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DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Northern Ireland


Question agreed to.

15 Jul 1999 : Column 681

Railways Bill

Motion made, and Question proposed,


Hon. Members: Object.

DELEGATED LEGISLATION

Ordered,

Data Protection Registrar


Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.

Ordered,

Food Safety



    That the National Health Service (General Medical Services) Amendment (No. 2) Regulations 1999 (S.I., 1999, No. 1627) be referred to a Standing Committee on Delegated Legislation.


    That the National Health Service (General Medical Services) (Scotland) Amendment (No. 3) Regulations 1999 (S.I., 1999, No. 1620) be referred to a Standing Committee on Delegated Legislation.

    Education


    That the Education (Head Teachers) Regulations 1999 (S.I., 1999, No. 1287) be referred to a Standing Committee on Delegated Legislation.

    Fire Precautions


    That the Fire Precautions (Workplace) (Amendment) Regulations 1999 (S.I., 1999, No. 1877) be referred to a Standing Committee on Delegated Legislation.--[Mr. Allen.]

15 Jul 1999 : Column 682

Luton Hat Industry

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,

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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

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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.

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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.


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