BOARD OF TRADE (Hansard, 16 October 1945)

§ The President of the Board of Trade (Sir Stafford Cripps)
This is a new matter, and perhaps I may be allowed to give a short explanation of it to the Committee. Before the war, the Committee will appreciate that, though this country manufactured a certain number of high-grade clocks, practically the whole of our requirements, as regards the ordinary clock and watch trade, were imported from abroad. Over 7,000,000 watch movements and about 5,000,000 clock movements were imported into this country annually, and, when the war came and we needed, naturally, to mobilise all the engineering resources we could muster, the inadequacy of the clock and watch industry left a very serious gap in what may be termed our industrial armoury. The Services required a great number of clockwork fuses, as well as clocks and watches.
By the time the peak production had been reached during the war, we were able, broadly speaking, to provide the first two of these—clockwork fuses and clocks—in adequate quantities, but we have only recently reached the production stages for watches, and that only on a comparatively small scale. Consequently, we had, even in the war, to import our requirements of these, and also of an item which a good many hon. Members will remember from their correspondence—alarm clocks, which were one of the essential civilian needs. If we had had a considerable watch and clock industry earlier, not only should we have avoided the risks which are inseparable in such circumstances from dependence on 1046 overseas sources, but we should have had a reservoir from which we should have drawn machine tools, skilled labour and management well suited to the manufacture of many of those precision instruments upon which war so much depends to-day.
The civilian population has, of course, during the war, been kept extremely short of both watches and clocks, and the knowledge that we were bound to continue a tight control over imports for a considerable time until we could see our way through the difficult problem of the balance of payments provided a second reason for considering the steps necessary to encourage the large-scale production of watches and clocks in this country itself. Accordingly, the Coalition Government invited me, when I was at the Ministry of Aircraft Production, to examine this problem with the other Ministers concerned and with the industry, and my hon. Friend the Member for Mid-Bedfordshire (Mr. Lennox-Boyd), then Parliamentary Secretary to the Ministry of Aircraft Production, did a very excellent piece of work in conducting the whole inquiry for me, and the conclusions reached by that inquiry were endorsed by myself and the President of the Board of Trade and approved by the Government last May. The present Government is in full agreement with those conclusions. Although this Committee is concerned to-day with only one of the measures which were proposed, I think it may be of assistance if I were to take this opportunity of stating briefly the other main conclusions that were reached.
First, in view of the balance of payments difficulties, to which I have already referred, quantitative restriction of imports of clocks and watches is bound to continue for some time at least, but, in deciding what imports we must licence, we shall, of course, have regard to the quantity of home-produced clocks and watches. The industry has been informed of this fact, and it is hoped it will take this opportunity of putting itself on a fully efficient basis to supply our own needs and also, we hope, to make a contribution towards our exports. Secondly, import duties on alarms and other cheap clocks were reduced to 20 per cent. and 25 per cent. ad valorem respectively to implement the Anglo-German Agreement of 1933, and the last Government agreed to bring these 1047 again into line with the duties on other clocks and watches, namely, 33⅓ per cent. ad valorem, and a Treasury Order to that effect was made in July last. Thirdly, the Government will place orders for clocks and watches for the Services with British producers to the fullest extent practicable, always having regard to the fact that the Services must have the best equipment and that we must have it at a reasonable price. Fourthly, in order to build up a body of highly trained technicians, the provision of facilities for technical education is essential. My right hon. Friend the Minister of Education has decided that a National College for Clock and Watch Manufacture is needed, and she is taking steps to get this established in the near future.
These measures should enable us to build up an efficient industry so far as clocks are concerned. It is clear, however, from all the advice we have been able to secure, from our own war-time experience in production and a detailed cost investigation, that more will be needed if we are to establish ourselves firmly in the watch manufacturing field. Some firms, it may be, will be able to go ahead without further assistance than that I have already described, and we shall do all we can to make their projects a success. We are satisfied, however, that the hazards and difficulties are such that development of what amounts to substantially a new industry upon a sufficiently large scale will be unlikely without that degree of Government support, encouragement and supervision which can only be secured by some participation by the Government in the risk.
Accordingly, it is proposed that the Government should acquire and lease on easy rental terms the essential plant for a limited number of selected manufacturing projects. Pending the submission of these proposals to Parliament, those who it was thought might make a contribution to the problem were invited by the Ministry of Aircraft Production to discuss possible arrangements. Some proposals have already been submitted and others are expected to be submitted shortly, but, to enable assistance to be given immediately to the projects selected, this Supplementary Estimate is presented in advance of such legislation as may ultimately prove to be necessary.
1048 The broad outlines of the scheme are that essential plant will be leased to the selected firms for five years at a rental of 4 per cent. per annum on the initial value of the plant, and the firms will be given the option to purchase the plant at the end of the term at the then fair market price. In other words, the firms will have been relieved of depreciation for the duration of the lease. As a condition of this assistance, the firms will be required to make full use of the plant, to undertake research and development and take all possible steps to reduce their costs, so that British watches may become, as rapidly as possible, as competitive as those made elsewhere. The forecast of £1,000,000 mentioned in the Supplementary Estimate as the total of plant to be provided is the amount which we think will be needed to start an industry basically sound and capable ultimately of meeting a large part of our demand for watches. Some part of the plant will come from Government surpluses. If we assume a rate of 15 per cent. for depreciation per annum on the initial value, the assistance to the industry over the five year period will amount to 75 per cent. of the value of the plant provided, and that will probably be somewhere between 5 and 10 per cent. of the total cost of production during that period.
If we can so establish an efficient watch-manufacturing industry at so small a cost, I am sure the Committee will agree that the money will be well spent. It is to be observed that some of these projects are being placed in the development areas, and also, in one case, it is contemplated that a factory, where certain types of watches have been manufactured during the war, will come into use. I trust that, with that short explanation, the Committee will agree to the Estimate.

§ Mr. Lennox-Boyd (Mid-Bedford)
Whilst thanking the right hon. and learned Gentleman for his kind reference to myself, I would like to say how deeply this House and this country will be indebted to those officials of the Ministry of Aircraft Production who, at the height of the aircraft programme, in one of the worst periods of the war, gave such unstinting service in carrying out the inquiry on which this Estimate is based. I think it will turn out to be a very important day 1049 in the history of British industry, and that from these small beginnings something very valuable to our life and trade may well spring. As the right hon. and learned Gentleman said, we shall have the beginning of a very valuable industry here—the clock and watch industry. We shall be able to cut down imports at a time when it is imperative to do so. We shall be able to keep skilled labour in that field of high precision engineering in which we are unequalled, and we shall also be able to keep up to date in a vital field of defence and be able, should the need ever arise, to expand rapidly. I am glad on behalf of the Opposition to wish this venture every possible good fortune. The high precision firms to which we shall have to look in the future have in the war, by their hard work, their ingenuity and their courage under enemy attack, given us a very rich harvest of engineering achievement.
I am glad that the Government have realised the value of these private firms and the need and the propriety of giving them assistance in the difficult teething period of tooling-up on an expensive and elaborate scale for goods which in the early stages are bound to yield only an unremunerative return. I believe that given the good will and support which all sides of the House will be anxious to give, we shall draw from these firms in peace-time dividends as rich and valuable as they have given us in war.

§ Mr. Godfrey Nicholson
I hope the right hon. and learned Gentleman will bear in mind not only the big firms but the smaller ones. Some of the finest craftsmanship in the watch-making industry exists in very small firms employing perhaps four, five, six or seven men. I could show him cases in London in the Clerkenwell area where firms like that have rendered eminently valuable service to the country during the war, having been engaged on Admiralty and other contracts. They show that they possess as high a level of craftsmanship as could be found anywhere else, and it would be a thousand pities if this admirable venture, on which I congratulate all concerned, ignored these small firms.