COTTON SPINNING (RE-EQUIPMENT SUBSIDY) BILL

HC Deb 12 March 1948 vol 448 cc1567-643

Order for Second Reading read.

11.6 a.m.

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

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

This Bill is, I think, the first piece of legislation affecting the cotton industry since the Act establishing the Cotton Board was passed in 1940. I am quite certain that there is no need for me to stress the importance of the cotton industry, or to stress that not only is Lancashire's prosperity bound up with the industry, but also the prosperity of the whole country. We are all familiar with the part which the cotton industry played in our prosperity in the great trade expansion in the first half of the 19th Century. We know what a great part the cotton industry played as one of our staple exports in the 1920s. and even in the 1930s, although late in the 1930s the cotton industry for many reasons, chiefly due to world causes, was facing severe depression.

What is of the greatest importance today is that the cotton industry must be regarded as the spearhead of the export drive in 1948, and especially of the drive for dollar markets. This has been very fully stressed in recent Debates in this House. In the recent Debate on trade, for instance, a number of my hon. Friends, as well as hon. Members opposite, stressed the important part which the cotton industry had to play in the export drive this year, and especially in the dollar drive. All of them stressed the importance we must attach to getting the industry on the basis of maximum efficiency, so that it can play the great part we are asking it to play.

The hon. Members for Darwen (Mr. Prescott), Bucklow (Mr. Shepherd), Nelson and Colne (Mr. S. Silverman), Oldham (Mr. Hale) and others all stressed the different aspects of this problem. Special point was given to the urgency of this matter by the Secretary for Overseas Trade who gave some indication of the job ahead for Lancashire, when he said that the cotton export target for Canada this year was 10 times the figure for last year; we want to be exporting at the rate of 100 million yards this year as compared with 10 million yards at the end of last year. It would not be in Order for me to go into the many questions arising from this drive for increased production and manpower in the industry. A number of us, particularly those Members who sit for Lancashire constituencies, will be discussing these questions in Lancashire tomorrow.

I should like to refer to the suggestion of the hon. Member for Darwen, who proposed that we should regard this cotton drive as an all-party matter, and that Members of Parliament of all parties should play their part in Lancashire, particularly in the coming Recess, to bring home the need for increasing production. Following that suggestion, we have a meeting tomorrow of Members of Parliament, together with the leaders of the cotton industry in Lancashire, to discuss the best ways of pushing on with the production drive. Obviously, there is a very wide range of things to be considered, from the provision of amenities and day nurseries to the problems associated with Japanese competition. I am sure that the House will not expect me to go very widely or fully into any of these matters today.

The present Bill, I must readily admit, has only a limited role to play in all this, although it is an important role. It is important in relation to building up yarn production, crucial for exports and home supplies, which recently was so great a bottleneck in Lancashire. It is also important in relation to the building up of the long-term efficiency of the cotton industry. The policy that this Bill is helping to implement was set out in a speech by the Chancellor of the Exchequer at a meeting with cotton employers and operatives in Manchester on 3rd December, 1946. It was later set out in a letter to the Chairman of the Cotton Board, the text of which was made available in this House in answer to a Question by the right hon. Member for South Kensington (Mr. Law) on 30th April, 1947.

It was directed, in the first place, to the spinning section. For the spinning section, the main lines of action proposed were, first, the grouping of mills into manœuvrable units; second, the extensive re-equipment and modernisation of the mills within a reasonably short time, having regard to the great difficulties of re-equipment and modernisation at this time; third, the introduction of two-shift working as and when the mills were progressively modernised; fourth, the acceptance and encouragement of new methods of labour deployment and utilisation by both sides of the industry. That is a matter of great importance which we shall discuss tomorrow, and which I cannot fully go into today without going beyond the terms of the Bill.

As a part of this programme, the Government, through the Chancellor of the Exchequer at that time, offered to make a grant of 25 per cent. of the cost of the mechanical re-equipment of grouped mills. The first stage of the scheme would cover the re-equipment of mills containing one-third of the capacity of each group, and when this stage ended the second and third stages would be dealt with and the position reviewed. To qualify for assistance, groups would need to control a minimum of 500,000 mule equivalent spindles—taking ring spindles at an average ratio of about one and a half. Orders for machinery were to be placed not less than two years from the schemes coming into force, and a target date of five years was set for the completion of deliveries.

The basic conception underlying the Government's scheme is summarised in the Report of the Cotton Working Party, in one of the most important paragraphs in that very important Report. Perhaps the House will allow me to quote it: The industry must now prepare to work with a much smaller and higher paid labour force. This creates the need for installing labour-saving machinery combined with improved methods of labour utilisation; this leads to a further need for considering a change to double day shift working as an economic necessity, and, if that is accepted, the total quantity of spindles required will be substantially reduced. The industry must, in fact, contemplate a development which will ultimately amount to an almost complete transformation. There are at present in the spinning section of the industry, including waste spinning, over 500 mills, owned by more than 300 firms. They contain more than 37½ million mule equivalent spindles, again taking the mule equivalent basis, of which about two million are in mills which are entirely stopped. Taking the running mills themselves, they are operating on the average to about 70 per cent. of capacity.

As the House knows, our yarn output today is at least 25 per cent. below what we need, and I think all sides will agree that sufficient output can be achieved only by the introduction of labour-saving machinery and by the more effective utilisation of labour, involving a considerable redirection and redeployment of labour in the industry. It would have been wrong, on the part of the Government, to have asked for the changes in outlook and methods required from the operatives without, at the same time, being able to give an assurance that the industry was going in for a radical programme of re-equipment. Similarly, it would have been wrong to have asked for re-equipment without an assurance that there would be changes in the working methods of the industry.

This Bill deals specifically with the assurance of the re-equipment which is so necessary both in the technical interests of the industry, and also as a means of convincing the other side of the industry that we are in earnest about both our programmes. Today, modern spinning machinery is very expensive. That is one reason why we consider it important that there should be double shift working. Many of our present mills were built on an all-in cost of £1 per spindle. New machinery which is required today for re-equipment would cost, taking everything into account, about £9 per spindle. This is one reason for pressing for double shift working; it is also a reason for the Government's insistence on the formation of groups of mills in the industry, because only by grouping is there the possibility of arranging the concentration of labour to the fullest extent on the re-equipped mills.

Another reason for grouping is that if, ultimately, the industry is to consist of fewer and better mills it is wasteful of the national resources to spread the available supplies of new machinery and equipment thinly over the whole of the present industry, instead of thoroughly modernising the mills that will be wanted. We intend this subsidy scheme—for this Bill is fundamentally a subsidy scheme—to be carried out in a way which will ensure effective modernisation of some mills rather than the patching up of many mills. That is the basis of our approach.

It is proposed, under the Bill, that there shall be modernisation by stages. The first stage is that a group will apply for recognition. When we talk about a group we mean, of course, existing as well as new groups which may be formed. A group will apply for recognition, and they have to satisfy us that they are not only of sufficient size but have adequate central control of the operations of the group as a whole. The second stage is for the group to put forward to the Cotton Board their modernisation plans covering mills representing one-third of the total productive capacity of the groups. The Cotton Board—which will act as our agents in this matter—will consider whether or not the plans comprise effective modernisation of the mills, If they are satisfied with them they will recommend the Board of Trade to approve the plans. Plans covering the first stage must be approved and launched before the second and third stages are dealt with.

The Government intend to give the subsidy in respect of these first two stages, but they have not yet promised a subsidy in respect of the remaining third stage. Whether or not the subsidy is paid in respect of this will depend upon circumstances at the time and, in particular, upon whether there appears to be need for a greater number of modernised mills than are represented by the two-thirds then modernised or being modernised.

There are two points I would like to make about our general approach in this matter. The assistance offered by the Government is offered for the free choice of the firms in the industry. There is no compulsion. No penalties are threatened to mills which do not take advantage of the offer. The Government have promised that grouped mills will have preferential treatment in regard to supplies of spinning machinery, if available supplies are inadequate to meet all needs, but there is no intention of concentrating all attention on grouped mills. They will get first preference, but we shall not make that a condition of the scheme. Obviously the need of the grouped firms and the schemes which are particularly related to the attainment of the export targets will have first charge on the output of spinning machinery, including the export target for the spinning machinery industry itself. Beyond that, there will be no compulsion placed on the acquisition of machinery by ungrouped mills.

The second point which I wish to make clear is that the scheme is intended to be flexible. We are not laying down any particular form of association between mills. The only thing we require to be satisfied about is that there is adequate control. We are not prescribing particular forms of modernisation. The choice of any changes that it is wished to make or equipment that it is wished to instal will be left to the groups concerned, who will be required only to show to the Cotton Board that their plans, when implemented, will bring their mills up to the best modern standards. Indeed, the size of the groups is to some extent left flexible, subject to the general direction of 500,000 mule equivalent spindles. Lesser numbers may be accepted in particular cases.

For example, vertically integrated groups with a lower figure than 500,000 spindles might be considered suitable, provided that the spindles were contained in not less than three mills, otherwise it would be difficult to operate the scheme by three stages. There would be other cases where a lesser number of spindles might be accepted for geographical reasons, or where, through the needs of specialised production, it is difficult for a group approaching the half million spindles size to find another partner to bring it up to the desired level. We hope to use a certain amount of elasticity and flexibility in the operation of this figure. Five hundred thousand remains our target figure, and we propose to depart from that figure only in exceptional circumstances.

I now turn to the layout of the Bill itself. It is a very simple Bill. Clause 1(1) enables the Board of Trade to pay up to 25 per cent. of the expenditure incurred by grouped concerns in re-equipping or modernising their mills in accordance with plans approved by the Board of Trade. Clause 1 (2) sets the targets as to the size of groups and stipulates that the Board of Trade must be satisfied about the adequacy of the control over the mills within the group. It provides that groups seeking recognition must apply before 6th April, 1950. There has been some suggestion that a more logical date would have been 30th April, 1949, being the date for making contracts, and the reason for choosing the apparently less logical date is that it is the time-limit set for the concessions in the Finance Act, 1947, which deal specifically with the cotton industry.

Clause 1 (3) enables the Board of Trade to refuse to pay subsidy on all the mills in a group. This is because we may decide not to subsidise the modernisation of the remaining third of the group's capacity. Clause 1 (4) limits the payment of subsidy to expenditure incurred on machinery and equipment used for cotton spinning or preparatory or ancillary machinery or such other classes as the Board of Trade may approve. It covers machinery only and not buildings. There is a list of machinery already published, which was given in answer to a Question by an hon. Member just under a year ago. Hon. Members who want to see the list of the machinery can see it laid down there.

Clause 1 (5) lays it down that a grant shall not be paid until the machinery in respect of which it is claimed has been purchased and installed, or, in the case of machinery modernised in situ, the work has been completed. It also limits the grant to expenditure incurred in respect of orders placed before 30th April, 1949, and carried out since V. J. day, provided, of course, that it is carried out before 30th April, 1952. These are the periods to which I referred earlier, when I said two years and five years from when the scheme is put into operation. We have power to extend these dates in particular circumstances. The kind of circumstances we had in mind was the possibility that some machinery was ordered and took longer to supply than had been envisaged and we might want to extend the period for that reason. Clause 1 (6) provides that where a mill that has already been modernised joins a group, a grant may be made in respect of the expenditure incurred in modernising that mill, provided that the modernisation fits in with the approved modernisation plan of the group as a whole.

Clause 2 is included in the Bill to prevent firms who have been paid subsidy in respect of machinery or equipment purchased or modernised by them from reselling the machinery or equipment and pocketing the profit. The Clause prohibits the sale of subsidised plant except with the approval of the Board of Trade within a period of 10 years from the time of the subsidy. It also provides that if the Board of Trade gives permission in special cases for the sale of subsidised plant, it may require the repayment of the grant, in whole or in part, or the Board may make conditions as to the price at which the plant is sold.

Clauses 3 to 7 deal with powers of inspection, enforcement, etc., and I think that the House will agree that they contain no novel features and no features which have a sinister connotation to them. Therefore, I do not think that it is necessary for me to say anything about them. Clause 8 defines the terms used in the Bill. One of them may need amendment, namely, the reference to the Cotton Board, as it now seems probable that the new Cotton Board, 1948, may be established before the Bill becomes law.

There is a special point about Clause 9 which states that the Bill shall not apply to Northern Ireland. If a cotton spinning group in Great Britain which controlled mills in Northern Ireland applied for recognition under this scheme, we would be prepared to take its Northern Ireland capacity into account when considering its case, but we should not be able to make grants in respect of expenditure incurred in Northern Ireland. I want to make it plain we have not strong views about this question of the inclusion or exclusion of Northern Ireland. We have been in touch with Northern Ireland about it, and if there is strong pressure for extending the Bill to Northern Ireland we shall be prepared to make suitable arrangements with the Northern Ireland Government.

As there is some possibility of the establishment of new mills in the development areas and as we shall be providing for financial assistance in those cases, it is perhaps a little illogical if we refuse to do so if they are set up in Northern Ireland, which, in many ways, is the most severely hit of the whole lot at the present time. There is practically no cotton spinning there today. One or two mills are being set up, although I cannot at the moment see any prospect or possibility that the industry will develop very quickly in Northern Ireland. There is no possibility of a group covering 500,000 spindles being established in Ulster.

I want to say a few words on general points raised in public discussions on the Bill and on the policy underlying the Bill. First, I would like to say a word about the price to be paid for subsidised machinery. We obviously cannot contemplate a state of affairs under which the subsidy was paid merely to enable higher prices than would otherwise be paid to go to the textile machinery manufacturers. A lot has been said about that in the working party's report and it was the subject of special inquiry by the Evershed Committee. I think we can assure the House that we have worked out satisfactory arrangements to ensure that the price paid for this machinery will be based on actual costing and the real cost of production, and will not permit any profiteering out of the public purse. If the House want fuller details we shall be prepared to give them either now or in Committee.

Another point which has been raised, particularly in certain parts of Lancashire, is why is this confined to the spinning industry and not to the weaving side? The question has been given particular point at the present time because we are now passing out of a real yarn famine. A few months ago there was a yarn famine in Lancashire and yarn was the bottleneck in production. Today we have got to a situation where yarn in general is not only adequate for our manufacturing capacity, but in certain types is actually more than adequate. That will not be an embarrassment to us, because of the increased demand for the export of yarn and we should be prepared to extend our export target for yarn. We certainly very much welcome the big increase in yarn production in the last few weeks and we look to the industry for a much bigger increase in yarn production.

There are many who are asking, in view of the fact that the weaving industry has special problems and needs in the matter of re-equipment, why the Bill is confined to spinning. I hope I can satisfy the House that the scheme on the lines of this Bill is neither necessary nor desirable for the weaving section of the industry. The object of the scheme so far as the spinning industry is concerned is to stimulate modernisation and grouping. It is a fact that the spinners are not at the present time taking the whole production which the machinery industry could provide, which is entirely different from the situation on the weaving side.

The weaving firms are already taking all the automatic looms and winding machinery that they could get and would willingly take more if more were available. The order books of Northrops for weaving machinery are filled up with orders from the home market for years ahead, apart altogether from orders from the foreign market. On the spinning side the textile industry could put up the machinery if more orders were placed by the spinners, and there is a special need to provide more encouragement and incentive to the spinners to go in for more and quicker modernisation.

Hon. Members, especially those with close knowledge of the industry, will agree that the grouping policy is much less applicable to weaving with its great number of family concerns and great diversity of products than it is in the case of spinning. We are, of course, most anxious to stimulate and encourage modernisation in the weaving industry, and I shall have a few words to say about that tomorrow in Manchester, but it would be out of Order to say anything about it on this Bill. I am sure the House will agree that the lines of this Bill are not appropriate for the weaving industry.

The policy of this Bill is a policy which will not divide the House on the lines of party. We are all agreed, as are all sections of the industry, that this is the right policy to be followed not only in the terms of the Bill itself but also the general policy of which it is a part. The general policy outlined by my right hon. and learned Friend has received the support of both the Federation of Master Cotton Spinners' Associations and the United Textile Factory Workers' Association. They have pledged full support to it. Therefore, having said that, I am sure it will receive also the support of this House, because it does lie within the power of this House, so far as the Bill is concerned, to provide a small but quite important form of assistance and encouragement to Lancashire to put herself on her feet once again. Therefore, I am confident that the Bill will receive the support of hon. Members on all sides of the House.

11.35 a.m.

Mr. Oliver Lyttelton (Aldershot)

We on this side of the House do not propose to divide the House on the Second Reading of this Bill. Having said that, I hope the House will allow me a little indulgence in discussing the background of the Bill, and if I go on a little big longer than seems appropriate on a more or less agreed Measure, I hope I will be forgiven. My principal criticism is that a Measure of this kind has been so long delayed. The President of the Board of Trade said that this was the first piece of legislation for the cotton industry before the House since 1940, and if I have any criticism it is that it is rather long for so essential an industry.

If I may be forgiven for referring to personal matters, I should like to say that during my second and, unfortunately, very short tenure of the Presidency of the Board of Trade I told the permanent officials that, of all the industrial problems of reconstruction, we should tackle the cotton textile industry first. The right hon. Gentleman can check up on that statement at any time if he likes. The reasons for this decision were mainly two, one of which the President of the Board of Trade has mentioned. First, it was because of the immense importance as a potential exporter of the cotton industry. I should like to add that, perhaps because he was short of time, the other night, the President of the Board of Trade may have done rather less than justice to us on this side of the House, because we here do attach importance to exports. That was the first reason for the urgency of this programme; and the other one, to which the President has not referred, was the importance of relieving our shortage of clothing.

When on behalf of the Coalition Government I introduced clothing rationing in 1940, the number of coupons which each person got was about 66. After two and a half years of peace and the benefits of our present regime, they are still only about 48. It is beyond argument that both for export and to relieve our shortage of clothing, the cotton textile industry is of primary importance. It is also necessary to examine for a moment in an objective manner why intervention by the Government was desirable in 1945, as it is now. It was because between the two wars, on the whole, cotton had been a declining industry, and because insufficient profits were being made to enable the industry to keep its plant in modern conditions. It is worth remarking—and I do not apologise for doing so—that industries can only be kept in modern conditions if there are profits, and, however indecent or unfashionable it may be to mention profits nowadays, I have to ignore the "new look" for a moment.

The reason for this decline in one of our great traditional industries had been mainly the growth of competition from Japan and India and to a lesser extent from the subsidised exports from Germany. They were subsidised by the Nazis in order to gain at any cost foreign exchange which could be used for their rearmament programme. The Indian and Japanese competition was based on wages and standards of life which are unthinkable and intolerable in a Western country, most of all I think in this. There were some bad flotations at the end of the 1914–18 war, and that they were a contributory factor I should be prepared to admit. I would remark in passing that the present control of capital issues by the Stock Exchange Council is now very much tighter, and I do not think that many of those flotations could happen in today's conditions. In this great crunch of world competition the problem was the disposal of products and not as it is today one of trying to get production. It was inevitable that the smaller and less prosperous mills should fall behind in the struggle.

I do not intend to give in any way a résumé of the situation between the wars, but I want to come straight to the problem as it presented itself in 1945. I apologise for mentioning this to the House, but it is to try to put the Bill and its relation to the total problem of the cotton industry in its correct perspective. In 1945, of course, the first thing that was found wrong with the cotton industry was that it had been done very grave damage by the concentration which was necessary, but which has had a very deep effect on the problem. The labour force thus released, chiefly women, of course, had been dispersed on other production to the four corners' of the county of Lancashire and far beyond, all over the country. The job which these dispersed women and men did, I have some reason for describing as "champion." Even today I count as one of the few blessings left to me the fact that my company is a large employer of Lancashire labour, including women, and there is no better labour force in this country than they are, and that means in the world.

Not only had they been dispersed from the mills, but they had been employed mostly in the light engineering industry, often in brand new plants, recently erected. From the nature of those industries they are much more agreeable in which to work than even the best equipped textile mill, whatever one does. In 1945, 113,600 people were employed in cotton spinning compared with 177,400 in 1939, so that the problem in 1945 was primarily how to man up the industry again, I fear that the problem remains largely unsolved, since according to that "sea-green incorruptible" or the "Statistical Digest" there were only 148,000 people employed in December last. So, when the Labour Ministers left the Coalition Government and I returned to the Board of Trade, as I thought for a long time, but, as it turned out, only as a bird of passage, I formulated a scheme which I intended to press through with such energy as I could command.

I apologise for going into all this, but I do so because I wish to place the Bill in its proper perspective. The main features of this scheme were, first, that the employers should make a new charter for cotton—that is what we called it—and should pledge themselves to work in the direction of making the cotton industry more attractive and make it a higher paid industry. These two things are not quite the same, but they have a relation. I considered that as essential at that time, as I consider it to be now, if the necessary labour is to be retained in the mills and new labour attracted. Secondly, almost the most important part of the scheme was a commission consisting partly of employers and trade union leaders, to be set up to examine and, if possible, drastically revise by agreement, the famous or notorious wages structure which applied to the industry.

I do not think it is an exaggeration to say that even to understand the wages structure was not only a highly specialised study, but was a study which most people had to engage in for most of their lives before they were prepared to say they were expert in the matter. The wages structure had grown up and had had additions, subtractions, extensions and revisions since the second half of the last century, or even before that. It had become so cumbersome and obscure that it was in itself a major cause why in certain cases re-equipment was delayed or impossible. Some of the latest American machinery could only be operated at a loss if the wages structure continued in force.

It is quite clear that if the industry must pay higher wages, as I think it should to make it more attractive, it might well lose its competitive position in world markets unless higher production was achieved. So the third part of the plan was to try to increase output by intensifying the experiment in re-deployment of the labour force on the mill floor. In order to be able to carry out these experiments in re-deployment, the help and complacency of the trade unions concerned were required. I happen to remember the negotiations upon this particular subject with more than usual clearness because when I was flying up to Manchester to conduct a most important part of these conversations both engines of the Dakota in which I was flying cut out at 200 feet on the take-off. I had the misfortune to fly into the town of Hendon, which is rightly described in our modern terminology as a built-up area, and only Providence and a small recreation field saved my party, which included some of the most senior officials of the Board of Trade, some of whom are no doubt here now, and myself, who is less important, from sudden death.

I think that re-deployment has occasionally been resisted in Lancashire because it was felt it might be used as an excuse—and there is certainly a danger—for delaying re-equipment or modernising the machinery of the industry which is covered by this Bill. I stress most strongly that it should not in any way be regarded as a substitute but as one step towards the goal of increased production, and that those who regard redeployment as a means of putting off the capital commitments which re-equipment involves are doing a disservice to the industry.

Coming more particularly to the general scheme, in 1945 I had not, at least publicly, tackled the question of re-equipment and grouping, and I had it in mind to go about these amalgamations privately in a very practical and not theoretical way. One of the reasons at that time, as indeed at any other time, why amalgamations should not be brought about by comprehensive high-sounding schemes, if that can possibly be avoided, is that if one has to work entirely in public upon schemes which every one knows about, obviously one tends to put up the purchase price of those undertakings which are necessary to any particular scheme. Amalgamations should be brought about, whenever possible, by private negotiations. It is undesirable at any time that owners of mills which appear to be marked down for amalgamation should feel that the scheme will be carried through whatever price they ask for their assets, whether it is reasonable or otherwise. I did not at that time intend to make any public announcement about groupings but to work towards them and amalgamations by means of private negotiations.

Where finance was concerned, I intended to rely on the Industrial Finance Corporation which my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) had set up when he was Chancellor of the Exchequer. It is worth while for the House to remember that he had particularly in mind the re-equipment of the cotton industry when he first formulated the scheme of the bigger of the two finance corporations. The Chancellor of the Exchequer inherited this plan, and with the generosity which at least sometimes is characteristic of him, he publicly stated in a speech at Manchester shortly after the present Government came into power, that the plan had his full agreement. I believe he also said that the author was not quite so bad as some of his colleagues had painted him during the rough and tumble of the General Election.

The reason why I have taken the House over some of this ground is because I want to emphasise that this Bill only deals with part of the whole scheme which must be taken comprehensively if the problem is to be successfully attacked. I do not profess to know all the reasons why such a long time has elapsed before the main measures to which the right hon. and learned Gentleman then agreed have been put into force, although many of the negotiations had been successfully concluded as long ago as 1945. I do know some of them and I think it advantageous to mention them, not in any critical spirit but in order to try to make some contribution or give some help towards the solution of this general problem, which has always been, and is now very much in my thoughts. I am very keen to see the work done, and I am entirely indifferent as to who gets the credit.

I must say that at that time I considered that the appointment of a working party for cotton was a cardinal mistake. Although the working party eventually produced a very interesting report, and brought to the light of day many things about the industry which, I think, were previously known only by experts, it was manifestly impossible for them to throw new light upon the fundamental and cardinal problems facing the industry. All the time that they were sitting, which was about a year, we simply gave to the obstructive world an excuse for doing nothing. The answer was, "We must wait for the working party's report." When it came out it could not contain any new facts about the fundamental problems facing the industry, which are more or less those which I have already recited, and which everybody in touch with the industry knows about.

Another reason why a comprehensive scheme was not quickly undertaken was the disappointing result which has attended the Commission set up under the chairmanship of Mr. Justice Evershed by the present Chancellor of the Exchequer. The revisions of the wage structure were not nearly as drastic as I had hoped, and they did not, at the end of it, leave me with the comfortable feeling that I could understand them by studying any papers over the weekend. It appears to me that not until the Aarouson Agreement was made was there any real progress. It is true to say that it is the opposition of some unions, or some persons in the unions that caused the delay. I would not like the House to think that I do not understand what their reasons were, but I profoundly disagree with them.

It is not an exaggeration to say that redeployment was first of all arrested and then only partially applied through the opposition of some small section of the unions. I think it is rather lamentable when it is remembered that redeployment is a very difficult operation and requires the closest study. I should have thought that was all the more reason for getting on with it as quickly as possible, but that has not happened. A day or two ago the Parliamentary Secretary of the Ministry of Labour was reported to be flying to the Continent in order to bring back foreign workers to put into the textile cotton industry. It is no exaggeration to say that if full redeployment is part of this general scheme, of which this Bill forms a part, and if full redeployment was accepted, we should, in a year or two, require very little, if any, extra labour in the cotton textile industry to man to capacity. In the interim, since redeployment takes a long time, I admit that, on short term construction, foreign workers will be a great help.

In the older type of mills redeployment might easily raise output by 25 or 30 per cent. In the more modern mills, where the scope is not so great, 15 per cent. might be the maximum. That is without providing for any increase in productivity which might come from re-equipment. To hold up on this matter, in the particular circumstances in which we find ourselves, is rather lamentable. If that is caused at all by the feeling that redeployment is to be taken as an excuse for delaying re-equipment, I hope that the Government will do everything they can to eradicate that impression.

That brings me back to the place of this Bill in the whole scheme, namely in regard to grouping and re-equipment. It is not an uncommon delusion in business to suppose that, by putting two or three losing businesses together, one can wake up the next morning and find the amalgamation prosperous. That has not been my own experience. In a re-equipment programme, which, I am afraid, will necessarily be spread over far more than the five years which the Chancellor of the Exchequer rather incautiously mentioned on one occasion, groupings are more than ever desirable, because they enable a concentrated production to take place in part of the group while another part is being modernised, and so forth. On general lines, however naughty big business might occasionally appear to be to hon. Members on the other side of the House, in modern industry it is sometimes necessary to work with fairly large units in order that they can sustain the necessary overhead expenses to carry on continuous research and development, and develop the amenities which they should provide for their workpeople, and also in order to spread the activities over a sufficiently large field, so that the modernisation and scrapping of obsolete plant can be carried on continuously.

On the whole, I welcome this Bill. I think it means that something is now really on foot which is intended to give a practical stimulus to re-equipment and grouping. The Measure, in some respects, is not framed in the way that I myself should have framed it, and it has not faced one or two of the main obdurate problems. The position of the re-equipped mill, even with the subsidy as it is, may conceivably not be so good on short term as laymen outside this House might think. I have heard it said in Lancashire that there would be 2d. or 3d. a lb. of increased cost by the conversion. On short term some of the old mills, which have written down their equipment to nothing, but still have obsolete or obsolescent machinery, will, on short term, be in a favourable competitive position compared with those mills who have re-equipped themselves, even with the Government subsidy. This is a fairly important part of the problem.

I emphasise that, on long term, such an industrial policy is absolutely disastrous, but, on short term mills with old fashioned plant which has been written off, with the replacement of spindles at £9 a spindle, may find themselves temporarily in a highly favourable position. I think the working party who produced the report sought to overcome this difficulty by means of a levy. I thought the scheme was open to many objections but was very clumsy. It was however an attempt to tackle the problem. There are those, on the other hand, who think that by allowing extra margins and by compelling some of the extra money thus earned to be used for re-equipment, better results might be expected. I have been out of touch with these things for long enough not to venture to put forward any definite scheme, but I would urge the Government to devote their earnest attention to this aspect of the problem.

The attempt to use the financial bait of a subsidy of 25 per cent. on new machinery in order to force groupings is not likely, on the whole, to produce the best grouping. An Act of Parliament is not the right vehicle for bringing about the most sensible types of grouping. Some of the things which the President of the Board of Trade said this morning slightly relieved my mind on the point. The most important was that the system of grouping should be kept in the most flexible condition possible and we should not try to apply too rigid rules. From the very nature of things Acts of Parliament have to lay down very close limits. I think that the spindle capacity, namely 500,000 spindles, which alone qualifies a group for the help offered by the Bill—although the Bill does make a proviso saying a smaller number of spindles can qualify if the Board of Trade agrees—is rather too high. I think that we on this side will try during the Committee Stage to explore whether it would not be advantageous to reduce somewhat this maximum number from the figure at which it now stands in the Bill.

I recapitulate the arguments. Cotton must be made a more attractive industry. This will involve higher wages. If the industry is not to loose its competitive position, it will mean higher production. Higher production can be achieved at comparatively short-term by redeployment and, later, by redeployment, re-equipment and grouping. This would seem to be a logical progression. In the meantime, in our present position, the gap caused by delays in redeployment or re-equipment may have to be filled by longer hours or the importation of foreign workers. If we attack redeployment in a more energetic way, we can narrow down this gap very considerably. I conclude by urging the Government, in no party spirit, to the greatest drive and energy in tackling this most important national task. There is, after all, one thing in this troubled and difficult world which is rather unusual about the cotton industry. It is that everybody can see the problem very clearly. There is very little doubt about what the main measures are which ought to be applied in order to solve the problem.

It would be a sad indictment of homo sapiens if he sees the problem and knows how to solve it and is not then able to get on quickly with the solution. I must say frankly that I am rather disturbed at the long time which has elapsed and I am rather disappointed at the meagre results—this is a criticism not directed only to the Government; it is a general remark—and the slow progress which has been achieved so far in putting on its feet our traditional and our greatest export industry, one which I firmly believe can, within a very short time, make a contribution towards the solution of our balance of payments and, incidentally, may do something which is too often forgotten—add something to the comfort of our citizens at home.

12.3 p.m.

Mr. Fairhurst (Oldham)

For once, I find myself substantially in agreement with the right hon. Member for Aldershot (Mr. Lyttelton) who has shown a great knowledge of the cotton industry. I might argue some of the points he has made, but not those regarding the substance of the Bill. The reasons he puts forward for the decline of the industry may be debatable. I had no idea that we should be allowed to range so widely in this Debate, or I might have had more to say on that subject. I agree substantially with what the right hon. Gentleman said on the question of delay. Delay has been damaging to the industry. In some way steps ought to have been taken before now to impress upon the industry the urgency of the problem. There has been far too much procrastination and vacillation during the last five years. My last point in regard to what was said by the right hon. Gentleman is that I do not think that the working party was at all a mistake. The report of the working party has caused the industry to concentrate on some of the weaknesses which we find at present.

I trust that hon. Members do not expect me to say more about the right hon. Gentleman's speech. I want to discuss the Bill which has one most distinctive character. I refer to the provision of a subsidy or direct money grant out of money provided by Parliament to a person or group of persons carrying on a spinning concern. I cannot say whether there is a precedent for this. I think the nearest approach was when the late Lord Baldwin asked Parliament to grant money for a subsidy to the mines some 25 years ago. This Bill proposes to give a money payment out of money provided by Parliament to a person or group of persons engaged in private enterprise, provided that certain conditions are complied with.

This is a startling and disquieting development in our economy, and the Minister will be required to satisfy the House that such a course is warranted and essential. I say that being fully aware that much capital development in the form or reorganisation, re-equipment and modernisation has already taken place in some of our spinning mills, and that much further expenditure is contemplated and likely to be incurred in developing plant. Much more remains to be done if our spinning industry is to become an efficient and competitive factor in our national economy.

No matter what one's views may be about the past history of the industry—whether it has been mismanaged or efficiently controlled—the time has now arrived when it is necessary to have an open mind on the question, "How can we best assist the industry now?" That is the view I take in considering this Bill. I wish to see the industry brought to such a pitch of efficiency that we need have few qualms in the future on the subject of international competition. At the same time, I wish to see more security, and better, more humane conditions, for the workers. The Bill proposes to give one-quarter of the cost of new machinery purchased and installed, refashioned or rebuilt, within the period 16th August, 1945, and 30th April, 1952. Subsection (5, c) of Clause 1 which makes that provision, concludes with the words: … or such later date as the Board of Trade with the approval of the Treasury may in special circumstances allow. I consider that it is a mistake to include those words. Regulations in reference to the period should be rigid. Those words could be deleted. A figure of £12 million is mentioned as unlikely to be exceeded. Therefore, one can assume that the information in possession of the Minister is that not more than £48 million is likely to be spent in the period mentioned on the re-equipment or modernisation of cotton spinning mills. I want to ask the Minister if he is satisfied that the figure stated is sufficient, and that it is one of which full advantage is likely to be taken in the period between 1945 and 1952?

It is also proposed that the Board of Trade shall not approve of any claims made by a spinning concern unless application is made before 6th April, 1950. Why was that date fixed? Surely, the trade has had plenty of time in which to tell the Government exactly what they want and how they would like to operate the scheme? Clause 1 also states: (a) that the cotton mills comprised in the concern or group are not less than three in number and have a total spindle capacity of not less than five hundred thousand spindles or such smaller number of spindles as the Board may in any case allow. I feel that there should be more flexibility in this question of a fixed number, and that a case can be advanced for a smaller number, although, knowing the trade as I do, I think it is possible to go well beyond 500,000 spindles. The Clause also provides that, in the case of a group of concerns, it has to be organised effectively as a group with a view to making the best use of the most efficient mills within the group. In my opinion, that is very sound policy, for, with the best will in the world, I do not think it is possible to re-organise some of our Lancashire cotton mills as they are at the present time, because I think the expense would be prohibitive and quite outside the bounds of practical politics.

Clause 1 (4) requires further clarification. It is laid down that: (4) Grants shall not be made under this section except in respect of expenditure incurred in the purchase and installation, or the modernisation, of machinery or equipment used for cotton spinning or for any purpose preparatory or ancillary to cotton spinning, or any such other class of machinery or equipment used in cotton spinning mills as may be approved by the Board of Trade. I want to ask the Minister whether that means the re-spacing of machinery, changing of power drive, relaying of floors, the development of specialist training methods for the training of personnel and scientific investigation, or whether these will be ruled out. Perhaps the Minister will tell us. Clause 2 requires little comment, but Clause 3 deals with powers of entry and inspection, and I think these ought to be more clearly defined. The Clause states: Any person authorised by the Board of Trade shall. … have a right. … to enter and inspect. … and may require any person in authority or control. … to allow him to examine such books of accounts, records and other documents and to furnish such other information. This is going pretty far in this field because Clauses 3, 4, and 5 are complementary, and the penalties which may be imposed under them are certainly very varied and quite different from what one would expect.

I would further ask the Minister if he has consulted the textile machinery makers regarding their ability to meet the requirements of the trade, having in mind the commitments which they already have to manufacture for export. It is little use putting figures into a Bill unless we are satisfied that they are reasonable and approximate. Can the Minister say what is the total value of the orders placed by home customers up to now? Is it £4 million worth? I ask that, having in mind the fact that three years out of the seven year period have almost passed. If the figure of £4 million worth is approximately right, it means that £33 million worth of orders must be placed by home customers in the next three years, and if, at the present time, only £4 million worth of orders have been placed, it seems to me that there will have to be a radical speed-up if we are to reach the point which we aim to reach by 1952.

I feel that the cotton industry at the present time is at the cross-roads, and whether it is going to be an effective economic unit, capable of playing its part in our present social development in this country, will be decided in the next five years. The answer might very easily be in the negative. Lancashire today can play a tremendous and forceful part in rehabilitating our economic life, if it chooses to do so. I feel that this House, too, has a responsibility, and that, at this time, hon. Members here should state in unmistakable language to all concerned in the cotton industry that it will be required to do far more than it has done in the last five years. There are great potentialities in Lancashire, which can play a major part in this development, but, up to now, it has been a story of delay, delay, delay. If hon. Members will do all they can to back up any concentrated drive in Lancashire, it will have good results. We ought to say to the people there that the time has long gone by when we can afford to play with the industry, and that those who are retarding or holding back Lancashire's progress in the textile industry ought to be driven out as soon as possible.

Tomorrow, both sides of the industry are meeting with a view to helping forward this future drive in the cotton industry. We have the employers' side and the trade union side in contact, but there is a great mass of people in the cotton industry today who are indifferent, and, somehow or other, we have to get a message over to them and prove to them the real urgency of the position. We have to bring new machinery into the industry, and re-organise and rebuild some of the machinery which is in our mills today. We have also to tell our people who are manning the industry that their ideas must be more elastic than they have been in the past. I do not refer only to employers, but to all concerned in the textile industry. To them we must say quite frankly that we cannot afford to play with this industry or to fight the pettifogging little battles that we have done in the past, because, if we continue doing that during the next five years, the industry will be sunk. We must face that fact now.

I believe there are great possibilities of bringing our industry to the point where it was 25 to 30 years ago, but, to help in that work, we shall need the concentrated efforts of both employers and employees. If we could convince the Lancashire cotton operatives, and the people who live in the areas round about, that conditions and wages in the industry are going to be better than before, I think the job can be done. The right hon. Member for Aldershot mentioned how wages in the industry are checked. I do not think there is a lawyer in this House who, without having some expert knowledge to guide him, could reckon them up, even in the space of a week. In the past, the system of reckoning wages has been almost impossible, and has been a full-time job in itself. Thank God it is being got rid of.

I hope that this Bill will play its part in helping to create an urge on the part of all those concerned in the industry, that it will prove to Lancashire that this House is interested in the textile industry, and that we are prepared to give them all the help we can to build up and rehabilitate it so that it may reach that point of efficiency which we all desire to see. As I said in my last speech on this subject, we must try and impress upon Lancashire pride of service and pride in the job. I think that will do more good than anything else. If we do that, then we shall be well on the way to bringing success to Lancashire.

12.22 p.m.

Mr. Drayson (Skipton)

To begin with, I must declare my interest in this matter in so far as I am a director of textile manufacturing concerns, though I do not think my companies will get any particular benefit from this Bill as we have not a sufficient number of spindles. Nevertheless the industry would welcome an increase in the supplies of yarn to the weaving sections at the present time. The President of the Board of Trade said that there was a 25 per cent. deficiency in yarn supplies at the moment compared with pre-war production, and we all look forward to the time when that will be made up.

I wish to touch on the point which the hon. Gentleman the senior Member for Oldham (Mr. Fairhurst) mentioned—the money payment to public companies or private individuals. It occurred to me that he might like to view this money, not so much as a direct payment, but merely as an excessive allowance for depreciation. If, in the past, the textile and other industries had been allowed to depreciate their machinery at a higher rate, thereby putting more to reserve with which to buy new machinery later on, a great deal more new machinery would, perhaps, have come into the industry.

Mr. Fairhurst

Does the hon. Gentleman suggest that, in the past, the trade has been prevented from doing that?

Mr. Drayson

I am so informed by a number of manufacturers and have been told graphic stories of the difficult times because of competition which arose between the two wars—that it was only by practising the greatest possible economies that we were able to compete in many of the markets of the world. In fact, as hon. Members know, there were cases in my own constituency where a number of mills closed down completely in the years following the 1914–18 war. Before they closed down, those manufacturers who had failed to cheapen their products spent their last farthing in subsidising production in their mills, so that their operatives could remain in employment. That was the reason why, in many cases, they had no capital resources with which to carry out programmes of re-equipment.

The Minister devoted a great deal of time—and I am glad he did—to the all-important question of the redeployment of labour. I remember the present Chancellor of the Exchequer, when President of the Board of Trade, dealing with this point during the discussion on I think the 1947 White Paper. During his speech, I asked whether he was aware that many of the unions were resisting any attempt on the part of some industries to introduce time and motion study. I asked that question because the right hon. and learned Gentleman actually used the words, "time and motion study." I know of cases where the union representatives have said to management, "If you bring time and motion study into this mill, we will call the operatives out on strike."

I endorse what the hon. Member for Oldham said, that Members of this House must back up the drive and really try to educate some of the people who are preventing the various improvements and alterations so necessary in the set-up of the industry. What we have to make clear is that a great deal of this redeployment and the purpose of time and motion study are not to increase fatigue, but to eliminate it.

Mr. Fairhurst

I hope the hon. Gentleman will forgive me for interrupting him a second time, but I must point out to him that if, at the present time, we try to push into Lancashire the idea of time and motion study, all that we are now trying to do will be in vain.

Mr. Drayson

I think the hon. Gentleman should direct his remarks to the Chancellor of the Exchequer who, as he no doubt knows, takes a great interest in this particular subject. These things must be done with the full co-operation of everybody. The hon. Gentleman knows perfectly well that whatever decisions or ideas may result from any study, consultation or redevelopment that may take place, these things can only be done with the good will of the operatives themselves. I believe that is so, and, indeed, it has been proved to be so in a number of mills which have virtually done without trade union assistance, and where the operatives are perfectly happy and are getting higher rates of wages. But it has not been possible to bring about that position throughout the industry.

There is always, of course, the fear of unemployment. As was said earlier in this Debate, Lancashire has suffered very severely in the past. I wonder what hon. Members opposite thought when the President said that we wanted fewer and better mills. My right hon. Friend the Member for Aldershot (Mr. Lyttelton) intimated that, with new machinery and regrouping, we could manage with the existing labour force in the industry after it had been supplemented in the intermediate period by the several thousand more operatives required. Another important point made by the President was on the question of adequate central control. We in the textile industry know that, where there are family businesses in the weaving sections, it is not always possible to be certain whether the management would be either so strong or so effective, if it had to look after a large group of companies or mills, as it is when everything is under one roof.

I was glad to hear the Minister say that this scheme would be applicable to vertically integrated concerns which could not make up the half million spindles. I personally favour vertical integration rather than the horizontal set-up in the textile industry. In fact, some of us in the past, when the previous President of the Board of Trade was discussing this matter in the House, thought that he had in mind getting a grip on the whole of the spinning section by the horizontal set-up when the rest of the industry would fall into his nationalisation plan like a ripe apple.

I can say from my own knowledge that practically zoo per cent. of the management throughout the industry have been going all out, quite irrespective of politics, to assist the country in its export drive and to increase the production figures. In this respect they have perhaps been ahead of the other side of the industry. I do not like to talk of two sides of the industry; I like to think of the whole industry as one vast partnership with everybody co-operating for the good of all. I think it was the spinning section in Lancashire which had the five-day week before it was introduced into other industries. In fact, they were considered by the unions to have "jumped the gun" a bit, and it was even complained that to give a five-day week was in some way a breach of contract, because the spinning section had not obtained it by the usual union methods.

The President of the Board of Trade spoke of the weaving section, and I think that is where the main difficulty lies at the moment. He suggested—and I made a note of it—that Members who represent weaving towns should tell their union representatives what the President of the Board of Trade himself is saying, and should tell the people in those towns what is being said in this House, exhorting them to support the management and the Government by working double shifts or taking whatever steps are considered necessary. Lancashire weavers are probably the most conservative in the country. I use that expression not in any political sense, although they do show a certain amount of political sagacity in some constituencies such as Darwen and Bury.

Reference has been made to the question of war concentration, and I would like to remind the Parliamentary Secretary that there are still a number of mills which are under the control of the various Government Departments. They have not yet been derequisitioned. Government stores are still kept in a number of mills, and this matter should have been dealt with by now, two and a half years after the end of hostilities. I ask the right hon. Gentleman to consult with other Departments and ascertain whether there is any space at aerodromes and such places to where the stores at present in textile mills could be transferred, so that the mills could go into early production and help in the export drive. It cannot be too often repeated that this redeployment resulting in higher production will also result in higher pay. On that score alone, every assistance should be given to carry out the redeployment that is envisaged.

Mention has been made of the high cost of machinery; I think it is £per spindle as compared with £1 or so before the war. A point that cannot be emphasised too often is that this machinery must be paid for and it must earn its keep. This country cannot afford to have valuable machinery lying idle for many hours of the day. We must hit our targets and build up our exports with our existing machinery. I understand that we cannot increase the amount of machinery available, and therefore, it is ridiculous that these valuable capital assets should be lying idle for many hours of the day.

The hon. Member for Oldham referred to the desirability for making the industry attractive. That is what we all want, but there again we are held up for licences. Mills which had no canteens before the war are anxious to instal them; all their plans are made, but they cannot get the necessary labour or materials to carry out the work. That is a point which the Minister ought to consider. I hope this Bill achieves the object that the Minister has in mind. I know how important it is that we should have the maximum production of yarn in this country, not only for export but for our own manufacturing purposes in the textile industry at home.

12.36 p.m.

Mr. Anthony Greenwood (Heywood and Radcliffe)

The House will agree that we have had from the right hon. Member for Aldershot (Mr. Lyttelton) and the hon. Member for Skipton (Mr. Drayson) two speeches which were very restrained and reasonable. I hope that the extent of the reasonableness of their speeches is some indication of the extent to which hon. Members opposite and the private interests for which they stand have learned from the experience of the years before 1939.

I only wish they could have an equal opportunity of learning in respect of the weaving side of the industry. I find myself unable to accept the reasons advanced by the President of the Board of Trade as to why the Government are not going ahead with a similar plan for the weaving side of the industry. I appreciate, however, that if I were to digress on that point I should be getting rather wide of the subject which is before the House, and I do not wish to do that, because I warmly support this Measure. I believe it will provide us with an opportunity to increase the production of Lancashire cotton with the limited labour force that is available at present, or is likely to be available in the near future. I was sorry that the right hon. Member for Aldershot criticised the Government for delay in introducing this Measure. I was also sorry that my hon. Friend the Member for Oldham (Mr. Fairhurst) associated himself with the right hon. Gentleman in that expression of regret, because although the regret comes very well from my hon. Friend the Member for Oldham, it comes very badly from right hon. Gentlemen and hon. Members opposite who might well remember that even in 1937 and 1938 the bulk of the textile machinery in Lancashire was obsolete or obsolescent.

The right hon. Member for Aldershot spoke of the labour force in spinning and doubling as being at present "only 148,000." I was sorry he introduced the word "only," because that figure is a very considerable advance on the figure in 1945, as indeed it should be. It seems also from the report of the working party that it is a substantial improvement on what the working party itself expected would be the position at this stage in our post-war reconstruction. The labour force in 1937 was 186,000. Today it is 148,000. If the working party report is to be believed, as I think it is, that figure even now is only sufficient to man the spinning side of the textile industry up to 65 per cent. of its pre-war capacity.

Mr. Lyttelton

That is why I said "only."

Mr. Greenwood

If I may follow up the right hon. Gentleman's point, the reason I am giving the pre-war figure is this: The working party report and research at the Shirley Institute have shown that if American methods had been in operation in the textile industry in 1937 we would, in fact, have been able to achieve the same output with only two-thirds of the labour force then employed in the spinning industry.

Mr. Lyttelton

If the hon. Member is going to pursue that particular line of argument, I think he should say that the introduction of those methods would have been resisted at the time by the union.

Mr. Greenwood

I think that observation is completely irrelevant. It is 1948 and we are proceeding with a Measure to re-equip the cotton industry and to place it in a position in which it will be able to produce half as much output again with the same amount of labour as is at present available, if the figures of the Shirley Institute and the working party report will be accepted. I think the Bill which is placed before us today offers every hope that, even with this limited labour force, with only the 148,000, we shall in fact be able to get back very nearly to our output in 1937.

The right hon. Gentleman referred to the labour force in Lancashire as being "champion." I agree entirely with what he said, and I wish it were possible to say of the Lancashire cotton employers, that they, too, are all "a gradely lot." One of the difficulties we have to face to a very large extent, however, is that the Lancashire cotton spinners have not, in fact, kept sufficiently abreast with mechanical developments in the textile industry. All who have visited cotton mills must have come across cotton men who at one moment are handling samples of raw cotton with a tenderness and solicitude most of us reserve for our children, and five minutes later are viewing with complete complacency a card room where none of the equipment was installed after 1907 or 1908. Although there has been considerable technical and scientific development in the industry, these men have not kept pace with mechanical development. In 1914 there were 50 million spindles in this country. Since then another half-million new spindles have been installed. There are at present 33½ million. That means that probably 33 million were installed before 1914 and that is a very low percentage indeed of modern equipment. It was no doubt because of that that the working party report used these words: The equipment of the Lancashire industry is (a) old-fashioned and (b) extremely extensive in relation to the turnover handled. The hon. Member for Skipton suggested that something or other had prevented the Lancashire cotton industry re-equip- ping itself between the two wars, and it may be—I am not prepared to argue the point at the moment—that there were financial difficulties in the way of the Lancashire spinning industry re-equipping itself on the lines which reason suggested. So far as I know, however, there was nothing to stop the Government at that time stepping in with a Measure of this kind, in order to facilitate the re-equipment and modernisation of the spinning industry. In spite of the fact that textile machinery was available—it was being manufactured in this country—75 per cent. of that machinery was being allowed to go to countries overseas. It is perfectly true, as the hon. Member for Skip-ton and the right hon. Gentleman the Member for Aldershot have said, that severe competition was experienced in Lancashire from India and Burma, and they drew attention very properly to the poor labour conditions and low standard of life which made that competition unfair. It was because that competition was so unfair that it became more and more necessary to re-equip and modernise the Lancashire industry, yet so far as I can tell, very little was done in that direction between the wars.

If we take the percentage of ring spindles in the spinning industry in this country compared with other countries, we get these figures and I take them from the report of the United Textile Factory Workers which they issued in 1943. In 1938, 99 per cent. of the spindles in the United States were ring spindles. The figure for India was 91 per cent., for France 77 per cent., for Germany 73 per cent. and for the United Kingdom 29 per cent. It was in face of those figures that the Platt Report referred to the Lancashire industry as still being equipped mainly with mule spindles which no other countries retained to any extent and which the textile machinery manufacturers had in general ceased to manufacture.

We are told that the Lancashire cotton industry was not in a position to re-equip itself. If the Government of the day had facilitated it, it would have been, in fact, possible to re-equip the industry and to put it in a position to compete on equal terms, or more nearly equal terms, with the textile industries in other countries. The point is this. We cannot as a country continue to tolerate inefficiency and obsolescence in the Lancashire spinning industry, but the difficulty is—and here I have some sympathy with the right hon. Gentleman the Member for Aldershot and the hon. Member for Skipton—that it is not in every case to the financial advantage of the Lancashire cotton owner to go ahead with these schemes of modernisation and re-equipment. The figure that was given of £1 at the time the spindle was installed and £9 at the present time, is a significant figure because it means that even with the 25 per cent. subsidy the cotton spinners are going to be asked to contribute £6 15s. for each spindle which is being introduced into their mills under the Bill we are discussing this morning.

I think it is possible that that amount is not sufficient to give the necessary inducement to spinners to instal new equipment in their factories. I think it is also possible, if they do so, that one effect of this heavy new capital expenditure may be to increase the cost of production and so have a deleterious effect upon the export market. Instead of giving a subsidy I would like to have seen us taking shares in the industry and giving the new finance which is available in that way. That would mean the State, as a whole, would be able to get some sort of control over individual firms and would, in fact, be able to stop them slipping back into the trough into which they have fallen so frequently and so deeply in the past.

I want to agree with the right hon. Gentleman the Member for Aldershot that we have got to make the industry more attractive than it is at the present time. It is true that I think the figure of 148,000 is an encouraging figure, but, at the same, it is a deceptive figure, for this reason. A very high proportion of the workers in spinning and also in weaving are, in fact, very old indeed. They are making a magnificent contribution—and God bless them for the contribution they are making—but it must be apparent that a large number of the people in the industry cannot go on much longer, and if we are to take full advantage of the re-equipment which will result from this Bill, we have got to see whether we can get adequate recruitment in the spinning industry. It means that we have to have better working conditions and better welfare facilities in the industry than at the present time.

I want to suggest to the right hon. Gentleman the President of the Board of Trade, that in our mills we want re-spacing of machinery, in many cases we want renewal of flooring, and, as soon as practicable, the installation of individual electric drives; we want proper air conditioning, better lighting and proper dust extraction appliances. There are three things from the welfare point of view which are most essential. The workers need rest rooms, which are still a rarity in the cotton mills of Lancashire. Secondly, they need nurseries, and thirdly they need canteens. The hon. Member for Skipton referred to mills which may not have had canteens before the war. Perhaps the hon. Gentleman has been more fortunate than I have, because, so far, I have not discovered a cotton mill which, in fact, did have a canteen before the war.

I would like to see a really intensive drive on the part of my right hon. Friend and the Parliamentary Secretary to see that working conditions and welfare facilities are radically improved in the spinning industry, and I would go as far as to suggest to him that the sums which are going to be made payable should only be payable on condition that the President of the Board of Trade is satisfied about working conditions and welfare facilities in the mills and factories in respect of which this money is to be paid. I propose to put down an Amendment on those lines, which I hope my right hon. Friend will accept in due course. At the moment I will only say that I do not want to crab what I believe to be an important and valuable Measure, because it is the first step towards restoring stability and prosperity to an industry which has suffered so much in the past.

12.50 p.m.

Mr. Mikardo (Reading)

I never expected to sit in this House and listen to a speech of the right hon. Member for Aldershot (Mr. Lyttelton) with almost every word of which I agreed. But wonders never cease. There was only one expression in his long and detailed speech with which I disagreed, and that was his expression of regret that his tenure of office as President of the Board of Trade was cut so short. Apart from that, I found myself in complete agreement with his Views, and I hope he will not be so embarrassed by my agreement as to feel himself compelled to reconsider his views.

I congratulate the President of the Board of Trade and the Government on introducing this Bill. I would go so far as to say that I thought the President himself under-rated the value of the Bill. True, as he and the right hon. Member for Aldershot said, this Bill deals with only one part—a narrow though important part—of the problems facing cotton textile industry, but apart from its intrinsic importance to the cotton trade, it has a certain extrinsic importance in the whole field of industrial economics, and in the whole field of the relationship between the Government and industry at present. In point of fact, what this Bill does is to introduce as an experiment the first Measure in peace-time designed to rationalise industry without a change from private to public ownership.

During the war, of course, there were certain concentration schemes, but for the most part they were not voluntary; and even where they were voluntary, it was only because they knew that if they had not voluntarily done what was asked it would have been done compulsorily, and they were certainly under duress. So far as those war-time concentration schemes were concerned—and I make no point of this, because it had to be done in a hurry—there were only the vaguest and most indirect ways of improving actual efficiency. The main point was the release of labour for other purposes, and they succeeded. Here we have, in peacetime, an attempt to see whether a major and vital industry will, of its own accord, accept large-scale measures of rationalisation without any change of ownership.

I make bold to differ, as I very seldom do, from my hon. Friend the Member for Heywood and Radcliffe (Mr. Anthony Greenwood), in that I think it is a good thing in this instance, by way of experiment, for the Government not to attempt, as a part of this process of helping to modernise the spinning industry, to participate in ownership, because we ought at any rate to try on one experimental bench the possibility of getting rationalisation without a change of ownership, to see how far we can go in that direction. If we are to increase our power to compete in external markets and to raise our standard of living, it is very important that we should deal not only with the tactical methods by which we increase home production but with the strategic methods as well. Those strategic methods involve not only re-deployment in the sense in which that term is frequently used in the cotton trade—re-deployment on the mill floor—but re-deployment of resources, facilities, labour and materials between one factory and another. That is strategic re-deployment. We always seem to talk of deployment in the narrower and tactical sense.

As in many other respects, the cotton trade has been behind many other trades in realising the importance and value of those measures. If I may quote from personal experience, I have seen in other industries—notably the engineering industry—more than one case in which it was necessary, during the war sharply and quickly to increase the output of some component, and if the component was being made in five factories the only way to increase output was to close down three of the five factories. That sounds paradoxical, but I saw it happen in a matter of weeks—in one case in a matter of days—on a number of occasions. The closing down of the less efficient plants, and the re-direction of their labour, facilities, materials and stores to the more efficient plants, achieved this sharp increase in output.

What we seldom realise—and this is true in many trades, the cotton trade and others—when we talk about output per head and productivity is that even within the trades as at present constituted, without the introduction of any fresh methods, there are generally some factories in every trade producing anything up to three times as much per operator-hour as other factories in the same trade. Sometimes the ratio is as high as five to one; and I know of one case where it is as high as 12 to one. The major problem all the time is to lift up the productivity of the lowest to the average of the industry and to get the average factories up to the level of the best. Although that has been done, although we have had this rationalisation in the past, by a transfer of ownership, in some cases to a private monopoly and in others to a public monopoly, until the introduction of this Bill there has been no attempt to get these measures of rationalisation, with the benefits of operating in enterprises of a size nearer the optimum size, except with a change of ownership.

The right hon. Member for Aldershot pointed out, quite rightly, that it does not necessarily follow that increasing the size of an enterprise increases its efficiency. As he put it, very graphically, if three factories are put together, all of which are losing money and are inefficient, it does not necessarily follow that on the following morning they will jointly become a good organisation. Of course, that is one extreme end of the story. The other end of the story is that by centralisation of this sort the available managerial skill, as well as the available specialised capacity, can be spread, thus spreading the fixed costs over a wider area. By spreading specialised skills, too, over a larger area a great deal can be achieved.

I should like, in one sentence, to make a suggestion from my experience, I hope without being out of Order. I hope the President of the Board of Trade will bear in mind that these measures which he is proposing for the cotton textile industry are even more necessary in the woollen textile industry. I will not pursue that point, because to do so would be clearly out of Order. It seems, however, that more benefits from rationalisation are to be gained on the Yorkshire side of the Pennines than on the Lancashire side.

I would just add a little to what was said by my hon. Friends about the mistake which will be made if we confine rationalisation and modernisation to machinery only. Machinery is not the only factor in efficiency in the industry. In addition to the various improvements which have been referred to, there should also be improvements in ancillary equipment and in methods. This is just as important a part of reorganisation as is mechanisation. If we want to get a short-term improvement in the overall output per operator in the spinning and weaving sections, the quickest way to do it is not to worry so much about the work once it is on machines, but about the processes by which the work gets to the machines and gets off the' machines. Lancashire is suffering from the fact that many of the skilled operatives in both the spinning and weaving sections are skilled operatives for part of their time and are merely beasts of burden for the remainder of their time. We need to develop mechanical handling in both spinning and weaving if we are to get full advantage of the operatives already engaged on this work. What we want are mechanical contrivances for movement.

In this Debate, we have been talking only of improved output quantitatively. No mention has been made of another important facet of the problem. If one travels half way across the County Palatine from the sector which is engaged in spinning and to the other half which is engaged in weaving, it will be found that in the weaving sections everyone speaks with one voice. What they want is better yarn. Those engaged in the weaving section say that they could increase their output by 20 per cent. without any change in the labour force or in the equipment of the industry, if they did not get so many warp breaks. The weavers are not likely to be wrong in their contention. It is clearly important that re-equipment and modernisation should take place, but it is equally important that the quality of the yarn should also be taken into account.

I hope that my right hon. Friend will permit me to make one minor criticism of the Bill, which does not mean that I do not support this Bill very strongly. This is that I see no great virtue in this figure of three as the minimum number of firms to constitute a group. The important thing is the size of the group measured in terms of its productive capacity. For the purposes of this Bill, the productive capacity can be simply measured by the number of spindles. It ought to be possible in some cases to get modernisation within a single factory, which could act as a group for the purposes of this Measure. The sections of the factory could be divided up, with one section being mechanised and the remainder being "shrunk out," just as happens in the case of three factories grouped together for the purposes of this Bill. I should have thought that the measurement of the minimum size of unit to which the technique of this Bill should be applied could have been done according to the number of spindles. Beyond that measurement it would be unnecessary to consider the minimum number of firms to constitute a group.

I do not think the President of the Board of Trade should leave the choice of equipment to the group concerned. He said this was part of the arrangement by which there should be lack of compulsion on the manufacturers concerned and that they should be able to choose their own equipment. I know that the President of the Board of Trade could not do this in a Bill, but I beg him, when this Measure comes into force, to give much more consideration than the trade has done in the past to the question of standardisation of equipment. It would be completely wrong if all these organisations and groups who are beneficiaries under this Bill should be able to go their own sweet way as they have done in the past, and should develop not only a multiplicity of types of machinery, but a multiplicity of components and ancillary equipment.

Throughout Lancashire an undue number of spares have to be carried, and much time is wasted on maintenance and repair, because there are these differences in types of equipment. In the case of such a simple thing as a shuttle, we find that there are 30 or 40 different designs of the same size of the metal parts, all of which fulfil the simple purpose of holding the yarn. Spares have to be carried for all these different types, with the result that maintenance is extremely costly in terms of manpower. No one seems to be worrying about this aspect of the matter.

I welcome this Bill because I do not think we should have any doctrinaire approach on either side to these questions of relationship between the Government and industry, in the economic stage in which we find ourselves. We should be prepared to investigate every technique in the relationship between the Government and industry. This is a new technique, and it should be supported both by those who uphold Government enterprise and by those who uphold private enterprise.

I wonder whether the Board of Trade have given any consideration to what is the next step if this technique does not work. Suppose that the number of firms who are to come forward voluntarily to constitute groups within the meaning of this Bill is insufficient adequately to raise the efficiency of the industry as a whole and to make it competitive. The expenditure of the Government under the Bill is expected to approach £12 million, and that covers only a small part of the trade. My right hon. Friend may reply that the Board of Trade do not want to cross that bridge until they get to it. But that is bad tactics and bad strategy. We have to plan now what ought to be done in three or four years' time if this invitation which the Government have given to the industry voluntarily to re-equip itself with Government assistance is turned down.

It seems to me that the President of the Board of Trade should adopt the same attitude as the right hon. Member for Aldershot adopted during the war, when he said to the industry, "Look here, you chaps, you had better get together and rationalise yourselves. If you do not do it by a certain date, I will do it for you." I am not suggesting that we should wield the big stick, but merely that we should ensure that we get an efficient industry. The Government should therefore say whether they are prepared to take further steps if the necessary co-operation is not forthcoming voluntarily. I think it not improper to look that far ahead. I hope that will not have to be done, but that employers will show that sense of citizenship, good business, and good economy which will induce them to welcome this scheme and urge the Government—rather that that the Government should urge them—to set up the largest possible number of groups covering the largest possible number of spindles and perhaps almost the whole spinning trade.

1.11 p.m.

Mr. Erroll (Altrincham and Sale)

We on this side, as has been indicated already, are in favour of a measure of assistance to the cotton industry. A grant of some kind is undoubtedly desirable, in view of the misfortunes which befell the industry both before and during the war, when it had to be compulsorily concentrated in the form which has just been described by the hon. Member for Reading (Mr. Mikardo). Other industries during the war were in a much more fortunate position, in that if they did not expand they were at least able to maintain production at prewar rates, and keep themselves abreast of improvements in technical and other directions. Not so the cotton industry, which was compelled to concentrate and reduce its activities, and which is now, under difficult circumstances, being asked once again to increase its production although its labour force was partly dispersed during the war into munitions and other types of war factories.

The question which arises is not so much whether there should be a grant, but whether the present form of the grant is the most suitable. By restricting the grant to a contribution for the purchase of new machinery, we are, of course, preventing grants from being given for what is equally desirable—the provision of new buildings and ancillary equipment. Many existing buildings and mills are quite unsuitable for housing the new and modern machinery. It seems unfortunate that so much emphasis should have been placed on the purchase of new machinery under this Bill, and that nothing has been said about the importance of fresh buildings in which to house the new machinery.

When these proposals were originally introduced it was stated that the workers, on their part, must be prepared to accept the two-shift working of the modern machinery. We have heard very little more about that since then. This modern and most expensive spinning machinery can only be operated to full advantage if it is run for two shifts a day, and not just one shift. As labour is the principal bottleneck in the spinning industry today, and not machinery or equipment, it is questionable whether we shall get the best value out of a labour force which is working for only 32 hours a week on a two-shift system, instead of a longer 44-hour week on a normal one-shift system. Machinery and improvements must be considerable indeed to achieve a greater output total by working everybody for a shorter period, with more modern machines, than would be necessary if they worked rather longer hours, with slightly less efficient machines. I understand that the great improvement needed in the cotton industry is in the weaving section rather than the spinning section, and that the improvements to be obtained by the introduction of modern spinning machinery are not so great as in the case of introducing modern automatic looms. It is questionable whether we shall achieve a great increase in output by switching to more up to date spinning machinery and, at the same time, reducing the hours of operatives by introducing the double shift working.

The hon. Member for Reading drew attention to the possibility of the scheme outlined in the Bill not being a success, and queried what should be done if it is not a success. We hope it will be a success and I think the Board of Trade are right not to try to plan to cross bridges which they may not have to reach. There are times to plan ahead and times when not to do that, and I think this is a time when we should give the present proposals a chance to run without the threat of the big stick. It is all very well for the hon. Member for Reading to say that he does not want to wield the big stick, but he is, in fact, doing so when he talks as he did just now. That type of threat is very unpleasant. It might have been necessary to hold a certain threat over the industry under the pressure of war, but we on this side fought that war so that there should not be the perpetuation of that type of pressure on industry. If the scheme itself is not a success it does not mean that the industry as a whole will necessarily be hopelessly inefficient. It means that it will not have considered that the Government's offer is sufficiently worth while for it to be adopted. There may be very good reasons for so thinking.

The principal disadvantage of the scheme, I believe, is the necessity for grouping in order to qualify. Firms which group are offered a 25 per cent. rebate on new machinery, provided they buy the equipment within a certain time. That is the only advantage which is offered in return for the several very considerable disadvantages which are incurred in grouping. Take the efficient firm. They will not want particularly to look around for two or three less efficient firms to join with them. On the other hand, there is the inefficient firm. They have their labour force and machinery and, in present conditions of a sellers' market for yarn, in this country at any rate, they will see no reason why they should group with a more efficient firm and subsequently be squeezed out. All this is in return for a mere 25 per cent. rebate on the price of new machinery. So it does not follow that the bait offered in this Bill is likely to be sufficiently strong to overcome the disadvantages of grouping.

I do not think that the advantages of grouping have been convincingly put forward by the Government. I regret that I was not here to hear the President's speech, but I took pains to inquire whether any new points had emerged about grouping since the matter was last before the House, and I learned that no such points had emerged. Grouping simply means, to quote the phrase used when the scheme was originally announced to the Press, "the creation of manoeuvrable units." That was the phrase of the then President when he made the announcement in Manchester, but he has never explained exactly what he means by it. It does not follow that if two or three firms are grouped, a manoeuvrable unit thereby results. If a group becomes big enough it becomes a monopoly, and I understand that there is in preparation a Bill to curb monopolies.

The Government seem to want to have it both ways. If firms are small and independent they are wrong; if they group together, and become large and strong, they are monopolies due for suppression. It has yet to be proved that there is any advantage in grouping, except, possibly, the elimination of a firm which, on the decision of outsiders, is regarded as inefficient. Under present conditions, it will not necessarily be inefficient if it is operating with machines which have long been written off the firm's books, so that its costs are low. Why should that firm have to be saddled with the expenses of new machinery at a time when the future world outlook for cotton remains as uncertain as ever it did? Why should not some firms, particularly the old ones, whose machinery has been installed for 40 or 50 years, take the short view? Why not let the old firms die out naturally in the process of time, and let the efficient, progressive firms that intend to remain in the business get ahead with their modernisation and have the grant? It is hard to see the need for grouping, and I think that that part of the case has been very weakly presented. With the general principle of grant in aid for the spinning industry I am fully in agreement, and I shall, therefore, give my support to the Bill.

1.21 p.m.

Mr. Randall (Clitheroe)

It is quite clear, as the Debate has proceeded, that there is unanimity in the House with regard to this Bill. Perhaps the criticism that may be regarded as weighty came from the right hon. Member for Aldershot (Mr. Lyttelton) who referred to the delay that had taken place. I regard that as the only real criticism that has come from the Opposition benches. It comes with very bad grace from the Opposition to refer to delay in dealing with this industry when one turns back the pages of history between the two wars. That matter, however, has to some extent been dealt with, but there is another aspect of it. What is the explanation of the delay? First of all, a working party was set up. I think that my right hon. Friend was quite entitled to await the report of that working party. When it made its report, the Chancellor of the Exchequer, when President of the Board of Trade, made a speech in Manchester, on 5th December, which, I think, clearly gives us the answer why there has been this period of waiting. The scheme set out in the Bill was announced in the speech of the then President of the Board of Trade when he said: What I want, therefore, to ask both sides and all sections of industry to do, and do as quickly as possible, is to let me know whether or not they accept this scheme with the Government's obligations, their own obligations and the third party's obligations all firmly attached to it. Clearly, from that statement, what was desired was that there should be discussion; that there should be argument between the three parties and that there should be good will. I regard the 12 months from the original statement of my right hon. Friend in which there has been brought about agreement between the sides as time well spent, and I think that it ill-behoves the right hon. Member for Aldershot to suggest that there has been delay. It is true to say today, as did my right hon. and learned Friend when speaking at Manchester, that all eyes are on Lancashire. Today, millions of eyes are on Manchester. Perhaps the tragedy is that to some extent the thoughts that are on Lancashire do not go back to the time between the wars when there was human hardship and tragedies were enacted in every business in Lancashire. There is also the failure to remember that almost 250,000 of the workers in Lancashire left the industry between 1924 and 1938.

When all thoughts are on Manchester today, because we must have production and because there is desperate urgency about production, I hope some of the people of this country will remember the very difficult times through which the Lancashire operatives have passed. At the moment, the consumers are exceedingly anxious to know what is going to happen in Lancashire. They want more material for clothes, and they want to know how soon it will be before they get it. The consumers are also anxious to know when they are to have the opportunity of buying once again the goods that Lancashire can produce. I think that the workers at the present time are thinking about their future employment there, whether there is any stability, whether they can be reassured that their industry is to be carried on, and whether there is to be prosperity.

I think that from the national point of view we ought to be thinking of Lancashire today, because it is the real dollar earner, and if we can make a success of the cotton industry in Lancashire, that should go a long way to help the country in its present difficulties. Lancashire today, so far as its main, staple industry is concerned, is no longer depressed, and it has a market in the world which is unlimited. Yet it is necessary to bring along this Bill. What stands in the way of Lancashire doing its job? I think that the Bill answers that. We should keep in mind, for example, that it is not a question of raw cotton. There is plenty of raw cotton in the world. Hon. Members opposite will dispute with us whether we are buying in the right way or not, and whether we did the right thing in regard to the Liverpool Cotton Exchange, but the problem is not the supply of cotton.

Neither is the problem machinery. There is plenty of machinery in Lancashire. Heaven knows, some of it is out of date—70, 80 and 100 years old, but there is textile machinery there. Neither do I accept that it is because the workers have lost their skill. The skill of the Lancashire workers is as great as ever it has been. In fact in the present circumstances, with all the limitations placed upon Lancashire, magnificent results have been achieved during the last two and a half years. There has been some criticism this morning that sufficient has not been produced, and that the points which we have for clothes rationing are less than they were when another right hon. Gentleman was President of the Board of Trade.

If we look at the figures of exports for this year, we find that the workers in Lancashire have done a very fine job. They had every reason not to go back to the industry and not to help the country at the present time because of the past, but they responded, and I do not think there is another county in the whole of this country where the percentage of the population in employment is so high. I am referring to the men and women in the industry. People in London have no idea of how our Lancashire folk live. In nine out of 10 homes the wife is going out to work. The country should be very proud indeed of what our Lancashire folk are doing. There are limitations there, but even with those limitations, Lancashire folk have done a splendid job during the last two and a half years.

What is preventing us from having the clothes, material and exports we require? I think the answer is very simple. It is the question of the labour force. We have a smaller labour force than before the war and there is no hope of increasing it. It will never get back to the pre-war position. The Government have used almost all the inducements they can. They have attended to welfare—there are better working conditions there; they have given to the workers a five-day week; they have given them canteens; and there has been an improvement in the wages field. Although practically all the incentives possible have been given to the industry in Lancashire, it is still lacking in labour force. Lancashire has had other industries with which to compete. I do not suggest for a moment that these other industries should be turned away from Lancashire, but there is, as was suggested by the hon. Member for Heston and Isleworth (Mr. W. R. Williams), Littlewoods, and it is true that a large number of previous employees in the Lancashire mills have gone into Littlewoods. We have also the problem of the raising of the school-leaving age, which has had its effect on the industry, and that of the National Service Act.

The shortage of labour is a problem we are facing. What is the answer? There is world hunger for our clothes. Our own people want more clothes as quickly as possible. We are desperate to pay our way. This Bill, in my opinion, is the answer. Perhaps I should like to see the industry nationalised, but I should like to see this experiment carried out to ascertain whether the employers in the industry can respond as a result of being subsidised by the Government. The workers will respond. They have already shown their response. They have been willing to give to the country of their very best. I marvel that so many of them have remained in the industry; I marvel that they still continue. I believe that with the assistance of the subsidies from this Bill and with the re-equipment and modernisation of the spinning mills in Lancashire we will have the opportunity of producing the yarn and cloth the country needs so much, thus giving to us the opportunity of rebuilding the industry and getting rid of the bad history it has had over so many years.

1.32 p.m.

Mr. Osborne (Louth)

I heartily agree with the hon. Gentleman the Member for Clitheroe (Mr. Randall) that the problem today is not machinery or the supply of raw cotton but labour. There is a smaller labour force, and that is our real problem. He explained that everything had been done to attract labour back into the cotton industry and it had failed. Over a year ago in this House I raised this very question under the heading of "Football Pools." I asked the Government on that occasion if they would do something to get part at any rate of the 50,000 to 70,000 girls who were working in the so-called "pools industry" back into the main industry of Lancashire. I posed this question, whether the country wanted pools or clothes? It is all in HANSARD for anyone to see. I pushed this home as hard as I could. And so far as I know, the Government have been terribly slow in responding. There is no real manpower shortage in this country. If I might remind the hon. Member for Clitheroe, there are just as many people living in this country today as there were before the war. Indeed, there are probably more. There is no manpower shortage. What has happened is that our manpower has been diverted into the wrong channels and sooner or later we shall have to get it back.

First of all, I want to say that I welcome this Bill. Then I want to declare my interest. I am a director of a number of textile companies that use the cotton yarn as it is produced. I also want to state that I have a personal interest through marriage in the Oldham cotton industry. If the House will forgive me saying it, in the 1920s I went to Oldham to find a wife and I found a very good one. When I first saw Oldham I thought I had never seen such a depressing place in all my life. There was under-employment and unemployment. The mills were half derelict and there was despair in the hearts of both the owners and of the workers. I have never seen such a dismal place. It was only made tolerable by the decency and kindness of the folks who lived there. It was not only the workers who were suffering. There was also the system which allowed the cotton industry to be run on what I should call a partly-paid share finance basis. Men who had put money into the cotton industry at the end of the first world war found themselves saddled with large unpaid capital amounts which had to be met month in and month out. The guts of the area were torn out by this very unwise financial system upon which the industry had been based. I hope the Lancashire cotton industry will never go back to that method of finance.

The President of the Board of Trade said a most encouraging thing, namely, that yarn was more than adequate for manufacturing purposes and he welcomed that development. He also told us that there were export markets open to take the cotton yarn. As a buyer of Lancashire cotton yarn, I hope he will see that the home market gets all that is required before he starts sending it abroad. I would also ask him to look into this point and see that the costs of the yarn that we have produced are brought down, if at all possible. He is asking us in the hosiery trade to do our share in the export drive. We are finding that our markets are going because our goods are too dear. One of our problems is that our yarn is costing us far too much, and, therefore, anything that the Government or the Board of Trade can do to increase and regularise the supply of yarn and bring down its price would help us enormously in the Leicester, Nottingham and Derby areas to make our goods so that we can sell them abroad.

The hon. gentleman the senior Member for Oldham (Mr. Fairhurst) made one complaint against the Bill. He said that as he understood it, the Bill provided for subsidies out of public funds to private enterprise. He referred to the fact that so far as he knew this was only done once previously and that was by a Government headed by the late Mr. Baldwin. The hon. Member also argued that it would have to be justified. May I give this House some justification as I see it. Surely what the hon. Gentleman has to put to the workers, for whom he was speaking—and rightly so—is that this money is not being put into the owners' pockets. It is going into the industry to make it more efficient. The Chancellor of the Exchequer is already a sleeping partner in every industry as regards profits. Nine shillings in the £goes automatically to him and if we are fortunate enough to have more than a certain income up to 19s. 6d. goes to him. So to me it seems that more than half of this money is not being put into the hands of private people but private individuals are merely holding it for the Chancellor and working for him to give him his rake off. That is an important and essential point to be explained to the workers, whose co-operation will be vital if this Bill is to succeed.

One other point from the hon. Member's speech struck me. So far as I have got to know the Lancashire people it is fair to say that they are individualists to the core and both operative and owner are conservative in the non-political sense. It would be a mistake to try to do what one hon. Member suggested, namely, to take the big stick to make them do things because, apart from the people of Yorkshire, the Lanacashire people could be most awkward if they were threatened in order to get things done. Much better results will be obtained if we leave them to voluntary efforts instead of threatening them. While I am on that point I might say that his scheme will fail or succeed not according to the amount of machinery that is provided, but according to the loyal co-operation of the workers, and upon their willingness to work two shifts, to alter their working habits or to tackle this urgent problem from a new angle. We as Members of this House have a special duty. The operatives naturally look to their trade union leaders for advice and guidance. We must support what I call the conservatively minded trade union leaders in their difficult task of getting their workers to look at the problem through new eyes. It is a job which we have all got to do.

My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) said that the real justification for the proposals was the grouping of the industry into larger units. I would make the protest that bigness does not necessarily bring with it efficiency. There is an optimum size in industry beyond which one gets not greater efficiency but inefficiency. It would be a great mistake to worship size merely for its own sake.

There are several questions which I wish to ask the Minister about the proposals in the Bill. In Clause 1 (2, a) it is laid down that 500,000 spindles will be the ideal size for the new units. My friends in the trade suggest that this may be too big. As regards vertical combinations it is far too big. I should like an assurance from the Minister that the vertical combinations will be given special consideration. I suggest that a figure much nearer 100,000 rather than 500,000 spindles would be a reasonable basis for a grant in the case of vertical combinations.

Clause 1 (3) states that: The Board of Trade may approve plans for the re-equipment or modernisation of some, but not all, of the cotton mills… I suggest that instead of saying "some" it would be better to say "one or more." In a group of three mills there may be one which is as big as the other two together. If they are brought into a combination under re-equipment and modernisation plans, it might be much better to select that one mill rather than spread the money over the two smaller and less efficient units.

In regard to Clause 1 (4) I would like to emphasise the point which has been made previously, that the grant can only be made for machinery and equipment, and buildings are apparently specifically excluded. I make a plea that a certain latitude should be allowed for the modernisation of buildings. For historical reasons a lot of these Lancashire mills are old-fashioned and out of date. It is the fault of no one; they were built 100 years ago. If we are to get the labour back into the industry the mills will have to be modernised; we shall have to make them much more attractive to labour. I suggest that part of the money might wisely be expended on the modernisation of buildings.

Clause 1 (5, a) states that The purchase and installation of machinery or equipment or, … the modernisation thereof must have been completed before the grant is made; Some combines may not have ready to hand all the finance required to meet their programme, and I suggest the Government might consider making a grant or part payment before the whole process is completed. That seems a reasonable point to make. In my view it would cause other groups to come into the scheme which might otherwise hesitate if they were short of finance.

Under Clause 1 (7) the Board of Trade: may authorise the Cotton Board to perform such functions… Is the Minister sure that the Cotton Board have the technical experts, the men of wide enough knowledge, experience and ability, to carry out those functions? The worst thing that could happen would be for the industry to have its fate decided by well-meaning but inexperienced civil servants. Is the Minister sure that the powers he can grant under this Subsection will be carried out by men of adequate experience and knowledge?

These are the only comments I wish to make, apart from saying that I wish the Bill the greatest success. I agree with hon. Members opposite that something like this might have been done a long time ago. I also agree that something might have been done in the last two and a half years. For the good of the country and for the good of Lancashire, I wish the scheme well.

1.46 p.m.

Dr. Segal (Preston)

This Debate has covered a wide field. It is to some extent inevitable that it has ranged along party lines, but in this Measure we are dealing with what I believe to be a most constructive piece of legislation, and it is perhaps desirable that recriminations about the past should to some extent be left out of our Debate. I believe that there may be a danger that the 20 per cent. increase in production which is set as a target for the textile industry may not be reached unless we take care to see that human values are placed in the forefront of our programme. It is to some extent ironical that our Government are giving priority of legislation to machines rather than specifically to the men and women who are to work them.

It is most important that we should not leave this human element to the last when studying the problems which face the industry today. A little while ago I put a Question to the Minister of Labour as to the reason why certain evening shifts for married women volunteers in some of our Lancashire cotton mills had ceased. The reply I got was that it was due to a bottleneck in the industry, and involved 160 married women, who had had to cease employment. I ask the Minister to consider what are the human repercussions of the sudden sacking of 160 married women volunteers. Such repercussions are almost unlimited. These women go back home with a feeling of complete despair, and say, "We have tried to do our best to help our country to increase its production. We now find that we are not wanted." Whatever may be the justification for the existence of these bottlenecks I feel that there is here to some extent a gap in our planning. We appeal to women volunteer workers who respond, only to find that they are unable to continue at their work.

Several hon. Members have referred to the difficulties which face many of our mills in relation to the actual working conditions. One or two hon. Members opposite, notably, the hon. Members for Altrincham (Mr. Erroll) and Louth (Mr. Osborne) have said that it is not only new machines we need, but that it is vitally important that these new machines should be housed in new buildings. To many of the workers in Lancashire who have been brought up in the tradition of working in our cotton mills, and who have a certain pride in their craft, many of these old shells of factories will have very painful memories. Whatever new machinery is installed, I believe that a great deal more ought to be done to attempt to build new factories which, in themselves, ought to be attractive to the workers whom we are so anxious to secure. The Parliamentary Secretary knows that in my own constituency Courtaulds have built a new factory on the most modern lines, and they have a waiting list of workers seeking admission to this factory. If only we could establish an entirely new cotton mill on lines similar to Courtaulds' new premises at Redcar we should have very little difficulty in securing, not only the right type of worker, but in the right numbers.

Hon. Members who have taken part in this Debate have spoken of the actual welfare facilities which exist in many of our more modern mills. I do not believe that any development of welfare facilities in the mills themselves is likely to prove to be enough. We may set out to provide any number of rest rooms, day nurseries and canteens and we shall still not be able to attract the right type of worker in sufficient numbers. It is a fallacy to assume that, if we give sufficiently good accommodation to the workers, and sufficiently modern improved welfare facilities, we shall be able to obtain the workers which we require.

The hon. Member for Clitheroe (Mr. Randall) said that the real problem today is shortage of labour. He believed that there is no hope of ever recovering the labour force in the industry and that everything has been done, and has failed. I would suggest to the Minister that a new incentive should be created for the industry which would, I firmly believe, hold out a good chance of success. I believe that today we have before us a great opportunity of attracting workers by giving housing priority to workers in the textile industries to the same degree that we are according housing priority to workers in the coalmining industry and in agriculture. In my own constituency we have a show mill to which all foreign visitors to this country are taken. They are never shown the housing conditions in the immediate vicinity of this mill, which, to my mind are among the most dreadful in the country. Many of them are little better than hovels, and are quite unfit for human habitation.

Above all things, let us realise that higher wages, as the right hon. Member for Aldershot (Mr. Lyttelton) suggested, or improvement in welfare conditions, are, in themselves, not enough to attract the labour force that this industry so urgently needs. I would appeal to the Minister to seize this opportunity of placing this industry in the same degree of priority for immediate housing needs as is accorded to workers in agriculture and coalmining.

Mr. Osborne

If priority is given to every industry in turn there is no priority at all. That was the problem during the war. There were so many priority certificates that they ceased to be of any value. Surely, what is wanted is increased output from every industry?

Dr. Segal

It is all very well for the hon. Member for Louth (Mr. Osborne) to ask that if once we began with textiles where should we end? We should recognise that, according to The Economic Survey for 1948, the textile industry is now placed in the forefront of our export drive. It is more capable than any other industry in the country of attempting to bridge our dollar gap, and so I think that today the textile industry can stake a pre-eminent claim for priority in housing needs.

We are faced with the problem of a world hunger for textiles which is almost unlimited. In many parts of Africa today the workers are allowed to spend only 50 per cent, of their wages in textiles. Many of them would prefer to spend 80 or 90 per cent. of their total wages in buying textiles, after the shortage which they have had to endure for the last nine or 10 years. In this vast Continent of Africa, with its hundred million population, once the inhabitants take to wearing clothes they never leave off wearing them, so that once we have saturated the dollar market, there is opened up for us a vast, unlimited market for textile goods in Africa which is, at the moment, virtually untapped.

I feel that this Bill is, in itself, hardly adequate, both for world needs and for the needs of Lancashire. I think we should realise that, even more than in the past, we have in that county almost the finest human material in this country and the backbone of our labour force. We are bound to welcome this Bill as a first step towards rehabilitation of the cotton industry, but I feel that it is, to some extent, a niggardly Bill, compared with the vast problems which confront the industry today. It is an example of piecemeal legislation, and, as such, is not altogether a radical approach to these vast and terribly urgent problems. But it is a first step, and having said that we all welcome this Bill, I would only express the hope that the subsequent steps which the Government intend to take in dealing with this industry may not be too long delayed.

1.57 p.m.

Mr. Walker (Rossendale)

I represent a constituency which depends very largely on the cotton industry and, therefore, a Bill of this description is one which I welcome very sincerely. I do not wish to give the impression that the industry in my area is in a state of such starvation and need that it requires subsidising to help it carry on. I do not know for certain, but I believe that the cotton mills in my constituency are among the best equipped in the country. Nevertheless, the need for something to be done in the cotton industry is so apparent to any one who has any interest in it at all, that we cannot but welcome a Bill of this description. I have never been a great believer in subsidising industry. I have always held the view that a business ought to be able to run itself without being subsidised by the State; but here we have a most striking instance, in my opinion, where an industry must be bolstered up in the national interest.

We look upon the coal industry as being the greatest asset we have today from the point of view of our exports, and for putting us into a better position and relieving us of a considerable amount of the distress from which we are suffering. Next to coal must surely come the cotton industry. If we are to export our textiles all over the world—and Lancashire textiles are well known and eagerly bought up when they are of the right quality—something has to be done in the way of re-equipping and modernising this ancient industry.

One of the most depressing and heart-burning experiences I have ever had was about 12 years ago when I went to Blackburn to fight the seat for Labour. I was asked to address a huge crowd of unemployed cotton operatives. The melancholy gloom of the atmosphere left a fearful question in my mind as to what would happen to these people who had nothing to do save draw the dole. Whilst in Blackburn I saw a sight which I shall never forget. I was talking to a young fellow in a side street near by a large cotton mill. A couple of wagons loaded with textile machinery came down the street. I asked, "Where on earth is that machinery going?" The young chap said, "I don't know. It may be going to the scrap yard or it may be for export to China or some other Eastern country." He added, "But one thing I do know about that mill from which the machinery has come. I used to work there. I have now been out of work for over two years." That is an instance of what was happening in Lancashire 12 or 13 years ago.

We may be charged by the Opposition with having done nothing in the past two and a half years towards the rehabilitation or reconstruction of the cotton industry. What on earth were they doing during the years between the two wars when such things as that were occurring? Between the two wars in the great cotton centre of Blackburn, half the people were out of work and 40 of the mills were closed down. I am happy to think that Lancashire is not in that condition today. As the cotton industry is so important, this a Bill which demands the interest and support of everyone. I am sure that it will get that support. Along with the hon. Member for Preston (Dr. Segal), I consider that the £12 million which we propose to spend is very small indeed. Let us hope that, at any rate, it will set the ball rolling and put things in better shape in the county of Lancashire and in the textile industry generally.

The hon. Member for Louth (Mr. Osborne) spoke of the miserable conditions of the gloomy city of Oldham, from which I think he said that he had secured his wife. I compliment him on that. Oldham is not the only place that was gloomy and depressing. Even today perhaps Oldham is gloomy and depressing enough, as are a good many other Lancashire towns. I will give one instance of something which occurred recently in my constituency. This Bill lays special emphasis upon the necessity for the re-equipping and modernising of cotton mills. In my constituency there was a small mill which employed about 250 people. Someone came in from outside, and bought the mill in full working order. They packed up the machinery and exported it to somewhere in the Near East, leaving the 250 people to get work elsewhere. Perhaps the Minister will take note of that point. We do not want people to be taken out of the industry and put into other work.

I have been told by employers in the cotton industry in my constituency that what they want above everything else is more people introduced into the factories. The industry must be made more attractive and healthy, and I consider that this Bill will assist in that. As one who represents a constituency in which a large number of people earn their living by working in the mills, I hope that this Bill will assist in putting the industry on to its feet. I hope it will enable it to provide the textiles for export to other countries so that, in due course, we can earn those dollars about which we hear so much today, and which we need so much in order to save the country.

2.6 p.m.

Mr. Sutcliffe (Royton)

It may be rightly said that this Bill has had a quiet welcome on both sides of the House. The point made by the Opposition is that it should have been presented much earlier. It is some time now since the working party report was made, on the recommendations of which this Bill is based, and we think that vital time has been lost unnecessarily, during which some progress could have been made. We have had many interesting speeches and, in nearly every case, they have been of what might be described as a non-controversial character. I think that attitude is absolutely right when we are concerned with a Bill of this nature, and especially when we bear in mind that the President of the Board of Trade is calling a meeting of Lancashire Members of Parliament of all parties, and of all sections of the cotton industry, in Manchester tomorrow. We hope that at that meeting a great lead will be given to industry in Lancashire to go ahead and recapture the export trade. I liked especially the speech of the senior Member for Oldham (Mr. Fairhurst), who urged everyone to go ahead for the benefit of this great industry. He is a neighbour of mine, and I wish that he could bring some influence to bear on one or two trade union representatives in that district who are not encouraging progress in connection with time and motion study. Some towns in Lancashire are making progress with research work in that direction, but in Oldham, in the district which covers my area, unfortunately, similar progress is not being made. There is a great future in these experiments in time and motion study, which are working satisfactorily in some places, and it is found that they do not militate against the worker as has been suggested, or as used to be suggested in some quarters.

The only discordant note in the whole of the Debate was struck by the hon. Member for Heywood and Radcliffe (Mr. Anthony Greenwood), and I propose to reply to what he said. He drew attention to the state of the industry between the wars. It is no news to anybody in this House that the industry was not in a satisfactory state between the wars; but neither were the markets of the world in a satisfactory state at that time. We were up against the most terrible competition. That made it very difficult indeed for manufacturers, or for anybody else connected with the cotton industry, to go ahead and put in new machinery or introduce new conditions in other directions. Everybody admitted they were necessary, but we were fighting for our lives to retain what little trade was left. Everything had to be concentrated towards that end.

Since then, while we have been in a seller's market, a great deal has been done, particularly since the close of the war. There was a census taken at the end of 1946 of some 1,275 mills, and, of those mills, 740 had already established canteens and dining rooms. In regard to canteens, it was stated that there were no canteens before the war. There were very few canteens in any industry before the war; there was no need for them, and if we had started introducing canteens into cotton mills before the war, we should have found that the workers would not have patronised them. I do not think anybody can deny that. The fear after the war—and there still is that fear—is that, when rationing becomes easier or is abolished altogether, the workers will not stay in the canteens for their meals, because they like to get home in the lunch hour. Nearly all of them live close to the mills, and it makes a nice break. They get away from the atmosphere of the mill and into their homes for a short while. I cannot see, therefore, that there is very much in the point made by the hon. Member about prewar days.

As regards other improvements which have been put into force, 400 mills have full-time labour and welfare officers, involving 105 nurses, many of whom are State registered. Again, 470 mills have first-aid and rest rooms, which have been described today as a rarity. A large number of mills have been repainted inside—some 700—and some 600 were planning the respacing of machinery. Nearly £8 million has been spent on this work, and it works out at an average of £6,000 per mill. A great deal more has been done since the time of which I am speaking, but I think the figures I have given are useful in contradiction of what has been said here today, and as showing the position at the end of 1946.

I represented the same constituency in those days before the war, and, having visited certain mills during those years and having returned to some of them quite recently, I can say that the improvement is really very marked and most encouraging, especially in regard to air conditioning. One of the worst features of the cotton spinning mill before the war was the cardroom dust problem, and I used to express that point of view in this House in those days, when we had far more Debates on this industry than we have today. Since the Cotton Board has taken over and has direct contact with the Board of Trade, our Debates, and perhaps our responsibilities, in some ways, as Members of Parliament, have tended to become less and less, which I think is rather a pity.

In regard to air conditioning, I was in a mill last week-end in which there did not seem to be an atom of dust. It did not cause me to cough, and I cough on the very slightest pretext, having been gassed. The difference really was enormous. These plants, however, are very costly, but, if it had not been for the war, they would have been in much greater use than they are today. If employers could have got the licences for this new equipment, they would have installed it. Hundreds of licences were applied for, but long delays were caused by the fact that the equipment was not available, and because it was a question of priority; otherwise, the work would have been done in a large number of instances.

Many tributes have been paid, and quite rightly, from both sides of the House to the Lancashire workers. The suggestion was made by the senior Member for Preston (Dr. Segal) that, cotton having now taken equal priority with coal in regard to the export drive, housing for cotton workers should be given a greater priority, and should rank equal with the priority given to miners' houses and I fully agree. If there is any extra food available, we might have some of that as well, at any rate, for the mule spinners and some others whose work is just as hard as that of any other workers anywhere else.

The President of the Board of Trade did not tell us how the response to his appeal was going, how many firms had actually responded and exactly what the position is at the present time. No highly efficient firm is going to rush voluntarily into this scheme, because they have not a great deal to gain by it. In spite of that, a great many firms have come into it, and a great many more are at present taking part in conversations with other firms with a view to doing their best to make the appeal a success, and I think that is an important fact to remember. They have not a lot to gain, yet they are not holding back; in fact, exactly the opposite is the case. There is a great deal going on behind the scenes of which perhaps even the President of the Board of Trade may not be aware, but which we hope will bear fruit in due course. There has been some delay, but, in most cases, it is not due to the employers.

For instance, there are very few firms who specialise in cotton mill valuations, and I believe there are actually only three firms doing this work. As each mill forming part of a group of mills must be valued by the same firm, the process is bound to be rather slow. The average time, I am told, is nine months, and, after that, the scheme has to be submitted to the shareholders and has then to go before the Treasury for confirmation. Therefore, 18 months is about the quickest time in which this business can be completed, and we must bear that fact in mind. Perhaps, if the Parliamentary Secretary has any further information on the point, he will let us have it, because, if it is going to take so long to complete this task, it will militate against the success of the Bill. I do not know in what way this trouble can be avoided, but there may be some other means of hastening these valuations.

Another question which I would like to raise with the Government concerns this figure of 500,000 spindles. We think that is on the large side, although the President has said that it will be flexible. How far is that flexibility likely to go? We have had no information on that. To my mind a group of some quarter of a million spindles would be much more satisfactory than one of half a million. A quarter of a million spindles would be sufficient for three good sized mills which, one would think, would be enough for efficient working. How much are groups to be allowed to fall below the halt million? I hope that some considerable latitude will be allowed in this direction, but, on that, we should like some more information. Again, has the Minister anything in mind as regards those groups, among which is one very large one, which have not yet agreed, but are only a short way from agreeing, as a result of the votes of the shareholders? Can he tell us anything on that point as well?

I will now pass for a moment to the question of machinery. Is it a fact that there is priority for the export of machinery as against machinery for our home trade, and can we be told how much machinery is being exported at the present time? To what countries, for instance—and this is especially important in regard to Japan—are we at present exporting new machinery? If we are exporting any to Japan, we would seem to be cutting our own throats. That sort of thing happened in the days before the war, and needs most careful watching. If the export of machinery is thought to be so vital in connection with our export trade, how, at the same time, are we going to re-equip all our mills when this Bill becomes law? We must draw a line between the two.

The "Manchester Guardian" yesterday published some interesting observations about machinery makers. It appears that they are being held up and cannot go ahead with plans for extending their works, or for increasing production in other ways, because they have no idea how much machinery will be needed for the home trade as a result of these amalgamations. Nor have they any idea what amount is likely to be wanted for export. They are asking for a lead in this connection so that they can go ahead and increase production by building large extensions to their present works. They should be told at the earliest possible moment what the positon is, because the sooner they get these extensions built the better. They say that if they are allowed to put the work in hand, they can provide all the machinery that will be required in this country. Of course, unless they can start right away, it is bound to take some considerable time.

There is then the question of labour which, no doubt, we shall be discussing at greater length next Thursday. The industry is very short of labour for operating ring spindles. As is well known, a man will not work a ring spindle. Some firms have equipped themselves with brand new ring spinning frames only to find that the workers are not available. I would point out to the hon. Member for Heywood and Radcliffe, to whom I have already referred, who said that we were still working with old-fashioned type mule spindles, and so on, that there are certain kinds of cotton for which mule spinning is still essential. I suppose that we may never do away with mule spinning; if we did, we should interfere with, and do harm to, our production of that type of goods, although I agree that it is necessary to modernise our mills as far as possible in every way.

We must also take care that the groups are not too large. Some of the biggest combines have found themselves overloaded and far too big, and have had to make great efforts to decentralise themselves. That fact has already been mentioned in this Debate. In this Bill we are making rather too big a feature of amalgamation and too small a feature of new machinery. After all, it is the new machinery we require, not amalgamations, which are only a means to an end. We need the machinery at the earliest possible moment. Do not let us go in for grouping just for the sake of grouping. We must beware of that.

During the last war, this industry was the subject of such concentration as has never before been known in this country or, indeed, anywhere else in the world. In fact, the cotton industry was massacred. It is not always realised that 140,000 people—36 per cent. of the 1939 total of workers—were displaced by that concentration. Most of that immense number were young people who, having got out of the cotton industry, were naturally not very keen to come back into it. It will be no incentive to them to go back into the industry if people keep emphasising how drab are these Lancashire towns. As a matter of fact, some of the Midlands and the Black Country towns are worse, although that, of course, is no reason why the Lancashire towns should not be improved. It should not be imagined that Lancashire is the only place where there are drab buildings. How we are to get these people back to the industry is one of our greatest prob- lems. Again, the number of juveniles employed in 1924 was 84,000. By 1945, that figure was down to 21,000, although the entry of juveniles into the industry is now better than it was.

As has been said, the quality of yarn is one of the most vital problems. I would point out to the Parliamentary Secretary that I have had complaints about yarn destined for export, and already cased, lying for months in mill cellars. I think that proves that the bottleneck as regards yarn was got over some time ago. When workers see stocks ready for export being delayed in that manner, it is bound to take away some of their incentive. Inquiry should here be made as to why there is so much delay.

There is still much to be done, but, if we can only go ahead in Lancashire in the spirit in which we have conducted this Debate today, I do not think we need have any fear. I agree that pride of service, the pride of a man in his job is what we should foster, now that cotton has become the spearhead of the export drive. We welcome this Bill, and we shall do our best to see that it reaches the Statute Book without undue delay.

2.31 p.m.

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

I would like to take the first opportunity that I have had of congratulating the hon. Member for Royton (Mr. Sutcliffe) on his speech. I wish to do so because not only is he a Member for an adjoining Division, but he is also one of my constituents. I would not pretend to believe that he is entirely satisfied with his Member of Parliament nor do I believe that he had very much to do with my election, but the fact remains that I was very pleased to hear my constituent, a neighbouring Member, making a speech so thoroughly agreeable, sensible and courteous as he has done this afternoon.

Before I go any further, it might be as well if I deal with two of the most important questions which the hon. Gentleman posed to me. First, there is the extremely vital and important question of the export of textile machinery. I quite agree, from my own knowledge, that there are some people in Lancashire and the West Riding of Yorkshire who have apprehensions about the export of textile machinery; but with respect to the machinery with which we are concerned this afternoon, I understand that only recently the managing director of Textile Machinery Manufacturers Ltd., addressed a circular to various spinning concerns asking them to place their orders under the re-equipment scheme as early as possible. They stated that the plain fact was that, with certain notable exceptions, home spinners had not placed orders comparable with the manufacturing facilities and developments earmarked to meet the requirements of the home market. In other words, the production of this type of textile machinery is such that there is no fear that those spinners who group and qualify for assistance under this re-equipment scheme will be prevented from carrying out their schemes because of a shortage of textile machinery due to export. I am further advised by the Minister of Supply that of the orders for spinning machinery placed in 1947, 86 per cent. were invoiced during that year, which seems to indicate a pretty fair performance on the part of the machinery manufacturers.

The hon. Gentleman then mentioned the subject of a comparatively large group of spinners who were prevented from coming together in the way suggested in this Bill, because of the failure to secure an adequate percentage of the shareholders to back the scheme. That is perfectly true. The Companies Act requires that one needs to have the support of 90 per cent. of the shareholders if one wishes to carry the other 10 per cent., and in this case something like 80 per cent. of the shareholders voted in favour of the grouping scheme. That of itself need not necessarily have prevented the grouping scheme taking place, because it would have been possible to create another company, and then it would be necessary to hold only 50 per cent. of the shares of that company to influence the decision and to go ahead with the grouping scheme. As a result of this failure on this occasion we have been asked whether we would consider some action to make it possible for less than 90 per cent. of the shareholders to carry the remainder with them.

It is only a few months ago that this House revised the Companies Bill after a very long consideration of this type of problem by the Cohen Committee; and, in any case, we are not anxious to coerce people into this kind of grouping. We would be much more pleased to get the kind of thing we require by agreement. Therefore, we have not chosen to take any drastic action to deal with a situation of this kind. I would only ask that shareholders concerned should realise that this is something which is being done with the agreement, certainly on the general matter, of all parties in the House of Commons, and that in the interest of industry and of the nation they should seriously consider revising their attitude when they have originally objected to schemes of this kind.

Several Members, including the right hon. Member for Aldershot (Mr. Lyttelton), have expressed some alarm at the delay which has taken place in this matter, and I am most grateful to the hon. Member for Royton for pointing out that in a great number of cases this delay has been due neither to any deficiencies on the part of the Government nor to any deficiencies on the part of the mill owners. There are physical difficulties in the way, not the least of which has been the condition of the industry following concentration during the war years, and the distress into which the industry fell in the years between the two wars. In so far as it is possible for the Board of Trade to assist any people who wish to group themselves together under this scheme and cut across the physical difficulties we will be pleased to do whatever we can.

A lot has been said by hon. Members on both sides about a number of matters which might be somewhat indirectly related to this Bill but which cannot be said to be directly related to it. While I would not wish to spend too much time on those things, I would like to refer to some of the comments which have been made in passing. It is undoubtedly true, as was said by my hon. Friend the Member for Preston (Dr. Segal), that in the textile towns there is in most cases a rather serious shortage of houses. That problem, of course, does not exist only in the textile towns. It is probably far worse in cities like London which were subjected to physical bombardment during the war. I would not pretend that housing conditions in the textile areas are all they should be, but I must agree to a very considerable extent with the hon. Member for Louth (Mr. Osborne) that it is easy to add new priorities to those already existing until a position is reached in which the word "priority" does not mean a thing. What applies to houses in these areas applies to a number of other matters; for instance, the conditions of the mills themselves, so many of which were built many years ago and which in many cases need considerable attention.

We are aware of all these difficulties which militate against the shifting back into those areas of the population which has left them. I can assure the House that a great deal is being done at the moment with a view to expediting such work as can be undertaken to make these places more attractive and better than they have been in the past. For instance, in the matter of building licences, which at present are not granted very freely, it has been decided that every attention shall be given to applications for building licences to enable work to be performed on mills where the conditions are not as good as they might otherwise have been. My hon. Friend the Member for Preston was right when he pointed out, as I am informed, during my absence, that there was not a great deal of point in looking back into the past to find out who was to blame for the things which went wrong with the Lancashire industry. It is possible to say quite a lot about the cases of depression in Lancashire in the years between the two wars, All kinds of people were to blame, not least some of our foreign competitors whose business methods and treatment of the people who worked for them were not comparable with our own.

There were other reasons of course. I think there was a certain amount of dilatoriness on the part of people who could have modernised earlier than they did, but I agree with my hon. Friend the Member for Preston that there is not a great deal of point in going back to see who was to blame. The thing is to discover what went wrong in the past, and try to avoid such accidents in the future or avoid a repetition of the evil days and years between the two wars when so many tens of thousands of people went out of the textile industry and vowed that they would never go back into it—which is not the least of our difficulties at the moment.

The hon. Member for Preston asked me a specific question about 16o married women. My only knowledge of that par- ticular instance is what I read in the newspapers some days ago, and I speak entirely from memory, but I believe it was a case of production in different sections getting out of balance and the temporary standing off of a number of women who had been taken on in a particular department. There is no reason to believe that there is anything more serious than a temporary necessity for holding up one form of production in order that other forms of production might keep up.

The hon. Member for Louth suggested that we were very short of female labour, and that in all industries we are short of it, and that something might be done to get women out of other industries—and he particularly mentioned football pools, I believe—into the textile industry. Nobody wishes to do too much pushing around and directing of people out of one industry into another, but it will be within the knowledge of the hon. Gentleman, and within the knowledge of the House, that the present Control of Engagement Order does give a certain power to the Ministry of Labour, and that will be used in as sensible and sympathetic a way as possible.

Mr. William Shepherd (Bucklow)

What does that mean?

Mr. Belcher

It means exactly what it says. It will be used as sensibly and sympathetically as possible. It does not mean what hon. Gentlemen opposite say on propaganda platforms, that we are going to kick people out of one industry into another. It means that if we do find people in one particular industry are being displaced, we shall do our best, particularly by encouragement, to attract them particularly into the cotton industry. If the situation really warrants it, we might feel compelled to do certain things in connection with raw material allocation to shift people from one industry to another. It means that the order will be used sensibly and sympathetically in order to attract into the textile industry as many people as possible.

Hon. Members who sit for constituencies either in or near to textile areas could assist quite a lot by pointing out that not all the stories which are told today about the textile industry are as true as they might have been 25 years ago. In fact, very considerable efforts have been made by many employers and trade unions to make the industry very much better than it was, and although it is not possible to make a card room a place of delight, or a weaving shed a place where one can hear oneself talk, a lot has been done to make all sections of the textile industry in most parts of Lancashire considerably more attractive than they were some years ago. Certainly things are very much better in respect of wages and hours of work.

I do not think people should get into the habit of believing everything about the cotton industry is as bad as it is made out to be. Whilst I say that, I do realise that a large number of improvements are required, but these improvements are gradually being carried out and this Bill is one of the ways in which we can effect improvements in the cotton industry.

Mr. Osborne

Since it is over 12 months since I raised the question of the men and women workers in the football pool industry, specifically, and asked if they were being transferred or directed back to the textile industry, from which they have gone, and since I know the hon. Gentleman's Department has worked on this for 12 months, is he satisfied with the success he has had so far in attracting people back into the cotton industry?

Mr. Belcher

One of the great difficulties about the football pool industry—because the cotton industry is one of about 50o industries, including the football industry, with which we have to deal——

Mr. Lyttelton

Industry?

Mr. Belcher

Well, the hon. Member used the term "industry", and I am only following on. Whether it is called "industry" rightly or not I do not know. One of the difficulties in doing something to the football pool industry is that at present, in all probability, it would not mean attracting people into the textile industry, it would mean attracting them to the Liverpool Employment Exchange, where there are already something like 30,000 signing on. It does not make the task any easier.

I recognise that we should use all democratic means to attract from unessential industries to essential industries as many people as we can, but I do not think this country has yet reached—despite the dire warning given three years ago about the Gestapo—the position where we want deliberately to smash down one industry in order to transfer people by the thousand into another industry. The order does not mean that kind of thing, and we have not reached that stage, though it may be the desire of some Members opposite that we should reach it.

I am grateful to the right hon. Gentleman for the way in which he recognised the importance of this Measure and stressed his own interest in promoting the efficiency of the cotton textile industry. I know that is the case. I know he is anxious as any other hon. Member in this House to see the cotton textile industry really on its feet and making its maximum contribution. I am sorry to hear, for the first time that in connection with his efforts some years ago he almost lost his life when journeying by aeroplane. It is a strange thing, but the President of the Board of Trade when returning from a journey also crashed his plane, causing considerable physical pain to some high officials of the Board of Trade, which may cause some of the high officials of the Board of Trade in future to have second thoughts before they accept an invitation to travel by air with the President. Both my right hon. Friend and the right hon. Gentleman do not appear any the worse for it, and I think we can congratulate them and ourselves that their luck was as good as it was.

I was pleased to hear the right hon. Gentleman pay tribute to the labour force in Lancashire, and I have already said that one of our present greatest difficulties arises from the dispersal of that labour force in the years of the war. It was precisely because the labour force in Lancashire was so good that so many were recruited out of the cotton industry into the light engineering industries created in the war years. It is precisely because work in a modern, newly built, light engineering factory in the best modern conditions is so much more attractive than work in the textile mills, despite all the improvements which have been made, that so many have failed to return, although I do feel many of those who left and who have failed to return do not really appreciate how conditions have been improved in comparatively recent times.

It is a first-class labour force and we are anxious to get back into the textile industry as many of that labour force as we can. I would say, however, that there are other reasons why they do not return. In the past, Lancashire has depended to a very considerable extent on the labour of married women, for the very good economic reason that their husbands never earned sufficient money to keep the family going. Conditions have changed today, and their husbands are able to earn sufficient to keep the family going—especially in this time of shortage of consumer goods—and there is not the same need for them to go out to work. We hope to get back as many as we can of these people who left the industry in the years between the two wars.

The right hon. Gentleman referred to higher wages in the industry and went on to refer to this only being made possible in so far as we could redeploy and re-equip, and I would like to say a word about redeployment. The right hon. Gentleman also referred to the incoming of foreign workers whom we are acquiring from the Continent of Europe, a number of them to work in the Lancashire industries. He thought it possible that when we had full redeployment it would not be necessary to have these foreign workers or, at least, not many of them. Frankly, I do not know. I am not sure that we are going to get all the foreign workers, redeployment and re-equipment we require, but we shall do our best. I cannot say how long it will be before we have full redeployment and re-equipment, but, in the meantime, I am quite certain that these foreign workers can make a contribution to the well-being of the cotton industry.

In fact, we have a considerable number of European volunteer workers in Lancashire at the present time, not only doing a good job in the mills but also—and I say this not only from official reports but from personal observations, and I am sure the hon. Gentleman the Member for Royton will bear me out in this—being made welcome by the people of Lancashire. One of the difficulties we forsaw has not materialised to the extent we anticipated—the difficulty of accommodation—because the good Lancashire folk have taken these European workers into their homes and made them welcome.

Mr. Lyttelton

The point I wished to emphasise, and upon which I wish the Parliamentary Secretary would touch, was that I thought if redeployment were completed quickly it would be possible to engage these foreign workers on short-term and not long-term contracts. That is the point I should like the hon. Gentleman to cover.

Mr. Belcher

I believe the present intention is—I am subject to correction—to engage them on a two years' contract. I should think that is just about as short as could reasonably be expected in the circumstances.

I now wish to say a little on the question of redeployment, because I consider that very important indeed. My hon. Friend the Member for Reading (Mr. Mikardo), who is an expert on this subject, had quite a lot to say about it. True, putting new machinery into the mill, while important on its own merits, is also considerably important in the context of redeployment. Naturally, both sides of this industry tend to wait for the other to make a start before making their own contribution. The workers might very well say to themselves, "Let us wait until the new machinery is in before we move ourselves on redeployment, since if we move too fast on redeployment before the new machinery is in, the incentive to introduce the machinery may vanish." On the other hand, the employers might well say, "There is not much use our making a move on new machinery until we see that redeployment is a fact, otherwise we have no assurance that the capital invested in the new machinery will be worth while."

Obviously we cannot allow either of those views to prevail. Without redeployment there can be no assurance that re-equipment will be worth while, and without re-equipment there must be a fear that redeployment is a way of avoiding re-equipment. To put it another way, if redeployment can be under way it will be an assurance to the employers that re-equipment will be worth while; and if re-equipment makes progress, that will be a corresponding assurance that redeployment will not be used as an alibi. The truth of the matter is, the two sides go forward together, and we will do our best by pressing both sides to make yet further progress than they have made already.

I am afraid that there must be a getting away from the traditional suspicion which has existed between the workers on the one side and the employers on the other. I am happy to know from my personal experience in my own constituency that today there is a generation of employers which is prepared to make its maximum contribution to that end. I hope that there will be a recognition of that fact by trade union officials and representatives, and that they will realise that what may have been true at the time about which we read in "King Cotton" is not necessarily true today, and that there is more enlightenment than there was in those years.

The right hon. Member for Aldershot and my hon. Friend the Member for Heywood and Radcliffe (Mr. Anthony Greenwood) were slightly—only very slightly—critical of this Bill, in that it did not deal with all the varied problems with which this industry is faced, and that, for instance, in the short-term it may well be that the spinners, who came into the grouping schemes and spent their money during Government assistance on new equipment, would, because of the very much enhanced cost of the new machinery, find themselves at a disadvantage, at least in the short-term, as compared with those people who did not re-equip. I am afraid that there is no answer to that; it is probably right over the short-term. I think the answer must be that in the short-term there will be little difficulty in marketing the product.

In the long-term we are bound to have to face more intensive competition than we are facing today, although I hope that steps can be taken, and taken very quickly, in conjunction with other countries, to avoid the kind of competition which very nearly throttled Lancashire in the inter-war years. But the industry itself must recognise that, even though in the case of the firm which is prepared to go ahead and to modernise, there may be some temporary disadvantage compared with the firm which is not prepared to do so. In the national interest, certainly, and almost certainly in their own long-term interest, they would be well advised to do this.

Another question asked by the right hon. Member for Aldershot and the hon. Member for Royton was whether the figure of half a million spindles was too high. Both the right hon. Member and his hon. Friend recognised that there was power for the President of the Board of Trade to alter the figure, but I have the feeling that that is a matter of detail which we could better consider at a subsequent stage, when we could go into it more thoroughly than we can in a Second Reading Debate, when a large number of questions relating to a large number of subjects have been raised. There is a desire to be elastic on this matter, and it would be rather foolish to spoil the Bill if we were to insist upon a particular figure just because it is that particular figure. We shall certainly be prepared to listen to such arguments as are advanced from any part of the House when we come to discuss the matter at a later stage.

Mr. W. Shepherd

Where do the Board of Trade get the idea that 500,000 spindles is a good optimum figure, especially in view of the fact that the average size of the spinning mill in America is lower than the present sized spinning mill in Lancashire, and that, therefore, their productivity is more than double our own?

Mr. Belcher

The answer to that is: We get our advice on this matter, as on all matters, from the cotton textile industry, from the Cotton Board, which is composed of experts. Undoubtedly, they have advised us on this and made the closest possible investigation into the needs of the industry.

There is another point in that connection. It has been represented to me that we might have a look at the possibilities of some kind of vertical combinations, to see whether something can be done in that direction. That is another point which we shall be very happy to consider during the passage of this Bill through the House, and we shall be very happy to receive any suggestions and advice from those in the House who understand these matters, although it does not necessarily follow that in every case we shall follow that advice. I assure the House that it is our desire to be as elastic and helpful as possible, and we shall listen very carefully to those who are able to speak about it with authority.

My hon. Friend the Member for Oldham (Mr. Fairhurst) was critical of the 25 per cent. grant, and he warned me that I should have to satisfy the House of Commons that this 25 per cent. grant is necessary and desirable. Again, we are dealing with an industry which, in the inter-war years, had a very bad time; an industry which made a very big contribution during the war years by way of concentration; and an industry which undoubtedly—and everybody who knows the industry will agree with this—can do with an infusion of new blood in the shape of machinery. We want to be quite sure that the industry gets that new machinery, and a very good way to ensure that, in order to stimulate the desire for greater efficiency, is to make it plain that the Government are prepared to make some tangible offer of assistance to encourage those people who might be just wavering whether to do this or not, but who with that little injection of Exchequer assistance will be prepared to do it.

My hon. Friend the Member for Oldham referred also to the figure of £12 million, which is the money the provision of which we state is likely to be necessary, and refers to the figure of £48 million, which is indicated as being the total amount for new machinery to be supplied under these arrangements. He asked me whether that would be sufficient, or whether advantage was likely to be taken of it. I do not know whether it will be sufficient, or whether advantage is likely to be taken of it. Necessarily, it is something of a guess, although it is a formal guess taken with the advice of those people who are able to calculate the requirements of the Lancashire industry. It is a figure which we have reached after very careful consideration and consultation, and I hope that it will be just about right. My hon. Friend also asked why April, 1950, was the time limit. The simple answer is: that is the time limit laid down under the Finance Act, 1947, and it seems just about the most sensible time to choose.

My hon. Friend the Member for Heywood and Radcliffe mentioned indifference in the cotton industry. I have no doubt that there is still some indifference in the cotton industry. As a matter of fact, I know perfectly well that there is, because, together with colleagues of mine, I spent a lot of time trying to persuade certain sections of the cotton industry—and it is not confined to one section—that certain things which we propose at the moment are necessary and desirable. As has been said this afternoon by the hon. Member for Royton, my right hon. Friend, together with other Ministers, is visiting Manchester tomorrow, and will speak to the textile area Members of Parliament. I have been asked on many occasions why we do not make a greater effort to explain to the people in the Lancashire textile areas the urgent necessity for their industry to build itself up and make even greater contributions towards the industrial wellbeing of the country. My answer is that this is not something which can be done by an individual Minister making exhortations over the radio—it is not even something which can be done by Members of Parliament making periodic visits to their constituencies—but is something which has to be undertaken by everyone with any influence at all in the industry. It has to be got down to floor level. In so far as my hon. Friend who complained of indifference can give any assistance which would be helpful in bringing the facts of the situation home to the people, it will be welcomed.

The hon. Member for Skipton (Mr. Drayson) spoke of the high costs of machinery and of the necessity to use machinery to the utmost. That is perfectly true. My right hon. Friend referred to the necessity, under these grouping schemes, for a two-shift system, but I would go further and say that if we can get some overtime worked in those sections of the industry where wt are still very much below in our output, it would be of the utmost value in this time of emergency. I understand only too well the fears of the people in the textile industry in regard to overtime or a two-shift system. They are thinking in terms of unemployment between the two wars. I would point out, however, that there is an almost unlimited demand throughout the world for textiles at the present time, and that whatever may have been the case in the past, with the obvious desire of the Government to maintain a policy of full employment, they can be considerably less suspicious of these measures.

My hon. Friend the Member for Heywood and Radcliffe criticised the concentration of this Measure on improvements to equipment, and referred to personnel. I can only repeat that we shall be grateful for any assistance that he and other Members may be able to give. This Debate has indicated the necessity for providing Lancashire, and particularly the spinning sections of the cotton industry, with improved machinery. There have been criticisms on points of detail which no doubt we shall hear more about during the subsequent stages of the Bill. I am pleased that the necessity for this re-equipment has been recognised, and also the desire of the Government to assist in this matter. The hon. Member for Royton asked what has been the response so far. He knows it is difficult for me at this stage to say what has been the response, because it would be impossible to give any realistic figures. As he said, discussions are taking place between various people interested in this matter, and it is quite possible that the President of the Board of Trade does not know how many of these discussions are taking place and how the discussions have gone on.

While the actual number of schemes completed at the moment does not represent anything very glamorous, I hope and believe that we shall achieve a very considerable measure of success, and that this Bill will be a very considerable step forward in the history of the cotton trade. It is true that much more needs to be done. While it is possible to criticise piecemeal legislation, it is also possible to criticise a vast subject too comprehensively. If that is done, details, which may be very important, may be overlooked. One thing we can be sure of is that on a comparison between spinning mills in Lancashire and spinning mills in some other countries the difference between the number of mule spindles and ring spindles employed indicates that there is need for a considerable move forward in this country. I agree with the hon. Member for Royton that it is possible to have an obsession about these matters, and to think that everything in the garden can be made lovely simply by transferring all spinning from mules to rings, when, probably, mules might be better.

We know there is need for a considerable improvement in this industry which, in the past, has contributed possibly as much as any other to our prosperity. When we see, in the little cotton towns of Lancashire—and I have them in my own constituency—mills which are over 100 years old, the houses in which the workers live, and the cleanliness which the women manage to maintain in rather disadvantageous surroundings, we realise that here are reasons for the industrial growth of this country in the 19th century. During the 20th century the industry suffered from depression and ill-advised actions immediately after the First World War, from intensive and bitter competition, and from a hangover of mistrust and insecurity. But I still believe that those engaged in the industry have within them the capacity to expand their trade, and that the goods produced will more than bear comparison with those produced in other countries. Despite the handicaps of out-of-date machinery and mills, the workers are still producing goods of superfine quality comparable to whatever can be produced in America and elsewhere. If this Bill makes it possible for still further improvements to take place then, just as Lancashire contributed to our industrial greatness in the 19th century, so she will contribute again to the industrial greatness of the 20th century.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Standing Committee.

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1. COTTON SPINNING (RE-EQUIPMENT SUBSIDY) [MONEY] 134 words