36
7 July 1982]
MINUTES OF EVIDENCE TAKEN BEFORE
MR GT CHECKETTS, MR R T Fox, MR P J GODDARD and MR A G B YOUNG
[Mr Maxwell-Hyslop Contd.] energy and metals and commodities vital to the world's trade, you have a people with the work ethic, they work hard, they are dedicated, they have developmental plans which they tend to achieve by very good stable government. It is a recipe for growth and that is why we say it is there.
108. Why in so far are you can have evidence, of course, is Britain not holding her percentage of the ASEAN market?
(Mr Checketts.) This is our main concern. It has been discussed already this morning. I have some sympathy with your argument about Germany and South East Asia. It should be a test of manhood to sell to Germany and, if you can sell to Germany, you ought to be able to sell to Singapore. This is really what I think you are saying.
109. Do you accept the argument that greater success in Europe necessarily, or even reasonably, implies letting your per- centage in South East Asia slip?
(Mr Checketts.) I do not know whether you run a business. Sir, but if you run a business on a budget you are likely to go where the market is first of all. You would be stupid if you did not. You will neverthe- less pay attention to the longer term and more difficult and more distant markets. If Europe seems to you like the best place to get an order, if you are a sales director, you will go there this week and to Singapore next week. That is a question of judgment. You cannot make a rule to direct people to Singapore when they ought to be going to Germany. It is a question of judgement.
110. But where you have had success, where you have sold traditionally and successfully in a market, is it a reason to budget for less attention to that market because another one opens as well? This is assuming conditions where you are not having to pay overtime, where you have not got any difficulty in recruiting labour, where in fact you are not up against a full output barrier, where your costs certainly escalate if you achieve more sales, which surely is a true representation of the exports in 1980-81. Why does success in Europe imply a reduction of effort in areas of South East Asia where this country has a tradi- tionally strong foothold? If you look back as far as you did, 10 years, I think you were comparing 1970 with 1980, a great deal has happened in this country in that time and a great deal has happened in Europe during that time. Nothing ever stays the same, I do
[Continued
not think you would expect it to. The indifferent industrial performance of Brit- ain in the mid-1970s had a very marked effect on our reputation in South East Asia; a very marked effect. Those memories are long and even today they will say, "You will not follow through, there will be a strike, there will be something which will disrupt your supplies." That is one very important message if you can carry it round as you travel you may get a reaction of horror this week - but the message of change has not been told or received and this is a very important message.
111. In a nutshell it is confidence in our ability to deliver on time to the expected quality which has undergone an adverse reputation?
(Mr Checketts.) Over that period, yes.
112. This is a significant factor in losing our competitive edge?
(Mr Checketts.) Indeed, yes.
113. Thank you, because this was not the genre of answer given by the Minister and I was not satisfied that his explanation was an adequate one and so I was looking for other causes. I am grateful.
(Mr Fox.) Perhaps I could just comment on one thing? Obviously a reduction from 13 to 34 per cent. in a market is not at all exciting and that is one way of looking at it. Obviously British exporters were to some extent very complaisant, we had 13 per cent, of the market, they thought, "We are well established" and did not worry too much perhaps. On the other side even through out exports fell from 13 to 34 per cent. they were up, in dollar terms, by 8 per cent. per annum to Singapore. The market was growing so fast, although we had a smaller percentage, we had an 8 per cent. growth in dollar terms and in sterling terms even more. From a British exporter's point of view sitting in England it would seem he was doing very well in that market, far better than at home. It is only when you get the figures together at the end of the decade that they look so bad. There is another side, it is not a disaster in that sense.
114. Our opportunities in that area of the world in which we are focusing our attention this morning are primarily manu- factured and capital goods industries and service industries like insurance and bank- ing as opposed to consumer goods?
(Mr Fox.) Yes.