Cotton Industry Reorganisation

Oral Answers to Questions — Trade and Commerce – in the House of Commons at 12:00 am on 30 April 1959.

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Photo of Mr Charles Hale Mr Charles Hale , Oldham West 12:00, 30 April 1959

asked the President of the Board of Trade whether, in paying compensation for redundancy in the cotton textile industry, payment will be limited to firms continuing to operate or whether a firm will be able to qualify for assistance if it expects otherwise to have to close down.

Photo of Mr David Eccles Mr David Eccles , Chippenham

It is proposed that all firms in the cotton industry shall be eligible for assistance, whether or not they close down.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I am glad to hear that, but is the right hon. Gentleman aware that some of the very best equipped mills have been forced to close partly by their obligations to meet hire-purchase instalments or other payments on new machinery? Does not the plan mean that the best equipped mills could receive no compensation and no help and might have to be closed to make way for worse equipped mills, which will receive the maximum amount of compensation?

Photo of Mr David Eccles Mr David Eccles , Chippenham

All those things will have to be looked at very carefully in detail by the agency, but clearly the best equipped mill is the kind of establishment which will be greatly helped when the surplus capacity is taken out. I think that will make a great difference to its prospects.

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

Will the right hon. Gentleman bear in mind that many of us who are anxious to judge fairly whatever proposals the Government have to make are handicapped in doing so because at the moment the proposals have been made—I hope he will forgive me for saying so—in a vague and ambiguous form? Is it his intention to publish a White Paper so that the scheme can be exactly defined and so that we may all begin to understand what it is we are talking about.

Photo of Mr David Eccles Mr David Eccles , Chippenham

There is a written Question down by my hon. Friend the Member for Preston, South (Mr. Green) making the same point as that which the hon. Member has just made. To it I have answered, Yes, Sir. I hope to do so before the Whitsun Recess.

Mr. J. T. Price:

Can the Minister give a clearer indication of who is to decide or to take the initiative in deciding which firms are to go into liquidation and to scrap surplus capacity? Is it to be the firms themselves, who may come to the conclusion that, having received some Government finance, they should enter some other industry which is of no vital consequence to the country, or is his own Department to take part in this process of selecting those with surplus capacity, because that is the fundamental basis of any scheme which is to the advantage of the country?

Photo of Mr David Eccles Mr David Eccles , Chippenham

I believe that I made it clear that this is not a compulsory scheme. In other words, no firm will be forced to close unless it cares to do so. The sections of the industry are preparing schemes of contraction for their part of the industry. We have to look at those schemes to see whether they are adequate. In coming to the conclusion as to the amount of contraction which will be done they will have the help of the agency appointed by the Cotton Board.

Mr. H. Wilson:

Is the right hon. Gentleman aware that there has been some misunderstanding because of the misuse of the word "compulsory"? Should we be right to assume that while there will be no compulsion on any firm to close down, as he has just said, the levy will be statutory and compulsory on all mills in the industry? Would that be a correct interpretation of the situation?

Photo of Mr David Eccles Mr David Eccles , Chippenham

Yes. The industry has to finance one-third of the cost of the redundancy scheme, the whole of the cost of compensation of workpeople and three-quarters of the cost of re-equipment. I understand that it wishes to do this by a compulsory levy, for which we shall make provision in the Bill.