Commons Sitting of 18 November 1953

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GLASGOW CORPORATION (WATER &C.) ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS

  U.S.A. WEATHER SHIPS (WITHDRAWAL)
  Mr. de Freitasasked the Under-Secretary of State for Air when the Government of the United States of America informed Her Majesty's Government of their intention to withdraw their ships from the International North Atlantic Weather Service; and what representations were made to the United States Government, in view of the effect this will have on the accuracy of the Meteorological Office's weather forecasts.
  The Under-Secretary of State for Air (Mr. George Ward): The United States' decision not to subscribe to any Ocean Weather Ship Agreement after 30th June, 1954, when the present Agreement expires, was communicated to International Civil Aviation Organisation on 21st October, 1953. The United Kingdom representative at I.C.A.O., in common with the representatives of other interested Governments, was given a copy of the American Note on the same day. Our representative has already expressed to the Council our concern that the United States' decision may affect the regularity and economy of North Atlantic civil operations.
  Mr. de Freitas: Is it not really very serious that we were given no prior notice that this withdrawal would take
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  place? Is it not a fact that the Government have not made sufficiently strong representations, when we consider the disastrous effect that this may have on weather forecasting and the great blow that it is to the whole principle of international co-operation in science?
  Mr. Ward: The United States, of course, had no obligation to consult us in this matter. She did in fact notify her decision informally to the British Civil Air Attaché in Washington on the day before she handed her Note to our representative. I agree that the United States' action may well have a serious effect.
  Mr. A. Henderson: In view of the undoubted importance of this weather ships information, both as regards civil aviation and shipping in the North Atlantic, is the hon. Gentleman's Department considering having this matter raised and discussed at Ministerial level? Has the hon. Gentleman considered the suggestion made the other day that, if necessary, the Prime Minister himself should seek an opportunity to discuss this very important problem with President Eisenhower direct?
  Mr. Ward: Yes, Sir. This matter is already being discussed at Ministerial level and we have all these considerations very much in mind. We shall, of course, shortly be putting forward through the United Kingdom representative at I.C.A.O., and in consultation with other European Governments concerned, proposals about the continuance of the Ocean Weather Ships Scheme, but, as I told my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) the other day, we cannot do that until we have made an intensive study of the implications and have had discussions with other Governments concerned.
  Brigadier Prior-Palmer: Would my hon. Friend agree that the withdrawal of these ships will have an adverse effect on weather forecasting and will affect our fishing fleets round our coasts very much?
  Mr. Ward: The information that we can put out to shipping generally is liable to be less accurate, but we must bear in mind that the main gap will be on the farther side of the Atlantic and not on this side.

  ROYAL AIR FORCE

    Airborne Units (Aircraft)
    Mr. Ian Harveyasked the Under-Secretary of State for Air how far airborne units are provided with the number of aircraft they require; and to what extent these aircraft are of sufficiently modern design to ensure that these units are potentially effective.
    Mr. Ward: There is no permanent allocation of aircraft for airborne units; aircraft are provided from within the resources of Transport Command. Current types of aircraft cannot drop all types of heavy equipment, but more extensive training will be possible when the Beverley comes into service.
    Mr. Harvey: Is my hon. Friend aware that there is grave concern among those involved in airborne operations that they have inadequate equipment? As it is most important that this arm should be developed in full, will he give this matter close attention?
    Mr. Ward: We shall certainly do our best to fulfil our obligations to the Army in this matter.

    Nerve Gases (Airman's Death)
    Mr. Ian Winterbottomasked the Under-Secretary of State for Air what recognition has been made of the service rendered to the security of this country by Ronald Madison, who lost his life while taking part in experiments to discover an antidote to nerve gases.
    Mr. Ward: I understand that my right hon. Friend the Minister of Pensions and National Insurance has authorised the grant of a pension to the dependants of this airman.
    Mr. Winterbottom: Would the Under-Secretary agree that this might be a convenient opportunity to pay tribute to the services of this young man and his comrades who have taken part in this dangerous experimental work?
    Mr. Ward: I agree entirely and should very much like to associate myself with that tribute.

    Land Occupation
    Mr. Osborneasked the Under-Secretary of State for Air how many acres are occupied by the Royal Air Force; and
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    how much additional land has been taken over in each of the last three years.
    Mr. Ward: 199,500 acres in the United Kingdom are occupied by the Royal Air Force. 2,263 acres of new land were acquired in 1951; 1,534 acres in 1952, and 1,890 acres in 1953 so far. However, these acquisitions have been more than offset by the release, during the same period, of nearly 7,000 acres previously held on requisition.
    Mr. Osborne: Could my hon. Friend give an assurance that agricultural land is not being taken unnecessarily? Can he say how much of the 190,000 acres that are occupied are being cultivated?
    Mr. Ward: I willingly give the assurance for which my hon. Friend asks. We take agricultural land very reluctantly and only when we really must. As regards the second part of my hon. Friend's question, 79,000 acres of airfields in active use are being cultivated. It is not easy to give the exact figures, for other places, such as bombing ranges, although even at these some land is cultivated outside the danger limits.

    Airmen's Sons, Finningley (Corporal Punishment)
    Lieut.-Colonel Liptonasked the Under-Secretary of State for Air whether he has investigated the circumstances in which an officer of the Royal Air Force recently authorised the infliction of corporal punishment upon civilian juveniles at the Royal Air Force station, Finningley, near Doncaster.
    Mr. Ward: I have studied the very full report on this case which has been submitted. These two boys were airmen's sons, and had broken into Royal Air Force property. The station commander acted with the parents' consent in what they thought to be the best interests of all concerned.
    Lieut.-Colonel Lipton: Will the Under-Secretary make it quite clear that it is not within the normal course of R.A.F. duties to administer a system of private justice in competition with magistrates and duly authorised officers? Is it not quite undesirable that this practice should continue, even with the parents' consent?
    Mr. Ward: The action was certainly unorthodox, but no offence seems to have

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    been committed, because the station commander acted with the parents' consent. He was anxious in the boys' own interest that they should not start with a police record so early in life.
    Mr. Peter Freeman: Can the hon. Gentleman say what steps are being taken to prevent a recurrence of such an unjustifiable assault?
    Mr. Ward: None, so far as I am aware.

    Records Office, Ruislip (Discharges)
    Mr. Beswickasked the Under-Secretary of State for Air how many temporary clerks have been discharged in the past two years from the Records Office, Ruislip.
    Mr. Ward: Eighty-two, all of whom were discharged before the office closed down on 16th of May, 1952.
    Mr. Beswick: As the Under-Secretary has been short of clerical officers, would it not have been possible to promote some of these temporary clerks and employ them elsewhere?
    Mr. Ward: At that time there were no vacancies for temporary clerks at the Air Ministry. Therefore, we could not employ them there, but we did everything we could for them at the Employment Exchanges. I understand that at the time no dissatisfaction was expressed.
    Mr. Beswick: Possibly there were no vacancies for temporary clerks, but on the Minister's own showing there were vacancies for clerical officers; I am asking if it would not have been possible to promote some of these men and given them other jobs?
    Mr. Ward: We had no vacancies for established clerical officers that were not filled by the established clerical officers we had.

    Clerical Posts, London
    Mr. Beswickasked the Under-Secretary of State for Air what steps have been taken to fill with suitable civilian personnel the 30 clerical posts in the London area, which were held in August of this year by National Service men.
    Mr. Ward: The recruitment of staff through the Civil Service Commission continues, but civilian staff are not yet available to fill these 30 posts.
    Mr. Beswick: Is not the hon. Gentleman contradicting himself? The fact is that he was dismissing suitable clerical staff at the same time as we are now discussing. Why was it not possible to fill these jobs, held by National Service men, with the civilian staff he was discharging?
    Mr. Ward: I was talking in the first place of when the Records Office moved from Ruislip to Gloucester in May, 1952. The second Question refers to the present day.
    Mr. Shinwell: Is this what the hon. Gentleman, the Government and the Royal Air Force want National Service men for? If civilian labour is available, why not use it and use National Service men for purely military purposes?
    Mr. Ward: These established posts are for established clerical officers. At the moment we are not recruiting temporary civil servants because we expect that very shortly there will be redundancies in other Government Departments in established clerical staffs. We do not want to take on a lot of temporary clerks and make them redundant again.
    Mr. Beswick: Is the hon. Gentleman aware that we are not asking him to take on anyone, but to cease dismissing people who could be employed in positions now held by uniformed Service men?
    Mr. Ward: The hon. Member knows well that the only reason these men became redundant was because we moved the Records Office from Ruislip to Gloucester.
    Mr. Beswickasked the Under-Secretary of State for Air how many other ranks are employed at Air Ministry offices in the London area; and how many of this number so employed are in service trades other than clerks, general duties, organisation, personnel and accounts.
    Mr. Ward: 261 and 152.
    Mr. Beswick: Could not some of these positions held by clerical airmen be filled by the civilian employees who are being dismissed from the Air Ministry and other Departments?
    Mr. Ward: I have just explained that at present we are not taking on temporary clerks.
    Mr. Beswick: May we take it that the people who are being discharged from other Government Departments and the Air Ministry will now be given a chance of filling these positions held at the moment by uniformed airmen?
    Mr. Ward: Yes, certainly. If established clerical civil servants become available from other Departments they will certainly be given a chance of employment at the Air Ministry.
    Mr. Shinwell: Will the hon. Gentleman say quite categorically that it is not the policy of the Air Ministry to employ National Service men on non-regimental and non-military tasks which might be performed by civilians?
    Mr. Ward: I can certainly say regarding the 30 people—
    Mr. Shinwell: Two hundred and sixty.
    Mr. Ward: We are talking about 30 people, as I am answering the third Question. I can give the assurance that as soon as we can fill these 30 posts for established clerks we shall do so.
    Mr. Shinwell: Will the hon. Gentleman be good enough to reply to my question? It is quite a simple one. I want to know whether it is the policy of the Air Ministry to employ National Service men on tasks of this kind when civilian labour is available?
    Mr. Ward: Certainly not.
    Mr. Beswick: In view of the unsatisfactory nature of the replies, I beg to give notice that I shall raise the matter on the Adjournment.

  SHIPPING (OIL POLLUTION)
  Sir T. Mooreasked the Minister of Transport and Civil Aviation if he can now give a report on the result of the international consultations on the subject of eliminating the pollution of the sea by oil.
  The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson): The international consultations that have taken place on this subject since the war have amounted to little more than an interchange of information. As my right hon.
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  Friend indicated on 11th November in reply to a Question by the hon. Member for Cardiff, South-East (Mr. Callaghan), following the issue of the recent Report of the Committee on the Prevention of Pollution of the Sea by Oil, which underlines the urgent need to seek the cooperation of other countries in preventing pollution of the seas, we have decided to invite the principal maritime powers to attend a special conference as early as possible next year.
  Sir T. Moore: Will my hon. Friend recall that it is now some months ago since the former and popular Under-Secretary for Air—whom I am glad to see sitting beside him—assured me that this matter was being taken up urgently with the United Nations with a view to having separators established in order to save the thousands of sea birds which are killed every year?
  Mr. Molson: The recommendation of the Committee was that Her Majesty's Government should seek the agreement of other maritime countries to the fixing of a date after which discharge of oil into the sea would be prohibited. It is in order to obtain that agreement as soon as possible that my right hon. Friend is convening this conference early next year.
  Mr. Awbery: Would the Minister give instructions to our own shipping that they should not eject oil within 10 miles of our own coast?
  Mr. Molson: That is obviously a matter that will arise as soon as an agreement has been reached.
  Mr. G. R. Howard: Does not my hon. Friend think that Her Majesty's Government might take some steps, even before some international action, to give a lead to other nations and show them how we think the problem can best be dealt with?
  Mr. Manuel: Would the Parliamentary Secretary consider a very vexed question that is worrying many seaside local authorities who have spent vast sums of money in keeping their own beaches clear by putting in plant so that sewage will not be distributed along the beaches in their areas? Their whole work is becoming nullified because the discharge of oil on these beaches is destroying bathing facilities and everything else. We

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  should try to set some example so far as our own shipping is concerned that will give a lead to other nations.
  Mr. Molson: I shall certainly take note of the point which has been raised, but it is obvious that the evil to which the hon. Gentleman is referring cannot be rectified merely by British ships taking action. It is essential that we should get international agreement on the subject.

  CIVIL AVIATION

    Foreign Aircraft (Third Party Insurance)
    Mr. R. Harrisasked the Minister of Transport and Civil Aviation when it is intended to introduce legislation to implement the provisions of the Convention on Damage caused by Foreign Aircraft to Third Parties, thus making it compulsory for aircraft owners to insure against such liability.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo): This is under consideration, but legislation is not likely to be practicable this Session.
    Mr. Harris: Will my hon. Friend note that that information will be received with some disappointment, at any rate by the local authorities surrounding London Airport, who are very worried about what might happen if a disaster occurred? Will he please do his best to try to get the legislation brought into this Session?
    Mr. Profumo: I can assure my hon. Friend that the United Kingdom intends to make insurance compulsory for all aircraft flying over United Kingdom territory.

    Helicopter Station, London
    Mr. Doddsasked the Minister of Transport and Civil Aviation what progress has been made since July in arriving at a decision on the best site for a helicopter passenger station in London.
    Mr. Profumo: I have nothing to add at present to the answer my right hon. Friend gave the hon. Gentleman on 21st October, 1953.
    Mr. Dodds: In view of the urgency and importance of this matter and the need for some enterprise, will the hon. Gentleman say that his Department is not over-cautious and will be able to take advantage of this development in the very near future?
    Mr. Profumo: I can assure the hon. Gentleman and the House that there is no lethargy here whatever. There is purely caution as airstop requirements in terms of movement area and obstruction clearances may be greatly affected by the development of such features as stub wings and rotors propelled by tip-jet units. These developments are at an early stage and a good deal of trial and error must be studied before the performance of commercial-sized helicopters can be assessed with reasonable accuracy. The results would affect not only the suitability of a particular site but also the cost.
    Sir Edward Keeling: Will my hon. Friend give an assurance that the effects of helicopter noise on any houses or offices near the proposed station will be considered?
    Mr. Profumo: That would be one of the matters which would certainly be considered.

    Air Safety Regulations
    Mr. Bennasked the Minister of Transport and Civil Aviation what action he is taking to enforce and strengthen the air safety regulations following the Hermes air crash off Sicily in August, 1952.
    Mr. Profumo: In addition to the improvements in the life saving equipment and modifications to the aircraft mentioned in reply to the Question by the hon. Gentleman on 22nd July last, amendments to the regulations will make further provision for practice of emergency drills and for emergency lighting systems in aircraft.
    Mr. Benn: Would the hon. Gentleman explain why it is that the safety regulations on non-schedule airline flights are different from those required by schedule airlines?
    Mr. Profumo: These regulations have now been brought into line.

    Hermes Aircraft (Accident)
    Mr. Bennasked the Minister of Transport and Civil Aviation if he will institute a full inquiry into the circumstances surrounding the crash of the Hermes aircraft off Sicily in August, 1952.
    Mr. Profumo: No, Sir. A thorough investigation was made by the Italian authorities and my right hon. Friend does not consider any further light would be thrown on the cause of the accident by a separate United Kingdom inquiry.
    Mr. Benn: Is the hon. Gentleman aware that four very young children were drowned in this crash; that the dinghies for children could not be found; that no safety instructions were given to the passengers on this aircraft and that the equipment itself was defective? Is he further aware that the Italian report was very critical of the company and the crew, and is it not appropriate that the report should be either published or duplicated in England?
    Mr. Profumo: I have nothing to add to my answer. I have already acquainted the hon. Gentleman with everything I was able to tell him about the report, and there is another Question on the Order Paper about the matter.
    Mr. Beswick: Are we to understand that the report has not been published in England?
    Mr. Profumo: The report has not been published in England.
    Mr. Beswick: Why not?
    Mr. Benn: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall endeavour to raise the matter on the Adjournment.

    Valley Airfield, Anglesey (Diversionary Landings)
    Mr. C. Hughesasked the Minister of Transport and Civil Aviation how many diversionary landings have been made by civil aircraft at Valley Airfield, Anglesey, during the last three years.
    Mr. Profumo: Nine, Sir.
    Mr. Hughes: Is the hon. Gentleman aware that that is a most unsatisfactory reply? Is he aware that Valley is scheduled as the reserve airport for Prestwick? Can he say where aircraft
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    diverted from Prestwick go if they do not go to Valley?
    Mr. Profumo: Some go to Shannon, but we have, of course, no means of compelling operators to use a certain airport if they find that another suits them better.

  ROADS

    Staffordshire
    Mr. Swinglerasked the Minister of Transport and Civil Aviation if he will reconsider the amount of the road grant to Staffordshire, in view of the increasing weight of traffic on the county's roads, the number of danger spots, and the chronic congestion of traffic in principal towns.
    Mr. Molson: I regret that no further grant funds can be made available to Staffordshire in the current financial year, but the considerations which the hon. Member mentions will be given full weight in allocating funds for next year.
    Mr. Swingler: Will not the new Parliamentary Secretary put aside his brief and study the problem with a fresh mind? Is he aware that Staffordshire is receiving a smaller grant than neighbouring counties because its roads happen to be narrower although they are far more used and much more dangerous and, therefore, are in far greater need of repair? Will the hon. Gentleman reconsider the whole basis of allocations, which is grossly inefficient?
    Mr. Molson: I have already had occasion to study the grievances of Staffordshire. Although we hope to allocate more money next year, as I have said, I cannot admit that Staffordshire has so far suffered any injustice. Whereas the average reduction in grant for all the counties in the Kingdom this year was 3·5 per cent., the reduction in the case of Staffordshire was only 1·8 per cent. and, although Staffordshire has not the greatest mileage in the Midland division, the maintenance allocation was the highest. I therefore feel that Staffordshire has not been harshly treated.
    Mr. Snow: Is my hon. Friend aware that those figures mean absolutely nothing unless one takes into consideration the original grants over the years? Secondly,

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    would he call for a report on that section of A5 from Fazeley to Rugeley, which is a perfectly appalling section of a national road that is a direct responsibility of the Government?
    Mr. Molson: My right hon. Friend received in the summer a deputation of hon. Members representing the county of Staffordshire, and as a result of what was said to him then he has given orders that there should be a special investigation of Staffordshire's requirements.
    Mr. Harold Daviesasked the Minister of Transport and Civil Aviation how often the Class I and Class II roads in Staffordshire are re-surfaced; and how this figure compares with the national figure of complete re-surfacing every 42 years.
    Mr. Molson: I am informed that since the war the Class I and Class II roads in Staffordshire have been re-surfaced at an average rate of once every 33 years, which is considerably better than the national average.
    Mr. Davies: Is the Minister aware that if the re-surfacing rate is better than the national average some of us are sorry for the national average? Is he also aware that, after considerable search, the hon. Member for Leek has discovered that the Romans re-surfaced Watling Street, which is a part of the A5 road, at a faster rate than this at the time of the Augustine Empire?
    Mr. Molson: It may be that the quality of the Roman roads was not as high as the quality of the roads today.
    Mr. Harold Daviesasked the Minister of Transport and Civil Aviation the tonnage per mile per week of traffic passing over Class I roads in Staffordshire, as compared with Cheshire and Shropshire.
    Mr. Molson: No comprehensive census in these counties has been carried out since 1938, when the average weekly tonnage of traffic per census point was 31,799 tons in Staffordshire, 29,848 tons in Cheshire and 17,005 tons in Shropshire. The census was based on traffic counted at particular points and no figure can be given indicating tonnage per mile.
    Mr. Davies: While thanking the hon. Gentleman for those figures, may I ask him whether he is aware that they demonstrate the paramount importance of Staffordshire roads to the British economy? Is not he aware that in the industrial axis from Liverpool to London, where about five-sixths of the population of Britain live, access to East and West ports is bound to be taken over the roads of Staffordshire and that, consequently, without just pushing the case for Staffordshire, it is of paramount importance to the British economy to get a further grant for these roads?
    Mr. Molson: If I had ever been in doubt about the importance of Staffordshire to the British economy, I should have been informed upon the subject in the course of the last seven days.
    Mr. Harold Daviesasked the Minister of Transport and Civil Aviation if he is aware of the dangerous condition of most of the Class I and Class II roads in the county of Stafford; and when he will allocate an extra grant to the county for road maintenance and repairs.
    Mr. Molson: My right hon. Friend cannot endorse the suggestion that these roads are dangerous through lack of maintenance, but he will give full weight to Staffordshire's claims to receive more money for road maintenance when allocating funds for next year.
    Mr. Davies: Is the Minister aware that, while we are voting millions of pounds for the defence of this country, it is one of the most foolish acts from a strategic point of view to undermine the standard of our roads? Does he realise that if we had to evacuate London there would be chaos on the ancient roads of Britain?
    Mr. Molson: I can hardly imagine any development of the roads of Britain which would not result in chaos if London had to be evacuated.

    Pedestrian Crossings (Flashing Beacons)
    Mr. Shepherdasked the Minister of Transport and Civil Aviation if he has now been able to assess the value of the flashing crossing light; and what alteration is proposed.
    Mr. Fienburghasked the Minister of Transport and Civil Aviation what

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    evidence he has to support the extended provision of blinking beacons at pedestrian crossings in heavily built-up areas.
    Lieut.-Colonel Uptonasked the Minister of Transport and Civil Aviation whether, in view of the objections by local authorities and motoring organisations to the use of flashing beacons at zebra crossings, he will now abandon this experiment.
    Mr. Molson: This method of indicating pedestrian crossings was decided on after thorough trials of various alternatives. There have been no objections from the motoring organisations, and the local authority associations agreed with the flashing beacon. Road users generally seem to find it an effective warning and, as my right hon. Friend has already announced, he proposes to make flashing beacons compulsory as soon as all local authorities have had time to install the mechanism.
    Mr. Shepherd: Will my hon. Friend take great care, before he makes them compulsory, to consult opinion generally? Many of us feel that these traffic light indicators are very dangerous indeed on dark, badly-lit roads and that on well-lighted roads they add to the confusion of lights.
    Mr. Fienburgh: Did investigations dealing with this type of light include the use of these flashing beacons where a large number of these pedestrian crossings are close to one another, as in centres of large urban areas, where the confusion is such as to increase the danger to the pedestrian rather than reduce it?
    Mr. Molson: The purpose of having flashing beacons instead of steady lights was that it was thought that in illuminated streets motorists would find it easier to see the beacons if they were flashing. If the lamps were steady there would be danger of confusing them with illuminations in shop windows.
    As regards the second question, in the original circular issued by the Ministry of Transport it was said to be undesirable that where these crossings were close to each other the light should synchronise. We have changed our view about that as a result of experience, and we now think that it will be less confusing to motorists where the crossings are close together
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    that lights should synchronise. It is my right hon. Friend's intention to alter the circular in that respect.
    Lieut.-Colonel Lipton: Is the Parliamentary Secretary aware that there is a growing volume of opposition to the continuance of what has proved to be a "blinking flop" rather than anything else? Will he give serious consideration to the increasingly powerful arguments being advanced against the extension of this scheme?
    Mr. Molson: We are certainly willing to learn by experience. This is an experiment in an attempt to make the crossing of roads safer. There are all kinds of arguments for and against, and if as a result of experience and further discussion something better can be devised, we should be willing to adopt it. We are willing to listen to representations on the subject.
    Mr. Callaghan: In that case, will the Parliamentary Secretary keep in mind that one way of solving this problem is to have clear illumination of the crossings from overhead?
    Sir A. Hudson: Would my hon. Friend look at Sloane Square where there are about 20 of these signs, which are very confusing, particularly on wet nights, and also illuminated advertisements, which make the place look exactly like Battersea Park on festival night?

    Street Works (Traffic Control)
    Mr. Russellasked the Minister of Transport and Civil Aviation if, in order to minimise the risk of accidents and also delays in traffic where street works are in progress, he will now make Regulations under Section 8 of the Public Utilities Street Works Act, 1950, prescribing uniform methods of traffic control during the progress of street works.
    Mr. Molson: Regulations are in force under the London Traffic Act, 1924, relating to the lighting and marking of street works in the London traffic area and my right hon. Friend is ready to consider whether further measures are necessary either inside or outside London. Perhaps my hon. Friend would indicate rather more precisely the scope of the regulations that he has in mind.
    Mr. Russell: Is my hon. Friend aware that there are many different systems of

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    control in use, ranging from traffic lights automatically controlled to those controlled by hand and also the old fashioned method of flags? Does he not think that all these different controls make for a great deal of confusion?
    Mr. Molson: My right hon. Friend has not in fact made Regulations under Section 8 (2) of the 1950 Act, which applies to other parts of the country than London. The reason is that he is not convinced that they are necessary in view of the obligations imposed upon the statutory undertakers, and he is not at present convinced that it is desirable because of the variation in local conditions. But this matter is under consideration and we shall bear in mind what my hon. Friend has said.

    Tay Road Bridge
    Mr. G. M. Thomsonasked the Minister of Transport and Civil Aviation whether he will consult with the local authorities concerned with a view to initiating preliminary steps in connection with a Tay road bridge similar to those already undertaken in connection with a Forth road bridge.
    Mr. Spenceasked the Minister of Transport and Civil Aviation if he will arrange for the preparation of estimates for the construction of a new road bridge over the Tay at Dundee and of a dual carriageway trunk road from Forth to Tay in order that the project of an East Coast route can be viewed as a whole.
    Mr. Molson: I do not think that estimates or preliminary steps would serve any useful purpose at the present time. The construction of such a bridge and trunk road would be very expensive and in my opinion would not be justified in the foreseeable future by the volume of traffic likely to benefit.
    Mr. Thomson: On what strange concept of justice is the Minister refusing in the case of the Tay road bridge to take the very modest step taken in the case of the Forth road bridge?
    Mr. Molson: It is quite obvious that if steps are taken in the case of one bridge, that is the reason why there is less money available for taking similar steps in the case of another bridge at the same time. In point of fact there is
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    nothing like the same amount of traffic likely to cross the Tay as there is crossing the Forth, and therefore in terms of priority the Tay bridge comes a long way behind the Forth bridge.
    Mr. Spence: May I ask the Minister to have another look at this question with special regard to the road north from where the new Forth road bridge may be built? The exit from North Queens-ferry is very bad. May I also ask if he is aware of the position of the bridge further up the Forth which was recently opened, and where the south approach is only now being made?
    Mr. Hamilton: Would the Minister agree that it would help enormously in deciding the importance of projects if we could have a list of priorities?
    Mr. Molson: So far as the road is concerned, we have approved in county development plans the provision of a double carriageway trunk road from the proposed Forth bridge to cross the Tay. That matter is approved in principle for the future. Regarding the publication of priorities, they are indicated each year when the Estimates have been approved and the programme is made known.
    Mr. H. Morrison: As the Parliamentary Secretary has said that the priority of the Tay bridge is a long way behind that of the Forth bridge, will he say what is the priority of the Forth bridge?
    Mr. Molson: It is higher than that of the Tay bridge.
    Colonel Gomme-Duncan: May I ask my hon. Friend, as he has said that a double carriageway is planned between the Forth and the Tay, if it is not urgent to have some plan, at any rate at the blue-print stage, for carrying out what obviously is the intention?
    Mr. Molson: I will gladly consider the possibility of that, but it is a matter of making plans for the unforeseeable future.

    Junction, Cardiff
    Mr. G. Thomasasked the Minister of Transport and Civil Aviation whether he is aware of the danger existing at the junction of Sanatorium Road, Grosvenor Street and Lansdowne Road, Cardiff; and what action he proposes to take.
    Mr. Molson: I have no information that this junction is specially dangerous. The initiative for any improvement rests with the Cardiff City Council as the highway authority.
    Mr. Thomas: Surely the Minister is not unaware of the accidents that have taken place at this spot and, at least, has made some inquiries since this Question was put on the Order Paper? Am I to assume that he knows nothing at all?
    Mr. Molson: That would be a mistaken assumption. The accident record for the junction in question, as supplied by the City Police for the last three years, covers six accidents of which four involved only slight personal injury. The junction compares favourably with many similar junctions in Cardiff as regards the number of accidents. That perhaps is the reason why the Cardiff City Council has not made any representation to the Ministry on the subject.

    Unadopted Road, Newcastle-under-Lyme (Repairs)
    Mr. Swinglerasked the Minister of Transport and Civil Aviation if, in view of the action taken by his Department 11 years ago to repair the road between Silverdale and Crackley Gates in Newcastle-under-Lyme, he will now determine the responsibility for the maintenance of this road and take steps to put it in a reasonable condition.
    Mr. Molson: Though repairs to this road were done at Government expense as a war-time measure, it is an unadopted road and my right hon. Friend has no power to determine the responsibility for its maintenance. However, if it is repaired and the two councils concerned adopt it, we would favourably consider an application for its classification.
    Mr. Swingler: Does that mean that the Minister can do nothing to see that this road is made up? Does he know of the absolutely shocking state of the road on which the bus men have to do voluntary maintenance to fill in the worst potholes because nobody will take responsibility for it? Cannot the Minister say who is responsible for the road?
    Mr. Molson: It is a private road connecting two mining villages. It would be open to the two councils concerned
    1714
    to adopt it. In that case, as I have said, the Ministry of Transport would do what it could to help in a financial way.

    A6 (Shap to Hucks Brow)
    Mr. Vaneasked the Minister of Transport and Civil Aviation when he anticipates that the stretch of A6 from the top of Shap to Hucks Brown will be widened to allow three lines of traffic.
    Mr. Molson: In view of the proposal to construct a new road through the Lune Valley, it is not at present proposed to widen the existing road.
    Mr. Vane: Will my hon. Friend see whether he cannot arrange for the widening of the existing road at least at the most difficult points, because this road—which is much more important than any in Staffordshire or the road between the Forth and the Tay—carries very heavy traffic and in winter one heavy vehicle in difficulties is sufficient to block the traffic both ways? Is not he aware that a small amount of work would make a large amount of difference?
    Mr. Molson: If my hon. Friend can show how it would be possible without undue expenditure to relieve the pressure, with which I am familiar, on the Shap Road, we should certainly be very glad indeed to consider his suggestion. Perhaps my hon. Friend will have a word with me about it.
    Sir I. Fraser: In view of the delay which unfortunately must elapse before the Lune Road is dealt with, will not my hon. Friend give very serious consideration to what was suggested by my hon. Friend the Member for Westmorland (Mr. Vane), because the position is most desperate?
    Mr. Molson: I have already said that if my hon. Friend will raise the matter with me, I will go into the position most carefully.
    Sir I. Fraser: Will my hon. Friend receive a deputation?

    Slough
    Mr. Fenner Brockwayasked the Minister of Transport and Civil Aviation what reply he has given to the Association of British Chambers of Commerce regarding the need for a national plan of

    1715
    road improvement; to proposals by the Slough Chamber of Commerce for a northern by-pass to relieve the congestion in Slough High Street; for bridge improvements at Uxbridge Road, Wexham Road, Dover Road and Leigh Road; and for junction improvements where service roads meet the main road.
    Mr. Molson: My right hon. Friend has discussed fully and sympathetically with a deputation from the Association of British Chambers of Commerce their case for an expanded programme and has undertaken to consider their representations. As the reply to the other points in the hon. Member's Question is rather detailed, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Brockway: Will the hon. Gentleman pay special attention to the need for a by-pass to relieve Slough on three grounds: first, the need for an outlet from West London to the West; secondly, the danger of accidents in the congested area; and, thirdly, the fact that £183,000 has already been tied up in this scheme and that ever since 1939 there have been bridge foundations at Bray which cost £63,000 and which are still lying waste there?
    Following are the details:
    I have no knowledge of proposals having been made to me by the Slough Chamber of Commerce about a northern by-pass or about bridge improvements in Uxbridge Road and Wexham Road. I have replied to representations from them about bridges in Dover Road and Leigh Road that, as these are on unclassified roads, the cost of reconstructing them would not be eligible for grant, but that any application from the highway authority for authorisation under Defence Regulation 56A or for loan sanction would receive consideration. A meeting has been held with the Slough Chamber of Commerce to discuss conditions at the junction of a service road with Bath Road and experiments are now being carried out to ascertain whether the provision of a refuge as suggested at the meeting would be a satisfactory solution.

  TRANSPORT

    Traffic Indicators (Flashing Lights)
    Mr. Shepherdasked the Minister of Transport and Civil Aviation if he will state the technical considerations which led him initially to condemn the flashing light indicator.
    Mr. Molson: We never, in fact, condemned flashing light indicators but as, in all questions of this kind, there are arguments on both sides and it is necessary to weigh arguments on both sides before a final decision is taken.
    Mr. Shepherd: Does not my hon. Friend think it strange to find his Department changing its mind about the flashing light indicator because, firstly, it was condemned by his predecessor in the House; and secondly, two motorists in Stockport were fined for using it? Does he not think the failure of his experts to appreciate the value of the flashing light indicator is a serious reflection on their competence?
    Mr. Molson: My predecessor said in reply to a Question on 23rd June that there were a large number of technical objections—that was in fact the case—and that there were also a large number of arguments in favour of legalising this particular indicator. That is what is now being done.

    Lyneham—London Bus Service (Licence)
    Mr. Ian Harveyasked the Minister of Transport and Civil Aviation why he decided not to allow the appeal by G. & K. Barnes to operate an omnibus service from Lyneham to London in view of the fact that they had previously run this service for a considerable time and that a satisfactory alternative service is not now being provided.
    Mr. Molson: As my right hon. Friend said in his letter of 31st August to the parties, all the facts and circumstances of the case were carefully considered, together with all the representations made by the parties at the inquiry into the appeal, before he decided to accept the Inspector's recommendation. His conclusion was that it was not necessary or desirable in the public interest to grant the licence having regard to the alternative facilities already available to meet the needs of the airmen.
    Mr. Harvey: Is my hon. Friend aware that there is a suggestion in this decision that the interests of a nationalised industry were placed before that of the user, and will he in future bring an element of Tory reform to bear on his Department's policy in these matters?

    Highland Transport
    Lord Malcolm Douglas-Hamiltonasked the Minister of Transport and Civil Aviation what action he has taken, or proposes taking, on the Inverness Chamber of Commerce Report on Highland Transport problems sent to him on the 1st May, 1953.
    Mr. Molson: The Report covers a wide range of subjects, and I cannot deal with all of them in this answer. As regards railway charges, this is a matter for the interests concerned to take up in the first instance with the British Transport Commission, and if necessary with the Transport Tribunal. Delegation of regional authority is similarly a question primarily for the Commission in connection with their plans for re-organisation under Section 16 of the Transport Act, 1953. As has already been announced, special financial provision has been made for the improvement of Highland roads. Any increase in the existing subsidy for steamer services in the Western Highlands would require the approval of the House.
    Lord Malcolm Douglas-Hamilton: Is my hon. Friend aware that the Inverness Chamber of Commerce had not up to the end of last month received even an acknowledgment of the report? Does he realise that the apparent continued indifference of the Government to Highland transport problems is causing exasperation in the North? Is there not a precedent for intervention by the Minister when transport charges injure a community, as in the case of the London area?
    Mr. Molson: I am extremely sorry if by inadvertence the report was not acknowledged. It has certainly been received and is being given careful consideration. I agree that in certain circumstances there may be occasion for intervention, but not when machinery for the consideration of rates has been provided by Statute.
    Mr. Woodburn: Can the hon. Gentleman say whether his right hon. Friends have yet produced any plan to deal with the situation arising from the disorganisation of road transport in the Highlands?
    Mr. Molson: I am not aware of any "disorganisation" of road transport in the Highlands. As the right hon. Gentleman
    1718
    knows, the whole question of road transport is being dealt with at the present time.
    Mr. Woodburn: Is the hon. Gentleman aware that the Government recently passed an Act disorganising road transport in the Highlands?

    Foreign Service Men (Third Party Insurance)
    Mrs. Braddockasked the Minister of Transport and Civil Aviation whether his regulations in respect of insurance of the car, road tax and holding a British driving licence are imposed on foreign service men in Britain who own a private car, in the same way as they are imposed on British subjects who own a private car.
    Mr. Molson: Members of Visiting Forces are subject to the same legal obligations as British subjects in respect of the insurance and licensing of their private cars, with the one minor exception that no licence duty is payable for the first 90 days for a car which such a person brings into this country with him. They are also required to hold British driving licences, but these are granted without a driving test to members of a Visiting Force, in common with other temporary visitors to Great Britain, if they hold driving permits issued by the authorities of their own country.
    Mrs. Braddock: Can the hon. Gentleman say who is responsible for ensuring that a foreign service man who drives a car in this country complies with British regulations? Is he aware that there have been instances where British civilians have been killed by foreign service men who have been driving their own cars and that the relatives of the British civilians have no recourse to British law for compensation? Will he take some steps to deal with the matter or at least tell the House who is responsible and what steps can be taken to ensure that there is compliance with British regulations?
    Mr. Molson: It is the duty of the British police to see that the ordinary regulations are complied with. With regard to the second point, I think the hon. Lady is referring to a case which she took up with the Foreign Office. I understand that she has not responded to

    1719
    the invitation of my hon. Friend, one of the Joint Under-Secretaries of State for Foreign Affairs, to convey to him the further details upon the subject for which he asked.
    Mrs. Braddock: That case is an entirely different matter. What I want to know now is, if the British police authorities are responsible for dealing with these matters, how is it that they cannot take any action at all against a visiting foreign service man who commits a crime in this country by killing someone when using a car which is not insured? What are the responsibilities of the British police in this matter?
    Mr. Molson: If a breach of the regulations was committed, the police would make representations to the military authorities or whoever was responsible for the Visiting Forces
    Mr. Ede: Will the hon. Gentleman look up the debate we had in the House when this matter was dealt with by legislation and see if the promise then given by the Ministry that the law of this country could and would be enforced can be carried out in the case of uninsured cars being on the road?
    Mr. Molson: A civil action would lie. I will certainly look up the matter and see if any undertaking which was given has been carried out.
    Mr. Ede: Surely the hon. Gentleman knows that to drive an uninsured private car on the roads of this country is a criminal and not a civil matter?
    Mr. S. Silverman: Does the hon. Gentleman really mean to tell the House that under the existing arrangements between this country and the United States a service man belonging to the United States forces who drives a private car without insurance and without a driving licence can be prosecuted in the British courts?
    Mr. Molson: I should be glad if the hon. Gentleman would put that Question on the Order Paper. I was asked what the regulations on the subject were, and I have answered that. I should like to see a Question on the Order Paper before I state exactly what the correct procedure would be in the event of a breach of the regulations.
    Mrs. Braddock: In view of the unsatisfactory nature of the reply, I give notice that I shall raise the matter on the Adjournment.

    Road Haulage Disposal Board (Report)
    Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation whether he has yet received the report for the first six months of the Road Haulage Disposal Board; and when he expects to make it available to hon. Members.
    Mr. Molson: My right hon. Friend has not yet received this report. When he does he will lay a copy before each House as required by Section 2 (9) of the Transport Act, 1953.
    Mr. Davies: Why has the report been delayed in view of the fact that during the period no invitation was issued for tenders for the purchase of vehicles? In view of the statement issued yesterday concerning tenders, is it not clear that the vehicles will not be sold this year, which was the hope originally expressed by the Minister, or next year, and perhaps many of them never?
    Mr. Molson: No, Sir, none of those things is at present obvious. There has inevitably been delay in holding the first auction. As the hon. Gentleman knows, the auction was advertised in the newspapers yesterday. We have no reason to suppose that the report will not be presented to the House within the very near future.
    Viscount Hinchingbrooke: Will my hon. Friend accept the congratulations of this side of the House upon the expedition with which the sales of these units are now being organised?

    C Licences
    Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation the latest available figures of the number of C licences current and the number of operators relative thereto: and what increase this represents over the figure at 31st October, 1951, or for the nearest date for which figures are available.
    Mr. Molson: At 31st October, 1953, "C" Carriers' licences covering 430,756 operators and 861,953 vehicles were in

    1721
    force. This represents an increase of 30,618 operators and 74,546 vehicles over the figures at 31st October, 1951.
    Mr. Davies: Since the number of C licences continues to increase despite the Government's transport policy, will the Government now argue that the increase is due to their denationalisation policy in the same way as they formerly argued that the increase was due to the nationalisation policy of the Labour Government?
    Mr. Molson: The hon. Gentleman is not fully aware of the figures relating to the matter. It was in October, 1951, that denationalisation of road transport became a practical political issue.
    Mr. Callaghan: It is not that yet.
    Mr. Molson: The rate of increase of C licences in 1950–51 was 8 per cent. It fell to 5 per cent. in 1952. The increase for the first 10 months of 1953 is only 3 per cent., which represents an annual rate of rather less than 4 per cent. The figures point to exactly the opposite conclusion to that which the hon. Gentleman has drawn.
    Mr. Davies: Is it not a fact, first, that C licences have continued to increase, and, secondly, that the percentage increase was already declining steadily under nationalisation, with the number of new C licences taken out being less month by month as the success of British Road Services was appreciated.
    Mr. Molson: I have already pointed out that the rate at which C licences are now increasing is declining rapidly.
    Sir H. Williams: On a point of order. We have only reached Question No. 41, and the reason is the interminable length of many supplementaries. I wonder whether it would be possible, Mr. Speaker, to have a class of instruction in a Grand Committee Room in order to teach Members how to ask snappy questions?
    Mr. Speaker: We should have reached an even lower figure on Questions if I had taken all the supplementary questions which hon. Members desired to ask. I hope that hon. Members will try to keep their supplementary questions short and to the point.
    Mr. John MacLeod: Can it be noted that Scottish Questions are not on the Order Paper today?
    Mr. Speaker: There were some Scottish Questions on transport matters, and they have taken their normal time.

PROHIBITED AREAS, KENYA (BOMBING)
Mr. James Griffiths (by Private Notice)asked the Secretary of State for the Colonies whether he has any statement to make about the decision to use heavy bombers in Kenya.
The Secretary of State for the Colonies (Mr. Oliver Lyttelton): As I informed the hon. Member for South Ayrshire (Mr. Emrys Hughes) on 6th May last, Harvard aircraft have been used to drop bombs on known hiding places of terrorist gangs in the prohibited areas in Kenya. They are also used for reconnaissance. These prohibited areas, mainly the forest ranges of the Aberdares and Mount Kenya, are known to everyone, and there is no risk to law-abiding persons. Harvard aircraft are single-engined machines, have a limited range and can only drop small bombs.
General Erskine has asked for the use of a small detachment of Lincoln aircraft from the Middle East. He hopes that their long range and endurance will enable them to carry out more effective reconnaissance, and where targets present themselves to drop heavier bombs. There has been no change in policy concerning the use of aircraft. No bombing or other armed action by aircraft is permitted outside the prohibited areas.
Mr. Griffiths: May I ask the Secretary of State whether his attention has been called to reports that we are now to engage in what is called "pattern bombing," as distinct from target bombing, and whether he will now say exactly what that means? Does it not perhaps involve the loss of innocent lives as well? Secondly, may I ask the right hon. Gentleman whether his attention was called to the statement made by General Erskine on 21st October and reported in the Press on 22nd October, from which I quote:
"Though the situation was now much better, there was no military answer to Kenya's problems."

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General Erskine further stated:
"The problem is now purely political—how Europeans, Africans and Asians can live in harmony on a long-term basis. If the people of Kenya could address themselves to this problem and find a solution, they would have achieved far more than I could do with security forces."
In view of this statement, may I ask the right hon. Gentleman two further questions? First, will he consider the political repercussions of this statement; and will he reconsider his decision? Further, will he consult the Governor in order to make the Emergency Council in Kenya representative of all communities, so that their views on the political repercussions of military action may be considered? Secondly, in view of the recent statement by Mr. Blundell and Mr. Mathu will he consider reconvening the 1951 conference on further political action in Kenya.
Mr. Lyttelton: On the first point, I think the definition of "pattern bombing" applies to a large number of aircraft when they all release their bombs at once over a wide area. I think that is so. We are only talking now about four Lincoln aircraft.
With regard to the other question, which frankly appears to me to go very much wider indeed than the original Private Notice Question, of course, when General Erskine referred to these matters he was speaking generally. There is no doubt whatever that political advancement is now the subject of discussion, and consideration of the proposals put forward by Mr. Blundell is being retarded by the presence of these armed gangs in the forest areas. They have to be dealt with if we are to expect any great advance on the other fronts, but I assure the right hon. Gentleman that both the Governor and Her Majesty's Government are well aware of the need for an advance on the political and social fronts and that there is no reason whatever to cancel the instructions to try to comb out these gangs from the forest.
Mr. Griffiths: Do I gather from the answer which the Minister has now given that the term "pattern bombing" used here is not a reference to indiscriminate bombing over a wide region, because that impression was given by the report? Secondly, in view of the proposals of Mr. Mathu, as well as those of Mr. Blundell,
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will the Secretary of State now make an early statement on when this conference can be reconvened?
Mr. Lyttelton: I am not prepared to do that at the moment, because informal discussions are taking place. With regard to "pattern bombing," I do not think that is a phrase that has been used from any official source; I would not be sure, but I do not think so. Moreover, it is completely inapplicable to the number of aircraft involved, and also to the fact that the bombing takes place in prohibited areas where it is unlawful for anybody to be at all.
Mr. F. Harris: Will my right hon. Friend make a statement in regard to the report which has just been received that three Europeans were killed this morning by Mau Mau in Kenya, and that other Europeans and Africans were injured?
Mr. Lyttelton: No, Sir; I am not in a position to do so.
Mr. Edelman: Will the right hon. Gentleman say whether it is the case that the penalty for being in a prohibited area is death; and if the penalty is not death, whether it is not savage to use "pattern bombing" on anybody who might find himself in a prohibited area?
Mr. Lyttelton: I do not say that the term "pattern bombing" is the correct one, and if anybody endangers his life by being in a prohibited area, there is a very simple remedy, and that is to come out.
Mr. Hale: Did not the right hon. Gentleman assure the House a few weeks ago that Kikuyu tribesmen were being compelled to join Mau Mau or to go to Mau Mau and were being taken by force into these prohibited areas? Does not this represent a policy of extermination of innocent people? Is it justified by any law of any kind, and what defence will the right hon. Gentleman have against an indictment for murder brought against him and all other persons carrying out this policy?
Mr. Lyttelton: I really think the hon. Gentleman is very wide of the mark. All that we are dealing with here are gangs, and he should have addressed his question to the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths), because the policy we are now pursuing is precisely similar to that pursued in Malaya, where Lincoln bombers were used in 1950.
Mr. Griffiths: The right hon. Gentleman said there was no "pattern bombing."
Mr. Lyttelton: The right hon. Gentleman again raises this question. The term "pattern bombing" does not come from official sources, and I have already said that I regard it as inaccurate. I would refer the right hon. Gentleman to the reply which he himself made on this subject when he was asked on 25th October, 1950, by the hon. Member for South Ayrshire (Mr. Emrys Hughes) to reconsider the whole policy of using bombers in Malaya. He replied:
"This is a matter which I would prefer to leave to the Director of Operations in Malaya."—[OFFICIAL REPORT, 25th October, 1950; Vol. 478, c. 2772.]
We are not so leaving it in this case of Kenya.
Mr. Alport: Are not the jungle conditions in Kenya precisely the same as existed in Malaya? Were not these areas used for training in jungle operations in Malaya during the last war, and, therefore, the circumstances are exactly parallel to the conditions in Malaya itself?
Mr. Lyttelton: I think that is so.
Several Hon. Members rose—
Mr. Speaker: We cannot debate this matter further at Question time.
Mr. Hale: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, to call attention to a definite matter of urgent public importance, namely,
"The decision of Her Majesty's Government to utilise in Kenya Lincoln bombers in a new policy of large-scale bombing of British citizens of African birth."
May I say, in support of this Motion, as I am entitled to do—
Mr. Speaker: The hon. Gentleman should bring his Motion up to me. The hon. Gentleman asks permission to move the Adjournment of the House, under Standing Order No. 9, on a definite matter of urgent public importance, namely,
"The decision of Her Majesty's Government to utilise in Kenya Lincoln bombers in a new policy of large-scale bombing of British citizens of African birth."
I cannot find that that is at all within the Standing Order.
Mr. Bowles: On a point of order—
Mr. Speaker: I will deal with this point. I must deal with it first.
Mr. Bowles: I have a point of order.
Mr. Speaker: The hon. Member can rise to his point of order when I have sat down. The hon. Member who asked leave to move this Motion must place it as a definite matter of urgent public importance. The statement I have heard today from the Minister really means that, though the use of aircraft has been going on in Kenya—so the use of aircraft as such is not urgent or new—a new aircraft is being used, one of longer range. I cannot see that that is an urgent matter of public importance such as to justify me in interrupting the Orders of the Day for this Motion.
Mr. Bowles: The point I was seeking to make is rather serious, and is almost irrelevant now. It is that my hon. Friend should be allowed to make his submissions to you before you come to any decision. It is difficult for the occupant of the Chair to change his mind when he has come to a decision. In future, I suggest that you should hear submissions from hon. Members who raise points in this House before any prima facie Ruling is given. This is not making any criticism of your decision. I remember the Leader of the Opposition—[Interruption.] We are now allowed to make submissions to you, I assume, Sir?—in 1936 successfully moved the Adjournment of the House during the middle of the Spanish civil war as a definite matter of urgent public importance, in spite of the fact that the war had been going on for some time. I would ask you to have regard to that decision given by your predecessor, Mr. Speaker FitzRoy.
Mr. Speaker: With regard to the first point, naturally I will consider what the hon. Member says. I am acting in accordance with the practice, and I do not propose to alter it without deep consideration. With regard to the second matter, the ground of my decision is not that the emergency is still in progress in Kenya, but that I see no definite matter of urgent public importance in the use of one aircraft instead of another. There has been no Question put and no evidence given of any use of these aircraft in any exceptional way which might raise another matter. Clearly it is not within the Standing Order.
Mr. Hale: May I call your attention, Mr. Speaker, to a literary authority on the matter, Lewis Carroll, who pointed out the difficulty in which applicants are placed if the verdict is given before the evidence is heard? I would also respectfully call your attention to the fact that you quoted a statement made by the Colonial Secretary today without giving me an opportunity of quoting my side of the facts, so as to have the facts put from both sides of the House. The facts I wished to submit to you are these: the Colonial Secretary has said more than once that there are more people than the Mau Mau in the Aberdare forest, people who are being compulsorily recruited, being taken there by force, and being kept there as prisoners; therefore there are innocent people in the Aberdare forest who will be liable to suffer from this bombing.
On the question of degree, it may very well be argued that there is no material difference in nature between the stink bomb and the atom bomb, but I venture to say that there is a difference in the moral sense of this country in regard to the use of the atom bomb even in time of war.
There is this additional matter. The right hon. Gentleman has said that Harvard aircraft take off from land quite near and do not have to pass over any populous area. The Harvards are short-distance aircraft, easily manœuverable. They can take off from any short space. There is the important fact that I wish to put to you as a matter of common knowledge of which you can take judicial notice that throughout the war towns in Holland and Belgium were being destroyed by accident as bombers passed over them. It is not therefore accurate to say that the introduction of new, modern bombers in a place like Kenya can be done without risk to the civilian population.
This is a grave decision and a matter of great importance. It means that British citizens who are innocent may be killed tomorrow. There can be no greater urgency than that and no greater reason for moving the Adjournment.
Mr. Speaker: These arguments are really out of order. I gave careful consideration to this matter. I anticipated that such a Motion might arise when I saw the Private Notice Question. I
1728
have given my decision after the deepest consideration. There is nothing new in what the hon. Gentleman has said that was not before my mind when I came to the decision. There is no question here of atom bombs or stink bombs, and there is nothing before the House of that nature. There has been no change at all in the policy which has been pursued of using aircraft in this emergency. I do not see that the substitution of one aircraft for another alters the matter at all.
Mr. Warbey: On this question whether or not there has been new development in policy, according to reports in the Press, confirmed, I believe, by what the Colonial Secretary said today, this matter was referred by the Director of Operations on the spot to the Cabinet, and the decision embarked upon, this new development of bombing, was taken at Cabinet level. Do not that fact and the fact that the matter should be referred to the Cabinet in themselves indicate a new development?
Mr. Speaker: There would be difficulties if every matter decided by the Cabinet became the subject of a Motion under Standing Order No. 9. Lots of matters are decided by the Cabinet. I have no knowledge, anyhow, of that except what the hon. Member tells me.
Mr. S. Silverman: May I put two short points to you? If this development involves nothing which is either new or urgent, how came it to be allowed—as it did not come from the Leader of the Opposition—as a Private Notice Question? Secondly, if the change is one from a small aircraft flying locally and using minor armaments to the use of much larger aircraft flying larger distances with immensely more powerful and more destructive armaments, does that not amount to a change, in view of the increased destruction and the wider area of destruction that are obviously involved?
Mr. Speaker: As regards the first point, there is no necessary connection at all between my allowing a Private Notice Question and allowing a Motion for the Adjournment of the House. I frequently allow a Private Notice Question on a matter which I think is of interest to the House. When the right hon. Gentleman asked leave to put this Question, I

1729
thought it was a proper Question for him to ask and I allowed it. That does not by any means settle the question whether I shall accept the Motion of the hon. Member for Oldham, West (Mr. Hale).
As regards the second part of the point put by the hon. Member for Nelson and Colne (Mr. S. Silverman), I have covered that entirely in what I have said. I do not think there is anything new here solely because another type of aircraft has been used. No evidence of the use of bombs from these aircraft is yet before the House.
I assure the House that this is not a decision I have come to for any other reason than a desire to save the House from undue interruption of its business on matters which do not comply with the Standing Order. I further assure the House that I have given the matter careful consideration, and I hope that the House will accept my decision.
Mr. Fenner Brockway: In view of your Ruling, Mr. Speaker, may I ask you whether, if this bombing does take place on a large scale over a wide area involving great loss of life, you will then be prepared to accept such a Motion, despite the Ruling you have given today?
Mr. Speaker: It is always a very unwise thing to answer hypothetical questions. The events themselves must be clearly established and a proper shape given to them before I could give a useful opinion to the House upon them.
Mr. I. O. Thomas: Arising out of your Ruling, Mr. Speaker, can you indicate what size the bombers used will have to reach before the matter becomes one of urgent public importance?
Mr. Harold Davies: Would I be in order, Mr. Speaker, in appealing to the Government Chief Whip on this occasion to move the Adjournment of the House, in view of the fact that the matter has necessitated a special Cabinet meeting and that the change of policy involved is of such vital importance to Her Majesty's subjects to whom the party opposite wishes to be loyal?
Hon. Members: Answer.
Mr. Speaker: Order.
Mr. Thomas: May I have an answer to my question, Mr. Speaker?
Mr. Speaker: I am afraid that the hon. Member's question is another one in the hypothetical range. I could not possibly give an answer on that matter. As far as the present position is concerned, we have no evidence that any bombs have been dropped from these aircraft, and that is the position before us.

BRITISH GUIANA CONSTITUTION (ORDER IN COUNCIL)
Mr. Hale: I gave notice, Mr. Speaker, that I proposed to seek your guidance on a different subject, but may I first of all sincerely apologise to the right hon. Gentleman the Secretary of State for the Colonies for not giving him notice on the matter? I had intended to do so, but I was preoccupied this morning, and I knew that in any event he was going to be here.
I want to raise the question of the British Guiana Constitution Order which was down on the Order Paper on 5th November as being laid, a copy of which is known to have been placed in the Library of the House of Commons and that of the House of Lords on 5th November.
This is no normal Statutory Instrument. It is, in fact, a draft of an Order in Council designed to alter the whole Constitution of a British Colony, to substitute government by the Governor for the time being, and then to substitute vicarious government by the Governor by a Council of 24.
That Order is still not available in the Vote Office, 14 days after we were told that it had been laid. Under the British Guiana Act, 1928, this is an Order which has to be prayed against within 21 sitting days of the House, subject, of course, to the Amendment of Statutory Instruments Act, 1946, which extends the period to 40 days.
The matter on which I am seeking your guidance, Mr. Speaker, is not merely the grave lapse of time. The Colonial Secretary, in answer to a Question by the hon. Member for Eton and Slough (Mr. Fenner Brockway) as far back as last Thursday, promised that it would be available within two or three days. Apart from the grave lapse of time so far as this House

1731
is concerned, and the fact that it is not available for discussion, it is the fact that during all this time no one in the British Colony knows what is the law. People who want to bring actions have no way of finding out what the facts are. The document is only available in the Library of the House of Commons and cannot be seen by them at all, and we are again told that it may be a day or two before it is available.
Mr. Speaker: The hon. Member gave me notice and asked me a question about it. It really has nothing to do with me at all, but, in order to try to comply with the hon. Member's request, I made some inquiries. It seems that the position is that a small number of copies of this Order will be delivered to the Vote Office within two or three days. There are two copies at present in the Library for the use of hon. Members. That is all I have been able to find out.
Mr. Lyttelton: May I add something to what you have said, Mr. Speaker? I am sorry if any inconvenience has been caused to hon. Members, but I can inform the House that 100 copies of the Order in Council will be available in the Vote Office after 5 o'clock tonight.
Several Hon. Members rose—
Mr. Speaker: We cannot proceed with this matter any further now. It is most irregular.

PRIVATE MEMBERS' BILLS
  SLAUGHTER OF ANIMALS (AMENDMENT) BILL
  "to implement certain recommendations of the Committee of Inquiry into the Slaughter of Horses, and otherwise to amend the enactments relating to the slaughter of animals," presented by Mr. Moyle; supported by Sir Robert Cary, Mr. T. Williams, Mr. Stokes, Mr. Maclay, Mr. J. Morrison, Mr. Wallace, Mr. Elwyn Jones, Mr. Ross, Miss Burton, Miss Herbison and Colonel Clarke; read the First time; to be read a Second time upon Friday, 29th January, and to be printed. [Bill 16.]
  PROTECTION OF ANIMALS (ANAESTHETICS) BILL
  "to repeal the Animals (Anæsthetics) Act, 1919, and to extend the provisions of the Protection of Animals Acts in relation to the performance of operations on animals," presented by Viscountess Davidson; supported by Miss Bacon, Mr. Finlay, Colonel Gomme-Duncan, Mr. Anthony Greenwood, Sir Arnold Gridley, Mr. Mulley, Mr. Paton, Miss Pitt, Miss Ward, Mr. Willey and Sir Herbert Williams; read the First time; to be read a Second time upon Friday, 12th February, and to be printed. [Bill 17.]
  SAFETY IN EMPLOYMENT (INSPECTION AND SAFETY ORGANISATION) BILL
  "to ensure the representation of employees in the establishment and maintenance of standards and conditions of safety and health in employment; and for the national co-ordination and co-operation of interested parties in matters of occupational safety and health," presented by Mr. William Paling; supported by Mr. Finch, Mr. Elwyn Jones, Dr. Broughton, Dr. Stross, Mr. Hobson, Mr. Monslow, Miss Herbison, Mr. Ellis Smith, Mr. Anthony Greenwood, Mr. Sylvester and Mr. D. Griffiths; read the First time; to be read a Second time upon Friday, 26th February, and to be printed. [Bill 18.]
  PROTECTION OF BIRDS BILL
  "to amend the law relating to the protection of birds," presented by Lady Tweedsmuir; supported by Mr. Alex. Anderson, Major Beamish, Mr. Elliot, Mr. Grimond, Mr. Glenvil Hall, Air Commodore Harvey, Lord John Hope, Mr. Noel-Baker, Mr. Ormsby-Gore and Mr. T. Williams; read the First time; to be read a Second time upon Friday, 4th December, and to be printed. [Bill 19.]

  MARRIAGE ACT, 1949 (AMENDMENT) BILL
  "to amend the requirements of the Marriage Act, 1949, relating to marriages in registration districts in which neither party to the marriage resides," presented by Mr. Watkins; supported by Rev. L1. Williams, Mr. Cledwyn Hughes, Mr. G. Thomas, Mr. P. Morris, Mr. Grenfell, Mr. West, Mr. C. Davies, Mr. Elwyn Jones, Mr. Goronwy Roberts, Mr. Wade

  1733
  and Mr. Black; read the First time; to be read a Second time upon Friday, 26th March, and to be printed. [Bill 20.]

  HIRE PURCHASE BILL
  "to extend the application of the Hire Purchase Act, 1938, and the Hire Purchase and Small Debt (Scotland) Act, 1932, and to make further provision as to postponed orders for specific delivery of goods under the said Act of 1938," presented by Sir Wavell Wakefield; supported by Mr. Arbuthnot, Mr. Bottomley, Mr. Burden, Miss Burton, Colonel Gomme-Duncan, Mr. Grimond, Brigadier Medlicott, Mr. Rhodes, Mr. Shepherd, Mr. Spence and Miss Ward; read the First time; to be read a Second time upon Friday, 12th March, and to be printed. [Bill 21.]
  National Insurance (Small Incomes) Bill
  "to amend section five of the National Insurance Act, 1946, so as to permit the crediting of contributions for all purposes to an insured person exempted from liability to pay contributions on the ground of small income," presented by Mr. Alport; supported by Mr. Fletcher-Cooke and Mr. Longden; read the First time; to be read a Second time upon Friday, 26th March, and to be printed. [Bill 22.]
  LAW REFORM (LIMITATION OF ACTIONS, &c.) BILL
  "to assimilate, in certain respects and subject to certain exceptions and special provisions, the law applicable to proceedings against public authorities (including the Crown) and persons acting in pursuance or execution or intended execution of enactments to that applicable in other cases; to amend the law as to the time limited for bringing legal proceedings and as to the survival of causes of action against the estates of deceased persons; and for purposes connected with the matters aforesaid," presented by Mr. Peyton; supported by Mr. Hylton-Foster, Mr. Maclay, Mr. Paget, Sir Edward Boyle, Mr. Holland-Martin, Mr. N. Macpherson, Mr. Turner-Samuels and Mr. R. Bell; read the First time; to be read a Second time upon Friday, 4th December, and to be printed. [Bill 23.]
  INDUSTRIAL AND PROVIDENT SOCIETIES (AMENDMENT) BILL
  "to amend the Industrial and Provident Societies Acts, 1893 to 1952," presented by Mr. W. T. Williams; supported by Mr. H. Wilson, Mr. Robens, Mr. Marquand, Mr. Mitchison, Mr. Coldrick, Mr. Hudson, Mr. Darling, Mrs. Slater and Mr. Forman; read the First time; to be read a Second time upon Friday, 12th March, and to be printed. [Bill 25.]
  ANIMALS (CRUEL POISONS) BILL
  "to prohibit the killing of animals by strychnine or other cruel poisons; to amend the Pharmacy and Poisons Act, 1933; and for purposes connected therewith," presented by Mr. Spearman; supported by Mr. J. J. Astor, Mr. J. Foster. Mr. Anthony Greenwood, Mr. Maude, Lady Tweedsmuir, Mr. Usborne, Mr. Ian Winterbottom and Mr. Wood; read the First time: to be read a Second time upon Friday, 12th March, and to be printed. [Bill 26.]
  PROTECTION OF ANIMALS (AMENDMENT) BILL
  "to extend the powers of the courts to disqualify for having custody of animals persons convicted of cruelty to them and to increase the maximum fine for offences of cruelty to animals; and for purposes connected therewith," presented by Mr. Remnant; supported by Mr. Braine, Mr. Anthony Greenwood, Mr. Burden, Major Beamish, Mr. Russell, Mr. Hastings, Viscountess Davidson and Mr. R. Harris; read the First time; to be read a Second time upon Friday, 12th February, and to be printed. [Bill 27.]
  MINISTERS OF THE CROWN (FISHERIES) BILL
  "to provide for the establishment of a Parliamentary Secretary to the Minister of Agriculture and Fisheries with special responsibility for fishery; and for purposes connected therewith," presented by Mr. D. Marshall; supported by Mr. Cooper-Key, Mr. Duthie, Mr. Grimond, Mr. Greville Howard. Mr. Leather, Mr. Nabarro, Captain Orr, Sir Harold Roper, Lady Tweedsmuir. Mr. G. Williams and Mr. G. Wilson; read the First time; to be read a Second time upon Friday, 26th February, and to be printed. [Bill 28.]
  POOL BETTING BILL
  "to regulate the disposal of moneys and to provide for the publication of certain accounts and information in connection with pool betting; to permit ready money bets in certain circumstances by way of pool betting conducted by post and in that connection to repeal the Ready Money Football Betting Act, 1920, and to restrict the application of the Betting Act, 1853; and for purposes connected therewith," presented by Mr. Mulley; supported by Mr. Blyton, Mr. J. P. W. Mallalieu, Mr. Mikardo. Mr. Mitchison, Mr. Nally, Mr. Padley, Mr. Peart and Mr. R. Winterbottom: read the First time; to be read a Second time upon Friday, 29th January, and to be printed. [Bill 29.]
  JURIES BILL
  "to amend the provisions of the Juries Act, 1949, as to payments in respect of jury service," presented by Mr. F. Harris; supported by Mr. G. Thomas, Mr. Willey, Mr. Baldwin, Mr. K. Thompson, Mr. McAdden, Mr. Lewis, Mr. Duthie, Sir Herbert Williams, Sir Herbert Butcher, Sir Robert Cary and Mr. Peart; read the First time; to be read a Second time upon Friday, 4th December, and to be printed. [Bill 30.]
  LICENSING (AIRPORTS) BILL
  "to exempt international airports from the restrictions on the times at which intoxicating liquor may be sold or supplied," presented by Mr. Ian Harvey, supported by Mr. Kerr, Mr. G. Rogers, Mr. Russell, Colonel Gomme-Duncan, Mr. Crosland, Mr. Maude, Mr. Follick, Mr. J. Rodgers and Mr. Fienburgh; read the First time; to be read a Second time upon Friday, 29th January, and to be printed. [Bill 31.]

  CORONERS BILL
  "to amend the law as to the fees and allowances payable by coroners to witnesses, to persons summoned to attend as witnesses and to medical practitioners making post mortem examinations by the
  1736
  coroner's direction or at the coroner's request," presented by Mr. Nabarro; supported by Mr. Mitchison, Mr. W. Bennett, Mr. Willey, Mr. Baxter, Mr. Hylton-Foster, Viscount Lambton, Mr. Follick, Mr. W. Wells and Sir Herbert Williams; read the First time; to be read a Second time upon Friday, 12th February, and to be printed. [Bill 32.]

  REPRESENTATION OF THE PEOPLE (ST. ALBANS) BILL
  "to amend the law with respect to the conduct of parliamentary elections in the St. Albans Division of Hertfordshire," presented by Mr. J. Grimston; supported by Mr. Hollis, Mr. E. L. Mallalieu, Mr. Renton and Mr. Wade; read the First time; to be read a Second time upon Friday, 26th March, and to be printed. [Bill 33.]
  MARRIAGE (CERTIFICATES OF MEDICAL EXAMINATION) BILL
  "to make it compulsory for the exchange of certificates of medical examination between persons before marriage," presented by Colonel Stoddart-Scott; supported by Sir William Darling, Dr. Stress. Mrs. Hill, Mr. N. Macpherson, Mr. A. Roberts, Mrs. Ford, Miss Pitt, Mr. Vaughan-Morgan, Rev. L1. Williams and Professor Sir Douglas Savory; read the First time; to be read a Second time upon Friday, 26th March, and to be printed. [Bill 34.]
  SALMON AND FRESHWATER FISHERIES (PROTECTION) BILL
  "to amend the law in regard to the protection of salmon and freshwater fish in England and Wales; and for purposes connected therewith," presented by Mr. R. Donald Scott; supported by Mr. J. Morrison, Colonel Clarke, Mr. Beresford Craddock, Colonel Gomme-Duncan, Sir Fergus Graham, Mr. Hurd and Viscount Lambton; read the First time; to be read a Second time upon Friday, 26th March, and to be printed. [Bill 35.]
ORDERS OF THE DAY

  COTTON BILL
  Order for Second Reading read.
  4.0 p.m.
  The President of the Board of Trade (Mr. Peter Thorneycroft): I beg to move, "That the Bill be now read a Second time."
  The subject which we shall be discussing is the method of purchasing the raw material of a large industry, together with certain associated problems such as the provision of what is called "cover" to the industry. On these matters there is clearly room for differences of view, not only in the House of Commons but in the industry itself. It is, if I may say so, eminently one of those subjects upon which wise men can hold differing opinions.
  We might, however, all agree about one thing, and that is that the subject is one of considerable technical complexity, and I think the best service I can give to the House is to strip the problem of all unnecessary technicalities, and to present it in its bare essentials, with at any rate the minimum of prejudice. I do not say that I am entirely devoid of prejudice.
  It may be convenient if I make one thing clear at the outset. I am not here to criticise, let alone attack, the Raw Cotton Commission. Whatever view we may hold about the policies which have been pursued, or which ought to have been pursued, I think everyone in this House will agree that the Raw Cotton Commission, under the able leadership of Sir Ralph Lacey, have made the very best of the task entrusted to them. That view is held, not only by all parties in the House but by all sections of opinion in Lancashire, and I think that fact, bearing in mind the rather controversial background to this subject, is no small tribute to the work which they have carried out.
  I think that a convenient starting point for the story I want to tell the House is the autumn of 1951—two years ago—when the Government took office. The Raw Cotton Commission had been established then for some four years—it started in 1947—and at that time was virtually the sole buyer of all the raw cotton imported into this country. That time, two years ago, was a period of acute difficulty,
  1738
  not only for the Raw Cotton Commission but for the textile industry. A world recession in textiles—it was to go very deep in the months ahead—was already well on the way, and that depression hit the Raw Cotton Commission at a particularly awkward moment.
  A short American crop in 1950 had coincided with the post-Korean boom, and the Americans had been compelled to impose export quotas on their cotton. That action forced up the price of what we call the outside growths, such as those from Pakistan and Brazil, to almost unprecedented heights. The Raw Cotton Commission's allocation of dollar cotton was obviously limited, but it retained its obligations to its customers and was forced, willy-nilly, to buy large quantities of those outside growths at very high prices indeed. In order to deal fairly with its customers, it averaged its prices between the dollar and the non-dollar cottons.
  A lot of comment was made at that time, and has been made since, but, given its statutory obligations, it is very difficult to see that the Commission could have acted differently from the way in which they did act. But the results led to widespread criticism. As the price of United States cotton began to fall, and the textile depression took effect, Lancashire exporters found themselves at a disadvantage. By one means or another, their competitors were getting hold of the cheap dollar cotton and were able to undercut our prices. The Commission held grimly to the policy of averaging the prices. I do not say now that they were wrong. Indeed, it was of the very essence of the system that they were set up to implement. They clung to that policy right up to the end of 1951, and since then, as the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) knows, they have really been compelled to follow world prices on the New York market.
  That was the background to the situation which we found when we took over. There were some people, even then, who said that we should at that moment make a bid for freedom and reopen, right away, the Liverpool futures market. I want to say that I am absolutely satisfied that such a course, at that time, would have been wrong. It might well have proved disastrous. The futures market had not been open for many years, and the dollar situa-

  1739
  tion in 1951 certainly ruled out the taking of any risks on dollars, and certainly ruled out, at that time, the reopening of the market on pre-war lines. At any rate, rightly or wrongly, we rejected that course, but, while rejecting it we recognised that we could not, of course, leave things exactly as they were.
  We decided to put the problem to the industry itself, and I want to make quite clear just what the problem was that we put to the industry. It was the immediate problem with which we were faced. I will just give the House the short terms of reference:
  "… how, in the current foreign exchange position, cotton can best be supplied to the United Kingdom cotton industry on the most advantageous terms as to quality and price."
  Those were the terms of reference of what came to be known as the first Hopkins Committee, a Committee consisting of three spinners, three merchants, three trade unionists, a weaver, a converter, and the Chairmen of the Raw Cotton Commission and the Cotton Board—all under the able chairmanship of Sir Richard Hopkins. We did not ask that Committee to say what the long-term future of the cotton industry ought to be—I think that they would certainly not have agreed on any answer they gave to us. What we did ask them to do was to face the practical problem of what it was best to do in the existing circumstances of that time.
  They told us what, in their judgment, it would be best to do. They were unanimous, including the trade unionists. Briefly, they recommended that the monopoly of purchasing enjoyed by the Raw Cotton Commission should be ended. Once a year—on their suggestion, which was accepted by the Government—the spinners should be asked: "Do you want to buy from the Commission or from outside?" Once the spinner had made up his mind which way he wanted to buy he had to stick to that for the rest of the year. They further recommended that the Commission should continue to give cover for the whole of the industry—but I want to deal with the cover question a little later in my remarks.
  In the season which followed the report of the first Hopkins Committee, rather more than one-third of the industry's cotton was purchased on
  1740
  private account. Here may I say that the scheme worked well, thanks very largely to the co-operation and skill of the Raw Cotton Commission themselves, who co-operated wholeheartedly in it. But the very success of the scheme brought its own problems in its trend. It soon became clear that, when the options for the next season were announced, it was at least possible—I do not put it any higher than that—that many more spinners might contract out.
  I do not want to make any legalistic points about this, but I think that the right hon. Gentleman the Member for Huyton would agree that it is pretty clear there would have come a point at which licences to buy privately, as recommended by the Hopkins Committee, would begin to place a very severe strain on the Act which conferred a monopoly on the Raw Cotton Commission. I believe the right hon. Member for Huyton has made the point to me before in debate. Moreover, apart from that, there were some quite practical difficulties, such as the problem of how a Commission, much further reduced in size, could carry out their statutory obligations, how far they could or should continue to provide cover for the whole of the industry, and what they should do about their redundant staff.
  Faced with that situation, the Minister of Materials and I appointed a Review Committee, again under Sir Richard Hopkins, to whom we are very much indebted for his help during this period, and the terms of reference of the Review Committee were these:
  "… whether, within the framework of the report of the Cotton Import Committee, any change would be desirable in the obligations and duties at present imposed on the Raw Cotton Commission, with respect in particular to the supply of cotton and provision of cover to the United Kingdom cotton industry; and to make recommendations."
  Under Sir Richard Hopkins's able guidance, the Committee once again reported, and, I may say, once again reported unanimously. It said, broadly, that the scheme should continue, that it should go on for, at any rate, the coming season, that the right to opt out should go on as before, and it added a much discussed sentence in paragraph 21:
  "It is intrinsically undesirable that cover for private trade should be provided at the risk of public funds, and the time has come for this issue to be faced."

  1741
  I believe that the members of that Committee, if they were asked to lay just what that sentence meant, would give different interpretations. I think that the majority of the trade union members would say that what they meant by that was that public funds should not be used to cover the contractors-out. I think there are other members of the Committee who would say that they thought that all private traders, whether they bought from the Cotton Commission or directly, were covered by the sentence.
  I am not seeking to hold anybody to any particular interpretation of that sentence this afternoon, but I am entitled to express my own view about it, which is quite plain. I very much doubt the propriety, and certainly the wisdom, of taking money from the general body of taxpayers and using it to guarantee businessmen, trading privately and for profit, against changes in the price of their raw material. It seems to me that once a Government accepts that obligation, it is a little difficult to know where it should stop. If it does not amount to a straight subsidy, it comes precious near to it; and for the purpose of this argument, of course, the source of the purchase is quite irrelevant.
  In the event, a month after the second report was issued, spinners were invited to exercise their option for the second time, and the number of mills which chose public and private buying was about equal on the second occasion. But because rather more of the larger mills, for various reasons which are well known to hon. Members, contracted out, the Raw Cotton Commission are now buying rather less than half the cotton in the industry.
  I think one thing is absolutely clear at this stage, and that is that some legislation is necessary. The Raw Cotton Commission are, after all, based on the principle that they should be a monopoly. They are no longer a monopoly. It has been decided that they should no longer be a monopoly and, by steps which have been unanimously approved by all sections of the industry, they have moved to a situation where today they sell less than half the cotton to the traders.
  In those circumstances, what are the courses open to the Government in any legislation which we introduce? I think there are only three courses. The first
  1742
  course is to stay as we are, in a sort of half-way house, half-way between a monopoly and a free market. But even if we did this, we would have to do something pretty drastic on any interpretation of the Hopkins Committee's report in its references about cover. To those, if there are any, who urge that this half-way house is a solution, I would commend one or two considerations.
  The problems that confront the Raw Cotton Commission are considerable on any reckoning, but they are certainly not made easier if half the trade is buying outside the Commission. It seems to me that, in these circumstances, a Commission tends rather to lose any virtue which may attach to a monopoly and becomes a mere competing merchant. Even if we look at it as a competing merchant, it is then open to the criticism of being subsidised out of public funds.
  Finally, as to cover, whatever may be the right solution about cover, I think everybody who has studied this complex subject will agree that a dual cover system has certain obvious disadvantages; in particular, ex hypothesi it must cover a much narrower field than a single-cover system would do. Views differ about this, but frankly I do not believe there are many people in the industry who really understand the subject who think that the existing situation today provides a permanent solution to the problem.
  I believe that most people would agree that the real choice here is whether we should go back or whether we should go forward, whether we should re-establish a monopoly or whether we should advance to a free market. We may differ about the choice we make, but I think that is the choice which is before the House this afternoon.
  I want only to say this about the possibility of going back—the alternative of re-establishing the monopoly. I am not here to say that there is no conceivable advantage in central buying or selling. There are advantages, but many of them are not the advantages which were envisaged when the Raw Cotton Commission were established in 1947. First of all, the Raw Cotton Commission, whether we like it or not, have been compelled to abandon long-term stabilisation of prices, which was really the principal argument

  1743
  advanced in favour of the Commission, and have been forced in effect to follow a world price as fixed in New York.
  Secondly, the very obligations imposed upon them—I think rightly imposed, and I think they were obligations inseparable from those of a monopoly—have hampered them in certain respects in their commercial operations. The Commission are compelled to hold large stocks of cotton at public charge, entirely unprotected against market fluctuations. Worse still, as prudence might have foretold, and certainly as a study of their accounts reveals, on a rising market they have to sell quickly and on a falling market their stocks accumulate.
  They are compelled by the inexorable logic of circumstances to sell at the bottom of a rise and to accumulate at the top of a fall. I do not say that they gain nothing on the swings, but I do say that they lose nearly everything on the roundabouts. The accounts published last year—and this is a fact which the House must keep in mind—showed a loss of no less than £25 million. I am sorry to say that the accounts for the year just ended will show a loss very nearly as great.
  Finally, the whole industry has been unanimous in the view that the Commission should not be a monopoly. In both reports of the Hopkins Committee everybody in the industry agreed that those who wanted to buy outside the Commission should be entitled to do so. In these circumstances the Government have rejected the halfway house solution, and also the view that we could go back to the complete monopoly. We have decided that we should advance to the free market, wind up the Raw Cotton Commission, and leave the way clear for the futures market to open in Liverpool. If there are any Members who disagree with this course, they should be prepared to show, in the face of the arguments which I have adduced, what other course that is really practicable is open to the Government at this stage.
  The Bill which gives effect to this decision is a relatively short and simple one. Clauses 1 and 2 deal with the interim period, and enable the Commission to carry on giving its present services until the next buying season. This is achieved
  1744
  by removing some of the obligations at present imposed upon them, and some provision of this kind would be necessary in a Bill whatever course we took.
  Clause 3 provides for a scheme to be drawn up making provision for the compensation of staff. The problem of compensation in the case of the Raw Cotton Commission presents certain special difficulties, but discussions have taken place with the Commission, the views of the staff associations have been obtained, a suggested scheme is now under consideration by Ministers, and I expect to be able to announce details, during the Committee stage, of a scheme which both the Commission and the staff will consider fair and reasonable.
  Clause 4 enables the Board of Trade and the Minister of Materials to dissolve the Commission by an Order, which will be subject to affirmative Resolution, if at any time they are satisfied that it is in the public interest to do so. No date is mentioned, but for the convenience of the House and as background to the debate I may say that it is our intention that the Commission should cease their active operations as soon as may be after 31st August next year. The Bill does not refer—and has no need to refer—to the Liverpool Cotton Exchange as such, but it is, no secret that the Liverpool futures market plans to reopen in time to be in full operation in the next buying season.
  Much of the discussion here will range not only round the provisions of the Bill to which I have referred, and the background of which I have spoken, but will also embrace the general problems associated with cover, the Liverpool futures market, and so forth, and though I cannot hope to answer in advance all the arguments and many complex points which no doubt will be put forward during the debate, I believe that many of them will centre on three problems—cover, dollars and stocks. If I say a few words about those, it may provide a certain background to the discussion.
  I shall start by saying a word about cover, and I would ask those who have operated in futures markets to stand back a little while I explain to those who, like myself, have never done so, exactly what cover is. Cover is, quite simply, a method to ensure against fluctuations in the price of a manufacturer's raw material. If a manufacturer contracts to

  1745
  supply his goods some time ahead, and the price of his raw material goes up, it is quite clear that he may very well be substantially out of pocket. The method of giving cover—though in its elaborate forms it may become very complex—is extremely simple. At the time the manufacturer enters into his forward trading contract to sell goods he also enters into a futures contract to buy cotton. If the price of cotton falls, he makes a profit on his trading contract, because his raw material is cheaper, but he loses on his futures contract, so that he is in the same position as before. If the price of cotton rises he loses on his trading contract, but makes a profit on his futures contract. In other words, the futures market is a device to protect the trader from any need to speculate in the price of his raw material.
  In future, this cover will be provided by the Liverpool market. The Liverpool Cotton Exchange propose, with the agreement of the spinners, to open the market on what is known as an American contract, which means that the futures contract will be based on American cotton, at a price decided by transactions in the Liverpool market. There are arguments for and against this method, and they are pretty difficult and technical arguments, but the cover provided by this type of contract is at least as good as the cover at present given by the Raw Cotton Commission, which is itself based upon the American price, and it is a method which is capable of adaptation later, should events indicate this to be desirable.
  Finally, under these arrangements the risk of fluctuations in price will be borne by the private traders themselves. No penny piece of public money will any longer be at risk.
  Secondly, as to dollars, some fears have been expressed that the freedom here granted may result in a great increase in expenditure on dollar cotton. I think that it may result in some increase, but to say how much one would need to be a prophet rather than a politician, because how the money is spent between dollar and non-dollar growths depends not on me but on the quality and price of the cotton which happens to be on offer.
  The principal Commonwealth and colonial countries are selling their cotton, upon its merits, in Lancashire. The principal colonial marketing boards confirm
  1746
  that there is no reason to fear a decline in their total sales. The existing long-term contracts will, of course, be honoured in so far as the marketing boards wish to retain them.
  Mr. William Keenan: Does that mean that they are being renewed?
  Mr. Thorneycroft: The existing contracts will be retained. I did not say that they would be renewed. In the long run, it is in everybody's interest that the price in the market should be fixed by the decisions of a free market, directly related to spinning values rather than by the artificial interventions of producing Governments.
  Lastly, with regard to stocks, it has been suggested that with the dissolution of the Raw Cotton Commission the industry will not hold adequate stocks. That fear is shared by some of the small spinners. I wish to say quite bluntly that if an industry as great, as powerful and as historic as the cotton industry were unable to finance its own stocks, it would be an astonishing and deplorable situation. The truth is, of course, that stocks will be held, but held at the expense of those who use them and not of the taxpayer. I cannot, therefore, accept the idea that we should keep the Raw Cotton Commission as a kind of public stock-holding body. Such an arrangement, in my view, would discourage private stock holders and involve, or might involve, heavy losses to public funds.
  That, then, is the position. The existing arrangements for cotton purchasing are at best a makeshift. We are not prepared, for the reasons—I think the strong reasons—which I have adduced, to go back to a monopoly and rigid restrictions against private purchase. It is, therefore, our intention to move forward into the freer atmosphere which I have described. I would only say in conclusion to those who want to go back to that, that I think it is worth while remembering that the industrial and commercial strength of this country has in the past not depended simply upon our island trade but on the fact that we are the centre of world trade. Our policy is not simply to follow 24 hours behind the New York market. What we want is that other countries should come here and participate in our markets.

  1747
  We are engaged today in a battle for trade far more difficult and desperate than most people in this country yet realise. We cannot afford even a marginal disadvantage in price. Above all, we cannot afford to forget that we sell from here not merely goods but services. Our banks, our insurance, our shipping, our markets are more precious to us now than ever they were in the heyday of our prosperity and our wealth. This Bill is motivated not merely by the logic of the circumstances in which we find ourselves, but by that larger vision of the future which should inspire us all.
  4.32 p.m.
  Mr. Harold Wilson: The Minister has, I think, introduced this Bill with rather less than his usual enthusiasm. He explained that, in the present situation, while a gain is possible on the swings a loss is certain on the roundabouts. Of course, the Bill will provide that, as in prewar days, the spinners and the industry proper will be losing both on the swings and on the roundabouts.
  The greater part of his speech was an historical account of the past two years, given not entirely free of prejudice. For instance, there was no attempt to explain the action of the Raw Cotton Commission in their purchases of the outside growths. The very period that the right hon. Gentleman is talking about, 1951, was a period when hon. Members on both sides of the House were pressing for maximum stocks to be built up in this country because of the situation which immediately followed the outbreak of the war in Korea, when there was great apprehension about the level of stocks.
  Moreover, we were trying to make good, as the right hon. Gentleman will recall, the fact that our supplies from the United States had been very heavily cut in the previous year. Before I finish I hope that I shall satisfy even the right hon. Gentleman that the Lancashire industry will have every reason to be glad that those large purchases of the outside growths were made, because of the prospective future position as regards Sudanese cotton in particular
  During his historical account the right hon. Gentleman relied quite heavily on his interpretation, at least, of the second Hopkins Report, which we debated in
  1748
  July. I believe that he misinterprets what can only be regarded on any fair reading as the all-important sentence of the Hopkins Report, but if he is leaning so heavily on the wisdom of Sir Richard Hopkins and his Committee, why did he not call the Hopkins Committee together again before taking the fateful step that he has commended to the House today?
  I think there is a very good reason for it. The Committee had been asked to advise on the first faltering steps towards this dual system; it had been asked to advise about the continuance of the existing system; but when it came to the decision that we are debating today the right hon. Gentleman took that decision on his own, or, at any rate, the Government took the decision on their own. The reason was because the Government knew perfectly well that if the Hopkins Committee had been reconstituted the trade union members, at any rate, would never have supported such a Measure as the right hon. Gentleman proposes today. I suspect that the right hon. Gentleman knew that, very properly, Sir Richard Hopkins would not have allowed himself to be used as the honest man through whom to pass on the bad penny of denationalisation.
  In July, I said that Sir Richard Hopkins had a great genius for reconciling two apparently opposing, apparently incompatible, points of view. I referred then to what he has done in certain inquiries in the wool industry. But I believe that even Sir Richard Hopkins, with all his great genius, would have been quite incapable of reconciling the Prime Minister's doctrinaire desires in this matter with the facts as we are facing them at present.
  The right hon. Gentleman's historical account missed out the most important event in the whole series from which this Bill stems. We know that this Bill actually stems not from any proper assessment of the economic position of Lancashire. It stems from the speech of the Prime Minister when, as Leader of the Opposition, he opened the Tory-Party's General Election campaign in Liverpool in October, 1951. He wanted to say something that would be popular in that particular audience, and I have no doubt that he succeeded.
  Mrs. E. M. Braddock: He increased my majority by 1,000.
  Mr. Wilson: I have no doubt that he did that very valuable thing, but we are paying the price in this Bill today.
  My hon. Friend will recognise that this is the result of what the right hon. Gentleman did. He went on to Devonport from Liverpool. I think it is a measure of the frivolity with which the Government regard their responsibilities that if the Prime Minister had opened the campaign in Devon port instead of Liverpool we should have been debating not this subject today but a proposal for the denationalisation of Devonport Dockyard. In fact, he started in Liverpool, and this Bill stems directly from that speech there.
  It does nothing to help Lancashire in solving the difficult problems of the textile trade. At this very time, when Lancashire is still struggling out of last year's depression, when it is still naturally apprehensive about the future, the right hon. Gentleman, or his noble Friend the Minister of Materials, throws this spanner of contention into the works. I want to tell him that this Bill will not be welcomed generally in Lancashire.
  In the first place, it is most vigorously opposed by the trade unions in the textile industry. They fear that unemployment will be the direct consequence of this Bill, and they say:
  "Fair warning is now given that in the event of unemployment arising a most serious view will be taken."
  Those words are from a most responsible and statesmanlike trade union. There is no politics in that statement at all. They go on to say:
  "So far as the trade unions in the producing end of the industry are concerned, the action of the Government can only be regarded as a part fulfilment of a political promise made to the commercial and financial interests of Liverpool. The spinning section is now faced with a gamble the like of which has never before been witnessed. All the signs and portents show that confusion and chaos will surround the trade, the outcome of which may very easily be serious and permanent."
  There speak the workers in the industry.
  What about the managements? I have no doubt at all that this Bill will be welcomed by the big spinning combines. It will, indeed, help them to strengthen their grip on the industry, particularly if a number of the smaller firms are driven
  1750
  out of existence, as is more than likely. But what of those smaller concerns'? As far as I know the smaller mills have not been clamouring for a return to private buying. I well remember a speech of my hon. Friend the Member for Farnworth (Mr. Thornton) last July, in which he described the elaborate manoeuvres the protagonists of private buying had indulged in to persuade, on purely political grounds, a number of mills to contract out of the Raw Cotton Commission.
  It is the so-called unit mills which are worried most of all, but I want to tell the right hon. Gentleman that this Measure is not even universally popular in Liverpool. I am not speaking now, of course, for those whom my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) and a number of us represent here; of course, the Measure has no popularity there. But I want to tell the President of the Board of Trade that it is not even universally popular within the Liverpool Cotton Market itself.
  I want to quote a few words from a well-known cotton trade letter which was published on 3rd November, 1953, which was, if I remember rightly, the day of the Gracious Speech. It began rather in the terms of the right hon. Gentleman's peroration, with these words:
  "Mr. Thorneycroft said yesterday, 'Our competitive position, while it is sound, is not so strong that we can give an inch of advantage to our competitors.' So saying, this same gentleman in the not unimportant field of cotton, is preparing to give away several ells."
  The document then quoted from an earlier issue, one in which it said it feared that the Government might do certain things about reversion to private purchase—which they have done—and quoted words which it used in the earlier issue. I must inform the right hon. Gentleman that these are not words coming from this side of the House at all, for they come, no doubt, from respectable supporters of his own party on Merseyside. These are the words used:
  "We can imagine no arrangement so slapdash, so fortuitous, so little carefully contrived, showing such scanty planning and foresight. …"
  They continue in that strain; indeed, they refer to the Sudanese problem, after having paid tribute to the Raw Cotton Commission, in these words:
  "What a slap-dash proceeding, on the part of a Government Department which presumably has received some higher direction to carry

  1751
  out an Election pledge to restore 'freedom' to the cotton trade."
  Those are all quotations; they are not my words. I could quote some other interesting remarks, such as the need to push
  "… the All Blacks of bureaucracy off the ball of procrastination."
  It goes on to talk about a system of "catch-as-catch-can." That is one Liverpool voice saying quickly, after the Gracious Speech, what view should be taken of the right hon. Gentleman's action.
  Mr. William Shepherd: Would the right hon. Gentleman say what this publication is?
  Mr. Wilson: Certainly. It is a document called "Market Comments" published by a Liverpool firm at Cotton Exchange buildings. I shall be very glad to show it to right hon. or hon. Gentlemen afterwards.
  Mr. Shepherd: Read the title.
  Mr. Wilson: It is called "Market Comments." It is issued by the firm of W. E. Cliff-McCulloch and Co., of 139–140, Cotton Exchange Buildings, Liverpool, 3, to whom, no doubt, any inquiries will be addressed by the hon. Member.
  What is clear is the very rapid development of Government policy over the past two or three months since we debated this question in July when the right hon. Gentleman gave no inkling of the kind of Measure which we are debating. Of course, there have been some Government changes since July. The former Minister of Materials has gone to another place and has been replaced by Lord Woolton, who is not only Chancellor of the Duchy of Lancaster but also Minister of Materials.
  The view which is very common in Liverpool is that some of the trade interests concerned were successful at getting at certain members of the Government, who then overrode the President of the Board of Trade, and I think that that accounts for his lack of enthusiasm this afternoon. He even began by saying that it is possible for wise men to have two different views about policy. Whether, under that generic description, he includes the Chancellor of the Duchy of Lancaster and himself I do not know,
  1752
  but certainly it would seem that the doctrinaire political views have got into the saddle since we debated raw cotton in July. I cannot believe that the right hon. Gentleman, and I certainly cannot believe that his officials, can have been in favour of the proposal which he has commended to us this afternoon. The whole thing simply reeks of the Liverpool Constitutional Club and not of an economic assessment of Lancashire needs.
  The right hon. Gentleman said this afternoon, as he did in July—and we all agreed with him—that the Raw Cotton Commission have done an extremely good job. Tribute was deservedly paid to Sir Ralph Lacey and his colleagues. In the July debate that tribute came from both sides of the House.
  One important aspect is the reputation which the Raw Cotton Commission have established for quality. Previously in the House I quoted a statement in the "Manchester Guardian" of last June, which said:
  "On the operatives' side, good cotton has come to be associated with State buying, and there are fears that private buying might lead to the use of inferior cotton and so to a lessening of the operatives' earnings."
  I know that my hon. Friend the Member for Farnworth made that point before, and he can give countless examples in support of it.
  Then, on price, we know, furthermore, that after some assessment of the position the Hopkins Report concluded that there did not seem to be very much in it either way, as between public centralised buying and private buying. It was not possible, they said, to establish any advantage in either direction. The Raw Cotton Commission have undoubtedly done a first-class job, and they have done it, as they mentioned in their last annual report, in the face of continuous hostile and malicious propaganda about all their activities.
  The July debate centred around the second Hopkins Report and especially the statement quoted by the right hon. Gentleman that it was intrinsically undesirable that cover for private trade should be provided at the risk of private funds. I am surprised that this phrase is now being interpreted by the right hon. Gentleman—and in this he is following his hon. Friend the Member for Cheadle (Mr. Shepherd), who said it first, in July—

  1753
  as meaning that it is undesirable for this cover to be used for any section of the cotton trade. My own interpretation, and that of my hon. Friends, is that it means that it should not be used for the benefit of spinners who bought their cotton from outside the Raw Cotton Commission—that it should not be used to provide cover for the contractor-out.
  The right hon. Gentleman will not be surprised to hear that that was the interpretation put upon it by the trade union members who signed the Report. I can tell him frankly that had they thought his interpretation could have been placed upon it, they would not have signed the Report nor pledged themselves on that point. I am surprised that the Government should now interpret this statement as meaning that public funds should not be used to provide cover for risk in private trade, because a large portion of their policies in other directions is based on the use of public funds.
  What about their agricultural policy, with the deficiency payments? What about the Film Finance Corporation, which we shall debate on Friday, where Government cover, which began under the Labour Government and which the right hon. Gentleman is continuing, is provided for one of the most risky industries of all? What about the Export Credits Guarantee Department, which exists as a nationalised organisation providing public cover for the risks of private trade?
  Mr. Ian Horobin: I am following the right hon. Gentleman's argument with great care. Do I understand him now to be advancing a proposition that export credits, for instance, should be given only to those firms who buy their materials from a Government Department, because that is what his argument amounts to?
  Mr. Wilson: If the hon. Member has deduced that from what I said, then he had better deduce again. I was saying that if the President of the Board of Trade is arguing that public funds should not be used to provide cover, then one half of the Government's economic policy disappears in support of what he has said to us this afternoon.
  Mr. Horobin rose—
  Mr. Wilson: I think the hon. Member had better look into the subject a little further before he intervenes again.
  In July, we on this side of the House warned the Government that in our view they had already gone too far in the reversion to the private buyer. I agree with the right hon. Gentleman that a 50/50 system certainly looked like becoming unworkable, but we felt that the Government had gone too far in the matter of contracting out. At that time. I quoted from an article in "The Times Review of Industry." I will not weary the House with all the extract I gave before, but I would repeat these words from it:
  "The world market for cotton seems to be in or near a condition where the process of transferring importation and distribution from a State-supported monopoly to private traders may be checked."
  That was the view expressed in July.
  What I want particularly to do is to remind the House of the danger to Lancashire as represented by this Bill, especially when we enter upon the next dollar crisis; and any hon. Member opposite who thinks that there will never be another dollar crisis, and who is taking his tone from the rosy optimism of the Chancellor of the Exchequer, need not bother to listen. He can, as the right hon. Gentleman said, sit back during the next stage of the argument.
  I am very surprised that the Chancellor of the Exchequer, or one of his deputies, is not here this afternoon, because what the Government are doing by this Bill will endanger our economic position as regards the dollar balance of payments They are endangering Lancashire cotton supplies and, therefore, endangering Lancashire's employment. What happens when a dollar shortage begins? There is a slight recession in America, a drying up in the buying of sterling area commodities, a foreign exchange famine and a shortage of dollars, all developing in a matter of a very few weeks. That is what happens.
  There will have to be, whatever Government is in power, dollar allocations, and import licensing will have to be introduced for raw cotton. How will the allocation of dollars for cotton be shared among the merchants dealing on the Liverpool Cotton Market? Is it to be

  1755
  done on the basis of quotas, related to some past rate of importation or consumption?
  Sir Walter Fletcher: Has the hon. Gentleman forgotten the chief precedent established by him and his hon. Friends: the denial of any crisis, followed by drastic panic measures to cope with it?
  Mr. Wilson: We are delighted to welcome the hon. Gentleman back to this House, but I hope that his succeeding interruptions will be more in accordance with the tradition which he established before he was away, because the last one did not contribute very much to the discussion of this rather important Bill.
  I think I know what the hon. Gentleman means, but I very much doubt whether he knows what his interruption meant. I was trying to say, when he made that irrelevant interruption, that we should like to know what will happen in relation to the allocation of a scarce amount of dollars among the merchants, and what is even more important: how will the cotton paid out under an allocation be shared out? Is that to be done on the basis of fair shares, or on the basis of favouritism?
  There is a very real danger that if there is a cotton shortage supplies will be very easy for certain mills and very difficult for others because of the growing tendency of members of the Liverpool Cotton Association to join the boards of the spinning companies, especially the big combines. I think it is calculated that one-third of the Lancashire cotton spinning industry has on its boards representatives of the Liverpool Cotton Market. That is one of the reasons for the influence on some of the big combines to contract out and back up their friends in Liverpool.
  What will happen if there is a shortage of dollars? One thing that will happen, of course, is that there will be a waste of such stocks as are available. Under the Raw Cotton Commission the stocks are centrally held and available to all. It is always more economical in times of shortage to have centrally held stocks than to have them dissipated, and for any given amount of dollars the Raw Cotton Commission would be able by means of its stocks to keep more mills in production than would be possible by a whole series
  1756
  of privately held stocks, even apart from the question of favouritism in their distribution. It is obvious that if some mills have six to eight weeks' stocks while others are out of stocks there is some waste of stocks in the critical period before more cotton is available.
  There is another very sinister development, and I am surprised that the right hon. Gentleman, in his very short discussion of the dollar problem, did not refer to it. It is this. We all know that Liverpool is critically short of capital for the establishment of the cotton market. We know that the Liverpool Cotton Association have altered their rules so that membership will be no longer confined to private partnerships but be open to limited companies, and we know that these rules provide also that these companies can have up to 49 per cent. of foreign capital.
  That means an invitation to the United States to invest capital in the Liverpool cotton market. A number of Liverpool cotton trade leaders and Tory leaders have just come back from the United States. I do not know what they have been doing, but there is widespread suspicion in Liverpool and in Lancashire generally that they have been over there to try to persuade American cotton interests to put money into the Liverpool cotton market. That means not only tying us to a greater dependence upon American cotton supplies generally, but tying us, in many cases, to particular American suppliers.
  Again, what is the position if we run into a dollar crisis? Are these interests who have got money in the Liverpool market going to bale us out by selling cotton for sterling? That is a thing which I think they might be willing to do. One can imagine, to use the modern jargon, that the "counterpart" of the supplies they will make available to us will be used to buy further cotton interests, not only in Liverpool but perhaps by buying control in the spinning section of the industry in Lancashire. It is bad enough to see the invasion of Liverpool with United States capital, but it is worse still if this Liverpool beachhead, already conceded by the Government, is to be extended so that Bolton, Oldham and Rochdale are overrun as well.
  There is, I think, a real danger as a result of greater dependence on American

  1757
  supplies. The hedge which is offered by Liverpool—the right hon. Gentleman told us what he is going to do—is likely to be confined to American grown cotton, and so far as we know to one particular growth. The Hopkins Report has shown how difficult it is to relate other forms to one particular form of cover.
  Perhaps I may remind the House of what has been said very recently in the "Economist," when they told us:
  "If spinners consider that, in practice, the American futures contract is an adequate hedging medium for non-dollar cotton, they are likely to protect themselves by using more American cotton. This would increase the dollar cost of re-opening the market, and it might also mean that the Lancashire consumption of Colonial cotton, which the Government is naturally anxious to encourage, would suffer with that of other growths. … The main risk … is that if a dollar famine should develop, non-dollar cotton might command a premium over dollar cotton, as it did a few years ago."
  The right hon. Gentleman gave no encouragement to the House about the future of Commonwealth supplies. We all take pride in what has been done to increase the usage of Commonwealth cotton in replacement of American cotton over the past few years. In 1938, Commonwealth raw cotton accounted for 23 per cent. of the total import. In 1952, it accounted for 37 per cent. West Africa has gone up from 95,000 centals in 1938 to 432,000 centals in 1952, that is, from 0·8 per cent. of our imports to 7·3 of our imports last year. British East Africa has gone up from 170,000 centals to 517,000 centals, or from 1·4 per cent. to 8·7 per cent. of the total. That is a very healthy development for Lancashire and for the Colonies, and all of us must be very apprehensive of the future trend of development under this Bill.
  We are told that bulk buying can continue by private interests. But does anyone seriously believe that long-term contracts will be negotiated by Liverpool with the Colonies? Without long-term contracts there is very little hope that we shall get colonial cotton, even on the scale that we have so far been doing. That is why we must ask the Government to take the question of colonial supplies a little more seriously.
  This action of the Government in introducing the Bill accords very ill with all that we ever hear from them about
  1758
  Commonwealth development. One is bound to ask what the "Daily Express" is doing all this time. There is not a word of criticism of the right hon. Gentleman—which is a change for him—about the body blow that he is dealing to Commonwealth trade by this Bill. In fact, the Commonwealth producer, like Lancashire, is being sacrificed to the speculator.
  This Bill is a speculator's charter. I do not think that hon. Gentlemen opposite will deny that the speculator will have a big part to play in it. I noticed last Sunday that the "Sunday Times," which is certainly not a Socialist newspaper, had an article by its City Editor, which, referring to cotton, said:
  "These provisions will rule out 'men of straw' "—
  whoever they are in Liverpool—
  "but they will not exclude the substantial speculator, who is needed to maintain a free and active market."
  Then we must ask about some of the special problems of particular cotton—Sudan cotton, for instance. Lancashire uses 300,000 bales a year, and one sees, according to the same trade document from which I have quoted, that
  "Only the large earlier stocking by the Raw Cotton Commission of Sudan cotton has enabled such a supply to be available to spinners …"
  So, when the right hon. Gentleman felt that too much had been bought in 1951, here we have the reply. I am sure that Lancashire could not have been kept going without building up those stocks.
  The document goes on to say that it is quite certain that
  "if the Lancashire trade is left to bid for this cotton, mill by mill, or even group of mills by group of mills—in open competition with the rest of the world—we predict that it would be fortunate indeed if one-third of the forthcoming crop"—
  that is the Sudan crop—
  "reaches these shores."
  There we get a direct risk to Lancashire's employment and Lancashire's export trade due to the decisions of the Government.
  The view is expressed in cotton circles that even the Raw Cotton Commission, given all the help in the proper directions, could probably not do more than just keep Lancashire supplied with its minimum needs of Sudan cotton, but that if these mills are obliged to resume their

  1759
  own buying after July next there is not the slightest prospect of them having the minimum supplies of cotton that will be required.
  One could equally refer to the problem of the Peruvian purchases. Will the Raw Cotton Commission go ahead and buy next year's Peruvian supplies? They will have to decide very quickly. But even when they have placed their contracts, those supplies will be coming forward in a period when, according to the right hon. Gentleman's time-table, announced today, the Raw Cotton Commission will be no more.
  Who will take on those contracts? Who will have the money to do so? The right hon. Gentleman certainly did nothing to suggest that the financial problem will be solved. Who is to be responsible for the tremendous futures load when stocks pass from the Raw Cotton Commission to the market? And who will be willing to take on these risks with the threat of American export subsidies overhanging the market? One can understand the right hon. Gentleman saying that he hopes producers' Governments will not interfere with prices any more, but however much he may say that, he knows perfectly well that in the United States, in the present situation, there will be continued Government interference with the export price of raw cotton; and if export subsidies are imposed by the American Government, that provides very difficult problems indeed for those who are dealing in futures.
  Again, the right hon. Gentleman has not told us who is going to maintain the stocks. The Government provided facilities last winter for Liverpool merchants to build up spot stocks. So far, very little has been done, and that is hardly surprising. Are the mills to be forced to sink a lot of capital in holding stocks? We know that some, of course, will buy direct from the ship, but in that case there is always the risk that they do not get the quality they want. It is no good countering that by saying that they can always get allowances or compensation, because if the quality is wrong they cannot use the cotton for the purpose for which it was originally required.
  Anyone who knows the Lancashire industry must ask where the small mills are to get their capital from. We know that it was the small mills in particular
  1760
  who made the greatest use of the Raw Cotton Commission's services. The big combines can afford to face the position created by the right hon. Gentleman, because they can pool their stocks between their different mills. The big vertical combines are in a better position to know exactly what kind of stocks they will require, so that they can use smaller stocks.
  But what about the problem of the small mill which has to hold stocks? I have seen a calculation that something like £60,000 to £100,000 will be required for each of very many mills, and many mills do not have that amount of money to set aside. Some have got it. Some have been ploughing the money back for the purposes of much-needed modernisation in the industry, which all parties want to see developed. That will be stopped, because this money will have to be diverted from mechanisation to the holding of raw cotton stocks. One of the results almost certainly will be that some of these small mills will close down, and perhaps their manpower—certainly their markets—will be absorbed by some of the big combines.
  It was the policy of the Labour Government to try to encourage more grouping and amalgamations in the cotton industry, but Sir Stafford Cripps tried to do it by rather more gentlemanly methods, by the provision of unprecedented subsidies, instead of doing it in the way that the right hon. Gentleman is doing it—by all the brutalities of forcing small mills out of existence and the creation of unemployment.
  On the details of the Bill, my hon. Friends would want to keep most of their comments for the Committee stage. We welcome the fact that the right hon. Gentleman has responded to our appeal of July in working out a compensation scheme. I hope he will be able to give an assurance to the House that that scheme will provide equality of treatment between all the groups of employees who will be redundant—those who have already left, those who will be leaving between now and the date of closure of the Commission, and those who will be kept on for a time for what might be called "mopping up operations."
  The President has not explained to us why he has introduced retrospective legislation in the Bill. Some of us felt in

  1761
  July that the Government had rather been straining the legislation. The right hon. Gentleman was a little shocked when I suggested that to him in July, but he has almost admitted it this afternoon; certainly, the Government have been straining the spirit of the legislation.
  But why do they now ask for certain retrospective cover for what they have been doing? Have the Government, in fact, been acting ultra vires during this period for which they now seek cover? We all welcome the fact that the right hon. Gentleman has responded to our appeals and has come along with a Bill to make an honest woman of the Board of Trade, but some of us are a little afraid that certain follies have been committed in the interim for which the right hon. Gentleman now seeks a certain retrospective respectability.
  Another aspect about which the right hon. Gentleman has said nothing and about which we would like to know a little more is the provision that independent members, who were very important in protecting the public interest and the interests of Lancashire generally, should now be free to have interests within the cotton trade and in the cotton industry. We must view that with a certain degree of concern.
  The right hon. Gentleman has told us that the date of ending of the Raw Cotton Commission will be as early as possible after 31st August next year. That sounds to us rather like 1st September. I suggest, however, that if by any unhappy mischance the Bill is passed by the House this evening, if the principle is won by the Government, it will have very bad effects on Lancashire if the right hon. Gentleman rushes into a premature dissolution of the Raw Cotton Commission.
  If the principle were admitted, I should still say that the right hon. Gentleman ought not to contemplate closing down the Commission before the Autumn of 1955 at the earliest, otherwise the utmost dislocation will be caused in relation to the Commission's purchasing of particular Peruvian cotton and certain other growths during the next 12 months.
  All of us on this side of the House—perhaps we have not convinced hon. Members opposite—are convinced that this is a thoroughly bad Bill and utterly doctrinaire in its origin. Perhaps I might be permitted a final quotation from the
  1762
  trade document which I have already used, when it says:
  "The Raw Cotton Commission could have been used to further rather than to create the development of parallel private activity."
  It goes on—and this is not a Socialist document—
  "But it is quite another thing if, in pursuit of dogma—and blind dogma should be just as much anathema, whatever the complexion of the Administration—any salutary function is abruptly suspended before its adequate replacement is anywhere in sight, even on the horizon."
  Those are not my words. They are the words of people in Liverpool, with far more experience of this problem than anyone in this House.
  This Bill sacrifices true trade and industrial interests to speculation and political loyalities. The day when it becomes law will certainly be a black day for Lancashire, for the Commonwealth and, indeed, for the economic future of this country.
  5.11 p.m.
  Sir Walter Fletcher: I am delighted to have the opportunity of taking part in this debate particularly in general, though not in total, support of my right hon. Friend the President of the Board of Trade. I remember in the old days, going back a long way, when we looked upon him as the Young Lochinvar coming out of the West. Transport was his aim in those days, but I was glad to serve beneath his banner—with a few odd tilts at windmills on the way.
  We have heard from the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) the frequent use of the word "doctrinaire." A curious thing has been that so far in the debate neither speaker has said anything about the origins from which various things stem. A whole series of bogeys were put up by the right hon. Gentleman the Member for Huyton, some with more substance than others, but nobody has brought forward the fact that these stem, not from 1950 or 1951 but from 1946, when the most doctrinaire Act of the Party opposite was enacted.
  Let me remind right hon. and hon. Gentlemen opposite that those were the days when the right hon. and learned Gentleman the Member for St. Helens (Sir H. Shawcross) produced the phrase, "We are the masters now." The right hon. and learned Gentleman hardly graces us with

  1763
  his presence at all now for what reason we can only assume—it may be private enterprise or it may be disagreement with his colleagues. And the most masterly act of the masters was the destruction of the Liverpool Cotton Exchange.
  Mr. Sydney Silverman: That was not in 1946.
  Sir W. Fletcher: The refusal to reopen the Liverpool Cotton Exchange—[HON. MEMBERS: "Ah."] I make hon. Gentlemen a present of that. It would be very salutary if the hon. Member and his colleagues were to read the debates of 28th March, 1946, and 2nd December, 1946—
  Mr. Silverman: Was the hon. Member there?
  Sir W. Fletcher: Yes, certainly, and I took part in both the debates. I closed the debate on behalf of my party in December, 1946, when I referred to the Act, the refusal to reopen as the "Manchester November Handicap"—and what a handicap it has proved to be. Every single one of the bogeys that the right hon. Gentleman the Member for Huyton has brought out do not stem from any action taken in 1950 or 1951, but from the fact that during the years from 1946 onwards—
  Mr. Silverman: In 1939.
  Sir W. Fletcher:—the inability to use the Liverpool Cotton Exchange was gradually accumulating evils which only began to show themselves in 1950 and 1951.
  Mrs. Braddock: Can the hon. Gentleman tell us why it was that in 1939, when the Coalition Government asked the Liverpool Cotton Exchange to act for them in relation to these matters during the war, they refused to do so?
  Sir W. Fletcher: I cannot answer that question straight away. I am getting down to the Act of the right hon. Gentleman and his party in 1946.
  Do they remember that every single other cotton country—America and every other country—was anxious that they should keep open the Liverpool Cotton Exchange? We should have avoided much of the dollar shortage if it had been reopened as those countries wanted it to be.
  1764
  On that occasion the then Lord President of the Council, who handled this matter on behalf of the party opposite, produced no reason—except doctrinaire reasons—why this action of theirs should be taken. It is perfectly obvious—and I am speaking with knowledge of other exchanges which were not closed and which have continued since—that the dollar earning capacity of the Liverpool Cotton Exchange was sacrificed for all those years; and it is humbug for the right hon. Gentleman to raise the bogeys which he has raised today as if they only existed since 1950 and 1951.
  We used to hear the phrase, "Taking one year with another." That phrase was thrust upon us the whole of the time on that occasion. Now, "taking one year with another," we take one £25 million loss on top of another £25 million loss. That is "taking one year with another," and that arises entirely from the action of the party opposite in their original action in 1946.
  May I point out one or two of the difficulties and dangers, on a realistic basis, which do exist? Not the bogeys produced by the right hon. Gentleman opposite, most of which do not exist. I would point out that I represent a part of Lancashire where there is a considerable amount of cotton industry and I am not speaking entirely without knowledge. When my right hon. Friend the President of the Board of Trade described the cover system I think he only described one side of it, that which helped—as it undoubtedly does help in an open exchange—the consumer. What about the producer? For years, the producer of cotton has been deprived of the value of the Liverpool Cotton Exchange as cover for himself.
  The American cotton growing area was only able to use the New York Cotton Exchange as a hedge. They always came to Liverpool because it was the only real open market. The closing of that market for outside growths, whether Peruvian or Brazilian, has resulted in the fact that it has forced on those countries a pattern of trade most inimicable to the interests of this country. There is hardly any free dealing in cotton and other commodities now. It is nearly always sewn up with barter business. The producer—and it will be a grievous disadvantage

  1765
  to the maker of textiles in this country—can very seldom get the free price under present conditions for the cotton produced. Goods are supplied against a certain raw material price, and the price for cotton or any other commodity concerned is not the true price.
  The chief task confronting the Liverpool Cotton Exchange—which it will not be able to achieve very rapidly, but I will come to that in a minute—undoubtedly will be gradually to persuade the producers of cotton, just as much as the consumer, that the old system in the market by which the consumer and producer were able to take out at any moment the essential hedge that was needed, will come back. We have had in this House debates on housing and the repair of houses and how long that takes. The same will be true of the Liverpool Cotton Exchange.
  We have not had an intake of young people to learn the business, and that is a considerable disadvantage. From the financial side, speaking with some knowledge of commodity finance, I would say categorically that the bogey raised by the right hon. Gentleman on that point is an unreal one. All the finances will be available. If the right hon. Gentleman has had the time to follow what is going on in that despised area, the City of London, he will know that special arrangements have been made by financial institutions of responsibility and knowledge for exactly that contingency.
  The fixing of prices, whether for a small mill or a vertical combine or any other combine, is a matter of utmost importance. We are in competition with others, with Japan for instance. I pointed that out seven years ago. And the only way that we shall be in fair competition is by getting rid of unfair subsidisation, which is beginning to show itself in Germany, and by gradually building up again the Liverpool Cotton Exchange to its previous place as an absolutely fair and open market.
  It may not be easy and may not be quick, and the possibility of a dollar famine which was raised by the right hon. Gentleman the Member for Huyton deserves the closest attention. If a dollar famine ensues what will be the result if there is no Liverpool Cotton Exchange open? Will it be any more palatable? Not at all. If there is a dollar famine
  1766
  and a recession in America, there will be, as there has been already in other commodities produced in the dollar area, the certainty that the producers will have to come down and sell in our currency at our price, and that will be much more fairly achieved by an open exchange than by the present system. We shall see forward discounts instead of forward premiums, which is a feature that occurs always on occasions such as that, and that in itself is not unhealthy for a limited period of time.
  Mr. H. Wilson: While agreeing with the hon. Member, following the precedent of tobacco and certain other sales for sterling, that we may see cotton sold for sterling, may I ask whether he agrees that if it is sold through the Commodity Credit Corporation or other United States Government agency, as it is very likely to be, it will be very difficult indeed for a futures market to buy from such an organisation and a relatively simple transaction for the Raw Cotton Commission to do so?
  Sir W. Fletcher: No, I do not believe that. If there is the pressure which the right hon. Gentleman presupposes, the pressure to sell will force the seller to the only market at which he can dispose of his goods. That is the sound logic and precedents exist.
  Let us not pitch our hopes too high. No free commodities exchange—and we are talking about a free exchange—can exist without full freedom of currency, without complete convertibility. That, for obvious reasons, is not in sight at present and, therefore, the period in front of the Liverpool Cotton Exchange must be one of gradually building up again from the wreckage and ruin brought about by the party opposite by their actions in 1946. It will take quite a considerable time.
  It is not alone within the power of the Chancellor of the Exchequer to put it right. Other countries which previously used the Liverpool Cotton Exchange have their own exchange regulations and stop their own nationals from using open markets. That is equally true of commodities other than cotton. If we are realistic in this we must see the present Bill not as a panacea, not as a means of rapid cure for a considerable evil that exists and which stops the consumer at present from being an all out competitor in world markets, but as an

  1767
  opportunity for him to build up gradually to the position which he held before.
  There are many markets closed to him. It is not wise or sensible to think that the breadth of the market can be regained very rapidly. And many people have to be trained. But I have seen in other commodity markets in which my working days are spent—though not quite to the same extent now as they were previously—how if there is in a market hope for the future, if there is in a market the certainty that those concerned will have from the Government, the Treasury and Bank of England the maximum support, if in every international conference the doctrine is preached that we want to return to freedom of trade, which is the genius which made the Liverpool Cotton Exchange what it was, a sound futures market is assured. Incidentally, it was odd to hear the right hon. Gentleman the Member for Huyton speaking so very much against free international trade.
  I am going to speak with dangerous freedom and frankness about the horror of hon. and right hon. Gentlemen opposite and their pious hypocritical display when the word "speculator" is used. It is something wonderful. It is almost impossible to believe that they ever put even a sixpence in a football pool to hear them talk, but they know perfectly well in their heart of hearts that whether he is buying Government stock and financing the whole of the activities of the Government and the country because he thinks the interest rate is too cheap, or whether he is selling because he thinks it is too dear, the whole of industry and commerce is based on the investor's or speculator's intelligent anticipation of the future and his taking of commercial risk.
  That is the essence of trade and commerce and if we emasculate it by taking that out of it there remains what never existed in this country in the past—the easy acquiescence in taking a day-by-day bread and butter living from people who run one's business for one. That is something which I hope we shall not contemplate for very much longer.
  The speculator certainly made the futures market to a considerable extent, and he will do it again because that is part of human nature. But he may very
  1768
  well be a trader, a producer or a consumer. At present, there is only one speculator and that is the Government and taxpayer, and the taxpayer is not even allowed to select his horse. Let us have an end to this canting hypocrisy about the speculator. Let us canalise and use the speculator, who always has existed and always will exist, to carry out his function.
  Who paid the carrying charges on commodities in this country? It was the buyer of futures, the man who was willing to take the risk. Now he is ruled out. He is not the man who sits and gambles madly in commodities. He is often the user, though I admit that there may be a small fringe of outside people, mostly from other countries.
  Until this is restored to the market, until we have freedom of exchange, until we have free physical stock behind the market—without which no such market can work at all—we shall not have the full benefit of this Bill, which is the first step and a most important step in the right direction, and the only possible step to take. We know that the right hon. Member for Huyton and other hon. Members opposite always say that it is the wrong time to do anything. I have never known it to be the right time for any Bill of any kind. It is always either too early or too late according to some people. But this is the time for this Bill.
  The next two years will be fraught with difficulties. This is the time to harness again that lifetime of experience of the past to this task of re-creating the Exchange and to building up stocks to create terrific invisible exports and dollar earnings. This is certainly a step in the right direction and a step which, with considerable knowledge of this market and others, I commend fully to the House.
  5.30 p.m.
  Mr. H. Rhodes: First, may I congratulate the President of the Board of Trade on the adroit way in which his Department have handled this business of reversion to the Liverpool Cotton Exchange. They have shuffled the responsibility very nicely on to the Hopkins Committee. That Committee, composed, as it was, of representatives of the trade, brought in their first Report and then their review. They have done the job for the Government very nicely,

  1769
  very painlessly. Considering that the Government had the idea all the time that they were going to do this with the Raw Cotton Commission the Government have been able to get out of it very well.
  I want to refer to a remark made by the Minister on the question of cover on the Liverpool Cotton Exchange which, he said, would be as good as that given by the Raw Cotton Commission. The President of the Board of Trade should not mislead the House in this way. It is not correct. He knows, or should know, that the type of American contract which is to be put into operation in Liverpool does not provide for cover for the Commonwealth, for Dominions and colonial cottons, at all. To that extent he is trying to mislead us.
  The hon. Member for Bury and Radcliffe (Sir W. Fletcher) always tries to tell us that he is not a bad speculator. We do not believe he is a bad man at all. In fact, we have missed him in these debates. We have missed him in debates about the Far East and trade with the Far East, more perhaps than he realises, and we are very happy to see him restored to a measure of health. I hope that he will keep his health for a long time.
  Having said that, I now wish to deal with the point he made about the elimination of the Liverpool Cotton Exchange which, he said, forced a pattern of trade on America. It did not do so. There was a pattern of trade in the American cotton industry long before 1939 which had been forced on the trade interests in America by events.
  The hon. Member knows, probably as well as anyone in the House, the events of the 1920s and 1930s and I shall not go into them. He knows how the American Government set up their own commodity corporation with their own funds to underpin the prices of all farming products in America. That was exactly because the exchanges were not doing the job adequately even in those pre-war years. Otherwise, there would never have been the necessity for underpinning American farm prices.
  It is always the argument of those who say we should establish a futures market that it makes for stability, that it enables cotton to be moved from the farm into
  1770
  the pipelines for the use of industry. Of course it does—we all agree with that—but even in the days before the war it was not moving in the pipeline at all until the American Government came on the scene and underpinned the price of cotton by introducing support of farm prices.
  I see the hon. Member for Cheadle (Mr. Shepherd) in his place. I have been waiting this opportunity for some little time. In our last debate on cotton I was very rude to him. I contradicted him on a matter on which he was perfectly right and I was wrong, and I apologise. It was something I said the wrong way round and was stupid enough to stick to it instead of thinking for a minute.
  The next point I want to raise is what is the likely outcome for Empire cottons. We have had quite a little speculation this afternoon and a few hypothetical questions were posed, but there is no doubt whatever about the need to address ourselves to the question of Empire cottons in a most serious way. We have said that the American futures contract is to be put into operation and is to be rigidly adhered to. I understand that a seven-eighths staple is to be the standard. It must be that there is stock to support the futures market.
  What is to happen in the case of colonial cotton? We all appreciate that we must have some security. I have said before that I am not against some sort of a futures market as such, but how are we to deal with this situation if colonial cottons are not to be included in a standard in Liverpool?
  We know full well that a cotton crop comes on the market in a comparatively short time. We know that somebody must take up that cotton and put it in the pipeline to bring it to the customer. The question of whether it is the merchant, the Raw Cotton Commission or the speculator, we will leave for the moment, but someone has to do it. If there were not somebody fulfilling that function in a bad time all the cotton would be crowding back along the pipeline to the poor producer, who would not be able to put his seed in for the next year's crop.
  Sir W. Fletcher: Is the hon. Member presupposing that there is no sort of

  1771
  points on and off system such as we had before? As one who had a great deal to do with the starting of Uganda cotton, I can tell him that we always knew we would be able to hedge under that system.
  Mr. Rhodes: That is what I am coming to; that is the evil of the whole business. [HON. MEMBERS: "Why?"] I will tell hon. Members why. I will give one example.
  Before the war, when Sudan cotton was 7d. a lb., the discount on it, because it was not tenderable in Liverpool, was 2d. The sole reason for the 2d. was because it was not tenderable against futures. [HON. MEMBERS: "No."] Oh, yes. Let me follow my argument. Cotton comes on the market in a comparatively short time. In the case of America it is August, September, October or November and an ordinary operator going into the market could not buy all his cotton in one transaction for the whole year. Someone has to take out the cotton and fill the pipeline with it.
  But what is to happen in the case of Uganda, Sudanese or Nigerian cotton? Will a user go to the sales there and buy up for 12 months all at once? Of course not. It will be left to individual merchants who are interested in this particular market to take an interest in it, and the result will be that the price of colonial cotton will always be lower and always at a discount in comparison with the equivalent staple coming from America.
  This happened time and time again before the war. If the hon. Member for Bury and Radcliffe will listen to this, he will hear an opinion from what he will probably regard as a better authority than himself. It is none other than the chairman of the Council of the Empire Cotton Growing Corporation who probably knows a good deal more about Empire cotton than anybody else in this country. He said in June last, at a meeting of the Administrative Council:
  "Before the last war, and for many years, colonial cottons were not allowed as tenderable against the Liverpool Contract and, in consequence, laboured under a serious handicap, which in effect drove the cottons into the mills of India and Japan instead of, as was intended, their coming to Lancashire. It is true to say
  1772
  that before the war a separate contract was made available for them"—
  it was before the war that they were working under that handicap; now there is a separate contract for them—
  "but it never really functioned, as, in effect, it placed a penalty on the cottons included in it, as compared with American cotton.
  "I wish to submit that such growths as Uganda, Nigeria and Tanganyika, for instance, are not inferior in grade, staple, character or spinning qualities to American cotton. If I am right—and I have no doubt about it—I submit that the Committee that will have very soon to be appointed to deal with the matter should take into its most serious consideration the inclusion of cottons equal to American under the Contract on an equal footing."
  I want to make a serious plea to the House on this question of colonial cotton. This Government and the Labour Government before them have taken all the care that they could to introduce cash crops into these colonial countries. One of the handiest cash crops that can be grown in most of these areas is cotton. If, by some means, what the Government are doing here can be misrepresented by extremists to the cotton growers, who are always peasants and who are the backbone of the particular community in which they live, what will happen is that the same sort of trouble that now exists in Kenya will be stirred up.
  There will be an enormous amount of trouble. Hon. Members opposite should not smile about it because it is serious. The effects of it will be seen within a year or two, because the nationals of our Colonial Territories do not intend to be messed about any more by business interests simply because something is put in a party political programme. It cannot be done.
  What I am asking the President of the Board of Trade to do is to delay the setting up of the Liverpool Cotton Exchange until satisfactory and adequate means have been devised to ensure that colonial cottons of equal quality receive the same treatment in Liverpool and in Lancashire as American cotton. All I am pleading for is the opportunity for the natives of the Colonies, who grow cotton as a cash crop, to compete on the same footing as their big brothers from America. If, in the months ahead, we put something into this Bill which will make that possible, then I for one will be happier than I am now.
  5.46 p.m.
  Mr. William Shepherd: I am grateful to the hon. Member for Ashton-under-Lyne (Mr. Rhodes) for kindly referring to an incident in a previous debate. I felt certain that on reflection his good humour would convince him that what he had said was not in accord with his own standards.
  I want to say right away that the point on which the hon. Member has chosen to attack this Measure is perhaps the most serious and substantial of the lot; and hon. Members on this side of the House will join with me in taking the view that merchants and brokers in Liverpool and the Government must do all that they can in the new circumstances created by the passage of this Bill to fortify the position of colonial growers.
  When I say that, I ought to add that things ultimately sell upon their value, and if one looks at 1937–38 and 1953 one must not overlook that during that time the colonial growths have improved immensely from the packing and marketing points of view, and the degree of acceptability in Lancashire is much greater than it was. I see no reason—and I am not making any political point on this—why colonial growths, with their new standards of quality, should fail in competition with the United States.
  After all, there is a high-cost economy in the United States, whereas in the Colonial Territories there is a relatively low-cost economy. As the hon. Gentleman knows, the marketing boards in those countries have quite a substantial margin with which to play on the basis of present-day prices. I do not really think there is any serious danger, and I reiterate the view of this side of the House that nothing should be left undone not only to promote the sales of Colonial growths, but to increase them.
  Mr. Rhodes: But that is only one side of it. There may be the question of price, and the native growers may think they can stand losing 2d. a lb. But what I was trying to get over was that because nobody is covering colonial cotton, as the only contract will be an American futures contract, it will not be bought.
  Mr. Shepherd: The hon. Gentleman will realise that under the existing contract they are insured for the range of differences in the prices of American middlings. I look forward to the time
  1774
  when under a separate contract colonial growths will be covered or there may be perhaps colonial growths included under the existing contract.
  I am afraid I cannot see much merit in the speech of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). He was heavily pressed this afternoon to make a case against this Bill, and I have never seen him at such a disadvantage. When he talks about this Measure stemming from the Prime Minister's speech, how unreal it is. I will tell the right hon. Gentleman where this Measure stems from. It stems from the voluntary option of 60 per cent. of the buyers in Lancashire to buy outside the Commission. That is the origin of this Bill—the option and the free choice of 60 per cent. of the purchasers to purchase outside the Raw Cotton Commission.
  Moreover, the right hon. Gentleman made another point which I think is invalid. He attacked my right hon. Friend for not sticking to his principles. He said that public subventions were given for the purpose of fortifying various industries, but that we said that it was improper to do it in this case. I wish to make it clear to the right hon. Gentleman that we on this side of the House are not in any way departing from our principles. We feel that where-ever possible public subventions to industry should be avoided. If there is a choice of doing something by public subsidy or private manipulation, we choose the private method every time. That is precisely the principle on which we stand on this Bill.
  The right hon. Gentleman was probably on stronger ground when he came to the question of the scarcity of dollars and cotton. On scarcity economics I admit that the right hon. Gentleman has us beaten all the time. But we are not aiming at a world in which scarcity economics predominate. We are aiming at a world in which there is a balance and in which there are fair shares between supply and demand.
  Mr. H. Wilson: Does the hon. Gentleman really say that he does not regard the danger of a dollar crisis as a real one in which all the scarcities of these commodities will be repeated once again?
  Mr. Shepherd: I intend to refer later to the dollar question. I was saying in comparing the weakness and strength of

  1775
  the right hon. Gentleman's case, that he was much more at home on the question of scarcity economics. I am concerned with this issue on one basis only, and that is what is the most economic way for Lancashire to buy its cotton? There should be no other issue before this House today than the question of what is the best way, from the business point of view, for Lancashire to buy its cotton.
  Mr. H. Hynd: The business point of view?
  Mr. Shepherd: Yes.
  Mr. Hynd: The business man's point of view.
  Mr. Shepherd: The business man's point of view. There is no other question before this House than what is the best way from the business man's point of view for Lancashire to buy its cotton.
  Mr. Hynd: What about the consumers' point of view?
  Mr. Shepherd: That, in the ultimate, is the same thing. No one will deny that the methods that have been canvassed have had a fair trial. The Raw Cotton Commission have taken high prices and low prices and, after six years or so of trial, 60 per cent. of the people, under adverse circumstances, choose to buy outside the Commission. That is the evidence.
  I am not only a believer in trade unions; I am proud of the kind of trade unionism which we have in this country. But for the purpose of my argument I do not take the view of the trade unions. If we are to have managing directors, managers and others responsible for the financial success of their businesses, we must not allow trade unions to tell them how to buy their materials. There must be a limit to which we accept the argument that trade unions shall dictate to us what business methods are to be employed.
  There is a proper field for the opinion of the unions, and it is obvious that we should consult them on some matters; but if a man running a business believes that there is one way of buying material and the trade unions say that there should be another, then, if that man has the financial responsibility of the business, his
  1776
  decision must prevail. Therefore, I say, with all respect to the unions and as one who is not only a supporter but an admirer of them, that this is not a case where, if there is a clash of opinion, their view should prevail against the view of those who bear the financial responsibility.
  I turn now to the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand), who I am sorry to say is not in his place. I understand that he is to wind up the debate for the Opposition. When he introduced the previous legislation, he said that Lancashire spinners would be assured of a long-term stability in the price of their materials unequalled in any other country. That is what he told us in 1947. There was little doubt about his sincerity and even less about his accuracy. We cannot expect stability in a commodity like cotton. It is like taking a ride on the scenic railway and expecting to be straight and level.
  Cotton is a yearly crop commodity which varies immensely in price through a great number of circumstances quite beyond the control of any individual or group of individuals. If the right hon. Gentleman does not accept my word for it, I invite him to read a report of an organisation known as I.C.A.C., which said recently that it was much more difficult to bring about a commodity agreement for cotton than for wheat. Indeed, it finished its proceedings without taking any material steps towards providing such an agreement.
  Therefore, it is not only the jaundiced view of mere doctrinaire Tories that one cannot achieve stability. It is the view of the whole of the people who have any knowledge of the circumstances. If we do not achieve stability but manage to achieve near-stability, we do something which is damaging to the industry from the point of view of the spinners. I will explain why it is damaging to achieve near-stability.
  What has happened in the past six years? When prices have been moving up the Commission have sold to the spinners at lower than the world price. That is not necessarily a good thing. It may have two effects. It may render the spinners less efficient or it may mean that the spinner sells in the world market below the price which he could achieve

  1777
  if he had had to pay the proper price, and as a result we lose foreign exchange.
  What happens when we get near-stability and we are going the other way and world prices are falling? The central purchasing organisation cannot follow the world price right away. It follows some distance behind, and the spinner has to buy his cotton at higher than the world price, with the result that he loses foreign business. Therefore, whichever way we look at the matter, if we get a near approach to stability it is harmful to the business interests of the community. That is one of the reasons we should get away from this quite impossible method of centralised buying.
  I was more than surprised that in a speech of some considerable length the right hon. Gentleman the Member for Huyton put forward not one suggestion about how we should deal with this situation. Here we are with 60 per cent. of the trade opting to go into private hands, and he comes to the House as a former President of the Board of Trade and puts forward not one idea about how we should deal with the situation.
  I know how the right hon. Gentleman would deal with it. He would dragoon the spinners of Lancashire into his central buying organisation once again. He would say, "I shall not give you free choice to buy your cotton as you would wish." If the right hon. Gentleman has any other alternative suggestion, I am willing to hear it, but I do not think that he has. Indeed, every speech from the Opposition side of the House must be farcical and hypocritical if hon. Gentlemen opposite accept free buying. Once we allow the merchants and the spinners of Lancashire to buy their cotton freely, then we have to admit the necessity and the desirability of the futures market. It follows logically one from the other.
  Mr. H. Wilson: To save the hon. Gentleman the trouble of any more speculation, perhaps I might repeat what I said in July so that he will know where we stand. We believe in the maintenance of the Raw Cotton Commission. We believe that the problem will not be solved without its maintenance. We are certainly prepared to experiment with a certain amount of private buying, but we do not see why public funds should be used for those who choose to go in for
  1778
  private buying. If that is the position, I think the vast majority will continue to use the services of the Commission.
  Mr. Shepherd: The right hon. Gentleman is merely fortifying my belief about what his viewpoint would be. He says he would accept a certain amount of private buying. That means that he would restrict the free choice of Lancashire spinners. His whole argument is based on that restriction. We do not accept the economics of restriction. We believe that the buying of cotton freely will be best for Lancashire and the rest of the country in the long run.
  Mr. Wilson: What facilities is the hon. Gentleman providing for the majority of the firms in the industry who have so far wished to continue using the Commission? He is denying the majority of the firms the right to buy their cotton through the Commission by abolishing the Commission.
  Mr. Shepherd: I am satisfied that, when the market takes over, those spinners who, for a number of reasons, some not unconnected with the shortage of cotton from Sudan, choose to continue with the Commission, will be adequately safeguarded and their needs will be met by the market. That is what the people in the Liverpool market will be in business for. After all, if one has a business in a competitive enterprise one lives by satisfying the customers and one dies if one does not do that. That is the best guarantee for the Lancashire spinners.
  The right hon. Gentleman the Member for Middlesbrough, East made a most fascinating contribution to the debate last Friday in which he said how wonderful the Raw Cotton Commission organisation was and that it cost the country in administration only £500,000 a year. He asked whether private enterprise merchants could do that. He omitted one figure. In the year about which he was talking, the Commission lost £25 million. Does the right hon. Gentleman believe that a loss which falls on the taxpayer is not a loss, or that it is a good thing to have an administration costing £500,000 when there is a trading loss of £25 million? To put that sort of argument before the House of Commons, which is largely composed of people with adult minds, is really taking us less seriously than we ought to be taken.

  1779
  I agree that since private buying has been in operation stocks have not been entirely satisfactory. There are reasons for that. The Commission carried very big stocks, and in view of the political difficulties in various parts of the world and the difficulties in the cotton market, that was to be expected. We ought now to realise that there has been a change in the pattern of buying and it may not be necessary in future for Lancashire to carry the amount of stocks that was carried before the war. The manner in which the mills are now buying cotton enables them to save ½d.¾d. per lb. As we say, there is some "brass" in Lancashire now, and the mills can afford to finance the present type of buying. The fact that enormous bales of cotton are not now being brought into Liverpool does not mean that satisfaction is not being given to the spinners. I anticipate that in future a smaller amount of stock will need to be carried compared with the past.
  I congratulate my right hon. Friend upon bringing in the Bill. It is an inescapable step following the Report of the Cotton Import Commission. It comes not from any doctrinaire Tory policy but from the free and unfettered choice of Lancashire spinners. It gives us a chance to establish another terminal market. The right hon. Member for Middlesbrough, East poured contempt upon the prospect of getting a little more foreign currency. He ought to have a talk with his right hon. Friend the Member for Huyton and listen to what he says about the difficulties which may face this country in the future. There is no room for people who say that we should ignore an amount of foreign currency because it happens to be small. It is important for this country to earn every possible scrap of foreign currency which can be earned by terminal markets.
  Mr. H. A. Marquand: The hon. Gentleman may have noticed that his right hon. Friend did not refer in his speech to dollar earnings. What he was afraid of was dollar losses.
  Mr. Shepherd: I am sure that my right hon. Friend has in mind the prospect that the Liverpool Market will be a dollar earner when it is thoroughly re-established. It was a dollar earner before the war, and it will be again. It is true that
  1780
  we imported a certain amount of cotton from the United States, but, as a market, the Liverpool Cotton Market was a net dollar earner. It is essential for us, in our difficult plight, to use terminal markets and utilise the skill of our merchants. I am glad that the Liverpool Market will once more have a chance to give us a place in the sun. America is the great cotton producer, and we are relatively insignificant even when we take into consideration our Colonial Territories as purchasers. However, before the war the Liverpool Market was recognised as the main market of the world, and I hope the Bill will enable Lancashire to regain that position.
  6.6 p.m.
  Mr. Ernest Thornton: I am glad to have the opportunity of following the hon. Member for Cheadle (Mr. Shepherd), because there were one or two points in his speech on which I wish to comment. The hon. Member referred to the origin of the Bill. I agree with my right hon. Friend the Member for Huyton (Mr. H. Wilson) that the Bill originated in the speech which the Prime Minister made at Liverpool. Before I became a Member of Parliament, the cotton trade unions met the President of the Board of Trade when he contemplated setting up some machinery to alter the present method for the import and distribution of raw cotton.
  The right hon. Gentleman put to the trade unions not only terms of reference for short-term proposals but also terms of reference for long-term proposals, which inferred the reopening of the Liverpool futures market. The trade unions refuse to support the long-term proposals, and it was then that the President of the Board of Trade—I am sorry that he is not in the Chamber at the moment, because I should have preferred to say this in his presence—changed his terms of reference to short-term proposals only, and it was because of this that the trade unions agreed to participate.
  The hon. Member for Cheadle referred to the rights of trade unions in this matter. I do not think it can be alleged that the British trade union movement and the cotton textile trade unions in particular have ever tried to usurp the functions of management, but we claim the right to be consulted and to have note taken of

  1781
  our opinion upon matters which will affect employment and the quality of work which is required.
  Mr. Shepherd: I should like to make it clear that I consider the unions, in Lancashire particularly, to be admirable in every way. Their leaders are first-class men, and they ought to be consulted. The point I was making was that, if a man is given responsibility for the financial side of a business and if there is a purely business point as to how material shall be bought, the decision of the man who has to accept responsibility for the financial side of the business must be accepted.
  Mr. Thornton: That interruption does not take us anywhere. The matter we are considering is one in which the trade union view should be regarded as of the utmost importance. On the admission of the President of the Board of Trade, 50 per cent. of the mills have contracted in and 50 per cent. have contracted out. If 100 per cent. of the workers, as represented by the trade unions, have one particular view, and half of the employers have the same view, that is a situation in which the trade union point of view should have some influence.
  I was very interested to hear the very doctrinaire speech of the hon. Member for Bury and Radcliffe (Sir W. Fletcher), and I do not say that unkindly at all. The hon. Gentleman preaches the doctrine of private enterprise quite effectively, but I thought the burden of his case was that it was this side of the House that closed the Liverpool Cotton Market. If my memory is correct, it was closed as a result of action by the Conservative Government in 1939 or 1940, or by the Coalition Government in 1940—I am not quite sure which.
  There were one or two points in the speech of the President of the Board of Trade on which I should like to comment. On the whole, I think his statement was not an unfair statement in all the circumstances, but I think the House should realise that the reason more people contracted out—as many as 57 or 58 per cent. by weight of cotton consumed—was only because, substantially, the Raw Cotton Commission were going to give them the excellent cover which they have had hitherto. Had it not been
  1782
  for that guarantee of the best cover scheme which the industry has ever had, there would have been less than 30 per cent., and not 57 or 58 per cent., contracting out.
  Reference was also made by the right hon. Gentleman to the trade union members of the Hopkins Committee agreeing to the recommendations, which gave the indication that they believed in them and thought that that was the way to go. I think it is only fair to remind the House that the trade union and other representatives co-operated with the Government to attempt to find a compromise, and I presume these proposals represented the lowest common denominator.
  Since the speech of the present Prime Minister in Liverpool two years ago, there has been a lot of smooth propaganda to try to create the impression that, if only we can go back to the conditions prevailing in the Liverpool Cotton Market in the 1930s and the 1920s everything will be well. I want to remind this House that that is a delusion. The industry was not satisfied with the operation of the Liverpool Market in the pre-war years, and I have quoted before in this House this passage from "The Economist" of 26th February, 1949:
  "Before the war, cotton spinning employers were vociferous in their complaints about the Liverpool Cotton Market."
  I refer also to the statement made by that very powerful figure in the cotton spinning industry—Sir Charles Macara—who was strong in his condemnation of the Liverpool Cotton Market. I make this quotation from "Tattersall's Weekly Newsletter" as recently as the 10th of this month:
  "The important aspect is the effect on the spinning trade as the main users of the raw material. It is fair to say that, in the years up to 1939, the mills were not always in the position of being able to have first say as to their requirements. Raw cotton merchants were often in a strong position and were inclined to act independently. It should be predominantly clear at the outset of the new régime that the user of cotton, as the first instrument in preparation for the final article, should not only be taken into consultation, but should be able to procure the cotton of his choice as and when he needs it."
  The clear implication of that statement by Tattersall's is that Liverpool will have to do better than it did before the war. Self-interest has been the driving force in this proposed legislation, and it is the self-interest of a relatively small trading

  1783
  community, as compared with the quarter million or more workers employed in the cotton spinning, doubling and weaving sections of the cotton textile industry. Little regard is being paid to the well-being of the industry as a whole.
  My right hon. Friend referred to the number of spinners who have contracted out, and the point which he made, which I want to emphasise, should be borne in mind. The interlocking directorships which there are now between the Liverpool cotton merchanting firms and the larger spinning units in the cotton industry have been an important factor in this matter.
  Reference was made earlier to the debate in this Chamber on 28th March, 1946, and I am glad, because I have had a look at it. I was not a Member of this House at that time, when the right hon. Gentleman who is now Secretary of State for the Colonies moved this Motion:
  "That this House regrets the decision of His Majesty's Government not to reopen the Liverpool Cotton Market and considers that the system of bulk purchase under State control will hamper the manufacturer, increase the cost of cotton to the consumer and deprive this country of a valuable source of foreign exchange."—[OFFICIAL. REPORT, 28th March, 1946; Vol. 421, c. 591.]
  I want to deal with the three assertions made in that Motion, which happily was defeated. The first is the assertion that it would hamper the manufacturer, and I wish to quote some interesting observations from the "Rochdale Observer" of 7th November:
  "Mr. G. E. Gardiner, the President of the Rochdale Cotton Employers' Association, said he deeply regretted the change."
  That is to say, the change envisaged in this Bill. He went on:
  "I do not think spinners will get a service equal to that provided by the Raw Cotton Commission. I believe it will mean that the 'spot' market in future will not be adequate, in comparison with the Raw Cotton Commission, to meet the need, and, that being so, spinners will have principally to be their own merchants, which will require a great deal more capital to finance the cotton supply. We have never had cover equal to that given by the Commission, and in my view we have never had a service equal to it. While one generally appreciates private enterprise, it has never given us this service. Some people say that the taxpayer should not provide this, but in the aggregate I do not think he has lost any money yet. The whole thing is a political move."
  That is Mr. Gardiner, whom I know, and I have taken the opportunity of
  1784
  having a talk with him to see if this report accurately records what he said. He told me that it not only accurately reported what he said, but represents what he still thinks, and his political affiliations are on that side of the House, not on this. In fairness to Mr. Gardiner, I ought to add that, in saying that, he was not speaking as president of the Rochdale Cotton Employers' Association, but the fact that he is president of that association indicates that he is a man of some responsibility and that he is trusted by his colleagues.
  The second point on the question of centralised cotton buying of the Raw Cotton Commission hampering manufacturers, leads me to quote again from "Tattersall's Weekly Trade Letter," of 10th November:
  "Whatever the respective merits of State-controlled buying and distribution and the operation of a futures market, few people in the industry will deny that the Raw Cotton Commission, after its initial teething troubles, gave not only an adequate but an almost foolproof system of cover for spinners."
  That does not indicate that the Commission have been damaging and hampering the manufacturer.
  Then we have from the Liverpool Cotton Association some notes on the formation of a Liverpool futures contract, dated July, 1953. Paragraph 25 (b) says:
  "There may be a readiness on the part of spinners—particularly those who continue to support centralised trading—to be critical of the market after several years' experience of the artificial stability of the cover scheme."
  So the Raw Cotton Commission have given a cover so stable as to be considered abnormal and to be described as "artificial."
  On the second point of the Motion proposed by the right hon. Gentleman who is now Secretary of State for the Colonies, that the Commission would increase the cost of cotton to the consumer, I want to quote—I hope I am not wearying the House—[HON. MEMBERS: "No."]—from paragraph 4 of the Cotton Import (Review) Committee, that is, the second Hopkins Report. It ought to go on the record. It says:
  "Our attention has been drawn to various statements which have obtained a certain publicity, indicating the degree to which contracting-out spinners have been able to buy their cotton more cheaply than contractors-in. We have made no detailed inquiry into the

  1785
  figures on which these statements were based and it is, in any event, too soon to attempt precise judgments. But we have the impression that if a thorough general examination of results over a complete trading period, conducted in the light of all the circumstances, were practicable, it might well appear in the net result that differences were only marginal."
  Therefore, the Raw Cotton Commission have not resulted in an increase of cost of cotton to the consumer, on the evidence of the Hopkins Committee.
  The third assertion of this Motion was that the setting up of the Commission would deprive this country of a valuable source of foreign exchange. According to the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield)—whom I see sitting opposite—when he spoke in the debate in July on colonial questions, and I take his authority for it—only 8 per cent. of our raw cotton came from the Empire pre-war, and last year the quantity had risen to 26 per cent. More Empire cotton consumed by our industry means less American cotton. The Raw Cotton Commission have, without question, by their long-term guarantees and assurances, been able to ensure that the cotton grown in the Empire came in large quantities to Lancashire. By these means the Raw Cotton Commission have been a great dollar saver. Apprehension is felt in many quarters that the impending change-over will add substantially to our dollar expenditure on raw cotton and be responsible in some degree in bringing forward another dollar crisis.
  Events have proved that the doctrinaire pessimism of hon. Gentlemen on the other side of the House was wrong, that is, the doctrinaire pessimism expressed in the Motion of 28th March, 1946. What guarantee is there that the doctrinaire and dangerous optimism represented by the Bill will not prove equally wrong? The Raw Cotton Commission have done an excellent job under the incredible difficulties of dollar shortage, to which reference has been made, and of actual physical shortage of certain growths of cotton in the world. A well-known spinner and cotton manufacturer said to me only on Monday of this week, "The Raw Cotton Commission have never stopped a Lancashire spindle." I wonder whether we shall be able to say that about the Liverpool private market set-up in two or three years from now. I have very great doubts, and large
  1786
  sectors of the cotton industry have great apprehensions on this point.
  Are the Government afraid of competition between private trading and the Raw Cotton Commission? The trade union representatives apparently were not afraid of competition. They agreed to the recommendations of the Hopkins Committee which meant private trading alongside trade through the Raw Cotton Commission. They felt quite sure that if that were allowed to develop the Raw Cotton Commission would justify themselves in competition with private trading. I have it on quite good authority that the stocks of the Raw Cotton Commission will be dissipated by the summer of 1954, that is, next summer. That will throw the market entirely on to spot cotton and on to cotton brought hastily from the United States under the two-months trading idea. A futures market without adequate stocks of cotton in support of the contracts is a mere gamble.
  I should like to quote further to the House, and I hope that the President of the Board of Trade will take note of the quotation. I hope he has already seen it. He certainly ought to see it. It is from an article by Mr. Sydney S. Gampell, Reuter's Financial Editor, and it was published in the "Textile Mercury and Argus" for 13th November, 1953. He says:
  "One current Liverpool argument for an all-American contract, the alleged superior stability of Americn cotton prices, very much remains to be tested. In the recent past, some outside growths have been less stable than American, because those outside growths were the more 'political,' liable to sudden disturbance by arbitrary or empirical actions by the Governments concerned. Even now, prices of American cotton may look more stable than those of other growths, but it could prove to be a very brittle stability. It is hard to believe that any values in the free world are more 'political' than those of U.S. cotton and other U.S. surpluses. Accordingly one may doubt whether there are price risks anywhere in the free world comparable to the risk of unloading of U.S. cotton and other surpluses."
  He goes on:
  "In their latest repetition of the Secretary of Agriculture's denial of an export subsidy on cotton 'this season' … spokesmen of the U.S. Department of Agriculture candidly said that Congress could force the Secretary to change his mind; they admitted that with the entire House of Representatives and one-third of the U.S. Senate facing election contests in November, 1954, just a few months after next year's cotton harvest was completed, U.S.

  1787
  cotton policy could be decided in Congress and not by the Agriculture Department. If that is the form of an export subsidy which the Secretary and the Department oppose, there clearly is a very real prospect of unloading by some such device as the two-price system, which the Secretary and the Department favour."
  That is Mr. Sydney S. Gampell, Reuter's Financial Editor. I think that if that happens it will smash any futures market that is set up.
  There has been a lot of talk today by hon. Members opposite about free enterprise and the law of supply and demand. Their case has been built mainly on that thesis, and I submit that it is illusory and dangerous in the world as it is today. The United States is looked upon as the citadel of free enterprise, but I think that its farm support policy may well prove to be the first crack in the wall of that citadel. If the farm support policy is allowed to remain, it will be interesting to see the political reactions in the United States, and, if it goes, it will not only be interesting to watch the political reactions, but also the economic reactions, which will be alarming indeed.
  I do not wish to spend much time on the question of colonial interests and the importance of colonial cotton growing, but the Raw Cotton Commission have, without doubt, by their long-term guarantees and assurances, built up confidence among the Empire cotton growers. Private traders acting separately or collectively cannot possibly give these assurances and guarantees.
  I fear that during the next few years we shall not see a continued expansion of Empire cotton growing. Indeed, if this Bill becomes law, I think that we shall actually see a decline. I need hardly remind the House of the economic dislocation that that would cause in many of our colonial countries.
  In addition, what about the political reactions which would inevitably follow? The more dollars we spend, the nearer we are brought to another dollar crisis, and, when it comes, I fear that the Empire cotton will not be available to us for the simple reason that it will not have been grown.
  There is another aspect of this problem to which I want to direct the attention of the House, and that is the question of
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  re-establishing the Liverpool Cotton Market on anything like its pre-war setup. If that happens, it will inevitably result in a substantial expansion of manpower in the carrying out of the non-productive jobs in Liverpool. Do not let it be thought that I am disparaging what I refer to as non-productive jobs. Some of them are necessary, some not quite so necessary, and others not necessary at all. It will result in more manpower being used in these particular services.
  I am one of those in the cotton textile trade union movement who has played—and I say this not immodestly—something of a leading part in attempting to increase productivity in the industry. I have spent a considerable time and earned some disfame by the activities in which I have engaged in that direction, because I profoundly believe that the future of this country is dependent upon a rising level of productivity.
  I am profoundly disturbed to think that while we are saving manpower in the productive sections, either by producing the same volume of output with less labour, or producing more with the same labour, we are going to have non-productive and unnecessary jobs filled in Liverpool and elsewhere. If hon. Members opposite think, and employers as a class believe, that increase in productivity, or redeployment, is something for manual workers only, they had better think again, because the administrative workers and every section of society must make their contribution.
  If this Bill goes through, the best that the Government can expect is that if the private raw cotton interests serve the industry much better than they did before the war they will do nearly as well as the Raw Cotton Commission have done since the war. But that is not a good enough ground for making the radical change proposed. I submit that a more realistic expectation is that we shall see chaos, unemployment and perhaps disaster come to many of the single-unit spinning mills.
  There is great apprehension today concerning these changes in various sections of the cotton industry. That apprehension runs right through the employees section of the industry, and from the evidence which has been adduced it is clear that at least half the employers

  1789
  are apprehensive about these changes. The only people who stand to benefit from them are the private raw cotton interests and the big and the very big cotton spinning combines.
  I know, from communications that have been sent to the President of the Board of Trade, that the right hon. Gentleman is well aware that the trade unions are 100 per cent. opposed to the winding-up of the Raw Cotton Commission, and, seeing that the employers are divided fifty-fifty on the matter, I believe that, in this case above all others, the trade unions are right.
  6.36 p.m.
  Mr. Richard Fort: The hon. Member for Farnworth (Mr. Thornton) seems to be as sensitive as other hon. Members opposite about the trade unions' concern with the Hopkins Committee whose recommendations really started the train of thought logically leading up to the Bill which we are discussing today. I should have thought that anyone who read both Reports of the Hopkins Committee could not help being struck by the increasing emphasis in them of the fact that we could no longer tolerate a system of purchasing cotton for this country which depended upon the expenditure of very large sums of public money purely for private enterprise purposes.
  When the right hon. Member for Huyton (Mr. H. Wilson) was challenged by my hon. Friend the Member for Cheadle (Mr. Shepherd) to say what alternative methods the party opposite would like to employ out of the choice set out in paragraph 21 of the second Hopkins Report, I thought he was rather disingenuous in a coy way when he gave no indication to what the party opposite would like to commit itself. True, the hon. Member for Farnworth speaking, I expect, at least for the great textile trade unions, indicated that they would like to see continued the present system of spinners being allowed to contract out, but with the Raw Cotton Commission providing cover against the ups and downs of the industry for both the contracting-out and the contracting-in sections.
  But, as we heard from the President this afternoon, during the not particularly
  1790
  exceptional trading conditions of the last two years the loss last year was about £25 million, and it looks as though the Commission are going to lose a similar amount this year. That is what we are asking the taxpayers to provide in order, let us be frank about it, to subsidise the textile industry in Lancashire.
  That industry has had enormous difficulties, dating from the competition of pre-war years when countries that we all know had workers working for scarcely any wages, and it suffered worse than any other large industry from concentration during the war. It certainly deserves great consideration from any Government, but to ask for that consideration to run into those sums of money, for several years in succession, is really asking for a tremendous lot. One of the reasons I welcome the return of the Liverpool Cotton Market and its dealings in futures is that our industry will no longer be making these calls on the public purse, but the losses will be put where they rightly ought to be—on the shoulders of those who are primarily concerned with the industry.
  Mr. Edward Shackleton: The general public.
  Mr. Fort: No, the hon. Gentleman must have failed to follow my argument. The general public is suffering at the present time through having to meet these losses-by taxation. In future, when the Exchange opens again, losses will fall on the more limited range of those who are directly concerned with the industry. Equally, if losses have to be borne at all—and the hon. Gentleman knows from his own daily affairs, as we all do, that that can happen—there will also be profits. And why should there not be profits in this industry?
  Mr. Dryden Brook: Have the Cotton Commission never made profits?
  Mr. Fort: They made a profit of £1 million in the first seven months of their operations, and made £10 million in the year of devaluation, entirely due, as the Report says, to revaluation of the English pound. Apart from that, they have lost money every year.
  Mr. Brook: Will the hon. Gentleman go back to the time when the Cotton-Commission started in 1939?
  Mr. Fort: I think the hon. Gentleman is confusing the Cotton Commission with the Cotton Control.
  Mr. Brook: I want to go back to the time when the Liverpool Cotton Exchange went out of existence.
  Mr. Fort: The Liverpool Cotton Exchange went out of existence in 1942, with the setting up of the Cotton Control, which was a different organisation from the Raw Cotton Commission.
  Mr. Brook: But the Cotton Control was based on the same principle as we want to continue now. It was a departure from private enterprise, and was an attempt to satisfy the needs of the cotton industry on a collective basis.
  Mr. Fort: I really think the hon. Gentleman is stretching his argument rather far in applying to peace-time conclusions drawn from the conditions of war-time, when there was no export trade at all, no competition to be met all over the world, and very limited supplies of cotton. Indeed, I am sure he will remember, from his own reading of the first Report of the Raw Cotton Commission, in regard to its first seven months of operations, that it is commendably open about the difference between war-time conditions with, as I say, limited exports, limited supplies of cotton, and fixed price margins for yarn in this country, and the conditions to which it was exposed under peace-time conditions of strong competition.
  Mr. Brook: The hon. Gentleman will surely agree that the conditions under which the Cotton Commission were set up immediately after the war were as difficult as any conditions could have been in the war period.
  Mr. Fort: No, I do not agree with the hon. Gentleman there. In some ways they were and in some ways they were not. To the very important extent that, during the war we were supplied with Lease-Lend, the war-time conditions were less difficult; to the extent that we had a much wider range of growths from which we could draw our supplies, the post-war conditions were easier. I think one has to balance these things.
  The setting up of the Raw Cotton Commission was based on deductions drawn from the war-time situation. Its very large losses have been met from taxation. I think that we are bound to conclude, from
  1792
  the logic in the two Hopkins Reports, that a change had to be made from the Raw Cotton Commission method of purchasing to the more flexible one of the Liverpool Cotton Exchange. If the Hopkins Committee had come out with an entirely different recommendation, and had said the Raw Cotton Commission were working with such extraordinary excellence that really no change at all was necessary, then, indeed, we should have had a very much more ferocious argument than we are having now. But, in view of what has been said in two expert examinations, I cannot help thinking that the change was inevitable.
  Furthermore, it is not only inevitable but desirable. We are now entering into a period of ever more intensive competition in the export markets, and although the Raw Cotton Commission have probably been run as well as they can be run, by their excellent Chairman, Sir Ralph Lacey, they have great limitations, as is mentioned in the Reports themselves, in meeting foreign competition. They find themselves supplying raw cotton, admittedly sometimes at a price below, but often at a price above that which our overseas competition are paying. One remembers the very harsh feelings there were in the industry, about two years ago I think, when we were having to spend so much on the outside growths and finding our prices were above those of our competitors who, at that time, were able to purchase, admittedly through American financial aid, the American growths themselves.
  In the Commission's efforts to keep us competitive they have lost very large sums of money. I think anyone who has looked at the proposals of the Liverpool Cotton Exchange, with the improvements and modifications which they have introduced as a result of pre-war experience and of representations made to them by various interests in the industry, will agree that we shall see a more flexible instrument of getting this country's cotton in Liverpool than we have seen with the Raw Cotton Commission.
  I must support the views of those who have said that, while there have been improvements in the conditions which the Raw Cotton Commission were proposing for their future operations, a clear undertaking must be given, and I hope that the hon. Gentleman who winds up the

  1793
  debate this evening will give it to us that, in no longer than a year's time, when the Exchange is operating again—and we shall see how the futures market is working under post-war conditions then—the Liverpool Cotton Exchange will undertake the examination of its contracts with a view to making Empire cotton tenderable.
  6.50 p.m.
  Mr. Anthony Greenwood: Before I deal with some of the points which the hon. Member for Clitheroe (Mr. Fort) made, I should like to say how happy I am, as his neighbour, to see the hon. Member for Bury and Radcliffe (Sir W. Fletcher) back in the House. The House was a duller place without him, and I hope that he will have many years of public service before him—preferably in another place and not in the House of Commons.
  I am a little suspicious when newspapers like the "Economist" and "The Times" give good advice to the Labour Party. On this issue they have been most generous in their advice. They have told us not to be partisan and not to be doctrinaire. I think that one of the refreshing features of our textile debates in the last two years has been their remarkable freedom from doctrine. In our analysis of the problems that have faced the industry, most of us have agreed, and the thing which has divided the Government benches from the Opposition benches is that we have wanted to take action while they have been perfectly happy with merely making the analysis.
  On the whole, I think that we have been severely realistic in our approach to the problems of the industry—an approach which has not always been helped by the attitude of the leaders of the industry. By "the leaders of the industry" I mean the industrialists who control the industry, and whose loud protestations of confidence in the future of the industry have been belied by their reluctance to invest more money in re-equipment. That has not helped us to give Lancashire a fairer break than it has had in the past.
  The hon. Members for Clitheroe and Bury and Radcliffe have implied that we on the Opposition benches have taken a doctrinaire line on this occasion. It is remarkable how a belief in national ownership is doctrinaire, in the view of
  1794
  hon. Members opposite, while a belief in private ownership is not. I think it is true to say, as hon. Members on this side of the House have argued, that when the Act was passed in 1947 it was a continuation, under a different name, of the system which had operated during the war years.
  It is all very well for the hon. Member for Clitheroe to make his fine distinctions between the situation which obtained in 1947 and the situation when the Liverpool Cotton Exchange closed down, but whatever the hon. Gentleman says, it is un-disputable that international financial difficulties in 1947 were even more serious than at the time when the Liverpool Cotton Exchange closed down. The hon. Gentleman must know that it would have been impossible in the conditions of 1947 to return the purchase of raw cotton to the mercies of private enterprise operating in Liverpool.
  If there has been a doctrinaire approach to this problem it has come from hon. Members opposite. When there was a dollar shortage in the days of the Labour Government, when there were crop failures, and when the United States Government deliberately restricted the output from the cotton fields, hon. Members opposite were happy to lay the blame at the door of the Labour Government and to attribute the situation to the so-called weaknesses of bulk purchase. The present Prime Minister was playing up to that irresponsible attitude of the party opposite when the unfortunate promise was made during the Election campaign in Liverpool.
  I was delighted to hear the President of the Board of Trade pay tribute to the work of Sir Ralph Lacey, but I think it is unfortunate that while the leaders of the party opposite pay tribute to his work, the hon. Members for Bury and Radcliffe and Clitheroe should be prepared to sneer at the work of the Raw Cotton Commission. The hon. Member for Clitheroe, for whom I have the highest personal regard, indulged in what I thought was a lot of irresponsible talk about the losses which the Raw Cotton Commission had incurred. Let us look at the reason for the losses which were incurred. The hon. Gentleman has studied the last Report of the Raw Cotton Commission, and he should know the reasons for the loss.
  An obvious reason is the overall difficulties of the world textile industry last

  1795
  year. It was a time when the Governments of Pakistan, Brazil and Egypt were having to come to the rescue of their producers of raw cotton. It was a time when there was a world reduction in consumption, and in Lancashire we were consuming for a period rather less than half the raw cotton than we consumed in the previous year. Hon. Members opposite know that most of the loss resulted from the sudden drop in demand coupled with the reduction in price. The price of Egyptian top grade karnak, for example, fell from a highest level of 123d. per lb. to 70·8d. per lb., and the price of Sudan high grade cotton fell from 124·75d. per lb. to 70·80d.
  Mr. Fort: The point that I was trying to make—the hon. Gentleman may not have understood it—was that while the reasons for the losses are well understood, those losses should have fallen on the shoulders of those directly connected with the industry and not the general taxpayers of the country.
  Mr. Greenwood: I know that the hon. Gentleman understands the reasons, but it would have been fairer to the House and to the public if he had referred to those reasons in his speech. His suggestion that the loss should have been borne by the people directly connected with the industry would mean that a small number of the citizens in our country would have been asked to accept the responsibility for the hardship which had fallen on them not through any fault of the industry itself. I would not have minded if the £25 million deficiency had fallen on the merchants of Liverpool, but I am afraid that it would have been the workers in the industry who would have been left bearing the burden.
  Mr. Shepherd: If the hon. Gentleman reads page 11 of the Raw cotton Commission Report he will find that they give the reason for this loss, and say that it is due to
  "losses on its large open position."
  Our argument is that had the merchants been allowed to run the business this great loss would not have been incurred.
  Mr. Greenwood: And the industry would have been in a very weak position. The hon. Member for Cheadle (Mr. Shepherd) is aware that the Raw Cotton
  1796
  Commission mentions a number of causes of the loss which was incurred. There was the loss which resulted from the difficult situation in Egypt and the Sudan. In my submission, it was perfectly proper—and I am sure the President of the Board of Trade would agree—for the Raw Cotton Commission to take what steps it could last year to ensure supplies of cotton from Egypt and the Sudan, which, at one time, looked as though they might dry up as a result of Government action in Egypt. That was another of the causes of the loss which resulted.
  I know that the hon. Member for Cheadle has given a great deal of attention to the question of Purchase Tax, and knows perfectly well that the effect of that tax is to alter the pattern of the industry. There has been a reduction in the average count in spinning, and the result is that we are now relying more on American cotton than would previously have been the case. I know that the hon. Gentleman would agree with that analysis of one of the effects of Purchase Tax. That was one of the reasons for the loss, and I do not think it is fair for hon. Members opposite to attribute it to irresponsibility or any other fault on the part of the Raw Cotton Commission. I believe that if they were honest with the House they would agree that the loss resulted from the world situation which obtained last year.
  I think it was the hon. Member for Cheadle who, in reference to the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), mentioned the effect of the winding-up of the Raw Cotton Commission on the production of cotton in British Colonies. On 30th January, 1952, I asked the Secretary of State for the Colonies what plans were in hand for increasing production of cotton in the Colonial Empire. He told me, in the course of a rather lengthy answer, that there were plans for increasing production in Uganda by 50 per cent.; in Tanganyika, by 80 per cent; in Nigeria, by about 300 per cent.; in Nyasaland, by 100 per cent.; and, in the Aden Protectorate, by 60 per cent., and the right hon. Gentleman ended with these words:
  "Certain colonial producers, namely, Nigeria, Nyasaland and the Aden Protectorate, have entered into long-term contracts with the United Kingdom Raw Cotton Commission, which, by offering a stable market for some

  1797
  years ahead, serve to encourage expansion of production. In addition, advances by the Raw Cotton Commission have been of considerable help in starting irrigated cotton production in the Aden Protectorate."—[OFFICIAL REPORT, 30th January, 1952; Vol. 495, c. 175.]
  It is not enough for hon. Members opposite to make casual references to the effect on the Colonial Empire such as those made by the hon. Member for Cheadle and the hon. Member for Clitheroe. In further evidence I should like to read to the House an extract from the trade notes in the "Manchester Guardian" of 13th November. Talking of the Raw Cotton Commission, it said that:
  "… it exerted an important influence both in encouraging some of the smaller and newer cotton-growing countries to develop their production and in persuading British spinners to use the raw material obtained from those sources. Cotton from Turkey, Syria, Greece, Iraq, and Belgian and French African territories have been affected by its operations, but perhaps the most strongly marked effects have been on cotton from the Sudan and from Uganda and other Commonwealth sources. It is to be hoped that these aspects of the Commission's activities will be borne in mind when arrangements are being made for the complete transfer of its former functions to private trading. There might be scope for joint bulk purchases from those territories where cotton growing still needs the encouragement of an assured outlet for at any rate a substantial proportion of each crop."
  Hon. Members opposite have been very fertile with questions as to what is our programme for the industry. When the Minister of State, Board of Trade, replies to the debate perhaps he will tell us, in his turn, exactly how the Government are to safeguard the interests of colonial cotton producers when the Raw Cotton Commission has been wound up.
  Another effect, which I believe will be serious, is the effect upon the smaller firms in Lancashire. It is a little surprising to find the party which has talked so much about the Empire and the small man selling them both down the river at one and the same time. Lest I should be accused of quoting a partisan publication, I should say that my next quotation is from the "Economist" of 7th November, which says:
  "Most contracting-out spinners have found that they needed a stock equal to some 15 weeks' consumption, compared with roughly five weeks' stock carried by contracting-in spinners."
  It goes on to say that that is going to add considerably to the running costs of
  1798
  smaller firms. It is no use for hon. Members opposite to refer vaguely to arrangements now being made in the City of London and to expect those references to bring any great comfort to the people of Lancashire who are worried about the future of their industry. The hon. Member for Bury and Radcliffe brought tears to our eyes by referring to the difficulty that the Liverpool Cotton Exchange would have because it had not had a sufficient entry of young people during the past few years. Unfortunately the entry of young people to the cotton industry has also dropped since right hon. Gentlemen opposite accepted responsibility for the welfare of this country.
  One of the things that will do great harm to Lancashire and to our economic stability is the further uncertainty and anxiety which will be caused to the cotton workers by the Bill. The hon. Member for Bury and Radcliffe accused us of having all sorts of erroneous ideas about what speculators did. Our ideas may or may not be erroneous but they are certainly widely held among the people of Lancashire and goodness knows they had a bad enough time between the wars. Fluctuations of industry were widely attributed to the activities of speculators on the Liverpool Cotton Exchange. How the President of the Board of Trade thinks he will stimulate recruitment in the cotton industry by handing back buying to the Liverpool Cotton Exchange is something which baffles me and, I believe, the people of Lancashire.
  Let me quote from the "Cotton Board Quarterly Statistical Review" for September. It says:
  "The shortage of labour is currently the most serious brake on any further expansion of output. Recruitment to the industry continues at a steady but inadequate rate. At the end of July the number of workers on the books of firms in all sections of the industry totalled 326,000, compared with 306,000 at the end of August, 1952, the lowest figure recorded during the recession, and with the post-war peak of 370,000 at the end of November, 1951, so that less than one-third of the loss has been made good."
  The only way in which we can get back badly needed people into the industry in Lancashire is by giving them a feeling of confidence in its future. By fooling about, as the President of the Board of Trade is doing in this Bill, with the whole future of the industry, and with the supply of the vital raw material which the industry needs, the right hon. Gentleman

  1799
  is doing nothing to ease apprehension in Lancashire.
  I like the President very much as a person, but either his summing up of the problems of the industry is wrong, or the advice he gives to the Government is always ignored by Ministers more powerful than himself. Whichever interpretation is right, the time has come for the right hon. Gentleman to resign his office. Hon. Members will find, when the next Election comes, the gravest disquiet on the part of the people of Lancashire.
  On this occasion the Government are dealing another blow at the cotton industry. Their attitude to Purchase Tax has been condemned roundly enough by hon. Members opposite and has caused a good deal of discontent. Their development area policy is a slipshod and rather slapdash proceeding, which is doing no good at all to part of East Lancashire. Now, by the disbanding of the Raw Cotton Commission, the Government have introduced a new factor of uncertainty in the industry which will be present for several years to come. I hope that the House will reject this mischievous and irresponsible Measure.
  7.8 p.m.
  Sir Victor Raikes: I am happy to be the first Liverpool Member to be called in this debate, in view of the fact that the restoration of the Liverpool Cotton Exchange plays a considerable indirect part arising out of this Bill. This has been an interesting debate—a debate without violent heat. I propose to deal with certain of the arguments put forward by hon. Members opposite.
  First, we can wipe out the argument of the individual person in the cotton industry who objects to the change-over. We can always find such an individual. When my party were in opposition, on several occasions I have found strange Left-wing individuals who were against some particular Measure brought in by the Socialist Government. Arguments based on the opinions of such individuals are simply debating points.
  I find it difficult to feel much confidence in an Opposition which, while painting the most horrible picture of what is likely to happen if this Bill is passed, were nevertheless completely and utterly wrong in the main argument they put forward
  1800
  in 1947 in favour of a central buying organisation. I have listened to all the speeches warning us of what would happen, but when I remember that even the then Chancellor of the Exchequer, in 1947, stated that with centralised buying we would be able to procure through this purchasing agency a much more stable price than we had ever had before, it seems that the first and main argument in favour of centralised buying has been knocked inside out by results.
  I am not blaming the Raw Cotton Commission. I never thought it would have that effect, but that was the main argument. The Raw Cotton Commission, however, very soon found that they were bound to go in for risk insurance. During that period, whatever the cause may have been, the fluctuations in price were greater than they had ever been at any time before the war, and yet hon. and right hon. Gentlemen opposite expected that they were going to be the great price stabilising organisation. If they were so wrong about that it is conceivably possible that they may be a little bit wrong in their arguments that they have brought forward today against the opening of the futures market, and so on. I cannot believe that hon. and right hon. Members opposite would be satisfied with a situation that meant that we might go on indefinitely losing £25 million a year, which is what we are doing at present, and have been in the last two years under the Raw Cotton Commission.
  I will tell the hon. Gentleman the Member for Rossendale (Mr. Anthony Greenwood) where I think we have a fundamental disagreement in regard to the Raw Cotton Commission. On his side he maintains that the loss that took place was a loss bound to take place anyhow, and that it is unfair, therefore, to suggest that a change to something else would be an advantage. It is a perfectly reasonable argument, but, of course, the view we take is this.
  We have nothing but admiration for Sir Ralph Lacey and all the people who run the Raw Cotton Commission. There is no question about that. It is a question of the system. Under the system of the Raw Cotton Commission there is a statutory obligation to hold high stocks. When prices are falling that means a loss. When prices are going up, it is true, there is a gain, but it is not a gain to the same

  1801
  extent really, because when prices are going up one diminishes one's stocks, and when prices are falling one's stocks are inclined to increase. I do not attack the Raw Cotton Commission in any way when I state that we on this side of the House feel that the present system can only on the whole lose on balance unless we have a long period of rising prices, which we do not anticipate as being a general likelihood in the years that lie directly ahead. I think that is a fair definition of the division of opinion. I think that perhaps hon. Members opposite thought that our arguments against the Raw Cotton Commission were based on something rather different from what, I think, is the fair and the right opinion.
  Mr. S. Silverman: On the assumption that the losses were not the fault of the Raw Cotton Commission but were inevitable and would have happened anyhow, who does the hon. Gentleman think ought to have borne those losses.
  Sir V. Raikes: Of course, the hon. Member knows quite well, because he is really able, that that was not the assumption that I made. I do not say that the moment we came in we could have made a switch-over. I agree with what my right hon. Friend said. I maintain, however, that if we had had the other system working in full order we would not have had such high stocks, in my view over-high stocks, during that particular period, and therefore the losses would have been considerably less than they were, than they were bound to have been, with the Raw Cotton Commission having the statutory obligation to have stocks of that height. I think that that is a fair and reasonable answer.
  I want to deal with just a few of the points which have been made against the Bill, and I am going to agree with one hon. Member opposite in a moment, which is unusual for me. Another point which was made, and which has been made more than once, was that, after all, the Raw Cotton Commission have done a good deal to improve the quality of cotton coming from abroad, and that there is a danger, with the disappearance of the Raw Cotton Commission, that the quality of cotton coming from abroad will deteriorate. I think we are under something of a misapprehension there.
  I think there may be two reasons why the quality of cotton coming from abroad
  1802
  has improved—as it has, let us make no mistake about it. For one thing, in 1947 in particular, when we had a very strong sellers' market, which incidentally was one of the advantages which the Raw Cotton Commission had that has not been referred to—
  Mr. Silverman: 1947?
  Sir V. Raikes: In 1946 and 1947 they made a profit, I think, of £100 million, in the first seven months. At that time there was a very sharp sellers' market which undoubtedly helped people to press for the best of the improved growths that were coming from abroad. In every country where cotton is produced there has been a definite improvement in the standards of growth in the last seven or eight years. There would have been, whether we had had the Raw Cotton Commission or not.
  The question of a dollar crisis has been mentioned. I quite agree that we have always to face the danger of a dollar crisis. We should be foolish if we assumed that we had not. We could have a dollar crisis of such a magnitude that it would completely "bust up" any scheme which we put forward. I quite agree with that, but in a dollar crisis of a manageable size it has been possible in the past to have a licensing system for individual rationing of dollar cotton. That has proved workable in the past. I have no doubt it could be done again, and I have no doubt we should have adjustments in the futures contracts. There is nothing new in having to make that form of adjustment.
  It is when we come to the question of Empire cotton that I, like a number of my hon. Friends, feel a certain anxiety. I feel that certain of the arguments put up, not least by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), were, perhaps, a little bit over-stressed. I do not think, for example, that the question of bulk purchase is a main anxiety. We can have long-term contracts as well under our system as under the other.
  It is true, of course, that in East Africa we have been having a very successful period during the last year of selling cotton through the normal market channels. It is also true, as hon. Members opposite are fully aware—this is not in dispute amongst us—that in the

  1803
  Colonial Territories on the whole colonial marketing boards in general pursued a policy of giving a price to their producers below the world price, and they have a certain margin to play with in the event of there being a very sharp turn in prices. There is a disadvantage, undoubtedly, to Empire growers if the new contract is based purely on that of New York, and that was the argument which was, I think, put by the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes).
  I realise that when we are re-starting a thing like this we do want to have a stable price level at the start for basing futures contracts, but on the other hand, from the point of view of this country and of the peoples within the Empire, it is, in my view, very important that as soon as possible the Empire growths should be brought into the futures contracts. I agree very much with what the hon. Member for Ashton-under-Lyne said about that. I am not sure that the argument about fluctuations, in connection with bringing them in now, has not been a little exaggerated, and I hope that in the later stages of the Bill, in Committee, we may be able to deal with that very important aspect, which does not affect the principle of the Bill to a very considerable extent.
  I do not want to speak for very long on this topic, but I should perhaps make a passing comment on the question of futures speculations. I am a Liverpool Member and I know that the hon. Member for Liverpool, Exchange (Mrs. Braddock) has her eye firmly fixed upon me. I shall not make the eloquent speech on this subject made by the hon. Member for Bury and Radcliffe (Sir W. Fletcher), who dealt with it at considerable length, but we all know there is both desirable and undesirable speculation. I am not at all sure that the most undesirable form of speculation is not speculation by a public body with public funds which it loses and whose losses the taxpayer has to pay. At any rate, that is certainly a form of speculation.
  We also know that in the past in the Liverpool market there were certain forms of speculation which were definitely unsatisfactory, such as over-trading. There were occasions when advantage was taken of technical weaknesses of the
  1804
  market. Undoubtedly those things did harm and were not in the public interest. It is only fair for me, as a Liverpool Member, to say that in the new scheme, as we have seen, which will be built up through the Liverpool Cotton Exchange, steps are being taken to tackle the undesirable element in speculation. Some forms of speculation, of course, are very desirable.
  Mr. J. T. Price: Perhaps the hon. Gentleman will tell the House how the Liverpool Association will control undesirable speculation at the other end of the pipeline, in America, which will dominate the market.
  Sir V. Raikes: I think what I am about to tell the hon. Member will have a bearing upon that matter too. In the first instance, we shall have daily settlements, instead of weekly, and secondly, cash deposits—"margins" I think is the technical term—and a code of discipline backed by the nationalised Bank of England, that will certainly play some part at the other end, in the New York trading. It is very easy to exaggerate the amount of harmful speculation.
  There is, of course, the other type of speculation, which is the real reason we have a futures market at all. The real reason is so that we can have investment buyers. The investment buyers are obviously out for a profit, and in going out for a profit they will buy on their view that the market will turn in a certain direction. Time after time they provide an offset to the trade's hedge contracts and very often that tends to avoid the violent seasonal fluctuations which otherwise occur. That is one of the reasons the fluctuations were less violent before the war than they have been in recent years. The hon. Member for Westhoughton (Mr. J. T. Price) shakes his head, but we will disagree on these points.
  I think the case which I have put is the reasonable one of bringing back a futures market which will enable that degree of checking of seasonal variations and at the same time, as far as possible, avoid certain of those undesirable elements of the past to which I have referred.
  I shall not detail the House longer, because I hope the voice of Liverpool

  1805
  may be heard from both sides of the House in the course of the debate. In conclusion, I think the President has taken an excellent step forward. As he said, it would be impossible to remain drifting in the present situation. Having gone so far forward in the encouragement of private traders, nothing would be more disastrous than to tie up the whole thing and to go back to the position from which we have been moving. In the circumstances, I think he is right to go forward, but, coupled with going forward on these lines, I beg of him to think still further of steps by which we can bring the Empire growths within these futures contracts and thus avoid anything which might penalise both the Colonial Empire and the Commonwealth.
  7.25 p.m.
  Mrs. E. M. Braddock: When the President of the Board of Trade opened this debate he said that the question of the Liverpool futures market was beset with very considerable technical complexities. I do not understand any of them, and I make that perfectly clear right away, but I think something ought to be said, outside the complex technical difficulties, about the effect which the opening of the Liverpool Cotton Market will have upon the people whom I represent, because for very many years before 1939 the Liverpool Cotton Market worked for a very long time on a speculation basis in the Liverpool area.
  The complexity which I know about, although very different from the technical complexities, is this: when it was operating fully there were attached to it many working class people on very low wages, who were employed for a maximum of seven months of the year and who, because their job was cotton portering, which was a very specific and special sort of job, had no job for the rest of the year. They were unemployed for approximately five months of every year.
  When we are talking about the opportunities of reopening, or the advisability of reopening, the Liverpool Cotton Exchange, I should like to know what all the fuss is about. If, as has been said, the Raw Cotton Commission have lost £25 million, why the rush by those who want to get into the new cotton market to lose another £25 million—or have they some idea of holding and tying up the
  1806
  cotton in order to ensure that, individually, they do not lose anything? That seems to me to be the technical complexity we hear so much about.
  As I said on a previous occasion, I have never heard of a cotton speculator in a Liverpool area who died in the workhouse. I always found that they took away the very considerable profits which they made. The people who were operating in the Liverpool Cotton Association through the futures market, hedging and all the rest of it, always seemed to be able to retire quite early and to go off into the more salubrious parts of Liverpool, such as Blundellsands or Southport or, on the other side, into the Wirral, and to establish themselves in very comfortable and nice homes. When they died they left fairly considerable fortunes for those who followed them.
  On the other hand, I always noticed that those who worked as ordinary workers, in the employ of these firms or companies, generally found themselves, for a considerable part of the year, either signing on at the employment exchange and drawing unemployment benefit or appealing to the relief committees or the U.A.B. for supplementation to their income. I do not want to see that situation back again. Yet that is exactly what the Cotton Market is for—speculation, cornering, holding the market up so that somebody has to pay for it in the long run.
  The reason why I have not intervened until now is that I thought that those who feel the effects of the technical complexities of the Liverpool Cotton Market—the spinners and those who have to earn their living through manufacturing cotton and cotton goods—ought to have their say first, because in Liverpool we feel the effects of the market to only a limited extent.
  When the Prime Minister came to Liverpool to open the Election campaign in 1951 he came right into the middle of my constituency. With great gusto the right hon. Gentleman told everybody that the Liverpool Cotton Market would be reopened very soon. I expected to see top hats appearing the next morning in prospect of lining up at the Cotton Exchange to see the thing being put into operation, but the only effect that speech had was to arouse the natural resentment

  1807
  of the people of Liverpool, who had put up with some of the manipulations and speculations of those dealing in cotton through the Liverpool Cotton Exchange, and to increase my majority by just over 6,700.
  It does not seem to the Government to matter very much that the ordinary people in Liverpool are to be brought back into the ramifications of the Cotton Exchange. For instance, there were times when we never saw the cotton which was bought in Liverpool. It never came anywhere near us. It changed hands three or four times as a result of speculation by various associations or companies acting through the Liverpool Cotton Market, and every time it changed hands through speculation a little more profit was added to the speculator, who passed it on to someone else. The same thing will happen again.
  In the final analysis, the cost had to be borne by the people who were producing the cotton in the cotton fields at low wages, right up to the spinner who was on low wages in the cotton areas in Lancashire. If that is what the Government want to get back to, of course they will open the Cotton Market. The speculators and the firms in the Liverpool Cotton Market bought cotton and it was shipped from Boston to the Merseyside. By the time it had sailed the seas, it had been sold back to those on the other side of the Atlantic, without it ever coming off the ship at all. The dockers of Liverpool never handled it. That is private enterprise.
  What the hon. Member for Garston (Sir V. Raikes) said is, of course, true. Those speculators do not go into these speculations for the purpose of doing a good turn to anyone apart from themselves. They go into them for the specific purpose of making as much profit as they possibly can out of speculation in cotton and the other things with which private enterprise deal.
  Then there is the question of limited companies starting up. When I first heard about the reopening of the Cotton Exchange I was worried because I thought that perhaps the re-establishment of these firms in the Liverpool area would bring more voters on to the Parliamentary register, but I notice that a lot of them are now to be limited companies, and a
  1808
  limited company cannot have a Parliamentary vote, so I am quite all right in that respect—not that there would be 6,700 of them.
  I think I am entitled to intervene in this debate because my point of view is so totally different from that put by hon. Members on the other side. I believe, as my party believes, that cotton and other things which we are able to obtain in order to produce goods ought to be easily accessible for the benefit of the people, and not to allow speculators to make profits. We believe that this could be done by international agreements, not from the point of view of private enterprise and capitalism, but from the point of view of the need for these things by the people. They should result in the raising of the standard of living of those who produce or grow these things right through to the time when they are manufactured and sent out to the various parts of the world to meet the world's needs.
  Yesterday, I was invited to see an all-party film show. I did not know what it was all about until I had a look at another document which I received, which mentioned something about a terminal market. A gentleman was brought from the Liverpool Cotton Association to explain to us what it was all about. It was not about cotton. It was a terminal market about soya beans, and it portrayed exactly the sort of thing which is being suggested now should be reinstituted in the Liverpool Cotton Market — speculation, hedging and arranging.
  I have no objection to making arrangements about buying things in the future—that is part of bulk purchase—but what I have a strong objection to, and what I am voicing on behalf of my constituents, is the opportunity given to private enterprise to start robbing the ordinary workers as they did for so many years in the past. I am objecting to the opportunity which is being given to them to do this. As I have said, I have no knowledge of the technicalities and I do not want to know anything about them, because I think that the sooner we know a lot less about them, the sooner it may be possible to get on to a decent, straight, trade stability basis.
  I understand that an hon. Member opposite wants to make reference to a

  1809
  previous speech which I made. Anything I have said I am quite prepared to repeat, whatever it happens to be. If it was not bad enough when I said it, and the hon. Member will tell me what it is he wants to know, I shall probably add to it and make it much worse. In case he may want to repeat any part of what I said, in perhaps a not very enlightened speech, I can say that it expressed what the people have known right through the years, and that is the jiggery pokery of the futures markets and of the Liverpool Cotton Exchange—a palatial place built from the profits made out of the ordinary working-class people of this country and of other countries, and which is right in the middle of my constituency. I hope that we shall be able to use it some day as the headquarters of the Exchange Division of the Labour Party.
  No doubt the party opposite will make an attempt, although there will be rules and regulations, to prevent people speculating quite as much as they did or, at any rate, to prevent the bad speculator. But sometimes the bad speculator makes more money for the good speculator, so that makes this thing all the more insidious. Even though they may make an arrangement of that sort, we may get back again to the misery of speculation in cotton in my area which made it necessary to have a trade union to see that an organisation was built up to prevent the speculation which had such a bad effect on the lives and wages of the ordinary workers.
  I hope that this business turns out to be a really bad speculation for those who are to enter into it, because I shall be highly delighted if a number of them find themselves completely stripped of all they have at present and invite me to be present when they appear in the bankruptcy court.
  7.39 p.m.
  Lieut.-Colonel Wentworth Schofield: The question which we have to consider is the manner in which this industry can obtain its raw material. Nothing much has yet been said as to the conditions which obtained pre-war, before the Liverpool Cotton Market was closed, except by the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock). Although she has painted a grim picture of what she considers was
  1810
  the case before the war, I should like to draw attention of the House to the position as we see it, or those of us, at any rate, who had to spin the cotton after we had got it.
  Before the war, cotton was bought and imported into this country by merchanting firms. It was the job of the merchants to keep their spinner customers supplied with the type of cotton which they needed to maintain a regular and constant quality of yarn. This was, and still is, very important, especially for the better quality yarns, which, in many cases, have to be woven into branded types of cloth.
  By that method of selective buying of cotton, spinners were able to turn out the same quality of yarn, year in and year out, with little or no variation. In consequence, the manufacturer who had to weave the yarn was able to rely upon it and to know that his quality and standard of cloth would also be maintained. I do not need to explain to hon. Members how necessary it is to maintain quality standards in manufactured goods if the goodwill upon which trading connections have been established over the years is to be maintained.
  Those merchanting firms did not import cotton and sell it to all and sundry. They devoted their whole attention to meeting and satisfying the needs of those spinners who were their regular customers. They specialised in supplying certain types and marks of cotton. They knew where the particular type of cotton was grown. They knew exactly what quantity was grown and they knew it was their job to get it for their spinners. By careful sampling, they also kept a check on the grower and saw that he, by careful sampling, maintained his quality year by year.
  A great deal has been said about the virtues of the Raw Cotton Commission, but under the centralised buying of the Commission specialisation of this kind was not possible. Instead of being able to obtain the right type of cotton, there is abundant evidence in the industry to show that many spinners have complained from time to time that they had to make do with what the Commission supplied. However dissatisfied the spinners were with what they got, there was simply nothing that they could do; they were in a cleft stick, and there was no one else to whom they could go to buy their supplies.

  1811
  The most serious weakness of centralised buying relates, first, to quality and, secondly, to price. As regards quality, a large volume of evidence which has been furnished in the industry shows that the requirements of spinners, and particularly those which we term "quality spinners," and upon whom our exports so largely depend, have not always been met regularly by the Commission. Though it is possible to get away with almost anything in a strong sellers' market—even variation in quality—that is impossible under normal conditions, when buyers become particular as to what they buy.
  As far as price is concerned, when the 1947 Act was passed for the setting up of the Commission, it was stated that the object of its working would be to ensure adequate supplies of suitable cotton at the lowest price. But, as my right hon. Friend the President of the Board of Trade has stated, there have been long periods during which British spinners had to pay to the Commission for American cotton a price which was in excess of the price which our foreign competitors had to pay for the same type of cotton, simply because the Commission's price was in excess of the world market price for that cotton.
  That was because of the Commission's system of averaging the price of the various cottons, and because of that system American cotton was made dearer than the world price. It is true that such other cottons as outside growths, like Brazilian, became cheaper, but my point is that we do not fight Japanese competition with Brazilian cotton. We have to meet Japanese competition with the type of cotton which is American cotton.
  Like ourselves, the Japanese are dependent for their supplies on sources outside their own country, but Japan, like all our other foreign competitors, is able to buy at world prices. It is certainly very important that spinners in this country should be able to obtain their raw cotton at prices and terms at least as good as those at which the Japanese can buy theirs.
  Mr. J. T. Price: Is the hon. and gallant Member suggesting that during this period the Japanese had a free economy and were able to enter into world markets and buy such American cotton as they required? He ought to tell the
  1812
  House that America has had a political interest in bolstering up the economy of Japan to relieve themselves of some of their obligations to that country.
  Lieut.-Colonel Schofield: I shall develop my argument as I go along.
  I quite agree that during the last few years the Japanese have been using American cotton and were getting much more allocated to them than we were getting here; but I am developing the argument as to what may occur in the future should we find ourselves having to buy from an organisation in which the price, through averaging, has been put above world price whilst our Japanese competitors can buy at a lower price. It is bad enough for us to have to compete with the low wages of Japan, but if British spinners are ever again forced into having to pay more for their raw cotton than the Japanese have to pay for theirs, any efforts to meet Japanese competition would be absolutely hopeless.
  Hon. Members must not imagine that such a situation could not arise. It did arise, and, what is more, it was not simply for a short period, as was represented by the right hon. Member for Huyton (Mr. H. Wilson) in 1949: it lasted for nearly two and a half years, when the prices of American cotton supplied by the Raw Cotton Commission were higher than world prices. In 1950, in fact, British spinners were having to pay anything from 5d. to 8½d. per lb. more for American cotton than world prices, and it was only this year that the Commission started to bring down their prices so as to be more in line with world prices. Fortunately, because of the very strong sellers' market obtaining in 1950 and 1951, it was possible for the British cotton industry to carry that disadvantage. In ordinary trading conditions, however, it would be quite impossible to carry that disadvantage, and would be fatal to Britain's chances of competing in world trade.
  In 1952, the spinners were allowed to choose between contracting out and contracting in—that is to say, between buying their requirements through merchanting sources, or remaining tied to the Commission as their sole supplier. This was the first move towards the free buying of cotton, and it was not surprising that after something like 11 years in which spinners had been having their cotton

  1813
  supplied from one central organisation, a number of spinners were definitely nervous as to whether private merchants would be able to supply them satisfactorily with their requirements in competition with the gigantic Raw Cotton Commission.
  Even so, a small number of spinners took the plunge. In spite of what has been said in the House today, that small number of spinners who took the plunge were not the cotton combines. It was, in fact, the small spinners who led the movement towards free buying. It was not responded to very much at first by the combines. Those small spinners, representing one-third of the spinning capacity of the industry, contracted out.
  Mr. S. Silverman: I know that the hon. and gallant Member is something of an expert on this and I certainly am not, but is not what he is saying in direct conflict with what the President of the Board of Trade said in presenting the Bill? Did the right hon. Gentleman not say that the proportion was all the other way, and that it was the big combines who were in favour of free buying on the Exchange and the smaller ones who were against it?
  Lieut.-Colonel Schofield: No, I do not think my right hon. Friend said that, but the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) said it.
  Mr. Silverman: No.
  Lieut.-Colonel Schofield: The point I am coming to is this. In the first year when contracting out started it was the small spinners who led the movement and there was no response by the combines. That happened in the second year of contracting out to which the right hon. Gentleman the Member for Huyton was referring. But in the first instance the small spinners led the movement.
  Mr. Silverman: Why did they give it up?
  Lieut.-Colonel Schofield: They have not given it up. They were the ones who led the movement, and it was only when they found that they were able to get their cotton at lower prices than those of the Commission that the Commission started to bring their prices down and more in line with world prices.
  It is significant that this year many more spinners elected to contract out,
  1814
  bringing the percentage to, roughly, two-thirds of the industry. It is true, of course, that during the last two or three years the affairs of the Commission have been much more efficiently handled. They were not very efficiently handled in the first few years. Even so, it is questionable whether, in spite of better and more efficient handling, the Commission could have continued very long without becoming a very heavy charge on public funds.
  To many in the trade this is rather difficult to understand. When one considers the position, one finds that there are not many trading organisations that have the luck to start off in circumstances as favourable as those which attended the start of the Raw Cotton Commission. When the Act of 1947 was passed it was estimated that the value of the assets handed over to the Commission by the Board of Trade was in the region of £90 million, included in which was a large stock of cotton estimated, together with: a few other sundry assets, at £57 million.
  In addition, the Commission were presented with a nest egg of nearly £31 million in cash, which was the balance of the profit made by the raw cotton section of the Raw Cotton Control. Taking over the whole organisation of the Raw Cotton Control, which already was handling over 2 million bales of cotton a year, they started off with their shop well filled with over £57 million worth of cotton, with more than £30 million in the bank and with their customers already made, for they could not buy from any other source. They started with a reserve of assets over liabilities of almost £31 million.
  What more could anyone wish for in starting in business than that? But in spite of the fact that most of the trading was during the period of rising prices for cotton that reserve of nearly £31 million was whittled down to £11 million last year, and we have been told by the President of the Board of Trade today that not only has that gone but another £14 million as well.
  Mr. Keenan: Were they not selling the cotton they held in stock rather cheaper than the price on the world markets at that time? That was the cause of the surplus going down.
  Lieut.-Colonel Schofield: I shall come to that point if the hon. Member will have patience.

  1815
  I was asked about the fall in values of cotton. It is a fact that even today the value of the cotton which was taken over—and certainly the price of American and Egyptian cotton—is 10d. to a 1s. per lb. higher than when the Raw Cotton Commission took over their large stocks. As I see it, the position is as follows. Either the Government must go on paying ad infinitum for the privilege of dealing in cotton, or they must decide to wind up the Cotton Commission.
  If the Government decide to wind up the Commission, then the industry will have to find their own money and surely that would be a wiser course. If we persist with the former method, and the cotton industry becomes a drain on public funds, does any hon. Member really think that the people in other industries which stand on their own feet will think that that is a very good suggestion, and will look kindly at the idea of the cost of running an independent industry falling on the British taxpayer?
  I do not propose to dwell on the change which will take place in the nature of the cover which will be available to spinners on the reopening of the Liverpool Cotton Market, except to say that while accepting the decision to start off with an all-American contract I hope that those responsible will continue to examine the possibility of widening that contract with the future intention of including those Empire cottons which, at any rate can be considered as equivalent to the middling American standards upon which the futures contract is based.
  As other hon. Members have stated, I hope the President of the Board of Trade will get an assurance from the Liverpool Cotton Market that it will keep this question constantly under review and not allow it to be pushed into the background, because I happen to be one of those who is a very fervent believer in Empire cotton. I feel sure that Members on both sides of the House will agree about the desirability of growing more cotton in our Colonial Territories.
  I believe, therefore, that a bold policy of growing cotton in our colonial fields has much more in its favour than anything which can be said against it. Not only would it bring to our colonial peoples the prospects of increased production of cotton and a higher standard of
  1816
  living, but it would enable them, in turn, to buy our goods and it would provide that much needed alternative supply of suitable cotton. Personally, I believe that the inclusion of equivalent Empire cottons in the Liverpool futures contract would be an encouraging feature to that end.
  An even greater encouragement to our colonial cotton growers would be a greater use of colonial cotton by the spinners of this country. Last year, more than 30 per cent. of all the cotton which they consumed was from Empire sources as against 8 per cent. prewar. If British spinners want an alternative supply of suitable cotton the way to get it is by an extended use of that cotton, and I submit that that means of achievement lies in their own hands.
  7.58 p.m.
  Mr. Edward Shackleton: The hon. and gallant Gentleman the Member for Rochdale (Lieut.-Colonel Schofield), like some other hon. Members on the Government side of the House, ended his speech with pious hopes about the opportunities which he hopes the Liverpool Cotton Market will provide for the protection of growths other than American; and in particular, he talked about Empire cotton.
  The extraordinary thing about this attitude is that here we see the Government deliberately pulling down an organisation which, by its nature, was best calculated to promote the development of these growths, and particularly Empire growths. It is not good enough for the hon. and gallant Member for Rochdale to give us a text book account of how the Liverpool Cotton Exchange works, or will work, and then at the end say, "They should do this also and everything will be all right," because we have no guarantee whatsoever that they will do it at all.
  I am aware, as are some hon. Members on this side—though this may seem surprising to hon. Members opposite—of some of the advantages, of the mechanisms, and, indeed, of the interests of the operators of some of the commodity markets. This is an extremely involved problem. It is difficult to find any real denominator of value that can be applied generally to these markets. It is clear that we must look at the Liverpool Cotton Market and the methods of

  1817
  buying cotton solely in their relation to cotton and the Liverpool Cotton Market.
  It is no good trying, as there has been some tendency to try in the past, to apply general arguments in favour of free markets to the Liverpool Market. What is relevant is the economic situation of the country. It is most extraordinary that, when we know that the country is threatened as seriously as at any time in the last few years with an acute dollar shortage, an essential mechanism in the protection of our economy, an essential part of our bulwark to protect us against a dollar crisis, should be destroyed in this way.
  I fully realise that the arguments relating to the setting up of the Liverpool Market in isolation from general world economic trends can be finely balanced. Some of the arguments in favour of bulk buying and the setting up of the Commission, and some of the hopes, have not been fulfilled, but equally I do not agree with the argument of the hon. and gallant Member for Rochdale about the decline in quality. I am sure that many hon. Members opposite would concede that to us.
  But basically, that apart, the problem which faces us nationally is how best in this dangerous world to earn our living, to pay our way and to buy raw materials. We find that the Government in some other departments of commerce are prepared, quite properly, to follow policies initiated by the Labour Government involving a certain amount of planning, however, objectionable that word may be to some hon. Gentlemen opposite. It is ridiculous to produce the argument that Government finance should not be used to bolster up or assist any section of industry provided that it is in the national interest. It is ludicrous to suggest that the Government should not bear risks if it is in the national interest to do so.
  Hon. Gentlemen opposite know that in the operation of export credit guarantees there are two sections provided for by Parliament under which risks can be insured. One is what may be called reasonable commercial risk and the other is non-commercial risk where it is in the national interest that the Government should provide protection. It is a false argument for hon. Gentlemen opposite to suggest that there is something automatically morally wrong in the suggestion,
  1818
  or that the Government should not be prepared to provide protection of the kind the Raw Cotton Commission have given in the last few years, and, indeed, in recent times, to people who were not officially in the scheme.
  There have been other recent developments in the use of public funds by the Government. Only last week we had the fantastic spectacle, in the Government White Paper on Television Policy, of the Government being prepared to lend money from Treasury funds to encourage advertisers to foist cheap advertising stuff on the public. So this argument does not have a complete validity in all circumstances. I do not believe that it has validity in the case of the buying of cotton.
  The truth is that the free market, however necessary it may be in certain fields, tends to be the enemy of the primary producer. It may be argued that the purpose of the free market is to buy raw materials, whatever they may be, as cheaply as possible. I suggest that this is not necessarily always in the national interest. I am sure all hon. Gentlemen will agree that in a world where there is a continual need to stimulate on a long-term basis the production of all types of raw materials and foods—not only for their own sake, but as a means of raising the standard of living of the people concerned—an action such as this is flying in the face of all the long-term needs of the world and in face of what the long-term policy of the Government should be.
  It is not the slightest use the Government providing funds through Colonial Development Corporations or United Nations technical aid schemes if they are not prepared, also, to ensure in their own economy that there is a support and co-operation which will in itself further the aims which they seek to achieve in their own policies.
  A particular point which worries me is that we find it most extraordinary that the Government should have taken this decision without further inquiry. I realise that any Government faced with a situation have in the last resort the obligation to take their own decision. But the Government must be aware of the suspicion that exists in Lancashire about the reopening of the Liverpool market. They may argue that the suspicions and fears among the workers are

  1819
  misplaced. If that be so, how much more important it is that the Government should take every step to explain and to justify the action they propose.
  There is little doubt that in Lancashire there is a profound problem still to be overcome in connection with the attitude towards productivity. The trade unions and the management—I still believe that, basically, this will mainly be the responsibility of management—have produced shining examples of people who are playing their part in trying to stimulate productivity and the most efficient use of manpower. There has been a great deal of talk about standardised costing, and the bringing in of efficient methods.
  Then, just at this time, the Government allow an economic scheme to go and a new one to come which they know will take extra manpower. They know that there is not the slightest chance of doing any real costing from an accountant's point of view on the operations of the people who are buying the cotton. The Government do this lightly at a time when they are still urging on the workers, not only in Lancashire but elsewhere, the need for harder work, for wage restraint, and so on. They have done that without any real attempt to justify their decision, beyond the statement today that they found a difficult situation and that certain principles of a dubious validity affected their decision. They have arrived at that decision without regard to the warnings which have been clearly expressed in Lancashire, especially from the trade union side of the industry.
  I can only say that in Lancashire there has already been suspicion of the Government's economic policies generally. There is already belief that the Conservative Party, which prided itself in the past on being a pragmatic party free from the doctrinaire prejudices of Socialism, has become the worst type of doctrinaire in this matter. I am certain that this action of reopening the Exchange, admittedly in fulfilment of a pledge, but one which we thought the Government had perhaps conveniently forgotten in a moment of sanity, has been taken in the name of doctrinaire free market economy and doctrinaire free enterprise. This is a damaging and dangerous step. I hope
  1820
  that the Bill will be fought hard throughout its passage and that in due course the Government's policy will be reversed.
  8.10 p.m.
  Sir John Barlow: I am glad to be able to follow the hon. Member for Preston, South (Mr. Shackleton), for he and I represent divisions which are vitally interested in the cotton industry. It is dangerous for him to say that it is not always in the national interest to buy raw materials at the lowest prices. That is a very wide and sweeping statement. There are very few cases in which that may be true, and I advise him to be very careful about making such a statement.
  Mr. Shackleton: I did not say that. I made a very precise statement, and if the hon. Gentleman will confine himself to quoting that, he will not come to any harm.
  Sir J. Barlow: I noted it at the time. The hon. Gentleman said that it was not always in the national interest to buy at the lowest prices, referring to cotton and, presumably, many other commodities. It is most dangerous to apply that to the cotton trade. In any case, it is most difficult to compete with other countries abroad, and unless we buy our raw materials at the cheapest possible prices, it is impossible to compete against Japan, China and other manufacturing countries. As an exporting country, we are forced to buy our raw materials, with very few exceptions, in the cheapest possible markets in the world.
  I notified the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) that I proposed to quote from her earlier speeches on this subject. She and I and other hon. Members who have spoken today contributed our part to the debates that we had six or seven years ago before the appointment of the Raw Cotton Commission. I was struck during those debates—and I am to a lesser extent today—by the opinions expressed by Members of the Government back benches in those days. They were giving opinions and guessing about what would happen when the Commission was set in operation. They said how much better they thought the industry could be worked and how much better the buying could be done. It was impossible at

  1821
  that time to refute their arguments with facts because they were merely guessing.
  I was most interested in what the hon. Lady said at that time, and said in very similar words today. In our debate in 1946 she referred to her visit to the Liverpool Cotton Exchange. After she had been taken round by the secretary, she asked how many of the past-presidents whose photographs adorned the walls had died in the workhouse. It seemed to me that she thought they could not have been successful and contributed their part to the cotton trade unless they had ended their days in the workhouse. It seemed very strange at the time, and I never understood it.
  Mrs. Braddock: That was not what I said. I was referring to members of the working class who had worked for those people and had died in the workhouse without anybody bothering about them.
  Sir J. Barlow: The hon. Lady did not make that clear at that time. She spoke of the past-presidents for the previous 100 years and expressed great surprise that none of them had died in the workhouse.
  Mrs. Braddock: It was a little bit of satire. The hon. Gentleman could not have understood.
  Sir J. Barlow: I did not appreciate that fact. We have heard a great deal tonight from the hon. Lady and others, quite rightly, about the necessity to save dollars and the importance of international trade. In the same debate in 1946, the hon. Lady referred to international trade in cotton and said:
  "In regard to the international aspect of buying cotton, it is bought in Egypt and sent to America and is never seen here at all. Nobody here ever sees it. It is dealt with only on the basis of samples. That is international trade—but capitalist international trade. There is a different way of dealing with the situation, and this Government have found the different way of dealing with it."—[OFFICIAL REPORT, 28th March, 1946; Vol. 421, c. 628–9.]
  That was a reference to the Raw Cotton Commission. Apparently the hon. Lady did not realise that the cotton which was bought in Alexandria and sent to America probably brought us a slight profit. It was probably transferred in British ships, financed by British banks and insured with British insurance companies. All
  1822
  these things constituted very valuable invisible exports. I emphasise it tonight because other hon. Members opposite may not be clear about it.
  Apparently the Chancellor of the Exchequer at that time was also not clear about it and did not realise the difficulties, and even the impossibilities, of doing such trade by means of a Commission. He said:
  "… there were certain associated foreign exchange earnings on freights, insurance and banking which are put at perhaps the same amount again, with the result that the top limit at issue here is £1 million a year."—[OFFICIAL REPORT, 28th March, 1946; Vol. 421, c. 660.]
  He went on to say that, while the Government would dislike losing £1 million a year in such international trade, it was hoped that on the new basis the Commission would make £10 million a year. That was merely a matter of opinion and guessing, and at that time no one could refute it.
  I have made careful inquiries during the last few days and I find that, as far as can be estimated, the Raw Cotton Commission made only £40,000 last year in exporting cotton or in international trade of that character. That is a serious statement on something which it was impossible for us to deny at that time. It is only after six years that we can get a categorical answer on that point.
  I agree with the hon. Member for Ashton-under-Lyne (Mr. Rhodes) about the great necessity for developing and helping Empire cotton in every way. It is most important not only in the interests of our Colonies and Empire but also from the point of view of foreign exchange. It would be helpful if in the near future Empire growths could be added to the new Liverpool contract.
  I see the difficulties at present in adding outside cotton. We have been told that the contract will consist merely of American growths for the present, but I do not see why such cotton as Nigerian should not be added immediately, because it is similar in colour and fibre to American cotton and could be tendered against it. Some of the other Empire growths are not quite so similar. However, they should be added as soon as possible. It is important for the Colonies and ourselves that this should be done and it is probably much simpler than having a second contract consisting entirely of Empire growths.

  1823
  Much play has been made on both sides about the losses which the Raw Cotton Commission made during the last two years. Undoubtedly, these are very serious losses indeed—something like £25 million a year on a turnover, I suppose, of £200 million, which is something like 12½ per cent. That is very serious indeed, but there is another aspect of the matter. It might at some time be urged that there should be a strong infusion or injection of Government money in order to subsidise the export trade in textiles. That might raise very difficult questions and prove very embarrassing to the party in office at that time, whether it be the Labour Party or my own.
  It could act both for and against the Government in very embarrassing ways, and, for that reason alone, I think it would be most unwise to allow public funds to be used to subsidise and provide what seems to be the perfect cover scheme for buying cotton generally. It is true that it has been a very fine cover scheme, but it has been executed at a very great cost to the taxpayer, and has been far more expensive than the average taxpayer himself realises.
  I regard this whole subject as being far too doctrinaire, as many people have said, on both sides of the House. It is a question as to which is the best and most efficient way of buying cotton for the textile industry. It has been suggested repeatedly that the difficult days between the wars—the days of slump and misery; we all recognise it—were due to the speculation on the Liverpool Cotton Exchange. I think it is absolute nonsense to say that, and, in my view, that was very far from being the case.
  I shall tell the House what has been happening. I have been an exporter of textiles all my life. In the 1920s and 1930s when I used to export textiles to the Far East, I travelled India, Malaya and parts of China, trying to sell our textiles against the Japanese. At that time, I went through one large textile factory in Shanghai where they spun, wove and finished. They had old Lancashire machinery, and they employed two shifts of labour for 12 hours each. The highest pay of these labourers was 10d. or 10½d. per day of 12 hours.
  Mr. Keenan: Who owned the mills?
  Sir J. Barlow: It does not matter who owned the mills; that has nothing to do with the cotton market. It was the conditions existing out there which mattered, and those people were taking the bread out of the mouths of Lancashire people. There was a basis of water and rice competing against beef and beer in this country. That was why we lost a great deal of our export trade. It had nothing to do with the Liverpool Cotton Exchange, and I hope I have impressed that fact on some hon. Members opposite. It was not speculation and the loss of money that lost us the vast textile export trade which we used to have for so many years.
  I firmly believe that cotton can be purchased more efficiently and more cheaply through private enterprise in Liverpool than by any cotton association. We have had the Cotton Association for five or six years, and we have seen how much it has cost. Personally, I shall be glad to see this Bill passed into law.
  8.25 p.m.
  Mr. William Keenan: I am very pleased to have the opportunity of saying a few words now, particularly following the speech of the hon. Member for Middleton and Prestwich (Sir J. Barlow). One thing I do want to say in connection with the picture which the hon. Gentleman has drawn is that the particular machinery about which he complained in the mills in Shanghai had been shipped by somebody in Lancashire. That is not the only case of that sort in the cotton industry. I remember when I was an official seeing three textile mills dismantled and shipped to Egypt for the purpose of dealing with Egyptian cotton.
  Sir J. Barlow: Does the hon. Gentleman suggest that we should have prevented the export of that machinery and have allowed America or Germany to supply it, or what would his remedy be?
  Mr. Keenan: I can provide a remedy if the hon. Gentleman wants it. What I am suggesting is that these difficulties about which he has been complaining were largely created by the manufacturers themselves. It was a question of one robber against another, and the individual who went to Shanghai or Egypt to utilise the cheap labour available in those

  1825
  countries obviously benefited at the expense of the traders and workers here. That sort of thing has gone on for the fast few centuries with the development of industry.
  It seems to me that what we are concerned about today is the reinstitution of the Liverpool Cotton Market. Judging from what has been said today, it would appear that the quality of the cotton is determined by who buys it. [HON. MEMBERS: "Nonsense."] The suggestion is that we shall get a much better quality of cotton, and that cotton will be much improved if the speculators who used to buy it before the war are allowed to operate again.
  I wish to follow up something that was said by the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock), because I spent 30 years at the dockside and was concerned with cotton. I saw it sampled and all the rest of it. I live not far from Blundellsands, and I remember as a youngster noticing how many of those who made fortunes on the Liverpool Cotton Exchange went to live at Blundellsands. That seemed to be the fashionable place in those days, but later they went to Formby, Ainsdale and Southport, whereas they now go to the Wirral. Most of these people never saw a bale of cotton, and it is true to say that many speculators on the Liverpool Cotton Exchange have sold hundreds of thousands of bales of cotton and that some of them have seldom seen one. What is the operation? What is the cost?
  Sir J. Barlow: I suggest that the cost is shown by the fact that the Raw Cotton Commission cost £5 million a year.
  Mr. Keenan: I want to point out that, while the Raw Cotton Commission have shown a deficit as a result of their operations, the fact remains that somebody got the cotton cheaper than apparently they would have done from the speculators. If the old gang of Liverpool had been operating the sale of cotton, then certainly the spinners would not have been able to get their cotton at the price at which they got it from the Raw Cotton Commission. I was not worried about it, because I recognised that in those years we were building up the cotton textile industry, which was in bad shape at the end of the war. It was necessary to give the textile industry the opportunity of
  1826
  recapturing the markets lost during the war.
  What contribution does the speculator make to any of the things he operates in? What does he add to the balance? We know that cotton is bought and sold several times over. It is bought while it is still on the ocean, it is sold when it arrives in Manchester or wherever it is being shipped to, because the margins permit certain operations. I have seen cotton loaded back to America although it was perhaps grown in Texas, only to be reloaded and sent to Liverpool. Even then they could afford to sell it back to America, and it probably came back again to Liverpool or Manchester. I ask those who support the Bill: What value did the different speculators put into the cotton?
  Would it not be better to have a centralised buying authority, such as the Raw Cotton Commission? If it appears that there is waste, we ought to arrest the waste if we can and point out what is faulty in the trading operations. What is proposed now is that we should again allow the manipulators of finance, in the Cotton Exchange, to rise again, so that they will sell cotton to each other, adding to the price every time until, at the finish, as in the case of every other commodity which is bought and sold in this way, the consumer pays the whole thing. There is no escape from that result. We are to go back to organised, legalised robbery.
  Not one worker will benefit by a halfpenny from the Bill. There might be something to be said if firms buying and selling cotton on the Cotton Exchange were merchants as well, and stored the cotton in Liverpool. It might mean a little more handling than would normally be done, but even this would simply add to the cost. We are seeking to get cotton at the cheapest price, to give our manufacturers a chance to compete in the markets of the world. There are foreign competitors in Japan, China and India.
  This kind of thing will be disastrous to the cotton industry. It means that much more will have to be paid eventually by those who use cotton because of the margins which will be added as the cotton passes from one speculator to another. We ought to have greater assurances than we have already had

  1827
  from the President of the Board of Trade. We have competed on both sides of the House in the last few years to show how anxious we all are for colonial development and trade in what is called the Empire or the Commonwealth. Surely we can get something more than we have had from the President of the Board of Trade about what is going to happen to Commonwealth cotton. Of course, it is in competition with American cotton, and the less there is of Commonwealth cotton, the more we shall pay for American cotton.
  I demand from the Government that something better should be done to protect Commonwealth cotton. All that is being done here is to enable the speculators on the Liverpool Cotton Exchange practically to operate in American cotton only. That is altogether wrong. All that this system has done in the past has been to enable the sons of merchants who made great fortunes to enter what is peculiarly called an industry. It is nothing more than a gambling place like the Stock Exchange. Why we do not nationalise the Stock Exchange, I do not know.
  I shall tell the House a little story which puts the matter in a nutshell and illustrates just what is the value of these people on the Liverpool Cotton Exchange, or any other exchange, to the particular industries they represent or the commodities which they handle. It tells of a traveller who called at a country inn on a rather cold morning. After passing the time of day with the innkeeper, he asked what there was to drink. The innkeeper suggested a sherry. The traveller said that would be lovely, but asked to be excused for a minute or two while he went across to the grocer, to whom he passed the same remark about the weather and told about the innkeeper's suggestion of a sherry. The grocer mentioned eggs and sherry, and so they decided on that.
  The grocer provided the eggs and the innkeeper the sherry. After a moment or two, the innkeeper looked at the traveller and said, "Smith provided the eggs and I provided the sherry. Where do you come in?" The traveller replied, "I am the promoter." That is just about where the Liverpool Cotton Exchange will come in as far as the cotton industry is
  1828
  concerned. Like the traveller, the speculators on it will be the promoters.
  8.38 p.m.
  Mr. Ian Horobin: I only wish to make one comment on the speech of the hon. Member for Kirkdale (Mr. Keenan). It is true to say that year after year, before the war, when the Liverpool Cotton Market was operating, we generally got the cheapest cotton in the world. I shall not go into all the technicalities of the operations, but, as a result, spot cotton in Liverpool was actually cheaper than cotton in America, even after adding the cost of insurance and freight in bringing it across the Atlantic.
  Without going into an explanation of what these people added to or subtracted from the price of the cotton, the fact remains that, by and large, Liverpool got cheaper cotton than anywhere else in the world. That is the short answer to the hon. Gentleman.
  There are two other points which have, I think, been the main serious arguments against this proposal. I am sorry that the hon. Member for Ashton-under-Lyne (Mr. Rhodes) is not in his place, because in a characteristically charming speech he made the first point, which was a substantial one. It was on the matter of colonial cotton. I hope I will be forgiven, in view of the hour, for not elaborating, but I do want to make three or four brief points in answer to his observations.
  The first is that, before the war, there was an alternative contract which was not, in fact, much used. Secondly, there is not a sufficiently wide market in a good many of these growths, in comparison with the American cotton market, to make what we call a fine market. To add, for tender purposes, some of these other growths would, so far from helping the colonial producer, actually hurt him.
  In addition, we must all be agreed that, if there is to be no Cotton Commission cover, the only one will be the futures cover. It is vital that that should work, that it should be a fine contract and a fine market. To put these alternative growths, which are not easily tenderable and which, in particular, cannot easily be laid off in New York, would be a dangerous thing to do.
  Mr. H. Hynd: Who sells the colonial cotton?
  Mr. Horobin: I do not think that that point is relevant. The point is whether it is wise to complicate and make less effective at this moment, the main American futures contract by introducing an alternative tender. I am confining myself to that in answer to the hon. Member.
  Next, it is agreed on all hands that this matter must be kept under consideration and reviewed—that the door should not be permanently closed, whether, perhaps by alternative tender, or in another way I will suggest in a moment. But it is absolutely vital to Lancashire next year, if the Cotton Commission cover finishes, that there should be a really working, acceptable futures contract with a free market on both sides of the Atlantic, and nothing must be allowed to endanger that.
  I must make the next point quite clear, because there really does seem to be a good deal of confusion and misunderstanding on this in some quarters, not confined to these benches but sometimes also in Lancashire, as to exactly what cover is provided now. It is not, in fact, true that anybody in Lancashire today is covered, except by a rather inferior American contract. That is all they now have. It is talked about as if we were taking something away, but that is the only cover they have—some of them have not read their insurance policy. I shall show in a moment, in a particular case, that there will be a definite improvement in the American cover which will be offered under the new scheme.
  The last point I want to make on this very important colonial point—and I can only speak subject to correction—is that, after exhaustive inquiries and discussions, at the present moment those views that I have just put to the House have been accepted by those responsible for the sale of colonial cotton. They are not committing themselves, of course, as to what may happen later, but they do take the view that the best available cover they can get, strange as that may seem to some hon. Members, is not by a cover contract based on their own cotton, but a contract based on the overwhelming majority of cotton moving in the world, namely, the American.
  Before I leave the first of the two points to which I have addressed myself, I would like to make this suggestion to the Minister, or whoever replies. There
  1830
  is a great deal of sympathy, I think on both sides of the House, with the main object of the point raised by the hon. Member for Ashton-under-Lyme (Mr. Rhodes), and other Members, on this question of colonial cotton, if for no other reason than the psychological reason. It is extremely important that no suggestion should be made to those countries, and particularly to their present populations, that, in some way, they are being neglected or pushed out.
  I do not deem that to be true, for many reasons, but it is important that that impression should not be made. I suggest that it may well be, to put it no stronger, that rather than concentrating on adding an alternative tender to the main American contract, it might be better to explore the possibility of a separate Empire contract; but I shall not develop that theme. However, that, as it seems to me, is the main line of the answer which we on this side of the House should give to the criticisms so reasonably and weightily argued by the hon. Member and others from the point of view of Colonial cotton
  The second main line of attack has been on the suggestion that this is a return to speculation. I submit to the House, in the light of experience, quite apart from theory, that it is not a question of whether we should have speculation. Speculation in the merchanting of a crop of this kind is inevitable. Anybody who buys today rather than tomorrow, or who sells today rather than next week, is inevitably, and in the nature of the case, taking a view of the market. He is, in fact, a speculator.
  The point is not whether there should be speculation in a crop so volatile; the boll weevil, the sun and the climate in Georgia are among the things which affect the price of cotton. Anybody dealing in it is, in the nature of the case, involved in speculation. The point is not whether, but who.
  Mr. S. Silverman: And how much.
  Mr. Horobin: And how much. I am glad the hon. Gentleman has added that consideration. The first point is not whether, but who.
  Mr. Jack Jones: And how many.
  Mr. Horobin: How many, exactly.
  Should there be a monopoly, or should the business be spread as widely as possible over an enormous number of independent expert judgments, subject to the closest control of all—namely, the control that if they make too many wrong judgments the market will no longer be handicapped by the result of their operations because they will go broke? That is the first consideration from the point of view of who. Should it be one man? Nobody who knows anything of the problem doubts that, on the whole, Sir Ralph Lacey and his colleagues have done a remarkable job of work. If there had to be a Cotton Commission, it could hardly have been done better, and I can say nothing more condemnatory of the Commission than that, because if it is not likely to succeed under those people it is not likely to succeed under anybody.
  Is it better to have one person, however suitable, whose judgment must occasionally go wrong and, if it goes wrong, goes wrong catastrophically, or is it better to spread the business over a large number of people who cannot call upon the public purse to the tune of millions of pounds but who, in season and out of season, happen to be, roughly speaking, more often right than wrong? We on this side of the House believe that, as we are in favour of speculation anyway, we do not like a monopoly doing the job with our money. We prefer to have a great many people doing it with their own money.
  Having got so far, the question is: if it should be many, and not a monopoly, and not at the public expense, should it be the spinner? Here again, we on these benches appeal to experience. Hon. Members opposite continually seem to suggest that the Liverpool Cotton Market is a new, strange stunt invented by the Prime Minister or somebody else. Actually, it is one of the most ingenious inventions of over a generation ago by the people of Lancashire.
  It was Lancashire people who, in the course of generations, discovered that it was a very bad thing for the spinner to speculate in cotton. The spinner's job was to know how to spin and look after the work. I do not think there can be any differences of opinion between us about that. That was his job. Taking
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  a view of the probable course of markets all over the world is a very specialised job in which the ordinary spinner ought not to indulge.
  The whole object in building up this great futures market was exactly the same as led, in the course of the last century, to dividing the risk between the equity shareholder and the debenture shareholder. In the light of all that has happened in the development of our great mercantile community—certainly before the war—it is surely true to say that if we take the view that we do not want public money involved and we do not want a monopoly, we must proceed to the view that it is very unwise—as Lancashire has hitherto thought it very unwise—for the spinners to operate the market. But somebody has to do it, and we are, therefore, left with the professional futures market operators. It was demonstrated year after year that by doing so we got the best cotton, we got it cheap, and at no cost to the taxpayer.
  Without becoming technical, I should like to point out one or two facts which make it quite clear that the proposal to return, along the lines laid out, to the free market will definitely reduce the real economic costs inseparable from dealing in this commodity. Let me take a small but definite example. At present, Lancashire is covered not only on an American type of cotton contract; it is covered on a price effectively determined only in New York. Not only that; it is covered for a large part of the day only on the New York price of the day before, so that there is actually no question that the American contract now proposed will give a better cover to Lancashire at a cheaper real cost.
  That is another way in which the proposed method will reduce the real costs of Lancashire in insuring against these risks. It is inseparable from the monopoly that all its purchases must be covered, but under this arrangement there is no compulsion—there was none before the war and there is none now. If the spinner chooses to decide that on a certain proportion of his purchases he will not cover, he will take up an insurance only for that proportion which he desires to cover. At present, he is compelled to cover all his purchases. That is another way in which cotton will be cheapened for the spinner.

  1833
  Then there is the very ingenious and highly important provision which enables a very large part of this risk automatically to be laid off in New York, by the arrangement whereby only the first month of each two-monthly contract will be operable, leaving the last 30 days for bringing into Liverpool cotton from abroad, if necessary. So we have as cover for the contract not only stocks physically present, bought, and at risk in Lancashire, but we are able to bring in, in support of the contract, cotton purchased for that purpose from the other side of the Atlantic.
  Lastly—and this is extremely important—it is of the essence of a market of this kind that we bring in outsiders. As an illustration of the importance of this fact, everyone knows that if we are trying to sell a house to somebody we cannot get a price at present, because there does not happen to be anyone who wants No. 7 Laburnum Road, Rochdale. Today, for various reasons, they prefer to live in Oldham. But if one is selling Consols one can sell and buy on a tiny turn.
  It is of the essence of a scheme such as the futures market—just as on the Stock Exchange—that one brings in a very large number of purchasers and sellers, who are available to deal with any particular request for a quotation; who happen to be wanting to buy some cotton and put it in a cellar at a particular moment, or who happened to have cotton in a cellar and want to sell it at that particular moment. The essence of a market of this kind, as soon as it gets into full working order, is that one can buy and sell on very much finer margins. That is a real and genuine economic saving to the industry.
  That leads me to one further point. I shall not bother the House many more minutes. I apologise if I have been a trifle technical but, after all, this is a business question. It is not an emotional question, and should not be. Anybody who treats it in that way, as though everything done by the Raw Cotton Commission is good or bad and that everything done in the futures market is either going to solve all the problems of itself or ruin the industry, is talking nonsense. This is a highly difficult, technical, business question of how to buy our cotton.
  1834
  I would suggest to the House that there is a further real saving in this, which is very important. I think we can be agreed that we have either to go back to what is practically a working monopoly or go forward, and for all sorts of reasons which do not need to be elaborated we could not permanently go on as we are now, and could not because year after year more are contracting out.
  We have to consider either a complete monopoly or the reopening of the Liverpool futures market. There is a very serious disadvantage of an absolutely practical nature in the monopoly system, and that is that it is extremely extravagant in the amount of stocks which have actually to be held in this country, because the Raw Cotton Commission have a statutory duty to provide cotton to anybody who comes along and wants it.
  I do not speak as a great expert on this matter, but I have tried to study it as far as I can, and I should be extremely surprised—and I think a similar point from a different point of view was made by an hon. Friend of mine—if it were necessary for England as a whole permanently to keep at risk stocks of cotton as large as have been kept in the last few weeks under the Raw Cotton Commission.
  One of the real advantages, I believe, of going forward to a system of being able to hedge and of dealing in futures and of bringing in cotton as and when required for the contract may well be that it will not be necessary to hold as big stocks, and if that be true it will be a very big saving. It has been said over and over again in this debate that holding stocks—and it does not matter from the country's point of view who holds them—in England on a falling market is an extraordinarily expensive business. So I think that is an additional advantage of this system.
  I do not want to delay the House. I have merely suggested that there are genuine business objections to complicating the American futures contract at the moment, and that is roughly the answer to those who fear for the colonial market. I have attempted to justify the workings of the futures market from the severely business point of view that it provided cheap, good cotton, and, in practice, did not lead to the results which have been

  1835
  suggested. I have argued that the monopoly system to which we should have to go back has very grave objections and very grave risks and is expensive, and that there are genuine economic savings to be made by the redeveloping, if we can, of the well tried system by which Lancashire found it best to buy its cotton for generations.
  I would conclude with two words of warning. I think this is rather important. First, I think it is an unfortunate coincidence that, perhaps, requires careful thought by the Ministry that the first futures contract coincides so nearly with the time when, it may be, the American guarantee against export subsidy comes to an end. We certainly do not want to run the risk—I do not think we shall, but it is a real possibility that we have to watch—of opening the futures market when there are all sellers and no buyers. That particular fear, although we can exaggerate the possibility, is a very real one and should be borne in mind in any negotiations we have with the American Government.
  I speak for the spinning section, and not for any constituency in Liverpool, but I would correct those people who talk about the Government's reopening the Liverpool Cotton Market. The Government cannot reopen anything. It is possible to kill a kid, but it requires certainly some co-operation from a certain number of others to produce a new one, and nobody can say that it must be born on 1st September. It is essential, I believe, that the whole industry, and particularly the spinning section of the industry, should appreciate the fact that it is up to them to co-operate in every possible way to make this scheme work. It is no good simply saying to Liverpool, "It is your business to provide us with cotton. If we like to buy it we will; if not, we will buy it direct from the other side. You carry all the risks."
  This is a very big, difficult and delicate experiment and one which I am perfectly certain is worth making. I go further and say that we must make it. But I am sure my right hon. Friend will agree that it poses a number of problems and, in particular, that it will depend entirely on the co-operation not only of the people in Liverpool but of all concerned with the manufacture and sale of cotton throughout Lancashire. I believe that
  1836
  that co-operation will be found, and I personally have no doubt at all that my right hon. Friend deserves very well of the cotton industry for doing what he has done.
  9.1 p.m.
  Mr. H. A. Marquand: The hon. Member for Oldham, East (Mr. Horobin) was perfectly right in at least one of his statements: there is no reason why emotion should be generated on this subject. It has not been generated today, and I think we shall all agree that we have had a very good-tempered and very well-argued debate.
  My mind naturally went back a little to the debates which took place six or seven years ago. Since then there have been some changes. The President of the Board of Trade has, as it were, taken the place of the present Colonial Secretary, at least as far as his party is concerned. On those occasions the present Colonial Secretary was always reasonable in his attitude, as was the President of the Board of Trade today. May I take this opportunity of saying a word of congratulation to his right hon. Friend the Minister of State, Board of Trade, who is to wind up the debate. I am very pleased to see that, having been Minister of Pensions—as I was—he has now become, at a more exalted level, responsible for overseas trade, as I was at the time the original Bill was introduced. I wish him well in his new job.
  I was glad, too, as were so many hon. Members, to see the hon. Member for Bury and Radcliffe (Sir W. Fletcher) back again. I well remember his contributions to our debates some time ago. He was, if I may say so, in very good form indeed today. He spoke with the wonted vigour which we all remember, and we were very pleased to hear him in such good form, but of course he has been away for some time and it seemed to me that during that period one or two things which have happened may have escaped his attention. He seemed to forget who it was who closed the Liverpool Market. The market was, of course, closed in 1940–41 by the Coalition Government.
  At several points to which I shall refer later he seemed to forget some of what took place in our previous debates. Worst of all, he forgot Lord Woolton—a very

  1837
  unwise thing, I should have thought, for any member of his party. Like other hon. Members opposite, he persisted in saying that their attitude in this matter was not doctrinaire. During the debate on the Address, I quoted what the noble Lord said about the Government's policy in this matter, and in the light of this persistent repetition today that their attitude is not doctrinaire, I feel I must quote it again. The noble Lord said:
  "Since this Government came into office it has been our consistent policy to eliminate State trading in commodities wherever this could be done."—[OFFICIAL REPORT, House of Lords, 4th November, 1953; Vol. 184, c. 101.]
  Unfortunately, that is the attitude which has been adopted here. The attitude today has not been to consider the circumstances of the moment and to examine what is the best step to take in those existing circumstances, but to pursue blindly the objective of the restoration of the so-called free market.
  In the debate on the Bill, which is now the Act to be repealed by this Bill, six or seven years ago, we had only five, I think—certainly it was not very many—sittings in Committee on the Bill. Yet, after all, it was an important piece of nationalisation. It was, as we have heard again today, a decision taken by the Government of the day to which hon. Members opposite objected very strongly—many of them, I am quite sure, very sincerely. They thought it was a mistake and a wrong thing to do.
  Yet it all went through in that short space of time; whereas at the same time the Transport Bill was going through this House, as were the Gas and Electricity Bills, and they were fought tooth and nail, by hon. Gentlemen opposite. Mr. Brendan Bracken, Lord Bracken, as he now is, kept Committees sitting all through the night, so fierce was his opposition to the Gas Bill, yet the right hon. Member for Aldershot (Mr. Lyttelton), the present Colonial Secretary, leading for the Conservative Party in debates on the 1947 Cotton Bill, took no such action. So far as I remember, we never had to move the Closure. Why? Obviously it was because the Conservative Party knew very well then, though they never admitted it, that there was no alternative to the continuation of the system of public buying at that time.
  Today we come to something more like a real clash of principles. In the
  1838
  somewhat more favourable and somewhat easier economic circumstances of today, hon. Members opposite are entitled perhaps to press their point of view a little more strongly than they did then, but I still feel that they are forgetting altogether the real surrounding circumstances in which they are asking for the re-establishment of the sort of market which might have existed reasonably well in times gone by, but can never exist reasonably well either today or in the future, so far as I can see it.
  The Lancashire cotton trade is a very different industry now from what it was in those days, which we have heard described tonight, when this wonderful market operated with such smoothness and always gave Lancashire cheaper cotton than could be got by anybody else. The trade in those days was three-quarters overseas trade and one-quarter home trade. Now the position is entirely reversed. Lancashire has lost a great deal of that overseas trade, and now three-quarters of its products are consumed at home and only one-quarter exported. The whole industry, as a consequence, is so much smaller, and the whole business of the Lancashire cotton industry is much less than it was.
  Mr. Shepherd: I do not know why the right hon. Gentleman goes on repeating that assertion made in his previous speech. If we take the total weight of single yarn spun in 1937, it was about 23 million lb. a week; now it is 20 million. Why does he say that there has been an enormous contraction?
  Mr. Marquand: Obviously it is very much less important in relation to other parts of the world cotton market. It is no longer such an important centre of the world trade in cotton.
  Much more important than that is that free convertibility of currencies does not exist. The hon. Member for Bury and Radcliffe and many other hon. Members admitted that the perfect market, which they tried to describe to us, can exist properly only when we have a free market in foreign currencies, as well as a free market in the commodities concerned.
  Further, the free and unfettered competition of the trade itself has gone. Producing countries now take care to limit their supplies, if necessary, or try, by one

  1839
  means or another, to protect their home producers from fluctuations by some sort of restrictive practice. The Commodity Credit Corporation of America, the Egyptian Cotton Commission and the marketing boards in the Colonies have been referred to. Moreover, Lancashire itself is differently organised as a result of the changed circumstances and a passing away from something like a free competitive economy to a very much regulated economy. With limited competition in Lancashire today, I believe that six large firms control 40 or 50 per cent. of the spindles. The conditions of the free market no longer exist as they used to do.
  There has been no very substantial criticism of the Commission itself, except perhaps by the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield). There hardly could be, because the Commission which we set up were constituted—are still constituted, for that matter—very largely of representatives of Lancashire spinners and merchants. It is true that the final decision on prices was left to the independent members, but these merchants, traders and spinners who were on the Commission were throughout the whole proceedings free to render their advice and to comment on any mistaken policy which they might think was being pursued.
  There has been some criticism about the cover which has been provided by the Commission, and, I think, some misunderstanding. The President of the Board of Trade himself said that he doubted the propriety of using public funds to insure private traders against loss and that the source of the purchase was quite irrelevant. Other hon. Members spoke in a similar strain. But the right hon. Gentleman was not in our debate six or seven years ago. There are others who were present, and they ought to remember the emphasis which they laid at that time upon the necessity for a complete cover provision.
  Again and again in the Committee stage I was pressed about the cover position that we were going to make. The party opposite laid tremendous emphasis upon it. The cover provisions were put into the Act as they were with the agreement of hon. Members on the other side, and to a considerable extent under the influence of their persuasive
  1840
  remarks on that matter. Now hon. Members opposite seem to have turned right around and are now accusing the Commission, in effect, of having provided a far too generous cover. "The Times" this morning takes up the same strain, and says:
  "All are agreed that the Commission's forward cover service has been luxurious."
  Hon. Members who have spoken about cover and who pressed me so hard about it all those years ago cannot have it both ways.
  The President of the Board of Trade said that there should be legislation at this stage in the development of the Commission. I agree. In one little intervention which I was able to make in our last debate in July, I suggested it was high time that legislation was undertaken in view of the extraordinary use, as it seemed to me, that had been made of that Section in the Act which permits the Board of Trade to license imports on private account.
  The right hon. Gentleman said that the Commission started as a monopoly and were no longer a monopoly; that they bought less than half the cotton for the industry, and in that situation we were faced with three choices: either to continue this half-and-half system, to go back to the monopoly Commission, or to re-establish a futures market. Of course, the right hon. Gentleman came down in favour of the re-establishment of the futures market. What he was saying, in effect, was, "I have found this system of trading in Lancashire cotton which was established by the Act of 1947. I opened its veins through the relevant Section of the Act, I bled it white, and now that it can no longer stand on its own feet I am going to finish it off."
  The hon. Member for Cheadle (Mr. Shepherd) and many other hon. Members from the other side of the House who spoke after him cited again and again the figures of loss made by the Commission in the last two years. But those losses, it must be remembered, were made in that very half-and-half situation which, the right hon. Gentleman says, was so unsatisfactory. Of course, the Commission were not able to exercise their full powers during that period, and this must be remembered in mitigation of any criticisms about the loss which was made.

  1841
  The hon. Member for Clitheroe (Mr. Fort) joined in the cry, failing at first to mention, as the President himself failed to mention, the profits which had been made in previous years. When pressed upon the point by my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), the hon. Member admitted that in the circumstances those losses could not have been avoided. The President told us that the sort of circumstances which arose were these. In 1950–51 there was a depression and a short American crop simultaneously, and in those circumstances the Commission were forced to buy outside growths at high prices. It was from that sort of circumstance that the losses arose.
  So the Raw Cotton Commission pursued the duty laid upon them by statute of securing a supply of cotton to Lancashire, and to do that they went outside and bought at a premium over American prices. I want to ask—and I hope the Minister of State, Board of Trade, will deal with this—what will be done if these circumstances should be repeated and if for some reason, which could be a monetary reason and not a physical reason, it is impossible to get adequate supplies of American cotton. If the Commission were still in existence, it would be their duty to step into the gap as they did before. If there is no Commission and only a free market, what will happen?
  It is a crucial question and hon. Members opposite have shrunk from answering it. They say, "Oh, no loss will be made, because traders will not enter into the kind of transaction which might involve them in a loss and force them to go bankrupt." That means there is only one answer. In those circumstances the merchants of Liverpool will keep off the market. They will try to wait until such time as conditions change and the price of outside growths comes down again to a level comparable with American growths of spinning value. They will keep out of the market and the cotton will not be bought. The Lancashire workers will go idle; in other words—and the hon. Member for Cheadle had better listen, even though he does not like it—the so-called losses have been the price paid for maintaining full employment in Lancashire during that period, and I say it was a price which was well worth paying and one which was reasonable.
  1842
  The Bill is, of course, utterly destructive. It does not pretend to do anything else than destroy the existing system. Because of that it will be impossible during the Committee and Report stages, assuming that the House gives the Bill a Second Reading tonight, to discuss what is to follow the Bill. That is why it is most important that the right hon. Gentleman should endeavour to answer the important questions which have been raised about the future—never mind about the theoretical advantages of a free market or even the theoretical advantages of monopoly, centralised buying.
  Let us consider now what is likely to be the shape of things to come. Let the right hon. Gentleman answer the key questions which have been asked about the availability of dollars for futures trading in this market. Nobody can deny that the restoration of a private market trading in futures to take the place of American cotton will involve increased dollar expenditure. Even this mysterious and anonymous pamphlet, which appears to be printed in Liverpool, although we do not know who wrote it, admits that the most serious obstacle in the way of the restoration of the market is the question whether sufficient dollars will be available. The "Economist" has followed the same strain, and so has the "Manchester Guardian." I armed myself with quotations, but as we want to give the right hon. Gentleman time to reply to these questions, I shall not bother the House with them.
  Has the right hon. Gentleman any better guarantee to offer us that the dollars will be available than the answer which was given by the Chancellor of the Exchequer the other day in reply to my right hon. Friend the Member for Huyton (Mr. H. Wilson)? He was asked:
  "… what conditions have to be satisfied for the investment of United States capital in cotton merchanting firms in this country; how many applications have been received; and what is the amount of capital involved."
  The Chancellor replied:
  "Each case has to be considered on its merits in relation to its prospective benefit to the economy. One application has so far been received for the investment of a small amount."—[OFFICIAL REPORT, 17th November, 1953; Vol. 520, c. 142.]

  1843
  That may be reassuring from the point of view of the entry of American business into Lancashire, but it shows that from that source there is no great likelihood of additional dollars becoming available. Is there no other arrangement? Have the Government made any sort of inquiries in the United States? Have they got any kind of gentleman's agreement or understanding that if the market gets into difficulties it will be helped from the United States? We should like to know.
  It seems the most dangerous time to embark upon this experiment. I do not want to be alarmist or to make any forecasts, but it is a time when some people fear there may be the beginning of a great depression in the United States of America. Hon. Members will have read Mr. Colin Clark's two very interesting articles in the "Manchester Guardian" the other day. He may be wrong—let us hope that he is—but there was a definite suggestion that all the talk which has been going on in the United States about the possibility of a depression is far from wide of the mark. That may happen. If there is a depression in America it will create a severe dollar shortage, as we know well from past experience, apart altogether from theory.
  How shall we be situated then to ensure the necessary supplies to the Lancashire industry? It may be said at that point that we will turn to the Colonies and rely upon that increased output of cotton to which my hon. Friend the Member for Rossendale referred in quoting an answer which he had from the Secretary of State for the Colonies. But I do not think that answer will do. Will those increased quantities be available? Under the present situation, with the long-term contracts which the Commission have entered into for the supply of many of these goods, we know where we are. They are forthcoming, but will they be forthcoming in future? Do not we run the serious risk of finding ourselves, in a situation of American depression, in a position where we simply have not been able to earn enough dollars to buy sufficient dollar cotton and where, by gradually dropping off the Commission's purchases, liquidating stocks and terminating long-term contracts, we find ourselves unable to turn to the Commonwealth for the alternative supply?
  1844
  The most serious misgiving which everyone has had during the debate has been on the ground of the availability of Commonwealth supplies and the danger that the reopening of this market may cause spinners to shift their demands somewhat towards the American cotton on which they can fully hedge their position, and thereby lead to a decline in the demand for Commonwealth cotton. I have no need to call in aid my hon. Friends in that matter. That doubt has been expressed by the hon. Member for Garston (Sir V. Raikes) and several other well-informed speakers opposite. It is on that question that we need reassurances from the right hon. Gentleman more emphatic than those he has been able to give so far.
  My right hon. Friend the Member for Huyton addressed a Question to him also, and in reply he said:
  "The long-term contracts between the Raw Cotton Commission and Aden, Nigeria and Nyasaland. to which the colonial Administrations attach great importance, will be honoured and consultations on the methods of doing this will commence shortly."
  For how long will they be honoured, and how will they be honoured when the Cotton Commission comes to an end? Does it mean that they will be honoured only as long as the Commission lasts, and will then finish, or what does it mean? He went on to say:
  "It is obviously not possible to say with certainty whether there will be any fall in United Kingdom purchases of colonial cotton"—
  That is not a very reassuring answer to those of us who are anxious to see the development of raw material production in the Commonwealth—
  "but my noble Friend is satisfied that the colonial producers should have no difficulty in finding markets for their cotton if they can produce it competitively."—[OFFICIAL REPORT, 17th November, 1953; Vol. 520, c. 139.]
  So, having been helped along by the strong hand of the Raw Cotton Commission all these years, and having with that aid been able to increase their production formidably, they are now to be told, "Goodbye, boys, look after yourselves, and if you bring your prices down lower even perhaps by reducing the already deplorably low incomes earned in some of the territories, you may be able to sell your cotton to somebody else." That is the situation to which we seem to be reduced by this deplorable decision, made

  1845
  mainly for doctrinaire purposes, to carry out this proposal at all costs before next August.
  I was shocked tonight to hear that the decision is to be carried out with such speed. When I read the Clause which permits the President of the Board of Trade and the Minister of Materials to make up their minds, in the light of the general advantage, about the best moment at which to do it, I thought it was a wise provision, but it appears that they have already made up their minds. It is a leap in the dark. It is an attempt to establish free market conditions in a world system which has completely changed and in which such a market can no longer reliably exist. It is a decision to gamble with dollars at a time when all the world is wondering whether the American economy is going to lurch again. It is a decision which will jeopardise the future of colonial production. I hope the House will reject the Bill on its Second Reading.
  9.27 p.m.
  The Minister of State, Board of Trade (Mr. Heathcoat Amory): We shall all agree that we have had an excellent debate today, one which has been fully up to the standard of the many good debates that we have had on industrial and commercial subjects during recent years.
  I thank the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand) for the kind remarks that he made about me. There must, I feel, be some association, which it is difficult to spot, between war pensions and overseas trade. I should also like to join in the expressions of pleasure which have been voiced by so many hon. Members at the reappearance in our midst of my hon. Friend the Member for Bury and Radcliffe (Sir W. Fletcher), whom we found lashing out in his usual vigorous style.
  I felt a fellow feeling with the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock). We have been discussing a very intricate subject, and there have been many times when I have felt unequal to the technical pressure of the atmosphere; and I gather from the hon. Lady's remarks that her experience has been similar.
  In summarising the debate, I want to remind the House of one or two key points made by my right hon. Friend in his opening speech. First, he paid a
  1846
  tribute, which has been paid by almost every other speaker, to the Raw Cotton Commission. It is certainly no part of our object to criticise the way in which the Commission has discharged its duty in difficult days. It has earned a good reputation for itself.
  Secondly, we must bear in mind that the Commission were forced by events to throw overboard their system of pricing based on average costs and to sell at replacement prices. In the circumstances, that was probably inevitable, but it was a major change from original policy and it destroyed any real chances of avoiding substantial losses in the following years.
  We must also bear in mind the two Reports of the Committees presided over by Sir Richard Hopkins. Both of them were concerned with short-term problems. Both these Reports were unanimous, and I think that the right hon. Gentleman the Member for Middlesbrough, East, was perhaps not quite fair to my right hon. Friend when he seemed to imply that my right hon. Friend had decided on these policies without any advice at all. We did receive the advice of these two Committees, and both their Reports were unanimous. We accept absolutely the different interpretations placed on the words "private trade."
  Then, another relevant factor we have to consider is that in this second option period the contractors-out increased from about one-third of the volume of the trade to more than half, and, clearly, in those circumstances some action was necessary, in view of the entirely changed position of the Raw Cotton Commission, who were no longer able to carry out their original statutory obligations. So, as my right hon. Friend said, we were confronted with three possibilities. First, we could go back to monopoly; secondly, we could continue the dual system—the halfway house—which is the existing position; and, thirdly, we could abolish the Raw Cotton Commission and re-establish a free market.
  At this stage, I think three facts have to be set out clearly. First of all, as far as the industry is concerned, a very competitive climate indeed has returned, calling for the utmost possible flexibility. Secondly, the industry's opinions, reflected in the Reports of the Hopkins Committees, unanimously recommended

  1847
  against the continuance of monopoly and against the provision of cover from public funds, at least, for the contractors-out. The third thing we must try to remember is that the Raw Cotton Commission had lost between £40 million and £45 million in the last two years' trading.
  Against that background, Her Majesty's Government decided that the dominating consideration was that the industry must have the benefit of the most flexible, the most sensitive and the most efficient cotton procurement system that is available, one that will place the industry under no avoidable handicap in relation to its overseas competitors. That was and still is our primary objective, and I think that that point was well made by my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield).
  Furthermore, we concluded that the financing of stocks and the provision of the necessary cover facilities are really normal services which industry should provide and pay for itself. It is not the responsibility of the Government normally to provide those services for a particular industry at the taxpayers' expense. Then, the Government also remembered that in prewar days the Cotton Exchange was a substantial earner of foreign exchange, and I think there is no hon. Member in the House who will not feel that today we are in no position to reject any possible source of invisible earnings. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) dealt with that aspect very well.
  Mr. H. Wilson: This has been debated very fully this afternoon. Will the right hon. Gentleman say whether he really thinks that any invisible earnings that will be possible, particularly dollar earnings, are likely to cover the certain increase in dollar expenditure resulting from increased dependence on dollar supplies?
  Mr. Amory: If the right hon. Gentleman will allow me, I shall say a word about that when I come to the question of dollar expenditure.
  Those are the considerations which led us to conclude that the only workable solution was the restoration of a free
  1848
  market, or a market just as free as circumstances will permit.
  Looking back over the debate this afternoon I do not feel that hon. Gentlemen opposite have given us any very clear or agreed alternative solution. There has been quite a lot of talk about doctrinaire motives. Doctrinaire motives are extremely difficult to define, and I do not think that the argument that we have been motivated by doctrinaire motives can be sustained in this case. We do not feel guilty in that respect.
  Other things being equal, we do not like monopolies, but we have a pragmatic approach. Where it is shown that there is a clear advantage, or where there is no alternative, we are prepared to accept them. In this case, two advisory committees have recommended us against monopoly, speaking with the united voice of the industry primarily concerned.
  It is up to the critics to suggest a workable alternative. None has yet been suggested which stands any chance of being accepted by the industry as a whole. The right hon. Member for Huyton (Mr. H. Wilson) took what I thought was a rather gloomy view when he said, as I understood it, that our proposal was bound to result in losing both on the swings and on the roundabouts. If that is so, it seems rather odd that 50 per cent. of the trade have decided that it is to their advantage to contract out.
  I now want to deal with a few of the misgivings that have been expressed during the debate. First of all, will harm be done to the small spinner? Unquestionably, the Raw Cotton Commission have provided the small spinner with generous stock facilities, but at enormous expense to the taxpayer. Spinners, like any other industrialists, should be prepared to accept the normal obligation of holding stock, or to pay the cost of stock facilities. There is little doubt, and certainly no evidence has been provided to the contrary, that the Cotton Exchange, when it gets into its stride, will not be slow to provide stock facilities to the extent that there is an effective demand for them. I cannot quite understand why hon. Gentlemen opposite should assume that that will not be so.
  There are one or two other changed circumstances here. As my hon. Friend the Member for Cheadle (Mr. Shepherd)

  1849
  has pointed out, it is today easier than it used to be for the smaller spinner to buy direct from the shipper, which means that the spinner can get on with less stock than he would have needed in times past. Also, certain exporting countries will now, I understand, ship on consignment to this country. As my right hon. Friend said, the majority of the firms who have contracted out have been the larger ones, but a substantial number of unit spinners have taken advantage of the facilities and are contracting out today; so I do not think that the smaller spinner will find that he is not getting the facilities that he needs.
  I now want to deal with a point which many hon. Gentlemen have raised, a very important one, the question of possible damage to the prospects for colonial cotton. My right hon. Friend referred to that in his opening remarks. I think we shall all agree that it would be a great tragedy if anything went wrong there, as we all want to see production in the Colonies and the Commonwealth steadily moving ahead.
  As my right hon. Friend said, the best advice we have today is that there is no reason why those interests should be adversely affected. The quality of cotton growths has steadily unproved over the past 10 years, and today there is every evidence that those growths can sell, and sell successfully on their own merits.
  Another point which, I think, has a bearing on this is the fact that the Colonial Marketing Boards are today much better off than they were some years ago and are in a position to stand on their own feet and continue their development work. I think it important that the two biggest colonial producers, Nigeria and Uganda, have, through their marketing boards, expressed themselves as quite happy about the future in regard to the arrangements made.
  Another point that has been raised is the question of the Liverpool market contract. This is quite a technical business, and I hope that I shall find my way through it successfully. The hon. Member for Ashton-under-Lyne (Mr. Rhodes) mentioned it in his speech, and when the hon. Gentleman starts talking about a technical subject I always enjoy listening to him because I have a great respect for his knowledge, though I find
  1850
  it very difficult to keep up with him. It reminds me of when I used to attend lectures on philosophy at the Sorbonne, when I did not know French. I was always about 30 seconds behind.
  This is an important question on which I want to make the following points. I am advised that even though the Liverpool Cotton Exchange contract will be based on American cotton—and, incidentally, I think I am right in saying that it will not be seven-eighths but fifteen-sixteenths middlings—it will give a good hedge for other American-type cottons and will be almost exactly what the Raw Cotton Commission are providing.
  My next point is that this single American contract is what the Exchange are to have to start with. They hope that, later, it will be possible to extend it and either arrange for other cottons to be tenderable against the main contract, or introduce separate contracts. The Liverpool Cotton Association have promised to look at this again 12 months after they start to see whether it is possible to introduce some alternative contracts, or the tendering of other cottons. It is significant that the Empire Cotton Growing Corporation, who would also like to see this done, have agreed that it is not feasible in present circumstances. They hope that it will be possible to introduce an Egyptian-type contract. They would like to do so as soon as possible, but, clearly, it is not possible at the present time.
  Any possible risk to Commonwealth cotton would come not from the fact that there is only an American contract for futures, but from the removal of the dollar restrictions. There, again, all the evidence is that there is very little to fear and every hope that the use and the prosperity of Commonwealth cotton will go steadily ahead.
  I am quite sure that the Liverpool Cotton Association will note the arguments put forward and the interest that hon. Members have shown in this important aspect, and will give great weight to the views expressed.
  Mr. Rhodes: Can the right hon. Gentleman assure the House that adequate stocks of colonial cotton will then be held in this country?
  Mr. Amory: I have no doubt that if the demand for the use of Commonwealth

  1851
  cotton is there, and there is every evidence it will be, then adequate stocks will be held. I do not think there is any question about that at all.
  The right hon. Gentleman the Member for Middlesbrough, East asked me how the long-term contracts would be honoured, or whether they would be honoured in full. The answer is that they will be honoured in full. They will be honoured right up to their termination, whether three, four or five years ahead, or satisfactory arrangements will be made by mutual agreement for their termination. But in no case will those contracts be dishonoured just because the Raw Cotton Commission may have ceased to operate in the meantime.
  Mr. Marquand: I hope I am not being stupid, but I do not understand that. Who is to buy once the Commission cease?
  Mr. Amory: How it is to be done is being studied at the present time, and I have no reason to believe that it will be beyond the wit of man to devise an arrangement. But I should like to give an assurance that, in no circumstances, will the long-term contracts be terminated before their time.
  Mr. Marquand: But no new ones made?
  Mr. Amory: So far as I know, no new ones will be made; certainly not under Government auspices under the new arrangements.
  I should now like to turn to this question of the risk of extra dollar expenditure, which is another important point. There is admittedly some risk, and even I think likelihood, of some additional dollar expenditure there. It is impossible to forecast how much, but the evidence is that it will not be anything except a manageable proposition. It does seem to us that, to ensure users having an absolutely equal choice of cotton growths with their competitors, a risk of that sort is one we must be prepared to take. The extent of the risk, I think, will be limited by the fact that foreign buyers who may come to operate on the Liverpool market will not be able to buy dollar cotton for sterling and export it outside the United Kingdom.
  1852
  But I do feel that if, through timidity, we restrict the ability of the industry to use growth and types that it wants to use and finds best for its purpose, we may put it under a grievous handicap in vital export business. In this case, surely the bold course is probably the safest course, and in our position we must learn to live dangerously.
  The advice we have had is that if, unfortunately, moderate restrictions again have to be imposed temporarily on dollar imports, that could be managed within the framework of the Liverpool Cotton Exchange. The entitlement system of individual rationing now in force is an example of the way in which that could be tackled.
  Mr. Marquand: Before the right hon. Gentleman leaves this dollar question, though he says that temporary restrictions on dollar imports could be made, have the Government really got in mind a plan of what action to take if there should be a severe dollar shortage, which is certainly not impossible in the present circumstances?
  Mr. Amory: I agree it is certainly not impossible, but I think the right hon. Gentleman will agree, in turn, that if we were faced with a really severe crisis, all round action would have to be devised to deal, not only with cotton imports, but with all kinds of commodities and imports in general. But we do not feel that it is a sensible thing to do, or one that we can afford to do in our position, to continue to live in a seige economy at a time of flexibility. We have to be on our toes to provide against a task of that magnitude in the future.
  It has been suggested that the termination of the Raw Cotton Commission will mean the use of lower grades of cotton. I do not really think there is substance in that argument. It has been said that since the Raw Cotton Commission have been in existence, higher grades have been used and these have worked better in spinning. I think it was the hon. Member for Farnworth (Mr. Thornton) who made that point. I do not dispute that, but if that is so, is it not probable that it is due to the existence of the sellers' market with more comfortable profit margins, permitting the use of higher grades, and that it has nothing whatever to do with the machinery for the procurement of the cotton?
  Mr. Thornton: The important point is this. During the existence of the Raw Cotton Commission and the period of shortages of certain growths, spinners have had a choice in an upward quality direction and not a downward quality direction.
  Mr. Amory: I think there is every hope that as a result of these changes, spinners will have not a narrower but a wider choice of all qualities than they have at present, and will be able to select exactly the quality which suits their particular business best.
  I should like to refer to another matter which the hon. Member for Farnworth raised, concerning the views of the trade unions. The Government very much regret that the trade unions' view is unfavourable to the proposed changes. We are sorry about that, because we attach very great weight to the views of trade unions on all matters affecting the welfare of their respective industries. At the same time, it is impossible to expect to get absolute unanimity, and here, we have had to decide on the balance of advice, bearing in mind the unanimous recommendations of the two Hopkins Committees. I think that our trade union friends will agree that the increasing proportion of spinners who have decided that to contract out will advantageously affect their competitiveness, is a significant factor. Any increase in the competitiveness of the industry will be as welcome to the trade unions as it is to other sections of the industry.
  Mr. Thornton: I am grateful to the right hon. Gentleman for giving way again. The point I should like him to answer is this. When we have 100 per cent. of the employed persons in the industry and 50 per cent. of the mills against this change, why take notice of the other 50 per cent. who are in favour of it?
  Mr. Amory: I am not quite sure whether the hon. Gentleman is right in suggesting that it is 100 per cent. Could it not just as well be 51 per cent.? I do not know; I do not wish to press that. I only want to point out that weight has been attached to the views of the trade unions in this matter.
  I want now to say a word about speculators and speculation. It is a mistake to regard all speculation as
  1854
  necessarily bad and harmful. The speculator who buys cotton because he believes that the price will move to his advantage can be quite a useful person to have in the market. He helps to enable the market to do its job by providing the off-take for the trade's hedges. In other words, he helps to underwrite the risk and so helps to safeguard the stability of the industry.
  That really is a fact. It is very difficult for us laymen to understand, but anybody who knows what goes on inside industry, in a market like this, will confirm that fact. If it were not for these outside speculators coming in, it would be extremely difficult to cover the risks involved. Against that, there are some speculators who are less useful, and it is to mitigate any possible harm that they might do to the market that new rules and drastic safeguards have been provided against any misuse of the position. For instance, I understand that settlements will be made daily, and larger cash deposits will be involved.
  I was asked whether the compensation would apply equally to those who leave the service of the Commission before it terminates and those who leave after. The intention is that the same compensation arrangements should apply to both, provided that the cause of leaving the Commission's service was a result of the change of official policy.
  I conclude with one or two final sentences which I shall try to reduce to as simple terms as possible. We are all proud of our great, robust cotton textile industry, which has played such a notable part in our industrial history in the past, which provides employment for so many people, and on whose efforts we depend so greatly today for a substantial contribution to our export trade.
  The question with which we are faced is, what arrangement will serve this vitally important industry best? Should we return to a monopoly service? Two Reports, and the opinion of the bulk of the industry, are against that. Hon. Members opposite have not given us a very clear idea of the alternative which they favour. Do they favour contracting-out? If so, by how many spinners? I believe they indicated that too many were contracting-out today. How do they suggest that this problem should be dealt with?

  1855
  We have decided—and all the evidence points to the fact—that the present dual system cannot efficiently be maintained permanently. We believe that the only practicable alternative is to allow an international market to be re-formed at Liverpool, operating under an improved rule. We believe that this will give the industry all that the present Raw Cotton Commission can provide, at no expense to public funds, and with additional important opportunities for earning substantial foreign currency.
  I remember an observation attributed to an elderly philanthropist:
  "When I can do good and, at the same time, make money I find all my powers moving in harmonious co-operation."
  That is very much how the problem looks to us. We can do what is best for the industry and, at the same time, save money for the country. There are risks to be faced, but they are the type of
  risks that we, as a nation of traders—and let us be proud of that honourable designation—should not be afraid to take.
  We all want the greatest degree of security and stability obtainable for those employed in our cotton industry, but we must beware lest, by seeking to insulate ourselves too much from the world market, we incur the greater risk of losing the keen nerve, the resource, the flexibility and the expertise on which our whole future as a great trading nation in this intensely competitive modern world depends. In this matter the Government are confident that the course they recommend to the House is the right one, in the interest alike of the cotton industry and all who work in it, and of the nation at large.
  Question put.
  The House divided: Ayes, 306; Noes, 277.

  Division No. 8.]

  AYES

  [10.0 p.m.

  Aitken, W. T.

  Channon, H.

  Godber, J. B.

  Allan, R. A. (Paddington, S.)

  Churchill, Rt. Hon. Sir Winston

  Gomme-Duncan, Col. A.

  Alport, C. J. M.

  Clarke, Col. Ralph (East Grinstead)

  Gough, C. F. H.

  Amery, Julian (Preston, N.)

  Clarke, Brig. Terence (Portsmouth, W.)

  Gower, H. R.

  Amory, Rt. Hon. Heathcoat (Tiverton)

  Cole, Norman

  Graham, Sir Fergus

  Anstruther-Gray, Major W. J.

  Colegate, W. A.

  Grimond, J.

  Arbuthnot, John

  Conant, Maj. R. J. E.

  Grimston, Hon. John (St. Albans)

  Ashton, H. (Chelmsford)

  Cooper, Sqn. Ldr. Albert

  Grimston, Sir Robert (Westbury)

  Assheton, Rt. Hon. R. (Blackburn, W.)

  Cooper-Key, E. M.

  Hall, John (Wycombe)

  Astor, Hon. J. J.

  Craddock, Beresford (Spelthorne)

  Harden, J. R. E.

  Baker, P. A. D.

  Crookshank, Capt. Rt. Hon. H. F. C.

  Hare, Hon. J. H.

  Baldock, Lt.-Cmdr. J. M.

  Crosthwaite-Eyre, Col. O. E.

  Harris, Frederic (Croydon, N.)

  Baldwin, A. E.

  Crouch, R. F.

  Harris, Reader (Heston)

  Banks, Col. C.

  Crowder, Sir John (Finchley)

  Harrison, Col. J. H. (Eye)

  Barber, Anthony

  Crowder, Petre (Ruislip—Northwood)

  Harvey, Air Cdre. A. V. (Macclesfield)

  Barlow, Sir John

  Darling, Sir William (Edinburgh, S.)

  Harvey, Ian (Harrow, E.)

  Baxter, A. B.

  Davidson, Viscountess

  Harvie-Watt, Sir George

  Beach, Maj. Hicks

  Digby, S. Wingfield

  Hay, John

  Beamish, Maj. Tufton

  Dodds-Parker, A. D.

  Head, Rt. Hon. A. H.

  Bell, Philip (Bolton, E.)

  Donaldson, Cmdr. C. E. McA.

  Heald, Sir Lionel

  Bell, Ronald (Bucks, S.)

  Donner, Sir P. W.

  Heath, Edward

  Bennett, F. M. (Reading, N.)

  Doughty, C. J. A.

  Henderson, John (Cathcart)

  Bennett, Dr. Reginald (Gosport)

  Drayson, G. B.

  Higgs, J. M. C.

  Bennett, William (Woodside)

  Dugdale, Rt. Hon. Sir T. (Richmond)

  Hill, Dr. Charles (Luton)

  Bevins, J. R. (Toxteth)

  Duncan, Capt. J. A. L.

  Hill, Mrs. E. (Wythenshawe)

  Birch, Nigel

  Duthie, W. S.

  Hinchingbrooke, Viscount

  Bishop, F. P.

  Eccles, Rt. Hon. Sir D. M.

  Hirst, Geoffrey

  Black, C. W.

  Eden, Rt. Hon. A.

  Holland-Martin, C. J.

  Boothby, Sir R. J. G.

  Elliot, Rt. Hon. W. E.

  Hollis, M. C.

  Bossom, Sir A. C.

  Erroll, F. J.

  Holmes, Sir Stanley (Harwich)

  Boyd-Carpenter, J. A.

  Fell, A.

  Hope, Lord John

  Boyle, Sir Edward

  Finlay, Graeme

  Hopkinson, Rt. Hon. Henry

  Braine, B. R.

  Fisher, Nigel

  Hornsby-Smith, Miss M. P.

  Braithwaite, Sir Albert (Harrow, W.)

  Fleetwood-Hesketh, R. F.

  Horobin, I. M.

  Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)

  Fletcher, Sir Walter (Bury)

  Horsbrugh, Rt. Hon. Florence

  Bromley-Davenport, Lt.-Col. W. H.

  Fletcher-Cooke, C.

  Howard, Gerald (Cambridgeshire)

  Brooke, Henry (Hampstead)

  Ford, Mrs. Patricia

  Howard, Hon. Greville (St. Ives)

  Brooman-White, R. C.

  Fort, R.

  Hudson, Sir Austin (Lewisham, N.)

  Browne, Jack (Govan)

  Foster, John

  Hudson, W. R. A. (Hull, N.)

  Bullard, D. G.

  Fraser, Sir Ian (Morecambe & Lonsdale)

  Hulbert, Wing Cdr. N. J.

  Bullus, Wing Commander E. E.

  Fyfe, Rt. Hon. Sir David Maxwell

  Hurd, A. R.

  Burden, F. F. A.

  Galbraith, Rt. Hon. T. D. (Pollok)

  Hutchinson, Sir Geoffrey (llford, N.)

  Butcher, Sir Herbert

  Galbraith, T. G. D. (Hillhead)

  Hutchison, Lt.-Com. Clark (E'b'rgh, W.)

  Butler, Rt. Hon. R. A. (Saffron Walden)

  Gammans, L. D.

  Hutchison, James (Scotstoun)

  Campbell, Sir David

  Garner-Evans, E. H.

  Hyde, Lt.-Col. H. M.

  Carr, Robert

  George, Rt. Hon. Maj. G. Lloyd

  Hylton-Foster, H. B. H.

  Cary, Sir Robert

  Glover, D.

  Jenkins, Robert (Dulwich)

  Jennings, R.

  Mott-Radclyffe, C. E.

  Spearman, A. C. M.

  Johnson, Eric (Blackley)

  Nabarro, G. D. N.

  Speir, R. M.

  Johnson, Howard (Kemptown)

  Neave, Airey

  Spence, H. R. (Aberdeenshire, W.)

  Jones, A. (Hall Green)

  Nicholls, Harmar

  Spens, Sir Patrick (Kensington, S.)

  Joynson-Hicks, Hon. L. W.

  Nicholson, Godfrey (Farnham)

  Stanley, Capt. Hon. Richard

  Kaberry, D.

  Nicolson, Nigel (Bournemouth, E.)

  Stevens, G. P.

  Keeling, Sir Edward

  Nield, Basil (Chester)

  Steward, W. A. (Woolwich, W.)

  Kerr, H. W.

  Noble, Cmdr. A. H. P.

  Stewart, Henderson (Fife, E.)

  Lambert, Hon. G.

  Nugent, G. R. H.

  Stoddart-Scott, Col. M.

  Lambton, Viscount

  Nutting, Anthony

  Storey, S.

  Lancaster, Col. C. G.

  Oakshott, H. D.

  Strauss, Henry (Norwich, S.)

  Langford-Holt, J. A.

  Odey, G. W.

  Stuart, Rt. Hon. James (Moray)

  Law, Rt. Hon. R. K.

  O'Neill, Phelim (Co. Antrim, N.)

  Studholme, H. G.

  Leather, E. H. C.

  Ormsby-Gore, Hon. W. D.

  Summers, G. S.

  Legge-Bourke, Maj. E. A. H.

  Orr, Capt. L. P. S.

  Taylor, Charles (Eastbourne)

  Orr-Ewing, Charles Ian (Hendon, N.)

  Taylor, William (Bradford, N.)

  Legh, Hon. Peter (Petersfield)

  Orr-Ewing, Sir Ian (Weston-super-Mare)

  Teeling, W.

  Lindsay, Martin

  Osborne, C.

  Thomas, Rt. Hon. J. P. L. (Hereford)

  Linstead, Sir H. N.

  Page, R. G.

  Thomas, Leslie (Canterbury)

  Llewellyn, D. T.

  Peake, Rt. Hon. O.

  Thomas, P. J. M. (Conway)

  Lloyd, Rt. Hon. G. (King's Norton)

  Perkins, W. R. D.

  Thompson, Kenneth (Walton)

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Peto, Brig. C. H. M.

  Thompson, Lt.-Cdr. R. (Croydon, W.)

  Lockwood, Lt.-Col. J. C.

  Peyton, J. W. W.

  Thorneycroft, Rt. Hn. Peter (Monmouth)

  Longden, Gilbert

  Pickthorn, K. W. M.

  Thornton-Kemsley, Col. C. N.

  Low, A. R. W.

  Pilkington, Capt. R. A.

  Tilney, John

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Pitman, I. J.

  Touche, Sir Gordon

  Lucas, P. B. (Brentford)

  Pitt, Miss E. M.

  Turner, H. F. L.

  Lucas-Tooth, Sir Hugh

  Powell, J. Enoch

  Turton, R. H.

  Lyttelton, Rt. Hon. O.

  Price, Henry (Lewisham, W.)

  Tweedsmuir, Lady

  McAdden, S. J.

  Prior-Palmer, Brig. O. L.

  McCallum, Major D

  Profumo, J. D.

  Vane, W. M. F.

  McCorquodale, Rt. Hon. M. S.

  Raikes, Sir Victor

  Vaughan-Morgan, J. K.

  Macdonald, Sir Peter

  Rayner, Brig. R.

  Vosper, D. F.

  Mackeson, Brig. H. R.

  Redmayne, M.

  Wade, D. W.

  McKibbin, A. J.

  Rees-Davies, W. R.

  Wakefield, Edward (Derbyshire, W.)

  Mackie, J. H. (Galloway)

  Remnant, Hon. P.

  Wakefield, Sir Wavell (St. Marylebone)

  Maclay, Rt. Hon. John

  Renton, D. L. M.

  Walker-Smith, D. C.

  Maclean, Fitzroy

  Roberts, Peter (Heeley)

  Ward, Hon. George (Worcester)

  Macleod, Rt. Hon. Iain (Enfield, W.)

  Robinson, Roland (Blackpool, S.)

  Ward, Miss I. (Tynemouth)

  MacLeod, John (Ross and Cromarty)

  Robson-Brown, W.

  Waterhouse, Capt. Rt. Hon. C.

  Macmillan, Rt. Hon. Harold (Bromley)

  Rodgers, John (Sevenoaks)

  Watkinson, H. A.

  Macpherson, Niall (Dumfries)

  Roper, Sir Harold

  Webbe, Sir H. (London & Westminster)

  Maitland, Comdr. J. F. W. (Horneastle)

  Ropner, Col. Sir Leonard

  Wellwood, W.

  Maitland, Patrick (Lanark)

  Russell, R. S.

  Williams, Rt. Hon. Charles (Torquay)

  Manningham-Buller, Sir R. E.

  Ryder, Capt. R. E. D.

  Williams, Gerald (Tonbridge)

  Marlowe, A. A. H.

  Sandys, Rt. Hon. D.

  Williams, Sir Herbert (Croydon, E.)

  Marples, A. E.

  Savory, Prof. Sir Douglas

  Williams, Paul (Sunderland, S.)

  Marshall, Douglas (Bodmin)

  Schofield, Lt.-Col. W.

  Williams, R. Dudley (Exeter)

  Maude, Angus

  Scott, R. Donald

  Wills, G.

  Maudling, R.

  Scott-Miller, Cmdr. R.

  Wilson, Geoffrey (Truro)

  Maydon, Lt.-Comdr. S. L. C.

  Shepherd, William

  Wood, Hon. R.

  Medlicott, Brig. F.

  Simon, J. E. S. (Middlesbrough, W.)

  York, C.

  Mellor, Sir John

  Smithers, Peter (Winchester)

  Molson, A. H. E.

  Smithers, Sir Waldron (Orpington)

  TELLERS FOR THE AYES:

  Monckton, Rt. Hon. Sir Walter

  Smyth, Brig. J. G. (Norwood)

  Mr. Buchan-Hepburn

  Moore, Sir Thomas

  Snadden, W. McN.

  and Sir Cedric Drewe.

  Morrison, John (Salisbury)

  Soames, Capt. C.

  NOES

  Acland, Sir Richard

  Bowles, F. G.

  Dalton, Rt. Hon. H.

  Adams, Richard

  Braddock, Mrs. Elizabeth

  Darling, George (Hillsborough)

  Allen, Arthur (Bosworth)

  Brockway, A. F.

  Davies, Ernest (Enfield, E.)

  Allen, Scholefield (Crewe)

  Brook, Dryden (Halifax)

  Davies, Harold (Leek)

  Anderson, Alexander (Motherwell)

  Broughton, Dr. A. D. D.

  de Freitas, Geoffrey

  Anderson, Frank (Whitehaven)

  Brown, Thomas (Ince)

  Deer, G.

  Attlee, Rt. Hon. C. R

  Burke, W. A.

  Delargy, H. J.

  Awbery, S. S.

  Burton, Miss F. E.

  Dodds, N. N.

  Bacon, Miss Alice

  Butler, Herbert (Hackney, S.)

  Donnelly, D. L.

  Baird, J.

  Callaghan, L. J.

  Driberg, T. E. N.

  Balfour, A.

  Carmichael, J.

  Dugdale, Rt. Hon. John (W. Bromwich)

  Barnes, Rt. Hon. A. J.

  Castle, Mrs. B. A.

  Ede, Rt. Hon. J. C.

  Bartley, P.

  Champion, A. J.

  Edelman, M.

  Bellenger, Rt. Hon. F. J.

  Chapman, W. D.

  Edwards, Rt. Hon. John (Brighouse)

  Bence, C. R.

  Chetwynd, G. R

  Edwards, Rt. Hon. Ness (Caerphilly)

  Benn, Hon. Wedgwood

  Clunie, J.

  Edwards, W. J. (Stepney)

  Benson, G.

  Coldrick, W.

  Evans, Albert (Islington, S. W.)

  Beswick, F.

  Collick, P. H.

  Evans, Edwards (Lowestoft)

  Bevan, Rt. Hon. A. (Ebbw Vale)

  Corbet, Mrs. Freda

  Evans, Stanley (Wednesbury)

  Bing, G. H. C.

  Cove, W. G.

  Fernyhough, E.

  Blackburn, F.

  Craddock, George (Bradford, S.)

  Fienburgh, W.

  Blenkinsop, A.

  Crosland, C. A. R.

  Finch, H. J.

  Blyton, W. R.

  Crossman, R. H. S.

  Fletcher, Eric (Islington, E.)

  Boardman, H.

  Cullen, Mrs. A.

  Follick, M.

  Bottomley, Rt. Hon. A. G.

  Daines, P.

  Foot, M. M.

  1858

  1859

  Forman, J. C.

  McInnes, J.

  Short, E. W.

  Fraser, Thomas (Hamilton)

  McKay, John (Wallsend)

  Shurmer, P. L. E.

  Freeman, John (Watford)

  McLeavy, F.

  Silverman, Julius (Erdington)

  Freeman, Peter (Newport)

  MacMillan, M. K. (Western Isles)

  Silverman, Sydney (Nelson)

  Gaitskell, Rt. Hon. H. T. N.

  McNeil, Rt Hon. H.

  Simmons, C. J. (Brierley Hill)

  Gibson, C. W.

  MacPherson, Malcolm (Stirling)

  Slater, Mrs. H. (Stoke-on-Trent)

  Glanville, James

  Mainwaring, W. H.

  Slater J. (Durham, Sedgefield)

  Gooch, E. G.

  Mallalieu, E. L. (Brigg)

  Smith, Ellis (Stoke, S.)

  Gordon-Walker, Rt. Hon. P. C.

  Mallalieu, J. P. W. (Huddersfield, E.)

  Smith, Norman (Nottingham, S.)

  Greenwood, Anthony (Rossendale)

  Mann, Mrs. Jean

  Snow, J. W.

  Greenwood, Rt. Hn. Arthur (Wakefield)

  Manuel, A. C.

  Sorensen, R. W.

  Grenfell, Rt. Hon. D. R.

  Marquand, Rt. Hon. H. A.

  Soskice, Rt. Hon. Sir Frank

  Grey, C. F.

  Mason, Roy

  Sparks, J. A.

  Griffiths, David (Rother Valley)

  Mayhew, C. P.

  Steele, T.

  Griffiths, Rt. Hon. James (Llanelly)

  Mellish, R. J.

  Stewart, Michael (Fulham, E.)

  Griffiths, William (Exchange)

  Messer, Sir F.

  Stokes, Rt. Hon. R. R.

  Hale, Leslie

  Mikardo, Ian

  Strachey, Rt. Hon. J.

  Hall, Rt. Hon. Glenvil (Colne Valley)

  Mitchison, G. R.

  Strauss, Rt. Hon. George (Vauxhall)

  Hall, John T. (Gateshead, W.)

  Monslow, W.

  Stross, Dr. Barnett

  Hamilton, W. W.

  Moody, A. S.

  Summerskill, Rt. Hon. E.

  Hannan, W.

  Morgan, Dr. H. B. W.

  Swingler, S. T.

  Hardy, E. A.

  Morley, R.

  Sylvester, G. O.

  Hargreaves, A.

  Morris, Percy (Swansea, W.)

  Taylor, Bernard (Mansfield)

  Harrison, J. (Nottingham, E.)

  Morrison, Rt. Hon. H. (Lewisham, S.)

  Taylor, John (West Lothian)

  Hastings, S.

  Mort, D. L.

  Taylor, Rt. Hon. Robert (Morpeth)

  Hayman, F. H.

  Moyle, A.

  Thomas, George (Cardiff)

  Healey, Denis (Leeds, S. E.)

  Mulley, F. W.

  Thomas, Iorwerth (Rhondda, W.)

  Henderson, Rt. Hon. A. (Rowley Regis)

  Murray, J. D.

  Thomas, Ivor Owen (Wrekin)

  Herbison, Miss M.

  Nally, W.

  Thomson, George (Dundee, E.)

  Hewitson, Capt. M.

  Neal, Harold (Bolsover)

  Thorneycroft, Harry (Clayton)

  Hobson, C. R.

  Noel-Baker, Rt. Hon. P. J.

  Thornton, E.

  Holman, P.

  O'Brien, T.

  Timmons, J.

  Holmes, Horace (Hemsworth)

  Oldfield, W. H.

  Tomney, F.

  Houghton, Douglas

  Oliver, G. H.

  Turner-Samuels, M.

  Hoy, J. H.

  Orbach, M.

  Ungoed-Thomas, Sir Lynn

  Hudson, James (Ealing, N.)

  Oswald, T.

  Usborne, H. C.

  Hughes, Cledwyn (Anglesey)

  Padley, W. E.

  Viant, S. P.

  Hughes, Hector (Aberdeen, N.)

  Paget, R. T.

  Wallace, H. W.

  Hynd, H. (Accrington)

  Paling, Rt. Hon. W. (Dearne Valley)

  Warbey, W. N.

  Hynd, J. B. (Attercliffe)

  Paling, Will T. (Dewsbury)

  Watkins, T. E.

  Irvine, A. J. (Edge Hill)

  Palmer, A. M. F.

  Webb, Rt. Hon. M. (Bradford, C.)

  Irving, W. J. (Wood Green)

  Pannell, Charles

  Weitzman, D.

  Isaacs, Rt. Hon. G. A.

  Pargiter, G. A.

  Wells, Percy (Faversham)

  Janner, B.

  Parker, J.

  Wells, William (Walsall)

  Jay, Rt. Hon. D. P. T.

  Paton, J.

  West, D. G.

  Jeger, George (Goole)

  Peart, T. F.

  Wheeldon, W. E.

  Jenkins, R. H. (Stechford)

  Plummer, Sir Leslie

  White, Mrs. Eirene (E. Flint)

  Johnson, James (Rugby)

  Popplewell, E.

  Jones, David (Hartlepool)

  Porter, G.

  White, Henry (Derbyshire, N. E.)

  Jones, Frederick Elwyn (West Ham, S.)

  Price, J. T. (Westhoughton)

  Whiteley, Rt. Hon. W.

  Price, Philips (Gloucestershire, W.)

  Wigg, George

  Jones, Jack (Rotherham)

  Proctor, W. T.

  Wilcock, Group Capt. C. A. B

  Jones, T. W. (Merioneth)

  Pryde, D. J.

  Wilkins, W. A.

  Keenan, W.

  Pursey, Cmdr. H.

  Willey, F. T.

  Kenyon, C.

  Reeves, J.

  Williams, David (Neath)

  Key, Rt. Hon. C. W.

  Reid, Thomas (Swindon)

  Williams, Rev. Llywelyn (Abertillery)

  King, Dr. H. M.

  Reid, William (Camlachie)

  Williams, Ronald (Wigan)

  Kinley, J.

  Rhodes, H.

  Williams, W. R. (Droylsden)

  Lee, Frederick (Newton)

  Richards, R.

  Williams, W. T. (Hammersmith, S.)

  Lee, Miss Jennie (Cannock)

  Robens, Rt. Hon. A.

  Wilson, Rt. Hon. Harold (Huyton)

  Lever, Harold (Cheetham)

  Roberts, Albert (Normanton)

  Winterbottom, Ian (Nottingham, C.)

  Lever, Leslie (Ardwick)

  Roberts, Goronwy (Caernarvon)

  Winterbottom, Richard (Brightside)

  Lewis, Arthur

  Robinson, Kenneth (St. Pancras, N.)

  Woodburn, Rt. Hon. A.

  Lindgren, G. S.

  Rogers, George (Kensington, N.)

  Wyatt, W. L.

  Lipton, Lt.-Col. M.

  Ross, William

  Yates, V. F.

  Logan, D. G.

  Royle, C.

  Younger, Rt. Hon. K.

  MacColl, J. E.

  Shackleton, E. A. A.

  McGhee, H. G.

  Shawcross, Rt. Hon. Sir Hartley

  TELLERS FOR THE NOES:

  McGevern, J.

  Shinwell, Rt. Hon. E.

  Mr. Bowden and Mr. Pearson

  Question put, and agreed to.

  Bill accordingly read a Second time, and committed to a Standing Committee.

COTTON [MONEY]
Considered in Committee under Standing Order No. 84 (Money Committees).—(Queen's Recommendation signified.)
[Mr. HOPKIN MORRIS in the Chair]
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to modify the functions of the Raw Cotton Commission, and to enable the said Commission to be wound up and dissolved, it is expedient—

(a) to authorise the issue out of the Consolidated Fund of any increase attributable to the provisions of the said Act of the present Session in the sums authorised to be so issued under section twenty-one of the Cotton (Centralised Buying) Act, 1947;

(b) to authorise the raising of money by the Treasury, in any manner in which they are authorised to raise money under the National Loans Act, 1939, for the purpose of providing, or of replacing in the Consolidated Fund, any increase in those sums which is so attributable;

(c) in the event of the winding up of the said Commission, to authorise—

(i) the cancellation of all or any of the liabilities of the Commission in respect of initial and periodical advances under the said Act of 1947;

(ii) the making good, out of moneys provided by Parliament, of any deficiency of assets resulting from the winding up of the Commission, or, as the case may be, the payment into the Exchequer of any surplus moneys resulting therefrom.—[Mr. Boyd-Carpenter.]

Mr. Harold Wilson: I do not want to detain the Committee for more than a few minutes—
The Deputy-Chairman: If the right hon. Gentleman wants to make a speech on this Resolution, it must be put off until another day.
It being after Ten o'Clock, and objection being taken to further Proceeding, The CHAIRMAN left the Chair, to make his report to the House.
Committee report Progress; to sit again Tomorrow.

WAYS AND MEANS
[17TH NOVEMBER]
Resolution reported,
That it is expedient to authorise any increase in the sums which, under the Armed Forces (Housing Loans) Act, 1949,—

(a) may be issued out of the Consolidated Fund to be applied as appropriations in aid of moneys provided by Parliament for the
1862
provision of housing accommodation for persons serving in, or employed in connection with, the armed forces of the Crown.

(b) may be raised by the Treasury in manner authorised under the National Loans Act, 1939,

(c) are to be repaid into the Exchequer out of moneys provided by Parliament for the defence services, and

(d) are to be issued out of the Consolidated Fund and applied in redemption or repayment of debt or payment of interest,

being an increase attributable to amending the said Act of 1949 by extending the period during which sums may be issued out of the Consolidated Fund to be applied as appropriations in aid as aforesaid until the end of the financial year ending on the thirty-first day of March, nineteen hundred and sixty, and by increasing the aggregate amount of the sums which may be so issued to seventy-five million pounds.
Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, Mr. J. P. L. Thomas, Mr. Antony Head, Mr. John Boyd-Carpenter, Mr. Nigel Birch, and Mr. George Ward.

ARMED FORCES (HOUSING LOANS) BILL
"to extend the Armed Forces (Housing Loans) Act, 1949," presented accordingly, and read the First time; to be read a Second time Tomorrow, and to be printed. [Bill 36.]

NATIONAL SERVICE (PERSONAL CASE)
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Studholme.]
10.15 p.m.
Mr. David Jones: After the debate all day on cotton, it is not without significance that I want to return tonight to the problems arising from National Service. Neither is it without significance that this follows the debate yesterday and the day before on National Service, which largely ranged around the difficulties arising from the call-up. I am particularly concerned tonight about raising the case of a young man in my constituency who, in my judgment, has been treated very badly by the Ministry of Labour and National Service. His treatment is certainly not conducive to doing what the Minister said yesterday was the desire of himself and of his Department.

1863
This young man reached the age of 17 years and 10 months in March this year. Being a shop assistant, and anticipating his call-up under National Service on reaching his 18th birthday, he volunteered in advance in March for enrolment in the Royal Air Force for a three years' engagement with nine years in the Reserve, and he was provisionally accepted. On 8th April, he received a notice from the Royal Air Force recruiting station at Middlesbrough telling him to report at that point on 27th April. The notice which he received instructed him to be at Middlesbrough at 9 o'clock in the morning and to be ready to proceed to his depot. It said:
"You should come prepared to proceed at once to your reception unit."
Because he did not want to leave his employer, a shopkeeper, in the lurch, the young man tendered his resignation, attended at Middlesbrough on 27th April, and was sent to Bedford and given a medical examination. He was rejected for three years' service in the Royal Air Force and was sent home on 29th April.
On 2nd May, the young man and his father saw me in the constituency and sought information as to whether the young man would again have to be called up for National Service. To make quite sure that there was no mistake, on 5th May I communicated by letter with the Minister of National Service, and on 22nd May, 17 days afterwards, the Minister replied:
"Mr. Thompson has been found unfit for a Regular engagement in the R.A.F. but he has not been found unfit for military service under the National Service Acts. On the advice of the Department's medical advisers, however, arrangements are being made for him to be medically re-examined under the Acts. The Minister will write to you as soon as a full report of the examination is before him."
The young man was examined on 12th May by the medical tribunal at Middlesbrough, was graded in category 2, and was sent back home and told to await further instructions. The next instruction which he received was to report at Middlesbrough on 9th June for a further medical examination, which was to be a specialist examination. He attended on 9th June, when he was given no information whatsoever by the medical panel, but was told to return home and await instructions.
1864
On 18th June, the young man was instructed to proceed to Hartlepools Hospital to be examined by a specialist. He was then put into category 3 and was told that in due course he would be called up for Army service. That was four medical examinations that this young man had had. Indeed, it looks very much as though the Ministry of Labour were seeking to persecute this lad, and kept having him re-examined until at last someone was found who would declare him fit to put into the Army.
He was not called up to the Army until 20th August, so that he was from 27th April until 20th August waiting for the Ministry to decide what they were going to do. Is it any wonder that the Minister of Labour and National Service said yesterday in the House that his Department were trying
"to bring about a constructive attitude towards National Service … trying to create a feeling that if there has to be National Service it should be made a period of opportunity, and not merely an unwelcome disruption of ordinary life."—[OFFICIAL REPORT, 17th November, 1953; Vol. 520, c. 1586.]
I should like to ask whether the hon. Gentleman regards the period of more than 100 days as being something conducive to inducing young men to regard their entry into National Service with anything like the approach that is likely to make them good soldiers?
I want to put a further point. The young man had volunteered for three years in the R.A.F. and nine years in the Reserve. He was declared unfit to do three years in the R.A.F., but after three further examinations was found fit enough to do two years in the Army. If I am told that the standard of physical fitness for air service must be high I will agree, but this man was going into a ground job. Why is it necessary to have higher standards of medical fitness for three years' service on the ground in the R.A.F. whereas Grade 3 men, after three examinations, can be put into the Army? Does that accord with the approach to the problem of National Service about which the right hon. and learned Gentleman talked yesterday.
It took over 106 days to get this boy into the Army. On 17th August I inquired of the Minister whether he would compensate him for the wages that he had

1865
lost, or for the difference between the wages he could have earned had he remained in his employment until he was called up for the Army and the unemployment benefit which he drew for the 106 days which passed from the time he was rejected for the R.A.F. until the final call-up for the Army.
When the Parliamentary Secretary and I discussed this matter he said that there was no obligation upon his Department, but there is certainly an obligation to speed up the method by which these young men are taken into the Forces when they have to be examined and reexamined because their medical category is not high enough. When the point was made that the young man should not have given up his job, the Parliamentary Secretary referred me to a document which he says the young man received and signed. If the young man received the document he must have received it at the recruiting office. The father of the boy emphatically denies that the form ever came to the boy's home.
At the top of the form are the words:
"To be made out in duplicate. One copy to be given to the prospective regular recruit with form 308."
The point on which the hon. Gentleman relies in his refusal to give any compensation is paragraph 6, which says:
"You are advised to ask your employer whether he will continue your employment if your acceptance into regular service is not confirmed."
In other words, the employer should be asked whether he will retain the young man in his service if he is not accepted into the R.A.F., but the recruit is not given the chance to go back to the employer to tell him whether or not he is accepted. Also, the employer is under no obligation under the Reinstatement in Civil Employment Regulation to reemploy a man who accepts a Regular engagement.
Therefore, I submit that it was perfectly reasonable that if the young man wanted to leave his employer on the best possible terms the sensible thing to do was what the boy did—to tender his resignation and leave the job on the best of terms with his employer so that he might rely on the employer's generosity to take him back when he came out of the Air Force.
1866
When I raised a further point I was told that on 10th June, the day following the young man's third examination, he was offered a job by the officials of the employment exchange at West Hartlepool. That I emphatically repudiate. When the young man presented himself in the ordinary way at the exchange to sign, he was told that there was a likelihood of his being given employment with Messrs. Binns Limited, West Hartlepool. But I should like the hon. Gentleman to tell me why Thompson was not given a green card if there was a specific vacancy to be filled.
In the afternoon the young man's father went to the exchange and explained to the supervisor that his son did not yet know whether he was to be called up or not. He was awaiting the convenience of the hon. Gentleman's Department. I suggest that in those circumstances even if there was a job available no employer would have accepted this young man, because there was a distinct possibility that within days of 10th June he would be called up for two years National Service.
The employer, having taken him into employment for two or three days, would then have been under obligation to take him back into employment when he had completed his service in the Forces. If the hon. Gentleman believes that employers take people into their employment temporarily in those circumstances, he is simpler than I imagine he is. The fact is that there was no specific vacancy, or else the boy would have been given a green card.
Can the Parliamentary Secretary tell us whether the Ministry of Labour, having regard to the declarations made yesterday by his right hon. and learned Friend, will try in future to co-ordinate the medical examination standards for three-year Regular engagements and two-year National Service? I think the hon. Gentleman's defence will be that the successive medical examinations were undertaken in order to be sure that the boy was in a fit condition to go into the Army. Whether that be necessary or not, it ought not to take a Government Department 106 days to decide whether or not they will take into the Armed Forces a man whose medical category is Grade 3.
If the Ministry want to make the National Service scheme work, they had

1867
better set about making regulations which will prevent this frustration in the lives of young men who have to endure at least four months' unemployment, not because they have committed a crime, but because they are anxious to do their National Service for the country and are precluded from doing it because of the dilatoriness of the Ministry of Labour. If the hon. Gentleman wants to live up to the promises which his right hon. and learned Friend made in yesterday's debate, something must be done to make the machinery work much more smoothly than it has done in this case.
10.33 p.m.
The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Harold Watkinson): This is rather a long story, and I am obliged to the hon. Member for The Hartlepools (Mr. D. Jones) for giving me enough time to tell it.
First of all, I want to make it plain on general grounds that at the Ministry we shall continue to carry out the policy which my right hon. and learned Friend enunciated yesterday. This is to try to be as fair as we possibly can be, and as sympathetic as the law allows us to be, over the very difficult question of the call-up.
I do not blame the hon. Gentleman at all for making as powerful a case as he could. That was his duty. He came to see me about the boy, and we discussed the case at great length. He has now made a very powerful case in support of his constituent, as it was his duty to do. I understand that, although I consider he has said some things which are hardly applicable to National Service. He has talked about persecution and a great many other things which I must rebut. I do not blame the hon. Gentleman for trying to ensure that his constituent gets what he believes to be his rights. But now I have my duty to do, and that is to put the facts as we see them, and try to relate them to the question of National Service as a whole.
We had better deal first with the relevant facts. The case starts with the boy volunteering for the R.A.F. When he went for examination as an R.A.F. volunteer at Middlesbrough, he was not only given the form which the hon. Gentleman has mentioned, which says in paragraph 6:
1868
"You are advised to ask your employer whether he will continue your employment if your acceptance into Regular service is not confirmed."
but also R.A.F. Form 308, which says:
"I understand that I shall receive a further medical examination at the reception unit and that if I am found to be below standard my final acceptance will not be approved. Although I have expressed a willingness to enter the Royal Air Force, I have not yet been enlisted and my final acceptance and allocation to a trade will depend on the requirements of the Service."
I have a written undertaking here from Commanding Officer, Middlesbrough Recruiting Centre, that the boy signed both those forms, and that they were countersigned by an officer as well. I do not think there is any doubt that the boy received the two forms, which told him plainly that there was no certainty of his being enrolled in the R.A.F. and that he should take care to preserve his job as far as may be while the process was going on. I am not saying for a moment whether or not the boy read the forms carefully.
Well, he did not take that care. He left his job. Again, I do not propose to say whether that was right or wrong. My concern is to see that the procedure was properly carried out. Although what the R.A.F. does is not my responsibility, I have made most careful and searching inquiries, and am satisfied that as far as was possible the position was made plain to this boy. He left his job and went to the R.A.F. Reception Centre, Cardington. Let me here deal with the allegations of the hon. Gentleman that there is some "funny business" between the R.A.F. grading and that required for the Army.
Mr. Jones: I want the hon. Gentleman to explain why it is necessary to have a much higher standard of medical examination for three years in the R.A.F. than for two years in the Army.
Mr. Watkinson: I will, if the hon. Gentleman will give me time. The answer is that even ground staff, and indeed, all personnel in the R.A.F., must be prepared to fly. The whole basis of the R.A.F. is that ground crews must be prepared to be transported by air to any place where the R.A.F. need to send them. We all know that weakness of ears, nose and throat is the thing that most inhibits people from going by air.
It is quite reasonable that the standard for that part of the R.A.F. medical

1869
examination should be higher than for Grade 3 in the Army when we remember there is a territorial restriction on Grade 3 men in the Army. They are not sent out to fly, and in some cases they may be restricted to certain duties. It is quite right that the R.A.F. standard should be higher and that there should be a limited Grade 3 to suit certain Army requirements. It is very unfair on the fit men if we do not allow the less fit men to play their part. I do not think there is any grumble there. The normal procedure was carried out.
Now I had better explain the delay—there was a very long delay—which took place under the normal procedure for calling the boy up as a National Service man. Here we come to another difficulty, which just shows what the difficulties are in these personal cases. I have gone through this whole thing again most carefully. One of the great difficulties was that the boy, in filling in his first medical form—that is the form that all these National Service men complete for the benefit of the medical board—put "No" in answer to the question asking if he had had any discharge from either ear. He thus, quite unwittingly perhaps—I am not imputing any motives—misled the medical board on that point, and they did not at first find this trouble in his ear. When he came up again for his medical, on 12th May, he said "Yes" to the same question. This started a closer investigation into his ears.
The hon. Gentleman apparently takes the view that the purpose of repeated medical examination is to try to get a man's grade up to the stage where we can call him up. That is an untrue and improper suggestion. The whole purpose of the medical grading is to make sure that the man is excluded from the Services if he does not reach the appropriate standard.
Mr. Jones: Will the hon. Gentleman explain to me how many re-examinations a man must have before he is finally excluded?
Mr. Watkinson: As many as are necessary to satisfy the medical boards that they have given him a fair deal. This was a most difficult case, and I think that is proved by the fact that the man went to two ear specialists.
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My right hon. and learned Friend and I thought that we were only deferring to the hon. Member's interest in this case. He had written to us and expressed his belief that this boy's medical examination had not been properly carried out, and that he had been improperly graded. Therefore, it was clearly our responsibility to go to whatever lengths were necessary to make sure that his final medical assessment was as correct and proper as medical skill could make it. That was the only reason—and quite a proper reason—why these medical examinations had to be carried out.
I admit that if I had been the boy's father I should have been worried, too, and I do not disagree with the hon. Gentleman when he says that it was a terribly long time to keep a young boy waiting about, not knowing what was going to happen to him. But I hope the hon. Gentleman will accept from me that if we were to try to get this medical grading really right—and I assure him that our desire was, and is in all cases, to exclude a man if he does not come up to the proper standard—it was necessary to have these further medical examinations.
As the hon. Gentleman knows, we have recently issued instructions to all medical boards—and they were going out when this boy had his last examination—that they must take every care to see that an unfit man does not enter the Services. That was the purpose of this examination and re-examination: to make quite sure that this boy was fit for limited service in the Army. That, of course, is how he finally finished up in Grade 3.
I think it is fair and right to say that although my right hon. and learned Friend and I certainly regret the delay that was caused, we do not accept for one moment that it could have been avoided. Once the machine had been put in train, and once the hon. Gentleman had written to us and expressed his disquiet about the medical grading of the boy—and I am very glad that he did so—then this delay was unavoidable.
Then there is the last question of whether the boy should receive any compensation.
Mr. Jones: I want to put the hon. Gentleman right on one point. All I did

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in my initial letter of 5th May was to inquire from the Minister whether the young man would now again come under the National Service Act, and whether the matter could be expedited because of the condition in which he found himself.
Mr. Watkinson: But the qualifying thing was whether the boy's standard of fitness was at an appropriate level or not, and until we had established that fact his case could go no further.
Coming to the question of whether he has any right to compensation, I think we must rest on the fact that in the beginning the boy was told, as he should have been, the difficulties arising from the R.A.F. I think that most employers try to be helpful to these young boys. They know these difficulties. Had the boy gone to his employer and said that he had applied to join the R.A.F., but did not know whether he would be accepted, I am sure he would have received a sympathetic reply from his employer. His employer would most
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likely have told him to wait for a bit to see how the matter went; but the boy did not do that.
When the normal call-up procedure took place, the boy only suffered the same risk that any young boy must suffer under the Act, which is that we must be quite satisfied that he reaches a proper standard before we put him into the Services at all.
I very much regret that this case took so long, but it was quite inevitable. I do not think that any particular responsibility rests on the Ministry of Labour and National Service for what happened. We shall, as always, try our best to see that this sort of thing does not happen, and that people get through their medicals as quickly as possible. I do not accept that we did not try to be as sympathetic and fair as we possibly could in this case.
Adjourned accordingly at a Quarter to Eleven o'Clock.