§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Bowden.]
§ 11.24 p.m.
§ Mr. Spence (Aberdeen and Kincardine, Central)
At Question time on 10th March I put a Question about the amount of yarn being exported from this country, which was answered by the President of the Board of Trade. On that occasion, in the course of answering a supplementary to my Question, the President of the Board of Trade said that he would by glad if I would bring my suggestions to him and discuss the matter; but because the points which I have in mind are of wide interest and affect the whole hosiery trade of our country, and are 519 not connected with any isolated or single instance, I applied for this adjournment, which I was lucky enough to get.
The particular point on which I want to focus the Minister's attention tonight is the fact that the hosiery industry, in which I am personally interested, has over the last 12 months increasingly found supplies of raw material becoming shorter and shorter. I recall that on 19th April last year, we had a Debate on the question of our export targets. In that Debate I called the attention of the House to a statement which had been made by the President of the Board of Trade to the effect that he was going to export yarn from this country because there had been a fall in the demand from abroad for the finished product in textiles. At that time, I warned the House of the dangerous consequences which might result from following such a policy.
It is my view that this policy of exporting yarns, which are the raw material of the hosiery trade, is the cause of the shortage of supplies today The hosiery industry employs 90,000 people. It makes a substantial contribution to the export field. Its raw material is spun yarn, either wool or cotton, and it is usually in the folded form. To get full production from our industry adequate supplies are essential. It is common experience today to find that deliveries from the time of ordering may take anything from five to seven months, whereas, 12 months ago deliveries took from three to four months. This is extremely serious, because it delays production. But in addition to this delay there is definite shortage of supplies because our allocations from the Director of Civilian Hosiery are being kept to a minimum. They are still based on a four-monthly period, which is not only inconvenient but I claim inefficient. I have in my file a letter from the Director of Civilian Hosiery on a point which I raised with him. He said:It is becoming more evident that yarn, owing to the acute shortage, must be directed to those making the greatest contribution to export, particularly to hard currency areas.I have no quarrel with that, if it be necessary; but three-and-a-half years on the road to recovery in the industrial sphere should not find us with these shortages. The figures which I can quote 520 prove that a lot of yarn is going out of the country today. Total exports of yarn for 1947 were £4,500,000, but for 1948 they were £8 million. If I may quote monthly figures, they show that for January, 1948, they were £500,000 the monthly figure for January, 1949, is over £1 million. I suggest that we are following that policy too far.
I recall very well the reply of the President on the occasion of the Debate last April, when he said that he entirely agreed that it would be false economy to export these things if it means denying essential raw materials to our own manufacturers, and he went on to say that he would certainly keep this question closely under review. It is for such a review that I make my appeal tonight, because I believe that we have pursued this policy of exporting this very essential raw material for one of our essential industries too far.
Our export policy in spinning machinery is another matter. Spinning machinery is largely built in this country and all the ancillary parts which go to the production of yarns are also made here, for the most part. I have examined the figures of our exports of this machinery, and I find that, whereas in 1946 we exported £14,500,000 worth, in 1948, we exported £36,500,000 worth. I am not competent to deal with the techicalities of the spinning machinery business, and must leave that to the Parliamentary Secretary, but what I do know is that here is a tremendous rise in the export of this machinery and the ancillary parts which are required. I get impressions from my own contacts in this trade and from talking to those who supply me with raw materials; and when I challenge a certain supplier for being late with his deliveries, he says "We are so busy with exports." I am sincerely convinced that we have reached the point where the export of this yarn on an increasing scale is going to recoil on our own national economy.
Another harmful effect to the industry is that if we send abroad the raw material, in the form of yarn, which we require here, we are supplying to producers abroad who have more or less the same machinery for the production of the finished article. Knitting machinery is more or less internationally standardised, and by sending this abroad, we enable our competitiors to produce characteristic goods of the same type as we can pro- 521 duce ourselves, and this in itself tends to close foreign markets to our goods.
I appeal to the Minister to make a review of this situation. I ask him to consider whether, when we are exporting raw materials vital to us and when he is pursuing his present policy, he is not in actual fact being penny wise and pound foolish.
§ 11.30 p.m.
§ Mr. Sidney Shephard (Newark)
My hon. Friend the Member for Central Aberdeen (Mr. Spence) has put forward a very reasonable argument, and I agree with every word of it. I should like to reinforce what he said. Like him, I have a vested interest in the industry, but I hope the Minister will appreciate that we are not speaking for ourselves but for the industry as a whole. My hon. Friend mentioned a figure of approximately 90,000 people being employed in this industry. I should like to point out that 126,000 people were employed in the industry before the war, and that if the industry is ever to regain its prewar labour force and its pre-war output, it must have a greater supply of raw materials. It is not entirely a labour shortage which is causing the industry not to produce as much as it did before the war. It cannot produce as much simply because the raw materials are not available.
My. hon. Friend devoted most of his argument to the shortage of woollen and worsted yarns, but of course cotton yarns are greatly used in this industry, particularly for making underwear. I was interested to notice that a few days ago a prospectus for a share issue to the public by a well-known and large firm in this industry was published. Under the heading "Prospects" I read the following:The progress towards full recovery to the pre-war level of production is restricted by the limited supply of raw materials, as a result of which the plants are at present operating at 75 per cent. of capacity. The demand for the company's products in the home and foreign markets is in excess of the present output, and would enable the plants to operate at full capacity if relaxation of controls and increased supplies of raw materials permitted.That situation does not apply only to that firm; it applies to every firm in the industry, and we want the Minister to look into this matter and particularly the question about the allocation of exports 522 and home market requirements. This industry has been set an export target of £18 million this year and it will do its best to achieve it. The Minister will agree that the export trade must be based on a flourishing home trade, and if the industry is only working to 75 per cent. of capacity it is not in a position to compete as well as it ought to do in export markets. One point which my hon. Friend did not mention is the fact that during the past three years production both of woollen worsted and cotton yarns has been progressively stepped up, but none of the increase has been allocated to the home market. It has all been sent to exports.
There is one other matter which I would like to mention in passing. Yesterday the President of the Board of Trade took off a certain number of controls and a few days ago he lifted controls on the rationing of clothes. That will enable anyone to open a shop to sell clothes and will allow new entrants into the industry. I ask the Minister to consider whether the time has not arrived when new entrants should be allowed into the hosiery industry. This industry has been a closed shop now for eight or nine years, and no man, unless he is an ex-Service man, can get an allocation of yarn. If he is an ex-Service man his allocation is so small that he cannot "make a go" of it. I think it is wrong that we should have this closed shop inside any branch of industry. Surely the Minister will agree that unless one can continually have new blood in industry, we cannot get it up to its proper competitive strength.
The last point I wish to make is in regard to the Development Areas. I should like the Minister to tell me whether, if a person in this particular industry goes to one of these Development Areas, or is willing to go—and this industry is particularly suitable for Development Areas—he will be given sufficient allocation of yarn to enable him to make a success of his undertaking.
§ 11.37 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. John Edwards)
The hon. and gallant Gentleman who opened this Debate suggested that the policy that was being pursued at the present time meant that we were being penny wise and pound foolish. I think 523 that if we were to follow his advice, we should indeed be working according to that maxim. I want to make it quite plain that we must adhere to the view which my right hon. Friend put forward when he announced the end of textile and clothes rationing, namely, that the export drive in textiles must be pressed on with the utmost vigour and that there can be no question of our being able to afford to increase supplies of yarn for any part of the home trade at the expense of the potential export trade, whether that is in the form of made-up goods or in the form of yarn.
I would, however, like to make one thing abundantly plain—that in so far as the hosiery industry is contributing to the export trade, we would not want any impediment put in its way. Certainly, so far as they need yarn for export purposes, they will not be held up. If any case is brought to my notice where a firm is prevented from doing export business because it is not supplied with yarn, I will do my best to deal with it and to prevent anything like that occurring again.
We do not, of course, make a new beginning in the hosiery or textile industries. We start from where we were. We start with certain traditional markets to which we have customarily exported yarn in the past. Many markets do their own making-up processes themselves, and have looked to us for yarn in the past. A further point is that, apart from the difficulties of abandoning our traditional exports at the present time, when we are doing business with many countries and trying to make agreements, we are not in a position to dictate our terms. In order to get vital things that we need, we have from time to time to make concessions to the countries with whom we are negotiating. That again means that we do get demands for the provision of yarns, and we feel that it is our business to meet those demands.
I was a little puzzled by the argument that there was something inherently wrong in supplying a country with material which it could make up. On that basis America or India would never supply us with raw cotton because it would in the end compete with their own cotton industry. If we tried to run the world on the assumption that countries must never send partially manufactured goods to 524 another country lest it might interfere with their own home manufacture, we should be in a complete lunatic asylum so far as economic affairs are concerned. There cannot be any question, in any event, of our starting all over again about the export of yarns so long as we are in our present economic difficulties. We must sell abroad what we can. If we could pick and choose, I should be the first to agree with the hon. Member that we ought to balance a little on the other side.
I do not think that the industry is being hard done by. Because of the shortage of worsted yarns, we have had to curtail the exports. In 1947, exports amounted to less than half of what we exported in 1938, which was a poor prewar year. In 1948 we were able to send rather less than 60 per cent. of that figure, and basic allocations for export were still little more than 50 per cent. of the 1938 figure. Extra allocations are only given where it can be clearly shown that the yarn cannot be used by the home weaving or hosiery industries. If one takes it in terms of the proportion which has gone to the trade, I would not myself have thought that there were any real grounds for complaint.
If we take the recent period, the allocation of worsted yarn to the hosiery industry during the curent period March to June is the same as it has been over the last three periods—19 million lbs. I understand that the Wool Controller has in fact, agreed, since the original allocation was made, to an extra issue of a little over a further one million lb. Therefore, it looks to me as though the division of supplies as between the hosiery and weaving trades has not been unfair. The thing that interested me when I looked at the figures for 1939 in comparison with the trade figures for the current year was that during the past year the hosiery industry has received a higher proportion of the available supplies of worsted yarn than it did in 1939.
I know that the industry may not be working up to capacity. I appreciate the difficulties that arise on that account, but since the only way in which we can meet that surplus capacity would be to take yarns away from export and divert them to the home trade, I hope that—while we might progressively work towards an improvement in the sense of the total 525 production of yarns being increased—and therefore the amount that went to the hosiery trade being increased—both hon. Members who have spoken will feel that the trade is getting a higher proportion of what is available now than it got even in the years before the war. Having regard to our pretty desperate economic situation overseas and our need to export what we can to maintain traditional markets and often to make the right kind of bargains with other countries, I think the industry has not been so badly treated.
I would not tonight wish to deal with the matter of new entrants to the trade. Doubtless that point can be considered when we are considering the whole matter of controls in this field; but so long as yarn is allocated on this basis, one does not want to precipitate even greater trouble for the existing firms by encouraging newcomers. However, in the case of the Development Areas we would encourage in every way open to us any firm that wanted to go there, and if there were export potential we could give considerable assistance. If the hon. Gentleman has a case in mind, I should be very happy to discuss it with him and give such help as we could at the Board of Trade, because we still require firms to go to the Development Areas and we have factories which they can use.
While there may be other detailed points with which I might deal, I content myself by saying, as I did at the beginning, that if allocations to the hosiery 526 trade are kept to what has been called the minimum—although that is the wrong way of describing it—it is because of over-riding economic considerations. We are anxious that the hosiery trade should export more, and we will do everything we can to help it to attain its targets. We always help and encourage the firm that is really getting down to the export job against the firm that is not, and under present plans that is inevitable. I hope the hon. Gentleman will feel that we must continue to proceed along those lines.
§ Mr. Spence
Before the Debate concludes, I hope the hon. Gentleman will answer one question. Is he aware that in actual practice there are not priorities today, other than the supply of what are called rarer fibres, in the supply of yarn for the export trade? When we are dealing with the ordinary worsted yarn, the position is exactly the same for the exporting firm as it is for the firm for the home market, and there is no over-riding priority. Will the hon. Gentleman look into that?
§ Mr. Edwards
I will certainly look into it. The Controller warned manufacturers recently that there might be a drop for home-producing firms in favour of those firms who cater for the export trade and who are going ahead.
§ Question put, and agreed to.
§ Adjourned accordingly at Thirteen Minutes to Twelve o'Clock.