§ 10.2 p.m.
§ Mr. John Edwards (Brighouse and Spenborough)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Utility Goods (Revocation) Order, 1952 (S.I., 1952, No. 489), dated 11th March, 1952, a copy of which was laid before this House on 13th March, be annulled.I think that it might be convenient if this Prayer were taken at the same time as the other Prayer relating to utility goods—That an humble Address be presented to Her Majesty, praying that the Utility Goods (Maximum Prices) (Revocation) Order, 1952 (S.I., 1952, No. 490), dated 11th March, 1952, a copy of which was laid before this House on 13th March, be annulled.1786 Would you agree to that suggestion, Mr. Speaker?
§ Mr. Speaker
I think it would be a convenient course if the House were to agree to take these Prayers together, and then, when we reach them, the second two Prayers also.
§ Mr. Edwards
I should like to address a few words mainly on the first of the Statutory Instruments, leaving it to my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) to say more about the second. On 13th March the President of the Board of Trade announced his acceptance of the Douglas plan. The following Monday, on 17th March, 118 Utility Orders were revoked. These two Statutory Instruments against which we are praying tonight I think may be said to be the chief instruments concerned in this wholesale revocation. The Board of Trade Journal, in the issue 1787 following the speech of the President of the Board of Trade, I thought rather euphemistically referred to this as a revision of the Utility scheme. In fact, of course, from the date of the revocation of these Orders, 17th March, Utility in textiles and clothing was for all practical purposes dead.
In the Budget debate we were necessarily preoccupied with a large number of other matters, and even when we were considering the question of the utility scheme the discussion necessarily dealt very much with Purchase Tax and with the new D scheme. I do not myself want to deal with that aspect of the matter at all. I am concerned with quality, standards of production and manufacture. I want to elicit if I can from the right hon. Gentleman more than he had to say in the Budget debate about this important matter.
I listened with very great interest to the right hon. Gentleman on 13th March, not only to what he had to say, but to the way in which he dealt with his subject. What interested me very much was that on that occasion, anyway, the right hon. Gentleman seemed to show no sign of any historical sense. If that occasion is indicative of the fact that he lacks any historical sense, doubtless that quality will stand him increasingly in good stead the longer he stays in office. I say that because, having given us one or two quotations from the Douglas Report, he then dismissed the Utility scheme to oblivion, except in relation to furniture, In that case he said, "I will reprieve furniture for the time being, but not for long."
I think that is a fundamentally wrong attitude to take, for I believe that the Utility scheme, from the time it was started in 1941, played a valuable and indispensable part. Although its efficacy as a quality control varied—though I would not subscribe to the sweeping condemnation contained in the Douglas Report—even the most superficial examination of the figures of deliveries will show that over a vast part of this field, right up to the end, the Utility scheme was guaranteeing standards.
I would agree with the 1947 Report of the Heavy Clothing Working Party and say that the improvement in the average quality of clothing production has been in large measure due to the enforcement 1788 of utility standards. Nevertheless, the Utility scheme was open to criticism. I have not spent some 12 months at the Board of Trade without knowing all the difficulties connected with the scheme; but I would say, speaking very seriously, that I believe the right hon. Gentleman was wrong to abandon the Utility scheme in textiles and clothing without first having provided something that in a real sense would take its place, in so far as it was a means of quality control.
It is wrong to suggest, as I thought the President did, that the Government can contract out of measures to protect the consumer. One of the things he said was:I believe that the best safeguard is the standard of the manufacturers and workers in this industry working in a competitive system and seeking to meet the demands of the consumers."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1585.]Obviously, we would all place a good deal of reliance on those things, but I think we need more than that. We must have more than that if we are to protect the consumer. When the right hon. Gentleman said that the public will be the deciders in the matter, I think he was crediting the ordinary buyer with a degree of omniscience that the buyer does not in fact possess, particularly when we consider the class in the community that the Utility scheme was designed primarily to protect.
I should like to bother the House for a minute or two with two quotations which, I think, illustrate what I mean and which show a different attitude of mind from that shown by the right hon. Gentleman. It will be recollected that there were established in 1946 a number of working parties. One of those was the Light Clothing Working Party, and this is what that body had to say on this very issue, looking at it and anticipating the day when S.I. 489 would be introduced:If the Utility Scheme is withdrawn, unless some general system of standards has been brought into operation in the meantime, standards similar to these under the Utility Scheme should be promulgated and enforced.Here was the unanimous view of the Light Clothing Working Party, saying, "We must have something like Utility and, unless we have some standards in some other way, if Utility goes we must bring forward some protection for the consumer."
1789 Take the Heavy Clothing Working Party, with its positive proposals which came nearer to what the right hon. Gentleman has proposed:It is possible that unless these or similar regulations are retained when normal competition returns and the Utility Scheme is withdrawn, inferior garments may be produced either because they are made from inferior or unsuitable materials … or because the making up itself has been scamped.The same Report says:Past experience has shown that in a state of unrestricted competition, particularly in time of economic depression, some manufacturers used to cut down the quality both of the materials they used and of the work put into the making of garments in order to undersell their competitors or to meet a demand made upon them for lower priced goods. This was not good for industry; it was even less good for the distributor or the consumer, who was tempted by cheap prices to buy articles which were of poor quality and in some cases practically worthless.I am sure we all agree, and I am sure we all agree, too, that that kind of behaviour would not apply to the majority; but if only a few people begin it, then the effect on manufacturers is demoralising.
I ask the right hon. Gentleman what has happened since he made his speech on 13th March. He will recollect that he said:In particular, the cotton industry have told me that, they propose within a few weeks to deal in this way with the most popular specifications, which cover a wide range of cotton cloths and household textiles up to about 75 per cent. of the trade in those particular types."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c, 1586.]I shall be interested if the right hon. Gentleman will tell us what has happened. He said "within a few weeks." That is nearly two months ago—something like seven weeks—and there were a number of other things which he forecast in his speech. I have the greatest respect for the British Standards Institution and a high personal regard for the director with whom I worked when I was at the Board of Trade, but I must say that even if I add up all the things which the Minister proposed, and even assuming that one day they are all put into operation—I think they will take years—even then the right hon. Gentleman's proposals do not add up to anything which remotely can be described, in his own words, as a "new and much simpler Utility scheme." It is a misuse of the word "Utility" to say that what he proposed, even when it 1790 is in full operation, is a "new and much simpler Utility scheme."
We think it was wrong of the right hon. Gentleman to take the step which he took, to issue this Order—and I am talking about the first Order, No. 489—and to revoke all these various safeguards which existed to a greater or lesser extent, without having first done all that was necessary to put something in their place. The public are entitled to protection. I believe they are entitled to protection from any people, few though they may be, the unscrupulous people, who produce the worthless goods or the rubbish; and if what people tell me is correct, and if such evidence which has come my way is to be believed, I must say that, for one reason or another, there are already signs of deterioration in quality and standards.
I have seen it myself in cloth, and I have already been shown examples of it in garments by reputable people; and I beg the right hon. Gentleman, even if he cannot now re-instate the system of protection for the consumer, that at least he will press on with all his vigour to establish these other systems in which he puts his faith and which, although I do not regard them as adequate, would certainly be better than nothing.
§ 10.15 p.m.
§ Mr. Rhodes (Ashton-under-Lyne)
I beg to second the Motion.
I shall concentrate more on the second of the two Prayers, and I, too, shall be as brief as I possibly can. I do not think that the President of the Board of Trade can really please himself about the question of quality now, because, as I said in the Budget debate, I really believe that the Board of Trade has sold its birthright to the Treasury in the matter of being able to say what shall be done with the products of a consumer goods industry which was previously under its control. In the few minutes I propose to speak, I shall try to show why that is.
When we have price control there can be two situations; one in a war, when raw materials and labour are short, and the second, in a post-war, peace-time situation when the buyers are prepared to pay any sort of fancy price for the goods they want. In the first case, in the case of war, the physical controls are obviously necessary on account of the shortage of labour and on account of the shortage 1791 of materials. Comparatively, a war-time control is a very easy one, because people accept sacrifices, and they are satisfied with making do. There is also no pull from exports. If with such control we have a swingeing tax on goods outside control and of the same sort, the discipline is complete. In peace-time labour is returning and materials are more plentiful and exports are more profitable—very profitable—and shelves and wardrobes throughout the country are empty and people have plenty to buy.
There are certain principles common to both cases. Price control is needed; if price control is needed, definition is needed; if definition is needed, specification is needed; and the tighter the price control is the tighter specification must be. Above all, we must have production control at all stages in such circumstances. All this goes on swingingly so long as goods are bought red hot from the factories, but let some intervention come, such as the balance of payments question—let that come into the picture—and the Government of the day want the highest prices they can get for exports, and that is when the trouble begins for, if the sky is the limit in exports, we automatically get two classes of goods, one for home, and one for export, and then we run into trouble, because foreign Governments accuse us of subsidising the home market at their expense.
The result is temporisation. The external situation may be such that we must have all we can get for our exports. "All right," it is said, "take off the production price control." Then we find producer prices go up, export prices go up, and those at the finishing end are squeezed against the ceiling. There comes the cry, therefore, for specification. If exports have to be maintained, flexibility is brought in. As soon as this occurs, instead of the Utility scheme being the most important element in the set up and keeping the Purchase Tax going, the Purchase Tax keeps the Utility scheme going.
That was the only discipline that we had. If Purchase Tax had been higher, we should have been able to impose even more discipline, because there is a tremendous reluctance to pay unnecessarily 33⅓per cent. or 66⅔per cent. That was 1792 one of the strongest weapons we had at the Board of Trade, after production control went off, to keep some discipline in prices.
If, while this is going on, the Government of the day makes arrangements with foreign countries for goods to come in without any other taxes except the ordinary import duties, we are accused of not keeping our obligations under agreements, such as the general agreements on tariff trade. At the same time, the seasonal goods are coming in. If exports falter a bit, we have a demand for even more flexibility. I say that it is not necessary to keep price control on in a buyers' market. We are agreed on that. I said it in the Budget debate. It goes by the board. But when we consider all the things in the terms of reference given to the Douglas Committee, there was precious little which alluded to the interests of the consumer. In most cases he came last.
I support my hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) in his contention that there should have been some scheme ready to be brought in as soon as the Douglas scheme was adopted, so that the consumer could be protected. I am going to give another reason why a scheme relating to quality standard marks or specifications should have been continued. It is this: If the President of the Board of Trade and the other Ministers will study the history of the cotton industry just before the war, and particularly the debates on the Cotton Re-organisation Bill, which was brought in in 1939, they will see that there was a demand for a price control of a different sort altogether—and that price control was a minimum price control below which the spinners and the manufacturers could not sell because otherwise the capital was being drained out of the industry.
I ask the President of the Board of Trade this question: Supposing in the coming months—and this is possible because the situation is very serious—that we need to bring in something of that sort again, and minimum prices are going to be a help to the producer in Lancashire, on what is he going to build if he scraps the whole of the specifications under the old Utility scheme? Do not let us forget that the Douglas Com- 1793 mittee overplayed the question of goods coming on to the market to specification.
If the right hon. Gentleman will look at the figures for 1951 and I stand to be corrected—he will see that in the Utility field of the deliveries last year something upwards of 400 million square yards came into the home market. I contend that no more than 20 per cent. of that 400 million square yards was outside specifications allowed under the old utility scheme. That means to say, considering the flexibility that came in in the early part of the year, that there was a strong desire on the part of manufacturers, spinners, producers and everybody else, and by the general public, to support the specifications that we ran for so long under the Utility scheme.
I beg the right hon. Gentleman to consider that angle, to see that something is done in a way in which will be obvious to the public that the consumer's interests are being looked after. There are the questions of fastness of dyes, of colour, wearability and the rest, as can be seen in any of the schedules where the specifications were laid down.
I ask the right hon. Gentleman to get down to this, so that he can have something on which he can build if the time comes in the cotton industry when he needs a framework by which he can put into operation a scheme for minimum prices. I think he will find, if he looks into the matter closely, that he can have no better means than of allying it to some of the specifications in the old Utility scheme.
§ 10.26 p.m.
§ Mr. William Shepherd (Cheadle)
The hon. Gentlemen who moved and seconded the Motion have put up a very reasonable case, and in a most reasonable manner, but I think that they shed too many tears for the old Utility scheme. The House must face up to the reality that that scheme has outlived its usefulness. It was, in its later days certainly, a very poor protector of quality, but where it was a protector of quality in the field of the furniture industry, the Government have, I think, taken the right view in retaining it.
The suggestion made by both of the hon. Members opposite, that very shoddy goods would be launched suddenly upon an unsuspecting community, 1794 is not borne out too readily by the facts. It is possible in most textiles, at any rate, to see whether the goods are bad. It is true that in furniture it is quite easy to conceal a perfectly awful frame by some, perhaps, quite acceptable upholstery, but in most textile goods the value is more or less apparent to the eye and to the touch. [HON. MEMBERS: "No."] Oh, yes. There is not so much danger as hon. Members make out.
The whole question of shoddy goods has been grossly overrated. When one considers the kind of suit that the 50s. tailors made before the war, one realises what was done in the "bad old days," when there was some sort of freedom for industry. The 50s. suit before the war was a marvellous job, and was done without any attempt on the part of the Government to safeguard quality or to protect the public.
I do not think there is any urgency such as the two hon. Members opposite make out. I do not for one moment think there is any great danger that suddenly there will be a rush of substandard goods. For one thing, the Utility scheme has been in operation for about 10 years. It cannot be without its permanent effect upon the industry. People who have been accustomed to making these specifications have, probably, proved them to be of some value, and will go on making them. I do not think there is any prospect whatever of a serious deterioration. The danger we see coming, if it is not here now, is not because of the absence of a utility scheme, but of the existence of a D line which in itself is an invitation to debasement. That, of course, is an entirely different argument which we cannot pursue this evening.
It is important to bear in mind what is fair to industry and, in general, that debasement arises not due to a utility scheme but to an entirely different factor in the industry. I think there is a real necessity for safeguards, and if we can establish, as I think my right hon. Friend is endeavouring to establish, safeguards in respect of colour and other factors, this is going to be to the public good. The Government can play a useful role. But a person who goes shopping is not quite such a fool as some hon. Members think. Women, particularly, look at their purchases very carefully I know, because 1795 I have tried to sell them things from time to time.
Whilst I agree that there is a need for as many safeguards as we can possibly put in, especially by the B.S.I. and other organisation, we should not under-estimate the value of freedom. It is true that we have to honour our international obligations, and the Utility scheme has really meant a tariff of about 40 per cent. over which our foreign competitors had to jump.
§ Mr. Rhodes
There is no need to put it into the Douglas Report at all just before action was taken, because in November they removed all need for any consideration of our international obligations by the import restriction.
§ Mr. Shepherd
I do not think that is really a very valid point. It does not affect the long-term position or the moral position. I think there was a real necessity, on moral grounds, to say it was unfair to put an additional tariff of something like 40 per cent. on other people's goods.
I believe that on the whole, and I think this was the thought of the hon. Member who moved the Prayer, the Government have done the right thing, although perhaps we are not satisfied with certain other aspects of the matter, but we should not shed too many tears over the Utility scheme.
§ 10.34 p.m.
§ Mr. Harold Wilson (Huyton)
I should like to welcome the hon. Member for Cheadle (Mr. Shepherd) back to our debates on Utility questions, because we have heard from him many times in the past on this subject. I felt that one or two of his arguments were extremely far fetched, particularly the one that, as we had had the Utility scheme for 10 years, therefore we could let it go now because it must obviously have left its mark on the industry. In other words, if a thing is a good thing we can let it go because it has left its mark. I hope he will not carry that argument too far, or we shall have him one day suggesting that because we have had the Factory Acts for about 120 years we do not need to legislate to protect children against forced labour in the mills.
§ Mr. Shepherd
The right hon. Gentleman is misrepresenting me. The hon. 1796 Member for Brighouse and Spenborough (Mr. J. Edwards) said that my right hon. Friend was in trouble because the matter had not been dealt with in a few weeks about which he apparently gave some promise, and I used the argument to show that there was not the immediate urgency that had been suggested.
§ Mr. Wilson
If there was anything in that argument, we would say that there was no urgency to get rid of the Utility scheme which the right hon. Gentleman seemed to suggest in the two contributions he made in the House, in January and again in March.
I should like to address my remarks particularly to the President of the Board of Trade. I congratulate him tonight on the fact that we have a full Board of Trade team here on the Front Bench, which is a very good thing in any Government. It does show the importance that the Board of Trade, at any rate, attach to the subject, even if, perhaps, they have done the wrong thing about it.
I appeal to the right hon. Gentleman not to introduce the argument about international obligations, as did the hon. Member for Cheadle. Of course, we all recognise the strength of the argument, but it is relevant only to a discussion of Purchase Tax, not to a discussion of the Utility scheme itself. If it is argued that the Utility scheme can exist only if we have Purchase Tax to enforce it, then it is difficult to divorce the two. I presume that we shall be debating Purchase Tax and the D scheme, probably at length, in the next week or two, because my right hon. Friends and hon. Friends and I have put down a considerable number of Amendments to enable the Government to fulfil the Chancellor of the Exchequer's undertaking to have a very full discussion of individual D levels.
To my mind, it is possible and highly desirable to have a Utility scheme that still fulfils our international obligations. We have had for many years the example of children's clothing, where there was no taxation to discriminate between the Utility and non-Utility, yet a very satisfactory proportion of Utility production was maintained by the trade. That was not always true in footwear, as my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) will remember from the action he took last year.
1797 We on this side believe that the Utility scheme, with all its faults and difficulties—no one was more conscious of these than I and the hon. Member for Ashton-under-Lyne—did provide a real protection to the consumer and to the housewife and mother when she went shopping. I know there were relaxations in that scheme; they were forced on us by the necessities of the export trade; but I entirely agree with my hon. Friend the Member for Ashton-under-Lyne, that the Douglas Committee greatly exaggerated the importance of the flexible cloth.
The general comment in Lanes about the Douglas Report, apart from its comments on the D scheme and taxation levels—especially in trade union circles, from which I have had considerable information—has been to the effect that the Report over-emphasised the weakening of the Utility scheme, due to the introduction of these flexible specifications. It also greatly exaggerated the decline in the Utility proportion. The period referred to, last spring, was a period when there was a considerable sale of frustrated exports on the home market, and that temporarily reduced the Utility proportion. Our biggest danger was in the spring of 1950, when there was a real danger of a famine in Utility production and when we had an argument from the Front Bench opposite about the need for Lancashire to maintain Utility production.
At that time I announced—and it may have given some confidence to Lancashire to maintain Utility production—that so long as the Labour Government was in power we were going to maintain the Utility scheme, with such amendments or modifications as might be necessary from time to time.
The President of the Board of Trade has quite fairly recognised the need for some protection of the consumer, and he devoted a great part of his speech on 13th March to that subject. He referred to what he hoped was going to be done through B.S.I., the Cotton Board, merchandised marks provisions, and so on.
I want to reinforce what my hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) said earlier and ask the President of the Board of Trade to say what 1798 has happened since that speech of 13th March. Particularly I should like him to say what sanctions are going to be applied to ensure that these marks and the other provisions will really give an assurance of quality. I would also ask him—I hope he will come clean with us about this—what proportion of the total textile production he thinks is going to come within the scope of the provisions he is trying to work out through B.S.I. and elsewhere. Does he really hope we are going to get something like 70 to 80 per cent. of the total clothing textile covered by this sort of scheme?
I want to support what has been said from this side of the House. We are facing a real danger of a dumping of shoddy goods on the home market. That is going to be all the more dangerous at a time when poverty in the country is on the increase. People with only a shilling or two in their purses cannot protect themselves against shoddy production to anything like the extent that can those who have rather more money to spend. With the general financial policy of the Government—it would be out of order for me to go into that now—with the growth of unemployment, with the financial squeeze going on in the country, and with higher prices, and so on, there is going to be less money available for textiles and clothing, and, therefore, a real temptation to buy the shoddy goods which some manufacturers—I believe only a small minority—will want to dump on the home market.
I do not agree with the hon. Member that the consumer can always protect himself or even quite often protect himself. I doubt if the hon. Gentleman himself, with his long experience of the textile trade and allied industries, if he were to go into a shop would be able by fingering a piece of material to say whether, for instance, it would guarantee him a reasonable fastness to light, what its abrasive qualities were or what its shrinkage qualities would be. Therefore, I think it is very optimistic to assume that the general public can do that and very optimistic to assume that competition is going to provide the answer.
It is certainly true that the D scheme, which we are not debating tonight, is going to lead and is already leading to a debasement of quality. I do not just say that on my own responsibility. It is the view of leading authorities in the 1799 textile and clothing trades and it has been widely commented on in such journals as the "Manchester Guardian," which, as the hon. Gentleman knows, has a very detailed knowledge of this subject. Therefore, at a time when we must expect debasement of quality and when the Government are, in fact—not deliberately, of course—promoting debasement of quality by their D scheme, it is vital that if the old Utility scheme is to go something powerful and effective should be put in its place.
If the President of the Board of Trade cannot assure us that he really means business and that something is really happening about a scheme to replace the old Utility scheme, then he will have inflicted very grave damage on the housewives and consumers of this country by the Orders we are praying against tonight. I hope the right hon. Gentleman will give us some reassurance which so far we have not been able to get either from his speeches or from the actions reported from his Department.
§ 10.44 p.m.
§ The President of the Board of Trade (Mr. Peter Thorneycroft)
I welcome the fact that hon. Gentlemen opposite have put down these Prayers, although the time is nearly running out, because it gives us an opportunity of saying just a word about the old Utility scheme before we part with it. As we are parting with it, may I just say that while there are many criticisms that could be made of it—I am going to make one or two in a moment, and the Douglas Report made many more—I do not think anybody should forget that at the time it was introduced and for the purposes for which it was introduced in war-time, it served those purposes very well and enabled many people to get good quality materials at a reasonable price, and nothing that I say here would detract from that.
But, at the same time, one has to recognise that if these Prayers were carried the effect would be to annul the Orders which abolish the Utility specifications and the whole complex structure of price control which went with them. And I rather doubt whether hon. and right hon. Members in their hearts really exactly want to do that this evening. Whatever arguments can be adduced—and I have 1800 no doubt that in a few weeks' time plenty of arguments will be adduced—about the levels of the D scheme and rates of tax and all the rest of it, anybody who looks objectively at this matter would agree that the Utility scheme had reached a stage when it had to go and something else had to take its place.
I receive a great deal of advice at the Board of Trade, and it is naturally often conflicting. But I must say that the overwhelming body of advice which I received about the old Utility scheme was emphatically on one side.
§ Mr. H. Wilson
Assuming that is true, will the right hon. Gentleman not tell us there is even more unanimity in the body of opinion now advising him on certain aspects of the D scheme; and if he was so moved by unanimous advice on the Utility scheme, will he not be moved by even greater unanimity on the D scheme?
§ Mr. Thorneycroft
I read a very powerful speech by Mr. Trevor Owen of Barkers the other day about the advantages the D scheme would bring to the public, which I very much welcomed. I daresay there are other views, but here we are debating whether it was an advantage to do away with the old Utility scheme. The overwhelming advice was on the one side. The Cotton Board, which I consulted, represent a very wide cross-section of the industry. I consulted trade union members with very wide experience and employers from all sections. I ask the House to accept that there was not the slightest doubt where the overwhelming opinion lay—and it was that the old Utility scheme had to be done away with.
The Rayon Federation, who, after all, are experimenting in new cloths and have a great field of development before them, asked specially to come and see me, and I spent much more than an hour listening to their views. They said that the Utility scheme was dislocating their industry, provided no real safeguard to the public, interfered with the introduction of new types of cloth and was a serious obstacle to exports.
The Wool Textile Delegation from Yorkshire was precisely of the same opinion. Mr. Heywood, who is Secretary of the National Association of Unions in the Textile Trade, member of the Douglas Committee and member of the Cotton 1801 Board, whose views are respected on all sides of the House, emphatically impressed that same view upon me. He has stuck to it since and has repeated it in speeches in the North of England.
Nor am I alone in being impressed by those arguments. The right hon. Member for Colne Valley (Mr. Glenvil Hall), when we discussed this matter during the Budget debate, said:We realise, and have done so all along—at any rate, for a long time—that something had to be done about the Utility scheme. The original scheme was excellent, but the classifications … became unwieldy and the specifications very obscure. Above all, as we know, it was viewed by the signatories to G.A.T.T. as a violation of international agreements."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1602–3.]May I say about these international agreements that we cannot just dismiss them as red herrings? There is rather more to this question than the right hon. Gentleman would have us believe. I would emphasise that it was not just the General Agreement on Tariffs and Trade. I can imagine no commercial treaty which this country would ever be able to come to with any other country would permit discriminating taxation of that particular type. If we entered into an agreement with another country and they tried to use that kind of discrimination against us, we should certainly make the very strongest representations to them. The fact that we may subsequently have imposed or been compelled to impose for balance of payments reasons certain quotas upon imports from other countries would be no possible justification for us maintaining discriminatory taxation on other than a national basis.
§ Mr. Rhodes
Would the right hon. Gentleman agree that the General Agreement on Tariffs and Trade is now as dead as the dodo?
§ Mr. Thorneycroft
No, it still happens to be a binding treaty. But, as I say, this goes much wider than that. I am not arguing this on the basis of one particular commercial agreement. There is no commercial agreement which a great exporting country such as ours could ever come to which would permit other countries to discriminate in that particular way against our exports, and I think that ought to be made quite plain.
We have pledged ourselves twice in the clearest and most specific terms to do 1802 away with that particular type of discrimination. One pledge had been given as long ago as 19th December, 1950, not by but under the authority of the right hon. Member for Huyton (Mr. H. Wilson). The pledge had been repeated in even more specific terms on 20th September, 1951, by the right hon. and learned Member for St. Helens (Sir H. Shawcross), who preceded me at the Board of Trade. I believe that the House would be unanimous in the view that we were under an absolute obligation to honour those pledges solemnly undertaken on behalf of the Government.
§ Mr. J. Edwards
Would the right hon. Gentleman agree that there is not a single word in any of the Orders which the Statutory Instrument revokes which is inconsistent with the General Agreement on Tariffs and Trade? That Agreement is wholly concerned with tax and with the Finance Acts. There is nothing in a single one of the matters that we are discussing this evening which is incompatible with G.A.T.T. The incompatibility only arises in connection with the Finance Acts and with Purchase Tax.
§ Mr. Thorneycroft
The hon. Gentleman is under a great misapprehension in that matter. The difficulty arose because the Utility scheme was inextricably entangled with the Purchase Tax, and it was because of that that the right hon. Member for Huyton or my predecessor—I forget which of them—very properly and wisely appointed the Douglas Committee to look into the matter and see what other schemes could be devised in order to get over this as well as other difficulties.
§ Mr. F. Blackburn (Stalybridge and Hyde)
If a specification scheme is divorced entirely from a Purchase Tax scheme, there is then nothing which would conflict with our international agreements.
§ Mr. Thorneycroft
Exactly. That is the principle upon which the D scheme is, in fact, based. I therefore come immediately to what alternatives have been suggested. I think everyone would agree that the old Utility scheme which then existed was a direct breach of this obligation. There is no question about that. The question arises as to what alternative methods of running a utility scheme of some kind were open to us. 1803 I am not going to argue them all this evening because many of them would be out of order, but the fact is that the Douglas Committee was appointed, not by me but by the party opposite, for the purpose of looking into that matter, and they came to a very clear decision.
The Committee decided, both for the commercial reasons I have mentioned and for many others which they argued at great length, that the Utility Scheme had got to go and that another scheme, which is referred to as the D scheme, had to be put in its place. I only want to draw the attention of the House to two paragraphs in the Report of the Douglas Committee. The first is paragraph 127, in which they state:Most of the Utility schemes no longer justify the faith which many people still have in them as providing a guarantee of quality or of value for money.The second is paragraph 25, in which it is stated:Far from offering any assurance of value for money the wool apparel cloth Utility Scheme may well deceive the uninformed consumer on this very point.Some people may take a different view, but it is right for me to point out that these are the views of a Committee appointed by hon. and right hon. Gentlemen opposite, and a very representative committee it was.
§ Mr. Rhodes
Let me read to the right hon. Gentleman what the Report says in paragraph 30. At the top of page 12 it states, and this refers to depreciation and debasing:The consumer will probably not believe it has taken place because he has detected no parallel deterioration of Utility goods, and, of course, there has been none.That answers the right hon. Gentleman's point.
§ Mr. Thorneycroft
I should have thought it bears out my point. What paragraph 30 was pointing out was that there has not been a debasing of the standard provided because the manufacturers produced decent stuff. What they were pointing out was that the quality guarantee was not guaranteed by anything in the Utility Scheme which, as they said, might deceive the uninformed consumer.
I have been asked to answer questions about what has been done about the new 1804 quality safeguards which I referred to in my speech in the Budget debate. The suggestion was made that they all ought to have been worked out in advance. Anyone with experience would realise the difficulties of doing so in advance. No discussions had started when I took up my office to work out alternative methods. I make no complaint of that. I do not think it was possible to start discussions. The Utility scheme was inextricably involved with Purchase Tax and other fiscal problems, and discussions with the industry would not have been possible without a forthright statement about Purchase Tax, which would have led to trouble.
The House will recall, however, that I did say shortly after I arrived at the Board of Trade that I had set about trying to obtain, with the advice of the British Standards Institute, methods of guaranteeing quality. I can say this, that a good deal of progress has been made. It is a very complex thing, as anyone who understands the subject will appreciate. It requires careful work, and a lot is of a pioneering character. Standards will shortly be issued for bedding, safety footwear, rubber proofed cloths and garments, girls' blouses, gym tunics, the fabric content of woven wool cloth, and industrial overalls, Other items which are well advanced are colour fastness and shrink resistance standards for rayon fabrics.
The House will recall that the Cotton Board have assured me that within the next few weeks it hopes to deal with the most popular specifications over a wide range of cotton cloths and textiles amounting to 75 per cent. of the trade in those types. Frankly, the progress in that has not been as fast as I had hoped. The cotton industry has been having great difficulties, and the leaders have been fully occupied. I have news from them and have every reason to suppose they are pressing on, while we hope to get these specifications at an early date. I want to say a word on wool textiles. There is a meeting with the British Standards Institute in Bradford next week to discuss the terms for labelling woollen goods.
To summarise the position on the first Prayer, it seems to me that the case for the abolition of the old Utility scheme was an overwhelming one and that the new quality specifications, though not perfectly completed at the present time, are making some good progress.
1805 I must say a word, too, about the speech of the hon. Member for Ashton-under-Lyne.
§ Mr. Gerald Nabarro (Kidderminster)
Will the right hon. Gentleman allow me? I merely want one issue clarified. Is it his intention, when the British Standards Institute has settled minimum standards, to embody them in a Statutory Instrument to be laid before this House, or will the B.S.I. standards become agreements between his Department and the manufacturing or trade associations?
§ Mr. Thorneycroft
I am happy to answer that question. I certainly do not intend to start again a whole mass of Statutory Regulations, which are constantly amended and all the rest of it. I do think, while I believe the Government has an important role to play in these matters, that the Government is not qualified to undertake a great deal of this particular type of work. I would much rather the Government gave some encouragement to starting schemes of this kind, which are much better left to the industry and bodies like the B.S.I.
On the question of price control, the truth is that price controls in the Utility range were increasingly becoming a matter of definition of a tax-exempted field, and decreasingly becoming an effective control of prices. I feel that if price control is to be used to protect the consumer, it must be used with discrimination and judgment at the right times and under the right conditions, and not all the time, irrespective of the state of the market. When one moves from a sellers' to a buyers' market, it seems that competition is a much more effective way than price regulations for controlling these matters. I am satisfied that the price control of Utility goods was certainly unnecessary on 11th March, when I ordered its removal. Since then, many prices have moved down.
To be effective, price control has got to be accompanied, as the hon. Member said, by a tight quality specification so one can have the squeeze between the two. That state of affairs long since ceased to exist. I cannot sum up better than in the words of the hon. Member for Ashton-under-Lyne in his speech upon the Budget Debate. The hon. Gentleman, with all his experience of the industry and of the Board of Trade, said: 1806In a buyers' market, a tight scheme is quite impossible.That is, in the situation we have today.Production control is no use, because people cannot be forced to make what they cannot sell. In regard to specifications, we cannot have in such circumstances a long list of specifications tightly drawn, and, thirdly, neither can we maintain price control in a falling market. It is just impossible, and it is a fatuous thing to do, …"—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1657.]I cannot express my views more strongly than that.
§ Question put, and negatived.