HC Deb 26 March 1952 vol 498 cc533-789

10.8 p.m.

Mr. Sutcliffe

I was saying, when the House passed to other business, that the recession in the textile industry is worldwide, and all the work that has been put in by way of modernising our mills and increasing the efficiency of our industry in recent years has been of no avail to stop it. I want to suggest to the Government one or two ways in which they can be helpful. First of all, as regards Purchase Tax—[Interruption.]

Mr. Speaker

Order. I must ask hon. Gentlemen below the Bar to pass out of the Chamber quietly.

Mr. Sutcliffe

An alteration in Purchase Tax is essential. The past scheme towards the end was holding up production, because nobody knew on what goods it would in future be placed, but the new scheme will have some unforeseen results. I think they must have been unforeseen. It will hit very severely several classes of the better quality goods which Lanachire has always been able to export and on which she so much depends for success, such as best quality shirts and furnishings. A large number of these were previously in the Utility scheme and were sold free of tax. Now they will pay quite a high rate of tax, and that will be a definite hindrance to their export sales, especially in the American market. That may not have been realised, but it is having a serious result. The leaders of the cotton industry on all sides urge that the Purchase Tax on cotton and rayon goods shall be abolished altogether. This has been suggested already by hon. Members in all parts of the House, and I urge most earnestly that it should be done.

There will be a further shrinkage of trade if it is not done, and it will be a definite hindrance to the increase of our export trade. That shrinkage will cause the Chancellor further losses in taxation from the lowering of profits in the industry. Also it might cost a great deal in unemployment benefit, so serious is the position. On the other hand, the value of "D", as we call it, could be raised, or the rate of Purchase Tax could be reduced; but neither of those two things will be sufficient to prevent a shrinkage in our export trade.

Another point is the question of Government contracts. We have heard from the President of the Board of Trade that he intends to do all he can in that direction, but there is a rumour in the North that a proportion of Government contracts, said to be 25 per cent., is to be placed with firms in the Development Areas. The cotton industry towns and villages have never been classed as Development Areas, but there are many towns and villages which are entirely dependent on this one industry. If the trade recession goes on, they will be worse hit than the Development Areas, and so I urge the Government to place their orders in Lancashire in adjacent cotton towns, and not to single out the Development Areas for these contracts, which it would be a help if the Government could place as soon as possible.

If one made a criticism of the previous Government, it would be that they placed too many orders for re-armament too quickly, so that they were at the height of the cotton boom and many of the orders had to be placed abroad. That was a pity, because if the orders had been more spaced they would have overlapped this situation and would have been able to fill a gap most usefully by diversion to our own mills. However, it is obviously too late to do very much in that direction.

Local authorities and county councils also can help by placing orders in this country rather than abroad. I mention this because recently the Lancashire County Council sent round to schools in their area a large quantity of tablecloths. They have ordained that school children in future shall have their meals at tables covered with cloths instead of with American cloth or something of that kind, but to the surprise of many schoolmasters and others in the school, these cloths, which have arrived in lengths of 36 yards, have stamped on them, "Chang Lu Weaving Company, Kowloon, Hong Kong" Undoubtedly, that is a British territory and it is important to maintain trade there, but it is a little unfortunate, to say the least, that these cloths should have arrived in recent weeks, when the position is so very bad and when they will certainly cause a good deal of dissatisfaction.

I want to mention one other matter. It is, perhaps, an unusual point and may not have been raised before. Recently, in some of the weekly and other papers, leading economists have been suggesting that textiles are no longer the first priority in Lancashire, that Lancashire is tending to become an engineering county, and that engineering should take priority. I ask the Government: are textiles still to be the first priority of Lancashire and the West Riding? It would be a tragedy if they were not, but undoubtedly the engineering industry there has increased greatly in recent years and is, of course, playing a vital part in the re-armament drive. Many new firms, especially smaller firms, have started in recent years, but Lancashire is still dependent, and has been built up, upon her textile industry, and I say without hesitation that it should still have first priority there.

To help the industry to maintain this first priority, help is needed by firms who are developing new ideas. There are some firms—perhaps, only one or two—who are developing these new ideas and new products. On their own initiative, they are specialising in certain lines which will play a very useful part in the future. They want support from the Government in dollars and in machinery.

These firms are having difficulty in importing from the United States and from Switzerland certain machinery which is vital to them in this new work, and they ask that the Government should not be so restrictive in considering the imports of this machinery. The Government should use more skill in discriminating between what is absolutely vital for the future, rather than the present tendency to refuse everything.

Certain types of synthetic materials should come in duty-free. These new products are being made for defence and for the export trade; 75 per cent. of the materials are being used in these two directions. There is laminated board for the insulation of machines, etc.; glass cloth, for which there is a big future, and fabric of various sorts, including fabric which has been used for the insoles of boots which our men are wearing in Korea.

Imports of synthetic yarn, for example, from the United States bear a duty of 35 per cent. This item is not manufactured here, and is not obtainable here. No harm could be done, therefore, by lowering the rate of duty. The duty of 35 per cent. is subject to a drawback of 9d. per lb., but this still leaves a duty of no less than 22 per cent., which goes to the Chancellor of the Exchequer.

These yarns are classed as artificial silk, I understand, because nobody knows in what other category to place them. But surely, if they were artificial silk, they should bear some slight resemblance to real silk, which always has been the criterion. Although this synthetic yarn bears no resemblance whatever to artificial silk, it pays the same import duty because it is classified under the 1925 Act, which is still in use by the Customs and Excise, an Act which certainly has amendments but which was originally passed over a quarter of a century ago. I think that Act wants revising and new categories placed in it to bring it up-to-date with modern inventions and modern requirements. There should be a review of the tax on these basic synthetic products for which there will be great use in the future.

Mr. William Ross (Kilmarnock)

Did I understand the hon. Member to say that no synthetic yarn is made in this country?

Mr. Sutcliffe

Not of the nature used in the products of which I am speaking: it is a special plastic yarn.

The Government can help a great deal in these and other directions, which will probably be suggested by other hon. Members. We hope and believe that this is only a temporary recession in trade. The industry, incidentally, is much smaller than it was; there are 700,000 fewer spindles than in 1950, and it should therefore make a quicker recovery. There is no spirit of defeat in Lancashire, but we do rely on the Government for all the assistance they can provide. The duty of a Government is, surely, not to interfere too much with industry, but to guide and help wherever and whenever it can, especially at a time like this. We, as Members for these areas, look for all the help the Government can give us, and we do not think we shall look in vain.

10.23 p.m.

Mr. Frank McLeavy (Bradford, East)

When my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) was making his very well balanced opening speech, I thought that the general consensus of opinion on both sides of the House was very much with him in respect of the points of view he was putting before the House. I feel that the speech of the President of the Board of Trade must have been received on both sides with considerable disappointment, because we are all deeply concerned about the growth of unemployment in Lancashire and Yorkshire arising from the difficult circumstances confronting the textile industry.

We must, of necessity, be conscious of the fact that the prosperity of this country has in the past been largely based on the prosperity of the wool and cotton textile industry. If we get a measure of depression in either cotton or wool textile, it will undoubtedly mean poverty and destitution in the homes of the operatives in all parts of the country.

I sometimes think we do not quite appreciate the importance of the problem which is developing. I sometimes wonder whether the present set-up of the Board of Trade is really modern enough to meet the modern requirements of industry, or whether some new organisation which can speedily apply new remedies should be created by consultation on both sides of the House.

Hon. Members representing the City of Bradford have received very serious representations from the industry respecting the development of unemployment. I wish to read a few extracts from a letter I received from one Bradford industrialist who is anxious that the points which be makes shall receive the consideration both of the President of the Board of Trade and of Parliament itself. I consider it important that in these debates, apart from expressing our own point of view, we should know what the industry is thinking and what remedies they consider ought to be applied in the present situation.

My correspondent is the director of a large textile firm in Bradford. I will give brief extracts from his letter. He writes: The restriction of trade imposed recently by several countries are in my view much more important than is generally appreciated. The unemployment in this area"— that is, Bradford— is only just beginning. I fear it will soon be extremely serious. I cannot emphasise this enough. I felt that the speech of the President of the Board of Trade this afternoon did not reveal that he felt this matter was likely to be extremely serious in the near future. My correspendent goes on: My own firm are now only paying 70 per cent. of last December's wages and our shortage of business is only just beginning to be felt. He then goes on to deal with the various areas where the restriction of trade is seriously affecting the woollen textile industry, and his reference to Australia is as follows: The reduction of the total importation of wool cloth by four-fifths gives the trade a heavy blow. It also gives the customers in Australia a powerful aid to cancel orders placed at prices over double what they are today. This means enormous losses to manufacturers here or at best, difficulty in holding high-priced goods here for a long period, if ever they are taken up. Then he refers to Switzerland as a small country, but nevertheless a country which is making its contribution, or was making it, towards helping our textile industry. He says of Switzerland: A smaller, but still important, hard currency market has put all wool textiles from England on licence for the last four months. Licences are most sparely given. There, again, is an indication that in countries like Switzerland we are experiencing difficulties today which have not been experienced for many long years.

France, I presume, is an important importer of textiles. My correspondent's comments on France were: All imports are stopped pending the issue of a quota. I have it on good authority— and I should like the President of the Board of Trade to note this— that the French Government are delaying the issue of this quota unless pressure is applied by our authorities and will postpone the issue for a long time. I appeal to the right hon. Gentleman to give us at an early date some encouragement to hope that his Department and the Government are determined to tackle this problem and are getting down to the job, because these difficulties will cause much distress in all the industrial areas of England, and especially in Lancashire, Cheshire and Yorkshire—the areas that laid the foundation of the greatness of our nation and made its prosperity possible.

The President of the Board of Trade should take the matter up with the Chancellor of the Exchequer and with the Government generally and should seek some way by which representations can be made to Australia and other countries who have decided to suspend their orders, and in some cases to cancel them. After all, Australia is part of the British Commonwealth of Nations, and I should have thought that the interests of the British workers in the textile industry were also the interests of the Commonwealth.

The conference of Commonwealth Ministers should have dealt with these problems and should have made sure that whatever restrictions Britain or Australia or any other country in the Commonwealth had to apply because of temporary financial difficulties, they would be applied in such a way as not to strike at the industries of the various countries concerned. I know there are difficulties.

Lancashire, Yorkshire and Cheshire have made it possible by their sheer industry for our nation to rise to influence and power throughout the world, and here in this House we do not appear to be alive to the serious nature of the present situation. We do not appear to be roused tonight by the dangers not only to our financial position but to the happiness and well-being of our people.

I think hon. Members representing constituencies in Lancashire, Yorkshire and Cheshire will agree when I say that we expect the Government to get down to this problem and bring forward a scheme which will prevent the serious dangers to which my correspondent referred. I hope the right hon. Gentle- man will convey to the Government the general feeling of the House and that something will be done to ensure that we do not go back to the old days of unemployment and destitution.

It is true that during the six years from 1945 we had no unemployment and very little competition. But at least we should see that there are no restrictions which can be removed by negotiation and by representation by the Board of Trade and the Chancellor of the Exchequer.

There is a general feeling in industry that the Government have not been bargaining hard enough. Correspondents have sent telegrams to the Bradford Members of Parliament saying that industry feels that the Government have not bargained hard enough in order to prevent Australia, France and the other countries cutting the importation of British textile goods. If that is so, it is a serious indictment upon the Government. I think this is far too serious to make a political point of it. It is a question of concern to both sides of the House whether or not these great industries are going to continue to play their part in the industrial activities of this nation and of the world.

In spite of the growing competition, I think the time has come when the President of the Board of Trade and his colleagues should get down to the problem. It may well be that consultations on both sides of the House, to try to reach some solution of this problem, will do a great service to this nation and to mankind.

10.37 p.m.

Mr. Geoffrey Hirst (Shipley)

I am very pleased to follow the hon. Member for Bradford, East (Mr. McLeavy), inasmuch as he is the first and I am the second speaker from the back benches on either side of the House whose constituencies are primarily concerned with the wool textile industry. We have heard a great deal today about the problems of the cotton areas, and I do not want to suggest for one moment that their problem is not very grave indeed—graver than that of many of the wool textile areas. It has shot up much more quickly; it has been more sudden and the numbers concerned are infinitely greater.

In the case of the wool textile industry, it has been more gradual. The recession started almost a year ago. I hope the hon. Lady the Member for Blackburn, East (Mrs. Castle) will bear that in mind when she makes her political points on another occasion. The number of productive operatives in the wool textile trade 18 months ago was of the order of 170,000. In January this year it dropped to 149,000—a drop of over 20,000—and I am quite sure that the present situation is a good deal worse and probably down to the low level of September, 1947, when the industry got going again after the war.

The number of unemployed in the wool textile industry, including the officially recognised return of short-time on 14th January, was over 14,000. It is now most certainly greater. My own constituency of Shipley, which covers Bingley and Baildon, lies adjacent to Bradford and accounts for nearly one-tenth of that amount. If I include Bradford—because it is adjacent and the trade is intermixed, with often one firm with one process in one town and another process in the other—it accounts for 50 per cent. of the unemployment and short-time in the whole wool textile industry.

So I can understand and have great sympathy with the strength of the views expressed by the hon. Member for Bradford, East, although I do not quite agree with some of his peroration. I do not want to be pessimistic—I felt that the very fair speech of the hon. Member for Rossendale (Mr. Anthony Greenwood) was a little pessimistic—so let us hope that in the textile trade we can—I speak for the wool textile trade at the moment—return, for at any rate a fair share of the time, to at least normal demand at home and abroad; if we cannot reach the peaks which we have known in the last two years, at least normal proportions. It would be distressing if we could not meet the demand.

It would disastrous if acute recession yielded to such normal conditions that demand remained substantially unsatisfied because the industry had lost the labour force which it very painfully and painstakingly built up and trained since 1947. In the words of the Wool Textile Bulletin of December, In this task it will be difficult to succeed twice in so short a time. I realise that in the national interest there has inevitably to be a fair measure of redeployment of labour to meet the national emergency, but anything of that nature which may be required has been exceeded in the areas which are predominantly textile.

I most decidedly associate myself with the hon. Member for Rossendale in his reference to the fact that in many textile areas many of the villages consist of one mill or two mills at the most and that the livelihood and happiness of all the people in the village stand or fall by the extent to which the mill or pair of mills can be kept going. There is no question of redeploying those people in some armament factory, at least in nine cases out of 10, and I hope that we shall all bear that in mind.

Mr. Hale

I take it that the hon. Member is talking about redeployment, not in the technical sense, but in the sense of all our people being transferred from the textile industry altogether or for a long period? Does he suggest that that is an involuntary or a planned act?

Mr. Hirst

I am suggesting that it is inevitable that a certain measure of transfer of labour will take place in the national emergency. It will result automatically from the circumstances of the orders and the flow of materials. It has far exceeded anything which is desirable in the textile areas, and we must do all we can not to aggravate a situation which has developed in areas which are predominantly textile and in small communities which are built up on one aspect of an industry.

The textile trade—I think I can fairly speak for all of it here—consists of an independent type of people who do not expect the Government to go out and get orders for them and who are quite prepared to do that for themselves. But the channels must be opened.

I wish to refer hon. Members to one short passage in the annual report of the Bradford Chamber of Commerce, which was approved at the annual meeting yesterday. It says: Lack of quotas in some markets, refusal of import licences in others, and the unsettled conditions in the Middle East are among the factors that darken the outlook for increased exports, and in this connection the need for more effective bargaining when making trade agreements with countries which limit imports by quotas or other means has been brought to the notice of the President of the Board of Trade by a deputation from the Wool Export Group. Evidence is available that other countries when making trade agreements contrive to find outlets for their products to the detriment of United Kingdom exporters. To that extent I again support the hon. Member for Bradford, East. In the old days the only barrier in many instances was the tariffs. Subsequently we got quantitative restrictions at an alarming rate, and in many cases there was total exclusion.

I do not myself think at times that Government bargaining has gained enough. My little experience goes back over many years. For over 12 years I served on the grand council of the F.B.I., and when I served on the particular committee dealing with this subject Presidents of the Board of Trade came and went, Governments changed, yet the same situation seemed to go on. There was a lack of appreciation of the fact that we are a great importing nation—and even with these import cuts of today we still are so—and have a reasonable right to demand some quid pro quo for the markets we give to other people. I think there are occasions when we could drive harder bargains.

I do not want hon. Gentlemen opposite to be sensitive on this point, for I am not making a political speech, nor am I claiming that this has necessarily happened over the past six years, but there have been occasions when the Foreign Office have had too much to say in business matters. I think we could drive better bargains.

I know the difficulties today in Latin America. The fact remains that exports now are roughly between one quarter and one hundredth—and in one case more than one hundredth—of what they were in 1937. What about Germany? I would like some help here from the President of the Board of Trade. Why did we get such a bad deal on the Anglo-German Agreement? What about Greece? Many hon. Gentlemen will remember that country as a traditional market for our textiles. Why can France drive a better bargain than us? Has there been a lack of liaison between the Ministry of Food and the President of the Board of Trade? Why can France insist on her textiles being taken in exchange for currants and raisins?

I do not want to be over-aggressive in this matter, but I do suggest that we are in a position to drive better bargains. I am advised that this is a sore point with many industrial firms in my part of the country. I naturally regret as much as any hon. Gentleman the unhappy circumstances of Australia. I do not want to cause any embarrassment, and certainly two blacks do not make a white, but I am sure everyone will have a little feeling and understanding of textile operatives in this country either unemployed or in fear of unemployment. They see on the one hand that Australia can cut four-fifths of her imports overnight, and on the other hand that we have negotiated reductions of imports which will continue to flow in to the detriment of the people in the textile mills.

I do not suggest two blacks make a white, but I want the sympathy and understanding of the House of the feeling in the minds of these people who see these imports still coming in and yet another member of the Commonwealth throws the whole thing off. I do not think everyone realises what that means to many firms. They felt they had a gilt-edged market and manufactured their stuff many months ahead of shipment. These orders are now likely to be cancelled, for it is unlikely that the high priced goods will be chosen for the export quota. I feel that these are important matters. I am glad the Member for Bradford East, read that letter from a constituent with mills in both our Parliamentary divisions. I, too, have a copy, and I hope some of the points will be borne in mind by the President of the Board of Trade.

I have now, I think, spoken for long enough, but I would emphasise my hope that we can get a little more hard bargaining. I hope, in that connection, that the President of the Board of Trade can really speed up and get his co-Ministers, if I may use the word, "cracking" on getting the re-armament orders to the textile industry. It would be a godsend if those orders could be got out quickly to the firms while the consumer resistance still remains, and the stocks are in the shops waiting to be liquidated.

I hope, too, that he will look again at the "D" scheme. I think that he takes a rather rosy view of the conversations which he had in Bradford and Leeds. I know perfectly well that he has interpreted the conversations aright, but I do say he has taken too optimistic a view; because, according to the information given me, there was no question that the people concerned had any conception that the so-called "D" line was going to be fixed at so low a level. I will not weary the House with examples, but would say that some of these are far too low. I sincerely hope that the Government, politics apart, will in their wisdom realise that this is a fact. A lifting of the "D" level is absolutely essential if, in fact, we are going to get the home market going and if we want to allow the smaller shopkeepers to keep in trade at all, because they cannot do so at the ridiculously low level of some of the "D" items.

The hon. Member for Rossendale spoke of reviewing the Purchase Tax in the light of these special circumstances, and I hope that we can do something which will help until some better negotiations can take place, or until currency arrangements become better able to help the export trade. Unless we have some action to liquify the solidity of the home market, while trying to get some effective measures for the export trade, it is only fair for those of us from the constituencies concerned to warn the House that unemployment may get out of hand.

10.54 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

Having spent my life in Lancashire, there is one phrase which the President of the Board of Trade used this afternoon which struck me, and that was that the pre-war history of Lancashire's cotton industry, and its pre-war experience, had bitten hard into the hearts of the Lancashire people. What we have to do is to approach the problem in a more fundamental way than we have done so far.

This county has produced mountains of wealth for generations which has made ours a great industrial country. Lancashire was the birth-place of Britain's industrial development, and unless constructive and fundamental action is taken, Lancashire can become the graveyard of British industry.

I want to make two suggestions. The first I have made before, but it has now been proved right, and there is evidence also that it is a matter of extreme urgency. It is that the time has come when there should be a Commonwealth economic conference. But instead of just meeting as the Commonwealth representatives did at the recent financial conference, where those attending do not seem to have known what action was to be taken, or what the repercussions would be on other countries, an agenda should be drawn up so that this conference can adopt a real economic policy that can be applied throughout the Commonwealth.

The second suggestion is that the Government—and I think our Government should have done it—should take the initiative in the United Nations so that all nations can look upon this problem as one world. There is to be a conference in Moscow in a few weeks, and I understand that three or four hon. Members from each side are going to it. We should send from this House a message that we hope the world intends to use the United Nations as thousands of men who lost their lives in the war intended that it should be used. We have suffered not only from military aggression but from economic aggression. The world ought to approach this economic problem so that the foundations can be laid for saving the world economically, and we might then also avoid something else that we all dread happening.

Britain has reached such a stage of development in which we cannot survive unless we remain a great trading nation. What we are considering today are only the symptoms of a much bigger problem than the House has yet faced. Our two greatest assets are coal and the skill of our people. In the past, both have been neglected, and treated in such a way that it is remarkable that the people have responded to the nation's need in the way they have. The responsibility is on every one of us. Just as our forefathers played their part in the development of economic ideas and democratic government, so we are called upon to be pioneers so that the world shall approach its economic problems in the same way. Those two assets of our country should be given complete priority. It is only in that way that the country can save itself and at the same time make its contribution to world co-operation.

World trade is not divisible, except within very narrow limits. Less buying in one part can cause less trade in another part. What we are faced with now is the result of speculation, cornering, and—to use the modern word which too many politicians like to use—stockpiling.

We can have a slump in this country today and it may not be apparent in some other part of the world until next year, or even later. I have before me a copy of the "New York Herald-Tribune" showing that it prophesied weeks ago exactly what we should be faced with as a result of the policy that is being carried out.

Australia has been caught up in the same world economic affairs as ourselves. We should be on guard against speaking too critically about Australia and New Zealand, who have been our best friends in two world wars and have been more British than many of the British in matters of that kind. We have some responsibility for the situation in Australia. Official figures are given in the Melbourne. They state: Australian food exports to Britain and other Commonwealth countries fell sharply in the seven months to January this year. The value of food shipped to Britain fell from £171,000,000 to £111,000,000. That was the beginning of Australia's immediate difficulties. Therefore, we are all caught in a vicious circle. It is now urgent that there should be a Commonwealth economic conference to consider these problems.

I read in today's "Manchester Guardian" a good analysis of the world textile position. It also made some comments. I agree with the article, except when it states: The world's textile industries have been over-producing. Is there one hon. Member of this House who accepts that? What the world is suffering from is under-consumption, and not from over-production by certain industries. Therefore, what the world is suffering from is lack of planning, lack of organisation, and a failure to bring the productive industries into relationship to the world's consumption needs. I hoped that it would be upon this basis that the Government would approach these problems in the conference for which I am asking. If this Government are not prepared to take the initiative in this way, it is only a matter of a relatively short time before a government of other political forces will come into being so that the country can be saved, as it has been in the past, from difficulties of this kind.

One country after another is making its contribution to world economic suicide. Just as our country took the initiative through Arthur Henderson, Sir Austen Chamberlain, and two or three others at various times, we are now called upon to take the initiative inside the Commonwealth and inside the United Nations. Our concern tonight is mainly with our own country and the Commonwealth. Due to seven years' regulation by the Labour Government of our economic forces, we in this country have managed relatively better than have most industrial countries. But had we planned our economy in accordance with Labour's real policy, we should be in a much stronger position now to deal with problems of this kind.

During the past seven years we have, in many instances, sold abroad too cheaply and bought our raw materials too dearly. We have suffered from the Conservatism that has found expression in many quarters on economic and financial questions. The national interest should always be put first, as it was in the main during the war; but that is not Britain's policy at present. There are too many well-organised vested interests in this country, represented in trade associations and the like. It is there that the real restrictions are to be found, and not among the ordinary people.

For six or seven years the pottery and textile industries have made a great contribution to enabling Britain to live—and every one of us who is not employed in industry is now living upon industry, because income from other sources went in two world wars.

Mr. W. Fletcher

What about invisible exports?

Mr. Smith

That is true. We have to approach this problem from the point of view of 1952 and not of pre-war times. I think of the people to whom I belong, among whom I have lived and still live, and I ask whether they are again to be repaid for their work by frustration, disappointment, short-time, and unemployment. My memories are bitter.

I remember as a mere boy in the First World War, and then again in the Second World War, the promise that if we only played our part we should never be asked to live in that kind of world again. Yet we ordinary people of Staffordshire and Lancashire can again see the clouds coming and growing blacker week by week because of the failure of mankind to deal with this problem fundamentally Employment can be found for both the textile and the pottery industries. We must not allow the labour force to be dispersed, for it is far too valuable. It is our economic wealth and strength. Most of the labour is skilled and should be retained within the industry and not sent to certain quarters of which talk has been heard behind the scenes.

I hope that the Parliamentary Secretary will reply to some questions. Has the pottery industry made a valuable contribution to the export drive? Do exports still count in our country? I can imagine some smart Member saying that I ought to know, but for years it has been said that re-armament must not affect our export trade. Does that still apply? Will the President of the Board of Trade undertake to see that the labour force of the pottery and textile industries is kept together so that we continue to benefit from the worth of those who have made such a great contribution to our economic recovery during the past seven years? Surely we are not going to repay them by having them influenced in certain ways?

Today I put two Questions to the right hon. Gentleman. In one of the answers he said that the Government are now discussing the problems with the British Pottery Manufacturers' Federation. But why are the trade unions not brought in? They have been brought in in the past when developments have been taking place. Why have they not been brought in now? Last week I asked if the services of the Export Credits Department could be placed at their disposal, and I am pleased that within such a short time the right hon. Gentleman has given a definite answer on that. If this Commonwealth conference takes place, and if we can have a world economic conference, we may expand the needs of these industries.

The workers should not be dispersed, and in this connection I want to quote what Mr. Lewis Wright said last Saturday in Manchester, as President of the Lancashire Weavers' Association, when he said what thousands of people are thinking. He asked whether recent Government policy, which had hit the industry at every point at which it was vulnerable, was not deliberately designed to release labour for munitions, and whether the Australian Government's im- port cuts—in spite of British Government denials—had not been agreed at the rceent Commonwealth economic conference as a result of co-operation between the two Governments. I do not go so far, but I do say that the victims of inability to deal with economic problems are the men and women now signing on at employment exchanges, or who are on short-time. These people have a right to know whether anything was said at this conference and whether it has affected our people in this way.

I hope the President will consider the record of this debate and that whatever he does he will adopt a policy so that the skilled workers—and they are all skilled workers, it is only a matter of degree—shall not be dispersed and shall not be treated in the way they have been too often in the history of our country. I hope they will see that at least the House of Commons is determined that we shall re-organise economic affairs so that they can make their contribution to Britain's economic needs.

11.13 p.m.

Mr. Ralph Assheton (Blackburn, West)

I propose to detain the House for only a very few minutes this evening. I was born in Lancashire and have lived there for more than 50 years. I am bound to say that this debate has given me encouragement.

I share with the hon. Lady the Member for Blackburn, East (Mrs. Castle) the honour of representing the greatest weaving town in the world, and I can understand very well the anxiety which is felt not only there but in other parts of Lancashire, and specially East Lancashire. Those who lived through those years of depression, whether they were fortunate enough to have been protected from the worst effects of them or not, can never forget them. It would not have surprised me if there had been some bitter speeches from the other side of the House. I am glad there have not been. I thought that the tone of the debate was well set by the hon. Member for Rossendale (Mr. Anthony Greenwood) who was so well followed by the President of the Board of Trade, and I hope that we shall continue the debate in the same spirit.

The hon. Member for Rossendale, who has a considerable amount of cotton industry in his constituency, told us that there was a world recession in the textile trade and quoted figures to prove it from the various markets of the world. In today's "Manchester Guardian" there is a great deal of statistical information which bears that out. I want to deal with that in order to deal with the question raised by the hon. Member for Blackburn, East and also referred to by the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), to whom we have listened, as we always do, with such attention.

I think the fact that there has been a world-wide recession in trade really disposes of the question put by the hon. Lady as to whether Her Majesty's Government are deliberately causing unemployment in the textile trade. I can assure the hon. Lady that that is not the case, and I suggest to her that it is rather a dangerous suggestion to make. I fully appreciate the arguments that she put forward, that we need to find an increasing amount of labour for the armaments programme, and so on. But it is not from the textile trade, so far as I understand it, that it is intended to find that labour. The textile trade is designed to supply our home market and to do considerable export trade. I do not think—although this the Government will be able to tell us—that there has been any suggestion whatever of running down the textile trade with a view to finding labour for the armaments drive. That is my honest opinion, and later perhaps we shall hear from the Government that that opinion is confirmed by the Ministers.

I do not want to make any further criticisms of the speech of the hon. Lady, because I know she feels as deeply as I do the vital importance to Lancashire of this unemployment question. But some remedies have been mentioned, and I wish to recapitulate them. I think the President of the Board of Trade should consult with the Chancellor of the Exchequer and the Cabinet to see whether they can suspend the Purchase Tax on textiles. If they cannot do that, will they consider modifying the incidence of Purchase Tax under the D scheme so far as it affects textiles?

I could give instances, particularly in the case of furnishing fabrics, which are important to Blackburn, of how ill this has been designed in some details, due partly to the fact that there has been no time to consult with industry; everything in the Budget is always so secret that it is not possible to make the necessary consultations in advance. But, in the case of furnishing fabrics, out of 35 specifications there are, I believe, only two which still go free of Purchase Tax. That cannot have been intended and must be corrected when we come to deal with the Finance Bill.

The question of pressing forward with some Service Department contracts will, I know, be considered by the Government. Then we have always to bear in mind the need for cutting down our costs in Lancashire by increasing efficiency, and I hope we shall have increasing co-operation in this between the employers and the unions, because that is so important.

New industries have been mentioned. Of course we want new industries in Lancashire, and diversification, although some do not share that view. It is my view. I would remind some hon. Members, although I do not need to remind Lancashire Members, and I would say this so that all the employers in England may hear it, that in Lancashire we have the best skilled workers in the world. I was talking recently to one of the greatest manufacturers in the world, who was asked by the Government during the last war to put up a factory. He said to the Department concerned, "Yes, if you will let me go to Lancashire, because that is where I can do the job properly, and that is where the best skilled workers in the country are to be found." If other employers do not know that, they had better learn it.

Another suggestion I wish to make is that we should re-open the Liverpool Cotton Exchange as quickly as possible. My next suggestion is that the Government should go ahead with making arrangements with Japan as fast as possible. My last suggestion is that we should continue to work together in this House irrespective of party. I had the pleasure the other day of going on a deputation to the President of the Board of Trade with other hon. Members of all parties from East Lancashire. I beg hon. Members on the other side of the House and on this side to continue to co-operate in the interest of Lancashire.

11.20 p.m.

Mrs. Eirene White (Flint, East)

We have had a very calm and sensible and well-informed debate so far upon this subject, but I must confess that I have a sense of disappointment, though not so much with hon. Members on both sides of the House, many of whom have spent the best part of their lives in the textile industries and who naturally wish to emphasise the particular and more detailed problems of the industry with which they are acquainted. But, quite frankly, I should like to say to the President of the Board of Trade that he has missed a historic opportunity.

If I may say so, the right hon. Gentleman is a Welsh Member of sorts, and perhaps he will not take it amiss from a colleague if I give him a friendly warning that, after all, in one's youth, good looks and a fluent address may take one a long way but, as a Cabinet Minister, we expect a more substantial analysis of the problem than we have had from him today. I say that for the reason that today in this House he had the opportunity of telling not only the House but the country, and I might even suggest the world, what is to be the Conservative Party's method of obtaining a high and stable level of employment in this country.

It is natural enough that many of us should deal with the details of the textile industry with which we happen to be most concerned at the moment. But surely this is the first occasion facing any Government in this country since 1945 on which they have had a major problem of full employment. Both parties are committed—we on this side to a measure of full employment and the party opposite merely to a measure of high and stable employment. This was the occasion to inform the House by what methods, by what new techniques and new instruments, the party opposite propose to deal with this problem, different from the methods which they employed with so little success between the wars. To suggest that at present we have a high and stable employment in our textile areas is obviously false.

I represent a constituency in North Wales, which is not usually considered to be a textile area. We are renowned for our slate quarries, for our beautiful scenery and for our hospitality; but in fact in my own constituency there are at this moment upwards of 5,000 rayon workers either unemployed or on short-time or facing a prolonged holiday without pay over Easter. We have also in North Wales, on a smaller scale, our woollen industry which is facing difficulties too.

I do not wish to be parochial in this matter, but before the war we were urged to modernise the Welsh textile industry. It is only small, but for its own locality it is important. The industry in my own division did precisely that. It modernised itself, became up-to-date and went into the fashion market. In other words, it went out on to the high seas and did not remain just a coastal vessel. Now it faces the full blast of world conditions.

This problem is being dealt with by the firms concerned—and I should like to pay them this tribute—with the greatest consideration, in that they have been doing their best to meet the immediate interests of their employees. The fact remains that we have some very difficult problems here to which, in my opinion, the right hon. Gentleman did not offer adequate solutions.

In the woollen industry, the primary difficulty has been the question of fluctuations in prices. The advice that I am given from the persons with whom I have consulted on this matter is that the woollen industry is not in such a desperate position as cotton or rayon—the outlook is somewhat more hopeful—but it is going through a very painful process of readjustment after the fantastic boom in world wool prices last year, and the revival of trade depends upon a firm basis for finished cloth and wool prices.

That is a major problem. It is not a national problem; it is an international problem, and I do not feel that we have had from the right hon. Gentleman evidence of sufficiently profound thought upon this matter. It is not a new problem. It has occurred before and will probably occur again, with extremely disturbing effects throughout the world. Have we any new thoughts on this matter—anything fresh to offer which is different from the policy of alternate booms and slumps pursued between the wars—or are we defeated by it?

In rayon and cotton we seem to have a very serious problem. It is not just a matter of raw material prices and how to deal with them; it is the more difficult problem of the whole level of distribution and consumption in international trade. Again, what are the proposals which the right hon. Gentleman is considering? What conclusions has he arrived at? As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) put it, what is he considering as a solution of this international problem, which is affecting not only the workers of this country but the workers of the world? Have we had from the right hon. Gentleman tonight a clarion call to the world to try to get together and solve this problem? I find that completely lacking in his speech.

Turning to the home position—because there, after all, the matter is more within our own control—have we had any evidence from the Government that they have had any fresh thoughts about the methods of dealing with this problem of under-employment and unemployment when it hits this country? I should like to remind the right hon. Gentleman that when the Labour Government took office in 1945, although we did not have this particular problem to deal with, we had the extremely difficult problems of postwar reconstruction; we did not just sit down and drift with the tide. I suggest that the same constructive spirit that animated Sir Stafford Cripps when he was President of the Board of Trade should animate the right hon. Gentleman, if that is not too much to ask.

What evidence have we had from the Chancellor of the Exchequer that he, in charge of the monetary policy of this country, has shown any better appreciation of the need for a new outlook in this matter? In other words, what is the value that we are to place upon the Tory pledge that they are able and prepared to maintain a high and stable level of employment?

Mr. S. Silverman

What does "a high level" mean?

Mrs. White

That is another matter which my hon. Friend can press when he catches the Speaker's eye. Surely we are entitled to have some evidence that there is some fresh method of approach. Instead of that, what have we had? We have had evidence that the Conservative Government are still using the indiscriminate weapons of monetary policy, about which we on this side of the House have always complained; that they cannot take into account any particular social or economic difficulties.

If we take the Bank rate and the restrictions on credit, for example, there may be arguments for them in general terms. But how, then, does Her Majesty's Government meet the position mentioned by hon. Members on both sides of the House, when one has whole communities depending upon one industrial unit? The criterion of this form of monetary policy is a financial one, but there are other criteria—social and economic—and if the criterion is purely a financial one, one cannot make allowances for the condition of certain industrial units. That applies in areas where, for one reason or another, there is no opportunity of shifting labour from one occupation to another. My constituency is a case in point. No work is available in the townships of Flint and Holywell, other than in the textile industries, on which the people are dependent for a livelihood.

A large enterprise with resources may be able to carry on for a fairly considerable period, but the financial stability of smaller enterprises may not be so great, and they may need extra financial help. Nevertheless, the disastrous effect on the workpeople is just the same whatever the financial status of their employer. How do the Government propose to deal with that? If they are to use monetary means alone, how do they bring the social factors into their economic planning?

We believe that the Chancellor of the Exchequer ought to have taken a different attitude towards Purchase Tax in the present situation of the textile industries. In his Budget speech the Chancellor told the House that, realising that there are difficulties in consumer industries, he is proposing to keep the level of purchasing power this year similar to what it was last year. Again, this is an undiscriminating monetary method of dealing with a particular industrial problem. It is like a blindfolded man wielding his bludgeon and knocking down the good, bad and indifferent.

Why have we not had evidence from the Conservative Party, if they really are converts to the philosophy of full employment, that in their financial policy they propose to take the steps which will meet our industrial needs? By raising purchasing power in the way in which the Chancellor has done in the Budget, they have raised the purchasing power of the middle and upper classes, the people in a position to have stocked up last year with clothing, household textiles, furniture, and so on. If their purchasing power is increased in that way, the money need not go, and in the circumstances probably will not go, to help the industries which are in special need at present. It may go on wine, women and song, and that will not help the textile industry.

Although there is some belated conversion on the other side of the House, we have evidence that in the highest quarters of the Government there is not an adequate appreciation of the need to fashion the implements of economic policy to meet the difficulties with which we are confronted at the moment. I feel very strongly that as it is purely a revenue raising matter in the present situation, Purchase Tax should be taken off textiles completely or the D level should be very much higher.

The Government cannot do everything, though they can do a very great deal more than they have. Industry itself has to face these problems and find many of its own solutions. What concerns me so much in the present situation, if it is allowed to continue without far more enterprising methods of dealing with it, is precisely this.

In the last few years since 1945 we have managed to secure to a very large extent on both sides of industry acceptance of the idea that we should improve our industrial methods and do everything which is covered by the umbrella term "productivity." Anyone who knows anything of working-class psychology knows that the minute this feeling of uncertainty arises, at one blow much of the confidence upon which that spirit of co-operation was founded is destroyed. It is not only in the industries directly concerned—it is not only in textiles—that uncertainty arises. It is infectious. It spreads to the whole district. One person speaks to another and we suddenly find coming back all the old fears, phobias, complexes, and all the tightening of emotion and the restrictive outlook which we have done so much to disperse in these last few years.

We have here a problem of the most vital concern, not merely to the textile industry which is at present in difficulty, but to the whole industrial outlook of the country. For that reason I do suggest that it will be extremely disappointing to the country if we do not have a more vigorous and constructive approach to this problem than we have had from the President of the Board of Trade today.

11.38 p.m.

Mr. W. J. Taylor (Bradford, North)

It was perhaps inevitable that this debate should range more on the western side of the Pennine range than on the eastern side, and I am therefore glad to be able now to say something of the Bradford wool textile industry. Before I do so, I should like to say that the speech of the hon. Lady the Member for Flint, East (Mrs. White), and the earlier speech of the hon. Lady the Member for Blackburn, East (Mrs. Castle) contained an unfair attack on my right hon. Friend and his colleagues in the respect that both hon. Ladies seemed to imply that the difficulties of the textile industry started from the time that my right hon. Friend took office.

Mrs. White

I made no such suggestion. All that I was pointing to were the deficiencies in the approach of the right hon. Gentleman today.

Mr. Taylor

I am sorry the hon. Lady does not feel that she implied what I have just said. I certainly took her speech as implying that the difficulties of the textile industry started at the time my right hon. Friend took office. The hon. Lady the Member for Blackburn, East, certainly did say in her speech that the difficulties had become very much worse since November of last year. [Interruption.] I say that this problem, in the words of the hon. Member for Rossendale (Mr. Anthony Greenwood), is at least five years old. It is also a fact that it has been increasing in seriousness these last few months.

While we have unemployment in Bradford of a fairly serious nature, it is not as serious as it appears to be in Lancashire. We also have part-time employment that is increasing in volume. Although the situation shows no sign of any immediate improvement, I am sure that if the right methods are adopted we can do something towards the alleviation of this very serious problem. The President of the Board of Trade posed this question this afternoon: in what markets is the textile trade going to expand? He answered that the South American markets held out more hope of success than perhaps any others. He posed, also, the question as to what had happened to the traditional markets in those countries, and asked for a frank and free discussion. He has had that here today.

But I want to say this, and it is perhaps a little critical of the right hon. Gentleman's administration and his Department, as well as critical of the administration which preceded his. It is a fact that many deputations have attended on Presidents of the Board of Trade, and have pressed upon those Ministers and their advisers the necessity for looking more closely into the development of certain markets, which I shall enumerate in a few moments. Both this Government, and the last, could have been more successful in restoring those lost markets, which would largely have prevented the present trend, and I hope to be able to show that the margin they could have restored would have offset the comparatively low percentage of unemployment which has come into the industry.

Before I make my proposals, I would remind the House of the figures of our exports of wool textiles to the Latin-American countries. With regard to the Argentine, we exported in 1937 almost 13½ million square yards of woollen cloth. In 1951, we exported only 100,000 square yards. With regard to Chile, Uruguay and Cuba, whereas in 1937 more than four million square yards of woollen cloth were exported, in 1951 under a million square yards went to those countries. The case of Brazil merits the attention of the House, for there is a remarkable fluctuation of trade in the case of that country. In 1937, 300,000 square yards of woollen cloth were sent out; in 1949, nearly two million, but in 1951, the figure had fallen to 350,000 square yards.

The point I want to make with these examples is that the late Government, and this Government, should have paid more attention to commercial than to political considerations, and should they have been tougher in their bargaining?

Mr. S. Silverman

Is the hon. Member saying that the late Government, when it was negotiating with Argentina about how much meat, and at what price, we should take from that country, should have been bargaining not so much about the price we should pay but about how much of our textiles Argentina should take for the meat? If that is so, is that what he and his party were saying to the Minister of Food in the last Government when he was in the middle of those negotiations?

Mr. Taylor

I am not saying anything of the kind. What I am saying is that when the Government release sterling for the purpose of purchasing goods from this country, they should insist on a condition that the country concerned should buy our manufactured goods in return for the sterling we make available to them. I anticipated such a question as the hon. Member has put, and I would say that I am not in favour of bulk buying in the sense which he is trying to pin on me; but that there should be conditions attached to the making available of sterling for trade.

Mr. Silverman

I fully understand that the hon. Member is not in favour of bulk purchasing, but only of bulk selling. What puzzles me is how he hopes to get the one without the other. He says that if we do make a bargain for bulk purchase, it would be a very good thing to make conditions about taking in return manufactured goods from this country. I quite agree. But that is not the line his party were taking when they were in opposition and we were in the middle of these negotiations. On the contrary, they were pressing the Government not to make any conditions at all, but to take all the meat they could get at any price they had to pay.

Mr. Taylor

The hon. Member is very persistent. What I said, or what I intended to convey, was that the Government should be much more strict with regard to the conditions under which they release sterling for purchases by overseas countries, and that if they were much more strict they would be able to insist on conditions which would result in the sale of our manufactured goods to those countries. The Government of the day ought to insist on manufactured goods being taken as part of the bargain.

Several Hon. Members

rose

Mr. Speaker

Order. We must have only one interruption at a time. Mr. Dryden Brook.

Mr. Dryden Brook (Halifax)

The hon. Member talks about releasing sterling. What other sterling was there to release except what was released for the purchase of the meat? If that is the case, what is the sense of his reply to my hon. Friend?

Mr. Taylor

I was not at the Treasury. I cannot tell him the answer in terms of how much more sterling was available, but there were other things we wanted, and other things besides wool cloth that Argentina wanted from us.

Mr. John Edwards (Brighouse and Spenborough)

It is beside the point to try to compare the 1937 figures with the recent figures. Argentina, in common with a lot of other South American countries, lived through the 'thirties, a period when they could not sell their primary products to Europe or anywhere else. In sheer self-defence they built up textile industries of their own, and there is all the difference between Buenos Aires now and the pre-war Buenos Aires. The second thing is that they have built up a lot of weaving and manufacturing establishments which want yarns. During my negotiations with the Argentine, because of the sellers' market and the demand for our yarns everywhere, I was not able to offer them the yarns they wanted in return.

Mr. Taylor

The hon. Gentleman ought to know something of the subject about which he has been talking, because he was one of the negotiators, and he did not get meat from the Argentine. All I can say is that if he had wanted yarns and had come to Bradford for them, he would probably have got his orders fulfilled. I really do not follow the point of the interruption. I will admit that there is a limit to what any Government can do in these matters; but I do say that while it is necessary for a Government to negotiate, the Government ought to be tough, and ought to put our national interests first.

Nobody wants unemployment, and I think it is wrong of hon. Members to assert in the House, as did the hon. Member for Blackburn, East, that right hon. and hon. Gentlemen on this side are deliberately creating unemployment. Unemployment is not only bad for the worker, but for the employer and for the country. Therefore, I hope we shall have no more of that. We have to strain every nerve to increase our markets, and I hope that my right hon. Friend will pay due attention to the suggestions which I have made.

Reference has been made by several hon. Members to the increasing trade barriers being put up by different countries. There is an alarming increase in the number of markets where imports of our goods are coming under the most rigorous quota control. From some markets our goods are being excluded entirely. The time has come to inquire whether we are getting value for the money we are spending overseas or are giving away more than we receive. A much stronger line is required if we are to maintain our position.

Reference was made earlier to Greece. I do not intend to deal with that matter in detail, but it does seem odd that we buy currants from Greece but, when she wants wool yarns, she goes to France for them. I should have thought there was some method of controlling the sterling which Greece was using and to prevent that kind of thing.

I should like briefly to mention Australia and the import restrictions which she has imposed. In Bradford the opinion is that Australia, of all countries, ought perhaps to have given this country, and particularly Bradford, some priority, for Bradford paid the high prices for the wool she produced last year. I agree with hon. Members opposite that these high prices have contributed to many of our difficulties. I understand that negotiations are proceeding, and I hope that something substantial will be done to meet the position so far as Australia and ourselves are concerned.

I further understand that Australia is prepared to allow 20 per cent. of the old orders to be fulfilled over the next 12 months. If she would bring that 20 per cent. into the second quarter of this year it would very greatly help the Bradford trade. Then, perhaps by the end of September, we could come to some arrangement with her about the future.

The overriding question for the Government, if they expect the wool textile industry to maintain and increase exports, is to decide whether the multilateral trade policy that they are pursuing is paying off, or whether they should consider strengthening the United Kingdom's bargaining power in its dealings with foreign countries. Now is the time to consider that, when sterling is strengthening daily throught the Chancellor of the Exchequer's policy.

With an expanding population at home, we can continue to keep our people in full and regular employment and with a reasonable living standard only if we extend our markets. Selling more and more of our manufactured goods abroad, in the end, is the real cure for unemployment. The export trade bolsters the home trade, and our whole system may be strengthened if we fight for these overseas markets and secure them.

11.57 p.m.

Mr. Arthur Holt (Bolton, West)

I shall confine my remarks to the cotton trade, and I do not know whether some of them will be very acceptable to either side of the House. At least, they are a sincere expression of my views, and the situation is so serious that this is a time for us to come out into the open and be frank. There is rather a nice phrase credited to the right hon. Gentleman the Prime Minister in one of his lighter moods—"that I never know quite what I think until I have heard what I said."

Mr. S. Silverman

He does not know then.

Mr. Holt

For my part, I do know what I believe and I hope to succeed in saying it. It is essential to keep this debate in the framework of the realisation that there is a world textile recession. Everybody has done that, and I do not wish to retrace that ground.

Mr. Silverman

Will the hon. Gentleman not tell us how it came about?

Mr. Holt

Yes. There was a piled up demand after the war and textile industries quickly got going. Raw material prices went up in the beginning and then, after a few years, started to fall. When the Korean war started, the big demand sent prices up again. They have since started to come down for one or two reasons. First, people bought a lot because they realised prices were going up, but when prices went higher they stopped buying and now they will not buy until prices come down further.

If the hon. Member for Nelson and Colne (Mr. S. Silverman), is interested, I would remind him of one or two raw material prices. There are only two major raw material prices that now are less than they were before Korea. Wool "66's" before Korea were 145d. a pound and are now down to 119d. Hides at 22d. a pound before Korea are now down to 17d. United Kingdom American cotton on the eve of Korea was 33⅛d. per pound and is only down so far to 41d.

Mr. Silverman

Is the hon. Gentleman using the word "Korea" as a synonym for world re-armament, because Korea obviously had nothing to do with it? It was the sudden world-wide demand for raw materials that sent prices up. Korea did not cause that.

Mr. Holt

I do not intend to follow the hon. Gentleman on that track. He is welcome to his view if he thinks that is the case. I am talking of the prices of these raw materials just before Korea and now. The price of American cotton in the United Kingdom now is 41d. but the price of that cotton in New York, spot, today is 35¼d., so that our prices are still higher than America's.

I feel perfectly hopeful about the future of the cotton textile industry. I make no comments about the other parts of the industry, because I have little knowledge of them. The essential thing to realise is that, although there are many demands on both sides of the House for a clear statement from the Government on what is to happen in the future, I defy anybody to produce any foundation on which they can base, at the moment, a reliable estimate. Anyone who pretends he can is indulging in wishful thinking. What is essential is that if and when in the near future the world recession in the textile trade stops, it is vital that Lancashire then shall be competitive.

I should like to put Lancashire's position in its proper perspective to world trade. Before 1914 the proportion of Lancashire trade to world trade in cotton was approaching 90 per cent. It was last year only 15 per cent. That is some measure of its reduction. The total production of the cotton textile trade in the United Kingdom is only now 6 per cent. of the whole world production of cotton goods, yarn and woven cloth. It is just as well to bear that fact in mind when we are talking about our particular problem.

We are now in fact a very small part of the total world cotton textile trade. Our actual exports at the moment, as has been said, are put at about 25 per cent. I think it is actually 30 per cent. in round figures. Regarding the employment position in these areas, I can best speak for my own. In Bolton this week it is estimated that there are about 11,000 people in part-time employment or part-time unemployment, however one likes to put it. It means, so far as many Bolton firms are concerned—although I gather it is rather different in Burnley and other weaving towns—working four or three days a week.

What actually is the condition of the market at the moment? It is very varied and very complicated. Some mills are still busy and others are in serious difficulties. I spoke to the chairman of one big spinning and weaving company this week. He is making some adjustments now and confidently expects that after Easter he will again be running at full-time.

What can the Government do? They can do several things, but what can they do to alleviate the present situation? I think they can do very little, and I say that advisedly. The Government could consider the D scheme and decide whether adjustments could be made to lift the level. The Government might even decide, if the Chancellor of the Exchequer thinks he can spare the money, to scrap the D scheme so far as textiles are concerned. That would be welcomed by everyone. But the final decision there, it appears to me, is whether the Chancellor can spare the money.

As regards the placing of Government contracts, that matter has already been raised, and it is only a little drop in the Lancashire bucket in any case. But if those contracts could be placed early it would help in a small way. So far as the Australian trouble is concerned, we should remember that the buying spree was coming to an end in any case. Most manufacturers in Lancashire will say that they did not expect in the months ahead to place anything like the orders with Australia that they did during the past year.

I think the Government should make clear their attitude towards the immediate future of the cotton trade and its size. That is quite reasonable and would help to clear the air, but I would put it this way. They should make it clear whether they wish Lancashire to go on and earn its own living in the world, and if Lancashire is given the chance it can do so. But if the Government decide they would sooner have these people in engineering now, and that there is plenty of scope in engineering, they should also indicate that. I hope they will not indicate that, and I do not think there is any need for it.

I think Lancashire can earn its own living if—and on that "if" I wish to put several points. The Government should make it plain that there is no intention to protect Lancashire industry from fair world competition. I have been a little alarmed today at the way in which hon. Members have been talking about trying to break down the barriers of trade and in the next breath saying that we must keep Japanese stuff out and keep somebody else from going into the Colonies but that everybody must let our goods go through. It is extraordinary to me how people have asked for discussions with the Empire and other countries to force down these barriers and then have suddenly stopped. Nobody ever seems to mention the words "free trade."[An HON. MEMBER: "No."] All right, we will see.

Surely it is essential that while the Government continue with their efforts to make the £ convertible they should provide sufficient dollars to buy an adequate amount of dollar cotton. That provision would have an immediate effect in bringing down prices of many other qualities of cotton that can be used in place of American cotton. It is essential also that the Government should alter the arrangements for buying raw cotton, to provide the consumer with an opportunity to obtain regular supplies of quality cotton at world prices and to influence prices by his purchase or refusal to purchase. Those conditions do not exist at the moment, and that is one of the reasons for the high price of raw cotton.

It is very necessary to stress that the future of Lancashire largely rests upon quality. We cannot pretend that we can compete with the cheaper goods coming from Japan. That quality must be not at the high levels only but at all levels, and to produce that quality Lancashire must be enabled to buy regular supplies of the type of cotton it requires.

Probably most important of all in this problem is the over-all policy of the Government. It is of vital importance that the Government should get on with the job of making the £ convertible and of forcing down the barriers of trade throughout the world. If they do not do that, the House must realise that trade must come to a standstill and that there is no future for us other than complete stagnation in every country.

I should like to conclude on this note—that in the 1930's Lancashire trade was on its knees or, colloquially, on its uppers, and my impression is that now it is very much on its toes. I should like to draw the attention of hon. Members to what I consider a very reasoned and admirable speech which was made yesterday by the President of the Master Cotton Spinners' Association in Manchester. The most interesting feature of the speech was its spirit. The President said that there were two solutions to these problems. First, there is the restrictive and defensive attitude which thinks only in terms of cutting down and contracting. … Secondly, there is the strong and fighting attitude of an industry which is prepared to go out and win, as it has won before. It makes me angry when people who should know better talk as if we had no competition to face before the First World War. We faced and beat competition from America, from France, from Germany and from a dozen other countries. We can do it again.

12.15 a.m.

Lieut.-Colonel Sir Walter Smiles (Down, North)

This debate today carries me back to the time when I first entered the House, when I had the honour to be the Member for Blackburn. I can remember many debates, much the same as this, which then took place on the textile situation, in one of which one of the former Members for Nelson and Colne said: "Lancashire is listening to this debate with tears in its eyes," The hon. Member for Bolton, West (Mr. Holt), at any rate, has reassured us that there are no tears in Lancashire's eyes today; there is a real fighting spirit.

The hon. Gentleman did mention free trade. I believe a great many people in this House are in favour of free trade; but not free trade for this country only. If it were to be free trade more or less all over the world, that would be a different matter; but the textile industry in a great many countries has been built up into competition with us behind protection.

Mrs. E. M. Braddock (Liverpool, Exchange)

By British capital abroad.

Sir W. Smiles

Do not think that people in India have no capital. There are far more millionaires in India today than in this country.

Mrs. Braddock

British capital in Malaya.

Sir W. Smiles

I can remember that during the slump in 1931, outside a mill in Blackburn, an overall was shown to me by the manager, and he said: "If we got the cotton for nothing we could not manufacture at a price to compete with Japan."

I was in India in 1947, and I saw that the people then were terribly short of cloth. It is a custom there—just as we give presents at Christmas time—for Indians to give their wives and children presents of cloth in the spring, at the Fagooa Festival and in the autumn at the Durga Festival. There were several strikes in India because this cloth could not be obtained at any price, even if aeroplanes were sent right to the manufacturing districts. It is a different matter today. I get no complaints from India, and I understand there is plenty of cloth available now.

The hon. Member for Burnley (Mr. Burke) raised the question of Japanese trade marks. I can remember very well that one of the larger cotton firms—I think it was Tootal, Broadhurst & Lee—complained bitterly several times that the Japanese were taking their trade marks and imitating their goods within a few months after they had been shown at the British Industries Fair and elsewhere. There was a match factory in Japan which was named "England" by the then Japanese Government, and every box of matches sent out from that factory was labelled "Made in England."

The hon. Member for Bolton, West, referred to competition before 1913. I can remember going out first to India in 1904, in a steamer with Lancashire cotton men, and they were "on the pig's back" and practically owned the ship because they had command of the industry all over the Far East.

Afterwards, India competed with Lancashire, and later on Japan beat India in competition. I believe that one of the reasons for the Japanese-Chinese war in the 30's was that if Shanghai, Hong Kong and other parts of China had been left alone, they would have beaten Japan in this trade.

Competition exists all over the world. It is no good pretending that an ill-wind does not blow anybody any good. Great numbers of people in the Far East cannot afford high prices for cotton, and they depend on the cheaper sorts, made by Japan and India, for the clothes which they wear every day. Japan actually supplies that need.

The matter which principally concerns me is Ulster linen. Only a few months ago a lady in Ulster was sending a sheet to the laundry and she remarked to the girl who was helping her, "Look at that sheet—made in 1886."The girl gave the good answer, "It is time enough now to replace it." Linen has the disadvantages that it is the most expensive fabric and that it is the most durable. It lasts far too long when sheets made in 1886 are still standing up to our laundries.

The Huguenots who came to Ulster after the massacre of St. Bartholomew nearly 400 years ago would be very surprised to find that the greatest single export to the new world is linen. It is even greater than the export of Scotch whisky. In the last year the linen industry in Northern Ireland got five million dollars from the U.S.A., and in our best year we have got, in round figures, £500,000 sterling from the Argentine and £1 million from Australia.

Everybody desires to speak of Australia with great respect. Many hon. Members must have served with the Australians in one world war or the other, and we know their feeling for the Mother Country. We know that we should not have had this trouble about contracts if Australia had not been in very dire financial straits, and we hope she will very soon recover.

Some six months ago we had only 6 per cent. of unemployment in the Ulster textile industry; today we have 12 per cent. I had a telegram from the Belfast Chamber of Commerce this morning saying: Unemployment in textiles increasing. Outlook not good. Approximately 20 per cent. looms stopped. Only about 40 per cent. on full-time. Some anomalies in D scheme should be dealt with quickly.

Hon. Members

Hear, hear.

Sir W. Smiles

I am not the first hon. Member today to have mentioned the D scheme.

Several linen manufacturers came to see me the weekend before last to complain about the D scheme. It seems that manufacturers who were making a decent living and keeping their employees occupied were very badly hit when some goods which were not bearing Purchase Tax were taken out of the Utility scheme. I bring this to the notice of the President of the Board of Trade so that he can see that not only Lancashire has been hit as a result of that.

Buying has stopped all over the world and the textile pipe-line is full. That is what has brought about the present depression. My four suggestions are these. The first concerns the Lancashire Cotton Exchange. It would be a good thing if it were re-opened. [HON. MEMBERS: "Why?"] Because I believe that manufacturers could then go, as in the old days, and buy exactly the quality of cotton they want for the goods they are going to produce. It also provides a hedge for them. If they are selling forward they know where they are.—[Interruption.]—I think we will leave it at that.

My second suggestion concerns the convertibility of sterling. I agree with the hon. Member for Bolton, West that this should be our aim. Convertibility would help the trade and efforts of the people of our island. My third recommendation is for Imperial Preference. That is the one thing we should go for all the time. The South American market has dried up very badly. I do not know the reason trade with Argentina has suffered. We are ready to buy Argentine products. We used to have a very good market there. There is no doubt the United States have helped the linen trade, and they have not been so harsh in their tariffs after this war as they were before.

The right hon. Member for Bishop Auckland (Mr. Dalton)—and he is an important person—advised the country and the world not to buy. I am not suggesting that the whole of the slump is due to the right hon. Gentleman, but at any rate, sitting on these benches, if one looks at the coats of my hon. Friends they are like mirrors. You get a shock when you see your face, and I suggest that it is time that all of us, and our wives also, bought some new clothes.

The question arises whether this is a slump, a depression, or a temporary recession. That question can possibly be answered by asking whether we should put our own children into the textile industry today. I am doubtful if it would be wise, unless they emigrate to Canada or Australia, where eventually a lot of people in this island are going to go, 50 million people are going to find it very difficult to earn a good living in these islands.

Not enough encouragement is being given today to the installation of new machinery in industry. Some of the provisions of Finance Bills of recent years have not been encouraging. Take a firm like the Lancashire Cotton Corporation, which was built up between the years 1930 and 1939. New buildings were erected and new plant installed, and this was all possible under liberal taxation principles introduced by a Coalition Government.

I do not want to tell a fairy story by suggesting that all our troubles would be solved by exchanging our surplus textile goods for Russian grain and timber and, much as I admire the President of the Board of Trade, I do not look upon him as a magician or even a hypnotist. I do not believe any Government can run any industry. I do not think they are capable. I am a firm believer in private enterprise and hard work. But still I think the President of the Board of Trade can do something to help and not to hinder, and I hope that this debate will enable a clever man like him to separate the wheat from the chaff, to profit by the good advice given to him, and to do something for the great textile industry of this country.

12.29 a.m.

Mr. F. Blackburn (Stalybridge and Hyde)

The hon. and gallant Member for Down, North (Sir W. Smiles) will forgive me if I do not follow him on the question of the linen industry of Northern Ireland, except to say that if he is still using sheets dating back to 1886 I do not think he is making his proper contribution to the linen industry of Northern Ireland.

I am very pleased that we are having this debate and hope that something concrete will emerge from it. My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), in an excellent speech, set the tone for this debate; and that was followed by the President of the Board of Trade who, I think, slipped once when he became somewhat partisan, trying to make political capital out of certain contracts placed abroad in the past year. I think that he might have told the House that when those contracts were placed abroad, firms in this country had been asked to tender, and that the contracts were placed abroad with the approval of the industry. [An HON. MEMBER: "He said that."] Well, if he said that, I missed it; but I thought he was trying to indicate that something was done when my party was in power which would not have been done if his own had been in office.

Mr. F. P. Bishop (Harrow, Central)

I think that it ought to be made clear that he said that the reason the orders were placed abroad was that the manufacturers were full up.

Mr. Blackburn

If the President said that, I did not hear him say it; but I am not going to adopt this morning the attitude adopted by the Opposition of a previous administration, when everything that went wrong was blamed on the then Government. I am not going to blame the present Government because there has been a recession in world trade. The present Government will not be judged on that fact—which they could not control—but upon the way they deal with the crisis of the present time. Governments come and Governments go, and this will be one of the Governments which goes; but it is the Government, and it is to them we look for action. We do not expect them to solve all the problems of the textile industry which, if helped, can solve its own.

As Sir Raymond Street, when addressing the Cotton Board's conference at Harrogate in October, 1951, said: I do not believe that our ultimate destiny depends on what the Government does for us, but more upon what we do for ourselves; but, all the same, it is important that Government policy should be such as to create conditions in which our energies, our resources and our enterprise can yield a harvest of success. I should like to come to the speech of the President and express disappointment that he did not put forward more concrete ideas. He said that he would deal with the action taken by the Government. I listened carefully, but the only two items of action I discovered were the appointment of the Hopkins Committee and that the right hon. Gentleman had visited industries in the North of England.

It is right and proper that the President should make himself acquainted with conditions in the industry and get in touch with industrialists and trade unions, but we expect a little more to emerge from these discussions. We want some action to be taken. If we ask the Minister of Labour about the position in the textile industry he will tell us that he is in close touch with the President of the Board of Trade; if we ask the President he will say that he is in close touch with the Minister of Labour. We want something more to emerge than that. Throughout his speech I can find no other evidence of the action the Government have taken.

He then went on to deal with the problems that faced him. The first was that of raw materials, and that, he said, was why he appointed the Hopkins Committee. I am not going into the question of the purchase of raw cotton, as I prefer to leave that till the Committee has reported. But I would remind the House that when there was a quick rise in the price of raw wool and stockpiling took place, a suggestion was made from America that the solution was bulk buying and guaranteed prices for a number of years.

The right hon. Gentleman's second problem was prices, price control and utility. Because of the growing complexity of the utility scheme and certain complaints from other countries, the late Government appointed the Douglas Committee. Unfortunately this Government have been in too much of a hurry to accept the Douglas Report and in fixing D levels without the full consultation and consideration that should have been given to the matter.

I have been very pleased tonight to hear so much agreement from both sides of the House that the D line must be altered, or that as a temporary measure Purchase Tax should be removed. In the Budget debate last week I asked the Chancellor of the Exchequer if he would consider removal of the tax as a temporary measure, but I got no answer. Now that the point has been pressed by hon. Members on both sides, I hope that a little more attention will be given to it.

The third problem that the President said faced him was the world-wide decline, and I should like to take that in conjunction with the next two—the buyers' market and competitive efficiency. I do not want to under-estimate the importance of the world market to us, because if we lose the world market now we lose it for all time; but I would remind him that 75 per cent. of our trade is home trade, and therefore we must see that we have conditions in this country which will help us to maintain a high level of production for home consumption. The restriction in purchasing power of a large section of the community is not going to help the textile industry.

The Chancellor of the Exchequer tells us that it is an incentive Budget and that he has removed Income Tax from certain sections of the community. But what about the millions at the bottom who were not paying Income Tax before and who now have added burdens? They are going to find it still more difficult to purchase in the near future.

The next problem was the increase of unemployment. The President of the Board of Trade quoted for the textile industry an unemployment figure of 5 per cent. and a figure of 2 per cent. for the rest of industry. That figure was given in the "Financial Times" yesterday. I would not advise the President of the Board of Trade to suggest to the textile workers of Lancashire and north-east Cheshire that they do not need to worry much as there is only 5 per cent. of unemployment among them. They will tell him whether it is 5 per cent. or not. The hon. Member for Rossendale used the figure of 70,000, and I think it is generally accepted that throughout the textile industry unemployment is running at about that figure.

The problem does not end there. With the growing unemployment, we get a new spiral. In the past, there was a good deal of talk about the spirals of wages and prices chasing one another. Unemployment brings restriction of purchasing power. This creates more unemployment, and so the spiral goes on. When unemployment stands at 70,000, it is not only their purchasing power which is restricted. They all have dependants, and one can count at least two dependants per unemployed person. The purchasing power of about 200,000 is affected. Those are the problems facing the President of the Board of Trade and to which we have to apply our minds.

Let us hope that after this debate we shall have some idea of what help can be given to this industry; not that we expect the Government to solve all the problems for the industry, but we do expect them to take certain steps which will be helpful to the industry.

I want to refer first to Australia and other Commonwealth Governments. Like other Members, I do not want to say anything which might be critical of Australia without knowing the full facts. Last week I asked the Chancellor of the Exchequer to give us more detailed information about what took place at the Commonwealth Finance Conference in January. We have had no information about that conference that allows us to judge whether the decisions then taken were sufficient to solve the problems of the sterling area. The Chancellor of the Exchequer had this to say about the conference on 29th January: Expansion and development of the great resources which each of us commands are the only real and lasting remedies, and I must say that our imaginations were fired by the extent of these resources in the overseas dependencies and in the Commonwealth as a whole. A little later on he says: But there will be no future unless the sterling area can overcome the immediate and pressing difficulties which face it. The whole foundations of our trade, and, therefore, our existence—the central reserves—must be preserved and must be built up again. In other words, the sterling area as a whole, and not only this country, must face up to the basic need of paying its own way. To all of us in the conference it was clear that, unless the sterling area paid its way, the stability of our currency would be undermined, with great loss to ourselves and to our friends outside, and therefore, we were all agreed that we should not spare ourselves at all in taking whatever action was necessary to put the whole area firmly back on the road to complete recovery."—[OFFICIAL REPORT, 29th January, 1952; Vol. 495, c. 46–47.] The surprising thing is that only two months after that speech this action was taken by Australia.

The important thing is that the sterling area must work together. The policy must be co-ordinated, or the sterling area might disintegrate, with disastrous effects to every member of it. That underlines the importance of calling a Commonwealth conference. On Monday the Prime Minister told us that there was no evidence that Australia's action had caused unemployment in the textile industry—that was the excuse for not calling a conference. But nobody has suggested that. Nevertheless, that action is one of the additional factors that the industry has to worry about. The Commonwealth must work together and consider the sterling area's problems as a whole.

Secondly, the Government should take more positive action in international co-operation, not only to stabilise prices but to widen world markets. Action by one country can disastrously affect the economy of others. For example, American stockpiling had disastrous effects upon the economy of this and other countries in Western Europe. In the conditions under which we live, there must be more international co-operation, and I ask the Government to take the lead.

Thirdly, there is the question of Japanese and foreign competition. The Japanese must live, and they are faced with an exporting and importing problem like ours. But we have had plenty of examples of unfair competition, and the Government must be alert to act when that emerges again. We have seen in this House copies of goods produced in this country, and possibly other speakers will refer to them tonight. We are not saying Japan must be prevented from trading, as one of the Bolton Members seemed to suggest. I should like to see a liberalisation of a good deal of world trade, but when we are fighting for our lives we must consider ourselves first. It is going to be necessary for the Government to impose quotas so that the textile industry of this country can recover.

Fourthly, I touch on the placing of defence contracts. The President of the Board of Trade said that not very much could be done, but whatever is done would help the industry now. Some contracts have been placed and others are to be, and the suggestion made by the hon. Member for Rossendale was that the placing of contracts should be expedited. What can be done to help the industry, must be done.

I warn the Government to show no complacency about unemployment in this industry and think it can be swallowed up by the re-armament programme. If we lose the labour force in textiles now, we shall have lost it for all time. As has already been said, the labour force has been built up again in the past few years. One of the directors of a textile firm near my constituency was speaking to me in the House today. He said that one of the great changes recently was that they were getting back to the industry boys of 15. If we allow unemployment to continue, if there is a greater recession still, and if we look with complacency on it and allow them to go into retirement, we shall never again get back confidence in the industry.

My next point is the question of credit restriction. The Government must look at this problem again. The industry needs the help of the Government. Their policy, by raising the Bank rate, is to restrict credit. Whatever their general policy, the industry is now fighting for its life and requires all the help the Government can give it. Again, on capital investment, there should be a removal of the restriction. We must make the industry as efficient as possible and allow new machinery to go in.

My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) referred to machinery being sold to America which should be going to our own factories to improve efficiency here. We can carry this idea of exporting capital equipment too far, so that we build up the industries of all other countries abroad to the detriment of our own.

The President of the Board of Trade referred to Arkwright. Hargreaves, and Crompton, whose inventions gave such a start to the industry, but the unfortunate position is that at the present time inventions like theirs would not be used in this country but would be exported to other countries. We should still be left with the old hand-loom weaving. We are partly responsible for having built up these industries in other countries, and the Government should look into the problem. It is said that if we do not export textile machinery other countries will, but let us see that our own industries are equipped as efficiently as possible.

I call for the greatest consultation and co-operation between every section of the industry. There must be a joint effort between Government, employers, and employees. I should like to see the greatest measure of consultation between employers and employees in every factory in addition to the general consultation which takes place. I appeal to the Government to call a conference of Government, manufacturers, and trade unions, not only for the cotton industry but also for wool, silk, and linen. It might even be worth while calling in one or two Members of Parliament. We should see if we cannot work out some solution for the difficulties which are now facing the industry.

12.55 a.m.

Mr. Cyril Osborne (Louth)

My only excuse for taking part in this debate is that I am a director of a number of textile companies. The hon. Member for Stalybridge and Hyde (Mr. Blackburn) said that he did not blame the Government for the world-wide slump but that this Government would be judged on how it handled the problem at home. I think both statements are perfectly fair. A previous Opposition Member said that the position was very serious, much more serious than most people in this country realised. I think that is profoundly true. Unless they are very lucky, I think that every exporting industry will find themselves in exactly the same position as the textile industry are faced with today. We are facing what I would call a crisis in the world capitalist system, and we either stand or fall on the way it is handled and the measures taken here and in America. [An HON. MEMBER: "The hon. Member will soon be on this side of the House."] I have much more sense than that. At least on this side of the House we are prepared to face facts, whether they happen to please the party extremists or not.

The hon. Member for Rossendale (Mr. Anthony Greenwood) opened this debate with a most reasonable and well-informed speech. He made only one bloomer, and it was a bad one. He was pleading that the Government should use their powers when negotiating with people like the Argentine to see that the Argentine bought more textiles from us, when we were trying, for example, to purchase meat. What he could not see was the face of his hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) who, when he was Economic Secretary to the Treasury, had the responsibility for those negotiations. He should have seen the face of his hon. Friend when he made that extraordinary statement.

The hon. Member for Brighouse and Spenborough knows quite well, and I hope he will tell his hon. Friends, that he could not get the Argentine people to buy our finished textile products. They were not interested. They can make their own stuff. What the Argentine required from us was coal, petroleum, tin-plate and steel, none of which we could supply in adequate quantities or at the right price. Hon. Members should get hold of the facts.

I speak as one who is interested in one of the smaller sections of the textile industry, the hosiery trade. Hon. Members opposite may be interested to hear one or two facts. It is just a year ago this week since wool touched its highest price. A year ago what we call 64's wool, the best quality, was costing around 34s. 6d. a pound. Today we are buying it under 12s. In those days, as the President of the Board of Trade doubtless knows, deliveries were so difficult and trade was so uncertain that the trade was having to contract, not for the normal three months ahead to get delivery, but for nearer 12 months ahead.

The industry has round its neck—and the Chancellor will discover this when he wants the tax next year—contracts at 30s. and over. Yet we are pricing to try and sell at home and abroad on the basis of 12s.; and no Government can alter that. Hon. Members should get hold of these facts first before they ask the President of the Board of Trade to do things which I believe neither he nor his predecessor could possibly do.

Mr. J. Edwards

Does not the rate of interest have any bearing upon carrying this financial burden?

Mr. Osborne

I will give the hon. Member that point, but it does not make all that difference between 34s. 6d. and 12s. a lb. when one has, say, 250,000 contracts to face.

Mr. S. Silverman

rose

Mr. Osborne

No, I will not give way. The hon. Member has more than his fair share of the time of this House. He is not a Socialist in that respect, to the extent that he does not believe in fair shares. Hon. Members opposite have criticised, and many of our constituents criticise, the alteration in the Utility scheme.

Mr. E. Fernyhough (Jarrow)

Hear, hear.

Mr. Osborne

That shows how little hon. Members know about it. Utility scheme schedules without specifications are utterly useless. I am not blaming the Socialist Government but asking Members of that Government the economic facts of life. After Schedule K, in the hosiery trade there were no specifications at all, except for nylon stockings. In Schedules L and M, which were issued while the party opposite were in power, there were no real safeguards at all for the general public in the utility scheme. If we are to have a Utility scheme as we understood it during the war, we must have specifications to which garments must be made. Without those specifications it is a Utility scheme in name and not in reality.

There are four points I want to make as shortly as I can, because many hon. Members wish to take part in this debate. The first is that this problem in the textile world, which from the point of view of employment shows up worst and in its harshest form in Lancashire, did not start, as some hon. Members have implied, when this Government came into power. I recommend hon. Members to examine the Economic Survey for 1951, published by right hon. Members opposite. Paragraphs 100–103 of that Survey show quite clearly that the textile industry would face the gravest and most difficult times in 1951.

No one suggests that world conditions today are easier than it was then believed they would be. Of course not. The previous Government said, on page 45, paragraph 128, of that Survey: The account given in this Survey of the United Kingdom's economic prospects in 1951 is in many ways harsh and unpleasant. The Survey goes on to say: Even so, many of the assumptions on which it is based may well prove to have been optimistic. That is what the previous Government said over a year ago. This problem of manufacturing textiles and being able to sell them abroad at a reasonable price was obvious to the previous Government 18 months ago. The only point I am making on this is that it would be unreasonable to put all the blame for the present crisis, acute as it is, on to the present Government. [HON. MEMBERS: "Nobody has done so."] That has been inferred, if not said.

Mr. W. R. Williams (Droylsden)

The hon. Member is trying to shoot down his own clay pigeons.

Mr. Ronald Williams (Wigan)

The hon. Member has made a statement quite clearly to the effect that it has been asserted that the causes of the trouble in the textile industry lay at the door of this Government. Will he indicate which hon. Member has said that in this debate, or even suggested it?

Mr. Osborne

Quite easily. I have the exact words here. The hon. Lady the Member for Blackburn, East (Mrs. Castle) said, "This Government is deliberately reducing the standard of life by the policy it is pursuing in the crisis"—

Mr. R. Williams

That is not saying that it is responsible for the world crisis.

Mr. Osborne

One hon. Member is a Bevanite and the other an Attleeite. I recommend hon. Members opposite who will not believe that this is not a purely British problem to read the United Nations Economic Review for 1951. It says: Unemployment in the textile and clothing industry was higher than a year ago in nearly all countries for which figures are available. So it is quite clear that our problem is part of the world problem, and we are not going to cure it in isolation from the rest of the world.

Hon. Members should bear in mind that the textile supremacy which we enjoyed before the war has gone for ever. The Economic Review was that, taking 1938 as 100 per cent., the volume of textile production in Western countries works out for last year approximately as follows: Ireland and Norway, 203 per cent.; Belgium, 177 per cent.: Greece, 174 per cent.; Finland, 169 per cent.; Denmark, 166 per cent.; Hungary, 156 per cent.; Sweden, 146 per cent. and the Netherlands 146 per cent. Then we come to the United Kingdom—116 per cent.

So the traditional markets that we enjoyed have gone because, as this Survey says, It is extremely unlikely that these countries will be able to develop textile exports on a large scale. … This prospect carries with it the danger of a revival of textile protectionism in the smaller countries, which, in turn, will make the great European textile producers still more dependent upon exports to other overseas areas. Hon. Members opposite have spoken many times about what we should do to protect our country from Japanese competition. There are two aspects to that. One is that we have not yet felt the full force of the Japanese competition that we shall have to face. At the moment Japan is employing only 5½ million spindles, whereas her capacity pre-war was 13 million. She lost 80 per cent. of her spindles during the war, and so practically the whole of her industry will be modernised and up-to-date. If we find it nearly impossible to live with the Japanese competition today, what are we to do when the Japs really get back into the full tide of their trading?

Hon. Members say that we should protect Lancashire against them. When we talk about the undeveloped peoples, the Opposition cry out that we should do all we can for the Asiatics. Shall we help them by denying them the right to earn their own living? If hon. Members opposite wish to protect Lancashire from Japanese competition, to that extent they prevent the Japanese from earning their own living.

We have an income per capita of 774 dollars; the Japanese an income per capita of only 100 dollars, a little more than an eighth of ours. The Japanese textile worker works for 7½d. per hour compared with the Lancashire worker's 2s. 7d. If we take steps to prevent the Japanese from selling their goods in favourable or reasonable conditions, we prevent the Japs from getting a decent standard or anything like the standard which our own people enjoy.

Mr. Harold Davies

Then open China.

Mr. Osborne

It is not within our power to open China.

Mr. Davies

Why not?

Mr. Osborne

Because we do not control China. That is quite simple.

Mr. Davies

Of course we do not control China, but we seem to have a lot to say in the control of policies which encourage the closing of China and stopping the very kind of thing of which the hon. Gentleman is a protagonist, namely, opportunities for free competition. We ought not to agree with the American policy of closing the Chinese market to Japanese trade.

Air Commodore Harvey

Does my hon. Friend agree that for two years we have had a British Government representative in Pekin—

Mr. S. Silverman

The hon. and gallant Member can find his own answer.

Air Commodore Harvey

—and that he has yet to be recognised? This country has done its level best to trade, but unless one's Ministers are recognised one cannot make any progress.

Mr. Silverman

The hon. and gallant Gentleman has not helped his hon. Friend.

Mr. Osborne

I shall never need any help from Nelson and Collie until the constituency gets a new Member of Parliament.

I now leave cotton and turn to wool, in which I am more closely and personally interested. When the war ended, the Joint Organisation had 10 million bales of wool which had been accumulated during the war, and it was its task to market those surplus bales, as they were regarded, in an orderly and reasonable way.

It was thought that it would take 13 years to market that accumulation, but it has gone, as far as we can tell, within five years. So it is reasonable to say that the world has purchased—not consumed; I do not believe that it has been consumed—the annual world clip of wool plus two million bales per annum of these war-time reserves. Is my right hon. Friend sure that great quantities of those J.O. reserves were not purchased and put on one side as a currency hedge by people in Western Europe? Is the right hon. Gentleman sure that part of those reserves are not now coming on to world markets and are partly responsible for the slump?

It is of the greatest importance to us in the wool industry to know, because I believe it to be fundamental in regard to wool and cotton, that people throughout the world will not start to buy again until they have some confidence that the raw materials have touched bottom and that there is going to be stability. They purchased in great quantities a year or 18 months ago because every time they opened their newspapers they read that wool was going up, and so naturally they bought and put away good stocks. They will not purchase today when they see that prices are going down and down.

There is no cure for the world textile problems unless there is stability in raw materials in world markets. Has the right hon. Gentleman any knowledge whether these war-time accumulated stocks have really been consumed? Or are they still coming out from those countries which, I believe, purchased them as a hedge against currency inflation?

Lest I give hon. Gentlemen the impression that I am a complete Jeremiah and defeatist, I would remind them that the world population is growing at the rate of 25 million a year and that the coloured peoples are demanding a higher standard of life. Therefore, if only there could be some stability given to world commodity prices, I believe we could turn from the present state of world markets to better times.

Mr. Harold Davies

That is planning.

Mr. Osborne

I do not care what it is as long as it produces good results. It is this psychological attitude of the purchasing public towards world prices that is going to give us the turning point in our industry. It is not Government action on isolated points. Given world stability of commodities and restored public confidence, half our troubles would be over.

1.17 a.m.

Mr. H. Hynd (Accrington)

I think it was rather unkind of the hon. and gallant Member for Down, North (Sir W. Smiles) to remind his colleagues that the last time this subject was discussed was in the bad old days of Tory Government before the war. He said that in those days people in Lancashire were thinking of the debate with tears in their eyes. I think they will have more than tears in their eyes when they read that he believes that the reason for the collapse of world markets and the restrictions imposed in Australia and South Africa, and all the other consequences of the crisis we are discussing, was the speech of the right hon. Member for Bishop Auckland (Mr. Dalton). But it really is depressing that we are back discussing unemployment in Lancashire.

Many Labour candidates were chided during the General Election for talking about this subject. They were told in the Press that unemployment was a thing of the past and that they had no right to turn people's minds back. Yet here we are, having said good-bye to full employment discussing this depressing subject.

The hon. Member for Heywood and Royton (Mr. Sutcliffe) pointed out, for the most part, that Members on both sides have treated this subject as if this were a Council of State. I am bound to say that I thought my hon. Friend the Member for Rossendale (Anthony Greenwood) was far too kind to the Government when he opened the debate. When the hon. Member for Louth (Mr. Osborne) took up that unusually reasonable tone—unusual for the hon. Member—and said it was unreasonable to blame the Government, I found myself trying to imagine what would have happened had the role been reversed. What kind of speeches would hon. Members opposite have made against a Labour Government, led, no doubt, by the President of the Board of Trade in great form? They jeered when we on this side talked of trade recession, and had we been in power hon. Members opposite would have told us today that the trouble was all the fault of the wicked Government.

Lancashire is not so much in a mood of bravely facing a temporary recession; it is thoroughly alarmed, and with good reason, at the trend of events. The people of Lancashire see the spectre of mass unemployment, of the dole queues forming again, and the return of the soup kitchens and the pawnshops; and in this connection. I think that the President should drop the talk about this figure of 5 per cent. unemployment. That is perhaps the figure on the books, but the hon. Member for Burnley (Mr. Burke) and others have explained how false it is; and it only causes annoyance to the people of Lancashire because they know only too well that to say that unemployment is only 5 per cent. gives an entirely wrong impression. It gives the impression that those who talk in that way are taking the matter with far too much complacency.

We have some half a million people dependent on the cotton industry for a living, and hundreds of thousands more in other ancillary branches of the industry. The population in the industry is unfortunately much below what it used to be, and I have some figures showing how the insured population fell from 497,901 in 1929 to 248,890 in 1947, which is more than a 50 per cent. drop. In North-East Lancashire, where my constituency is situate, the fall has been even worse; from 155,981 in 1929, to 62,837 in 1947—which is a drop of nearly 60 per cent. Those figures, I suggest, put a different aspect on the argument we have just heard from the hon. Member for Louth, who was comparing the increase in production of various countries, including our own, from 1938 to the present day.

In 1938, the number of insured workers in the British textile industry had already fallen considerably, and that point should be taken into account when comparing the figures. The right hon. Gentleman also drew attention to the concentration schemes operated and operated very effectively during the war. They operated so effectively that they cost the industry about a third of its labour force.

There are three other peculiar features about the population of north-east Lancashire. First, 42.2 per cent. of the insured workers are women, as compared with 37.1 for the whole county; and that is one thing to bear in mind when one talks of shifting workers from one employment to another.

The second feature is that unfortunately a large proportion of the younger workers are not staying in the area. They are leaving because the industry seems to them to be dying, and they are finding jobs elsewhere, with the result that an elderly age-structure is being created which is not good for the economics of the district.

The third feature is that there is just outside that area a new developing industrial district around Preston and Leyland, to which, I am told, 2,300 male workers go every day. As soon as they can find houses in this new district they are going to move their families, which will mean more women workers taken out of the industry, thereby depleting the labour force still further. It may be that is part of the Government's plan but, if not, I hope they will take that into account when considering this problem. The local authorities are gravely concerned about it, because it is facing them with many new and serious economic problems.

I should like to mention also the position in conditions of unemployment and short-time working of many foreign workers brought here when the industry badly needed extra help. My hon Friend the Member for Blackburn, East (Mrs. Castle) reminded us that many of them had gone home; but many cannot do so for political and other reasons. They have to pay the cost of their hostels, and they find it impossible to do that on unemployment pay, and some of them are getting into a desperate position. I ask the Government to pay some attention to that, because we have a responsibility to these people.

As illustrating the seriousness of the situation in Lancashire, the Board of Trade Journal last week stated: The latest weekly production figures for cotton, spun rayon, and mixture yarns for the week ending 1st March, 1952, was very much lower, at 16.57 million lb. compared with 18.99 million lb. in the previous week. The "Manchester Evening News," commenting on that, went on to say that 43 mills were closed all the week, and that the wastage of full-time workers in the spinning section was 973 and there was a loss of 300 part-timers. This brought the wastage for a fortnight to over 2,000. I call special attention to the fact that this is in the spinning section. Hon. Members who know the textile industry will realise the significance of that. It is the weaving side that is hit first, and we know that we are in for really serious trouble when the spinning section begins to be hit. In my constituency there is a spinning mill which has just stopped for the first time since 1923. All during the last depression it was able to carry on. Now it has stopped. That sort of thing is not lost on the people of the district.

The President of the Board of Trade mentioned more diversification. My constituency is relatively fortunate, in that it has more diversification of industry than some neighbouring towns, but nevertheless it has serious unemployment and under-employment, and the whole town is suffering. It hits the other subsidiary industries of the town. There is a large factory there which prints textiles. It went on to a four days week last week. There is another mill with not one stripper and grinder. That is a skilled job, but men are leaving this skilled work for work that is not so well paid because of this feeling of insecurity. It is a terrible thing which is beginning to creep through the industry.

Most Members have mentioned the Australian ban, but there are two things I want to say on that. I learn from my constituency that Australia has put a stop on all the goods in the pipeline—has put a complete ban on all coloured textiles. It has been suggested to me that as a temporary measure the goods which are now held up should be diverted to the home market. Whether that can easily be done I do not know. It may be that it would clash with Government policy, because I believe that the Government want to restrict purchases on the home market for certain economic reasons and have taken steps to see that purchasing power is cut.

Why is there this shortage of sterling in Australia, when last year the price of wool rose about four times? I am not an economist, but as Australia last year got for her wool four times what she got in the previous year, it beats me why there should be a shortage of sterling there this year.

The hon. Member of Ashton-under-Lyne (Mr. Rhodes) drew attention to certain excessive dividends, ranging up to 45 per cent. I am told that one of the difficulties in the trade at the moment is that owing to an old custom of the trade there is an automatic profit margin at each process from the grey cloth to the finished article. Therefore, when there is a small increase in one of the early stages, that multiplies itself through the subsequent stages and gives an artificially high price to the finished product. Perhaps that matter could be examined by the Government,. or by the trade.

I am further told that even where some spinners and manufacturers have cut the price to try to keep the wheels turning, this lower price has not been passed on by the wholesalers or by the retailers to the customers. We have been told that one of the causes of this is a buyers' strike. But was not the buyers' strike to some extent contributed to by the party opposite which, a few months ago, promised that Purchase Tax would be abolished?—[HON. MEMBERS: "Nothing of the sort."] Many people told me that they were holding up the purchase of goods because they hoped that if there were a Conservative Government Purchase Tax would be removed. These people may legitimately claim that they have been let down.

The President of the Board of Trade also mentioned that Korea had started stockpiling, and that merchants and shopkeepers had bought over-large stocks in anticipation that prices would rise still higher. That is quite proper trading in the view of the party opposite; it is called private enterprise. They do that sort of thing to try to get a profit and not to see that the best goods are produced in accordance with the needs of the people.

In "The Times" today there is a leading article headed, "Unwanted textiles." It dealt with this point in a way that is worth quoting. It says: The trouble goes back to the spring and early summer of last year, when consumers abruptly broke off an orgy of anticipatory buying prompted by the Korean war and retired with palpable indigestion. Consumers, wholesalers and retailers, had all overbought in varying degrees. This sequence was world wide and little distinction need be drawn between home and export trades. Retail sales dwindled, especially those of household textiles, and stocks accumulated rapidly. By the autumn of last year wholesale textile stocks in this country, for example, had risen (in value) to one-and-a-half times the level to which they had been reduced in the spring, while sales had dropped by about a fifth. In consequence orders to manufacturers were steadily reduced. "The Times" goes on to discuss possible Government responsibility in the matter. The Government's responsibilities in the matter are mixed and to some extent conflicting. On the one side is their plain duty to prevent serious and avoidable unemployment if they can. On the other is their duty to find more labour for defence work and for any industries which can increase their exports, to permit the operation of the natural cure for temporary indigestion in the textile trade itself—and to protect the pound sterling in its still perilous straits. "The Times" goes on to say that: the immediate serious danger to sterling makes it imperative to prevent the accumulation of stocks and to encourage their clearance. This is what the new credit policy does. There seems to be some justification for certain remarks made from this side of the House to the effect that the Government's new policy has affected the whole issue. When "The Times" puts it as cautiously as that, hon. Members are entitled to comment in their own way along the same direction of thought.

What are the remedies offered to us? So far, there has been practically none from the Government Front Bench. In opening, the President of the Board of Trade, made two points, that he would try to limit foreign competition and to divert Government contracts. There was nothing very definite, but he expressed the wish to do something in those directions. That is not going to satisfy Lancashire when it reads this debate. From our correspondence we know that Lancashire people have great hopes of the debate, and the Government ought to remember the word used earlier in this sitting by the Secretary of State for the Colonies and consider following a more robust policy.

I fully support the constructive suggestions made by my hon. Friends the Members for Burnley (Mr. Burke) and Ashton-under-Lyne, and I would call attention to the letter, referred to by the hon. Member for Rossendale, in "The Times" today, from Major Beddington Behrens, a well-known industrialist. Major Beddington Behrens made an interesting suggestion, that certain leading firms would be willing to take orders without charging any profit to maintain their operatives in employment. He says: Bargain prices could thus be obtained by the Government, which must need immense stocks of clothing to re-equip the armed forces and civil defence. It is better that such orders should be given now than later, when they will compete with civilian demand. That suggestion might be worth following up by the Government, if they are looking for bargain prices at the present time. Another suggestion in the same letter was: If the workers in the textile industry are suddenly dispersed it will deal a body blow to future British exports, because the demand for British textiles has been due to their specially high quality—the product of skilled labour. That brings me to comment on one or two suggestions that have come from the other side about the transference of workers from one industry to another. The idea in some quarters seems to be that because there are so many vacancies here and so many unemployed there it is a simple arithmetical matter to take the people from there and put them to work here. The hon. Member for Bolton, West (Mr. Holt), who sits on this side, although he ought to be over there, said that the weavers could go into engineering. Married women weavers are not suitable for engineering work, generally speaking.

Mr. Nabarro

Would the hon. Member allow me? I am sure this argument cannot hold water. Quite a large percentage of weavers in industry are doing this. I have been concerned with the transfer of these male weavers to engineering where they are wanted. That is not unreasonable.

Mr. Hynd

The hon. Member is talking about carpet weavers. We are principally concerned today with the cotton industry, and any remarks I make must be regarded as affecting that industry. I would not attempt to argue with the hon. Member, particularly about the carpet industry.

The hon. Member for Bolton, West, also took the opportunity of mentioning the possibility of re-opening the Liverpool Cotton Exchange. We have it on the authority of the President of the Board of Trade that it is impossible to open the Exchange at the present time. He gave us cogent reasons, and I take his word for it. Whatever merits there may be in the suggestion of re-opening the Cotton Exchange, I seriously suggest that this would be the wrong time to do it. It is not the time when the industry is struggling with difficulties to encourage the kind of speculation that would follow.

Mrs. Braddock

Any time would be the wrong time.

Mr. Hynd

On the question of buying United States cotton, the right hon. Gentleman mentioned shortage of dollars. The hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) said that we were buying non-dollar cotton as a consequence. My information is rather different. What is happening is that we are buying American cotton, not from America but from other countries, and paying a higher price for it than if we were buying direct. If the Government would only release sufficient dollars to buy U.S. cotton direct there would be a saving under that heading.

May I quote from the speech, which has already been referred to, by Mr. George Hasty, President of the Federation of Master Cotton Spinners' Associations in Manchester yesterday? He said that a broadminded reception by the Treasury of our request for more dollars to buy American cotton would have the effect of bringing outside growths down to their right spinning value. There is something else which the Government might investigate. I liked the suggestion that came from the hon. and gallant Member for Bedford (Captain Soames) about placing orders for clothing for Arab refugees in Palestine. That is a good practical suggestion which I should like to be taken further. I have great hopes for the hon. and gallant Member when his mind works on those lines. I can see him supporting the Colombo Plan and going on to other Socialistic methods. It is a common-sense proposal that, in a world where there are millions of people requiring clothing, it should not be beyond the possibility of this country, with idle looms and idle workers, to supply them. It is only a matter of organisation, or of international politics—of people getting together to work out ways and means. That is the ultimate aim of all our policy. It would result in our looking for a policy of expansion instead of the continued suggestion of restricting imports and exports and one thing or another.

I want to draw special attention to the home market, which is the principal market for the cotton industry. Here we are getting very little encouragement from the Government, because the policy of the D scheme, restriction of credit, the increase in the cost of living, and cutting down of purchasing power has all tended towards the opposite direction. Instead of the home market showing any signs of expansion it shows every sign of restriction in the near future.

I ask the Government to give some guidance to Lancashire as to whether they regard this as a short-term or a long-term policy. We have been told by many hon. Members today that they are confident and optimistic and that they have great hopes. But that is not enough. We cannot live on optimism and hopes. We want some positive action by the Government. I suggest that the Government might very well consider making northeast Lancashire a Development Area in order to give it the advantage of the special legislation applying to such areas.

It is the duty of the Government to help. The hon. Member for Heywood and Royton said that it was the duty of the Government not to interfere with industry but to guide it. I suggest that the Government have a bigger duty than that, a duty to the nation, which must supersede any qualms they may have about interfering with industry, if that industry is not satisfying the needs of the nation. I suggest to the party opposite that they must not allow any of their traditional opposition to planning to get in the way of bold measures to tackle this problem before it gets any worse. If nothing is done the Conservative Party will forfeit any support they still have in Lancashire. If we go back to the bad old days of before the war, they will never be forgiven.

1.47 a.m.

Air Commodore A. V. Harvey (Macclesfield)

I agree with much of what has been said by the hon. Member for Accrington (Mr. H. Hynd). He referred to textile companies' dividends as did the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I think he said that dividends should be limited to 5 per cent. I shall be very happy if Textile equities yield 5 per cent. in the next two years. I think many of them will forgo dividends altogether. And do not forget that in the years between the wars capital was written down considerably, and shareholders lost part of their investment. But my case this morning is not on behalf of the shareholders, but on behalf of the workers in my constituency.

The hon. Member referred to firms selling at a loss. One firm in Macclesfield was taking orders for rayon from Ireland before Christmas at a loss in order to pay wages, and that has been done for several months. Several hon. Members opposite have referred to November as being a significant date, and while they did not say that this Government was responsible, the implication was that it happened since the General Election.

I think I was the first Member, certainly in this Parliament, to raise the question of textiles in this House on an Adjournment debate on 23rd November, 1951. Last June and July salesmen coming back from the United States of America were telling me they were empty-handed of orders. Others could not get orders at home and in the Colonies, and there was a steady con- striction of trade in the silk and rayon industry. Silk is usually affected first in a recession of trade in the textile industries because it is a semi-luxury, or is thought to be.

In the debate on 23rd November, I said: The alarming thing is that in my constituency, which is concerned with weaving and the manufacture of silk and rayon, orders, both from abroad and at home, have steadily been declining since the summer. … as I see it, the textile trade may be in for a very difficult time. I should like to think it was only a phase, but the industrialists who have spent their whole lives in this business do not seem to think it is. I also said: If we wait until next April before something is done many firms will be bankrupt and many thousands of people will be out of work. My right hon. Friend, who had only been at the Board of Trade a fortnight, could not have been responsible in any way for that situation in November.

Mrs. White

Would the hon. and gallant Gentleman tell us, if there were so many indications in the rayon industry as well as in the silk industry, as I think he said, that the market was tightening to that extent, why was it that production of rayon in this country in November reached the highest point, I believe, for any time?

Air Commodore Harvey

Production may well have reached the highest point, but it was not sold. They were quite right not to stop production because the fall in sales might only have been a temporary phase, perhaps due to the dislocation of work because of the General Election. I hoped it was. In my constituency some of my political opponents said it was a stunt and that workers were being stood off because of the Election. I only wish it had been. I would willingly have suffered any humility that might have come my way if that had been true.

Mr. Henry Usborne (Birmingham, Yardley)

I find myself somewhat confused. The hon. and gallant Gentleman has just said that industrialists in his constituency, with virtually generations in the trade, were themselves aware that this was not a passing phase but was something which was foreseeable ahead and they believed it would be critical and severe. If that experience was there and that fact was known by them, can the hon. and gallant Member explain to the House how it is they ever produced so fantastically so recently when they knew perfectly well it was coming?

Air Commodore Harvey

In my constituency we manufacture pure silk and rayon, and it was rayon mainly that was over-produced at that time. When the Parliamentary Secretary replied to that debate he said: I am certain that the House will appreciate that actual harm might be done to the industry whose cause my hon. and gallant Friend has so eloquently pleaded if we were to treat as permanent a shortage of work which may be destined to be only temporary."—[OFFICIAL REPORT, 23rd November. 1951; Vol. 494, c. 837–8, 841–6.] That was way back in November, and it would have been quite wrong of the Government at that stage to have taken drastic action which might have turned the whole industry upside down only to find afterwards the buyers coming into the market again. But now the time has come when the Government have to take very drastic action in many directions.

We have had in the last three Parliaments an all-party silk committee, and I have had the honour and privilege of being its chairman on all three occasions. As a small body representing the silk constituencies we have worked extremely well together in facing our problems boldly and, on a non-party basis, in putting forward to the Ministers of the day suggestions which I think sometimes have been appreciated.

If we are to export textiles, a flourishing home market for quality goods is absolutely essential. It is no good Britain manufacturing a lot of cheap textiles. Other countries can do that, and cheaper than we can do it. We have to produce quality good in the production of which generations have been trained—beautiful garments which will sell at competitive prices. But it has been admitted on all sides today that foreign competition tends to increase, and our manufacturers have to adjust themselves to new conditions. I do not say they have had a honeymoon for seven or eight years, but they have had a seller's market. They must get together more and pool their ideas and methods. There are many things they can do. They work extremely well together in the rayon industry—except for a few who will never work with anybody. Sir Frederick Goodale is now chairman of their association.

I ask the President of the Board of Trade not to look upon silk as a luxury. Silk is a very fine material, but it is used in many different ways for strengthening other textiles and improving them. I should like to see an international agreement which would bring about the stabilisation of silk prices. We have had fluctuations in the prices of raw silk from Japan which had to be paid for in dollars. Perhaps the Minister would tell us what progress is being made. It would certainly be an advantage to the silk industry and to textiles of a high quality if the Government adopted the principle that, over and above a certain wholesale price, no additional tax would be chargeable.

The D scheme has had a very mixed reception. In the industry I should say that more were against it than were for it; but do not let us forget that it was the Labour Government which drew up the terms of reference for the Douglas Committee, and in my view the terms of reference were far too narrow. Had they been wider we might have had quite a different report; but that is too late now.

Whatever advantage the D scheme may have is largely negatived because the rate of tax of 66⅔per cent. is still too high to encourage the production of high quality goods. I am afraid we are going to have less high quality goods produced, and I think it is quite wrong to classify silk, cotton and rayon and nylon all in the same category for the purpose of assessing tax. It would be far more realistic if silk and nylon were placed in the wool category. I am not a technical expert, but that is what I am told by the experts in the industry. Apparently the basic costs are similar and that is a very good reason for it. Special provision has been made for linen in this respect. Many linen household textiles are in a category bearing a higher exemption rate than similar goods made of cotton or rayon.

In connection with the Australian cuts of imports, my sympathies are to some extent with the Australians in their economic difficulties. It is a vast and complex problem. The hon. Member for Accrington (Mr. H. Hynd) asked why this had been brought about. It has been brought about for the reason that the price of wool has been up twice and down twice in the past 18 months and the Australians have spent hundreds of millions of pounds more abroad than they have exported. They bought mostly from this country and they can no longer go on doing it.

But I think that the way the cuts have been introduced has been quite wrong apropos the British manufacturer, because his business with the Australians is always done on trust; letters of credit are rarely opened; whereas the Czechs, the Italians, the Swiss and the French who trade with Australia mostly insist on letters of credit. This means that orders placed in those countries by the Australians will be honoured but in the case of Britain, where no letters of credit have been opened, I understand that the goods will not be accepted. Where the goods have been sold, but not through letters of credit, I hope that the Australians will be persuaded by some means or another to accept goods where it can be proved that they were genuinely ordered before the date of the import cuts.

Much has been said about diversification of industries in the textile areas. I quite agree that we do not want to break up these industries. They bring us much foreign currency. But let us remember and be realistic about it. Other countries are producing, or will produce, far more textiles than they did before the war, and my own view is that the volume of textiles that Britain can export will be less than hitherto. We have to accept that. I am not a pessimist, but I believe that we have to make up for it in quality and in value. We may achieve the same figure by better methods.

So we may have to face the fact that there will be a considerable number of people who in future cannot be employed in textiles. If we have to have a rearmament programme in the next few years, which appears to be necessary, the Government should bring some of the light engineering industries into places like Macclesfield and Congleton, where 70 per cent. of our trade is textiles.

It has been said that textile workers are unable to do the other type of work, but I do not believe it. During the war the textile workers turned over to making difficult components for the aircraft industry—it was skilled work—and they can do it again.

Mr. Hale

I have listened to the hon. and gallant Gentleman with great attention and a very great measure of agreement. He is right in saying that he called the attention of the House to this earlier than anybody else. I intervene because I believe this to be a vital point. The loss of the textile industry from 1914 to 1918 was due not merely to the war but to the fact that, in war conditions, we had to develop textile industries overseas and turn our workers into armament industries. When operations were over, those workers had nothing to which they could return, and fear of that exists now.

I am grateful to the hon. and gallant Gentleman for mentioning re-armament. The word has not been mentioned for a long time; it appears to be regarded as a naughty word. Is not the position that if we drive the textile workers into armament industries we shall help to build up the textile industries of other countries and there will be nothing to which the workers can return when the re-armament programme is finished?

Air Commodore Harvey

That is a fair point, but unfortunately, the re-armament programme has yet to get under way. We heard recently how little we have got out of it. Even if we had not had a rearmament programme, we should still have had the same situation in the textile industry. Fifteen hundred people in Macclesfield alone, apart from Congleton, are partly or wholly unemployed. The re-armament programme might make a difference in the long run, but it has not so far done so. Some of the light engineering industries ought to be brought into these more difficult areas.

An industrial site has been prepared in Macclesfield and some of the services are available. Yet last August the Labour Government gave the North Western Region Gas Board a permit to establish a new showroom, with enormous plate glass windows and demonstration rooms, in the middle of the borough. I have seen the chairman of the North Western Region Gas Board and am convinced that in normal times this would have added to the efficiency of the industry, but I contend that that was the wrong time to issue such a licence when I cannot get a licence, for a smaller value, for a firm to build a comparatively small factory for manufacturing goods of an important nature in the town. I blame the Labour Government for that. People passing through the market place are horrified to see this showroom, for it could have remained in its former premises for a year or two until the lease ran out. That may be a minor point in this House, but it is an important point in Macclesfield.

Congleton, which was almost a distressed area before the war, is going through a difficult time. There was recently a fire in one of its textile mills, and as result 400 or 500 people were thrown out of work—many fortunately have obtained other work. I hope that the Government will give an assurance that the licence will definitely be given for rebuilding the mill.

Another firm not actively employed in textiles had a Government contract for packing since 1943. That contract is now going out to tender again, and 150 people may be stood off work next week. I have put the facts to the Ministry of Supply, and I hope that some action will be taken.

I want the Government for a short period to look upon the textile areas as semi-development areas and feed them with work. If the people on the spot are asked whether they would rather make ailerons for new types of fighter aircraft or stand on street corners kicking their heels, they will say that they would prefer to work. Nothing is more demoralising than for men to be out of work for any length of time, and so I hope they will be given work.

I have one request to make to the Minister regarding supplies of material to N.A.T.O. countries. Could it be arranged that parachutes made of British nylon could be supplied with the aircraft? I believe that the Purchase Tax should be adjusted. I have read the debate which took place during the war. The present Leader of the Opposition said then that he thought it was tax only for the duration of the war, but he continued it after the war for six years because it suited him to do so. The textile industry should have initial allowances for replacement of machinery continued, otherwise the mills may not be capable of keeping up to date. These allowances should be continued for at least another year.

I should like to see a Commonwealth conference, not of Finance Ministers, but of Prime Ministers, together with their financial and trading advisers. We often have requests in this House for a meeting of the leaders of the four great Powers, but in my opinion it is equally important that the Commonwealth Prime Ministers should get together. The meeting should not necessarily be in London, but if they really got down to the task much could be achieved. Unless we pull together as an Empire I believe that we are all in for a rough time. It is our only salvation, and I hope a Conservative Government will accept this opportunity at an early date.

2.7 a.m.

Mr. W. R. Williams (Droylsden)

I am rather sorry in one respect that my first speech as the Member for Droylsden should be coinciding with a serious and rapid deterioration in the conditions of employment of the people who reside in the four towns which go to make up the Parliamentary Division of Droylsden. I feel that I would be almost a super-optimist after all these hours of debate to think that I could make any novel contribution, but it seems to me that there is a common theme throughout the whole of our discussion. It is that the situation in the textile industry is grim in the extreme, and as far as I can see the situation is going to get worse still.

We are all agreed that unless we are very careful the serious unemployment that has developed in some of the N.E. Lancashire towns is likely to have a serious adverse effect on other industries not only in that area but in other parts of Lancashire and the North of England. I am afraid I cannot claim expert technical knowledge of the textile industry, but after some experience in the trade union world I am not sure that is always a disadvanage, for I find that if one gets a sufficient number of experts together they eventually cancel each other out and there is a chance for powers of observation and deduction to become more effective than the experts' knowledge.

Be that as it may, the situation has deteriorated so much in my own constituency that I thought it desirable to make a special investigation. I decided the best way to do that was to get in touch with the employment exchanges in four towns. I did that, and I am bound to say that it would be incorrect to state that the situation in Droylsden is as bad as say in Nelson, or Colne, or Burnley. But what I must say is that the situation, even in a constituency like Droylsden, which is not entirely dependent on textiles because it has some diversified industries, is deteriorating rapidly and to such an extent that where one could count the wholly unemployed or temporarily stopped in tens or dozens six months ago, we must now unfortunately count them in hundreds. So, what must it be like in areas such as those represented by the hon. Member for Nelson and Colne (Mr. S. Silverman) and other hon. Members from Lancashire?

I have spent a good deal of time in Lancashire between the two wars. Some may argue that when in Liverpool one is only on the perimeter. [AN HON. MEMBER: "It is the capital of Wales."] Well, some of us think that it might be even more influential than Cardiff, although, for my own part, I would back Caernarvon. But I hope that hon. Members will not tempt me any further on that point. What I was saying was that I have 20 years' experience of Lancashire. I was there during the inter-war years. I saw some of the depression even on the Liverpool side of the cotton industry in those days, and I know from personal contacts of the terrific depression in Lancashire between the wars.

When renewing association with Lancashire once again, I found that there was a sense of security in the county which had been very much absent in those inter-war years and that security had brought happiness to the homes and the lives of thousands in the area. It is, therefore, all the more tragic so far as I can see that, for the third time in my experience of the county we are now once again in the trough of depression. Two things are likely to happen as a result. Those in the textile industry are going to lose their confidence for ever in that trade, and there will be a position similar to that which some of us saw in Wales years ago, where the people lost confidence in coal and the quarries, with the result that parents refrained from sending their sons into what were the traditional occupations of the areas.

I am satisfied that we are reaching the point in Lancashire where the people are losing faith and hope in the textile industry. The more I go round the various mills, the more I find skilled workers leaving the industry; workers difficult to replace in an emergency; and management and union officials assure me that the people who are going out in these circumstances are not likely to return. That is the view held by managements and workers in that area.

The second point that occurs to me is that unless we are very careful some of the towns in north-east Lancashire may have to make an important decision shortly—whether they are going to continue to place their faith in the textile industry. Are they going to depend solely on textiles? Are they going to place all their eggs in the one basket? It seems to me that despite the fact that, to carry out the wishes of Sir Stafford Cripps and the Labour Government when they were in office, they undertook the responsibility of relying on cotton, thinking there was a future in it, if they are going to experience this depression again they are inevitably bound to ask themselves if they can afford to do it, and they will press the Government to bring them some other industries not so liable to the fluctuations of world trade and the slumps which the textile industries have experienced over many years.

I was rather intrigued and not a little perturbed by one or two remarks of the President of the Board of Trade. He said the problems are such that they must be grappled with and resolved by the industry itself. I know from notes of a meeting he had with representatives of the industry in November that he made it clear that he regarded the solving of these problems as being a matter for the industry. I am not one who denies that there is a great part for the people in the industry to play in the solution of these problems, but there are elements which are beyond the capacity or skill of anyone engaged in the industry.

The basic core of this problem is international, and must be dealt with internationally. Unless there is stability in raw material allocation, prices and distribution on an international level, nothing that the industry can do will be anything but abortive. I should like an assurance that the Government are taking up this matter seriously, and not just remitting it to the industry and hoping that it will alleviate in due course some of the distress. It must be solved between Governments.

That leads me to ask how many conferences are taking place between Governments of the Commonwealth on these issues. We never hear anything about them. I have here the Colombo Plan, Command Paper 8080. Some of us placed great faith in the potentialities of that plan. But one hardly hears anything about it. One wonders what has happened to it. There are elements in that plan which might be useful for discussion between Governments in regard to the issue we are now discussing.

I agree with those hon. Members who say that colonial development is something which can very much affect, and improve, the conditions in the textile industries here: but we do not hear very much about it. I hope that the hon. Gentleman who is to reply to the debate will lift the veil a little and let us into some of the secrets with regard to the discussions which are taking place at international level on some of these important problems.

With some trepidation I refer to the Australian restrictions. It would be improper for me, or for any other hon. Member, to give the impression that we were challenging the sovereignty of any member of the Commonwealth. But I do not think it is improper in a family of people for one member to suggest kindly to the other members of that family that they have made a grievous mistake in enforcing cuts of a particular extent and at a particular time.

We could point out to our Australian friends that there are mills in the constituencies of many of us which are committed up to the hilt in the Australian market, and that those concerned are wondering what they are going to do with the goods which they expected to deliver to Australia. Someone has had to finance these goods which probably will have to be sold at prices less satisfactory than would have been received for the contracts with Australia.

I do not think it would be unreasonable to ask the Parliamentary Secretary to say what discussion took place in the London Conference on this issue, and, more important, whether it is proposed to ask Australia and others, in the light of what has been disclosed in this debate, to review the situation. I do not think it would be difficult, because we have already had expressions of opinion from Australia which show that there are people there who are disturbed by the Australian Government's decision. I cannot help thinking that if the cuts had been imposed by a Labour Government in Australia there would have been a furore in the British Press, which seems to have been strangely quiet as the decision was made by a Conservative Government in Australia. But the British Press has been strangely quiet.

Dr. Evatt has said that he regrets the Australian Government's decision and that he thinks there will be serious repercussions upon Australia herself in due course. But I leave that; it might be regarded as a biassed opinion if I quoted him. Here is the "Melbourne Herald" not the "Daily Herald"—in which the financial editor says: The real answer to Australia's difficulties is to be found not in reducing imports but in increasing exports. Australia must beware of the 1930 mentality, which envisaged a solution wherein every country should sell more and buy less. Then the writer adds this caustic comment: This opinion still seemed to survive at the 1952 London conference. The important part of the quotation is in that very caustic comment, and I hope the Parliamentary Secretary will meet that point.

I refer to one other subject, as one who has spent a lifetime in the trade union movement. Although the Government can do a tremendous amount and will have to undertake great responsibilities if we are going to revitalise this industry. I still believe that the people in the industry have a tremendous part to play. Never in the history of this industry has greater goodwill and co-operation been required if it is going to overcome the many problems that are approaching. It would not be a bad idea if the President of the Board of Trade whispered in the ear of some of the people on the managerial and administrative side of the industry not to be too silly at the present time in pressing for certain things that they may think are very justifiable in normal times, but which, if pressed too far now, could produce a deadlock and complete lack of goodwill.

I see the Minister of Labour is here, and I believe that he will subscribe to my view. Never did the industry require more goodwill and patience than now. If it means a bit of give and take on both sides, that is better than that men and women should suffer as they suffered in the inter-war years.

2.29 a.m.

Sir John Barlow (Middleton and Prestwich)

It has been an interesting debate, in that there is such unanimity on the seriousness of the situation and in that suggestions have come from both sides on how the situation can be improved.

There was a very interesting speech by the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who attacked the profits that some textile companies had made in recent years. I agree that some of the profits, quite frankly, have been too high. These were not profits obtained in the ordinary way of business. Many of them were largely automatic increases in the value of stocks and not ordinary profits. These fictitious inflationary profits largely disappeared in high taxation. When a loss is faced, as it will be in many cases in the near future, it means that there is much less capital to meet it than previously.

As to the supposed high dividends, many companies started with small capital many years ago and ploughed back their profits to improve and extend machinery. I think that the hon. Member would find that the dividends paid on capital actually used in these companies was very moderate indeed. If he takes the dividends paid in the previous 20 years up to the war, they would be in most cases minute.

Certain Members opposite have tactfully suggested that this slump first became noticeable about last November. The textile industry, as all Lancashire Members know, is complicated in that it really consists of four or five completely separate industries which people call the cotton industry. There is spinning and weaving, finishing, merchanting, and there are different stages for each of these. In some cases from the time the cotton goes to the spinning mill to the time it is sold in the shop it often takes two years. It means that the process of passing through the pipe-line covers a very long period.

The suggestion that the slump started in November and that the present Government have the responsibility of putting the industry on its feet again is not quite a fair one. Undoubtedly the last Government must bear some responsibility for the things it did, or did not do, which have led to the present position.

Mr. Fernyhough

If the hon. Member suggests that the slump did not start last November but a long way back, how is it that Lancashire manufacturers could not accept Government contracts in connection with re-armament?

Sir J. Barlow

There were certain lines of goods in which manufacturers were filled up and for which they could not take more orders. The Government required these goods very quickly and, as they could not get them placed in Manchester, they were placed abroad. I think that to a certain extent the last Government are responsible for some of the difficulties of today. I do not want to over-emphasise but to put forward what I believe to be the case. First, the abolition of the Liverpool Cotton Exchange did not help matters. It has been explained by the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) that outside growths became necessary and were much more expensive to the extent of 5d. or 6d. a pound.

In the case of American cotton the standard line known as middlings before the war, known as symbol Atus today, could be bought more cheaply in New York and shipped to this country than is being supplied by the Cotton Commission today. I believe that on Tuesday, the day before yesterday, the basic price in New York for what was known previously as middlings and is now known as symbol Atus was 41.18 cents, which converted into sterling is about 35.3d.; to which should be added brokerage, about 1½d., and insurance and freight, 1.75d. per pound, making a price landed in Liverpool of 38.55d. per pound. That compares with 41d. quoted for the same thing by the Cotton Commission. That difference in price of a little over 2d. may not seem very great, but it is all contributory to higher prices and makes it more difficult to compete with foreign competitors when we have to quote abroad.

Mr. S. Silverman

Since the matter is so clear, can the hon. Member explain why the Government, of which he is such an indignant and loyal supporter, does not propose now to re-open the Liverpool Cotton Exchange?

Sir J. Barlow

I gather that the matter is under consideration, and we are hoping for a report in the near future from a committee which is sitting on the matter.

Mr. Silverman

There may be a report from a committee which may be sitting. But the hon. Member will recall that the President of the Board of Trade, in his very full and lucid explanation of his policy at the beginning of this Parliament, made it very clear that he did not propose to re-open the Cotton Exchange; and that he was really appointing a committee only as a kind of alibi in view of the representations made to the electorate during the Election.

Sir J. Barlow

The hon. Member makes certain statements—

Mr. Silverman

The President said it himself.

Sir J. Barlow

I have nothing to add to that. What I am pointing out is that one case of the drawbacks and difficulties of foreign competition in textiles today is the action of the former Government in abolishing the Liverpool Cotton Exchange. As many of us pointed out at the time, when such a thing is once abolished it is very difficult to bring it back to life again—

Mr. Silverman

Now is the time.

Sir J. Barlow

These things which were built up out of custom over the ages, once they are destroyed, are very difficult to restore, and we warned the Government at the time. We are doing our best, because we think it will help the Lancashire industry to become competitive.

Another thing which did not help matters last autumn, when the textile trade was in a very ticklish position, was the free advice of the right hon. Member for Bishop Auckland (Mr. Dalton). That advice went round this country rapidly, and it went round the world. The whole position was very delicate at that time. A recession was expected and perhaps the right hon. Gentleman thought he was being clever by advising the housewives not to buy at that time. It would have been infinitely better for the industry, and this country, if there had been a slower slackening oft in the autumn. Instead of that, strange as it may seem, a great many people took the right hon. Gentleman seriously. That meant a stop in buying for a time, which had very serious repercussions. That is another thing for which the last Government were responsible. I will not go into the question of Government purchases on the Continent last year because that has been raised already.

Fourthly, the last Government did not anticipate the Japanese competition which was bound to come. We all knew it was coming, but the last Government did nothing to forestall it. We had great experience of it in the 1930s. The Japanese spindleage and looms were increasing very rapidly, and it was very evident that there was going to be serious competition from that quarter. I was one of the people of Manchester who criticised the Government in the 1930s very severely for not taking any action when this competition was so evident. I criticised the last Government for not taking action when it became evident again.

I should like to quote from a letter I received on Tuesday from a very experienced textile man in Singapore where, of course, Japanese competition in textiles is very severe. He writes: We are much concerned as to Government's intentions regarding the import of Japanese textiles this year. Government had been instructed to limit imports from Japan to the 1951 level, that is, to the value of 100 million dollars. In restricting the 1952 imports to the 1951 figures the Government has apparently overlooked the fact that the 1951 imports were the highest on record, and this market received millions of yards more than it could digest. All the people in the textile industry in that market knew what was going on in 1951, and nothing was done here to stop it. I suggest that this Government will have to tackle this matter, and the sooner the better. It is probably happening in other colonial markets, and I suggest that while we have only certain powers and rights in colonial markets, the Government should impose suitable quotas where proper in certain cases.

This problem was discussed very thoroughly in the middle 1930's. It is probably more serious now than it was then. For that reason I hope that this Government takes it seriously and tackles it before rather than after the saturation of the markets with these goods.

Now I come to what are, I hope, constructive proposals. I hope that the Government, as far as it can with tact, will take a strong line about the Australian contracts. The whole of the export industries of this country—textile and other industries which rely on exports—have been built up on the basis of the sanctity of contracts and the good word of British merchants. Once we lose that we shall lose a great deal of good will for this country. Similarly, we expect to be dealt with in the same way by others.

I believe that most of the Australian goods now in dispute were sold on firm contracts. If they were sold on firm contracts the buyer in Australia is responsible for them, no matter what his Government do. His Government cannot legally write them off and say the country cannot pay for them. It is just too bad for the Australian importer if he has ordered too much. He must meet his deficit in some way or other. I am sure that if the matter is put fairly to the Australians they will see it in that light. If we lose the sanctity of contract the greater part of our trade will have to pack up.

I should like to say a word about Purchase Tax and the D level, about which we hear so much. I know this can be discussed at a future time, at greater length, and probably much more appropriately; but I hope the President of the Board of Trade will consider this matter most carefully. It deals very hardly with some sides of the textile industry, and there are many anomalies in it.

I will mention just two cases. The price of an all-cotton tapestry to the merchant is 13s. 4½d. and the estimated wholesaler's price, including his margin, is 15s. 7½d. The tax is 6s. 10d., making a total estimated selling price of 22s. 5½d. That, incidentally, is taking the price of cotton at 41d., which I mentioned earlier as being the price quoted by the Cotton Commission. If the maker could buy his cotton direct from New York at 2¼d. lower, the finished article would be about 5½d. less and the Purchase Tax would be 2d. less, because the whole cost would be less. That shows how every little bit should be saved.

Incidentally, if, instead of being all-cotton tapestry 15 per cent. of wool were introduced, it would slightly improve the fabric and it would avoid tax altogether. That is an anomaly which ought not to exist, because the brains of the trade will be absorbed entirely in avoiding tax when they should be producing as cheaply as possible.

In the case of the ordinary 16-inch roller towel cloth, if sold in the piece I am told its tax is about 8d. a yard. If it is made up into 2-yard roller towels the tax is 7s. 8d. per yard, and if it is made up in 2½ yard roller towels it escapes tax altogether. That is one of the many anomalies that I am sure could be ironed out; but I do urge the President of the Board of Trade to look into this matter of Purchase Tax most sympathetically, because it may help the industry very, very much indeed.

2.48 a.m.

Mr. S. Silverman (Nelson and Colne)

I have been waiting for many hours to hear someone make an attack upon the Government and Government policy in its relation to the textile trade in the crisis in which it now finds itself. The last attack I heard came from my hon. Friend the Member for Blackburn, East (Mrs. Castle), and it was very refreshing to hear the next attack come from the hon. Member for Middleton and Prestwich (Sir J. Barlow).

Mr. Anthony Greenwood

What about my speech?

Mr. Silverman

The speech of the hon. Member for Rossendale (Mr. Anthony Greenwood) was also welcome from my point of view, but perhaps less unexpected than the one we have just heard. I think the hon. Baronet was a little hard on his Government. He seemed to be in conflict with them at many points. He thinks they are wrong about the Liverpool Cotton Exchange; he thinks they are wrong about Japanese competition; wrong about Australia, and about Purchase Tax. I cannot agree with the hon. Baronet on all of them, but I congratulate him on his speech. He may deviate to the right and he may be wrong; but at least he does deviate, and that is something.

I have found the debate extremely depressing, and Lancashire will also find it extremely depressing. I have heard hon. Members say—not all from one side of the House—that they have derived some sort of comfort from it. The comfort which will be derived from it in my constituency will be cold comfort. In Nelson last week 40 per cent. of the registered working population were unemployed; by the end of this week it will be 45 per cent.; and by the end of a month the figure will be even greater.

Mr. Douglas Houghton (Sowerby)

Did my hon. Friend refer to "the registered working population"?

Mr. Silverman

Yes, Sir. My hon. Friend must bear in mind that Nelson is almost entirely a cotton town. There is a little spinning and a little of the other finishing trades. I do not say that the figures apply to Colne, for the position is not quite so bad there, but the president of the weavers' union and the executive members of all the textile unions in the constituency assure me that those are the figures for Nelson.

Mr. Richard Fort (Clitheroe)

Do those figures include part-time work or are they the wholly unemployed?

Mr. Silverman

They include some part-time work. They include some weavers who are doing some work and earning some wages but not earning enough to deprive them of unemployment benefit. The percentages which I have given are for workers in receipt of unemployment benefit in Nelson last week and the prognostications for the coming weeks.

The hon. Gentleman is right to demand some modification of the picture with which I began. On the other hand, not all the partial unemployment is reflected in the figures. A number of people are partially unemployed but, under the guaranteed wages system, their earnings, even part-time, are sufficient to disentitle them to any unemployment relief for the time being.

A further point—the President of the Board of Trade made it in his speech—is that many of the married women workers who did not elect to join the National Insurance scheme are now unemployed but do not appear in the figures. They are non-registered workers and are in no circumstances entitled to unemployment pay, and so the employment exchanges do not include them in their returns.

That is a very frightening picture, as everyone will agree. The matter seems to have been approached throughout the debate, with some notable exceptions, in a thoroughly unrealistic way. Everybody has talked about world conditions and the recession in the textile trades as though they were natural disasters and we were dealing with a flood, a tornado, or an earthquake, and all we could do was to organise first-aid relief.

This is not a natural disaster at all. It is something which we have created. When I say "we," I do not mean the present Government or this country alone. These variations in prices, the slumps, booms, or recessions, are things that are within our control if we are prepared to control them. If we are going to bring any comfort to Lancashire workers we must show that we are not merely prepared on a humanitarian basis to patch up their wounds but also prepared to prevent the disaster from occurring.

What has occurred? In 1945 this country was bankrupt. It was internationally insolvent. It could not pay its way in the world at all. We set ourselves to put that right. The thing that we mainly relied upon in those years was the export of cotton textiles. I am not saying for a moment that we relied on that alone, but I do not think it will be contested that without reliance upon the export of textiles from Lancashire we could not have put our international finances on a reasonable balance.

Mr. Nabarro

Surely the hon. Gentleman will concede that the first requirement of this country to contribute to financial equilibrium is the export of coal, which does not involve us in imports, as cotton goods do?

Mr. Silverman

We have not been able to export much coal between 1945 and today. The hon. Gentleman will realise that is so. There is a good deal in the point, but I do not want to be led into what we might have managed to do. I am saying it is cotton, not coal, that restored our financial fortunes between 1945 and 1951. The hon. Gentleman will not contest that.

Mr. Nabarro

I do.

Mr. Silverman

Then the hon. Gentleman finds himself alone in the House. He will alter his view if he pays as much attention to the cotton figures in those years, and studies them with the same understanding as he has already devoted to the coal industry figures.

That policy succeeded because Lancashire, which had suffered so bitterly in the inter-war years, especially from the fact that so many of its towns depended almost entirely upon cotton so that when cotton was depressed there was no living for anyone in the towns, did its patriotic duty. If Lancashire had resisted the appeals made to it by the Labour Government of the day, supported by the Opposition, to devote itself entirely to cotton production we would not have been able to get out of the red in our international finances.

Mr. William Shepherd (Cheadle)

What has the hon. Member in mind with regard to exports? What were the export figures, for example, for Lancashire textiles in 1949, and does he realise that the volume of textile exports have never exceeded 40 per cent. of 1937?

Mr. Silverman

If the hon. Member wishes to make that contribution to the debate, I am sure that when his turn comes—and, as we now know this is exempted business, so he has an opportunity—he can make his case. But, without going into figures, I do not think that he contests what I am saying. He only intervened, if I may say so, to put something else to me about which I was not talking.—[Interruption.] I do not think that the hon. Member should be so amused; Lancashire is not amused. What I am saying is that Lancashire accepted the appeal made by all responsible leaders of political and commercial opinion of the day to turn its back on the old memories and to devote itself loyally and patriotically to building up the textile industry; and, had it not done so, we should not have been able to balance our accounts in the international phase.

What I am putting to the House is this. If these towns in Lancashire—those which had suffered most in the inter-war years by being "one-industry"places—had, in fact, resisted the appeals made to them, and had said, "No, we are not going to do that any more, but we will have some cotton and rebuild some parts of the textile industry, but are never again going to put all our eggs in one basket," nobody in 1945 would have resisted them. Those towns could have had as much diversity of industry as they wished. Nelson could have had as much as anywhere if Nelson had said that was what it was going to have.

Mr. W. G. Bennett (Glasgow, Woodside)

Would the hon. Member have brought the labour from Birmingham and Coventry in order to start these new industries in Lancashire?

Mr. Silverman

In 1945 there was a sellers' market, not merely in cotton, but in a great many other things. There were people going about looking for factories and looking for workers, ready to build new factories in new places; and if these towns of Lancashire, which were one-industry towns, had said, "We will not be one-industry towns any more," they could have diversified their industry then.

Mr. G. B. Drayson (Skipton)

The hon. Gentleman knows my constituency which is adjoining his, and he knows that we tried to start a business in refrigerators there, but his party killed it by Purchase Tax.

Mr. Silverman

What the hon. Member says, and accepting it for the purpose of the argument, and without going into all the inferences he would apparently wish me to draw, is that a new industry went there; but if it did not succeed, that was due to extraneous forces, and it is not a fact that this industry could not be attracted to the area. Constituencies which wished to diversify their industry could have done so at that time. They did not do so. They accepted the appeals made to them, and it is for that reason alone that in my constituency the percentage of unemployed is so high. Apart from the general economic or political questions involved, that fact lays a moral obligation on the Government to see that they do not suffer from the public spirit they showed between 1945 and now.

Mr. Anthony Fell (Yarmouth)

Why? Why does that place a moral obligation on the Government? There is enough moral obligation on the Government without anything that may have happened between 1945 and now. The obligation is there to start with.

Mr. Silverman

Then we understand. The hon. Gentleman will go to his constituency, and I invite him to come to mine, and explain to the people unemployed that they need not have been unemployed, that they could have had other industries if they had wanted, that they had only the cotton industry because they yielded to a national appeal, that they are now unemployed through no fault of their own, if you like through no fault of anybody, but that these facts do not impose on the Government any obligation to see that the burden is borne by anybody but the workers.

Mr. Fell

I did not say that.

Mr. Silverman

I cannot give way any more.

Mr. Fell

What I was saying is exactly the opposite: that the moral obligation is there in any case. I cannot understand why the hon. Gentleman has been maintaining so hard all through this long story that this placed some special moral obligation on the Government.

Mr. Silverman

I find it difficult to understand what the hon. Member says. Is he saying there is a moral obligation, or there is not?

Mr. Fell

Of course I am.

Mr. Silverman

Then what is he complaining of? I am saying that there is a moral obligation on the Government to see these people do not suffer, and the hon. Gentleman says there is a moral obligation on the Government to do so, so I do not see why he wants to prolong my speech by numerous interruptions in order to agree with me.

Mr. W. Fletcher

I think I can assist the hon. Gentleman. I think the point is this. Is there a greater moral obligation towards 5,000 people in the cotton industry in a constituency with mixed industry, or towards 50,000 people in a town where there is only one industry? Surely the answer is that the moral obligation is to all people in the cotton industry, whether in a town of mixed industries or not?

Mr. Silverman

I have said nothing which conflicts with that. The greater the suffering the greater the moral obligation. If a whole town is unemployed, there is greater suffering than if 5 per cent. are unemployed. The hon. Member must know what made the House long ago pass special legislation for special areas. It was precisely because the degree of social suffering in a town which is wholly, or almost wholly, unemployed is infinitely greater than the sum of the suffering of the same number of unemployed families spread through communities which are not completely unemployed. We must leave it if the hon. Gentleman does not agree with that. I think he will find that most social students take that view.

Whether it is a greater or a smaller obligation, we all agree that there is an obligation to see that they do not suffer. Let us see what are the consequences of that agreement. Our rates of unemployment benefit are low. [An HON. MEMBER: "Who fixed them?"] They were fixed by the Labour Government. The benefit is much lower now than it was when this Government came into power.

The Government have just announced a Budget which will take £160 million from the food subsidies. In their announcement they agreed that that would add 6s. weekly to the cost of the food for a famliy of four. It is true that the Government also announced certain reliefs in other directions which were intended to compensate for that extra cost. But none of those compensatory reliefs applies to the income of an unemployed man, because he does not pay Income Tax.

Colonel J. H. Harrison (Eye)

The child allowance for a second child has gone up by 3s.

Mr. Silverman

He is worse off by 3s., is he?

Colonel Harrison

The hon. Member is saying 6s.

Mr. Silverman

Let us agree that, as far as food is concerned, with a family of four he will be 3s. worse off with his basic 26s., which will be worth 23s. None of the palliatives recommended from either side and none of the long-term remedies referred to will do anything to relieve that suffering. I want to know whether the reward for the successful effort of these people for six years is to be not merely a reduced standard of living but one reduced even below the unemployment benefit standard created in 1945. Is there going to be any kind of special reief, or are they to be left to bear the burden until the Government make up their mind whether the cotton industry can be restored and when?

From purely humanitarian points, I come to general causes. Up to 1951 this effort had succeeded. Some capital has been made out of the Labour Government's placing of certain orders abroad in July, 1951. They were placed abroad because it was deemed urgent to have those orders completed early and the Lancashire mills were so fully occupied, and apparently were going to remain so, that there was no hope of getting early deliveries from them. In 1951 it seemed clear that the hopes of a stable textile trade in Lancashire were still to be relied upon. Everyone has commented on the suddenness with which the deterioration began and the speed at which it progressed.

Air Commodore Harvey

The hon. Member will recall that soon after this Parliament assembled in November, Questions were raised in the House about one order for £50,000 for shirts from Italy, and the Minister replied for two or three weeks in succession that it was placed as late as October because we were morally committed. It was obvious even at that time that the cotton trade was short of work, and we should have put our own people first.

Mr. Silverman

There may be something in that point, but in July, 1951, there seemed no reason to suppose that the crisis, which has now descended so disastrously upon us, was to be feared. What happened? There was a dislocation of financial stability over the world. Reference was made to Korea, but there was nothing in the Korean campaign itself to have any effect, one way or the other, on world trade as a whole. The Korean affair—I use an absolutely neutral word for obvious reasons—was made the legitimate and inevitable occasion in many people's opinion for sudden world-wide re-armament expenditure upon a vast scale.

I hope that no one will pretend that that has had no influence on the situation. I can quite understand those who say that this was something we had to do. It is a perfectly tenable view, and it has had many distinguished advocates on both sides of the House. It is not a view I share, but there were many and weighty arguments which led responsible and intelligent people to that conclusion. If one does come to the conclusion that it is necessary to do this thing, then one has to be honest about it and play fair with the people who are bearing the burden and paying the cost of it. One is treating them very badly indeed if one seeks to pretend that this sudden infusion of immense purchasing power for the purpose of taking materials, labour, and services out of the production of consumer goods into other goods, had no impact at all on international financial and economic arrangements.

It plainly is not so. It is something we could have avoided if we had taken a different view. There is no doubt that this attempt to spend so much more money—not merely in this country but everywhere in the world—has had the most disastrous effect on the balance of international trade in every country in which the attempt has been made. It is not to be supposed for a moment that the textile crisis is only a textile crisis. It is clearly part of a general trade crisis largely occasioned—I would say wholly occasioned—by the distortion of the whole international financial machine by the attempt to spend more money than one has on goods that were not there.

The whole effect has been to destroy the financial stability of the Western world, at any rate, in order to get increased armaments which in fact it could not produce. The result was merely to get less armaments for more money. I am not arguing that in relation to the problem we are discussing. I am saying this was the first and most important cause of the distortion of world finance that has produced general insolvency almost throughout the world. At that moment a number of other different things were happening, because obviously the first result of worsened conditions is that one is less favourably placed in one's customary and traditional markets.

Our old trade competitors in Japan and Germany were rebuilding their industries so that at the moment when our own position was being adversely affected by financial changes due to world-wide rearmament, we were getting increased competition in the markets we had been able to establish, or re-establish, since 1945. This, at any rate, could have been minimised by wiser political handling. No one suggests for a moment that the Japanese ought to be prevented from earning their living because if they do it somehow interferes with the people of Lancashire earning their living. But Japan had on her doorstep a vast market in China, and we allowed ourselves to become parties to a political settlement in the Far East which had the effect of depriving Japan of this natural market in China.

This is not merely politics, because if we go back on a treaty between the de facto Government in Japan and the de facto Government in China all sorts of consequences flow from it. If we do not have a treaty of peace and the Governments do not recognise one another, we can have no commercial understanding, no trade, no consular offices, no banking or credit facilities and no port or shipping arrangements. And the consequences of having no political settlement with Japan and the de facto Government of China is that virtually we bar Japan from her natural market in China and virtually invite them to compete with us in our own markets when that need not have happened at all.

Mr. Holt

The hon. Member brought up this point about a fortnight ago. Before the war Japan could sell her goods to China and still there was this Japanese competition with the rest of the world. I agree that Japan has to live, but I do not feel that is arguable on this point.

Mr. Silverman

The hon. Member did me the honour on the occasion to which he refers to intervene in my speech to say the same thing as he has just said, and I will give him the same answer. The fact remains that whatever the situation was before the war, if in the present state of the world there is no political understanding, no political settlement, between Japan today and China today, then there can be no Japanese-Chinese trade today. If this vast Chinese market were open to Japan today, is there any hon. Member of this House who does not think that would be an ameliorating factor in the Japanese competition in the markets of this country about which everybody complains?

Mr. Holt

They would increase production.

Mr. Silverman

All right, let them increase production. There are plenty of people in the world today waiting to wear clothes. Hon. Members must bear in mind that if we believe the author of that remarkable book "The Geography of Hunger"—and I see no reason why we should not—of every three people who die in the world one dies of hunger, and their clothing is not much better than their food. There is no reason to be afraid that the world cannot absorb, if proper arrangements are made, all that the industries of the world can produce. There is no reason why we should fear each of these countries building up their own textile trade. There is plenty of room in the world for the production of all of us for at least more generations than we need bother about tonight.

That is one thing, but there are certain other consequences. Here we have one thing, a disastrous political arrangement, on which ultimately we were double-crossed by the United States, about the recognition of Governments. One result of it was to keep Japan out of her natural markets and force her to compete with us in other markets where competition need not have happened. But there is something else. Until 1920 Lancashire herself had a valuable Chinese market which the Japanese were able to get from us in the years that followed. One would have thought that one compensating advantage of the disasters of a foolish political settlement in the Far East would have been to give us an opportunity of recapturing that Chinese market. But we did not try.

Although we have recognised the Chinese Government we still hold them at arm's length, and no attempt has been made so far to win back for Lancashire the Chinese market out of which the Japanese have been kept by political arrangements to which we were party.

Air Commodore Harvey

The hon. Member must know that British traders in places like Shanghai have been quite unable to carry on. The other day we read of Mr. Robin Gordon of Jardine, Matheson, who was locked up because he was not able to pay the wages bill. They have made every effort to trade and credit should be given to them.

Mr. Silverman

The hon. and gallant Member knows more about these matters than I do, and I appreciate that. I think he will agree with me—he is always fair-minded in matters of this kind—that the British trading community of Shanghai and Hong Kong have been by no means so pleased with the development of British-Chinese relations in the last year or so. I think they would agree with what I was saying when the hon. and gallant Member interrupted me, and I think he knows they would agree. There is a vast market waiting for us in China if we only removed political inhibitions.

Mr. Gilbert Longden (Herefordshire, South-West)

I am sure the hon. Member will allow me to interrupt him. After all, the whole night is before us. I really must ask him in all fairness to say what more he would do to persuade the Chinese Government? What more can we do than we have done?

Mr. Silverman

One thing I would do, and I only mention one thing now and do not want to debate it; whether anybody else liked it or not, I would back up the right of the actual Government of China to take their place among the rest of the United Nations.

Mr. Longden

Would the hon. Member really do that when the Chinese are shooting our troops in Korea?

Mr. Silverman

We are shooting their troops, too. It seems to me that ever since September, 1950, the war in Korea has gone on only because the United States of America takes a different view about this matter of Chinese membership of the United Nations than we take. Only the other day an American statesman was saying that the Chiang Kai-shek handful in Formosa was an ally of America—and we are an ally of America everywhere in the world. I say that with suitable political conditions—the political conditions that would be a natural and logical consequence of our having recognised the Government in China—there would be a vast Chinese market ready for us to enter.

It does not only stop there. There are two ways of relieving competition in restricted world markets. There is the whole of Europe. I have heard hon. Members and the President of the Board of Trade himself say that we must carry on the old adventurous spirit and send out our people to find new markets. Would he tell me, at some time during the debate, what in the world the Lancashire commercial traveller is to do about the Battle Act? Where does he go to find these new markets? He could go behind the Iron Curtain. He might like to go to Czechoslovakia; or to the Balkan countries; the Baltic countries; or to the Soviet Union. But he cannot, because politics again have dropped a curtain between East and West Europe, from which both East and West Europe are suffering.

How in the world can Europe recover its financial and commercial stability if it remains permanently divided? This has nothing to do with ideology; it has nothing to do with politics, and it has nothing to do with religion.

Mr. Holt

And it has nothing to do with textiles.

Mr. Silverman

It has a tremendous lot to do with textiles. If we have a lot of textiles to sell and they have a lot of timber to sell, is it not stupid that we should not be able to exchange our disposable surpluses with the disposable surpluses of others? It may well be that it is not possible to do a deal. It may be that it would be resisted, or that the terms offered would be too harsh, or that the mode of payment or the security of payment would be unsatisfactory. All those things are possible. But we know nothing about them if we begin by saying that we will not trade at all because of some political dispute. That is what the Battle Act said.

Mr. Fitzroy Maclean (Lancaster)

I should like to ask the hon. Gentleman, in relation to China, if it is not a fact that it has been the declared policy of the present Chinese Government, long before the Korean war started, not to trade but to be self-supporting—or if they did trade, to trade with the Soviet Union and not with Western Europe.

Mr. Harold Davies

Nonsense!

Mr. Silverman

I say "No."

Mr. Maclean

It is no use saying "No."

Mr. Silverman

If the hon. Gentleman says it is no use my saying "No" it means that he is not interested in my answer, and if he is not interested in my answer I fail to understand why he asked the question. In my opinion, what he is saying is not so.

Mr. Maclean

The hon. Member should have read their statement of policy.

Mr. Silverman

If the hon. Gentleman will do me the courtesy of trying to follow what I am trying to say, he will realise that I left the subject of China a few minutes ago. Quite clearly, if anything is to be done to restore Lancashire's trade it can only be by either winning back markets which we have lost, finding new markets, or relieving ourselves of competition in existing markets.

I should have thought that this was precisely the kind of thing that the British Traders Research Organisation was intended to do. If that organisation were still in existence one would have thought that this was the very moment when it might have been applying its resources to a research into where markets might be made available.

But this is the moment which the President of the Board of Trade has chosen for liquidating the organisation. It does not make sense. The organisation cannot have cost the Government very much. The President of the Board of Trade talks about sending commercial travellers all over the world looking for markets, but that will cost something. Yet he chooses this moment for disbanding that organisation.

With an opportunity offered to us to investigate the possibilities of East-West European trade, one would have thought that the Government would have encouraged those possibilities instead of frowning upon them and discouraging people from investigating them. A delegation has been at Geneva discussing the possibilities, and now there is to be an economic conference in Moscow.

Some hon. Members opposite wanted to go to the Moscow conference. I believe one has decided to go. One put down a Question to the Foreign Secretary. Instead of being encouraged to go and make such investigations on the spot as were possible, he was frowned upon and told that it was not in the public interest for him to go even to look. That was bad advice.

I have accepted an invitation to go, and I shall go. I cannot see that the textile trade will have lost anything if I come back with empty hands. [An HON. MEMBER: "Does the hon. Member propose to wear the shoulder badge"?] I beg hon. Members opposite not to mix up their policies with their prejudices. If they are really anxious to preserve the peace of the world, they should take every opportunity of patching up differences, removing mutual fears and rebuilding the world markets, and the world markets include the European markets.

If hon. Members opposite are not prepared to do that because of their political prejudices or for any other reason, it is idle for them to sit through the long hours of the night weeping crocodile tears over the sufferings of the Lancashire textile trade.

3.43 a.m.

Mr. Julian Amery (Preston, North)

The newspapers have recently told us that the students of Sfax University have solemnly declared that until Tunisia is liberated they will stay in bed. We appear to have pursued the opposite policy tonight and to have resolved to stay out of bed until we have discussed the matter before us as fully as we can. That is a more robust attitude. I can only hope that it will prove more effective, but I am not convinced of that.

We have had some extremely well-informed analyses of the crisis, but I have not derived any very clear idea of what we are going to do about it. The hon. Member for Nelson and Colne (Mr. S. Silverman) developed an argument which had the great merit of being logical. He said—and it is true—that the world re-armament programme had had an influence on the slump in the textile trade. He also told us, equally truly, that the fact that Japan and Germany are cut off from their natural markets does sharpen their competition against us. There is no denying this, but what the hon. Gentleman is really saying is that if you have less guns you can have more butter. But we have discussed all this before and a great majority of us on both sides of the House have come to the decision that we have got to have guns. We have got to get the guns if we are to have security at all, and in the long run security is more important than well-being.

The hon. Member for Rossendale (Mr. Anthony Greenwood) and the President of the Board of Trade very rightly said that, however long this particular crisis may last, the textile industry, and more particularly the cotton industry, is going to be faced with a grievous long-term problem arising first of all from growing foreign competition, and secondly from the fact that so many countries which did not manufacture textiles in the past are doing so now. We used to take refuge in the idea that high quality assured us a market. To some extent it still will, but there is no doubt, or so I am told by well-informed people, that the Japanese mills are already producing high-quality goods, and with the backing of American dollars it is not surprising. In these circumstances we must safeguard our markets as much as possible, and first of all our markets in the Commonwealth and Empire.

For 50 years or more British textile exports to the Commonwealth have enjoyed an extensive measure of imperial preference. That was strengthened in the 1930's by the introduction of quotas on a preferential basis in the West Indies and West Africa. This preferential treatment has been going on for so long that it is difficult to say exactly how valuable it has been to the textile trade. But we have been able to see that in those territories where we do not receive preference—the Congo Basin Treaty territories—we were not able to hold our own at all in the years between the wars, while we were able to hold our own in those other markets in the Commonwealth and Empire where preference was enjoyed.

I agree with what was said earlier by the hon. Member for Oldham, West (Mr. Hale), and I think that the Government should consider fairly soon whether something can be done to reshape our obligations under the Congo Basin Treaty. I believe an opportunity may arise quite soon. It may arise if the proposal for Central African Federation materialises. The status, at any rate, of Nyasaland and part of Northern Rhodesia would then be modified, and there might be an opportunity of exempting them from the provisions of the treaty which prohibits them from granting preferences.

Since the war there has been a more important change in the incidence of Imperial Preference upon British textile exports. That is the result of the agreement signed with Pakistan last April. Under this agreement the preference fell from 45 per cent. to 5 per cent. and the consequences have been really disastrous. In 1950, the year before the agreement was signed, we sold 67 million square yards of cotton to Pakistan. In the following year, up to a month or two ago, we have only sold 39 million square yards.

In the same time, Japanese exports doubled to 198 million square yards. They now sell 90 per cent. of the total rayon consumed in Pakistan, and we used to sell rather more than half. Meanwhile, Italy has ousted us from the position of being the chief suppliers of cotton yarn to Pakistan. We ought to look into these figures.

The House will be familiar with the events leading up to the treaty with Pakistan, and it will remember that when India was united, we received preference levels in India equal in value, more or less, to those India received in the markets here. That gave, roughly speaking, an equal advantage to both sides. But, when India was partitioned and Pakistan had been created, it turned out that we had about four times as much advantage in the Pakistan market as they had in ours. One cannot blame Pakistan for regarding this as unfair.

Had it not been for the General Agreement on Tariffs and Trade, however, we could have got round the table with the representatives of Pakistan and said, "If you will keep the preference margins more or less where they are, we will extend new preferences to you if you ask." But, because of this unfortunate G.A.T.T. agreement, we were precluded from doing that, and Pakistan, therefore, had no alternative to depriving us of our preferences, with the disastrous consequences I have mentioned.

The simple conclusion which I draw from all this is to ask the President to consider very seriously whether the time has not come when we should take the action necessary to free ourselves from the G.A.T.T., or at least from those provisions of it which preclude us from increasing the preferential margins we can give to other parts of the Commonwealth and Empire. We have only to give 60 days' notice of our intention, and if we say we are going to give that notice, I believe we would give new hope to Lancashire and confidence that something is really being done to safeguard markets we already have, and to secure new ones.

Mr. Hale

I find the hon. Member's argument an impressive one, but I would remind him that the present figures show that the exports of India are greater than those of Britain and Japan together.

Mr. Amery

I do not pretend that this action would solve all our problems, but would prevent the kind of disaster we have suffered in Pakistan.

Hon. Members on both sides of the House, and particularly on the other side, have said that we ought to have a Commonwealth conference now on this subject of the textile trade; but I put it to those hon. Members, and to the President of the Board of Trade, that if we have a Commonwealth conference now it will be a conference which will analyse problems but will not come to conclusions. But if the President of the Board of Trade, on behalf of the Government, would denounce these provisions of the G.A.T.T. to which I have referred—denounce this treaty which ties our hands at present—then we should call a Commonwealth conference and say, "We are now in a position to give you these increased margins of preference," and then we could also ask, "What can you do for us?"

I suggest there would be new hope of saving our markets on these lines. It seems to me that that would be a constructive policy, and I ask the President of the Board of Trade to ask his colleagues in the Government to consider whether action could not be taken upon it in the near future.

3.55 a.m.

Mr. Ronald Williams (Wigan)

I hope that the hon. Member for Preston, North (Mr. Amery) will not think me discourteous if I do not follow him in his argument. I want to develop an argument which has been passing through my mind, and if I were to do this and also reply to the hon. Gentleman the House might think perhaps that I was taking too long. My constituency suffered as much as any during the years between the wars, and although it seemed as if confidence had returned completely, it is a fact that large numbers of workers now feel the gravest anxiety about the position in the textile industries.

I would feel more confidence in the future if that anxiety were shared by Her Majesty's Ministers. During this debate I have had a feeling that they are by no means satisfied that the position is as desperately serious and urgent as it is. The speech of the President of the Board of Trade today was directed to showing reasons why the Government should not be regarded as having responsibility in this matter, and I was puzzled for some time as to why this should be so. Obviously, as individuals, hon. Members on the other side appeared to be very sympathetic when they were talking about unemployment.

I came to the conclusion at last that we were speaking different languages; that we on this side were hypersensitive about unemployment because it means so much more to us than it does to the party opposite, and that there is a deep cleavage between the parties on this issue. I do not make that statement without having gone into some detail as to the reasons on which I base that observation.

The difference between the parties is to be found chiefly in this: we on this side are pledged to full employment, and we recognise that there are some difficulties of great intricacy which flow from our acceptance of that principle. The party opposite are not so pledged. They do not believe in full employment. They have clearly stated so on many occasions, and recently and clearly in the debate on manpower and productivity. We on this side have suffered many jibes on many occasions from hon. Members opposite, and we have been jeered at in the Press, because of our belief in full employment, and we have been criticised in many learned journals.

It has been said that if we have full employment we have incipient inflation as its consequence, that we are asking for disaster if we persist in that policy of full employment, and that the only way out of it is to have a pool of unemployment. There are many economists of some standing who have taken that point of view, and pressed it, repeatedly. So far as the party opposite is concerned, even when we attempt to give them credit for believing in it, they demur. One of its most distinguished Ministers is a lawyer of great experience, a person whom I say, frankly, I respect so far as his legal qualifications are concerned, and to whom I offer tribute as a person and on the impecoable way he expresses himself in this House. I am referring to the Minister of Labour.

No one more authoritative can be discovered if one is to find out what is the attitude of the Conservative Government in relation to this question of full employment. I want to make it clear that I am not making any attack upon him. His words are clear. I will quote them. My right hon. Friend the Member for Blyth (Mr. Robens) had given the Minister of Labour credit for believing in full employment, and had said so. The Minister said: He,"— that is, my right hon. Friend the Member for Blyth— also did me the justice of saying that he was sure I was in favour of a policy of full employment. I want to see a high and stable level of employment. That is my aim, and within that policy to achieve the other objects which we are going to discuss."—[OFFICIAL REPORT, 3rd March, 1952, Vol. 497, c. 53.] Now there is a world of difference between full employment and a high and stable level of employment.

Mr. Fell

The difference here is one of real honesty. It depends surely upon what the hon. Gentleman means by full employment. If he means by this complete and absolutely full employment that, of course, is a palpable absurdity, because that has never happened, and never will happen. If, on the other hand, he means the absolutely true and only attainable object, he must use the words, "a high and stable level of employment" because those are the honest ones.

Mr. Williams

The suggestion made in the intervention is that there is some dishonesty by someone regarding the use of these terms. Let me say immediately that I do not for one moment suggest that there is any dishonesty on the part of the Minister of Labour, for the term was used with precision, and, unlike the hon. Gentleman who has just spoken, the Minister of Labour really appreciates the difference between full employment and a high and stable level of employment. He so distinguishes in the words I have quoted.

When we talk about full employment, we mean the type of attainable full employment that involves the controls and the policy which hon. Members opposite criticised for so many years and which so-called orthodox economists have criticised in their journals. The type of full employment we mean is that which, we acknowledge, keeps us on the brink of incipient inflation. The high and stable level of employment of the party opposite would allow for 8 per cent. unemployment.

Mr. C. I. Orr-Ewing (Hendon, North)

The hon. Gentleman is trying to make a difference where none exists. "High and stable level of employment" is the phraseology of the White Paper on Full Employment, which was signed by the present Leader of the Opposition and the ex Lord President of the Council. It was a coalition matter, and I do not see why the hon. Gentleman tries to make capital out of it.

Mr. Williams

I am indebted for that courteous intervention. There need be no misunderstanding about this point, for the term was used in the White Paper.

It is clear that certain people had in mind a level of unemployment of about 8 per cent. I am not saying that the Conservative Party have indicated that they would like that level of unemployment. I should be delighted to hear from any member of the Conservative Party what he does mean by a high and stable level of employment, because nobody could be more shy about anything than they are about that. They always say that the term was used in the White Paper and that other people signed it. But I have found that our term "full employment" is frequently understood by members of the Conservative Party as over-full employment—a disgraceful, disgusting term that we have heard in this House on many occasions, always from members of the Conservative Party.

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

I do not know if the hon. Gentleman was in the House from 1946 onwards. If he was, he may remember that I pointed out on more than one occasion that the first public man to use the phrase "over-full employment" was the Foreign Secretary of the Labour Government, the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison), then Lord President of the Council, at a Press conference in August, 1947.

Mr. Williams

If the House feel that I should withdraw, I must say that I was speaking within my experience during my period in this House—a short period, but it extends over the past four years. I say that, whatever the origin of the term may be, I have heard it in this House on many occasions and never from anyone but a member of the party opposite.

Mr. C. I. Orr-Ewing

As the hon. Gentleman has made an allegation, could he quote, giving, perhaps, some reference to HANSARD? He appears to be under a misapprehension. I never heard the term, except in the context stated in the intervention by my hon. and learned Friend the Parliamentary Secretary.

Mr. Williams

I am in the recollection of my colleagues. I can only state that it is within my recollection that the term has been used on many occasions here and always by members of the Conservative Party.

Mr. Anthony Greenwood

It was used by Lord Woolton.

Mr. Strauss

It is perfectly true that it was used by Lord Woolton some weeks after it was used by the then Lord President of the Council. They both meant exactly the same thing by it and it was quite justifiable. I asked the present Leader of the Opposition who was then Prime Minister—because I did not want there to be a misunderstanding—whether this statement of the then Lord President represented the policy of what was then His Majesty's Government, and the answer was "Yes." I will not quote the exact answer but he said it had a context. I had no quarrel with it.

Exactly the same use was made by the Lord President and by Lord Woolton of that phrase. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) made exactly the same use of Lord Woolton's phrase as the hon. Member is now making. He asked what Lord Woolton meant. I at once wrote to "The Times" asking why the right hon. Member for Bishop Auckland put that question to Lord Woolton and not to his right hon. Friend the Lord President of the Council, who had used it to describe his Government's view some weeks earlier.

Mr. Williams

I am most indebted to the hon. and learned Gentleman for his observations. They do not detract in the slightest from the substance of my submission, which is that there is a substantial cleavage of opinion between the party opposite and the party on this side about our ideas concerning full employment. There is, therefore, greater anxiety on this side of the House in relation to unemployment than there is on the other. May I make this clear? Nobody on this side would have taken the same view as did the President of the Board of Trade concerning the 5 per cent. level of unemployment in the textile industry. The situation in the industry today is an economic crisis—

Sir Herbert Williams (Croydon, East)

Who started it?

Mr. Williams

—and will become an economic catastrophe if matters are not dealt with vigorously and diligently by Her Majesty's Government. If I am wrong, and if the Parliamentary Secretary can assure me that Her Majesty's Government are as anxious as anybody about the situation in the textile industry, nobody will be more pleased to report the matter to my constituents than myself.

Up to the present I have had a contrary opinion, an impression from speeches opposite and from what was said by the President, that a certain part of these great industries are expendable, which, for reasons for which the Government are not in any way to blame, must go because they cannot stand up to the changed conditions in the commercial world.

That may be the correct view, but if it is, let the Government not conceal it. Let the Government clearly state that we shall be obliged in this country to carry on in future with very much smaller textile industries. If they say that, they could bring hope where there is now despair, because of the uncertainty of the present position.

At present the impression is given that the Government do not care; that they are going to leave the textile industries to their own devices and that they will not intervene. Consider what the President of the Board of Trade said today. He might have felt that we were holding this Government responsible for all the troubles which have come on the textile industries. I repudiate that view completely; I do not for one moment assert that that is so.

There is, however, a field of Government responsibility in relation to every one of the points to which the President referred, and my complaint is that he did not give us the slightest idea of what the Government were going to do about it For instance, he talked about worldwide decline. Nobody in his senses would say that this Government is responsible for the world-wide decline. But surely the Government itself should say that, in face of a world-wide decline, they have certain responsibilities; that they do not take any blame upon themselves for the position, but they feel that in relation to these industries they have a certain job to do.

But the whole attitude of the President was clearly to the effect, "How can you blame us for a world-wide decline? That is something for which no Government is responsible." From that point on we had no statement about what the Government was proposing to do. It does hearten me a little to realise that there are critics on that question actually on the Government side of the House. In the course of the debate there have been many suggestions that the Government should do this or that. It would have been a much happier state of affairs if those proposals and suggestions had come from the President himself, indicating that the Government were occupied about this matter.

Then the President spoke of the buyers' market, his second point, as if, because there was a buyers' market, and because we had to leave so many things to the industries themselves, the Government had no responsibility. If the Government are turning their back upon the industries, let them say so quite clearly. If, in fact, they accept responsibility let them please define the area of that responsibility and give some message of hope to people who are despairing at the present time.

Then we come to the third and fourth points, the problems of competitive efficiency and increase in unemployment. There, again, I ask the House to note that we did not have from the President any indication of what the Government is prepared to do. Not the slightest idea was given as to whether they had any policy at all. In fact, the position was so unsatisfactory that one of my hon. Friends suggested that the Government might be deliberately causing unemployment. While I dissent from that view, I accept that it does look very much like that.

Unless firm assurances are given from the Government Front Bench, the impression can easily be given that it would be most convenient if a certain part of these industries were destroyed and the people transferred to other industries. If that is their view, if it is part of their policy that, because of the difficulties we are running into in the world markets, it is better that part of the industries should be destroyed, the Government should say so. Whatever the consequences of their pronouncement might be, it would be honest.

The Australian cuts followed the conference of the Finance Ministers. We are left in as much doubt as ever, after the observations of the President, as to whether they did discuss the effect on the textile industries.

Personally, I acquit them of the suggestion that they did not discuss it. I do not think that such an important conference could have been held without their having any discussion at all. If, in fact, they did not have any discussions, if they entered that conference convinced that the textile industries did not really matter and they could turn their back upon them and need not discuss them at all, then this Government would be completely discredited and not fit to hold office a moment longer.

But if they did discuss the effect on the textile industries then surely, having discussed it, they would have made some pronouncement. It would not have come as such a surprise to them when the cuts occurred. When they did occur, we had a statement in the House concerning the sovereignty of the nations in the Commonwealth. Surely there is a clear inconsistency between the concept of sovereignty in that context and the degree of co-operation which it was suggested had existed in the conference.

If this is the degree of co-operation—I say nothing about the pressures the Australian Government were under—which exists at the present time, then the idea of that sort of co-operation is a mere sham and a disgrace. In the meantime, here is one of our greatest industries which is dying while the Government are doing nothing whatsoever about it. Apparently they have no policy in relation to this industry. If they have a policy, then in heaven's name, since the President of the Board of Trade himself has said nothing about that policy, the Parliamentary Secretary might fill the breach by telling us, in his reply, whether the Government have any views on this matter at all.

4.22 a.m.

Mr. Richard Fort (Clitheroe)

The horn Member for Wigan (Mr. R. Williams) has an agreeable manner which belies the political platform "facts" which he tries to put over. He knows that the reference to the Government wishing to see 8 per cent. unemployment is based upon a complete untruth. The figure of 8 per cent. was taken by the Government Actuary as an assumption when working out certain figures in connection with unemployment insurance and when discussing insurance and full employment.

Mr. S. Silverman

Would the hon. Member explain to the House why, if "a high and stable level of employment means" exactly the same thing as "full employment," the party opposite did not say simply "full employment" instead of using this other long and cumbrous phrase?

Mr. Fort

Because, as the hon. Member very well understands, neither at this time nor in the time of any Government has every single person who could be working in this country been working. It is dishonest to mislead people with a jargon expression and to use "full employment" when all that any Government has achieved is a high and stable level of employment.

Mr. H. Strauss

Is my hon. Friend aware that this much discussed phrase "a high and stable level of employment" was not only used in the Coalition White Paper but was used in the White Paper on the distribution of industry published by the Socialist Government in 1948?

Mr. Fort

I am very grateful to my hon. and learned Friend for that additional information.

The moving peroration which the hon. Member for Wigan delivered when he said the Government had not defined the areas of responsibility in connection with the textile industry surely meant that he has not given much thought or study to what my right hon. Friend the President of the Board of Trade said in his opening speech in this debate. Clear areas of responsibility were laid down. Decisions were made about import licences being discontinued, quota arrangements being made with the Colonies and also the policy of diversification in the textile areas.

I think that what we have been able to put before the Government from both sides of the House have been additional points to which the Government might well turn their attention. One of the difficulties in the whole of this discussion has been that unemployment varies tremendously from place to place. In one of my own townships it reaches the same level as in Nelson and Colne, the division which the hon. Gentleman opposite represents. In another—about six miles away—there are just about 100 unemployed, which is about the same figure as that for the last two, or three years.

Mr. Hale

Do I understand that the hon. Gentleman is now saying that the meaning of "a high and stable level of employment," in political propaganda, is virtually the same as "full employment," meaning thereby nearly full employment, and something like total employment? In Oldham at present there are 33 per cent. unemployed in the textile industry. Is the hon. Gentleman now saying to the House that if that misery is spread over the country and averaged out, it does not matter very much? If he is saying that there is a serious situation? Is he also saying that the Government meant what they said and are going to do something about it—and if so, what?

Mr. Fort

I say that there is a desperately serious situation in one of my townships and there is a situation which has remained the same for the last three or four years in another one. That is the problem we have throughout Lancashire. It is desperate in some places and it is less so in others.

Let us turn to some of the causes and some of the remedies which the Government have put forward and others which have added to the list during this debate. Undoubtedly, we must turn our attention to exports. It is exports which have dried up, not only from this country but from all other exporting countries in the world. This, unfortunately, has been part of a long-term trend, as other countries have put in their own manufacturing equipment. I think there is no doubt about the truth of the suggestions of the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who has such an extensive knowledge of the textile industry generally, that we must hold on to what we have, using all the bargaining weapons which the Government and the industry possess.

We must not allow a single yard of cloth to be lost, wherever we can get that by fair trading and by firm negotiation. As part of that fair trading and firm negotiation, the proposals which my hon. Friend the Member for Preston, North (Mr. Amery) put forward about the use of preferences and the repudiation, if needs be, of G.A.T.T. ought to be considered by the Government.

There are other points to which the Government can certainly turn their minds. One of these has been the importation of grey cloth for finishing in this country. As I add up the figures, there have been imported here for finishing something over 1,000 million yards between 1948 and 1951. They were imports, as hon. Gentlemen opposite know, which were arranged under the Socialist Government as part of the Socialist planning for the textile industry.

Mr. Burke

Does the hon. Gentleman remember that when these goods were imported it was necessary to get supplies from abroad, and that every loom at home was full of warps and we could not make them ourselves?

Mr. Fort

Perhaps I may continue before the hon. Member for Burnley (Mr. Burke) becomes too excited on this score.

I object not necessarily to the amount imported but to the relatively small quantities re-exported. Of over 1,000 million square yards in three years, only about 580 million have been re-exported. I shall be glad if my hon. and learned Friend can tell me, when he replies to the debate, what has happened to the over 400 million square yards which have apparently been absorbed in this market.

It was all very well importing Japanese, and also in later years, large quantities of Indian grey cloth for finishing and re-exporting to the low-cost colonial market, for which there might have been an argument, but nearly half the quantity has apparently not been exported, and that needs to be explained to the House and to the industry.

The other imports which have greatly concerned hon. Members and need explaining are the very large imports for re-armament purposes. The hon. Member for Nelson and Colne (Mr. S. Silverman) says that they were made to meet the needlessly rapid demand for rearmament in this country. I do not want to enter into a political argument with him, but why could not the late Government, when placing contracts, have placed the huge quantity of over 100 million square yards—which it could not get English manuafacturers to accept—in smaller quantities with properly negotiated break clauses instead of loading up the market so that delivery will not be completed until well past the middle of this year?

Mr. S. Silverman

Does not the hon. Gentleman realise that the argument against that—which I do not accept—was that the whole thing was so urgent that it was not possible to wait? If the hon. Gentleman is now saying that that is not a good argument and that it was possible to wait, would he apply that argument only to cotton or does he think it valid for any other aspect of the rearmament programme? If he thinks the latter, he is in the same danger as his colleague who spoke hours ago of finding himself joining the group led by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan).

Mr. Fort

With his characteristic beguilement, the hon. Member has tried to make me say what I did not say.

I did not criticise the Government for placing re-armament orders at the time that they did, because no doubt English manufacturers could not accept them. I did criticise them for placing re-armament orders abroad in the quantities and for the length of time that they did and for not arranging, in accordance with normal commercial practice, break clauses, with compensation if need be, to make provision for eventualities which they could not then perceive.

Mr. Silverman

How does that differ from what I said?

Mr. Fort

The hon. Member was trying to imply that I said that the Government should not have placed orders abroad.

Mr. Silverman

I am sorry if I did not make myself clear. I thought that the hon. Gentleman's argument was that it would have been possible to arrange these matters in such a way as to enable all or some part of these contracts ultimately to be fulfilled by English manufacturers. That could only have been done if all or part of the deliveries had been delayed. His argument concedes that some delay was possible. If some delay was possible for that, why not for other aspects of the re-armament programme?

Mr. Fort

Deliveries under contracts are apparently being delayed at least into the second half of the year in any case.

Mr. Hale

The hon. Gentleman is running away from the argument.

Mr. Fort

I am certainly not running away, but I am not going to be enticed into discussing the matter in other fields.

Mr. J. Edwards

The hon. Gentleman does not seem to have listened to the President of the Board of Trade. The right hon. Gentleman made a perfectly fair statemeut about this, to which I took no exception. He made it plain that the circumstances were such that the programme of our defence requirements could not be met if we had not placed these contracts where we did.

Mr. Fort

If the hon. Gentleman has put the correct interpretation on my right hon. Friend's argument. I still find it difficult to understand in view of the fact that delivery is certainly not being completed until August at the earliest, and some are later still.

Mr. Silverman

But that failure to deliver on the arranged dates is not confined to these contracts. It is true of every single item in the whole of the re-armament programme.

Mr. Fort

We are discussing textiles now, and not other items.

On the subject of trade negotiations much has been said about Australia, and I am not going to add anything, but more might be said about Argentina. In the last trade agreement negotiated the Argentinians undertook to grant licences for British textiles up to £4 million. I understand that in fact they have not granted licences for more than £1 million. In the meantime, we have been paying them large sums of money for their meat. They have been spending that money on textiles from Brazil, Italy, France and Germany. I would ask the Government, when they come to negotiate the next trade agreement this summer, to take a very tough line about getting Argentina to use the sterling to buy textiles from us instead of other European countries, whatever they may do about their neighbour Brazil.

Long-term improvement of employment in Lancashire falls into two parts. First, all possible assistance should be given to the building of plants to develop new textiles whether improvements of the different types of rayon, or the new fibres such as nylon "terelene" and others still being developed. The highest priority should be given to these development because the future of the British textile industry depends on bringing out new cloths and the use of these new fibres. To maintain our position both in the home market and in exports we must lead development in the world in these new fibres.

For all that the hon. Member for Nelson and Colne said, the previous Government did not encourage diversification of industry in East Lancashire. They seemed to take too much notice of what employers and some on the union side said about the need to keep new industries away in order to retain the workers in the textile industry during the boom days of the late 1940's.

I must say that I fell for the policy myself; but few said that it was unwise at the time, and experience since has shown how unwise we were to put all our eggs in the one basket. If we had shown wisdom, more industries would have gone there. The operatives then would have known that there was alternative employment, and might have felt that they could more easily accept the idea of redeployment and the adoption of new ideas without the risk of working themselves out of the only work or almost the only work that there is now in the district. Another aspect of diversification is that there would have been a stimulation of new ideas all through the district.

I am quite sure that, even at this late hour, it would be to the benefit of East Lancashire if a great amount of drive was put into the bringing of new industries to that part. If the Government, or if industrialists, want advice or information, we have not only the excellent voluntary organisation which is known to many hon. Members on both sides, and to which some belong. The local authorities are also working together to give information about facilities available, and when the Parliamentary Secretary winds up the debate, I hope he will express, with all the warmth he can, the acceptance of the idea that we must see new industries and further diversification in East Lancashire.

4.42 a.m.

Mr. William Ross (Kilmarnock)

Having been here ever since the start of the debate, I do not think I can offer much which will be new, but I will contribute a new accent; because, if I have any comment to make about the debate, it is that it has been very parochial. I want, geographically at least, to extend the scope of the debate.

Some people think that Scotland provides only spirits, ships and scenery. But, there are no fewer than a hundred thousand people whose wellbeing is tied up with this very industry which we have been discussing all day. In my constituency of Kilmarnock and area, in Ayr to the south, and in Central Ayrshire, we are already feeling the cold draught of unemployment that we used to look back on with a shudder, having experienced it before.

The President of the Board of Trade cannot be very proud of his performance today. He gave a very placid, and rather ponderous review of facts; a nice historical survey, but there was no attempt properly to analyse the difficulties of industry. There was certainly no solution propounded in his speech. We got the usual pronouncements and exhortations and nothing else. If in Lancashire, Paisley, Kilmarnock, Glasgow, people were hoping for anything from him they certainly did not get it.

In the debate some strange suggestions have been made. This matter of the diversification of industry: is it practical at this stage, with this Government, with the pronouncements which we have had on credit policy and building policy, to suggest new factories as a possible way out? In any case, it contains the seed of the despair which we have been suspecting, that the battle for the textile industry is already lost, and that the Government have accepted it as lost.

The hon. Member for Louth (Mr. Osborne) made one of the most significant remarks in the debate, but unfortunately he did not follow it up. In one of those rare flashes of insight which occasionally illuminate the gloom in which he revels he said that what we were facing was a crisis in the world capitalist system. We have had talk about a world wide recession in textiles, the Australian cuts and so forth.

Why was there a recession? It was due to the complete lack of confidence of traders, manufacturers and of the woman standing in the shop hoping to get goods at the right price. It was the lack of confidence in the future of industry created by the panic that raised the cost of raw materials of the textile trade to such fantastic heights.

Hon. Members opposite do not like price control. But what was needed was not just price control in the home market, but price control in international markets, and a joint buying policy. It was something we should have looked for from countries that were supposed to be co-operating militarily. The same co-operation economically would have prevented that fantastic rise that has bedevilled the textile industry ever since. I can see no hope of international action in the speech of the President of the Board of Trade. He does not seem to think the problem arises at all. But it is the first problem, and until we get that price stability and that return of confidence, with justice to everyone—producers, traders, manufacturers, and consumers—then this slump will go on.

I want to deal with a factor which has aggravated this slump. I refer to the Australian cuts. I put a Question to the Prime Minister on Monday. I asked him for something which in this debate I have heard asked for from both sides of the House, namely, a Commonwealth conference. Probably not every hon. Member agrees with the reason which I gave for holding such a conference—because of the serious unemployment in Britain, arising directly out of decisions of Commonwealth Governments. I want to try to get some light on what happened at the last conference, and on whether this matter was discussed. From the Prime Minister's reply, it obviously was discussed. Otherwise, why should the Prime Minister have said: The Commonwealth Finance Minister's, after their conference in January, re-affirmed the need for frequent and comprehensive consultation between Governments within the Commonwealth on the problems of the sterling area. They stated that steps would be taken within the next few months … I am satisfied that the Chancellor of the Exchequer and, surely, the President of the Board of Trade, knew what those steps were going to be so far as South Africa and Australia were concerned, and the effect they were going to have on the trade of this country. If they did not, what were they discussing at the conference? Is there no confidence between the various heads of the Commonwealth these days? It is not what we were led to believe by the red, white and blue publications which poured forth from the Central Office.

And then the Prime Minister went on to say: It is not true that serious unemployment in Britain is arising directly out of the decisions of other Commonwealth Governments. An hon. Member, speaking about the effect of a decision of the Pakistan Government, belied that fact. This cutting from a Conservative newspaper in Scotland, the "Daily Record," last week, "Australian import cuts hit Scots lace industry," belies that fact. I want every Lancashire and textile Member of Parliament to read, in the Prime Minister's reply, It is not true that serious unemployment has arisen directly out of the decisions of other Commonwealth Governments or from any other cause."—[OFFICIAL REPORT, 24th March, 1952; Vol. 498, c. 7.] In other words, we have heard repeatedly today about 70,000 unemployed in the textile industry in Lancashire alone, but the Prime Minister says that is not serious.

Mr. Fort

I should like the hon. Member to do what his colleague did earlier, namely, to say part-time working and unemployed numbering 70,000.

Mr. Ross

It is pretty serious for the housewife trying to run a home.

Mr. Fort

Yes; but that figure includes part-time working.

Mr. Ross

I received a letter this evening from a constituent on a constituency matter, and at the end of it I read: I have learned, since starting to write this, that six more girls were paid off on Friday last, and that Dobson and Brown are now working short time, a fortnight in and a week out. You can call that by any name you like, but the housewife calls it unemployment.

Mr. Hale

I have some constituents who rank as part-time and apparently are not even classified as unemployed unless they are out on a Monday in the middle of the month, and who are working three days in five weeks.

Mr. Ross

If this debate has proved anything, it is that the situation is serious, no matter how one chooses to describe the state of unemployment in the industry. For the Prime Minister to suggest that it is not true that serious unemployment has arisen in Britain from any cause is fantastic. Must the figure go to one million before it is serious, or how high?

Mr. C. I. Orr-Ewing

I remember hearing my right hon. Friend use that phrase. I think he said, "from this cause."

Mr. Ross

The hon. Gentleman could not have heard the Prime Minister say that because it was in a written answer, and he will find it in Monday's HANSARD.

In Scotland, where the unemployment percentage is double that of the rest of the country, we consider it is already serious. The figures in Ayrshire are rising every day. I want to refer to industries in my constituency that have not been mentioned. The lace industry in Britain is divided between Nottingham and part of the Kilmarnock constituency—three towns, Darvel, Newmilns and Galston, from which a great proportion of our lace comes in the form of lace curtains, Madras muslins, table spreads and the like.

There had been a certain amount of recession but not much until now. What was reported last week in the Scottish Press about the Australian cuts has now created a serious situation. There are fears of unemployment facing the 2,000 workers in the Irvine Valley lace industry. What is the President of the Board of Trade prepared to do about it? The lace workers and the manufacturers in Kilmarnock constituency, as well as the country and the Chancellor of the Exchequer, got very little hope from his speech.

The point is that we cannot afford to lose these industries, on which the economy of the country and our progress this year depend. We must build up the textile industry and get the necessary volume of exports. Lace industry figures show that Australian imports represent £1,390,000 or 36 per cent. of total lace exports, or 16 per cent. of the whole trade. That does not take into account the further deterioration caused by the South African position.

With the cut to 20 per cent. which has been announced, the permissible quota hardly covers the orders already contracted for which are either on their way to Australia or in warehouses awaiting shipment. The manufacturers would like to have the ideas of the President of the Board of Trade on that matter and on the question of the sanctity of contracts. I hope he will earnestly consider the problem, because to ask the industry to carry these heavy stocks and to have the Bank rate raised is to throw the lace trade into financial chaos at a time when the industry, under the present Government, has not a pleasant prospect for the future.

Then there is the question of switching to other markets. The dollar market is absolutely impossible so far as America is concerned, and the President of the Board of Trade knows why. The dollar market for lace is completely cut out by a high tariff wall. As far as Canada is concerned, the lace industry has just embarked on a five-year publicity programme and does not expect any immediate return. Here is the position of how hard and how directly the Australian decision has affected that industry.

I want to deal with another textile that has not been mentioned, the carpet industry.

Mr. Nabarro

Hear, hear.

Mr. Ross

As everyone knows, Kilmarnock, followed by Kidderminster, which closely follows it, are important carpet manufacturing centres. There is no industry that has given itself over more whole-heartedly to the question of boosting exports in the past five years. A firm in my constituency has just completed a new extension and into that extension probably will go Rolls-Royce engines.

The industry has been so anxious to help the Government in their determination to get dollars that whereas in Kilmarnock we have a Canadian firm producing agricultural implements, the carpet industry has set up a factory in Canada. Their position—and this applies to Glasgow, and to some other Scottish constituencies is that short time is already being worked. I will leave the hon. Member for Kidderminster to speak for the English section. Here again it is an under-the-belt blow that has come from Australia, with exactly the same kind of bedevilment and confusion about contracts and difficulties being thrown on to the industry out of which they cannot readily see a way.

When the President of the Board of Trade appeared, I wondered what kind of stuff we should get. I remember the breezy garden-party efforts he made over transport, but with the problems he has on his hands now I do not wonder he stands there and gives us placid addresses and does not throw his weight about as he did then. What is to be done? Carpets are to be free from Purchase Tax, we gather from a reply given by the Chancellor of the Exchequer.

Mr. Nabarro

I am sure the hon. Gentleman does not wish to mislead the House. Carpets are still subject to 33⅓ per cent. tax.

Mr. Ross

I regret that I misunderstood the reply the hon. Member received to his Question. That makes the position exactly the same as in the lace industry. Both of these industries are bedevilled again by this D scheme.

Mr. Shepherd

Does the hon. Member realise that they are not bedevilled by the D scheme?

Mr. Ross

If the hon. Gentleman would read the correspondence from manufacturers of lace—

Mr. Shepherd

We are talking about carpets.

Mr. Ross

If we get the question of Purchase Tax on carpets the same thing is going to apply.

In this age of abbreviations, I do not think any abbreviation has been more apt than that applied to this D scheme, judging by the remarks which have been made about it today. Remember that the great bulk of the textile trade of England, and Scotland as well, is for utility products in the home market. This new scheme will raise prices and make it more difficult for people to take up their share of the home market allocation; quite apart from the fact that another aspect of the policy of the Government, which will be applied in a few hours, will further reduce the purchasing power of the mass of the people; that new charge which will affect their ability to take up the slack.

This fear of unemployment is spreading in the textile industry, and when other people read about it in the newspapers the same fear eats into them. They wonder whether the bad old days are coming back, and the tendency is to hold on to what they have; not to buy the carpet they need or the dress that they would like. Unemployment snowballs and creates unemployment, and this curtailing of necessary spending will worsen the position.

What is to be done? The President of the Board of Trade should accept the advice which has been so freely given to him and exempt all textiles from the incidence of Purchase Tax and the D scheme which he announced so recently. That at least would help meantime. Then he has other things to do. He has to achieve price stability and work for the freedom of trade within the Commonwealth. There should be a new Commonwealth conference called immediately to deal with this specific matter.

Do not let us accept this talk about over-production. Go into any home in Britain and ask the housewives to believe that there is over-production in the textile industry, when she needs so much and the person next door needs so much. The same thing applies throughout the world. We come back to what the hon. Member for Louth said. It is a crisis of the capitalist system, the failure to equate the purchasing power of the people with the productive capacity. I can see absolutely no hope of the present Government being able to lead us towards a solution.

5.8 a.m.

Mr. G. B. Drayson (Skipton)

I should first declare my particular interest in this debate. The textile industry is the largest single industry in my constituency, and I am a director of cotton and woollen companies. As a result of this debate, the House is in no doubt about the magnitude of the problem which confronts the industry at the present time. I know the Government will be anxious to take what steps they can to help us to solve these problems, although it has been appreciated by hon. Members on both sides of the House that many aspects affecting the textile trade are world problems over which we have very little control. But the whole matter is one of immediate importance, and I think we need some immediate action to deal with it.

As I see it, we are confronted with three special problems. One is the question of overseas markets. The second is the position of the home trade and home consumption of textiles. The third is the financial and technical problems which are facing manufacturers at the present time. On the question of overseas problems I should like to reinforce what has already been said in this debate—that the Government should make a special point, when negotiating further trade agreements, to see that textiles are written into those agreements.

Mr. Hale

If the hon. Member will allow me, this point has been put so often; it was put by an hon. Member just now: when we buy meat from the Argentine, will we insist upon their buying textiles in return? Does that mean that we are talking about bulk buying and selling or are the individual butchers to be allowed to buy textiles vicariously in the Argentine?

Mr. Drayson

Greece, for example, has already been mentioned in this debate. I do not think we have a trade agreement at all with the Greek Government but we do buy a considerable amount of produce from Greece every year, and it would be reasonable for us to say they should spend a certain amount of sterling in this country on our textiles. The exact textiles they buy is a matter for individual traders to make contact with buyers in that country, where the Government could license the expenditure of a certain amount of sterling for purchasing textile goods.

It does not involve bulk buying or bulk selling at all. It involves a quota system agreed to by the Governments—that a certain amount of money shall be made available for purchasing textiles rather than that the Governments or countries with which we are doing business should buy textiles from a third party.

Mr. J. Edwards

Does the hon. Member mean that if, for example, we are making an agreement on meat or some other essential commodity, he would rather not buy the foodstuffs than make an agreement in which another Government were not told they had to buy this or that? If he is saying that, it is very serious. Is the hon. Member saying that, however much we need the food, we will not take it unless the other country earmarks sterling for a particular purchase?

Mr. Drayson

No, I am saying that if we reach agreement we should see that textiles are written into that agreement. If the Argentine say quite definitely, "We do not want your textiles," I should have thought that to reasonable people it would have been possible to explain the position of this country.

Mr. Houghton

They are not reasonable.

Mr. Drayson

We should make a special effort at this time, pointing out our problems to the countries whose produce we are anxious to take, and stating that it would be appreciated—

Mr. J. Edwards

I have never known a single negotiation where every effort has not been made to do exactly that; and I have no doubt exactly the same thing is happening under the present Government. But, as I have already pointed out, in the case of the Argentine I was not able even to supply the yarn they wanted to put into the agreement. That was because at that time there was a sellers' market and a terrific demand all over the world for our yarn.

Mr. Drayson

That is the point. The position is now different. We would be able to supply yarn or cloth. I am dealing with any new agreement or commitment. I am not blaming the hon. Member for his inability to persuade the Argentine Government to take our textiles which we would not have been able to supply. I am saying that in any fresh agreement entered into, the House should urge the Government to make a point of seeing what can be done to ensure that our textile goods go into the markets concerned.

Having just mentioned Greece, I should like to put a question to the President of the Board of Trade and to ask what is the position about Italian cloth coming into the English market. Now that we are having difficulties at home, is it not a fact that Italian cloth can still come into this country and compete with our own product? A lot has been said during this debate about Japan, and I should like to say that the workers of Lancashire and in the textile industry in general will remember well which Government has been in power during the past six years, when Japan has been able to build up her industrial capacity and to re-establish herself in the world.

Mr. Anthony Greenwood

Will the hon. Gentleman say what steps he thinks the last Government should have taken to stop Japan doing that?

Mr. Drayson

I merely made a statement of fact as to the Government that was in power. If the Government thought it was possible to do anything about the situation, no doubt they would have done it, unless they could not find anything to do.

Mr. S. Silverman

The hon. Gentleman is not being clever when he says that Lancashire workers will remember which Government was in power when something happened, if he intends to infer that that Government was to be blamed in some way for what has happened, or could have controlled it. The Japanese industry was built up in that period by the American Government, with American capital, for a set purpose, and if the hon. Gentleman says we should have quarrelled with the Americans about it, I agree with him.

Mr. Drayson

I said I thought it useful to the public, when reading the speech of the hon. Lady the Member for Blackburn, East (Mrs. Castle), to remember that the Socialist Government was in power when the Japanese were building up their industry.

Mr. Anthony Greenwood

Perhaps the hon. Gentleman will refresh our memories and tell us what practical proposals in that direction he himself submitted during the six years of the Labour Government?

Mr. Drayson

I remember a delegation going to the President of the Board of Trade when certain proposals were put forward, as suggested by the hon. and gallant Member for Macclesfield (Air Commodore Harvey). The suggestion was that a delegation should certainly go to Tokyo and see that the British textile industry's interests were considered in any discussion that took place at that time.

Mr. T. Driberg (Maldon)

If the hon. Gentleman is arguing that the electorate are to hold responsible a Government for whatever happens when it is in power, can we take it that the public are to assume that this Government are responsible for the present serious unemployment?

Mr. Drayson

That would possibly be equally true. That is precisely what hon. Gentlemen opposite are trying to do when they suggest that the effects we are suffering from now—which are again the results of their mismanagement of affairs for six years—are the result of this Government having taken over only six months ago.

Mr. Joseph T. Price (Westhoughton)

Is that the hon. Memer's idea of conducting the Council of State which has been referred to so charmingly by hon. Members on his own side?

Mr. J. Edwards

Will the hon. Member for Skipton (Mr. Drayson) put forward some sensible suggestions? We are dealing with a serious situation in this industry, and we ought really to pool our ideas and not resort to all this totally irresponsible talk and what I consider to be the lowest kind of political artifice to which I have listened for a very long time.

Mr. Drayson

Perhaps I have been listening to the speeches of hon. Members opposite for so long that I have fallen into the error of their ways. I shall put forward what I consider to be practical suggestions. I would first say a word about the action which Australia recently took. We all appreciate what Australia has done in the sterling area in the past six years, but her recent action has been rather a blow to the sterling area as a whole. If individual countries within the sterling area are to take unilateral action, it will tend to undermine the confidence of the members of the sterling area in each other.

As to the cancellation of orders placed by Australian firms, I am told that in many cases the goods were ready for delivery before 7th March. The Australian buyers asked the merchants in England to delay shipment, and this was done in order to oblige the Australian customers. The merchants find that, through their action to maintain the good will of their Australian customers, they are now penalised by being unable to deliver the goods at all. I hope that, when they are able to re-open their markets, Australia and South Africa will give some preference to British textiles rather than the products of some of our competitors.

I am glad that reference has been made to the possibility of exploring the markets of Eastern Europe. I want to put on record the comments made by the Secretary for Overseas Trade in his speech at Geneva on 7th March to the Economic Commission for Europe. I admit that towards the end of the conference he became rather sceptical as to whether any good was likely to arise in this direction, but he was full of hope at the beginning, and said: It would be most helpful to Western Europe, and, I am sure, equally valuable to Eastern Europe, which seems to be so short of consumer goods, if some way could be found of increasing Eastern European imports of textiles from Western Europe. This is one way in which we could help each other. Let us try to do so. What has happened? Under trade agreements entered into by the party opposite, this country has received considerable quantities of grain and timber from the U.S.S.R. It is reasonable to expect that the U.S.S.R. should take some of our consumer goods in exchange.

Another problem is the position in the home market in the wholesale and retail trades. Sales are now at an extremely low level, and it has been suggested that adjustments should be made in the D scheme. Some people would like to see it suspended altogether or brought into operation on, say, 1st January next year with a Purchase Tax-free holiday for textiles in the meantime. I really think something like that will have to happen, even if it is only for two or three months, just to try to clear some of the stocks and to get down to a sound price basis, which everyone would like to see.

Reference has been made to the effect of the D scheme on the medium-priced fabrics. If more drastic action cannot be taken, I suggest that the figure of 4s. should be raised to 6s. That would help considerably because the effect of the D scheme has meant that a large number of medium-priced articles are now more expensive to the consumer than they were before.

Management could be helped in a number of ways. I am in favour of the increase in the Bank rate. It will achieve results in other directions which will ultimately be for the benefit of all, but it has had an adverse effect on textile companies, and I should like the Chancellor to see if it is not possible for the Inland Revenue Department to deal more leniently with textile companies who are in the process of paying their Income Tax and Profits Tax.

Mr. W. Nally (Bilston)

Is the hon. Gentleman seriously suggesting that the Inland Revenue should be given a vague sort of instruction that they shall deal leniently with cases of Income Tax arrears or difficulties affecting a particular industry? If so, that would create a remarkable precedent.

Mr. Drayson

I do not think so. In many cases the Inland Revenue are able to spread the payment of Income Tax and Profits Tax, if it is an industry dealing in hundreds of thousands of pounds and that money could be more usefully employed in carrying stocks or continuing a business without resorting to bank borrowing. It is not an unusual arrangement to find that Income Tax liability is spread over six months.

Mr. H. Hynd

A moment ago the hon. Gentleman said he was in favour of the increase in the Bank rate which, he said, was an added burden on industry. Now he says that because of that he would like to see some special arrangement by the Inland Revenue to spread payments, otherwise money would have to be borrowed at an increased rate. Is he not contradicting himself?

Mr. Drayson

I am not unduly concerned about the Bank rate itself. One or 2 per cent. on borrowing, which is a charge against trading profits, is not a very large item. I am perfectly consistent. With the shortage of capital and the restriction on trading, money reserved for the payment of Income Tax and Profits Tax could temporarily be employed in the industry if the Inland Revenue would accept payment over a longer period.

Mr. Houghton

The hon. Member is asking for a tax-free loan from the Inland Revenue.

Mr. Drayson

That would at least, perhaps, enable extra profits to be made from which additional taxation could later be enjoyed by the Treasury.

Also, I should like to see a review by the Chancellor of the request he has made to the banks about their policy of advances. On 10th March, I think it was, the Chancellor said he had asked the banks to consider sympathetically any requests made for advances by the farming industry where such loan was for increased production. I think that it would be quite possible to say that the strict conditions which he has laid down could be relaxed for a short while to tide the textile industry over its current difficulties. If we could have other concessions, such as attention to Purchase Tax in the way I have described, to enable stocks to be cleared, then this trouble would be found to be temporary.

But if the outlook is as dark as some hon. Members fear, then the banks and Inland Revenue authorities will no doubt take a different view. If, however, we consider this as a temporary phase, then we are justified in making these alterations in policy.

Mention has been made of the Liverpool Cotton Exchange. There is a feeling in Lancashire that we should like to be able to buy direct from the Raw Cotton Commission at the sterling equivalent of New York prices, plus any difference because of freight charges and brokerage involved. At the same time, owing to the difficulties that some of the spinners are experiencing, I would suggest that the Commission itself should be empowered to give credit for, say, sixty days, when a spinner is taking up raw cotton.

I think that the President was quite right in not coming forward with his suggestions as to how this problem should be tackled in detail; but, as a result of this debate, I am sure that the President will be able to discuss the substance of the matter with other Members of the Government and then come forward with proposals for getting over the present textile troubles.

5.35 a.m.

Mr. Harold Davies (Leek)

I have listened with interest to the argument of the hon. Member for Skipton (Mr. Drayson) and it seemed to me that he has really been making a case for "featherbedding" the industry when, on other occasions today, hon. Members opposite have told us that we want more energy and initiative in this industry; more private enterprise, which means more keen competition. But suppose that one accepts the argument supporting the idea of a free loan to the industry; then my answer is that that is not the problem.

The problem is getting rid of the stocks in the pipeline of the textile industry. Seventy five per cent. of the output of the British textile industry is sold in the home market. Even with a loan we shall not solve the problem which arises whereby, with the re-armament policy envisaged by the Conservative Government, 75 per cent. of the consumers have not the purchasing power to buy these commodities. There is no getting away from that argument.

For the other 25 per cent. we are to search the markets of the world. No longer can we hide the argument that with a Budget of £4,500 million, of which one-third is to be devoted to armaments, we can get anything else but the kind of unemployment that is now arising throughout the world. I overheard the President of the Board of Trade say that it was inevitable. I have stood, all along, for what I stand for now; I believe that which is happening is inevitable under any Government, Labour or Conservative, it they follow a policy of overburdening the economy with re-armament to the extent that we are doing now.

Mr. Houghton

Does the hon. Member not remember the time when we had unemployment and no re-armament?

Mr. Davies

That has nothing to do with the case, and there is no need for the hon. Member to stab me in the back.

I believe we must get some agreement about East-West trade. I was perturbed to find in the B.B.C. monitoring service that the Supreme Command of the Allied Powers in Japan has now agreed to permit the barter of Japanese goods for coal from Russia. The Ministry of International Trade and Industry has drawn up a list of goods which can be bartered. It includes spun silk, yarn, rayon yarn, and rayon fabrics. There are others, but I merely want to make the point that for the sake of getting coal into Japan for the purpose of re-arming Japan and using her as a jumping-off board into China, they will even trade with Russia if the necessity seems to be there.

I submit that we have had no concrete policy put before us on East-West trade. It is all very well for an hon. Member to say, as he did, two hours ago, that China refuses to trade with the rest of the world and had declared this. Since he said that, I have tried to find such a declaration; and I do not believe he can give me any source of any direct evidence that "Red China," to use the emotive term now used by hon. Members opposite, is not prepared to trade with any part of the world if she can get goods which are useful to her.

In my constituency there is the silk fabric industry and the rayon industry. The hon. and gallant Member for Macclesfield (Air Commodore Harvey), last November, drew attention to the growing crisis in the rayon industry. I do not intend to descend to the political dishonesty of accusing the present Government of causing this situation in the textile industry; but I do say that the world neurosis which has led to the raw materials of the world being sucked into an uneconomic re-armament programme is responsible not only for the crisis in the textile industry, but for the crisis in the other industries of the world.

I was pleased to hear the hon. and gallant Member for Macclesfield refer to the need, especially in the silk industry, for the stabilisation of prices for a longer period. Speaking from memory, I think it is right that at the International Silk Conference in London in, I believe, September, 1951, we had such a guarantee. That is a good thing for the industry; but could we maintain it?

In a place like Leek we are pretty well dependent on this industry, and I believe that orders should be canalised into those parts of Britain where there is complete dependence on this industry. I appeal to the President of the Board of Trade to act more quickly when those of us from constituencies where there is a silk or rayon industry ask for licences to build other incoming industries. The right hon. Gentleman promised the hon. and gallant Member for Macclesfield that he would quickly give the licence for the rebuilding of the mill burned at Congleton, and I am interested in that because of the drift of workers from my constituency into Macclesfield. If that promise is not kept, I shall help the hon. and gallant Gentleman to be as much a rebel in his party as I have tried to be in mine when I thought my party was wrong.

Air Commodore Harvey

I am quite capable of looking after myself.

Mr. Davies

That may be, but I am interested because of the drift of workers. There is a danger that if textile workers, with all their skill, are driven into other industries, it would be difficult to find labour when the time came to re-enter the world market. Nevertheless, the argument for distributing industry more in the textile areas is fully justified.

What is the policy envisaged by the Government? That, as Americans say, is the 64-dollar question. The hon. Member for Preston, North (Mr. Amery) said that the choice was between guns and butter, and I say that we are now so loading the re-armament programme that the western world is getting neither guns nor butter. That is reflected in the textile crisis. We should do our utmost to demand that the Eastern, especially the Chinese, market should be opened.

I have been looking at a statistical review of Wall Street stock exchanges in a gazette published by the banking house of Morrow, Rowland, and Strong. There are fascinating figures, demonstrating that last June foreign shares in Japan numbered 5,000; in October they numbered 1,326,000 and had a value of 600,000 dollars. In other words, Japan is looked upon as a good investment.

Sir William Darling (Edinburgh, South)

Are the shares not bonus issues?

Mr. Davies

Neither this Government nor our own party, when we were sitting in that side of the House, were able to influence General MacArthur or Japanese or American policy. Japan is being used as a pipeline for investment for the United States and the putting on of a policy which disallows trade with her natural market, China. From this same statistical review it will be seen that in 1938 the average exports from Japan to China were about 43.5 per cent. of Japan's exports, while about 5.8 per cent. went to the rest of Asia. Today, the position is reversed, as 5.8 per cent. goes to China's mainland and 40 per cent. goes to Asia, competing with the very markets we were searching for.

This is suicidal. This is not private enterprise, it is merely moving into a position where economic war will lead to physical war and world destruction. [Interruption.] Perhaps the hon. Member looks upon it in a light and trivial manner, but there are some people on the bread line, who fought in the last war, who are now realising that the dim mind of Toryism has not realised that the law of diminishing returnis beginning to operate.

We have reached a point where war solves no political problems. If we agree on that, let us use an international conference and discussions to try to get freedom for movement of goods. In that direction more than in any other we can reach national understanding and the solution of these problems. Having promised to give way in my own time, that time has come if the hon. Member opposite wishes to intervene.

Mr. F. Maclean

The hon. Member said he doubted the veracity of my statement that the Chinese Government had declared it was their policy that they wished to be self-supporting and that they wished to have trade with the Soviet Union and not the Western Powers. That statement was made by Mao-tse-Tung soon after the occupation.

Mr. Davies

That is a completely different thing. Mao-tse-Tung said they wished to be self-supporting as far as they possibly could.

Mr. Maclean

But they did not want trade with the West.

Mr. Davies

I am sure that Mao-tse-Tung has never said that he did not want to trade with Britain.

Air Commodore Harvey

Will the hon. Member have a bet on it?

Mr. Davies

One is not allowed to bet in the House of Commons, as the hon. and gallant Gentleman knows. The trouble is that this nation, having been misled by the untruths and lies of hon. Gentlemen opposite—

Mr. Maclean

On a point of order: Is it in order for the hon. Member to say "lies"?

Mr. Speaker

It is not in order, but I think that the stage which the debate has reached is one in which an unguarded expression of that kind is very apt to slip out. I have no doubt that the hon. Member will withdraw it.

Mr. Davies

Certainly, Mr. Speaker, if it is thought that I meant by that that any hon. Member or any hon. and gallant Members opposite is a villain—[HON. MEMBERS: "No"]—I will withdraw it. I will say that in their suave and sophisticated way—

Air Commodore Harvey

That makes it worse.

Mr. Davies

—they misled the public to give their social security and their future to the Government now in power. Therefore, I believe that the Government now in power have a moral obligation, contrary to what was argued by an hon. Member earlier, to do their utmost, as I am quite sure they will, to meet the problems which have been put from both sides of the House in this debate.

5.56 a.m.

Colonel Cyril Banks (Pudsey)

I have listened to the major part of this debate and as I represent a constituency where woollen textiles are manufactured, I think it appropriate that I should put forward my views. I will endeavour to be as brief as possible and not go over much of the ground which has already been covered.

In so far as the woollen textile area is concerned, the trouble has been felt for longer in my area than in Lancashire. We have had partial unemployment for over a year now, and the position has greatly deteriorated. On the whole, the debate has been constructive from both sides of the House and will have done a lot of good, but I believe that we have limited ourselves to thinking in terms of textiles when we should have been thinking of the country as a whole; not only about wool and cotton, but everything else in the country which is affected.

Mr. S. Silverman

indicated assent.

Colonel Banks

The hon. Member for Nelson and Colne (Mr. S. Silverman) nods. I suggest that the schemes he proposed for helping the people of Nelson and Colne should be applied to all the industries in the country, and he knows that that is quite impossible.

Mr. Silverman

I think the hon. and gallant Member was present when I spoke, and he will bear in mind that I said that although the textile industry was suffering, it was not suffering in isolation, and it should be considered against a background of shortening and contracting world trade as a whole.

Colonel Banks

But the hon. Member did ask what was to be done for the people in Nelson and Colne who had made sacrifices because of the state of trade. I think that that is reasonable. I am not trying to be awkward. I am trying to put it fairly.

On the other hand—and this is the point I wish to make—other industries in this country will be affected. We have to face that, and the only way we can do anything is to get together and exert all our energy as a team, and not do a lot of bickering across the Floor of this House on small issues. That is not a criticism of anyone, but rather a statement of our approach to the problems we have to face.

The hon. Member for Nelson and Colne rather ridiculed the amount of business which could be done by travellers sent out into the world unless they could get behind the Iron Curtain—

Mr. Silverman

rose

Colonel Banks

No, I will not give way. You have made your speech and I wish to make mine. That was my interpretation of your speech and if you think that I have made a deliberate mistake I am prepared to sit down—

Mr. Speaker

Order. I must remind the hon. and gallant Member that I have not made a speech at all. He should address his remarks to the Chair.

Mr. Silverman

I wish to make it clear that I would not accuse the hon. and gallant Member of making a deliberate mis-statement. I am sure he would not do that. But the statement the hon. and gallant Member made was wrong. My reference to Lancashire commercial travellers and agents was in their defence. It was said they could do something to open foreign markets by themselves without political aid. I was pointing out that the American Battle Act would prevent them from doing so, and that if that was to be counteracted in any way it could not be done by individual commercial travellers. I am sure that the hon. and gallant Member will see the point.

Colonel Banks

First, Mr. Speaker, I must apologise to you for having spoken to the hon. Member directly across the Floor of the House. I apologise, too, to the hon. Member if I misconstrued what he said. But the point I want to make is that outside the Iron Curtain, among free nations—and this has been said frequently from the other side of the House—there are large numbers of people in need of the textiles we manufacture.

It is not a question of any side of the House asking the President of the Board of Trade for a solution to these problems. No one expects him to have the solution, and no one ought reasonably to ask him. It is a question of co-operation between the President and the Treasury and the co-operation of the directors and people who operate business in textiles. It is a question of their going out, and doing their job.

It is the job of all of us to co-operate in everything possible to maintain and win trade. If we all co-operate, that aim is possible of achievement. Therefore, I appeal not only to the President but to industry generally. All engaged in the textile industry must put their backs into it, and when directors want help from the Board of Trade they should go after it and not stop until they receive it.

6.2 a.m.

Mr. W. T. Proctor (Eccles)

The fact that we are all here at this hour indicates the deep concern for and interest we have in the subject we are discussing. I recently attempted to put a Question to the Prime Minister asking that some time be given to discuss the affairs of England on special days. At that time I had intended to put down a Question asking that we should discuss the special affairs of Lancashire, but that was not in order. I feel that we should have more time to discuss matters such as we are discussing this morning in respect of various areas. Having spent much of my time in Wales I do not wish to be envious, but I think that both Wales and Scotland are allotted considerable discussion periods in this House and that we ought to have a few special days for England.

Mr. Ross

My hon. Friend can discuss England any time he likes on any Friday.

Mr. Proctor

Some very interesting theories have been put forward in this debate. The first was on the question of responsibility. It has been suggested by one hon. Member that the Labour Government are mainly responsible for the situation in which we find ourselves in the cotton industry today. Earlier, the hon. Member said we on this side were in power when the Japanese potential was built up.

He appeared to hold the theory that the Labour Government was responsible for everything that had happened in every country in the world during the period we were in power. Now we are being held responsible for everything that is happening at present in this country. It is a far-fetched theory and the Tory Government of the day cannot get away from their responsibility for the present situation.

When the Labour Government were in power they were the only Socialist Government in any great country in the world. But this Government is one of many capitalist and Conservative Governments throughout the world. The principles they uphold are in operation and the ills we are suffering come as a direct result of the operation of those principles throughout the world. I therefore say that the present Government, which does not believe in national or international planning, must accept the great responsibility for the position in which this country finds itself today.

We are faced with a tragic position in the textile industry. The ominous fact is that large-scale unemployment has returned in a great industry. I agree with hon. Members on both sides of the House that we must realise what a tremendous thing that is and how much bigger it can be in the future. Looking back over the last 15 or 20 years, I beg hon. Members to realise what a tremendous part unemployment has played in the history of our time.

I do not think that Hitler would have risen to power in Europe and that we would have had the devastation of the Second World War if it had not been that millions of people in Europe who were capable of being exploited by Hitler were out of work. Unless the free democratic nations can solve the grave problem of unemployment and the problem of using the resources and the vast labour power that are at their hand in order to give the peoples of the world food, clothes and shelter, I do not think that our way of life will survive.

Everyone should consider that problem and try to find some solution to it. My own belief is that the only solution is democratic Socialism throughout the world, and I believe that the only hope of this Government finding any solution is to depart from their principles and the policies which they have outlined and to adopt a collectivist policy. I am trying to put first things first in this problem.

I am sorry that my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) is not here, because he also mentioned this problem of the unemployment pay rates. They stand today at exactly the same figure as they did when we provided for them in 1947 and 1948, and the nominal sum of 26s. which was provided then would have to be raised to 34s. to provide the same standard of life now.

On top of that we have the increases that will be imposed by the present Budget, and then one can see how far the standard of life of an unemployed man has fallen in the last few years. This House, especially my hon. Friends on this side, must really face that problem. It is a problem the Government will have to decide; but our representations should be strong and direct and we should make it clear that we want the same standard of life, at least, as was represented by the 26s. when it was brought into operation. We ought as a community to say that, if we are to be faced with large-scale unemployment, we will not have the depressed standard which is represented by the present payment.

If any hon. Member wants to know what that standard is like, I invite him to follow the example of Major Vernon, a former Member of Parliament. When we were discussing the standard of living in Germany, Major Vernon lived on the German standard. If any hon. Member tries to live on 26s. a week he will soon realise the standard of living which will be imposed on large sections of our community.

The President of the Board of Trade went into the history of the textile industry, back to the beginnings of the factory system. He lost the real point in his dissertation. He stated that we became a fabulously rich country because we had new machines. Today, the position is that we have sent the new machines to other countries and have kept the old machines in our cotton in- dustry. Between the wars the trade union leaders, the Labour Party and Lloyd George, with all his brilliance and eloquence, failed to move the Tory Party to re-equip this vast industry when that could easily have been undertaken. We sent the new machines to India, China and Japan, and left our industry with old machinery.

Will the Government give us a full report about what happened at the recent Commonwealth Finance Ministers' Conference? I cannot imagine that the conference took place without there having been some very deep discussions about the position which has since come about in relation to Australia.

Speaking in Manchester recently, the Parliamentary Secretary to the Ministry of Supply welcomed the action of Australia in setting her house in order. I see very little in Australia's action for this country to welcome. I attempted to put a Question to the Prime Minister to ask him if that was the policy of Her Majesty's Government, but I found that that could be done only if a Cabinet Minister made a statement in the country. It is a very strange state of affairs when a Parliamentary Secretary can welcome the action of another country which leads to such disaster for a large section of our country.

At present, members of the Manchester Chamber of Commerce have goods on order or en route to Australia after 7th March to the value of £20,209,643. The unilateral repudiation of contracts by Australia is a very serious matter for them. Who will bear this vast loss? I foresee the very gravest difficulties if the full financial burden is thrown upon these firms as a result of this policy. Also, the position of the employees of the firms affected by the Australian action can be very gravely affected. The Government should press the Australian Government to review the position and honour their contracts. The Government must carefully consider how the financial burden which is falling on Lancashire trade is to be shared and how the industry is to be assisted, especially as the increase in the Bank rate has made the position more difficulty.

I appeal to the Government to abolish Purchase Tax in the textile industry. I also support the idea of the closest possible contact with the Commonwealth and Empire in these difficult days. We are in an entirely new world situation today from the position in pre-war days. The fact that this country is too small to support its population of 50 million is one of our great difficulties. People are searching the world today for a new unit. Some look to the British Empire, some to a united Europe, and others to a unit which would contain the United States. The ideal unit would be the whole world with every race co-operating for peaceful purposes.

It is, unfortunately, true that when a people acquire sovereignty they are reluctant to change, but I should like to see a great gesture made to the Colonial Empire in the shape of an offer of federation with them. We would then have a population of about 115 million with resources that could be developed on a grand scale. The whole of our textile industry could be fully employed as a result of such a union.

The Chancellor of the Exchequer should consider the release of post-war credits to unemployed, widows, and others in exceptional difficulties. Such a concession would be of great assistance in tiding people over a difficult period. I appeal to the Government, and especially to those at the Treasury, not to be afraid to take a few financial risks to save great human suffering in the areas we represent. All the cotton mills in my division are working short-time and all the areas affected expect the Government to do all in their power to alleviate the position.

6.20 a.m.

Mr. Anthony Fell (Yarmouth)

I hope that the hon. Member for Eccles (Mr. Proctor) who has given us the benefit of his views on the subject of textiles, will not be offended if I do not follow him in great detail; and, indeed, do not follow him at all into his great scheme for world co-operation.

In 1929, we sent from this country textile exports worth £241 million, and by 1931 the figure had fallen to £108 million. That was a tremendous fall, and, as everybody knows, the country fell with it. Now I want to go from Lancashire to the other end of the world; to New Zealand, where I happened to be living at that time on a small farm with my father. We out there were suffering very gravely because New Zealand fell at the same time as we fell with the diminution of those exports. New Zealand was hard put to it to survive, and it is certainly true that the New Zealand farmers did not know where to turn to keep their farms going.

One may think that this is far removed from textiles, but I beg the House for its indulgence, because it is very relevant. In 1932, the Ottawa Agreement was signed and then, as the House knows, Imperial Preference, and a whole scheme of trade tariffs, was set up surrounding the whole of the Empire. It is true to say that, from that time onwards, the people of New Zealand began to revive because they were able to get reasonably fair prices for primary products; and the people of this country began to revive because they had better markets abroad; and the basis was Empire and Commonwealth first, and the rest of the world second.

Some people criticised this, saying, "You will hurt New Zealand if you put tariffs on and do not allow cheap things into New Zealand." But we were then importing goods from Japan, and nothing could have been cheaper; canvas shoes with crepe soles, at from 2s. 3d. a dozen pairs, to 7s. 6d. for the larger sizes; towels at about 5s. 6d. a dozen for the large size. Socks, and all manner of textile goods; and yet it was at that time that we in New Zealand could not afford to live, in spite of these low-priced goods from Japan.

If we come right forward to Lancashire, and to 1952, we see the depression which has been debated now for 13 hours in this House. If we come right forward to 1952 we see Britain is once again in trouble over her exports, and I draw the attention of the House to a matter raised earlier tonight by my hon. Friend the Member for Preston, North (Mr. J. Amery). That is the question of G.A.T.T. Hon. Members on the other side have repeatedly talked about Commonwealth policies, but their leader led them, and led this country, into the agreement commonly known as G.A.T.T. There is another meaning to the word "gat," which is American word for an automatic revolver. It is not inapt, because this is certainly an American trade weapon that is being used to our disadvantage. It is unrealistic for hon. Members on the other side to talk about Commonwealth policies when we are tied to the General Agreement on Tariffs and Trade.

Mr. J. Edwards

That is rubbish. There is no reason why Australia, if she were so minded, should not discriminate in our favour in respect of quantitative restrictions.

Mr. Fell

That is true, but if this agreement means anything it means what is said in the introduction: Recognising that their relations … that is, the relations of the countries which entered into it— … in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods. So far so good. It goes on: Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce. The whole spirit of this agreement, in which countries like Greece, Czechoslovakia and the United States took part, and in which the whole of the British Empire is involved right up to the ears, is to lower tariff barriers and end discrimination in trade. Therefore, I say it is unrealistic to talk about a Commonwealth Conference and trying to help the trade of Lancashire when we are bound by this agreement. We should break the spirit of the agreement if we had discriminatory tariffs of that nature.

Mr. Hale

There is nothing in G.A.T.T. to prevent Commonwealth areas dealing one with another within the sterling area. Surely no one from our side has been advocating tariffs of the type to which the hon. Gentleman is referring.

Mr. Fell

There is everything to restrict it. If hon. Members will study the agreements to which I have referred, they will find that before doing so any signatory to these agreements has to give notice to the others, and if there is a disagreement they have to meet together and settle it.

Mr. Hale

We are talking about trade between Australia and Britain, between New Zealand and Britain, between South Africa and Britain. There is nothing in G.A.T.T. to restrict that. There may be something to prevent other people trading, but that is a different matter.

Mr. Fell

That is my point; that there is everything to restrict our putting on preferential tariffs.

Leading from that, I am saying that it is out of keeping with the action taken by hon. Members opposite, led by their leader, to keep on suggesting that there should be an economic Commonwealth conference to discuss this matter. G.A.T.T., as my hon. Friend suggested, ought to be given the 60 days' notice which is necessary. After that, there should be an economic conference, or a trade conference, of the Commonwealth.

There is this distinction; last time, at Ottawa, the other countries of the Commonwealth had something they also wished to get rid of, the same as we had. It may now be said that they can get rid of their primary products wherever they wish. But it must also be realised that we can co-operate in the Commonwealth; that there are vast lands in the Commonwealth almost untapped in regard to the growing of food and primary products. If only we can get together and make a real, long-term arrangement for increasing the food production of these Empire and Commonwealth countries, I believe that would be part of a long-term solution of our export trade problems in countries throughout the world.

Hon. Members opposite from time to time have fallen for the phrase, "The raising of the standard of living of the people to solve our export problems." In 1846 settlers in fairly large numbers began to arrive in New Zealand. Shortly after that the Maoris were put on an equal footing, to all intents and purposes, with the white settlers. When I was last there in 1933, it was true to say that, after nearly 100 years, progress in raising the standard of living of the Maoris in New Zealand was very slow. The Maoris are not a backward people. They are probably the most forward of all the coloured races. But we cannot change the standard of living of a so-called backward people sufficiently to make a great impression on world trade in a matter of five or 10 years, or even in a generation.

The real field of operation for extending our trade in the British Commonwealth and Empire is in countries like Australia which are already eating all their own food because their populations are growing. The one way to save the future long-term trade of this country is to shoot G.A.T.T. and to bring in a proper system of Imperial Preference and trade.

Mr. Hale

I want to correct an unintentional misinterpretation of our attitude. The hon. Gentleman said that we on this side have fallen for the expression "raising the standard of living of the people to solve our export trade." I have talked and written on this subject extensively over the last three or four years, and I assure the hon. Member that he might just as well say that any Christian was falling for the Sermon on the Mount to get a mention in heaven. We have never said it. We have said that we should try to raise the standard of living of mankind, in accordance with the United Nations Charter, because it is our duty to do it and because the world is intolerable unless we do try to do it.

Mr. Fell

My point was that a lot of people have fallen for the theory that it could be done quickly. Of course, we have to try to do it, but it cannot bring a great expansion of trade to Britain in the very near future.

6.36 a.m.

Mr. Frederick Lee (Newton)

I was distressed to hear the last suggestion of the hon. Member for Yarmouth (Mr. Fell) because, as I understand world problems today, they arise largely from the legitimate desires of those whom we consider backward peoples to raise their standards of life in a comparatively short time. Unless we are able to assist in the process, all our efforts to avoid a world war will be vain. It will not be a question of fighting Communism as an idea, but rather of giving these peoples some object in life and some hope. Unless we do that, all Western civilisation will not avail us.

In this debate we have been asked to put unemployment in the textile industry in correct perspective. I agree, but it has been said in a way that suggests that once put in perspective it is not really serious. It is serious. On 3rd March, when we discussed manpower, it was estimated that the number wholly or partly unemployed in Lancashire was 40,000; today, it is 70,000. That rise is at the rate of about 1,000 a day. That means a tremendous tragedy, unless the right hon. Gentleman is prepared to do more than, from his speech, he seemed prepared to do.

A point was made about the placing of textile orders abroad by the Labour Government. The hon. Member for Clitheroe (Mr. Fort) touched on it, and my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) legitimately answered that if the Labour Government is to be criticised for sending orders abroad when Lancashire could not take them, the hon. Member was arguing that we should have put a drag on the rearmament programme.

As to the causes of our present troubles in textiles, I have listened to experts today who have said that textile industries have been built up throughout the whole world, and that they think that the recession in Lancashire is temporary. The President of the Board of Trade said that. If he is going to alarm those hon. Members who represent Lancashire, and the people there who still hope to get a living from textiles, by using arguments which presuppose that the industry never really can get over the hump, while saying that this recession is purely temporary, they will conclude that he and the Government have not the slightest clue to the situation.

"The Times" yesterday gave that impression, and said they thought it was temporary, that it was caused by the pipeline getting blocked up, and that in six months we could clear it. The "Manchester Guardian" took precisely the opposite line, saying that there was a permanent drying-up of world markets, that new textile industries had come to stay, and they inferred that the trade union leaders in Lancashire are somewhat to blame because they demanded higher pay for the cotton operatives to meet the increased cost of living.

We see that 75 per cent. of our textiles are sold internally. It is difficult to know to whom they are to be sold unless purchasing power is at a higher level than it has been in the industry. Several of my hon. Friends have been criticised by hon. Members opposite for saying that the Government's policy is to divert labour from the textile industry to armaments. One or two have been very indignant when that statement has been made. I suggest that it is for them to show us that they are not doing that.

The fact that they need to enlarge the armament industry presupposes that they are going to take people from some other industries. If the industries from which they are taking personnel do not include the textile industry, will they tell us how we are to differentiate between the action they take in the case of an industry from which they are going to take people and an industry from which they are not?

I cannot find any difference whatever in their policy towards industries which they wish to denude of manpower and their policy towards the Lancashire textile industry. If they wish to prove that it is not their object to run down manpower in Lancashire, it is for them to show by concrete action that they do not wish to do so. I fail to see any difference between the policy which the Government apply in a county or industry which has suffered unemployment and the policy they pursue in an area of the country where there is no unemployment.

In the course of the Budget debate, some of my hon. Friends said that an inflationary situation would be brought about by the Budget, and some said it was deflationary. Hon. Members opposite are sceptical about that. I think we are in the position where there might be a new phenomenon in which, within the same country, we have an inflationary pull in some parts, and in others a most deflationary pull indeed.

I am quite sure that is caused by the increase in the Bank rate and the seeking to put a veto on hire-purchase agreements. The Government should understand what it means. In many Lancashire towns the people are concerned not only with buying furniture on the hire-purchase system they also buy clothes and boots in that way. If this veto is put on hire-purchase agreements, it means that a great percentage of the purchase normally made will stop. The Chancellor says—

Mr. H. Strauss

The hon. Member is making a mistake. There is no veto on hire-purchase, even in the case of those goods which are scheduled in the Order. But most of the goods he is mentioning are not even scheduled in the Order.

Mr. Lee

I am saying that once the full scope of hire-purchase agreements is restricted, the flow of trade, so essential for the welfare of our Lancashire communities, is also restricted.

I was about to say that the Chancellor excused his policy by saying it is so essential that we should stop the fall in the value of the £, and that many of the problems result from a lack of confidence in the £. The real issue in Lancashire is that there is a growing lack of confidence in the future of the cotton industry. Once that situation obtains, the work put in during the last six years has gone for nothing.

No matter what type of blandishments are held out, never again will the people of Lancashire believe that there is any future for them in the cotton industry. Instead of a happy confident collection of workpeople which existed a year or two ago, one sees a fearful, furtive, apprehensive collection of men and women who are wondering when their turn will come to be thrown on the scrap heap of unemployment.

I do not know whether the President of the Board of Trade has ever seen a Lancashire town during a depression. Some of us were born and brought up in those circumstances. It was not a nice sight to see hundreds and thousands of men and women depressed, having reached the condition where they believed that they were not as good as others, and had no reason for existence. Once we get into that position again in Lancashire, the textile industry is gone for good, because it took a lot of hard work to build it up again and to get those people to believe that they could have confidence in the future of their industry.

This Government must be prepared to shoulder the responsibility which now rests upon them, and not merely to argue that this is an international phenomenon; that textiles are in the doldrums all over the world. If they do that, then the Governments of other countries where the textile industry is depressed will do the same. Everyone will say, "It is too bad, but there is nothing we can do about it, because it is an international problem." I do not accept that.

My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) pointed out that a comparatively few years ago a lot of us from Lancashire were addressing the cotton workers and trying to get them to go back into the industry, because of the tremendously important part it could play in righting our overseas balances, etc. How does the President of the Board of Trade think it possible now for those of us who stumped Lancashire doing everything we possibly could to get people into the industry and asked for more and more production, believing that that would be the answer to any threat of unemployment, to advocate those policies in Lancashire not only in the textile industry but in other industries when we do not know what other industries may also be facing these difficulties in a few months?

The Government should realise that the obvious requirement now is a big increase in demand. How can we achieve that? First, by exactly the opposite policy to that which the Treasury and the Board of Trade are pursuing. I do not know whether anyone would care to speak from the Despatch Box now and argue that in Lancashire there is too much money chasing too few goods. That would be fantastic. The precise opposite is the fact.

We are not suffering from a buyers' strike caused by some words of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton). I never heard such nonsense in my life. Let anyone go to any house in Lancashire and ask the housewife whether she is scheming to lower prices by keeping her bawbees in her purse. The working man's wife is being driven to distraction in her efforts to find the money to buy the things she really needs.

We must increase purchasing power in—Lancashire and I am referring to working-class people in general—in order that they can purchase more of the goods that are available now. Indeed, to apply to the situation the classic methods of mopping up purchasing power, which one would apply to an inflation will quickly land us in the worst deflation we have ever known in this country.

It is no use the Government saying that this is an international situation over which they have not the slightest control. One of the immediate remedies we should apply—and I am glad this suggestion has also come from the other side of the House—is to allow all Lancashire textile goods to be sold free of Purchase Tax.

Mr. Nabarro

Why only Lancashire?

Mr. Lee

I merely happen to be arguing from the point of view of the area I represent. I should support the hon. Member in any legitimate claim he made on behalf of any other area. If a private trader is in the doldrums and he is overstocked, he does what he can to get rid of the stock. I suggest that we should embark on the same policy in the case of the Lancashire textile industry. The incentive to buy should be that people could obtain these textile products at rock-bottom prices and if they left their buying until next year the goods by then would be subject to Purchase Tax.

Mr. H. Boardman (Leigh)

Is it not a fact that retailers are reducing prices so that goods can be sold tax-free as the only method of getting rid of them?

Mr. Lee

If we declared that for the next six months these goods could be obtained free of Purchase Tax, I believe it would have a great psychological effect. If, in fact, there are people who are hanging on and not buying, it would be an inducement to them to buy. If it is true that this is a short-term slump, that is the only policy that will bring us through six months of a very difficult period. I am arguing that we must apply the theory that in time of depression credit facilities should be easier and cheaper. Unless we can move in that direction, I fear there are no other types of policy which can put the Lancashire textile industry on its feet again.

I read in the weekend Press an article which quite alarmed me in that it was reported that Japan had been given a credit of 40 million dollars to purchase United States raw cotton and that 80 per cent. of the resulting product should be made for export, including a great effort to capture the British markets. I should like the Government to tell us whether this is a wild exaggeration or whether there is any truth in it. If there is any truth whatever in it, I suggest that it reveals something even worse, if possible, than the agreements made behind our backs between the present Japanese Government and Mr. Dulles, some few months ago. I think such a report should not go uncontradicted if the Government can contradict it.

I was going to talk about the Australian position, but that has been covered adequately. For my part, I shall only say that I am most dissatisfied with the reports we have had both from the Chancellor of the Exchequer and the President of the Board of Trade as to the part they played during the Commonwealth discussions, and I reinforce what has been advocated from this side of the House—that a new conference should be called.

The President told us during the course of his speech that encouragement will be given to existing firms to enlarge their premises. I should like to ask the right hon. Gentleman about new firms? His Department controls the distribution of industry under the relevant Acts. I should like to ask him, first, whether he will now rigorously refuse to allow firms, no matter what pretext they put up, to enlarge their existing premises in towns where there is already a great vacancy list, where there are, in other words, far more jobs available than people to fill them. He should refuse to allow firms to enlarge their premises in towns of that type but should insist on them taking their businesses into areas such as Lancashire, where we now have a depression in the textile industry.

I had some little experience on a committee on the distribution of industry and, quite frankly, the Board of Trade frightened me to death. They have a phobia about dollar exports. In other words, if a firm wants to open up in Birmingham and Coventry and does not want to accept our invitation to open in Lancashire or somewhere else, and it is whispered into the ear of the President "These are dollar exports," the President gets the wind up at once and says: "By all means expand where you want to." The right hon. Gentleman may say that I am exaggerating; I do not know. But that is the sort of tendency the Board of Trade has, naturally, because it is so interested in the commercial side of affairs.

I suggest that the Board of Trade is utterly unsuited for this job and that it should be done by the Ministry of Labour, because that Department, and it alone, with all the manpower statistics available to it, can determine where expansion would be to the best advantage of the country as a whole. I hope the President will agree to look at the question of putting new factories outside the actual Development Areas.

One or two of my hon. Friends have mentioned that for certain reasons some parts of Lancashire where there is only the cotton industry were not scheduled as Development Areas. I hope the President will see that, great as has been the benefit of the whole of that scheme, we must now consider enlarging its scope and putting factories where there is the greatest need for them, irrespective of whether that happens to be in Development Areas.

I am very annoyed that the right hon. Gentleman has used the Douglas Report as an excuse for smashing the Utility scheme. It was not merely because of the Douglas Report that the Utility scheme was smashed. The decision was not made after the Douglas Report had become known It was made after 25th October. The "power lobby" upon which the Conservative Party depends insisted that the scheme, which they had never liked, should go once the Conservative Party got into power. The Conservative Party had no need to wait for the Douglas Committee to report in order to make up their minds about that.

I have quoted the words of the President of the Board of Trade in the manpower debate, in which both he and the Chancellor told us that much of the problem of the textile industry was due to the working of the Purchase Tax and Utility schemes. It is frankly dishonest to say on one occasion that the problems of the Lancashire textiles have been brought about by Purchase Tax and Utility schemes and on the next that there are world-wide implications over which the Government have not the slightest control.

The Douglas Report was never intended to be—nor is it—an objective survey of the virtues or lack of virtues of the Utility scheme. Commenting on the Committee's interpretation of its terms of reference, the report says, in paragraph 2: We sought official guidance on the meaning of this phrase"— that is, "classes of goods"— and as a result have interpreted our terms of reference to mean that our function was to consider the relationship between the existing Utility schemes and the existing Purchase Tax arrangements; that proposals to extend the Utility schemes beyond their present frontiers would be out of order; but that we were not precluded from drawing attention to anomalies or from proposing adjustments where an article outside the Utility schemes was directly competitive with, or could be substituted for, an article already within the schemes. In other words, their terms of reference were to bring out all the anomalies they could and to say nothing about how they could make a permanent structure for the Utility schemes, and it is on the pretext of a report of that type that the right hon. Gentleman has smashed the Utility schemes. Consequently, this report has had the effect which, possibly, he intended it to have.

Mr. P. Thorneycroft

The hon. Gentleman will observe that the terms of reference, which he has not read, were drawn up very carefully by the previous Government, and were very broad in their scope, and included consideration not only of the international implications of the old Utility scheme but also its effect upon consumers. It would be quite wrong—I am sure that he would not wish to give that impression—to say that the terms were limited in scope or excluded considerations which both sides of the House have at heart.

Mr. Lee

I do not wish to give any misleading impression, but the terms of reference were not that the Committee should examine objectively the Utility schemes and make a broad-based report upon them.

I agree that within the terms of reference there is the question of the effect of Purchase Tax upon our import-export position. It was said that discrimination was exercised against importers. I agree that that was so. But if the right hon. Gentleman now says that he is breaking down the Utility schemes because they are unfairly discriminating against a person importing goods to Great Britain, he had better point out to the Chancellor that he will not get more imports by cutting them to the extent of £600 million. He will probably institute quotas, to which the hon. Member for Yarmouth (Mr. Fell) was very much opposed a few minutes ago.

The effect of the break in the Utility schemes is undoubtedly that the incidence of taxation which was previously placed on luxury goods must now necessarily be reflected in many goods which were within the Utility scheme. Therefore, the incidence of taxation is passing again to the lower-paid worker, and he is thereby more and more restricted in his purchases at a time when the only solution of our problems is to give him more purchasing power.

For these reasons, I believe the Government have not displayed the slightest statesmanship in their approach to the textile industry. No matter how they try to ride off on the "international" pretext, a responsibility rests on them which they must discharge, and as far as we in Lancashire are concerned we shall do our level best to force them to discharge that duty. We advocated the extension of industry—and we did whatever we could to bring decency and comfort where there was misery and poverty before—and we are not going to be silent if that is to be broken down and we are to go back to the conditions of the 1920's and 1930's. We are dissatisfied with the Government's attitude, and I hope we shall bring this matter up again. We shall censure the Government on that occasion if they are not doing better than they appear to be doing now.

7.5 a.m.

Mr. Gerald Nabarro (Kidderminster)

I will not follow the hon. Gentleman the Member for Newton (Mr. Lee) because I am anxious to introduce a little of the diversification which has been alluded to as being so necessary in the textile industry. One important section of textiles, the carpet industry, has received only scant attention in the debate, although it was mentioned by the hon. Gentleman the Member for Kilmarnock (Mr. Ross).

The carpet industry has an important export record since the end of the war, and has had to face particularly difficult problems, even more difficult than the problems in some Lancashire towns. It should be remembered that while the cotton industry was concentrated in the war, the carpet industry was shut down, and in Kidderminster which is, with respect to the hon. Member for Kilmarnock, the traditional home of the carpet industry in the United Kingdom, and is responsible for more than 40 per cent. of the total output of the industry, almost every carpet factory was closed from 1940 until the beginning of 1946.

Therefore, the task of restoring the factories, of taking the looms out of store and setting them up again, presented very great difficulties that were even more onerous to the management and staff than those experienced in restoring the cotton industry. Notwithstanding these difficulties the carpet industry achieved, in 1949, an overall export figure of £10,350,000. That was raised in 1950 to £15,200,000, and in 1951 the figure reached was £22,500,000, or more than double the 1949 figure.

The President of the Board of Trade was brutally frank with me in a Parliamentary Question I put to him on the Australian import cuts. I asked him what effect in money this would have on United Kingdom exports, and he said in his reply: As the quotas are not tied to particular countries it is not possible to say precisely what amount of U.K. carpets will continue to be imported into Australia, but the effect of the restrictions will undoubtedly be serious, for Australia has recently been taking almost half of our total exports of carpets."—[OFFICIAL REPORT, 20th March, 1952; Vol. 497, c. 2541.] That means that of the £22,500,000 worth of carpets sent from this country last year, we are to be reduced by 80 per cent. in the case of Australian imports; and that is a loss of exports in a full year of something like £8 or £9 million. As 40 per cent. of the carpet industry of this country is centred in one comparatively small town in Worcestershire, the effect of this cut can well be imagined; and I am sorry that the hon. Member for Nelson and Colne (Mr. S. Silverman) is not in his place, because the severity of this cut in the case of Kidderminster is even greater than the matters of which he complains in the case of Nelson and Colne.

I do not, for one moment, suggest that Australia could have taken any other course. At Canberra, on 25th March, it was stated by Mr. Carver, the Government Statistician, that Australia's trade deficit for the six months ending 31st December, 1951, was £A145 million. That is a trade deficit of 290 million Australian £'s in one year, and Australia, after all, has a national income which is only a tiny part of the income of the United Kingdom. With such a deficit, it is clear that her action was completely justified, and I do not criticise her for the action, or for the timing, or for the fact that the matter was not dealt with at the Commonwealth Finance Conference, but simply left to the self-governing Dominions themselves to decide what amount of import restrictions they were to impose.

Mr. Hale

Not discussed at all?

Mr. Nabarro

I believe that that is so; following the Statute of Westminster, and so on, the self-governing Dominions decide their own trade arrangements and in balancing their trade they have exactly the same problems as we have.

Mr. Glenvil Hall (Colne Valley)

If what the hon. Member says is correct, then why have the conference?

Mr. Nabarro

There were other matters for consideration, and in the passage of time possibly this Australian position will recover because the primary cause of the trouble there is that she is exporting only about 50 per cent. of the foodstuffs she was exporting two years ago. The increased consumption of food in Australia is a fundamental cause of the savage cut she has had to impose on United Kingdom exports.

Mr. J. T. Price

Will the hon. Member say whether, in relation to his own private business, this principle would apply in relation to a civil contract? If so, could he do nothing about it?

Mr. Nabarro

In the tangled skein of international arrangements today we have circumstances arising that make such courses of action inevitable; but I remind the hon. Member that two years ago, the United Kingdom acted in a similarly arbitrary manner with the Canadian Wood Pulp Company. The international monetary situation has made certain acts of this kind inevitable.

The President, as I see it, has only three courses by which he can help the textile industry, and I refer here not only to the carpet industry. He can guide rearmament contracts to the textile trade areas, but the effect on them would only be trifling. Secondly, he can tackle the question of tariffs; and, thirdly, he could tackle the fiscal arrangements in the United Kingdom, and taxes of one sort or another which could be adjusted in many ways to help the textile industry. It is with the question of tariffs that I want to deal.

My hon. Friend the Member for Preston, North (Mr. Amery) alluded to the Anglo-Pakistan Agreement concluded last year. It is the classic case of how not to expand Imperial Preference. It is the worst Empire agreement we have made since the end of the war. I want to quote the effect of that agreement on the carpet industry. India and Pakistan make large quantities of carpets. They are allowed to import them into the United Kingdom free of tax. Yet if Kidderminster carpets seek to enter Pakistan or India they pay tariffs of between 31¼ and 45 per cent. Why this lack of reciprocity?

In addition the Indians, and the Pakistanis have put specific export duties on the raw materials of the British carpet industry such as wool and jute yarn which make those carpets even more uncompetitive in the world markets. The Indian Government have imposed a 30 per cent. ad valorem duty on Indian wool and 1,500 rupees per ton on jute yarn; the Pakistan Government have put a 25 per cent. ad valorem duty on wool and 35 rupees per bale of 40 lb. on jute yarn. British carpets are not only discriminated against in any attempts the manufacturers make to sell in India or Pakistan, but they are further discriminated against in competition with Indian carpet products by these very heavy taxes on the raw materials our manufacturers need.

I believe, as other hon. Members have suggested, that the way to circumvent these difficulties is to secure an overall increase in preferences, and to get that and to stimulate Empire trade we must first get rid of the encumbrance of the General Agreement on Trade and Tariffs. I will not embarrass my right hon. Friend by pressing him further on that point now, but I hope there will be some tangible result of his deliberations on it in the next few weeks.

Let me turn to the D scheme and Purchase Tax. I am not going to flog the same dead donkey that has been flogged all night about getting rid of the Purchase Tax.

Mr. Houghton

Why does the hon. Member think that a dead dog?

Mr. Nabarro

The hon. Member was not listening. I said dead donkey, not dog. Carpets are the only textiles which did not have any sort of utility mark, and between 1945 and 1952—when the D scheme comes in—there has been no such thing as utility carpets free of Purchase Tax. They have carried an overall Purchase Tax of 33⅓ per cent. The carpet industry was shut down during the war. Utility was for the most part introduced during the war. Now that my right hon. Friend has decided to adopt the D scheme—and, in principle, carpets are shut out because there were no utility types prior to the introduction of the D scheme—they cannot come in for any abatement of Purchase Tax.

This was confirmed by my right hon. Friend the Chancellor of the Exchequer, in answer to my Question last Tuesday: There were no utility schemes for floor coverings and they are not therefore covered by the new purchase tax arrangements provided for in the Budget Resolutions."—[OFFICIAL REPORT, 25th March, 1952; Vol. 498, c. 25.] Why this discrimination against carpets again? The manufacturers have enough difficulties without this added encumbrance. The least which could be done for the industry is that it should be brought within the general taxation provisions of whatever arrangements are finally made in connection with the D scheme.

I raise, finally, what is, to me, an extraordinary case. I gave my right hon. Friend's permanent officials prior warning that I intended to do so, because it seems fantastic that when the carpet industry is facing such difficulties a case of this sort could happen as a result of a misunderstanding between two Government Departments. In Kidderminster there is a famous carpet firm, Woodward Grosvenor, Limited, which is part of Gray's Carpets and Textiles, Limited. Their Kidderminster factory covers 80,000 square feet, and it is actually working two shifts in spite of the recession of trade, indeed, it is practically the only carpet factory in the town which is working two shifts.

This firm's exports have gone up steadily year by year, among them being a substantial part going to the dollar area. In 1949 its exports were worth £231,000; in 1950, £276,000, and in 1951, £310,000. The firm is working two shifts largely for the export trade. The Ministry of Supply have now come along and said that they will requisition the factory for making armaments.

I could not believe my ears when I heard that this morning. I said to the managing director, "Please photostat all your letters to the Board of Trade and send them to me." They have, and I intend to present them to the President of the Board of Trade with my compliments and appeal to him that if he has any heart for the carpet industry he will intercede in this matter and negative the requisitioning.

I think I have said sufficient on behalf of one part of the textile industry. I hope that my right hon. Friend will smile benevolently upon the interests of carpet manufacturing, which are facing great difficulties in the export market as a result of loss of the Australian trade, and other causes, Purchase Tax, and other matters. I am sure that I can rely upon his helpful co-operation in these matters.

7.24 a.m.

Mr. Douglas Houghton (Sowerby)

We shall have to leave the hon. Member for Kidderminster (Mr. Nabarro) to the kind attention of the President of the Board of Trade. Many of the speeches we have heard have underlined the deeper causes of our difficulties. The President of the Board of Trade began his speech with a reference to the history of the textile industry, an innovation that was not well received by my hon. Friend the Member for Blackburn, East (Mrs. Castle). He went on to speak of the danger and challenge that faces Britain today.

The question is how we can maintain our customary standard of life, and improve it, as converters of raw materials, when one of those raw materials for a staple industry is grown wholly outside this country and largely in spheres beyond our political and economic influence. We shall have to adjust our minds more and more to this fundamental weakness in regard to our economic and political independence. It is a matter of regret to us that when the late Government recognised that and embarked, for example, upon large-scale operations under the control of the Overseas Food Corporation, the difficulties and unfortunate disappointments attending the scheme met with constant criticism, nagging, and derision from the other side.

Sir H. Williams

Is the hon. Gentleman referring to cotton growing?

Mr. Houghton

Go to sleep again.

It was a valiant attempt to make a beginning with something that we shall have to tackle, notwithstanding setbacks, to secure the provision of food and raw materials within the Colonial Empire, and thus be politically and economically independent.

It is a precarious life we lead. Looking at the history of the textile industry, for example, we ask whether unemployment is the permanent condition and full employment the temporary condition. One of my constituents, speaking recently to a local newspaper, said that he had been 50 years in the cotton industry and he had not known continuous employment for more than three or four years. My own boyhood was spent among the ruins of the Nottingham lace trade. There we saw, as all textile workers and manufacturers are now seeing, the significance of the phrase, "the export of capital equipment." First, machinery to make lace was exported to the United States, and then, when the United States was self-sufficient, she clapped a prohibitive tariff on Nottingham lace and sent the Nottingham lace trade sprawling.

Sir H. Williams

If that is the case, why did the hon. Member's hon. Friends vote opposite to me when we were trying to protect the British lace industry seven years ago?

Mr. Houghton

I was not in the House then and nothing like the same attention, I am sure, was given to the difficulties of the lace industry as is now being given to the wider textile industry in this debate. [Interruption.] I wish the hon. Gentleman would contain himself. We are all fatigued. [HON. MEMBERS: "No."] Whether he is fatigued or not, I beg him to keep quiet. I have sympathy with hon. Gentlemen on both sides of the House who still have speeches to make.

I was referring to the possibility that the textile industry may go through a period of contraction which other industries have gone through owing to the transfer of capacity to manufacture from this country to countries overseas. The world moves relentlessly on. As the President of the Board of Trade said in his statement, there is perhaps more to be feared from production for home consumption in countries overseas than there is from competition among other textile exporters. The enemy of the textile industry and the menace to the survival of Britain is the political and economic nationalism which is rampart throughout the world.

In my constituency, happily, I have not the same harrowing story to tell that we have heard from other Members who represent textile constituencies. There is, however, the town of Todmorden, which is something of a postal oddity because it is in the West Riding of Yorkshire but if one buys a licence at a Post Office it is written out "West Riding" and then has put on it a postal stamp which says "Todmorden, Lancs." No one desires to disturb that curious arrangement because the main industry of this town is linked with the greater cotton industry of Lancashire.

What I say about the underlying causes of the present depression is that if this is the price of re-armament, then the textile industry alone should not pay it. If this is the price of saving the £, then the textile industry alone should not pay it. There is a responsibility which the whole country has towards any particular section of it which suffers unduly and especially as a result of policies taken for national security and solvency.

There is, perhaps, such a variety of underlying causes of the present recession that it is impossible to identify one of them as the chief cause of the difficulties. So much has been said about what has led up to it that I do not propose to dwell on that any longer. I would ask whether the industry itself was as alive to its own dangers as I should have thought it would have been when, in the autumn of 1950, 447 firms were asked to tender for drill of various types, yet only 40 offers were received, not all of which were acceptable, and which covered only 40 per cent. of the quantity needed. Why was it that those responsible for the industry failed to respond to the invitation to tender for these defence contracts when at that time the first signs of the shortening of the dates on their order books were clearly visible?

In the weaving section, in the autumn of 1950, the order books contained 30 full weeks of production. Within a year it had fallen—it had been steadily falling throughout the year—to 20 weeks of full production. In other branches of the industry there were 32½ full weeks of production on the order books at the end of 1950. That had fallen to 20½ full weeks by November, 1951. In other branches of the industry, the fall in the dates on the order books was clearly visible. Why, then, did not the industry see the red light and do something more intelligent and more effective with regard to the offer of defence contracts?

Their failure to do so meant that the Government placed orders overseas for £36 million worth of goods and, since we were obliged to honour them, by the time the recession was obvious all the commitments had been made and we could not repudiate them. Those contracts are running now and we have the distressing spectacle of imported goods coming into this country which our own mills could have been making. I think that is a reproach to those responsible for that attitude of the industry towards the defence contracts. Now we find, naturally enough, that manufacturers are most anxious to get all the defence contracts, and, if they can, to get them ahead of the gun.

A great deal has been said about Japanese competition, and I am not sure that we have got it straight yet. I understand it is not true that the Japanese competition has invaded the territories in which we had overseas markets. The entry of the Japanese into the export trade followed upon our own inability to satisfy the whole range of our overseas customers owing to the strain on our production immediately after the war. In order to satisfy some of our own customers, we have imported large quantities of Japanese grey cloth for processing and re-exporting to our own customers. There is no doubt that we have looked not only to the Japanese but to other sources, some in Europe, for finished goods and for additions to our own resources, some for home consumption and some for re-export to our own customers. That gave Japan an entry into the export trade which she might have had difficulty in entering had we been able to supply our own customers with our own goods.

Air Commodore Harvey

Will the hon. Member allow me to interrupt him for one moment?

Mr. Houghton

I am sorry, but many other hon. Members wish to speak. My hon. Friend the Member for Bolton, West (Mr. Holt), is already going through his speech for this afternoon on the National Health Service, which shows how near we are getting to the main business for today. However, if the hon. and gallant Member insists, I will give way.

Air Commodore Harvey

On Japanese competition, I think the hon. Member has under-rated the problem. We have proved they have copied British designs in Malaya and Africa. We were able to supply at the beginning, but Japan came in later purely on price because of their sweated labour and the 7½ an hour they paid the Japanese workers.

Mr. Houghton

I had no intention of under-rating the problem. What I thought I was doing was explaining how some of the Japanese competition came about. I heard various interpretations given which I thought were slightly inaccurate and I was putting the matter right. Many of the immediate remedies have been mentioned, and I am not going to dwell upon them again; but I must repeat from this side of the House that the President of the Board of Trade and the Chancellor of the Exchequer have a lot more thinking to do about Purchase Tax.

It is really monstrous that we should now be thinking of extending the life of a tax on consumption imposed during the war for reasons we all know, but which now will only aggravate and depress still further the problem of demand on the home market. The Government will have to reconsider their position with regard to Purchase Tax very seriously and very urgently.

They may say they cannot lift the whole of it for financial reasons. These taxes, started for special purposes as a kind of tonic or to meet a special situation, have subsequently become a kind of drug which no Chancellor of the Exchequer can stop taking. After all, the Income Tax was a temporary tax when it first began, and as recently as 1874 Gladstone promised to abolish it if he were returned to power. But for some reason the electorate either did not believe him or were not interested in a tax of 7d. or 8d., and so they elected Disraeli, who had made no promise to abolish Income Tax and who would have broken it if he had. Income Tax has now become a permanent feature of our fiscal system.

The hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) dealt with another feature of long-term remedies which merits attention. It has been a reproach both to us, and in part to the Colonies themselves, that one-half of their cotton goods come from Japan. At a time when we ourselves are hoping to extend aid to the territories of the Colonial Empire, and when we are studying and hoping to apply the Colombo Plan, surely there should be closer co-operation between the Colonie and the mother country in their trade Otherwise, we shall find it increasingly difficult to provide resources for the developments which they want and which we want to provide.

Sir H. Williams

Does the hon. Member support the policy of the Congo Basin Treaties, which is the main cause of the trouble to which he has referred?

Mr. Houghton

I am not familiar with that. After all, one cannot be familiar with everything in the complex and confused field of international trade and fiscal policy. But if there are impediments in the way of establishing this co-operation, they should certainly he looked at again.

I come finally to the home market. There is no doubt that the present policy of the Chancellor of the Exchequer is an aggravation of the difficulties of the textile industry in the home market. I do not see why right hon. and hon. Gentleman opposite should be afraid to say what I am sure they must admit, that the Chancellor's present budgetary and financial policy is deliberately designed to dampen down the level of purchasing power at home. It has that expressed intention, so why not freely admit it? Indeed, if it has not that intention, it does not make any sense at all. I hope that the Chancellor will study the effect of his budgetary policy on home consumption and relax, wherever he can, in a direction which will save the textile industry, especially, from further difficulties.

My final point is one that was raised long, long ago by my hon. Friend the Member for Flint, East (Mrs. White), who put it to Her Majesty's Government in this way. Here we have the first signs of serious unemployment since the war. The party opposite claim to have a policy to deal with unemployment; they claim to have a policy for full employment—and I am not going to argue about the effect of words, whether it is "full employment" or "a high and stable level of employment." They have clearly conveyed the impression to the electorate that what we mean by "full employment "they mean by "a high and stable level of employment." They claim to have the solution. What, then, is it?

What have we heard from the President of the Board of Trade in this debate which shows that Her Majesty's Government accept any responsibility for the social, economic and industrial welfare of the workers in this industry? It is not only a matter of lifting unemployment benefit; it is not a matter of adding to their monetary compensation for idleness. The Government must now accept the responsibility for starting the wheels turning again. They must do that, even if they have to adopt the most unorthodox methods of coping with this situation.

They can, for instance, ensure that home demand is stimulated by making special arrangements for the production of textiles at much lower prices than are now being paid, without damaging in any way whatever the standard of life of the workers in the industry. What we want is a "new deal" policy from right hon. Gentlemen opposite to deal with a flagging industry which needs the stimulus which the President of the Board of Trade has said can be brought to bear on an industry when the need arises. I think that either now or at some other time the Government will have to tell the country how they propose to cope with unemployment, even when they are faced with international complications and difficulties. That responsibility they cannot shirk. We want to know what is their policy.

7.49 a.m.

Mr. Fitzroy Maclean (Lancaster)

I hope that the hon. Gentleman the Member for Sowerby (Mr. Houghton) will forgive me if I do not follow him directly, but I have noticed that the hon. Member for Nelson and Colne (Mr. S. Silverman) is back in his seat, and we have had so many exchanges yesterday and today on the subject of East-West trade that I should like to say a word about that. The basic thing about the attitude of the hon. Member for Nelson and Colne and the hon. Member for Leek (Mr. Harold Davies) is always to assume that everything that goes wrong with the relations between this country and the Soviet Union is the fault of this country.

Mr. S. Silverman

I have never done that.

Mr. Hale

It is a monstrous charge.

Mr. Maclean

It is their basic assumption.

Mr. Silverman

It is not.

Mr. Maclean

That is a matter of opinion.

Mr. Silverman

The hon. Member says that it is a matter of opinion, but has he overlooked the fact that what he is talking about is not his opinion but mine and and that I am a much better judge of my opinion than he could possibly be? I want to make it perfectly clear to him that his interpretation of my opinion is wholly mistaken. I have never said, never thought, never implied and never given anybody any justification for saying anything like what he attributes to me.

Mr. Maclean

The hon. Gentleman has certainly given people justification for thinking that.

Mr. Silverman

Only the hon. Gentleman's kind of people.

Mr. Maclean

Perhaps only our kind of people, but the hon. Gentleman has given justification.

Mr. Hale

Will the hon. Gentleman give way?

Mr. Maclean

I am sorry, but I cannot give way.

The hon. Member for Nelson and Colne is always asking why we do not trade more with the Soviet Union and the other Communist countries. If he will cast his mind back six or seven years—this is not a party issue; after all, until six months ago a Labour Government were in power—he will recall that everybody in this country was only too ready to do all the trade we could with the Soviet Union.

Mr. Silverman

Are we still?

Mr. Maclean

Let me discuss for one moment what we were ready to do six or seven years ago. A lot of water has passed under the bridges since then. In those days Mr. Ernest Bevin was Foreign Secretary—I do not think that the hon. Member will doubt his honesty—and he said that Left would talk to Left in comradeship and confidence. That was the atmosphere in which the relations between the two countries started at the end of the war.

Since then a lot has happened, and today we are less ready to trade with the Soviet Union because we have had a number of extremely bitter and unpleasant experiences. What has destroyed our relations with the Soviet Union and what has destroyed the possibility of extended trade with her has been the Soviet Union's deliberately hostile and aggressive policy.

Mr. Silverman

At the end of this long tirade of misrepresentation, the hon. Gentleman comes finally to the assertion that, whatever may have been true six or seven years ago, and whatever justification may be derived or not derived from that, at this moment the failure to trade is due to his lack of desire to do so.

Hon. Members

No.

Mr. Maclean

The failure to trade is due to decisions which were taken by the late Administration and are, in my view, quite rightly being continued by the present Administration.

Mr. Anthony Greenwood

In view of that, would the hon. Gentleman say what purpose he thinks the Geneva talks were intended to serve?

Mr. Maclean

The Geneva talks were intended to afford an opportunity of considering whether, without doing any damage to our security, we could increase some aspects of our trade with Eastern Europe.

Mr. Silverman

Security?

Mr. Maclean

Earlier, we were selling them jet engines. In any case, what does the hon. Gentleman want to do? Does he think that we should sell them jet engines?

Mr. Driberg

It would save our exporting them to Switzerland anyway.

Mr. Silverman

The hon. Member for Lancaster (Mr. F. Maclean) has been here most of the night. He will by this time have appreciated that we are not discussing so much jet engines as textiles, and that we have a lot of textiles for sale. What is being suggested is that there is nothing connected with our security which need prevent us selling surplus textiles to the Soviet Union or to other Communist countries. I think that we ought to be free to do so. Does the hon. Gentleman think I am wrong or right in that desire?

Mr. Maclean

I think that in deciding the extent of our trade with the Soviet Union we have got to place, first and foremost, the security of this country. Selling textiles to the Soviet involves selling them a lot of other things and taxing other goods in return, some of which we might not want or have a lot of already. Some of the things the Soviet Union wants are goods which, in the interests of security, we should not sell. What is more, in view of the aggressive attitude of the Soviet Union and Communist countries in general, we do not want to do anything which bolsters up their economies.

What I am complaining about is that the hon. Gentleman always assumes that the reasons why our economic relations with the Soviet Union are not in a more satisfactory state today are not in any way due to the Soviet Union. The point I want to make is that the trouble started on the other side of the Iron Curtain.

Mr. Silverman

On a point of order. When the hon. Gentleman said that for the first time, he could have made a mistake. I have since intervened to correct him. If he persists in repeating the original thing I have repudiated, does that not become a deliberate misrepresentation which he is not entitled to make?

Mr. Speaker

I should not think that that follows at all. It is just possible that the hon. Gentleman the Member for Lancaster (Mr. F. Maclean) does not accept the hon. Gentleman's explanation. These are matters of debate, and we cannot conduct debates in this House on the principle of dialogue. I think that the hon. Member for Lancaster should be allowed to continue his speech.

Mr. Silverman

I think I am among the last Members of the House to be unduly sensitive about dialogue in debate, but this was not a matter of opinion. The hon. Gentleman said that I always assumed a certain matter, which he proceeded to state. I have told him I make no such assumption, and according to the rules of order the hon. Gentleman ought to accept my statement and not continue to attribute to me opinions which I have expressly repudiated.

Mr. Archer Baldwin (Leominster)

On a point of order. Am I not entitled to say that we are prepared to trade with the Soviet Union.

Mr. Speaker

Order. These are not points of order, but points of debate.

Mr. Maclean

If the hon. Gentleman opposite agrees with me that the state of our relations with the Soviet Union at present, and the trouble which has occurred over the last six years, is entirely the fault of the Soviet Union—

Mr. Silverman

I am sorry to interrupt again, but I am sure the hon. Member does not desire to be anything but perfectly fair. He said that I always assume that any unsatisfactory state between us and them must be our fault, and that they did nothing six or seven years ago which brings about the state of mind we adopt today. I said no such thing.

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)

We are not in Committee, and the hon. Member has already made one speech.

Mr. Maclean

All I say to the hon. Gentleman is that, if his attitude is not as I represented it, I am pleasantly surprised; he is coming on better than I thought.

Now I want to ask the Parliamentary Secretary, briefly, if he will re-examine a couple of suggestions for the solution to the very serious unemployment problem facing the Lancashire textile industry today. There are, of course, difficulties in the way of almost any solution. But we live in difficult times and most courses open to us at home or abroad, do present difficulties of one kind or another.

The first suggestion is that the Government should advance its orders for textiles under the re-armament programme. I was glad to hear the President of the Board of Trade give an assurance that he would endeavour to divert certain armament contracts to our textile industry in Lancashire. That may not be a complete solution, but it is bound to be of some help and, with the industry in the state it is, we cannot neglect anything which may alleviate the difficulty and stress in Lancashire. After all, if we can even tide over our difficulties temporarily, it will at least give time for the pipeline to clear itself and for something more approaching normality to be established. What the industry is suffering from is a shortage of orders. These armament orders have to be placed somewhere, and there is every advantage in placing them with our own Lancashire textile trade and doing so immediately.

The other idea I want the Parliamentary Secretary to look at again is the suggestion that new industries connected with re-armament or with the export drive should be established in the areas concerned in order to absorb as much surplus labour as possible. Again, it would not be a complete solution, and it will take some time to produce an effect, but it is bound to do some good and would be well worth while trying as part of a wider economic programme. It is true that, while there is unemployment in some industries, there is a shortage of labour in others. But labour is not mobile especially in the present housing shortage. So if labour cannot go to industry, industry must go to labour.

We on this side pride ourselves on avoiding undue rigidity in our economic policy. Here is an opportunity of showing foresight and flexibility in a way which would benefit everybody concerned.

8.5 a.m.

Mr. Joseph T. Price (Westhoughton)

I have had the privilege of sitting through this rather long debate, and I believe that most hon. Members who have done the same have been happy to do so because the House recognises that we have a great responsibility towards the people who send us here and who are being hit by the economic blizzard which has hit the cotton industry.

I am proud of the fact that I was born in the finest county in England, Lancashire, and that I represent a Lancashire constituency with a long and turbulent history of industrial trouble of one kind or another. It is a district founded on the two basic principles of British commercial supremacy, as we knew them in Victorian days and before the 1914–18 war.

The two opening speakers in the debate tackled their job with a sense of responsibility, and a serious and almost sombre attitude towards the problem that confronts the textile industry. One or two of the remarks by the President of the Board of Trade were particularly significant. He said, quite correctly, that the history of the industry was characterised by fierce individualism. During my life I have witnessed the vicissitudes of the industry at close quarters, I have read many books about it, and I have seen families taking their Sunday clothes back to the pawnbrokers on Monday morning—even the clothes that the children had been wearing in Sunday School.

I have seen all kinds of strife and struggle which have arisen from the twin troubles of coal and cotton. Nothing better typifies this industry, streaked as it is with individualism, than the old play, "Clogs to clogs," with which many hon. Members will be familiar. I was pleased that in the latter part of his speech the President of the Board of Trade mentioned that he did not propose for the time being to grant further licences for the import of grey cloth from Japan. I am willing to concede the point advanced by hon. Members on both sides that we cannot merely sterilise the economic activities of the great Japanese people, who have a rapidly multiplying population. It would not only be stupid economically to do that, but it would be immoral from a standpoint worthy of any civilised man or woman.

The problem is not merely the wobbling or slipping of our activities in the textile field at the moment: it is part of the problem of the great upheaval of world economy which is interlocked at every phase with armaments and other things which have upset the world for two generations. The philosophies of hon. Members opposite spring from a different source from ours, though we nevertheless concede that they are sincere; but I was surprised when the hon. Member for Louth (Mr. Osborne), I think it was, said, perhaps in an unguarded moment or in an interpolation in the thread of his argument that perhaps this recession in the textile industry of which we are complaining is a symbol or symptom of the decline of the capitalist civilisation. I was pleased to observe a gleam of light from those benches. It is indeed my belief.

Sidney Webb, the great sociologist, wrote as long ago as 1923 his book, "Capitalist Civilisation," in which he gave an accurate picture of the state of affairs existing today. One of the most surprising things about economic theory, as I have read it in the last 20 years, is that most of it has been wrong. Most of the expert economic information given to Chancellors of the Exchequer and statesmen has been proved wrong by events. Listening to the President of the Board of Trade and the hon. Member for Louth, I thought of a passage in Sidney Webb that is not inapposite. It is his reference to cosmic inspectors. He says: Imagine the report of the spirit expert in scientific consumption, deputed by the Government of All Good to investigate progress towards sanity of the inmates of the planetary lunatic asylum: 'I cannot agree with my colleague, the inspector of scientific production, that the inhabitants of the earth are showing any approach to sanity'.

Mr. Deputy-Speaker

I fail to understand how this is connected with the Consolidated Fund Bill.

Mr. Price

With respect, Mr. Deputy-Speaker, I am arguing that the economic disturbance that has given rise to the debate is only a symptom or a symbol of a much deeper malaise that has afflicted the whole world and with which Sidney Webb was dealing.

Sir W. Darling

The hon. Gentleman said economic advisers had always been wrong. Was not Sidney Webb economic adviser?

Mr. Price

I disagree; he was a sociologist.

If I may complete the quotation: 'My colleague tells me that in the production of most commodities and services they are showing signs of increasing intelligence in the use of materials and the organisation of manual labour and brain work. In the consumption of wealth, they seem to be going from bad to worse. Former generations produced less, but what they did produce they seemed to me to have consumed more intelligently'. The thought that haunts the minds of people in the cotton areas of Lancashire and the North is that there should be any risk of returning to the bad old days.

Reference has been made to the consequences which flow from the policy of this country. Maybe it is not a policy in which we have had a free choice but under which we have exported capital goods from the textile machinery workshops of Britain to the far corners of the earth. Not only have we seen it as part of the export drive, but we have seen technicians and skilled operatives launch new industries in lands where we had undisputed export markets.

It must be obvious to any thinking man or woman that we are faced today with a tremendous paradox. We have increased with tremendous strides the means of transport by land, sea, and air at a speed never dreamed of by H. G. Wells; communications have been perfected to a higher degree than were dreamed of a short time ago, but, at the same time, the natural development of economic intercourse between the nations of the world is being strangled and frustrated by the stupidity of man.

I know this is not an occasion to give a philosophic twist to this question. No doubt the people listening to this debate are expecting us to produce a remedy and a more direct approach to it. I would never lend any advocacy of mine to the kind of propaganda which would suggest that this trouble is one for which we can find a simple remedy or a simple formula. The difficulty of the cotton trade is the difficulty of relieving the tension that exists in the world on the economic and military plane.

I urge all those who are entrusted with the conduct of Her Majesty's Government to pay increased attention to those pledges they have given on international intercourse and the relief of international tension. It is sometimes imagined that a country which consumes 75 per cent. of its textile articles in the home market can, by a stroke of the pen, or by some magic, put itself in the position of forgoing the results of the export drive. I do not believe that. I do not believe that the state of affairs which has existed in the last three years in the textile industry can go on.

When I look at the figures for the balance of trade in all textile materials—the hon. Member for Kidderminster (Mr. Nabarro) referred to the importation of raw materials—I find that in the last three years, in the matter of textile materials, all piece goods, yarns, fabrics of various categories, only in 1949 was there a small favourable balance for this country. There was a balance of plus £20 million in 1949. The following year there was an adverse balance of £26 million, and in 1951 an adverse balance of £145 million. Obviously, that state of affairs cannot continue.

I hope that when he replies the President will tell us some of his ideas about the financial structure of the industry. From practical knowledge of Manchester and of cotton manufacturers, I can say that speculation has been the curse of the cotton industry for generations. I have seen families in Oldham of the "Clogs to clogs" variety, who made money in one generation and lost it in the next. I have seen them trying to give away shares on which there was a remaining 10s. to be paid, and I have seen homes sold up to pay the balance of shares.

I know something of the machinery of speculation, the short selling, the rigging, the bolstering, the hammering and the switching of the market, to use the conventional terms of speculators. I know the results of booms and slumps, bankruptcies and unemployment which has resulted from the speculative history of the cotton industry. Oldham in the 1930's was a typical example, and I would be bitterly opposed to the re-open- ing of the "spot" market which would give an impetus to the speculative urge. This is no time to re-open speculation and I hope that the President will have something to say about that.

In case I should be charged with not having made a constructive speech, but merely a critical speech, or even an historical survey, I would add my support to some of the practical remedies suggested which, however, are only "ambulance" remedies to deal with some of the minor problems of the present period; the speeding of defence orders, the D scheme and the removal of Purchase Tax. I am tempted to support the argument that even if it were but for a temporary period, it might be a good thing to remove Purchase Tax from textiles. What is the use of the Treasury having an income from Purchase Tax if another Department of State has to pay out millions of pounds in unemployment benefit?

I plead with the right hon. Gentleman with all the sincerity I can command that urgent consideration be given to the question of bringing new industries into the stricken areas which are now feeling the blast, and not for the first time. If the erection of a few buildings, even if it meant the transferance of the raw materials and labour which might be required, is essential to put some new form of work into these areas, the Government will be well justified in taking that course.

I ask the Minister, even at this late stage, to reconsider the wisdom of exporting our specialist machinery to foreign countries, and I would ask for earnest consideration of all that was said by my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) about the implementation of the Colombo Plan.

In the final analysis there are hundreds of millions of human beings in this world, who, though needing cotton goods in the form of shirts, loin cloths, sarongs, and so on, are too poor to make that demand on the trade of Lancashire. Whatever its political colour may be, an agency that seeks, by developing trade and bringing about confidence between man and man of different colours and different creeds and promoting the brotherhood of man through channels of trade is doing the work which in this day and generation we most need.

Several Hon. Members

rose

Mr. Deputy-Speaker

Mr. Strauss.

Mr. Anthony Greenwood

I rise on a point of order of some constitutional importance. We are discussing this morning the Consolidated Fund Bill, the purpose of which is to pay out to Her Majesty certain sums of money—rather more than £132 million. It is, incidentally, a little surprising that in a debate of such economic importance the Chancellor of the Exchequer himself should not be present.

What I am raising is this: it is one of the immemorial privileges of this House that when consideration is given to payment of money to the Sovereign, hon. Members should be entitled to petition for the redress of grievances. That is what hon. Members have been doing throughout yesterday and this morning. There are still several hon. Members who wish to bring grievances to the attention of the Government.

My hon. Friend the Member for Oldham, West (Mr. Hale) represents a constituency more severely affected by the slump in the cotton trade than any other town in the country. But when my hon. Friend and other hon. Members rise, the Parliamentary Secretary to the Board of Trade rises and calmly tries to reply to the debate. I think it is an intolerable abuse of the privileges of this House. The hon. and learned Gentleman is not here as a Conservative leader. He is sitting on the Front Bench as one of Her Majesty's Ministers and we are entitled to bring grievances to his attention and to have a reply to the points we raise. I beg him not to rise at this stage and conclude the debate as far as he is concerned, but to let hon. Members have a full discussion of their grievances.

Mr. Deputy-Speaker

The only point of order that arises as far as I am concerned is that when a Minister rises I call him in preference to other hon. Members, and I called him. As to the suggestion of who I am going to call next, as a matter of fact the hon. Member for Oldham, West (Mr. Hale) was not in my mind.

Mr. Driberg

Further to that point. May we, in that case, through you, Mr. Deputy-Speaker, appeal to the Parliamentary Secretary not to intervene at this stage in view of the representations made by my, hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) and in view of the fact that a few of us have been sitting here all night, as, indeed, has the Parliamentary Secretary, and have been rising each time to catch your eye? So far nobody who represents a constituency in southern England, where there are also textile interests, has been fortunate enough to catch your eye.

Mr. Hale

Further to that point of order. I am obliged to my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) but I have not endeavoured to thrust myself upon the Chair, Mr. Deputy-Speaker, except in the normal process of rising 36 times in succession, because it has never been my practice to make suggestions to the Chair, put my name on a list or make a request to the Chair to be called. But if I am called, there are one or two points I should like to put with equal courtesy to the Parliamentary Secretary, who has been so courteous throughout this debate.

I represent the greatest cotton-spinning town in the world and neither I nor my colleague the hon. Member for Oldham, East (Mr. Horobin), on the other side of the House, has been fortunate enough to catch the eye of the Chair, although my colleague opposite was rising until a late hour this morning. The figures of unemployment in Oldham are now 4,000 totally unemployed and 6,000 partly unemployed. If the Parliamentary Secretary rises now, and if I am fortunate enough to catch your eye later, Mr. Deputy-Speaker, I shall have no answer to the points I have to put. I am sure that with his usual courtesy the Parliamentary Secretary wishes to meet the desires of the House. I gather that not very many people are wishing to catch your eye at the moment, Mr. Deputy-Speaker.

Mr. P. Thorneycroft

We have had a long, interesting and I think, useful debate. I would hope that it would end in the same amicable spirit as it has been conducted. There are already quite a lot of speeches to reply to. I think that at a fairly early stage now it would be right for the Government to make some reply to the points which have been put, but I am anxious not to shut out the hon. Member for Oldham, West (Mr. Hale), or anyone else. If hon. Members feel that in a reasonably short space of time it might be possible for them to consider that their case was adequately put, I am quite sure my hon. and learned Friend would be quite happy to wait for a short interval to allow any points to be put, and then he could rise to reply.

8.36 a.m.

Mr. T. Driberg (Maldon)

I should like to start by expressing my appreciation to the President of the Board of Trade and the Parliamentary Secretary for their great courtesy in giving way a little further and enabling some of us, who do not have their good fortune of being able to intervene whenever they want to, to do so now. So far as I am concerned, I am afraid I cannot guarantee that the rest of the debate will be as entirely amicable as the President of the Board of Trade seems to think it has all been up to now. Perhaps he thinks that because he has not heard quite the whole debate. I will, however, endeavour to make my remarks reasonably brief; though I see that we are now reinforced by a number of hon. Members who have had the advantage of a night's sleep and have come back very early in the morning to show how interested they are in the textile trade.

I am rather sorry that the hon. Member for Lancaster (Mr. F. Maclean) has left us, because if he had still been here I should have tried to apply to him the technique that he applied to my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman). The hon. Member for Lancaster was so palpably embarrassed by one straight question which my hon. Friend asked him that I should like to have challenged him by saying that his "basic assumption" is that all East-West trade is a bad thing in itself and that the export to the Iron Curtain countries even of textiles must endanger our national security. I have no doubt that to put it in that way would be as unfair to the hon. Member as he was unfair to my hon. Friend; but unfortunately he is not here to say whether or not that is his basic assumption, and so I am entitled to assume, from the things he said, that it is.

I should like to urge him to be a little less timid in his approach to this problem of East-West trade. I would urge him to emulate the courage, enterprise and common sense of his one hon. Friend who is going to attend the forthcoming Economic Conference in Moscow. I must also tell the Parliamentary Secretary—if I may have his attention for a second—that I think that the President of the Board of Trade and Her Majesty's Government have not treated with sufficient seriousness the prospect of doing some real business at this forthcoming Economic Conference in Moscow. Whatever view Her Majesty's Government may take of the motives inspiring the organisers of the conference, I should have thought that it was at least worth attending. I should have thought that it should be taken at least as seriously as the Foreign Secretary, quite properly, has taken the recent Soviet Note. That has not been dismissed as mere propaganda or as not worth answering; it has been answered seriously. The Board of Trade should take equally seriously the possibility of some good coming out of the conference.

I am inclined to agree with those hon. Members on both sides of the House who have referred repeatedly in the course of this night's debate to Purchase Tax on textiles and who have urged that there should be some modification of it or that it should be abolished altogether on textiles. One hon. Member represented that it should be abolished on Lancashire textiles. I do not think he really meant only Lancashire textiles, because if it were done for one group it should be done for all.

Incidentally, in one infinitesimal branch of the textile industry—I wonder if I might again have the attention of the Parliamentary Secretary. I hate to keep on interrupting him when he is talking to a colleague, but it is most unfortunate for me. I do not wish to be discourteous to the Parliamentary Secretary, but every time I reach a point on which I should like particularly to have his attention, he is unfortunately otherwise engaged—if there is any reconsideration of Purchase Tax on textiles, I hope that he will consider seriously—I know that he will personally be sympathetic to this—the question of relieving of Purchase Tax tapestry of a particularly fine quality which is made at only one studio in Scotland. Unless there is some Purchase Tax relief on that product of the particular workshop or studio, it will probably be impossible to hang in the very interesting new Coventry Cathedral the tremendous tapestries which the architect envisages for the east end of that building. I am quite sure that the Parliamentary Secretary, with his interest in the arts, will appreciate the point of what I am saying, because that cathedral tapestry can only be made in this one workshop. Admittedly, that is one tiny, non-utilitarian aspect of the subject, but I thought I would mention it while I was on the question of Purchase Tax.

I remember discussing the whole question of Purchase Tax once with Sir Stafford Cripps when he was Chancellor of the Exchequer. He explained to me that he took the view that both Purchase Tax and post-war credits were two of the best instruments that any Chancellor could keep up his sleeve, so to speak, against any risk of a sudden deflationary situation. It seems to me that, in view of all that we have heard tonight, in view of the obvious grave unemployment that is arising in this industry, there may be said to be a functionally localised deflationary situation, which might appropriately be met by some Purchase Tax relief.

Furthermore, one of the orthodox defences of the maintenance of Purchase Tax is that it helps to divert or to force goods from the domestic to the export market. Of course, that argument does not apply when, unfortunately, export markets have very largely dried up. It is even necessary in the interests of the industry to stimulate domestic consumption, and that is surely another reason for considering the abolition of Purchase Tax.

Although, as is quite natural, hon. Members from Lancashire have very nearly monopolised this debate, I was glad that my hon. Friend the Member for Kilmarnock (Mr. Ross), the hon. Member for Kidderminster (Mr. Nabarro), my hon. Friend the Member for Flint, East (Mrs. White), and one or two other hon. Members reminded us that there are textile interests and textile workers in other parts of the country also. The hon. Member for Kilmarnock spoke for, I think he said, 100,000 textile workers in Scotland.

I myself represent a constituency in Essex in which the textile industry, and particularly the production of super-fine textiles for export, is traditionally of great importance, though, of course, not on such a great scale as in Lancashire. I can assure the Parliamentary Secretary that we are just as worried in Braintree by short time and unemployment as my other hon. Friends who represent constituencies further North. We are sorry, quite frankly, that the Government are not so worried as we are, and we were sorry to see that the Prime Minister had denied that the situation was serious at all. That was a most extraordinary reply that he gave on Monday to the hon. Member for Kilmarnock. Because there has been some disposition in some quarters of the House to minimise what the Prime Minister said, I will read his actual words: It is not true that serious unemployment in Britain has arisen directly out of the decisions of other Commonwealth Governments. … I think that the hon. Member for Kidderminster showed himself at variance with his leader here: in some parts of his speech he contradicted flatly what the Prime Minister said on Monday. The Prime Minister continued: or from any other cause."—[OFFICIAL REPORT, 24th March, 1952; Vol. 498, c. 7.] That is a comprehensive and curious statement by the Prime Minister. He says that it is not true that serious unemployment in Britain has arisen "from any cause." In other words, it is not true that serious unemployment has arisen in Britain. True, he adds that there is "anxiety" about the textile industry; but that only shows what a curious and self-contradictory answer this was. There is anxiety about something not serious. It is typical of the cloud-cuckoo-land, ringing with fantasies and phrases of the most grandiloquent kind, in which the Prime Minister lives, but it is not illuminating to those who think that there is a serious problem in the textile industry.

Some hours ago we had an interesting passage about the respective attitude of the two sides of this House to the problem of unemployment; and we dug up again that old argument about "full employment" or "a high and stable level of employment." The Parliamentary Secretary took it so seriously that he intervened once or twice, in great excitement, to document one single occasion on which a Labour Party spokesman had used the phrase "a high and stable level of employment." There is considerable force in the question already addressed to the Government on what they mean by that phrase. Is what we have got in the textile industry at this moment "a high and stable level of employment"? At what point does it become a low and unstable level? I realise that the phrase dates from a Coalition White Paper and that all parties were committed to it and to the White Paper at the end of the war, but the simple truth about that is, of course, that the Labour Government after the war did very much better than the Coalition Government thought would be possible.

One hon. Gentleman opposite said that the famous figure of 8 per cent. given in that White Paper was "the mere assumption of a Government actuary." But he presumably assumed the figure that he thought likeliest. That Government actuary was assuming that the likeliest level of unemployment consistent with the maintenance of what was called a "high and stable level of employment" would be 8 per cent., which might mean something like 1,250,000 or 1,500,000 unemployed. If that number of unemployed is what is meant by "a high and stable level of employment" according to hon. Gentlemen opposite—because it is a phrase which they still use—we shall know what to expect, and the country ought to have known what to expect at the last Election.

It really comes down once more to a question of ends and means. I have never questioned the sincerity of individual Conservatives of my acquaintance who say, "Honestly, we do not want to return to the bad old days of mass unemployment; we are with you in wanting as full employment as possible. Some of the bankers and economists, I know, 'talk a bit tough' sometimes, and there may be some reasons, according to some economists, for wanting a measure of unemployment. But we really don't want it." As I say, I accept their sincerity when they say that they want this desirable end of full employment; but it is no use willing the end unless one also wills the means; and it is here that even the best intentioned Conservative runs away from the means. Here is a good test. This deplorable position in our textile industry is the first real test that Her Majesty's Government have had of their ability to maintain what may be called, unequivocally and without quibbling, "a high and stable level of employment." I hope that the Government will come through the test successfully, for their own sake and especially for the sake of those people who are already suffering and will suffer more acute hardship if the Government do not pass the test.

It is a cruel coincidence that this hardship of substantial unemployment should come upon our people just at this moment of sharply rising prices and a sharply rising cost of living. It fits in alarmingly with the general pattern of the Budget—a Budget which has illustrated vividly one of the Gospel texts which I have always found the hardest to underestand: "To him that hath shall be given, and from him that bath not shall be taken away even that which he seemeth to have"; for it is a Budget which makes the rich a little richer, and the poor a little poorer—[Interruption.] Oh, yes, it is quite true. It has been worked out by perfectly independent economists, and their researches show that the net effect of the Budget, allowing for increased family allowances, reduced food subsidies, and Income Tax reliefs, is that if you are a married couple with one child, earning an income of £300 a year—that is, about £6 a week—you will be £12 a year worse off; but if you are a married couple with one child, receiving an income of £2,500 a year, you will be £50 a year better off.

This Government is, in fact, doing what the Labour government did for six years—re-distributing wealth; but it is re-distributing it backwards: backwards out of the goods and services provided for the poorest sections of our community, into the overloaded pockets from which wealth was being gradually, and almost painlessly, extracted.

This unemployment, coming at a time when the cost of living is being sent up deliberately for the poorest people, is indeed a cruel coincidence. Hon. Members opposite may talk of Income Tax reliefs, but it is little use talking of reliefs to people who are so poor that they do not pay any Income Tax at all. As I say, this unemployment at a time of rising prices fits into the Budget pattern; for when you analyse the Budget, unemployment is the Budget's answer to the Budget's own inflationary tendency. That is why this Budget has been correctly described as both inflationary and deflationary.

I agree with my hon. Friend the Member for Kilmarnock that there is little hope of any effective international action by this Government. I have referred already to the impending Moscow conference, and I agree with my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) in what he said about China. When he was interrupted by an hon. Member on the Liberal bench behind him with a completely invalid comparison between the present and the pre-war situation in China, he might have replied that there could be no comparison because of the industrialisation that has gone on pretty fast, the rising standard of living, and the fact that the Chinese have now a Government less corrupt than the old Government, all of which make a totally different situation.

Japan has been extensively mentioned, and I was glad to hear the hon. Member for Preston, North (Mr. Amery) refer to statistics about Pakistan which I had intended to quote if he had not done so. They are extremely revealing and show the first impact of Japanese recovery. It is clear that we are only at the beginning of Japanese industrial recovery and its effect on our traditional markets in the Far East and South-East Asia. That recovery has been sponsored, financed, and deliberately encouraged by America, on a traditional capitalist basis.

What is happening now to our export trade only goes to show how right the Labour Party were in 1945, when we said that it was essential that the ex-enemy countries and devastated areas should be rebuilt on a Socialist basis, with a high level of social security and decent wage standards—not only on merit, as it were, but for the strictly utilitarian reason that, if that advice had been taken, and we had been able to pursuade the Americans of its wisdom, neither in Japan nor in Germany should we now be suffering from unfair competition based on sweated labour. As it is, the welfare of the British people and Commonwealth trade are suffering from the Oriental torture of death by a thousand cuts—Tory cuts at home, cuts from American economic imperialism abroad.

I agree that there is no hope of effective international action by this Government, because the kindest thing one can say about them in respect of the Commonwealth Finance Ministers' Conference is "They failed." It may be that a Labour Government would have failed. All one can say of the Labour Government's record on Commonwealth matters is that it was remarkably successful on the whole. So far, the Conservative Government has an unsuccessful record. One hon. Member—I think it was the hon. Member for Kidderminster—stated as a fact apparently known privately to him that the serious matter of the action taken by Australia, and taken within her rights, was not discussed in advance at the conference. He went on to imply that it could not have been discussed without some infringement of Australia's sovereignty and self-government.

Surely that is nonsense. Sovereign States often discuss matters of mutual interest, and whatever decision is taken by one or other, or by all jointly, the matters can be thrashed out without infringement of sovereignty. I could not understand that suggestion; I hope that there is no truth in it. If the effect of the Australian Government's action upon our export of textiles was not discussed, then we have to say of the Government not merely that it failed, but that it did not try hard enough. If they did not discuss that matter, it was a gross dereliction of duty.

I should like to put in one word for someone who is perhaps not a particularly popular figure tonight, namely, the primary producer, because although it is important that Lancashire should get cotton at a reasonable price, it is also important, on a broader view, that the primary producer of cotton in the Sudan, or elsewhere, should not be starved. Those who have been to the Sudan know how precariously its economy is balanced on cotton exports. These have been extremely lucrative in the last few years because of the enormously inflated world price of cotton. The world price of cotton is falling. We do not know how far it will fall. I hope it will not reach slump depths, for that would mean a poor look-out not only for the Sudan and its economy as a whole, but in particular for that magnificent Gezira scheme which has been so successful in recent years. So I would make a plea for the primary producer in any international discussion or negotiations on which the Government may be embarking.

Finally, however, I come back unashamedly, as most hon. Members have done during this long debate, to my own constituency. In the black years before the war we were comparatively fortunate. We never knew the worst kind of mass unemployment in towns like Braintree, Witham and Maldon; but now they are beginning to feel the shadow of unemployment and short time. Factories such as Courtauld's at Braintree, at Bocking, and at Halstead—just over the border in the Chancellor of the Exchequer's own constituency—are working only three days a week. The first two expendable classes of workers—the married women and the Poles—have been sacked. The married women are turned out and sent back to their homes just when the cost of living is going up and they most need the bit of extra that they were earning at the factory.

What is going to happen to the Poles? Maybe it is right that they should be sacked before our own people. The Parliamentary Secretary has taken a personal interest in the past in the fate of refugees from Eastern Europe and other countries: can he tell us what is going to happen to the Poles, the first and most expendable class of textile workers? Will they be sent down the mines? Will the miners have them down the mines, if they will not have Italians? Are they to be sent back to Poland? Surely not. But I hope that they are not going to become chronic unemployed, drifting from café to bar, living on National Assistance, getting into gangs. There are thousands of these Poles involved, and in view of his former interest in them I hope that the Parliamentary Secretary may say a word about them.

In my constituency, as in all others, it is the young people in particular who are most aghast at this strange phenomenon, quite unknown in their experience, of a factory suddenly shutting for half the week. They cannot think what it means or how it is allowed to happen. It is like a visitation of God. It is incredible to them because they have grown up under a wartime Coalition Government and under a Labour Government, under both of which full employment was just a matter of course. It is a devastating experience. Those of them who voted Conservative at the last Election are unlikely to do so again; but I most sincerely hope, for the welfare of the country and of millions of our folk, that the Government, though Conservative, will successfully solve this very serious situation.

9.7 a.m.

Mr. Leslie Hale (Oldham, West)

When I first went to Oldham in the 1930s my first recollection of the first day I got to know the town is of counting the number of shops that were locked up, closed down, and boarded up in the main streets. I counted just over 90 from Mump's Bridge to the market place, which is the main street. Nothing could give one a more graphic impression of the results of prolonged unemployment on a town. I do not now want to recall these matters in any sense of bitterness, but I do want to recall the possibility we are facing and to remind the House of the urgency of the present situation. In those days ivy was growing on the walls of many mills that had changed hands for vast sums, had decayed, and were then to be bought for a trifling sum.

Today, in Oldham there are 4,000 people totally unemployed. The card room section of the Textile Workers' Association, one of the principal local trade unions, is paying out in benefit to the totally unemployed today £1,000 a week. In addition, there are 6,000 on what is called short time; and in many instances short time is a very euphemistic term. In a rather exceptional case in one mill, people are working three days in five weeks, but there is nothing exceptional today in working three days a fortnight.

I was very moved by what the hon. Member for Maldon (Mr. Driberg) said about this. It has come almost as a cataclysm. It has come after a few forebodings and a week or two of apprehension in more well-informed circles, but it has come so swiftly that I am a little surprised that so little attention has been paid today to the causes of it. I do not want to bring controversial matters into the discussion and I want to make a few constructive suggestions. But there has been an air of delicacy in discussing this matter.

We had to wait until the hon. Member for Preston North (Mr. J. Amery) spoke before we had a frank statement as to what the primary cause is. The hon. Member said, "We cannot have guns and butter, and we think we ought to have guns because guns are necessary to deal with the present international situation." No one discounts that as a reasonable argument, or under-estimates the threat of the situation. No one is trying to make capital out of the fact.

We have had to face a dilemma and nearly all the countries facing it have done so under pressure from the United States, with a plan presented to them under pressure from a friendly country, a very great nation, and one where I have a number of friends. But she is a nation which seems to misunderstand completely the economy of Europe and does not realise how difficult it is to emulate her in this matter.

That is my first point. My second point is that we have listened to speeches from the other side of the House advocating economic planning, systems of controls, priorities, quotas, bulk-purchase agreements with the Argentine and other countries based on textiles, and so on. Hon. Members opposite have been converted. I do not want to make capital out of it. It is a commonplace in Parliamentary history for an Opposition sometimes to sow a few wild oats in the days of its Parliamentary youth and then to acquire a sense of responsibility when it takes office, but nearly every suggestion from the other side of the House has been based on some sort of Socialist planning. I am going to make it plain that perhaps there has not been so much said from this side of the House with regard to Socialist planning on the full scale that the present situation demands.

Another point which has constantly been made in the debate should be replied to. It was the hon. Lady for Blackburn, East (Mrs. Castle) who said—and was fiercely challenged on it—that this was part of the Chancellor's policy. It is true that unemployment, or the first signs of unemployment, started before the present Government took office. We are not challenging that. The recession came as the armament programme developed all over Europe, but I am surprised that hon. Members did not understand the implication behind what the Chancellor of the Exchequer said when he presented his Budget.

We had a very surprising speech from the hon. Member for Skipton (Mr. Drayson), who said that his method of dealing with the crisis in the textile industry was this: "Rates of interest are too high. I approve of what the Chancellor is doing generally but it is hitting the textile industry hard. Let us therefore have an interest rebate for the textile industry as compensation, to be administered by the Inland Revenue and taxation people."

His other point was that restriction of credit was all right but it was hitting the textile industry hard so let there be special exemption from restriction of credit by granting a long-term credit to the industry for the purchase of raw materials. That is a surprising criticism of the Budget speech. Although restriction of credit is healthy it is hitting other industries a good deal more and it is likely to produce unemployment and other bad effects within a period of time.

The other point in the Chancellor's statement was that he purported to follow the practice set out in the White Paper of 1944 and budget for a heavy surplus to equate consumer supply with consumer demand. It has been common ground throughout the debate that the principal recession is in the home market and that it is there that consumer demand has gone. What, therefore, is the use of the Chancellor saying "I have equated, on a nicely balanced financial basis of £600 million, consumer demand with consumer supply" when in this vital industry there appears to be no consumer demand at all, and when it is very obvious that a great crisis is being faced?

I did make one intervention about the Congo Basin Treaties. I want to be blunt about this, because Oldham people are quite capable of thinking internationally, having handled international trade for long enough. I have no use for hon. Members on either side of the House who talk about tariffs and preferences and beating the Japanese and so on. We shall do no more good to humanity by driving down the standards of life of other people than has been done by the cold war which is being continued on both sides of the Iron Curtain.

Everyone knows that in regard to the Congo Basin Treaties the position is difficult. There were grants of land made at the time and rights were granted in perpetuity. But the Anglo-French Treaty was denounced in 1936, and I do not think that vis à vis some participating countries it could now be argued that Germany, who has lost her African Colonies and been defeated in two wars, is in the same position to argue about her rights in Africa as she was in 1884, when the main Treaties were signed.

My hon. Friend the Member for Maldon referred to the Gezira scheme, which I have no doubt the Parliamentary Secretary will regard as a very important scheme indeed. We have had immense development in the Sudan, and I still entertain the hope that when the Sudan secures her independence she may still come into the British Commonwealth of Nations.

But if we are to have a planned policy in the future at all, which will permit us to be independent of both East and West, we have to tackle as early as possible the job of planning an area which makes us completely self-supporting. One of the most vital things in that connection, perhaps the most vital, is the increasing of our cotton productivity in Africa and in those areas to which the Congo Basin Treaties relate. I suggest that that is absolutely vital and I commend it urgently to the attention of the Parliamentary Secretary.

As has already been said, we are facing a situation of fantastic economic complexity. We have inflation and deflation running at the same time, not, as has been said, for the first time; we have had this situation before. We are now in a position in which the Chancellor of the Exchequer finds himself forced to encourage both processes simultaneously. Inflation is being forced in the armaments and heavy goods section of industry by the programme of £1,500 million. Appalled by the consequences, the Chancellor finds himself endeavouring to apply deflationary remedies to the consumer market which are bearing very heavily on consumer production and demand.

I agree with those who urge that the Purchase Tax should be taken off textiles. That seems to be the obvious immediate step. It is quite impossible to access what effect that would have, but no one would suggest that it would completely solve the problem, or get near to solving it. And, of course, such orders as could be placed on a military basis would not touch the fringe of the problem.

There are one or two things which could be done. A number of people have suggested a Commonwealth economic conference. This time, if we have one, I hope there will be an agenda, and that people will remember to discuss Commonwealth matters while they are meeting. I suggest that the time has come for a world economic conference and an attempt to solve the world economic problems; in the solution of which I believe we could solve the ideological problems too. Certainly the effort is worth the making.

I say with respect that the tendency of the Chancellor to over-estimate and over-emphasise the gravity of our external situation is one of the causes of the lack of confidence which resulted in the stopping of buying. Whatever our external situation, our Budgetary situation in terms of finance to be raised by taxation and Revenue is certainly a sound one, yet the Chancellor of the Exchequer has budgeted for a surplus of £600 million. That £600 million is to stop buying. If the Parliamentary Secretary, who is now inheriting Socialist remedies of some kind or another and is adopting them in Statutory Instruments day by day is prepared to be broad-minded, I put to him quite seriously what he ought to do.

We have school meals and we have subsidised meals at schools; there was a time when we had free meals at schools. If the Parliamentary Secretary wants to solve the immediate problem of the textile industry for twelve months let us have free clothes at schools. Let us have a decent outfit available at every elementary and secondary school for every pupil there. We could pay for it out of the Budget surplus and still have an enormous surplus left. Let us start on a real Socialist remedy by creating demand in terms of need and not in terms of purchasing power.

When we have done that, may I come then to the main solution? We know the circumstances of the world in which we live. We know that this cold war—whatever be the measure of responsibility on either side—is frustrating economic development and prosperity in every country in the world. If it be true, as many hon. Members think, that the people of the U.S.S.R. or the leaders of the people are deliberately fomenting this cold war and deliberately making a challenge to bring about this situation, then the plain answer is that if that be their policy they are winning battles every day and gaining victories every day, as the economic position of the N.A.T.O. Powers begins to disintegrate and these cracks in our industrial and economic life appear.

I know that on certain terms a disarmament conference today is a hopeless proposition. If there is not a breakdown on atomic inspection, it can break down on the question of half a battleship being equal to a regiment and so on. But we are committed to that principle of world development and the development of the backward areas of the world which President Truman enunciated in the fourth point of his plan. And Marshal Stalin has written widely on this subject. In his earlier years he was the author of a great contribution to racial theory and understanding.

The summoning of an economic conference today on the basis of a concerted attempt to reach agreement on world development will, of course, involve automatic disarmament of a sensible kind; because if one allocates steel to a bridge or dam on the Congo one cannot allocate it for tanks in Europe; and as one increases allocations for that kind of purpose so one automatically disarms.

We have to recognise that the state of the world in which we live is utterly intolerable, a world in which 60 per cent. of the people are starving, suffering from malnutrition, intestinal disease, poverty and the complete negation of the values of life. We believe that at this moment, for the first time in history, we can battle against these world problems in conjunction with our allies across the sea and make our contribution on the basis of giving the world what it needs instead of in terms of arms which the peoples of the world do not want and which deprive them of their needs.

I believe that the one way of resolving this world difficulty, which will otherwise go on until there is an inevitable conflagration, is along those lines. Those who participate in that effort can at once win the respect of the world. In that way, by means of the great Colombo Plan, administered under new authorities like the T.V.A., in the Nile, the Congo and in the Yangtse, we could turn the ideals of mankind to new conceptions of economic life and to new conceptions of international planning. There would, of course, be ample outlet for all available goods for years to come.

But perhaps most of all it would mean that we should be able, through our great constructional engineering genius, to supply, on a full employment basis in Britain and Western Europe, the needs of the whole of these vast under-developed areas for a century or so to come. It would mean there would be an opportunity for our sons and daughters to seek employment in a life that was worth while, and to go out as research technicians, veterinary surgeons, experts in insectisides and the like, bringing health, amelioration, psychological and educational development to areas which have been deprived of them for so long. [An HON. MEMBER: "Hear hear."] I wish I knew the name of the hon. Gentleman who is disposed to be so facetious about these people's suffering. We have had during this debate one or two similar demonstrations. If I knew the name of the hon. Member, I would immortalise it by repeating it for the record in HANSARD.

As people are disposed to be a little facetious, may I say that the case I am putting is not my case but the case put by President Truman in his fourth point. It is the case which has been put by Lord Boyd Orr, the former Chairman of the Food and Agricultural Organisation, and by Josue de Castro, his successor. It is the case which has been put by the United Nations organisation in their extremely able report, documented by Arthur Lewis, in which he envisages a net increase in the standard of living in the whole of the backward areas as 2 per cent. per week for 25 years and the cost as 14,000 million dollars externally and 5,000 million dollars internally, per year.

At this early hour I am not putting up a case that has not been thoroughly documented and considered. I suggest to the Parliamentary Secretary that if he is determined to grapple with this problem he cannot do it on the basis of taking a farthing candle to light up the cliffs of Dover; but only on the basis of recreating a real demand and re-creating new markets and of development on the basis of bringing a new hope to this great industry, which has a right to the fullest security, and continued full employment.

Mr. Nally

On a point of order. Perhaps I could have your guidance, Mr. Deputy-Speaker. Is it quite clearly understood that when the Parliamentary Secretary has spoken, the mere fact that he has spoken does not rob any of us of our rights to continue this debate?

Mr. Deputy-Speaker

Certainly not.

Mrs. Braddock

On a point of order. Mr. Deputy-Speaker, could you tell me why it is that I am the last individual on the back benches on this side of the House who has not been called? I have sat in the House since 1.50 a.m. and I have risen on every possible occasion. Is there some particular prejudice about this matter? My constituency and a matter relating to it have been mentioned by almost every speaker, and I protest at the attitude that has been adopted in deliberately keeping me out of this debate.

Mr. Deputy-Speaker

I am quite certain that no one will keep the hon. Lady deliberately out of the debate. If she will bide her patience for a short time—I know she has been here all night—I shall certainly call her.

Mrs. Braddock

Am I going to be debarred from the privilege of putting forward certain matters which I think should be answered and not have the opportunity of hearing the Parliamentary Secretary replying to me? I am in exactly the same position as every other hon. Member and I contend, however unparliamentary it may seem, that I have been deliberately ignored in this debate. [HON. MEMBERS: "Order."] I take exception to it. I have sat here without moving out of the House at all since 1.50 a.m. this morning. I have not moved and I could not be missed. I protest about the matter. I wanted to say something to which the Parliamentary Secretary might have wished to reply. I think it is deliberate and most unfair.

Mr. Deputy-Speaker

On the first point, as the hon. Lady knows very well, she will be called. I am sorry that she has had to sit such a long time, but, of course, there have been a great many hon. Members wishing to speak in the debate and, unfortunately, we can have only one at a time.

Mrs. Braddock

Further to my point of order—

Mr. H. Strauss

If I might, on that point of order—

Mr. Deputy-Speaker

The hon. Lady is addressing me on a point of order.

Mr. Strauss

If it is in order for me to speak, I might be able to simplify the matter for the hon. Lady and myself. If the hon. Lady would like to speak now, and it is understood that I should then speak, I should not like to stand in her way.

Mr. Deputy-Speaker

I do not like to be a party to a bargain. I was not going to call the hon. Lady next but another hon. Member. So we may have another speech, but I am afraid that it will not be the hon. Lady yet.

Mrs. Braddock

Could you tell me, Mr. Deputy-Speaker, how long I am likely to have to sit here? There are limits to one's patience and one's endurance. I have plenty of both, but there are limits to them. I do think this is most unfair.

Mr. Deputy-Speaker

If the Parliamentary Secretary does not rise now, I will call Sir Leslie Plummer and then, on that side of the House, I will call the hon. Lady next.

Mr. Nally

Is it quite clearly understood—there must be absolutely no misunderstanding about it—that no matter who you, Mr. Deputy-Speaker, in your discretion, may choose to call, those whom you do not happen to have seen yet not only maintain their full rights to speak but are equally entitled—the Parliamentary Secretary has been very good this morning—to have a reply to whatever they have to say from someone on the Government Front Bench?

Mr. Deputy-Speaker

Most certainly; and, as the hon. Member knows, as long as I am in the Chair there can be no Closure and everybody who rises will be called. Sir Leslie Plummer.

9.33 a.m.

Sir Leslie Plummer (Deptford)

I represent a London constituency which makes no textiles of any sort. It is true that my constituents are worried about the textiles position, but they are concerned more with the prospect of their inability to buy textiles than with the problem of the textile areas and the maintenance of full employment there.

My constituents are, in the main, people in the low income groups who are so hard hit by the Budget that their purchasing power will be reduced to a condition which will, I regret to say, mean an even further blow to the Lancashire and Yorkshire textile areas. This is because the inability of many of my constituents to buy the textiles which they require will increase the unemployment which we have been discussing since 3.30 p.m. yesterday.

However, I live in a constituency which does produce textile goods of a very fine order. Those of us who live in the South of England have been aware of the very considerable change which has taken place in the last decade or so in the distribution of industry there. Among the fields and rolling uplands of Essex, new factories have been built and the smoke of the chimneys is to be seen across a great many of the pastures of the Essex landscape.

The effect of this re-distribution has been to create an entirely new employment situation for our people in Essex. The constituency in which I live is Saffron Walden, and it is a regrettable thing that for the last 13 hours it has been literally disfranchised. It is, of course, a development of our democratic institutions that when hon. Gentlemen and right hon. Gentlemen have high honours conferred on them their usefulness to their constituents falls.

For example, I put it to the House that the usefulness of a right hon. Gentleman on the Front Bench to his constituents is not half as great as my usefulness to my constituents as a back bencher. I am not afraid to get up—if called—to represent the grievances and ills of my constituents. So I can speak freely. I am not bound by any pledges of loyalty to the people who sit on either side of me.

Mr. Nally

What about Standing Orders?

Sir L. Plummer

But the situation in Saffron Walden is very serious. I would not have been making this comment about Saffron Walden if the Chancellor of the Exchequer had been here since 3.30 yesterday afternoon. I was surprised that he was not here, because I should have thought it would have been impossible that so important an industry as this, with its dreadful toll of mounting unemployment, should be discussed without him being present. Nor did I think it was possible that the effect on his own constituents should have been disregarded by him, because he knows very well how important the textile industry is to his constituency.

There is a belief that the right hon. Gentleman is a bookish and donnish kind of man. We know he is an extremely astute business man, a representative of big business, for he was for many years a representative of one of the biggest semi-monopolies of the textile industry of this country, Courtaulds, gracing the board room with that astuteness and clarity which we have learned to respect in this House. He should know the effect of the Government's policy on the textile industry only too well. Yet he has not been in the House to protect his constituents from the dreadful consequences of the Government's policy.

Let me give an example of what happens in the little country town of Halstead, in the middle of the Saffron Walden Division. There is the great Courtaulds works, outside which are tramping the men and women who have been on short time from last Monday on a four-day week, and who in the next week or so are to be on a three-day week. There is no alternative work for these people. The towns in the district are small. They cannot go to Braintree.

As my hon. Friend the Member for Maldon (Mr. Driberg), has said, unemployment there is disturbing. Two thousand out of 18,000 are either on part-time or wholly out of work. It has been suggested that the girls turned out of the factory should go into domestic service, just as the Tories promised at the General Election. I do not believe it, because they cannot be forced into domestic service. But there are young girls and men out of work in the Chancellor's own constituency, and there is no ray of hope for them at all.

The effect on this rural and semi-rural area is apparent. Halstead has a population of 6,000. Workers come from Halstead and the rural district, making a total population of 9,000 or 10,000; a very fine little economy, and a very fine shopping centre. But the present short time working at the Courtauld factory means a reduction in the purchasing power of the people of Halstead of £500 a day. That is a tremendous cut in the purchasing power of this district; and the unemployment spiral, if one takes £500 a day from the shops, with the shop assistants being discharged, has its effect throughout the length and breadth of the land.

This business of turning a prosperous semi-rural area into an industrial battlefield is producing in rural Essex a condition never known before. The boys and girls are walking through the streets of Halstead with a puzzled and hurt look on their faces. We told them, of course, at the General Election, that this is what would happen to them, but having been brought up in the state of permanent employment, they did not believe us. They are beginning to believe us now.

I appeal to the Chancellor, for I believe he is a man with the welfare of the district at heart. He is a sort of supra-natural squire, and when he rides through on his horse, as he does, let him set an example which can be followed in the North of England. Let him devise a new Utility scheme which will really work to clear the goods from the factories and the pipe-line. Let him be ingenious, as he always said his party would be when facing difficulties, and he will bring hope to a beautiful and smiling countryside which, at present, has no hope at all.

There is one positive way in which a real contribution could be made to the unemployment in the textile industry. It used to be said that one inch on the tail of an Indian's shirt would mean that Lancashire would work two or three shifts. I would say that if one gave a pair of shorts to each native of Tanganyika one would go a long way towards solving the unemployment in Lancashire—[Laughter]. I do not know why hon. Members opposite laugh; perhaps they have not seen the sights I have seen—Africans dressed in the tatters of a blanket, too poor to buy shorts or shirts.

I have never seen anything funny in malnutrition or most extreme poverty. I saw nothing to laugh at when the Conservative Party started a deliberate attack—a sustained campaign—against the Overseas Food Corporation, which was an attempt, approved by this House unanimously, at a scheme, risky in its conception, but which the House agreed only a Government could undertake for the provision of food for the people of this country, and to raise the standard of life of people living there. It was unanimously approved without a single dissident vote.

When the party opposite used every device they could in suborning the staff of the Overseas Food Corporation, in the maintenance of an "underground" in the staff of the Corporation, they were attacking the future prosperity of the very people who could now have been making a quite significant contribution to the consumption of Lancashire products.

Mr. Fort

Is it in order to discuss the monkey-nut scheme, and, if so, can hon. Members on this side reply?

Mr. Deputy-Speaker

I was in some doubt, but I have not stopped the hon. Gentleman.

Sir L. Plummer

I know hon. Members want to get in now so that they may sustain some of the charges they made during the General Election, at a time when they could not be rebutted. But I have waited a long time to say some of the things that have to be said on this occasion, and which, I hope, will be repeated and enlarged upon in the forthcoming debates that must take place on similar schemes of colonial development if our Colonies are not to stagnate and we are not to starve.

The time will come for hon. Members to think seriously and earnestly about the failure of private enterprise to sustain a decent standard of life for the colonial people. When hon. and right hon. Members opposite get themselves into the "Daily Express"—and it is a pity that a great many of them missed today's early morning editions—but never mind, I do not doubt that they will get a paragraph in the "Sunday Express"—when they talk glibly about integrating Empire development policy, and when we hear speeches such as we have heard during the night about the necessity of getting rid of G.A.T.T. and relying on the deep love of the Commonwealth countries for the mother country, they are not facing the fact that the development of the Colonial Empire which could sustain Lancashire and Yorkshire for years depends on a bold and vigorous and self-sacrificial policy for this country to adopt.

What these countries need is capital goods—cement, coal, steel, technicians—but they will give a return in prosperity for Lancashire and Yorkshire. I ask the Financial Secretary to the Treasury to say to his colleague that it is high time now for the Government to consider on a broader basis the possibility of saving Lancashire and Yorkshire by the use of extraordinary methods, and by using courage, initiative and enterprise in the development of the Colonial Empire.

Mr. H. Strauss

rose

Mrs. E. M. Braddock (Liverpool, Exchange)

On a point of order, Mr. Deputy-Speaker. I was promised that before the Parliamentary Secretary replied to the debate, you would call an hon. Gentleman, and then myself.

Mr. Deputy-Speaker

I said that I would call the hon. Lady next on that side of the House, but that if an hon. Member got up on the Government side I would call that hon. Member in preference to her.

Mrs. Braddock

I protest, Mr. Deputy-Speaker. I said when I rose before that there might be something to which I wanted the Parliamentary Secretary to reply. The hon. and learned Gentleman, said he had no objection to waiting until I had spoken. You said, Mr. Deputy-Speaker, that you would call an hon. Member first, and would call upon me next. I say that that is on record, and I claim the privilege which was extended to me by the Parliamentary Secretary.

Mr. Deputy-Speaker

I said that the hon. Lady would be called next on that side, but I must make clear that if any back bencher rose on the other side I would have to call him before the hon. Lady. Of course, a Minister or Member on either side on the Front Bench would be given preference.

Mrs. Braddock

I protest. I am going to leave the Chamber altogether. I have been deliberately kept out of this debate. I was given the promise by the Parliamentary Secretary, when I rose before, that I should speak before he replied to that debate, and that is in the knowledge of hon. Members on both sides of the House, if they are honest. I protest. I am going out of the House in protest. I am the only hon. Member who has risen on the back benches and I am not permitted to speak, although I was given the promise of being able to speak before the Parliamentary Secretary.

Mrs. White

The hon. Lady has been here for eight hours to our knowledge without a break. She represents a constituency in which is the Liverpool Cotton Exchange and which is in an area represented almost entirely by hon. Members on the other side of the House.

Mr. Glenvil Hall

May I put a point of order, Mr. Deputy-Speaker? It is for you to decide whom you call, and when. But may I remind you that the Parliamentary Secretary courteously said that if you permitted it, he would wait and speak after the hon. Lady had spoken. I think that that is how the misconception has arisen. We on this side were definitely of the impression that you would call the hon. Lady before the Parliamentary Secretary, so that if she raised any point which needed a reply, it could be answered.

Mr. Deputy-Speaker

When the matter was raised before, I had led an hon. Member to believe, through a friend, that I would call him next. I told the hon. Lady that I would call her next on that side, and I still intend to do that. I hope that she will remain and perhaps speak after the Parliamentary Secretary.

Mr. Maurice Edelman (Coventry, North)

Would it be possible for the Parliamentary Secretary to reply after hearing the points the hon. Lady has to raise?

Mr. H. Strauss

I think that my words were that if the Chair agreed I would postpone my speech; but the hon. Lady was not called, and I was not conscious of having in any way failed when no one else got up on my side.

Mrs. Castle

In view of the fact that the hon. and learned Gentleman said he would give way, could not the difficulty be solved by his remaining seated?

Mr. Strauss

rose

Mrs. Braddock

On a point of order. Do I understand that the Parliamentary Secretary is going to insist on being called in spite of the statement he made on a previous occasion when I raised the matter?

Mr. Deputy-Speaker

I do not think that that is a point of order for me.

Mrs. Braddock

Do I understand that that is the position?

Mr. Charles Boyle (Salford, West)

Further to that point of order. This has been a long and important debate. We are debating on the Consolidated Fund Bill, which, I respectfully suggest, is very wide and allows for a long debate. My hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) has been in this House a long time, and she represents a constituency which is very important in the cotton trade. I would plead, with others, to the hon. and learned Gentleman that he might give way to my hon. Friend, so that her points might be replied to by him.

Mr. Strauss

rose

Mr. Edward Shackleton (Preston, South)

Further to that point of order. There seems to have been some confusion on the point of calling the hon. Member for Liverpool, Exchange (Mrs. Braddock). May we also have confirmed the implication of your remarks to the hon. Member for Bilston (Mr. Nally) that there would be no Closure on the debate?

Mr. Deputy-Speaker

So far as I was concerned, I said that there could be no Closure, because I could not accept it.

Mr. Emrys Hughes (Ayrshire, South)

Further to that point of order. I have just returned to the Chamber, refreshed in body and mind. I would like to know what stage of the proceedings has been reached.

Mr. Deputy-Speaker

It is the Third Reading of the Consolidated Fund Bill. It is exempted business and can go on indefinitely.

Mr. Strauss

rose

Mrs. Braddock

I will say what I want. [Interruption.]

Mr. Deputy-Speaker

Order. The hon. and learned Gentleman the Parliamentary Secretary is trying to speak. I do not know what is going on.

Mrs. Braddock

I am making a definite protest. What is more, in the circumstances, I refuse to sit down. I refuse to sit down, in view of what has happened.

Mr. Deputy-Speaker

If the hon. Lady would sit down—

Mrs. Braddock

No, I will not sit down.

Mr. Deputy-Speaker

She will be well advised to do so.

Mrs. Braddock

No, no. I am making a protest here, because I believe that this has been deliberately done. I say so quite definitely in the hearing and knowledge of a number of Members in the House. I am just not going to sit down.

Mr. Deputy-Speaker

If the hon. Lady—

Mrs. Braddock

I am very sorry, Mr. Deputy-Speaker.

Mr. Deputy-Speaker

If she will not sit down, I must ask her to withdraw from the House.

Mrs. Braddock

You will have to, I am afraid, Mr. Deputy-Speaker. Under the circumstances, representing the constituency that I do and considering the debate which has been going on, my constituents and the country as a whole will take strong exception to this.

Mr. Deputy-Speaker

I must ask the hon. Lady to withdraw from the House. Mr. Strauss.

Mr. Strauss

rose

Mrs. Braddock

I am not sitting down. I am very sorry.

Mr. Deputy-Speaker

I ask the hon. Lady to withdraw from the House, and I hope she will accept that.

Mrs. Braddock

No. I will not withdraw, either.

Mr. Deputy-Speaker

Then it becomes very serious.

Mrs. Braddock

I know it does. I intend it to become very serious.

Mr. Deputy-Speaker

Then I must draw the attention of the House to the fact that the hon. Lady is disregarding my Ruling—

Mrs. Braddock

Then you will have to, Mr. Deputy-Speaker—

Mr. Deputy-Speaker

—and I must send for Mr. Speaker.

Mr. SPEAKER resumed the Chair

Mr. Speaker

I am afraid I have to name Mrs. Braddock for disregarding the authority of the Chair.

Mrs. Braddock

Am I permitted to make a statement?

Mr. Speaker

No.

Mrs. Braddock

Not at all?

Mr. Speaker

The hon. Lady is not permitted to make a statement on the position.

Mrs. Braddock

Although you have only received a report from the Deputy-Speaker?

Mr. Speaker

Under the rules of order, no statement is permissible.

The Minister of Health (Mr. Harry Crookshank)

I beg to move, "That Mrs. Braddock be suspended from the service of the House."

Mr. Emrys Hughes

On a point of order—

Mr. Speaker

There is no point of order. The only business before the House is the Motion moved by the right hon. Gentleman and that is not debatable.

Question put.

The House divided: Ayes, 125; Noes, 67.

Division No.47.] AYES [10.0 p.m.
Anderson, Alexander (Motherwell) Harvey, Ian (Harrow, E.) Pilkington, Capt. R. A.
Banks, Col. C. Hay, John Price, Joseph T. (Westhoughton)
Barber, A. P. L. Heath, Edward Prior-Palmer, Brig. O. L.
Beach, Maj. Hicks Hill, Dr. Charles (Luton) Richards, R.
Bell, Philip (Bolton, E.) Hill, Mrs. E. (Wythenshawe) Robinson, Roland (Blackpool, S.)
Benson, G. Hornsby-Smith, Miss M. P. Royle, C.
Boardman, H. Hudson, W. R. A. (Hull, N.) Savory, Prof. Sir Douglas
Boyd-Carpenter, J. A. Hutchinson, Sir Geoffrey (Ilford, N.) Schofield, Lt.-Col. W. (Rochdale)
Boyle, Sir Edward Hylton-Foster, H. B. H. Shackleton, E. A. A.
Braddock, Mrs. Elizabeth Hynd, B. (Attercliffe) Shurmer, P. L. E.
Braithwaite, Sir Albert (Harrow, W.) Jennings, R. Steward, W. A. (Woolwich, W.)
Brockway, A. F. Johnson, Eric (Blackley) Storey, S.
Brooke, Henry (Hampstead) Jones, Frederick Elwyn (West Ham S.) Sutcliffe, H.
Buchan-Hepburn, Rt. Hon. P. G. T. Kaberry, D. Taylor, Bernard (Mansfield)
Burke, W. A. Kenyon, C. Taylor, William (Bradford, N.)
Butcher, H. W. Kerr, H. W. (Cambridge) Teeling, W.
Cary, Sir Robert King, Dr. H. M. Thomas David (Aberdare)
Castle, Mrs. B. A. Kinley, J. Thompson, Kenneth (Walton)
Davies, Stephen (Merthyr) Logan, D. G. Thompson, Lt.-Cdr. R. (Croydon, W.)
Edwards, John (Brighouse) Longden, Fred (Small Heath) Thorneycroft, R. Hn. Peter (Monmouth)
Fell, A. Low, A. R. W. Tilney, John
Fleetwood-Hesketh, R. F. Lucas, Sir Jocelyn (Portsmouth, S.) Vaughan-Morgan, J. K.
Fraser, Hon. Hugh (Stone) Lucas, P. B. (Brentford) Wade, D. W.
Freeman, John (Watford) Lucas-Tooth, Sir Hugh Willey, Octavius (Cleveland)
Gage, C. H. McCorquodale, Rt. Hon. M. S. Williams, Rt. Hon. Charles (Torquay)
Garner-Evans, E. H. Maitland, Patrick (Lanark) Williams, Ronald (Wigan)
Gordon-Walker, Rt. Hon. P. C. Mallalieu, E. L. (Brigg) Winterbottom, Richard (Brightside)
Gower, H. R. Mallalieu, J. P. W. (Huddersfield, E.) Yates, V. F.
Gridley, Sir Arnold Morley, R.
Hall, John (Gateshead, W.) Oakshott, H. D. TELLERS FOR THE AYES:
Hargreaves, A. Oldfield, W. H. Mr. Maude and
Harrison, J. (Nottingham, E.) Orr, Capt. L. P. S. Squadron Leader Cooper.
Harrison, Col. J. H. (Eye) Orr-Ewing, Charles Ian (Hendon, N.)
NOES
Aitken, W. T. Baldwin, A. E. Bowden, H. W.
Albu, A. H. Balfour, A. Bromley-Davenport, Lt.-Col. W. H.
Ashton, H. (Chelmsford) Barlow, Sir John Brook, Dryden (Halifax)
Assheton, Rt. Hon. R. (Blackburn. W.) Bell, Ronald (Bucks, S.) Broughton, Dr. A. D. D.
Attlee, Rt. Hon. C. R. Bence, C. R. Brown, Rt. Hon. George (Belper)
Awbery, S. S. Bennett, William (Woodside) Brown, Thomas (Ince)
Ayles, W. H. Blyton, W. R. Bullard, D. G.
Bacon, Miss Alice Bossom, A. C. Champion, A. J.
Clarke, Col. Ralph (East Grinstead) Hutchison, Lt.-Com. Clark (E'b'rgh, W.) Rodgers, John (Sevenoaks)
Coldrick, W. Hynd, H. (Accrington) Roper, Sir Harold
Cook, T. F. Irvine, A. J. (Edge Hill) Ross, William
Craddock, Beresford (Spelthorne) Jones, T. W. (Merioneth) Short, E. W.
Craddock, George (Bradford, S.) Keenan, W. Simmons, C. J. (Brierley Hill)
Crosthwaite-Eyre, Cot. O. E. Lee, Frederick (Newton) Slater, J.
Crouch, R. F. Legh, P. R. (Petersfield) Smith, Ellis (Stoke, S.)
Crowder, John E. (Finchley) Lever, Leslie (Ardwick) Smithers, Peter (Winchester)
Dalton, Rt. Hon. H. Lindgren, G. S. Snow, J. W.
Deedes, W. F. Lloyd, Rt. Hon. Selwyn (Wirral) Soames, Capt. C.
Deer, G. Lockwood, Lt.-Col. J. C. Sparks, J. A.
Delargy, H. J. Longden, Gilbert (Herts, S.W.) Stoddart-Scott, Col. M.
Digby, S. Wingfield McGhee, H. G. Stross, Dr. Barnett
Dodds-Parker, A. D. McLeavy, F. Summers, G. S.
Donner, P. W. Macmillan, Rt. Hon. Harold (Bromley) Sylvester, G. O.
Drewe, C. Macpherson, Maj. Niall (Dumfries) Taylor, John (West Lothian)
Duncan, Capt. J. A. L. Mann, Mrs. Jean Taylor, Rt. Hon. Robert (Morpeth)
Ede, Rt. Hon. J. C. Maydon, Lt.-Cmdr. S. L. C. Thomas, George (Cardiff)
Evans, Albert (Islington, S.W.) Mayhew, C. P. Thomas, Iorwerth (Rhondda, W.)
Finch, H. J. Mellor, Sir John Thomas, Ivor Owen (Wrekin)
Finlay, Graeme Messer, F. Thurtle, Ernest
Fisher, Nigel Mitchison, G. R. Vane, W. M. F.
Fletcher-Cooke, C. Morris, Percy (Swansea, W.) Viant, S. P.
Forman, J. C. Morrison, Rt. Hon. H. (Lewisham, S.) Vosper, D. F.
Fraser, Sir Ian (Morecambe & Lonsdale) Mort, D. L. Wakefield, Sir Wavell (Marylebone)
Gibson, C. W. Mulley, F. W. Waterhouse, Capt. Rt. Hon. C.
Godber, J. B. Murray, J. D. Watkins, T. E.
Gooch, E. G. Nabarro, G. D. N. Watkinson, H. A.
Greenwood, Anthony (Rossendale) Nally, W. Weitzman, D.
Grenfell, Rt. Hon. D. R. Neal, Harold (Bolsover) Wellwood, W.
Grey, C. F. Nugent, G. R. H. West, D. G.
Griffiths, Rt. Hon. James (Llanelly) Oswald, T. Wheatley, Rt. Hon. John
Hale, Leslie (Oldham, W.) Paling, Rt. Hon. W. (Dearne Valley) White, Mrs. Eirene (E. Flint)
Hall, Rt. Hon. Glenvil (Colne Valley) Pargiter, G. A. Whiteley, Rt. Hon. W.
Hamilton, W. W. Partridge, E. Wigg, G. E. C.
Hannan, W. Paton, J. Wilkins, W. A.
Harvey, Air Cdre. A. V. (Macclesfield) Pearson, A. Willey, Frederick (Sunderland, N.)
Hayman, F. H. Perkins, W. R. D. Williams, David (Neath)
Heald, Sir Lionel Plummer, Sir Leslie Williams, Gerald (Tonbridge)
Hirst, Geoffrey Popplewell, E. Williams, Sir Herbert (Croydon, E.)
Holmes, Horace (Hemsworth) Price, Henry (Lewisham, W.) Williams, R. Dudley (Exeter)
Horobin, I. M. Price, Philips (Gloucestershire, W.) Williams W. R. (Droylesden)
Houghton, Douglas Proctor, W. T. Wills, G.
Howard, Greville (St. Ives) Profumo, J. D. Wilson, Geoffrey (Truro)
Hudson, James (Ealing, N.) Pryde, D. J. Woodburn, Rt. Hon. A.
Hughes, Cledwyn (Anglesey) Remnant, Hon. P.
Hughes, Emrys (S. Ayrshire) Roberts, Goronwy (Caernarvonshire) TELLERS FOR THE NOES:
Hurd, A. R. Robinson, Kenneth (St. Pancras, N.) Mr. Irving and Mr. Orbach

Main Question, as amended, put, and agreed to.

Division No. 48.] AYES [10.0 a.m.
Aitken, W. T. Grimond, J. Ormsby-Gore, Hon. W. D.
Amery, Julian (Preston, N.) Harris, Frederic (Croydon, N.) Orr-Ewing, Charles Ian (Hendon, N.)
Anstruther-Gray, Maj. W. J. Harris, Reader (Heston) Osborne, C.
Arbuthnot, John Harrison, Col. J. H. (Eye) Peake, Rt. Hon. O.
Assheton, Rt. Hon. R. (Blackburn, W.) Harvey, Air Cdre. A. V. (Macclesfield) Powell, J. Enoch
Astor, Hon. J. J. (Plymouth, Sutton) Hay, John Prior-Palmer, Brig. O. L.
Baldwin, A. E. Heald, Sir Lionel Profumo, J. D.
Banks, Col. C. Heath, Edward Raikes, H. V.
Barber, A. P. L. Hicks-Beach, Major W. W. Redmayne, M.
Baxter, A. B. Hill, Dr. Charles (Luton) Remnant, Hon. P.
Beamish, Maj. Tufton Hinchingbrooke, Viscount Roberts, Maj. Peter (Healey)
Bennett, Sir Peter (Edgbaston) Holland-Martin, C. J. Roper, Sir Harold
Bevins, J. R. (Toxteth) Holt, A. F. Savory, Prof. Sir Douglas
Black, C. W. Hornsby-Smith, Miss M. P. Scott, R. Donald
Bossom, A. C. Howard, Greville (St. Ives) Scott-Miller, Cmdr. R.
Boyd-Carpenter, J. A. Hudson, Sir Austin (Lewisham, N.) Smithers, Peter (Winchester)
Boyle, Sir Edward Jenkins, R. C. D. (Dulwich) Spearman, A. C. M.
Bromley-Davenport, Lt.-Col. W. H. Kaberry, D. Spans, Sir Patrick (Kensington, S.)
Buchan-Hepburn, Rt. Hon. P. G. T. Lambton, Viscount Stevens, G. P.
Bullard, D. G. Legge-Bourke, Maj. E. A. H. Strauss, Henry (Norwich, S.)
Bullock, Capt. M. Legh, P. R. (Petersfield) Studholme, H. G.
Butler, Rt. Hon. R. A. (Saffron Walden) Linstead, H. N. Sutcliffe, H.
Cary, Sir Robert Lloyd, Rt. Hon. Selwyn (Wirral) Taylor, William (Bradford, N.)
Clarke, Col. Ralph (East Grinstead) Low, A. R. W. Teeling, W.
Cole, Norman Lucas, Sir Jocelyn (Portsmouth, S.) Thomas, Rt. Hon. J. P. L. (Hereford)
Conant, Maj. R. J. E. Lucas-Tooth, Sir Hugh Thompson, Kenneth (Walton)
Cooper-Key, E. M. McCallum, Major D. Thompson, Lt.-Cdr. R. (Croydon, W.)
Crookshank, Capt. Rt. Hon. H. F. C. Macdonald, Sir Peter (I. of Wight) Thorneycroft, R. Hn. Peter (Monmouth)
Crosthwaite-Eyre, Col. O. E. McKibbin, A. J. Thornton-Kemsley, Col. C. N.
Crouch, R. F. McKie, J. H. (Galloway) Touche, G. C.
Darling, Sir William (Edinburgh, S.) Maclean, Fitzroy Turton, R. H.
Davies, Rt. Hn. Clement (Montgomery) MacLeod, Iain (Enfield, W.) Vaughan-Morgan, J. K.
Dodds-Parker, A. D. Macpherson, Maj. Niall (Dumfries) Vesper, D. F.
Douglas-Hamilton, Lord Malcolm Maitland, Comdr. J. F. W. (Horncastle) Ward, Hon. George (Worcester)
Drayson, G. B. Maitland, Patrick (Lanark) Ward, Miss I. (Tynemouth)
Eccles, Rt. Hon. D. M. Marlowe, A. A. H. Wellwood, W.
Fell, A. Marples, A. E. Williams, Sir Herbert (Croydon, E.)
Fletcher-Cooke, C. Maydon, Lt.-Cmdr. S. L. C. Wills, G.
Fort, R. Mellor, Sir John Wilson, Geoffrey (Truro)
Fraser, Sir Ian (Morecambe & Lonsdale) Nabarro, G. D. N.
Gage, C. H. Nicolson, Nigel (Bournemouth, E.) TELLERS FOR THE AYES:
Galbraith, T. G. D. (Hillhead) Noble, Cmdr. A. H. P. Brigadier Mackeson and Mr. Butcher.
Godber, J. B. Oakshott, H. D.
NOES
Awbery, S. S. Edelman, M. Royle, C.
Bence, C. R. Edwards, John (Brighouse) Schofield, S. (Barnsley)
Beswick, F. Edwards, Rt. Hon. Ness (Caerphilly) Silverman, Sydney (Nelson)
Bing, G. H. C. Fienburgh, W. Simmons, C. J. (Brierley Hill)
Blackburn, F. Greenwood, Anthony (Rossendale) Slater, J.
Boardman, H. Grenfell, Rt. Hon. D. R. Smith, Ellis (Stoke, S.)
Bottomley, Rt. Hon. A. G. Grey, C. F. Swingler, S. T.
Bowles, F. G. Griffiths, Rt. Hon. James (Llanelly) Sylvester, G. O.
Braddock, Mrs. Elizabeth Hale, Leslie (Oldham, W.) Thomas, George (Cardiff)
Brook, Dryden (Halifax) Hall, Rt. Hon. Glenvil (Colne Valley) Watkins, T. E.
Brown, Thomas (Ince) Hargreaves, A. White, Mrs. Eirene (E. Flint)
Burke, W. A. Holmes, Horace (Hemsworth) White, Henry (Derbyshire, N. E.)
Burton, Miss F. E. Hughes, Emrys (S. Ayrshire) Whiteley, Rt. Hon. W.
Castle, Mrs. B. A. Irvine, A. J. (Edge Hill) Wigg, G. E. C.
Champion, A. J. Jones, David (Hartlepool) Wilkins, W. A.
Craddock, George (Bradford, S.) Keenan, W. Williams, Ronald (Wigan)
Crossman, R. H. S. Lee, Miss Jennie (Cannock) Williams, W. R. (Droylsden)
Cullen, Mrs. A. MacColl, J. E. Williams, W. T. (Hammersmith, S.)
Davies, Harold (Leek) Nally, W. Wilson, Rt. Hon. Harold (Huyton)
Donnelly, D. L. Plummer, Sir Leslie Winterbottom, Richard (Brightside)
Driberg, T. E. N. Price, Joseph T. (Westhoughton) Woodburn, Rt. Hon. A.
Dugdale, Rt. Hon. John (W. Bromwich) Rhodes, H.
Ede, Rt. Hon. J. C. Ross, William TELLERS FOR THE NOES:
Mr. Bowden and Mr. Popplewell.
Mr. Speaker

I must now direct the hon. Lady to withdraw from the House.

Mrs. Braddock

I do that with a protest.

The hon. Member withdrew accordingly.

Original Question again proposed.

Mr. S. Silverman

On a point of order. I would, with respect to you, Sir, and with your leave, like to move a Motion to adjourn the debate in order to call attention to the serious limitation upon the debate which has just occurred, and the unsatisfactory position which would result if the debate were now to be continued.

Many of us on this side, and many, indeed, on the other side have sat in the House to debate the serious situation in Lancashire and elsewhere in the textile trade—with an interruption of three hours from seven o'clock until 10 o'clock last night—from 3.30; that is to say, for many hours. I see many faces here that I missed during the night—[HON. MEMBERS: "And on that side."]; it is perfectly true, as has been pointed out most vociferously from the other side of the House, that there are some new faces on this side of the House, too.

But there is a difference between the two cases. In the case of my hon. Friends on this side, they voted against the suspension of a Parliamentary—colleague[Interruption]—on this side all of them voted. The hon. Member may challenge it later in the debate but at the moment it is I who am addressing Mr. Speaker, and I say that all my hon. and right hon. Friends on this side voted against the suspension of their Parliamentary colleague, whereas the great majority of hon. and right hon. Members opposite voted for the suspension of a Parliamentary colleague when they had not the faintest notion what the dispute was about.

With the fair-mindedness of Members of the House of Commons, irrespective of party, where matters affecting the House itself as a House of Commons matter and individual Members are concerned, I am quite sure that they will have a little patience with me while I explain to them what the circumstances were, so that they may consider—

Sir H. Williams

On a point of order. Is it competent, Mr. Speaker, to debate a decision which the House has already taken?

Mr. Speaker

Do I understand that the hon. Member for Nelson and Colne (Mr. S. Silverman) is moving the adjournment of the debate? If so, I will forthwith put that Question.

Mr. Silverman

rose

Mr. Speaker

Does the hon. Member wish to raise a point of order?

Mr. Silverman

I was seeking, with your permission, Mr. Speaker, and I thought that you had called me and that I had your leave, to submit to the House that they should agree with me in thinking that the debate should be adjourned. I was in the middle of doing so and I sat down to enable the hon. Member for Croydon, East (Sir H. Williams) to raise a point of order.

I was not in the least seeking to discuss the decision to which the House has just come. I agree that that would be out of order. What I am saying is that in the circumstances which occurred—and I pass no opinion about them one way or the other, reserving one's right to do so on an appropriate occasion—I should like to explain why hon. Members should agree with me that the debate should not now continue for the moment. I thought it was relevant to that argument to explain to so many strange faces, new ones who have not been with us and who know nothing of the circumstances to which I have referred, what those circumstances were.

I was endeavouring to do so without expressing or indicating or hinting at any expression of opinion. But, with respect, I think it would be quite wrong for hon. Members to vote for or against the adjournment of the debate at this moment without in the least knowing what the circumstances are. Therefore, with your permission, Mr. Speaker, I propose to explain it to them.

Sir W. Darling

On a point of order. Is it in order for the hon. Member to suggest that I do not know why I voted or where I voted?

Mr. Speaker

That is not a point of order. The House must be presumed to be in possession of sufficient knowledge of its own proceedings to enable it to decide whether a debate should be adjourned or not. I do not wish to be over-strict with the hon. Member if he briefly explains his reasons, but I hope he will not find it necessary to give a long explanation of the facts, which are fairly well-known to the House.

Mr. Silverman

But for the interruptions of hon. Members whose anxiety not to know the circumstances is really very puzzling, my explanation would have been over long ago. What I want to explain is that my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) had sat in this House from ten minutes to two until a few minutes ago.

Miss Irene Ward (Tynemouth)

On a point of order. Is it not usual and traditional for the House to support the Chair? Is it necessary and in order for the hon. Member to continue?

Mr. Silverman

I am not seeking to discuss the action of the Chair. I know from recent personal experience that Mr. Speaker has been acting perfectly properly. I make no attack or criticism at all about that. What I am saying to hon. Members opposite is that my hon. Friend did sit here from 1.50 a.m. until a few minutes ago without going from the House at all, rising and seeking to catch the eye of Mr. Speaker or Mr. Deputy-Speaker after every speaker throughout that time, and at the very last moment there was some little misunderstanding about it and it seemed to many of us to be as a result of exchanges between the Parliamentary Secretary—whose good temper and courtesy in the matter up to that point we all acknowledge and who was in no way responsible—and the Chair agreed that the hon. Lady should be heard in the debate before the Parliamentary Secretary replied.

That did not happen, and if I have no right to make any comment about it at this stage, then I make no comment. What I say to hon. Members is that when an hon. Member has done what the hon. Lady did, and when she represents a constituency vitally concerned with the matters we have been debating for so many hours, it would be highly appropriate for the House to adjourn this debate until the day comes when the hon. Lady returns, and catches your eye, Sir—as I am sure she will—to make the contribution we were all anxious to hear.

Mr. Ross

On a point of order. I do not know how it is at your end of the Chamber, Mr. Speaker, but on these benches we cannot hear a word that is being said because of the babble that is going on.

Mr. Silverman

There is only one further consideration—

Mr. Drayson

Further to that point of order. [HON. MEMBERS: "Order."] I understood that the hon. Gentleman had finished.

Hon. Members

No.

Mr. Speaker

Mr. Silverman.

Mr. Silverman

I have only one further point. The only other consideration which I would commend to hon. Members is that it is in the highest degree unusual in the history of the House, so far as I know, that Motions of the kind which the House has just decided are decided as between the Government on one side and the Opposition on the other. It has happened very, very rarely, and when it does happen the circumstances are generally agreed to be exceptional.

I think that those exceptional circumstances would justify the House in agreeing to suspend the debate now and resuming it on the day when by hon. Friend the Member for Liverpool, Exchange, is back in her place and when Mr. Speaker calls her, as I have no doubt he would, to continue the debate which we now break off. I beg to move, "That the debate be now adjourned."

Mr. F. Beswick (Uxbridge)

I beg to second the Motion.

10.19 a.m.

Mr. Ede (South Shields)

I understand that the debate during the night has been conducted with an earnest desire on both sides of the House to bring to the attention of Her Majesty's Government the problems that confront the textile industry, which is certainly the staple industry of two of the largest counties in the country. I also understand that various suggestions have been made to the right hon. Gentleman the President of the Board of Trade. I was not present through the night. This is the first all-night Sitting that I have not attended in full since I became a Member of this House. But I made inquiries about 10.30 last night and was assured that if I arrived here at 9 o'clock this morning, I should find the debate still in progress.

There has been the unfortunate incident which has just occurred. I am bound to say that I view it with very sincere sorrow because I think the hon. Lady received an intimation from the Parliamentary Secretary which entitled her to think that he would not intervene until she had been heard. But that issue has been decided, and I do not wish to allude to it further.

However, it is quite clear that the subject matter of the debate is one that excites great interest in the House and that it cannot be expected that it will conclude with this discussion on the Bill and that the discussion must be still further prolonged for a considerable time.

No dilatory Motion has been moved during the night to ascertain the intentions of Her Majesy's Government about the matter. Therefore, I should like to ask the Leader of the House if he can tell us what his proposals are about the continuation of the debate on the Bill, and, if he does not think that he ought to ask for it to be continued much longer, what further arrangement Her Majesty's Government can make for the continuation of the debate and for giving us an opportunity of hearing something more hopeful from Her Majesty's Government than we heard from the right hon. Gentleman the President of the Board of Trade yesterday afternoon.

While we had a very interesting history of the cotton trade and appropriate laudatory references to Hargreaves, Arkwright and Crompton, who have been dead a very long time, we did not get any indication of any positive policy. I hope that the Leader of the House will give us some indication as to when we may get from Her Majesty's Government something constructive in the way of a reply to the very able speech which was made by my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), who opened the debate yesterday afternoon, and to the suggestions which have been made to him from the benches behind him as to the way in which the crisis in this industry should be met.

I hope that the right hon. Gentleman will be able to indicate either that the debate can continue for some time yet or that additional time will be found for discussion of the subject.

10.23 a.m.

The Minister of Health (Mr. Harry Crookshank)

I am very much obliged to the right hon. Gentleman for the courteous way in which he has put his question. As I understand it, the debate has been carried on right through the night in a very, shall we say, amiable manner. There has been, so my reports are, no bitterness about it but a general desire to explore this very difficult problem, and that has been carried out in the context of the Consolidated Fund Bill, this stage of which, as the right hon. Gentleman knows, it was agreed we should get through during this Sitting. As he knows, it has to be got through during the next four days.

Therefore, I do not think that we could possibly break off this Sitting without having got that stage of the Bill on which we are now engaged, and that makes it impossible for me to accept the Adjournment Motion, because it would mean that the business would have failed and we should be in considerable difficulty, which, as the right hon. Gentleman knows, is usually bound to arise at this time of the year owing to the statutory limits within which financial business is worked. I hope therefore that the hon. Member for Nelson and Colne (Mr. S. Silverman) will now be prepared to withdraw his Motion to adjourn, which I understood from his speech was largely a matter of protest because his hon. Friend had been suspended from the service of the House. That is not for me to enter into. It was a decision of the House, and the Motion automatically followed the result of her not accepting the Ruling of Mr. Speaker.

Mr. S. Silverman

I need not remind the right hon. Gentleman that any protest of that kind at this stage would be wholly disorderly. The rules of the House provide an opportunity for challenging anything which it may be thought should be challenged on another occasion. That may well be considered, but my intention in moving the adjournment of the debate was to afford an opportunity for the House to hear Members who, naturally, wish to be heard, and who, I thought, had the right to be heard on the Third Reading of the Consolidated Fund Bill.

Mr. Crookshank

I quite understand that, but I did hear the hon. Gentleman say quite a bit about his hon. Friend, and I was making the point that the House had come to a decision on a Motion which is automatic after action is taken by Mr. Speaker on an occasion like that. As the Consolidated Fund Bill has to be got through, I suggest that he should withdraw his Motion, and that the House should listen to the Parliamentary Secretary—[HON. MEMBERS: "No."]—who was in possession of the House—[HON. MEMBERS: "No."]—having been called by the Chair.

Whoever has not been here in the night, my hon. and learned Friend has been the most assiduous sitter on this Bench within living memory, as he has not stirred from his place. For that reason he is even better informed than usual to answer the points of hon. Gentlemen opposite. I suggest, therefore, we should now pass from this Motion to the continuation of the debate, and hear the speech of my hon. and learned Friend. For the rest, of course, the Government will naturally take into account everything said during the debate, but on this occasion I should have thought, looking at the time now and the time that the debate started, that we have done a great deal of exploratory work into this problem. I hope the House will now continue to the main business of the day.

10.28 a.m.

Mr. Hale

I think I may assist the House in this matter. I do not want to add fuel to the fires of controversy, but as I was here throughout the night, and at the time when the original incident materialised I think I may put to you, Mr. Speaker, in no sense of recapitulation, or talking about the vote, but as the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) has done, certain matters for your consideration for the adjournment of the debate.

The Leader of the House said that we must get this Bill today, but he will recognise that even over the importance of public business there is the decent conduct of the House and debates conducted with propriety. I do not know what understanding there was between the two Front Benches, but I think I can say that the debate has been singularly pleasant in view of the gravity of the subject.

I hope that hon. Gentleman on both sides will realise that those of us faced with this serious constituency problem had an added anxiety in the debate, and might not have been so much in control of themselves as in ordinary times in the average debate in the House. The Parliamentary Secretary has been a monument of courtesy throughout the proceedings, and held back for a very long time when other people might have attempted to put a summary end to the discussions.

I do not think that it would have been right for him to do so, but I must say that he behaved with great generosity in this matter. With great respect, may I say, too, that the Chair has been greatly overburdened in that the whole of the work has devolved largely upon two of the occupants of the Chair, and, so far as I know, no one outside the three regular occupants of the Chair has been called in to assist in this very laborious operation.

It has been an exhausting operation for all who have partaken in this debate, and I observe that all who have done so have been listened to with attention. All that noise now is coming from those who have popped in for five minutes on their way to the clubs and who have no knowledge of the circumstances that arose at 8 o'clock. At that time, there was a friendly protest and I was one of several hon. Members who rose to call the attention of the Chair—

Mr. Speaker

I would call attention to the fact that if the hon. Member is discussing now what happened before I resumed the Chair that would be out of order at the moment.

Mr. Hale

I am not doing so, Sir. I am trying to give a picture of the strain under which the House was labouring at the time as a reason why we should not continue that strain on this very important discussion, and why we should now consider the adjournment of the debate.

I ventured to say to Mr. Deputy-Speaker that I represented one of the largest cotton spinning towns suffering most from unemployment, and I have risen on 38 occasions to catch the eye of the Chair. Mr. Deputy-Speaker did say, with the courteous agreement of the Parliamentary Secretary, who sat back, that he would hear more speeches. The moment came when my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) rose and called attention to her own position. It is only fair to say that at that time she had been sitting here almost motionless, except for the intervention she made, throughout the greater part of the night, and I think I am right in saying that at this time we were all in a state of strain and emotion.

It would be impossible for me to recapitulate the facts relevant to the actual suspension. I think that both sides of the House would agree that a great deal of tact was not possible. Hon. Members had been sitting here for 17 hours in succession and were beginning to tire and nerves were beginning to crack, and it was difficult to recede from the position that had been taken up. The hon. Member for Liverpool, Exchange probably has as great a right in view of the importance of the matter in her constituency as anyone to take part in this debate. She represents the Liverpool Cotton Exchange itself, which was a very substantial subject of discussion during the night.

In those circumstances, if we have reached this stage when physical endurance has been brought to the limit, then I suggest that it is in the interests of the decency and dignity of the House that this Motion should be accepted and that, through the usual channels, we find an early and appropriate opportunity for continuing this important discussion.

May I add a final word? I am not discounting the merits of the matter. It would be a tragedy if we should not be able to have the advice and the eloquence of the hon. Lady the Member for Liverpool, Exchange. It would make for good feeling, for good understanding, and for the best interests of the House if the Leader of the House would now say that he is prepared to accept this Motion without a Division.

Mr. Glenvil Hall

I followed what the right hon. and gallant Gentleman the Leader of the House said and on this side we take clearly the reasons why this Bill must be through by 31st March. But that is no reason why this debate should be curtailed or, if it has to be, that time should not be found for this discussion to continue. As my right hon. Friend the Member for South Shields (Mr. Ede) said, this has been a friendly and important debate and it would be a pity, in our view, to cut it short unduly.

We are afraid that as soon as the hon. and learned Gentleman the Parliamentary Secretary has spoken, the Closure may be moved. I want to remind the Leader of the House that it has been understood that my hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) should speak. We also understood that there were others who might, if they were fortunate enough to catch your eye, Mr. Speaker, be able to speak also. Therefore, I ask the Leader of the House for an assurance that, once the Parliamentary Secretary has spoken, this debate will not be brought suddenly to a close by the moving of the Closure from the Government Front Bench.

Mr. Speaker

I must point out that the acceptance or not of the Closure is a matter for the Chair. It can only be moved by hon. Members. I certainly understood that the hon. Member for Brighouse and Spenborough (Mr. J. Edwards) would speak to end the debate for his side. [HON. MEMBERS: "No."] I may be wrong about that. However, on the Question which is now before the House, the best service I can render to the House is to put the Question. [HON. MEMBERS: "No"] Order, order.

Question put, "That the debate be now adjourned."

The House proceeded to a Division.

Mr. Emrys Hughes

(seated and covered): On a point of order, Sir. I wish respectfully to put to you the point of view of hon. Members who have been absent throughout the night, exercising a certain amount of self-denial in order not to compete with hon. Members from Lancashire and other textile constituencies, who wish to continue the debate. I come, Sir, with a fresh and open mind on this question, without knowing the current of discussion and without knowing the bitternesses of the last half-hour, to ask if it is fair to have this Division at a time when certain hon. Members who are anxious to contribute their share to the deliberations of this House have not had the opportunity to hear what the discussion is about.

I speak, Sir, not only for myself but for the hon. Member for Edinburgh, South (Sir W. Darling). We have exercised self-denial in keeping away from the precincts of this House in order to allow other hon. Members to contribute to the discussion and now, before casting our votes, I submit that we are entitled to hear a reasoned case as to the course now before us.

Mr. Speaker

The issue has been sufficiently deployed before us and the Division is on. Of course, if the House decides to adjourn the debate, that will be the will of the House, but, if not, the hon. Member may have a chance to contribute later on.

Ayes, 95 Noes, 134.

Division No. 49.] AYES [10.35 a.m.
Attlee, Rt. Hon. C. R. Greenwood, Anthony (Rossendale) Robinson, Kenneth (St. Pancras, N.)
Awbery, S. S. Grenfell, Rt. Hon. D. R. Ross, William
Bacon, Miss Alice Grey, C. F. Schofield, S. (Barnsley)
Bence, C. R. Griffiths, Rt. Han. James (Llanelly) Shackleton, E. A. A.
Beswick, F. Griffiths, William (Exchange) Shinwell, Rt. Hon. E.
Bing, G. H. C. Grimond, J. Shurmer, P. L. E.
Blackburn, F. Hale, Leslie (Oldham, W.) Silverman, Sydney (Nelson)
Blenkinsop, A. Hall, Rt. Hon. Glenvil (Colne Valley) Simmons, C. J. (Brierley Hill)
Boardman, H. Hall, John (Gateshead, W.) Slater, J.
Bottomley, Rt. Hon. A. G. Hannan, W. Smith, Ellis (Stoke, S.)
Bowden, H. W. Hargreaves, A. Snow, J. W.
Bowles, F. G. Holmes, Horace (Hemsworth) Stross, Dr. Barnett
Brooke, Dryden (Halifax) Holt, A. F. Swingler, S. T.
Brown, Thomas (Ince) Houghton, Douglas Sylvester, G. O.
Burke, W. A. Hughes, Emrys (S. Ayrshire) Taylor, John (West Lothian)
Burton, Miss F. E. Irvine, A. J. (Edge Hill) Taylor, Rt. Hon. Robert (Morpeth)
Castle, Mrs. B. A. Jeger, George (Goole) Thomas, George (Cardiff)
Champion, A. J. Jones, David (Hartlepool) Watkins, T. E.
Craddock, George (Bradford, S.) Jones, T. W. (Merioneth) White, Mrs. Eirene (E. Flint)
Crossman, R. H. S. Lee, Miss Jennie (Cannock) White, Henry (Derbyshire, N.E.)
Davies, Harold (Leek) Longden, Fred (Small Heath) Whiteley, Rt. Hon. W.
Donnelly, D. L. MacColl, J. E. Wigg, G. E. C.
Driberg, T. E. N. MacPherson, Malcolm (Stirling) Willey, Frederick (Sunderland, N.)
Dugdale, Rt. Hon. John (W. Bromwich) Neal, Harold (Bolsover) Williams, Ronald (Wigan)
Ede, Rt. Hon. J. C. Paling, Rt. Hon. W. (Dearne Valley) Williams, W. R. (Droylsden)
Edelman, M. Parker, J. Williams, W. T. (Hammersmith, S.)
Edwards, John (Brighouse) Plummer, Sir Leslie Wilson, Rt. Hon. Harold (Huyton)
Edwards, Rt. Hon. Ness (Caerphilly) Popplewell, E. Winterbottom, Richard (Brightside)
Edwards, W. J. (Stepney) Price, Joseph T. (Westhoughton) Woodburn, Rt. Hon. A.
Evans, Albert (Islington, S.W.) Pryde, D. J. Wyatt, W. L.
Field, Capt. W. J. Rhodes, H.
Freeman, Peter (Newport) Richards, R. TELLERS FOR THE AYES:
Robens, Rt. Hon. A. Mr. Wilkins and Mr. Royle.
NOES
Aitken, W. T. Harris, Frederic (Croydon, N.) Ormsby-Gore, Hon. W. D.
Amery, Julian (Preston, N.) Harris, Reader (Heston) Orr-Ewing, Charles Ian (Hendon, N.)
Anstruther-Gray, Maj. W. J. Harrison, Col. J. H. (Eye) Osborne, C.
Arbuthnot, John Harvey, Air Cdre. A. V. (Macclesfield) Powell, J. Enoch
Assheton, Rt. Hon. R. (Blackburn, W.) Hay, John Prior-Palmer, Brig O. L.
Astor, Hon. J. J. (Plymouth, Sutton) Heald, Sir Lionel Profumo, J. D.
Baldwin, A. E. Heath, Edward Raikes, H. V.
Banks, Col. C. Hicks-Beach, Major W. W. Redmayne, M.
Barber, A. P. L. Hill, Dr. Charles (Luton) Remnant, Hon. P.
Barlow, Sir John Hinchingbrooke, Viscount Roberts, Maj. Peter (Heeley)
Baxter, A. B. Holland-Martin, C. J. Roper, Sir Harold
Beamish, Maj. Tufton Hopkinson, Henry Savory, Prof. Sir Douglas
Bennett, Sir Peter (Edgbaston) Hornsby-Smith, Miss M. P. Schofield, Lt.-Col. W. (Rochdale)
Birch, Nigel Howard, Greville (St. Ives) Scott, R. Donald
Black, C. W. Hudson, Sir Austin (Lewisham, N.) Scott-Miller, Cmd R.
Bossom, A. C. Hutchison, Lt.-Com. Clark (E'b'rgh W.) Shepherd, William
Boyd-Carpenter, J. A. Hylton-Foster, H. B. H. Smithers, Peter (Winchester)
Boyle, Sir Edward Jenkins, R. C. D. (Dulwich) Spearman, A. C. M.
Bromley-Davenport, Lt.-Col. W. H. Kaberry, D. Spens, Sir Patrick (Kensington, S.)
Buchan Hepburn, Rt. Hon. P. G. T. Lambton, Viscount Stanley, Capt. Hon. Richard
Bullard, D. G. Leather, E. H. C. Stevens, G. P.
Bullock, Capt. M. Legge-Bourke, Maj. E. A. H. Strauss, Henry (Norwich, S.)
Butler, Rt. Hon. R. A. (Suffron Walden) Legh, P. R. (Petersfield) Studholme, H. G.
Cary, Sir Robert Linstead, H. N. Sutcliffe, H.
Clarke, Col. Ralph (East Grinstead) Lloyd, Rt. Hon. Selwyn (Wirral) Taylor, William (Bradford, N.)
Cole, Norman Low, A. R. W. Teeling, W.
Colegate, W. A. Lucas, Sir Jocelyn (Portsmouth, S.) Thomas, Rt. Hon. J. P. L. (Hereford)
Conant, Maj. R. J. E. Lucas-Tooth, Sir Hugh Thomas, P. J. M. (Conway)
Cooper-Key, E. M. McCallum, Major D. Thompson, Kenneth (Walton)
Cranborne, Viscount Macdonald, Sir Peter (I. of Wight) Thompson, Lt.-Cdr. R. (Croydon, W.)
Crookshank, Capt. Rt. Hon. H. F. C. McKibbin, A. J. Thorneycroft, R. Hn. Peter (Monmouth)
Crosthwaite-Eyre, Col. O. E. McKie, J. H. (Galloway) Thornton-Kemsley, Col. C. N.
Crouch, R. F. Maclean, Fitzroy Touche, G. C.
Darling, Sir William (Edinburgh, S.) MacLeod, Iain (Enfield, W.) Turton, R. H.
Dodds-Parker, A. D. Macpherson, Maj. Niell (Dumfries) Vaughan-Morgan, J. K.
Douglas-Hamilton, Lord Malcolm Maitland, Comdr. J. F. W. (Horncastle) Vosper, D. F.
Drayson, G. B. Maitland, Patrick (Lanark) Ward, Hon. George (Worcester)
Eccles, Rt. Hon. D. M. Marlowe, A. A. H. Ward, Miss I. (Tynemouth)
Fell, A. Marples, A. E. Wellwood, W.
Finlay, Graeme Maydon, Lt.-Cmd. S. L. C. Williams, Sir Herbert (Croydon, E.)
Fletcher-Cooke, C. Mellor, Sir John Wills, G.
Fort, R. Nabarro, G. D. N. Wilson, Geoffrey (Truro)
Fraser, Sir Ian (Morecambe & Lonsdale) Nicholls, Harmer
Gage, C. H. Nicolson, Nigel (Bournemouth, E.) TELLERS FOR THE NOES:
Galbraith, T. C. D. (Hillhead) Noble, Cmdr, A. H. P. Brigadier Mackeson and Mr. Drewe
Gomme-Duncan, Col. A. Oakshott, H. D.

Original Question again proposed.

Mr. Adams

As one who was not here during the debate throughout the night, and who has recently returned to the Chamber because of the increasing significance and importance of this debate, may I respectfully put this point of order? Why was it that in a debate, which is without a time limit and when there were several of my hon. Friends on their feet seeking to make their contributions to the Motion for the adjournment of the debate—I myself was anxious to get up after some of my hon. Friends, who had been here rather longer had spoken—that you, Sir, decided to put the Question? Why, should this debate be adjourned when other hon. Members like myself were anxious to put their point of view?

Mr. Speaker

In the case of a dilatory Motion, the Speaker or occupant of the Chair is given power under the Standing Orders to refuse to accept a Motion or to put it forthwith to the House. The only error I made, if error it was, was allowing the intervention of the right hon. Gentleman the Member for South Shields (Mr. Ede) in an attempt to see if we could get an agreed basis on this matter. I ought to have put the Question immediately the hon. Member for Nelson and Colne (Mr. S. Silverman) sat down. That is the only error in procedure that I can detect.

Mr. Adams

When a Motion to adjourn the House is submitted to you, it is, as you most properly said, Mr. Speaker, open to you to refuse to accept it or to put that Motion forthwith. I suggest that there is also a third course which you could have taken on this occasion, and that is permit a discussion in the House as to whether or not the Motion should be put. I would respectfully submit to you, Mr. Speaker, that having entered on the third course and permitted a number of Members to speak to that Motion, that those further Members who were anxious to put their point of view should have been permitted to do so.

Mr. Speaker

The hon. Member has made his point and he can carry it further if he wishes to. As soon as the hon. Member for Nelson and Colne had sufficiently delivered himself, as I thought, I tried to put the Question, and it was because I saw that the right hon. Gentleman the Member for South Shields was anxious to catch my eye that I refrained from putting the Question forthwith. If that is an error, I hope the House will think it is an error on the side of wishing to give both sides of the House a chance of being equally heard. But I must leave it at that and ask hon. Members if they wish to carry it further to do it in the proper way.

Mr. Ellis Smith

On a point of order. Am I correct in understanding that before Parliament votes supplies and services, the people's grievances should be ventilated and, if possible, remedied? If my understanding is correct, then before the Closure is accepted I want to ask you, Sir, if you will bear in mind that there are grievances among millions of people in Lancashire, North Staffordshire and Yorkshire, and I submit that before the Closure is accepted those grievances should be ventilated and remedied in this House.

Mr. Speaker

The constitutional principle that the hon. Member has enunciated is perfectly correct and well established, but the procedure of the House for giving effect to this principle is our procedure on Supply, and so on. The other matter of the Closure is one which must be exercised on the responsibility of the Chair, if it is moved. That I shall endeavour to do in the interests of the House.

Mr. Smith

And of the people.

Mr. Speaker

Mr. Strauss.

10.52 a.m.

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

This debate was initiated a very long time ago in an excellent and thoughtful speech by the hon. Member for Rossendale (Mr. Anthony Greenwood). When he intervened when I first rose to speak I think there was a little misunderstanding. I did not know that it was not agreeable to the hon. Member for Brighouse and Spenborough (Mr. J. Edwards), with whom I had had a word, but if there was any misunderstanding I apologise. My motive in getting up to speak at that time was that I thought I should be a little more in possession of my faculties than, I am afraid, I am now after 16 hours continuously in this debate.

I cannot deal with all the speeches, nor will the House wish me to, but I shall say something about some of them. I think it may be convenient if I deal first with a topic that was common to so many of them. One question kept recurring. It was raised by the hon. Lady the Member for Blackburn, East (Mrs. Castle), the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and many others. The question was: What is the view of Her Majesty's Government of the recession? Do they think it temporary or permanent, and what should be the permanent size of the industry?

That question, with variations, has been raised by many hon. Members. Let me say at once that I welcome and share the expressed view of many Members on both sides of the House who expressed confidence in the future of these industries and refused to admit any spirit of defeat. These are vigorous and sturdy industries, and no thoughtful person sees any reason to despair of recovery. But no thoughtful person would minimise the present difficulties and, indeed, anxieties. These have been expressed by many hon. Members who represent constituencies where these industries are carried on, and they all speak with knowledge of the anxieties of their constituents.

Let me give my own view, for what it is worth, stating it in these two propositions. I think that there will certainly be some recovery from what is a worldwide recession; that buyers will not refrain from buying indefinitely. But equally definitely, as far as we can see, there is not likely to be a return to the easy conditions of a sellers' market that marked the post-war boom.

I know there are hon. Members who think that Her Majesty's Government should go on from that to say what should be the right size of this textile industry. I do not take that view. It is impossible now to answer that question with any confidence. In my opinion, anybody who made a confident prediction would be either very conceited or very foolish, and he would do little more than guess. But the fact that the Government take that modest view, of not pretending that they can foresee the future sufficiently now to say what is the proper permanent size of this industry, does not mean that we cannot agree now on certain truths. As my right hon. Friend said at the beginning of the debate, the industry must certainly make itself as efficient as possible in order to make the greatest use of any improvement and revival. The importance of this was made particularly clear in a passage in the speech of the hon. Member for Ashton-under-Lyne.

The other topic that was common to very many of the speeches was the question of what I may briefly describe as alternative industries, or diversification. Let me, in answer to many questions that have been raised, make certain things clear. Some hon. Members have asked: Is it part of the Government policy to create unemployment in order to provide labour for defence? The answer to that question is, definitely, "No." That answer was given clearly, in answer to Parliamentary Questions, by my right hon. and learned Friend the Minister of Labour on 28th February. The Government are taking no steps to encourage the movement of workers away from these industries. That does not mean, of course, that if a man is unemployed or on short time, in such circumstances—

Mr. Ellis Smith

A man or a woman?

Mr. Strauss

Certainly. I am much obliged. That does not mean, of course, that if a man or a woman is on short time and desires a different job, the services of the Ministry of Labour and National Service will not be available.

Mr. Tom Brown (Ince)

Is the hon. and learned Gentleman aware—this is an important point, which affects both the unemployed and the under-employed—that, if cotton workers who have been signing on at the employment exchanges for a period are offered work elsewhere refuses to accept that work without any qualification, their unemployment pay will be stopped and they are forced to accept the work in order to maintain their standard of life?

Mr. Strauss

I think that those matters have been dealt with in debate by the Minister of Labour, and I would rather not start on an argument of that nature now. I do not think—I speak from memory—that anybody can be deprived of benefit in such circumstances without right of appeal.

On the question of diversification—

Mr. Ness Edwards (Caerphilly)

Before the hon. and learned Gentleman leaves that point, I would point out that it was this country which invited foreigners to come over here, and we should give some guarantee to the people from camps in Germany and Austria. What is to happen to these people to whom we have given specific undertakings, and what care shall we take of them?

Mr. Strauss

The right hon. Gentleman is himself a former Minister in the Department and I have no doubt that the undertakings will be observed.

Mr. Driberg

Would the hon. and learned Gentleman allow me?

Mr. Strauss

I think I had better get on. It will be for the convenience of the House. I am conscious of being rather inadequate in all the circumstances, but I shall do my best to deal with the questions many hon. Members have asked.

Mr. Driberg

It was relevant to that particular point. I did raise the question of the Poles who are now being sacked from various textile factories. Can the hon. and learned Gentleman say definitely what is being done about them, where they are being sent, and how they are to be treated?

Mr. Strauss

I would much rather not risk making a statement without full inquiry, which I have not had a chance of making since the hon. Gentleman put the point in his speech, but I shall certainly make inquiries.

I was proceeding to the question to which my right hon. Friend alluded in his speech, when he said in effect that ideally no area should be wholly dependent on a single industry. Of course, we all feel that, but let us have regard to what is practicable. In the past, it was not considered desirable generally in the textile areas—nor indeed would it have been good policy, because until recently there was no available labour for new industries other than textiles in the areas concerned. There is the point of the hon. Member for Nelson and Colne (Mr. S. Silverman), to which I will come later when I reply to his speech. Nevertheless, there are areas which are excessively dependent on a single industry. In such cases, we shall encourage firms looking for new capacity to consider those areas, as well as other areas needing new industry. I know there are many hon. Members on both sides of the House who have in mind the Development Areas, for example, which they do not wish to be forgotten.

In fairness to the House, because I do not wish to minimise the difficulties or exaggerate what can be done, I must remind them that there are great difficulties about new building through limitation of capital investment and shortage of steel. For those reasons, very severe tests have to be satisfied—strict tests—whether the proposed building or extension of a building contributes to defence, exports or other essential production.

I think that perhaps those were the biggest general questions which occurred in many speeches, and for that reason I have considered them separately. I now come to some of the speeches. I think I have dealt with the point raised by the hon. Member for Burnley (Mr. Burke). I was delighted that my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) ended his speech, as did so many hon. Members, with so tough a declaration of the confidence of this great industry. The hon. Lady the Member for Blackburn, East, was highly critical. I cannot deal with the whole of her speech, but I should like to deal with some of the points she made.

She seemed to think it would be useful if we indulged in rather close bilateral bargaining with other members of the British Commonwealth and Empire. I cannot share that view. I think it would not be at all a hopeful method of proceeding. She even suggested there might have been an agreement with Australia by which we refused to let them have any capital equipment unless they took so much textiles. Let the House consider what that means. We should be saying to Australia: "We refuse you the thing you believe to be the most necessary to your recovery and we insist upon your having the thing which you say at the moment you do not need." Not only would it not be the way to foster friendly relations with another member of the Commonwealth, but it would not help Australia to remedy her position and hasten the day when she could again offer a healthy market for our exports. The hon. Lady, having made that, as I thought, impracticable suggestion—

Mr. Ross

The hon. and learned Gentleman will remember that during the course of the evening about five or six speeches were made from his own side of the House asking for the same conditions to be attached to trade negotiations. The Argentine, Greece, and practically every South American country was mentioned. Does he take up exactly the same attitude?

Mr. Strauss

I have not mentioned those speeches. I will mention other speeches.

Mr. Ross

It is the same point.

Mr. Strauss

The hon. Member may think the point is the same, but at the moment I am expressing a view upon a point raised by the hon. Lady the Member for Blackburn, East. I am not expressing any agreement—nor do I in fact feel in complete agreement—with many of the speeches made on both sides of the House. I am giving, quite fairly I hope, my own view and that of Her Majesty's Government.

Mr. Ross

Are they the same?

Mr. Jack Jones

Not necessarily.

Mr. Strauss

Having made that very unhappy suggestion about Australia, the hon. Lady made the still more impracticable suggestion that we should do away with United States tariffs. That seemed to me to be a little more difficult.

Mrs. Castle

When the hon. and learned Gentleman says it was not a very happy suggestion, does he mean to tell the House that he does not agree that a reduction of the United States very high tariff on our textiles would be a good thing and should not be pursued?

Mr. Strauss

Of course I did not say anything of the sort. What was stated again and again was the suggestion that Her Majesty's Government had no practical remedies and that some of the speakers in the debate had. This was one of the practical remedies.

Mrs. Castle

Is it not?

Mr. Strauss

I do not think any foreign Government has the slightest doubt that we want a reduction of tariffs against our goods, and if the hon. Lady will use her very good brains she will come to the same conclusion.

Mr. Desmond Donnelly (Pembroke)

rose

Mr. Strauss

No, I feel less obligation to yield to those who have not taken part in the debate and who for most of the time were not here.

Mr. Donnelly

May I point out that, apart from a couple of hours I have been here all night. It is most unfair to make that suggestion. If the hon. and learned Gentleman really wants to throw stones he should look round at the glass houses behind him.

Mr. Strauss

One cannot be here for 15 hours without knowing the faces in the Chamber. I did occasionally see the hon. Member for Pembroke (Mr. Donnelly), but he was not one of those who were here through the night.

My hon. and gallant Friend the Member for Bedford (Captain Soames) made a proposal which, I think, interested the whole House. He inquired whether it would be possible to use some of the moneys made available for Arab refugees in the purchase of textiles. I can promise the hon. and gallant Member and the House that that proposal will be carefully examined. The hon. Member for Ashton-under-Lyne made a very important and true statement when he spoke of the extreme importance for a nation which had an important textile trade, at the time when a recession or slump was at its worst, to be ready efficiently to make use of any revival. That view is shared by Her Majesty's Government.

The hon. Member for Bradford, East (Mr. McLeavy), and my hon. Friend the Member for Shipley (Mr. Hirst) suggested that we were not tough enough in some of our negotiations with foreign Powers. I think there is a tendency to underestimate the difficulties of such negotiations when the commodities that the other countries require most are such commodities as coal and steel, which we are not in a position to supply in the quantities they desire, and when the first object of such negotiations so often has to be the obtaining of food and raw materials.

The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) rather gallantly introduced the subject of pottery and asked me one or two questions. He asked whether the pottery industry had made a valuable contribution to our exports. Yes, it has. He asked whether it still mattered. Very definitely, yes. There was one point in the hon. Gentleman's speech which I heard with a little astonishment, and that was that, while, on the whole, he praised the planning of our affairs in the period before the present Administration took office, he said the trouble about it was that we sold abroad too cheaply and bought too expensively. I thought that came a little strangely from a supporter of the Government which devalued our currency.

Mr. Ellis Smith

I am very pleased to hear the Parliamentary Secretary state that the export trade is as important as ever. Does that mean to say that it will be the Government's policy that the labour force engaged in this consumer goods industry should in no circumstances be dispersed?

Mr. Strauss

I think that some release of labour has been necessary recently; but I think the agreement of the pottery industry has been sought and obtained for the dispersal of some labour from the industry, which the hon. Member knows so well, for an urgent scheme. Subject to that limitation, he can take it that we are anxious not to disperse the labour in that industry.

Mr. Ellis Smith

Does that mean that girls who come from very poor homes and have qualified as very skilled people are now, after all that they have done, to be influenced in other directions?

Mr. Strauss

No, Sir. I do not think it means that at all.

Mr. S. Silverman

Does the hon. and learned Gentleman's reference to devaluation mean that it is now the official view of Her Majesty's Government that the devaluation of that time was wrong? They have never said so before.

Mr. Strauss

There was never the slightest sense in discussing whether it was right or wrong at the time it happened. It was not a stroke of policy at all; it was compelled; but the policy that led up to the disaster was the policy of His Majesty's Administration at that time.

The hon. Lady the Member for Flint, East (Mrs. White), asked what we meant by "a high and stable level of employment." The answer is that we mean exactly the same as the Opposition meant by their use of the identical phrase in a document of the Labour Government.

Mrs. White

The hon. and learned Gentleman has misrepresented what I said.

Mr. Strauss

That can be seen in HANSARD.

Several Hon. Members

rose

Mr. Strauss

I cannot give way. I shall not be much longer.

Mr. Driberg

Eight per cent. of unemployment. I asked the hon. and learned Gentleman—

Mr. Strauss

Several hon. Members asked me about that. I shall not identify them. Those who were here all night know what I say is true. Several hon. Members asked what we meant by "a high and stable level of employment," and my answer is—hon. Members may think it a good one or a bad one, but it is my answer—that we mean exactly the same as the Labour Government meant when it used the identical phrase in its document "Distribution of Industry," in the foreword and elsewhere in that document.

Mr. J. Edwards

rose

Mr. H. Strauss

I cannot give way—

Mr. Adams

On a point of order. Would it be appropriate at this stage to ask for your assurance, Mr. Speaker, that when the Closure is moved from the Government Benches, as it undoubtedly will be, you will bear in mind the refusal of the Parliamentary Secretary, who is speaking officially for the Government, to answer questions properly put from this side of the House; and can we have an assurance that you will give those hon. Members an opportunity to develop their points in speech?

Mr. Speaker

I can assure the hon. Member that, if and when the Closure is moved, I shall bear all relevant considerations in mind.

Mr. J. Edwards

I was about to ask the hon. and learned Gentleman, who is noted for his logic, how he thought he could possibly get away with a definition which merely repeats the words which are to be defined. That is what he has done. He is saying, in short, "I have not the faintest idea what I mean by the words I am using."

Mr. Strauss

It is possible to criticise both the term "full employment" and the term "a high and stable level of employment." I can see possible objections to both of them. The suggestion was that "full employment" was as clear as daylight, and that "a high and stable level of employment" was hopelessly obscure. I would point out that, whatever the merits or demerits of the phrase may be, it was used not only in a joint document of the Coalition Government but also in a subsequent official paper of the hon. Gentleman's own Government.

Mr. Harold Davies

So that hon. Members on this side of the House shall not feel quite so sorry for the hon. Gentleman, who has been good enough to sit here all through the night, and whose throat is so sore, will he take a glass of water so that we may be able to hear what he has to say?

Mr. Strauss

I know the hon. Member for Leek (Mr. Harold Davies) well enough to know that he did not mean to be offensive. I have, in fact, apologised for my voice. But on the chance that it makes it better—although it may make it worse—I will drink some water. I think the House is aware that I am not generally slow in yielding to people who wish to intervene, but I do ask hon. Members, in all the circumstances, to do it as little as possible.

Mr. Ellis Smith

I can assure the Parliamentary Secretary that at present he has the good will of all my hon. Friends. He has won that as the result of the standard he has set during the whole of the night. Therefore, I plead with him not to spoil that now, and to be a little more generous with my hon. Friends who are trying to clear up points so that they may be understood among the people they represent.

Mr. Strauss

I will do my best.

My hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) spoke, as he always does, think that actually it had equal third with great knowledge of the industry in his constituency, and rightly claimed that he was the first in this Parliament to raise the case of one of these industries. I wish to make clear—and the point was alluded to by the hon. Member for Leek—what I said about the factory about which my hon. and gallant Friend inquired. The industrial development certificate has been granted, but that does not necessarily mean the building licence. He asked me whether the building licence had been granted. I will find out and let him know.

The hon. Member for Accrington (Mr. H. Hynd) astonished me by stating that the Conservatives said that, in the event of their election, Purchase Tax would be abolished. Considering the number of people I assured when I was being heckled that nothing of the sort would happen, I was a little astonished by that statement.

The hon. Member for Droylsden (Mr. W. R. Williams) asked whether there was any international body studying the prices of raw materials, and so on. I think the House is familiar with the work of the International Materials Conference, and is also acquainted with some of the difficulties of that body. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) raised the question of the Liverpool Cotton Exchange. That subject obviously will be more suitable for discussion on a later occasion.

Mr. J. Edwards

Can the Parliamentary Secretary give us an up-to-date report about the work of the International Materials Conference? It is a long time since we heard anything about it, and it is really important.

Mr. Strauss

I am afraid not. I am making this speech for my hon. Friend the Secretary for Overseas Trade, who recently gave information about it and who I am glad to see back in the House, because at the time this debate was arranged he was ill.

I come now to the subject raised by the hon. Member for Nelson and Colne about the contribution the industry in his constituency has made. I am largely in agreement with what he said. I also agree that Nelson is suffering exceptionally, but I would correct him on two points. He said it was the greatest contributor to our recovery after the war. I think that actually it had equal third place, and vehicles and machines were ahead. He also overstated his point when he said that, at the time when there was this great urging of people to go into the industry, it would have been open to Nelson to say "No." It seems to me that would not have been quite so simple. They were then fully employed on textiles; in order to release the space they would have to be unemployed at least for a time, and it is not by any means certain that anyone else would have gone there. I think that the hon. Member greatly overstated his case for that reason.

He also said that Korea had had a tremendous result through re-armament. Of course, it has. The alternative would have been not to oppose aggression. If we had taken a different attitude we should not have had these economic consequences, but on the decision reached on re-armament I am glad to say that there is not only unanimity on this side of the House but a large measure of support on the other side.

Mr. S. Silverman

rose

Mr. Strauss

I am sorry, but I cannot give way. He also talked about China—China being a natural market of Japan. I shall not argue with him at the moment whether there was any action we could take which would make Japanese goods more acceptable to China. For the purpose of my argument, and only for that reason, I assume that he is right. But let us not exaggerate the amount of Japanese textiles which China would be likely to take. In 1938, for instance—I think that some of the figures were given by another hon. Member—China's imports were 25 million yards a quarter, of which 20 million were from Japan. That 20 million yards a quarter from Japan went to China as part of 540 million yards a quarter of total exports. I think it will be seen how comparatively small is the contribution that this makes.

The hon. Member for Preston, North (Mr. J. Amery), mentioned G.A.T.T., and he thought that but for G.A.T.T. we could have had a much more favourable agreement with Pakistan. The textile preference is 18 per cent., and even if G.A.T.T. were swept away there would have been other grounds why the particular thing he proposed would not have been possible.

Mr. J. Amery

Had we been free from G.A.T.T. we should have been in a position, to offer Pakistan further increases in preference in this country, which might have induced her to maintain the existing rate.

Mr. Strauss

I think that the hon. Gentleman is wrong. I think that another treaty, apart from G.A.T.T., would have stood in the way, and further there was no adequate quid pro quo that we could have given.

Mr. H. Hynd

What other treaty is that?

Mr. Strauss

I believe it is a commercial treaty with the United States. I am sorry that I have not further particulars on my notes.

The hon. Member for Clitheroe (Mr. Fort) asked me whether there was a risk of some of the Japanese grey cloth not being re-exported. All licences to import this are issued on the condition that it should be re-exported. There is no evidence that that has not been happening.

The hon. Member for Eccles (Mr. Proctor) said that the only solution was Democratic Socialism throughout the world. I can understand that an hon. Member may believe that; but, if he does, he believes that there is no solution for a very long time ahead, because it is quite clear that that is not going to happen.

The hon. Member for Kidderminster (Mr. Nabarro) asked me about a factory which he said the Minister of Supply was about to requisition. I can assure him that no decision has yet been reached, and any further representations will be considered both by the Minister of Supply and by my right hon. Friend the President of the Board of Trade.

The hon. Member for Maldon (Mr. Driberg) asked about trade with Eastern Europe, and the same point was put by the hon. Member for Nelson and Colne. He thought it would be impossible to have any such trade with Eastern Europe on account of the Battle Act. He is wrong. There is nothing to prevent textiles being sent to Eastern Europe, and in a passage quoted in one of the speeches my hon. Friend the Secretary for Overseas Trade made that quite clear recently in Geneva, though I am sorry to say that he did not get much response to what he said. If our textiles were to be taken, it would mean a considerable change in the policy of the countries behind the Iron Curtain.

Mr. Driberg

Could the hon. and learned Gentleman deal with the economic conference?

Mr. Strauss

No, I cannot give the hon. Gentleman any information on that subject.

Mr. Driberg

Surely the hon. and learned Gentleman must know of the existence of this important forthcoming economic conference in Moscow? I was urging that, whatever view is taken of the motives of the organisers, surely it is at least worth considering seriously, as the Soviet offer was considered seriously by the Foreign Office?

Mr. Strauss

I have got the point, and I assure him that it has been noted. I merely have no reply to give him on that point because I do not wish to make any reply which might mislead him in any way. I think those are the main questions put to me, with one exception—

Mr. Driberg

Purchase Tax.

Mr. Ross

Will the hon and learned Gentleman allow me—

Mr. Strauss

I am sorry—

Mr. Ross

On a point of order, Mr. Speaker—

Mr. Speaker

The hon. Member cannot raise a point of order merely because the hon. and learned Member does not give way.

Mr. Ross

On a point of order. It is rather disheartening, after an hon. Member has sat here from 2.30 yesterday afternoon until now, and made a speech at five o'clock this morning mentioning an industry vital to Ayrshire, when the hon. and learned Gentleman says he has answered all the main questions. He has not mentioned Leith or carpets.

Mr. Speaker

That is not a point of order; but I share the opinion of the hon. Member as to the time we have been sitting.

Mr. Shackleton

On a point of order. Mr. Speaker, I want to seek your guidance. It appears that the Minister is in some anxiety that he may possibly be closured before he has finished making his speech. I wonder whether you could assure us that you will not accept a Closure Motion while he is speaking, and perhaps you could give some indication to the House as to what is likely to happen if a Closure Motion should be moved.

Mr. Speaker

I could not do that because I do not know what will happen myself.

Mr. Strauss

I should have answered several more questions but for the frivolous interruptions and the waste of time.

Mr. J. Edwards

Is it in order for the Parliamentary Secretary to the Board of Trade to refer to interruptions as frivolous?

Mr. Strauss

I thought they were frivolous, because they were raised as points of order and you, Mr. Speaker, said they obviously were not.

Mr. Speaker

On the main point there was nothing wrong with what the hon. Member said, and also I must say, as an old Member of this House, that I have heard much worse things than "frivolous" said.

Mr. Edwards

May I point out to you, Mr. Speaker, that the hon. Gentleman also used the words "waste of time." We ought not, I submit, to have it said that if we raise points of order we are wasting time.

Mr. Speaker

That is a matter for debate and discussion and it is not a matter for me.

Mr. Strauss

The House obviously does not want to hear anything further from me, and I will not say anything further.

Mr. Driberg

Before those interruptions, the Parliamentary Secretary was just going to deal with the question of Purchase Tax. Surely he is not now going to refuse to deal with it out of pique. The subject was raised by a number of hon. Members in all parts of the House. Would the hon. Gentleman say a word or two about Purchase Tax?

Hon. Members

Answer.

Mr. Speaker

I have no power to make a Minister speak if he does not want to. I find it hard enough to stop them speaking. Mr. Edwards.

Mr. W. Nally (Bilston)

It lies within your province, Mr. Speaker, and within your power, without binding yourself in any way, to give hon. Members some guidance upon a matter about which they are not clear. It is now proposed that my hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) should speak, as you have called him. It would be a great convenience and help to hon. Members who still want to speak if you would give some indication if it is your intention to regard the debate as ended for all purposes once my hon. Friend has finished, or whether you will regard with some favour those of my hon. Friends and myself who have been here all night and who are anxious to speak in this debate after my hon. Friend has made what will undoubtedly be a very valuable contribution.

Mr. George Thomas (Cardiff, West)

May I put to you, Mr. Speaker, a further point on that matter? The House within the last hour decided that it preferred to continue this debate, and has, indeed, taken a vote on it, deciding that it did not wish the discussion to be adjourned. In view of that fact and also that several of my hon. Friends have been trying to catch your eye or that of the occupant of the Chair all night, I should like to have your guidance.

Miss Jennie Lee (Cannock)

My hon. Friend the Member for Bilston (Mr. Nally) referred to the fact that a number of hon. Members had been here all night and had tried to catch your eye. I should like to mention that there are some of us here who do not represent constituencies concerned essentially with the textile industry who have also points to put. Naturally, we have conceded first place to hon. Members whose constituencies are concerned with textiles, but in some of our constituencies there are small industries which supplement the basic industry in the matter of employment, and which are now faced with local unemployment. We are also deeply concerned with this debate and concerned with what is going to happen.

Mr. Adams

On a point of order—

Mr. Speaker

I think I had better deal with the points of order already put be- fore they pile up into an unrecognisable mass. I was asked by several hon. Members to express an opinion on whether or not I would accept the Motion for the Closure. I cannot answer a purely hypothetical question at the present stage. The decision on the Closure is not a matter for Mr. Speaker; it is for the House itself. All the Chair can do is to decide whether or not to put the Questions.

Mr. J. Edwards

Before the points of order were raised, I was going to ask the Parliamentary Secretary if he would deal with the subject of Purchase Tax. This is of the utmost importance, and if the House and the country are not to have a word on perhaps the most important point of all, I am sure that it would give a wrong impression about the way in which we have been debating these matters during the night. We are all tired and I can understand the general feeling, but we must all be a little patient. I would ask the Parliamentary Secretary to give us a reply, and if he cannot, perhaps his right hon. Friend the President of the Board of Trade will.

11.40 a.m.

Mr. P. Thorneycroft

If I may, by leave of the House, speak again, I apologise if I keep moving in and out of the Chamber, but I have certain other engagements. On this question of Purchase Tax, the House will recollect that I said a considerable amount—admittedly it may be rather far back in the recollection of the House—in the earlier stages of this debate about this aspect of the matter.

I said that I thought that, while it is certainly in the scope of the debate, we had had a fairly wide discussion during the Budget debate upon the D scheme generally. [HON. MEMBERS: "Oh!"] That is what I said; whether it is right or wrong is another matter. In addition, very wide opportunities will be afforded to the House when the Finance Bill is debated, when Purchase Tax will be discussed and when the Chancellor of the Exchequer will undoubtedly be dealing with the subject. In those circumstances, I do not feel that there is anything further that I could add, and that it is not any discourtesy to the House if I ask hon. Members to leave my statement upon that matter as I made it earlier in the debate.

Mr. Ross

Would the President of the Board of Trade please attend to this point? Has he seen the morning newspapers, such as the "Daily Express" and others? The point that is splashed in the headlines is "This tax must go." We have been talking in this debate—and there have been previous references—about sales resistance caused by speeches made by Members. It is imperative that an early announcement should be made about this matter, otherwise we shall get sales resistance and a worsening position of the textile industry.

Mr. Speaker

I must point out that these are not points of order.

Mr. James Callaghan (Cardiff, South-East)

rose

Mr. Speaker

Does the hon. Member wish to raise a point of order?

Mr. Callaghan

Yes, Mr. Speaker. As it seems possible that the Chief Patronage Secretary may chastise us with scorpions in the near future, I should like, if I may, to seek your guidance on this point. You indicated to us just now that it was a matter for decision by the House whether we should continue our debate or not. That, of course, we respectfully accept. But may I point out to you that discretion is not entirely outwith yourself, if I may use a Scottish expression which is, no doubt, familiar to you. Erskine May, at 457 says this: Closure of debate. The ordinary Closure: While the Speaker is in the chair, or the Chairman of Ways and Means or the Deputy Chairman is in the chair in committee of the whole House, if a Member rising in his place, after a question has been proposed, moves 'That the question be now put,' that question must be put, forthwith without amendment or debate, unless it appears to the Chair that the motion is an abuse of the rules of the House"— and then here come the important words in this particular context in view of what my hon Friend the Member for Cannock (Miss Lee) has said— or an infringement of the rights of the minority. It goes on to say in the next paragraph: When closure is movable.—The intervention of the Chair regarding closure is restricted to occasions when the motion is made in abuse of the rules of the House, or infringes the rights of the minority. There are two clear cases, and I only put it to you with due deference to yourself, Mr. Speaker, that the decision is not entirely a matter for the House but does concern you very much.

Mr. Speaker

I think I made that perfectly clear in what I said before. I have always been well aware of these facts. The decision as to whether or not the Question be put is left to the House—[HON. MEMBERS: "No."]—wait a moment—on a Division, if necessary. The decision whether the Question is to be put to the House so that it can come to a decision lies with the Chair. The two principles which the hon. Member has mentioned to me have been familiar to me for many years.

Mr. J. Edwards

May I ask the President whether I am right in assuming that the answer he gave is the answer that the Parliamentary Secretary was going to give; that there was no further information that the Parliamentary Secretary would have been able to give us?

Mr. P. Thorneycroft

indicated assent.

11.45 a.m.

Mr. John Edwards (Brighouse and Spenborough)

We have had a very interesting debate during the night and I, at any rate, have sat hour by hour with the Parliamentary Secretary, and although my voice may not have gone so badly as his, my head is probably in just as much a whirl as his.

Those of us who thought it desirable to debate the great textile industries in the United Kingdom were quite right in selecting that as a topic, for if there were any who thought that the situation in the textile industry was not serious, I am sure that those who sat through the night will now hold a different view.

I would say to those who represent the textile areas that I am sure all of us are entitled to congratulate ourselves on having had a worthwhile debate, and a debate which is of the utmost significance to certain areas and to hundreds of thousands of our citizens. In the very many speeches that we have had—over 40—we have had points of view put to us on behalf of almost every textile industry, although, of course, the most important emphasis has been laid on the problems of Lancashire.

As hon. Members will recollect, I had the honour of representing Blackburn in the 1945 Parliament, and I now represent a Yorkshire seat; and since I happened to have done my courting "On Ilkla Moor baht 'at," I think I am entitled on this occasion to lay a little more emphasis on the woollen industry than on the cotton industry.

The wool textile industry was, I think, the first of the textile industries to feel the slump. This is seen clearly enough in the profit figures for the industry. The profit figures for the cotton industry show that 1951 was a very good year indeed. According to Tatterall's Cotton Information Weekly Service, in 1951 80 companies had an average profit of £55,541, which compared with an average profit of £35,166 in the previous year. If we take the actual dividends declared, the average dividend in 1951 was 21.26 per cent. compared with 18.21 per cent.

In other words, the cotton industry, on the basis of this information, had its most successful year of all time, with the possible exception of 1919 and 1920; whereas, although I have not strictly comparable figures, on the basis of such figures as I have it would appear that profits in the wool textile industry fell by about one-half in 1951 by comparison with 1950; and we find from the indices that this decline has continued.

It is difficult to be sure of the numbers unemployed in the wool textile industry, but they cannot be fewer, I think, than 20,000; and, as the President of the Board of Trade himself admitted, these unemployment figures underestimate the problem, because, among other things, very many married women are not insured for unemployment benefit.

There is the further point that the figures themselves do not give the full story because, as would be expected, firms are doing their best to keep their staffs in anticipation of better days. So, if we take the indices of production, we find that they reveal a much greater fall than is indicated by the unemployment figures. For example, if we take the figures of wool consumed in January, 1951, by comparison with January, 1952, reduced for statistical purposes to a standard month of 20¾ working days, we find there has been a drop of 30 per cent. If we take similar figures for tops produced, we see a drop of 34 per cent. If we take the figures for worsted yarns delivered we see a drop of 29 per cent.

It is easy, especially because Yorkshire representatives are on the whole a trifle more reticent than Lancashire representatives, to conclude that there is nothing seriously wrong in the West Riding at present. I should be the last to exaggerate the position because I happen to be one of those who believe that we do not do our cause any good if we exaggerate it. Indeed, if we have to err, let us err on the optimistic side rather than on the pessimistic side.

Nevertheless, in my division, where there are a number of enterprises of various kinds, including one of the largest carpet mills in the country—I shall say nothing about that, because the matter was properly and adequately covered by the hon. Member for Kidderminster (Mr. Nabarro)—if we take wool textile concerns, we find that one firm is standing off workers alternate weeks. There are two others who have discharged some workers and are keeping the rest working four days a week. The dyehouses in my constituency are working three days or four days a week and that, obviously, is a serious matter.

Whether we consider wool or cotton, it seems to me that basically our troubles arise from changes in the prices of raw materials. I have not the time, and it would be wrong to detain the House after a long Sitting, to give a detailed analysis of the causes of the present position, but I am absolutely certain that the principal reason for our troubles has been these great fluctuations in prices of raw materials.

What I have been surprised at is that the Government apparently have nothing whatever to tell the House or the country about that. In effect, the Parliamentary Secretary said, "You will have heard of the International Materials Conference and know the sort of thing it does." When I asked if there was anything that could be said, he replied that there was nothing new to say.

So far as I can recollect, neither he, the President, nor the Secretary for Overseas Trade, has made any report to us on these basic materials since they came into office. I doubt whether they have made a single statement about them to the House since they came into office. The Minister of Materials is hidden away in another place, and we cannot get at him or question him.

When we have a debate of this kind, and when there are disorders in the industry which spring directly from problems concerning amounts of materials, allocations of materials and prices of materials, I should have expected that the first thing the President would have done would have been to give an up-to-date picture and to tell us what Her Majesty's Government have done in this field in continuation of the things the late Administration did.

What have they done? Would the Secretary for Overseas Trade care to tell the House? Can he give us any encouragement? Can we believe that the slightest progress has been made in the allocation of these materials or in regulating prices internationally? I would gladly give way if he can help the House.

The Secretary for Overseas Trade (Mr. Henry Hopkinson)

I did not intend to speak at all today. I have just got out of a bed of sickness and I hope I shall be forgiven for not having been present. But on at least two, if not three, occasions, in connection with Supplementary Estimates, I have spoken in this House and in this Parliament and have gone into considerable detail about the operations of the International Materials Conference. I have shown that we are entirely in support of the arrangements that are being developed there and, I believe, are being carried on very successfully by Lord Knollys on the lines laid down by the previous Government, with which we agree and which are leading to fair allocations of raw materials and stabilisation of prices.

Mr. Edelman

Is it not the case that cotton and wool are not under consideration and do not form part of the International Materials Conference, and that the cotton suppliers and wool suppliers have steadfastly refused to take part in that work? Should not the Government take the initiative in inviting producers to take part in the Conference?

Mr. Hopkinson

I feel that I cannot continue on that point much longer, but I note what the hon. Member has said.

Mr. Edwards

I do not want to press the hon. Gentleman because I know he does not feel exactly like standing up to cross-examination. But however much he has talked on Supplementary Estimates, I still cannot recollect an occasion when there has been discussion, or a report to the House, on textile materials and that, after all, is what I have been talking about. I think he will agree that there has not been such an occasion. I think we are entitled to draw the conclusion that in this important field the cause of our troubles is this question of raw materials, and that is the question about which this Government have done precisely nothing.

I would not wish to repeat what has been said by various speakers, but as one who took part in all the recruitment and training efforts from 1946 onwards as a member of what was publicly known as the Committee of Junior Ministers looking after recruitment and accommodation, the thing that worries me most about our present circumstances is the loss of labour and the difficulties the industry will be in if and when things pick up. The last issue of the "Wool Textile Bulletin," for example, says: By the end of January, 1942, the combing section of the wool textile industry had lost 21 per cent. of its workers. It goes on to say: There is no precise record of where these workers, largely men, have gone, but the history of the post-war years has shown how difficult may be the task of bringing them back to the industry. I think of the trouble we had and the co-operation we had from the industry and the trade unions, and how painfully, month by month, we gradually built up recruitment, and how we altered the climate of opinion, all of us working together—the people in the areas concerned and those of us in London—until we secured a complete change.

A Northern Ireland Member posed the question—"If you had a child, would you let her go into the textile industry?" When I first went to Blackburn, that was what my constituents were always asking me. By the time we had finished our campaign, we had almost returned to the pre-war scales of recruitment in the cotton industry, and a similar situation existed in the wool industry.

The same "Bulletin" gives the level of youth recruitment. It says that in the main textile districts of the East and West Ridings, 3,504 boys and girls left school at the end of the Christmas term, 1951, and, of these, 243 boys and 623 girls entered the textile industry—that is to say, something like 14 per cent. of the boys and nearly 35 per cent. of the girls.

What frightens me is that unless we can arrest the decline and change the climate of opinion, all this work will go down the drain and the industry which, after concentration in war-time, had to do an enormous amount to get on to its feet again and to recruit properly, may lose all that it had gained. There is, of course, more than that at stake. There is also the question of all the re-equipment which has gone on, all the amenity provision which has been made, and so on.

I think we are agreed that, while the basic cause of our troubles may be found in the raw material field, at present we could describe our position as one in which the pipe-line is full and in which there is a condition of stasis, where nothing is moving. The big job is to find some way in which the goods can be made to move and in which some of these stocks can be cleared off. That is the task to which the industries are addressing their attention and which I think is important from the Government's point of view.

I was interested that the President of the Board of Trade said, in the course of his opening speech, that it was of very great importance that a manufacturing industry should be able to obtain its raw materials on terms at least as favourable as those of its principal competitors."—[OFFICIAL REPORT, 26th March, 1952; Vol. 498, c. 428.] He went on to say that we may sustain some handicap in a sellers' market, but when we get into a buyers' market any handicap in respect of the price of our materials becomes of paramount importance.

I agree, and I am sure that anyone who knows the industry will agree, too; but what surprised me was that the right hon. Gentleman did not draw attention to another handicap which the cotton industry has been carrying and which, as far as I can remember, was referred to in our debate by only my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes). It is of considerable interest, I think, that between 1st January, 1952, and 11th February, 1952—in that short space of six weeks—the prices of various types of yarn fell by between 10d. and 2s. a pound, at a time when the price of raw cotton fell by only one penny.

Even when these margins had been cut by these quite considerable amounts, the industry was still operating its minimum prices scheme. In other words, the minimum prices, as laid down by the Yarn Spinners' Association, were exceeded as late as January and February of this year, by which time the recession was certainly on us. These firms had been holding the price.

This is what Tattersall's Weekly Information Service had to say about it: The first front established by spinners in the early days of the recession was the subject of considerable comment in other branches of the trade. Only now, when circumstances dictate no other course, have the leaders of the spinning branch decided to reduce prices substantially so that in many cases yarns are being sold at the minimum rates laid down by the Yarn Spinners' Association. I agree with Mr. Hasty in saying, as he did in a speech a day or two ago, that the spinners must have reasonable margins. But when we face a depression, if we have margins that can be cut by as much as 2s. a lb. that is a very much bigger handicap for the industry to carry than the slight differential on the Raw Cotton Commission's prices. Do not let us forget that the burden of this was being carried substantially by the converters, because they were the people with the price control upon them, whereas the spinners and weavers were free from it.

I should not complain, because I negotiated that particular de-control; but I may say that if I had known then what I know later, I should have preferred to retain the control in order that the full brunt was not born by the merchant converters. That is a technical point and it would be wrong for me to go further into it now.

Of first-rate importance to us all is the question of the closing of markets. The right hon. Gentleman outlined to us the great names of the cotton industry—the inventive genius which enabled us, to use his words, "to sweep into the markets of the world." At the moment the trouble is not, for the most part, that we are being priced out of markets; we are being shut out of them. Although tariffs are bad enough, when one gets quantitative restrictions they are very much worse, and anything the Government can do to open up trade, not necessarily in new markets but by changes in these quantitative restrictions, will be most valuable.

I had hoped that we should have heard something more encouraging about East-West trade. I know the Secretary for Overseas Trade would like to see an extension of East-West trade in this kind of field, and I hope that it will not be too long before he can tell us what has been happening and what hopes there are.

When we talk about the closing of markets, we are particularly concerned about the closing of Commonwealth markets. The President addressed a solemn warning to us. He told us, if I may paraphrase his words, that those who talk about cutting our own imports more should remember the consequences in other parts of the world of cuts that we make in our imports. I should like to tell the Parliamentary Secretary and his colleagues that no one on this side of the House has ever suggested cutting sterling imports. It came as a very great shock to us when we found that we were having quantitative restrictions imposed on us, for example, by Australia.

If I understand the position aright, we are being treated in exactly the same way as is Japan. I do not know if the hon. Gentleman would confirm that, but I think I am right in saying that we are being treated by Australia on all fours with Japan. I took part in the Supply Minister's Conference. I know what co-operation with Commonwealth Ministers means, and I cannot believe that the Commonwealth Finance Ministers' Conference sat round and solemnly came to the conclusion that it would be a good thing if the sterling area were treated by Australia in just the same way as Japan.

I pointed out that there is nothing whatever in G.A.T.T. which stops Australia from discriminating in our favour if they are using quantitative means. Surely the Government must impress on the Australian Government, with all their power, the very great importance of this matter.

After all, it was not the Socialist Party but "The Times" which yesterday said: The strongest stand must be taken on measures directly involving the breach of contract which is involved very substantially in this field. It is very difficult to find out what happened at the Finance Ministers' Conference, but nothing that has been said so far has produced the slightest evidence that anybody sat down and really considered what was to be done. It was thought important enough to have a committee under the chairmanship under the Minister of State for Economic Affairs to chase the mirage of the convertibility of the £. Would not the right hon. Gentleman's time have been better spent if he had sat down with his Commonwealth colleagues and said, "How can we do the least harm to one another?"

What is the point of the sterling area'? It is not just that we want to be the banker. The whole point of the sterling area is that we want to have as large an area as we can get within which trade can flow freely with the minimum of handicap and the minimum of limitation. That is the whole point of the concept of the sterling area. The failure of Her Majesty's Government in the recent conference is bad not only for our trade but also for the future of the sterling area.

I say to Members of Her Majesty's Government—with a proper sense of responsibility, I hope—that it appears as though Her Majesty's Government—nothing has been said to deny this—did not even try to minimise the impact of the measures on Britain or on anybody else. This is really serious. I am not making a party speech on this. Many Conservatives in my constituency whom I know feel just the same about it as I do. Her Majesty's Government ought not to have agreed to things of this kind except on the basis of sitting down together and trying to arrange matters as sensibly as possible, just as we did in the Supply Minister's Conference when we were talking about supplies for one another.

I turn now to the question of the D scheme. I shall not pursue it very far because we have had no extra information. I thought that the President of the Board of Trade left a wrong impression when he implied in his speech that there had been very great anxiety on the part of various textile industries to have the D scheme.

I would agree that the textile industries did not like the rigidities of the Utility scheme, but if a proper assessment could be made at present of commercial opinion we should find that the majority view would be that, while there were advantages in the D scheme, the disadvantages outweighed them. I should like the President or the Parliamentary Secretary again to consult the various parts of the trade, and if they then came and told us that the trade was keen to have the D scheme in its present form, I should be extremely surprised.

The D scheme is open to all kinds of objections. Here is one from a constituent of mine who makes women's underwear. He says quite simply in his letter: The D plan makes it quite impossible to put out a simple range of women's underwear in a good wearing cloth without paying Purchase Tax. He is talking about rayon, and that is just another point to add to those which other hon. Members have brought forward. The least that can be done with the D scheme is radically to revise it and, in particular, to place D at a very much higher level. I emphasise that that is the minimum.

The optimum would be to take Purchase Tax off textile goods at the present time. I am a former Treasury Minister, and I hope I have a proper understanding of what revenue means. It might mean a loss of as much as £60 or £70 million, but even that would be a small price to pay if we could remove the blockage and get goods moving along the pipeline.

Mr. Beswick

May I mention some figures which are relevant? My hon. Friend suggests that £60 or 70 million might be involved. In 1949 the total amount collected in Purchase Tax on textiles and also shoes, plastics and other sundries was £90 million. My information from the Wholesale Textile Association is that over the last six months the collections have been running at the rate of one-sixth of the 1950 figure. Therefore, the amount involved is nothing like that which my hon. Friend is suggesting. That bears out the case which he is making.

Mr. Edwards

I gave a round figure. According to figures given to me by the Financial Secretary to the Treasury for Purchase Tax, excluding haberdashery, the out-turn in 1951–52 was £68 million.

The substantial point which I make is this. I cannot think of any instrument which lies more readily to the hand of the Government at the moment than Purchase Tax. I know the revenue considerations, and I know that Sir Stafford Cripps always held the view that one could turn Purchase Tax on or off in general, depending on the inflationary or deflationary situation at the time.

He also held the view, as he often told me, that it was important to use Purchase Tax not just as a general instrument but as a particular instrument, and it may be recollected that in the last Budget of the late Administration we increased Purchase Tax on a number of things, against the wishes of hon. Gentlemen opposite. We did so not to get revenue but to stop production in large quantities of things like refrigerators.

It seems to me that, if it is right to do it that way, it is right to do it in reverse, and although I am in no position to judge the revenue aspects of this, I beg Her Majesty's Government to consider whether this instrument can be used, if not in whole at least in part, to help to keep the goods moving in the pipeline and to begin to shift the deadweight load which is pressing down upon the industry in Lancashire and Yorkshire.

I should like to advance two or three other considerations. I was a little bothered by what was said by the hon. and learned Gentleman about the diversification of industry. I thought that his very guarded reference to diversification did not really carry us very much further. It may be remembered that he said that, within the stringent limits within which we necessarily live, application by firms for new capacity will be considered sympathetically in this as in other areas.

I put it to the Parliamentary Secretary that even a carefully worded and very considerably qualified statement like that involves an assumption that there will be some slight recession in cotton otherwise there will not be the labour for the new industries which are established.

I wish to repeat a point which has already been made. I was very glad to hear the hon. and learned Gentleman say that it was not the policy of Her Majesty's Government to create unemployment in the textile industries. That was said without any qualification. Yet this is what "The Times" said yesterday, talking about the textile industries: The Government's responsibilities in the matter are mixed and to some extent conflicting. On the one side it is their plain duty to prevent serious and avoidable unemployment if they can. On the other hand is their duty to find more labour for defence work and for any industries which can increase their exports. So "The Times," at any rate, was not clear then, although it may be now.

Let us take this quotation, which is even better: Ministers are faced also with the need to grapple quickly with the problems of the textile industry. Unemployment in this industry is, of course, the deliberate result of the anti-inflationary policy. Workers must be squeezed out of such less essential industries into defence and export production. Unfortunately, the process in the textile areas has been carried too far, … Hon. Members will note the words, workers must be squeezed out of such less essential industries. That is the textile industries.

Mr. Ellis Smith

Would my hon. Friend forgive me interrupting for a moment? After the great record of those engaged in this industry, which has mainly saved this nation, if that is the policy adopted, then those who are retained in the industry will have the right to consider their position with regard to it.

An Hon. Member

Which quotation is it?

Mr. Edwards

The quotation I have given comes much nearer home. It is a quotation from the London correspondent of the "Yorkshire Post," the Conservative daily of the North. There was a ground for very considerable misunderstanding, and when my hon. Friend the Member for Blackburn, East (Mrs. Castle) was taken so savagely to task for what she had to say, she was using almost precisely those words which I have read from the Conservative "Yorkshire Post."

There remains this: what are the Government going to do with any who are unemployed who do in fact fall by the wayside? We have heard nothing about that. We have not heard either what assumptions have been made. Very soon now we shall have the Economic Survey. I have no doubt that right hon. Gentlemen opposite already know what is in that Survey. I imagine that the President of the Board of Trade does, and the Financial Secretary.

I wonder what assumptions they have made, and what assumptions the Minister of Labour is making for his purposes. It is all very well for hon. Gentlemen to say, "It is too difficult; we cannot look ahead." They cannot begin to do their job without making some assumptions. If the President of the Board of Trade says that he has not made up his mind already, and that he wants time, then let him set in hand the inquiries and necessary studies without delay. I would say that if we are really to come to grips with this industry we must deal with it in particular and not in general.

There is the question of the Bank rate. The Bank rate has been held by "The Times" as one of the best ways of getting rid of stocks. It is thought that firms will liquidate their stocks more readily because of the increase in the Bank rate. That may be so, but take that together with the restriction on credit, and what is the effect? It is not that we weed out inefficiency, not even that we treat good, bad and indifferent alike. We subject the firm that has served the public interest best to the most severe test.

The best firms are the most vulnerable. We have only to consider the firm that puts back its profit into new machines, the firm which has taken risks and gone out for the export market and which may have fallen down on the job. It is those firms, which may be highly efficient, which will go out under this general Bank rate-credit restriction policy, whereas the firm which has sat back and not bothered and has accumulated its reserves, will, at this moment, be in better form to survive the storm than will be the other firm.

If the President of the Board of Trade wants time before he can really form a view as to the long-term policy of the textile trades, I would suggest there are three things that should be done.

First, all contracts, not just defence programme contracts but all institutional contracts, local government contracts, Government Department contracts, should be hurried forward, and we should try, as speedily as we can, to place as large orders as are justified in the circumstances over as wide a field as possible and plan ahead as far as is reasonable. Second, we should have a drastic revision of the D scheme as a minimum but, in my view, the abolition of Purchase tax on textiles as an optimum. Third, we should make immediate efforts to do something about the quantitative import restrictions, particularly in the Commonwealth, and we should try to get our partners together to see how we can maximise trade and how we can avoid harming one another.

These are considerations that must weigh with all of us, and I believe there is no essential reason why these measures should not be taken. We must not behave as though a given economic climate necessarily applies to a certain industry. I recollect the 30's, before we had the Keynesian analysis, when we had a rather crude trade cycle analysis and, for the rest, were preoccupied with problems of structural unemployment. We shall never deal with genuine structural problems in industry by general monetary means. We did not in the 30's and we shall not do so now.

I have a letter from one of my constituents, a man who does not support my political views, who says, writing about rayon garments: There is no sense in asking the public to cut down on purchasing garments of this sort. There can be no inflation in keeping the wheels turning round. The very talk in the Press and elsewhere of slowing down trade in normal everyday necessities is suicidal. Let's talk success on those raw materials and goods which we control ourselves. That is a sentiment with which I entirely agree.

I am sorry that the President of the Board of Trade is not here. He was good enough to tell me that he had to go to an important meeting, and I felt bound to tell him that I could not avoid criticising him nevertheless, and the right hon. Gentleman said he thoroughly understood. However, I say to his colleagues, and I ask them to say it to him, that I think the mood of our long debate has been to say to Her Majesty's Government, "You have been warned; not just by Her Majesty's Opposition, but by almost all of us who have spoken in this long debate. We are worried. We are not satisfied. We think that while the industry must do most, the Government can do more."

Therefore, I say to the President, "You have been warned. We must ask you to report progress very soon and to give to the House some long-term policy for these textile industries at the earliest possible moment." I am sure that we on this side of the House will do anything we can to restore our great textile industries to the eminence they had for so long, or if it should, in the passage of time, come to it that some retreat has to be made, we will play our part in that orderly, disciplined retreat which will make consolidation possible at a somewhat lower level.

I am sure that in most of what I have said I have spoken not merely for the Opposition but for all of us who have sat through the all-night Sitting. To me this is a very serious matter, and I trust that the Parliamentary Secretary will take these words very much into account.

Several Hon. Members

rose

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn)

rose in his place and claimed to move, "That the Question be now put."

Hon. Members

On a point of order—

Mr. Speaker

If hon. Members will speak one at a time, I shall hear them. Mr. George Thomas.

Mr. G. Thomas

May I submit to you, Mr. Speaker, that according to Erskine May, which was quoted by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), it is laid down quite clearly that it is your privilege and responsibility to protect the rights of minorities in the House, and that some of my hon. Friends have been trying all night to speak on this important subject. May I submit to you, Sir, that you should exercise your authority to protect their rights?

Question put, "That the Question be now put."

Mr. Eric Fletcher (Islington, East)

(seated and covered): With great respect, I should like to put a point of order for your consideration, Mr. Speaker, before the House proceeds to a Division. You will be aware that when the Motion for the Closure was put to you, there was a large number of hon. Members on this side of the House who were on their feet anxious to put a point of order to you. My submission is that Members should be entitled to put a point of order for your Ruling and for the guidance of the House before a decision is reached. The point of order I want to put to you is this: today, we are dealing with the Consolidated Fund Bill and I—

Mr. Speaker

The hon. Member must excuse me—

Mr. Fletcher

With great respect, Mr. Speaker—

Mr. Speaker

I am bound by the Standing Orders, after two minutes have elapsed, to put—[interruption.] What is the hon. Member's point of order?

Mr. Fletcher

I would ask you, Mr. Speaker, to hear my point of order first. If you accede to my suggestion, which I gather commands the support of a good many hon. Members of the House, it may be unnecessary to put the Question a second time. Today, we are discussing the Consolidated Fund Bill and we are being asked to vote an immense sum of money, amounting to over £1,600,000 million. It has been a tradition of the House to discuss all the matters of the administration of the country before the Government are entrusted with this money.

So far, we have only had an opportunity to discuss one limited aspect of the affairs of the Government which is causing intense disquiet. It is no fault of mine or of other hon. Members that so much time has been occupied with one particular subject. Precedent shows that before we give a Third Reading of this Bill, it is vital that certain matters should be brought to the attention of he House.

Mr. Speaker

It is true that we are considering the Third Reading of the Consolidated Fund Bill and that a wide range of subjects can be discussed upon it; in fact, everything pertaining to the moneys taken out of the Consolidated Fund.

The fact that the debate has centred upon the question of the textile industry is not my fault any more than it is the fault of the hon. Member. I have to consider whether, after a long debate upon the Third Reading of the Bill, the House can now come to a decision without infringing the rights of the minority, and I say that it can. The Question is, "That the Question be now put." What is really happening now is a debate upon the Closure, and debate on the Closure is out of order.

Mr. Beswick

(seated and covered): On a point of order. May I seek your guidance on this point, Mr. Speaker? I recall that in the last Parliament a similar question to this arose. A point of order was put by an hon. Member after a Division had been called. It was then discovered that the doors had been locked and the hon. Member did not have the opportunity to exercise his vote. The matter was discussed after the Division, and it was decided that the time taken by the discussion on the point of order should be taken from the period which elapsed between the Closure being put and the doors being locked. May I therefore ask whether it would not be correct for the time taken by the point of order to be deducted from the period allowed between the time the Division was called and the doors being locked?

Several Hon. Members

rose

Mr. Speaker

I must bring this to a conclusion, and I must take the responsibility for doing it in the interests of the House. [HON. MEMBERS: "Oh."] Order. In answer to the first point, it was an attempt to question the propriety of the Closure; that was out of order. So was the second point. In the third point of order I was asked from what time the period runs. It runs from the moment, at which I am now trying to arrive, when I appoint the Tellers.

Question put, "That the Question be now put."

Mr. SPEAKER proceeded to collect the voices.

Several Hon. Members

rose

Mr. Speaker

I must request the House to contain itself. [An HON. MEMBER: "Collect the voices."] I am going to collect the voices now. In fact, I have already done so. [HON. MEMBERS: "No."] Order. This is not seemly behaviour. The Speaker is bound to put the Question and the House should support him in the exercise of his duty. [Interruption.] This is not seemly behaviour for the House of Commons.

Mr. James Griffiths (Llanelly)

(seated and covered): On a point of order. May I submit a point of order to you about which my hon. Friends and I are concerned? When you collected the voices, there were voices for the "Noes" but there were no voices for the "Ayes." I suggest that the Motion has been lost.

Mr. Speaker

I heard "Aye" myself. That is good enough for me.

The House divided Ayes. 168; Noes, 135.

Division No. 50.] AYES [12.28 p.m.
Aitken, W. T. Fletcher-Cooke, C. Mellor, Sir John
Alport, C. J. M. Fort, R. Monckton, Rt. Hon. Sir Walter
Amery, Julian (Preston, N.) Fraser, Hon. Hugh (Stone) Moore, Lt.-Col. Sir Thomas
Anstruther-Gray, Maj. W. J. Fraser, Sir Ian (Morecambe & Lonsdale) Nabarro, G. D. N.
Arbuthnot, John Gage, C. H. Nicolson, Nigel (Bournemouth, E.)
Assheton, Rt. Hon. R. (Blackburn, W.) Galbraith, T. G. D. (Hillhead) Noble, Cmdr. A. H. P.
Astor, Hon. J. J. (Plymouth, Sutton) Godber, J. B. Nugent, G. R. H.
Baldwin, A. E. Gomme-Duncan, Col. A. Oakshott, H. D.
Banks, Col. C. Gough, C. F. H. Ormsby-Gore, Hon. W. D.
Barber, A. P. L. Grimond, J. Orr-Ewing, Charles Ian (Hendon, N.)
Barlow, Sir John Harris, Frederic (Croydon, N.) Osborne, C.
Baxter, A. B. Harris, Reader (Heston) Peyton, J. W. W.
Beach, Maj. Hicks Harrison, Col. J. H. (Eye) Powell, J. Enoch
Beamish, Maj. Tufton Harvey, Air Cdre. A. V. (Macclesfield) Prior-Palmer, Brig. O. L.
Bennett, Sir Peter (Edgbaston) Hay, John Profumo, J. D.
Bennett, William (Woodside) Heald, Sir Lionel Raikes, H. V.
Birch, Nigel Heath, Edward Rayner, Brig. R.
Bishop, F. P. Hill, Dr. Charles (Luton) Redmayne, M.