Orders of the Day — Vote 2. Board of Trade (Assistance to Industry and Trading Services)

– in the House of Commons at 12:00 am on 14th March 1960.

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Motion made, and Question proposed.That a Supplementary sum, not exceeding £1,002,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1960, for the expenditure of the Board of Trade on assistance and subsidies to certain industries, and on trading and other services; subscriptions to international organisations and grants in aid.

5.52 p.m.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

In introducing the Supplementary Estimate, I have first 'to express my regret that my right hon. Friend the President of the Board of Trade is unable to be present. He is in Vienna on European Free Trade Area negotiations.

The amount of this Supplementary Estimate is £1,002,000, compared with the original Estimate of £2,044,095 for the year. But there was no provision in the original Estimate for 1959-60 for assistance to the cotton industry. Hon. Members will recall that the Cotton Industry Act became law only last summer and that provision was made then for supplementary sums of £10 in respect of compensation payments and grants towards re-equipment and modernisation.

The sum of money required for assistance to the cotton industry is £999,990.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Is that a serious figure, an actuarial figure, or an estimate?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

No doubt my hon. Friend has studied the Supplementary Estimate. He will see that it is a serious figure contained in the Estimate, but to a certain extent it is an estimate.

Over the remainder of Vote 2, which covers a wide field of activities, the net increase in only £2,010, expected savings of £40,100 being almost sufficient to offset the small additional amounts required under certain subheads—£33,420—and a small deficiency in appropriations in aid —£8,690.

The only significant item in terms of money required in this Supplementary Estimate is, therefore, assistance to the cotton Industry (Compensation Payments). This Estimate is required to make provision for the Government's contribution of two-thirds of the costs of compensation for the elimination of excess capacity under the Spinning, Doubling and Weaving Re-organisation Schemes, which were approved by Parliament in July, 1959, pursuant to the Cotton Industry Act, 1959.

The responsibility for making payments has been placed on the Cotton Board and the remaining one-third of the cost of compensation is derived from compulsory levies on the sections of the industry concerned. Except in cases where an extension of the period is granted by the Cotton Board for special reasons, scrapping must be completed by 31st March of this year.

The total amount of the Government's contribution under the three schemes will be of the order of £10½ million, but not more than £1 million will be required during the present financial year.

Every case is being thoroughly scrutinised by the Cotton Board so as to ensure that, before payment is made, all the necessary conditions laid down in the schemes—including the conditions relating to the compensation of displaced workers—have been strictly fulfilled.

Applications for scrapping under the reorganisation scheme have amounted to 50 per cent. of the spindles and 40 per cent. of the looms. Up to date approximately two-thirds of this machinery has been scrapped. Payments of about £600,000 have been made by the Cotton Board, of which £400,000 is the Government contribution.

The administration of the schemes falls on the Cotton Board, to whom Parliament entrusted the responsibility of carrying the schemes out. The House will, no doubt, fully share the Government's confidence in the Cotton Board and in Lord Rochdale and his colleagues on the Special Committee of independent members, which is the 'body set up to discharge the functions of the Cotton Board under the Cotton Industry Act. It consists of three employers and one trade unionist from other industries, in addition to Lord Rochdale as an independent Chairman.

The Cotton Board is naturally acting strictly in accordance with its statutory obligations and, while the Board of Trade keeps in close touch with it, the Committee will recognise that the necessary decisions which are required in the making of compensation payments, as in the administration of the schemes in general, are for the Cotton Board to take in accordance with the law.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

I hope the hon. Member will make it clear that the trade unionists and the employers' representatives on the Cotton Board have no responsibility for the administration of these schemes.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

The hon. Member is right. I was referring to the Special Committee which is responsible for this administration under the Cotton Board.

The indications are that the schemes are progressing satisfactorily. The necessary scrapping is taking place without, I am glad to say, the serious effects on employment about which apprehensions were expressed when the schemes were first announced. There have been transitional difficulties, for example, in supplies of special types of cloth, but such are inevitable in any operation of this scale, especially one which coincided with a remarkable upsurge in demand for cotton textiles both in this country and abroad, and they are being tackled by the industry and should not be exaggerated.

I think all hon. Members will agree the spirit of confidence in the industry has improved beyond all expectation. The trade unions are fully co-operating in the development of shift working on a wider scale. This should facilitate the progress of re-equipment with the most up-to-date machinery, which may be expected to get fully under way now that the scrapping phase is reaching completion. The basis has, I believe, been laid for a more compact and competitive industry. This is what hon. Members in every part of the Committee supported.

I turn now to other items in the Supplementary Estimate. As I have already mentioned, the additional amounts of money required are small in absolute size; and they represent only very modest percentage increases compared with the original Estimate. There is one new item, Marine Insurance Claims, with which I will deal later.

The Council of Industrial Design has received a grant-in-aid in each of the past three years of £180,000, provided that the Council obtained receipts of £40,000 each year from fees charged at the Design Centre.

In addition, it was agreed that the Government should contribute £10,000 towards the cost of the Design Centre. The Council has qualified for the maximum grant in each year, and received the extra £10,000 in 1958–59. The original Estimate for 1959–60 was £180,000, and the Supplementary Estimate is for £1,500 in the form of capital expenditure as an initial contribution to meet the cost of enlarging the Design Centre in Glasgow.

The success of the Design Centre in London led the Scottish Committee to establish a more modest version in Glasgow in 1957. This cost £7,800, approximately, of which nearly £3,000 was found by industry and the rest was found from the Council's basic grant. It was only possible, however, to stage three exhibitions a year there, and the Committee recently asked for assistance towards the cost of adapting its premises to enable a permanent but changing exhibition to be staged, and also for a copy of Design Index at present in the London Design Centre to be installed in Glasgow too.

It has been agreed that the Government should provide a maximum of £25,000 for this purpose, of which provision for £1,500 is made in this Supplementary Estimate.

I turn to the British Productivity Council. This Council is in receipt of a grant-in-aid of £110,000 for the five-year period ending 1960–61, conditional upon the Council obtaining, as it has done so far, annual contributions from both sides of industry of not less than £9,500. In a Written Reply to a Question on 29th July last, the then President announced that the Council had agreed to take over from the Government responsibility for publishing Target as from 1st January, 1960, and that the Government would seek authority for an additional grant to help meet the cost. Target is the official monthly bulletin on productivity, published by the Central Office of Information, on behalf of the Board of Trade and Ministry of Labour, and it consists mainly of case histories of the application of improved methods instituted by individual firms.

The original Estimate for 1959–60 was £110,000 and the amount of the Supplementary Estimate is £5,250. In recent years, Target has been financed largely from American Conditional Aid funds, but these ran out last year. The Government did not wish this useful bulletin to be discontinued, and the arrangement with the British Productivity Council ensures not only that it will be carried on by an expert body in the productivity field but that the net cost to public funds will be a good deal less than if the Government had continued to produce the magazine themselves.

So much for the British Productivity Council. I am willing to go into greater detail if hon. Members desire.

The original Estimate in respect of the Guarantee to the Government of Northern Ireland for flax supplies was £2,000 and the Supplementary Estimate is for f 160. This provision is needed to meet the final claim under the scheme.

With permission, I should like to take Items D.2—Capital Expenditure—and D.3—Care and Maintenance—together. The original Estimates for 1959–60 were £17,500 and £23,500, respectively. Supplementary Estimates are required of £5,500 and £1,500, respectively. These payments concern certain factories acquired for the purpose of State trading or the production of scarce materials during and immediately after the war which are being disposed of.

The chief capital expense—Subhead D.2—we expected to be involved in in 1959–60 was the final settlement of a claim for additional costs incurred by a contractor for the erection of a rotary kiln during the Korean crisis. The settlement cost more than was expected, £22,000 against £15,000, but was partially offset by savings on other projects.

The increase for Care and Maintenance concerns a former magnesium factory in Lancashire which is being disposed of. The cost of this work in the present year is likely to be higher than was expected but will be partially offset by a saving elsewhere.

As to Subhead E.3, Other Services, provision is being made in the 1960–61 Estimates for the cost of a possible mission to Venezuela—in fact, initially the visit of an agricultural expert. Since the cost—of fares—of this visit may fall to be met before the Appropriation Act has received the Royal Assent in July, it could not be met from the Vote-on-Account unless token provision had been included in this Supplementary.

Photo of Mr John Biggs-Davison Mr John Biggs-Davison , Chigwell

Is this expert who possibly may go to Venezuela going to learn or to teach or both?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

To teach, and to explore the export possibilities of agricultural machinery from this country, mainly to help the Venezuelans.

The new Item, E.4, Marine insurance, is a small new item amounting to £19,500. Under the revised arrangements set out in the Supplementary Estimate, the Board of Trade has received £65,000 which has been paid to the Exchequer as Extra Receipts, but there are certain claims still to be met. At the end of the operation the Board of Trade will have received the same net amount as it would under the original arrangement, but the Exchequer instead of underwriters will have had use of the money.

I come finally to Appropriations in Aid, which is, I believe, of particular interest to the hon. Member for Halifax (Mr. Maurice Macmillan). In 1953, the United States made a 9 million dollar gift to the United Kingdom for projects designed to increase productivity. The 9 million dollars were allocated to a wide range of projects administered by a number of different Government Departments, including the Board of Trade. The chief beneficiaries of projects for which the Board was responsible were the Revolving Fund for Industry, the British Productivity Council and the British Institute of Management, who received about £700,000, £220,000 and £95,000 respectively. The cost of the various projects, except the Revolving Fund for Industry, which was treated specially, and which is now being wound up, was shown in the appropriate Departmental Estimates in the normal way, but provision was made in the Appropriations in Aid to recover this from the American Aid (Productivity Assistance) Deposit Account into which the 9 million dollars had been paid. The cost of the projects did not, therefore, affect the net Votes for which Parliamentary authority was sought.

In the Board of Trade Estimates for 1959–60, provision was made for Conditional Aid Grants of £29,200 to the British Productivity Council, Subhead C.1, £8,000 for Miscellaneous Grants, Subhead C.2, and for £37,200 to be recovered from the Deposit Account, Subhead, Z.(2).

In fact, because projects have developed more slowly than was expected, the Conditional Aid grant to the British Productivity Council is likely to be only £25,000 and the Miscellaneous Grants £4,000. Provision is, therefore, made in the Supplementary Estimate to surrender the excesses of £3,700 and £4,000, respectively. This may be found half-way down page 110 of the Supplementary Estimate. This will result in our being entitled to recover £7,700 less than was expected from the Deposit Account, and this deficiency is shown at the bottom of page 111 of the Supplementary Estimate. The three provisions, C.I., C.2. and Z.2 therefore cancel one another out.

The money which has not been spent this year will be used for suitable projects next year, during which it is expected that the final balance of the Conditional Aid money will be used. The remainder of the shortfall of £990 is chiefly due to the fact that we have become entitled to less money than we expected under an arrangement with a firm in respect of plant provided by the Government during the war.

I have briefly covered all the items in this Supplementary Estimate. Except for the new provisions towards meeting the cost of compensation for scrapping excess capacity In the cotton industry, the other items represent very small increases over the original Estimate. If during the course of discussion any further information is sought, I shall hope to be able to furnish it when I come to reply.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Before the hon. Gentleman finishes with the point on the ultimate cost of scrapping in the cotton indstry, I should like to recall to him that the President of the Board of Trade, in presenting last year what is now the Cotton Industry Act, gave as the best estimate that could be provided by his Department a sum of £30 million, which I had the pleasure of challenging during an interchange of remarks across the Floor.

It was later reported that £30 million was very much less than the actual sum which ultimately would be required. I am not clear from the Supplementary Estimate whether we have now reached the end of the story with a Supplementary Estimate of £1 million. I would be better pleased if the hon. Gentleman could give more information about what the final figure will be when the operation is completed. I am far from satisfied that this is the end of the story.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Of course, it is not the end of the story. The Cotton Industry Act deals not only with the scrapping of excess capacity but also with the re-equipping and modernising of existing works, and the best estimate that we can give is still £30 million for the total scheme which will be spread over a five-year period.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

What was the figure of £10 million which my hon. Friend mentioned earlier?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

The £10½ million which I mentioned in my speech refers to the amount of money which we think will be required for the scrapping of excess capacity only.

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

Is it clear that this Supplementary Estimate brings us to the end of the story of the cost of scrapping?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

As far as we can estimate—and there is still a short period to go for the completion of the scrapping of machines—£10½ million is the total amount that we expect will be required for that purpose.

6.14 p.m.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

I want to address myself to Subhead A.15, "Assistance to the cotton industry (compensation payments)." I am sure that we are all grateful to the Parliamentary Secretary for the information which he has just given on the progress of the scheme to date. I hope that he will agree when I say that it is perhaps too early yet to measure the full impact and effect of scrapping, consequent upon the Cotton Industry Act, 1959.

As I understand, the £1 million which we are considering is only the first instalment of what the Parliamentary Secretary estimates will be eventually £10½ million. I take that to be a reduced estimate from the £11¼ million put up earlier by the Cotton Board.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Mr. J. Rodgers indicated assent.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

It is apparent that the amount of machinery entered into the scheme for scrapping exceeded all expectations, including those of the Board of Trade and the Cotton Board. The minimum number of spinning spindles; laid down in the Orders put before us last year was 6 million, and that has been exceeded by almost exactly 100 per cent. The minimum laid down for doubling spindles was 400,000 and that has been exceeded by about 43 per cent. The minimum laid down in the scheme for looms was 45,000, and that has been exceeded by about 130 per cent.

Judging from the rather guarded estimate which he hinted at rather than stated, the present Minister of Education, who was then President of the Board of Trade, expected the cost to the Treasury of these scrapping provisions in the Cotton Industry Act, 1959, to run at between £6 million and £7 million. As I have indicated, the earlier estimate put up by the Cotton Board was £11¼ million, when it had collected all the details, and now the Parliamentary Secretary states that the best estimate that he can make today is £10½ million.

It appears to me, therefore, that the amount of machinery entered into these scrapping arrangements far exceeded expectations. Fifty per cent. of the spinning spindles which were in place in April last year are to be scrapped, 35 per cent. of the doubling spindles, and 40 per cent. of the looms. I am not complaining—because we can all be wise after the event—but it is apparent now that the terms of compensation offered were too generous.

I think that that is proved by the number of spindles and looms entered into the scheme, and I am informed that accountancy experts who had been consulted by various firms had estimated that for a firm to continue in the weaving business it would have to make a return on capital of between 15 per cent. and 20 per cent. per annum for no fewer than three years to justify continued running as against closing down under the generous terms of these provisions.

That is something of which the Committee must take note, because in all probability this scheme, in one way or another, may be the pattern or the forerunner of other schemes that may follow in a changing industrial scene such as we have today.

Having regard to the extent of the scrapping, it would be foolish of us to ignore the fact that there is a big burden left on the truncated industry. Five million pounds, or £6 million, will have to be found for scrapping purposes by a levy on the firms that remain in the industry, and from £2 million to £3 million will have to be found by levy for purposes of compensation to redundant operatives under the agreement provided for under the Act.

I want to be quite frank with the Committee. I believe that this scheme is working better than I expected. It is working with less friction than I expected, but I would make it quite clear that my remarks at this stage are solely about the provisions and the working of the Orders in so far as they are concerned with closing down and scrapping. I shall have more to say, for purposes of comparison, about the effect of the compensation measures on the operatives.

I should certainly like to join the Parliamentary Secretary in complimenting the special committee of the Cotton Board and the very skilled administrative staff which it has, plus the seconded officers from the Board of Trade, on the good job which they are doing in this extraordinarily complex and, to a large extent, new undertaking. The scheme, from this point of view, is working tolerably well. It is certainly working very well for the directors and shareholders of the Lancashire textile mills which are scrapping machinery. There have been many "golden handshakes" of £5,000, £10,000, and even £20,000, without any condition that the recipients remain out of work.

I submit that it would be an interesting exercise to compare the total of unconditional severance pay—towards which this Committee will be contributing by the money voted tonight—for a few scores of directors and managers with the severance pay of tens of thousands of operatives. This would underline the unfair rewards of our private enterprise system even when aided by public funds. The shareholders also have done well, and will do well, because big disbursements are promised and are in store for the shareholders of the firms which are closing down under the scheme.

For good or for ill, the scheme is of great importance to Lancashire and will have a great impact on British industry. As I said earlier, it will establish a pattern for other older and contracting industries which, in the not distant future, will face some of the problems that the Lancashire textile industry has been facing for ten, twenty or thirty years. We have to face the fact that in a rapidly expanding industrial world, where there will be expansion of industry in some of the colonial and Commonwealth countries, and where we can envisage its expansion in most of the underdeveloped countries, this process of contraction will be repeated by certain other British industries. So the cotton industry scheme is probably a pilot one from which we should learn lessons about the future direction and organisation of industry generally.

As a result of public money being poured into the industry, not so much for scrapping purposes but for the re-equipment phases which will follow, sooner or later we shall have to insist on behalf of the taxpayer that if public funds are to assist private industry then there should be some return to public funds for the investments or loans or grants that are made. For instance, we may have to take equity shares in an industry where assistance is given in a way similar to that provided for by the Cotton Industry Act, 1959. I am sure that it is only a question of time before the public realises the essential fairness of that situation.

I again ask the Parliamentary Secretary to do all that lies within his power to ensure that abuses in the administration of the scheme are kept to a minimum. I have the fullest confidence in the special committee of the Cotton Board and in its fine staff, but I think that they should know that hon. Members are behind them in any efforts they make to prevent abuses in the disposal of public funds.

I thank the hon. Gentleman for his consideration of cases which I have called to his attention from time to time, but I would point out that there are some dangers inherent in schemes of this kind. For example, there is the danger of firms cashing in by closing down and scrapping their old machines, then purchasing at a much lower price secondhand even older machinery, starting up again, and thereby defeating the object of the Act and of the Orders under it, because the fundamental purpose of this scheme is to make a smaller, more compact and more efficient industry.

I am not suggesting that this type of abuse is widespread, but there are a number of cases, of which I have informed the hon. Gentleman, and I am sure that the Cotton Board is watching the position closely. The scope of this activity is probably limited to the weaving section. I am not complaining when I point out to the Committee that the President of the Board of Trade, in Manchester, in discounting the allegations I made at that time, stated that the capital cost of starting up again would of itself preclude any widespread abuse.

The right hon. Gentleman's comment was valid in respect of the spinning section of the industry, where the capital cost of providing the physical form of the building, the power, and so on, is substantial. In the weaving section, however, the pattern can be somewhat different. As my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) knows well, in north-east Lancashire there is a system of room and power companies, where companies provide the building for the weaving shed and the power, and rent off partitioned sections of the factory to anyone who wants to start business. The capital cost involved in that case is small, mainly the cost of the weaving machines and installation. The building, the power and the heating is met by an annual rent and often on a very short lease.

I also ask the hon. Gentleman whether he is satisfied with the system of scrapping machinery. When these Orders were going through the House last year the hon. and learned Member for Bolton, East (Mr. Philip Bell) said that there was a shortage of smashers, that is, of firms for smashing machinery. As I understand the system of smashing which has been applied in respect of looms, the practice to smash the sides of the looms and collapse the machine, and, in the case of the spinning section, to smash and destroy the spindles.

Is the Minister satisfied that this will prevent the later disposal of the collapsed machines? If they get into the hands of secondhand textile machinery dealers, will it not be possible for these people, at a relatively small cost, to repair and re-erect the machines, making them available for further productive use?

That problem should be watched carefully. I would like to know if the Cotton Board has sufficient control over the movement of such machines to ensure that they are not put back into productive use, thereby defeating the object of this exercise It is a difficult problem of supervision, but if we are finding the money for this purpose the Committee is entitled to know that the operation is carried out fully, so that such machines are not subsequently repaired and put back into productive use.

I should also like the Committee to consider the rather complicated system of discount, standard and premium payments The discount and standard payments—I do not want to go too much into detail—can be assessed relatively easily from ascertainable facts, but the premium payments will present far more difficulty because a condition of the premium payments is that the firm goes completely out of business in all sections of the industry.

I provided the Parliamentary Secretary with details of a case which I had investigated, and I thank him for the close consideration that he gave to my representations, but I had to send for five sets of documents from the Registrar of Companies to trace who was the majority shareholder in the firms under consideration It appeared to me to have all the signs of a "fiddle" on the part of someone who wanted to get the premium payments and, presumably, go out of business, because after he had entered the scheme he transferred his interest to new companies which had been set up.

One of the new firms had restarted with secondhand machinery. It appeared that, since entering the scheme, the person concerned had transferred his shareholding in the business which was remaining in production to other members of his family. Apparently, the family was remaining in business both with the firm which had been in operation and a new firm which was starting up with secondhand machinery.

I am not suggesting that this is a form of abuse which is widespread. Indeed, it may be that there are valid explanations for the process, and if so, I should be very glad to hear about them. However, I hope that the Cotton Board will feel that this Committee is fully behind the most thorough investigation of any of these possible abuses in connection with public funds.

There is a further point to which I would call the attention of the Committee. It has regard also to some of the other items which we are considering. I refer to cases where there is a large expenditure of public money, but no effective scrutiny by the House of Commons as to where the money goes. Through a Question to the President of the Board of Trade, I ascertained that these accounts will be subject to the scrutiny of the Comptroller and Auditor General, but I understand that they will be laid before the House only as rather comprehensive financial statements.

In view of the growing amounts of public funds going to the aid of industry, I submit that the time has come when the provisions of the 1947 Act and other Acts should be altered to do away with the secrecy which prevents the House and the public knowing to which individuals the funds have been paid. I ask the hon. Gentleman to give serious consideration to this aspect. We ought to know who are the recipients of these funds, and if more publicity is given to the fact that the public can know who has received these sums of money, it will do more to prevent abuses than anything else.

I want now to say a few words about operatives' compensation, because this is not working so well. I do not know whether there is anything the hon. Gentleman can do to help, but there is very serious delay in the payments. I understand that most of the lump sum payments have been made, but there is very great delay in the weekly payments of compensation to persons who are still unemployed or have taken less remunerative employment. The purpose of the weekly payments is to assist persons through a difficult period, and if they cannot be made fairly promptly the purpose of paying compensation in weekly instalments is defeated.

I appreciate that the question of operatives' compensation is a very difficult one. To a large extent, it is breaking new ground, and I do not underestimate the problems associated with it. There is much to be learned from the experience that we have had. There are undoubtedly many injustices. I do not want to make a constituency speech on the issue, but perhaps I might quote the case of a mill in my constituency which closed down on 17th April, six days before the appointed day. None of the operatives there will receive any compensation for loss of employment consequent upon the operation of the 1959 Act, but one can imagine their anger and feeling of injustice when they find that the employer will get compensation at discount rates for the machinery which is to be scrapped in that mill. That is obviously unjust, and it appears unjust to the operatives. There is no doubt about it that the directors and shareholders of the concern will get cash compensation, partly from public funds, for going out of business.

I hope that the hon. Gentleman will give attention to this point. It is manifestly unfair. I raised it while the Bill and the Orders were going through the House. I may be wrong, but my recollection is that the agreement reached between the trade unions and the employers for operatives' compensation was reached before the Orders were laid before Parliament. I believe that it was only when the Orders were laid before Parliament that anyone in the industry knew that a date other than 23rd April, 1959, could be the appointed day, and the appointed day for certain classes of machinery for compensation for scrapping is 1st January, 1956. If my supposition is correct, I think the trade unions might have taken a different attitude about the appointed day had they known that employers would be compensated in respect of machinery as far back as 1st January, 1956, in certain cases.

We still have the re-equipment proposals to come, of which this £1 million is only the first instalment. If the response to re-equipment is as enthusiastic as it has been to scrapping, the total cost of the Cotton Industry Act, 1959, will, I believe, be not the estimated £30 million, but more like £60 million. However, I have my doubts whether the enthusiasm for re-equipment will be quite as great as it has been for scrapping, because I feel sure that a far bigger influence in determining whether a firm will re-equip than the 25 per cent. grant for which the Act provides will be the uncertainty about what will happen when the present voluntary agreements with Hong Kong, Pakistan and India run out at the end of next year.

Therefore, I anticipate that the main decisions on the re-equipment will not be taken until well into next year, when some feeling is gathered as to what will happen in the future with these unrestricted, duty-free imports from India, Pakistan, Hong Kong and, perhaps, other Commonwealth countries. If the re-equipment does not take place on a substantial scale, then the main purpose of this exercise will have been defeated and frustrated, and we shall be faced again in another five years with another proposal further to contract the industry.

This Measure is working out, as I see it, very expensively in terms of machinery actually put out of production. It is illuminating to see the figures of the amount of machinery that was already stopped on 23rd April, 1959, when the then President of the Board of trade made his first announcement that he was prepared to consider a scheme. As I work it out, comparing the machinery that will remain after this exercise is completed with the machinery that was actually running on 23rd April last year, then the cost of scrapping, of putting additional spindles out of operation, is in the region of £3 per spindle and £230 per loom. That is a very heavy cost.

Two hundred and thirty pounds per loom is perhaps just about the cost of a new, up-to-date automatic loom, so the exercise we are pursuing is very expensive. We should watch it carefully and see that at least we get value for money placed in this very hard-pressed industry.

6.42 p.m.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I agree with a great deal of what the hon. Member for Farnworth (Mr. Thornton) has said. My hon. Friend the Parliamentary Secretary, the Board of Trade and the Cotton Board should be most careful to see that there are no abuses in this very expensive scheme. A great many industries are not receiving this privileged treatment and are watching this as interested spectators, not to mention the taxpayer. I hope my hon. Friend the Parliamentary Secretary will take that seriously.

I agree with what the hon. Member for Farnworth said about the disclosure of the greatest possible amount of information, and particularly do I want to have the facts for the information we have had this afternoon. This is the first opportunity we have had to look at this Supplementary Estimate. The politest way I can describe it is by saying that it is being excessively coy.

The first page of the Estimate gives rates and the rough information, and then on the next page we have this extraordinary heading Details of the foregoing. It contains, opposite the sum of £999,990, as an explanation of the details: Substantive provision to meet the cost of the service in 1959–60. What good is that to this Committee in making up its mind, and in deciding the views it is to have as to whether this Estimate is justified or not? The next explanation we have is: Additional provision required mainly to meet an agreed increase in the final cost of settlement of a claim. This sort of thing has been going on for many years, and I suggest to my hon. Friend and others similarly placed that this is not adequate information to give to the House of Commons at a time when, in this Committee, it is being asked to approve Supplementary Estimates for a very considerable amount.

Then we have this sort of thing: … cost of a possible agricultural mission to Venezuela ". I do not wish to question it, or challenge the principle, but I do criticise very strongly the appalling vagueness of this information, not to mention its utter paucity.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I do not want to be misunderstood in what I want to say. My hon. Friend the Parliamentary Secretary expressed the hope that the Committee would share the confidence which the Government feel in Lord Rochdale and the Cotton Board. All I want is some confidence. I want the Government to share their confidence with me and state on what grounds they feel confidence in the Board. I have no grounds for feeling any other than confidence in the Board, but this is reinforcing the plea I have made for information.

My final point concerns the detailed figures with which we are now faced and are going to be faced with in the future. It has appeared today, for the first time as far as I know, that the scrapping policy will cost about 50 per cent. more than my right hon. Friend the Member for Chippenham (Sir D. Eccles) estimated at the time the scheme was introduced. I understood that the estimate he made for scrapping was £7 million.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I will try to clear up this point. I think my hon. Friend is quoting figures from the White Paper. The figures mentioned in that White Paper were minimum figures and it was my right hon. Friend the Member for Chippenham's estimate. We all expected that the figures quoted in the White Paper would be exceeded, as they have been.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I am obliged to my hon. Friend. I understand that the total sum which is expected to be spent on scrapping is £10½ million.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

The hon. Member for Yeovil (Mr. Peyton) is asking a fair question: will the cost of scrapping be 50 per cent. in excess of the figure stated in the estimate quoted by the right hon. Member for Chippenham? On the figures quoted by my hon. Friend the Member for Farnworth just now, it will be almost double, and they have not been challenged by anybody.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I am obliged to the hon. Member for Westhoughton (Mr. J. T. Price), but the source of the answer I am seeking is my right hon. Friend the Parliamentary Secretary for the Government. I want to know, as does a great section of industry which faces very similar difficulties from very much the same sources. I cannot go into that now, but my hon. Friend the Parliamentary Secretary will be very conscious of the difficulties facing the gloving industry for many years because of imports from Hong Kong. People in that sort of industry are anxious to know what will be the total cost of this assistance to the textile industry. We are anxious to be furnished with the maximum amount of information throughout. I am rather horrified and disappointed by the incredible coyness of the document we have before us.

6.48 p.m.

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

My hon. Friend the Member for Farnworth (Mr. Thornton) said that he would not make a constituency speech, though I can see what the temptation to make one may well have been. I do not in any way criticise him for that decision, for, speaking from where he was, it was obviously his duty to deal with the broad aspects of the matter rather than with the local consequences and applications of it for which he is responsible as a Member.

I am not inhibited in that way, and I propose to make a constituency speech, because the quickest and clearest way in which the Committee can appreciate, and, indeed, ascertain the information which Members are very anxious to have accurately, is to see how the scheme works in a particular locality.

Hon. Members opposite have been laudably concerned—not merely in regard to these, but to other Estimates— to exercise their rights and duties as Members to see that the Committee does not part with large sums of money without knowing precisely what it is doing, why it is doing it and what will be the consequences of spending the money. That is not merely in accordance with the long traditions of the House; our work as a House of Commons, and especially as a Committee of Supply, cannot otherwise be done.

The hon. Member for Yeovil (Mr. Peyton) used a very strong word. He was critical of the Minister in respect of the information given this afternoon, when he rightly said that this was the first hard information which had been communicated about the work on the scheme, and he also said that the figures were largely false.

Photo of Mr John Peyton Mr John Peyton , Yeovil

The hon. Member must not make that allegation. I was asking for further information. I have no evidence upon which to base such an allegation, nor the desire to make it.

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

I do not wish to put anything into the hon. Member's mouth, and I am not making any allegations, but he used the word "falsity".

Photo of Mr John Peyton Mr John Peyton , Yeovil

No—I said "paucity".

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

Then I apologise to the hon. Member. I made a slip—possibly a Freudian one. At any rate, I at once acquit him of having made an allegation against the Government that the information they had given was wrong, or, at any rate, that it was intentionally wrong. He was merely saying that the information given was scanty.

I wonder how much information the President of the Board of Trade has. I have heard him quote figures which, according to other sources of information, are clearly not in accordance with the facts. In our recent debate on this subject, in connection with the list of places which were to have the benefit of the Local Employment Bill when it becomes an Act, when the right hon. Gentleman was justifying his exclusion from that list of places the North-East Lancashire cotton belt and the cotton towns in the area, he said: The reasons why the cotton towns are not put on the list are crystal clear. I ventured to say "No". Fairly enough, the right hon. Gentleman went on to say: I hope that in a moment they will be clear even to the hon. Member for Nelson and Colne. A few moments later my hon. Friend the Member for Farnworth asked a precise question. He said: Has the right hon. Gentleman taken fully into account the imminence of unemployment at 31st March, when many firms must close down under the cotton reorganisation scheme? That is the scheme with which the Committee is now concerned. The right hon. Gentleman replied: Absolutely, otherwise the figures I have given would give us more jobs being created than there are people unemployed, which would be absurd."' That exchange arose out of a question I put after the President of the Board of Trade had given certain figures for the north-east Lancashire cotton belt. I said that he had been rather selective in picking out places in order to get an optimistic picture, and I went on: Not a single one of those he has quoted is in the North-East Lancashire Development Area, yet the whole of that area has been taken out of his list. The right hon. Gentleman replied: I was saving that one up for the hon. Gentleman. In the North-East Lancashire Development Area unemployment in January. 1959, was 41 per cent. and in January, 1960, it was 1·9 per cent. I would ask the Committee to consider carefully the figures which the right hon. Gentleman then went on to give. He said: The total number of unemployed on 23rd February last was 1,748. Jobs in prospect are up to 4.000."—[OFFICIAL REPORT, 23rd February, 1960; Vol. 618, c. 221–2.] It was the right hon. Gentleman's statement that the number of jobs in prospect was greater than the total number of unemployed which led my hon. Friend to intervene and, subsequently, led the right hon. Gentleman to explain that when he said that the unemployment figure was 1,748 and the jobs in prospect were up to 4,000, so that neither the unemployment figure nor the imminence of unemployment could be taken as serious, he had taken into account the number of people who were to be made redundant as a result of the measures for which the Committee is now being asked to provide the money.

When we consider whether or not we should provide the money we are entitled to know whether the right hon. Gentleman was basing his argument upon sound information. If we can carry out a great reorganisation scheme of this kind without causing a serious measure of additional unemployment hon. Members on both sides of the Committee will, naturally, take a very different view of the question whether the money ought to be provided than that which they would take if the money were being provided to reorganise in such a way as to bring about a serious new measure of unemployment.

When we consider whether or not this money should be granted it becomes extremely important to study the figures closely once more to see whether the right hon. Gentleman had his argument right, and whether the Parliamentary Secretary has given the right figures today. In the course of the debate to which I have referred I provided some figures. They were not my own. I had not made a private investigation of my own. I had gone to the town clerks of each of the main towns concerned, and they had gone to the Cotton Board which, in turn, had gone to the Minister of Labour. To that extent, the figures that I quoted were the official figures, which I thought would be accepted by the right hon. Gentleman and which ought to have provided the basis of his hon. Friend's case today.

The right hon. Gentleman did not accept them. I want to remind the Committee what those figures were. I pointed out that on the information officially supplied by the Cotton Board notice had been given to close 63 weaving sheds in Nelson and Colne by 31st March, that is to say, 32 mills had given notice to close in Nelson and 31 in Colne, making a total of 63, which means about two-thirds of all the weaving sheds in Nelson and Colne together. There are about 100 left and now 63 are being closed by 31st March.

I pointed out again that on the official figures supplied that meant that in addition to the 1,100 weavers unemployed at 23rd February, by 31st March there would be an additional 2,300 weavers unemployed. I pointed out that the number of looms involved was 12,558 in Nelson and 9,218 in Colne, and if we had them together we get to within a hundred or two of 22,000 looms. If my hon. Friend's figure of £230 for the average compensation for scrapped looms is correct—

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

I hope that what I have said on this point will not be misunderstood. There are 105,000 looms to be scrapped. Of that number, 75,000 were already stopped at 23rd April when the President of the Board of Trade made these remarks. If we divide the £7 million which it is estimated will go for scrapping looms by the figure of 105,000 we get £66 per loom. If we divide it by the lesser figure, that is, the effective number which have been taken out of production, it would be £230 per loom.

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

I am obliged to my hon. Friend. I hope I have understood him correctly, and if I have what I said a minute or two ago is, broadly speaking, correct.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

If they were running looms.

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

Yes, if they were running looms. I gave the actual figure of how many of them were running looms and how many had already been stopped in the figures I quoted in the debate on 23rd February. The overwhelming bulk of the looms in question were still running on that date. Therefore, my hon. Friend's figure of £230 per loom applies if not to all the looms of which I have been speaking, at any rate, to the great majority.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

There must be no mistake about this. I was not suggesting that the employers will get £230 per loom scrapped. I suggested that on certain computations, which were not unreasonable computations, the cost to the Exchequer and the rest of the industry could be as high as £230 for each loom effectively taken out of action.

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

I am obliged to my hon. Friend for making it clear. But we all understand that in this debate we are not dealing with the financial advantage either to the employers or the manufacturers, on the one hand, or to the workers, on the other. We are dealing with the public money which is being expended and we are considering what we are getting for that money.

Therefore, while I am more than grateful to my hon. Friend for making clear the appropriate background against which the figures have to be considered, nevertheless it remains true that if we are to consider this matter from the point of view of the cost per loom to the Exchequer, by the time the running loom is scrapped, and if my hon. Friend is right, the figure is £230, in respect of the vast majority of 22,000 looms in those two towns alone.

That amounts to an expenditure of very nearly £5 million. To do what? To close down two-thirds of what is almost the only industry in the area, and, if the figures officially supplied are correct, to produce, in addition to the 1,100 made unemployed as a direct result of these schemes a month ago, an additional 2,300 unemployed, which makes a total of 3,400.

If hon. Members on both sides of the Committee—without any kind of political bias, or any primary intention of scoring political points, or making debating points against the Government— will consider those figures, they will realise that between 23rd February and 31st March we are to spend in all about £5 million to put another 2,300 weavers out of the only industry in which they have any skill. Perhaps it is not an over-statement to say that on those figures the reasons of the President of the Board of Trade for keeping Nelson and Colne out of his list of places to be assisted are very far from being crystal clear.

In case there has been any misunderstanding about it, immediately after the debate on 23rd February I sent a letter to the President of the Board of Trade which I had received from the Town Clerk of Nelson and upon which I had founded my argument. I also sent something else to the right hon. Gentleman. On that day I received, without having asked for it—unfortunately, I received it a day too late to enable me to make use of it in the debate—a letter from the Town Clerk of Colne. He had made his own independent inquiries and had reached very much the same result as had the Town Clerk of Nelson. As I had not been able to draw the attention of the President of the Board of Trade to those figures during the debate on 23rd February, I thought it only fair to give the right hon. Gentleman the benefit of them when they reached me, so I sent him that letter as well.

I have had an acknowledgement, but I have had no further communication from the President of the Board of Trade. For instance, I have not received any criticism of the figures. I have not received any denial of them. The right hon. Gentleman must know whether my figures are right or wrong. If they are wrong, I suggest—I hope that this is not too much to say—that the right hon. Gentleman is under a duty to say that they are wrong; to say in what degree they are wrong and to say why he comes to the conclusion that they are wrong. So far, we have had not a single word of criticism of these figures.

It must be borne in mind, as I said a few minutes ago, that these are very different figures from those which I quoted from the Minister's speech, especially in his answer to the intervention by my hon. Friend on that occasion. The right hon. Gentleman said then, as the Committee will remember—dealing not with Nelson or Colne, not with Nelson and Colne but with the whole of the north-east Lancashire development area, the so-called cotton belt—that after taking into account all the redundancy then existing and all the redundancy to be expected up to 31st March, there would be left a figure of 1,700, and alternative employment for 4,000.

There is some alternative employment in Nelson and Colne, certainly in Nelson. I have not denied that. I said so in my speech on 23rd February. We have been not unsuccessful in that respect. I will not say that it was due to private enterprise, because, of course, it was not private enterprise but municipal enterprise which was responsible; but without any assistance from the Government. We have been successful in bringing some new industry to Nelson; not so successful in the case of Colne. There was virtually nothing in Colne, nothing of any account. But in Nelson, at any rate, two especial industries have been brought in, for which we are extremely grateful. I am not grateful to the Government. They did nothing about it. It was done without their assistance.

In the case of the larger industry, the number of people so far employed is 100 and the number of people who will be employed when it is in full operation is 400, and it will be a year or two before it is in full operation. As I said, in Colne there is virtually nothing. Does the Committee really think that it is good, sound, national financial or economic policy to spend £5 million to bring about a position of that kind without any requirement that one single penny of the compensation paid—and I pay due regard to what my hon. Friend said, that it is not the employers who will get the £5 million—should be used to bring new industries into the area to take the place of the industries which are being compensated for being destroyed?

I cannot go into all that. This is a matter which Parliament has decided as a matter of policy. We are not entitled to deal with that now, and I am not attempting to do so. But what I am doing is this: I am putting it in this way so that the Committee shall have the proper facts before it when it decides whether this further money shall be granted to the Government to be used in this way.

My immediate object is to extract, if I can. information. I am not entitled to use the methods which the War Office says that it does not use, but only experiments with. I can only ask questions; I can only make speeches. There can be no kind of torture and no kind of brainwashing. Certainly, there ought not to be. It ought not to be necessary. These figures are known, and if the President of the Board of Trade does not know them yet he has the means of finding them out. He ought not to leave the Committee in ignorance as to what are the true facts, and I am certain that he would not wish voluntarily to mislead it.

If we are right that a fortnight from now there will be a couple of thousand additional unemployed in this area, is this imminent—a fortnight from now? Is it serious—this couple of thousand? If the answer to both those questions is "Yes," are the reasons crystal clear for denying them any assistance in getting alternative industries?

That is all that I wish to say. I do not know whether there are other hon. Members who wish to speak—I hope that there are. It is a most serious matter. This is the only occasion, so far as I know, when the House of Commons has committed itself to spending substantial sums of public money not to assist, not to produce or to expand, but to destroy; and it is only right that if we go on with this policy and provide the money for it we should be told with meticulous accuracy what are the facts and what are the consequences of our so doing.

7.15 p.m.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

If I am in order, Mr. Hynd, I would prefer, in view of the Parliamentary Secretary's detailed explanation, not to move the Amendment which stands on the Order Paper in my name, although I have some questions to ask him. The Amendment is Class VI, Vote 2 (Board of Trade (Assistance to Industry and Trading Services)) to move to reduce the Vote by £1,000.

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

It is not necessary for the hon. Member to move it.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

The Parliamentary Secretary went into great detail on the figures of this Vote, although not apparently into sufficient detail as to the position of Nelson and Colne under the Local Employment Bill. I think it is especially important that at this time and in this matter we should watch Government expenditure most closely.

The major part of this Vote is devoted to a sum required under the Cotton Act. Government spending at this moment is inevitably and, I think, rightly increasing. That to me makes it all the more important for hon. Members on the back benches to examine that expenditure in order to make quite sure that it is not being wasted administratively and not, as the hon. Member for Farn-worth (Mr. Thornton) said, the subject of abuse, but is spent in the most productive way and not spent where private money could be used as well. That is the reason why I originally put down this Amendment on the Order Paper. I wanted to draw attention to the item at the bottom of page 111 of the Estimates—Appropriations in Aid. That is something which is not easy to do by specifying details on the Order Paper.

I know that the Parliamentary Secretary has given a great many facts and figures which I was seeking. This is not an important sum compared with the others with which we are dealing, but it is one of the many small sums which, added together, make an important item of Government expenditure on this and other Votes. We are, however, confined by the rules of order to this Vote, but an attempt to control and examine even such small sums has its effect on the administrative machine and on the temptation to expend too much if examination is not forthcoming. We have seen some effect from the Parliamentary Secretary's statement, in that we have had details which part of the object of this Motion was to secure.

These Appropriations in Aid, as the Parliamentary Secretary said, arose out of the expenditure of counterpart funds which were a condition of the grant by the American Government in 1953. I am still a little confused as to the accounting for it, although I think I now understand the reason for it appearing on both sides of the balance sheet, so to speak; in that it is not so much an expected saving in expenditure which is cancelled out by deficiency in the source of income; it is an expected saving which enables money not to be drawn from funds available to meet a deficiency which did not arise.

I am still at a loss as to what this expenditure is. I see in the Estimates that it is described as coming from the Deposit Accounts, under the arrangements described in Cmd. 8776. In Cmd. 8776, in paragraph 6, under accounting arrangements: The counterpart of the Conditional Aid received by the United Kingdom will be paid into the Special Account established under Article IV of the Economic Co-operation Agreement. Detailed expenditure on the schemes will be provided on Parliamentary Votes with equivalent credits from the Special Account … The revolving fund will be held in Deposit Accounts operated by the Board of Trade and the Ministry of Agriculture and Fisheries. It is the account of the Board of Trade which concerns us now. These special schemes are provided for on Parliamentary Votes. Other special accounts are of the nature described by the Parliamentary Secretary, and one of the questions which I should like to ask him now is the extent to which they are continued. He indicated that the Design Centre and other arrangements under Subheads A2 and A6 were a hang-over of the expenditure of these counterpart funds.

In those days when the scheme was started it was obligatory on us to spend the money in this way. Now I understand from what the Parliamentary Secretary said it is no longer obligatory on us to do so; I should like to know whether we are still doing so. For the Advisory Service the level of expenditure was set at £457,000 for two or three years. There was the Expansion of Research into Factors Affecting the Efficiency of the National Economy and promotion of various studies which together accounted for £1 million over a period of two or three years. There is publicity, £178,000 over a period of two or three years. All these were running at that level. The first question I ask is the extent to which they are still running at that level and still being met by this sort of Vote in these Supplementary Estimates.

The only item under this counterpart arrangement which should still be continuing is the Loans to Industry to be met by the revolving fund, mentioned by the Parliamentary Secretary, of £1 million. It was stated in the White Paper, Cmd. 8776, that there was no time limit, no period set, for this operation. All the other activities had a period set of two to three years. The Parliamentary Secretary has indicated that they have come to an end and these Estimates are concerned with the remnants, yet in these Estimates they are being met from the deposit account which, according to my reading of the original scheme and of Article IV of the Economic Co-operation Agreement, covered only the revolving fund out of which loans were to be paid to industry. Whether it is the account which is wrong or the fund which is wrong, I am not quite clear. I have no doubt there is some very simple explanation of this.

Apart from that, I think we should examine the extent to which we ought to continue such spending now that the obligation under the Mutual Aid Agreement no longer exists. It obviously is continuing; Votes under Subheads A.2 and A.6 indicate that. The Minister said it was chiefly for the British Productivity Council, the Institute of Management and this revolving fund was for loans to industry. Are these things really worth the amount the Government are spending on them? The sum for Target in this Vote is £5,250, but the publication of this magazine, I understand, is to run at a cost to the Treasury of £110,000. I am not quite clear to what period that refers. Speaking as a publisher, I only wish my firm could afford to publish such expensive publications at the taxpayers' expense.

What about advice to firms on how to reorganise on production techniques and other matters which I understand under the counterpart arrangement were staffed by existing business and research organisations and people under contract to the Department of Scientific and Industrial Research? In the past, that was running at a rate of about £150 million a year. I understand they are included in the Supplementary Estimates. There is the further item for expansion of research, including research into incentives, restrictive practices and related efficiency of monopolistic enterprises, industrial fatigue problems, industrial relations, structure of trade associations and structure of trade unions. Is all that research still going on at the taxpayers' expense or, now that the obligation has ended, has that come to an end?

Apart from the loans for the promotion of studies there is another point. Studies were being promoted in technological subjects at universities and technical colleges. I am not clear about the extent to which that is still carried on under Votes for the Board of Trade, but that I should think should belong to the Ministry of Education Vote. I am not in the least trying to suggest that encouragement of these studies was not necessary and that we should not give scholarships in management and so on, but I should like to know whether these funds are in operation, whether they are to continue, and whether they are still on the Board of Trade Vote or now come under the Ministry of Education.

There is also the question of loans to industry. Are we still having the short-term loans for re-equipment and reorganisation of plant which were initiated under these counterpart arrangements to increase production and productivity? I am not disputing the principle of loans, or indeed grants, to industry. On the other hand, there is a great difference—

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

Order. Will the hon. Member say which item he is discussing in the Supplementary Estimate?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I am trying, Mr. Hynd, to discuss the Appropriations in Aid and recovery from the Deposit Accounts. I understand that the Deposit Account is what provides these loans to industry. In order to know where these recoveries should have come from but did not because they were not in fact needed, I am asking whether the account is still being used for this purpose, or whether it is all available to be met from other Votes arising, as it would in this case, under Subheads C1 and C2, Grants to the British Productivity Council and Miscellaneous Grants and Contributions.

Perhaps I had better leave that point and revert to the Cotton Act, which comes under Subhead A15. That is a grant for money spent to help the industry in a situation which is being created to some extent by Government policy in that we have decided not to enforce restrictions or quotas on cotton goods from the Commonwealth or cheap producers but to help the industry to adjust itself. I should suggest that the sums under this Vote are perhaps more appropriate to a Conservative Government than the general distribution of short-term loans and grants to do a job which in my view industry could well do for itself.

I should quite understand if this expenditure continues because we are bound by the terms of the Benton and Moody Amendments to the Mutual Aid Agreement, which laid down the original terms on which the counterpart money was to be spent, but I understood from what the Parliamentary Secretary said that we are no longer bound by those Amendments. I should like a reassurance that this type of expenditure, started because of conditions imposed by the United States Government, is no longer being continued unnecessarily, as I think there is some indication, from what he said and from the Estimates, that it is being so continued; because of inertia in different departments, or for other reasons. I hope that when he replies the Parliamentary Secretary will give us some assurance on these points.

7.29 p.m.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I was rather disturbed to hear the hon. Member for Halifax (Mr. Maurice Macmillan) criticising, if I understood him aright, Vote A.6 under Part III of this Supplementary Estimate, on page 110: British Productivity Council (Grant in Aid): Additional provision required to meet the Council's costs in assuming responsibility for the production of the publication 'Target' —£5,250. That is additional to the £110,000 which the hon. Member mentioned in the original Estimate.

I beg of these new "hatchet men" not to go round chopping off flourishing and useful twigs and missing the big trees of expenditure which really need attention rather than these. I wish that we could have this attention to defence expenditure, for example, and the same team of economists keeping up a running gauntlet on those occasions. The publication Target is not only a useful one in general, but is much appreciated in the trade union movement.

The British Productivity Council is a joint body of representatives of industry and of the trade unions. The chairman of the British Productivity Council alternates between a trade unionist and an industrialist, to distribute the honours and to symbolise the truly co-operative nature of the Council. Is the hon. Member for Halifax saying that we are no longer interested in productivity, that it is a needless luxury in these days of an affluent society and an expansionist economy, and that we need not spend any more money in this direction?

I have been present at annual meetings of the Trades Union Congress for a number of years and have listened to the report of the chairman of the Productivity Committee of the General Council, which covers to a great extent the work of the British Productivity Council. It would be lamentable if the Government, on the representations made by the hon. Member for Halifax or by any other hon. Member opposite, were to cease publication of Target, which publicises new methods of productivity, indicates directions in which incentives may be employed and generally popularises the idea of higher productivity.

This, surely, is a purpose we want to foster and encourage. Co-operation between the trade unions and industry is indispensable if we are to increase our productivity. I therefore urge a word of caution, if no more, upon the enthusiasts on the benches opposite in selecting their targets for these attacks. It would be a disservice if this matter were to be pursued as a call to economy in Government expenditure.

I am not suggesting that any Government expenditure, however small, should be overlooked, or should be continued if it is no longer necessary—that is the way to extravagance and laxity of public administration—but I can assure the hon. Member from my knowledge and experience that this is something valuable to the trade union movement. It is certainly appreciated on both sides of industry and it would be a blow to the idea of joint co-operation on productivity if the Government were to cease this support for Target. It does not cost a great deal of money relatively. Welcome as it might be as a contract to the hon. Member's publishing firm, it is not a very large sum looked at in the context of the purpose which it is intended to serve.

I am glad that I came in at the right moment to hear this almost blasphemous criticism of a most valuable publication which circulates amongst trade unions and industrialists under the auspices of the British Productivity Council.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

The hon. Member did not come in quite early enough. Had he come in a little earlier, he would have heard me say that because of the great present-day necessity for heavy Government expenditure on many items it was all the more essential to make sure that money was not wasted administratively, was not subject to abuse, was spent in the most productive way and was not spent where private money would serve.

I was merely looking at the total figures of the cost of producing Target and using certain private experiences which I have had to suggest that it might well be a rather extravagantly-produced magazine and that, possibly, a commercial venture might be able to introduce more rigid standards in production and produce it more cheaply than my hon. Friend's Department.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I am obliged to the hon. Member. I heard all the words which he has repeated. I was present and listened to his speech, because I had been forewarned that an attack might be launched on this item in the Supplementary Estimates. So I made it my business to be here when hon. Members who might be raising this matter were rising in their places.

I have said what I want to say. I have defended the publication of Target. I believe that it still serves a useful purpose. Its withdrawal would create the impression amongst trade unionists, if not industrialists, that the Government were not quite so interested in productivity as they used to be. This, surely, is one of the conditions of our continued prosperity. This is basic to our prosperity and the viability of our economy. Nothing should be done to damage that in the eyes of those whose co-operation we all need if Britain is to be strong economically and if relations in industry in this direction are to be co-operative and fruitful.

Hon. Members opposite know that it is not easy always to get this joint co-operation on the shop floor, in the factory and, in particular places, on productivity. Sometimes there is a suspicion on the part of workers that those who go in for the production committee in the factory are in a sense the boss's men, or are co-operating in raising productivity without at the same being assured that part of the profits of increased productivity will be distributed amongst those who work in the factory or in the industry concerned.

For all these reasons, I hope that the Committee will reject any attempt to disparage this magazine or to cut down the Supplementary Estimate which is before the Committee.

Photo of Sir John Hall Sir John Hall , Wycombe

Will the hon. Member address his mind to the argument which, I thought, my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) made—that is, not that Target need necessarily be withdrawn, but that it is, perhaps, being extravagantly run. Does the hon. Member contend that it is not extravagantly run?

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I have no information as to the technical side of the production of this publication. I do not know the contract price for its publication, or anything about it in that sense. All I know is the usefulness of the production and, so it seems from the original Estimate and the Supplementary Estimate, the relative modesty of its cost. If hon. Members opposite are saying that they want to continue this publication, that they would not see it die, and that all they are concerned about is producing it more economically and making it bigger, better and cheaper, I understand what they are saying, but I did not gather that any such purpose lay behind the comments of the hon. Member for Halifax.

7.39 p.m.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

There are three sorts of subheads in these Estimates. The first are those which initiate expenditure arising out of fairly recent decisions of the House. The second are those which carry on and increase expenditure arising out of different acts of policy in the past, and on these I think that the Select Committee on Estimates and the Select Committee on Public Accounts are probably better vehicles for examination than this Committee assembled as it is this evening. There is a third class of subhead, which I would call the old-fashioned expenditure, which is simply running on for some considerable time after its purpose has been achieved and, in some cases, years after examination by the Select Committees on Estimates or Public Accounts, as the case may be.

The Select Committee on Public Accounts looked at the Council of Industrial Design two years ago. I have not read its Report. I doubt if it was censorious, otherwise we would have had some Parliamentary occasion on it and it would have claimed our attention. The Committee probably decided that, on balance, it was a good idea to let the Council of Industrial Design run on to the extent of £180,000 a year.

It is in that kind of situation that the Committee can give a short sharp political judgment about aspects of Government expenditure which should be brought to a close because they have outlived their purpose. I should have thought that the present Government, who are supposed to be running Conservative theory in the country, good and pure after three most successful attempts to do so, would have concluded that where industry can do a job for itself and do it satisfactorily the Government should draw their horns in and let it carry on. This is an instance where that might be done, although we are talking of an additional sum of only £1,500.

I am not prepared to believe that the Government must tell industry what are standards of industrial design by aiding and abetting industry at the taxpayers' expense to put up a new industrial design centre in Glasgow. I should have thought that British industry—most highly gifted, most successful all over the world in the export trade, in the lead over countless countries in industrial techniques and "know-how"—could have done this kind of thing for itself.

I cannot understand how my hon. Friend the Parliamentary Secretary can allege the reverse. Has he someone in the Board of Trade who is a master designer, or who is clever at putting over show equipment or delineating the forms of industrial machinery, glassware, pottery and all the rest of it? Is there an artist in the Board of Trade who can give superior advice to industry than industry can give itself? If there is, by all means should Government money be spent upon doing this kind of thing.

I do not believe that there is such a civil servant in the Board of Trade. I do not believe that the taxpayer can commission people from the sidelines, as it were—from the universities, from schools, and so on —in a better way than industry can itself commission such people to put this sort of thing through. This is an example of where a Conservative Government should say, "We cut this item of expenditure. We think that industry is better equipped to put up its own design centres in Glasgow or Wigan", or wherever they may ultimately be.

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

Has the noble Lord seen those towns?

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

Of course, I have seen Glasgow and Wigan, and both are most excellent places. Has the hon. Gentleman any horror that he wants to exhibit in either of those places?

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

If the noble Lord has seen Glasgow or Wigan he would not cite them as evidence of the ability of private industry to produce beautiful things.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

The hon. Gentleman should not so insult those places. It will be a very grievous shock for the constituents of his hon. Friends to read in tomorrow morning's papers the strictures that he passes upon them. I am perfectly certain that Glasgow and Wigan can find industrialists who, in their own profession, can waltz away with designs and make themselves superior to anything that the rest of the world can produce. I do not think that there is anyone that the Government can commission who can do better than them.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

The noble Lord is putting a very fascinating argument before the Committee with a good deal of temperance at the moment, but in his strictures he admits one very important factor. When he refers to the Council of Industrial Design and to the British Productivity Council he forgets to include in his observations the fact that industry itself is a very large contributor to those bodies. Her Majesty's Government are actuated by good will in making their contribution. They want to show that they appreciate the value of having some kind of institutions which will set a standard of decent aesthetic tastes, as contrasted with the gross commercial values which so often disfigure the countryside. The T.U.C. and industry itself finance these bodies, as well as the Government.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

I take exactly the opposite point of view. If industry is so wealthy and is advancing these very large sums of money, that should be the reason for the Government withdrawing. If taxpayers' money is to be used for this sort of idea, it should be used to generate it, to put it on its feet.

I hate the cotton scheme. I dislike the Act which was passed last year. Nine hundred and ninety-nine thousand, nine hundred and ninety pounds are put down in the Vote we are now discussing to initiate the cotton scheme. Some of my hon. Friends and I do not like a policy of this sort of intervening in industry. However, a case can be made for saying that if the Government are to do anything they should initiate a scheme until industry can take up the slack and make it run for itself.

In the Council of Industrial Design grant in aid we have something which was, perhaps, applicable post-war, when industry was in a disastrous condition and needed some kind of prodding. I will come to that in a moment. It needed some prodding and it was necessary that the Government should allocate taxpayers' money to it. Now that we are, as the hon. Member for Sowerby (Mr. Houghton) said, living in an affluent society, it is absurd to suppose that the Government need carry on with this sort of thing at the taxpayers' expense.

I do not think that we need carry on with A.6 either. I am not talking about a road. I am talking about the next subhead in the Vote, "British Productivity Council (Grant in Aid): £5,250". The activities of the Council have not been inquired into at any stage by the Select Committee on Estimates or the Select Committee on Public Accounts. Therefore, we have to do the work for them. This is a concept which had an American origin, so far as I understand it. The Americans said, "We will give you aid, provided that you get yourselves on your feet". They did not like Socialism, planning and controls, or rationing. They did not like the depressed, queue-minded society which right hon. and hon. Gentlemen opposite arranged for this country for six years after the end of the war.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

The noble Lord should not talk rubbish.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

The Americans said, "We will give you aid, provided that you set up a British Productivity Council, which will promote the idea of enterprise, success, private commerce, profit-making and all the rest of it."

The hon. Member for Sowerby has been won over to the idea that this was a most successful move by the Americans, because he says now that, living in an affluent society, with everything having been arranged for as the Americans originally wanted, this must carry on. He is repudiating the attitude of mind of right hon. and hon. Gentlemen opposite, who resisted the whole idea which the British Productivity Council was originally promoted to bring about.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I was present throughout the negotiations in the period of which the noble Lord is speaking. I was present when the Agreement was signed. I knew everything which went on between the Americans and Sir Stafford Cripps on this question. The noble Lord's whole account tonight is a completely fanciful and imaginative account of what happened. The Americans laid down no such terms whatsoever in connection with aid. They never suggested anything about the British Productivity Council in relation to private enterprise and other things mentioned by the noble Lord. The Council arose out of certain wartime missions on coal and other things, and has been a highly successful thing for this country. It was not tied to the receipt of aid.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

May I correct the right hon. Gentleman on that point? I think that the right hon. Gentleman is confused between the Mutual Aid Act of 1948, and the arrangements, on which my noble Friend has based his statement, and which I mentioned in my own speech, which arise out of the arrangement to expend the counterpart fund derived from United States economic aid under Section 9 (c) of the Mutual Security Act, 1952. The arrangements were embodied in an exchange of Notes between Mr. Aldrich and the then Foreign Secretary, Sir Anthony Eden, and the first paragraph of the White Paper describing this arrangement reads: The United States Economic Co-operation Act of 1948 and Mutual Security Acts of 1951 and 1952 provide that 100 million dollars of the fund appropriated by Congress for the provision of aid may only be expended on certain conditions. The text of this legislation (known as the Benton and Moody Amendments) is given in Appendix B. The Temporary Chairman: Order. The hon. Gentleman is making another speech.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I am only correcting the statement of the right hon. Member for Huyton (Mr. H. Wilson) that my noble Friend was in error. I am merely pointing out that the Benton and Moody Amendment starts off by saying: It is hereby declared to be the policy of the Congress that this Act shall be administered in such a way as (1) to eliminate the barriers to, and provide the incentives for, a steadily increased participation of free private enterprise in developing the resources of foreign countries. I think that my noble Friend is proved to be right.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

I have not had the advantage of the intimate researches which my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) has been able to carry out, and I am most grateful to him for his detailed interruption on that point.

I am making the rather broader point that the tie-up between American aid and the contribution to the British Productivity Council can be seen from citing a single page of these Supplementary Estimates—page 110—on which we find, under Subhead C.1, for American aid, promotion of productivity, &c, and grant to the British Productivity Council, a total of £3,700. We have had the explanation given that that is set off by an Appropriation-in-Aid, but, at the bottom of the page, there is this proposal for an increased grant of £5,250 from the British Government to the British Productivity Council, so that, clearly, the American and British Governments are contributing to this organisation.

I say that that came out of the past, when the Americans thought that it would be a very good idea for us to get away from the liens of Socialism, and our low standard of existence, and try to put into operation some of the enterprise and zeal that they were successfully thrusting into the German economy. That is the kind of way in which this thing began, and it is has run on now long after we have got, except for certain unfortunate manifestations and relics of bygone days still perpetrated by Her Majesty's Government, a private enterprise and successful society largely formed on the model of the United States.

I think that this is another example, along with the previous one of the Council of Industrial Design, where a Tory Government should chop its head off and say, "We have had enough of that. Thank you very much for your past services in putting this country on its feet and aiding and abetting the high state of productivity that we now have. Let us now bring it to an end."

7.45 p.m.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I did not intend to intervene in this debate, and I did not want to interrupt the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) a second time, because I thought that the hon. Member for Halifax (Mr. Maurice Macmillan) had gone on rather longer than was normal in an intervention. That was why I did not reply to him when he sat down, because I did not want to interrupt the noble Lord still further. In fact, the intervention of the hon. Member for Halifax rather confirms my point that the noble Lord is in error.

The noble Lord said quite clearly what the purpose of the British Productivity Council was, and that it resulted from an American intervention conditional on American aid at a time when Americans felt that Socialism was going very far and all the rest of it— the usual stuff we get from the noble Lord—and that they felt that any aid which they gave during the period of the Labour Government should be made conditional on the British Productivity Council being tied to private enterprise and all the rest.

What the hon. Member for Halifax has been quoting was the subsequent Agreement negotiated in 1952, when, as the Committee will recall, there had been a change of Government. I want to get on record that the noble Lord is wrong in suggesting that the American Government made the British Productivity Council a condition of the receipt of Marshall Aid at that time. The Marshall Aid proposal, which was made, as we all know, for quite different reasons, because of the cancellation of Lend-Lease in 1945, was one thing. The British Productivity Council was a proposal due to the fact that the Americans recognised that many of our industries were extremely backward and certain missions during the war—and I was concerned with one of the most famous of them concerning the coal industry—had shown that we had a lot to learn from them. Because of that, they suggested the British Productivity Council, and the late Sir Stafford Cripps accepted the proposal.

I well remember the debate in the House. There was trouble from the right hon. Gentleman the Member for Wood-ford (Sir W. Churchill) because Sir Stafford Cripps did not want the debate that day because he was going to Bristol. That had nothing to do with Marshall Aid, and I wanted to correct the noble Lord on that point. I do not dissent from the statement made by the hon. Member for Halifax on Marshall Aid.

7.48 p.m.

Photo of Mr John Eden Mr John Eden , Bournemouth West

I do not see the relevance of the intervention of the right hon. Member for Huyton (Mr. H. Wilson). Surely the question is not so much that we are discussing the history and origin of the British Productivity Council, but whether or not it is now able to finance its own operations. This is the question which we are asking ourselves when we are directing our scrutiny to Subhead A.6, concerning the work of the British Productivity Council, and, coupled with it, that of the Council of Industrial Design. Both are probably, or almost certainly, essential. We are not criticising the work or the value of the contribution which they make.

The point that I want to make on this subhead is rather why is it still necessary today for the taxpayer to underwrite their operations to the tune of a Supplementary Estimate of over £6,000. Why cannot private enterprise and the trade union organisations contribute to the cost of this very worth while magazine, Target.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

I will give the hon. Gentleman the answer straight away if it will help him not to repeat his administrative ignorance on this matter.

The T.U.C. is making a contribution of £10,000, the Federation of British Industries makes a similar contribution, and the Confederation of British Employers is also making a large contribution. I believe that the same is true of the National Union of Manufacturers, so that this body is actually being financed from the very sources for which the hon. Gentleman is asking it should be. They are paying for it already.

Photo of Mr John Eden Mr John Eden , Bournemouth West

I wish that they would pay for the whole thing. I have no hesitation in displaying my ignorance on questions like this, because that is what this debate is for—to ask the Government why certain items of expenditure are required, and why we are expected to vote for them.

In reply to the hon. Member for Wesl-houghton (Mr. J. T. Price), I would point out that the note to Subhead A.6 refers to Additional provision required to meet the Council's costs in assuming responsibility for the production of the publication ' Target'. What do the words "assuming respon-sibibility for the production" mean if they do not mean to foot the bill and pay for the cost of that production?

I hope that we have made it quite clear, even to the hon. Member for Sowerby (Mr. Houghton), who apparently is so touchy on a rather tender spot as a result of some of our investigations in this matter, that we are not criticising the work or contribution of Target itself, but that we want to get an answer to the question why the taxpayer should still contribute towards the cost of this production.

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

But, in his argument, would the hon. Gentleman consider that the other bodies that contribute very much more to it and who bear the bulk of the cost, which is now admittedly common ground, all represent private productive interests? Is there not a public interest in this as well, and if we desire to have a say on behalf of the public—not of the private organisations and bodies—is it not proper that we should pay for the right of having a say? Does not that give us an entry into it, and does it not also give the consumer and the ordinary public a right to be heard?

Photo of Mr John Eden Mr John Eden , Bournemouth West

I do not agree that because everybody has an interest in anything which will assist in greater productivity one must necessarily, as a taxpayer, have to underwrite every aspect of an industry's operation—

Photo of Mr John Eden Mr John Eden , Bournemouth West

That is what the hon. Gentleman is asking should happen in this case, and I do not think that it applies here. It certainly does not apply to the new Design Centre to be built in Glasgow. The Council of Industrial Design does excellent work, but why should it not be financed wholly out of industry, which benefits from its operation? If these things are considered so essential and useful to an industry as a whole, I do not see why that industry—employers, trade unionists or both in co-operation—cannot, out of its own resources, find the money necessary for these operations.

I should like my hon. Friend the Parliamentary Secretary to tell us a little more about how this figure of £999,990 was arrived at. It is not a question of the mystique of that figure, but the mystique of the £10. Were we able to discuss Vote 3 and Vote 4 of Class VI we would see that each requires a further Supplementary Estimate of £10. This curious figure of £10 is very convenient, and a good round sum, but if we had a further £10 here we would have a nice £1 million. Is the reason for this that £1 million would not look so good? Is this Estimate as good a guess as any other that my hon. Friend can give?

Perhaps my hon. Friend would also tell us a little more about the rotary kiln in Korea and the settlement of "a claim". I am grateful that my hon. Friend has referred to this particular operation—it is some kind of settlement with a contractor who constructed a rotary kiln in Korea—but are these things really necessary? Are they to go on for ever and, if they are to continue, what steps does my hon. Friend intend to take closely to scrutinise these items before submitting them for our approval or rejection? I should like him to add to the explanation he has already given.

8.3 p.m.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

This discussion has been extremely valuable, and I welcome the close attention that has been given to Supplementary Estimates involving what are, in some cases, very small amounts. It is very efficacious in public life that attention should be directed to payments, however small, from the public purse, and this debate has afforded an opportunity to provide information sometimes not available to hon. Members unless they ask the Department concerned for it. I must be brief —there are other Supplementary Estimates to be discussed—but I hope to answer a good proportion of the questions which have been addressed to me. However, they were very detailed questions, and those that I do not answer now I shall try to answer by writing to the hon. Members who asked them.

My hon. Friend the Member for Yeovil (Mr. Peyton) complained of the paucity and the meagreness of the details of the Supplementary Estimates and the vagueness of their presentation. I would refer him to the Supplementary Estimates of 1959–60, which were laid on 6th July, 1959, when very full explanations of the various subheads were given—

Photo of Mr John Peyton Mr John Peyton , Yeovil

My hon. Friend quotes that example of the slightly better practice, but surely that adds strength to my point. Why on earth, on this occasion, has the Board of Trade gone back to such an intolerable state of coyness?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

These are exactly the same items for which detailed explanations were given six months ago. In order to save printing and so on, we merely gave the short subheads on this occasion. The details are available in the July paper.

The hon. Member for Farnworth (Mr. Thornton) has expert knowledge of the cotton industry, and we always listen to him with great respect. We also very much appreciate the moderation and objectivity with which he presents his case. There has been some discussion about exactly what are the amounts that have to be paid out under the cotton reorganisation scheme. As I mentioned, our best estimate is about £30 million. That is obviously not an accurate figure, but our estimate of the cost of scrapping, re-equipment and re-organisation is roughly £30 million—

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Is the hon. Gentleman aware that during the election campaign the then President of the Board of Trade, now Minister of Education, speaking in a cotton constituency and obviously trying to get the maximum publicity for what was being done, said that £30 million was the figure given to the House but that his estimate was between £50 million and £60 million, although he had not dared to tell the House that it would be as much as that or the House would not have voted the figure? Is he aware that during the election the Government were promising to spend £60 million, and, indeed, the Prime Minister in speeches that he made in cotton towns went far above £30 million?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

It would not be relevant for me to enter into a detailed discussion on that, but in the Board of Trade we regard £30 million as the best estimate we can give. This estimate deals with £1 million, less £10. There is nothing sinister in the omission of £10. That was the Vote on Account, which one must have in order to draw on the following year's money. The present sum, plus the £10, makes up the £1 million required for scrapping payments in the current financial year.

The £10½ million is the cost to the Exchequer of scrapping machinery under the spinning doubling and weaving schemes. There may, of course, still be required an additional sum if the finishing scheme has to be provided for. Discussions are at present continuing between the Cotton Board and the finishing industry to decide whether the re-organisation scheme shall apply there also—

Photo of Sir John Hall Sir John Hall , Wycombe

Has my hon. Friend's attention been drawn to the fact that payments of compensation under the Cotton Industry Act have led to a general shortage of supplies, with delivery dates from six to twelve months ahead?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I am aware of that question, but I do not think it is relevant to this debate.

The hon. Member for Farnworth asked whether the scrapping and the rates of payment were excessive. As I said in an intervention, the figures given in the scheme were the minima required for the whole scheme to come into operation. We fully expected that the figures quoted in the White Paper, which were the minimum figures which would lead to the operation of the scheme, would be exceeded, and they have been exceeded. But there are some people even now who maintain that we have not scrapped enough machinery and that even more capacity should be taken out of the industry. We accept the view of the Cotton Board, which is satisfied that the contraction of the industry is sufficient and that it is now at a size which can meet foreseeable demand through the introduction of a shift system and modern machinery.

The rates of compensation were fixed by the Cotton Board. They were approved by the Board of Trade, but after we had had expert and independent advice from Mr. Burney, a well-known accountant, who made an examination of all the circumstances. According to the best information we have, the payments of compensation are not excessive.

The hon. Member also asked whether we thought that the inspection method we have for the scrapping of machinery was adequate. He has put down a Question for answer tomorrow and, rather than delay the Committee, I would prefer to deal with the matter at Question Time tomorrow.

The hon. Member raised the question of possible abuses in the weaving section of the industry. We at the Board of Trade—and I know that the Cotton Board share what I am about to say— are grateful to him for the cases to which he has drawn our attention. I can assure him that the Cotton Board is as anxious as he is to avoid any abuses in the payment of compensation to firms in this, or any other section, who do not fulfil their obligation to cease to carry on business but carry it on in some cases, the hon. Member suggests, with second-hand machinery.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Does it not seem to the hon. Member, looking back at things in retrospect, that this kind of transaction and set-up, in which public money is being poured out to some outside agency with no public control whatever, is a clear invitation to abuse of all kinds in an industry which is riddled with holding companies and the switching of commitments from one to another in a way which baffles even the most expert accountant? Does it not appear to the Government that they have made a mistake in these arrangements and that there will be abuses? Does he not realise that these cause the greatest anxiety in Manchester and other places where people talk about what is going on?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I assure the hon. Member that the Cotton Board will make the most thorough and deep-searching inquiry before any premium payments are made. Up to date no premium payments have been made. We can rely on the Cotton Board to do all that is humanly possible to see that there is no abuse and no trickery by firms seeking wrongly to extract these funds.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Does the hon. Member realise what he is saying? The Committee is being asked to vote substantial sums of money. We have had evidence of abuses, and this has not been produced tonight for the first time but has been bandied about in responsible sections of the Press for about six months. The Minister said that he has listened to what has been said by my hon. Friend the Member for Farnworth, and other agreeable and pleasant things like that. He said that the Cotton Board will no doubt take notice of it. But he is asking the Committee for this Supplementary Estimate After all that we have heard from him in the past few weeks, does the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) intend to vote this money which, on all the evidence so far available, is being spent in a way which lends itself to much abuse?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

The right hon. Gentleman is utterly wrong, because no premium payments have yet been made. There is no question that money has been paid out wrongly, because no premium payments have been made, and the Cotton Board will carry out investi- gations, and be fully satisfied that the necessary conditions have been strictly fulfilled, before any moneys are paid out. While we are grateful to the hon. Member for Farnworth for bringing these cases to our attention there is no evidence that there have been abuses or that money has been wrongly paid out.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

These premium payments are a difficult proposition. They are made on the supposition that people go out of business. Presumably the supposition is that they go out of business permanently—not temporarily, until they get the money, and then come back. I suggest to him seriously that before premium payments are made, payments should be made at the standard rate and the payment of the difference between the standard rate and the premium rate should be delayed for two or three years to see whether the persons concerned satisfy the intention that they go out of business and remain out of business.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I will certainly consider that suggestion, but the hon. Member will agree that his right hon. Friend the Member for Huyton (Mr. H. Wilson) is wrongly suggesting that payments have been made. The Cotton Board has made no premium payments yet and is making most searching inquiries into certain cases, some of which have been called to our attention by the hon. Member for Farnworth.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The hon. Member is misleading the Committee. I did not say that any payments had been made. I heard him say that he had no knowledge of any payments having been made. But he is asking the Committee to vote a Supplementary Estimate in order to go into a scheme where these abuses could exist. I do not say that any money has been paid, but before the Committee can fairly be asked to approve this Estimate we want some more far-reaching guarantees against abuse than any we have yet been given by the Government.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

The right hon. Gentleman sometimes exaggerates the kind of abuse which is inherent in this scheme or even potentially inherent in it. As has been said, the Comptroller and Auditor-General has access to all the figures of payments, and he can scrutinise the accounts. There are a great many safeguards in the scheme, into which it would not be appropriate for me to go in any detail tonight.

The hon. Member for Farnworth raised a very important point that employers may receive the discount rate if they have been in business since April, 1956 whereas operatives receive compensation only if displaced after 23rd April, 1959. The purpose of the discount rate was fully explained to Parliament when the scheme was approved last July. Broadly speaking, it is payable in respect of machinery which was already idle or units which had already closed down on 24th April, 1959—or, in the case of weaving schemes, where only part of the looms in a weaving shed were being scrapped.

Firms are eligible only if they have been registered with the Cotton Board as carrying on business in the section after 24th April, 1956, and the Cotton Board has to be satisfied that the machinery in question could, on 24th April, 1959, be put into operation without undue difficulty or expense. It was necessary to provide for the elimination of such machinery since it would otherwise have remained capable of being brought back into production with reasonable ease and thus was as much a threat—as excess capacity—as was machinery which was still in operation. Moreover, firms might otherwise be able to scrap operating machinery and bring idle machinery back into production, thereby frustrating the scheme.

The Cotton Industry Act provided that the compensation arrangements for operatives had to be made by agreement between the unions and the employers in respect of loss of employment due to the elimination of excess capacity. The agreement between the unions and the employers provided that those eligible for compensation were operatives whose contract of employment had not been terminated prior to 23rd April, 1959. Employees who lost their employment before this date could hardly have been said to have done so as a result of the reorganisation scheme, and both sides of industry were no doubt conscious of the difficulties and anomalies which might arise by going back beyond this date. The essential point is that the arrangements for compensation of the operatives were left to be settled directly between both sides of the industry and the matter is not one in which the Government have now any power to intervene.

As for the application of the agreement to individual cases, both sides have set up an appeals board with an independent chairman (and two assessors, one from a union and one from the employers' side), for settling cases in which there may be difficulty or dispute. There seems to be adequate machinery to take care of the alleged abuses which the hon. Member suggested may arise in some of these compensation payments.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Has the hon. Member given proper consideration to one point which emerges from this transaction? Time and time again in the House on other occasions there has been very strong criticism of the dangers of retrospective legislation, as it is called. Here we have a situation in which retrospection is applied three years back to 1956, in the case of machinery lying in mills which were not going concerns in the sense that they were in production, but when a plea is made on behalf of the workers who may have worked in these places the same principle, for some mysterious reason, cannot be allowed to apply. That is completely unethical and the House has a right to object to such a transaction.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

If the hon. Gentleman were to study carefully the remarks I have just made on the subject, he would see that there is a difference between payments made for machinery, for the reasons I have just given, and payments to operatives who have lost their employment through the operation of the reorganisation scheme.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

I do not think the hon. Gentleman has covered my point satisfactorily. The case I mentioned—and it can be multiplied—was of a firm which closed down on 17th April, that is, six days before the appointed day, and the shareholders will get compensation for that machinery which is scrapped, but the operatives who lost their jobs six days before the appointed day get no compensation at all. Nothing that the hon. Gentleman can say, nothing I can say, can convince those operatives that that is just. It is unjust.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Of course, whenever an appointed date is introduced there are hard cases which fall just outside of it. I have given reasons why we wanted to get rid of excess capacity and why we are willing to take the compensation for machinery back to 1956. But the same does not apply to operatives, though I admit that there may be hard cases, falling a week or two before the operation of the scheme and the announcement of the appointed day, of people who have lost their employment.

Photo of Mr Ernest Thornton Mr Ernest Thornton , Farnworth

Would the hon. Gentleman not agree that it is not unreasonable for the operatives to feel, if there can be retrospective arrangements made beyond 23rd April and compensation for machinery, that for them, the operatives, there should be the same compensation arrangements?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I think that this is a point which ought to have been raised by the unions when negotiating the compensation arrangements with the employers.

I come to the hon. Member for Nelson and Colne (Mr. S. Silverman). It would not, I think, be appropriate for me to go into a detailed discussion of the unemployment situation in his area, which is all too high, we admit, but I should like to try to assess correctly the figures which he bandied about at the beginning, and which the hon. Member for Farnworth also tried to put into proper perspective. The average rate of payment per loom scrapped is £66 of which £44 only falls on the Exchequer. The hon. Member mentioned a figure of £230 and multiplied it up for Nelson and Colne and got it astronomically high.

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

I always understood that the amount paid was £66 on the average and that only about two-thirds of that fell on the Exchequer. What I was doing was applying in the case of my own constituency the same kind of analysis as my hon. Friend was applying over the whole field.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

I hope that the figures I have given will be of value, for I am sure that the Committee would not like to mislead public opinion into accepting the figures which were originally mentioned.

The hon. Gentleman the Member for Nelson and Colne was quite right in the unemployment figures—so far as I know: I have not got them with me. The figures he quoted were accurate, but equally it is true that the figures we have quoted to him are accurate, too. In the north east Lancashire development area, which includes Nelson and Colne and Burnley, in January, 1959, there were 4·1 per cent. unemployed. In February of this year the percentage was 2·3. There are just over 2,000 people unemployed in the north east Lancashire development area, and there are in fact already 4,000 jobs in prospect.

That is sufficient reason, I think, if any were wanted, why Nelson and Colne has not been included in the list of development districts so far announced. If the position were to deteriorate and we were to be convinced that there might be an imminent threat of unemployment—not just people losing their jobs but of their not being able to find other jobs—we would review the position immediately.

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

I am much obliged to the hon. Gentleman, and I should like to express my gratitude to him for now making it perfectly clear that the figures I gave on 23rd February and which I repeated today for my own constituency are correct. Since the Local Employment Bill does not deal with areas any more, but only with individual localities, will he now see to it that the President of the Board of Trade draws the right inferences from the figures in those localities when seeking to withdraw from them the benefits which other people may or may not be entitled to?

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Of course my right hon. Friend, obviously, will consider this very carefully, but also bear in mind the travel to work provision. We do not only extend aid to other areas outside those designated, but equally, expect those in those areas to travel to work if it is provided in the immediate vicinity. That must be taken into account. That fact, was, under played by the hon. Gentleman.

I should like to say a word to my hon. Friend the Member for Halifax (Mr. Maurice Macmillan). I agree with him that we should watch Government expenditure very carefully. He is quite right: there is no obligation on the Government at the moment to continue with services which were started with the assistance of American aid. It just so happens that the first to come up was the continuation of the magazine Target. It was decided that it would be a good thing in the national interest that it should be continued. The revolving fund has now been wound up. The British Institute of Management, I think I am right in saying, now receives no public funds; it has exhausted Government aid. In fact, we are pursuing exactly the policy which my hon. Friend wishes us to do, that is, that as schemes come up for review we decide whether or not on grounds of efficiency they should be continued.

I am grateful to the hon. Gentleman the Member for Sowerby (Mr. Houghton) for his intervention. Target is an excellent magazine, and it does an excellent job, which is very necessary.

I should like to correct my hon. Friend the Member for Halifax. I think it is a matter for correction, but I hope he will forgive me if it is not. He referred to Target as though it were a straight commercial proposition, extravagantly produced. The cost of producing it is not just that of a printing and distribution job. First of all, there is the collection of the case histories on which the publication is based, and which costs a lot of money. Then 15,000 copies are circulated free to trade unions whose co-operation it is essential to secure on the floor of the workshops of the country.

I believe the Government have made a right decision to continue with this publication. It is doing a useful job, and the taxpayers benefit from the arrangements, because if we had carried on independently of the British Productivity Council that would have cost the Government thousands of pounds more than this marriage of the existing publication and the British Productivity Council's journal. Therefore, I think we have looked after the taxpayers' money in the right and proper way in deciding to do what we have done.

The noble Lord the Member for Dorset, South queried whether certain expenditure should be continued on the Council of Industrial Design and the Productivity Council. I have every sympathy with him in wanting to make economies, but I do not think he stressed or even sufficiently appreciated the job which the Council of Industrial Design, among others, is trying to do. I invite him to visit the Council in the Haymarket, to go round to see the job it is doing and discuss it with the Director-General. I think that if he were to do that he would change his mind completely.

One point I would mention to him, and also to my hon. Friend the Member for Bournemouth, West (Mr. Eden), is that although it is true that a great many of these organisations which have been mentioned tonight receive Government funds, equally it is true that they receive very large sums indeed from other sources—private enterprise and the trade unions. For instance, while the Government make a subvention of £180,000 to the Council of Industrial Design, the Council's other sources of income account for no less than £131,500.

Other firms, and particularly small firms which are not members of the F.B.I. or the National Union of Manufacturers, can go to the Council of Industrial Design or the British Productivity Council and benefit from the work which these bodies do. It is an important aspect of their work that it is not so much the large firms which need their attention drawn to the importance of design or the improvement of productivity as the smaller or medium-sized firms which in many cases do not belong to these organised bodies.

As far as I can, I have dealt with all the points that have been made, but if on reading HANSARD tomorrow I find that I have omitted any I shall be only too happy to write to hon. Members. The debate has been very useful from our point of view at the Board of Trade and I hope that the Committee will now agree to the Vote.

Question put and agreed to.

Resolved,That a Supplementary sum, not exceeding £1,002,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1960, for the expenditure of the Board of Trade on assistance and subsidies to certain industries, and on trading and other services; subscriptions to international organisations and grants in aid.

CLASS V