§ Order for Second Reading read.
§ 3.55 P.m.
The Parliamentary Secretary to the Board of Trade (Major Lloyd George)
I beg to move, "That the Bill be now read a Second time."
This is a Bill to postpone the operation of the Cotton Industry (Reorganisation) Act, which was passed on 4th August last. The object of that Act was to provide the framework of an organisation for the improvement of conditions in the cotton industry. The framework consists of, first, a central body called the Cotton Industry Board, representing partly independent members and partly members engaged in the various sections of the industry, either as employers or as operatives, secondly, of an advisory body called the Representative Advisory Council—this Council represents not only the interests directly concerned in the cotton industries, but industries which may overlap to some extent the boundaries of the cotton industry—and, thirdly, an independent advisory committee, consisting of three members, who are to advise the Board of Trade from the general point of view on the proposals put forward by the Cotton Industry Board.
The Cotton Industry (Reorganisation) Act further provides for the submission of schemes covering different sections of the industry, with a view to their being given statutory force. Such schemes may be of two kinds. In the first place, they may be schemes designed to reduce or to eliminate redundant machinery in the section concerned, or their object may be to establish minimum prices for goods manufactured or for services rendered by the section concerned. Section 41 of the Act lays it down that the Act shall come into operation at the expiration of three months from the passing thereof, or at such earlier date as the Board of Trade may by Order appoint. That would mean that the Act would automatically come into force on 4th November.
Shortly after the war was declared consultations took place between the Board 1782 of Trade and the Joint Committee of Cotton Trade Organisations, to consider whether it was appropriate in the present circumstances that the Act should come into operation. It was agreed that there was no doubt that some sort of organisation should be provided to deal with the problems directly arising out of the war, but it was felt that a simpler organisation than the one set up in the Act would meet the purpose. The main Act, however, contains a provision quite incidental to the main scheme, which it is desirable should be brought into force at the present time. This is contained in Section 24 of the Act and concerns the operation of the Spindles Board, which was set up by the Act of 1936, to enable the Spindles Board to acquire and dispose of redundant plant in the spinning section of the industry. The effect of the provision in Section 24 is to allow the Spindles Board to reduce the rate of levy that they collect from the spinning industry, or to collect only a portion of the money so as to enable them not to be left with a considerable balance of money which they do not need after they have paid the loans raised for the purpose of reducing redundant plant.
The purpose of the present Bill is to amend Section 41 of the Cotton Industry (Reorganisation) Act, so as to leave it to the Board of Trade to appoint, by Order, the date on which the Act should come into operation, and to appoint different dates for the bringing into operation of different sections of the Act. This will allow the provisions affecting the Spindles Board and other provisions that may be required from time to time to come into operation, while implementing the agreement arrived at with the industry, by deferring the putting into operation of the main scheme of the Act until after the war.
§ 4 P.m.
§ Mr. Rhys Davies
I always hesitate to say anything about the Lancashire cotton industry when the hon. Member for Farnworth (Mr. Tomlinson) and the hon. and gallant Member for East Willesden (Captain Hammersley) are present, for they know more about this subject than almost anyone else in this House. Nevertheless, I want to make a few observations on behalf of the official Opposition, and I begin by informing the President of the Board of Trade and the Parliamentary Secretary that we do not 1783 propose to offer any opposition to this very short Measure. It is clear that the Lancashire cotton industry as a whole desires that this Bill should be passed in order to postpone the operation of the main provisions of the Cotton Industry (Reorganisation) Act. Representing a Lancashire constituency in which there are some cotton mills, I do not think it would be fair to the people there if I did not offer one or two comments on this Bill. During and immediately after the Great War of 1914–18 many Lancashire textile mills suffered a very severe blow, and in dealing with this industry I hope the President of the Board of Trade, before we conclude our proceedings to-day, will tell us whether the Board of Trade can do anything to prevent a repetition of the financial scandals that occurred in those years. It will be remembered that textile mills were bought and recklessly bandied about from one financier to another. Many people became enormously rich, a number became bankrupt, and not a few committed suicide in the bargain. I hope, therefore, that the right hon. Gentleman the President of the Board of Trade will keep his eye on this industry in the County Palatine during the present hostilities.
Let me add that during the last war the export side of this trade received a very serious set-back. The President of the Board of Trade and the Parliamentary Secretary will understand that up to a few years ago this industry provided us with the largest single export of all the commodities we send to overseas markets. Now it takes a second place in the list of our exports, and that for the first time since the industrial revolution, I suppose. I ask, therefore, whether the right hon. Gentleman will tell us what is intended by the Board of Trade as a substitute when we set aside Section 41 of the Act. The Parliamentary Secretary promised that the Board of Trade will do something; it would be very interesting to the industry to know what that something is to be. I am under the impression, from what I gathered from speeches in Committee upstairs, that some sections of the industry would be delighted if the whole Act were postponed for good. I am glad to see the hon. Member for Dumfries (Sir H. Fildes) is present; he was never in favour of the Act. Incidentally, people 1784 sometimes go to Scotland in order to secure seats in Parliament.
There are some people in Lancashire who are not quite satisfied with the postponement proposed by this Measure, and I will state why. There are minorities, of course, and I will not say anything about that. They were looking forward, war or no war, to a price-fixing scheme above all things. Now, however, when we set aside by this Bill the main provisions of the Act, it is complained, and in fact I have had representations to that effect already, that buyers for large retail stores who purchase direct from producers on an enormous scale will have a very-profitable time, because there is nothing to prevent them doing so when the Act is postponed. I cannot say how they arrive at their conclusions, but those are the representations made to me. They were, of course, the very same representations that were made when the Bill was in a Standing Committee upstairs for the reorganisation of the industry; the desire being then to prevent that sort of thing happening again, and to ensure, if possible, a return to the producers in the mills of some of the wealth that is made over the counter by some of the large retail establishments.
I would venture to ask a question which I think is fair. I suppose that during the present hostilities the textile industry of Lancashire will have more employment, more work in producing commodities until the fighting services are at least properly supplied. That is all to the good; but then there will be the inevitable slump. Has the right hon. Gentleman any plan of any kind in relation to this very important industry? I suppose that the Government have a plan for coal, oil, timber, agriculture and for practically all the other industries of the country—how much they are to produce, how much can be spared for home consumption and for export. I hope the right hon. Gentleman will tell us to-day whether the Government have any plan at all for the future of the cotton industry, especially during war-time and immediately after.
The Lancashire textile industry employs a very large number of females. Consequently, the Government in planning for exports and for home consumption will find it easier to plan and maintain this than almost any other industry. They can, if they like to extend the export 1785 market, employ this industry to the full without adversely affecting the country's man power in the least. I trust that the President of the Board of Trade will be good enough, therefore, to tell us what is in the mind of the Government on this very important issue.
As I have said, we do not intend to oppose the Second Reading of this Bill. I see some hon. Members on the Liberal benches below the Gangway looking rather gloomy. I suppose we shall hear speeches from them to-day. I wish there were some one present from the Home Office to hear one point that I wish to emphasise. I see from the Lancashire Press that there is a tendency already to degrade the standard of employment, to set aside some of the labour regulations arrived at between employers and employed, because there is a war in progress. I hope that the right hon. Gentleman will convey a request that the Home Office will see to it that, as a large proportion of the operatives are women and the exploitation of women and young persons is much easier than in the case of men, whatever happens to the increase of production for the Forces, above all things nothing shall be done to lower the conditions of the Lancashire cotton operatives. I hope, too, that the right hon. Gentleman will take care that all the preliminary work inside the scheme to prepare for the day when hostilities cease will be undertaken, and that he will set going such machinery so that when peace returns Lancashire will be ready to take its place once again in the industrial operations of the country.
§ 4.10 p.m.
Mr. Graham White
I share the hope expressed by the hon. Member for West-houghton (Mr. Rhys Davies) that, whether in peace or war, the President of the Board of Trade will, under this Bill or under whatever machinery he puts in it's place, see that none of the financial scandals which wrought such damage to the industry after the last War shall possibly occur again. If my recollection is right it was not during the war but in the years 1921 and 1922 that this occurred.
It was from 1919 to 1921 that these manipulations, which were so injurious to the industry and in particular 1786 to the workers, became rampant. We on these benches, having regard to the wish expressed by the trade, do not wish to oppose the Bill at any stage. But I am not unmindful of the fact that there are aspects of the Bill that we regard with some misgiving and apprehension. It is a misfortune that the Act should not be put into operation now. We regret that the great time spent on the Act by the House of Commons in Committee upstairs should be thrown away for the time being. I wish that the Parliamentary Secretary had given a little more explanation of the reasons why it was necessary to abandon the Act at this stage. I suppose we have to be content with the view that in the interest of the industry it is better that this amending Bill should pass. It is one of the lamentable facts of the time that we have to abandon so much of our constructive work, not only in the industrial but also in the social scale. We have had to abandon the provision for the raising of the school-leaving age. We understand also that the fate of the Criminal Justice Bill is in the balance. Now this Cotton Industry (Reorganisation) Act, to which the House devoted so much time, is to be postponed. I do not think that in recent times any Bill came to this House after a longer period of gestation. The President of the Board of Trade was no doubt right in delaying the Bill until he could ascertain that there was the greatest possible amount of agreement within the sections of the industry itself. None the less there are not wanting those who thought that the right hon. Gentleman erred too much on the side of discretion in having the Bill discussed outside. I hope that the experience of the Orders which the right hon. Gentleman is to make under the Bill will give some guidance so that if necessary the Bill may be modified.
I ask—and this really is the point that is raised by every one connected with the industry—whether some indication can be given as to what is to take the place of the Act. It is obvious that whoever is responsible for the conduct of the industry will be wielding an immense responsibility. It will be an immense financial responsibility. I can see very great danger in it. I know nothing about these arrangements, but I think it might be better if whoever is at the head of whatever may be established should be someone outside the industry. It seems to me that in an industry which has its roots 1787 so deeply embedded in private enterprise and in individuality, in the conditions in which it grew up and in which it struggled when times had changed, there is still a great deal in the various sections of the trade which does not lend itself readily to processes of co-ordination and working together as one unit. If there is any suspicion of partiality or favouritism to one section of the trade as against another, it may well bring disaster to the industry as a whole. I hope, whatever organisation may have control of the industry, there will be some representative and consultative machinery kept throughout the whole range of the industry. I hope the Joint Committee, which by common consent did very good work during the consideration outside and inside the House, may be continued in being and may co-operate in whatever is sought to be done during the time before the Act comes into operation. We do not propose to oppose the postponement. We had misgivings and heartburnings with regard to some of its provisions, but we should have been glad to hear why it is. proposed to postpone it now.
§ 4.19 p.m.
§ Captain Hammersley
The hon. Gentleman has made some complaint—mild complaint—that the Parliamentary Secretary did not give any reason for the postponement of the Act. It seems to me that the reasons are obvious. The Act itself is an elaborate Measure intended to assist the industry to deal with the burden of excessive productive capacity. As the Parliamentary Secretary explained, it worked in the main in two different directions, the setting up of price schemes on the one hand and of redundancy schemes on the other. In order that these redundancy and price schemes should work effectively, it was necessary that pretty elaborate committees should be set up in the various sections of the industry and, moreover, these committees, in order that the interests of the consumers should be properly safeguarded, had to work in co-ordination with other committees working outside. Therefore, it means that, if the Act remains on the Statute Book, very many people will be required for duties which will be of a purely unproductive and deliberative character at a time when they might be occupied at present in productive work.
1788 But this, in my way of looking at it, is not the only or the most vital reason for postponement. The war has completely altered the industry. When we were passing the Bill, the industry was suffering from excessive productive capacity. Now its whole productive capacity is required in order to supply the war needs of the fighting Forces, or, alternatively, to maintain the very vital export trade of the country. Of course, this does not mean that the problems of the cotton trade are completely solved. I remember that in Committee I and several of my hon. Friends were at some pains to try to see that the minimum price which it was proposed to introduce under the price-fixing scheme should not be too high. It seems to me that at present there is a public necessity to see that the maximum prices are not fixed too high—a quite different state of affairs. Some kind of regulation, in my view, is just as necessary to-day as it was then.
I should like to ask the President of the Board of Trade what plans are proposed? We know that the Cotton Board has been set up. We know that the chairman of that Cotton Board is a highly respected ex-civil servant, who has a great experience of the cotton industry and whom the industry as a whole greatly respects and trusts, but my information is that that Cotton Board has no statutory powers of any character, and that it will be a matter of very great difficulty to get prices fixed by agreement. Therefore, I think it is desirable that the President of the Board of Trade should let the House know what it is in the mind of the Department, when they postpone this Measure, which I think everyone agrees is unnecessary, to substitute in its place and by what means do they expect that the Cotton Board should have its deliberations made effective. It has been said by persons who look at the problem from an economic point of view that it does not matter very much if the cotton industry make large profits, because their standard years, from the Income Tax point of view, are so low that any excessive or extra profit they make will all be taken away in taxation, but it seems to me that it matters a great deal. It is very much better for the industry to sell at low prices and make reasonable profits than to sell at high prices and have the profits that they make absorbed by taxation, because in the one case the industry will 1789 remain healthy and in the other it will be left a most unhealthy industry. Therefore, like others, I would ask my right hon. Friend to give us some information as to how he hopes that in these times, when the circumstances of the industry are completely altered, prices will be regulated and how he expects the industry to be maintained in a healthy condition during war.
§ 4.24 p.m.
§ The President of the Board of Trade (Mr. Oliver Stanley)
I hope the House will forgive me if I take the unusual course of intervening now, not with the object of bringing the Debate to an end but of giving certain information which, in view of the way the Debate is developing, would make the rest of it of much greater value, certainly to me and, I think, to the House as a whole. The Debate is rather developing away from the actual Bill that we are discussing, because hon. Members, while they agree with the postponement of the Act, want to know what we are going to put in its place. In view of the sort of speeches which have been made, I think it would be for the convenience of the House if I gave some idea of the sort of thing that I have in mind, and certainly it would be a matter of convenience for me, for, when they have heard it, they can give me their impressions about what is to be done. My hon. and gallant Friend the Member for Willesden, East (Captain Hammersley), who speaks with such great authority on this subject, has made a short but, to my mind, extremely interesting speech. As regards the question of why the Act has to be postponed, and Heaven knows I, who had to sit more regularly through all those meetings than anyone else—[An HON. MEMBER: "No!"] I know that my hon. Friend used to go out at frequent intervals—regret its postponement, my hon. and gallant Friend put his finger on the reason. It is not only that the machinery that we laid down is too elaborate but it is the doubt in the mind of all of us whether the situation of the industry which that Bill was designed to meet is the situation of the industry in wartime, and whether in fact some of the remedies that we proposed are now superfluous, while there are other remedies which we never discussed which are now necessary.
There has been set up a Cotton Board, presided over by someone independent of 1790 the industry. It is true that up till now the board has been purely consultative in character. It has had no executive powers, although by methods of persuasion and discussion it has managed to do a great deal in the industry. Recently that Cotton Board put up to me a memorandum asking that certain powers for the control of the industry should be given to them. So far as I know, the public, and I believe the industry, are not yet fully aware of the powers that have been asked for, and they are certainly not fully aware of the view that the Government take of them. I think it would be very useful if I were to give the House some indication of the powers for which the board have asked and of the view which I and the Government hold as to those powers. They fall into two parts. Part of them are only the sort of powers which are already enjoyed, or used, by controllers who have been appointed by the Ministry of Supply in other industries. First of all, they ask for the power to fix maximum prices. I entirely agree with my hon. and gallant Friend that, as far as I can see, at any rate, the immediate problem of the cotton industry, it is the fixing of maximum rather than of minimum prices which is the more urgent necessity. They then ask for power to institute, as any other controller can do, some form of internal system of priority within the industry in order to secure that the supplies of raw cotton go to the more valuable and useful end rather than to less valuable and less useful. Thirdly, they ask for power to collect returns of stock and other information of that kind, which is clearly necessary if they are to carry on their work.
The reply that has been given to the board is that, as far as these powers which are enjoyed by any controller are concerned, the Government are perfectly willing to give them to the cotton industry. I am not saying exactly the instrument which is to wield those powers. It is, I think, essential that, once you clothe the body or the individual not with consultative functions but with executive authority, he should be completely divorced from any personal and pecuniary interest in the trade itself. For that reason, the existing instrument may need some reconstruction.
§ Sir Percy Harris
The right hon. Gentleman, in talking about control, has 1791 been referring to something which he has not defined. Who is to be the controller? Is the Board to be in control, or is the right hon. Gentleman going to appoint some individual to the position of controller?
§ Mr. Stanley
That is exactly the point with which I was dealing. I was saying that the Board asked for these powers of control. I said that I was prepared to give the powers, but I pointed out the reasons it was impossible for the Board to act as controller, and I said, therefore, that we were considering to what instrument these powers might be given. It is important that the House should know this, because I have seen articles in the Lancashire Press which are both ingenuous and misleading, for the impression has been given that this sort of powers, which we are perfectly willing to grant, are the only things for which the Board have asked, and it has been said that it is incomprehensible why these powers should be refused to the cotton industry when they have been granted to controllers in every other industry. But that is not the sum of the powers for which the Cotton Board were asking. They went on to ask for the power not only to fix maximum prices, but also to fix minimum prices. It is true that the power to fix minimum prices was included in the Act of Parliament which we are now postponing, but anybody who took part in the Debates—even those who, like myself, believed most sincerely that it was necessary that there should be the power to fix minimum prices—was conscious of the very great dangers which were inherent in this power, unless proper safeguards were provided, and that the fixing of minimum prices too high in one section might have disastrous effects on other sections and upon the ultimate product, unless there were provided safeguards by which the other sections could express their views and have their grievances met.
It is now proposed that this power to fix minimum prices which was inherent in the Act should be given without any of the safeguards. Although I am not saying that circumstances may not arise, or may not even now be present, where the power-to fix minimum prices may be necessary, at any rate I do not think I can be blamed for saying that I require 1792 rather more time to see what safeguards can be given, and what is the necessity for these powers, before I grant them in the same way as the Government are prepared to grant the powers which are ordinarily applicable to control. Quite apart from the question of safeguards, which I have to consider and which the industry ought to consider—and I am not sure yet that the industry really know that these powers have been suggested or have had any real opportunity of considering them—we have to consider the point that was made by my hon. and gallant Friend the Member for East Willesden as to whether the situation which last summer made the power to fix minimum prices so urgent and necessary has not so completely changed now as to make that power possibly redundant and dangerous. I do not close my mind to the possibility of such a power being given, or the necessity of its being granted, but I say that it cannot be done without very much wider consideration both by the Government and the industry itself of the conditions under which it is to be given and the circumstances which it is designed to meet.
The other power for which the board asked was the power to make a levy on raw cotton in order to subsidise the export trade. There, again, I do not say that either in the cotton industry or in other industries some arrangement of that kind may not in certain cases be necessary in order to give aid to vital export trade and to give much needed foreign exchange; but it is a power of a very novel and very drastic character and it is a power which has, I think, to be sparingly used and which ought not to be used until there has been a very close and careful survey of the markets in which it could be used and in which it ought to be used. It is not a power which one ought to give indiscriminately, because if one did so, there might be either a useless waste of the power in markets where cotton exports could penetrate without any help, or there might be an attempt to use it in markets where the laws and circumstances of the importing country were such as immediately to defeat our object.
I am very glad to have had this opportunity of explaining to the House what the position is. We are prepared to give to the proper instrument—for the moment, 1793 I leave the question of what the exact form of that instrument should be—the same powers as are given to any other controller, which includes the power to fix maximum prices, and we do not turn down finally and irrevocably the further suggestion that they should have power to fix minimum prices and power to make a levy on raw material in order to subsidise exports; but we do feel that those powers are so novel and drastic that they require perhaps greater justification than has yet been put up for them, and certainly they require wider knowledge and a wider opportunity of criticism and suggestion in the industry itself, and a further opportunity of consideration by the Government as to how such a power, given to a particular industry, would fit into the general picture of what can be done to assist the export trade.
Throughout his remarks, the President of the Board of Trade has assumed that there is to be a controller in the cotton trade, although he has not defined the instrument, and I do not ask him to do so now; but one must assume that whoever does have the power to control will be anxious, naturally, to keep in touch as far as possible with all sections of the industry. Having regard to the power to make a levy to help the export trade, it seems to me to be of paramount importance that there should be active contact with and free access to the controller by all sections of the trade. Therefore, I ask the right hon. Gentleman whether he will devote his mind to the question how such contact and consultation could be ensured.
§ Mr. Stanley
It is because of the difficulty of defining the executive power which must be in the hands of one person, or anyhow of a small number of people:, and the necessity for the very closest consultation, which should be rather more than simply asking for somebody's advice, with other sections of the trade, that I prefer at the moment not to specify the actual instrument. I have very fully in mind the very proper consideration which the hon. Gentleman has mentioned.
§ 4.38 p.m.
§ Mr. Burke
The remarks which the President of the Board of Trade has made make it unnecessary for me to say much of what I had intended to say, but in spite 1794 of his explanations, there are one or two things on which I would like to press him further. I should like particularly to stress the urgency of coming to some conclusion with regard to control. The right hon. Gentleman knows that when the Bill was passing through its various stages, hon. Members on this side, although they did not like many of the Clauses of the Bill, felt that the need for it was so urgent that they did their best to get it through. Apparently, it is now to be put into cold storage, and the industry do not complain about that, for the ramifications and intricacies of the Act were such that it could hardly be applied at a time of emergency. Nevertheless, the need exists just as it did when the Bill was passing through the House. There is need for the same kind of thing as the Act sought to bring about, that is to say, for some kind of control to prevent the industry being the heterogeneous collection of units which it has been for so long.
Hon. Members will realise that it was during the last war, and immediately after it, that we lost our foreign markets to a very large extent, and they may go again if the same sort of thing happens now as happened at that time, and if, as a result of war conditions, because it is so easy to make a fair profit or a profit much better than that which the industry has made for some time, the manufacturers neglect the export trade. Lancashire cannot afford to do that and, as the Minister has said and as the Prime Minister said the other day, the export trade is vital to us, vital not merely to Lancashire and to the operatives, but vital in providing the-foreign exchange with which to carry on the war. It is essential that the Minister should give very speedy attention to this matter. I do not suggest that there are not difficulties in defining the instrument, but already, as the Minister knows, prices have risen. Yarn prices have gone up and the Government are paying a good deal more for the stuff which they have to buy than might have been necessary if only they had put this control into operation at an earlier period. Before the war, there was a good deal of buying in anticipation of the materials that would be needed, and there was every evidence that some measure of control was needed straight away.
§ Captain Hammersley
May I point out to the hon. Member that the Act was 1795 going to fix minimum prices? He is now talking about the prices being too high. Surely, his point is that the maximum prices ought to be fixed, which it was not proposed to do by the Act.
§ Mr. Burke
I was not suggesting that the Act was going to fix maximum prices. What I am saying is that obviously, when the war began, it was clear that the Act could not be put into operation, as I think the industry realised, but it was clear that the war situation had made it possible for prices to rise very quickly and that a measure of control, in lieu of the Act, was certainly essential. The industry is now asking what is to be put in place of the Act, because something is necessary. There is a question of materials. The right hon. Gentleman knows that I have had to refer to him a case in which a firm, vitally concerned in the export industry, was not able to get the materials for its work because of those materials being diverted to other channels. The question of control of materials is very important. The question of keeping up the export trade is highly important. In 1937, the production of piecegoods was about 14,000,000 yards a day. The amount of cloth which the Government can take will be infinitesimal compared with that figure. The industry will still have to rely upon the export trade. The Minister knows that it is very much easier to lose a market than it is to get it back again. We have seen recent reports about Italy competing successfully with us in various markets of the world and capturing new trade. It is essential that powers to control materials and prices should be given to the Board at the earliest possible moment.
If the question is one between the Board of Trade and the Ministry of Supply I urge on the right hon. Gentleman to consider the fact that Lancashire has already been hit so hard that it cannot afford to sustain another blow. Lancashire cannot afford to lose the trade which she has at the present time, and, from the national point of view, export trade is vital. With the lack of control at the present time, every mill-owner is competing for whatever orders he can get, and everybody is trying to get hold of the materials which are available, not only the raw cotton, but all kinds of material, including materials for which certain Government Departments are 1796 themselves in competition. All these difficulties will have to be dealt with, and it is necessary that some body for this purpose should function at the earliest possible moment. I want the right hon. Gentleman to regard the element of time as being of paramount importance in this connection.
§ 4.46 p.m.
§ Sir H. Williams
I regard this as the best Bill which His Majesty's Government have introduced since the outbreak of war. I have no connection with the cotton industry beyond the fact that my constituents and I are consumers of its products, but, on principle, I opposed all three of the Fascist Measures which were introduced in connection with that industry. Being Fascist Measures, these naturally had the full support of the party opposite, because Fascism and Communism are the same thing. I rejoice that the particular Measure which is dealt with in this Bill is to be suspended, and I hope it will be suspended so long that it will never come into operation. I am satisfied, and always have been satisfied, that the attempt to make any industry a close industry is a complete denial of the liberty of the subject. I am not surprised that hon. Members opposite who sit for Lancashire divisions should, under pressure from their constituents, and, therefore, not taking the dispassionate view which they ought to take, have supported proposals which they would oppose if applied to any other industry than the cotton industry. I spent many weary hours in Committee when the Cotton Industry (Reorganisation) Bill was under consideration. The right hon. Gentleman said he had spent more hours than I had in Committee, and I challenged. that statement. He said that I sometimes went out of the Committee room. It is true that when Members of the party opposite were speaking, I sometimes went into the corridor to have a smoke, which seemed a better occupation than listening to them.
§ Sir H. Williams
I do not know what the hon. Member means and I imagine he does not know either. I am opposed in principle to every Bill the object of which is to deny the right of any citizen in this country to enter any occupation he 1797 desires. If the hon. Member opposite holds the view that it is right for the State to deny the citizen the opportunity of taking his chance, by entering into any occupation which he desires to enter, perhaps he will proclaim that view. If he does, then he will not be proclaiming that view of free opportunity for which I have always stood ever since I have taken any part in public life. Therefore, I hope the hon. Member will not again indulge in interruptions of that offensive character. I have always taken the view that this country has been built up on the principle of free opportunity—the right of the hon. and learned Member for East Bristol (Sir S. Cripps), for example, to take a brief. If the principle of the Cotton Industry Act were applied to the Bar, no one could be a barrister without the sanction of a Government Department. That might be a good thing for other learned gentlemen who might then get the briefs which now go to the hon. and learned Member for East Bristol.
I have opposed every Bill introduced during my membership of this House which interfered with the principle of free contract and I shall continue to oppose all such Measures. I stand for the principle that every child born in this country should have the opportunity of taking his chance in any trade or industry which he desires to enter. Because the Act which we are now suspending challenged that principle, I opposed it just as I moved the rejection of the earlier Cotton Industry Act just as I opposed at every stage the Cotton Spinning Act and just as I opposed the Coal Industry Act, because they denied the people of this country the right to which I refer. For the same reason, I rejoice at this Bill because it suspends the operation of a Measure, which, if brought into full operation, would deprive people of the chance of entering into an occupation which they might desire to enter.
§ 4.51 p.m.
§ Mr. Tomlinson
The hon. Member who has just spoken would be less satisfied if he had been called upon to earn his living in the Lancashire cotton industry during the last 20 years. I am particularly interested in freedom, but after my experience of the last few years I would say that freedom to starve is not the freedom for which I stand and for which this 1798 party stands. I was glad to hear the speech of the right hon. Gentleman the President of the Board of Trade because it indicated that his Department recognises the necessity for action, and in postponing the Measure, I hope the right hon. Gentleman will see to it that the promised action is expedited. In that connection, I join in the plea of my hon. Friend the Member for Burnley (Mr. Burke). It is true that minimum prices were asked for when the Act was under consideration. That was because of the cut-throat competition which was going on. The freedom of which the hon. Member for South Croydon (Sir H. Williams) has spoken, enable individuals in the industry to become members of a suicide club, and it was in order to prevent men and women entering an industry in which there was no hope of survival, that the demand was made for power to limit or get rid of redundant machinery and fix minimum prices.
As the hon. and gallant Member for East Willesden (Captain Hammersley) has pointed out, the urgent need of the moment is not the fixing of minimum but the fixing of maximum prices. I believe the board which was set up six weeks ago and the functions of which have not yet been defined has been acting in a consultative capacity. I believe that it had begun to function in that it provided some form of registration and was seeking by agreement to do certain things which are essential to the industry. I think this very board did attempt, about a month ago, to lay down some maximum price. It was thought that if they could introduce price control, some of the excessive increases which have taken place might have been checked. The price of American futures is now about 30 per cent. over the figure for the middle of August, and the average price of yarn has risen over 40 per cent. It is true that the weaving margins have not risen to the same extent, but there are certain types of cloth now in demand, chiefly for blacking-out purposes, which have risen 50 per cent. Already complaints are coming in from the principal export markets that Lancashire is taking undue advantage of the present position. I have here a letter which appeared in the "Manchester Guardian" on 27th October which indicates the way the wind is blowing. It is from a large exporting house and it begins: 1799The Chancellor of the Exchequer has stated that the export trade must be kept going at all costs and we have heard further statements from other persons in authority to the same effect.The writer of the letter goes on to point out that his firm deal largely in cotton piece goods and he gives an extract from a letter written by the firm's Rangoon representative as follows:We thank you for the prices quoted in your telegram. Those prices show an approximate advance of 40 per cent. on our July purchase. Business at these rates is absolutely impossible and we will be forced to turn to Indian mills for our supply, as although their prices have advanced they are not anything like as high as yours.Having given that quotation, the letter concludes:Therefore, if we are to retain our export trade something must be done. Prices have increased all round and it is questionable if all those increases are justified. We trust the Government will not overlook the seriousness of this position and will remember that when the war is over, every scrap of export trade will be doubly welcome.It seems to me that it is the long view which is needed at the moment and the Lancashire manufacturers, having had an unenviable experience over a number of years, are naturally tempted, as we are all tempted, to take the short view and take the profits while the going is good. But the majority of manufacturers and spinners to whom I have spoken in the last few months, have shown a willingness to agree to some form of price control, knowing that in the long run they will benefit by it. I believe that this board, if given the power, would have fixed prices which while appreciably lower than those now prevailing, would yet have given a reasonable margin to cover increased costs. As the representative of a trade union I have no desire, nor have any of my hon. Friends, to see wages soar as they did during the last war, because then they were always a long way behind prices. We were always six months behind and never caught up with the rise in prices.
I was interested in an answer given to-day which suggested that when replacements of goods were being considered, it was always the habit or rather the custom of the individual to "average out" in order that they might regulate the process. It does not work out that way when you are dealing with wage movements. Wages went up slowly and, as 1800 I say, always six months behind the rise in prices, but they came down with a flop all on one day, when the time came for reconsideration. If the attempt which is now being made by the trade unions to regulate increases by the cost-of-living index figure is to be successful, and if stability is to be obtained, some Government action is needed, and the earlier we get that action the better. Otherwise, excessive prices will prevail and it will be impossible to retain our export markets.
We all know what happened immediately after the last war. I want to be spared a repetition of the experience which I had then of explaining to people who had put their money into cotton mills the hopelessness of the situation. It was not the people who could afford to lose the money to whom I had to give those explanations. I had the unenviable task of explaining to people who could not afford to lose money, what had happened to their savings. The right hon. Gentleman told us that the Cotton Board had asked for permission to levy concerns dealing in cotton. That was one of the provisions which I was glad to see inserted in the Act—the levy that was called for from the individual owners with regard to their mills. I know that that levy is not needed now in order that redundant plant might be bought out. As a matter of fact, I have seen looms started up this last week which I used as an illustration of the particular machinery that would be bought out first when we were discussing the Bill upstairs, so that that which was redundant in July is useful at present. The competition that is taking place in my district just now is between the manufacturers and is as to who can obtain the best weavers in the village. Weavers just now are becoming at a premium, and I hope it will long remain so. A trade union secretary is always happiest when there is more work than there is labour for it. It is then that the individual who is in the happy position of owning a mill comes to the trade union secretary in a nice, quiet way pleading for his assistance, and, on the other hand, there are occasions when the trade union secretary goes to the manager in fear and trembling.
Therefore, I am hoping that when this new body is set up, if a new body is needed, or when this Control Board is 1801 given power, at least some power will be given to it to raise a levy in order that some of the things which were contemplated in the Act of Parliament may still be carried out. I am convinced that if the war goes on, the necessity for experiments and for publicity may arise, and the necessity for exploration will come, and the board itself can be financed out of the levy that is provided. I therefore hope that, if the powers that have been asked for cannot be granted through Orders-in-Council, a short Measure will be introduced at a very early stage and that some of the powers that are needed to be conferred upon this board will be contained in that Measure; others could be granted to it as the necessity arose. I repeat that unless something of this kind is done, we cannot possibly escape the tragedy which overtook us in the last war. The hon. Member for Burnley (Mr. Burke) suggested that we might lose as much on this occasion as we lost before:, but there is one consolation. We could not lose as much as we lost before, because we no longer have it. It would, however, be adding tragedy to tragedy if we lost what export trade we have as a result of a short-sighted policy at this time. In giving a blessing to, or at least not opposing, the postponement of the principal Act, I am glad that the Government intend to do something, and I hope they will do it effectively and quickly.
§ 54 P.m.
§ Major Dodd
The hon. Members for Farnworth (Mr. Tomlinson) and Burnley (Mr. Burke) both pressed for speed in the introduction of this system of control, and while I fully support that, I hope it will not be done so quickly that mistakes will be made such as have been made with other controlling authorities. The cotton industry is a very complicated industry, and nobody knows that better than my right hon. Friend the President of the Board of Trade, who spent weeks and weeks upstairs in Committee on the Measure which we are now postponing. The statement which he has just made will be particularly welcome to Lancashire, because it is the first time that the industry as a whole has known exactly what has been requested by the Control Board from the Board of Trade, and the answers given. I think that on the whole the requests that have been made have 1802 been reasonable, that is, so far as the fixing of maximum prices is concerned—the instituting of priority for Government orders and the power to obtain returns on stocks, to all of which the right hon. Gentleman replied, "Yes." I think he has been wise in waiting before making any definite decision on the other points raised. It seems to me to be ludicrous to ask for powers to fix a maximum price, while at the same time asking to be able to fix a minimum price. When we were discussing the Bill upstairs we were discussing a minimum price, at a time when there was under-production, but now we are discussing maximum prices in a period of over-production, and I want to suggest to the right hon. Gentleman that he should approach the maximum price position with the same care that he used on the minimum price position. Safeguards are quite as important when fixing maximum prices as when fixing minimum prices, for the maximum price will be the price at which sales will be made. There will be little sold below maximum prices, whilst demand lasts as there would have been little sold above minimum prices in a depressed market.
I hope most sincerely that organisations within the industry will be able to have close and continuous contact with the control body, however it is appointed, and organised industry and labour should have the opportunity of expressing their views to the controlling authority before any schemes are actually put into operation. My right hon. Friend did not mention one thing which the last Bill contained, and that is the matter of redundancy, which automatically, I presume, goes by the board so long as conditions are as they are now. We are unable to say what may be happening in the future—next year possibly or later—and I wonder whether my right hon. Friend could make any comment upon that. The export trade is of vast importance, and we must watch it, and I suggest that while the industry may not at this stage be able to levy raw cotton, if that has not been accepted as a proposal, he should consider the various markets where we ought to have more advantage than we have. May I suggest Burma as a case in point? In Burma large duties are paid on British goods whilst Indian goods are admitted free.
1803 There is one other point to bear in mind. When my right hon. Friend fixes maximum prices, the cotton industry may be one of the most hart-hit industries in this country as regards the Excess Profits Tax as it now stands under the Finance (No. 2) Act, with the present basic years. I hope he will bear that in mind, because many firms not being sure of their situation will want to know how they will be placed financially in the coming year, and that has undoubtedly affected a rise in price in certain sections of the trade and caused a great deal of uneasiness. I think the House will welcome my right hon. Friend's statement, and I think it will be generally welcomed as far as Lancashire is concerned.
§ 5.8 p.m.
§ Mr. Silverman
I support the plea of my hon. Friend the Member for Farnworth (Mr. Tomlinson) for taking a long and not a short view in this matter. It is true that the original question which was put to the right hon. Gentleman has been answered, namely, What is to take the place of this Act when its postponement has been agreed to? I think we are all, more or less, with certain modifications, satisfied that so far as the immediate position is concerned the proposals made by the Minister are probably adequate, but, especially in view of the speech that was made by the hon. Member for South Croydon (Sir H. Williams), I would like to have from the Minister an assurance that the principle behind the Measure has not been abandoned by the Government and still commands their support. I take it that this Bill is not being opposed because it is not a Bill for the repeal of the Act, but a Bill for its postponement until times return in which the conditions are suitable for the kind of Measure that we did agree to before war broke out. I should be very sorry indeed if the hon. Member for South Croydon were right in thinking that the Act itself is dead and that what we are here concerned with is not a postponement but a repeal. It was generally agreed, although there were some exceptions, that what was required in this industry was, above all, some measure of unity and co-operation.
I was not one of the those who were very enamoured of the particular scheme to which the Act gave legislative sanction, but we all supported it, in so far 1804 as we did on this side of the House, because it did go to an industry which had been hurt most by the fiercest and most selfish individualist competition, and, with its consent—reluctant, fighting every inch of the way, but ultimately with its consent—get a scheme which would enable it in the future, for the advantage of manufacturers and operatives alike, to work in with a more co-operative effort than had been the case in the past. The hon. Member for South Croydon spoke about the right which every free citizen of this country has to choose his occupation, but there is no such right economically. I represent a constituency which lives, when it did live—it hardly lives yet again—by the cotton industry alone. Children in the town of Nelson had no freedom of choice. There was the cotton industry in the town, and there was no other industry there. They were compelled to go into that industry or to remain unemployed, and going into that industry meant going into the most highly skilled and the worst paid industry in the country, without exception. The Act which it is now proposed to postpone did do something—in my view, not enough—to introduce some kind of co-operative effort in the cotton industry out of which the workers in the industry might have hoped for less chaotic conditions.
I would like the right hon. Gentleman, if he would, to make it clear that the postponement for which he asks in this Bill is a postponement arising out of particular, exceptional, and abnormal conditions and is not intended to be a repeal, and that as soon as more normal conditions return, it is still the view of the Government that a measure of unification, this or some other Measure, in the industry should be proceeded with. The hon. and gallant Member for East Willesden (Captain Hammersley) said they did not want it now because the industry was fully occupied, among other things, in supplying the needs of the fighting forces. The time will come, we all hope, when peace will return and the fighting forces will no longer be fighting forces, but they will still have the same need for cotton goods when they return to their normal avocations as they have while they are engaged in the fighting forces, and I hope nothing will be done to prevent the industry from adjusting itself to the conditions which will then exist and which will enable it to go for- 1805 ward in a cooperative effort, removing the chaotic conditions that existed before and going forward, as every industry will have to go forward, in view of what is necessary for it, and not return to the old cut-throat competition which has cost the industry and its workers so much in the past.
§ Question, "That the Bill be read a Second time," put, and agreed to.
§ Bill read a Second time.
§ Resolved, "That this House will immediately resolve itself into the Committee on the Bill."—[Mr. James Stuart.]
§ Bill accordingly considered in Committee, and reported, without Amendment.
§ Motion made, and Question proposed, "That the Bill be now read the Third time."
§ Mr. Silverman
Would the right hon. Gentleman take this opportunity of giving the assurance for which I have asked?
§ Mr. Stanley
Certainly. I did not wish to be discourteous to the hon. Gentleman by not replying to his speech, but I thought that the Parliamentary Secretary and I made it plain that that was our intention. I certainly give the assurance again.
§ Question put, and agreed to.
§ Bill read the Third time, and passed, without Amendment.