HC Deb 27 March 1939 vol 345 cc1723-54

Order for Second Reading read.

3.43 P.m.

The President of the Board of Trade (Mr. Oliver Stanley)

I beg to move, "That the Bill be now read a Second time."

Hon. Members will not expect that this Bill or my speech will contain any element of surprise. It is probably true to say that there has been no Bill presented to Parliament, certainly since I have been in this House, which has been so thoroughly examined and criticised in all quarters before it came to the House for Second Reading. So far as I am concerned, the history of these proposals goes back to the very start of my time at the Board of Trade nearly two years ago. I remember that one of the first things I had to do as President of the Board of Trade was to meet a deputation from the cotton industry organised by the Joint Committee of Cotton Trade Organisations, representing all sections of that industry, including the merchants; that, I remember, at that time was hailed by the Lancashire Press and Lancashire people as a new and wonderful sign of Lancashire unity. Unfortunately, that unity was, as so often has happened in the history of the cotton trade, of a rather transient character.

When that deputation came to see me they urged the acceptance by the Government and the submission to Parliament of two schemes for different sections of the industry. The schemes included proposals of the type made possible under this Bill, but they included also certain other more far-reaching provisions. My answer was that the Government were unable to accept those schemes or to submit them to Parliament, for two reasons. The first reason was that they contained proposals of a "ring-fence" character, which, in my view, would have stifled initiative in the industry and prevented the entry of any of that new blood and new enterprise which is so often necessary. The second reason was perhaps the more important. It was that these schemes dealt only with sections. If my memory is not wrong, the two sections dealt with were the printers and the dyers. The schemes had no relation to the other sections; still less did they have any relation to the finished products of the cotton industry, on the sale of which, of course, the cotton industry must depend. That is one of the difficulties one has to deal with in the cotton trade. It is organised largely on a sectional basis, and there is very little co-ordination between the different sections. It is almost impossible to devise any scheme which is applicable to all sections, yet anything done to one section is bound to react on all the others, and on the actual prices.

Therefore, I asked the deputation not only to take out those features to which I have referred, but to try and devise some plan which would cover the industry as a whole and, while leaving it possible for the sections of the industry to devise their own schemes, would make it possible for persons or bodies concerned to see the general effect of the schemes as a whole and to see what effect they would have upon the export trade. It says a great deal for the energy of the Joint Committee of Cotton Trade Organisations that within a few months of my making this request to them they did produce and publish the sort of scheme which I had asked for. That scheme, now nearly 18 months old, contains the main essentials of the Bill I am now introducing. At the time that scheme was received I had required that certain points in it should be altered; that, if possible, difficulties with various sections of the industry and industries outside should be settled; but, otherwise, I promised the support of the Government if, when the scheme was in its final form, the Government were satisfied that it had the support of a substantial majority of the industry.

In order to determine whether, in fact, the scheme had that support, I promised that a ballot would be taken under Government auspices. During that intervening period I was subjected to some criticism, on the grounds that if a Bill was to be introduced at all the Government should take the responsibility, and that all this question of the support of the industry ought to be dispensed with. I agree that, with a normal Bill, it is for the Government of the day to take the responsibility of saying whether it is a good or a bad one, and whether it should be submitted to the House of Commons.

But this Bill is of an exceptional character. It is substantially an enabling Bill. There are certain parts of it which will come into force at once—certain parts not without importance—but the substantial importance of the Bill lies in the possibility it gives after its passage for the industry itself to take certain measures and get statutory sanction for them. It is quite clear that it is a mere waste of time for the House of Commons to pass a Measure of that kind, which depends on the desire of the industry itself to make use of it, unless the House is satisfied that there is such a desire for it, that there is such a demand for it and such belief in its utility, that, when we have passed it, the industry intend to make use of its provisions.

I have, on behalf of the Government, carried out the pledge I gave. When the scheme was completed I circulated to the industry a White Paper, and it was also circulated to hon. Members, which set out the draft of the proposed Bill almost exactly in the form in which I now introduce it, and on that draft Bill I took a ballot of the industry. I sent out actual ballot papers to the producing sections which were returnable to the Board of Trade, and I also asked the organisation representing the employed for their opinion, and the organisations, such as they were, representing merchants, and for that purpose I selected the Chambers of Commerce of Manchester, London and Glasgow, to give me the opinion of their members as well. I have already circulated in the OFFICIAL REPORT the exact details of that ballot. I was anxious that it should be put forward in the most complete form, so that everybody in the House would have for themselves the material upon which the Government came to the decision that their requirement of a substantial majority of the industry had indeed been fulfilled. In view of the fact that the figures have already been given to the House, I do not think that it is necessary for me to go through them again this afternoon. In the producing section I have shown the results of the ballot under three headings—by individual firms, by employment, and by output. In the various producing sections the percentage who voted in favour, by firms, varied from 52 to 66 per cent.; by employment, from 68 to 79 percent.; by output, from 66 per cent. to 77 per cent.; and the total figures for the producing sections were, 65 per cent. in favour by firms, 72 per cent. in favour by employment, and 70 per cent. in favour by output.

Sir Henry Fildes

Will the right hon. Gentleman—

Mr. Stanley

I shall be glad if the hon. Gentleman will allow me to go on. I know exactly the question he is going to ask. I had a suspicion that he would ask it, and I have the answer. The hon. Gentleman was going to ask whether the proportions I have quoted were the proportions of the trade as a whole, or the proportions of those who voted.

Sir H. Fildes

Yes.

Mr. Stanley

I made it quite plain both in the OFFICIAL REPORT and in the Press that the figures I gave are the proportions of those who voted.

Sir Reginald Clarry

May I interrupt—

Mr. Stanley

Perhaps I may be allowed to complete this part of my argument. If I have omitted to answer in advance all the questions, I shall be only too glad to answer them later. By the number of firms, over three-quarters of the firms voted, and on the basis of employment, over five-sixths voted. Many ingenious attempts have been made by opponents of the Bill, by the use of these figures, to show that in fact there is no substantial majority, and, indeed, so far as I can gather, no majority, for the Bill at all, even in the producing section. They rival in their ingenuity in the use of figures that ingenuity which hon. Members opposite attribute—quite baselessly—to my right hon. Friend the Minister of Labour. But whatever ingenuity they have used, and by whatever new method they try to present these figures, it all comes down to the one simple basic principle that they count everybody who did not vote as being against the Bill.

Mr. Macquisten

Does not the right hon. Gentleman know that that proposition was put forward in the Bill?

Mr. Stanley

It has now been reinforced apparently by the personal opinion of my hon. and learned Friend. Certainly it is a proposition to which, I think, very few hon. Members in this House can subscribe. When we talk about being elected by a majority, we mean, and certainly the Government mean when we talk about a substantial majority, a majority of the people who troubled to vote. If some of us only got here by a majority of those who are entitled to vote but did not, we might have seen a lot of vacant seats this afternoon, and certainly when we get inside this House the principle is even more closely enshrined. When we carry something in the Division Lobby by a majority, very often we carry it only by a majority of those who vote, and perhaps very seldom by a majority of the Members of the House. I think that if the hon. Gentleman's proposition were accepted that those who were not with us were always against us, there would be a good many grey hairs on the head of the Patronage Secretary.

Hon. Members, whatever their views about the merits of the Bill, will, in fact, be with me when I claim most emphatically that, by adopting this usual procedure of taking the majority of those who have taken the trouble to vote and acting upon it, there has been no breach of the pledge which the Government gave that it would only be if there was a substantial majority in favour of the Bill that they would proceed with it. Anyhow, it is an idle wrangle which those who put this up cannot really believe, because, if they really believe that in the producing section there is no majority for the Bill, the whole necessity for opposing the Bill disappears. They know well that if under the subsequent provision of the Bill there is not a majority, if the conditions for voting on the various schemes is not fulfilled, then, so far as the industry is concerned, the Act may be on the Statute Book but it will be an absolutely dead letter. I maintain very decisively that the condition that there should be a substantial majority in the producing section has been fulfilled, but I admit quite frankly that in the merchanting section there is a decisive majority against the Bill. The dilemma, therefore, for the Government, the decision to which they had to come, in a case where there was a clear division of opinion between the producing and merchanting sections of the industry was, which of those two opinions they should allow to decide the day.

The Government came to the decision that, on a producers' Bill, designed for the assistance of producers and designed to remedy the grave difficulties of producers, it must be the decision and the wish of the producers which should have full weight. I certainly do not join in many of the criticisms, which I hear in Lancashire to-day of the merchanting section of the industry. There are a great many merchanting firms who do a real service to the industry, although I admit that equally there are a number of merchants who really contribute nothing to the industry at all, either in the way of capital stability or of knowledge of markets or of assistance to the producer. I do not regard the objections of the merchants to the Bill as valid, and I feel that the interests of the producers must have the fullest weight. After all, in the long run, the interests of the producer and of the merchant are similar. The producer can get along without the merchant, but the merchant cannot get along without the producer; and it seems to me that in coming down towards a continuance of the present system the merchants are overlooking the very real danger that the producing section of the industry, on which they depend, is crumbling under their feet, and that they may find themselves, if nothing is done, with none of the present advantages of merchanting and no producing interest from whom to draw their goods. I think that the merchants are fully entitled, in the discussion of this Bill, to have their case heard, to have their criticisms ventilated and carefully weighed, and to have safeguards appropriate for them properly tested, but I do feel that, despite that principle, this Bill should go on, and that was the decision of the Government. Whatever the arguments may be as to the actual size of the majority for this Bill in the producing section, to those who know Lancashire and who have followed the history of the cotton trade, it is a pretty surprising thing that there is any majority at all for a Bill of this character.

In a century which produced a good many individualistic industries there was no industry so fiercely individualistic as the cotton industry was before the War. Part of that was due to the temperament of the county in which that industry had been so largely built up; part of it depended upon the economic structure of the industry itself. We talk in grand terms about mills, and we have before our eyes visions of great factories employing hundreds or thousands of people, but the term "mill" is a very elastic one, as hon. Members from Lancashire know, and may mean very little more than the installation of a few spindles or looms in a shed or even a private dwelling-house; and all through the last century the lesson of the cotton industry was that it was possible to start a new enterprise without any great initial capital. We had a constant stream, during the last century, of the type of man who had begun as a worker, as a man employed in a mill, gradually starting up for himself and sometimes attaining great success. There is an old saying in Lancashire, "Clogs to clogs in three generations." That saying may have been unduly pessimistic. But in those days there were a great many examples of "clogs to patent leather" in one generation. Indeed one of the most distinctive features of the cotton industry before the War was that you did not get what I always regard as the most hateful legacy of the industrial revolution, that is, the hard-and-fast line between employed and employer. In that industry it was possible to cross that line and very often it was crossed.

What has created the revolution, what has caused this fiercely individualistic industry of the last century to become almost a pioneer in this new collective technique? It is, I am afraid, the hard tragedy of fact. I am not going to trace the tragic history of the last 25 years. It has been not less catastrophic because in some degree it was inevitable. In the old days the industry grew into its prosperity as a supplier to certain primary producing countries—India, China, Egypt and Brazil. As soon as the primary producing countries first began to stir from their agricultural pursuits, as soon as they first seemed to see the rather meretricious attraction of an industrial life, the cotton industry was bound to be the first industry in this country to suffer, because the introduction of cotton goods is the first experiment in industry which an agricultural people make. When we had the War, with the interruption of supplies, the post-war period, with the growth of economic nationalism, spurring on this new desire of the agricultural community to become also industrial, it was clear that the old predominance of Lancashire in these markets was bound to disappear; and, indeed, although we talk a great deal about what we have lost in the export market to competitors, the fact is that nearly 70 per cent. of the losses of British cotton exports since the War has been, not to foreign competitors, but to national industries growing up inside the countries that previously took our exports.

It is true that during that period there have been certain minor gains to set against this gradual loss. There has been a considerable increases in the home trade, and there has been the advent of rayon, but still to-day the production in the Lancashire industry is only half of what it was in 1913. I think it needs someone who knows Lancashire to realise what that means in human values. Those of us who know that county realise how dearly Lancashire has paid for too great concentration on one industry. There is no one who knows Lancashire who does not know countless examples of families, once prosperous, now reduced to poverty, not through any extravagance or mismanagement on their part, but simply due to sticking to the industry which had brought them prosperity in the past. There are none of us who do not know mills that used to give employment not only to the breadwinner in a house but to his whole family—mills that are now closed and closed for ever. There are none of us who do not know parts of Lancashire which were perhaps never beautiful, but used to be busy and bustling with the warmth of success and are now silent and dreary with the stamp of failure upon them.

It has not been a very pleasant time for anyone connected with Lancashire to watch that process going on. It has certainly not been a pleasant time for a Lancashire man at the Board of Trade. I remember that when I was appointed to the Board of Trade I received from kind friends, as people do, a considerable number of letters of congratulation. I received one letter of condolence. It was from my father. He said that he felt that no President of the Board of Trade who did his duty to industry as a whole could ever be able to satisfy the Lancashire cotton industry or to avoid the unpopularity and the criticism which attached to all my predecessors. He was right. Whatever one's personal sympathies, the President of the Board of Trade after all is trustee for industry as a whole; he has to look after the general interests of industry and not the interests of one section only. I think I can say that within those limits I have tried to do what I could for the Lancashire cotton industry in the last few months. The cotton provision in the Anglo-American Treaty, the arrangement in Argentina as to the "woven and finished formula," and, finally, the recent trade agreement with India, have all made substantial contributions to the possibilities of Lancashire in the export trade, and I believe that in a world less insane than the world is to-day one can look forward to bringing really substantial benefit to the cotton industry of Lancashire. Although, of course, it is easy, when talking of benefits conferred by the Government upon industry, to talk in terms either of reduction of duties or subsidies, I believe and hope that this Bill, if it passes into law, will prove of as substantial benefit to the cotton industry of Lancashire as any of these trading facilities which have been obtained.

The House, I am sure, will not expect me to deal to-day with anything more than the principles of the Bill. Anyone who has even looked at the Bill will see that it is a long one; anyone who has read the Bill will see that it is a complicated one; and anyone who has read the definition Clauses will see that to someone who is not in the industry it is not only long and complicated but also unintelligible. But although it is long and complicated the principles which are embodied in it are few and comparatively simple, and it is with those principles that I want to deal this afternoon. The first few Clauses are devoted to the setting up of the machinery by which this Bill is to work. Largely it is to meet the requests to which I referred earlier that the machinery enables the sectional schemes to be viewed not only from the point of view of a particular section but of its effect upon the industry as a whole, upon other industries outside and upon the general national interest as well. As a matter of fact I think that these Clauses are much more likely to be criticised for giving too many safeguards and therefore being too cumbersome, than for giving too few safeguards. But that is a fault on the right side. It is very much better that new, almost experimental schemes, such as those in the Bill, should start with ample safeguards against misuse, because it is much more likely that, if that is done, you will get the growth of the spirit of compromise which is so essential. The main organisation which is set up by the Bill is the Cotton Industry Board.

Mr. Levy

Will my right hon. Friend enumerate some of the safeguards with regard to rayon?

Mr. Stanley

I shall come to that point later. The Cotton Industry Board consists of three independent people with special knowledge of the cotton trade but with no financial or administrative affiliations to it, and 12 persons engaged in the industry, as set out in Schedule I, representing various sections, both employers and employed, in the cotton trade. In general these 15 people will sit together and of course act as one board, but when, as is specified in the Schedule, certain functions have to be performed which involve the disclosure of the details of individual businesses, the independent members will sit alone and there will be none of the danger of details of individual businesses being revealed to people who will be competitors. To this board are allotted certain specific functions, both with regard to the central scheme and the general question of trade development. But it has, in addition, a general function, and that is to attempt to act as some sort of mouthpiece and some sort of clearing house of the industry, and to try to bring into the industry some degree of the unity which to-day is very badly lacking.

After all, when we complain, as we do, about the amount of trade which has been taken from us in various markets by our competitors abroad, I think we ought at the same time to learn some lesson from some of the methods that those competitors have employed. When we talk about loss of trade to Japan, we have not been losing trade to a Japanese industry organised on an individualistic basis. As a matter of fact, it is organised on a collective basis much more severe than anything that is presented in this Bill.

Mr. Lansbury

We shall make Socialists of all of you before we have finished.

Mr. Stanley

I will not pursue the right hon. Gentleman's rather pink herring at this time.

An Hon. Member

A very real one.

Mr. Bellenger

It smells as nice.

Mr. Stanley

Shall I say it smells no different? If I may return to the structure of the machinery, the main purpose of the Advisory Committee is to advise the Board of Trade upon schemes that are put up. The Cotton Advisory Committee will consist of three independent members and is really a sort of court of appeal, not so much for the cotton industry as for all other interests that may be concerned. The export trade, consumers, the industry as a whole, the "fringe" industries that are affected by the cotton scheme—all these will have a right to lodge their objections to this committee and on that the committee will advise me. Then there are two consultative councils, one a wider advisory committee which will enable representatives, for instance on the basis of locality in the cotton trade, to be called into some kind of association with the machinery, and an export development committee which will consist partly of members of the board and partly of outsiders. Clause 5 provides for registration. As far as the producing sections of the industry are concerned, registration of course will be compulsory but, as far as merchanting is concerned, it will be voluntary, and only merchants who are registered will be able to take advantage of some of the privileges which are later accorded in the Bill. It is quite clear that, if we set out with the assumption that this is to try to organise the industry, the first essential is to know exactly of what the industry consists.

Then we come to the major part of the Bill, that is, the provision that is made for the passing of sectional schemes, and there is one thing about which I ought to warn the House. We use in the Bill the words "sectional scheme," and that may be rather liable to cause confusion with what we know commonly as sections of the industry—spinning, weaving, whatever it may be. It may give the impression that a sectional scheme must be one which refers to the whole of a particular section, spinning or weaving. That is not so. A section is defined by reference to the activities carried on or the products manufactured by a group of firms and inside what we commonly call the section you may have a number of people who are able to join in a sectional scheme of their own. There are only two types of scheme which the Bill permits. One is a redundancy scheme and the other is price fixing. Both are part of the same problem which faces the industry to-day, and that is the excess capacity which has been left in the industry as the result of serious contraction in the past 10 or 15 years. I will deal first with schemes dealing with redundancy. This, of course, is no new thing either to the cotton industry or to this House. In passing the "Spindles" Bill a few years ago the House gave authority for exactly this kind of redundancy scheme for one section of the industry alone, that is the spinning section. The scheme set out in these Clauses follows very closely the lines of the "Spindles" Bill and extends the possibility of that same kind of scheme to other sections of the industry.

I think the case for some measure to deal with redundancy can be based upon two arguments. The first is a positive one, that a good deal of the increased cost of manufacture to-day is caused by the fact of so much short-time working and, if you concentrate production and get a fuller working week in particular mills, that itself would tend to reduce costs. There is also a negative argument, that in almost every section of the industry you have this large excess capacity overhanging the market, really taking away from the section the possibility of benefiting from the normal increase of price based on economic conditions which justify it, and making almost certain that as soon as any improvement is manifested, which in ordinary times would give to the section some prospect of a better return for their production, you call into play this disused capacity lying idle and your hope of a better return is immediately falsified. The main points to be noted about the schemes are that they are first of all to be administered by an independent board appointed by the Board of Trade, that any scheme must be submitted within five years of the passage of the Act unless the Board of Trade by order extend the period, that every scheme must provide for the repayment of the money expended by levies, to terminate within 15 years, that there is the same provision for guarantee by the Exchequer under these schemes as there was in the "Spindles" Act, and finally that a scheme submitted to the Board may contain provisions for compensation for displaced employés.

The other type of scheme is a price-fixing scheme and that, of course, is intended to deal with what has been an urgent problem in Lancashire for many years, the problem of the weak seller. The weak seller is very often a man who is prepared to sell his goods at barely enough, sometimes not enough, to cover even his operating costs and, in doing so, of course, he is sacrificing the future to the present, because he makes no provision at all for depreciation or replacement of machinery, hardly, even very often not, for the proper maintenance of machinery. That might not matter in the case of an individual because you might say the inevitable result is that sooner or later he will go out, but what does matter is that by his action he forces the industry as a whole to follow him. They have to bring their prices down too and, if he sacrifices proper provision for depreciation and replacement or maintenance, they have to follow him and they have to sacrifice too. In other words, the industry is being forced to sell cheaply at the expense of being able to produce cheaply.

In past years there have been many attempts in various sections of the industry to try by voluntary schemes to overcome this problem of the weak seller. Some of these schemes have got as much as 90 per cent. of the particular people affected in their favour but, with one exception, every single scheme of this kind which has ever been started has always been broken down by a small minority who have stood out, and a small minority which was prepared to take advantage of the scheme without incurring any of its obligations and was always therefore able to under-sell those who abided loyally by the scheme. It is clear that no progress such as has been made by other industries on a voluntary basis could be made in this industry unless some statutory sanction was put behind a scheme which, in the sort of case to which I have referred, has been desired by an overwhelming majority of the people concerned.

There are, however, two particular points with regard to these price-fixing schemes to which I should like to draw attention. The first is contained in Clause 9 (1), sub-paragraph (d) (ii). Obviously the great danger of a price-fixing scheme is the level at which the price should be fixed. If it is to be fixed at a price which is to give a profit to every one who is covered by the scheme, obviously you are going to get an absurdly inflated price. It may be that, even if you strike some sort of average, you are going to get a price which is in fact too high and will give to the most efficient concern a profit which it neither should have nor in fact desires. It will be the duty of the Cotton Industry Board to see the basis upon which the price in any price-fixing scheme has been fixed and to refuse consent unless they are satisfied that the proposed price does not exceed the cost that would be incurred by a person carrying on business in an efficient manner, for the number of hours in each week customary in the section of the industry to which the scheme relates, in obtaining and executing orders for the manufacture of the relevant products, or the carrying out of the relevant process. It is the duty of the board to see that the price fixed is one which represents the proper price for an efficient, and only an efficient, firm in that section. That, of course, is an element which has not been in these voluntary 'schemes where, owing to the fact that you have to try to get agreement among a large number of people, the tendency always is to fix the price rather too high in order to get all the people into the scheme.

The second point is that the succeeding paragraph empowers the Cotton Industry Board, if they think it expedient, for the purpose of increasing or maintaining the consumption of a particular product either generally or in particular markets to sanction a discount from the established minimum price. I will deal rather more fully with that when I come to the general effect upon the export trade. The general machinery of the scheme is an elaborate one which provides a considerable number of safeguards—submission to the board of the scheme, approval by the board after consultation with other industries and other sections of the industry and with the representatives of employers, and the decision of the Board of Trade on a report from the Advisory Committee, and finally the decision of Parliament on the order submitted. Clause 18 sets out some other functions of the Cotton Industry Board, functions which I believe may in time prove to be just as important as the more specific functions dealing with these particular schemes. The Bill makes the Cotton Industry Board a sort of general staff. A general staff sometimes does not have enough money, but the Bill provides that the board should have sufficient funds,

The particular purposes for which the board may act and for which funds may be levied are set out in the Clause. In the first place there is scientific and industrial research. For this there is no express provision in the Bill because the Government already assist research through other means. Then there is market research, obviously an important element. Market research undertaken by the industry as a whole is likely to be much more comprehensive and more sucessful than research by bits and pieces undertaken by an individual firm. There are also advertisement and display. We have heard a great deal about attempts to organise display and advertisement for the products of the Lancashire cotton industry, and I can assure the House that some individual firms are not always very helpful or, indeed, very convinced of the necessity, which I believe to be paramount, of advertisement and display if they are to get further markets for the cotton industry. There is also the question of statistical information. Again, a good many people in the industry are apt to underrate its importance. The statistical information published now about the cotton industry is by no means complete. I think that if fuller statistics and more information had been available in 1937 the cotton industry would have been better able to realise the situation and would have been in a better position to have anticipated the subsequent depression in 1938. Finally, the board is the mouthpiece of the industry as a whole in negotiations with other industries, and for wider markets.

Let me say one word on the financal provisions. They consist of two parts. First, there is the registration fee, which has to be paid by everyone who registers, and is intended to cover the general expenses of the board. The maximum is laid down in the Fourth Schedule, which also shows the various ways in which it will be levied in the various sections. The second financial provision deals with service expenditure, the money required to cover the activities of the Cotton Board which I have detailed in connection with Clause 18. This is paid only by the producing firms, and the limits of the contribution are laid down in the Fifth Schedule, although the method by which it is to be levied is left over for decision. Under Clause 20 the Government make a contribution on the basis of £ for £ on approved expenditure, subject to a limit of £40,000 a year.

I now turn to deal with the Bill as it affects industries other than cotton. In the first place, the Bill includes all purely cotton products, except, in Clause 27, where certain exemptions are granted from the scope of the various schemes to industries which, although using cotton, do not use it in such quantities as to compete with the products of the cotton industry itself. I pass to the most difficult point raised in connection with this part of the Bill—the rayon industry. Hon. Members know that in the later processes the use of rayon is quite indistinguishable from the use of cotton. It is worked by exactly the same people, the spinners and weavers, and in exactly the same machinery. The same firm may be using cotton one day and rayon the next, and in the later processes it is quite impossible to separate the use of one from the use of the other. In the earlier processes there is a marked division. Under the process which is known as continuous filament spinning the initial process of spinning is carried out by firms like Courtaulds and Celanese, who are mainly rayon producers. It is then delivered to the weaver, who may be weaving cotton or rayon. With regard to the staple fibre, that initial process is in two parts. It is produced by the same people who spin continuous filament, but it goes then not to the Lancashire cotton weaver, but to the rayon spinner, who spins it as he spins ordinary cotton and then passes it on to the weaver. We have drawn a distinction between these different processes. The continuous filament spinning and the first process in the staple fibre are excluded from the operation of the Bill altogether. That means that the rayon producer—and we call him the rayon producer because rayon producing is the substantial part of his business, although sometimes he may be spinning and weaving as an experiment—is for all practical purposes excluded from the scope of the Bill.

Mr. Levy

The spinner of the yarn is not excluded from the Bill as I read it.

Mr. Stanley

I am sorry if I do not make myself plain.

Mr. Tomlinson

You are quite clear.

Mr. MacLaren

We understand it.

Mr. Stanley

The rayon producers are substantially excluded from the Bill, but the spinner and weaver who is indistinguishable from the spinner and weaver of cotton is included.

Mr. Remer

Is the right hon. Gentleman aware that he is bringing the whole of the silk industry into the Bill, because rayon is largely used by practically every silk manufacturer in my division?

Mr. Stanley

I am now dealing with the rayon producers from whom no doubt all hon. Members have received a circular. I would like hon. Members to understand that the people who have sent out the circular are substantially excluded from the Bill. What they want is that other spinners and weavers should be excluded also, although in fact it is the express desire of the spinners and weavers that they should be included. The hon. Member for Elland (Mr. Levy) asks what are the safeguards. We cannot assume that a large number of people who will consider these proposals are all going to act in flagrant disregard of common sense or justice. If I can show that the interests of the rayon producers will be considered at various stages I think I must assume that at one stage or another there will be somebody with some sense of justice and common sense.

The first stage at which rayon producers will be consulted is when a scheme comes to the board, who have to decide whether they will approve the scheme or not. They will have to forward to me, if they approve a scheme to which the rayon producers object, the statement of the rayon producers against it. It will then be considered by an advisory committee to whom the rayon producers are entitled to appeal, and the committee will have to advise me as to their objections. With all these various statements by the rayon producers available, the scheme will come before this House and cannot become effective unless the House agrees with it. I think with all these various stages—the board, the advisory committee, the President of the Board of Trade and this House, all of whom are under a statutory obligation to ask for the opinions of the rayon producers if they feel they are in fact being damaged in some way by any scheme—there are ample safeguards for their position. What they want is a separate scheme for rayon producers. That is absolutely impracticable. It would mean for these two sections two different boards and two different advisory committees; it would mean machinery run mad, and I cannot see that any practical good could possibly come out of it.

There must, of course, be some overlapping among firms using a certain amount of cotton and wool. The position of wool has been safeguarded to every possible extent. In the first place, unless the product which is being spun or woven contains more than 85 per cent. of rayon or cotton, it is not a product of the cotton industry and any operation in connection with it is excluded from the Bill. That, of course, excludes every Yorkshire firm which deals in products consisting substantially of something other than rayon or cotton. But beyond there is this further safeguard. Unless the products of the firms are more than one-third of the total output, all they need to do is to register, to make an annual return, and if there is a price-fixing scheme for the cotton products they manufacture, they have to conform with it. There is the special case of products which are common to both industries. Although the products of the cotton industry are brought within the operation of the scheme, wool is particularly safeguarded in Clause 14, under which the Advisory Committee has to refer it to the consideration of the representatives of the woollen industry. Finally, in regard to linen It is treated on the same footing as wool, and as far as I can see the exemptions which I have referred to will mean that with the exception of four or five firms dealing in linen, there will be no obligation except the payment of the registration fee.

Let me answer one question which is always asked concerning the Bill, and that is what effect it is going to have on the export trade. In answering that question I start from the assumption that the present situation is impossible, that you cannot go on indefinitely having an industry exporting at a loss. The effect on the financial structure of the industry, its machinery and efficiency and the modern-ness of its equipment, is so disastrous that sooner or later, and probably sooner, a situation of that kind is bound to come to an end. The one basis of assumption which must underlie any support we give to the Bill is not whether it will be of assistance to the export trade, but that the provisions of the Bill will, in fact, lead to an increase of efficiency in the cotton industry as a whole. If the Bill does not do that, we ought not to reject it because it will not help the export trade, but because it will not help anybody; and if it does increase the efficiency of the industry, improve its machinery and give it greater financial stability, I believe that will be the greatest assistance which can be given to the export trade.

Apart from this, there are in the Bill certain powers which, I believe, can be of assistance to the export industry. For instance, the funds available for research of one kind and another will provide something which is very much needed in the industry at the present time, when the merchant is neither as strong nor as powerful, and sometimes not as enterprising, as he used to be in more prosperous days. There is a very great deal of importance in the provision, to which I have already referred, giving the possibility of price concessions under a price-fixing scheme. The whole idea of this provision is that it may be possible, with unity through all sections and all processes up to the final product, to give special prices to a special product, or products, going to a special market, and to give them where it is necessary in order to sell the goods. The trouble about the price concessions which are given now, by price-cutting and other means, is that they are made indiscriminately, whether they are needed or not, whether the export market is one in which the price must be cut to the very limit in order to sell, or whether it is a market in which it would be possible to get a more reasonable price for the goods. Under the new scheme, it will be possible to confine concessions to markets where they are necessary, and behind those concessions we shall be able to put the whole strength of all the various sections of the trade.

Finally, I believe that the greatest assistance to the export trade will be the unity of the industry which, I hope, in the long run, will be the result of this Bill. The old system, to which the merchants refer with pride, is breaking down —the old system under which the merchants were the only people who had any connection with or knew anything about the export trade, and under which the men who produced the goods had no connection with the consumers of the goods. That may have been all very well as long as the merchants were in a position, by the orders which they gave, to keep the producing section fully employed; but now that they cannot do that, of course the producing section itself is taking a greater and greater interest in the ultimate destination of its products. Some representatives of the merchants came to see me the other day, and I must say that they spoke most frankly and sincerely about what they believed would be the effects of the Bill. I was very much struck by one thing during those discussions. One of the merchants gave me several instances—and rather appalling instances—of lack of co-operation by the producing section in the merchants' efforts to get a particular export market. It is that sort of thing which I hope will be stopped by increased unity in the industry. I hope that greater interest by the producing section in its ultimate markets will lead to greater co-operation between the producing section and the merchants, not only with regard to the question of prices, but the sort of goods which the export market demands.

That is the Bill to which I ask the House to give a Second Reading. I know that in Committee hon. Members will' wish to examine the Bill carefully and' to try to improve and strengthen the safeguards, and speed up the machinery What we are trying to do is to get the maximum of efficiency and justice. I need hardly say that I shall welcome the examination which hon. Members will make of the Bill and any improvements that they may suggest. All of us, however ardent supporters we may be of the principles enshrined in the Bill, will be only too glad to adopt any suggestions which seem to us to make the machinery work more smoothly, rapidly and justly. I believe the provisions of the Bill will bring substantial help to the industry, and I believe also that the spirit which the Bill may create may well be the turning point of the Lancashire cotton industry. Perhaps we can never hope to regain the position which that industry occupied in pre-war days, but I believe that with organisation, efficiency and determination we can, on a more restricted basis, once more restore to the industry a stable and profitable future.

4.52 p.m.

Mr. Clynes

The right hon. Gentleman the President of the Board of Trade has necessarily been rather long in explaining the Bill, and I would like to thank him for his great lucidity and helpfulness, in view of the complicated character of many of the Clauses of the Bill. In the time that I take up, I shall not need to emulate the right hon. Gentleman. I know that on both sides of the House there are many hon. Members, closely associated with various branches of the industry covered by the Bill, who will be able to make very helpful speeches, and I shall not stand in their way for too long. I am certain that the right hon. Gentleman, because of his personal contacts with the County Palatine, will, on that ground alone, be only too glad to do anything that it is possible for him to do to assist this declining industry, and I am sure that his long family attachments to that county will further reinforce his personal feeling. It is no wonder that the right hon. Gentleman's father sent him a letter of condolence when he was appointed to the office of President of the Board of Trade. Lord Derby, whom I regard as the most popular figure in the county and a man who stands in the front rank of its most serviceable sons, knows something of the duties, anxieties and dreads of a President of the Board of Trade.

Perhaps the House will pardon me if I make a personal reference before going further. The right hon. Gentleman mentioned that his connection with these proposals goes back two years. In a Ministerial and Parliamentary sense, my connection with the cotton industry began ten years ago, when, during the Labour Government, it was my privilege to be appointed chairman of its Cotton Committee. We produced a scheme which was explained in pamphlet and speech to those interested in the problem at several meetings in Manchester and elsewhere. We were compelled to leave office before anything effective could be done, and I regret that such a long interval has elapsed between that scheme and this Bill in regard to any endeavours being made to assist the cotton trade. My personal association with the cotton industry goes back not two years or ten years, but 60 years; for it is just 60 years since, as a boy of ten years of age, I walked in the early morning from our humble dwelling to the cotton factory to get to know something about the trade. For 12 years I earned an honest living in a mill. I have retained all the interest that one can acquire under industrial and living conditions of that kind. I have seen with a sense of real grief the disappearance—I feel for the most part the permanent disappearance—of that great industry. There may be people living in the South who are inclined to regard the cotton industry as a local matter, and who have very little concern about what is happening to that industry. That is a great mistake. It is not a local enterprise, but a national interest.

I have had, as anybody can have, a peculiar personal experience of what this means. Two or three years ago, in Grimsby, I found dockside workers and railwaymen out of work. Why? Because the closing of cotton mills in Lancashire led to fewer trains being run to and from Grimsby, since the same weight of cloth was not being sent. Moreover, many fish-and-chip shops in Lancashire had been closed down because the population there had less money to spend; and therefore, far less fish was being taken from Grimsby for sale in the fish-and-chip shops. Thus, there was less work in those shops and in the fishing industry. These are instances which show how far the long arm of unemployment stretches when an industry becomes seriously depressed, and they show that the cotton industry is a national industry, and that anything which can be done to bring greater prosperity to that industry is in the national interest.

The right hon. Gentleman has described the sectional character of the industry. There are four chief divisions of labour in the cotton processes. First, the spinner turns the raw cotton into yarn. Secondly, the weaver turns the yarn into cloth. The third section consists of a considerable group of people engaged in innumerable finishing processes to make the cloth saleable. The fourth division is concerned with the sale of the article, and is commonly covered by the term "merchanting" There are scores of sidelines and occupations linked up with those four divisions. Unfortunately, so far, the leaders of the four great divisions have not seen that their common success depends upon complete co-operation among them. The failure of one means the failure of the remainder in some degree; and the success of all of them is a matter of common interest; for if one section seriously suffers, the remainder are to some extent involved in the loss.

Mr. Levy

Does the right hon. Gentleman consider that the rayon industry as a whole could be termed a section of the cotton industry?

Mr. Clynes

I am speaking of the industry as it has operated in former years. The rayon industry is a newcomer in comparison with the older sections, and to the extent that that industry is specially covered by features of this Bill, I gather that its interests will not suffer. The public mind has not grasped the problem of the cotton industry in its true dimensions. I wish that we could import into the consideration of this matter the spirit expressed a few days ago in the "Times" in a leading article in regard to this Bill. In that article the "Times" used language which is commonly applied only to great imperial or national issues. It said: The occasion for it (the Bill) is grave and even graver than when the proposals were first framed and Parliamentary time is crowded. A Bill making so great an innovation in industrial organisation cannot be regarded as non-contentious, but no other industrial legislative proposals put before Parliament have had such prolonged and close preliminary study The right hon. Gentleman anticipated that during the Committee stage of this Bill much would be said about the various matters covered by its Clauses, but the Government cannot escape and must not seek to escape a great deal of criticism and even censure for the long interval in which nothing whatever has been done. They have waited for agreement. They have waited in order to be able to say that they approved of something which had been agreed to, but the urgency of the problem has been unheeded, and little or no initiative has been exhibited by those who have authority in this House and in the Cabinet in providing assistance for this harassed and declining trade. The truth is that Lancashire, for long, has been a distressed area in fact though not in name, and although a distressed area, has been deprived of the help extended to other like areas. The Joint Committee on Cotton Trade Organisation in the latter part of 1937 exacted from the President of the Board of Trade some assurance on what the Government were prepared to do. The President had invited that committee to make a statement of proposals and he wrote them as follows: The Government are ready to give any help they can towards the reorganisation of the industry on lines of which the Government and Parliament approve, and are willing, if necessary, to make proposals for legislation for that purpose. There is very little in that statement beyond a vague and not quite clear announcement of the Government's intentions. The situation in Lancashire was so desperate that actual and constant personal contact was essential in order to give the right kind of assistance at the right time. Residents in and visitors to the county think the same. Mr. David Mitchell, a very acute observer who paid a recent visit to Lancashire, gave the following as the reason why this Bill has been accepted: In Lancashire, my impression was they regard the Enabling Bill with something like fatalism. Their position is so bad that nothing can make it much worse and they might as well try something. It is unusual to hear greater enthusiasm than this expressed for the Bill on the Manchester Royal Exchange. That is the emotion of despair. If we have reached the stage of saying "Something must be done; we cannot be worse than we are," it is a measure of how bad the position is. In so far as I shall use figures on this occasion, I shall do so only for the purpose of implying arguments and affording contrasts, but it is necessary to give some figures, because, as yet, many people do not appreciate the meaning of this depression in the industry. Indeed it is worse than depression. It is the disappearance, not of one-half but of two-thirds of the industry. When we remember that prior to the War the cotton industry was the first of our industries in point of employment, in point of money invested, in point of the population covered by it, in point of its contacts with the rest of the world—when we remember those things, we must be struck with a sense of melancholy on reflecting how the people engaged in the industry have suffered by the loss of their trade.

Unfortunately for the operatives trained for that trade alone, and chained by it to the particular town in which they were bred and born, there are no alternatives to which they can turn. The unemployed operative cannot tramp to some other place and undertake other work for which he is completely unfitted and therefore his condition is all the more distressing.

In 1914 there were 640,000 operatives engaged in the industry. To-day the figure is 324,000, and of that number one-third are totally unemployed, although described as "engaged in the industry." At this moment only 50 per cent. of the machinery in the industry is producing fabrics. Britain is no longer the biggest exporter of cotton piece goods. Japan has taken the lead in that respect because of its lower cost of labour, longer hours of work, the use of the two-and three-shift systems, currency depreciation and organised methods of trading. India, also, has become an exporter of cotton piece goods, and notwithstanding its imposition of heavy import duties on Lancashire goods, retains the same export privileges throughout the British Empire as the Lancashire manufacturers.

Perhaps in the course of our discussion those who have definitely taken a side on tariff and fiscal questions will explain to the House why it is that, in spite of the help which it was said the imposition of tariffs would give to the industry, its condition has become worse day by day and year by year. Considering the larger aspect of the question, why is the adverse balance of trade worse to-day than it has ever been before? We on this side can take no responsibility and no charge can be levelled against us, arising out of the ill-effects of the process of tariffs upon the Lancashire cotton industry. In regard to the decline of our trade with India, nothing effective has been done to arrest it, and I am unmoved by the statement of the right hon. Gentleman this afternoon about Lancashire's gains from tariffs or from such arrangements or understandings as have been made between this country and India. Indeed the effect of the decline in the case of India has been shattering. Industries might have been diverted to take the place of those which were killed, but little or nothing to that end has been done by the Government. I know that there is a very enterprising Development Board, but there has been no Government initiative or Government action, and, in spite of repeated promptings from different quarters of the House, nothing serviceable has been done by the Government in that respect. Such a state of affairs cannot be left to voluntary effort.

The strongest contrast is presented to us again in the case of India. When the India Bill was being forced through, steps were taken in Government quarters to ensure that exporters to India should not have the opportunity of saying what they really thought about it, with the result that during the past 18 months there has been a dwindling of Lancashire trade with India. Why should Indian goods be allowed to enter the Burmese market free of duty, when Lancashire cotton goods have to pay 20 per cent.? What other country in the world would allow such a condition of things to exist? Those who believe in the process of tariffs ought to justify their belief by showing that the system is a success and that the great industries of the country have benefited by it.

Mr. H. G. Williams rose—

Hon. Members

Order.

Mr. Clynes

The result of the imposition of tariffs, trade restrictions, quotas and the like has been no doubt to confer benefits upon certain trades and certain employers who in comparison with the cotton trade could very well have got along without them, but all that that policy has meant to the cotton industry has been injury. As several speakers on behalf of the industry have recently declared the results have been devastating. Perhaps the hon. Member for South Croydon (Mr. H. G. Williams) was about to put the question "What would the Labour party do in such a case?" The hon. Member is very well informed upon these questions, but if he is anxious to know what would Labour do I will repeat what has been said already. The Labour plan would require human standards of work and good wages in the countries of our competitors. But, it will be said, how can you "require" those standards in other countries. Well, if they cannot be secured, Labour goes on to say, that where sweating conditions prevail they would prevent the admission of the sweated goods into our Empire markets. That certainly would be much more effective than the policy which has been pursued so far by those who believe in tariff methods.

Like the right hon. Gentleman I must cut short what I have to say on the details of the Bill, and I shall touch upon two only. We have often heard about Lancashire caution, but the details of this Bill seem to show that caution has degenerated into Lancashire timidity, and fear of each other. The gibe which was common against Socialists years ago was that Socialism would involve a swarm of officials and an endless number of boards. No wonder that my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) indulged in a facetious interjection when the President of the Board of Trade was explaining the constitutional steps to be taken under this Bill. There are to be boards and committees, committees and boards and how these various bodies will be able to keep out of each other's way I do not know. Certainly, they are bound frequently to get into the way of the problem but without solving it.

Let us examine the provisions of the Bill as far as they deal with safeguards. Indeed, instead of being called an "enabling Bill" I think a Measure which will so disable people from doing anything, might have been more accurately described as a safeguarding Bill. Every sectional scheme must provide for the admission of new firms on terms equitable to them and to firms already in the section; for revision of any quota or similar regulations, to allow for expansion of the industry in response to increasing demand or in response to technical improvements; for submission to the Cotton Industry Board of any regulations involving changes in the prices charged under the scheme; for special discounts or other concessions to enable the firms concerned to co-operate with other sections in developing export trade; and for appeals to the Cotton Industry Board by aggrieved interests. No sectional scheme can come into operation until it has gone through all the following seven stages, at each of which interested firms and organisations would have an opportunity of expressing their views: Approval by a majority of the section concerned, through a ballot, conducted by the Cotton Industry Board; consideration by the operatives' organisations in the section concerned; consideration by all other sections in the industry; approval by the Cotton Industry Board, after considering comments and criticisms; examination and report to the Board of Trade by the independent Advisory Committee; approval by the Board of Trade, which may amend the scheme if it thinks fit; and, finally, Parliamentary approval.

However any action of those who want to enable the industry to get out of its troubles can plough its way through this jungle of restrictions and safeguards, I cannot at this moment see.

There is one detail in the Bill which I welcome. It is in Clause 8, on page 7 of the Bill, and deals with the question of displacements and compensation there-for. We are always urging that operatives are entitled to compensation when displaced by legal enactments in order to ensure some prosperity for others. When the Cotton Spindles Bill was before this House and upstairs in Committee, we pressed for this, but for technical reasons we had little or no opportunity to get a discussion or to get the Government to change their mind on that subject. But even here, although throughout the Bill the term "shall" is used as a compulsory term when you enable certain people to do certain things, when the employés are reached it is not "shall," it is the term" may" which is used, so that a redundancy scheme, as the Clause runs: may contain provision for the making of payments by the board administering the scheme to employees who lose employment by reason of that board having acquired any plant or cotton mill in connection with the use of which they are employed. I think the right hon. Gentleman may be certain that on the Committee stage efforts will not be lacking to place the terms of that particular Clause in the same category of "shall" as applies throughout the Bill when it is not the employés but property and the interests of property which are in question.

I would say that the difference, broadly, between this Bill and the Labour Government's scheme submitted in 1930 is that we proposed greater freedom of action for the industry, with greater assurances of better support from the Government. All the same, we support this Bill to do a little good and in the hope of more effective action being taken to save a primary industry from ruin. If, to close my observations, the trade would care for any advice from a one-time cotton operative, I say that the essential to any kind of improvement, not to say revival, in the cotton industry is unity in the industry itself, or worse remains behind. We shall, therefore, suggest to the cotton industry leaders that they ought to press the Government for much more than this Bill contains and that they ought themselves to set the example by creating conditions of greater co-operation in the trade, or else they will go under.

5.20 p.m.

Captain Sir William Brass

I agree with quite a few of the remarks which were made by the right hon. Member for Platting (Mr. Clynes), and certainly at the commencement of his speech, in connection with the deplorable conditions which exist in the Lancashire cotton industry. He talked about people owning their own houses, the trade gradually going away, and those people moving from that part of Lancashire to another part of the country, and with all that I entirely agree. I am afraid I cannot agree with him on the question of tariffs, but as this Bill does not deal with tariffs, I do not propose to enter into a controversy with the right hon. Gentleman on that subject. I have, for nearly 17 years now, represented a cotton constituency in North-East Lancashire, and I want, before dealing with the Bill itself, to compliment the Joint Committee of Cotton Trade Organisations on the work which they have done in bringing together all the different sections of the trade and making proposals to my right hon. Friend the President of the Board of Trade.

I listened very carefully to the speech made by my right hon. Friend. He is a Lancashire man, of a family which is highly respected in that county, and he showed by his speech the sympathy which he holds as a Lancashire man for this Lancashire trade. I feel convinced, from all the remarks which my right hon. Friend has made, not only to-day but at other times during discussions on the cotton trade, that he is most anxious and ready in every possible way to help that trade. He spoke about the United States Trade Agreement, and there, I think, he was right. I have heard in my own constituency that that trade agreement is beginning to have some effect, although only on certain lines. Then he spoke about the Argentine Trade Agreement, and there again I feel that that agreement is going to be of considerable help to the trade, because in it is the "spun woven, and finished in Britain" Clause, which is so essential to the cotton trade in Lancashire. As far as the India Agreement, which the right hon. Gentleman mentioned, is concerned, it was a very hard bargain, but I feel that now that the cotton industry has realised what the position is vis-à-vis India, it will try to do everything it can to improve the trade with that country.

To start with, my right hon. Friend, in dealing with the Bill, talked about the ballot. He said there was a certain objection by the opponents of the Bill that the ballot as he described it was not sufficient justification for the Government to act. I do not agree with that. I think that the ballot, as far as it went, showed that there was a general majority of opinion in the trade in favour of a Measure of this kind. After all, if you are to pretend that all the people who have not taken the trouble to vote are against it, I think that is a wrong principle. Those who did not trouble to vote obviously were those who were not sufficiently interested to vote, and if they had been antagonistic to the Measure, there is no question but that they would have registered their opinion against it.

Sir H. Fildes

There is a two-to-one majority against, of those engaged in the industry, not taking a section.

Sir W. Brass

I think my right hon. Friend was correct in the figures which he gave just now about the different parts of the industry, and as the President said, if the industry itself was in fact against this Measure, it could make it inoperative. It is perfectly able, under the provisions of the Bill, to make it entirely inoperative, and from the ballot which has been taken I think it is clear that the trade did in fact want it, and that my right hon. Friend is not wasting the time of Parliament in bringing forward this Measure. We must remember that it is merely an enabling Bill and that as such it rests with the industry. The industry is given an enabling Bill, and that Bill will help the industry to help itself. If it does not choose to help itself with the enabling Bill, then it is the industry's fault and not our fault in Parliament. We shall have given it the power to be able to help itself.

It is essentially a producers' Bill. I feel that the cotton trade up to the present has not been able to speak with one voice, which I think is essential. I have often been asked by my constituents why it is that the Government have not done this or that for the cotton trade, and I have replied that the Government have done everything they could for the cotton trade, by trade agreements and so on, but that if the cotton trade is so divided, as it is, it is almost impossible for the Government to do anything for it. When this Bill has been passed, then I feel that the cotton trade itself, through the Cotton Industry Board, will be able to speak with one voice and as a whole, and in that way will be able to come to the Government and ask the Government whether they can help the industry in any way which they consider to be possible. At the present time that is not possible, because we have the different sections of the industry speaking, one with one voice and another with another voice. My right hon. Friend the President of the Board of Trade mentioned the Japanese industry. There you have a wholly organised trade, a trade organised from top to bottom and helped by the Government. That trade has been able to penetrate into all sorts of markets which previously were our markets. I feel that once we have got our trade organised and able to speak with one voice, as it will do when we have passed this Bill, then the Government, if they are willing to do so, may be able to help our great cotton trade, which deserves all the help it can get.

Another thing which I want to mention and which has not yet been mentioned is the question of the workers in the industry. I have been very depressed recently by talking to a lot of my constituents, whom I find not only terribly unemployed, but many of them underemployed, in the cotton trade. That, I think, is a very serious matter indeed and is a thing which really wants mending. I hope that as a result of the passing of this Bill the conditions of the workers in the industry will be ameliorated and that the workers will have more permanent and satisfactory employment than they have at the present time. There is no doubt that with the trade as it is at present there is a tremendous amount of cut-throat competition. This cut-throat competition goes on all the time. What really is happening is that the cotton trade is putting itself into the hands of the buyers. The buyers come along, and naturally they try to buy everything they can at the cheapest possible rate, and in doing this they force the industry, which is not organised as a whole, to produce cloth at a loss. The effect of producing cloth at a loss is bad, not only on the trade itself, but also on the workers in the trade. As a result of this lack of organisation in the trade the unfortunate operatives in Lancashire are being underemployed and unemployed. I hope that, as a result of the passing of this enabling Bill, the conditions of the workers in the trade will be much more satisfactory than they are at present.

There is only one danger that I foresee, and I would ask the Parliamentary Secretary to consider this point. Redundancy is dealt with in the Bill, and I feel that if certain mills or sections of the industry are cut out, great care will have to be taken where that is done. I am frightened lest in certain parts of Lancashire it may be decided by the industry as a whole to cut out certain mills under the redundancy scheme. We want to be very careful when that is done to consider the question of the employment of the people in various areas, because if certain areas are made redundant and the mills closed, a very large amount of unemployment might result in those areas, and that would be disastrous. That is an important point which should be looked at from the point of view of the operatives. I feel that in this Bill the Government are trying to do something to help the trade in Lancashire, and I hope that the Bill will work satisfactorily. I am not going into its details, for no doubt there will be a great deal of talk about them in Committee. There are a great many Committee points that want to be raised. I feel, however, that the Bill as a whole will be of benefit to the trade and that the trade generally, with certain exceptions, want it. I hope that the House will pass it and that it will be of benefit to the greatest industry in the country.

5.32 p.m.

Sir Percy Harris

I am sorry that the President of the Board of Trade is not able to be here, because I wanted to congratulate him on his lucid and eloquent speech. He showed how deeply he was concerned with the well-being not only of the industry, but of the county of Lancaster—

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