Cotton Industry (Reorganisation) Bill.

– in the House of Commons on 27th March 1939.

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Question again proposed, "That the Bill be now read a Second time"

5.44 p.m.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

When our proceedings were interrupted I was paying a tribute to my right hon. Friend the President of the Board of Trade for his obvious sincerity in commending this Bill to the House. I was going to point out how the long associations of his family with Lancashire specially qualified him to pilot such a Bill through the House of Commons. He need not have apologised for introducing the Bill. My criticism is not that a Bill should be introduced in 1939 to deal with the problem of the Lancashire cotton trade, but that there should have been such a long protracted delay. The situation is so serious that something has to be done. One of the great staple industries, the lifeblood of our foreign trade, is in a depression which, as the years have gone by, has seemed to go from bad to worse. During the last quarter of a century the output of cotton yarn has fallen by one-third, and of piece goods by more than one-half, and apparently we have not yet reached the bottom of the depression, because I see that in 1938 there was a further decline of over 20 per cent. in output. In the same period Britain's share in the world demand has fallen from 13 to 4 per cent. I think the feeling in the trade, however critical it may be, is that the position is so serious that they must clutch at any lifebuoy and hope for the future.

We have waited long for this Bill, and if the size of it is indicative of its importance we have not waited in vain. It fills some 58 pages of print, and there are no fewer than 38 Clauses and six Schedules. Anybody going into the cotton trade will have to be an expert in legislation and in the technical provisions of this long and complicated Bill. But if people believe that this Bill is a milestone on the return to prosperity I am afraid they will be disillusioned. As the President of the Board of Trade rightly pointed out, it is, at the best, only an enabling Bill, and it is full of pitfalls, and I think the Committee to which it will go will have to be very critical in the examination of its Clauses, because there is a real danger that some of the proposals, at any rate, will hinder rather than help what we all want to secure.

A great point was made by the right hon. Gentleman of the support accorded to the Bill in the ballot that the industry was allowed to have before the Measure was introduced into the House. I think that procedure was wise, and I am not going to labour the point that a good many people did not trouble to vote. That is their responsibility. It may be an indication of lack of enthusiasm for the Bill. I think that probably it can be interpreted as meaning that many people in the industry recognise that the position is so serious that they will not take the responsibility of crabbing or putting any difficulties in the way of even an experiment of which they do not thoroughly approve. Only 75 per cent. troubled to vote, and of those 75 per cent. only 65 voted in favour, and that does indicate that there is no great enthusisam for it. On the other hand, in the light of that vote I think the President of the Board of Trade was at any rate justified in introducing the Bill.

What, of course, is significant is that practically all the merchants are against it, including the Manchester Chamber of Commerce; and even more significant, perhaps, is the fact that some of the most powerful and successful men in the industry, men who can be regarded as leaders of the Lancashire textile trade, have been its convinced supporters. They include such names as Sir Kenneth Lee, Sir Thomas Barlow and Sir Thomas Higham, who are recognised authorities throughout Lancashire. There is opposition to many Clauses in the Bill and the Government must be prepared to face it. The fact is that these successful business men feel that this complicated involved Measure is likely to hinder the development of their industries. I know, and the right hon. Gentleman rather made the point, that it is the fashion nowadays to disparage merchants. The tendency in all industries is to look upon them as excrescences, as something that can be dispensed with with no loss to industry, but it is fair to say that merchants created the Lancashire export trade. It was through them, through their knowledge of the markets—

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

The hon. Member might as well say the shipping industry created it.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

I am not talking about the present but about the past, and I say it is true that it was through the merchants that our markets were developed. They brought their knowledge of the wide varieties of demand to the service of the producer. What suits the Chinese market is no use to the Indian market, what suits the Indian market is no use to the Australian market, and what suits the Australian market is of very little use to South America. From district to district on the great American continent the kind of cloth suitable for one area does not suit another. The counts required, the finish, even the get-up and packing have all to be suited to the needs of a market. The manufacturer who has dispensed with the merchant has often found that he has had to open his own merchanting department, with his own travellers and his own agents, and that in the long run he has found it was not economical to dispense with the merchant. The good will and the cooperation of the merchants are essential for the export markets.

It is the export market that has suffered during the last 25 years, particularly during the War. The home market has suffered from changes of fashion and demand, but the real depression in Lancashire is due to the decline in world demand and the loss of export trade. I suggest that we should examine very closely in Committee the proposal to fix a minimum price. The very essence of success in world trade is elasticity in prices and the ability of the manufacturer to meet demand as it comes along. If we are to compete successfully with Japan our manufacturers must have the greatest freedom. One firm may have large stocks of cotton or have its plant idle, and it may suit it, in order to keep the workers employed, to offer a special cut price. Other firms, being busy in the home trade, may not be anxious to go below the minimum. Many of the quotations sent to South America, China or India go by cable and it depends upon a quick response, and sometimes upon one-sixteenth, whether the order comes to England or goes to some other market, to Japan, India or even to the Continent of Europe. The cumbrous machinery of committees in the Bill was criticised by the right hon. Gentleman who spoke for the Opposition. The earlier Clauses of the Bill, which provide for four or five committees, do not lend themselves to elasticity. Once the price and conditions are fixed an elaborate procedure by committees and boards has to be gone through before any alteration can be obtained, and in the meantime the order may have gone abroad and trade will have been lost to Lancashire.

As regards the payment for redundant plant, when the Spindles Bill went through this House many promises were made as to the prosperity it would bring about, but I am afraid that most of us have been disillusioned by experience. There is every reason to think that the scrapping of plant would have gone on just as fast, or even faster, if that Measure had not been in operation, and no doubt the same observation applies to the proposal we are introducing into this Bill. Those who are most in favour of it are the big combines, some of which came into existence in the boom period just after the War, a period when companies were selling out at high prices, withdrawing their experience from the trade and selling to new companies with inflated capital and managements not so experienced in the trade. Then we had the attempt to combine many of the unsuccessful businesses, to pool their resources and concentrate production in combines like the Lancashire Cotton Federation. I have nothing to say against combines, I think there is something to be said in favour of them, but when they have invested their capital in out-of-date plant it is not right to put the burden of scrapping it on the small enterprising firms who have kept their plants up to date out of profits and used their resources for that purpose. But quite apart from abstract justice there is a serious danger that we shall make it more difficult for the smaller manufacturers to compete in the world markets if we burden them with the task of buying out redundant plant at their own expense.

However, here is the Bill and that is what we have to consider and we must try to improve it. It would be a serious thing to throw it out, and our purpose must be to make it into a good workable Measure. It is fashionable nowadays to look for remedies for the ills of our industries in regulations and restraints and checks upon production. Is it unreasonable to suggest that we are tackling the problem from the wrong end? Our aim should rather be to stimulate demand and increase consumption. The old truth that imports in the long run pay for exports still holds good. One of the reasons why there has been such a decrease in the demand from abroad is the blocking of the exchange of goods by tariffs and restrictions. The real remedy seems to be to break down those barriers. Reference has been made to Ottawa, and in so far as Ottawa reduced duties in certain markets it was all to the good, but, unfortunately, it has done very little in the light of experience to help Lancashire. It was admitted to the world that we were now going to regard the British Empire as a closed market. That is one of the contributing factors that have led to a still further blocking of trade. I prefer the spirit of the Anglo-American trade agreement, which will always be associated with the President of the Board of Trade.

In so far as this Bill will encourage co-operation and will bring all sections of the industry together in recognising their unity, it may do good by enabling the industry to recapture some of the markets that are still not closed. We have to recognise that in the new conditions the hope of the industry lies fundamentally in the initiative and enterprise of the individual effort that is made by the various sections of it. It must also be recognised that enterprising firms and manufacturers with new ideas and methods have to carry the burden of those who are stereotyped and out-of-date. The Bill should go to Committee, and I hope that the President of the Board of Trade will be sympathetic to any Amendments which, after careful consideration, we may put down.

6.3 p.m.

Photo of Mr Peter Eckersley Mr Peter Eckersley , Manchester Exchange

Very seldom when speaking in this House do I find myself in agreement with the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris), but this afternoon I am in agreement with a great part, although not by any means with all of his speech. I have not discovered any of his reasons for Free Trade in general, but he put forward two reasons which will touch anybody who has at heart the interests of this industry. He feels that great good has been done to the industry in the past by the merchants, and by their work abroad in particular. I know that it is fashionable to say that merchants in all industries are parasites and that industry cannot bear the burden of people doing nothing at the top; the implication is that these merchants are all rich men sitting back in their club armchairs and smoking cigars, and doing nothing for the trade. As a matter of fact, the great majority of the merchants in Manchester to-day are very hard put to it to make ends meet.

These merchants have fulfilled a great function in the past and they are fulfilling a great function to-day, and if the result is not as satisfactory as all of us would hope they are at least fulfilling that function in a way which I believe nobody else could. There is no other organisation which could do the work in foreign countries and in the Dominions and Colonies that these merchants are doing. They all have their agents—I am now talking of the exporting merchants and not of the home-market merchants—or houses of their own in the great cities abroad, and they have a knowledge of those markets which will not be available, so far as I can see, to some other kind of organisation.

The merchants are not, as some people would have us believe, utterly and entirely opposed to the Bill root and branch, but they feel that, as such a long time was taken by the joint committee in getting together these proposals, a little longer time might have been given to them just now, when they have formed a new merchants' association under the blessing of my right hon. Friend the President of the Board of Trade—although very much splendid work was done by the joint committee in regard to these proposals. It was rather unfortunate that on the day of the first meeting of that association, when they addressed a petition to the President of the Board of Trade and to the Prime Minister, the Government should, I understand, have seen fit to announce that they were going forward with the Bill. That has not created a very good impression in some parts of Lancashire and cannot help the smooth working of the Bill if and when it becomes an Act.

I would thank my right hon Friend for the nice things he said about the merchants. He said there were many decent ones, but I think there is a great proportion of decent ones. I would ask my right hon. Friend to supplement those nice words by action when the Bill comes before the Committee and to give us a little hope that the door is not going to be entirely shut on the hopes and aspirations of the merchants to help this trade in future as they have done in the past.

6.6 p.m.

Photo of Mr Stuart Russell Mr Stuart Russell , Darwen

I rise as a representative of what is, I suppose, one of the most modest cotton towns in Lancashire, to give my support to the Bill, and to pay my tribute to my right hon. Friend the President of the Board of Trade. I often wonder whether hon. Members who do not represent Lancashire constituencies realise the tremendous decline that has taken place in the cotton industry, and the very serious reactions which have been caused through the county of Lancashire. The cotton trade has lost at least 80 per cent. of its pre-war exports. In 1912 the exports of cotton piece goods amounted to very nearly 7,000,000,000 square yards. By 1937, those exports had fallen to under 2,000,000,000 and, by 1938, to just over 1,300,000,000 square yards. If one looks at the number of people employed in the cotton industry on the export side, one sees that in 1912 it was approximately 600,000. In 1937, by no means a bad year for the industry as a whole, the figure had fallen to 250,000, and unfortunately it has fallen further in 1938 and is now no more than 200,000 people. That is to say, approximately one-third only of the number of people who were engaged in the export industry in 1912 are so engaged to-day. Out of the people who are left as insured workers in the cotton industry 83,000 are unemployed and are unable to find work.

To put it in a slightly different way, between 1912 and 1937, 25 years, the output of cotton yarn has fallen by approximately one-third, while the output of cotton piece goods has fallen by more than a half. The number of people employed in the industry as a whole has fallen by about 40 per cent. As that decline went on, it was inevitable that a considerable amount of machinery and plant in the factories would be scrapped. The latest figures that I have been able to obtain show that the spindles have been reduced by more than one-quarter during that period and that the looms have been reduced by very nearly 40 per cent. Great and very largely disastrous as that reduction has been, nevertheless it is not so large as the decline in the output of cotton goods. Even as late as 1937 it was estimated that 11 per cent. of the spindles and 17 per cent. of the looms in weaving were in excess of the requirements of full-time production.

With that terrible and tragic background this Bill has been introduced this afternoon by the President of the Board of Trade. The history of the Bill is known to hon. Members. I think that the right hon. Gentleman said in his speech that it dated from the letter which was sent by him as far back as July, 1937, to the joint committee of the cotton trade organisations, asking them to prepare a scheme. This was done, and it was, of course, amended in details and in various important features. In its final form it went before the industry for a ballot. It is very important to realise that the Bill which is being presented this afternoon is not being thrust upon the cotton industry as a result of the deliberations of the Government. It is nothing of the kind.

It is a Bill which has been thought out and sponsored by the cotton industry itself, in reply to the request of the Government that the industry should put up its own proposals, on the understanding that if those proposals commanded the support of an adequate majority in the industry the Government would seek means to give those proposals statutory effect. That is, of course, what has happened.

The objections were put forward, and have been sent to hon. Members this morning from the opposition committee, saying that the majority in favour of the Bill is insufficient. I think that the majority is a perfectly satisfactory one. As my right hon. Friend pointed out, the opponents seem to rely upon the argument that all those who did not vote were against the Bill, but I am certain that if those who did not vote had had strong feelings against the Bill they would have been the first to register their disapproval by way of a vote.

The right hon. Gentleman has made it quite clear that the two things with which the Bill deals are redundancy and the fixing of minimum prices. The great drawback and disability from which the cotton industry in Lancashire has been suffering has been redundancy of plant and lack of unity in the industry, which has resulted in desperate cut-throat competition. This has often meant that firms have had to go on producing at a loss. The two things to which I have referred are exceedingly important, but I feel that they are not the only things with which the Bill deals. There are two other things. The Bill seems to me to represent the first united attempt by the cotton industry to put its own house in order. When the Cotton Industry Board is set up under the terms of the Measure, the cotton industry will be able for the first time to talk, whether to the Government or to the foreign countries, with a united voice expressing the will and the intentions of the industry as a whole. Moreover, for the first time to my knowledge, the cotton industry is definitely trying to do something with regard to exports, and, after all, the question of exports lies at the bottom of all the troubles in the cotton industry.

I do not believe there is any enlightened employer in the industry who believes for a moment that it will be possible for the industry to regain more than a small part of the exports which have been lost. They have been lost for reasons which are well known. Other countries, particularly India, have learned to do the same thing that Lancashire did 80 years ago, but at a very much lower cost, and their industry is protected by tariff walls which make it impossible for Lancashire to compete. There is also the very intense Japanese competition in neutral markets. These reasons are realised by responsible people in Lancashire, and they know it is of no use moaning for the day to return when the industry will have the exports that it enjoyed in 1912. They realise that the industry has to be stabilised on an altogether lower level than that of the prewar years. But that is not to say that the industry should not make every attempt to recapture what it can, and I believe that this Bill will enable it to get on to a really healthy basis, which, after all, is the first essential in trying to recapture foreign markets which have been lost. I feel that, even if the trade has to continue on a far smaller basis than in the past, even if its output and its exports have to be far less, we must see to it that the trade that is left, however small it may be—and we hope it will not always be as small as it is to-day—is a healthy trade giving a reasonable return to manufacturers engaged in the industry and a reasonable livelihood in wages to the workers.

A certain amount of capital has been made of the fact that in closing down surplus mills and scrapping surplus capacity labour will be disclosed. It is, of course, inevitable in any industry which is a shrinking industry—and, unfortunately, the cotton industry has been a shrinking industry for some time—not only that plant should become redundant and have to be scrapped, but also that a certain amount of labour must be displaced. As far as I can see, however, it will probably be a case of a larger number of employés who are at present engaged on short time being replaced by a smaller number who will be employed full time and will have far greater security of employment. The hon. Member for South-West Bethnal Green (Sir P. Harris) said that nearly all the merchants were against the Bill. I defer to his superior knowledge, but I understand that quite a substantial number, particularly of important merchants, actually support the Bill and were parties to its drafting; and 1 notice, further, that the Manchester Chamber of Commerce had two representatives on the joint committee who were responsible for drafting the Bill. While I quite appreciate that a large section, particularly of the smaller merchants, are opposed to the Bill, I do not think it is at all fair to say that the great majority are against it.

I do not want to detain the House any longer, because I realise that a large number of Lancashire Members will desire to make their contribution to the Debate. I would conclude by saying— and I do not address these remarks to my Lancashire colleagues only, but also to Members from other districts—that, after all that the cotton industry has been through, after this tremendous tragedy which has affected the whole county of Lancashire in a way that is realised by few people who do not know the county very well, the cotton industry, for the first time, has by a very large majority submitted its proposals to the Government and asked the Government to put them through. I hope that hon. Members who for one reason or another may see fit to oppose the Bill will bear that fact in mind. It is easy enough to get disunity in the cotton industry; it is very hard indeed to get unity. We have got it at the moment, and I hope that hon. Members will think twice before they oppose a Bill which is supported by the majority of employers in the industry and which has the support of the workers' organisations. I sincerely hope that the Bill, coupled with such reasonable assistance in the future as can be given by the Government—and I hope it will be given—will bring about a new era of hope for those who have been dependent on the cotton industry for so long, who have been through times probably worse than those which have been suffered by any other industry, and who have laced their difficulties and troubles with such courage and fortitude.

6.22 p.m.

Photo of Mr Wilfrid Burke Mr Wilfrid Burke , Burnley

I am glad that, so far, no speech has been made against the Bill. The hon. Member for the Exchange Division of Manchester (Mr. Eckersley) certainly said a few words on behalf of the merchants in his own division, and the hon. Member for South-West Bethnal Green (Sir P. Harris) at first left me in doubt as to how he would vote, but finally decided to support it. I, also, want to support the Measure. As the President of the Board of Trade has said, people who do not live in Lancashire hardly appreciate the difficulties through which the county has gone during the last 12 years, and that is borne out by the statement of the hon. Member for South-West Bethnal Green that the chief opponents of the Bill are two big men, Sir Thomas Barlow, of Messrs. Barlow and Jones, and Sir Kenneth Lee. The hon. Member could, however, if he had known the facts, have mentioned half-a-dozen other big men who support the Bill, and, if he knew more of the facts, he would realise that the reason why those two gentlemen oppose the Bill is that they have achieved a measure of vertical organisation for themselves in a special and restricted market. If they continue in their opposition, and if other organisations try to enter into their market, there will be competition such as has been going on elsewhere in the trade. We have to take the ballot figures as they stand, and realise that there is in Lancashire an overwhelming majority of people who are in favour of the Bill, and that it is supported by people in all sections of the community. The hon. Member for South-West Bethnal Green raised the question whether the merchants or the producers were the more important. I think, myself, that that is a futile kind of argument; it is like arguing as to which comes first, the hen or the egg.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

I do not wish it to be thought that I think the merchant is more important than the producer; quite the contrary; but I say that the merchant has played his part

Photo of Mr Wilfrid Burke Mr Wilfrid Burke , Burnley

I thought, when the hon. Member went on to say that the merchant found out what was wanted in China and it was entirely different from what was wanted in India, and that he went to Australia and found that an entirely different thing was wanted there, he gave the merchant a good deal more credit than he was entitled to, for, when he has found out what is wanted, it is the producer who has to find out how to make it. This Bill, of course, is essentially a producers' Bill. The hon. Member for Darwen (Mr. S. Russell) made a suggestion which I am going to carry out. He said he would not speak at any great length, because many others wanted to speak. I have another reason for not speaking at length, and that is that I want to set an example now which I hope other Members will follow when we get into Committee. This Bill is vitally urgent, and we have had such a barrage of propaganda about it in Lancashire during the last two years that everything that can be said on either side has been said already.

We on this side support the Bill for the same reason as the merchants, the producers, and, indeed, the majority of the people in Lancashire, that is to say, out of sheer necessity. The tragic facts are more eloquent than any words. Take the case of my own constituency. In Burnley for years we have had 5,000 people unemployed in the cotton trade alone, out of a total of about 7,000 unemployed. The bulk of the people in Burnley are dependent upon this trade. Burnley was at one time the largest weaving centre in the whole world. To-day in Burnley, because of the decline of the cotton trade, our unemployment figure is 24 per cent.; one out of every four of our workpeople is unemployed. In addition to that, we have to face the very difficult problem that the cotton industry is becoming an industry of aged persons; it is being found difficult to get young people to come into the industry, and the skill which has made Lancashire famous is likely to go by the board unless the industry can make itself more acceptable to young people. In the last few years the number of books put in at the Burnley Exchange for persons between the ages of 16 and 18 going into the cotton industry has fallen from 1,700 to 750. Our population has declined in the last few years; people are going away; the rates are high, and we pay over £1,000 a week in public assistance. All these things are attributable to the decline of the cotton trade. We know these tragic circumstances, and we accept this Bill because we think it is the only way that presents itself to us at the moment. Opponents of the Bill say that there are other ways. They suggest a subsidy; but the Government have not offered a subsidy. They suggest different trade agreements; but -the Government tell us they cannot get -different trade agreements. The only thing that is on the carpet at the moment is this Bill, and, while it does not go as far as we should like, we think it will put a basis into the industry and bring some measure of co-operation and collaboration into the industry.

The decline which has been going on for years in the cotton trade has been evident to a very great extent during the past year. In 1913, as one speaker has told us, we exported 7,000,000,000 square yards. In 1919 the yardage had gone down by half, but in spite of this the prices have been doubled. That high price in the boom period was one of the things that started the cotton industry on the way it has gone. Apart from the lack of organisation in the industry a good deal of the blame for the present position is due to the employers. The workers have shown, as the Prime Minister said in Blackburn, extraordinary patience. You read about people buying shares in their mills, paying 10s. a week out of their wages—against the Truck Act, I know—buying looms, and paying £40 for 10 looms, in order to keep themselves at work, because they prefer to go on working even though they are getting less for it than they would get on public assistance. People say there are things to be feared in the Bill, but it is so ringed around with safeguards that my only fear is that we shall not be able to do anything because there is not time enough to catch up with the decline. It is not that the Bill allows too much to be done, but it tries to safeguard, at every hand's turn, each particular section. It has been drawn in order to meet the case of all sections; even now, when the industry has come to the point where it has to cooperate and collaborate, the Bill has been drawn to meet the individualistic spirit of the Lancashire cotton employers. But, because it does something to make the industry into a unit, and because it does something to enable us to keep what markets we have, and to speak as a unit, I hope the Bill will go through, and that it will have a very speedy passage.

6.33 p.m.

Photo of Mr John Dodd Mr John Dodd , Oldham

I do not wish to follow the arguments of the hon. Member for Burnley (Mr. Burke), but I wish to say how much the House always appreciates the contributions he makes on the subject of cotton and of Lancashire. Those of us who are interested in the industry appreciate the speech made by my right hon. Friend, and congratulate him on the clear, precise and lucid manner in which he introduced this Bill, bristling with technicalities and details. I hope that the Bill will have an easy passage through Committee, and that on its way it will be made into a first-class Measure. I represent the largest cotton-spinning town in Lancashire in the American section, and I have some personal interest in the industry, too. I want the House to know to what extent I prejudge the position, and am personally prejudiced towards the Bill. I am intimately connected with cotton mills at present spinning. I am also connected with textile machinery manufacturing, both new and reconditioned. I have seen at close quarters the operation during the past 2½ years of the Spindles Board. I have been connected for the past 10 years with the schemes which have been put before the industry and voted on.

On every occasion those ballots were indecisive, and there has been something wrong with the schemes. In 1931 there was a scheme—a good scheme in my opinion. It had certain clauses which have been washed out of this Bill, and certain clauses which put a premium on efficiency. Unfortunately, the week the ballot was taken this country came off the Gold Standard, and everybody in Lancashire imagined that the millennium had arrived. The result was that the ballot was quite decisive, and against the scheme. The people who do not vote in a ballot cannot be said to be for or against. In my opinion, many stand aside because they are neutral. There are others in Lancashire who do not vote because they have divided boards, and the vote is invariably given by a board. Nevertheless, here we have a Bill which has been drawn up by men experienced in the cotton trade. A great deal of work has been done for two years, and even previous to that. A great deal was done by men who have given their time voluntarily, and we, and the industry, should be grateful to them for the work they have done. Also, my right hon. Friend the President of the Board of Trade showed in the remarks he made this afternoon that if he did not know anything about the cotton trade two years ago, he has certainly learned something from the deputations he has received in the last two years.

I shall support this Bill. There are many things about it that I do not like, and I frankly admit that this is not the type of legislation that appeals to me. That is perhaps a rather wide and sweeping statement, but, nevertheless, it has a reasonable and sound basis. I believe this legislation is similar to several other Bills that we have passed in recent years, and typical of the legislation we have to face in the present changing conditions. It savours too much of trying to make somebody do what he does not want to do. Perhaps the day of individual liberty is over to some extent, but, at any rate, no unity can come in Lancashire without a Bill of this character. If the Bill has a rapid passage and becomes law, I would not like to think that Lancashire is going to relieve my right hon. Friend of any further responsibility towards this industry. Once this type of legislation has been put into operation it is no use unless it is backed very forcibly by the Government. It is no use having unity and collaboration unless it is used, and the industry cannot make use of it by itself in negotiations with foreign countries. I am sure that many of the Lancashire Members will agree that the Government's responsibility does not end with this Bill.

I still think that there is a future for the cotton trade. During the past 12 months we have had probably the most deplorable conditions that have ever existed in Lancashire, and many factors are to blame. How can anybody carry on normal trade with the international conditions that exist at the present time? Up to a fortnight ago inquiry had improved, trade had improved, prices were better, there were far more samples and far more quotations out. In 24 hours the whole thing was brought to a standstill again. No more traffic: passed one way or the other. So it goes on time and again. That is a fact of major importance, which can be guided only by Government policy and leadership from above. Another factor which has presented considerable difficulties in the past two years has been the price to which raw cotton has fallen. When the raw commodity is almost halved in price, it must have an unsettling effect.

A great deal has been said from time to time about individual spinners, and more particularly about combines. There is room for combines and for individuals, and 1 cannot see why both cannot operate their functions correctly. Combines have varied in recent years; they have had their capital reduced from time to time; but there are also some combines whose capital has been greatly weakened in recent years and they have worked in cooperation with friends who have been individualists. But I do not think that combines are the real cause of the trouble. The troubles in Lancashire, in my view, started with the limited liability company, and the fact that men came into the industry who had not the interests of the industry at heart individually.

The Bill covers mainly two essential matters, price-fixing and redundancy. The House passed a Bill dealing with redundancy in the spinning industry two years ago. The Spindles Board are due to terminate their activities on 14th September this year. They had an extension by an order by the Board of Trade under which they should have finished in September last year, and a further extension which will conclude in September this year. There are powers given in this Bill for the extension of redundancy in any section which requires it. As far as the spinning section is concerned, they do not want it after this year. If that is the general view, and I believe it is, it would be wiser at this stage to say that there shall be no redundancy after 14th September. If you have a redundancy scheme going on for a period of years, and you introduce alongside that a scheme whereby you are controlling prices, you are giving an incentive to a man to wait and see if he can operate profitably and say, "Maybe next year I can make more than this year," and, therefore, he hangs on. But if you say, "We shall finish with redundancy at a definite date," the mills will come in and sell. I do not want the House to forget that we have had two-and-a-half years of redundancy in the spinning industry, and that a great deal of machinery has been bought and dismantled. If the weaving side want their redundancy scheme, they must work it out in a similar way, as the spinners worked out theirs.

We have had no statement anywhere, either in this House or outside, or from any organisations, on what is intended by redundancy, and in what section, what kind, what it is going to cost, and who it is going to displace. We have been told nothing of that. There must be individuals in the industry working on this scheme who are in a position to give that information as we proceed with the discussions on the Bill. We must know what is the likely cost in any one section. If this House is being asked to pass a Bill which allows a further levy of £2,000,000 on an industry already very heavily burdened, it is important that the House should know how the money is to be spent, and where it is to go. If it is to be compensation for the operatives, how many operatives are going to be displaced, what compensation is to be offered to them and what is to be the burden in the years to come? All these are points about which we require to know.

On price-fixing schemes, which is the other important Clause in the Bill, there is something much more tangible than on redundancy. We have had price-fixing schemes in Lancashire for the past two or three years, some of which have worked successfully and others have not worked too successfully. In the coarser end and the finer end they worked better, but the medium section was affected very badly. The 1936 ring agreement broke down. The medium weft counts agreement may also break down. These various agreements will break down because of non-rectification of faults and dissatisfaction by individual members, who have claimed that they ought to have consideration for difficulties which have been thrust upon them. But we live and learn; we should learn, at any rate, by experience. If we try new experiments and agreements then, after the operation of these for some time, a review should be taken as to where faults lie.

I will give a case in point. It is a company with which I happen to be associated, and there is no particular secret about it. This company has operated, and the mill has had money spent on it, for many years. It has been well equipped, and had for years, after the War and before the War, consistently paid a steady dividend and employed its operatives full-time. There has been no need for that mill to stop even for one week. It has never paid less than 10 per cent. dividend since the War, and it has paid as much as 20 per cent. It is well equipped and can compete with anybody on ordinary Oldham accounts. It has been able to compete with all others, and there may be many reasons which people claim for its ability to do that. Nevertheless, it was so equipped with machinery that it could produce at a cheaper rate, sell as good or better cotton yarn cheaper than its competitors, and when other companies were losing money it could make money. It came into the present scheme and was put on a basis on which it is expected to sell, but it cannot sell because the price is higher than that of some other competitors. The company did not even need the large profit it was expected to make when things were satisfactory 18 months ago. What has happened? That mill has been stopped for 34 or 35 weeks in the last 50 weeks, and the company will this year lose money. It cannot fail to do otherwise. It never lost money all through the slump, and was employed at full time. That is one case which we as a House are going to hand over to a board. Whether a company is independent or not, we have a responsibility to individuals as much as we have to industries and to this whole country. We have to see that there is ample protection for all individuals concerned in the industry. I hope that the House will understand that that is a case I know of from a merely personal point of view, but I could quote many other cases, and there is a good deal to be said for their point of view.

Photo of Mr Edmund Radford Mr Edmund Radford , Manchester Rusholme

Would my hon. Friend explain to the House how it came about that, when under the price-fixing scheme profit was controlled, the trade of this efficient mill went entirely?

Photo of Mr John Dodd Mr John Dodd , Oldham

It may be rather a long and difficult explanation to make, but briefly, if a spinning mill is capable of using a cheaper cotton and selling yarn cheaper than other people, it has a certain competitive value and can compete. Once you put it on a straight and level price line you are on the same basis as a man who is not so well equipped or not buying so cheap a cotton as you are. That is bound to happen. I do not press the point, but it is a case of what can happen. I am not very fond of rigid price schemes. If something can be incorporated in sectional schemes to cover full-time running and reasonable marginal rates, we are then able to put a premium on efficiency and not on inefficiency. Then I would support it wholeheartedly in every respect.

What is happening under the price-fixing scheme at the present time? There are honest men and dishonest men. What is there to prevent a man delivering 13 skips of yarn when he has only sold 12, or delivering coarser counts than he has sold? We know that it is happening. Everybody in Manchester knows that it is happening, and has happened. These sectional schemes will have to be dealt with of course when the time comes. There is also the question of who should be entitled to contract out of the Bill and who should contract in. This is particularly important under this Bill.

Any criticisms that I have made this evening, I assure the House, have been made in the spirit of a contribution of helpfulness rather than of criticism or destruction. If we are to have a Bill, let us have the best Bill that Lancashire can have, and let Lancashire have a chance of getting everybody really to work for it. Why should not the cotton trade have this? But one of the most important points is the question of arbitration. I can find only one mention of arbitration throughout the whole of the Bill, and it is in Clause 26, Sub-section (4), where there is a passing reference to arbitration. The cumbrous committees which are being provided under the Bill are perhaps essential to the industry, although they may appear as not so essential to anybody who does not know the industry intimately. Nevertheless, in the whole of the Bill there is everything that protects on the: way up to the working of a scheme, but there is nothing in the Bill which protects the individual after the Act or schemes have become operative. We are giving; powers to boards to produce schemes. They can take a scheme to this body or to that body; they can take it to the Board of Trade and bring it to the House of Commons with approval all the way, if you like, but there is no protection for the individual either by way of arbitration or by way of a final appeal before a court of law. While all schemes can be protected in the making of them, there is nothing to say afterwards what is to be done to see that the individual concerned is protected, and that his case shall be examined before a committee when a scheme is not operating fairly. It does not matter whether he is a spinner, merchant or whoever he is, surely, the individual is entitled to that protection.

6.55 p.m.

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

I am glad the hon. Gentleman the Member for Oldham (Mr. Dodd) told us that he is in favour of the Bill. Some of his criticisms seem to be so fundamental that it was difficult to see where his support of the Bill lay. He has criticised very much all price-fixing schemes.

Photo of Mr John Dodd Mr John Dodd , Oldham

Oh, no; I have not criticised price-fixing schemes. I have supported price-fixing schemes throughout the whole industry, and have worked for them for the past 10 years. My criticism is of the method by which these price-fixing schemes are operated.

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

In that case there is no reason to oppose this Bill, either now or in Committee, or even to criticise it, because the details of price-fixing schemes will arise when the sectional scheme is produced under the provisions of the Act. There is nothing in an enabling Bill of this kind to deal with such details in the working of a price-fixing scheme as those with which the hon. Member was dealing.

Photo of Mr John Dodd Mr John Dodd , Oldham

I have not opposed the Bill and I support it on Second Reading. I know full well that under the sectional schemes these things will come forward. I am not criticising the Bill from that point at all, but asking that there should be some method by which the proposals should be simplified and that there should be ample protection in the Bill in order that when difficulties arise they can be dealt with very much more smoothly than appears to be the case now.

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

These are Committee points, and they can be elaborated when we come to Committee. On the question of redundancy, the hon. Member said that he wanted to know the cost of a redundancy scheme, its scope and its size, and I suggest that that would arise on a sectional scheme. In any event, the very nature of the redundancy renders it impossible to estimate beforehand the cost of a redundancy scheme under the working of the Act or individual schemes. It would have been impossible before the Bill was introduced to give any idea of the precise cost. These must be matters dependent on the state of the industry, the price at which the various obsolete machinery can be acquired, and so on. The actual facts of which he wanted information are, from the very nature of the scheme, impossible before a redundancy scheme is introduced.

I would like to congratulate the President of the Board of Trade on the speech with which he introduced the Second Reading of this Bill. I am sure that we all considered it to be a very eloquent and convincing case for the Bill. I remember that when the Cotton Spinning Industry Bill went through this House giving powers to the spinning section to adopt redundancy schemes, the Bill was introduced by the then President of the Board of Trade, the predecessor of my right hon. Friend, in a speech which we thought was a little perfunctory, and perhaps not completely whole-hearted. Some of us were hardly surprised, in view of the known views of the late President of the Board of Trade on the type of matters which were dealt with in that Bill. I was present in Manchester at a meeting where one of the members present made the statement that the present President of the Board of Trade was not really in favour of the cotton enabling Bill which we are now discussing. I ventured to contradict that at the time, and I am sure that all who have heard the speech of the President of the Board of Trade to-day can be in no doubt whatever that he is sincerely and wholeheartedly in favour of the Bill, and desirous of making it as great a success as it can possibly be made. His arguments were very convincing.

It has been said that the ballot does not show a sufficient majority of the industry in favour of the Bill, and the point has been made by opponents of the Bill that you ought to take only the percentage in favour of those who voted, and that on that basis it means only about 49 per cent. of the total production capacity of the industry in favour of the Bill. That argument has been answered by the President of the Board of Trade and other hon. Members this evening, and I do not propose to add to these arguments, but I would remind the House that the Joint Committee themselves took a ballot only about a month before the ballot which was taken by the President of the Board of Trade. In the figures which they gave they assumed that all those who did not vote were against their proposals, and the proposals were almost identical with those now contained in the Bill. On that basis, on the assumption that all who did not vote were against, the figures showed substantially the same majority as in the case of the ballot conducted by the President of the Board of Trade. In the ballot of the Joint Committee, counting everyone who did not vote as being against, there was a majority of over 70 per cent., in every section of the industry. So I think there is no question about it. I know that when the Cotton Spinning Industry Bill was before the House there were tremendous arguments as to its value, as to the time at which it was taken, whether the proposals had not been altered since they were made, and so on. Well, none of those objections can be raised against this Bill. And why? Because we have had two ballots since the proposals were in their concrete form, as represented in the Bill. One did not allow people to vote against, but an assumption was made that anyone who did not vote was against, and the other allowed them to vote both for and against; and both ballots revealed a majority on the turnover or employment basis of over 70 per cent.

Photo of Major Henry Procter Major Henry Procter , Accrington

Do you mean 70 per cent. of the whole industry or of those who voted?

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

Seventy per cent. of the producing section of the industry, that is spinning, weaving and finishing—all the productive side of the industry.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Does that 70 per cent. consist of people who have any personal knowledge of export trade?

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

I think that has already been dealt with by the President of the Board of Trade, but what we are concerned with here is the producing section of the industry, and in this Bill is laid down machinery for developing our exports on an organised plan, which has not been done before in the Lancashire cotton industry; and it is in fact because of the improvement we expect on the export side of the business from this Bill that most of us are so anxious to see it passed.

I would like to draw the attention of the House to the history of the Bill in order to show how very thoroughly every proposal in it has been examined. I notice that in some of the communications which have recently been circulated by the opposition committee and other interests new arguments are raised for the first time within a day or two of the Second Reading of the Bill. In many cases, such as, I think, in the case of the t exporters section of the London Chamber of Commerce, numerous interviews between the members of the Joint Committee and that section took place months t and months ago, and long discussions 1 were carried on, and certainly in the case of that section the members of the Joint Committee were under the impression that the London section was in favour of the proposals. And yet only two days ago we have circulated a memorandum from them in which the objections are so fundamental that one can only assume that they are against the Bill in the form in which it now is.

It is, therefore, relevant to consider how long a period there has been in which every section in the trade might examine these proposals thoroughly and exhaustively, It may surprise some hon. Members to know that the history of this Bill goes back as far as October, 1936— nearly two and a-half years ago. The Joint Committee authorised the executive to bring forward a comprehensive scheme covering all sections. It was in April, 1937, that the largest and most representative deputation which has ever gone from Lancashire went to the then President of the Beard of Trade, Lord Runciman. That deputation was headed by Lord Derby and Lord Colwyn, and it asked, in addition to proposals with regard to the export trade, for some Government help in facilitating the internal reorganisation of the Lancashire cotton trade. The reply of the Board of Trade was given by the present President, who had succeeded Lord Runciman in July, 1937. He said the Government promised favourable consideration to comprehensive proposals to deal with the reorganisation of the cotton trade, including special provision for the export trade.

In consequence of that, the proposals which are the basis of this Bill were produced by the Joint Committee as long ago as October, 1937, in a document which was known as "Lancashire's Remedy." It was submitted to the full committee and passed in November, 1937. In February, 1938, that is, more than 12 months ago, a detailed scheme called "Proposals for a Cotton Industry Enabling Bill" was approved by the Joint Committee and submitted to the Board of Trade. In July of last year, after various discussions with the opposition, a revised draft of those proposals was submitted to the Board of Trade. Then there were further discussions with opposition interests and sectional interests in different parts of the country, and a further revised draft was submitted in December, 1938, and finally we have this Bill presented. So I do submit that never has there been any Measure for which there has been so much opportunity afforded the opposition to criticise it in detail, and it is amazing that these detailed criticisms, some of which are still of a very general character, have only just been produced.

The President of the Board of Trade has given the general arguments for the Bill in a convincing manner, and I do not think it is necessary to add much to them. After all, this Measure is needed because the pre-War conditions of the cotton trade have ceased to exist, and new methods have to be devised, whether people wish it or not. It is not a question of choosing whether we prefer this new method or the present one. A new method has to be devised, or else the cotton industry will disappear altogether. One of the arguments of the opposition committee is, "You are going to increase costs of production by this Bill, and how are you going to increase your export trade if you increase prices?" That argument has been used continuously throughout the years since the War. The only way of reviving the industry hitherto attempted is by cut-throat competition, thoroughly unorganised—the so-called policy of attrition. If any policy has had an opportunity to prove whether it is right or not it is the policy of attrition. If this Bill will raise prices and do harm how is it that under the normal laws of supply and demand and this hard method of attrition the trade has constantly declined, and that the export trade has fallen from 7,000,000,000 to 2,000,000,000 square yards? Last year there was a fall which was quite exceptional because exports fell to less than 1,400,000,000 square yards, a fall of more than 600,000,000 square yards.

It is quite clear, therefore, that you cannot leave things alone. If you leave them alone under the existing system there will certainly be no cotton trade. Why do we think this Bill might help the export trade? If there is one thing that all will admit it is that the conditions of international trade as a whole have completely altered since the War. We have heard a great deal of what the merchants have done to build up the Lancashire cotton trade, and we know that this country, being the pioneer of the industrial revolution, was able to build up, by purely individualistic methods, an enormous export trade which has enabled us to preserve the standard of living in this country. But those conditions have vastly altered since the War, and if we examine the export statistics of almost any industry in this country it is clear that it now depends largely on bargaining, as the result of bilateral agreements between one country and another. If we examine the markets, the only country in the world of which the exports have increased since the War is West Africa, because in West Africa the Colonial Secretary introduced the principle of quotas on imports. So the one market which benefited enjoyed that benefit as the direct result of Government action.

The President of the Board of Trade has shown that the most serious foreign competitor of Lancashire is Japan, and Japan has the most highly organised of all cotton industries. In that country they have much more severe measures to secure unity in the trade than anything contained in this Bill. If international trade is now so dependent on bilateral or multilateral agreements between Governments, surely an industry which is so organised that for many purposes it can be regarded as a unity, has infinitely more chance both of securing benefits and, when those benefits are secured, seeing that the fruits of them are thoroughly enjoyed.

Let us suppose that under an agreement to-day we got an increased market for Lancashire as a whole, and yet an oversized industry remains with all the redundancy of which we have heard today. It is perfectly possible, nay, from past experience it may be probable, that the benefit of that market would be almost valueless to Lancashire, owing to the cut-throat competition which might take place in it. When an industry is unprofitable it can never be efficient or successful in the long run. Everyone will admit that the Lancashire industry has been very unprofitable since, at any rate, 1921. That was when we had the great depression in the cotton trade, and there has been no substantial revival since that date. The industry is financially exhausted. No industry in such a condition can possibly deal with technical obsolescence. We hear much of the importance of new machinery. How can an industry which is as impoverished as the Lancashire industry get that new technical machinery? It is fortunate for Lancashire that there has not been any great alteration in cotton machinery during the last 20 years, because if there had been, the exhaustion of the industry would have resulted in a still greater decline in trade than has actually taken place.

A word on the subject of combines. I think the hon. Member for South-West Bethnal Green (Sir P. Harris) produced that old bogy; he said that it was the combines who wanted the Bill. I have no doubt we shall hear that again in reckoning the value of a ballot. But under the existing system of free and uncontrolled competition surely the combine has an advantage over the private individual. It is well known that one of the ways in which monopolies have been obtained has been by a combine indulging first of all in price-cutting, and then, having killed all the small individual traders, it obtained a relative monopoly. So that any objection to combines would apply far more under the present system than when this Bill has become law. I think it was Mr. Frank Platt, managing director of the Lancashire Cotton Corporation, who used a phrase that is very apt. He says an elephant chained down is much less dangerous than an elephant running. I should think that the danger of the combines, so far from being increased by the passing of the Bill, would be very much lessened. It may be asked why the combines support the Bill. I should have thought the answer was obvious. Because they, like everyone else, will benefit when the industry as a whole is rendered more prosperous, as we hope it will be by this Bill.

The delays to sectional schemes coming into effect are very great and I hope, when the Bill goes into Committee, the President will be willing to consider Amendments which will speed up the machinery. As the Bill stands, it would take eight months for the first sectional scheme to come into operation. That eight months includes three months for registration, which would be nonrecurring after the first scheme has come into operation, but even for the second and subsequent sectional schemes under the procedure laid down in the Bill, at the very best, that is assuming not much opposition and no amendments by the Board of Trade or by this House, it will take five months and, furthermore, if the House is not sitting at the time the scheme is ready to be laid on the Table for its 28 days, it may be that the scheme could not come in for a period of eight months. I hope that it will be possible in Committee, without altering substantially any of the safeguards, to speed up that machinery. I only hope that the Bill will now be able to be put on the Statute Book at the earliest possible moment, and I hope we shall have the Committee stage on the Floor of the House.

7.18 p.m.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

As probably the only Member in the House who is here as a consequence of the pennies of the impoverished operatives, for whom I am speaking, I feel that I ought to say something about the Bill. I happen to be here because the people who contribute to the political levy, that is, the operative sections of the industry in their trade unions, make it possible for me to come by paying my expenses, and therefore I speak primarily for them and on their behalf. The President of the Board of Trade spoke of people who went from "clogs to clogs in three generations." That is a well-known phrase in Lancashire, because of the way in which those very capable individualists in days past built up a business, were followed by sons who could spend the money that their fathers had made very adequately, and their sons came back to wearing clogs. That is the explanation of it. I want to speak particularly on behalf of those in the industry who have been wearing clogs all the time, and who through all the generations and during the last few years have had to go with those clogs without irons, and clogs without irons are down at heel. I know that London Members will not understand, and I do not think it matters whether they do or not, but the fact is that a clog without irons shows the impoverished state of the individual, and that has been the position of the workers in the industry.

I was interested in the remarks of the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris), who said that anyone who wishes in future to enter the cotton industry will have to be an expert in understanding legislation. I wish there had been some qualification for entry into the industry a little earlier. It seems to me that, if there had been, we might not have been in the Godforsaken position we are in as a consequence of the way it has been managed. I want to enter what, I think, some of my friends would call a caveat. I do not know what it is, but I understand it expresses your dissociation with the forces that have led to the present position. I want to put in such a thing for the worker, for whoever blames the industry or seeks to find a cause for it going down cannot point to the workers. For skill, dexterity and loyalty they have been unsurpassed. You need only look at the representation in this House to test their loyalty. The cotton workers who, in spite of all that has happened during the past few years, have been humble enough to imagine that by consistently voting Conservative they were raising their hopes of entry into the millennium for Lancashire, must have been sadly disillusioned during the past few months. [Interruption.] If you want to deal with 1929, I agree that you were able then, or rather in 1931, to sweep Lancashire, because again the loyalty of the operatives to the-powers-that-be was unsurpassed, and the National Government came back from Lancashire, I believe, stronger than from any other part of the country. Why?

Photo of Major Henry Procter Major Henry Procter , Accrington

Because they had had experience of the Labour Government.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

Yes, and the financial crisis which developed, as the hon. Member will suggest, as a consequence of that experience led them to the position in which their hopes were to be centred in the return of our hon. Friend. They came back. Still they were trusted by the cotton operatives. [An HON. MEMBER: "And still are."] That is a tribute, if anything, to their loyalty, so that their loyalty cannot be questioned. When you are pointing to the downfall of the cotton industry, I claim, therefore, that the workers in it can be exonerated. It is not the workers who are responsible for the position into which the industry has got. I have established that point, and the hon. and gallant Gentleman can have the rest. The admissions to-day have all been that the industry has been brought to such a state that any way out would be taken, whether it was contrary to their beliefs or not—and it is contrary to their beliefs. The operatives are asking that the Bill should be passed. It is not the Bill that we should have brought forward if we had had the opportunity. It does not go nearly so far, but it does contain the collective principle. It denies the individualism upon which the industry has been built up, and to which some Members would still cling in spite of everything. If you want an illustration of "every man for himself and devil take the hindmost," it can be found in Lancashire, and the devil has been busy. There have been a lot of hindmosts during the last few years. What are those dilapidated houses and shops and empty mills that I see week after week when I go home, but indications of where the devil has taken the hindmosts? Why have they become hindmosts? Because of that unfair competition which has been bolstered up by those who have spoken against the principle of the Bill. I have seen it in operation time and time again.

My hon. Friend who spoke from below the Gangway, the leader of the Liberal party—to-day at any rate—suggested that the merchants have made the industry. I am not seeking to deprive anyone of any credit that is due to him, but I have in mind an advertisement that I saw yesterday in which a firm in Lancashire say definitely that it is only possible for them to supply their goods through certain merchant houses. They have been manufacturing that class of goods for the last 37 years to my knowledge and yet they could not get into direct touch with their customers in other parts of the world, because of the close corporation of the merchants, it may be here in London. On Saturday morning I was looking at a sample of cloth. The name of a firm was on it and, to my surprise, it was one of the merchanting firms about which our friend spoke—a London firm. A little time ago I went to the docks to see what kind of firm this was which was busy exporting shirtings to other parts of the world, and I discovered that they were very large timber merchants. There is a little couplet which comes to my mind when I hear this talk about merchanting. I heard it as a boy at school and I wondered then what it meant: Big fleas have little fleas upon their backs to bite 'em.Little fleas have lesser fleas, and so ad infinitum." There is a redundancy problem. The hon. Member for Oldham (Mr. Dodd) asked whether we should have redundancy or not. What I think he meant was whether we should have redundancy schemes. You do not do away with redundancy by refusing to have a scheme. I believe that the redundancy that is there had better be organised and we had better set about it. If what the hon. and gallant Member for Clitheroe (Sir W. Brass) suggested had to be done and whole districts are not to go out, redundancy has got to be organised. I can see more difficulties in it for the workers, and particularly for those who are seeking to lead the workers, than for any section of the owner class. We have heard a good deal about the capital invested in the industry, and I know that there has been, and there is still a good deal of capital invested in it, but when a man has invested his capital he may have invested the whole of it, or he may not.

Every worker who has gone into the industry at 13 or 14 years of age, in my young days at 11, and in my father's days at eight years of age, has invested his life, all the capital he ever had, in the industry. He has lost everything. There is no manufacturer who has lost more than a worker who loses the opportunity of working, I care not how rich he may be. When organising I want to be in a position to say how and where redundancy shall operate in order that small municipal districts which have been set up to cater for the needs of workers in the cotton industry shall not go out altogether. If the present process of attrition goes on—some firms want it— I can see some small districts going. In the little town in which I am living there were 50 years ago 5,350 inhabitants. Ten years ago there were 8,000, but this year the population has gone back to just over 5,000. Ten years ago there were 11 mills running in the little village; there were more looms than there were population. To-day six of the mills are closed and there are only five left. There is nothing else in the village, and if redundancy continues without any organisation it is possible that this village will die altogether. Yet there are four or five firms in that village who could be brought into a scheme if there were organisation.

The principal value of the Bill to me is that it begins organisation for the first time. I think the Title of the Bill is a misnomer. It should not be a "Cotton Reorganisation Bill," but a "Cotton Organisation Bill" The industry has never been organised; and you cannot reorganise something which has never been organised. This is the beginning of organisation. Up to the present individualism has been dominant in Lancashire, but very reluctantly they have been driven to the conclusion that they must accept the collective principle in order to save themselves. It is not that they are in love with it. The workers are not in love with this particular scheme. There is nothing at all in it for them unless it will help to save the industry. The benefits which are coming to the workers through this scheme are benefits which will come as a result of the industry being improved.

Speaking of redundancy, may I suggest to hon. Members who spoke with their hands on their hearts about the merchants, that they must recognise that there are redundant merchants as there is redundant machinery. The number of merchants in operation is not less now than when the trade was three times what it is to-day. There you have a redundancy problem, and it is a question whether you are going to face it. As a matter of fact, we have 2,000 merchants and 300 spinning companies, or nearly seven merchants to every spinning company. It is not so bad if you are getting a living, but there is not going to be very much left if you continue to find a living for these big fleas. There are about 320,000 looms working, and for every 200 looms you have one merchant. From my practical experience I say that you cannot carry that load. If the dead wood is to be cut out as far as the operatives are concerned, it must be cut out at the other end if the industry is to be saved. You cannot carry the merchants in the numbers they are at the present time. If it is true that they bring trade and find markets there is something to be said for them, but if they are simply hangers-on, taking a rake-off, without doing anything constructive, nobody can defend their position in the industry. It is not often that I have the privilege of quoting the "Times," because I do not often agree with what that newspaper says, but I think the "Times," on 18th March, summed up the situation perhaps better than anyone else has done. By sales decreases and by depressing hard facts the industry has been brought to conclusions which are all the stronger evidence of conviction because they are so great a departure from its traditions. Lancashire has been traditionally individualistic. If now it has turned to collective enterprise it is only because it has been driven there. Whether the cotton industry is going of its own accord or whether it is because it is being driven, as long as I find it going in a direction which will bring some advantage to the operatives in the industry, I am going to support a Measure which will take. us along that road. For these reasons I support the Second Reading of the Bill.

7.37 p.m.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

I have listened with great patience to the whole of the Debate, and until now I have not heard one hon. Member speak of the rayon industry. I am in this invidious position, that in my constituency I represent the largest cotton mills in Yorkshire. I represent wool, and I represent the beginnings of the silk industry in this country in rayon. I have been asked by the cotton people I represent to support the Bill, and I have been asked by the silk and rayon people to oppose the Bill. Hon. Members will agree, I think, that I am certainly in rather an invidious position. When I speak of silk, may I say that I speak for and on behalf of the Rayon and Silk Association of Great Britain and Ireland which represents 98 per cent. of the industry and may I say that the rayon industry to-day employs over 110,000 people. This would be a good Bill except for one thing: it places a young and expanding industry under the control of an old, and it must be admitted—indeed it has been admitted—decaying cotton industry. In this respect it runs counter to economic common sense and the trade interests of the country.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

When the hon. Member speaks of the rayon industry does he include people in Lancashire who spin and weave rayon?

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

They are people who wish to be included in the Bill.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

No. These people who are in the cotton industry, as such, desire to be in the Bill, but those people who are in the rayon and silk industry, as such, although they may be operating machinery which is similar to that of the cotton industry, do not want to be in the Bill because their conditions of labour are much better.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

I am sure the hon. Member has heard of the Rayon Association, and they are certainly supporting the Bill.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

That is not my impression. I was going to compare the figures of the two industries. The cotton industry output has fallen in 1937 by 40 per cent. of the total output in 1913, while the rayon industry in the same period has increased its production 22 times. That is surely sufficient reason for giving the rayon industry freedom to develop itself instead of being placed, as it is by the Bill, in a position of complete subservience to the cotton industry. So far as the cotton industry is concerned, it pays no tax of any description to the Treasury. The rayon industry this year has paid over £2,100,000 in Excise to the Treasury, and although the President of the Board of Trade suggested that the industry is really a section of the cotton industry, the right hon. Member for Miles Platting (Mr. Clynes) agreed that it was a new industry, a new-comer; he thought it was certainly an industry and not a section. Indeed, the industry is treated by the Government as an industry in so far as it collected £2,100,000 from the industry last year, and since 1926 has collected just over £30,000,000 from the industry for the Treasury.

If any section of the rayon industry prepares a scheme for increasing the demand for rayon patents the cotton industry can circulate it to the cotton section which may or may not approve of it. If they do not approve, the scheme will be killed, but, even if they approve, the scheme could still be killed under the Cotton Industry Board. Clause 13 of the Bill lays it down that the Cotton Industry Board shall submit the scheme to the Board of Control and the Cotton Advisory Committee. If satisfied that it is expedient the scheme should have statutory effect, the Bill places complete power in the hands of the Cotton Industry Board, and the rayon industry is thus completely at the mercy of the cotton industry.

Photo of Sir Reginald Clarry Sir Reginald Clarry , Newport (Monmouthshire/Gwent)

I think the hon. Member is referring to rayon producers and the effect the Bill would have on these producers rather than on rayon weavers or spinners.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

That is true, and if I have not made myself clear I am grateful to the hon. Member. I am going to suggest that schemes to the advantage of the rayon industry are not necessarily going to be maliciously blocked by the cotton industry. What I say is that there is the power to do that, and there may be the temptation on competitive grounds to do it; and I contend that such a situation ought not to be created by this Bill.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

I think my hon. Friend will agree with me that there are ample safeguards all the way through to prevent a scheme going through if it is definitely to the disadvantage of the rayon industry.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

I hope to deal with the safeguard?, and also to suggest a further safeguard. The reason that is advanced for bringing the rayon industry under this Bill is that cotton and rayon can be and are woven on the same looms, either separately or as mixtures. That is held to be a sufficient justification for putting what I would describe as young man rayon entirely under the domination of old man cotton. For instance, in the event of there being a levy on cotton spinning or weaving machines—it is true, as my right hon. Friend has said, that some rayon is woven on similar machines —there is nothing to stop the levy being made also on the rayon machines. This Bill places the cotton industry more or less in the position of a potential vampire in relation to the rayon industry.

Photo of Mr Edward Fleming Mr Edward Fleming , Manchester, Withington

Can my hon. Friend tell me whether there is any firm in the rayon producing industry that is using machinery of the year 1885?

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

I think it can be truly said that there is no more progressive industry than the rayon industry. That industry is using more automatics than any other section of the cotton trade. It has been admitted that one of the reasons the cotton trade cannot develop and improve its machinery is an insufficiency of money. In the cotton industry in this country, there are only 15,000 automatics. How can the industry expect to produce in competition with other countries if it has not the latest machinery?

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

That is due to the economic position of the industry.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

I agree. My right hon. Friend the President of the Board of Trade said that this Bill cannot be worked without good will. The rayon industry wants safeguards which would not interfere with any of the schemes which the cotton interests might bring forward for the cotton industry. All that the rayon industry is asking is that it should be regarded not merely as raw material for the cotton industry, but that its existence as a separate industry should be recognised. Therefore, the industry proposes that a rayon industry committee should be set up under the Bill, as a recognised authority, to safeguard and promote the interests of the rayon industry, without its being subservient to the cotton industry. The rayon industry committee would work in close association and in co-operation with the Cotton Industry Board. I hope that my right hon. Friend will agree that this is a reasonable compromise. The principle of a rayon industry committee has been accepted by the Board of Trade in Clause 15, but there is a snag in this. The formation of such a committee is contingent upon a recommendation of the Cotton Industry Advisory Committee and the acceptance of such a recommendation by the Board of Trade. Thus, the interests of the rayon industry can still be taken out of the hands of the people who run that industry.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

Everybody wants to meet any legitimate claims of the rayon industry, but I would point out, in connection with this Clause, that the Cotton Industry Advisory Committee are to set up a rayon committee if it is desired by all sections of the rayon industry. As I have explained before, the difficulty is that there is a complete division in the rayon industry, and that although the rayon producers urge it, the weavers and spinners do not want to sit on the committee at the present time. They want to be in the other scheme. If all the sections of the rayon industry want to come together, there will be provision for them to do so, and such a committee can be set up.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

If the rayon producers—who are a very large and important section, and represent an industry in themselves—suggest that they want a rayon industry board which shall work parallel with the Cotton Industry Board, what is the objection, since they would then have control over their own industry? They would work in collaboration with the Cotton Industry Board, they would still go to the Advisory Committee, and ultimately to the President of the Board of Trade. If the producers want it, what is the objection to have a rayon industry board? After all, if there were no producers, there would be no weavers, and therefore, the producers are fundamental to the industry. If this board is not set up, then the interests of the rayon industry producers axe taken out of the hands of those who run the industry, and the rayon industry is definitely made the Cinderella of the cotton industry.

In connection with Clause 9 of the Bill, let it be noted, in particular, that the Cotton Industry Board may authorise discounts and price concessions for rayon as well as for the cotton industry. If that means anything, it smacks for a form of financial dictation. The rayon producers will have no control. The rayon industry is far from being a small affair which can be treated as if it is merely a section of another industry. In 1937, the total value of the rayon trade, in fabrics and hosiery, was about £33,000,000, and the industry employed over 109,000 workpeople. Apart from the importance to the national economy of such a growing industry, there is the important question of war chemicals, which are produced by this industry. This makes the matter one of national safety as well as of industrial prosperity. I submit that there are very good reasons for placing the administration of the rayon industry in the hands of an authoritative, and above all an independent, committee chosen from among the producers; and this I suggest should be the rayon industry board. Such a measure of independent control of the rayon industry would not be detrimental to the cotton industry. The two industries could and would work together, and the Cotton Industry Board would be free to concentrate on the problems of the cotton industry, which are its real concern. The rayon interests feel strongly that if the rayon industry is handed over to the cotton industry, they will suffer, and I suggest that the country will be very much the poorer.

With regard to price-fixing and merchanting, under the Bill there is price- fixing for spinning, with a margin of profit, and price-fixing for weaving, with a margin of profit—price-fixing with a margin of profit right up to the finished product; and then, when the finished product is merchanted, there is a minimum. I would emphasise that in the marchanting of fashion goods, sometimes a question of colour makes all the difference. If they want to sell below the minimum price in order to get rid of their goods, they will have to ask the Cotton Industry Board before being allowed to do so. That seems to me to be unadulterated nonsense. I conclude by saying that I am in a very invidious position. In my constituency there is a large section of the cotton industry which desires to have this Bill, and there is also a section of the rayon industry which opposes it. I ask my right hon. Friend to help me out of this dilemma. If he can insert some safeguard which will satisfy the producers' end of the rayon interests, then I shall be happy and they will be happy, and we shall continue with good will, and vote wholeheartedly for the Bill.

7.57 p.m.

Photo of Major Henry Procter Major Henry Procter , Accrington

It is well that we should not deceive ourselves by thinking that this Bill will in any great measure solve the problem of the cotton industry, which is a problem of the loss of export markets. Indeed, one of the things that may well prevent an increase of our export trade is the fixing of prices. If there is a flexible price, it is easy to compete with competitors abroad who are under-cutting us. Let us have no illusions on that point. I should like to take this opportunity to express my thanks to the Government for co-operating with the cotton trade in producing this Bill. However, it is very sad to think that at least 25 per cent. of this great industry seem to be insufficiently interested to vote one way or the other on this matter. That is a very sad commentary on the industry as it is.

I have felt all along that if the cotton industry could speak with one voice, the National Government would do anything for it, within reason. I recognise that the majority of the cotton trade has brought forward this Bill as an attempt to solve the problems of the industry. I shall not vote against the Bill, but in order that the Bill may be a workable and efficient Measure, there will have to be some drastic Amendments to it. These we can deal with in the Committee stage. I listened with pleasure to the speech of the hon. Member for Farnworth (Mr. Tomlinson). I am sure that no one in the House can describe the plight of the industry better than he can, but I regret that in his speech, which we all enjoyed, there was no constructive suggestion for helping the Bill to do more for the people he represents.

I am certain that in the Committee stage the hon. Member and myself will see that the interests of the workers in this industry are safeguarded. Care will be necessary in order to make sure that in the carrying out of the redundancy scheme, men and women are not put on the scrap-heap along with the machines. A cursory glance at the Bill reveals one or two other matters which require amendment. First, it seems to me that the proposed board is far too large to be efficient and that it could be reduced with advantage. Then there must be amendments to allay the fear which now exists in the trade. Certain cotton manufacturers who are efficient and who use up-to-date methods do not wish their competitors to know the details of the processes employed by them. They fear that this board may send people round to inspect their works and that some "Nosey Parker" would find out trade secrets and pass them on to other manufacturers. In Committee, some provision ought to be inserted to safeguard trade secrets.

I also suggest that the President of the Board of Trade ought to give some assurance that if and when this Measure is placed on the Statute Book, and the industry is in a position for the first time to speak with a united voice, he will effectively co-operate with it by getting better trade agreements, as far as Lancashire is concerned. I know that the right hon. Gentleman has already done well in certain directions but a little stimulation can do no harm and might prove helpful to Lancashire. Lastly I would point out that the Government, apart from giving its blessing to this Bill, is doing very little for the industry in comparison with what it has done by direct financing assistance for other industries. The direct financial contributions for research and publicity under 18 are limited in accordance with the schedule to a maximum of £100,000 during the first four years of the operation of this Measure. Compare this financial assistance to the cotton industry with that which has been given to other industries by way of subsidy. The Government have given £21,000,000 to the beet sugar industry; £18,000,000 to the beef producers; £6,000,000 to the milk producers; £2,000,000 to land fertility schemes; £4,000,000 to tramp shipping; £4,000,000 to civil aviation and £130,000 to the herring industry. Agriculture is now receiving about £12,000,000 a year.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

May I ask the hon. Gentleman why he was so indignant when I pointed out those facts to his constituents?

Photo of Major Henry Procter Major Henry Procter , Accrington

I have no recollection of ever having been indignant with my hon. Friend. I like him too well to be indignant with him. My quarrel is not with him but with some of his ideas. I point out these facts now to the President of the Board of Trade because it seems to me that in comparison with those figures the amount proposed in the Bill is a very paltry sum indeed to give to an industry which has done so much not only for England but for the British Empire. I suggest that the sponsors of the Bill should co-operate with the right hon. Gentleman and see whether help cannot be provided which would enable us to beat our competitors at their own game. Where they subsidise their exports, let us subsidise ours. In that way something practical may be done as a result of the Bill.

8.5 p.m.

Photo of Sir Henry Fildes Sir Henry Fildes , Dumfriesshire

I wish to express a view which has not, I think, been heard in the Debate so far. First, may I be allowed to say that whether or not there is a majority in the industry in favour of the Bill does not seem to me to affect the merits of the Bill. There is no need to refer to that question beyond saying this: It was suggested that there was a crying out in the wilderness of Lancashire for this Bill, the truth being that only 49 per cent. of the people in the producing section thought it worth their while to get out of bed to vote for it, and when it came to the merchanting section—those poor people who have to deal with the product —there was a killing majority against it. As I say, however, that does not affect the merits of the Bill. I had been asked to move the rejection of the Bill, but as the President of the Board of Trade intimated that he intended to give time upstairs in which it could be properly investigated—[HON. MEMBERS: "Why upstairs?"] I understood that it was intended to send the Bill to a Standing Committee upstairs.

Photo of Sir Henry Fildes Sir Henry Fildes , Dumfriesshire

I thought it was to be sent upstairs to a Standing Committee, where it could be thoroughly investigated. May I, then, ask the right hon. Gentleman whether he is prepared, by referring this Bill to a Committee upstairs, to give an opportunity of having it properly investigated, and whether, provided there is no fractious or polemical opposition, he is prepared to give the opponents of the Bill a fair hearing and a fair chance? Perhaps I have no right to put that question now, but from my point of view and the point of view of those who regard the Bill with grave misgivings there are several points which have to be considered very seriously. There is a cotton industry in Lancashire which, if not prosperous, has over a long series of years met its commitments with regard to Income Tax and carried on, without asking for support by way of subsidy or in other ways, and there is a feeling that this comparatively successful section of the industry might be placed under the control of, I will not say the incompetent, but the unlucky part of the industry.

I am one of those who are prepared to vote for a minimum wage in the cotton industry. The day has gone when we could hope to recover our trade in Japan and India. It is not a very dignified thing that Lancashire operatives should get up four or five or six o'clock in the morning to make loin clothes for the poorest people in the world, the natives of India and China, and I think that we, as an industry, ought to welcome the fact that those people have now reached a stage at which they can make their own loin clothes and other necessaries for which they cannot afford to pay a price which would maintain the standard of living we wish to see in this country. I would ask the House to remember that this country has sold to Japan and India the machinery which they are now employing to supply their own needs, and it does not seem to me to be commercially fair or moral to deny to those people to whom we have sold that machinery, the opportunity for the full exploitation of their investment and their purchase from this country.

It would appear that, under this Bill, the combines will largely control the election of these five committees, and I hope the Parliamentary Secretary in his reply will give us a clear-cut statement on that point. One thing which is worrying people in Lancashire is this: The spinning section will elect a representative and the Lancashire Cotton Corporation, the fine spinners, the Egyptian combine, and one or two great firms like Horrocks's and Joshua Hoyles', together will decide who is to be the representative of the spinning industry on this committee. Then there is the Bleachers' Association. Nobody knows what efforts the bleachers have made to place the industry on a competitive basis, and they deserve great credit, but if you take the Bleachers' Association and the body which is known as the United Bleachers, those two, with one other body, can by sheer weight of machinery, control the representation of the whole industry. In each case, individuals or collections of individuals who have played a great part in the industry will have their influence wiped out. The protection of minorities is something which we have a right to ask the Government to maintain.

Then there is the case of the merchants. Few Members of this House understand the part which the merchants have played. The manufacturer brings his completed week's work to Manchester on a Friday morning at 10 o'clock and draws his money at 12 o'clock or 2.30 o'clock on the same day. When these goods are delivered the merchant pays for them the very same day. He is responsible for bad debts. He may send them out abroad and not get a shilling back for them. He takes all this responsibility, and I would ask the Government not to divorce the interests of the merchant from those of the cotton trade. It is vital that we carry the good will of the merchant, because in the supplying of his needs— and I am talking of the export trade entirely—if you treat him too roughly, he has other sources of supply to which he can go. [Interruption.] I hope no one will make unkind references to a body of men who have suffered very gravely and who have stuck by the British cotton industry.

Whatever is done now, I do hope the President of the Board of Trade will see that three things shall ensue, the first being that the operatives shall get a living wage, the second being that the persons who handle the product after it has been made shall receive due consideration, and the third being that the individual in the industry, who has never yielded to the blandishments of high profits that the combines look for, but who has carried on year by year and day by day, shall not be prejudiced. I remember names like Fielden Brothers, who have been 125 years in the trade, and literally dozens of first-class firms who ask for nothing, who do not want a subsidy, who do not want £10,000,000, who ask no more than to be allowed to carry on, to pay trade union rates of wages, and to do the best they can.

Finally, what have we in this House done to meet this problem? We have had a Coal Bill proposed from the Treasury Bench, and it is computed that last year £1,250,000 was added to the cost of coal used in the industry. If you work that back to 1914, and if we had been producing on the basis of 1914, it would be an advance of £4,000,000 in the cost to the cotton trade. The miners have a right to the money—I am not quarrelling with that—but let us get an industry that can pay the miner a decent wage for getting its coal and that can pay the operatives a decent wage for weaving and spinning. We are paying no per cent. more for wages than in 1914 in the spinning section, 80 per cent. more in the weaving section, and 80 per cent. more in the bleaching, etc., section. I am not saying, "Do away with it," but I am saying that it will be wiser for us to be content with a smaller industry with some dignity about it, in which we can pay a reasonable wage for the services that are rendered to the industry, an industry whose product is something which we can be proud to supply and which afterwards our customers will be proud to purchase from us.

8.19 p.m.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

My apology is due to the House for entering this Debate, and my excuse is to be found in the fact that so far every speaker in this Debate, including the President of the Board of Trade, has assumed that the cotton problem is a Lancashire problem and a Lancashire problem exclusively. Just because that idea is so widespread in the country generally and so very strongly embedded in the mind of every Lancashire Member, I feel it absolutely essential to speak in this Debate. My reasons are included in Clause 36 of the Bill, where it says: This Act shall apply to Scotland subject to the following modifications:

  1. (a) the expression 'chattels' means corporeal moveables';
  2. (b) in Part II of the Third Schedule for references to the High Court and to the county court there shall be substituted respectively references to the Court of Session and to the sheriff court, and proviso (b) to paragraph 4 of the said Part II shall not apply."
That is my reason for coming in here, because there is a cotton industry in Scotland, and, unfortunately for myself on this occasion, a large proportion of it is concentrated in my division. The hon. Member for Elland (Mr. Levy) told me about the difficulty he was in, because of the various interests in his constituency that were giving him different advice and instructions as to how to act. I am in a more difficult position still. I have two big cotton firms in my constituency; the one tells me to support the Bill very strongly arid the other tells me to oppose it very strongly. If they had both been against the Bill, I would have known that my duty was to support the Measure, or if they had both been for it, my duty would have been to oppose it, but when I am in this position, caught between the two, I should be at a very considerable loss as to how to act if I had not a few ideas on the subject myself.

I was interested in what the hon. Member for Dumfries (Sir H. Fildes) was saying, how Lancashire had exported cotton machinery to Japan and India and had helped to build up competition in far parts of the globe. I am very interested in another aspect of the same thing. Last year at this time I happened to be staying in Lancashire while attending a conference, and I was living in one of the hostels that accommodate students from Manchester Unversity. The ordinary students had gone off for their Easter holidays, and all that were left over in the hostel were students from foreign parts, who had no friends or homes to go to in this country. Nearly every one of them was a Latin American— Argentinian, Brazilian, and so on—and each one of them to whom I spoke, about a dozen all told, and asked what they were studying at Manchester University, told me "Textiles." So that you are not merely exporting machinery from Lancashire, you are exporting skilled technical people also and inviting citizens from other countries to come and acquire your knowledge of textile manufacturing so that they can go back to their own quarter of the globe and do, what they have a perfect right to do, and indeed, from my point of view, a duty to do, namely, start making their own textiles and not depend on Lancashire. That is the long-term problem which will not be solved by this Bill.

This Bill presumably is attempting now to organise, under some measure of national support and direction, the remnant of what was once a world industry, and I am standing up here to make two points. First, I have seen several Measures of this description before the House. I have seen them in agriculture, in the coal trade, in shipbuilding, and in other industries, and I always think, as the hon. Member for Dumfries said, that it seems grossly unfair when we are giving to a privately-owned industry national support and national aid, even when we are not giving actual financial support. It seems to me that that will be the next stage in the development of this type of legislation for Lancashire cotton, that we should have some provision definitely in that legislation for securing the rights of the workers who are employed in the industry. After all, Lancashire cotton financiers must have made a lot of money at one time, and if they are like financial magnates in other branches of industry, they will not have all their eggs in one basket. I should imagine that the more clear-sighted of those who have made money in Lancashire cotton will have placed a few savings in other industries and in other parts of the country.

The workers, however, are completely involved in the industry and in the locality. Their homes are there and are very often owned by the operatives themselves. Their labour is associated with the mills, and, as the hon. Member for Burnley (Mr. Burke) has said, in these later times some of them, in order to save the industry, have put their savings into shares in cotton. They are tied to the soil, as it were, of Lancashire and to cotton in a way that the financial capital of cotton is not tied. Therefore, when one is making provision for safeguarding the capital of the cotton industry, something should be in the legislation to ensure that the people who have to work in the industry shall have something in the way of a secure income. In these days a representation on the boards of control of one kind and another which gives to the operatives 20 per cent. of the total control seems to me not right or fair. In the politics of the country the electors are prepared to give the workers' representatives a much bigger share of representation than one-fifth, but in the setting up of the various committees and boards that are to work on the organisation of the cotton industry, one-fifth is the largest workers' proportion of representation that is permitted.

I repeatedly asked the President of the Board of Trade while this Measure was in preparation and under discussion whether the Scottish end of the industry had been consulted. A month or so ago he was able to assure me that the Scottish cotton trade had agreed to the Measure. I am not quite sure about it. I have certainly had a note from the Glasgow Chamber of Commerce saying that their textile committee had approved the Bill. Textiles, however, are a secondary matter with the Glasgow Chamber of Commerce, as can be readily understood, and cotton textiles are subsidiary to that. In Scottish cotton the biggest element is cotton thread manufacture, the J. P. Coats' combine and associated companies. They are the dominating power in Scottish cotton. They are big enough and strong enough to look after themselves. They are looking after themselves because they are specifically excluded from the operation of the Bill. In my constituency there are firms with just as long and as honourable association with the manufacture of cotton as firms in any town in Lancashire. There is a hereditary tradition of textile work. Admittedly, it is a minority in my constituency, but it is there. Generation after generation have been engaged in cotton and have never drifted away to shipbuilding or bridge-building or any of the other industries in the division. They are as interested in the maintenance of their industry in Bridgeton as any hon. Member is in its maintenance in Bolton, or Elland, or Burnley or any other place.

Therefore, I am anxious that what we have left of a cotton industry in Bridge-ton shall not be destroyed by the operation of this Measure. I can imagine a board of 15 Lancashire people, as they probably would be, sitting down to consider where redundancy exists and making short work of the Bridgeton mills. I am certain that one of the first things a Lancashire committee would decide is that the Bridgeton mills are redundant.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

We are always fair in Lancashire.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

I have had some experience of Lancashire in politics, and they are about as fair as the average Scotsman is when it comes to looking after his own interests. Let me point this out to the hon. Member as showing an example of Lancashire fairness in the matter of cotton organisation. Forty years ago, when I was a boy, in the town in which I lived, a small community of 10,000 people eight miles from the centre of Glasgow, our one staple industry was calico printing and its associated industry of bleaching. We had seven works within a radius of about two miles engaged in bleaching or calico printing. Forty years ago some men in Lancashire with big ideas decided that this small-scale calico printing business was uneconomic, and they decided to form a combine. It was known as the Calico Printing Association. Scottish people were invited in, and the head of one of these local firms was given a directorship on the first board of directors that was set up. Instead of seven calico printing and bleaching works in that area there was then a collection of derelict properties. Not one bleaching works or calico printing works was left in the whole district. That was an example of reorganisation in the cotton industry 40 years ago.

Lancashire believes, what, of course, is always right on paper, that it is more economic to concentrate production in the most favourable areas and near to the big supplies of raw material. If Lancashire carries that logic too far, the production will all be carried on in Egypt, or India or the southern States of America where cotton is actually grown. We here, however, have not to consider merely harsh economics. We have to bear in mind social considerations as well. I think all of us will agree that, looked at in retrospect, it has been a bad thing that cotton has been so concentrated in Lancashire. It has been a bad thing for Lancashire. I am sure that the local governing bodies in that county to-day must be looking round wishing they could get some other kind of industry. That is certainly true of South Wales, which has been a one-industry area concentrating on coal. The one industry area, however sound it may be from the point of view of abstract economics, is absolutely wrong from the point of view of social considerations and the humanities. I ask the President of the Board of Trade to consider when this Bill is in Committee doing something to see that the outlying scraps of the cotton industry—because, relatively to the whole, they are only small—shall not be slaughtered as the first victims on the altar of efficiency. I would further ask the right hon. Gentleman who has brought forward this Measure for the reorganisation of the cotton industry—which when reorganised must be smaller than it has been in the past—to concentrate attention on how to turn Lancashire from a one-industry county into a varied-industries county.

In face of my constituency difficulties I cannot offer that enthusiastic support to the Measure which otherwise I might, nor can I offer uncompromising hostility. I am always interested in these experiments. It has been very interesting for a number of years to watch capitalist politicians trying to devise some means of maintaining private enterprise. Up to date I do not think they can mark up one victory. The state of agriculture still remains unsatisfactory, to put it mildly; and in the case of shipbuilding, bacon, milk and all the rest of them, none of the attempts to develop some sort of mongrel combination between private enterprise and public control has so far produced the success which its promoters hoped for. "I hae ma doots," very grave doubts, about the success of this particular Measure, but I am not averse to the experiment being tried.

8.36 p.m.

Photo of Mr John Remer Mr John Remer , Macclesfield

There are many parts of this Bill which I dislike, but I do not propose to oppose it, mainly on the ground that my right hon. Friend, in his Second Reading speech, said that he was going to consider very closely the Amendments which would be put forward in Committee. I hope that the Committee stage will be taken upstairs and not on the Floor of the House, in spite of what has been said to the contrary, because I think a Bill like this will be considered much more carefully upstairs. I would ask the Minister to consider what I should regard as the most important Amendment which could be made in this Bill. It would be an Amendment to Subsection (6) of Clause 16. Under the Bill as it is any Order which is made will be laid on the Table of this House for 28 days, and unless the House passes a Motion against it it will become the law of the land. Everybody knows that that procedure offers no safeguard whatever. All that could happen would be that we should have to submit a Prayer after eleven o'clock, when it would be almost impossible to keep a House and to secure adequate consideration for the matter. I suggest that the Bill should be amended to conform with the procedure of the Import Duties Act, under which a Resolution has to be passed by this House before the Orders of the Import Duties Advisory Committee can become law. Such a change would make no difference to the speed with which the regulations could be put through, and if there were any serious objection to them from any large section of the trade there would be an opportunity for their opposition to be voiced in this House.

The main point to which I would call the attention of the Minister is that the Bill ought to have a different name. Instead of the Cotton Industry (Reorganisation) Bill it should be called the "Cotton, Rayon and Silk Industry (Reorganisation) Bill," because it goes much further than the control of the cotton industry. It controls a very large section of the rayon industry, and I am informed that in the borough of Macclesfield there is not one single factory engaged in silk manufacture which will not come under its provisions. I am informed also that not a factory where more than 25 per cent. of cotton or rayon is used in the manufacture of silk mixture goods will escape.

Photo of Sir Ronald Cross Sir Ronald Cross , Rossendale

Did the hon. Member say 85 per cent.?

Photo of Mr John Remer Mr John Remer , Macclesfield

I understand the Bill to say that if there is 25 per cent. of cotton or rayon in a piece of silk mixture the factory manufacturing it will come under the provisions of this Bill. If I am wrong, then I hope that I shall be corrected, but if I am right I hope that some alteration will be made in that position. This is a matter of very considerable importance. The silk industry is not an exporting industry. It is almost wholly an industry producing for home consumption, and anything which would increase the price of silk goods or silk mixtures would be a very disadvantageous matter to the silk industry, which is already suffering very severely from Japanese competition, a competition which started five or six years ago and for which the Government have not yet been able to find any solution. In the silk industry there is no protection as such. A revenue duty is placed on the raw material, and there is an excise duty upon all artificial silk or rayon manufactured in this country. When cotton and rayon mixtures are exported there is already a Government subsidy which is provided by the difference between the excise on the rayon and the amount of the drawback which the cotton manufacturers receive when it is exported. There is thus a definite subsidy, though the right hon. Member for Epping (Mr. Churchill), when introducing the Silk Duties, refused to call it protection or a subsidy and insisted upon calling it compensation for the inconvenience which the manufacturers were suffering. In Committee there should be a close study of the Bill to see how far it affects other industries besides the cotton industry and to see that those industries are dealt with in a generous manner, so that their businesses are not interfered with.

8.44 p.m.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

This Debate has now ranged over so wide a field and so many Members have taken part in it that I hope I may be forgiven if what I have to say about it is not entirely new. So far as I can see there is not in the House or in the industry any overwhelming enthusiasm for the Bill. That is due to two causes; on the manufacturing or employing side it is due to the fact that, reluctantly and fighting every inch of the way, the most uncompromisingly individualistic industry in this country has been forced to realise, as the President of the Board of Trade said this afternoon in his speech, that only upon a collective basis can that industry hope to meet the greater efficiency of competing industries which are themselves organised upon a collective basis. Because the industry has been brought to that realisation it is prepared to support the Bill, but because it has been brought there against its will it supports the Bill without enthusiasm.

On the workers' side, the lack of enthusiasm is due to the realisation that the Bill, though for the first time it attempts in some degree to introduce that collective principle into the industry without which the industry is for ever doomed, can introduce that principle, under this system and this Government, only by consent; and that the price paid for that consent has been so high as to make it doubtful whether the Bill, with all its checks and safeguards and counter-checks and counter-safeguards, can really be what everybody hoped for who supported the proposals now embodied in the Bill. The hon. Baronet who spoke on behalf of the Liberal party was against the Bill in principle, and he dwelt at great length upon the difficulties of all the committees and boards who would have to administer the Bill. He failed to realise that there would be far fewer boards and committees had it not been necessary to introduce them into the Bill in order to obtain the reluctant consent of the manufacturing side of the industry, or portion of it, to the principle of the Measure.

On the workers' side there are other reasons for the lack of enthusiasm; but when it is realised and admitted that the lack of enthusiasm exists let it not be supposed that those who question whether the industry as a whole is in favour of the Bill have any substance in the question which they raise. I offer to the House two tests which I think are fair. They give an answer which puts beyond controversy whether the industry wants the Bill. One test is that, of all the Members who have taken part in this Debate, to whatever side, party or part of the country they belong, not one has said: "I am against the Bill, and if there were an opportunity to vote against it I would do so." The other test, although it is not so easy to apply, is that if the Bill be passed, as I hope it will be, there will be no outcry in Lancashire against it, but that if, by some incalculable chance, the Bill were rejected, I doubt very much whether any Conservative Member representing a Lancashire constituency would see this House again after the next election. When you apply those two tests fairly, and when you get the answers which I suggest are inevitable, you are driven to the conclusion that the industry has made up its mind that it wants this Measure and that, in those circumstances, no one would take the responsibility of refusing to the industry as a whole the measures which it has demanded and which it says, whether rightly or wrongly, will enable it to do something.

Having said that, I want to make one or two short points. Two of them have already been referred to, and I will therefore touch upon them only briefly. The other point has not yet been stated, but I think it absolutely necessary to have it said. I first want to make the point in which the hon. Member for Bridgeton (Mr. Maxton) has anticipated me. I see no reason why a Measure to be passed by the Legislature of this country to reorganise the cotton trade should not contain some provision for a minimum wage. I heard one hon. Member say to-day that the cotton industry is paying 80 per cent. more in wages to-day than it paid before the War. I wish that he had had time to develop that point, because I do not quite know what he meant. I know that the average wage of a fully employed weaver in Lancashire is about 32s. I wonder whether the hon. Baronet meant that that figure is 80 per cent. more than the weaver got in 1913. Whether that is so or not, if you reorganise an industry you ought to do it in such a way as to make the average wage of the fully-employed weaver, who is as highly skilled a workman as anybody in this country, more than the wretched sum of 32s.

Another point is that the Bill takes no account at all of, and makes no attempt to deal with, the problem of underemployment in the weaving section of the trade. Considered as a Measure for reorganising the cotton trade these proposals are lamentably defective. I do not want to dwell upon this point at any great length because it has been raised repeatedly in question and Debate, and deputation after deputation has been to the Ministry of Labour and to the Board of Trade. Nothing has been done and nothing so far has been proposed. The last time that the Minister of Labour was pressed hard upon the point in Debate he confessed his complete inability to deal with the matter and laid the blame at the door of the organisation of the trade. I do not know whether that be justified or not, or whether some proposals might not have been made by that Department for meeting the deficiencies in that organisation where they had resulted in the cruel injustice that arises out of under-employment. Here we have a Measure designed to reorganise the trade. Cannot we reorganise it?

When you talk about unemployment in Lancashire you are only at the beginning of the problem. In my constituency the actual percentage of unemployment among weavers, who form about 80 per cent. of the insured population of the constituency, those who have no work of any kind never represents less than 22 per cent. or 23 per cent., and sometimes represents as high as 40 per cent. But those people are considerably better off than many who are employed, because many of those who are employed put in a full 48-hour week by looms some of which are idle a great part of the time, so that they go home at the end of their 48-hour week with wages that may be as low as 10s., and are rarely higher than 15s.; and they have no remedy, either under the Unemployment Act or under the Poor Law Act. Will it be believed that there are not in my constituency more than 10 or 12 per cent. of employed weavers who are fully employed all the time? In the industry in my constituency—and I refer to my constituency because I happen to know it best, and not because it is any different from other similar districts in the industry—as many as 70 per cent, of the workers are living either on or below the level of subsistence fixed by the Unemployment Assistance Board. It is a substantial defect in a Measure which proposes to reorganise the cotton industry that it appears to be completely unaware that that problem exists.

Everybody who has taken part in this Debate has expressed the hope, in which I most earnestly join, that these proposals may secure a quick passage, and may bring, so far as they are able to do so, speedy relief to this tragically stricken industry. In passing, may I say that I do not agree with the hon. Member who spoke from below the Gangway opposite in his hope that the Bill will be sent to a Committee upstairs. I profoundly hope that it will not. Time is of the essence in this matter. Already there has been great delay, and, if there is any advantage at all to be derived from the Measure, we ought to be put in a position to get that advantage promptly; it should not be delayed by sending the Bill upstairs and perhaps coming to the end of the Session without having it on the Statute Book at all. Everyone wants to see the Measure in operation quickly, and everyone hopes that it will bring some relief. But everyone knows that, even if the Measure succeeds to the utmost of our most optimistic hopes, it will not enable the Lancashire cotton industry ever again to enjoy the world monopoly or anything like the world monopoly of the cotton trade that it once did.

Nobody, however, appears to have drawn what I suggest is the proper inference from that common belief, namely, that, when you contemplate a contracted industry, and hope, perhaps, to recover a little, but not more than a little, of the lost trade and to maintain it at that slightly higher level—when you have done that, you may have dealt as well as you can deal with, the cotton trade and its problems now, but you will not have dealt with the problem of Lancashire, because, on that hypothesis, you will be accepting the position that for ever some, perhaps many, thousands of workers must never again look to this industry for their livelihood, that many places in Lancashire must never again look for a share in whatever prosperity this industry again recovers, or must share in it only to the advantage and benefit of a portion of then-inhabitants; and there are in Lancashire, or in a great part of it, no other industries.

I hope the Government will not believe, or will not be allowed to believe if they show any tendency to do so, that, when they have secured the passage of this Bill into law, their responsibilities are at an end. On the contrary, their responsibilities will have begun. There are no serious proposals in the Bill to compensate redundant workers. It is true that there is power, and schemes are being drawn up, to include some kind of compensation for workers, but it is a power and not a duty, and it is a power that will not always be exercised. Lancashire, if the cotton industry is restored only to the extent that is proposed in this Bill, will remain a distressed area, and it will then become the duty of the Government to devise some method whereby the rest of the county, deprived by the operation of this Measure of any hope of sharing in the renewed prosperity of the industry, can look to the Government for new industries or for help in some kind of way. The Government must devise some way of preventing the rest of Lancashire from developing into a permanently distressed area. I hope that, when the hon. Gentleman comes to reply, he will be able to tell us that that problem is present to the mind of the Government, and that they will at some early date let us know what are their proposals for bringing some kind of renewed prosperity to those persons and those places in Lancashire that, by the very hypothesis on which this Bill is based, are not to share in its benefits. That is a grave responsibility of the Government. I hope that they will be able to tell us that they have not ignored it, and that at no distant date they will tell us what in that regard their plans are.

9.3 p.m.

Photo of Sir Harold Sutcliffe Sir Harold Sutcliffe , Royton

It must be some considerable time since any Measure before the House obtained so much unanimity as this one. We have had speeches from Members of every party in the House this afternoon, and everyone, so far, has expressed sympathy with the Bill. It was thought at one time that some opposition might arise, but apparently it has not done so. I rather suspect, however, that it may be kept for the Committee stage of the Bill, and, with regard to this, I agree with the hon. Member for Nelson and Colne (Mr. Silverman), who has just been urging that it should be taken on the Floor of the House. My hon. Friend the Parliamentary Secretary will be aware of the document signed by a large number of Lancashire Members which was sent to my right hon. Friend the President of the Board of Trade, conveying the opinion of the Lancashire Members that it would be a very great advantage if the Committee stage of the Bill could be taken on the Floor of the House. We all know how vital it is that the Bill should pass speedily into law, because otherwise it cannot come into force next year. I hope that my right hon. Friend will bear that in mind when he comes to make his decision.

To-day we have discussed many aspects of this problem, and I do not propose to dwell for more than a moment or two on the present state of the industry, but rather to speak about the future and of what we hope from the Bill. Exports of cotton piece goods in 1938 sank to the lowest level that anyone now in the trade has ever experienced. It used to be said that all the spinning for the home trade was done before breakfast—and it was rightly said. In those days 80 per cent. of the production was for export; to-day it is only 45 per cent., and the remainder is for the home trade. If it were not for the home trade we should be in a much worse position even than we are. The index of employment in the industry has fallen from 80.34 in 1937 to 56.8 in 1938. That is a very serious drop.

For those reasons I welcome this Bill. It will enable Lancashire, for the first time in its history, to speak with a really united voice. Something has been said about the ballot not being satisfactory, and about the majority not being sufficient, but we are confronted here with the largest majority we have ever had in the cotton industry for any scheme, and that is an adequate reason for my right hon. Friend the President of the Board of Trade to go ahead with the Bill. It has always been very difficult in Lancashire to get a majority for anything. In fact, it has always been a gibe, not only in this House, but outside, that it was never any good doing anything for Lancashire, because it had no idea what it wanted and the industry was totally unable to agree. At last that has been changed, and I am very pleased to see it. No one can say that the President of the Board of Trade has rushed this Bill. There has been no stampede! During the years that have been taken in getting this Bill into shape in the county, not only were ballots held by the Joint Committee, but the President of the Board of Trade took his own ballot to make certainty doubly certain. I should like, if I may, to congratulate him on the way he moved the Second Reading this afternoon. I feel sure it is largely due to the very sincere manner in which he spoke from his own knowledge of the conditions in the county that the Bill has gained such a unanimous welcome.

There is no doubt that the opposition committee have worked extremely hard in trying to raise public opinion, in the county especially, against the Bill, but they have been singularly unsuccessful. On many points they have been met by the Joint Committee; in fact, in many ways the proposals have been considerably modified, and it was thought months ago that they would be acceptable, but up came the opposition committee again with a new set of proposals and demanded further concessions. Concessions could not continue to be made for ever, and a stand had to be made. Some of the members of the opposition committee were too shy to reveal their names, and the world does not yet know exactly who they are. But it was obvious that many of the objections were designed merely to obstruct; to prevent any Bill being brought in, or, alternatively, to kill the effectiveness of any Bill if one was brought in. As the "Manchester Guardian" said at the time: ''One may suspect that even if a committee of archangels propounded a Bill, the opposition committee would still be producing memoranda of objection. At the same time there were no really helpful suggestions of practical value. The very fact of this opposition emphasises the great need for such a Bill as this. You cannot expect unanimity in an industry which has been so highly sectionalised, and which has grown up in such a haphazard way for such a long period, especially during and after these recent years of depression. But the opposition committee now states that it is in agreement with the Bill in principle, but that it will bring up many points on the Committee stage. I only hope that as a result that stage will not be too protracted.

Now I want to say a word about the merchants. We have to realise that they are divided among themselves, and that also many of them would be able to carry on if Lancashire stopped producing cotton goods altogether; it would still be possible to purchase them elswhere and sell them. At the same time many merchants who are members of the Manchester Chamber of Commerce deal not only in cotton goods, but also in other goods made in Manchester, such as the products of the engineering industry. As regards the London Chamber of Commerce, which has been sending correspondence to us against the Bill, it is extraordinarily difficult to find out what proportion of their members is in any way connected with cotton goods, or, again, what proportion is connected with cotton goods made in England, rather than with Empire or foreign goods. It is not easy to know what importance to attach to these letters from the London Chamber of Commerce without knowing to what extent its members are concerned with cotton goods. We should have some regard to the important report which was drawn up by the sub-committee on cotton industry organisation and submitted to the Manchester Chamber of Commerce last December. There were many well-known merchants on this sub-committee, and the chairman was Sir Edward Rhodes. A part of the report read as follows: The Committee are prepared to believe that the passing of the Bill will help Lancashire to maintain her position in general and to take advantage of opportunities to improve it as they arise…The enabling Bill will, for the first time in the history of the industry, provide a central organisation representing the trade as a whole. This is a very strong point in favour of the Bill which in this respect remedies a disadvantage under which the industry has suffered too long. Should the Bill fail to secure the approval of the industry, there is every reason to suppose that the Government will feel Lancashire has thrown away her chance of welding the industry together and speaking with a united voice. Those are the views of a number of representative merchants in Lancashire who are connected with the textile industry and they must carry considerable weight. It may be said that the interests of the country must be considered as well as the interests of one part of the country, in any Bill which is brought before this House, but surely to-night we can definitely say that the interests of the whole country are being considered, because we hope that this Bill will help to revive the cotton export trade, which is a very large part of the export trade of the whole country. The advantages especially of having a representative and influential body to negotiate with the Government will, and indeed must, be of great help to the export trade in cotton goods.

Organisation is the keynote of our industries to-day, and we must have unity. My right hon. Friend the President of the Board of Trade and my right hon. Friend the Secretary to the Department of Overseas Trade have been constantly urging, during the last few months, that British industries must organise themselves as units in order to be able to cope with the new developments in trade, especially originating from the totalitarian States. Is not. that exactly what we are for the first time now trying to do in the cotton industry? There could be nothing which could be more in the interests of the country as a whole. Mr. Forrest Hewit, chairman of the Joint Committee of Cotton Trade Organisations, says that this Bill is "a thoroughly practical measure of self-government which can bring back order and prosperity to our industry." There is no doubt that in this Bill lies at the present time the main hope of pulling the industry together. We all know about its sorry plight at the present time; here is a chance of pulling it together and of increasing and expanding its exports.

The old method of laissez-faire cannot compete with the methods of trade in the world to-day. What has been called the automatic organisation under which the trade grew up is dead and finished. The heyday of that has long gone by. The industry asks now for the opportunity to work out its own salvation. That is really what this Bill means. Lancashire is still capable of great achievements, and if it can get stability and unity of purpose, there is a great opportunity for co-operative effort. The only alternative is an intensification of that dreadful competition which has taken place during the last 10 years and which has been so weakening to the industry. I hope that, in view of what has been said to-night, the Bill will go through all its stages with the minimum possible delay and will shortly reach the Statute Book, because I am sure that it will be of considerable help to the industry.

9.19 p.m.

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

The hon. Member for Royton (Mr. Sutcliffe) referred to the fact that no one has been disposed to challenge the Second Reading of this Bill. That will be readily understood, because, whatever our views may be with regard to the principle or the structure of the Bill, the gravity of the condition of the cotton trade is fully recognised in all quarters of the House. No one is disposed to put a spoke in the wheel of the industry now that it has reached the stage when it wants to grapple effectively with its problems. I think that the President of the Board of Trade, when introducing this Measure, made out a fairly strong case with regard to the preparation, consideration and the taking of the voice of the industry on the proposed Measure. It is true that a considerable proportion of the representatives of the industry did not take the trouble to vote upon these proposals. I am never disposed to consider the case of those who will not take the trouble to express their opinion on a vital industry of this character. They do not recognise their own responsibility to the industry, and consequently do not discharge their responsibilities to this country, which is in a very difficult position because of the state of many of its basic trades, upon which the labour and the life and the economic prosperity of the country depend. Therefore, I am prepared to accept the position of the President of the Board of Trade that, as far as the views of Lancashire could be collected on this Measure, it has given an emphatic approval of the effort. I have also noticed, on the other hand, that the support is particularly deficient in enthusiasm. There has been a general expression of hope as to what may come out of the Bill, but I see no clear opinion among those who support the Bill that it will in fact produce the situation for which they are hoping.

I wish to offer a few reflections on this type of legislation. I join with the general expressions of good will and hope with regard to the cotton industry, for two main reasons. It is one of the great industries of this country which, if it is allowed to continue in a state of decline, is bound to undermine the economic strength of the State. Also I have a very warm, sympathetic and idealistic interest in Lancashire, because I remember that 100 years ago or thereabouts, when the cotton industry was in a similar plight, it was due to the initiative and enterprise of the Lancashire people, who are not disposed to sit down in times of adversity, that the Co-operative movement, with which I am now connected, was originated. Even to-day a great part of the strength of the Co-operative movement rests upon the Lancashire people and upon the basic industry of cotton on which their livelihood depends. I want to make that position quite plain, but, while recognising that fact, I should be deficient in my duty if I did not offer sincere reflections upon a Bill of this character.

Here we have an industry that has now reached the stage when it is disposed to depart from its old-established tradition and is prepared to depart from the chaos of individualism, which is out of date in present-day affairs. There is a general desire on the part of all parties in this House to treat the industrial problem on a non-party basis, and I sincerely regret that, given these favourable conditions, the capacity of the Government and Parliament and the industry could not have produced a better Bill than that which we have before us at the present moment. It appears to me that practically all the speakers, particularly those from Lancashire, have failed to capitalise the enormous possibilities of the industry. I want to ask whether the Bill does in fact meet the problem which everyone wishes to grapple with. I notice that my right hon. Friend the Member for Platting (Mr. Clynes), when giving general approval to the Bill, quoted a statement which indicated that the Lancashire industry had accepted the Bill in a kind of fatalistic despair. Even my hon. Friend the Member for Farnworth (Mr. Tomlinson), in his very moving speech descriptive of the plight of the Lancashire workers, ended by stating that he could not see in this Bill any great hope for the workers of Lancashire, but he welcomed it on the ground that it represented a departure from tradition and because the industry was prepared to grapple with this problem in an organised fashion.

Now, what is the real problem of the cotton industry and other similar industries? Speaker after speaker has given us figures to show that the real problem is a decline in trade. My right hon. Friend the Member for Platting said that the employment in the industry is only about one-half what it was in 1913. We are getting considerable experience in this type of legislation in the post-war period. It represents the first effort of this country to move from the purely competitive system of pre-war days to some process of industrial reorganisation, and so far Parliament and our Governments have approached this problem of organisation on the basis of organising the owner-producers, in spite of the fact that these problems arise from a decline of trade. Quite frankly, I favour the approach to reorganisation from an entirely different angle. I think it is essentially a problem of consumption, of the quantity of goods you can put on the market and the capacity of people to purchase them.

That problem of purchase and consumption falls in this industry into two categories. The hon. Member for Dumfries (Sir H. Fildes), who speaks from very great practical knowledge of this problem, showed us very clearly that there is an extensive market and a limited market. India and China have immense populations living on an exceedingly low wage rate, and it is difficult to grant reasonable hours of labour and a high standard of living for our workers in this industry and at the same time cater for a population whose purchasing power is down at an utterly impossible level. That is the extensive market. The alternative is to exploit and develop the limited market, that is, those people who have already a relatively high standard of remuneration. Before the Government embarked on legislation of this character it occurs to me that we should know whether we were going to organise the cotton industry for a limited market and a population with a relatively high standard of purchasing power, or for the larger and lower paid populations of the world.

If we are going to organise it for the more extensive market then, in view of the fact that the large populations are within the boundaries of the British Empire it is about time the Government addressed itself to raising the purchasing power of those populations. If we devoted some of our time in this Parliament to raising the purchasing power of people in India, in Burma, and in the Dependencies, we should not only perform a very humane act, but at the same time we should bring the best type of prosperity to our own country. If we are going for the limited market, then again I think the Government should face the problem of raising the purchasing power of the whole mass of workers in this country. All these schemes that seek to organise the manufacturers—you can see it in the agricultural marketing scheme— organise down to the market and they do not organise the expansion of the market.

Photo of Mr Edward Fleming Mr Edward Fleming , Manchester, Withington

Does the hon. Gentleman suggest that the manufacturers have organised this scheme?

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

As producers, yes. The President of the Board of Trade has made it perfectly clear that the producing sections of the industry have been balloted upon these proposals—and the trade unions also, certainly. But 1 think I fully admitted that every legitimate step of consultation had been taken. I do not think it can be reasonably denied, however, that this is a producers' Bill. At this stage it is a legitimate point to make that whilst we are considering a Bill for the producers' side of the industry there are no provisions in the Bill to deal with the finance side of the industry. Here we have an industry which has particularly suffered from the inflation of its capital in prosperous times, which has introduced artificial overheads, and when the industry was moving towards a period of prosperity the finance capital brought into the industry raised the cost of production, and the conditions that were leading to expansion were thereby arrested, and then, when that process was liquidated, the industry fell back into chaos again.

There is no provision in this type of legislation which, even if it is successful, will safeguard the industry from the repetition of disasters of that kind. Surely when Parliament is promoting legislation of this kind, obviously of a very experimental character, it ought to be fairly complete and, if we are going to safeguard the industry by giving exceptional powers to existing producers against the weak seller or the producer through redundant machines it is a legitimate point that the prosperity of the industry, if it should develop, should be safeguarded from this exploitation and manipulation of capital which has no roots in the industry itself.

If I may turn to the structure of the Bill itself, it is very natural to desire to produce a type of organisation which, even if it cannot increase wages, will endeavour to avoid depreciation of wages, but I do not think the House should leave out of account that we are in fact creating what has never before existed—a new property right in the processes of production, and the type of board that we are creating is conferring powers on groups of private persons carrying no public obligations or responsibilities whatever—powers which hitherto have been conferred only on State Departments and municipal corporations. Immediately you start to license and register and introduce your quota of production—I know the quota of production is not actually in the Bill but the powers are there—

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

Mr. Stanley indicated dissent.

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

At least I am bringing out a very important point. I certainly should have conceived that, under the provisions of Clauses 8 and 9 particularly, it would be possible for a section which had put up a scheme to introduce the quota principle. I understand the right hon. Gentleman says the quota goes out of the Bill.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

It is not in it. [Interruption.]

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

I think we had better accept the right hon. Gentleman's assurance that no such quota can arise in a Bill of this kind. That has been the general purpose of other schemes and, if you reach that point, it appears to me that a firm that is efficient and capable of expansion has to buy out the less efficient type of organisation. From my experience on the distributive side even at the present moment, one is continually finding that lines of goods which are achieving a considerable sale in the shops come from various places abroad, sometimes from low-paid-wage producing areas, but not always. Very often Lancashire is beaten en initiative and design and attractiveness and novelty, and fashion and things of that kind. This is essentially an industry in which novelty, design and appearance are very vital to continued success. I feel that a cumbersome machinery which compels every change to go through application and check, all the way through, tends to destroy initiative in a developing industry. It leads to delay and to suffocation and eventually people in business get so weary of these interminable processes that the process steadily tends to destroy initiative. I think that is a general trend which legislation of this kind represents.

All through this Debate we have seen Conservative Members in the position of poachers turned gamekeepers. We find that, when they are really up against it on the capital side, and no profits are coming out of their industry, it does not take them long to throw over the mumbo-jumbo and shibboleths of economic law and things of that kind. That has been the history of this Government. From the moment that the National Government started it has steadily destroyed all the old things that it believed in and said were essential for the economic life and prosperity of the country. I suppose we shall go through this period. In their efforts to maintain private enterprise they will clutter up the machinery of industry and trade to such an extent that it will not be able to move. In my view all that we are doing is wasting time, and sooner or later the people of the country will have to decide one way or the other and, as the hon. Member for Royton let slip the term that he was glad to see this attitude of co-operation on the part of Lancashire industry, I hope it will not be long before they realise that the Government have led them into another tangle and that the best thing they can do is to throw over the capitalist system and adopt a real co-operative system.

9.44 p.m.

Photo of Mr Samuel Rosbotham Mr Samuel Rosbotham , Ormskirk

I hope to gain most points for the shortest speech of the day. I wish to speak from an agricultural point of view. We agriculturists and horticulturists of West Lancashire have always looked upon the cotton towns as our best markets, so I wish this Bill every success. I hope it will attain the object that is intended, that is, to bring prosperity back to the cotton industry and protect it from further depreciation. We are all interested to-day in bringing men back to the land and keeping them on the land, and if the cotton industry can regain prosperity it will greatly help to attain that object. I support the Second Reading with great pleasure.

9.45 p.m.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

I am sure that the support of the hon. Member for Ormskirk (Sir T. Rosbotham) will be welcomed by all hon. Members quite apart from their views on the Bill itself. The hon. Member for East Ham South (Mr. Barnes) will not expect me to deal with the points he made and which can be summarised in the administrative complexities of the scheme, which I should say would be very much greater under Socialism than they will be under a Bill of this character. I should like to join other hon. Members in congratulating the President of the Board of Trade on the speech he made in introducing the Bill. It was a speech which some of his stalwart supporters have described as confident; I would describe it as hopeful as to its effect on the industry.

That is the spirit in which most hon. Members of the House, I think, regard the Bill. The President of the Board of Trade was hopeful, but he used the phrase "if the Bill is passed." That phrase indicated to me that there is still some slight feeling of apprehension which may be summarised in the phrase of another hon. Member who said that, "When the Bill passes through this House the responsibility of the House of Commons, is not ended; the responsibility 61 the House of Commons has begun." It is on that particular aspect of the problem that I should like to say a few words.

The state of the cotton industry has been a matter of grave concern for all Governments since 1924. There have been two Government inquiries, the inquiry by the Balfour Committee and the inquiry of the committee presided over by the right hon. Member for Platting (Mr. Clynes). While these Government inquiries have been taking place there have been continual committees of the trade itself sitting and dealing with the various ramifications of the industry. I have given evidence before the two Government inquiries, and I cannot pretend that the problems of the cotton industry are new to me. We have one great advantage, that as a result of this continuous study of the Lancashire cotton trade the main points of the problem are not in dispute. The statistical section of the joint committee of the Cotton Trade Organisation sends out to its members every week a vast amount of detailed and careful statistical data, and hon. Members are glad to receive this brochure giving all the facts of the general position of the cotton trade. The facts are presented in a clear, precise and non-controversial manner, and I doubt whether any other industry in the country could present the facts of the situation as clearly as they are presented in the case of the cotton trade.

Let me say one word on the origin of this proposal. More than 10 years ago it was realised that the development of manufactured cotton goods in the home markets of native countries like India would result in a permanent contraction of the Lancashire cotton trade. This decline has continued since 1924, and it was felt that perhaps one of the problems upon which there could be concentration was the problem of withdrawing the surplus productive capacity by some more orderly fashion than the fashion and system of bankruptcy. The desirability and force of this contention led to the passing of the Spindles Act three years ago, but that Act dealt with the spinning section only. It was quite natural that other sections of the industry should come to the Board of Trade and endeavour to obtain legislative sanction for redundancy schemes similar to those in the spinning section. Several schemes were put before the President of the Board of Trade, but the right hon. Gentleman turned them down either because they were objectionable in themselves, or were objected to by other sections of the trade. He made a statement which seems to me a very wise statement, that he would only approve schemes and proposals which were agreed to by the trade as a whole, and which safeguarded the interests of the export trade.

The Bill before the House is the result of that decision, and the machinery of these various committees, which is so prominent a feature of the Bill—the Advisory Committee, the Advisory Council, the Export Development Committee—is introduced in order to secure that safeguard. When we realise that no sectional scheme such as the Bill proposes has been approved, although it has been put in front of the President of the Board of Trade, it is possible to take a cynical view of what is attempted here; and that is 10 put the responsibility on the trade itself of turning down schemes which are put forward by sections of the trade. How ironical it would be if, when the Bill is passed, it is found that it imposes on the industry the expense of elaborate committees whose only effective work will be to prevent the legalisation of schemes which are initiated by sections of the trade. If it were desirable to get out of the political difficulty without economic liabilities, I find it difficult to imagine a scheme which is more suitable than this. Personally I refuse to take such a disparaging view of the Government's intention. I do not think they are anxious to get out of the political difficulty by a device of this character. I am merely pointing out the possibility to the House.

I am prepared to believe that the Bill has been introduced to help the cotton trade and to assist the economy of the country. It is in that spirit that I should like to examine the Bill. It is clear that if the Bill passes we may be able to get sectional price-fixing schemes. I doubt whether it is the duty of the House of Commons to endeavour to improve the profits of any section of the industry without increasing the volume of trade. Certainly, I am a little surprised at the attitude of hon. Members of the Opposition to a project of that character. It is true that you may have redundancies, but when we realise what has happened in respect of the Cotton Spinning Act, which was a redundancy scheme which has imposed burdens on the most virile section of the trade, burdens which have no corresponding advantages as far as we can see, because the withdrawal of surplus spindles during the period of the Act has been rather less than the withdrawal of spindles before the passing of the Act it does not justify unlimited enthusiasm. These two sections brought forward schemes, but we know that when they were put before the President of the Board of Trade the right hon. Gentleman more or less turned them down.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

Really, the hon. Member must not go on repeating that I turned down schemes which were price-fixing or redundant schemes. I turned them down because of certain features. I explained the position in my speech.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

I am very glad to have got that statement from the Minister.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Westmorland

I made it in my original speech.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

It is a very important statement. One knows that schemes were turned down, and I am glad to know that they were turned down for that particular reason. I am pointing out that the schemes, such as they were put forward by the sections, were schemes that were turned down by the President of the Board of Trade. If I have put the matter in a way that is controversial, I feel sure that the President of the Board of Trade will not misunderstand me. The important point to bear in mind is that the test of this Bill is a simple one, and it is a test by which the Bill will fundamentally stand or fall. Will it increase the volume of trade? If it does so, then it will have done good; if it does not, then finally it will have done harm. In order to be perfectly fair, I think the question might be put in two parts. First, will the passage of the Bill itself increase the volume of trade; and secondly, will the passage of the Bill subsequently enable something to be done to help the trade? It may be that we ought to consider those two items separately.

Taking the first one, if we are to assess the value of the remedy, obviously we must know something of the disease. The information which has been given to us by the joint committee is extremely useful. The joint committee pointed out that the decline in the cotton trade is entirely due to the decline of the export section, a decline since pre-war days of some 80 per cent. There has been no decline in the home trade. Therefore, we are in the position of being able to say that we can examine this Bill purely in regard to its effect on the export trade. There are three causes for the decline in the export trade—hostile tariffs, under which home industries have been expanded; lower costs of production by competing nations; and the use by such nations as Germany and Italy of the cotton trades of their countries as economic fighting weapons through currency manipulation and subsidies. Hon. Members must appreciate that neither in respect of hostile tariffs nor in respect of the use by countries of their cotton trade as an economic fighting weapon can any reduction in costs of production, either by reorganisation or any other means, be of great avail. I think that is self-evident, but if proof is needed, I would refer hon. Members to the prolonged negotiations which have taken place with India, over a period of very nearly three years. All the time the negotiations have been based on the cost of production in this country, and India has used an impossible reduction of costs of production over here as an argument for preventing any reduction of her tariffs which, in the opinion of this country, are excessive. It is only in respect of competing nations having lower costs of production, countries such as Japan, that we can say that if we reduce the costs of production sufficiently low, we shall get some more export trade.

I would like to draw the attention of the House to the volume of this kind of export trade which can be affected by reducing costs of production. The Joint Committee said that something like one-third of the export trade has been lost. There are, of course, borderline cases, but I would like to be as fair as possible. I take it that something less than 50 per cent. of the lost exports could be recovered if costs of production could be reduced low enough. What is "low enough"? The difference in costs of production between Lancashire and Japan —and Japan is, practically speaking, the sole factor in this competition—is due solely to wages. There is no attempt and no desire on the part of the employers in Lancashire, or on the part of the general community, to reduce wages in Lancashire. If wages had to be reduced to improve the export trade in cotton goods, the employers in Lancashire would prefer that the trade were lost. Therefore, we have to consider what proportion of the trade can be regained by economies exclusive of reductions in wages. So far, I have been giving figures provided by the Joint Committee, but here I must give my own estimate; and it is an estimate which I think everybody engaged in the trade will agree is rather an over-estimate than an under-estimate. I estimate that 10 per cent. of this available trade could be obtained by making every kind of economy in costs of production other than a reduction in wages. This includes reorganisation, re-equipment, improved cooperative effort—in fact, all the various items which were summarised by the committee over which the right hon. Gentleman the Member for Miles Platting (Mr. Clynes) presided. Ten per cent. of one-half of the trade means 5 per cent. of our lost exports. Five per cent. of a very large figure such as this is not to be despised.

But that is not the real figure of the possible lost trade that might be recovered by reducing costs of production as much as possible. Hon. Members will have noticed that I have said that this 5 per cent. includes all economies, exclusive of wages. It is important to arrive at some view as to what proportion of these economies might be brought into existence, either now or later by the passage of this Bill. I will give my own estimate. Ninety per cent. of the total amount of possible economies is due to good management; if there is not good management, one will be lucky if one gets 10 per cent. Therefore, the possible figure of increased export trade which might be obtained by co-operative effort is 10 per cent. of this 5 per cent.; that is, one-half of 1 per cent. of the trade.

If the figures which I have given are at all accurate, it stands to reason that this Bill, with its definite burden upon individual enterprise, has not been introduced in order to endeavour to recover one-half of 1 per cent. of the export trade. No; I am satisfied that no Government would introduce such a complicated Measure to achieve such a meager result. What I imagine we have to do, in considering this Bill, is to look beyond it, not at what it contains, but at what it is intended to convey may happen if the Bill is passed. Clearly, there is 50 per cent. of the lost export trade which can be helped by Government assistance; and if it is in that direction that we ought to be looking—the direction of saying that we must have organisation in order that the Government can help—then I am satisfied that it is right and proper that we should perhaps take the burden of some of these complicated Measures in order to set up such an organisation. My difficulty is that nothing has been said—a great deal has been inferred, but nothing definite has been said—as to what is going to happen when this Bill has been passed.

The other day I put a question on the subject to the President of the Board of Trade, whose reply suggested that we had made a little progress and that subsidies were not turned down. We have had a very full speech from the right hon. Gentleman in introducing the Bill to-day, but he has been non-committal on this subject and I think this non-committal attitude places the supporters of the Government in a very difficult position. Are we to look upon the Bill as a reorganisation Measure, or as the precursor of a new system? If it is a reorganisation Measure then the ambit of its reorganisation is extraordinarily small and of doubtful benefit, but if it is a new economic Measure there is a great deal to be said in favour of it. Obviously we ought to know. Are we putting a chain on individual enterprise to organise national economic fighting power, or are we erecting a facade of complicated committees which may do more harm to the industry than they can do good?

This question can only be answered if the Government give us some indication of their intentions. If the Government say that this Bill is a forerunner of help to be given where it is most needed, I shall have no hesitation in voting for the Second Reading. If, on the other hand, the Bill is to proceed without any information being given to us about the Government's intentions, if the industry is asked to accept certain burdens and further unproductive expenditure without hope of co-operative gains and if the disadvantages of a new economy are to be imposed without any of its advantages, then, in my opinion, the Bill will be difficult to justify. What a calamity it would be if the industry were forced into the form of a dictatorship economy without dictatorship drive. It would be much better to leave the industry to work out its own salvation, with a free economy based on individual enterprise. There are many other points on which I should like to speak, but I feel I have detained the House long enough, and I conclude with an appeal to the Parliamentary Secretary. Will he, when he replies, tell us whether this Bill is the precursor of a definite attempt to help the cotton trade in the only way in which it can be helped, and that is, by selected subsidies or is it merely a smoke-screen? In my opinion the House ought to be informed.

10.8 p.m.

Sir Nairne Stewart Sandeman:

At least 66 per cent. of those whom I have consulted in Lancashire are in favour of the Bill, and I have promised to support it to the best of my ability. I hope that the Bill will do something for the trade of Lancashire, but my personal feeling is that it is more or less in the nature of a temporary palliative. I do not think it goes far enough. The Bill does not face the facts of the trade, and one of those facts is the cost of production. Further, I think the Bill begins at the wrong end and, as regards its actual terms, I can see certain defects in them, but I suppose it will be for some of the committees which are to be set up to consider those later. There is, for instance, the difficulty of price-fixing. You have to consider the quality of the cotton, the age of the machinery, and the question of "on costs." There has also to be taken into account something of which we shall hear more in the near future, and that is the number of shifts and also the number of looms worked per operative. Those are all factors which enter into the question of cost.

Then there is the question of redundancy. I do not believe, no matter how many enabling Bills you have, that they will make things any better unless we have markets assured and orders coming in for our goods. What may happen is that a great many looms and spindles will be cut out as redundant, but if exports again go down, we shall have exactly the same thing repeated. That is one of my fears. The first thing, in my opinion, is to get some of our old markets back, and the Board of Trade has a responsibility in that connection. I believe that it can be done and that it is one of the most important things to be considered. If we got back a number of our big markets, the question of redundancy would not arise. It is because of the loss of our markets that the question has assumed such supreme importance.

On the question of how we are to get the markets back, I hope that we shall be able to get a number of them back by means of trade agreements. We have had the example of two agreements lately. I cannot, however, congratulate the Board of Trade on their trade agreement with India which is one of the most one-sided documents of the kind I have ever read. India allows us a quota, although we apply no quotas to India and take her goods free. I think the Board of Trade might have made a better arrangement than that with India. There are, however, other countries. We have all our Colonies where we could arrange to get some business, and I believe something could also be done to get bigger orders from the Dominions. We should also tackle the question of Japanese competition. Why should we be afraid of Japan and her competition? Japan is doing nothing for us. She is, on the contrary, trying to lift the whole of our Chinese trade and yet we allow Japan to send her goods into this country and into our Dominions and Colonies. That certainly should stop.

Sir N. Stewart Sandeman:

This is not a question of encouraging them. It is a question of trying to get work for our people in this country, and that, surely, is more important than making a cheap gibe.

The next thing is that I feel that the Bill does not go nearly far enough. I wish the people in Lancashire had brought forward some Measure by which the vertical combine would have been encouraged, because I believe that by vertical combines the cost is at once reduced. If you have these horizontal combnies, four, five, or six of them very often, each wants so much per cent. profit, but if you have a vertical combine, a very much smaller rate of profit, hence a cheaper cost of goods, will suffice. I hope it is not too late yet for the Board of Trade to encourage Manchester to go in for combines. I know that this Bill is very much brought forward by combines which are feeling that they are losing their business and cannot make their profits, but which, supposing you put them in a watertight compartment and give them their profit, think they will get enough orders to keep that profit going. I think that will be one of the reasons why the cost of production goes up.

What has happened in these vertical combines at present in Lancashire? You find that the firms that are really doing well and running full time are mostly these vertical combines. Another thing in Lancashire which I think is a very great pity is that from the time the cotton comes in it has to travel all over the countryside before it gets back to the packer for export. It is handled and re-handled, and you are paying for cartage, and all these things are adding to the cost. Further, I wish that in this Bill there had been something about making it possible to work three shifts. We may as well face the facts. I know that the workers do not like the system, but it is better to work one of three shifts than not to work at all. During the War they did work three shifts. It is not nice, but it is better than not having a job. Another benefit of it would be that you would be getting new and up-to-date machinery in a third of the time, and new and up-to-date machinery is a very great thing. It is a question of facing facts, whether they are nasty or not, and you have also to take the question of the price of your finished goods. In America we know quite well that with certain looms one weaver is looking after 50 looms, and even more in some cases. It is far better having one weaver going than none going. It is far better to keep some of your trade, and if possible to increase it, than to let it all go. It is not nice to look forward to or to think about, but it is better than letting our export trade go.

We have heard a good deal about why our trade went. I think a great deal of it was through our own fault. We lost a great deal of the Indian trade, as I know well from experience, by the Fiscal Convention, which I personally believed, and always have believed, could have been stopped in 1923–24. Time and again I went to the Secretary of State for India and was told, "You are just too late; the duty has gone on, but do not say anything about it just now because things are difficult in India." We should have stopped it, and we could have stopped it, but at that time we got very little backing from Lancashire on the subject. Now that things are really bad, they come to us, and we want to help them all we can. I promised to sit down by 20 minutes past 10, so I must conclude by saying that I feel that this Bill will do something to help, but I hope the Board of Trade will take their courage in their hands and go very much farther along the lines which I have suggested.

10.19 p.m.

Photo of Mr Arthur Greenwood Mr Arthur Greenwood , Wakefield

We have had a number of speeches from the Government side of the House supporting and opposing the Bill. I have not the time, nor did I expect the time, to deal with the details of the Bill, but we are faced now in the cotton industry with a situation which is very largely the creation of economic circumstances on the one hand and of the short-sightedness of the cotton industry on the other. It was perfectly clear that when, under the modern industrial system, cotton became our first big manufacturing export industry, as the President of the Board of Trade said to-day, we could not expect to keep that. We taught the world how to manufacture under modern industrial conditions, and during the War, when nations were thrown back on their own resources, that movement received an impetus. At the end of the War we were faced with the difficult situation that the War itself had intensified this process of industrialisation in other countries. That was bound to be. We have heard arguments to-day about rayon. If I may suggest it to the people in the cotton industry, it is a thousand pities that they did not see the possibilities of rayon after the War. It is a tragedy for that industry that they were not sufficiently quick to see that new markets might be possible for them but that old markets for cotton had possibly gone for ever. However, the industry did not see that. It is true, of course, as the hon. Member for Elland (Mr. Levy) and the President of the Board of Trade pointed out, that rayon is now being used in the cotton and wool textile industry and is incorporated in the whole of the general textile industry of this country.

The industry, since the War especially, has suffered from two scourges. One is finance. I remember those days when, after the War, there was in the cotton industry a boom which ruined large numbers of people, including operatives in the industry. The other scourge is the merchant. I have heard the merchants defended to-day. We are told that merchanting is an essential function of the economic system. We all agree with that, for goods produced have to be sold. I do not want to quote figures, because figures have been quoted to-day about the degree to which the cotton industry in Lancashire has shrunk, and most of us are familiar with them. The merchanting side of the industry, however, has not shrunk nearly to the same extent as the productive side. Indeed, these people continue to batten on the industry. One of the difficulties has always been, more especially in the home trade—I do not say it applies to our exports nearly to the same extent—that the margin between the price at which goods leave the factory in Lancashire and that at which they are sold in London or elsewhere to the individual consumer is a terrific gap due not merely to the merchant, but to the inefficiency of the whole of our distributive system. I am not blaming the industry as being responsible for that side of it. They had to sell themselves to the banks two or three years after the War and have always been in the hands of the merchants, with the approval of the productive side of the industry before the War, but with a growing degree of discomfort in recent years.

The real difficulty, to which the President of the Board of Trade referred this afternoon, is the individualism of the cotton industry. The various sections of the industry have never been able to see eye to eye. Vertical combinations do not solve the problem of this industry, nor do horizontal combinations. The hon. Member for Middleton and Prestwich (Sir N. Stewart Sandeman) thought there was some magic in vertical combines, but that is not so, because time has proved that however far one goes with vertical—or with horizontal—combines these people always stick to their own particular individualism. That has been one of the serious difficulties of this industry; I think far more difficult than in another textile industry, that of Yorkshire, my native county, but even there there is the same kind of controversy. Everybody has realised for years that some reorganisation must take place. Time and time again the industry, of its own volition, has appointed committees to consider the future of the industry, and time and time again, through this strong individualism of the sections, those efforts have broken down and come to naught. But this is not an industry which we can allow to go, and at long last we have something in the shape of an agreement which the right hon. Gentleman has embodied in his Bill.

Frankly, the Bill is not one which satisfies me. It bears all the marks of compromise after compromise. It represents the compromises of sincere-minded men who over years, and long before the right hon. Gentleman started his operations, saw that the only future for this industry was that it should become an organised unit. My right hon. Friend the Member for Platting (Mr. Clynes) referred to the scheme which the Government of which I was a Member produced 10 years ago. That was not acceptable to the industry. Now the right hon. Gentleman has succeeded in getting a Bill which represents what I should regard as about 25 per cent, of what is necessary in the circumstances, but in the situation in which the industry finds itself it is essential for prejudices to be put on one side and for some organised attempt to retain what is still left, and if need be to develop the industry and to seek for new markets. I do not think any scheme, however good, not even the scheme that I myself would like to see, would be effective in the circumstances. I do not want to be regarded as one who wishes to Socialise every derelict industry, leaving the profitable ones to private enterprise, but if we were to go to the extent even of nationalising the cotton industry that would not be enough in itself to restore even 50 per cent. prosperity to it.

Although in the view of myself and of most of my hon. Friends on this side of the House a scheme of this kind is essential and will, indeed, make it easier when the day comes for us to take over the industry as a national concern, the scheme cannot do what is necessary to restore the industry. Trade now depends not upon individual industries entirely, though they may do much; it depends upon general national planning. We have realised to-day that every industry in this country depends upon almost every other My right hon. Friend the Member for Platting pointed out the plight of Grimsby and the relation between the situation in Grimsby and that in the cotton industry. Apart from general national planning of our economic life, schemes for individual industries can never be completely successful and of course they depend upon our world trade policy.

This afternoon the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) spoke with that traditional inflexion of his voice which we always associate with the pure Liberalism of which he is so great an exponent, as though the mere reduction of tariffs and so on would fill the bill. In our view that is not true. World policy in matters of trade has been transformed in the last five years and the man who has revolutionised it is Herr Hitler. The new national organisation directed to economic world purposes is something which we have to face with a world trade policy such as the Government do not yet possess.

I would go further and say—I have put this point to the House of Commons before—that in the interests of general prosperity labour conditions ought to be withdrawn from the competitive scale; that is to say, trade ought not to be made possible because of sweated conditions of labour in certain countries. I do not accept at face value those wonderful figures of the cost of production that one gets from Japan and so on; there is an element of efficiency in Lancashire labour which you do not get among producers in the cotton industry in any other country in the world. It is, nevertheless, true that low labour conditions permit world trade to find its way into channels to which it could never attain if that success were not built upon labour slavery. That seems to me to be one of the weaknesses of the last seven years of international labour legislation. I am not blaming the right hon. Gentleman for that, except collectively, and the Minister of Labour is not here, but it surely ought to be the policy of this Government, considering that we have the most skilled labour in almost every industry, and our constant endeavour, to use all the power that we have to raise labour standards in all other countries, not merely because of the productive aspect of the problem but because of the consumer aspect of it.

The consumers' side of this subject was presented by my hon. Friend the Member for South East Ham (Mr. Barnes). It is, of course, true that our prosperity depends upon the prosperity of the standard of life of the masses of the people abroad who, after all, are the consumers of the major product of this country. While it may not be possible for us to do anything to effect an improvement in the standard of life of peoples under other flags, we set an example in this matter of labour standards in our own legislation, and we can at least, by promoting and doing our best to secure the enforcement of international labour agreements, do something to raise standards, and by that very fact increase the consuming power of foreign peoples.

I do not wish to be too hard on the Government; I am of a very forgiving nature, as the right hon. Gentleman knows, and, of course, the Government are in a mess and muddle over the whole economic situation. They have allowed our premier manufacturing export industry to continue in this position for years without making any serious attempt to deal with it, and they have allowed the people in the industry to play about, trying still to continue to disagree, without putting sufficient pressure upon them. I personally welcome this Bill. I think it is a very clumsy Bill; I think its machinery is too complicated; I think the number of safeguards introduced as the result of compromise upon compromise will make the Bill very difficult to work; but, at least we have got this, that reasonable people in a majority—if there is a minority who do not care, they are not to be troubled about—have agreed for the first time in the history of the industry to make some attempt to work together. I think it would be a shock to Lancashire if the House of Commons were to declare any dissentient voice against the step which is now being taken, and I hope, therefore, that the House, after the hon. Gentleman's reply, will give the Bill a Second Reading.

10.37 p.m.

Photo of Sir Ronald Cross Sir Ronald Cross , Rossendale

I think that this Debate has been remarkable in the main for the extraordinarily broad welcome which has been given to the provisions of the Bill. I believe I am right in saying that no Member has opposed the Bill in principle, although there has been a certain amount of criticism, and it has come from every quarter of the House, on Committee points. On the other hand, a number of speeches have given unreserved support to the Bill, and I find myself with not a very great deal to which to reply. A number of hon. Members have dwelt on the serious condition of the industry, and it is indeed true that the post-war history of the industry has been a grim one. As hon. Members have indicated, there have been catastrophic falls in its exports, and a huge reduction in the employment, output and plant of the industry.

I should like to endorse the tributes which have been paid by a number of hon. Members to the extraordinary fortitude and stubborn independence with which both employers and employed have met these conditions of misfortune. The hon. Member for Burnley (Mr. Burke), in particular, referred to the extraordinary fortitude of the operatives in refusing to give up work, in a number of instances setting about buying their own looms, and in other cases buying shares in the industry in which they were working, by which, I conceive, they were indirectly subsidising their own industry out of their wages. To that may be added the magnificent way in which some operatives —hon. Members who represent constituencies connected with the cotton industry will be familiar with instances of this— have continued to work with considerably less than their proper complement of looms, drawing in many instances only a few shillings a week, it may be less than they could have drawn on unemployment benefit. I do not think there will be found anywhere in the country a more heroic example of operatives who prefer to stick to their work rather than draw assistance or benefit.

Hon. Members have indicated a number of points which they think would be suitable for amendment at a later stage of the Bill. The right hon. Gentleman the Member for Platting (Mr. Clynes) referred to his own experiences in the industry, and the many years he spent there. I am sorry he is not in his place, because I wanted to tell him that, although I cannot claim any lengthy direct contact with the industry, such as he has, I also have my associations with it, and I have to a small extent been engaged in the industry. I am glad that he and the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) are not opposed to the Bill. The right hon. Gentleman the Member for Platting raised a number of points. In particular, he laid emphasis on the provision in the redundancy Clause for compensation of operatives for the loss of their jobs, and he criticised the fact that in the Clause the operative word is "may" and not "shall," which would give it mandatory effect. That provision was inserted at the joint request of both employers and operatives in the industry. I think there is no parallel for such a provision and it is in terms which interpret the wishes expressed by both employers and operatives. It is proper to mention, in this connection, that a majority of the sections concerned would have to pass the redundancy scheme before compensation for loss of jobs would be payable—to pass the scheme by a majority of the persons entitled to vote, representing at least two-thirds of the capacity of the section. All of us who are familiar with the financial condition of this industry will agree—and it is only proper for us to say so—that one could not suppose that any large sums could be forthcoming from the industry in this connection.

The right hon. Gentleman the Member for Wakefield said that the industry had suffered in the past from two scourges— finance and the merchants. I do not think anyone would be disposed to quarrel with him for that, but I suggest that the Bill will go a long way towards meeting those points for the future. The damage done in the boom of 1919 is done, and we cannot deal with that. I think that, in so far as it created inflated paper equities it was not so damaging as is generally supposed, but it did have ill effects in so far as it resulted in ill-assorted amalgamations or the creation of heavy debenture burdens. As to amalgamations I recall a case where a fine spinning concern was amalgamated with a mill making carpet yarns and the management had to sell both these classes of production. In the case of debentures many of these concerns were landed with heavy interest charges which are of course an on-cost; and that raised prices.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

Will the hon. Member allow it to be put on record that that was a time when London came to the help of Lancashire?

Photo of Sir Ronald Cross Sir Ronald Cross , Rossendale

I think the hon. Member and I are quite in agreement. I know the Londoner did not leave a good reputation behind him on that occasion, although, by the time I got to the City myself, which I did at a subsequent date, I found that the people there completely-disowned the gentlemen concerned. I think this Bill should be a real contribution towards the conservation of what remains of the finance of the Lancashire cotton industry. With regard to the merchants, they certainly will be prevented from playing off one manufacturer against another, a practice which enables them to buy under cost whereby they achieve nothing in the national interest whatever, and, on the contrary, only succeed in depleting the industry a little further. My hon. Friend the senior Member for Bolton (Sir C. Entwistle) particularly requested the Government to take this Bill upon the Floor of the House. I am fully aware that many of my hon. Friends would desire that to be done, and my right hon. Friend shares that wish. He took this matter up in -appropriate quarters some time ago and found that, owing to the pressure of business, it was, unfortunately, quite impossible for us to take this Bill on the Floor of the House, and it will consequently be necessary for us to adopt the somewhat slower procedure of taking it upstairs.

My hon. and gallant Friend the Member for Clitheroe (Sir W. Brass) spoke of under-employment, as also did the hon. Member for Nelson and Colne (Mr. Silver-man). I agree with the hon. Gentleman, and perhaps I am as familiar with the facts as he is himself. I might add that, in so far as he spoke of the underemployment of weavers who have not the full complement of looms, it is a matter. which I myself, before I became a Member of the Government, took up with my right hon. Friend the Minister of Labour and both his predecessors, one of whom is now my right hon. Friend the President of the Board of Trade. These are matters which are not, of course, directly dealt with in this Bill. It would not be proper to deal with them in a Bill dealing with reorganisation for the purpose of developing trade, and especially the export trade, but in so far as this Measure succeeds— and we hope it will succeed—in introducing a measure of greater stability in industry and developing the trade of the industry, it will improve the regularity of employment and make an important contribution towards the alleviation of the difficulties of which the hon. Member complains.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I know that the hon. Gentleman shares my sympathies in this matter, and I only rise to remind him that when we approached the Minister of Labour to ask him whether he could do anything to relieve the distress that results from these difficulties by the operation of the Unemployment Assistance Act, he said that it was not a matter for him but for the industry. Now, failing that, I raise the matter when the House is considering a Bill which by its title is for the reorganisation of the industry, and the hon. Gentleman tells me that this is not the time or place. How long are these people to work 48 hours for 10s. or 12s. and get no relief or help to supplement their means of existence?

Photo of Sir Ronald Cross Sir Ronald Cross , Rossendale

If the hon. Gentleman exercises his ingenuity to find a way in which to tackle this problem, I can assure him that in principle he will have all the support that I can give him, but I do not think that this Bill is the place where we could deal with that particular evil. My hon. and gallant Friend the Member for Clitheroe, in further reference to redundancy, particularly asked that regard should be had to the question of employment when mills are purchased under a redundancy scheme. He clearly had it in mind, I should say, that a number of mills in a given area might be bought under a redundancy scheme and it would have disastrous effects upon employment in that area. As he will be aware, if he studies the Bill, the redundancy scheme would be administered by a board of three or five persons appointed by the Board of Trade, and it would depend on the exact terms and conditions of the redundancy scheme with which they were dealing. This is a matter at which we might have a further look, and no doubt it will be referred to in Committee.

The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) questioned the desirability of price schemes, and I very much appreciate his points. It is quite clear that there are a number of details that will have to be very carefully considered at the next stage of the Bill, or alternatively when the price schemes are formulated. We are told that in particular instances—offers it may be by cable from abroad—it is necessary for these merchants to accept or reject them in a matter of hours, and therefore there is no time to apply for concessions to the Cotton Industry Board, and the order would be lost.

Now the Bill admittedly does not contemplate making concessions of that nature at short notice for individual orders, and, indeed, under the development Clause, it is laid down that the Cotton Industry Board would have to consult interested persons, which would take days, or weeks, and it would be quite impossible to employ that machinery for the purpose the hon. Baronet has in mind. In passing I may say I think there is some answer but not a complete one to the hon. Baronet's point in the fact that the fixed price would be the bare minimum laid down in the Bill. It is reasonable to suppose that the merchant is selling at a higher price, or else he would not be making a profit at all, and therefore there would be a certain margin within which to bargain. But clearly the full answer must depend on the actual conditions of the price scheme. There are other difficulties which the hon. Baronet did not himself cite—such things as stock which has missed its market, or a converter merchant may have a line of designs which he has never been able to get rid of. There are a number of other ways in which stock is left on a merchant's hands, and it is quite obvious that there must be a price concession in order to enable him to liquidate at a price well under the cost.

As to quick decisions, I should conceive that that matter must depend upon the export policy which is formulated by the Cotton Industry Board. I would suggest to the hon. Baronet that it is probable in the case of some markets that no concessions whatever would be permitted; indeed, it would vitiate the whole principle of the Bill if such concessions were permitted. In other cases, presuming that the markets were those in which there was a keener competition, concessions on certain clothes would be permissible; and consequently no quick decisions, in regard to the merchant would be necessary. I am not sug- gesting that this is the last word, but merely a direction in which a solution may perhaps lie. There is an alternative which I would suggest to him might be adopted under the price scheme, and that is that the merchant should not be included at all in price-fixing, although, of course, that would have the disadvantage of permitting the vertical organisation having its own merchant section in effect to escape from the provisions of the Bill. On the other hand, it might be held that, since they are a comparatively small body in the industry, their influence would not really be injurious to price-fixing as a whole, and they are not people who are at all interested in cutting these prices. However, one is really speculating on these points.

My hon. Friend the Member for the Exchange Division of Manchester (Mr. Eckersley) complained that the merchants have not had more time in which to consider these proposals. I think he will agree with me that they came along extraordinarily late in the day. They only raised their objections after the White Paper had been printed and circulated, but the substance of the proposals had been available to them since November, 1937. I think their case is rather the same as would be that of an hon. Member who, having forgotten to come down to this House for a Debate, came on the following day and asked that the Debate should be continued because he had missed his opportunity of taking part in it. At the same time, I would like to endorse what the hon. Member had to say about the valuable service performed by these merchants. Their initiative, their enterprise and their knowledge of markets has been of great value to Lancashire, although we are all conscious that the value of some of their activities has been offset by playing off producers one against the other.

Two of my hon. Friends have appealed for a cotton subsidy. I must most certainly reject that idea, not only on the ground that, if we once gave a subsidy to cotton, there is no reason why other textiles should not come next and be followed by other manufactures. But would it help? It is morally certain that, where there is a local industry already, anti-subsidy duties would be applied to cancel out the effect of the subsidy, and indeed the power to impose such duties is already in existence in the United States and Canada. And in neutral markets a very probable effect would be to invite counter-subsidies by our competitors.

I think I can appeal with confidence to hon. Members to give the Bill as easy and rapid a passage as they feel they reasonably can. Combination in the cotton industry has proved very difficult, not only on account of the traditional individualism of the people of Lancashire, but also because the vast variety of the products of the industry has made it extremely difficult for the producers to get together. At last a majority of those concerned have supported a Measure which will give them the powers that are necessary to enable them to help themselves. These proposals are none too soon. The Government have treated the Bill as urgent, and there is now no time to be lost, and no time has been lost since the industry was ready with its final proposal. If, then, these powers are to benefit the industry, I think, for the sake of all concerned, the Measure should be put through with all possible speed in the hope that the remedy which has been sanctioned by the industry may bring back some reasonable measure of prosperity.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill accordingly read a Second time and committed to a Standing Committee.