We are delighted to welcome the hon. Gentleman back to this House, but I hope that his succeeding interruptions will be more in accordance with the tradition which he established before he was away, because the last one did not contribute very much to the discussion of this rather important Bill.

I think I know what the hon. Gentleman means, but I very much doubt whether he knows what his interruption meant. I was trying to say, when he made that irrelevant interruption, that we should like to know what will happen in relation to the allocation of a scarce amount of dollars among the merchants, and what is even more important: how will the cotton paid out under an allocation be shared out? Is that to be done on the basis of fair shares, or on the basis of favouritism?

There is a very real danger that if there is a cotton shortage supplies will be very easy for certain mills and very difficult for others because of the growing tendency of members of the Liverpool Cotton Association to join the boards of the spinning companies, especially the big combines. I think it is calculated that one-third of the Lancashire cotton spinning industry has on its boards representatives of the Liverpool Cotton Market. That is one of the reasons for the influence on some of the big combines to contract out and back up their friends in Liverpool.

What will happen if there is a shortage of dollars? One thing that will happen, of course, is that there will be a waste of such stocks as are available. Under the Raw Cotton Commission the stocks are centrally held and available to all. It is always more economical in times of shortage to have centrally held stocks than to have them dissipated, and for any given amount of dollars the Raw Cotton Commission would be able by means of its stocks to keep more mills in production than would be possible by a whole series of privately held stocks, even apart from the question of favouritism in their distribution. It is obvious that if some mills have six to eight weeks' stocks while others are out of stocks there is some waste of stocks in the critical period before more cotton is available.

There is another very sinister development, and I am surprised that the right hon. Gentleman, in his very short discussion of the dollar problem, did not refer to it. It is this. We all know that Liverpool is critically short of capital for the establishment of the cotton market. We know that the Liverpool Cotton Association have altered their rules so that membership will be no longer confined to private partnerships but be open to limited companies, and we know that these rules provide also that these companies can have up to 49 per cent. of foreign capital.

That means an invitation to the United States to invest capital in the Liverpool cotton market. A number of Liverpool cotton trade leaders and Tory leaders have just come back from the United States. I do not know what they have been doing, but there is widespread suspicion in Liverpool and in Lancashire generally that they have been over there to try to persuade American cotton interests to put money into the Liverpool cotton market. That means not only tying us to a greater dependence upon American cotton supplies generally, but tying us, in many cases, to particular American suppliers.

Again, what is the position if we run into a dollar crisis? Are these interests who have got money in the Liverpool market going to bale us out by selling cotton for sterling? That is a thing which I think they might be willing to do. One can imagine, to use the modern jargon, that the "counterpart" of the supplies they will make available to us will be used to buy further cotton interests, not only in Liverpool but perhaps by buying control in the spinning section of the industry in Lancashire. It is bad enough to see the invasion of Liverpool with United States capital, but it is worse still if this Liverpool beachhead, already conceded by the Government, is to be extended so that Bolton, Oldham and Rochdale are overrun as well.

There is, I think, a real danger as a result of greater dependence on American supplies. The hedge which is offered by Liverpool—the right hon. Gentleman told us what he is going to do—is likely to be confined to American grown cotton, and so far as we know to one particular growth. The Hopkins Report has shown how difficult it is to relate other forms to one particular form of cover.

Perhaps I may remind the House of what has been said very recently in the "Economist," when they told us: If spinners consider that, in practice, the American futures contract is an adequate hedging medium for non-dollar cotton, they are likely to protect themselves by using more American cotton. This would increase the dollar cost of re-opening the market, and it might also mean that the Lancashire consumption of Colonial cotton, which the Government is naturally anxious to encourage, would suffer with that of other growths. … The main risk … is that if a dollar famine should develop, non-dollar cotton might command a premium over dollar cotton, as it did a few years ago. The right hon. Gentleman gave no encouragement to the House about the future of Commonwealth supplies. We all take pride in what has been done to increase the usage of Commonwealth cotton in replacement of American cotton over the past few years. In 1938, Commonwealth raw cotton accounted for 23 per cent. of the total import. In 1952, it accounted for 37 per cent. West Africa has gone up from 95,000 centals in 1938 to 432,000 centals in 1952, that is, from 0·8 per cent. of our imports to 7·3 of our imports last year. British East Africa has gone up from 170,000 centals to 517,000 centals, or from 1·4 per cent. to 8·7 per cent. of the total. That is a very healthy development for Lancashire and for the Colonies, and all of us must be very apprehensive of the future trend of development under this Bill.

We are told that bulk buying can continue by private interests. But does anyone seriously believe that long-term contracts will be negotiated by Liverpool with the Colonies? Without long-term contracts there is very little hope that we shall get colonial cotton, even on the scale that we have so far been doing. That is why we must ask the Government to take the question of colonial supplies a little more seriously.

This action of the Government in introducing the Bill accords very ill with all that we ever hear from them about Commonwealth development. One is bound to ask what the "Daily Express" is doing all this time. There is not a word of criticism of the right hon. Gentleman—which is a change for him—about the body blow that he is dealing to Commonwealth trade by this Bill. In fact, the Commonwealth producer, like Lancashire, is being sacrificed to the speculator.

This Bill is a speculator's charter. I do not think that hon. Gentlemen opposite will deny that the speculator will have a big part to play in it. I noticed last Sunday that the "Sunday Times," which is certainly not a Socialist newspaper, had an article by its City Editor, which, referring to cotton, said: These provisions will rule out 'men of straw' "— whoever they are in Liverpool— but they will not exclude the substantial speculator, who is needed to maintain a free and active market. Then we must ask about some of the special problems of particular cotton—Sudan cotton, for instance. Lancashire uses 300,000 bales a year, and one sees, according to the same trade document from which I have quoted, that Only the large earlier stocking by the Raw Cotton Commission of Sudan cotton has enabled such a supply to be available to spinners … So, when the right hon. Gentleman felt that too much had been bought in 1951, here we have the reply. I am sure that Lancashire could not have been kept going without building up those stocks.

The document goes on to say that it is quite certain that if the Lancashire trade is left to bid for this cotton, mill by mill, or even group of mills by group of mills—in open competition with the rest of the world—we predict that it would be fortunate indeed if one-third of the forthcoming crop"— that is the Sudan crop— reaches these shores. There we get a direct risk to Lancashire's employment and Lancashire's export trade due to the decisions of the Government.

The view is expressed in cotton circles that even the Raw Cotton Commission, given all the help in the proper directions, could probably not do more than just keep Lancashire supplied with its minimum needs of Sudan cotton, but that if these mills are obliged to resume their own buying after July next there is not the slightest prospect of them having the minimum supplies of cotton that will be required.

One could equally refer to the problem of the Peruvian purchases. Will the Raw Cotton Commission go ahead and buy next year's Peruvian supplies? They will have to decide very quickly. But even when they have placed their contracts, those supplies will be coming forward in a period when, according to the right hon. Gentleman's time-table, announced today, the Raw Cotton Commission will be no more.

Who will take on those contracts? Who will have the money to do so? The right hon. Gentleman certainly did nothing to suggest that the financial problem will be solved. Who is to be responsible for the tremendous futures load when stocks pass from the Raw Cotton Commission to the market? And who will be willing to take on these risks with the threat of American export subsidies overhanging the market? One can understand the right hon. Gentleman saying that he hopes producers' Governments will not interfere with prices any more, but however much he may say that, he knows perfectly well that in the United States, in the present situation, there will be continued Government interference with the export price of raw cotton; and if export subsidies are imposed by the American Government, that provides very difficult problems indeed for those who are dealing in futures.

Again, the right hon. Gentleman has not told us who is going to maintain the stocks. The Government provided facilities last winter for Liverpool merchants to build up spot stocks. So far, very little has been done, and that is hardly surprising. Are the mills to be forced to sink a lot of capital in holding stocks? We know that some, of course, will buy direct from the ship, but in that case there is always the risk that they do not get the quality they want. It is no good countering that by saying that they can always get allowances or compensation, because if the quality is wrong they cannot use the cotton for the purpose for which it was originally required.

Anyone who knows the Lancashire industry must ask where the small mills are to get their capital from. We know that it was the small mills in particular who made the greatest use of the Raw Cotton Commission's services. The big combines can afford to face the position created by the right hon. Gentleman, because they can pool their stocks between their different mills. The big vertical combines are in a better position to know exactly what kind of stocks they will require, so that they can use smaller stocks.

But what about the problem of the small mill which has to hold stocks? I have seen a calculation that something like £60,000 to £100,000 will be required for each of very many mills, and many mills do not have that amount of money to set aside. Some have got it. Some have been ploughing the money back for the purposes of much-needed modernisation in the industry, which all parties want to see developed. That will be stopped, because this money will have to be diverted from mechanisation to the holding of raw cotton stocks. One of the results almost certainly will be that some of these small mills will close down, and perhaps their manpower—certainly their markets—will be absorbed by some of the big combines.

It was the policy of the Labour Government to try to encourage more grouping and amalgamations in the cotton industry, but Sir Stafford Cripps tried to do it by rather more gentlemanly methods, by the provision of unprecedented subsidies, instead of doing it in the way that the right hon. Gentleman is doing it—by all the brutalities of forcing small mills out of existence and the creation of unemployment.

On the details of the Bill, my hon. Friends would want to keep most of their comments for the Committee stage. We welcome the fact that the right hon. Gentleman has responded to our appeal of July in working out a compensation scheme. I hope he will be able to give an assurance to the House that that scheme will provide equality of treatment between all the groups of employees who will be redundant—those who have already left, those who will be leaving between now and the date of closure of the Commission, and those who will be kept on for a time for what might be called "mopping up operations."

The President has not explained to us why he has introduced retrospective legislation in the Bill. Some of us felt in July that the Government had rather been straining the legislation. The right hon. Gentleman was a little shocked when I suggested that to him in July, but he has almost admitted it this afternoon; certainly, the Government have been straining the spirit of the legislation.

But why do they now ask for certain retrospective cover for what they have been doing? Have the Government, in fact, been acting ultra vires during this period for which they now seek cover? We all welcome the fact that the right hon. Gentleman has responded to our appeals and has come along with a Bill to make an honest woman of the Board of Trade, but some of us are a little afraid that certain follies have been committed in the interim for which the right hon. Gentleman now seeks a certain retrospective respectability.

Another aspect about which the right hon. Gentleman has said nothing and about which we would like to know a little more is the provision that independent members, who were very important in protecting the public interest and the interests of Lancashire generally, should now be free to have interests within the cotton trade and in the cotton industry. We must view that with a certain degree of concern.

The right hon. Gentleman has told us that the date of ending of the Raw Cotton Commission will be as early as possible after 31st August next year. That sounds to us rather like 1st September. I suggest, however, that if by any unhappy mischance the Bill is passed by the House this evening, if the principle is won by the Government, it will have very bad effects on Lancashire if the right hon. Gentleman rushes into a premature dissolution of the Raw Cotton Commission.

If the principle were admitted, I should still say that the right hon. Gentleman ought not to contemplate closing down the Commission before the Autumn of 1955 at the earliest, otherwise the utmost dislocation will be caused in relation to the Commission's purchasing of particular Peruvian cotton and certain other growths during the next 12 months.

All of us on this side of the House—perhaps we have not convinced hon. Members opposite—are convinced that this is a thoroughly bad Bill and utterly doctrinaire in its origin. Perhaps I might be permitted a final quotation from the trade document which I have already used, when it says: The Raw Cotton Commission could have been used to further rather than to create the development of parallel private activity. It goes on—and this is not a Socialist document— But it is quite another thing if, in pursuit of dogma—and blind dogma should be just as much anathema, whatever the complexion of the Administration—any salutary function is abruptly suspended before its adequate replacement is anywhere in sight, even on the horizon. Those are not my words. They are the words of people in Liverpool, with far more experience of this problem than anyone in this House.

This Bill sacrifices true trade and industrial interests to speculation and political loyalities. The day when it becomes law will certainly be a black day for Lancashire, for the Commonwealth and, indeed, for the economic future of this country.