HC Deb 30 April 1948 vol 450 cc773-800

11.5 a.m.

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

I beg to move, in page 1, line 21, to leave out "five," and to insert "four."

The Amendment is intended to implement a promise which I gave in the Committee that I would reconsider the size of the groups specified in the Bill. The right hon. Member for Aldershot (Mr. Lyttelton) moved to reduce the qualifying size to 300,000 spindles. We have thought very carefully about the matter, in consultation with the Cotton Board. I hope that the compromise which I am now suggesting in the Amendment, 400,000, will be acceptable to the House, particularly when I point out that we retain in the Bill the provision for the President of the Board of Trade to consider any other figure if he thinks it is desirable. I hope that the House will not be delayed at this stage on this subject. I said that I could not accept 300,000 and that we felt that 500,000 was the right figure, but that I would reconsider the matter. The Amendment is an attempt to reach a compromise agreement between those who wanted the lesser number and those who wanted the larger.

Mr. Erroll (Altrincham and Sale)

We are naturally glad that the Minister has been able to consider the proposal we made in Committee and we are sorry, of course, that he has not been able to go the full way and to bring the figure down from five to three. We understand now, from what he has said, that 400,000 spindles will not be a hard and fast rule and that the Government can bring it down to 300,000 or even lower in suitable and approved cases. The Amendment, therefore, has our support.

Sir John Barlow (Eddisbury)

While I welcome the reduction, I am sorry that the Parliamentary Secretary has not seen fit, after consultation with the Cotton Board, to reduce the figure to the 300,000 which we proposed. In conceding the figure of 400,000, the Parliamentary Secretary gave no real reason why he arrived at it, other than that it is half way between the two other figures. That is not a convincing reason, Incidentally, the figure 400,000 implies the Government's view that the spinning industry should be put on a horizontal basis as against a vertical basis in the industry. No doubt the Parliamentary Secretary will be aware that the present Chancellor of the Exchequer, when he was President of the Board of Trade, advocated vertical organisation in the cotton industry. The Amendment tends to prevent that organisation.

Whether vertical organisation is better than horizontal has been a matter for discussion and dispute in the industry for the last 20 years. I think there is room for both. I dislike the Government coming down rather suddenly on one side and encouraging what is undoubtedly permanent horizontal organisation in the industry, and in the spinning industry in particular. It will prevent in many cases any vertical organisation which might naturally arise.

Mr. Belcher

Before the hon. Member sits down, perhaps it might assist the Committee in dealing quickly with the Amendment if I told him that in cases of satisfactorily integrated vertical organisation we are proposing to work to a considerably lower figure, possibly in the region of 250,000.

Sir J. Barlow

I am very glad to hear that. Perhaps the Minister would have in mind taking the equivalent of one loom to 60 mule spindles or one printing machine to 12,000 mule spindles, and working on that basis. It might be of very great advantage in the modernisation of weaving sheds and the two-shift system, and it would be of very much greater benefit to the industry as a whole than modernising merely the spinning industry itself.

Mr. William Shepherd (Bucklow)

I consider this to be a most footling Amendment. It misses the point stressed by hon. Members in this House and in Committee. I have yet to hear any justification whatsoever from the Government Benches for forcing these amalgamations on the industry. If there is any justification for it, if the Parliamentary Secretary knows any justification and if he knows anybody who can tell him the justification, it is proper that this House should be given that information. Up to now we have had no information which would justify any hon. Member saying that this forced amalgamation is in the interests of the country. Forcing an industry to do something against its natural wishes and as a result of economic forces is not a good thing. If the industry is to be planned, as the Government intend to some extent, they should try to move along the line of the natural impulses of the industry and not by way of unnatural channels. The suggested loom is obviously undesirable. I agree that some sort of safeguard is essential if public money is to be spent on private industry but why could we not have had a simple sort of safeguard? The Cotton Board should survey the factory which it is proposed to modernise and say that it is capable of being effectively modernised. That is all that is necessary. This nonsense about forcing amalgamations is not in the best interests of the workers or the industry.

Does the Parliamentary Secretary appreciate that in the United States, which is held up to this country as the best example of production, the units of production are very much smaller than those in Lancashire? If large scale units were the test of efficiency, Lancashire would be knocking spots off the rest of the world. It is clear that that factor does not necessarily control efficiency and cost of production because the United States have a much higher production per man than we have. In face of that evidence and the fact that in the United States over the last 20 years the unit of production has been going down, why are we forcing the industry in Lancashire to amalgamate into big units?

The experience of large-scale organisation in Lancashire in the past has not been happy. After the 1914–18 war when the crash came the big fellows fell first, and fell hardest. This attempt to force the industry into unnaturally sized units is most unsatisfactory. This Measure's reception in Lancashire indicates how unnatural and unsatisfactory it is. Where is there in Lancashire haste to accept the Government's offer? Where is there anxiety to rush into this scheme? The Board of Trade are very reticent about the number of people who are projecting schemes or have agreed to schemes. It is almost a Budget secret. The fact is that the number of people coming forward is disappointingly small.

This Bill looks like being sterile when it becomes an Act because it imposes conditions which are unnatural and uneconomic to achieve results which might well have been effected in a much more satisfactory way. The Measure is most undesirable and the Amendment is very unsatisfactory. It does not meet the wishes of the Members of this House or of the industry. I feel there is only one reason for this large scale compulsory amalgamation—the administrative convenience of Government departments and statutory authorities. We are reaching a very dangerous position in this country where industry is encouraged and forced by Government departments and statutory authorities to combine into units with which those authorities can deal. The Board of Trade would rather deal with one firm than 14 and probably the Cotton Board also prefers to deal with one rather than 14, but that may not be in the interests of the industry or the workers. I am very sorry that the Government have not had the courage to do something more in line with the needs of the industry and the country.

Mr. Rhodes (Ashton-under-Lyne)

The remarks of the hon. Member for Bucklow (Mr. Shepherd) about the American cotton industry are not strictly true. He should be in possession of the full facts. Whereas the individual unit may be smaller than many in Lancashire, there is closer integration on a larger scale in the American textile industry than in Lancashire.

Amendment agreed to.

11.15 a.m.

Mr. Erroll

I beg to move, in page 2, line 2, to leave out from "to," to "with," in line 4, and to insert: control modernisation and re-equipment in planned stages. If the Government are prepared to accept this Amendment, they will go a long way towards meeting the objections of my hon. Friend the Member for Buck-low (Mr. Shepherd). It has never been clearly explained to us why grouping should be such an essential condition for qualification for subsidy. When the scheme was originally announced, we were told that the mills must be grouped into rnanoeuvrable units, but we have never been told what a manoeuvrable unit is for this industry. One reason for grouping is undoubtedly to avoid the dissipation of new machinery into a large number of small old-fashioned mills which might be better scrapped, and that is a sound reason, but the Minister has never said that he has insisted on grouping for that purpose. The grouping suggested in the Bill as necessary to secure a subsidy is nothing less than financial amalgamation with all that that implies. The independent mills suffer and lose their identity in these circumstances, and it is not unreasonable for mill owners and mill managements to look with suspicion upon a scheme which offers a small subsidy for new machinery but, at the same time, insists on amalgamation with other firms with which it may or may not be desirable to amalgamate.

Is this what the Government really want? Do they want thoroughgoing, wholesale amalgamation of the type which is inevitable if the provisions of this Bill are to be followed? The industry certainly does not want it. The good independent mill does not wish to ally itself with the relatively inefficient mill, from its point of view, further down the road. The inefficient mill, which probably does not realise that it is inefficient, in any case may not want to be tied up with the people at the other end of the road who have different ideas. Are the Government trying to bring in compulsory amalgamation by a side wind or are they genuine in wanting only modernisation and re-equipment? This Clause as it stands insists on the amalgamation of mills as a prerequisite to receipt of subsidy. If, however, the Government are only concerned with re-equipment and modernisation the industry will be greatly reassured if they accept my Amendment, because it shows clearly that the functions of the Bill are intended solely to secure groupings for the purpose of modernisation as distinct from amalgamation.

I feel it would be a great improvement of this Bill if the Amendment were accepted, because many mills would then come together for the purpose of securing modernisation by planned stages. This would take on an informal character. Three or four mills would get together and form, for example, a re-equipment committee to decide on a general programme for modernisation and for the reallocation of their employees consequent upon the introduction of modern machinery in one or more of the mills, such re-equipment to be given the approval and the sponsorship of the Cotton Board. In this way grouping could achieve the purpose which the Government require, and at the same time the mills would not suffer the loss of their independence.

As it stands, however, the industry remains suspicious of this Measure and doubtful of the Government's intentions. It is not at all unlikely that it may become a dead letter and it would be a great pity if the opportunity of the subsidy were to be lost through what may be unfounded suspicions of the Government's intentions. If these suspicions are ill-founded the Government are surely able to accept my Amendment and thus clarify an issue which is going to be helped by The implementation of this Bill.

Mr. Osborne (Louth)

I beg to second the Amendment.

In my opinion this Amendment merely asks for greater flexibility. What we on this side of the House feel is that the Government may be in danger of thinking that big amalgamations are going to be more efficient because they are bigger. There is in industry an optimum size, which changes from section to section and merely to demand larger units in the belief that thereby it will make for greater efficiency is a mistake. In so far as I believe that this Amendment would give greater flexibility and, therefore, allow for smaller units which make for more efficiency, it should be accepted.

Mr. Belcher

I hope the hon. Member for Altrincham and Sale (Mr. Erroll) will not regard me as unreasonable when I say that the Government cannot accept the Amendment. He and I and others have discussed the line behind the Amendment, and the Board of Trade have done their best to understand the need for the kind of thing he has suggested. Having thought about it, we have come to the conclusion that while this Amendment may give a certain amount of flexibility, which might be desirable, on the whole the Bill would be better without it. I should like to say why. It is true that the Bill, if amended in this way, would encourage modernisation and at the same time go a long way towards avoiding the danger of dispersal of effort. On the other hand, it would remove all the incentive to mills to get themselves into groups of a sort which would make it easier for the modernised mills to be properly run.

I want to make it plain that this subsidy is offered not only in order to encourage modernisation, but to create conditions in which the modernised mills can be run as we think eventually they must be run, that is to say, on the double shift system—this will help the hon. Member for Bucklow (Mr. Shepherd) to understand why we have fixed the figures as we have done—and in order that the slogan, with which I think many hon. Members on both sides of the House are familiar, "Fewer and better mills" can be put into operation with the least dislocation to the industry and its workers. The Amendment suggests that control of modernisation and equipment in planned stages would do what we are seeking to do, but it would do nothing to ensure that, if it became desirable to transfer workers from unmodernised mills to provide a second shift in the modern mills, the unmodernised mills would agree to the transfer.

Mr. Osborne

Would they agree to it under the present scheme?

Mr. Belcher

There will be more control over the situation as the mills stand at the present time than would be the case if the Amendment were put into operation. We feel, moreover, that in the somewhat uncertain future a greater adaptability or manoeuvrability of the group as compared with individual mills will be a very great asset to the industry. We have made our offer of financial assistance with the two-fold aim to encourage both modernisation and grouping. Nobody is compelled to take up the offer, but we are not prepared to change it from what it is at the present time—something to encourage modernisation and grouping—into a straight modernisation subsidy.

I hope what I am about to say will be of interest to the hon. Member and that he will feel better about the situation when I have said it. Although the Government are not prepared to pay the subsidy to groups which control their constituent parts only in regard to modernisation and re-equipment, and although they regard control over such matters as the running of two shifts in some mills and the closing of others as essential for the scheme, it might be made very clear that the Government do not insist upon complete financial amalgamation. What the Cotton Board and the Board of Trade will require to be satisfied upon is that applicants will be able to control the unit mills covered by their application in regard to their modernisation plans and in such matters as the concentration of production in the modernised units, as and when it became desirable to do so. The manner in which this control is to be exercised is not specified and cannot be specified in the Bill, and if applicants can show that they can exercise effective control over the units without complete amalgamation their applications will be approved. Having said that, I hope there will be better feelings about the Bill as it now stands, especially in the minds of those hon. Members who have expressed apprehension about our desire for complete financial control.

Mr. W. Shepherd

I do not think that the explanation given by the Parliamentary Secretary will be of much assurance to us on this side of the House. I fail to see how the compulsory amalgamation into groups of 400,000 spindles is going to facilitate the double-shift system. I fail to see why it is necessary to do it unless it is accompanied by a threat, which is behind the words of the Parliamentary Secretary, of the compulsory transfer of workers from one factory to another. I see behind this Measure a compulsory direction of labour, and indeed the Parliamentary Secretary made it quite clear from his remarks that this Bill was going to be utilised not merely as it is here now but through direction of labour to ensure double-shift working.

Mr. Rhodes

Nonsense!

Mr. Shepherd

That to my mind is the inevitable interpretation of what the Parliamentary Secretary said on that matter. Secondly, I completely fail to understand how we are going to have a half-way idea of control. The Parliamentary Secretary said that we did not need to have complete financial amalgamation but could have a group of concerns where there is some central organisation controlling production. I would like him to tell me what kind of organisation he visualises.

11.30 a.m.

Mr. Rhodes

That is up to the spinners.

Mr. Shepherd

I can hardly visualise the kind of organisation without some central organisation but with authority to close down factories and say to one in the group that it must stop production, while controlling production in the remainder. I think that is absolute nonsense. When the Parliamentary Secretary comes with this lame justification for rejecting the Amendment, it shows that there has been no attempt to come to grips with the problems of Lancashire.

Sir J. Barlow

This introduces something entirely new in regard to the aims of the Bill. We are told that complete financial amalgamation is not necessary, but that so long as they have sufficient control for modernisation and some control of two, three or four mills worked together, which implies control of labour, the subsidy may be granted. It seems to me that the subsidy will be granted where it is known that labour can be transferred. That comes very near to compulsory transfer of labour and the buying and selling of labour of bad and old-fashioned spinning mills, and that is entirely new. The Parliamentary Secretary suggested that there would be 250,000 spindles in the case of vertical combines, and I suggest that that is too large, as very few vertical combines have that number. If the hon. Member means what he says and does not mean to prohibit amalgamation but to promote amalgamation, he will have to reduce the figure of 250,000 spindles very materially.

Mr. Erroll

I am naturally sorry that the Government are unable to accept my Amendment, but the assurances the Parliamentary Secretary give in the latter part of his remarks are, of course, some step forward. I wish he could give some examples of the type of informal collaboration which he is prepared to accept in lieu of complete financial amalgamation. As my hon. Friend the Member for Bucklow (Mr. W. Shepherd) pointed out, we cannot have effective control if it is not financial amalgamation. Who is going to be boss? If it is grouping for the purpose of modernisation only, it should not be necessary to have complete financial amalgamation.

Amendment negatived.

Mr. Belcher

I beg to move, in page 3, line 7, at the end, to insert: (7) Any plans submitted for approval under this section for the re-equipment or modernisation of any cotton spinning mill shall be accompanied by particulars indicating the arrangements being made or proposed to be made for promoting the safety, health and welfare fare of the persons employed in the mill. During the Committee stage there was a discussion about requiring the Board of Trade to be satisfied as to working conditions and welfare facilities before making a grant. After a good deal of discussion, in which I expressed complete sympathy with the aims behind a suggested Amendment, I promised that we would consider the matter before the Report stage, and would move an Amendment to bring about what was desired by hon. Members who expressed themselves strongly in Committee. I wish to make it plain that when I opposed the Amendment in Committee, it was not because I, or the Government, objected in any way to the purpose underlying it. I opposed it for totally different, and in the main administrative, reasons.

I hope the Amendment I have moved will be acceptable, and will be regarded as an earnest of our intention to do all we can in this matter. It will make certain that applicants for subsidy must disclose the welfare and other arrangements in their mills. The Cotton Board will play a very considerable part in the administration of this scheme. The Cotton Board includes a number of trade union repre- sentatives who will certainly be most interested to see that applicants for subsidy are providing satisfactory welfare arrangements and amenities. I hope the Amendment meets the wishes of hon. Members on both sides of the House, who expressed themselves as much concerned in the matter.

Mr. Oliver Lyttelton (Aldershot)

We on this side of the House are in sympathy with this Amendment. Not only will the trade union members of the Cotton Board be interested in these matters, but all the members will be interested. I think the Amendment is a definite improvement in the Bill.

Mr. Anthony Greenwood (Heywood and Radcliffe)

I wish to thank my hon. Friend the Parliamentary Secretary for the very generous way in which he has implemented the promise he gave in Committee that he would try to incorporate in the Bill the principle of the Amendment which was put down by my hon. Friend the Member for Clitheroe (Mr. Randall) and myself. The significance of this Amendment is two-fold. First, it will be the guarantee of welfare to a group of workers who have had very few guarantees of welfare in the past. Secondly, it will serve as a prototype for similar provisions in subsequent Bills presented to the House. It is an improvement in the Bill as it originally stood and will be greatly appreciated by hon. Members here, and equally appreciated by workers in the textile industries.

Mr. Randall (Clitheroe)

It would be ungracious if I did not add my thanks to the Parliamentary Secretary, in view of the hard things I said about him in Committee. I tender an apology for that, and I am very glad that he, and not the right hon. Member for Aldershot (Mr. Lyttelton), is sitting on the Government Front Bench. The Amendment will make the Bill more acceptable, especially to the workers in the industry.

Mr. Leslie Hale (Oldham)

Everyone on this side of the House will, of course, welcome this Amendment, which is very important, very useful, very sensible and very desirable. I would like my hon. Friend to make one thing a little clearer, as I think it is important that it should be made clearer. He said that this Amendment makes it compulsory for an applicant to disclose welfare arrangements and arrangements for the health and safety of workers. I think he should go a step further and say that there is power for the refusal of subsidy in cases where the arrangements are inadequate.

Mr. Oldfield (Manchester, Gorton)

I also wish to thank the Parliamentary Secretary for this Amendment. As an ex-president of the cotton operatives on the spinner's side, I know something of the conditions which used to obtain, and I am looking forward to this rectification and the building up of welfare arrangements for spinners in Lancashire.

Mr. Belcher

I am grateful for the remarks of the right hon. Member for Aldershot (Mr. Lyttelton) and other hon. Members about this Amendment. In reply to my hon. Friend the Member for Oldham (Mr. Hale), I can certainly give the assurance that the purpose of seeking disclosure of this information is to ensure that we shall not be paying Government money in the form of subsidy if welfare arrangements and amenities are unreasonable. That is the whole purpose of the Amendment. I am grateful for what has been said. In Committee, the right hon. Gentleman was good enough to say that he had previous experience of my promises. I hope that this experience will convince him of my bona fides.

Amendment agreed to.

11.40 a.m.

Mr. Belcher

I beg to move, "That the Bill be now read the Third time."

I shall be very brief. I regard this Measure as extremely important. I believe it can play a great part in the development of the cotton industry, and every hon. Member is well aware of the considerable contribution which can be made to this country's future prosperity and security by this old and great industry. During the Debate this morning, it has been suggested that the Lancashire cotton industry is in some way inferior to the cotton industry of countries such as the United States of America. It has always appeared to me that one of the wonders of the world is the amazing variety and quality of the textiles turned out in Lancashire in mills which were built 100 years ago, with machinery built 50 or 60 years ago.

I would pay my tribute to the great skill of the people in Lancashire who are responsible for this production. Whether they are owners, technicians, spinners or weavers, they are doing a first-class job of work. The announcement yesterday that the target for yarn production had been reached is very gratifying. I would like in this House to pay my tribute to that number of men and women, far smaller than it ought to be, responsible for this production.

Turning to the Bill, I must confess that the hon. Member for Bucklow (Mr. W. Shepherd) was right when he suggested that the response to our desire for grouping had not been as good as we should have liked. It has been disappointing. Nevertheless, there has been some response, and possibly when this Measure passes through all its stages, and some of the undertakings I have given this morning become known in Lancashire, there will be a speeding-up of the grouping process. That is my hope. I am grateful to hon. Members in all parts of the House for the assistance they have given during the passage of the Bill through its previous stages. I hope that before long it will become an accomplished fact, and that as an Act it will be of great assistance to the cotton industry in Lancashire.

11.44 a.m.

Mr. Lyttelton

Our anxieties about this Bill are more concerned with its becoming a dead letter than with anything contained in it. Of course, as we stated on Second Reading, it is attacking this problem only on one front. I feel that the success of the Bill will depend on the energy displayed in attacking the problems on the other fronts at the same time. One of these difficulties is the present price of new spindles for those who wish to take advantage of the subsidy. Some of the difficulties are caused by slow progress on other fronts. I am not imputing blame to one side of the industry or the other.

In saying that we welcome this attack on this particular front of the problem, I hope that the Government will not take it amiss if we ask them to press on on the other fronts, which are equally important. That will have the effect of making the advantages which owners of mills get under this Bill much more alive. I can only say that we very much hope that the effect of the Bill will be to produce more modern equipment in Lancashire and further the cause of this great industry.

11.46 a.m.

Mr. Scott-Elliot (Accrington)

While welcoming this Bill, I wish to point out how short is the time in which it can be put into effect. I also wish to say a word about the practical application of this Bill, and in this connection I wish first to consider what amount of spinning capacity is likely to benefit as a result of the Bill, how far spinners are likely to take advantage of it, what they are likely to buy, what sort of delivery they are to get, and how it is likely to affect the export trade. I am very glad that we have had an Amendment reducing the number of spindles required, but I wish to draw attention to the fact that a comparatively limited amount of the spinning capacity of the industry will benefit as a result of this Bill. My information is that on the basis of 500,000 spindles there are only 11 concerns likely to benefit, which represent only 43 per cent. of the spinning capacity of Lancashire. It will be a serious matter if a large number of spinners are likely to be left out of the benefits of the Bill.

I fully agree with the Parliamentary Secretary that we need to have amalgamations, but amalgamations are difficult to effect. I wish to say a word about that difficulty, which is a point that has not yet been discussed during the consideration of this Bill. There are two ways of effecting an amalgamation. One is by the purchase of the shares. That is a difficult way of effecting an amalgamation because there is always a dissident minority of shareholders. The Companies Act, 1929, laid down that there could be a degree of coercion of a 10 per cent. minority, but if the minority were greater than 10 per cent. obviously one could not effect a purchase of the shares. It is thus extremely difficult to bring about amalgamation by the purchase of shares.

I turn to the more promising way, the purchase of the assets. I do not say that that is always possible but the articles of association of many companies in Lancashire allow of the disposal of assets. Those concerned could go straight ahead by working on those lines but for the provisions of the Finance Act, 1945, which contained the so-called balancing charge. That is a serious drawback. I would here pay tribute to the move made by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in the Finance Act, 1947, in reducing this restrictive provision. That has only gone part of the way, and I wish to draw the attention of the President of the Board of Trade to the matter so that he can have a talk with the Chancellor with a view to some further steps being taken in the forthcoming Finance Bill.

I come to the question of how far this Bill is likely to be taken advantage of my the spinners today. I am very doubtful as to how far it is likely to be taken advantage of, for two reasons. The first is the fear that is inherent among the spinners of Lancashire that some new invention which is round the corner will upset any purchase they make. The Government should state quite specifically what are the facts of the case. To a humble individual like myself they are not fully known, but I would express a tentative opinion, and would be glad to hear what my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), who is a far greater expert than I am, has to say on the question. It would seem to me that a new ring spindle cannot be produced every year in the way that a new motor car is produced, and that in fact the fears of these spinners are unwarranted.

What is needed is that the Government should embark on a programme of research, that they should make a lot of money available to the Shirley Institute, which will proceed with research not only in respect of cotton machinery but wool machinery and machinery for other textiles. If the Government stated quite clearly what the position was, there would be a far more ready acceptance by the spinners of Lancashire, and they would purchase machinery.

The other reason is the very substantial one that those interested in the textile industry fear the high cost of textile machinery. No firm which is running at 6o per cent. of capacity is likely to jump in and instal a lot of new machinery. A firm needs to be running at very nearly full capacity. We want to go further than that. As the Parliamentary Secretary said, we want to be running fully on two shifts where possible. Where that can be done it should be possible to put in this expensive tex- tile machinery with far greater confidence that otherwise would be the case. I wish to stress that, because I believe it is an important question. I would also draw attention to the fact that, during the war, we had a concentration of the industry, and we found that, very often, it was the bad mill that remained in production, because the better premises were taken over for war production or storage. What we want now is for the concentration to be worked in such a way that production is in the efficient mills, and that the old fashioned mills are closed down, to the very great benefit of the health and amenities of those working in them. That would also be a very great incentive to the new workers coming into the industry.

What are the spinners likely to buy? I hope that my right hon. Friend will be flexible in the case of administration. New machinery is desirable in certain cases, but not in all. It must depend on the individual circumstances. I hope that the grant will be made available for the adaptation of machinery and the putting in of high drafting, where high drafting can be applied to existing machinery. I believe that the delivery of this new machinery is not likely to affect the export trade; indeed Textile Machine Makers Ltd. should be in a position to deliver fairly quickly. I had a talk with some of the directors before the Second Reading and I was assured then that they were well up to their target, indeed they were a little ahead of it. They have new production capacity coming into being at Barton, but they have received so few orders. It is vitally important that Lancashire spinners should place orders as quickly as possible. I do not believe that the export trade, which is very important, is likely to be upset by this, but I do feel that everything depends on the spinners of Lancashire placing orders quickly so that T.M.M. may know where they are, and plan production.

I would appeal for a vigorous approach in this matter. We are standing at the cross-roads. The sellers' market will not go on for ever, and it is necessary that the Government, the spinners and the textile machinery manufacturers, and, indeed, the research people, should all come together and put their backs into it, and try and make the greatest possible success in the little time available to us.

11.55 a.m.

Mr. Erroll

I think we ought to review what has happened since the proposal was first announced by the President of the Board of Trade in Manchester nearly 18 months ago. Then it was more a long-term problem of regrouping the cotton industry, but now that the Bill has reached the Third Reading, it is quite a different matter. It is a matter of urgent production now, and not at some time in the future. Textile production is urgently required in the export drive, and we cannot wait on a long-term development of the industry. The wholesale modernisation and re-equipment of mills will hinder current production. What we need is production now. I hope that this Bill will not in any way hinder the piecemeal modernisation of individual mills.

In many mills today one or two rooms in the mill are not in use at all, and others are working overall at about 70 per cent. capacity, owing to the shortage of labour. Therefore, it should be quite permissible for a mill to re-equip just one room, and not necessarily the whole mill, thus keeping the balance of its machinery working full out while one room is being modernised. In that way, too, it will be possible to avoid the unpleasant dislocation of labour which might otherwise result. It was apparent in the Committee stage, and subsequently, that hon. Members opposite seemed to think that mill labour could be moved about from one mill to another. It should be made clear that that cannot be so in this particular industry, and that wholesale modernisation may very well dislocate the labour force at the very time when current production is so essential.

When the scheme was first announced, we were told that an essential feature would be double-shift working in all modernised mills. We were told that the trade unions concerned would be consulted, and that their agreement would be obtained. We have heard very little about the outcome of those consultations. I do not think that, in fact, the trade unions have given their unqualified approval to the system of double-shift working. It should be made quite plain that a good deal of this modernisation depends for its success on whether double-shift working is achieved in the modernised mills. There is no sign yet that the workers of Lancashire are prepared to go in for double-shift work. I, person- ally, would have every sympathy with them if they refused. I feel that, if an industrial process is so developed, and plant production so expensive, that double-shift work has to be introduced, it is time that we thought again, and decided whether we really believe that the lives of working people should be disrupted by the necessity of double-shift work. It means the complete dislocation of the ordinary family life, particularly as it has grown up in the mill towns of Lancashire, and it will be very understandable if it is bitterly resisted.

On the other hand, the industry has been encouraged to go ahead with schemes of modernisation on the implied understanding that double-shift working would be agreed upon by the workers concerned. What happens if a firm goes ahead with modernisation, and then the workers do not agree to double-shift working? What are the Government going to do about that situation? Or is it to be left to the employers to take upon themselves the unpleasant task of trying to educate workers in the merits of doubt-shift working? Double-shift working implies working only 32 hours a week, as against the present 44. Modernised machinery has to be very much more efficient than the older machinery that it is to replace if it is going to do, in 32 hours, what at present is accomplished in 44.

It must be remembered that the bottleneck in this case is labour, and not machinery. Every person working 44 hours with old machinery is worth more than a person working 32 hours with more modern machinery, unless that more modern machinery is at least 50 per cent. more efficient than is the machinery which it replaces. Added to that there is the probability of greater absenteeism on double-shift working. We must also remember the question of the actual physical displacement of labour which must accompany modernisation—elderly women who say that, if they have to move from their own mill, they might just as well pack up altogether. That is an aspect of this Bill which has received scanty attention by the House, and I hope that the full seriousness of the effect of modernisation on Lancashire labour will not be forgotten by the Cotton Board.

I also think it important that the Government should not imagine that it is doing very much for the industry. Certainly a 25 per cent. discount on machinery is something, but not a very great deal for an industry which has suffered so much as a result of the war, and of pre-war competition. If the offer of this small discount is refused by the industry, because it fears the effect of the amalgamations which must follow, let not that be held against individual mills or owners. It is because the terms are not at all attractive. Do not let the Government think that they are making a generous offer to Lancashire. It is quite a mean offer, particularly with the present price of new spinning machinery at £8 a spindle. I hope that in days to come the Government will not abuse the industry for not taking advantage of what is still considered by many to be a very doubtful offer.

12 noon.

Mr. Hale

The hon. Member for Altrincham and Sale (Mr. Erroll) has made an appeal for interference by the Government in the cotton industry on a wholesale scale, of such a nature that it could only be achieved under nationalisation. That does not arise under this Bill and, therefore, I cannot follow him. However, it is a happy sign that such pleas are being made from the other side of the House.

I rise only to say that I share some of the apprehensions expressed by the right hon. Member for Aldershot (Mr. Lyttelton). There is a real danger in Lancashire that this Bill can easily become a dead letter. There is real concern that up to now sufficient advantage has not been taken of the provisions of the Bill. I am in the unhappy position—or indeed it is a very happy position which has certain unhappy responsibilities—that in Oldham we have not only the greatest spinning town in the world, but also the greatest makers of machinery. Textile Machine Makers, Limited, are greatly concerned about the position on the home market. There are plenty of orders for export. We must face the facts when we criticise the policy of sending machinery abroad to re-equip industries to compete with us. We preach the doctrine of re-equipping home industries, but at the moment the overwhelming bulk of our machinery production is going abroad. No plans are being made that are sure and certain for the re-equipment of the home industry.

I am greatly concerned about this matter, because the position is now so acute in Oldham that town meetings have been held about the fear of unemployment among the engineers who are working at Platts Brothers and Company, Limited, makers of textile machinery. I am glad to see my hon. Friend the Member for Stretford (Mr. Austin) here. The position at the moment appears to be that either I lose employment for the people in my constituency, or he does. The rival factories in this sphere of activity have not got enough home orders to keep them going.

I venture to make two suggestions to the President of the Board of Trade. It is exceedingly important that the very able speech made by my hon. Friend the Member for Accrington (Mr. Scott-Elliot) should be followed up. It is exceedingly important that time should be taken by the forelock in this matter and that there should be no delay. I suggest that there are two steps which could be taken to encourage this development and modernisation. The first would be for the Minister to consult with his right hon. and learned Friend the Chancellor of the Exchequer and try to revise the allowances for depreciation so as to give much more generous allowances to those who are modernising their factories and installing modern machinery.

The second one is much more important and would be much more effective. I suggest that my hon. Friend should consult the Home Secretary to see that advantage is taken of the provisions of the Factory Acts and that any necessary Amendments are proposed which will ban the use of broken-down, old and ancient machinery over a long period, and to see that the 50 year old loom would be out of the industry altogether by a certain date. The old machinery must go and the new machinery must come. If those steps were taken this Bill could be a turning point in the history of the industry. It is exceedingly important, not merely for Lancashire, but for Great Britain, that it should be.

12.3 p.m.

Mr. Osborne

I agree with a great deal of what the hon. Member for Oldham (Mr. Hale) has said. This Bill may become a dead letter not only because the spinners will not play ball, but because labour will not do its share. It is useless filling mills with up-to-date machinery if the labour force will not co-operate.

Mr. Hale

Probably the hon. Gentleman has not heard the announcement this morning that the new target has been exceeded even with the old machines. The new target has been exceeded, and that could only have been done with the terrific co-operation and help of labour.

Mr. Osborne

I saw that announcement in the Press and I am just as delighted as the hon. Member for Oldham at the results achieved with the old machinery which he wishes to kick out. The Parliamentary Secretary said that the ideal is fewer and better mills. That means that certain of the old mills must be closed. Inevitably that will involve a great deal of dislocation. From my experience in another type of mill, I know that there is a lot of female labour which does not like to move from one end of a town to the other when the women have become used to living near the mill in which they work. We ought to hear from the President of the Board of Trade about his negotiations with the trade unions on the question of double-shift working and the closing of certain mills.

It is within the knowledge of all Members of this House that the National Coal Board have run into a similar problem. They have tried to close down certain inefficient pits and to transfer the labour to more efficient pits. In that they have been met with bitter opposition, which I understand and with which I sympathise, from the trade unions. It is as important to get the willing co-operation of the trade unions in these changes which will have to be made in labour conditions as it is to fill the mills with up-to-date machinery. I beg the Minister to give us some information on that subject when the time comes.

12.8 p.m.

Mr. Rhodes

There has been a tremendous amount of talk about the cotton industry during the last few years. I would say that there has been far too much for what good has been done. Some of the Acts passed by this Government to assist the Cotton Industry have been of a practical nature, and this Measure is one of them. It may not go as far as the hon. Member for Eddisbury (Sir J. Barlow) would like to go in the support that should be given to vertical firms. I would like to see a very much lower ceiling for spindleage for vertical firms than 250,000. That is far too high. If an assessment could be made of the productivity of vertical firms, their weaving and finishing departments, along with an assessment of the capital employed in the business, I think a reasonable spindleage figure could be arrived at which would be more helpful than the one proposed.

We have heard a lot about T.M.M. in these debates. It is a remarkable thing that the really outstanding achievements in the production of new textile machines of up-to-date design, have not come from large firms. New textile machines other than spinning have come from firms of the size of Bruggers, Schweiters and Scharrers in Switzerland. We have enough firms of that type of precision engineers in this country. On the spinning side, we are handicapped by the feeling prevalent in Lancashire that just around the corner there may be new developments which will put a lot of our spinning equipment out of date by 1952, which is the end of the subsidy period.

A lot of people have thrown mud at T.M.M. but they are in great difficulty and some of their fears are very real. They have seen the Japanese textile machinery industry built up by copying their designs, and using their patents and they are naturally apprehensive whether this will go on in the future. Let me give an instance to show why we should be concerned. In 1937 a large engineering firm came into existence in Japan for the express purpose of making munitions of war. It is a gigantic place with four huge foundries, as the hon. Member for Darwen (Mr. Prescott) could confirm. This firm produced munitions during the war. As a result of an edict from the Far East Commission in Washington on reparations and the level of production of machines and steel, this particular Japanese firm is now trying to switch over to textile machinery.

This is happening in many other cases in Japan. Firms are trying to change from medium or heavy engineering to textile machinery making, which is of a lighter type and is looked on favourably by the Far East Commission. The firm I have in mind has a capacity equivalent to that of the whole of the United States during the peak year of 1937, when I believe 772,000 spindles were made and installed in America, and this is in addition to the production of existing firms.

No wonder the T.M.M. is apprehensive of the future, if nothing is done either to make interim arrangements now with General MacArthur, and the Far Eastern Commission and to have conditions included in the peace treaty when it is drawn up.

The development of textile machines in this country needs invigoration. We have the spectacle of the T.M.M. dominating the spinning side and of small firms trying to get going on precision machines. I urge the Government once again, if they cannot put into operation a development scheme of their own, to give more support to the Shirley Institute, so that the development of machines can take place at a far greater rate than it has in the past. If the development of spinning machinery is to be static until 1952—and it looks as though it might be under the provisions of the Bill—it will be a tragedy not only for our cotton industry, but also for the textile machinery makers, who will probably lose the opportunity of exporting their products in the future.

12.14 p.m.

Sir J. Barlow

In view of what was said by the hon. Member for Ashton-under-Lyne (Mr. Rhodes), I should like to make it quite clear that I hold no particular brief for vertical combines. I merely pointed out that the minimum of 250,000 spindles which would be required to take advantage of this help is far too large a figure for any vertical combine. There is room for vertical combines in the trade, but I think the Bill rules out any increase in their numbers at present for that reason.

The Bill is disappointing. It offers little or no solution to the present great problems of the cotton industry. We are all familiar with the difficulties of the cotton industry between the wars and with its falling output against foreign competition. The period of conversion during the last three years since the war, however, has been a period of great opportunity, but I feel the Government have not taken adequate advantage of it. I think this is the third Cotton Bill they have passed. The first, which did away with the Liverpool Cotton Exchange, was a most unfortunate Measure. The second, which put the Cotton Board on a different basis, had a lot to be said for it. The present Bill is really a minute one com- pared with the problems in the industry; It deals with one small corner of the spinning section. It has been shown by the hon. Member for Accrington (Mr. Scott-Elliot) that very few people are in a position to take advantage of this Bill and I am disappointed that the Government have not taken the opportunity of dealing more adequately with the trade as a whole. Such a favourable period will not easily recur when the sellers' market comes to an end.

It has become increasingly clear during the Debate today that this is a deal, not only with the owners of large numbers of spindles, but with labour also. Two mills under the same ownership may purchase a third mill, which may be a very bad one with bad machinery; under this Bill they may acquire power to re-equip and modernise their existing two mills and they must apply for authority to move labour from the bad mill to the new modernised mills. Those of us who live in the North-West know that over a period of years mills have acquired an identity—or perhaps more, a personality. It will be very difficult in some cases to transfer workers, even from an old mill, to one that has been modernised. When this aspect is realised by the workers they will criticise the Measure a great deal.

Another important aspect has only been briefly touched on. Modernisation of spinning machinery is useless without double-shift work. Have the Government faced up to that? Have the unions faced up to it, and are they willing to do it? Without double-shift working, the subsidy will be largely a waste of money. One of the great difficulties concerning the large amount of old machinery in the cotton mills—typical of many other industries at present—is the policy adopted by the Treasury over a great number of years of not allowing adequate depreciation on machinery and encouraging modernisation. We, of all countries, have allowed statutory depreciation at probably the lowest rate. This means a continuation of the process of patching up old machinery rather than putting in the newest and most up-to-date machines. I should like the President of the Board of Trade to bring pressure to bear on the Government for the cotton industry as well as for others, to allow very much more depreciation. That would be a natural encouragement to manufacturers of all kinds to keep their factories as modern and as up-to-date as possible.

I feel that in this Measure the Government have missed a great opportunity. We should not let them suppose that the passing of the Bill is in any way adequate for the circumstances. The industry and the country will demand, and rightly so, a much greater contribution to this very important industry than is included in this small Bill.

12.20 p.m.

Mr. Austin (Stretford)

I wish to make only one point, and that is briefly to underline what has been said by my hon. Friend the Member for Oldham (Mr. Hale) about the manufacture of spinning machinery and its contribution to the cotton industry. Recently, I put down a Question to the President of the Board of Trade asking him about the use of Platt Bros. factory at Barton, because I was concerned about the dismissal of 112 employees apparently on the ground of redundancy. He replied that the reason was that they were attempting to lower the cost of production. Another view has been advanced to me by those employed at the factory, who are concerned about the possibility of further dismissals there. Their view is that the reason for the dismissals was that orders were not coming in for the production of spinning machinery for the home industry.

The Barton factory can play a very great part in the re-equipment of the cotton industry, not only in this country but all over the world. It has a much greater capacity than is being used at present, and I ask the President of the Board of Trade to give this matter his attention. Concern is felt not only by people in my division but in almost every constituency in Lancashire where cotton machinery is used. I think the people concerned have a right to know what is the position and what the President of the Board of Trade intends to do about it.

12.22 p.m.

The President of the Board of Trade (Mr. Harold Wilson)

I should like to join with my hon. Friend the Parliamentary Secretary in his expression of thanks to the House for the welcome given to this Bill and for the co-operation of hon. Members in all parts of the House during all the stages of the Bill in getting it through so expeditiously. After what has been said, I do not need to stress again the urgency of cotton production or to underline what a number of hon. Members have said about the welcome which the House gives to the industry's success in reaching the first stage of its target, the figures for which were announced last night. We all hope that the industry will be equally successful in quickly reaching the second stage of the target which is so essential if we are to achieve our essential exports and, as has been said on more than one occasion by the right hon. Member for Aldershot (Mr. Lyttelton), to do it without any further interference with supplies for the home market which we are all so anxious to see increased as quickly as possible.

Nor is it necessary to stress the need for the re-equipment particularly of the spinning side of the cotton industry. It is common ground between us that a substantial proportion of the machinery which is now in place on the spinning side and, indeed, on the manufacturing side is not only old in type, but very much of it is beyond its efficient working life already. The right hon. Member for Aldershot said that his only fear was not about what is in the Bill, but that it may become a dead letter. I would express general agreement with what he said on that point. I think the Bill, as it has emerged from the Committee and Report stages, is certainly an improvement on the Bill which came before the House for Second Reading. My principal concern is to ensure that it does not become a dead letter. It is absolutely essential that it should be used to the full.

My hon. Friend the Member for Accrington (Mr. Scott-Elliot) said he hoped that we would do something to exorcise the fear which exists in certain parts of Lancashire that there are new inventions round the corner and that this Bill will prevent Lancashire from going ahead with developments on the lines of existing inventions. Lancashire is a long way behind—about 20 or 30 years behind—catching up with existing inventions, to say nothing of new inventions. However, I do agree with my hon. Friend and a number of hon. Members opposite who stressed the need for spending more money on research, and the Cotton Board particularly have this point in mind in their use of the Shirley Institute, and in other ways. My right hon. Friend the Minister of Supply is paying great attention at this time to questions of improvement, not only in the quantity of textile machinery but in the development of new types wherever possible. Both sides of the industry in Lancashire are doing a fine job today in face of very great difficulty, and their achievement of this target is the first step in their efforts to meet the country's needs.

We cannot go on indefinitely asking the workers in Lancashire to continue making the greatest possible effort in an industry which is so ill equipped and out of date. I am sure hon. Members in all parties experience great difficulty when they ask for increased production, for overtime, and for people to come back into the mills, very often at great domestic inconvenience, when the obvious answer is that much of this would not be necessary if it were only possible to re-equip Lancashire with the machinery that is required. I must also say—and a number of hon. Members have referred to this matter—that it is difficult when one asks for increased efforts, and the workers to whom one appeals say, "You regard cotton as important and so do we; yet there are not many orders being placed for spinning machinery. If cotton is so urgent, both from the short-term and the long-term point of view, there ought to be more re-equipment."

I want to conclude on that note. As the right hon. Member for Aldershot said, we do not want this Measure to become a dead letter. It is vital that this industry, which is being singled out for this special Government subsidy, should be conducted in accordance with the spirit of the Debates in this House, and should press ahead with the placing of orders for spinning machinery. The hon. Member for Eddisbury (Sir J. Barlow) said that the Government have missed chances in the last two or three years, and he seemed to suggest particularly that this Bill is a very inadequate Measure. I have never suggested that this Bill does anything more than a small part of the job, for the main job has to be done not by legislation—I do not know what increased legislation the hon. Member would like introduced—but by the industry.

So far as the spinning equipment is concerned, the first stage is the placing of orders. We cannot continue with this situation. The textile machinery industry is not going full out, simply because there are not enough orders being placed at a time when the need for these orders and the machinery is greater than it has ever been, not merely to advance on our present production, but, as has been stressed by the hon. Member for Altrincham and Sale (Mr. Erroll) and my hon. Friend for Accrington, to get costs down, because the sellers' market will not last for ever. Indeed, it is disappearing quickly now. It is vital that Lancashire should get herself re-established so that she can play a permanent part in the export trade of the world.

In thanking the House for the reception given to this Bill, I again stress to the spinning manufacturers the importance of taking a leaf out of the book of those who manufacture the machinery, who have not been deterred by the present high costs and who are placing orders, many of which cannot be fulfilled for three, five or eight years ahead. I say to the spinning manufacturers: now you have got this special subsidy, go to it and get your industry into a state of modernisation as quickly as possible.

Mr. Osborne

Will not the right hon. Gentleman say a word about the double shift, the negotiations with the trade unions and the question of redundancy?

Mr. Wilson

On the Third Reading of this Bill I am sure I would be out of Order if I were to attempt to deal with those matters which are not covered in any part of the Bill. I assure the hon. Gentleman that we regard this Bill as an attack on only one of many fronts. The points to which the hon. Gentleman has referred are points to which we are certainly giving our attention and shall continue to do so, but we must get the machinery.

Question put, and agreed to.

Bill read the Third time, and passed.