§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
8.51 pm§ Mr. Kenneth Carlisle (Lincoln)I am grateful for the chance to hold this debate on a major campaign to persuade the British to buy British, and I am very glad that my hon. Friend the Minister for Trade, who has done so much for British trade, is here to reply to the debate.
No war is a good war, and we are fortunate to be living in an age when wars are no longer seen as solutions, so it is with considerable concern that we should regard the recent rampant enthusiam for a "lovely little trade war". In the past few weeks, the ugly face of protectionism has made a dramatic come-back. Even as I speak, there is legislation in America to tax certain imports.
Some Members of this House have repeatedly called for the protection of British industry as a means of rebuilding British manufacturing, proposing that we copy the Japanese. Let me establish at the beginning that I believe that mindless chauvinism is futile. If we as a country retreat into protectionism, we are dooming ourselves to a market of ready-made, inferior products. We cannot copy the Japanese, simply because we are not Japanese. It is for us, as a trading nation, to insist on fair trade. I believe that protectionism is a perilous form of patriotism, just because it is so disastrous as an economic strategy.
One of the fruits of living in a free society is the freedom to choose what we buy and to buy what we choose. It also turns out to be one of the best ways of creating harmony between nations. The informal relationship of trade between nations is, though not foolproof, the best insurance policy for peace that man has yet devised. How, therefore, have we reached this pitch of trade war fever where there is more enthusiasm for trading punches than for trading nations? It is because Britain, like America. went too far.
We moved from being the kind of country that Adam Smith described in "The Wealth of Nations"—a prudent nation that welcomes commodities from foreign countries when they are cheaper than we ourselves can produce—to a country that now imports more than one third of all manufactured goods. Britain is the fifth largest industrial economy, but our imports, as a percentage of our gross domestic product, our overall wealth, are 34 per cent., and rising, and they are higher than those of Germany, France, Italy, the USA and —surprise, surprise — Japan. I submit that 34 per cent. is a terrifying and unnecessary statistic.
In the last seven years we in this country have witnessed a radical change of gears. Now we are seeing an exciting reverse in Britain's economic decline, a reappearance of British vitality and a rediscovery of the vigorous inventiveness that is worthy of the country that was the birthplace of the steam engine and the cradle of industry.
The complacency that brought about our decline, and certainly installed in many of us a preference for imports that were better designed, cheaper and more reliable, has been checked. The institutional arthritis — a disease characterised by too many regulations, too many laws, too powerful unions, too high taxes and too many interests —shows every sign of remission. We, the British, have taken a very long time to learn to be competitive and we still cannot afford to make a wrong turn, but the facts and 389 figures show that we are going in the right direction. We simply cannot afford to retreat into protectionism. Instead, we must use the tried and true formula of investment in high technology to create growth and to improve our living standards.
However, there is something that every citizen in Britain can do as well. Every man, woman and child in this country can influence the future of this country—and influence it powerfully—by what they buy. That means, first, looking for a product that is British made and, if it is good enough or, better still, if it is better, then buy British. No consumer should be deprived of choice, but if every British consumer makes just a little effort to see if a British product is available, to compare and, if it is good enough, then to buy British, the result will be greater job security and greater creation of jobs.
I am not saying that that is easy. We are now so inundated with imports that, if we tried, we probably could not find a British typewriter, or dishwasher, or car radio. I am saying that all we have to do is to try.
Two organisations in this country are dedicated to raising our consumer consciousness. One of these is Think British. It has published some troubling and fascinating statistics. Import penetration of all manufactured goods has risen from 25 per cent. in 1981 to 34 per cent. today. Without a campaign to think British, imports will certainly grow. The average household of a husband, wife and two children spends about £110 a week on consumer goods, services, food and drink. Of this £110, an average of £30 is spent on imported goods, and this is rising.
Research carried out by The Economist intelligence unit shows that if consumers switched just £5 a week, which is now spent on imported products, to quality British products, within two years the result would be the creation of 580,000 jobs and a £1.5 billion improvement in the balance of payments. I am sure that is of great interest to my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) because jobs are of great importance to him. That improvement could be achieved by the modest switch of £5 a week from imports back to quality British goods and services. If more than £5 a week were switched, the results would be even better.
These statistics are striking, but more startling is the fact that they do not seem to be taken to heart by the British public. To change this, I urge the acceptance of three duties—duties that are the opposite of trade duties—which are intended to lay to rest any attraction that those dated trade duties might have.
The duties that I have in mind are a duty on those who manufacture and market goods in this country, a duty on the purchasers and a duty on the advertising agencies and the media. As I have emphasised from the beginning, manufacturers have to produce goods of the right quality at competitive prices and deliver quickly when they say they will. West Germans buy goods produced in Germany because they are good, not because they are cheaper or because West Germans are patriotic. That procedure is right. For that to occur here, we look to the manufacturers.
A very promising effort in this direction has been the Better Made in Britain initiative. This group was set up to jolt manufacturers into producing what retailers really want. It holds exhibitions where retailers exhibit products that they import and where one hears the often depressing stories that led retailers to look outside Britain — predictable sagas of poor quality, unrealistic times and 390 delivery dates not kept. In those exhibitions hungry and determined British manufacturers prowl and plot how they can outmatch the competition. Manufacturers have learnt the lesson of the 1980s, that we simply have to work harder and manage smarter.
The figures of Better Made in Britain estimate that for every £35,000 of imports, one job is lost. That is a gloomy statistic. But there is also a growing number of success stories. One example is the Stuart Mensley Knitwear company. In 1983 the company employed 120 people. Today it employs 500 people because of contracts that grew out of Better Made in Britain. There are many other examples, too.
The second duty is on the purchaser — both the retailer and the consumer. Over Easter I was in the United States of America. Its trade deficit in 1986 towered towards $170 billion, or 4 per cent. of its gross domestic product. Such a huge deficit is too great to sustain. It poses terrible threats to the world economy, especially as it leads inexorably to protectionism. Everywhere I went in the United States of America I was struck by the abundance of foreign-made goods to the point of absurdity. I found a 100 per cent. cotton shirt in a shop in Greenwood, Mississippi — the land of cotton — that was made in China. America is in a severe crisis simply because it has abandoned the label "Made in the USA". They have dealt with that problem by going deeper and deeper into debt. That is a warning to Britain, if we need it.
If we look in our own homes at our televisions, cookers, refrigerators, irons, washing machines, vacuum cleaners and kitchen clocks or at the clothes and shoes in our cupboards, we can see how far we have gone in the same direction as the Americans. One will not always want to buy British, even after one has thought about it, but the thing is to think British. The job saved by buying British could be one's own.
The third duty is both a duty and a challenge and it is aimed at the members of our society who have already made spectacular profits from selling British — the advertising and media folk. I want them to invest the skills and talents so brilliantly evident in the selling of British in the buying of British. Seven different agencies worked on the publicity programmes surrounding the three major privatisations — £12 million was spent on British Telecom, £29 million on the sale of British Gas and £6.5 million on British Airways. I propose that the agencies which have been instrumental in those privatisation campaigns should each create one television advertisement which will bring home to the British consumer the vital connection between the shopping bag and the dole queue.
We need a nationwide campaign which brings the same sense of urgency and possibility that inspired more than 3 million people to buy shares for the first time in British Telecom, British Gas, British Airways and other privatised companies. I challenge those writers, actors and actresses, designers and cameramen to invest their imaginations and skills in a campaign that will make every consumer a shareholder in Britain's future. As British advertising is art art envied and exported throughout the world, I feel that the campaign will be a celebration of that unique British product as well. At the very best, it should be "pure genius".
I have made it clear that Britain cannot afford to retreat into protectionism, which serves only to protect poor design, inferior workmanship and irresponsible delivery. British products must be bought because they deserve to 391 be bought, because they meet the standards of quality and service. Above all, we must all be involved in this battle to regain Britain's competitive edge in the battle for jobs and for the revival of growth. We need a united front — a productive work force, the creative talents of the highly skilled persuaders and, finally, the conscious and caring consumer, the British public. If we can form a consensus, it could mean—we must bear this in mind—the creation of more than 500,000 jobs in two years. I believe that that is a goal that we all support.
§ 9.7 pm
§ The Minister for Trade (Mr. Alan Clark)I am grateful to my hon. Friend the Member for Lincoln (Mr. Carlisle) for raising this extremely important topic and especially for the lucid and persuasive way in which he put his case, the way in which he set out his three goals and the imaginative and compelling way in which he discussed those three possible approaches. I assure him that we fully share his keenness for competitive British goods not just to capture a larger share of world markets but to recapture a larger share of our home markets. The whole House knows that we must expand our industrial base if we are to secure for the United Kingdom the extra jobs and living standards that we want.
After six years of steady growth, exports of manufactured goods are at an all-time record; and they look set to grow even further this year. Manufacturing industry should therefore grow faster than the rest of the economy. Britain's successes in exporting are well known and, of course, they are to be encouraged and applauded. But it must be remembered that a pound earned at home is of absolutely equal value to a pound earned abroad.
Last year, as my hon. Friend reminded us, imports again grew faster than exports, with all the signs, I am sorry to say, that they will continue to do so this year. A sustained effort will be needed if we are to ensure that the growing demand in the home market is to be met by our own industry and not someone else's. It is true—I know that my hon. Friend will admit this—that most of the free world trading nations, even West Germany, which has been acknowledged as successful, import on a substantial scale. We have to import that which we cannot make.
One of the regrettable elements to which my hon. Friend drew attention is the fact that, with the glut of imports, we have lost the capacity to make certain things in our own country. Even were the British people to be alerted in the way he suggested to the possibility of choosing a British product and testing its qualities against a foreign import, the British product simply does not exist. We all regret that. It need not necessarily be a permanent omission. British manufacturing is recovering at a fast enough pace for it to begin to look seriously at the possibility of returning to some of the markets and some of the products that it has had to cede in more difficult times. But that is a second stage. We have to lay the goundwork along the lines that my hon. Friend suggested.
Of course, even when we can make certain things, there can be sound economic arguments that mean that it is preferable to import and to use our own resources for something that we do better. Of course, we cannot ignore the matter — I do not think for one moment that my hon. Friend intended to—of customer choice. But—I cannot emphasise this strongly enough—I recognise the 392 concern about our level of imports and about whether employment opportunities are being put in jeopardy by the constantly rising level. Although many of my own instincts are to support a "Buy British" policy, I recognise that it will be effective only if it is equated with a customer's need to get value for money.
Of course, protection is not necessarily the way to a better trading performance. Insulating domestic industries from the stimulus of international competition, as my hon. Friend properly reminded us, encourages inefficiency and resistance to change. But the Government have already put considerable effort into ridding British industry of such handicaps. Industrial relations are being transformed, and our reputation for quality is gradually and painstakingly being restored. Our policies derive from certainty that industry has to be competitive. We are therefore concerned to create the climate in which industry can thrive. I do not propose to drench my hon. Friend or the House with the statistics that we hear often enough about the progress that we are making, but the conditions in which British industry is now operating have improved out of all measure.
When it comes to front-line action in making and selling goods, it is the responsibility of each supplier to make sure that he knows what the customer wants. That makes communication between buyers and sellers vitally important. In addition, the supplier must then try to match the quality, design, delivery and price expectations of the customer. Getting the communication right is not entirely a matter for suppliers. A great deal of power is wielded by purchasers, and the large ones especially have a responsibility to use that power effectively. The Government believe that it is in purchasers' own interests to use their commercial influence to help to improve the competitiveness of their suppliers. They stand to get better value for money, plus the cost and efficiency benefits of having a strong supplier base close at hand.
That has certainly been the Government's approach to public purchasing. Our guidelines on public purchasing require public purchasers to secure best value for money. They remind public purchasers that, by deploying their massive purchasing power of £40 billion per annum on assets, goods and services to ensure the development of constructive buyer-supplier relationships, they can help to ensure that their own needs are met most cost-effectively and that the wider competitiveness of British industry is enhanced. In essence, we want public purchasers to buy products, processes and services that reflect the requirements, in terms and price, of world markets.
We can all draw encouragement from the fact that our public purchasing is 95 per cent. British sourced. That shows that, even if the strict guidelines relating to the quality, delivery, appropriate meeting and conformity of needs are applied, and applied scrupulously, they do not necessarily exclude a 95 per cent. British purchasing content.
The practices that public purchasers are asked to follow to achieve this include an early dialogue about their requirements with potential suppliers; encouragement of innovation; specifying requirements in performance terms rather than detailed design which may stifle innovation; framing specifications around appropriate standards to enable economies of scale and to help exports; encouraging suppliers to be assessed to British Standard 5750 — the standard for quality systems; and, where appropriate, insisting on independently certified goods to 393 reduce in-house inspection costs and costly failures; maintenance of even ordering patterns to allow efficient production planning; and debriefing of suppliers on request.
Similar initiatives are being taken by the more forward-looking parts of British industry. "Positive purchasing" is a phrase which is increasingly cropping up in discussions with companies. It describes a practical way of stimulating greater activity in the economy. Like the public purchasing initiative, it involves organisations in carefully examining their purchasing practices. The aim is to ensure that they are getting the best possible value from their suppliers in terms of quality, design, price and delivery. It involves them in developing constructive partnerships with suppliers which will encourage the development of more competitive products. This approach, if widely adopted, should provide opportunities for the purchasers to obtain better value for money and for British manufacturers to prove their worth and expand their markets.
The retail sector in particular, with its enormous purchasing power, is potentially very influential. My colleagues and officials in the Department of Trade and Industry have been discussing these issues with the major retail companies. More generally, because positive purchasing policies must start from a commitment at the top, my colleagues are meeting the chief executives of major companies to encourage more to follow the good example of those, such as Marks and Spencer, which have combined a thoroughly commercial approach with very high levels of United Kingdom sourcing.
The process of communication is also greatly assisted by the enterprise of such initiatives as Better Made in Britain and I was especially glad to hear the tribute paid by my hon. Friend to that organisation. Those exhibitions make an important contribution to getting across the message that the quality of British goods and the efficiency of British companies have improved faster than consumer's attitudes towards them. That change is the key to widening the awareness that I believe will achieve the results which we all want and which have been shown can be achieved in public purchasing.
That is achieved by bringing the requirements of industrial purchasers and retailers to the notice of large numbers of suppliers. So far, the exhibitions have covered clothing, knitwear, footwear, home furnishings, lighting, carpets, furniture, textiles, do-it-yourself kits, building products and hardware. All those have been extremely effective in heightening the awareness of purchasers to British alternatives, often in cases where purchasers did not realise such alternatives existed until they attended the exhibition and realised the full scale of what was available.
The "Think British" campaign to which my hon. Friend referred is also relevant. The campaign specifically aims to raise consumer awareness of the quality of British goods and to encourage consumers to seek out competitive United Kingdom products. My hon. Friend suggested an advertising campaign, and I like that idea very much. I can see that his challenge to those specialists who have made very large sums of money from advertising for various privatisation campaigns should be considered very seriously by those organisations and I hope that we will hear more about that idea.
394 The Department is already supporting the "Think British" campaign to research ways of setting up a general advertising campaign. Where there is an element of direct Government support—as my hon. Friend is aware, and the House accepts with varying degrees of tolerance—that must be consistent with the treaty of Rome. It must draw consumers' attention to the quality of goods built to certain recognised quality criteria rather than relate them to any particular national origin. Industry, like the Government, is bound by its treaty of Rome obligations. We cannot discriminate, directly or indirectly, against the products of other member nations. Any advertising campaign which has Government sponsorship must have regard to those obligations.
A great deal is being done, both by Government and by industry, to assist in the all-important process of communication between users and suppliers. I draw the House's attention also to the practical help my Department provides to companies which, in trying to match the expectations of their customers or potential customers, find that they need to improve the quality, design or marketing of their goods.
In 1983 we launched the national quality campaign as part of our wider effort to increase the competitiveness of British industry. The aim was to produce in industry a total commitment to quality. After extensive launch promotions, the campaign concentrated on encouraging the total quality approach on a sectoral basis, and on companies interested in promoting quality with their suppliers and sub-contractors. The response from industry, particularly the willingness of management and others to work constructively together, with support from the Department of Trade and Industry, has been most encouraging.
British industry has advanced in its recovery and the quality of its products is greatly improved, yet a certain hangover from earlier days, when people regrettably bought the foreign product because it was chic or fashionable to do so, still colours the attitude of consumers. All British manfacturers should return to their former practice of proudly and confidently marking the origin of their products. The imprint "Made in England" or "Made in Britain" has largely disappeared. One wag has said that it is more often found on goods from Taiwan than on goods made in Britain.
An essential part of the campaign my hon. Friend suggested is for consumers to have all the help we can give them in determining whether products are made in England or Britain. The treaty of Rome does not prevent British manufacturers from marking the origin of their products. The reputation of manufacturers is such that they should consider this seriously. The House should be grateful to my hon. Friend for his service in putting the argument so succinctly. It is an important subject. I hope that he will remain in touch with me and my Department and that the original and imaginative challenge he threw down to the various advertising agencies will be considered seriously by them.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-three minutes past Nine o'clock.