Orders of the Day — Cotton Industry

Part of the debate – in the House of Commons at 12:00 am on 28th June 1962.

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Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale 12:00 am, 28th June 1962

The hon. Member will have his opportunity during the debate.

Although Lancashire now possesses a highly diversified industrial structure, Lancastrians still think that cotton is the country's main industry, but the figures of employment show the position to be very different, and it is a good thing for the prosperity of Lancashire that so much diversification has taken place. I know that the record of percentage of unemployment which I quoted relates to the wholly unemployed and that there are special difficulties about short-time working, particularly at present, and the re-employment of older people from the textile industry. I shall say a word or two about that later.

I have said that the industry is suffering from a crisis of confidence. This is a plain fact, and I am sorry that it is so. The industry, I know, has a simple, one-word explanation for this—the word "imports". I will, therefore, deal with this matter at once and in some detail, although there are other factors, too.

Looking at Britain's trading policy in general, with only a few exceptions goods of all sorts may be freely imported into this country from all parts of the free world. We protect domestic industries by means of a protective import tariff, which tariff also enables us to give preferences to the Commonwealth countries and to our Colonies under the Ottawa and other agreements. In return, many of our exports, including cotton textiles, obtain preferential treatment in the Commonwealth. British cotton exports benefited greatly from these arrangements before the war, and such exports, when they are made today, still secure some benefit over those of foreign competitors.

When, therefore, cotton cloth and later yarn began to enter England from India, Pakistan and Hong Kong in the late 1950s we were bound to admit it free of duty and without quantitative restrictions. We recognised that these developing countries, for which Britain has a special responsibility, must find export outlets, as was pointed out by the hon. Member for Sowerby, if they were to earn the money to pay for their imports. Indeed, many of their purchases are exports from Lancashire's own engineering and chemical industries.

But because these textile imports were adversely affecting the cotton industry, the Government supported the negotiations which led to the inter-industry agreements for voluntary restrictions on imports from India, Pakistan and Hong Kong in 1959. The Government went further than this. We realised that excess and idle capacity was overhanging the industry and impeding the necessary processes of modernisation and reorganisation. In the Cotton Industry Act, 1959, therefore, which had the full support of the House, the Government were empowered to make payments for scrapping plant under redundancy schemes and towards the re-equipment of firms deciding to remain in the industry.