding what form this action should take it is essential to take 1200 account of the fact that the United Kingdom is a major exporter, vitally interested in maintaining open markets worldwide. Thus, although the Government are anxious to assist domestic industry wherever possible, it is understandably anxious not to impede our access to the markets of Eastern Europe, where our exports have in general been increasing in recent months. Nevertheless, and contrary to the impression given by the Financial Times report of 14th January 1975 of the meeting of the Parliamentary Labour Party Footwear Group with the Secretary of State for Trade, it is the Government's intention to approach the Eastern European supplying countries concerned with a view to discussing the difficulties facing British industry at the present time, and particularly where these relate to imports from the three countries.
Some of my hon. Friends will recall that in the autumn of 1972 the Department of Trade and Industry accepted that there were grounds for investigating an application from the Footwear Federation for the imposition of antidumping duties on imports of men's leather-uppered footwear from Czechoslovakia, Poland and Romania.
This led to discussions at official level with the countries concerned, as a result of which the application was not then pursued. In view of the continuing rise in these imports and the industry's difficulties, we are approaching the supplying countries with a view to seeking a solution to the situation. No form of solution will be excluded from these discussions, including voluntary restraints by the relevant countries. We intend to begin consultations before the end of this week. Whilst clearly, at this stage, it would not be helpful to the industry's cause for me to elaborate further, I can give an assurance that we shall fully take account of industry's representations to us on the level of these imports.
Apart from action on footwear imports, in the November Budget the Government announced measures to strengthen the private industrial sector generally and to encourage consumer expenditure. The footwear industry, in common with other consumer goods industries, should benefit from those measures, and one would hope to see 1201 an improvement in company fortunes and in employment in the coming months, as a result of these measures.
Turning to the specific point raised by my hon. Friend, I emphasise that the footwear industry in Bristol is relatively small. Its work force of some 1,300 represents less than half of 1 per cent. of all employees in the area. That is in no way to underestimate the importance of what my hon. Friend said, but we need to have this in perspective. The largest local footwear employer—G. B. Britton, one of the Ward White Group—employs just over 1,050. I am advised—and my hon. Friend confirmed—that this firm has been operating a four-day working week since October, but I understand that there have been no redundancies.
For the Bristol area as a whole, the latest—November 1974—figures for unemployment of 8,500, including 7,400 males, represent a rate of2.7 per cent., which is below the regional rate of3.2 per cent., and the same as the national rate.
Short-time working of this order is, I regret, typical of the industry at the present time. In another factory of the Ward White Group, at Brynmawr, where I understand shoes similar to those at Kingswood are made, about 250 employees have recently received notice of redundancy. Before taking the Brynmawr decision the group examined a number of alternatives, one of which was to introduce a similar number of redundancies at the Kingswood factory. This has now been firmly rejected and the position of Kingswood is correspondingly strengthened. From my own discussions with both sides of industry, I know that the local consequences of the Brynmawr decision are well understood by the Ward White Group, which has emphasised that the Brynmawr factory is not being closed and has 1202 assured my officials that, should conditions improve, it will take steps to increase the number of jobs at Brynmawr once more. I hope that this time is not far off.
In view of reports in the local Press that the redundancies were caused by the Government's alleged refusal to act on imports, I should make it clear that the company informed us that the decision was due to general lack of demand, coupled with excess capacity in the group as a whole.
I end by looking beyond the short-term difficulties facing the industry and towards the study to which my hon. Friend referred. It is essential to place it on a sound long-term footing. The Government believe the footwear industry to have potential for development both in the United Kingdom market and abroad. An internal study of the industry was therefore made by officials of my Department, in particular of the scope for using the powers of the Industry Act 1972 to assist and further develop the footwear industry in the United Kingdom. I repeat what I recently told an industry delegation. The Government certainly do not consider this industry to be expendable. I stress that because my hon. Friend expressed doubt whether that view had been firmly taken. The Government wish to see it sufficiently strong and imaginative to be capable of dealing with free and fair competition throughout the world. I would therefore welcome an early approach from the industry to officials in my Department with proposals on how Government and industry together might determine how best to assure a successful future for the industry.
§ Question put and agreed to.
§ Adjourned accordingly at six minutes past Twelve o'clock.