NEW CLAUSE.—(Compensation for injury to business.)

HC Deb 18 April 1947 vol 436 cc481-521

(1) Any person who was immediately prior to the third day of September nineteen hundred and thirty-nine engaged in the business of raw cotton merchanting or of raw cotton broking and who shows that by reason of the provisions of this Act the resumption by him of such business in whole or in part is rendered impossible shall be entitled on making a claim for the purpose to be paid compensation by the Commission in respect of the pecuniary loss thereby suffered by him.

(2) The amount of compensation referred to in the foregoing subsection shall be a sum of not less than twice or more than five times the amount of the average of the annual profits, computed for the purpose of income tax, for the three complete financial years of such business next preceding the said third day of September nineteen hundred and thirty-nine arising out of the whole of the said business or of the part thereof as the case may be rendered impossible of resumption by the provisions of this Act.

(3) A person shall not be entitled to compensation under this Section unless he is able to show that it was his bona fide intention of resuming the business aforesaid and that he would have resumed such business but for the provisions of this Act or of any measure having the force of law and having substantially the same effect as this Act.

(4) In the event of any dispute arising out of or in connection with any of the matters aforesaid such dispute shall be referred to an arbitration tribunal to be appointed by the Lord Chancellor for the purpose of the determination of such disputes.—[Mr. Lyttelton.]

Brought up, and read the First time.

Mr. Lyttelton

I beg to move, "That the Clause be read a Second time."

I put in a very earnest plea that the Government should accept this Clause. This and the next Clause on the Order Paper—[Provisions as to transfer and compensation of employees]—deal with two separate aspects of the subject, the first dealing with the loss of business as a result of the closing of the Cotton Exchange, and the second Clause dealing with the loss of employment to employees. First of all, let me address myself to the question of loss of business. I am sure that neither the right hon. and learned Gentleman the President of the Board of Trade nor the hon. Gentleman who now holds the office of Paymaster-General will take it amiss if I say that their arguments on the Second Reading of the Bill and on its Committee stage have been very perfunctory and wholly unconvincing on the subject. I was under the impression that where the State took over a business or dispossessed those who were carrying on such a business, the Socialist principle was that they should be paid, at least, compensation. Indeed, I believe some hon. Members have gone so far as to say that fair compensation should be paid. It is the feeling of everyone on this side of the House that, in many instances, the compensation has not been fair. But that is not an argument on which I need embark this morning, because I am concerned chiefly with the principle, and not so much with the method of assessment. The President of the Board of Trade on the Second Reading used these words: In this case, we are not taking any property or any business."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 431, c. 156.] That, I submit, is an entirely incorrect statement. It is quite true that he is not taking much property, because the property side of the cotton broking or merchanting business consists largely of office furniture and telephones, so that, with that reservation, I should accept the first part of the right hon. and learned Gentleman's statement that he is not taking any property. But I cannot agree that he is not taking any business.

The present Paymaster-General made things much worse by trying to explain what his then chief meant. The hon. Gentleman's argument was largely devoted to the impossible task of trying to show that no damage had been inflicted upon cotton brokers or merchants, who were, said the hon. Gentleman, quite free to act as they wished as brokers for the spinner. But under Subsection (1) of the new Clause which I am moving the merchant could only receive compensation for that part of his business which had been destroyed by Government action, and not for that part which subsequent events or actions might preserve. During Committee the Paymaster-General used these words: It may be argued, of course, that the function of importing raw cotton was their prime function,"— it has not only been argued, but it is the fact; it was their prime function— but one must remember that they have been prevented from doing that ever since 1941. This is a really astonishing line of argument. We all know—and, indeed, I should have to confess to a great responsibility for some of these measures in the war—that many businesses were shut down in the war, or concentrated. Many small shopkeepers, with one-man businesses, were called to the Forces, and, consequently, their businesses were, in the words of the hon. Member, "prevented" in 1941, and in subsequent years. Some of the shutting down of small retail businesses took place in a very simple way. The proprietor was called to the Forces, and, consequently, his business could not be carried on. In other cases the Board of Trade concentrated production in certain sections of the industry, and, consequently, plants had to be shut down.

However, over all these matters we took the most careful steps, by licensing new retailers, to secure that the opportunity for restarting their businesses was kept open to ex-Service men. Not only did they get, so to speak, a priority for licences to restart their businesses, but great care was taken by the Board of Trade to prevent new retailers coming in, in an unlicensed way, and setting up shop where they had previously carried on their businesses, and so destroying the goodwill. Those measures, as far as I know—and I remember it quite well—at the time had the support of every quarter of the House. They were based on a very sensible idea of justice. Look at what the Government are doing in this case. They are doing exactly the opposite. They are taking every step to see that, so far from being able to continue a previous business, there shall be no possibility of that business being continued. Later in his speech the hon. Gentleman said: It is a mistake to represent this Bill as if it were the first and only Measure to close the Liverpool Cotton Market. That is another very tenuous line of argument. That is not the point at all. The point is, that this is a Measure to close the Cotton Exchange in perpetuity, and we require no information from the hon. Gentleman to tell us that the Cotton Market was, in fact, closed down during the war. It was; but the point is, that in other businesses which have been closed down during the war the opportunity of restarting them has not only been given, but, in certain cases—and particularly those which deal with ex-Service men—every facility which the Government could place at their disposal has been placed at their disposal, so that they should resume their business without interruption, and, as far as possible, without competition coming in from those who were not previously engaged in the business. The rest of the hon. Gentleman's speech—and I do not think I am doing an injustice to his argument—was designed to show that the Government had committed so many injustices in other cases that just one other injustice hardly mattered. His argument was directed more to showing what hardship had been incurred in other cases than to showing that there was no injustice in this case. He actually mentioned the Pembroke Dock. No compensation was paid when the Royal Navy transferred its business from Pembroke Dock. But that is no analogy at all. This was always a Government business, and in their disposition. Here, what is clearly happening is, that the Government are taking over other people's businesses, and, incidentally, following the now common Socialist practice of creating a whole new series of offences.

Mr. Fairhurst (Oldham)

Could the right hon. Member give us some idea of exactly what tangible assets are being taken over?

11.15 a.m.

Mr. Lyttelton

I have already dealt with that point. It is an interesting point, because it shows how far hon. Gentlemen opposite are from understanding the root of this matter. The assets are not only tangible. I have already explained that in the business of cotton brokering or merchanting, the tangible assets, unlike other industrial concerns, are confined chiefly to office furniture and telephones. Therefore, there is no means by which a man's tangible assets, and giving him any real capital to start again in business, can be determined. If it was plant it would be different. The real asset which a cotton brokering and merchanting firm has is a world-wide connection in cotton, and skill and "know-how." I am sure the hon. Member would be the last person to deny that brains are an asset in human life, just as much as machines. Those are the matters for which we are asking compensation.

The import of raw cotton, and its sale and distribution, was the main business of a large number of people who were members of the Liverpool Cotton Exchange, or who were affiliated to or associated with it. I ask the Government to consider the plain fact—and this will rather touch upon the point of the hon. Member for Oldham (Mr. Fairhurst)—that they admitted that a road haulier who is operating his own fleet of lorries under a nationalisation scheme is not only—and this is the hon. Member's point—entitled to compensation—that is the genteel word which is used, but I should prefer to call it a fair payment—for the actual lorries which are taken over by the State, but is also to be entitled to compensation for the loss of his business, for what is technically known as the goodwill, and a number of years' purchase of the profits being added to the physical value of the assets. The Government have admitted that, under a nationalisation scheme, the road haulier is not only entitled to what they call fair compensation—but which I should call a fair price—for the actual lorries being taken over by the nationalised authority, but also to so many years' purchase for the loss of the profit which he had been earning by operating his own fleet. It is in the second part of this compensation that the true analogy lies between the position of the road haulier, who is dispossessed of his business by the action of the Government, and that of a cotton broker, whose business is being taken over by the Government.

I must say I have subjected other parts of the speech of the Paymaster-General to a very close scrutiny. I can sum up by saying, that the first part of it consisted of saying that because the Cotton Exchange was closed as a war necessity in 1941 the fact that the Government intend to close it for ever, and to prevent, under severe penalties, the import of cotton by private individuals, the Government's action is one which does not attract compensation for those dispossessed of their livelihood. The second part of his speech—which, not surprisingly, is completely at variance with the first—was designed to show that the Government had committed so many injustices in the past that one more will not make very much difference. I say that the whole attitude of the Government on this matter is one of cynical opportunism. The Paymaster-General ended up his speech by saying: The reason the Government has never recognised liability to pay compensation for loss of business or goodwill caused by changes in Government policy in regard to economic matters or because of widespead economic changes over which the Government have had no control."—[OFFICIAL REPORT, Standing Committee C; 11th March, 1947, c. 331–2, 338.] But this is not a correct statement at all. If so, no compensation would have been granted to the road hauliers. Or is it to be regarded as a change of Government policy on an economic matter, that the road hauliers should be incorporated in a national service and can no longer carry on their business as private individuals and not so when the Cotton Exchange is closed?

So far I have dealt only with the extremely tenuous nature of the Government's argument for rejecting compensation. I want to end by making a positive appeal. It is quite true that the number of people affected is very small; but I know quite well that hon. Members on both sides of the House do not regard as important whether their numbers are small or not; and whether they are politically vocal or not is a matter of no concern to hon. Members in any part of the House. We are here trying to follow a simple line of justice. We have all received—I have not myself, because I do not sit for a constituency which has any concern with cotton, but hon. Members in the North-West of England have received—not a very large number, but a fairly large number of letters, some of which are really heartrending.

Some play has been made by some hon. Members opposite with the fact that the first new Clause, as drafted, would confine compensation to those directly concerned in the business of cotton merchanting or broking, but this morning we have put down two new Clauses, one of which deals, as I said at the beginning of my remarks, with the loss of business, and the other of which deals with the loss or diminution of employment. I think it is probable that the hon. Lady the Member for the Exchange Division of Liverpool (Mrs. Braddock), who, I am glad to see, is in her place, would readily vote for the second new Clause, and would be equally ready to vote against the first.

Mrs. Braddock (Liverpool, Exchange)

In the second new Clause there is mention of superannuation. Is the right hon. Gentleman aware that there is no superannuation scheme at all for the brokers or the employees, so far as the Cotton Exchange is concerned? There is no superannuation scheme of any sort

Mr. Lyttelton

It is not a matter of the Cotton Exchange.

Mrs. Braddock

I am talking of the employees. There is no superannuation scheme.

Mr. Lyttelton

The hon. Lady has interrupted me and I am trying to reply. It is not a matter of the Liverpool Cotton Exchange, but the method of employment by cotton merchanting or broking firms, and in many of these firms, as the hon. Lady knows, there are superannuation and pension schemes.

Mrs. Braddock

No.

Mr. Lyttelton

I know myself of two or three of the largest brokers who have such schemes. Naturally, nobody is proposing to compensate people for something they have not got. All we are proposing to do is to compensate them for something they have got. I was just saying, when the hon. Lady interrupted me, that I felt sure she would have no difficulty in voting against the first new Clause, because that would do justice only to employers and partners, and she does not necessarily feel so keen about them as she does about compensation for employees. But that is not a view which I share. I do not care in the least whether there is any vested interest or not, or who these people are: I am only directing my remarks to try to get fair compensation for all those whose business has been taken away, or whose employment has been cancelled, or whose employment has been diminished as a result of an entirely arbitrary piece of Government action which has closed the Liverpool Cotton Exchange. If I cannot get, the support of the hon. Lady on the first new Clause, "I hope I shall get it for the second new Clause, because in this sad world I follow the old adage that half a loaf is better than no bread, and if we cannot do justice to all concerned, at least let us see that the employees are protected in this matter. At any rate, however hostile one may be to the Liverpool Cotton Exchange, however much one may disregard the great services which the Cotton Exchange has performed in the growing and spinning, weaving and finishing industries, the wickedness of this Exchange, in the opinion of the hon. Lady, can scarcely be visited upon the employees; and, therefore, they are, perhaps, entitled to even more consideration in her mind than the others.

The new Clause dealing with employees largely speaks for itself. It seeks, in general, to compensate employees for loss or diminution of their employment. I must admit that, in some cases, particularly with regard to the diminution of employment, difficulty may arise upon the assessment, and, therefore, this new Clause seeks to set up an arbitration tribunal appointed by the Lord Chancellor for considering those particular cases. I do not think that where there is a total loss of employment it will be very difficult to assess the compensation to which the employee is entitled, and I do not think that in those cases the arbitration court will often be evoked. But I admit, as I have already said, that with regard to the diminution of employment there may be some cases which may require careful consideration by an expert body. I come now particularly to the second new Clause, Subsection (2).

The point to which I wish to draw the special attention of the House is that of the compensation of ex-Servicemen. I have already gone into the ways in which the small retailer has been protected in the Board of Trade scheme. I would also draw the attention of the House to this fact, that, with the assent of all parties, we have been particularly tender on the subject of the reinstatement of ex-Servicemen in their employment. In fact, a statutory obligation has been imposed upon employers to reinstate those whose employment was interrupted as a result of the war, and that obligation has been very gladly and fully met. Now, in this case there is no question of reinstatement, because the Government have destroyed the business in which these ex-Servicemen would otherwise have found employment. I think that the Members who represent constituencies in Liverpool and Manchester are those who should deal particularly with cases of hardship, about which they themselves have had letters, and which have been brought to their attention.

I should, however, like to say that loss of employment weighs particularly heavily upon the shoulders of those who have reached middle age when they are released from the Services. They have the greatest difficulty, first of all, in finding new employment. Secondly, I am ashamed to say, having passed middle age myself, that they find it particularly difficult to adapt themselves to learning it. Thirdly, of course, there are those whom it is particularly difficult—and this is the point in which the hon. Lady will be interested—to fit into the pensions schemes their new employers may have in force. The cost of bringing a man who is 5o into a pension scheme may often be the reason why his claims for new employment are set aside in favour of those of younger men for employment, who have more years to run than the older men. If he were to receive a pension—or compensation rather—on the scale laid down In this new Clause, he would get a breathing space, an opportunity for training himself, and time to look around for new employment. But the argument is hardly less strong that the compensation should also be paid to the younger men, who may wish to set up in businesses of their own; and the small capital they would get, as a result of compensation, would be a considerable help to them in establishing new lines of business. Those are the main reasons why we press strongly that the Government should reconsider their attitude on this matter of compensation.

11.30 a.m.

Unless some such Clauses as these are accepted by the Government, the most heartless injustice will be inflicted—a man's employment is taken away, his chances of reinstatement in a similar business are practically nothing, and he is to receive no compensation. The impression, which I think is a false one, will be left in peoples' minds that these injustices are being inflicted because the number of people who have suffered are very small, and the political consequences of disregarding common justice are not likely to be great. That is not a reason which, in my experience, weighs with hon. Gentlemen opposite. I beg of them, if they cannot accept the first Clause, to consider the second one very sympathetically. It is true that the first Clause would largely compensate those who vote for us. It is true that the second would compensate those who vote for hon. Gentlemen opposite and for us, but that is no reason why we should not try to pursue a path of common justice to all the people whose livelihood has been removed by an arbitrary action, namely an Act of Parliament.

Mr. Leslie Hale (Oldham)

I wonder whether the right hon. Gentleman would clarify the Clauses? Subsection (1) of the first new Clause refers to "any person who was engaged." There is no definition. Would he tell us what it is intended to mean. Does it include the directors of a limited company, the managing director, the secretary, or professional persons engaged on a retainer? Does he suggest that where a person was engaged prior to 1939 and is now engaged in some very prosperous business elsewhere, he should get compensation, or are the same provisions to apply as those given in the second new Clause which provides that in the case of a workman, the fact that he is in employment now apparently disentitles him to compensation?

Mr. Lyttelton

When the hon. Member asks me legal questions—

Mr. Hale

They are not legal questions.

Mr. Lyttelton

I feel that he is much more able to answer them than I am. It means those who are … engaged in the business of raw cotton merchanting or of raw cotton broking. As far as I know, there are practically no limited companies. One of my hon. Friends says that there are none at all. Therefore, the hon. Gentleman's question about managing directors, and so on, does not arise. It means all those who are engaged in the business, whether they are keeping a ledger or whether they are a partner. It means all those engaged in the actual business of cotton broking and merchanting. It does not extend beyond that.

I think that in general the sampling of cotton, although it may be slightly reduced, will not be affected by this Measure. I imagine that the Government will employ that part of the industry in order to sample and handle cotton. Therefore, this is confined to those who were engaged in cotton merchanting and broking. Then the hon. Member for Oldham (Mr. Hale) asked whether compensation would be payable to those who have now become engaged in a more profitable line of business. I think that if somebody has lost the business in which he was engaged, and he is now engaged in another one, that is no reason why he should not receive compensation for what he has lost. However, if the Government accept the Clause and choose to confine it only to those who have not since been able to find another business, I would, reluctantly, be content with that. If something has been taken away from me and I have been able to find something else, there is no reason why I should not receive compensation for what was taken away. If the hon. Member takes away my house and I buy another, why should I not be paid compensation for the one which was taken away?

Mr. Rhodes (Ashton-under-Lyne)

have listened most attentively to the very reasonable speech of the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton). It was one of the most reasoned speeches I have heard him make on this subject, which I have followed very carefully through the Second Reading and the Committee stage. Compensation has been a question which has come up repeatedly throughout the various stages of this Bill. In our discussions we have always come up against one particular point. There is some equity in the argument advanced by the spokesmen of the Liverpool cotton brokers who sit on the Benches opposite. The weakness of their argument for compensation is that it is so intangible that it is impossible for anybody to bring forward a claim that can be met.

Mr. Lyttelton

I hope that the hon. Member will develop that a little further.

Mr. Rhodes

Yes, I will. The reason is that we have the residue of the people who were engaged in the cotton broking and merchanting industry at the beginning of the war concentrated into about 80 firms. The right hon. Gentleman made some play on remarks made by my hon. Friend the Paymaster-General on the last day of the Committee stage, when he referred to the closing down of the Liverpool Cotton Exchange in 1941. The right hon. Member for Aldershot has had quite a good innings on that this morning. At this stage I do not intend to throw a spanner into what should be, or could be, an amicable arrangement which I hope we will reach—that this Clause should be withdrawn—by referring to what the brokers and merchants in Liverpool did when they were approached by the then Government, for the good of the country, at the beginning of the war. I will not refer to that because it is not to their credit.

As the cotton merchanting industry was reduced to about 80 firms during the war, I think that, remembering that these firms were engaged in the futures market, in cotton, copra, cocoa and a whole range of commodities, it would be impossible to be definite on the point of how much was lost by a firm. If a firm was engaged in the futures market and probably had a line in a raw commodity, say cocoa, it would he impossible to get a basis for compensation—

Mr. Lyttelton

rose—

Mr. Rhodes

Let me finish my argument. As it would be impracticable to meet a claim for compensation, and as the claims have been advanced on such poor and intangible grounds, I think that it would be helpful if we could have a statement from the Minister of the view likely to be taken by the Board of Trade and the advice that could be given to the cotton purchasing Commission. It would be interesting to know whether the Board of Trade are in favour of the merchants being retained. Make no mistake about it, I am in favour of that. [An HON. MEMBER: Some of them".] Yes. There is no doubt that they can, and will, fulfil a function if they are retained. If they were retained with a minimum such as I suggested on the Second Reading, so that selection can be given to the mills in Lancashire, as it has been given before, we could have a set up which would be more satisfactory to the cotton merchanting side of the industry. There has been a lot of talk about bulk purchase solving the problems of the cotton trade, but that is nonsense. I would say the same of much talk from the other side of the House about the damage that can be done to the cotton textile industry by the setting up of the cotton buying Commission.

I would ask the Minister to give us a guarantee that the Board of Trade will make strong representations to the Raw Cotton Commission that the merchants should be allowed to carry on, so that I would ask the Minister to give us a guarantee that the Board of Trade will make strong representations to the Raw they will be able to give Lancashire the service that they have given in the past, retaining the skill and knowledge of a large number of people who can serve the cotton industry very well.

Mr. Selwyn Lloyd (Wirral)

I support the proposed new Clauses and I welcome very much the reasonable speech that has just been made by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I would remind him that we must deal with the situation as it will be under the operation of the proposals in the Bill. The Bill will leave to the Liverpool Cotton Market only the functions of acting as selling agents for American shippers and of acting as buying brokers for the spinners. I think the hon. Member will agree with me that that is a very small proportion indeed of the business of those who have been engaged in this trade before. In view of that exiguous residuum we think there should be compensation for the loss that has been sustained. The hon. Member put his finger on the point, which is, that the merchanting of cotton is all-important. The point of the Bill is that it puts an end to the merchanting activities of the cotton market.

Mr. Rhodes

The hon. Member is quite right so far as restriction of brokering and the agencies is concerned, but the Bill does not restrict the sale of raw cotton.

Mr. Selwyn Lloyd

I accept that correction, which is true. What have been called third country dealings are left, but I doubt very much whether that side of the business will develop very much. The Liverpool market is gone. The Bill deals with the case of the principals who have lost their businesses, to which they have devoted in the past a great deal of time, training and money, and they have suffered, as the hon. Gentleman has said, substantial loss.

I am sorry that the hon. Member for the Exchange Division of Liverpool (Mrs. Braddock) is not in her place, although I see her beyond the Bar. I wish to devote the next portion of my remarks to her views on these matters. The hon. Lady and the hon. Member for Nelson and Colne (Mr. S. Silverman) have always drawn a distinction between compensation for the employer, the principal of the firm, and compensation for the employee. The two proposed new Clauses have really been drafted to cater in part for that rather curious differentiation in their minds, in the hope that if the hon. Members could not bring themselves to give the compensation deserved in equity by principals or members of firms, for the most part small men who have made their own way, at least they might support a plea for com pensation for employees.

11.45 a.m.

In fact, the hon. Lady herself said in Committee that if it could be proved that employees were totally unemployed because of the closing of the Exchange there might be some consultation and some consideration on the basis of compensation, but not where alternative employment can be found."—[OFFICIAL REPORT, Standing Committee C, 11th March, 1947; c. 308.] That statement rather disposes of the point about alternative employment, which has been raised on the other side of the House, because in the hon. Lady's opinion it would be just and fair that some system should be devised of compensation for people who have been totally deprived of their occupation by the passing of the Bill.

The question of superannuation schemes has been raised. Many firms are pensioning old employees and dependants, but when those firms go out of business they will not be able to continue to do so. I know of one case in which six old employees are being pensioned by the firm which used to employ them. If that firm goes out of business those pensions will have to stop. It is for that type of person that we ask compensation. I agree that there are practical difficulties in the determination of this matter, but it is extraordinary what a tribunal can do when it is given some funds and a problem to solve. I do not think there is the slightest difficulty about a tribunal being given certain directions and arriving at a fair basis for compensation. Without Clauses providing for compensation, the Bill, besides being against the interests of the country, will be mean and shabby.

Mr. Keenan (Liverpool, Kirkdale)

The Opposition are always concerned with compensation, when we are dealing with questions of taking over organisations by the State or schemes of nationalisation. All they are trying to do is to get as much as possible from the State for those whom they represent. If the State had taken over totalisators for dog racing and horse racing, the Opposition would come here demanding that bookies and touts should be compensated. Most people in Liverpool have looked upon the Cotton Exchange in Liverpool as nothing more than a gambling institution.

Mr. Walter Fletcher (Bury)

Is the hon. Member confusing the words "Liverpool" and "Littlewood's"?

Mr. Keenan

Not at all. I happen to have lived all my life in the Liverpool area and I represent a Liverpool constituency. I worked for about 16 years as an official on the docks, and I know something of the subject. I probably have handled more cotton than the hon. Gentleman has seen. I can truthfully say that I have received cotton, delivered it, seen it sampled, got it out to the samplers, and all the rest of it. I know what I am talking about, and I know something of the firms who have handled it. It appears to me that they are asking for something which cannot be justified. The only asset that has been mentioned this morning was the telephone, and even that belongs to the State, as has been pointed out. I would ask the Minister to give us something more specific concerning the likelihood of some of these firms mentioned by the hon. Member for Ashton-under-Lyne (Mr. Rhodes) continuing in business. I want to know what it is they are going to do. I am concerned, in the taking over of the Cotton Exchange and its business, whether or not there will be any limitation to the trade in cotton which has gone on for all time. We are not limited, in the amount of cotton which we import, to the cotton which we use in this country. I know from experience that in normal times consignments of Egyptian cotton which came to Liverpool and the firms which shipped it—

Mr. Speaker

We are now dealing with the question of compensation.

Mr. Keenan

It is suggested that there are some firms who are not compensated, and I am trying to get from the Minister information as to whether these firms, who are likely to be outside the compensation, are to be retained on the particular work which hitherto has passed to Liverpool. So far as I know, that has been done by the cotton brokers—that is the cotton that came to Liverpool and other ports, which was transhipped to other countries. One-tenth of the cotton which came from Egypt passed through Liverpool, and it was not sent to the Lancashire mills, but transhipped to Philadelphia or Boston. Are the Cotton Commission to continue to do that? It is not only Egyptian cotton, but the cotton of other countries—I suppose there are 20 or more countries which import cotton. Will any of the firms hitherto concerned now be retained to buy cotton, so that they can re-export it? I feel sure that the business should be retained, because it is valuable. We shall have the earnings from the shipping companies, we shall get the varieties of cotton, and will have the handling of it. If we buy cotton in sufficient quantities to sell it, there is that margin of profit, out of which cotton brokers did so well in the past, and which the Commission will be wise to continue.

Mr. William Shepherd (Bucklow)

I was surprised that the hon. Member for Kirkdale (Mr. Keenan) was opposed to the justice of the claim which we seek to establish. With his knowledge of this industry and the people engaged in it, I think that he might have had a little more consideration for the interests involved. He drew our attention to such examples as the totalisator, but, surely, there is no comparison. This is a business which has not been established for two, three or 20 years. It is not a business which is immaterial to the welfare of the community. It is an industry which has grown up over 100 years, and into which much skill and experience have been put, and upon which a large number of people have relied for their livelihood. We, on this' side of the House, contend that during the war sacrifices were demanded of those who conducted this business. The time has come when those people are entitled to justice. I wish some hon. Members opposite, to whom I think justice is not unattractive, would consider some of those who will be affected by this Bill. I am going to stay a little later on this afternoon with such a man. He served seven years in the Navy, and his sole business experience is confined to dealing in cotton. He has established himself with a wife and three children. Now he returns from the Navy with no experience at all outside this business, and he has little or no prospect of employment. He and his wife are turning over in their minds the prospect of emigration. He sees nothing before him but a blank picture. It is not easy for a man who has reached the age of 35 to start afresh in a job or business. He is not welcome when he has no experience, and he cannot start afresh and establish himself by means of further education or grants.

Mr. Gallacher (Fife, West)

Is not the hon. Gentleman aware that we have thousands in exactly the same position in Scotland at the present time?

Mr. Shepherd

I am glad that the hon. Member for West Fife (Mr. Gallacher), whose belief in justice I know to be extremely profound, has drawn my attention to the fact that there are a large number of people in Scotland in such a position. I sympathise with the people in Scot- land who find themselves without livelihood. It is perfectly true that there are many men who have come back from the Services who, through circumstances which are outside their control, and which are outside the control of the community, are unable to get a start again in life. Here is a case where the community is denying these people from getting a start in life by the deliberate and positive action of the Government. Surely, the hon. Member for West Fife is prepared to draw a distinction between what happens as a result of harsh or inexorable economic changes and what happens as a consequence of deliberate action on the part of the Government. I believe that even Socialism does not need to stoop so low as it appears to be doing in refusing these people compensation. The amount, after all, is not large; the administrative difficulties could be overcome. If one seeks the easy way out of this so far as administration is concerned, surely, a global sum could be allocated in compensation and left to the industry to allocate the proportions to the various firms. I suggest that justice demands that this action should be taken. I hope that the Paymaster-General will show, when he replies to this discussion, that the Government are not prepared to further besmirch their record by the action which they propose to take at the present time with regard to compensation.

12 noon.

The Paymaster-General (Mr. Marquand)

The Debate has inevitably traversed ground covered by the Debates which took place in Standing Committee, and those Members who were in the Committee have repeated some of the arguments which they then made. I hope that the House will, therefore, forgive me if I repeat some of the things which I have said before. It may be to the advantage of Members of the House who were not Members of the Committee to know our arguments. In the first place, I want to point out and emphasise that many of the functions hitherto performed by merchanting firms may, under this Bill, be continued by them. That is one of the main arguments we adduce. It is true that they will not be allowed to import cotton into this country. That will be a monopoly of the Raw Cotton Commission, but there remain many functions which they ate allowed to perform. As I said during the Committee stage, there is nothing to prevent merchanting firms continuing to act as agents for the sellers of saw cotton abroad. As I have already explained to the Committee, merchanting firms do act as agents for the selling of Indian and American cotton. There is nothing to prevent that continuing.

Mr. R. S. Hudson (Southport)

Sellers, where?

Mr. Marquand

The sellers of Indian and American cotton in India or America may use the Liverpool merchants to sell their cotton to the Cotton Control or in future to the Commission. They may also act as brokers for the spinners in this country in so far as the spinners choose to use them. At present some 6o per cent. to 70 per cent. of the cotton sold by the Control is sold through the agency of the brokers acting for the spinners, and if the spinners value their services there is nothing to prevent them continuing to use them. The merchants may also buy raw cotton from the Commission for the purpose of exporting it abroad. The hon. Member for Kirkdale (Mr. Keenan) referred in particular to this question of re-exports, or trans-shipment as he called it, and he asked for an assurance that there was nothing in the Bill to prevent it continuing. If he will look at Clause 1 (2, b) he will see that an obligation is laid upon the Commission to see that such quantities, growths, types and qualities of the raw cotton which shall be brought in will be consistent with meeting the requirements of British industry first and, secondly, of the export trade. They have a definite obligation to look after the interests of the re-exporting trade in buying their cotton from abroad.

In Clause 3 (3, a) there is a reference to the possibility of the Commission making contracts of sale which provides that the raw cotton sold to any person thereunder is sold with a view to exporting it from the United Kingdom. We have every intention of protecting the interests of the re-export trade. We see that it is a source by which we can earn foreign exchange for this country, and it is also an economic form of transport so that if there is a shipload of cotton to this country some of it may be trans-shipped and sent somewhere else. There is every intention of continuing that. I do not want to delay the Com- mittee nor to develop the arguments at any great length, but the first point is that we must remember that a substantial part of the business carried on before 1941 by firms of this kind can continue to be carried on far will continue to be carried on in so far as they satisfy the needs of the brokers.

Mr. Selwyn Lloyd

The non. Gentleman used the term "very substantial." Does not he admit that the functions to which he has referred amount in total to a very small proportion of the form of business previously done?

Mr. Marquand

I have no figures, neither I expect, has the hon. Gentleman the Member for Wirral (Mr. Selwyn Lloyd) to determine the exact proportion, but I will not admit for a moment that it is negligible.

Mr. W. Fletcher

Does not the Minister realise that the closing of the market in Liverpool must result in the stopping of much of the business attached to it before?

Mr. Marquand

No, I do not admit that at all.

Secondly, I want to put forward this argument so that it may be recorded, because I do not need to delay the Committee with it, as it has been admitted by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton). The argument is that the functions which are prohibited under this Bill have been prohibited since 1941. He said that there was no need to inform hon. Members opposite that the Liverpool Cotton Market was closed in 194I. I said "Hear, hear," because I was glad to know that they understood it. I am quite well aware that the right hon. Gentleman understood it all along, but from some of the speeches which have been made by some of his supporters in Committee and in the country and from some of the articles published in the Press, it is perfectly clear that opponents of this Measure have not appreciated that the Market was, in fact, closed in 1941. What the Government are doing under this Bill is to continue a system which has been carried on since then.

Mr. Selwyn Lloyd

rose—

Mr. Marquand

I have not interrupted anybody this morning, and I think that it would be better to leave me to develop my arguments all together and then I will gladly listen to any interruptions.

The decision to close the Liverpool Market in 1941 was similar to industrial concentration. That again the right hon. Gentleman the Member for Alder-shot has already admitted, but he seemed to suggest that because, theoretically, the opportunity to continue in business was still open to some of those concentrated firms their case was substantially different from that of the Liverpool firms. I do not agree. It is true that the opportunity to continue the importing function will no longer be there for the Liverpool firms, but many of the opportunities which concentrated firms lost for years with no payment of compensation of any kind whatsoever may never be regained and nobody proposes to pay compensation to them. I suggest quite seriously to the Committee that there have been similar losses—and one does not deny that there are losses—incurred as a result of import licensing, of requisitioning of premises for other uses, the retention of those premises by the Government, slow derequisitioning and all that kind of thing. I still feel that the analogies I introduced of the conversion of the Navy to oil burning instead of coal burning and the damage which it did to the coal industry of South Wales, or the transfer of the naval functions from Pembroke Dock elsewhere are reasonable analogies to use in this connection.

They are frustration of expectations and that is what we are dealing with here. We are asked to compensate people because their expectations of being able to continue after the war in certain types of business have been frustrated. That is what the arguments of hon. Members opposite are based upon, and I say, rightly or wrongly, that there are numerous precedents in the past where no compensation was paid for frustration of expectations. The right hon. Gentleman the Member for Alder-shot attempted to confuse the matter by introducing the question of the loss of goodwill by carriers under the Transport Bill. We on this side of the House hold that there is an essential difference between frustration of expectations due to a change of policy and circumstances and the taking over of a business. When businesses are taken over we recognise that there shall be compensation not merely for the purchase of the physical assets, but compensation for the loss of goodwill and earning capacity.

What has not been referred to this morning very surprisingly—but perhaps not so surprisingly—was that for five years under what they call in Lancashire the care and maintenance scheme, compensation has been paid. Certain very small and very slender services indeed connected with the rendering of invoices were made by the cotton merchanting firms to the Control, and under an arrangement entered into with those firms at the time that Cotton Importers and Distributors Limited was closed, the Cotton Control paid for those services sums in excess of their market value.

Mr. W. Fletcher

The hon. Gentleman has referred to the market value of those services. Can he enlarge upon that and clarify his point a little by saying what yardstick he is using to assess the market value of those services?

Mr. Marquand

I am saying that the servicing of invoices for the transfer of cotton from the Control to the mills could have been done by clerks hired in the open market for very much less than the sums which were paid out to the Liverpool cotton firms for doing it. That was done quite deliberately in such a way that, after meeting expenses, which included the wages of the employees doing the work, the partners of the firms should each receive about £500 a year. That went on for five years—a scheme administered by the association in Liverpool—and at the end of the period, after the Government had decided that the bulk buying of cotton was to continue, we gave due notice of the termination of that scheme. When representations were made to us about the difficulties caused thereby, we extended the notice for a further period. Thus there was that substantial payment over a period of five years, there was due notice given of the ending of these contracts, the contracts have now come to an end and that is all there is to it.

So much for the first of these two new Clauses. As I said in Committee, I have not denied that hardship to individuals may be caused by changes of Government policy or of economic circumstances, but I can only say that we have now comprehensive systems of social insurance and services. After all, they are designed to take care of these changes in employment opportunity which occurred from time to time. I have the greatest possible sympathy with men advancing in years who have found it difficult to obtain new employment, but, as I said before, that is an argument for some special provision under the social services through the Assistance Board, the Ministry of National Insurance, or whatever it may be, and for special attention to be paid to the case of elderly men or women throughout the country whatever the industry in which they may be concerned so that their employment opportunities may be improved. We cannot go out of our way to make an exceptional provision in this particular case.

Then it has been said that we are taking over the business of other people. We are not. We are taking over the business which the Cotton Control has performed over a period of five years and we are continuing it in a new form by means of a public corporation. Having created a body intended to do this business of importing cotton and supplying the cotton industry of Lancashire more economically than the Liverpool market did it, it would be illogical to saddle the industry for two or five years thereafter with the burden of continuing to carry unnecessary persons on its pay roll. That is what we are asked to do This raw cotton buying Commission will be a public corporation similar, if you like, to the London Passenger Transport Board, and I should hate it to be said that it carried more passengers than that body. We see no reason why the cotton spinning industry of Lancashire should be saddled for from two to five years with the burden of paying to persons the difference—as I understand it—between what they actually earned during these last seven years and what they might have earned had some other circumstances prevailed In recognition of the misfortune suffered by particular individuals in Liverpool, we have agreed that the headquarters of this organisation shall be in that city.

12.15 p.m.

Mr. Lyttelton

Whose Amendment was that?

Mr. Marquand

The suggestion was put forward by hon. Members interested in Liverpool on both sides of the House and long before the Bill was introduced, the Government announced their intention to establish the headquarters of the Commission in Liverpool.

Mr. W. Fletcher

Is the hon. Gentleman putting that forward on a challengeable basis, or is he saying that it is the obviously logical and economically correct place for the new headquarters to be?

Mr. Marquand

It was a decision made, like many decisions, after considering a number of arguments, and if it had been grossly uneconomic, of course, it would not have been made. There has been much exaggeration of the number of employees affected by the changes that have occurred in the conduct of operations in Liverpool in the cotton business during these last years. At the end of March there were registered at the payments offices of the Ministry of Labour 109 persons, and at the exchanges of the Ministry of Labour 36 persons who had previously earned their living as employees of these firms—a total of 145. As I have already said, I do not give these figures in order in any way to suggest in the slightest degree that because they are few we should take no notice of them, but merely in order to correct the impression which has been given in some quarters that very large numbers have been affected by these changes. Over the years many who have lost earning and employment opportunities who were previously engaged in this industry have gained new ones.

Lastly, if we were to accept the proposals which have been made we should have very great difficulty indeed in determining who lost employment as a result of the war circumstances and who as the result of the passing of the Bill—the two criteria which are laid down in the Clauses we are asked to accept. As I have said, I agree that ex-Servicemen have returned to Liverpool to find their expectations of being able to take up business in that import industry have been frustrated, just as ex-Servicemen returning to ports in my own constituency—which has nothing to do with cotton—have found that their expectations of taking part in the coal export trade or the import trade in certain commodities which used to come through those ports have been frustrated because limitation of imports now confines the right to import to those who imported in a base year, or because certain of the export regulations similarly frustrated various expectations. There is no compensation for them. We should find it very difficult indeed to say that any given individual had lost his employment or his business as a direct result of these war circumstances.

After all, the total sum of the turnover of raw cotton in the Port of Liverpool, and in the other ports of Lancashire which take in cotton, is very much less than before the war, owing to the fact that the spinning industry is smaller because of its shortage of labour. Unemployment would have been there in any case, and it is virtually impossible to distinguish how much of the frustration of the expectation of employment is caused by the diminution in total turnover, and how much of it may be caused by the changes in methods of importing. I regret the misfortunes which individuals have suffered, and the Government regret it, but for the reasons I have briefly outlined—and I could have dealt with them in extenso—I cannot accept either of the new Clauses, in principle or in toto, and I must, therefore, ask the House to reject them.

Mr. R. S. Hudson

I did not serve on the Standing Committee, and therefore I have heard the arguments for the first time from the lips of the Paymaster-General. I am bound to say that in a considerable experience I have rarely heard a more miserable collection of so-called arguments. A great number of them were, frankly, an insult to the intelligence of the House, as I will try to show in a few moments. Let me first deal with the speeches of the hon. Member for Ashton-under-Lyne hoped that the the hon. Member for Kirkdale (Mr. Keenan). They both made very moderate speeches, and showed that there are Members on the other side who, in their heart of hearts, are apprehensive about some of the results likely to flow from the passing of this Bill into law. The hon. Member for Ashton-under-Lyne hoped that the Paymaster-General would be able to reassure him that the Board would, in fact, use large numbers of merchants, and the hon. Member for Kirkdale hoped to be reassured on the question of re-exports. I do not think they got much satisfaction from the reply of the Minister.

Neither of the two hon. Members dealt with the question of compensation. The hon. Member for Ashton-under-Lyne said that it might be difficult to pick and choose and decide who was entitled to compensation, but that seems a very poor argument against the essential justice of the Clause we are putting forward. When we come to the Paymaster-General, he proceeded to argue on two completely contradictory grounds. He devoted himself in the first part of his speech to saying that this really was not a serious problem at all, because there would be large openings for merchants and brokers to continue the jobs they had been accustomed to do before the war. He said, in reply to the apprehensions of the hon. Member for Kirkdale, that they would still be able to act as agents for producers, including India and America, and he instanced two Subsections in the Bill which specifically enjoined the Board to make cotton available for re-export. If that is the case, it is a very small number of people who will be involved. It completely disposes of the argument he used later in his speech, that he was not prepared to impose at the beginning of its life, an overwhelming burden on the Board by the payment of compensation. If the total number of people is very small, why not have the system of compensation—normally you do not have compensation unless damage can be proved? He cannot have it both ways. Even if the extreme were true, and there were a large proportion of the people concerned, the total sum involved, as my right hon. Friend the Member for Aldershot (Mr. Lyttelton) has said, would be negligible. Is the hon. Gentleman seriously going to get up and ask us to believe that million, in the light of the figures involved, would make any difference either way?

Mr. Fairhurst

Whether it is justifiable or not?

Mr. Hudson

I am not arguing whether it is justifiable or not. All I am doing is to address myself to the arguments put forward by the Paymaster-General. He defended his refusal to paying compensation on the ground that it would impose a heavy burden on the Board in its early days. His words were that he was not prepared to saddle the Board with carrying this burden. I am saying that the burden is, in fact, negligible, and amounts to something in the nature of £1 million. I am asking whether anyone considers £1 million is either here or there in relation to the figures involved in the Board's operations. When we were discussing this Bill on Second Reading, the figure of the stocks was given as £90 million. In the course of the Committee stage, the hon. Gentleman said that the value had diminished to £80 million. And so the Board will have been involved in a loss of £10 million before it has started to operate.

Mr. Rhodes

That is not a fair argument. It is totally unfair to say that the £90 million has shrivelled to £80 million overnight. It was from the time the Bill was introduced and the matter was discussed.

Mr. Hudson

It is a measure of the enormous fluctuations in losses and profits which the Board will have to carry over comparatively short periods of time. It is negligible—

Mr. Sydney Silverman (Nelson and Colne)

; Is the right hon. Gentleman really arguing that an addition of ten per cent. is negligible?

Mr. Hudson

It is not an addition of ten per cent. per annum, but an addition once and for all.

Mr. S. Silverman

That is precisely the reason given by my hon. Friend for not adding that additional burden once and for all in these early stages of the transition period.

Mr. Hudson

The hon. Gentleman does not know whether—

Mr. Silverman

I am arguing only on the point of negligibility. The right hon. Gentleman's argument shows that the figure is not negligible.

12.30 p.m.

Mr. Hudson

On the contrary; but if the hon. Member wants me to take up the time of the House on this argument, I will do so very gladly—it is the Government's time and not mine. Perhaps he will show the usual courtesy and take the trouble, having put forward the question, to listen to the answer. He said that the figure of £1 million is not negligible. The Paymaster-General said that he did not know within a million or two whether the figure was £80 million or £90 million. The figure of £1 million is completely derisory in relation to the total figures. The Paymaster-General talked about the numbers concerned, and, in an answer to an interruption by my hon. Friend the Member for Bury (Mr. W. Fletcher), denied that the closing of the futures market would result in fewer people being employed. Earlier, the Government defended this Bill on the ground that it would lead to more economy in labour. The Paymaster-General seems to have forgotten what his right hon. and learned Friend the President of the Board of Trade said in winding up the Second Reading Debate: We say that a large buyer can provide those services more cheaply, and the first example of that is that the actual staff engaged on it will be cut to about one-tenth of what it was under former conditions."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 432. c. 153.] That rather disposes of the argument which the Paymaster-General used, that the bulk of these people would not need to find re-employment. The hon. Gentleman did not realise that the abolition of the futures market would result in substantially fewer people being employed than before.

Mr. Marquand

It does not seem to be clear to everybody opposite that the futures market closed in 1941. The loss of employment resulting therefrom has been taking place over a number of years. Is the right hon. Gentleman seriously suggesting that now, suddenly, there will be an additional loss of employment?

Mr. Hudson

I will deal with that point when I come to the further argument of the hon. Gentleman. All I am concerned with at the moment is to refute the suggestion made by the hon. Gentleman, in answer to my hon. Friend the Member for Bury, that the permanent abolition of the futures market would not result in a reduction of staff, as compared to prewar. It is the people employed in that market prewar with whom we are concerned. The Paymaster-General said that there were adequate social services available today for those employees. I do not know whether the people in Liverpool, in the constituency of the hon. Member for the Exchange Division (Mrs. Braddock)—

Mrs. Braddock

They do not live in my area.

Mr. Hudson

Wherever they live, I do not think that they will be very comforted by reading in the Press tomorrow that the Paymaster-General's recommendation was "Put 'em on the dole."

Mrs. Braddock

They are the right hon. Gentleman's constituents.

Mr. Hudson

Yes, some are my constituents, and they will not be pleased to know that the only solution for their difficulties is to "put 'em on the dole." That is the sort of sympathy which Members opposite have for these unfortunate people. The Paymaster-General talked about difficulties and frustration on entering employment. During the Committee stage he talked about ex-Servicemen who said they expected to be able to enter employment, to set up in new business, but had found great difficulty.

Mr. Marquand

Re-enter.

Mr. Hudson

Really, the hon. Gentleman must be more accurate. I have already shown him up in regard to what his right hon. and learned Friend the President of the Board of Trade said. On 11th March, in standing committee on the Bill, the Paymaster-General—and ha ought to know by now that I do not make statements of this kind without being able to produce evidence if I am challenged—said: Nobody could have more sympathy than my colleagues in the Government and I have for men returning home from the war, of whom we have heard today, who find that they are not able to enter the business they had hoped to enter … My own constituency has nothing to do with cotton in the slightest degree, but a number of my constituents, ex-Servicemen, come to me and tell me of their difficulties in establishing themselves where they hoped to establish themselves."—[OFFICIAL REPORT, Standing Committee C, 11th March, 1947; c. 337.] That is not re-entering; it is entering. The point I want to emphasise is that a large number of the men concerned are ex-Servicemen who were in the business before the war. They went into the business and have the right, not to enter into the industry, but to re-enter it. They have a statutory right of re-employment. There is no question of a feeling of frustration about not being able to enter an industry. By the Government's action they are not being allowed to re-enter their former business.

The Paymaster-General said that employers had no "grouse" because, during the war, they were paid small sums while the market was closed and while the Control Board was in operation. But they were paid those sums, not by way of compensation for the permanent loss of business, but to keep a nucleus staff going against the day when the market would re-open. The whole essence of the payments was to keep a nucleus staff going against the day when the Liverpool futures market would re-open. It is idle for the hon. Gentleman to ask the House to believe that these payments were compensation for the closing of the business. So far from that being true, a great number of these firms found that the sum they were getting, in order to keep a nucleus staff, was wholly insufficient. In fact, they incurred substantial losses during the war. They would not have gone on doing that if they had been told, at the beginning, that their job and business would never be re-opened. They were confident in the belief that they would have the chance, after the war, of doing the job they did before the war.

Mr. Marquand

The right hon. Gentleman has just said that there were substantial losses, yet he previously said that the total of losses was negligible.

Mr. Hudson

We are talking about what we believe to be the sort of sum which would be involved. I am told that the sum total would be something in the order of £1 million and that, in relation to the whole expenditure by the Board, is negligible. In the case of an individual firm, the actual expenses over what they got are not negligible. All I say is that these people were asked to carry on with a view to re-opening as soon as the war was over, and circumstances allowed. The Government, by their action, have completely prevented that expectation from being fulfilled. It is not like an ordinary concentrated industry—hosiery, or something like that—which is continuing after the war, and where people who were concentrated had the opportunity of re-entering their job. This is a specific industry which, by the deliberate action of the Government, has been closed for good. We say that in these circumstances it is mere common justice that the people concerned, if they are able to show that they have suffered damage, and cannot get any other occupation, should be entitled to a fair measure of compensation from the Government.

Mr. Charles Williams (Torquay)

rose—

Mr. Speaker

I hope that the House will now come to a decision.

Mr. S. Silverman

I do not propose to say a word about the first of the new Clauses which we are discussing, because I think that the arguments from both sides on that Clause during the Committee stage were quite adequate. I do, however, ask your indulgence, Mr. Speaker, in prolonging the Debate on the second Clause. It is a wholly new Clause; it has not appeared before us at any previous stage. I am going to vote against it, and I think that right hon. and hon. Gentlemen opposite, who have taken so much trouble in its preparation and presentation, are entitled to know why I oppose it. I oppose it, first of all, because I do not believe in the sincerity of their intentions. I said that before, and I say it again. I have no faith in it of any kind. It is wholly out of court—

Mr. Speaker

I do not think that the hon. Member is entitled to say that he has no faith in the sincerity of arguments used by other hon. Members. That, surely, is casting an unworthy imputation.

Mr. Silverman

If you say so, Sir, I, of course, agree with you and withdraw it. [HON. MEMBERS: "Unreservedly?"] I withdraw it completely and unreservedly. I am perfectly certain that hon. Members opposite are sincere in wanting to do what they have always wanted to do. They are perfectly sincere in not wanting to afford one penny of compensation to anybody, because that is what the Clause is for.

Mr. W. Fletcher

On a point of Order. I would point out, Mr. Speaker, that what the hon. Gentleman has said is exactly opposed to the Ruling which you gave just now. For the hon. Gentleman to say that we are not sincere in wishing to give compensation to any working man is another imputation of insincerity.

Mr. Silverman

What I am saying is that no one who reads this Clause can see any way in which any worker in industry would benefit. I accept your Ruling, Mr. Speaker, and I am sure that what this Clause actually proposes is what hon. Members opposite sincerely mean. It proposes to give no compensation to anybody. That is my reading of it. We have only to look at the first Subsection: Regulations shall provide that every person to whom this Section applies who in consequence of the operation of this Act suffers any loss or diminution of employment or any loss or diminution of emoluments or superannuation or similar rights shall receive certain things. But there are no such persons, and I believe that right hon. and hon. Members opposite know that there are no such persons. There is nobody in this industry who receives, or has ever received from the Liverpool Cotton Exchange, one penny of superannuation of any kind. There are people who have spent a lifetime in the industry, and who have been turned out at the end without receiving a single penny by way of pension, superannuation, or loss of any sort or kind. Hon. and right hon. Gentlemen opposite know that perfectly well.

Mr. Lyttelton

On a point of Order. Is not the hon. Gentleman, Mr. Speaker, again repeating charges that we are putting forward arguments, knowing them to be false? I know of many firms who are making such payments at the present moment.

Mr. Silverman

I would only repeat to the right hon. Gentleman my own experience, in which I have more confidence than I have in his. I say that there is no firm engaged in this industry which has ever paid any compensation, any superannuation or any pension of any kind.

Mr. Speaker

A point of Order was raised. Again it is alleged that the hon. Member has imputed bad faith to hon. Members opposite. I am not sure that he did so, but he certainly ought not to have done so after my Ruling.

Mr. Silverman

I would only repeat, Sir, that I am sure that hon. Members opposite intend, in perfectly good faith, to give compensation to every man in this industry who by reason of this Bill loses any superannuation that he formerly had, and I say that they know perfectly well that there are no such persons, and that, therefore, it is a very improper Clause.

Mr. Speaker

The hon. Member says that he knows perfectly well that this is a fraud. He really must be a little more careful in what he says, and must not impute motives.

12.45 p.m.

Mr. Silverman

I am not imputing motives at all. I am entitled to my view, first, that there is nobody who gets any superannuation, and, secondly, that there is nobody who could qualify for compensation under this Clause. With great respect, Sir, I am entitled to my view and right hon. and hon. Gentlemen opposite, who know this industry so well, know that I am right. I say that those are the facts.

Then the Subsection talks about diminution of emoluments, but does not define emoluments. Presumably, it means something different from loss or diminution of employment. I know this part of Liverpool very well. For several years, I represented on the Liverpool City Council many of the people who would be affected by this Clause. I know the subject inside out. I know of no such case, any more than I know of any superannuation. Therefore, that part of the Clause would entitle nobody to one penny of compensation. There is left—I must be careful of my words—a more comprehensible category—I will put it that way—of those who suffer loss or diminution of employment. Undoubtedly, there are such persons: everybody admits it. But they are very few indeed. What does this Clause offer to them? First, it places upon anyone who is to get compensation an impossible onus of proof. The words: Regulations shall provide that every person to whom this Section applies … suffers any loss. clearly place upon such a person the onus of proving that he has suffered a loss or diminution of employment. But the Subsection does not say at what stage. Obviously, if a man comes forward and says, "I have lost part of my employment, and I have suffered a reduction in wages," since he is not to be entitled to compensation merely because he ceases to be employed, he must prove his loss He must do his best to find other employment at least at the equivalent rate. Only if he fails to do that will he be entitled to compensation. But the Subsection does not say how long he is to wait, or what efforts he is to make. It places upon him an impossible burden of proof which, in most instances, he would never be able to carry out, and, therefore, he would not get a single penny of compensation.

The idea that the State should compensate persons who suffer loss of employment, owing to the development of the Government's policy in trade and industry, is both a dangerous and a new one for hon. and right hon. Gentlemen opposite to put forward. The very first Standing Committee of which I had the honour to be a Member, was also concerned with the Bill to nationalise the cotton industry. The Cotton Spindles Act, 1936, was a Measure to levy on the owners of spindles a certain amount, and out of the pool of money thus created, spindles were to be bought and destroyed, so as to rationalise the industry, concentrate it, and make it, I quite concede, more economic and more profitable. But the loss of spindles meant loss of opportunity for spinners to work, which is precisely the point that is claimed in connection with this Amendment. In that Committee, some of my hon. Friends and I tried very hard to persuade the Government of the day to introduce into the Measure a proposal to compensate spinners who were thrown out of employment altogether because the spindles with which they worked were to be bought up and scrapped. We failed hopelessly in our effort; not one Conservative Member supported us, although on that occasion the money was not to be provided by the State, but was to come out of the levy which people made and which went into a common pool for the purpose of destroying spindles in order to increase the value of the remaining spindles.

We failed then, but there is enormous enthusiasm on the part of hon. Members opposite now, in quite different circumstances, to provide compensation because some advantage might be derived for a different class for which they have more sympathy. The proposal they make is dangerous for the reason that we art now engaged in this country in a new industrial revolution, of which this Bill is a small part. We have to re-orientate our ideas, to re-assess our assets and re-deploy them, and this includes, as we all know, a vast re-allocation of manpower in this country. It would defeat the whole of the social purpose which the Government were elected to perform, and which they are carrying through with courage and vision, if, every time they went forward a step in the allocation of manpower, they had the clog and drag of compensation. If that were introduced in all circumstances where changes of employment follow upon the introduction of major Government policy in trade and industry, it would make as difficult as possible the transitional social and economic phase through which we are now passing, and which is being managed with so much skill and courage.

Mr. W. Fletcher

Those hon. Members who sat in the Committee on this Bill can find a good many excuses for the irrelevant and hairsplitting speech of the hon. Member for Nelson and Colne (Mr. S. Silverman). During the Committee stage, the hon. Member put himself under a very severe restraint. It must be difficult for the most assiduous patron of HANSARD in the House to have to turn himself into a member of the Dumb Friends League day after day. That must have imposed a very great strain on the hon. Member, and he must be forgiven the little excursion he has just made into country a long way from the Bill. The imputations, both overt and covert, which he made about our sincerity can be judged by anybody who reads the report of the Debate, and by everybody who knows what is behind the Amendment. I will leave the hon. Member's speech at that.

The Minister's speech was really staggering. If that speech had been made by an employer who was throwing his men out of employment during that period about which we hear so much in the House, the years between the wars, there would have been a howl from hon. Members opposite about the bad employer trying to find excuses for not looking after his men and compensating them. The cares of office seem to have changed men's minds to a very great extent. That, undoubtedly, was the reason behind the Minister's speech. The argument he used about there not being very many people concerned has a classical procedent in the argument of the servant girl who found herself with an unwanted offspring and said, in excuse, that it was only a very small one. The Minister's argument was on the same basis.

Mr. Marquand

As I am sure the hon. Gentleman does not wish to misrepresent what I said, I would point out that I made it abundantly clear that, in quoting the very small number unemployed, I did not intend in any way to suggest that that made the hardships and misfortunes less severe in any way, or made it possible for us not to care for them.

Mr. Fletcher

The very thin layer of synthetic sympathy sauce with which the crumb has been covered hardly alters what the Minister said.

Mr. S. Silverman

On a point of Order, Mr. Speaker. What is the precise significance of the term "synthetic sym- pathy," and does it involve a charge of bad faith?

Mr. Speaker

My attention was not directed at the moment to what the hon. Member for Bury (Mr. Fletcher) was saying. Therefore, I am unable to answer the question.

Mr. Fletcher

I would like to point out, as a culinary expert, that all sauce is, from a chemical point of view, synthetic. I turn now to an argument of considerably more weight. The Minister put forward, as vague and half-hearted compensation that might be received, the entrepôt trade in cotton that might fall to certain former members of the Liverpool Cotton Exchange who are now to be thrown out of employment, and he passed over an interjection I made by saying that it could not be so. I ask him to believe that he is wrong on that point. It is impossible for the entrepôt business in cotton, which was a large portion of the useful work carried on, work which gave employment and produced dollars, to be carried on unless there is a futures market. One cannot buy cotton in other markets, bring it to Liverpool, have the double handling charges, put it into store, take it out of store, re-ship it—one cannot bear all those charges—without serious loss to the Exchequer under the present scheme, and that loss will come out of the general funds that have been voted. To think that the members who used to do that very useful business will now be able to carry it on without a futures market to hedge in is really out of the question, and shows a lamentable lack of essential knowledge which should be in the head of the Minister when arguing a point of this sort. The Minister has given a blessing to that business, and says it is business that he would like to take place, and hopes that revenue will accrue to those who undertake it; but I say that it cannot be carried on unless there is a futures market in which to hedge the import which later becomes an export.

I was glad to hear that compensation for goodwill is not necessarily something which is altogether outside the purview of the Government, because the argument which is used that one should not compensate those whom we are seeking to protect because the loss they are suffering is intangible, and is based on goodwill, cannot hold water. The statement of the hon. Member for Kirkdale (Mr. Keenan) that cotton could be imported from Egypt by these members and re-exported is proof of the existence of goodwill. It is the direct personal connection between members of the Liverpool Cotton Exchange in the past, their knowledge, their personal contacts, their credit standing, and the transactions they have carried through in years past in Egypt, Uganda, and all over the world, which has made that business possible. If the Chancellor were here, I believe he would be in agreement with our argument that goodwill is the most important part of the business, and is the very real essence of what is being lost at the present moment.

I hope that in the reconsideration that may yet take place after the pleas we have put forward, with all sincerity, that matter will be taken into account, and that not only the plea put forward by the hon. Member for Ashton-under-Lyne (Mr. Rhodes), but the pleas put forward from this side, will lead to a review of the method to be used, so as to permit the entrepôt business to be continued, with greater employment than is at present contemplated of past members of the Liverpool Cotton Exchange, and proper compensation for those who are losing. The argument used by the Minister about the interim period between the original telescoping of this industry and the decision taken now is worth examining in the light of what has happened in regard to rubber. On the Minister's argument, the rubber exchange has been opened by the Government again after exactly the same arrangement was made. If his argument holds good, the money will be demanded back, because the rubber exchange has been reopened. In logic that is the next step the Minister ought to take. Does he intend to do that? If not, the whole argument that compensation has been paid already falls to the ground.

1.0 p.m.

Mr. C. Williams

When I read these two new Clauses last night I was in a considerable amount of doubt as to whether it would be possible to justify voting for them purely from the taxpayers' point of view. All the hon. Members who have spoken in this Debate up to the present have come from what I might call the cotton producing and manufacturing area. With the exception of my right hon. Friend who moved this new Clause and who has an exceptional knowledge of the subject, there has been no speaker from any other part of the country. It cannot be right that the only Members to take part in a Debate of this sort, which involves the taxpayers' money, should be those intimately or closely connected with the area concerned. This is a national matter, and I intervene on that account.

It is with regret that I notice the hon. Gentleman the Paymaster-General is no longer here; of course, I recognise that he has been here all morning. I want to thank him for helping me to make up my mind to vote for these new Clauses. He has had every help that he could have got from Government Departments, and he clearly admitted that the amount of compensation involved would not be damaging. He also brought forward the amazing proposition that, in the same way as we change from coal-burning to oil-burning in ships, this is a natural trend of development. I only wonder that he did not bring forward the more antiquated idea of the change from coach horses to railway trains. It was quite clear that the hon. Gentleman was entirely lacking in the clarity which one might expect from his right hon. and learned Friend whose name appears on the back of the Bill. I can only assure him that who wanted complete clarity to make our decision in this matter, deeply regret that we did not have the help of the right hon. and learned Gentleman, because he has a much closer and more kindly feeling for the workers for whom we are appealing in the second of the new Clauses, than his hon. Friend has, judging from the rather sneering remark he made about employment in the second part of his speech. So far as that point is concerned, the hon. Gentleman helped me to come to the conclusion that there was a complete case for voting in favour of the new Clauses.

I will not refer to the speeches from this side of the House. Neither will I deal with the speech of the hon. Member for Nelson and Colne (Mr. S. Silverman). But we did hear earlier in the day a very remarkable speech from the hon. Member for Ashton-under-Lyne (Mr. Rhodes) who, for practical purposes, appealed to the Government to accept these two new Clauses. In trying to decide whether these new Clauses are fair and whether, as a taxpayer, and in the interests of the taxpayer, I can vote in favour of them, I am completely convinced by the arguments put forward from this side of the House. As a result of the help I have received, particularly from the case presented by the Minister and from one hon. Member opposite, I am satisfied that, as far as fairness is concerned, one cannot possibly vote against the new Clauses.

I would like to give another reason. The Government are turning certain people out of the industry—not many people—some employers and some workers. I am certain that very shortly we shall want them back again, and it would be just as well to compensate them now and leave them with a desire to come back into the industry in a short time as they will when the situation is changed once again. The appeals for help which have been made in many other directions will be made to these people, when the industry is denationalised, and put upon its feet again. That is a reason which has

not been put forward today so far. I say to the Parliamentary Secretary to the Board of Trade—I see he has a smile upon his face, but he ought to know something of the complete changes which take place in the Government's theories compared with six months ago, if he has read their White Papers—that for that reason alone, we have an overwhelming argument for voting in favour of these two Clauses. I hope those hon. Members opposite who represent the cotton area and who have, as I have, very close connections with the industry—I have a connection from the wider point of view of taking a national interest in this matter—will do nothing by voting against these new Clauses which would hurt this industry today, or in the future.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 72; Noes, 210.

Division 121.]	AYES.	[1.7 p.m.
Agnew, Cmdr. P. G.	Gridley, Sir A.	Noble, Comdr. A. H. P.
Amory, D. Heathcoat	Hannon, Sir P. (Moseley)	Peake, Rt. Hon. O.
Astor, Hon. M	Hare, Hon. J. H. (Woodbridge)	Ponsonby, Col. C. E.
Barlow, Sir J.	Headlam, Lieut.-Col. Rt. Hon. Sir C	Poole, O B. S. (Oswestry)
Baxter, A. B.	Herbert, Sir A. P.	Price-White, Lt.-Col. D.
Boyd-Carpenter, J. A.	Hogg, Hon. Q.	Prior-Palmer, Brig. O.
Braithwaite, Lt.-Comdr. J. G.	Howard, Hon. A.	Reed, Sir S. (Aylesbury)
Buchan-Hepburn, P. G. T.	Hudson, Rt. Hon. R. S. (Southport)	Renton, D.
Bullock, Capt. M.	Hulbert, Wing-Cdr. N. J.	Roberts, H. (Handsworth)
Byers, Frank	Hutchison, Lt.-Cm Clark (E'b'rgh, W.)	Roberts, Maj. P. G. (Ecclesall)
Carson, E.	Lambert, Hon. G.	Savory, Prof. D. L.
Challen, C.	Lipson, D. L.	Shepherd, W. S. (Bucklow)
Channon, H	Lloyd, Selwyn (Wirral)	Smith, E. P (Ashford)
Clifton-Brown, Lt.-Col. G	Lucas-Tooth, Sir H.	Snadden, W. M.
Cooper-Key, E. M	Lyttelton, Rt. Hon. O.	Sutcliffe, H.
Crookshank, Capt. Rt. Hon. H. F C	Macpherson, Maj. N. (Dumfries)	Taylor, C. S. (Eastbourne)
Crosthwaite-Eyre, Col. O. E	Manningham-Buller, R. E.	Thomas, J. P. L. (Hereford)
Darling, Sir W. Y	Marples, A. E.	Thorp, Lt.-Col. R. A. F.
Dower, Lt.-Col. A. V. G. (Penrith)	Marshall, D. (Bodmin)	Touche, G. C.
Drayson, G. B.	Morrison, Maj. J. G. (Salisbury)	Wheatley, Colonel M. J.
Duthie, W. S.	Morrison, Rt. Hon. W. S. (Cirencester)	Williams, C. (Torquay)
Fletcher, W. (Bury)	Neill, W. F. (Belfast, N.)	Willoughby de Eresby, Lord
Fraser, H C. P. (Stone)	Neven-Spence, Sir B.
Gage, C.	Nicholson, G.	TELLERS FOR THE AYES:
Galbraith, Cmdr. T. D	Nield, B. (Chester)	Mr. Studholme and Major Conant.
NOES.
Adams, Richard (Balham)	Blenkinsop, A.	Clitherow, Dr. R.
Adams, W. T. (Hammersmith, South)	Blyton, W. R.	Cocks, F. S.
Allen, A. C. (Bosworth)	Bottomley, A. G.	Collick, P.
Anderson, F. (Whitehaven)	Bowden, Fig.-Offr. H. W.	Collindridge, F.
Attewell, H. C.	Bowles, F. G. (Nuneaton)	Colman, Miss G. M.
Ayles, W. H.	Braddock, Mrs. E. M. (L'pl. Exch'ge)	Comyns, Dr. L
Ayrton Gould, Mrs. B.	Braddock, T. (Mitcham)	Cooper, Wing-Comdr. G
	Bramall, E. A.
Baird. J	Brook, D. (Halifax)	Corbet, Mrs. F. K (Camb'well, N.W.)
Balfour, A.	Brooks, T. J. (Rothwell)	Corvedale, Viscount
Barstow, P. G	Brown, George (Belper)	Davies, Edward (Burslem)
Barton, C.	Brown, T. J. (Ince)	Davies, Ernest (Enfield)
Battley, J. R.	Bruce, Maj. D. W. T.	Davies, Harold (Leek)
Bechervaise, A. E.	Burden, T. W.	Deer, G.
Belcher, J. W.	Butler, H. W. (Hackney, S.)	Dobbie, W.
Benson, G.	Callaghan, James	Dodds, N. N.
Berry, H.	Castle, Mrs. B. A	Dumpleton, C. W.
Bing, G H C.	Champion, A J	Edwards, N. (Caerphilly)
Binns, J.	Chater, D.	Evans, E. (Lowestoft)
Blackburn, A. R	Chetwynd G R	Evans, S. N. (Wednesbury)
Ewart, R.	Longden, F.	Skinnard, F. W.
Fairhurst, F.	Lyne, A. W.	Smith, C. (Colchester)
Foot, M. M.	McAdam, W.	Smith, Ellis (Stoke)
Gallacher, W.	McAllister, G.	Smith, H. N. (Nottingham, S.)
Ganley, Mrs. C. S.	McGhee, H. G.	Smith, S. H. (Hull, S.W.)
Gibson, C. W	McGovern, J.	Snow, Capt. J. W.
Goodrich, H. E.	Mack, J. D.	Solley, L. J.
Greenwood, Rt. Hon. A. (Wakefield)	McKay, J. (Wallsend)	Soskice, Maj. Sir F.
Greenwood, A. W. J. (Heywood)	McLeavy, F	Sparks, J. A.
Grey, C. F.	Mallalieu, J. P. W.	Stamford, W.
Griffiths, D. (Rother Valley)	Manning, C. (Camberwell, N.)	Stewart, Michael (Fulham, E.)
Griffiths, W. D. (Moss Side)	Marquand, H. A.	Strachey, J.
Guest, Dr. L. Haden	Mellish, R. J.	Strauss, G. R. (Lambeth, N.)
Gunter, R. J.	Mikardo, Ian	Stubbs, A. E.
Haire, John E. (Wycombe)	Mitchison, G. R.	Swingler, S.
Hale, Leslie	Morris, Lt.-Col. H. (Sheffield C.)	Sylvester, G. O.
Hamilton, Lieut.-Col. R	Morris, P. (Swansea W.)	Symonds, A. L.
Hardman, D. R.	Moyle, A.	Taylor, H. B. (Mansfield)
Hardy, E. A.	Murray, J. D.	Taylor, R. J. (Morpeth)
Hastings, Dr. Somerville	Naylor, T. E.	Taylor, Dr. S. (Barnet)
Henderson, A. (Kingswinford)	Neal, H. (Claycross)	Thomas, D. E. (Aberdare)
Henderson, Joseph (Ardwick)	Nichol, Mrs. M. E. (Bradford, N.)	Thomas, George (Cardiff)
Hicks, G.	Nicholls, H. R. (Stratford)	Thurtle, E.
Hobson, C. R.	Noel-Buxton, Lady	Tiffany, S.
Holman, P.	Pargiter, G. A.	Titterington, M. F.
Holmes, H. E. (Hemsworth)	Parker, J.	Tolley, L.
House, G.	Paton, Mrs. F. (Rushcliffe)	Turner-Samuels, M.
Hudson, J. H. (Ealing, W.)	Pearson, A.	Ungoed-Thomas, L.
Hughes, Hector (Aberdeen, N.)	Peart, Capt T. F.	Vernon, Maj. W. F.
Hughes, H. D. (Wolverh'pton, W.)	Piratin, P.	Viant, S. P.
Hynd, H. (Hackney, C.)	Platts-Mills, J. F. E.	Walker, G H.
Hynd, J B. (Attercliffe)	Poole, Major Cecil (Lichfield)	Wallace, G. D. (Chislehurst)
Irving, W. J.	Pursey, Cmdr. H.	Wallace, H. W. (Walthamstow, E.)
Isaacs, Rt. Hon. G. A	Randall, H E.	Wells, P. L. (Faversham)
Janner, B.	Ranger, J.	Wells, W. T. (Walsall)
Jay, D. P. T.	Reeves, J.	Whiteley, Rt. Hon. W
Jeger, G. (Winchester)	Reid, T. (Swindon)	Wigg, Col. G. E.
Jones, D. T. (Hartlepools)	Rhodes, H.	Wilkes, L.
Jones, P. Asterley (Hitchin)	Ridealgh, Mrs. M.	Willey, F. T. (Sunderland)
Keenan, W.	Roberts, Goronwy (Caernarvonshire)	Willey, O. G. (Cleveland)
Kinghorn, Sqn.-Ldr. E.	Rogers, G. H. R.	Williams, D. J. (Neath)
Kinley, J.	Sargood, R.	Williams, J. L. (Kelvingrove)
Kirby, B. V.	Scott-Elliot, W.	Williams, W. R. (Heston)
Lavers, S.	Shackleton, E. A. A.	Williamson, T.
Lee, F. (Hulme)	Sharp, Granville	Wills, Mrs. E. A.
Lee, Miss J (Cannock)	Shinwell, Rt. Hon. E.	Yates, V. F.
Leslie, J. R.	Shurmer, P	Young, Sir R. (Newton)
Levy, B. W.	Silverman, J. (Erdington)	Zilliacus, K
Lewis, A. W. J. (Upton)	Silverman, S. S. (Nelson)
Lewis, J. (Bolton)	Simmons, C. J.	TELLERS FOR THE NOES
Lindgren, G. S.	Skeffington, A. M.	Mr. Hannan and Mr. Daines
Lipton, Lt.-Col. M.	Skeffington-Lodge, T. C.