§ 32 and 33. Mr. Fortasked the President of the Board of Trade (1) what is the price at which the Raw Cotton Commission buys Nigerian raw cotton, in view of the fact that it charges spinners 33.75d. a lb. for it;
(2) why the Raw Cotton Commission charges cotton spinners 40d. a lb. for Uganda BP52 raw cotton when it is buying it at a price equivalent to 32d. a lb. spot, Liverpool.
Mr. H. WilsonThe Cotton (Centralised Buying) Act, 1947, lays upon 2463 the Raw Cotton Commission the responsibility of determining the prices at which they sell raw cotton. I understand that the present selling-price policy of the Commission is based generally on current world replacement prices, taking account also of the relative spinning values of different growths of cotton. Since buying prices for both the Uganda and the Nigeria crops last season were negotiated some time ago, it stands to reason that current selling prices may well differ from the purchase prices. In fact, since these prices were negotiated last autumn there has been a steady rise in world replacement prices (although in subsequent years the reverse may be the case). The Raw Cotton Commission have a long term agreement with the Nigerian Produce Marketing Company Limited, and the price agreed annually between these two bodies is a matter for settlement between them.
§ Mr. FortIs not the right hon. Gentleman aware that the prices being paid to the growers both in Nigeria and Uganda, are very much lower than the prices at which the Commission is selling to spinners in Lancashire? Is he not further aware that he is in this way making it difficult for the Lancashire textile industry to compete with Japanese and other overseas competitors, who will be able to buy raw cotton cheaper than it is being supplied in Lancashire?
Mr. WilsonNo, Sir. The prices being charged are world replacement values. If I may say so, hon. Gentlemen who complain when the policy of selling at replacement prices lead to bookkeeping losses under falling market conditions, can hardly complain when the same practice leads to profits on a rising market. They cannot expect to have it both ways.
§ Mr. FortIs the right hon. Gentleman aware that by the methods which are now being followed, the Lancashire cotton industry is in a very bad competitive position in selling in these African markets?
Mr. WilsonNo. I have made it clear that sales are at replacement cost. The hon. Member would, I hope, be the last to complain at the introduction of long-term contracts with Commonwealth countries for the supply of cotton.
§ Mr. DraysonWhy not re-open the Liverpool Cotton Exchange?
§ Sir H. WilliamsDoes the doctrine of replacement prices apply also to the regulations under the Prices of Goods Act, which denies that doctrine?