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Mr. Stinchcombe: My hon. Friend mentioned small family businesses. Will he join me in expressing concern to the Minister that some of those firms feel that they are over-regulated?
Mr. Sawford: Yes, I think that they do express that view. That has not happened just in the past two years. I know that many of those businesses feel that successive Governments have perhaps regulated them a little too much.
Mr. Gates has called on the Government to work alongside regional development agencies and to recognise the need for positive help and support on IT. I hope that the Minister will note that and provide support if his Department can be of assistance in that direction.
I do not intend to speak for too long, but I hope that in this short debate I have been able to highlight the successes of our footwear industry as well as its challenges and concerns. Yesterday I was interviewed by a television company which said that it wanted to talk about the crisis in the industry. I said that that was not my agenda or how I saw it. That is not what we are talking about here. There are problems in terms of trade agreements and negotiations, and the industry has become depleted since its heyday; but, for all that, we are highlighting successes--we are proud of our industry.
The Minister for Energy and Industry (Mr. John Battle):
It is traditional to compliment hon. Members on winning an Adjournment debate, and I congratulate my hon. Friend the Member for Kettering (Mr. Sawford) on that. However, I want to do more than that. The way in which he used a constituency example--a personal story--not only to champion the excellence of the production skills of a company in his constituency, but to spell out the structural questions relating to a whole sector, was quite remarkable. I enjoyed the personal tone and the lively and interesting way in which he presented the case. It was a model of what Adjournment debates should be.
I notice that my hon. Friends the Members for Corby (Mr. Hope), for Northampton, North (Ms Keeble), for Wellingborough (Mr. Stinchcombe) and for Derby, North (Mr. Laxton) are in the Chamber. They were anxious to speak, but, at this time of the evening, were unable to fit in more than one sentence. It is unfortunate that we cannot hold a longer debate in which to raise these matters; they are precisely what we should be talking about in the Chamber.
My hon. Friend the Member for Kettering and I began the day together in the Chamber, because he switched the place on--as it were--with his question at Trade and Industry questions. Now, he is putting the lights out tonight--what a day. He assiduously represents his constituency in raising these matters.
When I was elected to this place in 1987, my hon. Friend the Member for Linlithgow (Mr. Dalyell) asked me how I got here. It was somewhat unexpected because I won against the trend. I explained to him that I had traipsed around my constituency, knocking on doors and talking to people. He made the remark, "What makes a good politician is shoe leather". A winning politician is about shoe leather. I think that we could take my hon. Friend's remark especially personally in the case of the footwear industry.
I enjoyed my visit to Cheaney. My hon. Friend the Member for Kettering patiently persisted in urging me to go there, to see one of the United Kingdom's leading manufacturers. From that visit, I learned about the blend of traditional craft skills with the latest high-tech technologies that has transformed what is regarded as a traditional sector, and has shown how that sector can be regenerated and built up for the 21st century. It was a good experience. My hon. Friend invites me to buy a pair of shoes, and I shall be more than happy to do so. If he is willing to act as their transport, he can be my guest. I am happy to purchase a pair of stout shoes, as I shall continue to do a great deal of walking; I shall be glad to do so in a pair of Cheaney's best.
In February 1998, I gave a speech at the footwear liaison action group's first national conference to launch its action plan for the industry and to try to get ahead of the game--not to treat events as a crisis, but to anticipate what we would be up against. The fact that the hon. Friends whom I mentioned are in the Chamber shows that the regional clusters that we talk about in my Department exist. There is a cluster of excellence in the industry that should be supported, and should be given the best assistance that we can provide to meet the challenges of global competitiveness that face industry.
The sector has real strengths: quality, design, innovative products, world-leading flagship brands--Church's, Clarks, Dr. Martens or Cheaney's--and an amazingly strong export performance. There is a positive attitude towards improving the sector's performance, from the trade associations, the business support associations and, of course, the Cordwainer college, which my hon. Friend congratulated. The college is internationally renowned for the design talent of Patrick Cox and others. The list is impressive. It provides a firm foundation that will ensure a successful future for the industry.
Some ideas have already emerged from the action plan. There are developments in relationships with customers--life style clothing retailers, department stores, mail order companies and so on--to build and develop supply chain management. There are benefits from the clustering that aids collaboration between manufacturers, components suppliers and educational establishments; that has already happened in Northamptonshire, providing a model of how to do it. Export markets have been developed, using innovative sales techniques and methodologies.
I hope that high-tech in the industry will also include e-commerce, because that is where the trade of the future will be. That needs to be plugged in to the overall
development. Marketing--especially effective branding--should be used to add value. Changes should be explored to improve adaptability and flexibility to new market demands. Technologies should be adopted that make production more efficient and, indeed, environmentally friendly. I have seen evidence of that in my visits. The industry is pursuing those opportunities enthusiastically, and many manufacturers have taken up the challenge and are well-positioned to break through into the 21st century.
In the time available to me, I shall focus on technology and innovation. We cannot meet the challenge of global competitiveness on low wages: only one company can be the cheapest; everyone else must compete on quality, innovation, new ideas, new processes, new products and new ways of doing things. That involves technology, looking at production methods and management systems, and innovating to meet the needs of the market. Here in the UK, companies in the footwear sector produce some of the highest-quality footwear in the world and have done so for generations. I expect them to do so well into the 21st century.
The British Footwear Association runs an ADAPT project--Quickfoot--to help smaller UK manufacturers adapt to the threats and challenges posed by international competitiveness by offering a series of events and diagnostic support. With the participation of Nottingham Trent university, Cordwainer college, Business Links, the Department of Trade and Industry and Eurocad Projects Ltd., that project has delivered a range of consultative and training events to the smaller companies that make up the majority of the UK footwear industry.
UK footwear manufacturers increasingly use CAD-CAM digital last-making and other high- technology and environmentally friendly applications to ensure that the sector has a positive international future. In 1997, the shoe and allied trades research association, with some support from the DTI's innovation budget, ran a project to develop water-based adhesives for the footwear industry to replace some of the solvent-based adhesives. Such innovation is world class and world leading, and it sends a signal to other sectors to transform traditional manufacturing industries into ones of which we can be proud in the 21st century.
There are several education and training schemes and projects run with DTI support either by the Leicester and County Footwear Manufacturers Association or by the national footwear training organisation, which was recently granted national training organisation status by the Department for Education and Employment. Those schemes are designed to ensure that there is adequate and appropriate training in the sector; to attract youngsters and school leavers and to persuade managers to enter the footwear sector because they have a prosperous and successful future there; and to encourage closer links between companies, schools and colleges, so as to ensure that the right skills are taught and the right imagination, willingness and commitment to the sector instilled in the next generation.
With DTI support, the BFA has launched, here and in 12 overseas markets, the industry's largest-ever marketing exercise. The BFA produced a life style brochure that demonstrates the capacities and capabilities of footwear manufacturers in the made-to-order sector. The brochure was sent to more than 2,000 freshly researched contacts, all of which are potential specifiers of own-label footwear.
The 22 participating companies have started to assemble new marketing methods to ensure a market for their products.
The footwear liaison action group is a partnership between the Department of Trade and Industry, the Department for Education and Employment, the KFAT, Business Link Northamptonshire, the British Footwear Association, the Leicester and County Footwear Manufacturers Association and the Northamptonshire Footwear Manufacturers Association. All have come together to combine, co-ordinate and co-operate, even in the context of competition, to determine when to compete and when to co-operate for the good of the whole sector. They are working together to support the footwear industry.
FLAG's steering committee has consulted many parties on the range of challenges facing the industry and has drawn up an action plan under three main headings. "Education and training" identifies skills shortages and challenges misperceptions of the industry to increase graduate recruitment. "Competitiveness" addresses supply-chain management issues and runs the Footprint project, which is designed to enhance the use of information technology and other high-tech technologies. "Marketing and exports" encourages branding, sets out a benchmarking project looking at Italian footwear companies, and seeks means of enhancing the safety footwear sector. The group has also advanced a number of projects for support from the DTI's innovation budget. Some are already up and running and others are nearing approval and start-up. I hope that they will prove helpful.
The group is responsible for organising national footwear conferences, such as the one held in Rossendale last February. I think there is to be a second conference on 11 November in Northamptonshire. We hope to build around those conferences and add some momentum and dynamism to the whole sector. Companies are certainly making more use of business support organisations in their local areas.
I must move on to the issue of trade. Given the problems and challenges facing the sector, it is absolutely remarkable that footwear manufacturers achieved an export figure of £517 million in 1998. What is the sector up against? It has received assistance from the DTI's support for the exhibitions and seminars abroad scheme and for overseas trade fairs. This relatively small sector is doing very well in winning resources to participate internationally, which speaks volumes for the industry's tenacious and forward-thinking approach.
There are several important issues to consider. The Government acknowledge that the sector has suffered as a result of both high tariffs on footwear exported from the United Kingdom and low tariffs on imported footwear, particularly products from developing countries. However, the United Kingdom will not be acting unilaterally and we want to see other World Trade Organisation members offering reductions in their tariff rates in order to achieve a level playing field. We will work to that end.
Several of my hon. Friends mentioned China. Any complaints of alleged dumping are lodged with the European Commission, which investigates on behalf of all member states, including the United Kingdom. Each case is then considered carefully by the Government. When there are allegations of fraud, we encourage the Commission to investigate. We are fully apprised of the various non-tariff barriers restricting access to the Chinese market, and we are pressing the European Commission--which negotiates on behalf of the United Kingdom and other member states--to address those matters robustly in the continuing negotiations concerning China's accession to the World Trade Organisation. That issue is part of the negotiations and we will continue to press the Commission about it. It is a vital matter for the sector.
I am aware also of the sector's priorities and goals set out in the British Footwear Association's recently published trade policy paper, and we will take full account of them during the World Trade Organisation market access negotiations. That is consistent with the aim of opening up markets fairly and creating a level playing field that will enable this quality sector to flourish. A paper has been submitted arguing that many overseas markets have high tariffs and other market access restrictions, and that there should now be reciprocity. We cannot wait: we must press hard to ensure that happens.
There have been requests for projects to upgrade recruitment and careers resources in the industry. Officials in the textile, clothing and footwear unit will consider on merit any applications for project support, including those involving the innovation project. We anticipate that the national footwear training organisation will make a strong application and, if it fits the usual project criteria, I hope it will be viewed favourably. I can say no more than that in the Chamber. Let us see what can be done.
The point of this debate is to get ahead of the game and anticipate future difficulties. The industry today is facing real difficulties involving China and tariff barriers. However, the WTO and the European Commission are forums for negotiation and we will keep challenging and working on behalf of the sector. The sector has realised that the traditional crafts and skills, honed over generations--which are a pleasure and a delight to see in action--can be blended with new technologies, including information technologies, mechanical equipment technologies and CAD-CAM design. That will lift the sector but not denature traditional crafts. Traditional hands-on crafts can be blended with the best scientific and technological advances to develop and deliver a product that is serviceable and a pleasure to wear.
I cannot think of a more vital industry. Try walking around London or elsewhere in modern Britain without shoes. That is practically impossible. We want to ensure that the British footwear sector is strong. There is a cluster of excellence in the region represented by my hon. Friends, and I am sorry that we cannot debate this matter further tonight. Let us treat this Adjournment debate as the beginning of our conversation.
Question put and agreed to.
Adjourned accordingly at half-past Seven o'clock.
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