Orders of the Day — Small Businesses

Part of the debate – in the House of Commons at 9:03 am on 4th August 1980.

Alert me about debates like this

Photo of Mr Peter Fry Mr Peter Fry , Wellingborough 9:03 am, 4th August 1980

I am grateful to my hon. Friend the Member for Rugby (Mr. Pawsey) for introducing this subject. He has given me the opportunity to direct the attention of the House, especially my hon. Friend the Under-Secretary of State, to a disturbing situation in the area that I represent. As my hon. Friend knows—he has visited Northamptonshire—the county is substantially one of small businesses. We do not have the large employers that are to be found in other areas.

The county has expanded considerably in the past few years, and an enormous number of young people are leaving schools. We calculate that about 35,000 new jobs will be required in the next five or six years. The problems at Corby mean that we shall need about 10,000 new jobs there. We face the daunting task of providing about 45,000 jobs.

Since shortly before Christmas a most alarming number of firms have been going into liquidation or closing their branches. These have been mostly small firms. They include Ideal Clothiers Ltd. of Wellingborough, which has cut out 49 jobs: Wallis and Linnell Ltd., clothing manufacturers, which is shedding 250 jobs at Kettering, and completely closing down; Rushton and Sons Ltd., manufacturers of footwear components, which has shed 150 jobs in all; Leather Dressers, of Burton Latimer, which has contracted to the extent of 28 jobs; Adams Brothers Ltd. of Raunds, footwear manufacturers, which has shed 42 jobs; and Cox and Wright Ltd., of Rushden, shoe machinery engineers, which has shed 57 jobs. I could read out a list of firms, many of which would share the twin industries of clothing and footwear, and the associated trades. For a long time those industries have provided Northamptonshire's staple employment.

The time has come for steps to be taken to instil, once more, a greater degree of confidence in the future. During the past month I called two meetings of those firms involved in the footwear and leather industries. The response of local industry was staggering. Virtually every local firm was represented. I gained the overall impression that the industry had begun to feel that the Government had forgotten it. The industry thinks that firms of that size are being placed on one side and occasionally sacrificed to those concerns that sell large amounts of heavy equipment overseas.

My hon. Friend the Member for Rugby has amply illustrated the problems. However, many small firms find themselves in trouble for other reasons. In the past, many were urged to export. The reaction of a number of firms was highly commendable. In the past few months the export markets have dried up. Many now find that they must compete in a smaller home market and against very fierce overseas competition. If I were to add to my hon. Friend's list the problems besetting my part of the world I would have to add four more.

First, there is an unfortunate degree of unfair competition from other EEC countries. There is no doubt that sections of the Italian industry do not have to cover the oncosts mentioned by my hon. Friend, such as those arising from health and safety at work measures and many other aspects of industrial activity. As a result, small firms in my constituency find it impossible to compete. They are therefore being undersold.

Secondly, very unfair competition is being experienced from countries such as Brazil. During the past few months, Brazilian imports into Britain have risen by an alarming percentage. In the first five months of this year, they rose by 45 per cent.

Thirdly, many local firms in my constituency have been affected by increased sales from Eastern Europe and the Communist countries. Imports from Czechoslovakia increased by 50 per cent. in the first five months. Imports from Poland have risen by 32 per cent. Both of those countries are substantial exporters to Britain.

Fourthly, the export markets to which many of my local firms used to sell have closed down. Small firms are crucial to the survival of the county. Many towns and large villages in my constituency are virtually dependent on one trade. If those small firms—many of which employ between 50 and 200 people—are forced out of business the area will change from an area of average unemployment to one of very high unemployment. Indeed, it is not too wild to say that if the shoe and leather industry were to collapse parts of Northamptonshire would virtually become disaster areas.

I do not suggest that the Government are solely responsible, or that they can supply all the answers. However, the Government should recognise that a crisis of confidence exists in Northamptonshire. They should take positive steps to help. My hon. Friend the Under-Secretary has already taken some steps in that direction. He has visited the county and has expressed an interest in my constituents and in those of neighbouring hon. Members. However, interest alone is not enough. I urge him to discuss with his colleagues constructive steps that will show clearly that the Government recognise the problems of small firms in my constituency and the rest of the county and intend to do something about them.

One of the problems is the trade cycle. We are going through a deep trough. It will be some time before buying and restocking takes place. The all-party footwear group has had the advice of distributors and wholesalers. They are willing to prepare estimates of when they believe that the rebuying will take place. It is obvious that many of the firms that exist on the temporary employment subsidy will run out of subsidy before the market starts to upturn. I hope that the Minister will ensure that the subsidy is not arbitrarily cut off when industry is suffering severe damage and there is a risk of a sudden drop in employment. The subsidy should be extended for a few weeks at least until orders are coming in and confidence is returned.

I hope that the Minister will encourage the steps being taken by the industry, the retailers and wholesalers, to mount a campaign in the autumn to sell British made products. Steps are being taken, but Government help and advice is needed. Small firms are unable on their own to mount the marketing exercise needed to be entirely successful.

The Government must make at least one dramatic gesture to show that we shall not allow the products of British firms to be undersold deliberately by dumped clothing or footwear. The Minister should examine Brazil. There is no question but that Brazilian products are being brought into Britain at a very low price. We can take action against the Brazilian Government. It is not much good just warning them, as the Minister for Trade has done. Concrete action is required. If the Government took that action and moved along the lines which I have discussed, the small firms in my constituency and in the rest of the county will take heart, weather the next winter's storms and I shall not have to make such a speech this time next year.