§ 2.13 a.m.
§ Mr. Harmar Nicholls (Peterborough)
I beg to move,That an humble Address be presented to His Majesty, praying that the Order, dated 1st February, 1951, entitled the Sewing Cottons and Threads (Maximum Prices) Order, 1951 (S.I., 1951, No. 166), a copy of which was laid before his House on 2nd February, be annulled.I was surprised, and indeed, very delighted, to see that so many great minds have thought alike on the question of the examination of these Statutory Instruments; and I hope that hon. Members on both sides of the House have the same view in mind as I. It is important, in view of the terrific increase in the cost of living which we are all facing today. Of course, nobody pretends that the retail price of sewing cottons has a very profound bearing on the cost of living; but, at the same time, there are few things in such universal use in our homes as sewing threads and cottons and the cumulative effect of the sharp rise in prices, even of these small items, is not a negligible part of the housewife's budget.
§ Mr. Bing (Hornchurch)
I thought the hon. Member was going to deal with the policy of trade associations in regard to this matter, because this Order gives effect to the recommendations of trade associations.
§ Mr. Nicholls
I have always been told that a very good quality for an hon. Member of this House is that of patience, and I should have thought that the hon. and learned Member opposite would have given me a little time to develop my point. We might just be thinking along the same lines, and worse characters than he have been known to reform. It is a 865 good thing, also, always to live in hope and I had hoped that this Prayer having been put down at this time, would disclose for the general public the reasons for the need of Statutory Instrument 166 at all.
Last week, from 24th February to 3rd March, there was held throughout the country a National Sewing Week promoted by the manufacturers of these products. During that week, retailers all over the country participated in window displays and the promotion of events of various sorts. The slogan of many of these displays was "Sew and Save." It is still just about possible to sew, despite the meat ration, but it is certainly becoming increasingly more difficult to save.
Similarly, during the war there was very much talk about "Make do and mend," so as to conserve the nation's depleted stocks of clothing. The W.V.S., did good work in this direction. It is obvious that, as the prices of clothing rise, the public will not need Government publicity to encourage them to save some of these costs by making their own clothing. They will have to make do and mend to provide themselves and their children with changes of clothing, the need for which the various seasons will undoubtedly bring with them.
If the prices of raw materials continue to rise, as was suggested by the President of the Board of Trade last Friday, then it will be a case of allowing the householders to have a chance to make at home clothing which, previously, they bought ready-made in the shops. It is, therefore, obviously desirable that the prices of mending materials, including sewing cottons and threads, should be kept down to the lowest possible level. I do not deny, and I do not think anyone would, that some increase would have been necessary, and has been necessary, to keep pace with the rising cost of raw materials. For instance, the increasing cost of raw cotton, the increasing cost of the timber to make the reels, and all the various items which are required in connection with this particular product before it reaches the shelves of the shops.
Nevertheless, I feel that the House should note the marked increases which have been brought about in the maximum retail prices of sewing cottons by this Order. But I do not feel that we should have in mind only this last increase. One 866 advantage of submitting a Prayer, even at this late hour, is that one can burn some midnight oil with a view to keeping well-informed other hon. Members who may have been taking advantage of the opportunity to sleep on previous nights.
I have taken the trouble to go back to 1945 to see how these prices have altered. In 1945, under Statutory Instrument No. 446, we have this example: Coates 64 soft sewing cotton, 100 yards reel, maximum price fixed by this Order, 3d. In another Order, in 1947, No. 1837, it went up by one halfpenny to 3½d. In 1948, by Order No. 1308, it went up to 4½d., first by an increase of a halfpenny and then by another halfpenny. In this final Order of 1951, No. 166, the Order which I am discussing now, it is going up a further twopence to 6½d. So, it is not just a case of the maximum price having gone up from 4½d. to 6½d. since 1945; it has gone from 3d. to 6½d., or more than doubled.
Similarly, if we look at the other popular thread, the 200 yards reel, that, in 1945, cost 4½d., in 1947 it went up to 5d., in 1948 to 6d., and now under this Instrument, it goes up to 9d. The increase is from 4½d. to 9d. The 400 yards reel, that is the reel used on sewing machines—and all of us who have young families know that this is much in use nowadays—went up from 7½d. in 1945 to 8½d. in 1947, to 10½d. in 1948, and to 1s. 0d. in 1951.
§ Mr. Nicholls
I am making my own point; if hon. Members want to make another point about profits they must do so.
The increase is not just of Id. or l½d. compared with 1948. In all of these popular sewing cottons the increase is more than double. We ought to remember that the people who are paying for this are, for the most part, young mothers whose young families are continually growing out of their clothing. This is no question of over-paid brigadiers or chairmen of nationalised boards. It is a question of ordinary families, where wives have to use this cotton. When we approve this Statutory Instrument we are hitting hard at the very people whom, when we are electioneering, we desire to represent 867 I could give a much longer list, but know that hon. Members will accept my word, since I have gone to great trouble to investigate the details, that the instances I have given are typical of other instances. I would like to say a word on what has caused this increase, because if we could show that the causes were unnecessary, and that if we had the power we would dispense with this Instrument, then some good would be done.
There has been a rise in the cost of labour. Wages have gone up because the cost of living has risen, and the cost of living has risen because such things as cotton have gone up. If we allow the various increases to go on and on, we are merely producing further need for wages to rise still further, and so the merry game will continue.
§ Mr. John Lewis (Bolton, West)
Surely the hon. Member sees that the fact that raw materials go up in the world market, has a direct effect upon the price of the finished product?
§ Mr. Nicholls
That is a very sound observation and the hon. Member is anticipating, because that is the next point with which I wish to deal. There are various reasons for this increase and I am dealing with wages first. The hon. Member is quite right—the rising cost of labour is only one of the reasons. Another cause is the increased cost of raw materials that go to make this cotton. It is not without significance that since the Cotton Commission, with its rigid buying technique, replaced the merchant, who could buy 50 or 100 bales at a time, we have seen this increase in the cost of raw material. Further, I suggest that the cost of our raw materials has risen higher than it need have done, because of this inept technique——
§ Mr. Nally (Bilston)
Assuming the hon. Member to be right, that in this country the increased prices are, in part at any rate, the result of the Government's policy of bulk buying, would he care to give us the result of his researches into the increases on the commodities he has named in the United States, where none of these considerations apply?
§ Mr. Nicholls
Charity begins at home, and I must confess that I confined my 868 labours to this country. The hon. Member ought to have great sympathy with this case, because all my personal experience is derived from having lived for many years between Bilston and Dudley.
In general, the price of raw cotton has increased, on an average, by something like 80 per cent. since 1948. Certain kinds have increased even more. The packing of them is also a fairly large item, and the price of packing materials has also gone up considerably. The price of raw cotton is determined by the Raw Cotton Commission, and they have completely lost control of any say in world prices; they are following, like Mary's little lamb, behind world prices.
The other main reason for the increase is, as we all know, but do not all admit, the result of devaluation. When Sir Stafford Cripps said that it would only raise the cost-of-living index by 1 per cent. he was either incapable of making a responsible estimate, which questions his ability for the high office he held, or he deliberately tried to mislead the nation. Hon. Members can have their pick, but they must pick one or the other.
§ Mr. Paton (Norwich, North)
If the hon. Member pretends to quote Sir Stafford Cripps, he might do it correctly. When Sir Stafford Cripps mentioned the figure the hon. Member has just given he stated that that was the figure for the few months immediately after devaluation.
§ Mr. Nicholls
We all know that Sir Stafford Cripps was a lawyer, and how lawyers delight in tying things up. There is no doubt about it: the message Sir Stafford Cripps intended to give to the ordinary layman was that the cost of living was going up by only 1 index point.
That is my case: that the increase has been brought about by the increase in wages, the rise in the cost of raw materials and by the effects of devaluation. We all know that devaluation is a proof of the failure of the Government's previous financial policy, which increased the cost of living all round. The Government now try to put the blame on to the Korean war, re-armament and stockpiling. We ought to 869 keep clearly in mind that the increases that have taken place this year were to pay the cost of devaluation last year and that next year we will have to pay the cost of the re-armament and stockpiling that is taking place now. I think we could agree, so far, that this Statutory Instrument will certainly play a part in putting up living costs to younger families.
Many responsible reviews have told us that the consequences are heavier than that. I have here the "Cotton Trade Union Journal" for 31st December, 1950, No. 629. After all, it looks as though we have our money on a horse that has been scratched. This is what this very responsible journal says:This year as a whole, however, may be divided in two parts. During the first six months, although all firms were very busy, there were signs of a decline in the demand for Lancashire products and in certain quarters there was a feeling that the healthy conditions which had existed for many years were about to become less favourable to a considerable extent. This state of affairs was due to the increased competition from countries abroad, and reports were received of Lancashire prices being above those of some foreign producers. Also, during the first half of the year, there was a tendency for exports to decline.This is a very serious report to come from this impartial review, and I suggest it is a piece of advice which ought not to be laughed out of court. The conclusion I draw from that is that we have been going along the wrong track for the last five years.
§ Mr. Albu (Edmonton)
The quotation which the hon. Member gave referred to the healthy condition during the last few years.
§ Mr. Nicholls
It is a good thing to look forward sometimes, and not to wallow too much in the idea that everything is all right. This Statutory Instrument is merely the last piece of evidence of the failure of the Government during the whole of the last five years. The reason for the one-time popularity of the Government was as a consequence of the good schemes they inherited from the Caretaker Government of my right hon. Friend the Member for Woodford (Mr. Churchill).
We know the old cliché "The last straw that broke the camel's back," but now it may be the last piece of cotton that will break it. This Instrument is another sympton of this tragic trend, and I believe 870 that it would have been wrong for this Instrument to have slinked—[HON. MEMBERS: "Slunk"]—or slunk on to the Statute Book in the darkness of the night. As the right hon. Gentleman the Home Secretary (Mr. Ede) has often done, I may have backed a "wrong one" there. I think it was right that this should have been brought to the notice of the House so that hon. Gentlemen may know what they are approving by allowing the Order to come into operation.
§ Several Hon. Members rose——
Mr. Deputy - Speaker (Colonel Sir Charles MacAndrew)
Hon. Gentlemen must remain seated while I am standing. If I can have silence, I shall put the question. We must carry out the correct procedure.
§ 2.36 a.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. Rhodes)
In answering the speech by the hon. Member for Peterborough (Mr. Nicholls), may I tell him what the Order is about? When I have finished perhaps he will decide whether he is going to divide the House. The Order increases the maximum prices of domestic sewing, mending, fancy and handicraft cottons and threads. These higher prices were required by the manufacturers because of the increase in the cost of raw cotton. We allow them after a very careful review in consultation with the Central Price Regulation Committee. The hon. Gentleman was quite right with his original figures, but may I remind him that the price for raw cotton rose eight times between 1938 and 1950?
The prices allowed for in this Order range from a halfpenny for some reels of sewing cottons, balls of darning cotton and skeins of embroidery cotton; 3d. for large balls of embroidery cotton; 4d. for small balls of knitted cotton; and 5½d. for large reels of machine thread. May I inform him that this is the first increase in prices that has been allowed to the sewing trade manufacturers since 1948? So far as there is any disagreement between us and the manufacturers, it is because they feel that the price increases allowed have not been enough. If hon. Gentlemen opposite feel that the Government are, on this particular issue, not doing all they can to prevent 871 prices rising unduly and without sufficient cause, they should ask manufacturers whether they feel that the new prices are unduly generous or not. I would ask the hon. Member for Peterborough to withdraw this Prayer. [HON. MEMBERS: "No."] All right then, but I am asking the hon Member to withdraw it because it is rather a foolish Prayer. The hon. Member did a lot of talking about the price of cotton, but he knows full well, or at least he should know, that if this Prayer were carried, it would have very serious consequences for the sewing trade manufacturers themselves.
§ Mr. Joynson-Hicks (Chichester)
Could the hon. Gentleman answer what is the value of the raw cotton content in a 100 yard reel of finished cotton?
§ 2.45 a.m.
§ Mr. Lennox-Boyd (Mid-Bedfordshire)
If only all the members of the Government had had the same candour as the Parliamentary Secretary to the Board of Trade we would have had a much easier five years in British history. He acknowledged that he had not the remotest idea of the answer to a perfectly reasonable question which was put to him. My only point in getting up at this moment is to ask the hon. Gentleman a question. He has described this Prayer as a foolish Prayer. I am interested to see that the hon. and learned Member for Hornchurch (Mr. Bing) and the hon. Member for Pembroke (Mr. Donnelly) have both subscribed to this foolish Prayer. To heal the breach in his own ranks, I hope that the Parliamentary Secretary will persuade one or other of his colleagues to give the House the reasons which led them to sign this Prayer.
§ 2.46 a.m.
§ Mr. H. Hynd (Accrington)
I should first like to protest against the procedure of the House which allows such a ridiculous proceeding to take place at such an unearthly hour. I interrupted the hon. Member for Peterborough (Mr. H. Nicholls) when he was moving this Prayer to ask a question about dividends. He was stressing the various reasons for the increase in price, mentioning how wages had risen, how the price of cotton had risen, and so on I asked him what 872 were the dividends paid by Messrs. Coats this year. I do not know whether he knew the answer, but he did not reply to me and I am going to give him the answer. I find from the reference books that the capital of this company is some £20 million to which it has been swollen artificially from £3¾ million.
§ Sir Hugh Lucas-Tooth (Hendon, South)
On a point of order. Would I be in order, Mr. Deputy-Speaker, following the hon. Member for Accrington (Mr. H. Hynd), to speak of the dividends payable by all the companies concerned?
I think that the dividends to be paid are very far removed from the question of the price of these commodities.
§ Colonel Crosthwaite-Eyre
Is it in order now to discuss the whole question of bulk buying of cotton by the Government?
§ Squadron Leader Burden (Gillingham)
If it is proper for the dividends to be brought into this matter, would it be proper to refer to the profits which the Government themselves are making out of the raw materials which they are buying and selling to the manufacturers of this country?
§ Mr. Hynd
I am sorry if I woke the hon. Lady. I was saying that the capital of this company was some 20 million pounds. No sum of £20 million was ever paid in, but only some £3¾ million 873 was originally paid. The increase, largely made up of what is called watered stock, has gone on until the sum of £20 million has been reached. In 1945, which was the year quoted by the hon. Member, the dividend paid on this watered stock was 10 per cent. In 1946 and 1947 and 1948 that dividend had increased to 12½ per cent.
It is going too far to discuss balance sheets and the details of the various companies mentioned.
§ Mr. Remnant (Wokingham)
On a point of order. Is it in order for the hon. Member to base his suggestions on incorrect figures? The important figure is the capital employed in the business, not the issued capital.
§ Mr. Hynd
I am sure that if the hon. Member wants to reply to me he will have an opportunity to do so. If he can prove that my figures are incorrect I shall be interested to hear him. It is quite unfair to put before the House certain elements as having increased the price of cotton without putting forward what I consider to be one of the most important elements—the increased dividends paid to the producers of this material.
§ 2.51 a.m.
§ Mr. Grimond (Orkney and Shetland)
The discussion appears to have been conducted on the assumption that the Government are laying down minimum prices for cotton. There is nothing to prevent a manufacturer from charging less than those prices if he wishes.
While I agree that there are many parts of the economy of this country in which control is necessary and in which the Government have to intervene, the type of debate which takes place on such a Prayer as this seems to indicate that there are also considerable parts of the economy where there is a lot to be said for the old fashioned remedy of a little free competition. If we had a little more free competition, a rather more free market in certain parts of the economy, we should be saved the necessity of being here at this time of the morning and a great deal of the discussion which has 874 just taken place would have been unnecessary.
§ 2.52 a.m.
§ Sir Herbert Williams (Croydon, East)
I intervene for only one moment to deal with certain obvious misconceptions which appear to have arisen. Hon. Gentlemen opposite have made such a lot of noise that they have not heard what has been said. They might have done the Parliamentary Secretary—a Member of their Government—the compliment of listening to him. His concluding remarks were to the effect that if this Order were rejected the producers and manufacturers would be in great difficulty. The Parliamentary Secretary and his superior, the President of the Board of Trade, have decided that these prices are necessary so that firms might survive. They do not regard these prices as profiteering, therefore. Hon. Members opposite have neither read the Order nor listened to what the Parliamentary Secretary said. They think if they make strange noises they are assisting Parliamentary government. It is clear that there is a conflict between the Parliamentary Secretary and the hon. Member for Accrington (Mr. H. Hynd)——
§ Sir H. Williams
I am trying to educate hon. Member's minds. They should have listened to the Minister, who, presumably, spoke on their behalf.
§ 2.53 a.m.
§ Mr. J. Lewis
Why does my hon. Friend assume that the hon. Member for Croydon, East (Sir H. Williams) is dehydrated?
§ Mr. Nally
When we are here at this time of the morning we might as well have a serious discussion on the detailed points before us. These Prayers are carefully timed by the Opposition so as to cause the maximum inconvenience to those of us who are without cars. There is an obligation upon the hon. Member moving the Prayer to prove, by examples 875 from abroad, that where the principle of bulk buying and State interference does not apply either to the buying of raw materials or to manufacture then, as a consequence of free enterprise, the price to the housewife of the articles he has named is cheaper than in this country. The truth is that if we take any country in Europe—Holland, Belgium, Denmark, or, for that matter, the United States or Canada—where the principles, broadly, of private enterprise operate——
§ Mr. Nally
With respect, Mr. Deputy-Speaker, if we are to have it argued that because of certain policies of the Government some prices are higher than they should be, surely it is right for me to ask the advocates of private enterprise on the benches opposite about prices where private enterprise operates.
I think that there is an obligation upon the hon. Member who has conducted these deep researches to take them a bit further. It is perfectly true that one of the major factors in price increase in this particular field is wages. I not only admit that fact; I proclaim it. Those of us born in Lancashire, in the textile areas, as in my own case, remember what happened. When my mother's mother worked in the mill, there was nothing funny about that at all. There was nothing funny in her going to work in the cotton mills at 11 years of age, as did both my grandmothers. That sort of thing may be funny to hon. Members opposite, but it is not funny to me. There has been a quite remarkable increase; next to the miners, the increase in textile workers' wages has been remarkable.
I hope that the Government, in introducing this Order have never sought to disguise the fact that the increase in wages is not based on the cost of living, but on a long overdue feeling that there was need for elementary justice. It was justice which should have been given years ago; but the increase has had its effect on the commodity. I am by no means certain about all things, but this is a fact: all the manufacturers' associations who are associated with this trade have complained, one after another, to the Parliamentary Secretary to the Board 876 of Trade that the increased prices are not sufficient to satisfy them.
If, in fact, this Prayer is carried tonight, does that mean that the Board of Trade, following the adverse decision of the House, will go to the manufacturers and say, "We are not prepared to approve this increase in price?" Further, if it does, will the Opposition then support the President and the Parliamentary Secretary when they have their row with the manufacturers?
§ 2.59 a.m.
§ Mr. Boyd-Carpenter (Kingston-upon-Thames)
I hope that my hon. Friends will forgive me if I say that the strongest case for this Motion was made by the hon. Member for Accrington (Mr. H. Hynd). The hon. Gentleman said that the manipulation of the price control system by the Board of Trade had had the result, among other things, of causing one firm— which he mentioned by name—to make such profits that it had paid 12½ per cent. on what he described as "watered capital". I hope he understands it, for that is what he said.
If that be true—and I take it that the hon. Member would not have made that statement, and taken responsibility for the statement, if he were not quite certain of it—two consequences seem to follow: first, it seems a pity that a Government so skilled in making profits for private enterprise is unable to do so when it conducts a private enterprise itself. By way of illustration alone, I would remind hon. Members that the groundnut scheme did not pay quite as well. Second, if the hon. Member's statement is true the prices' fixed for cotton have been fixed too high. Surely that follows. The purpose of this Order is to fix the prices even higher. If hon. Members believe what the hon. Member for Accrington said, to the effect that the prices are already too high, they are morally bound to support us in annulling an Order which will make the prices even higher.
§ Question put, and negatived.
§ Mr. Lennox-Boyd
As the voices have been collected, Mr. Deputy-Speaker, I take it that I may ask a question on a point of order without covering my head. The point is that if there are divisions, I take it that if hon. Members opposite call out "Aye" they should follow their voice if a vote is taken. A minute or 877 two ago the hon. Member for Bilston (Mr. Nally) called out "Aye." Had there been a vote, and had the hon. Gentleman voted "No," his vote ought to have been registered as "Aye." I ask in order that the matter may be cleared up.
Let me answer one point of order at a time. A Member's vote must follow his voice.
§ Mr. O'Brien (Nottingham, North West)
On a point of order. Is it for the good order of the conduct of this House, at this time in the morning, that hon. Gentlemen opposite should move six or seven Prayers and then not enforce them by a division?