HC Deb 06 July 1939 vol 349 cc1607-29

8.20 p.m.

Mr. E. Smith

I beg to move, in page 25, line 38, at the end, to insert: (b) to establish a fund to assist the ex port trade by the imposition of a levy, subject to such conditions as may be deemed proper on persons entered in the general register. I am sorry that there are not more Members present because this is a very important Amendment. It is only a matter of time before the House will have to adopt the principle contained in this Amendment, and I should have liked more hon. Members to have been present to listen to the reasons we shall give, because I am convinced that if the President of the Board of Trade cannot accept the Amendment hon. Members who sup port the Government will vote against us. It is a pity that that should be the position, because our case is so reason able and so urgent, in view of the world situation, that I am convinced that if hon. Members were present and could hear the reasons we propose to give they would support us. Let me make it clear at once that my friends and I stand for a policy of economic co-operation. We believe that sooner or later the world will have to organise itself, or those parts of the world which are prepared to associate together for the benefit of humanity, and will have to work towards the goal which is the only goal ultimately for humanity, and that is economic co-operation.

While these are our principles and our policy, we realise that there is an economic war going on, and that this economic war is having a very serious detrimental effect on industrial nations such as ours. Therefore, we are forced to think in the direction which we are going by this Amendment. While these are our ideals and principles, and while we are doing all we can to make towards economic co-operation, meantime we have to live. In addition to that, some of as, and especially the younger section of the movement to which we belong, realise that we have had a legacy handed down to us as the result of the sacrifices made by our forefathers. We have built up relatively high standards in this country, and unless we do something to maintain them now we shall not be able to maintain them in the future. Therefore, while we speak as Socialists, and most trade unionists are Socialists, until we reach the stage when the world is ripe for Socialism we have to live.

For example, most of the miners' representatives are Socialists, yet at the same time in their day-to-day work they have to negotiate conditions in the pit and in regard to prices, and the same thing obtains in the engineering industry. While we are Socialists we have in our everyday work to negotiate improved conditions and prices, and we have to take world affairs as they are to-day. If we are agreed upon that it brings us to this, that while we stand for world co-operation and do not compromise the fundamentals of our principles, we realise that the world is as it is and not as we would like it to be.

An economic war is going on. It takes many forms—tariffs, restrictions, quotas, subsidies, industrial pools, the ruthless suppression of the people's aspirations and liberty, and in some countries, slave labour. We have to consider our export trade against this background, and we have to consider whether we are going to hold our own in future. If the House accepts this as a correct picture of world affairs—it is not exaggerated and if any thing, it is an under-statement of the situation—then we need to legislate against that background. In these days, in particular, it is idle to talk about remedies in the sweet by and by, when we have this very serious situation clouding the industrial position at the present time. Britain is a relatvely small country. We have a huge industrial population which depends for its livelihood upon the maintenance of our export trade. The success and prosperity of the railways, the distributive trades and the transport industry ultimately depend upon the maintenance of our export trade. There fore, it is of the utmost importance that we should show determination to maintain, and where possible to increase, the export trade, and in my view, we shall be able to do this only by adopting the principle embodied in this Amendment.

I should like to give the House a few facts. In 1912, the exports of cotton yarn from this country amounted to 244,000,000 lbs., whereas in 1938 they had gone down to 123,000,000 lbs. In 1912, the percent age of production for the export trade was 86 per cent., and by 1938 it had gone down to 51 per cent. In 1912, cotton piece goods exported amounted to 6,913,000,000 square yards, and in 1938, 1,386,000,000 square yards. It is against that background that we have to consider the position, and we are more concerned about the people who are suffering from it than about anybody else. We do not want to give anybody an excuse for coming here in future and proposing a reduction in wages or a reduction in the, social services, which we want to maintain and improve in order to set an example to the world. We shall not be able to do these things unless we main tain the export trade, and it is for that reason that we move this Amendment. As is known by anybody who has any thing to do with industry, industrial productivity in this country has enormously increased as a result of mechanisation and a greater exploitation of human energy. Let me give the House an idea of what has happened. In 1912, the number of people employed in the cotton industry was 711,000, and in 1938 it was 365,000. In 1938, unemployment in the cotton industry amounted to 26.7 per cent. I will put it another way. Taking 100 as the index figure, we get the following result, which shows the seriousness of the position in the cotton industry. In 1923, 100; in 1929, 109; in 1933, 85.2, and in 1938, 56.8; or a reduction in productivity between 1923 and 1938 of 50 percent.

I am not a pessimist. Our people are virile and will adapt themselves to any set of circumstances in order to hold their own in the world. Some of the people who have been talking about this country in the way in which they have in a certain part of the world will get a rude shock if they attempt to do to this country what they have done to certain other parts of the world. We have to deal with the industrial situation in the same way as we have dealt with the international situation, and just as we have been forced to rearm in order to deal with the inter national political situation, so we must introduce new methods in order to deal with the international situation on the economic plane. It is because we realise that, that we shall press this Amendment to a Division. It is only a matter of time before we shall be on the other side of the House, and we shall have to adopt this principle, and although the President of the Board of Trade may not accept the principle this evening, it is only a matter of time before he will come to the House and recommend it. I will give a little more evidence to indicate the serious position. I will quote from the trade notes of the "Manchester Guardian" of 27th June, 1939. There it was stated: In the five-month period of this year as compared with 1938, both the United Kingdom and Japan have lost about 20,000,000 square yards of trade. As compared, however, with the corresponding period of 1937, the United Kingdom has lost 236,000,000 square yards, while Japan has lost only 154,000,000 square yards. What is happening is that production in Japan is being carried on on the basis of slave labour. Moreover, the people of that country and other countries cannot struggle to achieve their aspirations as we have done in this country. It is a question of our determining that we will not be driven down to the standards that prevail elsewhere. We want the Government to take steps to bring about economic re armament in order that we may meet those countries in the economic field in the same way as we are doing in other fields. When those countries are prepared to meet round a table at Geneva, or in an international conference, in order to discuss the situation, we shall be prepared to do so. It is because those countries are adopting new methods of increasing their export trade, such as direct and indirect subsidies, that we propose the adoption of the principle embodied in the Amendment.

I want to make it quite clear that we are not satisfied with this Bill. As a matter of fact, we are not satisfied with the Government. While we are here, we do our duty, and we may safely claim that during the past few years, in particular, hon. Members on this side have done their duty by the country in trying from day to day to ginger up the Government in order that their legislation should be improved on the lines on which the people of the country desire. In spite of the imperfections of the Bill, we realise it is a step in the right direction, but it will not bring the results which every one desires unless the Government accept this Amendment, so that they can be provided with an instrument which will enable the Ex port Development Committee to have something with which to bargain and so be able to meet the competition which they will have to meet in certain parts of the world. The Bill provides for an Ex port Development Committee and that is a step in the right direction but a committee without power will be of no use and that committee must have an instrument if it is to carry out its ideas.

If hon. Members examine Clause 4, particularly Sub-sections (1) and (5), they will see the necessity for adopting the principle which we propose in this Amendment. Anyone who is acquainted with industry, and particularly those hon. Members who run industries, know that one of the most important things at the present time is not merely to hold our own in the world's markets, but to increase our production considerably. Increased production has an important bearing upon cost. If certain fixed capital can be utilised day and night, then, automatic ally, overhead charges are reduced. The more you use your fixed capital, the more you reduce costs, and this, in the end, benefits the people of the country and benefits our export trade.

There are two methods of dealing with the cotton industry. One of the most important steps to be taken, if the cotton industry is to be placed in a stronger position, is to bring about a fairer distribution of wealth. I take a very strong stand upon this. If there was a fairer distribution of wealth in this country, the wives and children of our workers would be able to buy more cotton goods, more jerseys and stocking and articles of that description. In our industrial areas, it is a tragedy to see scores of ill-clad boys and girls going along the streets. If there was a fairer distribution of wealth the mothers of those children would see to it that they were provided with more clothing and that would be a step in the right direction.

I know that I have to keep within the limits of the Amendment, and I will not go further into that general question. We believe that a considerable increase in our export trade is necessary and that this Bill will assist in that direction. But now that the nation is about to give legislative sanction to the re-organisation of the industry the nation has a right to demand that the industry should contribute, in proportion to the improvement which will be brought about by this Bill, to the general pool, in order that the economic position of the nation may be improved. A few weeks ago a deputation from certain municipalities and other bodies waited upon the right hon. Gentleman and proposed a subsidy to the cotton industry. It may be that we shall ultimately come to that point, but I am becoming concerned about all these subsidies. This is the position in which I find myself. I was engaged in an industry in which com petition is probably as keen as in any industry in the world. Increasing com petition affects our conditions and our piecework prices, but there is no sign of any subsidy for engineering. We see all these other subsidies being agreed to by the Government, but there is nothing for us and we know where all these subsidies have to come from.

I do not want to be misunderstood. I believe that the principle of subsidy has, within limits, to be carried out. At the same time subsidy alone cannot bring about a situation which will give satisfaction for any length of time, and when an industry asks for a subsidy the first question put to it should be, "What are you prepared to do with regard to your own industry?" The Amendment proposes that the cotton industry should levy itself in order to subsidise its export trade. We believe that would go a long way towards improving the whole market and protecting the price level. One of the finest economists which this party has ever produced was the late William Graham. He had a great economic understanding and he did not content himself with talking about what might be done in the sweet by-and-by. He translated his principles into economic reality whenever he had the opportunity, and he stood for the principle which is contained in this Amendment. That man burned himself out in work. While certain other people associated with him got all the limelight, he carried on the work behind the scenes, as far as the opportunities which our party had at that time allowed. One of his main contentions was that this country had arrived at a stage when we ought to introduce legislation to deal with the price level in this country, having made allowance for international fluctuations which are bound to affect internal prices. He held that, as far as prices could be stabilised internally, it was to the interest of all that that should be done.

This Bill will assist in guaranteeing profits in those mills which cater for the home market. It would not be fair to the rest of the industry that those profits should be stabilised and in some cases increased at the expense of the internal consumer, and as legislative sanction is now to be given to the re-organisation of the industry, those who cater for the home market should be prepared to con tribute to a pool, in order to assist the export trade which has to face difficult competition throughout the world. If the country and the industry adopted this principle it would give us bargaining power. When the representatives of the industry or of the Board of Trade, attended international conferences they would be able to say to the representatives of other countries, "We have been forced to adopt these measures but if you are prepared to support a policy of economic co-operation, we will gladly take from you the articles which you can pro vide us with, and in return supply you with the products of our highly industrialised country."

We want to work towards that policy of economic co-operation, having regard to the serious economic situation which exists to-day as a result of the fact that certain countries have driven their people down to slave labour. It is because we are determined ourselves not to go down to that level that we want to reorganise industry in this country, so as to maintain our relatively high standards of living and also our industrial position.

8.45 p.m.

Mr. G. Macdonald

I beg to second the Amendment.

What is vitally needed in the cotton industry is an improvement in the export trade. The mining industry has gone through an experience similar to that which the cotton industry is going through now. We found that the export trade was falling year by year and that its decline endangered the whole industry. I could understand arguments against a levy of this kind, if it could be shown that the industry was unable to afford it. My information is that there are certain sections of the cotton industry, the home sections, which are doing fairly well, and that if only they would bear more of the burden we could bring about a substantial improvement in the export trade. Like the home trade, the export is largely a matter of price. We have lost our trade largely because other cotton manufacturing countries have displaced us in certain markets be cause they could sell cheaper than we were able to. If we do not do some thing soon we shall have lost still more, if not all, of our export trade, and that to Lancashire will be a very serious, thing.

I agree that a declaration of economic war is never wise if it can be avoided. I can see this Amendment being interpreted in some countries as such a declaration. If they do think that they may fight back, and ultimately we may not gain much. But I am certain that the idea of appeasement in the economic world is not to be carried too far. We have seen the results in the political world. I appreciate the attempts made by the Government to show other countries that we are anxious for peace, but at the same time it is well to let our competitors know where we stand, and I cannot think of any more effective way of doing it than by accepting this Amendment. I know that both sides of the industry are not opposed to it, though the employers' side may be. The right hon. Gentleman may tell us that this was not put before the industry, but I know that the workers' side of the industry is very anxious to get this if possible. We in the inland areas of the coal industry have begged the Minister for Mines times out of number to agree to something of this kind, but he has refused. We feel that this is essential if anything is to be done in regard to our foreign trade, and knowing what that means in the cotton industry I beg to support the Amendment.

8.48 p.m.

Mr. Burke

I should like to support the Amendment. There is a feeling that this Bill will make it much better for people in the home trade while putting, those competing in the export trade at a considerable disadvantage. The Bill is an indication of the failure of what was a great industry to stand the strain of post-war competitive capitalism. It is also an indication of the failure to realise the need to adapt itself to a different set of circumstances. One of the things in the Bill that has appealed to us is the Export Development Committee. That committee must get to work as early as possible and something must be done to see that the export trade is not neglected under this Measure. I am apprehensive that while there are a number of orders going about for Army contracts, producers will be tempted to concentrate on them, as they did in the last War, to the detriment of the export trade.

Let me remind the House that the position of our trade in relation to Japanese trade grows steadily worse. The first five months of this year we have aver aged 118,000,000 square yards a month, while the Japanese export has been 180,000,000. In other words, every month their export has been 50 per cent. more than ours. That has been going on for a long while, and to-day the cotton trade finds itself in the position it was in 1850. Some new methods will have to be devised. We look upon this Bill not as an end in itself bat only as a beginning, and the part with which we want to see a beginning made is the Export Development Committee. The right hon. Gentleman will know there is a suspicion that the export trade may not benefit as much as it should under this Bill, and that there is also growing up in Lancashire a demand for a subsidy, and we would like to hear what he has to say. I believe he has met a deputation representing some 4,000,000 people in Lancashire—mayors and councillors of local authorities connected with the cotton trade. They have put before him the idea of a subsidy. I do not know what the cost would be, but I do know that money has been given to other industries that did not do as much as the cotton industry to place this country where it is to-day. I have seen a figure of about £ 6,000,000 for a subsidy for the cotton industry—not a very great figure in terms of what has been given elsewhere, but I am informed it would reduce the prices of a Burnley printer by something like three quarters. In the world as it is, when Governments stand behind their traders in the export markets, we cannot expect that even under this Bill the industry can fight alone. It will want further assistance from the Government, and that may well be given in the nature of a subsidy.

8.53 P.m.

Mr. Silverman

A little earlier I was taken seriously to task, if not rebuked, by the right hon. Gentleman for suggesting that people who had opposed in Committee an Amendment might think discretion the better part of valour and take no part in the discussion in the House. I think I am entitled to say now that not one of them has had a single word to say during this Debate, and I shall be interested when we look at the Division List to-morrow to see how many were discreet there, too. On this Amendment we had a keen though short Debate in Committee. Where are the hon. Members who opposed it then? We are concerned now with a Measure for improving the export trade. It may be that this Amendment is well designed to facilitate that. It may be that it is a bad one and it ought not to be accepted. But I am entitled to point out that there is scarcely anybody present with any interest in it at all. On the other side of the House I do not see one Lancashire Member except the Minister himself.

Captain Cobb

I am here.

Mr. Silverman

I apologise to the hon. and gallant Member, and I shall apologise to him again if he takes any part in this discussion. In Committee the hon. and gallant Member for Accrington (Major Procter) took part in the discussion and opposed an Amendment on these lines and we Divided upon it.

Mr. Stanley

Will the hon. Member say how many of his friends were there to Divide upon it?

Mr. Silverman

I will first tell the right hon. Gentleman what I wanted to say and then I will answer him.

Mr. Stanley

Shall I tell the hon. Member? There were four of them.

Mr. Silverman

The point I was putting was that one of the right hon. Gentle man's colleagues took part in the Debate in Committee to oppose this proposal but did not carry his opinion so far as to vote against it, and to-night he is not here at all. As to the point the right hon. Gentleman has just made, it is true that Members of my own party were present to the number of only four in the Committee, but all four of them voted for the Amendment, and they were the only Members who did so.

Mr. Stanley

Again I must point out that an hon. Member of his party was there who spoke rather against the Amendment and did not vote at all.

Mr. Silverman

I think the right hon. Gentleman is completely mistaken in suggesting that anybody spoke against it. It is true that one of the four made a speech in which he was rather opposed to an export subsidy, but he pointed out what I rose in order to point out, that such a fund as this could be used to assist the export trade in a variety of other ways than by subsidy, and I think the right hon. Gentleman is mistaken in suggesting that the hon. Member voted against the Amendment. I think he voted for it. Well, who was it?

Mr. Deputy-Spearker (Colonel Clifton Brown)

I think the hon. Member is devoting too much time to that point, and that he ought to get back to the Amendment.

Mr. Silverman

I rose only to make the point I have made, and to put one other point. In a Bill which is designed primarily to assist the export trade in this industry and is calling upon people for levies for that purpose it is anomalous not to call upon them to contribute to some fund which could be used for the common benefit of the industry abroad. No adequate reason was given by anyone who took part in the Debate in Committee why the Amendment should not be accepted, and no reason, adequate or otherwise, has been given to the House, because there is no one present to offer a reason except the right hon. Gentleman and we ought to hear his reason now.

9.0 p.m.

Mr. Tinker

I wish to support the Amendment and to say that coal and cotton are working together in this matter. Coal and cotton have made Lancashire famous. Cotton is now suffering and an attempt at re-organisation is taking place to improve the trade. Clause 18 is a step forward such as would not have been contemplated in this House at one time. I remember the old Free Trade tradition, which was that nothing should be done to bolster up trade. When we attempted to get a similar provision put into the Coal Industry Bill the Liberal party were the means of defeating it, because they had the old idea of unrestricted Free Trade, and the Labour party had to forego what they wanted, although they believed in it. I think that everybody agrees now that the old idea of Free Trade has gone by the board and that something else will have to be done, and Clause 18 deals with that situation, only it does not go far enough in my opinion. It proposes to allow the Cotton Industry Board: To conduct, and to promote or encourage by financial assistance or otherwise, research and experiments in matters relating to the manufacture of products of the industry, for the purpose of getting overseas trade. With that object a fund is to be got together. What we are asking is that a fund should be established so that if prices in the overseas market have to be balanced there will be a fund ready to hand. In order to get orders from over seas travellers will have to be sent out, I expect. I do not know whether they are sent out under a collective head or as representing individual firms. If they are sent out individually it will be a big drag on each firm. If they are sent out under a collective head there will have to be a general fund to meet their expenses. As they are setting out to do something to get back the export trade we argue that the soundest method is to have a general fund for the purpose of regulating what ever prices have to be regulated in order to get that export trade.

What will happen if that is not done? Some sections of the cotton industry may be able to get the home market and others may be dependent on overseas trade. Those dependent on overseas trade will be cut out, because of foreign competition from countries which, under present circumstances, undersell this country. We in this country, and especially we on the Labour Benches, pride ourselves on up holding decent conditions for our workers, and with the exception, possibly, of the United States, no country maintains the same standards as ours. Therefore, it will be very difficult to maintain our prices in overseas markets, and we say there must be a fund to assist our exporters to get that foreign trade. If it is so essential to get that foreign trade we say that all those engaged in the industry in the country should contribute to that fund, because it is not right that the burden should be borne by one section only of the industry. If it is left to that section to bear all the loss the result will be that employers will be saying, "We cannot sell our goods if we have to pay these wages and if we are to keep the works going lower wages will have to be accepted." Indeed, eventually the mills may have to close down.

We are trying to organise the cotton industry in such a way that we shall establish it in a better position in the world's markets and give to the workers the rate of pay to which they are en titled. We cannot keep both those points going unless we can establish a fund to help the overseas trade. There cannot be any objection from the other side of the House to that proposal. Once hon. Members have accepted the principle that something must be done to organise the industry on those lines, it is not too much to ask them to take another step forward so as to give to the cotton industry a fund that will produce equality all round in every part of the industry.

I, therefore, hope with my colleagues that we shall be able to do something better than we have done for the coal industry. It would put the cotton industry in the right way to establish itself in the markets of the world.

9.7 p.m.

Sir H. Fildes

I should like to bring the discussion back to the cotton trade. We have to recognise that whatever has happened in that trade there has been a greater consumption of raw material in 1938 than there has ever been in the history of the world. We have not received our share because we have the dearest stall in the markets of the world. If we carry the Amendment, we shall place another burden on our competitive ability. The rate of wages paid in India is such, and the duty put upon the entry of goods in India is such, that if our weavers in Britain wove the cloth for nothing, you could not get underneath the tariff wall that is against you in India. It is better that we should be honest with ourselves and recognise that the people who are cotton's biggest customers are the poorest people on the face of the earth, but that they cannot afford to pay for our product and for a standard of civilisation that embraces Little wood's pools, football matches, cinemas and a thousand-and-one things of a similar character.

Mr. Silverman

Is the hon. Gentleman recommending a counsel of despair? Is he suggesting that we should cut down completely, or, on the other hand, that we should reduce our costs proportionate to those that he is describing?

Sir H. Fildes

I am trying to bring to the notice of hon. Members the hard facts of the situation. We have already inflicted upon the cotton trade by the passage of the Coal Act a charge of £1,250,000 a year on our decreased production. The last proposal that has been advocated by my hon. Friends is that on top of these things our very poor customers in India and Africa should provide holidays with pay. You cannot do all these things unless you are prepared to recognise that your export trade is gone. Compared with 1913 the trade is paying 110 per cent. more for spinning and 80 per cent. more for weaving and a further 80 per cent. for bleaching. If there is to be prosperity in the cotton trade remember that 5s. 6d. in the £ has to go to the revenue, and that if anybody makes £100,000, 13s. 4d. in the £ must go to the State. Let us see what is the result of this Measure before we place upon the industry additional burdens which will have a very deleterious effect upon trade and upon our competitive ability. No matter how sym pathetic the President of the Board of Trade may be towards this Amendment, I trust that he will face the hard fact that to accept the Amendment will be putting us further in the mire and further restricting our competitive ability to re gain our export trade.

9.12 p.m.

Mr. Stanley

To start with, although it is perhaps irrelevant, I must apologise to the hon. Member for Nelson and Come (Mr. Silverman) or rather to the hon. Member for South East Ham (Mr. Barnes), whose name I took in vain. I see that he was one of the gallant four who voted for the Amendment. The Amendment raises a very important point. I am going to follow the example of the hon. Gentleman who raised it in confining myself, as he said he was doing, strictly to the terms of the Amendment. I must confess straight away that the theoretical argument which he put for ward in its favour does not shock me in the least, nor is it one with which upon general grounds I quarrel. I think that my hon. Friend the Parliamentary Secretary and my hon. Friend the Secretary to the Department of Overseas Trade have not been backward in saying in public that there is great necessity for new methods in the export trade, and we have been encouraging industry to organise for export and particularly to get together and agree to charge lower prices, in order to try to capture a particular export market or to resist some particular competition from which they are suffering. I am not in the least shocked by the theory he propounded, although, as I have had reason to express before, I do not know whether to be gratified or alarmed that I very often find myself in agreement with him on ideas about the economic future of this country.

After all, we have to consider not a general economic thesis but a particular Amendment to a particular Bill dealing with a particular industry, and it is with the circumstances of that industry and of this Amendment that I propose to deal to-day. The hon. Member made a very-eloquent reference to the number of people and boys and girls who are walking about without stockings, and he desired that they should be more fully clad. I cannot think that the best way of doing that is to impose an extra duty upon the stockings they will buy in order that you might sell more stockings more cheaply to India or West Africa.

Mr. E. Smith

That is not usual with the President of the Board of Trade and not fair. I made it clear that I was of the opinion that by the adoption of this principle the bulk output of the industry would be increased, that prices would be reduced and that it would have a beneficial effect upon prices internally.

Mr. Stanley

I consider that that is extremely optimistic. Although there are arguments in some cases for the adoption of methods of this kind, we must face the reality, and the reality is that, while we may stimulate sales at home in order to maintain our share of the export market and keep people in employment, to expect at the same time, by a levy of this kind, both to reduce prices in the export market and to reduce prices in the home market, despite the levy, is an optimism which none of us is entitled to share.

It is only fair that in the first place I should put certain facts before the House. I am sure nobody will deny that to introduce into the Bill at this moment an uncontrolled power—because that is what it amounts to—on the part of the Cotton Industry Board to make a levy on the whole trade, with no limit to its extent, for the purpose of supporting the home market, would be a departure of the first magnitude. This matter was discussed for a considerable time during the preparation of the scheme, and it was finally dropped from the proposed Bill because it aroused such intense controversy that it was felt that it would probably endanger the acceptance by Lancashire of the Bill as a whole. Of course, the House must make up its own mind on the matter, but certainly it would be a great breach of faith on my part towards the members of the industry in Lancashire to whom I gave a pledge, with which I think the House as a whole agreed, that I would introduce this Bill if I was assured of the support of the majority of the trade, if I were to re-introduce into the Bill a proposal which had been dropped before they voted on it because it aroused so much controversy and might have defeated the object of the Bill. As far as my personal position is concerned, hon. Members must see that it would be quite impossible for me to accept the proposal.

My second point is with regard to the Amendment itself. It is quite dear that if we were to adopt a policy of this kind, which everyone would agree, although it may be necessary in some cases, is fraught with danger, presenting very dangerous possibilities in the home market—if this power were to be given at all, it must be very closely safeguarded. But this Amendment creates no safe guards whatsoever. Although there are limits to what the Board can raise for purposes of research, although the price laid down in a price-fixing scheme has to go through innumerable tests and has to receive the assent of the House, here, in connection with the most important matter of all, namely, the possibility of the imposition of a large cash levy on a section of the industry, with no Parliamentary limit, no check, and no reference to Parliament, either as to the question of its imposition or of its amount, a proposal is being made with which, I think, nobody would agree.

I would point out, with regard to this particular industry, the very great practical difficulties which you encounter when you try to deal with the export trade by way of a subsidy. That is what this is; it is a subsidy of the same type as, for instance, the Germans give to the Opel motor car. One hon. Member made reference to a deputation which I received from a number of Lancashire authorities to discuss this point. I had a very long meeting with them, because I thought it was a matter of such importance that I should like to take the discussion in real detail, and not just deal with it with a few generalities. I should hesitate here to go over all the ground that I was able to go over with them in confidence, because I do not think it would be of any advantage publicly to discuss beforehand any difficulties that might arise for our trade in any particular market; but the general point that people must have in mind when they are discussing whether in a particular industry a proposition of this kind is likely to be of advantage to the export trade, is the possibility that the subsidising of exports will be met by countervailing measures in the country to which the exports are sent.

When that is borne in mind, one is struck immediately by the fact that, in the case of the cotton industry, there is hardly any country, except the African countries, where, owing to the quota system this proposal really would not help, since we already have a high quota where that is possible—there is hardly any other country to which we send our cotton goods where they have not a home industry of their own, and where, there fore, they are not only empowered, but bound to protect their home industry against any increase of subsidised com petition from this country. Take the case of India, the loss of whose market has been the severest blow to our cotton trade. The great loss of our market in India has not been from our competitors. We have, of course, lost something to Japan, but Japan's exports to India are now on a quota level. The great cause of our loss has been the Indian industry itself. Recently I concluded, after long negotiations, a trade agreement with India, and in that trade agreement, although I am sorry to say many industries in this country failed to get what they considered they should have got, and some indeed suffered losses as compared with their present position, I was nevertheless able to secure for the Lancashire cotton industry a substantial reduction in duties. How long do hon. Members think that reduction in duties would be allowed to stand if we put, on the top of that, the subsidisation of our exports in order to increase our competitive power as regards the Indian industry as a whole? They would be entitled to take, and no doubt immediately would take, countervailing measures to counteract an export subsidy of that kind.

It seems to me that, before it would be possible for the House to consider such an Amendment in this particular case and in this particular industry, it would be essential that the Export Development Committee set up under the Bill should be functioning, should be surveying the possibilities of the export trade, and should see how far the provisions that are made in the Bill will help. The line that we have laid down in the Bill is not the same as, but perhaps, in principle, is not very different from, this Amendment. It recognises in certain cases the necessity for a difference of level as between home and export prices, and it makes provision for the keeping of home prices at a fully remunerative level, if that is possible, and for concessions from the minimum price in order to send goods into a particular market. We must first of all see how that scheme is going to work. Then let these people, whose main interest will be the export trade of the cotton and rayon industries, study this sort of problem, and even this sort of remedy, not from the point of view of generalities, not from a theoretical point of view, but by taking markets one by one and saying with regard to each: Is this proposal going to help us there? What will be the result if we adopt it?

Then, when they have considered all these things, not theoretically, but as practical men, when they have surveyed the possibilities of increasing exports, we shall be in a position, with their report and their knowledge before us, to come to a decision on whatsoever additional assistance they may recommend for the export trade. I hope the hon. Member will not think that I am not treating seriously an Amendment which raises a question of very great interest. I have given as fully as I can the reasons why T believe that this particular Amendment, in these particular circumstances, in this particular industry, would not be of ad vantage to the export trade and might indeed be detrimental.

9.26 p.m.

Sir P. Harris

I think the right hon. Gentleman's statement is a complete answer to the proposal from a practical point of view. I quite appreciate and recognise that the Amendment is put forward as a constructive contribution to the difficult problem of recapturing our export trade, but I think the right hon. Gentleman is right. We have had in Nazi Germany experiments of this kind which have been used with great skill on many occasions but, in spite of those ingenious experiments, the German ex port trade is not increasing and competition is not coming from that country. It would be dangerous at a time like this to adopt this ingenious experiment. It is bound to lead to special duties.

Canada, for instance, has always been very suspicious of any kind of subsidy. We had some difficulty with woollen goods because of depreciated exchanges and it led to very bad blood. This applies also to Australia, and certainly to India. I think it would be wise not to press the Amendment to a Division. If it is pressed, I shall have to support the Government.

9.28 p.m.

Mr. Rhys Davies

I think my hon. Friend the Member for Stoke (Mr. E. Smith) has performed a very good piece of service in raising this very important issue. Some of us who represent Lancashire seats, with cotton mills in our divisions, are sometimes in despair and will turn to almost anything in the hope of improving the situation, and we may sometimes turn to wrong remedies. It might help to satisfy my hon. Friends if the Minister would say whether the board mentioned in the Clause has it in its power to report upon an issue such as this. It seems to me that, if the Export Development Committee is entitled to watch the progress of our exports and to report to the right hon. Gentleman as to what are the conflicting interests in the export market, it might have an opportunity to look round and see what is actually happening in the world in that connection, and then I suppose we could have a Debate on the Board of Trade Vote to find out exactly what is happening.

9.29 p.m.

Mr. Stanley

Of course, one of the purposes for which the Cotton Industry Board is set up is to represent to me, and to the country, the views of the cotton industry, and it will be entitled to make any representations. In addition, Clause 30 imposes on it the duty of preparing a report, which is laid before Parliament, and one of the things they would have to report on would be their relations with the Export Development Committee. No doubt, the report would contain accounts of their meetings with that committee and any suggestions that it put forward.

Mr. Shinwell

Suppose that at any time a particular section of the Cotton Industry Board desired the imposition of a levy, not of general but of special application, perhaps applicable to a certain section of the export trade, are they vested with power within the Bill to take action with out making representations to the Minister, or must they make representations before any action is taken?

Mr. Stanley

Certainly they can only make representations, otherwise there

would not be any necessity for the Amendment. The point of the Amendment is that there

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 73; Noes, 168.

Division No. 222.] AYES. [9.34 p.m.
Adams, D. M. (Poplar, S.) Gibson, R. (Greenock) Parkinson, J. A.
Adamson, W. M. Greenwood, Rt. Hon. A. Pearson, A.
Ammon, C. G. Grenfell, D. R. Price, M. P.
Anderson, F. (Whitehaven) Griffiths, G. A. (Hemsworth) Pritt, D. N.
Banfield, J. W. Griffiths, J. (Llanelly) Quibell, D. J. K.
Batey, J. Groves, T. E. Ridley, G.
Benson, G. Guest, Dr. L. H. (Islington, N.) Riley, B
Bevan, A. Hayday, A. Ritson, J.
Brown, C. (Mansfield) Henderson, J. (Ardwick) Sexton, T. M.
Buchanan, G. Henderson, T. (Tradeston) Shinwell, E.
Burke, W. A. Hills, A. (Pontefract) Silverman, S. S.
Charleton, H. C. Jagger, J. Smith, E. (Stoke)
Cluse, W. S. Jenkins, A. (Pontypool) Sorensen, R. W.
Cooks, F. S. John, W. Stephen, C.
Collindridge, F. Johnston, Rt. Hon. T. Stewart, W. J.(H'ght'n-le'Sp'ng)
Daggar, G. Lee, F. Summerskill, Dr. Edith
Davies, S. O, (Merthyr) Leslie, J. R. Taylor, R. J. (Morpeth)
Day, H. Macdonald, G. (Ince) Tinker, J. J.
Dobbie, W. McEntee, V. La T. Viant, S. P.
Dunn, E. (Rother Valley) McGovern, J. Walkden, A. G.
Edwards, Sir C. (Badwellty) Mainwaring, W. H. Watson, W. McL.
Edwards, N. (Caerphilly) Marshall, F. Wilmot, John
Fletcher, Ll.-Comdr, R. T. H. Maxton, J. Windsor, W. (Hull, C.)
Gallacher, W. Milner, Major J.
Gardner, B. W. Oliver, G. H. TELLERS FOR THE AYES.—
Mr. Whiteley and Mr. Mathers.
NOES.
Acland-Troyte, Lt.-Col. G. J. Entwistle, Sir C. F. Lancaster, Lieut.-Colonel C, G.
Adams, S. V. T. (Leeds, W.) Erskine-Hill, A. G. Leighton, Major B, E. P.
Albery, Sir Irving Evans. D. O. (Cardigan) Lennox-Boyd, A. T. L.
Alexander, Brig.-Gen. Sir W. Everard, Sir William Lindsay Levy, T.
Allen, Col. J. Sandeman (B'knhead) Fildes, Sir H. Lipson, D. L.
Aske, Sir R. W. Findlay, Sir E. Llewellin, Colonel J. J.
Balfour, G. (Hampstead) Fleming, E. L. Locker-Lampson, Comdr. O. S.
Balfour, Capt. H. H. (Isle of Thanet) Foot, D. M. Loftus, P. C.
Bossom, A. C. Fox, Sir G. W. G. Mabane, W. (Huddersfield)
Bower, Comdr. R. T. Fremantle, Sir F. E. MacAndrew, Colonel Sir C. G.
Boyce, H. Leslie Furness, S. N. M'Connell, Sir J.
Braithwaite, J. Gurney (Holderness) George, Megan Lloyd (Anglesey) McEwen, Capt. J. H. F.
Brooke, H. (Lewisham, W.) Gledhill, G. McKie, J. H.
Brown, Rt. Hon. E. (Leith) Goldie, N. B. MacLaren, A.
Browne, A. C. (Belfast, W.) Grant-Ferris, Flight-Lieutenant R. Maclay, Hon. J. P.
Bull, B. B. Granville, E. L. Makins, Brigadier-General Sir Ernest
Burton, Col. H. W. Gridley, Sir A. B. Margesson, Capt. Rt. Hon. H. D. R.
Campbell, Sir E. T. Griffith, F. Kingsley (M'ddl'sbro, W.) Marsden, Commander A.
Carver, Major W. H. Gritten, W. G. Howard Medlicott, F.
Cary, R. A. Gunston, Capt. Sir D. W. Mellor, Sir J. S. P. (Tamworth)
Chapman, A. (Rutherglen) Hacking, Rt. Hon. Sir D. H. Mitcheson, Sir G. G.
Clarke, Colonel R. S. (E. Grinstead) Hannah, I. C Moore, Lieut.-Col. Sir T. C. R.
Clarry, Sir Reginald Hannon, Sir P. J. H. Moreing, A. C.
Clydesdale, Marquess of Harris, Sir P. A. Morgan, R. H. (Worcester, Stourbridge)
Cobb, Captain E. C. (Preston) Heilgers, Captain F. F. A. Morris-Jones, Sir Henry
Cook, Sir T. R. A. M. (Norfolk, N.) Hely-Hutchinson, M. R. Morrison, G. A. (Scottish Univ's.)
Courthope, Col. Rt. Hon. Sir G. L. Hepburn, P. G. T. Buchan- Munro, P.
Cox, H. B. Trevor Hogg, Hon. Q. McG. Nall, Sir J.
Crookshank, Capt. Rt. Hon. H. F. C. Holmes, J. S. Neven-Spence, Major B. H. H.
Cross, R. H. Howitt, Dr. A. B. Orr-Ewing, I. L.
Crowder, J. F. E. Hudson. Cant. A. U. M. (Hack., N.) Petherick, M.
Cruddas, Col. B. Hulbert, Squadron-Leader N. J. Procter, Major H. A.
Denman, Hon. R. D. Hunter, T. Radford, E. A.
Dodd, J. S. Hutchinson, G. C. Raikes, H. V. A. M.
Donner, P. W. Inskip, Rt. Hon. Sir T. W. H. Ramsbotham, Rt. Hon. H.
Dugdale, Captain T. L. Jarvis, Sir J. J. Rankin, Sir R.
Duncan, J. A. L. Jennings, R. Reed, A. C. (Exeter)
Dunglass, Lord Jones, Sir G. W. H. (S'k N'w'gtn) Reed, Sir H. s. (Aylesbury)
Eastwood, J. F. Keeling, E. H. Remer, J. R.
Eckersley, P. T. Kerr, Colonel C. I. (Montrose) Rickards, G. W. (Skipton)
Emery, J. F. Kerr, Sir John Graham (Sco'sh Univs.) Roberts, W. (Cumberland, N.)
Rosbotham, Sir T. Spens. W. P. Ward, Lieut.-Col. Sir A. L. (Hull)
Rowlands, G. Stanley, Rt. Hon. Oliver (W'm'l'd) Waterhouse, Captain C.
Royds, Admiral Sir P. M. R. Stewart, J. Henderson (Fite, E.) Watt, Lt.-Col. G. S. Harvie
Ruggles-Brise, Colonel Sir E. A. Strauss, H. G. (Norwich) Wells, Sir Sydney
Russell, S. H. M. (Darwen) Strickland, Captain W. F. White, H. Graham
Salmon, Sir I. Sueter, Rear-Admiral Sir M F. Williams, Sir H. G. (Croydon, S.)
Samuel, M. R. A. Sutcliffe, H. Windsor-Clive, Lieut.-Colonel G.
Selley, H. R. Tate, Mavis C. Wise, A. R.
Shaw, Captain W. T. (Forfar) Taylor, C. S. (Eastbourne) Womersley, Sir W. J.
Smith, Bracowell (Dulwich) Thomas, J. P. L. Wragg, H.
Smith, Sir R. W. (Aberdeen) Thomson, Sir J. D. W. Wright, Wing-Commander J. A. C.
Smithers, Sir W. Thorneycroft, G. E. P. York, C.
Snadden, W. McN. Thornton-Kemsley, C. N.
Somervell, Rt. Hon. Sir Donald Tryon, Major Rt. Hon. G. C. TELLERS FOR THE NOES.—
Somerville, Sir A. A. (Windsor) Tufnell, Lieut.-Commander R. L. Major Sir James Edmondson and Mr. Grimston.
Southby, Commander Sir A. R. J. Wallace, Capt. Rt. Hon. Euan

Question, "That the Schedule be read a Second time," put, and agreed to.