Clause 1. — (Establishment and primary functions of the Raw Cotton Commission.)

Orders of the Day — Cotton (Centralised Buying) Bill – in the House of Commons at 12:00 am on 18th April 1947.

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Photo of Mr Hilary Marquand Mr Hilary Marquand , Cardiff East 12:00 am, 18th April 1947

I beg to move, in page 1, line 21, at the beginning, to insert "The prices at which."

I think it would be for the convenience of the House if we considered with this Amendment the next Amendment—in line 22, leave out from "Commission," to "as," in line 25, and insert, "sell raw cotton shall be such,". Each of these Amendments perfects the other. These Amendments are designed to improve the drafting of the Bill, and to take account of a point raised by the hon. Member for Bury (Mr. W. Fletcher). He does have moments when he contributes valuable suggestions to the Debates, and when he resists the temptation to make his epigrams. The hon. Member moved in Committee an Amendment to insert after the word "imported", in line 22, the words "or to be imported" on the ground that, without those words, the Commission would be precluded from making forward sales. I said at the time that that was a point definitely worthy of consideration. He also proposed an Amendment to insert after the words "subjecting it to any treatment so as to render it saleable" the words "in the raw state." On that point I was not satisfied that his Amendment was really necessary, but I undertook to consider it.

What I am proposing here is a redrafting of the Subsection, because, as it now stands, it deals with one major matter, namely, that of selling prices; but it also refers, in parentheses, to a minor and quite different matter, namely, that of treating the cotton to render it saleable. I think the intention would be made more clear if reference to that minor matter were omitted altogether from this Clause, and were introduced, where it more properly belongs, in Clause 12, which deals with subsidiary functions of the Commission. When we reach that stage I would propose to move an Amendment, which is on the Order Paper, to introduce that matter in its proper place. So, the Amendment now proposed clarifies the intention of the Clause by making it say simply, that the prices at which the Commission shall sell raw cotton shall be such as may seem to them calculated to further the public interest in all respects. It will be seen that the words are not limited any more by reference to the cotton bought and cotton imported; and it is made quite clear that the function of the Commission is to sell raw cotton and nothing else. I hope, therefore, that the hon. Member for Bury and his hon. Friends feel that we have completely met the points made by them in Committee, and that these Amendments will improve the drafting of the Bill; and I trust the Amendments will be acceptable to the House.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

These Amendments are very acceptable to us on this side of the House, and I should like to thank the Minister for having given consideration to seeing that the substance of our points is acceptable, and for having met us in this very fair way.

Photo of Mr Robert Hudson Mr Robert Hudson , Southport

While echoing what my hon. Friend the Member for Bury (Mr. W. Fletcher) has said, that we are grateful to the Minister for having met us on this, I must remind the House that there were one or two other points of which, in the course of the Committee stage, the hon. Gentleman did say that, between then and the Report stage, he would consider the clarification. But there is nothing about them on the Order Paper. As it is technically impossible after this stage of the Bill in this House to make those clarifications, as there is no Question, "That the Clause stand part of the Bill," I hope that on the Third Reading he will explain why he has not been able to carry out, on these various points, his intention to clarify them. Perhaps I ought not to say "intention" and put words into the hon. Gentleman's mouth. I should say "understanding," and ask him to explain why he has not been able to carry out the understanding that there was that he would see whether he could meet the quite legitimate points put by my hon. Friends.

Photo of Mr Charles Williams Mr Charles Williams , Torquay

It must be very deeply regretted, by those of us who happen to be here at this moment, that we have not the good fortune to have the presence of the right hon. and learned Gentleman the President of the Board of Trade, in whose name this Amendment is put down on the Order Paper, to guide us. The hon. Gentleman referred to moments of clarity on the part of my hon. Friend the Member for Bury (Mr. W. Fletcher). I do hope that some day, at some time, somehow, I may have the opportunity of suitably congratulating the Paymaster-General on his clarity. Let us look at these Amendments. They are helpful Amendments. They are Amendments which are cutting out of the Bill something which is bad, and something which, so far as I understand it, is fundamentally dangerous.

1.30 p.m.

It is a little difficult for many of us who have not had the advantage of serving on the Committee, but if I react the words which are proposed to be left out perhaps I shall be able to explain why I think the Government are doing something which is good on this occasion. It is unfair always to criticise the Government if one does not praise them when something is good and when they avoid a danger. I congratulate them further because their wisdom in avoiding this danger has largely come from the fact that they have accepted the good advice of the Opposition. These are the words which it is proposed to leave out: … (in this Act referred to-as 'the Commission') shall sell the raw cotton bought and imported by them (after subjecting it to any treatment so as to render it saleable which they may think it expedient to carry out) at such prices … Those are the words which I am glad to see going out of the Bill. I do not think that this Commission will be very valuable. I am sure that it will be a great advantage to stop them from treating raw cotton. That is what we are doing now. The less they interfere with the trade—I am only dealing with the two words "raw cotton"—the better it will be. The cotton is bought from somewhere abroad. It is for a short time in a Government Department and then it goes straight to the people who make it up. All that the Government do is to handle it. If we once begin to allow the Government to treat it then it will decrease in value during the whole of the time. The fact that the Government are avoiding that treatment, that chance to make a muddle and a mess of it and to render it useless, is something which I welcome. To give an example, just as we talk of bad stuff in coal so, under this, we might have got stuff produced and treated by the Minister described as "Cripps' cobwebs" or something frightful of that sort.

For that reason I welcome this. I am glad to see that I have the support of one hon. Gentleman opposite. Whether or not he will have the courage to stand up and praise the Government for their good work in limiting control and muddle in this way, I do not know. When I see this sign of turning away from excessive control, as the Government undoubtedly are turning by this Amendment, it would be grossly unfair if I did not congratulate them not in a half hearted way, but in a thorough way. I would like the Minister to take a special message from me to the right hon. and learned Gentleman the President of the Board of Trade to say that I congratulate him on having brought his clear mind to this case and having come to a sensible decision, which is, to keep the Government away from treating the substance in any way and rendering it hopeless for further use as, undoubtedly, they would. We cannot afford to do that sort of thing today with any raw material.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

I wish to ask one question. As this matter now stands I am afraid it may lead to a certain amount of restriction on initiative. A duty has now been put upon the Commission to sell. It says: The Raw Cotton Commission … shall sell … Therefore, they have to take action. I have no doubt that the Minister will be able to assist me. What is the responsibility on the Commissioners if they act in breach of that? Have they any responsibility themselves? It may well be that the price may go down after they have bought cotton. I do not know whether the hon. Member for Bury (Mr. W. Fletcher) can help me on this. If the price goes down, then it would appear that they may have to sell at a loss. How is that calculated to further the public interest? I can foresee the time when the Commissioners will say to themselves, "If we sell at a loss somebody may come along and say, 'Look here, you are not acting in the public interest. You have a duty here to act in the public interest.'" Then they may say, "We had better hang on a little longer in case the price goes up again." When the Commissioners see that the price is going down, after they have bought some cotton, they may say that they have a definite duty to act in the public interest. Can a public informer come along and challenge their action by alleging that it is not in the public interest? If that is so, it will have a very bad effect. I would like information. There is no doubt I can be satisfied that this may not be so but at present, I find it difficult to understand.

Photo of Mr William Keenan Mr William Keenan , Liverpool Kirkdale

I wish to return to a point which I made on an earlier Amendment but which, apparently, would be more appropriate here. It was said that some of the cotton firms were likely to continue in business. I would like to know to what extent that is likely. If the Commission does not undertake powers which existed earlier, the position may not be so good in the future. I hope that the Commission will not be restricted by this Clause and that they will not repeat some of the blunders of the past. In regard to the import and export of cotton, it was not an uncommon thing before the war for cotton imported from America to be returned to that country and imported again. We looked upon that as involving unnecessary labour, but the fact remains that it was done.

In normal times there were considerable quantities of cotton in transit and in this connection I would like to know how far the Commission is likely to take the place of the cotton brokers. I hope that they will take over the work, because a considerable proportion of cotton is brought to this country and re-exported. It is brought into ports such as Liverpool and Manchester and resold and exported. There is a likelihood that some of the firms engaged in this may set up in business again unless the Commission undertake the whole of the function. I wish the Minister would inform us whether the cotton Commission will be restricted from acting in the way the cotton brokers acted in the past. I hope that the Commission will not tie itself, and that the cotton trade will be carried on in a smooth manner. By cutting out the gambling that took place in the past, I think the position will be improved.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

I should like to add one thing, with the permission of the Chair. In replying to the last speaker will the Minister explain how it will be possible for the Commission to import cotton which is later to be re-exported if it does not throw out a hedge against it? If the Government are not going to sell futures in some open market against cotton which is not already sold, how will they be able to import without incurring double handling charges, when they will be in competition with other firms which will be throwing up a hedge in Antwerp, Havre or in America? How will they be able to do that except at great cost to the public?

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I should like the Minister to clear up this question of re-export and to tell us whether this is a matter which it is proposed to leave to private purchasers.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Cardiff East

Let me answer the last question first, as I have it in mind. It is not intended that the Raw Cotton Commission should engage in the re-export trade, with certain exceptions. For example, we have made special provision whereby it might act as agent of the Board of Trade in sending cotton to the Control Commission in Germany. Otherwise it would sell its cotton to exporters, who would carry on the rest of the transaction and sell it abroad. The Subsection under discussion requires the Commission to sell the cotton in the manner best calculated to further the public interest in all respects, which evidently means that it must have regard to the interests of the export trade and to the necessities of the spinning industry. It must also have regard to the interests of the taxpayers who would otherwise have to bear the loss. The way in which it is to be done is fully explained in the following Subsection. I am surprised that hon. Members have asked me for an explanation, because it is all there. It is contemplated that over a period of years of these operations the revenue should exceed the outgoings, but not to make a balance between revenue and expenditure in any particular year. The reason for that is the reason which everybody now approves, in relation to the national Budget. There is no great sanctity in the twelve-monthly period.

Photo of Mr Charles Williams Mr Charles Williams , Torquay

I strongly dissociate myself from the new theory of Budget balancing over a period.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Cardiff East

When I said "everybody" I should have said all serious students of the subject. I think I have now answered all the questions.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

The hon. Gentleman has not answered my question.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Cardiff East

I apologise to the hon. Member. For the moment I had forgotten the question, which related to re-export and to the making of hedges by the Commission. We have said more than once that there is nothing in the Bill to prevent the Commission from engaging in these operations if, in its wisdom, the Commission decides that to do so is sound commercial policy.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

Would the hon. Gentleman answer the question I put to him? I appreciate that the duty of the Commission is set out in the following Subsection, but there is also a duty in the Subsection under discussion. If there is a breach of that duty, what action can be taken by any subject of the Crown against the Commission? If there is such action, will it not have a bad effect upon the operations of the Commission?

Photo of Mr Hilary Marquand Mr Hilary Marquand , Cardiff East

The remedy in respect of alleged dereliction of duty on the part of the Commission is the Parliamentary remedy. The Minister responsible for the Commission will be answerable, and a full account of the operations of the Commission will be given every year to Parliament.

Amendment agreed to.

Further Amendment made: In page 1, line 22, leave out from "Commission," to "as," in line 25, and insert: sell raw cotton shall be such."—[Mr. Marquand.]