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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 Harry Randall Mr Harry Randall , Gateshead West 12:00 am, 28th June 1962

—the House must remember that that represents only applications. There is 1964 to come yet, and we may well have an entirely different situation. Much will depend upon whether we can get rid of this crisis which is ahead of us. That will determine whether those applications are going to be picked up.

We in the Estimates Committee wanted to know Why firms were not responding and putting in their applications. We were told that this was due to lack of confidence in the industry and to the import situation. It was on that point that we continued our inquiries. It is perfectly true that for a number of years I represented a cotton constituency, and now I have had the opportunity of sitting in on this inquiry, but I still cannot claim to be an expert in this industry. It is an extremely complicated one.

All the same, I do not think it needs an expert, having read our Report, to appreciate the inevitable conclusion at which we arrive, namely: that, failing a speedy and satisfactory solution to the related problems of imports, marketing, and the fuller use of plant and machinery, much of the expenditure incurred will have been to no purpose. This is one of our oldest and most famous industries. It is in a precarious state. Government assistance to the tune of £30 million was offered, although under the Act £30 million is not necessarily the ceiling, but it was in mind at the time of the Second Reading debate that £30 million would probably be advanced from Government funds. Surely this £30 million was offered in the belief that such expenditure would enable the industry to put its house in order and make itself competitive. I cannot believe that when the Government asked the House to confirm an expenditure of that kind, it was not done in the expectation that the industry would be enabled to become competitive and to put its house in order.

What do we find? On the one hand, £30 million is offered to enable the industry to become competitive. On the other, a level of imports is permitted which, without doubt, prejudices the very survival of the industry. It is a paradoxical situation. In fact, it might even be called a dishonest one. No wonder there is a crisis of confidence in the industry. No wonder full advantage has not been taken of the Government's offer. The cotton industry, above all else, if it is to succeed, must have the basis of a sound home market if it is to survive. The industry rightly feels that the Government could not commit themselves to the tune of £30 million if it was not intended that the industry should survive. Yet experience does not support this view. The high level of imports is allowed to continue and a fair and reasonable home market is denied to the industry.

Considered in isolation, it would seem that the money has been well spent. We were given evidence of modernisation which had taken place. Improvements have resulted in output, lower costs and better working conditions. But this must be set against the whole picture, and one fact emerged quite clearly. All the experts, including the witnesses, were quite unanimous in the belief that British cotton will never be able to compete with Asiatic imports at their present level.

One witness, Mr. Cartwright, of Barlow and Jones, Ltd., said, as will be seen in answer to Question 471 in the evidence: … in view of the Government's policy of unrestricted imports from Asia we must face the fact that no matter how efficient we become, we shall never compete with the Asiatic imports. Colonel Whitehead, the President of the British Spinners' and Doublers' Association, was asked if he thought that we could compete without import restrictions. His answers to Questions 757 and 758 make his view quite clear. He said: … no, even with the new machines … Because of the wages paid in India, Pakistan and Hong Kong. In a memorandum which Colonel Whitehead submitted to the Estimates Committee, and which appears on page 128 of the Report, there is this statement: It was made clear by the industry's representatives … that any scheme of Government assistance and any efforts by the industry itself would be rendered useless, if low-price imports, from whatever source, were not strictly limited;… there was a serious danger that money already spent on modernisation would be thrown away. Colonel Whitehead is one of the experts in the industry and he gave us that evidence.

What else did we find? We found that, for the first six months of 1961, 36 per cent. of home demand was supplied from imports from abroad, and that the main suppliers were the Asian Commonwealth countries. This must put our industry at a disadvantage, even compared with European, for their markets are not swamped with goods as ours are, and Sir Cuthbert Clegg, of Clegg and Orr Ltd., made the point in this way: Our continental competitors have had the benefit of insulation from imports and low cost countries and have, therefore, been able to maintain continuous production better than we have. I could go on quoting from the evidence that was given, but surely it is ludicrous to talk of financial assistance and the present import levels in one and the same breath? It just cannot be done. All the modernisation in the world will never put us on an equal footing with our Asian competitors. Even our ability to compete with Europe is prejudiced while these present levels remain.

I should like now to say a few words about marketing arrangements. This problem gives further cause for concern. I agree that it is probably largely a matter for the industry, although I am bound to say that as a result of sitting on these inquiries. I consider that this problem cannot be divorced from the question of imports. Marketing appears to be a hit-and-miss affair. In fact, I think that Mr. Harrison put it very well indeed when he said: The tendency in the past was this. Someone grew some cotton and then looked for a spinner. The spinner did the spinning and then looked round for a weaver, and the weaver wove the cloth and then looked round for a customer. That may be over-simplifying the situation, but it is largely what is happening in the industry today.

We find ourselves with a market which has been overstocked and even fashion dictates and determines the markets. How many industries can plan an approach to marketing of this order? How many can expect, deserve even, to survive if they carry on in this way? This is why we say in the Report that the industry should make a contribution towards reorganising itself, and I hope very much—and this follows something said by the President of the Board of Trade—that the industry will take note of that part of our Report and set about the task of reorganising itself.

I now come to the question of the fuller utilisation of plant and machinery. This, again, is a matter for the industry, for the employers and the workers. This is extremely important. Such is the cost of the new machinery that if installation is to be worth while, it must be used to the fullest extent, because in any event it is likely to be obsolete in ten years.

To quote Mr. Harrison again, he says, in paragraph 374: My company in the United States runs a minimum of 120 hours and regularly 144 hours per week, three shift operation, five or six days. We find that the bulk of our continental competitors are running a minimum of 120 hours and many are running in excess of that. In Hong Kong, 144 hours is probably the minimum. What do we find in this country? In some mills—and, in fact, in the majority—it seems that a single shift is worked for five days, making a total of 37½ hours per week. In other mills, two shifts are run, making a total of about 75 hours a week. But in a few, a very few, there are three shifts totalling perhaps 112½ hours. Really, no more need be said about this. Obviously, the new installations will not be an economic prospect under such conditions.

It is no good blaming the industry. It is no good saying that it is up to the management or workers to deal with this. The problem again cannot be considered in isolation. The industry realises that shift work is necessary, but, because of the recession in the industry, is having to discontinue shift work. We had evidence that some of the new machines which have been brought in as a result of the re-equipment scheme—25 per cent. of the cost being provided from Government funds—are lying idle, and, therefore, something must be done so that, first, the industry can reorganise itself and, secondly, see that the maximum use is made of the new machinery.

It all comes back to the question of imports. This is the crux of the matter. This is why we said in our Report that if this problem can be solved it will create the confidence which is necessary as a prerequisite to tackling these other problems. We have today had a statement from the President of the Board of Trade. He has taken note of the comments of the Estimates Committee. He appreciates what we had to say. He went on to say that the Government recognise the serious difficulties caused by a large volume of imports. He says that the Government are aware that the industries consider the present level of imports excessive, and yet he goes on to accept the offer to continue the present ceilings until the end of 1965, although, it is true, with some modification with regard to yarn. This is the impossible situation facing the industry.

The industry has been told by the President of the Board of Trade that it has been given much special help, but the industry has a great deal to do. Is the statement of the President of the Board of Trade the Government's considered reply to the Report of the Estimates Committee? The Committee has been praised and been told that it has made a greater contribution than any other made over the past few years. Is this the considered reply of the President of the Board of Trade to the Committee's Report? Is this the considered and final reply of the Government to an industry which could well be facing extinction?

Perhaps I might make a final quotation from one of the memoranda we received. It says: What is now needed in Lancashire is full blast production which can only be obtained from higher technical and commercial efficiency based on confidence in the future. I regard that as one of the most important statements made to the Committee. If the statement of the President of the Board of Trade is the considered view of the Government, all I have to say is that there will be no confidence in the future of this industry in Lancashire, no higher technical and commercial efficiency, certainly no full blast of production, and, if we are not very careful, no cotton industry worthy of the name in this country.