HC Deb 19 March 1947 vol 435 cc528-48

10. "That a Supplementary sum, not exceeding £2,400,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1947, for the salaries and expenses of the Post Office, including Telegraphs and Telephones."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

10.1 p.m.

Captain Crookshank (Gainsborough)

I beg to move, in line r, to leave out "£3,134,000," and to insert instead thereof "£3,133,500."

I have put down this Amendment in order to make quite certain that the Minister would realise that my hon. Friends had some questions to which they would like replies, unlike what we have just been treated to by the Parliamentary Secretary to the Ministry of Labour, who came with a prepared brief and ignored all the questions which had been raised during the Debate. On this occasion, the Parliamentary Secretary to the Board of Trade will not be able to do that, because he does not yet know what we are to ask him. We will be in a better position, because everything he says will have to be in the nature of a reply to those questions. In point of fact we are quite confident, having had experience of the hon. Gentleman's debating skill in the past, that he will be able to deal with any situation which may offer during the next half hour or so, quite unlike his colleague who preceded him.

The particular point on which we wanted to say something relates to Subhead 0, because when we discussed this in Committee stage on Friday week, I specifically asked how it came about that the Board of Trade was taking power here, when they specifically say, in relation to the Subhead: It is not expected that any expenditure will be incurred during the current financial year…. The note goes on to say: but token provision is included in this Estimate in order to obtain Parliamentary approval in principle for the grants in question. Does that mean that the Board of Trade think that by obtaining the Estimate under this Subhead this House will have approved in principle the whole policy which is briefly described as "Assistance to the cotton spinning industry," or does it merely mean, as the language could directly mean, that we are approving in principle the grant rather than the policy? I was not quite certain about that. If, in fact, there is to be no money expended under this Subhead, and if, in fact, we are to have legislation during the next financial year, it is quite wrong and unnecessary to take any token sum here. Should any small expenditure be required this year there are other ways in which it can be defrayed. But if the object of this Subhead is to raise the question of assistance to the cotton spinning industry in this way, my hon. Friend behind me has certain questions which he wants to address to the Minister. It was to make quite sure that he would have the opportunity of doing so that this Amendment was put down—so that the Minister should be here and that other Members could, if necessary, take part in the Debate.

10.4 p.m.

Mr. Erroll (Altrincham and Sale)

I am glad of this opportunity of raising in the House the Government's proposals to make certain re—equipment grants to the cotton spinning industry, based upon certain conditions. I experienced considerable difficulty in obtaining information about the scheme announced to the spinners. Apparently, the original proposals were announced behind closed doors. The only information I could find was "The Times" report of the subsequent Press conference, which the Board of Trade held.

I hope, therefore, that if I quote from "The Times" of 4th December, the Minister will tell me if I am drawing wrong deductions from inaccurate information. As far as I know, it is the only information yet made available to Members of Parliament and the public at large. Some of my remarks may appear to be critical, but I do not wish it to be imagined that I am wholly critical of this scheme. The fact is that we have so little information upon which to work that it is very difficult to make anything other than interrogatory remarks of a somewhat critical tone.

First, we should like to know from the Minister whether it really is the right scheme for the industry. Is giving a 25 per cent. grant for new machinery in the cotton spinning industry the right way to advance this industry? It is particularly significant that the Cotton Working Party advised on quite a different system. They advised on a levy to be obtained from all spinners in the industry towards a re-equipment fund. This levy, admittedly, was not a unanimous recommendation of the Working Party. Apparently it has been shelved entirely without so much as a single word of explanation by the Minister. We would like to know what is wrong with the system of the levy and why it has been shelved so lightly.

In dealing with the re-organisation of the cotton industry, we are all in general agreement that a, great deal of new machinery is necessary, but I query whether it is machinery for the spinning section of the industry which should have the most urgent priority. I think it is much more likely to be true that it is really weaving machinery which is the most out of date in the industry of this country and in which there has been the greatest improvement over the last 25 years. I understand that apart from the change-over from mule to ring frames there have been relatively few opportunities of improvement in the spinning machinery. It would not be wise to pump money into the spinning side of the industry alone. A survey of textile machinery is still taking place and, as far as I know, the recommendations have not yet been submitted to the Cotton Board or the Board of Trade. One of the conditions of making this kind of machinery available to the spinning industry is, to quote from "The Times," that there shall be: The introduction of two-shift working as and when the mills were progressively modernised. Two-shift working is a very popular phrase at the moment, but apparently it is not generally realised that double shift working means very much shorter shifts for each individual worker per day. In the spinning industry the bottleneck is not machinery but labour. Therefore, we want to get the most out of labour rather than the machinery. What we really want is to make sure that every hand who goes into a spinning mill actually does 44 hours work per week on the machine rather than only 32 hours per week on the machine, even if it is on a more modern machine. It would mean that the more modern machine would have to be 30 per cent. more efficient to maintain the position. One must assume that there will be a tremendous advance in design of spinning machinery before one is able to reap any benefit from two-shift working. I would very much like to hear the views of the Minister on that point, because I do not see what merit there is in a re-equipment scheme which insists on two-shift working at a time when labour shortage is the real bottleneck in the spinning industry.

Another condition for attracting the grant refers to amalgamation. I will read out the condition. It is: (a) the extensive re-equipment and modernisation of the mill within a reasonably short space of time; and (b) the grouping of mills into manoeuvreable units. I do not know what a manoeuvreable unit is when applied to a group of mills. I find that the President of the Board of Trade, in his explanatory remarks to the Press in Manchester on 3rd March said that the industry must manoeuvre in divisions and not in regiments and platoons. What does that mean in relation to the spinning industry? It sounds grand stuff to anybody who knows nothing about the industry, but it is pure nonsense to anybody who does. Perhaps the Parliamentary Secretary can explain what that phrase meant, particularly as it is repeated in a more moderate form among the specific conditions which must be fulfilled before the grant can be attracted, namely that: … the mills must be grouped into manoeuvreable units. Apparently a section of the spinning industry becomes a manoeuvreable unit when it has reached the size of 500,000 spindles. That is only a provisional figure, but it is what the President of the Board of Trade has in mind. Unless the amalgamation is of such size that no fewer than 500,000 spindles are grouped together, no grant will be made. Why 500,000 spindles? What particular merit is there in that figure? The Cotton Working Party Report gives some very interesting statistics of the breakdown of the spinning industry. It points out on page 39 in regard to the size of spinning firms that there are only 26 firms having 200,000 or above spindles and only five having more than one million spindles. The firms with over 200,000 spindles comprise only 20.4 per cent. of the total industry. Undoubtedly there is to be a great deal of manoeuvreing to get these manoeuvreable units before they will be eligible to attract the grant.

Many of the smaller producers are extremely efficient and they resent having to amalgamate with their less efficient competitors in order to get a grant. Many of the smaller firms have gone ahead with re-equipment without waiting for a grant, and they will be penalised to the extent that the less efficient competitors who did not modernise will now by modernising attract a 25 per cent. grant. Any firm which desires to remain outside the scheme—the President of the Board of Trade said there would be no compulsion—will suffer when it tries to get new machinery, which may already be on order. The President quite clearly stated in the same Press interview that this re-equipment would carry preferential treatment for textile machinery and the scheme would only apply to groups of mills, etc. In other words, those who amalgamate and attract a grant go to the top of the queue for spinning machinery. That is a most unfair form of preference to be given to what may prove to be the relatively inefficient producers over their more efficient competitors.

One of the more unpleasant features of this grouping and amalgamation of the spinning industry is that it is producing horizontal combinations within the industry. I know it exists already but this is perpetuating it and stratifying the industry more than ever. What is wanted is something more in the nature of vertical combinations rather than in an increase in the horizontal combinations. That was brought out in the Working Party Report where they referred to a movement which was taking place towards vertical combinations as opposed to horizontal combinations. On pages 36 and 37 it points out that while>: the lines of horizontal demarcation are cut across by several vertical organisations, some of them of considerable size … In fact the majority of firms are not connected. There is, however, in fact, a definite tendency towards vertical integration, either in the form of converters reaching back to previous manufacturing interests or, conversely, manufacturers taking control over the distribution of their products. This tendency, however, has not been strong enough to bring about a radical change in the sectional structure of the industry. I think we are all agreed that that sectional structure needs modifying and the President's proposals are preventing that from taking place and will, in fact, fossilise the present stratification. I was glad to see that the President made it a condition of the grant that there should be extensive redeployment in the industry. Condition (d) states: The acceptance and encouragement of new methods of labour deployment and utilisation by both sides of the industry …. That amounts to an admission that there were restrictive practices in the industry at all times, and still are at the present moment, if deployment is to be made a condition for attracting grant. However, we are all glad to see that the problem of redeployment is being tackled vigorously, and few of us will find any reason to quarrel with that condition.

I would ask the Parliamentary Secretary what will happen to this scheme if the employers agree to the grant but the workers refuse to accept their conditions, namely, double shift working and extensive redeployment. Does the scheme go by the board, or what happens then, because it is sinister that although the scheme was announced on 4th December, there is still no announcement of any agreement having been reached? I would like to obtain some assurance from the Parliamentary Secretary that agreement is very near, and if it is not near, what is holding up the matter? Because three and a half months is a very long time to wait in a matter of this kind without hearing anything whatever. In fact, this will be the first statement in the House, when the Parliamentary Secretary replies, from the Government about a scheme of this great importance. If it is the fault of the employers, why are they holding back? I submit that if they are holding back, and I do not know whether they are or not, but if the charge is made that they are obstructing the issue, I suggest it is because the Government has not given a firm guarantee as to the future of the industry. Many men in Lancashire are reluctant to put money into the spinning industry and the rest of the cotton industry, even if it is only 75 per cent.

Mr. Jack Jones (Bolton)

Surely, the hon. Gentleman is well versed in what is happening, that the unions concerned are in the course of discussions at this very minute?

Mr. Erroll

I shall be surprised if they are working a night shift, although I know what the hon. Gentleman means.

Mr. Jones

I have been at trade union meetings that have lasted until well on in the morning when the hon. Gentleman was fast asleep.

Mr. Erroll

I much prefer discussions which take place early in the morning rather than late at night, but I will not pursue the point except to say that I appreciate that discussions are taking place. However, time is passing and we do not seem to be getting forward at all and we have no information on the matter, which is one reason why it is being raised tonight. As I was saying, I suggest that one of the possible reasons is that the firms wish to know a little more about the Government's intentions towards the future of the industry. The importance of this matter was clearly brought out in the Cotton Report and I hope the Committee will bear with me while I remind the Parliamentary Secretary of several of the most important recommendations in that Report: Recommendation No. 21. The Government must play its part in creating conditions which will afford a proper basis for confidence. Have the Government done that? Perhaps the Parliamentary Secretary will explain what part the Government have played in creating such conditions? Recommendation 22 states: The British Government must create confidence that it will work for the maintenance of fair conditions in international trade. Then there was that very weak statement about the resumption of trade and manufacture in Japan from the President of the Board of Trade only a few weeks ago. Did that create very much confidence in Lancashire? I do not think it did. Recommendation 23 states: There should be a clear statement of policy in regard to Japan. I suggest that all that the Government have said about their policy towards Japan has created alarm and despondency almost throughout the whole of the Lancashire industry. We cannot accept assurances that there is a world shortage of textiles, and therefore, there is no need to worry. We know there is a world shortage, but some of us know that very energetic steps are being taken by other countries to overcome that shortage, particularly in Brazil, where a large and flourishing textile industry is now under way. I have already made reference to Japan. We all know how rapidly Japan is coming on, and how much yarn is being produced in Japan at the present time. Even in our own British Colonies, I understand that the Government have been considering the possibility of setting up a spinning and textile mill in Nigeria, in West Africa, and that it is only held up for the moment over some small matter of Excise Duty. I am glad to see that the Under-Secretary of State for the Colonies is back after his recent visit to West Africa. I hope he will stay a little longer in the country for a change. He may be able to help us, perhaps, on the point about Nigeria. Of course, the shortage of textiles can be overcome in West Africa, but West Africa was one of our best and greatest markets in the past. I submit that the shortage may disappear very rapidly, and Lancashire may be on the rocks once again.

Finally, I suggest to the Parliamentary Secretary that there are several alternative methods, all of which might well be preferable to the method which the President of the Board of Trade has chosen. First, what about a levy? It was very seriously considered and put forward by men who had given a great deal of thought to the subject. I know that it is not universally popular, but that does not necessarily mean that it is not the right thing to do. Secondly, what about a system of taxation relief? Why not allow more rapid depreciation allowances for new machinery? There would not then be any of this bother about amalgamation and the manoeuvreable units, and so on. Thirdly, what about the method adopted in the shoemaking industry? It is a private arrangement, but it is one which the Government might well copy. The British United Shoe Machinery Co., as is generally known and to which reference was made in the Working Party's report, leases the bulk of its machinery to the shoemaking industry, and does it so efficiently that if it hired this machinery free of charge to the shoemakers it would only reduce the cost per pair of shoes by 1¾d. There is something to be said for the method of hiring, because it would avoid the high capital charges of spinning firms and ensure that the hirer makes certain that the machinery he hires is modern and up-to-date and continuously in a high state of repair. I will not weary the House with the details of that alternative. I suggest that it is another proposal which might well be considered and which might well have proved better than this hotchpotch grant about which we can find out so little.

10.24 p.m.

Mr. Osborne (Louth)

I want to concentrate my remarks on Subhead J, which refers to cotton and wool utility cloth rebates. I have a number of questions to put, and if I am critical, I hope the Parliamenary Secretary will not object, because my questions are not put in an unfriendly spirit. Under that Subhead, we are asked to provide an additional £6½million required to meet the increase in the rates of rebate in pursuance of the general cost of living stabilisation policy. That policy is already breaking down, not only here, but in respect of food. The subsidies are going to break down altogether, and will have to be abandoned. In the light of that, I want to ask a few questions. The original amount that was asked under this Subhead was £8 million. We are now asked to provide another £6½ million, an increase of 75 per cent. If that is planning, I call it very bad planning. If we planned in that way in private industry, we should soon be out of business.

Mr. Gallacher (Fife, West)

You will be out of business soon anyhow.

Mr. Osborne

Some of us would wish to see the Government out of business just as soon. Unless I get definite answers to the questions I wish to put under this heading, I shall want to vote against the Supplementary Estimate. I consider it is not only bad planning but shocking bad guessing. It may interest the hon. Member for West Fife (Mr. Gallacher) to know that if he thinks his Government are made up of well meaning old gentlemen, I think they are frightfully inefficient old gentlemen, and the sooner we are rid of them the better. This amount is put down as rebates, but the Parliamentary Secretary, when he spoke during the Committee stage, was much more honest—too honest almost for his Government. He did not call them rebates and try to hide them; he used the proper word "subsidies," and I would rather have them called subsidies. Tonight we are asked to vote an extra £6,500,000 in subsidies for wool and cotton utility cloth. I am against subsidies generally, because they are like drugs, the more you have the more you have to have. They are also like drugs to this extent, that they make the nation which takes them live in a fool's paradise, and what is needed is for this country to be shocked into a realisation of its real position. Therefore I feel that these subsidies ought not to be increased, as we are asked to increase them tonight, but ought to be gradually and slowly eliminated.

May I make this clear before I ask my practical questions? I am not against the idea of utility garments or goods. Utility goods, as the House will remember, are among the good things that came out of the war. I think the Parliamentary Secretary will agree that utility goods are generally mass-produced, they are the best quality for the money, they are produced at a very low rate of profit, they do not attract Purchase Tax, and they give the buyer the very best value he can get for his money. They are, as I have often said in my own factory, an attempt to produce a Rolls Royce article at a Ford price. That I think is a very good idea. We produce in utility goods the maximum quality at a minimum price, and the housewife cannot buy better quality than utility. Therefore I am not quarrelling with the idea of utility products, but what I do complain of, and that is why I am against this extra £6,500,000, is that, having produced something which represents the best value for money, we then sell it at less than the cost of production. To my mind it is the height of folly. I want to see proper prices paid for the goods we produce.

May I remind the Parliamentary Secretary that his Department and the Government cannot say that utility prices ought to be subsidised because there is a shortage of money. We on the back benches are often recommended to read Government reports, and I have had a good weekend with them. In the White Paper Cmd. 7018, page 6, Section 18, we were told by the Government that the wages bill compared with 1939 had risen by £1,200 million per annum. Therefore, there is no shortage of purchasing power; that argument cannot be used to justify selling utility goods below their cost of production. It cannot be used as an argument for agreeing to spend a further £6,500,000 of the taxpayers' hard-earned money. On page 7, Section 19 of the same White Paper issued about a month ago, the Government told us that there was £7,000 million of purchasing power chasing £6,000 million worth of goods, and the Government were at great pains to explain to us that the great danger was the inflation that might come because of the £1,000 million gap.

Surely if that be so, then it is the height of folly for the Government to be selling these utility goods at less than the cost of production and thereby increasing the gap. They ought to be charging the proper price and so absorbing some of the surplus purchasing power. In selling these utility goods at less than cost and in asking for this £6,500,000, the Parliamentary Secretary is doing a dangerous thing. He is increasing the amount of unexpended money. When the Parliamentary Secretary spoke in Committee on Friday, 7th March, he gave two reasons to justify the grant that we are asked to pass tonight. In the first place, he said that £2,000,000 of it was required for utility cotton cloth and household textiles. He said that of that £2,000,000 which was required for cotton utility goods, the bulk of it was required because cotton had gone up sixpence per pound in price during that period. If we are to subsidise this increase of price of cotton during this period just past, can the Parliamentary Secretary give me any idea whether he thinks, or his experts think, that cotton will go up again? Shall we be faced with a still greater subsidy for the next period? He does not know, but I think he ought to know. At least, he ought to have a much more intelligent guess than his original guess, because that was 75 per cent. out.

The Parliamentary Secretary also went on to say that part of the £2,000,000 was to offset the increased labour costs in the production of yarn and cloths. I want to ask him if part of that £2,000,000 was for the increased wages in the cotton industry. Can he assure me there has been no increase since then, or whether any further increase is likely? I would like to refer him to the "Ministry of Labour Gazette" for January, 1947. On page 4 the Government Department said that in February, 1946, there was a wage increase of l0s. per operative per week in the spinning section, and there was a reduction in the working hours from 48 to 45. I want to know this: is there any likelihood of a further reduction in working hours in the cotton industry and, if so, is it going to cause labour costs to increase so that we shall be faced with a still greater subsidy? If so, how much?

May I remind the Parliamentary Secretary of this? In the "Daily Telegraph" yesterday, the Industrial Correspondent gave the news on the front page that the four big railway unions were asking for an all-round increase of £I a week, and, in addition, the National Union of Railwaymen and the Associated Society of Locomotive Engineers and Firemen were asking for a reduction in hours from 48 to 40, and the railway clerks were claiming a reduction to 35 hours a week. If the railway clerks get a 35 hour week granted—[Interruption] I am in Order.

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

I think that is a matter for me to decide.

Mr. Osborne

All I am asking is this. If one union gets a 35 hour week granted, the cotton spinners are going to ask for a 35 hour week as well, and will not be satisfied with a 44 hour week. If the cotton spinners get a reduction in hours, the cost of production will go up and up, and this House will be faced with a demand for a still bigger subsidy, which will run into sums much greater than we have under consideration.

The Parliamentary Secretary's second reason for asking for this £6,500,000 was that he required an extra £4,500,000 on the wool side. These were his words: This subsidy on utility wool, which was originally estimated to cost £3,250,000, was introduced in order to offset a wage increase in the heavy clothing industry."—[OFFICIAL REPORT, 7th March, 1947; Vol. 434, c. 886.] Three-and-a-half millions was the estimate to begin with—and one has to remember that this Government said it could plan. It now turns out that it was 100 per cent. wrong. I should not like to employ planners like that, and I do not think that the nation wants planners of this sort. To justify asking for an extra £4½ million, the Parliamentary Secretary said—it is recorded in column 886 of the OFFICIAL REPORT—that it was to offset the increase in the price of men's suits and overcoats. That, he said, was why he wanted the extra £4½ million. He demands a vote of £4½ million to subsidise wages, and sell men's coats and overcoats at less than cost of production. I would ask, if men are prepared to pay real prices for their beer and tobacco, why not for their clothes? —[Interruption.]—Why not? If they do pay a proper price, why does the hon. Gentleman ask for more money? His original demand for £3¼ million was purely for wages. He asks for another £4½ million for wages.

What about the increased cost of wool? The hon. Gentleman said that cotton had risen by sixpence a pound, so he wanted two millions extra, but I would ask if he has considered the cost of wool. If not, then this House is faced with a terrible financial shock. The wool position with which we are dealing now is a most perilous position, and I want a specific explanation of this position. In the last few days, as is well known to the hon. Gentleman, the Wool Controller has authorised the top makers to increase their 64-tops prices from 4s. to 4s. 3d. a pound. Continental top makers are selling their tops at 8s. a pound—just about double our price. This unwise, this foolish Government, which controlled the whole of our wool, has allowed the Joint Organisation to sell freely the scarce quantities of merinos. They are being sought by the continental top makers, who can sell at 8s., contrasted with our controlled price of 4s. 3d., and the hon. Gentleman will find that the English top makers in the next period will not have the wool to produce. As a result of that we are faced with a clothing breakdown. I challenge the Parliamentary Secretary to deny it. I am told that tomorrow the President of the Board of Trade will probably make a statement, and it is my guess that he will say that there are not enough clothes to honour the coupons issued.

Mr. Randall (Clitheroe)

Another crisis.

Mr. Osborne

Well, without clothes, hon. Members opposite would think that it was a crisis. First, we hear that we have no coal, and then no food, and soon we shall hear we have no clothes. All this—and these are the planners; planners at a thousand a year. The supply of merino wools to our top makers in the face of competition from the French and the Belgians is a serious matter, and I want to know if they are going to get their supplies for the autumn.

In the "Monthly Digest of Statistics" which the Lord President recommended back benchers to read, for February, page 34, it sets out that the home consumption of wool for the last quarter of 1946 was at the rate of 750 million pounds weight of wool per annum; and on page 53 it shows that 80 per cent. of that was used for utility. Therefore about six hundred million pounds weight of wool is used in utility in a year. These statistics do not show us in the wool trade the same wealth of detail that we get in the cotton trade. Why is it that the Wool Controller is a law to himself and does not give the information? Why are we not given it? Why are we not given the same details from the Wool Control as we get from the Cotton Control? The Parliamentary Secretary cannot tell me, and no one can outside the Wool Control. I rang up the other day to try to get to know how much of the Merino we had used went into utility. We do not know; we should like to know. If we take the extreme case and say that our merino tops have to rise to the same price as Continental tops in order that we may get the yarn, it means is. a pound rise. That is, I know, an extreme case.

That, on six hundred million pound weight per annum, means a subsidy of £120 million. That is the bill this country may have to face, and the Parliamentary Secretary well knows it. We are not dealing with chicken feed in money now, but with a great crisis which this Government has brought on by its bad handling of the wool position. The people of this country, whom an hon. Member seems to think it a joke to underclothe, will have something to say about it. If it is said by the Parliamentary Secretary that 4s. rise is an extreme case, I will agree with him, but I am told by reputable top spinners that a shilling rise is the least that they can expect to pay if we are going to have wool supplied for the autumn. That means another subsidy of £30 million, and I want to know what the Department is going to do about it.

I do not think the remedy is to increase the cost of the article unreasonably. I think the solution is to say, as the Minister of Labour or the Parliamentary Secretary said a little while ago, for both sides of the industry to produce more. The answer is production, more production, and still more production. But the Par- liamentary Secretary well knows that it is not the employers who are standing in the way of production today. It is third rate trade union leaders who are demanding shorter hours all the time, and I challenge the Parliamentary Secretary to deny it. In the "Economic Survey for 1947," Command 7047, page 33, the Government told us this. They said that the textile and clothing industry before the war employed 1,803,000 Today it employs 1,405,000. That is, we are 400,000 work people short of our prewar total. Of course, what they are doing is making electric fires in order to burn the electricity that the Ministry of Fuel and Power cannot provide, and they are not providing clothes that would keep our people warm. And that is planning.

What I want to know is this: if we are to attract these 400,000 people back into the textile and clothing industry we can-not do it on the grounds that our factories are modern and up to date, because the industry is old, especially the spinning side. We cannot expect girls to come from modern wartime factories willingly to go into the old fashioned mills. [Interruption.] I am glad that for once the hon. Member for West Fife has shown some sense. They will only come in on one ground and that ground is higher wages. If we are going to get these 400,000 back into our industries we have to attract them by paying higher wages. I should like to remind the House that in the "Ministry of Labour Gazette" for October, 1946, which is the last one to give us any comparable figures for any of our industries, on page 273, these average wages are given—Cotton, 805.; wool, 775.; hosiery, 675. [Interruption.] Those right hon. Gentlemen sitting on the Government Front Bench have a chance to speak at any time. They should give an opportunity to us who are back bench boys to speak when we do get the chance, which is not often. As I was saying, in the "Ministry of Labour Gazette" on page 273 these figures are given—Cotton, 805; wool, 775.; hosiery, 675. Then on the other side there are—Papermaking, 1045.; printing, rots.; rubber, TITS.; Government industrial establishments, 1075. 6d. We are not going to attract girls back into our mills and factories unless we pay higher wages.

Dr. Morgan (Rochdale)

The hon. Member just now said that third rate trade union leaders were responsible for these conditions. Are not these third rate trade union leaders trying to get the higher wages which he is now advocating?

Mr. Osborne

What the hon. Member does not understand—it is obvious he has not spent much time in industry—is the difference between high wages that are paid on a static job and the high wages based upon output per unit. The hon. Member who is sitting behind him will enlighten—

Dr. Morgan

I know more about industry than does the hon. Gentleman.

Mr. Deputy-Speaker

I think that the latitude which I have allowed the hon. Member has been greatly exceeded. We cannot have a discussion on this Supplementary Estimate on a wages policy.

Mr. Osborne

With very great respect, what I am trying to show—and I think I am in Order in so doing—is that if we are going to produce the clothing which the people of this country require, which they would have got under an efficient Government—that is the reason why they are not getting it now—we will have to encourage these 400,000 people to return to the industry.

Mr. Deputy-Speaker

The hon. Member must not argue against my Ruling. What the hon. Member has just said is perfectly in Order, but his remarks previous to it were not.

Mr. Osborne

I am much obliged to you, Mr. Deputy-Speaker, and I must, of course, obey your Ruling. May I finish by saying that higher wages without higher production will involve us in bigger subsidies. We are asked to agree to an extra £6,250,000 subsidy which is going purely on wages. I am against using the taxpayers' money to increase wages, and then selling the products at less than the cost of production. I think it is the height of folly so to do. I would like some answers to my questions from the 'Parliamentary Secretary to the President of the Board of Trade, and unless I get some reasonable answers and some assurance that next year greater subsidies will not be required, I am determined to vote against this demand for an extra £6,250,000, which I think is being flittered away.

10.50 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Belcher)

I listened with great interest, as I am sure the House did, to the very many remarks of the hon Member for Louth (Mr. Osborne), including, his reference to the railway clerks, which I did not understand as coming within the purview of the House on this Supplementary Estimate. The hon. Gentleman has spent a great deal of time arguing about subsidies. I am inclined to agree with him that if they can be avoided subsidies are not desirable things, but there are reasons for having them. I would point out to the hon. Gentleman, also, that subsidies were not invented by this Government. They existed long before this Government came into power, and I would refer him to the remarks made by my right hon. Friend the Chancellor of the Exchequer on Monday in the course of the economic Debate when he said that he proposed not to omit the subject of subsidies from his Budget Speech. It would not be right for me to anticipate my right hon. Friend's Budget speech.

The hon. Gentleman asked me a specific question about the price of wool. He said that in this Supplementary Estimate we had mentioned the increased cost of cotton as being partly responsible for the increased requirement of finance. Wool had also increased in price; why had I not mentioned that in the Committee stage of this Supplementary Estimate? The answer is that wool was freed from Government control three or four months ago, since which time it has increased in price, but by careful adjustment of blends it has been possible to avoid an increase in the ceiling price of utility cloth. There is, therefore, no increased cost to be met out of this Supplementary Estimate. I would suggest that many of the detailed points which have been raised by the hon. Gentleman in connection with the Supplementary Estimate should properly be reserved for the full Board of Trade Estimates, and if he cares to raise these very multifarious questions of detail when we reach that point I, or whoever else is handling the matter on behalf of the Board of Trade, will be only too pleased to meet him.

May I turn now to the points raised by the hon. Member for Altrincham and Sale (Mr. Erroll) about the scheme for assisting the re-equipment of the cotton industry? I thought the major point which emerged from his speech and the most important question which he asked me was that concerning the levy which was suggested by the working party. We are proposing this 25 per cent. grant to the industry for re-equipment and he suggested that the proposal of the working party for a levy on the industry was a better way of dealing with the problem. The idea of the levy was very carefully gone into, and after full consideration it was dropped for two reasons. The hon. Gentleman himself has mentioned the question of increased competition in the future from other countries in the cotton industry. A levy on the cotton industry must inevitably mean an increase in the costs of that industry, and in the face of the increased potential competition that would be most undesirable and should be avoided if possible.

Again, there is the cost of the ultimate product of the cotton industry to the home consumer, and it was felt—in my opinion quite rightly—that a better way to deal with the re-equipment of the industry was by a Treasury grant which would be spread over the whole of the country and its impact on any particular part of the country thereby lessened. I am quite sure that this is a better way than a levy which would increase costs and weaken Lancashire in the face of world competition.

Mr. Erroll

Does that mean a levy on all sections of the industry or only on the spinning section? Are we, therefore, to expect re-equipment grants to apply to other sections of the industry in addition to the spinning section?

Mr. Belcher

The hon. Gentleman should not prejudge future issues. We are dealing now with a specific issue, and anything I say about it tonight should not be taken as prejudging any other issue.

I should like to spend a few minutes on what we are proposing to do about the cotton industry. The Working Party, in its report, stressed very strongly the urgent need for a considerable expansion of output, and pointed out that the industry is unlikely to achieve any great increase in manpower in the near future. That means that the increase in output would only be possible if the industry was immediately re-equipped with modern machinery on a very considerable scale, and if the conditions were created in which modern machinery could be used to the best advantage. In order to stimulate this process, my right hon. and learned Friend announced, towards the end of the year when he paid a visit to Manchester, that the Government would be prepared to pay 25 per cent. of the cost of new machinery and equipment in cases where they were satisfied that the firms involved were making a genuine effort to re-equip their plant on modern lines, and to form units which were sufficiently large to face the stresses of the next few years. Some play was made about the mills being grouped into manoeuvrable units.

Using modern machinery is no economy if you split it into tiny units which cannot possibly make the best advantage of it. You want large-scale production and long runs to make the best use of modern machinery. The best way is to group the units so that you can have economic producers utilising the best machinery available. There is nothing doctrinaire about it. As to what is a precise unit, that is a matter for discussion and agreement between the trade. We do not intend to compel people to close part of their production and amalgamate themselves with others.

Mr. Erroll

Does that mean physical regrouping under one roof, or financial regrouping?

Mr. Belcher

It might mean either or both. This is still in its infancy. If they can be grouped under one roof it might be an advantage, but it might not be possible owing to physical difficulties, in building, labour and so on. This offer of 25 per cent. towards re-equipment was made conditional on acceptance by both sides of the industry of the scheme as a whole. Since that time there have been discussions between the Government and both sides of industry, and we are still awaiting the final decision of the industry. I assure hon. Members that the sooner both sides make up their minds, the better we shall like it. We do not want to press them unduly. It is our firm intention that the scheme must be accepted as a whole, or not at all; that is to say, the 25 per cent. is conditional on both sides bringing the industry into line with the most modern conception of the cotton industry. There is no question of paying any subsidy unless the industry are prepared to play their part. If the reaction from both sides is favourable—and we have very good reason to hope that it will—we shall be anxious to press ahead with this effort to build up the industry, and in particular, to do our share by putting up such money as may be required as quickly as possible.

The right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) was inclined, on the Committee stage and again today, to question the form of this Supplementary Estimate for a token Vote of £10. It is true it is stated that this is an Estimate to obtain permission to spend a sum of £10 and to obtain Parliamentary authority, in principle, for a new service, to be followed by substantial provision in the main Estimates for the succeeding year. During the Committee stage it was suggested that there was something unusual in the procedure of this House, and I said that I would be prepared to provide some precedents on the Report stage. I have done so, but I do not propose to quote them all. I hope that the right hon. and gallant Gentleman will be satisfied with one. It is a precedent from the financial year 1938–39, from the Vote for prisons in England and Wales, and, singularly enough, is under Subhead O. It is for new buildings and alterations, and I was surprised to find that the wording was identical. The Vote was for the sum of £10, and the object of the token provision was to secure Parliamentary approval for that transaction.

We are as anxious as any Member in any part of the House to do all we can to assist the cotton industry—indeed all industries—to get on to its feet as rapidly as possible. We have made this offer to the industry: that if they will try to put themselves in order we will, by financial provision up to 25 per cent. of the cost of re-equipment, assist them. They have been a long time making up their minds, and it appears unlikely that we shall be called upon to make this financial provision during the current year. We would not want anybody in that industry to be frustrated in their legitimate desire to modernise and reorganise because of our inability to make the necessary financial grant. Therefore, we ask for this token provision, which will put the matter in order, and will enable us to do what we ought to do, should a legitimate request come forward. We have just had a three-day Economic Debate, during which Members on the other side of the House have urged on the Government the necessity of day to day assistance to British industry to get on its feet. We have been accused of being doctrinaire, of not concentrating sufficiently, day to day, on British industry. Here is an example of a Government Department, the Board of Trade, seeking the authority of the House to give this assistance if it is called for. I hope that the explanation I have given, and the precedent I have quoted, will enable the House to agree to the Report stage of this Supplementary Estimate.

Captain Crookshank

In asking leave to withdraw the Amendment, I would like to express our thanks to the hon. Gentleman for the very full way in which he has replied to the questions which have been put from this side of the House. We all realise that this has been a valuable Debate, because this is the first time in which we have had these details, which will be important to Lancashire and other parts of the country. I am obliged to the hon. Gentleman, particularly in view of the previous behaviour of his colleague, but I must say that the precedent he quoted did not seem to be a precedent at all, because he did not say that any legislation was foreshadowed in Subhead 0 in 1938–39. The whole point—

Mr. Deputy-Speaker

Is the right hon. and gallant Member withdrawing the Amendment?

Captain Crookshank

I am asking the leave of the House to withdraw it, Sir. It is not for me to withdraw it unless the House allows me to do so.

Amendment, by leave, withdrawn.