§ 2.19 p.m.
§ Mr. Sydney Silverman (Nelson and Colne)
I am grateful for this opportunity for the House to devote a little attention to a problem which keeps cropping up at Question time and in Adjournment Debates and is still occasioning deep and abiding anxiety in Lancashire. I was inclined at first to regret that my right hon. Friend the President of the Board of Trade is not to be here to help us in this discussion, but I am greatly relieved and encouraged to see my hon. Friend on the Front Bench. I know, from the contributions which he made to similar Debates before he had the responsibility of speaking for the Government, how deep is his interest in the matters that we shall be discussing.
It is the question of how the Government propose to deal with what is at present only the potential, but nevertheless real, threat to the present prosperity and usefulness of the Lancashire cotton 1416 industry, which might be imperilled by the emergence in the Far East of conditions of competition against which Lancashire could not, and should not be expected to, compete. Nobody thinks that this is an immediate or present danger. Today, Lancashire is a hive of happy and prosperous industry, rendering a very valuable contribution in these difficult days—perhaps a contribution greater than that of any other industry with the possible exception of coal—to the restoration of the balance of our foreign trade. That of course, is a new thing in this generation. There is no industry in the country whose present happiness and vigour contrasts so sharply with the picture presented by that industry before the war.
I want to refer to that picture for a while. When I was a very young and inexperienced Member of this House, in February, 1937, I was fortunate enough to win a place in the Ballot for Private Members' Motions, and I moved a Motion about the condition of Lancashire. I do not want to devote too much time to this, but I do want to point out the contrast. I moved:That this House views with deep regret the conditions under which the people of Lancashire are now and have for long been living deplores the wastage of natural resource acquired skill and human life that such conditions entail; declares that their continued existence is an indictment of statesmanship, and calls upon His Majesty's Government, whether or not such measures are within the limits of the existing social and economic order, to take such measures as may be necessary to secure to Lancashire's unemployed, part-employed and employed workers a standard of living commensurate with modern industrial potentialities."—[OFFICIAL REPORT, 3rd February, 1937; Vol. 319, c. 1683.]In the course of moving that Motion, I quoted figures supplied by the Government, showing that 670,000 people in Lancashire, out of less than five million, were living on public relief of one sort or another. There was a census of wages taken by the Weavers' Amalgamation in that year that showed that the average wages of a weaver were £1 12s. 6d. per week. The same census showed that not 10 per cent. of the most highly skilled workers in the industry were earning as much as 50s. a week, and the real situation was greatly obscured by the concealed unemployment which arose out of the peculiar working conditions and wage system of the industry.
1417 There were other figures, given by myself and others who spoke in the Debate, which showed how continuously and rapidly the cotton industry was contracting. Nearly half a million people were employed in it in the middle of the 20's, and not much more than a third of a million, a drop of 30 per cent., 10 years later. The rate at which our foreign trade was being reduced was illustrated most effectively by a Conservative Member, I think, Sir Joseph Nall, then Member for the Hulme Division of Manchester. Because some of the figures quoted showed how rapid the contraction was, I would like to quote a few of them. After saying that India was the worst case, the hon. Gentleman went on:… but it is not India alone with which we are concerned, because there are other countries with which we can do better deals with trade agreements … Egypt, which supplied a large volume of cotton used in the cotton industry, was once a good market. In 1932, Egypt bought 82 million square yards, and, in 1936, 64 million square yards. Morocco, a foreign market, in 1932 took 52 million square yards, and last year we sold Morocco four million square yards. To Iraq we sold 39 million square yards in 1932 and last year five million square yards; to the Dutch East Indies, 44 million square yards in 1932, and the figure dropped to 27 million square yards in 1936 … China, which was a market for 500 million square yards in prewar daysthat is, pre-1914—took 72 million square yards in 1932, and last year took four million square yards."—[OFFICIAL REPORT, 3rd February, 1937; Vol. 319, c. 1726–7.]That was a drop, in 20 years, from 500 million square yards to four million square yards.
The interesting thing was that in those days everybody accepted as an inescapable fact that the cotton industry could not recover, and could not again expand, and the problem of Lancashire was looked at in those days as one of introducing new industries and finding employment for Lancashire people outside the cotton trade. In that Debate, the Government reply was given by Lieut.-Colonel Muirhead, and in the course of his speech he quoted a statement by the general manager of the then Lancashire Industrial Development Council as follows:Former spinning mills in the Oldham district, for instance, have been occupied by firms making perambulators and toys, cork board, spring interiors and clothing. Similar 1418 buildings in the Bolton, Hyde and Stalybridge districts have been adapted to industries some of which are quite new to the particular locality, paper bag making, building materials, men's clothing, industrial starches, waterproof garments and brushes. In other districts, weaving sheds have been found admirably suitable for new business, beginning production of slippers (Blackburn), special cables (Ramsbottom), varnishes, paints and ancillary products (Hindley), metal stampings and turned parts (Atherton), leather goods (Blackburn), spring interiors (Walton-le-Dale). Some of these establishments, it is to be borne in mind, are either branch factories of firms in other parts of the country or represent transfers of businesses from the south of England or 'most satisfactory of all' have been set up by industrialists from the Continent.After reading that quotation from an article by the general manager of the Lancashire Industrial Development Council, Lieut.-Colonel Muirhead said:I think that makes a not unsatisfactory picture."—[OFFICIAL REPORT, 3rd February, 1937; Vol. 319, c. 1712.]I am not quarrelling with him about it, because in those days, everybody agreed that the problem of Lancashire was to take non-cotton industries into Lancashire, to accept its continuing contraction, and to seek to make it a place where other industries would go. It was regarded as a good thing that cotton mills in all branches of the industry should be turned over to other things.
The very first Bill which I saw put through this Parliament when I first became a Member in 1935 was the Cotton Spindles Bill. It was passed on exactly the same principle, exactly the same idea, namely, that a large part of the then cotton industry in Lancashire was redundant, and that the proper thing was to get rid of it as soon as possible. The principle of the Bill was that everyone who owned a spindle should pay something into a common pool, and that that pool should be used to buy up and scrap redundant spindles; not to buy them up and scrap them for the purpose of replacing them with better or more modern equipment, but for the definite purpose of bringing down the equipment of the industry to a much narrower field which was then contemplated for it as a permanent feature.
We have gone away from all that now. Today, the questions which the Government are being asked are questions about how to increase the labour force, how to re-equip the mills, how to 1419 expand them, and how to expand our production. The Government must make up their mind whether we are to regard our present prosperous and expanding cotton industry as one which is to continue to expand, as one which is to remain permanently on its present level, or whether they contemplate that the time may come when we may have, once again, to go in for restriction and contraction, and the substitution of other industries for it.
A Question was asked the other day by the hon. Member for Darwen (Mr. Prescott) about the recruitment of labour into the industry. The Minister we were all glad to note, was able to give a reassuring reply. There is no doubt that people in Lancashire are satisfied with the present conditions. They are not now underpaid or part-employed. Everybody is well and happily employed at wages that are not unsatisfactory, and, if they could be satisfied that those conditions were going to continue, there would never be any anxiety or trouble about maintaining ac adequately trained and equipped and willing labour force in the industry.
But over all this real prosperity and improvement there is the shadow of fear. There is the anxiety about whether they are again to be faced with conditions in other parts of the world which will render the maintenance of their present standards impossible, or, alternatively, lead to a new contraction of the industry. What worries them is, naturally, the danger that Japan will again be able to compete with them all over the world on conditions, as I said before, against which they cannot compete, ought not to be asked to compete, and, in any case, will not compete.
There is no present difficulty, but that is due only to temporary factors. The first factor is that Japan has not yet recovered her productive capacity to anything but a limited degree. We cannot take too much comfort even from that because such recovery as she has made in this field looks to the very places for its markets out of which we are most anxious to keep unfairly competitive activity. The other limiting factor is the currency question. We have an agreement under which Japan buys in sterling and the result of 1420 that agreement is that we must necessarily regard Japan as a hard currency area so that there is less temptation or possibility of buying from her.
But neither of those conditions can conceivably be regarded as permanent, and both of them are rapidly growing less important than they have been. Nor, indeed, if we are to be objective and to understand the facts as they are, can anyone contemplate a situation in which 83 million Japanese can be prevented from making the goods by which they earn their living. I understand that the population there is now somewhere in the region of 83 million, and that within a decade it may reach 100 million. Japanese labour standards have improved. I understand that, translated into our money, the wage which a weaver gets is about £10 a month. That means that he is getting, on average, as much as was earned by 10 per cent of the most highly skilled of our own weavers in 1938. But that is no help. Lancashire cannot compete against a 50s. a week wage and maintain its own wage of £5, £6 or £7.
There was a Debate about this in December of last year, and I think that the Secretary for Overseas Trade replied. I do not think he would complain if I described his reply as, at any rate, neutral. He did not offer us much guidance. No one can suppose for a moment that this Government of all Governments is blind to the danger. We know that we can do a great deal at home by improving the efficiency, the make-up and set-up of our own industry to lower our costs tremendously, without affecting the standard of living of any of its workers. I know that this Government has done more in these post-war years to bring that about than all the previous Governments which preceded it since the Industrial Revolution. But, however much that may accelerate and improve, we shall not remove from the minds of Lancashire workers the fear which may still keep them and their children out of the industry, unless we assure them that they are going to be fully and completely protected when the Japanese industry is again on its feet—as it ought to be—from the unfair competition of a rice standard.
I wanted to say some more practical constructive things, but I think I have said enough to indicate to the House and 1421 to the Government what are the anxieties in people's minds. I assure them that those are real and deep anxieties, and that Lancashire will be very grateful for any statement my hon. Friend can make which will tend to case them.
§ 2.40 p.m.
§ Mr. Stanley Prescott (Darwen)
I am very grateful indeed to the hon. Member for Nelson and Colne (Mr. S. Silverman) for raising this matter today. It is a subject which has been very near to me. I am glad to have the support of the hon. Gentleman in making this plea to the Government—to say that this is of great concern to Lancashire and to ask that we should be told something about the Government's attitude and policy. The hon. Member for Nelson and Colne referred to a Debate on 14th December last year and to the reply to it by the Secretary for Overseas Trade. Really he said nothing whatsoever. I congratulate the new Parliamentary Secretary upon his appointment, and I hope that he will be able to tell us something of the attitude of the Government in this matter.
I do not have to tell the hon. Gentleman about conditions in Japan. He and I were there together, and I know the great interest he took in this matter when we were there. I know he is as concerned as anybody in this House. Usually, when we have had Debates on these matters a Member of the Government, who knows really nothing about the subject, replies and tells us that the answer to it all is to raise the standard of living of workers in Japan. It is said that that is the answer to unfair competition. I agree entirely that we want to raise the standard of living of workers in Japan, but that is not going to be done ill the foreseeable future. Wages have increased, working conditions are better, but it is going to take a very long time before any of the operatives in Japan have anything like the standard of living we have in this country.
We are told of the great progress which is being made in forming trade unions in Japan. Some progress has been made, although most of them are company trade unions and are not very effective. Trade unionism cannot be given to a country. It must grow up gradually, and it will take a considerable time before there is effective trade unionism in Japan. I am 1422 sure that hon. Members opposite will be quite pleased with my conduct in Japan because I went round all the time advocating trade unionism as hard as I could.
It is very difficult to get any information as to what happens on the Far Eastern Commission. There is nothing in the Library about it from 1947 onwards. That is not the Librarian's fault. No information is provided by Washington. There are no minutes, there are only Press notices of what they want us to know and nothing else. Can we not have these proceedings made available to us in the Library of the House?
I do not know the Minister's personal views, but I hope he will look into it and make sure, as far as he can, that our voice is heard in the Far Eastern Commission and that records of the proceedings are available to hon. Members in the Library. Our interests and those of our American allies do not coincide entirely in Japan. We should recognise that. We should realise that their interests—and the pressure of Southern Senators in Congress is very great—do not entirely agree with the views of Lancashire.
§ Mr. H. Hynd (Accrington)
I do not want to quarrel with the hon. Gentleman in any way, but is he alleging, and if so has he any proof, that there is American capital invested in that industry in Japan?
§ Mr. Prescott
Most certainly there is American capital in the textile industry in Japan. There is also British capital. I do not know whether this has increased in the last two years or not.
We were told some considerable time ago that there would be an Anglo-American mission to Japan to investigate the textile industry there and report back. I do not know whether that mission did not go or whether, if it did not go, there is any suggestion that it still will go. Air Vice-Marshal Bouchier recently went to Japan and made investigations, though not on behalf of His Majesty's Government. I wonder whether the Government have had any communication with him on his return and, if so, with what effect and what representations he made to the Government.
I ask the Government to tell us what they propose to do about this Japanese threat, which is very much feared in Lancashire. I think it hinders the re-equipment of mills, the investment of capital 1423 and the recruitment of labour. I was delighted with the figures given us showing an increase in recruitment of labour, but I am sure there would be far more recruiting for the mills if this potential threat were removed. There are many approaches to the problem of Japanese competition, such as limitation of spindles, the sharing of markets and the raising of the standards of life of the Japanese. All these things are vitally important.
It is a surprising thing that importations of Japanese textiles by many British Colonies now exceed what they were prewar. The hon. Member for Nelson and Colne said it was a potential threat. It is, in fact, an actual threat, happening now. These importations exceed the prewar figures in East African and West African Colonies. I have asked many questions in the House about the Congo Basin Treaties. Some hon. Members may wonder what those treaties are about. They give Japan preferential trading rights in African Colonies. What is to be the future of these treaties? The answer I have had in the past is that we must wait until we have a Japanese Peace Treaty. The Parliamentary Secretary to the Board of Trade knows that this Peace Treaty is now under very active consideration. Can he tell us what is to happen with regard to the Congo Basin Treaties? I hope he will be able to tell us that something will be written into the peace treaty that will remove the threat that is hanging over Lancashire.
§ Mr. S. Silverman
It is not quite fair, is it, to describe the position under the Congo Basin Treaties as preferential treatment? Is it not, rather, a case of the most-favoured-nation clause, which I do not approve, except where the competition is fair? It is perhaps an overstatement to regard the Congo Basin Treaties as providing preferential trade.
§ Mr. Prescott
That is quite accurate. In fact, I think I told the hon. Gentleman so. I agree it is a slight inaccuracy to describe it as preferential trade, but even if it is the most-favoured-nation trade I want it abolished. Why should Japan have that benefit? It is very detrimental to us. We have talked about this Japanese business for five years now and I hope that the hon. Gentleman, when he comes to reply, will not make a speech 1424 like that made by the Secretary for Overseas Trade last time. Will something be written into the Peace Treaty? Can we have some assurance that in Lancashire we shall not face the terrible competition we faced before the war?
The hon. Gentleman the Member for Nelson and Colne referred to the state of Lancashire before the war. That situation arose, in part, directly from the Japanese competition we are talking about now. He spoke about the wages of weavers averaging £1 12s. 6d. before the war. I do not know whether those figures are accurate or not, but we accept them. What are the wages now? Competition will be far worse in the future than in the past.
May I remind him, too, that the textile machinery industry in Japan is in first-class condition? They can re-equip their mills and can operate at 100 per cent. Have the Government considered diversifying industry in Japan? Quite apart from the interests of Lancashire it would be of benefit to Japan if industry there could be diversified. In view of the destruction that has taken place there is quite a possibility of remodelling and reformulating the economic life of Japan in the interests not only of the Japanese but of Lancashire itself. I hope some steps will be taken to that end.
§ Mr. S. Silverman
I do not wish to be too controversial today, because I have found myself in agreement with the hon. Member to a considerable extent and I do not wish to spoil it. But the competition he is talking about before the war was, of course, largely contributed to by the failure of the Association of Employers here to support conventions on the subject. In the speech which I made in the Debate in 1937 I quoted some remarks by the Secretary of the Federation of Master Cotton Spinners. I said:This Association feels that the matter is one of greater importance than might appear at first sight. The matter is the seeking for regulation by international convention of a 40-hour week in the textile trade. … The workers are unanimously striving to have a convention recorded by the International Labour Conference, and many foreign Governments, notably Italy, France and the United States of America, are favourably inclined towards the project. Unless the textile employers take the opportunity of putting forward their opposition at every step, it is probable that the convention will be passed, and once it is in existence it will come more 1425 prominently into the arena of political controversy, pressure may be brought to bear upon His Majesty's Government to ratify it and thereby bring a 40-hour week into legal operation in this country."—[OFFICIAL REPORT. 3rd February, 1937; Vol. 319, c. 1689.]
§ Mr. Prescott
I am sorry, but I could not possibly deal with that intervention. It is far too lengthy for me to follow. I have made my point and I have asked my questions.
I conclude by saying, once again, that I am glad the Parliamentary Secretary is in the position he holds. If we must have a Socialist Government, I am glad the hon. Gentleman occupies that position on the Front Bench. I hope that today he will be able to tell the House of some specific proposal which the Government have in mind.
§ 2.53 p.m.
§ Mr. Leslie Hale (Oldham, West)
The House will be grateful to my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) for giving us a further opportunity of discussing this important subject, and discussing it in rather new circumstances. The protagonist who opened the discussion in November, 1948, and who from this side of the House has done more to raise this important subject in the House, now occupies a seat on the Treasury Bench. I think we are all pleased that he is there. He is an employer in the industry and a man of the highest repute. He has a wide knowledge of the industry and brings to this subject qualities of integrity, knowledge and courage that we know will help him in his career.
At the same time my hon. Friend has to face a problem today. He has raised this matter. He has postulated questions which have not yet been answered, and although on both sides of the House we accept the fact that when a Member speaks from the Treasury Bench he does so with a necessary restraint and perhaps with increased knowledge, I am sure he will give us frank answers today.
My hon. Friend knows the first question. It is and always has been: What are the powers of General MacArthur in this matter? What are our powers on the Far Eastern Commission? How far can we make representations? How far have the representations which we have made in the past been acted upon? What right have the Australian Government, 1426 who are more interested than we, to be consulted? What is it all about? As far as we can see, we see in Japan a benevolent dictatorship. It may very well be that General MacArthur is one of the most outstanding men of his generation. It may be that the work he has done in Japan merits the praise of the world. But we are concerned with certain aspects of the matter, and we want to know the answer. In fact, we are entitled to know.
I raised a question in the Debate in November, 1948, which has not been answered. I said that there was going to be sent from this country a trade union delegation. We were told that the right of collective bargaining had been abolished in Japan. That is important from our point of view. We were told that 20,000 unions have been created and that we were going to send a trade union delegation, but it never went. Why not? Who stopped it? What was the reason? Would it not have been a good thing if that delegation had gone?
The hon. Member for Darwen (Mr. Prescott) put his case temperately, sincerely and ably, as he always does on this subject. That is a fairly generous tribute. I am sorry to be controversial, but in one sentence he raised what seems to me a very vital issue which separates the two sides of the House in this matter. He referred to the wage rates in Japan. He implied that our employment prospects were governed by the rate of wages there, the productivity there, and so on. I accept that. It is one of the instances of the old system of laissez-faire and of competitive nationalism.
But in the Debate in 1948, I myself postulated some problems. I referred to some essential contradictions—the inherent contradiction in my own constituency, which the hon. Gentleman knows so well, of the great and prosperous textile engineering exporting industry, and the textile producing industry, each of which has a different problem. We are exporting 80 per cent. of our textile machinery to equip foreign industry to compete with us. If we leave the statement like that, it is an inadequate statement. In a planned and organised society which had turned its back on laissez-faire that might be a good thing indeed. It would keep us in first-class employment, which would go elsewhere if we did not do it in a competitive society.
1427 But we have had the answer to some of these contradictions in the course of the last few months. There has come out what I regard as one of the greatest State documents of the generation—the report of the expert committee arranged by the Secretary-General of the United Nations organisation on Measures for national and international full employment. Without wishing to introduce a partisan aspect in this matter, I must say that that document is the greatest defence of my right hon. and learned Friend the Chancellor of the Exchequer, both during his period of office as Chancellor and as President of the Board of Trade, that has ever been penned.
It recommends the application in an international sphere of planning of all those measures of legalised planning which we have applied to industry here. It recommends the collection of statistics, the utilisation of Budget surpluses for the control of employment, and the exchange of agreements on the lines that the Organisation for European Recovery has already adumbrated. It is really important. That is the answer to one great difficulty.
Of course, we do not want a Carthaginian peace. We want to see Japan come back into the comity of nations and see her people attaining a reasonable standard of life. But the point one must make is this. I heard an hon. Member opposite last night say that on questions of joint consultation employers and employees can get together in some industries and dispel their fears of the future. But in the cotton industry they are all afraid. That fear is a constant menace to every scheme which the Government introduce. It is a menace to the free negotiation between employer and employee. It is a constant threat to the possibility of complete reorganisation in the cotton industry. Every man in the industry thinks that the conditions of 1923 may come again.
Every spinner who contemplates putting in new machinery at the present high prices is worried about what is coming. Every union which represents his employees is worrying about him embarking upon schemes of reform which can be used against them in times when prosperity has ceased and when unemployment is rife. That is why it is essential 1428 that we should have an assurance in this matter. That is why it is essential that the President of the Board of Trade and the Parliamentary Secretary should go to the cotton industry and make clear what is the planned market of the future.
I accept what the hon. Member for Darwen said. There is no question that in the colonial territories, where we are embarking upon wider schemes of reform and capital expenditure than ever before, Japanese competition is already becoming a menace for the future. Here let me say that I would like to see President Truman's Fourth Point used in this connection. Measures should be taken to give priority to British goods in some of the colonial territories, and we ought to have an assurance that this will be done. I hope that in the course of the Debate after the Recess we shall be able to give some collective attention to the major problem of economic planning on wider lines. I hope we shall be able to know a little more about what happened in the Washington conversations. Even if an election be coming in America, I hope that we shall be able to talk freely on the basis of the Fourth Point and of colonial investment on the basis of the report of the United Nations organisation on world planning. But in the meantime we have to put forward our little local issues and worries.
May I put one before I close? We were told in the Debate of November, 1948, that Japan had a large measure of control over the Chinese textile industry. Of course, the situation in China has vastly altered since then, but before that situation altered £4 million worth of orders were placed for British textile machinery, most of which, I hope, will be made at Oldham, and payments were made on account. We are concerned about whether the change in the Far Eastern position will affect those orders and how our industry will be affected: we are equally concerned to know whether those orders are to be implemented.
We are concerned also about the state of the re-equipment of the cotton industry. My hon. Friend the Member for Nelson and Colne said that the present Government had done very much—so they have; but perhaps in that sphere they have done more in planning than in the realm of achievement. So far as one can see, not 1429 more than 20 per cent. of our home textile machinery production is at present going to the local industry. The reason it is not going into local industry is the fear of competition, to which I have referred. New machinery does not, perhaps, give any very great increase in production. It is not a very attractive proposition unless one is sure of some years of prosperity in the future.
That is why the particular subject which we are discussing today—perhaps I repeat myself when I say this—hangs over Lancashire like a cloud which it is the duty of the Government to try to dispel. That is why we are concerned about this problem, and we ask my hon. Friend, when he replies to this discussion, to give us as full and frank information as he can, and try to give us information upon which we can act and upon which we can go and consult with our people and talk more fully and more freely about the future of this great industry.
§ 3.2 p.m.
§ Mr. Sutcliffe (Heywood and Royton)
The hon. Member for Nelson and Colne (Mr. S. Silverman), who opened the Debate, dealt at some length with the pre-war history of the cotton industry in Lancashire, and some of us who then represented Lancashire constituencies on both sides of the House remember the situation in those days all too well. I thought that as the hon. Member's speech progressed he vindicated more and more the action of the Governments in those days before the war, in spite of much that was heard at the recent General Election, as he drew attention to the tremendous efforts which were made by those Governments to deal with the situation. After everything else had failed we turned our attention to alternative industries, and, in the circumstances, that was an excellent thing, as indeed the hon. Member described it.
§ Mr. S. Silverman
I certainly tried to avoid a controversy. I should not have intervened except that I do not want it to be accepted that I was paying any compliment to the Governments of those days. On the Motion which I moved that day, in a House in which we on this side had only one Member out of four, we nearly defeated the Government; we ran them to 99 votes against 92. The Lancashire Members, including those not of our party, certainly did not think the Govern- 1430 ment were doing what they ought to have done.
§ Mr. Sutcliffe
I certainly was not intending to introduce a controversial note when we are all this afternoon so much in harmony.
It is true, as has been said, that in the cotton areas there is more anxiety on this question today than on anything else. When the reports came through in the Press, both before and during the recent campaign that in this country we were receiving shirts via Hong Kong which might have been made in Japan, together with other rumours of that sort, there was very considerable tension and a fear that we were heading for the grim days of the past. Perhaps the Parliamentary Secretary will tell us exactly what truth there was in that rumour, and how much truth there is in the various reports that a good deal of material is now reaching us in one way or another from Japan.
I want to turn now to the question of Japan itself, which has not been mentioned this afternoon at any great length. We must not forget that Japan is a manufacturing nation and has to import nearly all her essential raw materials. She also has to import no less than three million tons of foodstuffs a year, and that figure will become larger as the years go on, as her population, as has been said, is increasing at such a rate. It is some 83 million now as compared with 72 million in 1941. At the same time we have to bear in mind that this immense population has to contain itself now in much less territory than before the war, owing to the loss of her overseas possessions; and that only 16 per cent. of the land area in Japan is fit for cultivation.
All this leads to this point, that Japan is forced to sell goods in the world market in order to live. She has made a wonderful recovery since the war. Last year she balanced her budget, and her industrial production was much higher than it was in 1948. Her exports doubled over those of that year, and were three times what they were in 1947.
As regards the cotton industry, with which we are specially concerned today, I think the following figures will be interesting. In 1949, Japanese production of cotton yarn reached 347 million lb., an increase of 27 per cent. over than of 1948, and it is planned to increase this by no 1431 less than 25 per cent. in the present year. Indeed, if the Japanese were able to plan for all they want they would like a production this year of no less than 621 million lb. The exact number of spindles is not known, but it is reported to have increased from four million to six million, and I am informed that the Japanese themselves have asked to have eight million spindles as being a reasonable number.
As regards exports of cotton textile fabrics, a reasonable estimate for the present year is no less than 800 million yards, and the Japanese themselves have been mentioning a figure of 1,000 million yards for export; out of a total production of 1,600 million yards—which is considerably in excess of last year's total production, which was under 1,000 million yards. I say this to show the House how serious the position is, how great is the production already in Japan, and how much it is likely to grow during the coming year, and, indeed in future years. It shows the eagerness to encourage and increase their production and exports by every possible means in their power.
The occupation, as we know, is proving to the United States of America to be a very expensive business. Occupation of a defeated country by another country is always an expensive business. Last year and the year before it cost the American taxpayer 500 million dollars each year. This year that amount has been cut to 320 million dollars—for the year beginning 1st July—which is some 34 per cent., but, even so, the cost is indeed high. It is not surprising, and no one can blame America—I think we should do the same ourselves—for being anxious to cut down this great figure at the earliest possible moment. They want to put the Japanese on their own feet, to rehabilitate them—to stop starvation and disease, but, so long as they do that, to let them stand alone and go ahead with their own industry and its development, as soon as possible. Let us not count too much on any United States restrictions being placed on Japanese output, especially in this "peaceful" industry, because I do not think we can count any longer on action along those lines. This means that we must work out our own salvation, probably even more than we have 1432 anticipated. It is more essential than ever that our plans should be ready.
My hon. Friend the Member for Darwen (Mr. Prescott) and others have raised many issues, and I hope we shall have a full answer from the Parliamentary Secretary, to whom I also should like to pay tribute. He and I once met on the same territory during a General Election, and it is, therefore, all the more pleasing to me to see him in the position he holds today. We ask the Government to realise the very serious problem which, even now, begins to face us, and which is likely to face us more and more seriously in the future. We hope that this afternoon we shall have a real assurance that the Government will go into this question very fully; and not only that they will go into it, but that they have plans which they are preparing in case the dreadful day arrives.
§ 3.11 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. Rhodes)
First, I wish to thank every hon. Member who has spoken this afternoon for referring to me in such nice and gentle terms. I doubt whether they will be referring to me in similar terms when they leave the Chamber this afternoon. This is a very complex problem. That is demonstrated when we remember that my hon. Friend the Member for Oldham, West (Mr. Leslie Hale) in the same breath mentioned the competition from Japanese cotton goods and also inquired about what had happened to an order for four million spindles, from China, for somebody to use in the same trade. That in itself gives a very good idea of the complexity of the situation.
I find that the three or four weeks that I have been at the Board of Trade is not sufficient time to solve this problem, and that I might need another week or two! I think everybody will agree that this problem is of the greatest concern to those who represent Lancashire constituencies, and to those whose livelihood this industry has been throughout the years, and so long as I am at the Board of Trade I shall never cease to keep it to the front; it never will be forgotten. As my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) said, the limiting factor at the moment is the hardness of the Japanese currency. I think the concern of all hon. Members this afternoon is 1433 more on the long-term than on the short-term. As my hon. Friend said, we cannot expect the balance of payments difficulty to impede the Japanese export programme indefinitely.
There has been mention of the disturbing of the pattern of world trade between the wars. Whatever pattern was disturbed between the wars, it was nothing like as big as the disturbance after the Second World War. In this case Japan lost her Empire and many outlets for her trade were closed up. Owing to the war there was a growth of secondary industries, including cotton, in many countries of the world, Brazil, Argentine, India and also China, about which I shall say a word later. There was also the rare phenomenon that the United States of America emerged after the war as a very big exporter nation. That in itself is one of the most significant facts.
Another thing to remember—perhaps not as a reason for such pessimism as has been suggested in this Debate—is that world exports of cotton piece goods today are probably down to less than two-thirds of the pre-war volume. How much the creation of secondary industries by many countries of the world takes up the remaining one-third, I am not in a position to say. The hon. Member for Heywood and Royton (Mr. Sutcliffe) mentioned the population problem. It is now 83 million. I suppose it was something under 70 million when the war began, and it is interesting to remember, as my hon. Friends who went to Japan will recall, that there has been a spurt in the population of Japan, owing in no small measure to an edict issued in 1943 by the Emperor to the effect that an increase in the population was very much desired—not for World War Two.
If we take the 1932–36 period as par, total industrial production in Japan is 82, production in manufacturing is 79, and in textiles 27.8. My hon. Friend the Member for Nelson and Colne drew attention to the fact that that really was not a very significant figure, and that if there was the menace now on the 27.8 figure, what will it be like if it goes to 100 per cent.? I think that was the inference he meant to draw.
There is no question about the possibility of our imposing restrictions in Japan itself on the size of the Japanese 1434 export trade in cotton textiles. As has been pointed out, Japan must be permitted to achieve a reasonable standard of living. That is accepted by everyone and to close the present gap between her essential imports of food and raw materials, and what she gets for the sale of her exports is essential. Japan already has a deficit costing the American taxpayer—not as large a figure as that suggested by the hon. Member for Heywood and Royton—about 400 million dollars per annum. It cannot, therefore, be said in those circumstances that our policy is to oppose the development of the Japanese industry on other than strategic grounds. I am bound to point out to the House that it was laid down in a direction before the surrender of Japan that Japan should be permitted to man such industries as would sustain her economy and allow an extraction of just reparations, but not those which would enable her to re-arm.
§ Mr. Leslie Hale
My hon. Friend says there is no possibility of restrictions on Japan by us. I understood that the Supreme Commander had introduced a restrictive policy, and my authority for that was a speech delivered by my hon. Friend himself in 1948. Could my hon. Friend deal with such powers?
§ Mr. Rhodes
If my hon. Friend the Member for Oldham, West (Mr. Leslie Hale) will be patient, I will deal with that point. The eventual participation of Japan in world trade relations was to be permitted. Japanese textile industries are relatively more behind their pre-war production than most other industries, but they still constitute 60 per cent. by value of the total Japanese exports, in spite of the efforts of General MacArthur's Administration to encourage a more even spread of Japan's industrial effort and to enlarge the light engineering section at the expense of the textile. The average export of cotton fabrics from 1934 to 1936 was more than 2,000 million square yards. In 1948, the export was 338 million and, in 1949, 800 million square yards.
Japanese goods processed in the United Kingdom have been excluded from the United Kingdom figures. Japanese exports of cotton piece goods were larger than those of the United Kingdom in those years. It is therefore clear that in the limited markets now available to 1435 Japan her competition in cotton textiles will have to be taken very seriously. I have a lot of figures, which I will not quote during the time at my disposal. I shall cut some of them out. I will come to the question of floor prices.
The system of floor prices in operation was abandoned on 26th October of last year. This decision was taken owing to the automatic raising of Japanese export prices because of the devaluation of sterling. The yen of course remained fixed to the dollar. Those floor prices were only a means of ensuring that Japan did not fail to earn foreign exchange through weak selling in a sellers' market. They were not really designed to be a curb, and they were not intended to be a restriction upon the competitive ability of Japanese industry. General MacArthur accompanied the removal of control with the statement that the Japanese Government were being instructed to prevent dumping and that steps would be taken to prevent any revival of pre-war unfair practices.
There are very encouraging signs that steps will be taken in Japan itself to prevent dumping by Japanese exporters, for example by quotation of export prices lower than domestic prices for the same goods. The Japanese Prime Minister made a statement to this effect in the Diet, expressing concern that exporters should not quote unnecessarily low prices and should not, as they have done in the past, frequently vary their quotations. Both these features had a depressing effect upon Japanese markets all over the world, beyond the importation of Japanese textiles. Much of Japan's trade brought goods to consumers who could not previously afford them, but the markets were greatly affected by uncertainty about the level of Japanese prices and the quantities that would be available.
Among the unfair practices which have definitely been put down during the last few months have been the fraudulent use of foreign trade marks and the copying of British and other designs. Quite a lot of attention from General MacArthur and the Administration there has been given to the matter and a lot of success has been achieved. With regard to labour costs and to what has been done in that field, there is now a 48-hour week—and I 1436 mean a 48-hour week—in comparison with the 60 hour week before the war. Overtime is now paid for a day in excess of eight hours. These things which have happened in Japan are tremendous steps forward.
There is a tremendous improvement in dormitory conditions, and the old prepaid contract system has gone by the board. It used to be possible before the war for a manufacturer to go to a father and say, "I will give a three-year contract for your child," give him the money and take the girl and make her work 60 hours a week, but that sort of thing has now gone. Another thing is that the school-leaving age is now 15, and in case a knowledgeable hon. Member says, "Yes, but you count the age of the Japanese child as two on the 1st January following the year the child is born," I have examined that and find that it no longer applies and that when they say "15" they really are 15. Eighty-five per cent. of female workers are aware that labour legislation is in existence. That is a tremendous step forward from when we went out there, because then nobody knew. This information is very reliable.
I now turn to one or two of the questions which have been put. There is the Far Eastern Commission. I had better be careful what I say now, but I shall say it. General MacArthur, as Supreme Commander for the Allied Powers—this is not Question time by the way—is responsible to the Far Eastern Commission which sits in Washington and on which are represented the 13 Powers which were most directly engaged in the war. The veto operates in this Commission, and it is true to say that the veto comes down on pretty well every controversial issue. I do not need to say any more than that in the absence of a policy decision by the Far Eastern Commission, General MacArthur has the right to issue interim directives on matters of urgency in the interests of the occupation. Therefore, if matters are continually controversial and the veto comes down upon them, General MacArthur issues his own directions.
I come to the question raised about the Anglo-American Mission. There has been a lot of talk about this, and many questions have been asked. That is one of the reasons why I have to be circumspect this afternoon. One of 1437 the last things said to me on Wednesday night, when I was in Manchester talking to the master cotton spinners and the unions about this matter, was, "You are having a Debate about this on Thursday. For goodness sake be careful so that you do not prejudice our mission." The situation is that the Cotton Board and the Government have been most anxious that a joint mission should go to Japan representing the United Kingdom and the United States cotton textile industries.
Sir Raymond Streat is on a visit in this connection—he may be back at this moment—and has definitely reached agreement with his American colleagues on the final arrangements, and the mission is expected to proceed to Tokio in the near future, maybe at the end of this month or the beginning of the next. We very much welcome this proposal and regard it as a hopeful initiative in dealing with the long-term problems involved. For the information of those who are interested, I would say that the mission will be on a purely industrial level, the members will be chosen by the two industries concerned and not by the Governments, and neither His Majesty's Government nor the United States Government will be in any sense responsible for any recommendations that may be made. I think the House will agree that this is a realistic approach which recognises that Japan will compete in world markets and couples with that recognition a determination to pursue methods of joint consultation and education in the belief that the worst evils of Japanese competition before the war can be avoided.
§ Mr. Rhodes
No, I have no time; Mr. Speaker is tapping the arm of his Chair now. With regard to the Congo Basin Treaty, this is a hardy annual. What I remember about the Treaty of Berlin; 1885, is that most of the commercial states in Europe were signatories. It was abrogated during the 1914–1918 1438 war and picked up again by the Allies, including Japan, who was a signatory to it. The U.S.A. was in it but did not sign for some considerable time afterwards. The treaty was made originally to protect the interests of the Africans who, as everybody knows, have been on a low standard of living for a long time. It means that any signatory to the Congo Basin Treaty agrees that there should be no discrimination.
§ Mr. Rhodes
It has to be unanimous. This is really a Foreign Office matter and it will have to be decided as and when the Peace Treaty is reached. I hope that it will be kept in front of the representatives when the time comes. With regard to most favoured nations, this Government has not been given credit for all the efforts that are made on behalf of the industrial community.
Whilst the problem of Japanese competition may not be as actual as it might be in the home market because of the balance of payments and the restriction of our imports from Japan, we recognise that it might be necessary to help Lancashire to meet abnormal competition when the present balance of payments difficulties have disappeared. The circumstances then prevailing would have to be taken into account in any decisions which might be made when the time arrives.
There is, however, one aspect of the question about which it would be well to clear our minds now, because over the greater part of the world the question would be, not what can the United Kingdom Government do to help, but what, if anything, will other Governments do? It is possible that the domestic cotton industries of other countries will seek protection against Japanese competition if it is abnormal, and it is possible also that the Japanese industry itself will be anxious not to create a situation similar to the one which led to the taking of special measures against Japanese goods in many countries before the war.