§ Order for Second Reading read.
§ 2.48 p.m.
§ The President of the Board of Trade (Sir Andrew Duncan)
I beg to move, "That the Bill be now read a Second time."
Inasmuch as from this place I am addressing the House for the first time, I crave the full measure of the indulgence which the House so generously gives to new starters. I find very great satisfaction in the fact that my first task is to move the Second Reading of a Bill that relates to a great export industry, for I know how deep are the interest and the concern of hon. Members in all parts of the House in the growth of our export trade The cotton industry is indeed our largest exporting industry, for in 1939the value of its exports, amounting to over £49,000,000, was higher than the value of the exports of any other single industry in the country. It constituted 10 per cent. of the value of the total exports of produce and manufactures of the United 2478 Kingdom. In the very vital task of providing foreign exchange for the purchase of munitions, foodstuffs and other essential materials, we look with confidence and great hope to the very important contribution which the cotton industry is making and will make.
But this pre-eminence in export value is not the only reason this Bill is brought before the House to-day. The last War dealt our export trade in cotton a very hard and cruel blow. While it would be too much to say that the present state of the cotton trade is entirely and solely due to the last War—for there had long been tendencies on the part of consumers either to make for themselves or to buy from cheaper markets—it certainly is very largely due to the last War. The leaders in the cotton industry—as their approval of this Bill makes evident—are not prepared to run the same risks on this occasion as they did on the last. They desire that there should be in the export trade a concerted effort to bring to their aid all the knowledge of markets which only a proper examination and analysis can bring. Last year, a much more comprehensive Act—the Cotton Industry (Reorganisation) Act—was passed after prolonged discussion both in Parliament and outside. It was designed to provide means for solving a great many of the problems of the cotton industry. Some of those problems have altered to-day, and 2479 the operation of that Act is in the meantime in abeyance. There is no reason to discuss surplus capacities, the maintenance of a stable price level is sufficiently and flexibly dealt with under the Defence Regulations; and there remains this question of the export trade, with which we are dealing to-day.
Like all good Bills, this Bill starts by constituting a Board, but the Board constituted under the Bill fortunately displaces a Board that is already in existence. As the House will recall, a Cotton Board was set up by the Minister of Supply and my predecessor shortly after the outbreak of war. The new Board will displace that Board, and will consist of 12 members. It will have an independent chairman and two other full-time members, one having special knowledge of the industrial side and the other of the merchants' side. It will have nine other members drawn from the various interests in the industry—raw cotton, rayon fibre production, spinning, weaving, finishing, and purchasing on the employers' side, and spinning, weaving, and finishing on the operators" side. The rayon fibre manufacturers and the raw cotton interests are additions to the make-up of the Board which was originally constituted by the Cotton Industry (Reorganisation) Act, but it is hoped that the addition of these two members will in present circumstances make for a very harmonious conjoint effort on the part of all interested in the industry on behalf of the export trade. This Board, although a smaller body, will be a very effective instrument. It will have powers to set up committees, and I am assured that the first committee it will set up will be an export development committee, in order that it may enroll the day-to-day knowledge and experience of those who are intimately concerned with the problems that arise in carrying on the export business.
The main functions of the Cotton Board, as provided in Clause 2, relate to market investigation, publicity, research, economic inquiry, circulation of information, and negotiations with interests outside the industry. The funds required for the work of the Board are by Clause 3 to be provided by a levy, a system well known in the cotton industry, on the raw cotton bought by spinners in the United Kingdom at the maximum 2480 rate of 5d. for every 100 lbs. This levy is now combined with the former levy which was raised for the purpose of supporting the Empire Cotton Growing Corporation, which will now derive its funds from the Cotton Board, out of the levy. In a normal year the levy is expected to realise £250,000, and the contribution to the Empire Cotton Growing Corporation will be something like £10,000.
The two main directions in which the Cotton Board's efforts will be employed are the assistance of research, both technical and economic, and the promotion of market investigation and publicity. This industry has been in the habit of very generously contributing to research, and the British Cotton Industry Research Association will now be assured of sufficient income at the hands of the Cotton Board, along with other contributions that are available to it, to carry on its excellent work. It will also be made much use of by the Board for special investigations. There is likewise an economic development intelligence service of the Joint Committee of Cotton Trade Organisations to which the industry has subscribed, and that will also be a proper medium for support from the funds.
The main purpose, however, for which the funds will be used will be in regard to market investigation conducted on behalf of industry as a whole. In this the Bill reflects the view generally held in the industry that the time has come when the cotton trade, with its vast importance to the export interests of this country, should provide itself with a centralised and co-ordinated overseas intelligence service. Although the most immediate function of the Cotton Board in developing that service relates to war purposes, it will still have an important service to perform in taking steps to safeguard the position of the industry after the war. The Bill is so drafted as to give the Board a completely free hand in tackling the problems I have described. The Board will consist of experienced people, and I hope the House will agree that it is right that they should be left, in these business matters, as free a hand as possible. It may be assumed that in the pursuance of their task they will establish at once such a market intelligence service as will give the whole industry confidence that the data and detailed knowledge of markets will be at 2481 their disposal. For this purpose they will send experienced representatives to investigate on the spot foreign markets. They will also send out special foreign missions to follow up the preliminary investigations, and they will organise sample exhibitions and conduct publicity. All these things will be proper objects for a Board of this nature in order to assist the rallying of the whole industry to a propel effort in the export field. I have dealt rather hurriedly, but, I hope, sufficiently, with the four main Clauses of the Bill. The other four Clauses are purely routine.
Before concluding, I would say a word, because I feel sure that hon. Members will expect me to, about the relationship of this Board to the Export Council which has been set up by the Board of Trade. In Clause 1 of the Bill provision is made that this Board shall be a medium of communication for Government Departments. I can give the House the most complete assurance that the Export Council will regard the Board and its export development committee as the proper channel for bringing to the Export Council all the wider problems which may engage the attention and agitate the minds of the cotton industry; and that the Export Council, on the other hand, will look to the Cotton Board and its export committee as the channel through which they in turn will approach the cotton industry on general market problems which arise in relation to foreign exchange, foreign relations, and economic warfare. I hope that on the question of economic warfare an opportunity will now arise for the cotton trade to secure for itself some of those markets from which our enemy is cut off by British sea power. I hope also that opportunity will be taken to make it much more difficult for the enemy to go on obtaining exchange in those markets surrounding them with which they are still able to trade.
That the collaboration between the Export Council and the Cotton Board will be very complete may be instanced, I think, by the fact that if this Bill is passed, I shall ask the Cotton Controller, who is a member of the Export Council, to become the independent chairman of the Cotton Board. The Bill is a simple Bill; it is stripped of all non-essentials. It is as little controversial as any Bill can be that relates to a great and, if I may use 2482 the term in the best sense, a proud industry. It is a Bill also which contains proposals which are urgent, and I hope that the House will see its way to pass it with such speed as adequate examination permits. Plans are already made to send investigators to markets that are awaiting attention, but nothing can be or will be done until the House has passed the Bill. I ask the House, therefore, to consider the Bill with as much urgency as they think proper in the circumstances.
§ 3.5 p.m.
§ Mr. Clynes
I rise to occupy only a few minutes of the time of the House in offering a welcome to this Bill, primarily for reasons of the shortness of the time available, and secondly because I know that quite a number of my hon. Friends behind me wish to say something. I count myself favoured in having the opportunity to offer the congratulations of the House to my right hon. Friend upon the character of his first performance at that Box. Private Members have often had just cause to complain of the length of speeches delivered from the Front Bench. The right hon. Gentleman has come to this House with a rare record of varied experiences and great services in the commercial and industrial life of this country, and he has shown us this afternoon that he has mastered the art of conciseness of speech, and has pressed an exposition of the main details of the Bill into 15 minutes. That is an example which I trust that his colleagues in the Cabinet will not be slow to follow when introducing Bills.
The fact that we offer a general support to this Bill and give it a sincere welcome must not be taken as implying on our part approval of the policy of the Government in relation to the cotton trade in the past. Indeed, that trade has been badly treated by the Government, and in some 20 years of deepening adversity has on only two occasions received anything like timely support from the Government. One occasion concerned the Bill, mentioned by the right hon. Gentleman, which is now in suspense, and the other concerned an Act of a like kind dealing solely with the spinning side of the industry. It would be helpful if on some future and, I hope, early occasion we could receive some general information as to the net effect of that earlier Act upon the industry itself. The trade has suffered 2483 so badly in the years since the last great war that it is no more than a shadow of its former self. Whereas the output was some 7,000,000,000 yards of cloth about 20 years ago, that figure has now fallen to below 3,000,000,000. I do not know that there is another great trade in the country which has suffered so severely, and I therefore welcome the information we have received this afternoon that preparations are already afoot and schemes well in hand under which, as soon as we have passed the Bill, the necessary steps will be taken to show the House that it has been well worth while to have laboured upon it.
The Bill is designed to facilitate and to increase the exports of our cotton cloth. I remember the time, when I was a worker in a factory myself, when prosperous and satisfied employers would say scornfully, in the almost complete absence of anything like effective competition, "Japs knaw now't about cotton." They were regarded as being so down and out that it would be easy for our export trade to continue to survive. The bitter experience which the cotton industry has suffered should teach us that in these days it is necessary to be more watchful than ever. As to the details of the Bill itself, hon. Members will find that the substance of it is really in the first two Clauses. The third Clause, dealing with matters of finance, indicates that this is not a Bill which will cost the Government anything. It is merely a Bill to give facilities to the industry to do for itself what might have been attempted long ago.
The only other word I would say on the details of the Bill is that it appears to me from the Schedule that the Board which is to be constituted will be, in personnel and in representative character, quite adequate to the service which it will be called upon to render. So saying, I give welcome to the Bill and hope that it will be passed speedily, in order that the Board of Trade can get quickly to work to preserve what still is retained of the industry and further to extend it by their endeavours.
§ 3.11 p.m.
§ Sir Cyril Entwistle
I propose to keep the House for only two or three minutes. The Bill is, I understand, approved by all the organised bodies and other sections of industry in Lancashire, and it 2484 can truly be called an agreed Bill. Therefore, not much time will be wasted by the House in putting it into law. I would like to put to the President of the Board of Trade a question arising out of some of the remarks in his speech. He told us that this Cotton Board will be the instrument for the larger Export Council and that there will be close harmony and co-operation between the two bodies; but the Export Council deals with all the exporting industries of this country. I do not know whether there is any finance at the disposal of the Export Council for assisting the general exporting industries of this country. If so, I would ask the President of the Board of Trade to make sure, at any rate, that, in the operation and the activities of the Export Council, any subsidies or subventions obtained from national funds on behalf of exporting industries, the cotton trade will have its share. Because the cotton trade is levying finances out of its own funds for what it is to do under the Bill, it should not be deprived of its due proportion of any contribution made by the Exchequer to the exporting industries as a whole, and it would be undesirable if there were any suspicion of that kind. If an industry is prepared to levy and tax itself in order to assist its export trade, it should not, on that ground, be deprived of any share of any general assistance given to industry as a whole.
There is only another word. The Bill is apparently all that is to be passed in regard to the cotton trade during the war. The Cotton Industry (Re-organisation) Act has been put on the shelf, and some hon. Members are no doubt very pleased about that. [Hon. Members: "Hear, hear."] I am not. I tried a great deal to help that Bill on to the Statute Book. It needed years of the most acute depression for the Lancashire cotton trade to reach a sufficient measure of agreement to put that Bill on the Statute Book. We know now that the Lancashire cotton trade is, owing to war conditions, extremely prosperous; at any rate, it is doing much better, probably, than it has done since 1920. One of the failings of the Lancashire business man is that when he is prosperous he does not want to be bothered with theoretical considerations or to look too far into the future. That has been a cause of calamity in the past. It is certain that when the 2485 war is over and these active conditions may be discontinued, Lancashire will be faced with all the problems that faced it after the last War. I hope that there will be no hesitation in bring into operation the Cotton Industry (Re-organisation) Act as early as possible after the present emergency ceases.
§ 3.15 p.m.
§ Mr. Tomlinson
For once I find myself in complete agreement with the hon. Gentlemen the Member for Bolton (Sir C. Entwistle), so that I can considerably shorten my own speech. As I represent particularly the operatives in this industry, I welcome the Bill which is before us as a war-time measure. Though small, it recognises the necessity for some action at the present time, and in that I find some feeling of relief, because I believe the danger which has been referred to by the hon. member for Bolton—the taking of the short view rather than the long view in the interests of the community as a whole—is the greatest danger which Lancashire has to face at the moment. The Bill, I agree, does not seek to do much except to focus attention and make possible several ways of placing the export trade into those markets in which we wish to place them, by advertising, demonstration, instruction, research, experiment, and the publication of statistics. I am glad that the finance is to be found for that very competent body, which during the last few years at any rate has provided statistics under the Joint Committee of the cotton trade organisation.
Hon. members who have read this Bill and compared it with the Bill which preceded it, and which became an Act of Parliament, will find that there is a difference in the method of financing the Bill which is now before the House and the one which is an Act of Parliament and which is in abeyance, we hope, only for the period of the war. As the Minister rightly said, it is being financed by a levy on raw cotton. Although I recognise the value of this method, I think the other was in some respects preferable, in that it brought everybody in just as this does ultimately, but in an individualistic sense rather than by a roundabout method. True, all who deal in this material have to pay their share of the levy which is placed upon the raw material, but there is another feature by which 2486 this Bill differs from the Act of Parliament and which I would wish to have seen in it: the previous Act of Parliament did provide for a registration system in the trade.
The first proposal was to set up a register of the industry. I look upon this, even though it be small, as the first attempt to organise the industry even in war-time, and I should have thought the first thing to do in creating an organisation would be to discover by means of registration all who came within its ambit. I know that under the methods which are at present being employed by the Cotton Controller there are ways and means of discovering who are the people dealing in this industry. Reports have to be made to him from time to time with regard to the cotton they are using, etc., but I think it would have been an advantage if that particular section of the Act had been brought into this Bill.
It also differs slightly in the constitution of the Board. Here I differ from the right hon. Gentleman, in that I think he has extended the Board in a way which I and the people for whom I speak do not consider to be warranted. He suggested that the producers of rayon fibre, for instance, would come into this Measure and under this Board, and would work along with the other representatives on the Board in a harmonious manner, for the benefit of the industry. I hope that his optimism is justified. I see no reason why those rayon producers should have been admitted on the ground floor. I should not mind the setting-up of an Export Committee for that industry, such as was provided for in the previous Act—that is their business—but I see no reason why those engaged in the production of that fibre from which manufactured goods are produced should be brought in if the individual who is growing the raw cotton is left out. I know that the fact that some of these people manufacture their own products afterwards gives them a little better standing, although I do not know whether, if you went to India, you might not find that some of the cotton manufacturers were growing 10 per cent. of what they manufactured.
My objection to this section being let in on the ground floor is based purely on their activities in the past. If they have reformed as a result of the war, I shall be very pleased, and I hope that the new 2487 President of the Board of Trade will be successful in keeping them on the right path. I do not want it to be understood that if this Bill becomes an Act of Parliament, taking the place of the one which is already on the Statute Book, and which is now in suspense, that is to be taken as a precedent in future for setting aside decisions made by this House. Ninety per cent. of the rayon that is produced is woven by the very people who are represented as manufacturers in the cotton industry itself. I would ask that what the hon. Member for Bolton said might be taken into consideration. As the Minister was explaining how this new Board would work, in co-operation with the Export Council, I wondered whether it was intended that this Board should finance the Export Council, since the Board of Trade is not called upon to contribute anything. It seems to me that the new Minister has belied his nationality. The Board of Trade, I am glad to see, is having a good deal to say under this Measure, and so are the rayon producers. Yet neither the rayon industry nor the Board of Trade is going to contribute to the expenses. As a good Scotsman, the Minister should recognise that where there is no taxation, there should be no representation.
If the value of the Board of Trade to this industry will be all that I expect it to be, the Board of Trade may be forgiven for not contributing. I think that one of the reasons why the Lancashire cotton industry has failed in the past is that it has had too much freedom, and I want somebody to control it in the interests of the whole industry, rather than in the interests of individuals. Too long has the interest of the individual predominated. The experiences of the last war should have taught us a lesson; but in Lancashire, at any rate, the lesson has not been applied. To-day the same thing is going on. Men are scrambling for orders in the home trade, and leaving the export trade to get along as it chooses. If this Measure, small though it may be, does something to prevent that, I shall welcome it gladly, and to the extent that the Bill will help, we shall all welcome it. We question its adequacy to deal with the problem as we envisage it, but maybe the new Minister will be emboldened by his attempt—and I am glad that he had the opportunity of making his maiden 2488 speech upon the most important industry in the country—and I hope that the industry will go from strength to strength under his guidance.
§ 3.26 p.m.
§ Sir H. Fildes
I would like to join with those who have congratulated the President of the Board of Trade upon his maiden speech here to-day. The measure he has introduced has been very carefully secreted, because it has been impossible to get a copy of the Bill without going to the House of Lords, and consequently I made inquiries and have found that not more than one out of every 10 Members has seen it, which makes it easier for my right hon. Friend to get on with the Bill. There are one or two features about these interferences with the cotton industry which are to be deplored. The levy on cotton coming into Liverpool provides a revenue of £250,000 per annum, which is equivalent to 10 per cent. upon £2,500,000 worth of trade, or 5 per cent. on £5,000,000 worth of trade, and when you have done all your pushing and advertising, and going out for new markets, all the profit and advantage accruing will be absorbed by the burden that is being put upon the export trade of this country.
The cotton trade of the world has never been better than during the last five years. There has been more cotton consumed and larger orders placed than at any time in our history. Why have not we got our share? Because we have the dearest stall in the markets of the world. I would remind the House that as compared with 1913, the days mentioned by the right hon. Gentleman opposite, we are paying 120 per cent. more in wages in the spinning section, and 100 per cent. more for weaving, bleaching and dyeing, and so on, and we recently adopted a policy of holidays with pay, and now we are asking our manufacturers to fight the keenest competition that any trade has had placed in its path in the shape of low prices and low wages in Japan, India, which has now become a very important export unit, and Italy, which is doing a very big trade in cotton goods to-day. I can tell the House that we have not been able to keep a measure of trade together because we had considerable stocks based on very low prices. But to-day our people are going out and quoting 25 per cent. above what the Indian, Japanese, Italian and 2489 United States of America manufacturers can afford to take. It is most lamentable to think that the firms in the export trade who, for 20 or 30 years have paid their Income Tax, and met all their charges without asking a contribution from anybody, should be brought under the control of this Bill. It represents nothing but the big combines, and the individual traders who have saved the industry are having the control of their businesses taken from them and transferred to London. If any hon. Member has a boy and wants to put him into business, what can he do with him except put him to sell sweets and cigarettes? He cannot go to the steel industry or the motor trade. These and other things have gradually come under Government control, and it is an eternal grief to me to think that the National Government, which was returned to fight and stifle Socialism, has drifted into the abyss and led us into "the slough of despond".
§ 3.32 p.m.
§ Mr. Burke
The hon. Bt. the Member for Dumfries (Sir H. Fildes) will forgive me if I do not follow him although I think he has given the House this afternoon an example of the sturdy independence of invidualism that has made Lancashire what it is to-day. It has been said that on this side of the House we have no desire to delay the passage of this Bill, and I, as one always keenly interested in the cotton business and representing a typical Lancashire constituency, do not want to see any delay. At the same time one of the reasons why I think we have no reasons for delaying the Bill is that it will not do any harm even if it does not do any good. The proposals in the Bill for dealing with the cotton export trade of Lancashire are, in my opinion, not nearly sufficient to touch the problem. There was a reference to the lesson of the last war, and it was stated that we have the same position here again—the same competition between buyers and sellers of yarns. The forward booking of export orders, which ought to be going on now, is held up because of that deadlock. This will not do anything to deal with that position. It is true that a priority order can give priority but it never does so until there is a deadlock, and it does not secure any orders. The difficulty of the export trade in Lancashire is that ways and means will 2490 have to be found of securing orders in the markets we have lost. We supported the last Bill because, in the main, it was a unifying measure and one which did bring the cotton industry into something like a central organisation instead of there being a conflict between various units. But there was no real drive for exports behind that Bill, and there is not to-day.
Contrast what has happened in wool. As soon as war broke out the woollen industry was controlled. The linen industry has practically turned over to the export trade, with great advantage to this country because of the value in the higher exchange countries of the world like the United States of America. You pay a 25 per cent. bonus to the people who are doing an export trade in wool but nothing like that in the case of cotton. It was not until 10th November that a Controller was appointed. Cotton, in my opinion, ought to have been controlled from the first, and no matter what the hon. Member for Dumfries says about control, I think that control is imperative and the sooner it is put into operation the better.
Let me say a few words about the Bill itself. I am sorry about the change in the composition of the Board. I am rather disturbed with the way in which the productive element has been reduced. In the old Bill we had five employing producers—I am not talking about the operatives, as they are the same in each case. In this Bill we have two spinners, two weavers and one finisher, and the balance is made up by the introduction of merchants. The business of cotton production in Lancashire has, in my opinion, suffered very greatly from the superabundance of merchants. We have 4,000 firms in the cotton industry, and of that number 2,300 are merchants and agents. There are 750 weaving firms. You have two exporting merchants for every one firm engaged in manufacture.
The irresponsible and irrepressible representatives of the rayon industry have apparently succeeded again. I am not disposed to quarrel with that very much, because the representatives of the rayon industry may be able to teach the cotton people something which they ought to know. The rayon industry is in a better position than the cotton industry because it has larger units and fewer of them. It 2491 is in a better position because it follows its product right through. They do not leave the stuff in the grey and allow it to be finished by somebody else and sold by somebody else. That is what the cotton industry must do. The producer must go right through from the beginning to its sale on the markets. The cotton industry has been ruined by competition. The Chairman of British Celanese in December last year said his aim had always been to make rayon able to compete to an increasing extent with cotton. If that is the object of the rayon representatives, it is likely to create a lack of confidence in some of our people in regard to the introduction of the Bill.
I should like to know something about paragraph (a) of Clause 2. What are these measures for promoting the export trade? The President of the Board of Trade said that these measures were to form an overseas intelligence service. It is rather a reflection on the multitude of merchants we have had in these markets for years past if they cannot tell us what the markets are now and that we should have to start and form an overseas intelligence department. Do I understand that there is any suggestion of forming definite selling agencies in those markets, of putting people there and of using our Consular services regularly? If it means that, there may be something of real value in it. There is the other question of research. We do not deny the need for continuing research, because the tendency is for the gap in technical skill between one country and another to diminish and we want to keep the gap always as wide as possible in our favour. I hope, too, that we shall get the widest possible range of styles and the maximum amount of variety by this research and that we shall use advertisements as far as we can. We have not told the world sufficient about Lancashire. May I suggest that, instead of using the ordinary agencies in London and elsewhere, we should turn to some of our technical schools in Lancashire and get men who know something about cotton from the beginning?
About the need for export trade, I think we are all convinced, but that is not a Lancashire problem. The provision of credit is a national problem. We want to see the Lancashire cotton trade put into a real fighting position. We want to see it take the place which it always held 2492 until recently as the first of our great export industries. I press upon the Minister that research, advertising and discovery of markets will not, of themselves, be sufficient. We shall come to the position of rationing cotton as we ration wool. We shall have to restrict the home consumer, I fear, in the interests of the export trade, and, it may be, put even the Government in the second place to the export trade. Something will have to be done about price concessions in certain markets and a great deal more weight must be put behind the industry than has been put behind it so far. No industry can get into the world market unless it is a unified industry with full Government support behind it.
§ 3.43 p.m.
Sir Nairne Stewart Sandeman
I welcome the opportunity of speaking on this Bill. I think the President of the Board of Trade, in his most able speech, showed that this Bill will be of great use to Lancashire. It is a Measure which has long been wanted and I hope that the Lancashire people will have the sense to follow it out and to take advantage of this board which is to be established. I look upon this as Lancashire's very last chance. During the last 20 years, the people in the Lancashire cotton trade have not been pulling together. The employers have not been pulling together. I have a feeling that they do not trust each other very much and are always trying to get behind each other's backs. They have now to take a long view if the trade is to survive against the competition with which it is faced. They took the short view in the past, with the result that they lost markets right and left which they need not have lost.
That, I think, is because the trade has been so much in the hands of the merchants. It has been a case of sending out a commercial traveller to see what is doing in the country. If they want to get the business, the people in charge ought to go out themselves, wherever they think they can sell their goods and discover what is really wanted. It is all very well to send out people from Government offices, but they cannot be expected to know the trade in the same way as the people who are handling the goods day in and day out. My hon. Friend the Member for Dumfries (Sir H. Fildes) talked about this small levy. The amount of that would be made up if there were 2493 not, unfortunately, all these middlemen. In the cotton trade it is the case of middlemen all the time, and I am certain that what the middlemen collect out of the trade is many times more than the levy will be. We have a lot of troubles in Lancashire. In Japan you do not find cotton, from the raw to the finished state, being handled nearly as much as it is handled in Lancashire—going from place to place with carriage and haulage costs, and frightful expense. However, we have to take things as they are to-day, but, if we had fewer middlemen who had a rake-off almost every one of these processes, we should be in a better position.
I am sure that in Japan at many mills it goes right through from the raw cotton to the finished article, and the mills themselves are selling, and so there is a chance of picking up a profit on the whole sale, instead of each department thinking it has go: to make a profit or else it is not being properly turned out. The greatest part of our falling-off in sales has been in India, and I think it is entirely our own fault. We had the Fiscal Convention with India, which was a unilateral agreement, and which we could have got rid of at a year's notice quite easily. Every year since I have been in the House I have been to the India Office, until the Bill of 1935 was passed, trying to get something done to prevent these duties always being put up Not only the Conservative party but the Socialist party when in power took exactly the same attitude, that nothing could be done. Do not let us make the same mistake again. Let us use our commonsense to try to get the whole trade very much more unified so that the success of Lancashire may be assured instead of it just being "Finis."
§ 3.47 p.m.
The Parliamentary Secretary to the Board of Trade (Major Lloyd George)
I am sure the House will agree that my right hon. Friend is to be warmly congratulated, not only on his maiden speech, but on the response made to his appeal that we should get the Second Reading with as little delay as possible, provided that whatever questions were asked should be answered. It is obvious that there is general agreement in every part of the House with regard to the Bill, with the exception of the hon. Member for Dumfries (Sir H. Fildes), who feels that there is nothing much more to be done at all. I should like to answer a question by 2494 the right hon. Gentleman the Member for Platting (Mr. Clynes) with regard to the position of the Spindles Board. I understand that their third report was laid about a month ago.
§ Mr. Tomlinson
Would it be true to say that, in spite of the fact that the Government backed any loss that may have been incurred, in all the reports the auditor suggested that no money has ever been required from the Government?
Major Lloyd George
That is so. One hon. Member seemed rather worried that probably at some future date the cotton industry, having raised this money in order to help itself, might be penalised because other industries might get exchequer assistance. There is no question of that at the moment, and I am certain we should not penalise an industry which tried to help itself. The hon. Member for Farnworth (Mr. Tomlinson) expressed fears in regard to certain changes in the representation of the Cotton Board. The Reorganisation Act which the House passed has only been postponed, and it will be put into operation by Order at a time to be decided by the Department. The hon. Member, therefore, need have no fear.
With regard to the main purposes of the Bill, it will be remembered that the machinery which was devised for the main scheme was postponed. Hon. Members will remember we suggested that it was far too elaborate for a war-time measure and that some other machine would have to be created to meet the needs arising out of war. The main purpose obviously is to increase our export trade. My right hon. Friend has pointed out the losses we have suffered in the past, and we shall do everything we can to see that that does not happen again. The hon. Member for Burnley (Mr. Burke) asked what exactly were the powers under Clause 2 of the Bill. First of all, there is an investigation to survey markets with a view to finding out what are the requirements, not only from the immediate point of view, but from a longer point of view as well. This will deal with the questions of price, design, colour and style. Under paragraph (c) of Clause 2 power is given to establish a comprehensive intelligence system for the industry as a whole. We propose that energetic and responsible people shall be sent out to oversea markets to 2495 observe and report on their requirements. Then it is possible that afterwards a Commission will be sent out to further the good work. Also under this Clause power is given for collective advertising, and, I think, by this Measure we shall, to a large degree, be able to do what the hon. Gentleman suggested—tell the world about Lancashire. Under this Clause power is given to the Board to do everything necessary for that purpose.
I would like to emphasise what has been said before, that it is vital that we should do everything we can to push the exports of this great industry, not only for immediate purposes, that is to enable us to maintain imports of raw materials and foodstuffs essential for the war effort, but in order, if possible, to avoid the disasters that occurred at the end of the last war. Not only that, but by making an investigation in these various markets to find out what our customers require I hope by that means we shall be able to prepare the way to regain some of the trade lost in that period.
§ 3.54 p.m.
§ Mr. Silverman
I welcome the last two or three sentences in particular of the right hon. Gentleman's speech, because he seemed to be approaching a question which is too often overlooked when considering these matters. The right hon. Gentleman who presented the Bill—and he did so very ably, if I may say so—talked about the industry as a proud industry. I would call it a stiff-necked industry and all this legislation as an effort to turn a stiff neck into a stiff back. Contraction of the trade after the war is one of the things which will have to be borne in mind, and I am glad it is not being overlooked. We must inevitably expect that at the end of the war the cotton industry export trade will contract. We shall not get that monopoly of the world markets which the old cotton industry used to enjoy. What is the importance of that from the point of view of constituencies such as mine? One of the two towns in my constituency did not exist before the cotton industry in Lancashire. It was a public house called the "Nelson Arms," in the middle of a field. Now it is very much the senior partner of the two towns. It was built on the industry. If the cotton industry must reckon with a serious ultimate contraction, then we are entitled to ask the Government 2496 a question which we have asked time after time without receiving any reply—what do they intend to do with regard to replacing that lost industry by something else? The town must go on, the people must live.
The other thing that happened at the end of the last war, and that will inevitably happen at the end, or before the end, of this one, unless something is done about it, was what one of the right hon. Gentleman's predecessors at the Board of Trade described as a financial ramp. The financial ramp in the Lancashire cotton industry in the years following the last war brought almost as much misery to the homes of the working class operatives in the industry as the years of bitter unemployment that followed. That sort of financial ramp ought not to happen again. I hope that we may feel assured that the right hon. Gentleman, in contemplating the problems of the future, has not forgotten that one.
§ Bill committed to a Committee of the whole House for Monday next.—[Captain Margesson.]