HC Deb 06 August 1940 vol 364 cc7-8
10. Mr. Cocks

asked the President of the Board of Trade whether he has considered the fact that, under the Limitation of Supplies Order, the wholesaler can cancel all or part of his obligations, whereas the manufacturer is not allowed to cancel any of his commitments; and whether, seeing that this anomaly is unnecessarily penalising the manufacturer and causing unemployment, he will take steps to see that the wholesaler is required to honour his contracts to the extent of two-thirds, corresponding to the limit on sales?

Sir A. Duncan

Yes, Sir; this matter was carefully considered before the Order was made. Wholesalers' commitments and stocks prior to the making of the Order were such that, if the hon. Member's suggestion were adopted, raw materials, labour and machinery would be expended unnecessarily on the production of goods for the home market in excess of the permitted quantities. I should add that the Government expect both manufacturers and wholesalers to do their utmost to divert supplies to export purposes.

Mr. Cocks

Is the Minister aware that as a result of this policy, the manufacturer is forced to accumulate stocks in excess of his requirements, and that that is likely to lead to increasing unemployment?

Sir A. Duncan

No, Sir. I am not aware of increasing stocks being held by manufacturers.

Major Sir George Davies

Is my right hon. Friend aware that in the gloving industry there is great difficulty in regard to manufacturers, who are finding themselves loaded with a large amount of stock, on which they get no turnover because of the limitation placed on them with regard to the distribution and manufacture of these gloves?

Sir A. Duncan

It is necessary to keep in mind that one of the objects of this Order is to not place upon the market, for sale at home, goods in excess of what is a reasonable allocation for essential needs, and the keeping back of any stocks for future purposes will, I think, make it unnecessary to employ fresh material and labour in manufacturing additional quantities.

Sir G. Davies

Does not that interfere with the export trade?

Sir A. Duncan

On the contrary. In so far as there is an opening in the export market for these goods now, they can be diverted to the export market.

Mr. Levy

Since the restriction is on the ad valorem basis, and in view of the fact that the tax is to be on goods over which they have no control, how will that affect the restriction and limitation of manufacture, plus price, plus Purchase Tax?

Sir A. Duncan

I shall have to have notice of that Question.