§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]7.26 pm
§ Ms Margaret Moran (Luton, South)
May I first doff my hat to my colleagues and to you, Mr. Deputy Speaker, for clarifying that it is entirely permissible for us to wear hats in the Chamber? We are thus re-establishing an important tradition for the House, which I hope many more of my colleagues and friends will take up in support of the Luton hat industry.
I take my hat off to the Minister for Energy and Industry for the work that he and his Department have done in identifying the issues that surround the hat industry, particularly the Luton hat industry. The Department's research has been extremely valuable, so our congratulations are in order.
Luton has been long recognised as the centre of the United Kingdom hat industry. It is a centre of international renown. The debate is important for the future of that industry in this, the year of the hat. I thank my colleagues, many of whom are here, for helping me to promote the Luton hat industry by modelling hats earlier. I much appreciated them joining me in the promotion and acknowledgement of the hat industry.
The hat industry is part of Luton' s history, heritage and future. It has given the town a distinctive and rich industrial past, which is visible in Plaiters Lea, the hatters' quarter. It has given the nickname to our football team, which is, sadly, now in receivership. I hope that, like the hat industry, it will soon rise like a phoenix from the ashes—come on the hatters, as they say.
The Luton hat industry has its roots in the 17th century and the production of highly-quality, locally grown wheat, which is ideal for the straw hat and boater. Initially, the straw plait was sewn together for gentlemen's hats, much like the cricket hat. Plait schools soon developed. Allied trades such as blocking, block making, which is, I understand, unique to Luton, and dyeing grew up to support the industry.
In the 19th century, the straw hat industry dominated Luton's economy; it was the feather in our cap. It transformed Luton into a major industrial centre. As I have said, today, Luton is the heart of the UK hat industry. It employs around 1,000 workers, predominantly in small and medium—sized enterprises—often family owned-65 per cent. of which have turnovers of less than £1 million. Fewer than 10 of those companies employ more than 75 workers.
Products range from specialist hats such as protective and safety headgear, mass market hats and traditional hats such as the trilby to high-quality couturier hats, which are sold throughout the world and are recognised by couturier houses in Italy, Germany and France. They all come to Luton to buy our product, such is its international renown. Names such as Olney, Bermona, Snoxells and Right Impressions are famous around the world.
The year of the hat provides an opportunity to review the long-term prospects of an industry that is important to Luton. The industry employs many people—including many women, many of whom work part-time. It also offers home-working opportunities. At first sight,
683 the industry appears—despite the appearance in the Chamber today of such glamorous hats—to be in long-term decline, although I hope in this debate to prove that it is not. Unfortunately, however, there is a decline in the market for low-cost hats—not like those being worn today by some of my hon. Friends. Nevertheless, a Department of Trade and Industry survey reveals that the industry has good long-term prospects in producing high-value, high-quality hats, such as those being worn by some of my colleagues.
The first issue affecting the hat industry's future could be summarised as competition from overseas producers located in low-wage economies. Such producers are putting pressure particularly on the mid-range, traditional hat sector. Dealing with that pressure will require a sharper competitive edge, especially by Luton's small and medium-sized enterprises.
I ask the Minister not for tit-for-tat export restrictions, but to consider what I call bad hats—those manufactured in the far east, especially China, which are brought into the United Kingdom simply for trimming or, worse, simply to insert the "made in the UK" or "made in Luton" label. Although I realise that that practice is a matter of production law, it undercuts Luton's hard-earned reputation on the international market for high-quality and high-value hats.
§ Judy Mallaber (Amber Valley)
Does my hon. Friend realise that some of us who are wearing hats—and some of us who are not wearing hats—in the Chamber also have clothing and textile industries in our constituencies, and that we are here to celebrate Luton hats as one example of the high-quality products made in much of the British textiles and clothing industry? Is not high quality the basis on which we have to compete internationally?
§ Ms Moran
My hon. Friend is quite right.
The hat industry needs more support in maintaining its excellent reputation. Marida Hats has specifically raised with me the issue of high mark-up by retail chains. In the hat industry, retail sale prices are high, but producers' profit margins are low. It is not fair for retailers to mark up by three or four times a product's finished value, because that deters people from buying the excellent hats produced in Luton.
Large retail stores are using their buying power to source globally, putting further pressure on producer profit margins. I hope that both the industry and the DTI will address that issue.
I have a particular bee in my bonnet about the skills shortage. The industry's specific skills, such as blocking, and transferable skills, such as machining and finishing, are in short supply. Right Impressions, in High Town, has told me that many skilled milliners are retiring with no skilled labour pool on which to draw for replacements.
The young talent that we need is certainly available in design, but not in manufacture and millinery. Although 64 per cent. of manufacturers and 87 per cent. of milliners recognise that there is a skills problem, few of them use external training and reskilling sources, such as existing education and training establishments.
Skills shortages are causing high labour mobility and wage inflation, in a cost-competitive environment. As the DTI report points out, without skills the industry is not sustainable, and there needs to be much closer and defined 684 links between the industry and colleges to ensure that that skill shortage is rectified. At this point, I pay tribute to Barnfield college in Luton, which is one of the few colleges with the city and guilds course which creates those industry links. Also, we need courses that introduce management skills for the new hat market.
To cap it all, there is a low level of technology in the sector which can adversely affect productivity levels. One manufacturer told me proudly that the company had only one ancient computer, which was used sometime for the payroll, but mostly was not used at all. In any discussions that I have had with the industry about the possibilities of e-commerce, I have been met with blank faces. I have pointed out the need for the industry to recognise that new technology can afford it greater export opportunities through e-commerce.
We need to ensure that the industry is encouraged to look to new technology for supply chain initiatives to co-ordinate information about total demands and new trends, and an export information service to identify growth markets for high-value hats, to retain Luton's excellent reputation as a high-quality supplier and to disseminate changes in the overseas markets.
It is clear from my experience of visiting many Luton companies that the industry performs best in areas where there is evidence of technological innovation, such as high-performance materials for sportswear and safety headgear, and where there are technological innovations in process and design innovation for the low-volume, high-margin fashion market.
It is in the high-value fashion market that the future of Luton's hat industry belongs. Bespoke high-fashion hats make up 52.7 per cent. of the UK production market for export, and it can and should grow with our support. That requires us to be constantly promoting the excellence of our Luton hat industry abroad, and it means that we need to ensure that the export of products for the middle to high-value market does not suffer to the extent that other low-cost sectors have.
By and large, the high-value end of the market is not so influenced by macro-economic forces such as the strength of the pound, and it can withstand those forces because customers from Italy, France and Germany are less price sensitive and are often willing to pay substantial amounts for a fashionable Luton hat.
I hope that the Minister will not think that I am talking out of my hat if I raise the issue of the financial support that the Department can give to the Luton hat industry. In the past, the DTI—with the support of the British Knit and Clothing Council—provided sponsorship for the cost of exhibitions abroad to promote export markets. Hats, unlike clothing, have high costs in terms of packaging and shipping, while exhibition incomes are often low. I am told by manufacturers that a £500 to £1,000 order from a single exhibition is not unusual. However, the costs of packaging and export are considerably higher—making it not worth while for many companies in the hat industry to export and exhibit abroad.
In the year of the hat, there is an opportunity for the DTI to reinstate that sponsorship, to sponsor such missions—again in conjunction with the British Knit and Clothing Council—and to assist in our bid for Luton hats to be more widely accessible in the export markets across the world. I hope that the Minister will seriously consider that in an effort to promote the Luton hat industry.
685 The Luton hat industry needs wider promotion. The excellent examples that we have seen today will stand us in very good stead and are excellent news for the retention and growth of jobs in the industry, for which my thanks are due.
§ Mrs. Teresa Gorman (Billericay)
On behalf of those of us who have stayed to listen to the hon. Lady's most fascinating debate, we would all jointly like to say that we take our hat off to her.
§ Ms Moran
I thank the hon. Lady for her support. Perhaps next time, she, too, will wear one of our excellent pieces of headgear. In fact, we have a spare demonstration model here, should she choose to wear it.
The hat industry is very sensitive to the fashion climate and the way in which celebrities, Members of Parliament and the royal family wear their hats.
§ Mr. Kelvin Hopkins (Luton, North)
As another Luton Member—and a daily wearer of hats, come rain or shine, for obvious reasons—I wonder whether my hon. Friend agrees that a revival of the cloth cap, and perhaps even the cloth-cap image, among Labour Members, would be beneficial to the hat industry and to the economy of Luton.
§ Ms Moran
All contributions to the promotion of the industry are welcome. Both cloth-cap and high-fashion hat wearers are part of the broad strand of politics embraced by our party.
The promotion of the industry is essential. Hat wearing by high-profile personalities is crucial. Exports and purchases of hats increase, for example, when there is a royal wedding. I encourage everyone to follow the example of the late Princess Diana, who was a regular wearer of hats.
May I be so bold as to suggest that when my right hon. Friend the Prime Minister next meets the Queen, he invites her to put hats and the wearing of hats high on the list of priorities for the next royal wedding? After all, the royal family receives money from the civil list, which includes contributions from Luton taxpayers and members of the hat industry, so we would like its members, in turn, to wear hats and support our industry on each and every possible occasion.
To cap it all, I would like to thank my hon. Friend the Minister for attending the debate. I hope that he, too, will encourage and support the Luton hat industry. We are not all as mad as hatters in trying to promote the industry. It is a serious industry providing many jobs, especially for women, as well as much enjoyment, entertainment and pleasure, as many of my hon. Friends here today have demonstrated.
§ The Minister for Energy and Industry (Mr. John Battle)
At the end of a long day—today started with Trade and Industry questions at 11.30 am and continued with two Opposition debates—it is usual in the House to dread Adjournment debates, but I am absolutely delighted that I am the one whose name was in the hat to respond tonight.
686 I come from Leeds, where Leonard Sachs was known for many years in the varieties for his overworked puns, and I would not dare to try to compete with my hon. Friend the Member for Luton, South (Ms Moran). The purpose of Adjournment debates is to raise matters of concern to our constituents, and I have never seen it done in such an imaginative and witty way that makes an important point. My hon. Friend is to be complimented for getting off the Order Paper and bringing a serious subject, about the textile, clothing and hat industry in Luton, to life.
Long may Luton be known as the centre of our hat industry. This year is the year of the hat, which is the first promotion event of its kind for the hat sector. Hats have been worn at various events and activities. Swing tags have been produced to attach to the brand labels on hats manufactured in Luton to publicise the year of the hat. Male Members are not allowed to wear hats in the Chamber, and perhaps we should change the rules to ensure that my hon. Friend the Member for Luton, North (Mr. Hopkins) could participate. However, I am not sure that wearing swing tags would ever replace pager tagging.
The British Hat Guild has organised promotional events, which are vital to the survival and prosperity of the industry. The hat industry in Luton is a small, highly specialised sector, but it produces some of the world's most sought-after hats. The UK hat sector's annual turnover is some £90 million and it employs some 2,600 people. It is estimated that there are 130 to 140 companies in the sector, and the majority employ fewer than 50 people. The sector is based in Luton, which is traditionally the millinery centre for Britain.
The Government recognise the importance of the sector to the economy of Luton and the rest of the United Kingdom. It is a flagship industry.
§ Mr. Andrew Stunell (Hazel Grove)
I come from Stockport, which has the UK national museum of hats, and we might dispute which town is the traditional centre of hatting. However, I appreciate the imagination and spirit behind this debate, and I hope that competitiveness is maintained so that Luton's hatting industry does not go the same way as Stockport's.
§ Mr. Battle
The hon. Gentleman makes a good point. We do not want to see a museum of the past, but an industry with a bright future. Europe is the industry's main export destination and figures show that 43 per cent. of manufacturers' sales are to Europe. However, more than half the UK's net supply was from outside Europe. The industry faces a real challenge in import and export markets.
We should emphasise our strengths. If the sector faces unfair import competition, especially in the details on clothing and hats, there are ways to tackle that within the European competitiveness rules. My hon. Friend the Member for Luton, South made the important point that the key to making progress in global competition is innovation and quality. That is where the real strength of the industry has lain traditionally and it is where it will lie in the future.
Companies and individuals are producing sports, protective and hygienic headwear. Headwear generally is becoming increasingly fashionable, and we also have.
687 high fashion, independent milliners who are performing well. The likes of Philip Treacy and Kangol have made a considerable impact on the fashion industry in recent years and are household names in Britain and overseas. Kangol has managed to launch its branded goods throughout the world's best high streets. It is such high-profile images that are enhancing consumer appeal, especially with younger people, which must be encouraging for the industry.
Only one company can be the cheapest, and the rest must rely on quality, innovation, new products and new processes to make progress. Our job in the DTI is to act as a catalyst to nudge British industry forward so that we face up to the challenge of new markets and global competitiveness. I am often amazed by the levels of skill and craftsmanship in our manufacturing industry. The traditional handcrafts are often blended with the most modern technology. That is the key to the future of manufacturing, and the hat industry is a prime example.
People, their skills, experience, expertise and talent, are the greatest assets of companies, and it is the companies that invest in training and building up skills that will have a competitive edge. In the past, there was no specific vocational training programme for the hat-making industry. Last year, CAPITB—the national training organisation—and the British Hat Guild developed a new programme of national vocational qualifications specifically designed to develop hat-making skills. My hon. Friend the Member for Luton, South mentioned the colleges running those courses and, as well as Barnfield college in Luton, Huddersfield offers a city and guilds certificate in millinery as part of the link between training and industry.
In common with most traditional, craft-based industries, the hat industry has to address the difficulty of recruiting skilled labour. I hope that the launch of the new NVQ programme will go some way to addressing the problem.
The NVQ in manufacturing sewn products includes mandatory and optional units, within which candidates can develop the vital hat-making skills of sewing, blocking and trimming. That will ensure that those skills are not lost and that examples of their use are not just museum displays in the future. It offers a real potential for developing the industry. In addition, the university for industry, when it is launched, will contribute to retaining skills and to upskilling in the workplace, for small and larger businesses.
There is no denying that trading conditions are difficult. The performance of the hat industry is affected by both external and internal factors. The hat sector has faced difficult trading conditions, as has the rest of the textile and clothing industries throughout Britain. The crisis in south-east Asia, the well-publicised strength of sterling, as well as wider factors in trading and manufacturing processes, mean that the international trading environment is fast moving and complex.
The size of the sector has declined over the past 40 years, as hats are no longer essential everyday wear. Increasingly, the trend has been towards wearing them 688 for special occasions only. However, as my hon. Friend said, that does not need to be the case, as wearing hats could again become ordinary and a matter of common sense. There is a long way to go, especially in protective and safety headgear—which is increasingly fashionable—and also in sportswear and high fashion.
Kangol has done a lot to improve the street credibility of hats with the young. In the wider world of fashion, London style is taking off, and its designers and brand names compete with the best in Paris and Milan. I am sure that Luton hats can feature in that future.
As my hon. Friend mentioned, my Department funded a competitive analysis report on the UK hat sector. Cranfield Innovative Manufacturing Ltd. produced a report that was presented to industry representatives in October, at a seminar funded by the DTI and the British Hat Guild. It concentrated on the competitiveness of the UK hat sector, highlighting its strengths and weaknesses, but also the real opportunities open to it.
The report contained recommendations to improve the industry's cutting edge and competitiveness. It looked in particular at the development of a supply chain initiative for hat making to co-ordinate information to suppliers about total demand and market trends. It proposed that suppliers should compete but also co-operate, through the supply chain, so that the whole sector could be strengthened.
The report also proposed the establishment of education and information services for managers in the industry, to equip them with the skills needed to lead their companies and to use the new technologies, including e-commerce, as my hon. Friend mentioned. In addition, it proposed education and training initiatives to integrate design and production skills so that producers become more aware of the potential of design and designers. Independent milliners especially could benefit from greater awareness of the potential of volume production.
Finally, the report recommended the establishment of an export information service to identify growth markets and to support the export potential of the high-value hat industry in particular by promoting Luton—and other centres in the UK—as high-quality suppliers. The service would also help by disseminating information in the UK about changes in markets so that suppliers can respond quickly.
I understand that, following the analysis report, a steering group has been set up this year to develop an action plan for the UK hat sector, based around the report's recommendations. The steering group is made up of representatives from industry and the British Hat Guild, while officials from my Department will work in partnership with the industry to do everything possible to promote its future.
I hope that I have demonstrated that the DTI has a commitment to helping to improve the competitiveness of this sector, as of all manufacturing. We want this creative sector to flourish, and we want to support international export efforts. We will continue to work in partnership with the sector to ensure that it has a bright future.
However, I want to compliment my hon. Friend the Member for Luton, South on her most imaginative way.
689 of going beyond mere words to demonstrate in a practical, bright and colourful way that there is a serious point to campaigning for manufacturing industry on behalf of the country and our constituencies. Presented in a lively and witty way, as was evident this evening, such a campaign deserves to attract a lot of attention.
690 We must build on our traditional strengths and thereby add to the creative potential of the 21st century. All of us in what I am tempted to call the capacity crowd attending this debate should thank my hon. Friend for detaining us this evening.
§ Question put and agreed to.
§ Adjourned accordingly at six minutes to Eight o'clock.