RAW COTTON COMMISSION (DISSOLUTION)

HC Deb 22 July 1954 vol 530 cc1695-743

9.38 p.m.

The Minister of State, Board of Trade (Mr. Heathcoat Amory)

I beg to move. That the Draft Raw Cotton Commission (Dissolution) Order, 1954, a copy of which was laid before this House on 146th June, be approved. The object of the Order is to provide for the winding up and dissolution of the Raw Cotton Commission. Section 4 (1) of the Cotton Act, 1954, empowered the Board of Trade and the Minister of Materials jointly to take this action if at any time they were satisfied that it was in the public interest to do so. On 4th November last my noble Friend the Minister of Materials intimated in another place that it was the aim of the Government that the Raw Cotton Commission should cease active trading at the end of August.

During our discussions on the Cotton Bill this intention was confirmed on several occasions by Ministers. We said that nearer the time we would look at the matter and consider in the light of the circumstances obtaining whether any postponement was desirable, but in fact nothing has happened since that time to give any reason, in our opinion, for revision of the date.

Mr. Harold Wilson (Huyton)

The right hon. Gentleman has quite fairly quoted what he said on a number of occasions on the Committee stage of the Bill, but on several occasions in Committee it was also said by Government spokesmen when we moved various Amendments that it would be appropriate to discuss those points when we came to the Dissolution Order. Will the right hon. Gentleman tell us why, therefore, the Government are bringing this Order before us so late at night when we have no real opportunity of debating those very important points which we wanted to debate in Committee and which were left for debate on the Motion to approve this Order?

Mr. Amory

If the right hon. Member listens he will notice that I shall refer to that aspect of the problem.

I was saying that in fact nothing has happened since that time to make us think that this date should be postponed. We believe there is general agreement that, the policy decision having been taken, it would be sensible now to proceed forthwith, as planned, to wind up the Corn-mission. During the intervening period things have gone smoothly. On 18th May the Liverpool Futures Market re-opened, and since that time operations on that market have been proceeding quietly, steadily and satisfactorily. Prices have moved within fairly fine margins, and it seems that merchants and spinners are settling down without difficulty to the new conditions. Cover is being transferred steadily from the Raw Cotton Commission, to the benefit of public funds.

Certain fears were expressed by hon. Members opposite during debates on the Bill. I should like to refer to them and, while I do so, if the right hon. Member will weigh up the answers I am giving now, he will see that a further prolonged discussion is not really called for. I want to be fair here, and I will run through the half dozen fears which were expressed in the debates.

First, fear was expressed about the dangers that would accompany a substantial recession in the United States. I do not want to go into that, but I think there will be general agreement that those dangers seem rather less acute today than at that time. Then, anxiety was expressed at the possible imposition of United States export subsidies on raw cotton. I think those fears have been allayed by the announcement of the United States authorities that there is no intention of applying those subsidies during the 1954–55 season.

Then, I remember, concern was expressed that the removal of restrictions on the import of dollar cotton might lead to dollar expenditure beyond what we could afford. After 1st September it may well be that there will be some additional dollar expenditure, but it is still impossible to say how much that will be. It does depend on the relative prices of the various types of cotton. I can only say that to date we have no reason to change the view we expressed at the time of our debate that the extra demand for dollars arising from this is not likely to be excessive or beyond our resources. We also feel extra encouragement from the fact that our resources are stronger today than they were at that time. Let us remember, too, that against any extra call for dollars there is the definite advantage that the industry will have freedom to buy from the most advantageous sources.

Anxiety, was expressed about stocks. Would sufficient stocks be held in the United Kingdom, particularly spot stocks? What about the position of the smaller spinner? Would finance be available? In a moment I shall give one or two figures on stocks. Meanwhile, I think it is the general opinion in Lancashire that in this respect, too, things seem to be working out all right. No inadequacies under those headings have come to light so far, although I admit that on this matter we cannot be quite certain until the Raw Cotton Commission's facilities are no longer there. So far the evidence is that the changeover is pro-ceding without inconvenience to those concerned.

I also remember that some hon. Gentlemen thought that the United States would be likely to exercise too great an influence on the Liverpool cotton market. I can only say that so far there are no signs of a new flow of American capital there, although Americans are transacting business on the Liverpool Cotton Exchange. I think that hon. Members will agree that that is healthy and profitable. On the other hand, the amount of investment of United Kingdom capital going in to finance the market seems to be satisfactory.

Another fear expressed by some hon. Gentlemen, in spite of assurances given, was that the type of cover that was to be provided would turn out to be inadequate and inferior, partly because of being limited at present to the American contract. I would say that there is now general agreement that it was wise to start with the American contract only, but the Liverpool Cotton Association, in co-operation with spinners, are, I understand, studying the possibility of a long staple futures contract. Also, as I think has already been said, they will consider the extension of the present contract to other types of non-United States cottons at the end of a year.

I remember fears being expressed about a prospective shortage of long staple cotton. I agree that the prospects at that time looked a little uncertain but that shortage has not, in fact, materialised, and there seems to be sufficient of long staple cotton about.

Lastly, some hon. Members expressed fears about the future for colonial cotton, particularly the long-term contracts. I would remind the House that long-term contracts were not universal in the case of these colonial types; and also that long-term contracts are not the only means of assisting the development of colonial cotton, an objective with which we all have the greatest sympathy. Let us remember that the object of the Raw Cotton Commission. in so far as it went in for long-term contracts, was not primarily the development of the Colonies in this way but to secure supplies for the cotton industry in this country. During the latter stages it found it advantageous, in fact, to have long-term contracts only in the case of three Colonies—Nigeria, Aden and Nyasaland.

Once again I would remind hon. Gentlemen of the assurances that have been given. I confirm again that these outstanding long-term contracts will be implemented in full if it is the wish of the Colonies concerned that they should be. Discussions on this point are proceeding with the Colonies concerned. It has been decided that the sensible way would be for the liquidator to carry out these contracts, subject as far as necessary to direction from the Minister. We did say that it was for consideration how it should be done—whether it should be done by the Minister directly—but we think it better for the liquidator to carry out these contracts as agent for the Minister.

I shall refer only very generally to the stock position. My noble Friend has already given some adequate figures in another place. I wish to say only that there seems to be no sign at present of stocks running down dangerously in the United Kingdom. At the end of May the stocks totalled 910,000 bales. It is estimated that at the end of August the stocks in the United Kingdom are likely to be about 880,000 bales.

Mr. William Keenan (Liverpool, Kirkdale)

What is that in tonnage?

Mr. Amory

About 190,000 tons.

Mr. F. Blackburn (Stalybridge and Hyde)

The right hon. Gentleman will agree that that is about 90,000 tons less than when this Government came in?

Mr. Amory

It is about 90,000 bales less than a year ago. But I do not think that the hon. Gentleman will say that there is any fixed level of stocks which is the right one. It must vary according to the regularity of supplies.

Mr. Blackburn

I agree with that, but this is the lowest level which stocks have been since the war.

Mr. Amory

I have had no opinions expressed to me from any quarter in recent months that the present level of stocks is unhealthy or dangerous.

Mr. H Wilson

Since the contacts of the right hon. Gentleman with Lancashire seem to be very limited, may I ask if he can tell the House of a single peace-time year since the American Civil War when stocks of raw cotton in this country have been as low as they are according to the figures which he has given?

Mr. Amory

No, but what I am not prepared to say is that, if that is so, it is necessarily a dangerous situation. There is every sign that there is in the country the level of stocks which the industry requires under present circumstances.

I should like to give one or two more figures. It is estimated that at the end of August the Raw Cotton Commission will have about 230,000 bales unsold and it will also have sold forward about a similar figure. I shall not quote any more figures of stocks at the moment, because I think that if I do we shall get all tangled up—

Mr. Wilson

We on this side of the House will not.

Mr. Amory

I wish to say a word about compensation. The scheme approved by Ministers, as provided for in Section 3 of the Act, is at present in force, and it is proposed to give a direction to the liquidator in the same terms as the direction given to the Commission. I wish to repeat what I said during our previous debates, that there will be no distinction made between service in the employment of the Commission and service during the winding-up period in the employment of the liquidator.

Hon. Gentlemen will remember that this compensation applies to staff whose services were dispensed with as a result of the change of Government policy. It was decided by the Commission, and confirmed by Ministers, that those who left of their own accord could not be eligible. Inevitably, perhaps, there are some borderline cases involving an element of bad luck. That seems almost unavoidable whenever one draws a line. But I should like to say—I have made absolutely sure of this—that the Commission has carefully considered each individual case. As the running down of its business proceeded, and the Commission could foresee accurately what its staff requirements were likely to be, it has done its very best to give as long notice as possible to the staff concerned. I think I ought briefly to refer to the Articles in the Order.

Mr. Wilson

I hesitate to interrupt the right hon. Gentleman for a third time, as he has been so courteous. But since, if I may say so, he showed great humanity about the question of compensation during the Committee stage, may I press him once again on this subject? I do so in the middle of his speech in order to save the time of the House, because I do not want to have to endeavour to catch Mr. Speaker's eye in order to make a separate speech. Surely the right hon. Gentleman is wrong in saying that the Commission could adequately foresee its requirements for staff during this period of contraction. There have been some very serious anomalies, apart from the hard luck cases which he has mentioned.

There were people who had no idea whether they would be redundant, and in order to avoid unemployment they sought alternative work. Yet, within a few days, their colleagues in a particular department—the right hon. Gentleman has had the evidence—were given notice, and have received compensation. I understand that has been brought to the attention of the Minister several times and that the Board of Trade and the Ministry of Materials considered this matter with the Commission.

Would not the right hon. Gentleman ask the liquidator, who is also acting chairman of the Commission, to show the same degree of humanity to these hard luck cases that was shown during the Committee stage of the Bill when we produced other examples of hardship and anomaly? Will he not leave this in the hands of the Commission, give its members a free hand and ask them to look at the matter knowing that the whole House will be behind any decision of the liquidator if he is able to give a square deal to these people who, through no fault of their own but through the inability of the Commission to forecast its requirements have been severely prejudiced?

Mr. Amory

The right hon. Gentleman agrees that as time went on it became more feasible for the Commission to foresee exactly when it could dispose of various members of the staff. The problem became easier to deal with as time went on. I am satisfied that the Commission has considered this on a number of occasions. It has examined individual cases. It has considered the matter with great sympathy and care, and I must conclude that once the principle has been decided, it must be right, to leave the administration of it to the Commission. I am satisfied that the difficult borderline cases have been considered thoroughly. I believe that that is the right way rather than that the Minister should intervene on a matter of administration once the principle has been decided.

Mr. Wilson

Is that issue finally closed?

Mr. Amory

The Minister has taken what action he thinks appropriate. There is great promise that the Commission—and I am sure that the liquidator would do the same thing—will continue to consider each case.

I believe that it is right to say, now that the Commission has been able to look forward for the rest of the running down period, it has been able to make pretty definite plans how quickly the staff can be run down and who can be made redundant.

I do not think that I will waste the time of the House by going in detail through the Articles of the Order. Each Article has a heading which is clear.

I should like to repeat what my noble Friend said in another place on Article 2. It is intended to appoint as liquidator Mr. H. Jackson who, since the retirement of Sir Ralph Lacey, has been chairman of the Commission. We consider that he will be a very fit person for this function and that it will be a convenient and sensible arrangement which will provide administrative continuity.

After 31st August there will be no functions for the independent and part time members of the Commission to carry out. I should like to take the opportunity to thank them very much indeed for the way in which they have helped us and performed their duties.

Article 4 deals with the powers of the liquidator. I hope that no hon. or right hon. Gentleman will ask questions about that because, as usual, we give the liquidator powers to do almost everything in the world. I am surprised to see that he is not authorised to make canals or to build railways, which is what we usually do in this kind of legal document.

I should like to say a few words about the disposal of stocks. I remember during our discussions on the Bill that hon. Members said that they would have liked to see it laid down in greater detail how the stocks should be disposed of. In the light of what they said we considered the matter very carefully. We took the advice of the Cotton Import Advisory Panel which concluded, as we did, that even in the Order, it would be unwise to lay down in any greater detail than is laid down in Article 5 (b) how this should be done.

However, hon. Members will notice that the arrangements have to be approved by the Minister after consultation with the Treasury and have to be arrangements best calculated to serve the public interest in all respects, due regard being had to the price obtaining for comparable cotton in the open market. We believe, and the Panel agrees, that it is best to leave it at that, and that is the way in which the Commission will ensure that the stock is disposed of in the best interests of the industry and public funds.

Mr. Keenan

I estimate that at present the Commission possesses about two-thirds of the quantity of cotton which it held about 12 months ago. Is it the intention to put 120,000 or 130,000 tons of cotton on the market immediately and let it go cheaply without there being a margin on it, or is it the intention to avoid that?

Mr. Amory

It will be the liquidator's duty to ensure that the stock is disposed of to the best advantage of the industry and public funds. It would clearly be wrong to throw it on the market and "job" it off at any price obtainable.

Article 13 provides for accounts. I would remind hon. Gentlemen that in due course final accounts will be laid before Parliament. To date, the losses of the Raw Cotton Commission exceed the reserve fund, which amounted to £30 million, by about £10 million. Authority is provided for any further losses beyond the reserve fund to be written off in accordance with Section 4 (6) of the Cotton Act.

To any hon. Member who asks what will happen if the present high level of activity in the cotton industry should not continue, I would suggest that in those circumstances, which we hope will not come to pass, it is still more important that the industry should have freedom to buy cotton from the cheapest possible sources. I hope the House will agree that no sound reason has so far come to light for postponing the winding-up of the Commission beyond 31st August and will approve the Order.

10.4 p.m.

Mr. H. A. Marquand (Middlesbrough, East)

The right hon. Gentleman has asked the House to approve the Order, and has shown his usual courtesy and patience, which we appreciate. None the less, the fact remains that the Motion is received with a great deal of resentment by the Opposition.

We object most strongly to its being brought before the House tonight at the conclusion of other important business at the fag-end of the week and on a day when, for various reasons, as we all know very well, many hon. Members find it difficult to be present. It would have been more courteous to the House and fairer to Lancashire and the cotton industry generally if this very important Order could have been debated when there was adequate time for the House to consider it and at a time of day when the newspapers could have taken longer notice of what was said than they are likely to do tonight.

In any case, we regard the introduction of the Order at the present time as a precipitate and unnecessary move. For 12 years raw cotton has been bought in this country on public account by publicly-appointed bodies, whether under the Ministry of Supply, the Board of Trade, or, later on, the Raw Cotton Commission. Even in the last two years, a great deal has been bought on public account, and everybody has agreed throughout our debates that the Raw Cotton Commission has done its job very well indeed.

Now, the Government are proposing, at the end of that very considerable period of 14 years, to embark on a new venture—because it is a new venture. It is all very well to say that the Liverpool Exchange is being re-opened in the same building as the old, but there is a great deal of difference in the personnel and there are entirely different conditions. I do not want to cover the whole of the arguments which we put forward on the Bill; that would, in any case. I am sure, be out of order, but we do say that to have rushed this thing through at the speed the Government have done has not been to do what they claim in the Order to have done—that is, considered the public interest.

The existence of the Raw Cotton Commission and public buying was a great guarantee of stability in Lancashire. It was a national insurance system for both employers and employed in the cotton industry, and it is by no means certain at the present time that this new venture can be successful. It would have to be done at a much slower rate than the Government have chosen to do it. In fact, the Government have had warnings on every side, not only from hon. Members on this side of the House or in Committee upstairs, but from Lancashire by such people as Mr. W. T. Winterbottom, the well-known chairman of Fine Spinners, Ltd. who said: The futures market does not remote risks: it only permits them to be shared. It is light-hearted of the right hon. Gentleman and the President of the Board of Trade to say as cheerfully as they do tonight that it is now quite safe to go forward with the dissolution of the Raw Cotton Commission. We should have had tonight, if we had more time to do it and a better occasion, a much wider review than we have had of the various possibilities and circumstances which confront the trade at the present time. At least, the right hon. Gentleman has not repeated the story which the Lord Privy Seal told us last week, when he said it was necessary to rush the Order through because, if it was not done, the Commission would have to be reappointed.

The right hon. Gentleman has told us quite correctly that the Act empowers the Minister of Materials and the President of the Board of Trade to put their heads together, and, having considered the public interest, to decide at what time the Commission should be dissolved. But the Minister of State himself has admitted tonight that in November they said that this was the date when the Commission should be dissolved, and, though they have made a courteous pretence of listening to what was said in the meantime, they nevertheless come back to the House and say that the original date which they thought of then will be the date when the Raw Cotton Commission is to come to an end. After all, we are getting that same date.

It is fitting that this Order should have been introduced in the first place in another place, because the real author of the Act is not the right hon. Gentleman the President of the Board of Trade, still less the Minister of State. The real author is Lord Woolton, and it was left to him to do in the House of Lords what he determined last November to do—to bring this Commission to an end at the end of August, whatever happened.

Mr. Amory

May I quarrel with the right hon. Gentleman's last two words—"whatever happened"? That was not what my noble Friend said. He said that would be the date if it was the right date, but that, if anything occurred to make the Government change their mind, the Government would reconsider it. In the event, I think my noble Friend has been extremely accurate in his forecast of what would be the right date.

Mr. Marquand

I was not purporting to quote the noble Lord when I said "whatever happens." I was giving my impression of what passed through his mind. I could have made as accurate a forecast last November as the noble Lord did; as soon as he said what the date was, I could have said what it would be, because it is in the House of Lords that the real power has resided throughout in this matter. In the Committee debates we made suggestions and pleaded with the Government for modifications of the Bill, and the Government listened to us and did not give way at all. It was only when the Bill was debated in the House of Lords, and when noble Friends of mine added to the pleas that we have already made, that concessions were given. It is therefore in the House of Lords that the real power in this matter lies and it was there only that the Government have made concessions.

We all thought on this side of the House that the right hon. Gentleman gave a very fair summary of the misgivings and the fears that we voiced during the Committee and Report stages of the Bill. He outlined them at length, and showed, we were very glad to see, that he had carefully reread what we said during those debates. I would summarise under four heads our misgivings, although I agree that the right hon. Gentleman's longer list was entirely accurate. They boil down, however, to four main types of misgiving.

There was, first, our misgiving about compensation. After more than one false start on the subject of compensation, including the necessity of retrospective legislation, we obtained reasonable assurances in Committee about compensation for the Commission's staff dismissed before the passage of the Bill. Now the right hon. Gentleman has assured us that the staffs who will become redundant after the passage of the Order will have their individual cases considered in the same way by the Raw Cotton Commission as did those other employees.

I cannot pretend to have taken a direct and close interest in this matter of compensation. Naturally, I left it to my colleagues who have these men in their constituencies, but I gather that the assurances are satisfactory. It has been left to the Commission to look at individual cases, but we think the Commission will be as just as reasonable as it has been hitherto.

Our second group of misgivings referred to dollars. to the possible danger of an American depression, and to the difficulties that we foresaw of an excessive amount of dollar expenditure, if the free import of cotton through the Liverpool Exchange on the basis of futures contracts based upon American dollars was allowed to begin. That danger still remains, though I agree with the right hon. Gentleman that the situation at the moment is not as bad as we feared one or two months ago it might become.

It has been reassuring to learn that there will be no export subsidy this year and it has been gratifying to find that a depression has not developed to the extent that some people feared it would. We are not entirely certain yet that it will not develop, and we still think that at least a substantial part of our defences have been pulled down. The possibility of flight of capital through cotton into dollars still exists. We agree with the noble Lord who said in another place that this new venture might mean some increase in dollar expenditure, the extent of which will depend upon the relative prices of other cotton.

We are not clear, either from what the noble Lord said or from what the right hon. Gentleman had said tonight, exactly why the Government feel that any such increase will be of "quite manageable proportions." We at any rate are not satisfied, and if it should turn out—we hope it will not—that our forebodings are justified, we shall be on record as having warned the Government to be extremely careful about this.

It is now agreed, under the concessions which the noble Lord gave, that the contracting-in spinners can have supplies of American cotton bought for them by the Raw Cotton Commission. That Commission has undertaken the special duty of ensuring that these supplies of raw cotton will be available for those contractors for a short period. We should like to know tonight how long exactly it is expected that that period will be. For how long can these contractors expect to receive their American supplies through the agency of the Raw Cotton Commission, or how soon will they be thrown to the wolves of Liverpool and have to obtain it themselves?

Our third misgiving arose, of course, in regard to stocks. We expressed repeated anxiety. The noble Lord in another place gave rather little information about the size of stocks, and the right hon. Gentleman tonight, no doubt having read what took place there, has very wisely given rather fuller information than we then obtained. But I think that we must still try to clear it up a little more.

If the right hon. Gentleman asks later for the leave of the House to reply to some of these questions, it will be very willingly given from this side of the House. During the Committee stage of the Bill in 1953, my right hon. Friend the Member for Huyton (Mr. H. Wilson) showed the fall in cotton stocks from 294,000 tons in August, 1950, to 267,000 tons in August, 1952, and said, as he repeated tonight that, apart from 1941, I cannot find any published figure showing lower raw cotton stocks than they were in May and August of this year."—[OFFICIAL REPORT, Standing Committee A, 10th December, 1953; c. 69.] That was May and August, 1953. If they were low then, they have gone even lower still, for the Monthly Digest of Statistics shows that in August, 1953, stocks of raw cotton were 214,000 tons and that in February. 1954, they amounted to only 187,000 tons. There was a slight rise in March, 1954, to 192,000 tons. According to that authoritative publication, the stocks in March, 1954, were certainly lower than those in March, 1953.

It seems to be absolutely clear that the stocks have been steadily going down. In view of that dangerous trend, and in view of the knowledge which everybody has that larger stocks must inevitably be required if they are going to be held in 100 different places instead of by the Raw Cotton Commission in one place, the situation is more serious than the right hon. Gentleman suggested tonight. He said that no opinion had been expressed to him that stocks were dangerously low, and that he did not think that they were necessarily dangerously low. That is not a very confident assurance to give to the House of Commons—to say "Well, the stocks are low but I do not think they are necessarily very dangerously low. I have heard nobody say that they were dangerously low." Surely, before taking the step of dissolving the Commission, he should have been in a position to come to the House and say "The stocks are going up. I am positively certain the situation is now quite healthy and that we have all the cotton we can reasonably require for this new experiment." He cannot say that. He can only justify his optimism about stocks on entirely negative grounds.

Mr. Amory

I do not wish to interrupt, but I should like to say that stocks did go up between April and May. Figures have just been published in the Board of Trade Journal. Stocks at the end of April, 1954, amounted to 188,000 tons and at the end of May they were 195,000 tons. So they did show an upward tendency there. The point I wanted to make, however, was that if the present level of stocks was insufficient, I am sure that stocks would be added to. There is no reason why they should not be. The stocks that are being held at present are those that, in the opinion of merchants and spinners, are required for the industry.

Mr. Marquand

I am glad to hear that they are going up slightly. As I said, they did apparently rise between February and March by 5,000 tons and now, if I understood the right hon. Gentleman correctly—though it is a little difficult to follow these figures quickly—they have risen again by another 7,000 tons.

The other day in another place the noble Lord said that the present stocks of 910,000 bales were worth £75 million. According to the Report of the Raw Cotton Commission itself, which was presented to Parliament, on 31st August. 1952, the Raw Cotton Commission's own stocks were worth £100 million. It may be said that in the meantime there have been price changes. Maybe there have, but it is not exactly my business to know and I have not at my command all the expertise available to the right hon. Gentleman. I should like to know whether the fact that the Raw Cotton Commission in 1952 had in hand stocks worth £100 million while the whole industry today has stocks worth only £75 million means what, on the face of it, it appears to mean—that the Commission was certainly looking after stocks a great deal better in August, 1952, than private buying, timorous and afraid and wondering exactly what is to happen, has been able to do since this degree of freedom was given to it.

It seems to me a most disturbing and unsatisfactory situation and not one in which one can honestly say that it is now clearly in the public interest to go forward with the new experiment. That is what the Ministers were required to do. They were required to be completely satisfied that it was in the public interest. I should like to know, if possible, how those stocks are distributed. We are told that they are equivalent to five and a half months' consumption by the whole industry, but how are they calculated and what is included in the figure of the stocks? We know that less than one-third of it, about £20 million, is in the hands of the Commission. Where is the rest? Is some of it represented by work in progress? Are we misleading ourselves when we are talking about stocks? Where is it and who has it?

If the Commission has less than one-third, is the right hon. Gentleman satisfied—and this is a question which he and his right hon. Friends must surely have considered before deciding that it was in the public interest—that that £20 million is adequate and entirely sufficient for the needs of the unit spinners who depend on the Raw Cotton Commission? On the evidence we have seen, we are not satisfied about that. We are certainly not satisfied that in this position the whole future responsibility for quite a long time to come—because it is still a long time—should be placed in the hands of a liquidator. We have been told tonight that he has been the vice-chairman of the Raw Cotton Commission. I understand that he has also been chairman of an even more influential body in the constituency of the Minister of State, Foreign Office, and I am not sure whether that is true or not.

I have no doubt that the liquidator is a perfectly competent person to be so appointed, and I am sure that he will try to do his duty, but in this doubtful, chancey situation, with all the uncertainty of stocks and overseas supplies, to which I will refer in a moment, we are not satisfied that this matter should be left to a liquidator.

We have been told tonight that the most "sensible" thing is to leave it to a liquidator. It appears that in the eyes of this Government, the most "sensible" thing to do is to leave the greater part of the lorries of this country in the hands of a liquidator, and that the mose sensible way to deal with the steel industry is to put a large chunk of it in the hands of a Holding and Realisation Agency responsible, not to the Minister of Supply, but to the Chancellor of the Exchequer.

Mr. H. Wilson

And the film industry.

Mr. Marquand

And the film industry, too, as my right hon. Friend says. The Government's solution is not to return industry, as we have been told they would, to private enterprise but to return it to liquidators. We are not satisfied that that is in the public interest. Indeed, we are convinced that it is not in the public interest, and that is a strong reason why we object to this Order.

Closely allied to the problem of stocks is the problem of the supplies of colonial cotton. We have a twofold concern about it. We have a concern about the availability of the long-staple cottons, which are largely grown in the Colonial Territories, for Lancashire in its growing need for this type of cotton to enable it to meet the growing competition with other countries like Japan. Lancashire needs to shift over to the finer types of production in the face of such competition and the competition in the other types of fibre. We have in mind the needs of Lancashire and the needs of the Colonies.

Much of the enormous development of colonial cotton growing which has been so successful and which has so markedly increased is directly due to the creation and existence of the Raw Cotton Commission. Consider why Lord Derby, the President of the Empire Cotton Growing Corporation, at its annual meeting a short time ago, should have thought fit to state that he hoped that the easing of the dollar restrictions and the reopening of the Liverpool Cotton Market, desirable as these were in themselves—no doubt, he was there speaking with the traditional voice of Lord Derby—would not lead to any diminution in the amount of Empire cotton used in this country. He expressed that hope obviously because he had the fear that there might be some such development.

It is true that three of the contracts for colonial cotton are being kept on if the colonial producers wish. We were told some months ago that these three long-term contracts would be kept in existence and honoured if the colonial producers wished. That has been repeated tonight. I hope the right hon. Gentleman will be able to say—in fact, he may like to interrupt me again now—that no sort of pressure has been put upon these colonial producers to give up the long-term contracts.

Mr. Amory

May I give the right hon. Gentleman that assurance. We are perfectly happy and prepared to carry out the remainder of the contracts for the full term if it is the wish of the Colonies concerned that that should be done.

Mr. Marquand

I accept what the right hon. Gentleman says. This continued repetition of "if they wish it" is just a cautionary phrase, and there is no suggestion that they—

Mr. Amory

I should like to make the point that there are some grounds for thinking that some of the Colonies are in two minds whether it would be to their advantage for these long-term contracts to run out their full period. That is why I said, "if they wish."

Mr. Marquand

When the noble Lord in another place was asked whether, going with this undertaking to keep these present long-term contracts in being, there was any understanding that new long-term contracts would be negotiated, no reply was made. We had had the reply already, in Committee upstairs, when we dealt with the Bill. I am quite sure that the Government do not intend to allow the Colonial Marketing Boards or the Colonial Governments—even "if they wish"—to enter into new long-term contracts with the liquidator or the Ministry of Materials.

The right hon. Gentleman has indicated that, for certain reasons, particular Colonial Marketing Boards or Governments might not wish to enter into longterm contracts. We were told to look at the example of Uganda who, although she used to have long-term contracts, is now doing quite well trading on the more familiar pattern. But I hope that those who are responsible for growing and marketing cotton in Nigeria will look carefully at the figures before they succumb to such blandishments. In 1948, Nigeria put on the market 45,000 bales of cotton. This year the figure was 140,000 bales, which is a remarkable increase and represents a great advance for the people of Nigeria and greatly widened opportunities for the farmers of that country. That expansion coincides with the entry by the Raw Cotton Commission into the long-term contracts field.

I am told that a development premium has been paid on this cotton, to encourage the production of more cotton for the fulfilment of these contracts. If Nigeria finds, on the termination of this contract, that she has to sell a great deal of her cotton in other markets—perhaps through Liverpool—I should like to know whether that development premium will still be paid. If the right hon. Gentleman is unable to tell me, we shall seek the information from his right hon. Friend the Colonial Secretary.

We are told that the Cotton Association and the cotton spinners together are considering whether, within the year, they can produce some form of cover, or futures contract, against which Empire cotton wilt' be tenderable. We welcome this consideration as some slight concession. It was first suggested that they might consider this over a much longer period, and it came down to a promise to try to do something within the next 12 months. It is tremendously important, if we are to have the restoration of the old-fashioned type of private trading, through futures markets and all the rest, that new Empire cottons should find their due place and not suffer an undue disadvantage.

The promise that this will be done within a year is a valuable one, but surely that, above all, is a justification for saying that the Government should have brought forward this Order one year from now and not tonight? They should have waited at least until the last of these long-term contracts ran out, in May, 1955, or, better still, until they were completely satisfied that this consideration of the new futures contract had been completed. Had this Order then come forward their case would have been stronger; but because they have failed to do that, and for all the other reasons that I have given, we certainly are not in favour of the House accepting the Order and we hope it will be rejected.

10.35 p.m.

Lieut.-Colonel Wentworth Schofield (Rochdale)

During the passage of the Cotton Bill through the House, many fears were expressed by hon. Members opposite about the difficulties which would confront the industry when the method of importing raw cotton into this country was changed from the system of Government bulk buying, which was instituted as a wartime necessity, to the private buying by merchants and spinners which had always been the custom before the war.

Grave fears were also expressed by hon. Members opposite as to the ability of merchants to provide the industry with the cotton which it required. If my memory serves me correctly, during the Committee stages great stress was laid by one or two hon. Members opposite on the difficulties which would be found about the importation and securing of some of the longer staple varieties of cotton, particularly those which come from the Sudan. As my right hon. Friend said tonight, experience has shown that the fears which were then expressed were greatly exaggerated and happily have proved to be unfounded. Indeed, instead of the state of chaos and confusion which was forecast, especially during the early stages, the period of transition continues to be moving smoothly without harm or injury to the industry. At no time since the change has taken place has any report been received of spinners having found any particular difficulty in obtaining cotton which was required for their use.

Mr. H. Wilson

Would the hon. and gallant Gentleman name anyone on this side of the House who said there would be chaos or confusion in the early stages of the establishment of the free market; and, secondly, since there were forecasts on this side of the House about the difficulties of supply on the assumption that the Raw Cotton Commission was going to be wound up, is it not a fact that the spinners so far have had the protection of the Commission which the Government are now seeking to abolish?

Lieut.-Colonel Schofield

I said that if I remembered correctly those things had been said, but in the case of Sudan cotton, about which special fears were expressed, there has been no difficulty. Large firms, such as the combines, have attended the auctions in the Sudan and have bought their supplies, and the smaller independent firms—the single unit firms—have secured their supplies from merchants who, in turn, attended these auctions and bought their supplies.

One of the reasons that has been advanced for prolonging the life of the Commission was the long-term bulk contracts which were entered into by the Commission with certain of our Colonial Territories, such as Nigeria, Aden and Nyasaland. It was felt by some hon. Members that the Commission should continue in existence at least until those long-term contracts had been completed. I heard many misgivings on the subject during the Committee stage from some hon. Members as to the effects which the winding-up of the Commission would have upon the future use of colonial cotton in this country.

If I thought for one moment that the only way to ensure the use of colonial cottons in this country was by a continuation of the Raw Cotton Commission, I also would have supported the Motion to retain the Commission, but I do not hold that view. Indeed, I see no reason at all why Lancashire spinners should cease to use colonial cottons merely because the method of importation has changed. My concern for colonial cottons extends much further than the completion of these long-term contracts which were placed by the Raw Cotton Commission. I want to see more and more colonial cottons used by the spinners of Lancashire.

At the same time, it is fair to say that those who hold responsibility for marketing of these colonial cottons must realise that, just as there has been a change in the buying mechanism of the British cotton industry, so also there has been a change in the conditions which govern the buying and selling of commodities in the markets of the world. The seller's market which has been such a feature of world post-war trade has changed in most cases today into a buyer's market, and in a buyer's market it behoves the seller to make the buying of the commodity as easy and convenient as possible for those who have to buy.

Futhermore, colonial cotton producers must realise that the system of bulk buying of complete crops of cotton has now changed to more specialised buying of smaller quantities. It is in that direction that a great deal could be done by various colonial marketing boards to facilitate the buying of colonial cottons by spinners in this country. If colonial cottons are to remain as a staple part of Lancashire consumption the whole system of marketing them must change.

Mr. Sydney Silverman (Nelson and Colne)

In this part of his argument the hon. and gallant Member appears to be advocating the retention of marketing boards in the Colonies. Why, therefore, is he against the retention in this country of the corresponding organisation which would buy from those marketing boards?

Lieut.-Colonel Schofield

I am merely saying that those marketing boards exist in the Colonies. I am not talking about their retention or otherwise.

Mr. Silverman

They exist here, why abolish them?

Lieut.-Colonel Schofield

I am talking about making it possible for colonial cottons to be brought into this country.

It is necessary that the whole system of marketing these cottons should be changed. Instead of British buyers having to go to Africa to buy their stocks, would it not be more satisfactory if these marketing boards or companies set up their own organisations to sell the cottons in this country and to keep in this country sufficient stocks of cotton to ensure that spinners could more easily rely upon the continuity of supply of these cottons, in order to maintain their own quality of yarn? Colonial growers should realise that not only is there a ready market in this country for their cottons, but that the shop window for their cottons should not be in Africa but somewhere in this country, preferably in Liverpool, Manchester or both.

For example, the general character of the Nigerian cotton which is mentioned in the Order is closely similar to that of American cotton, and Nigerian cotton is approximately equal in value to similar staple cottons in America. The spinning qualities of Nigerian cotton are well known to Lancashire spinners and are appreciated by them. Because of its close similarity to American cotton, I submit that that is one of the most suitable of the colonial growths for ultimate inclusion as a tenderable cotton against the Liverpool futures market.

The Nigerian cotton crop is marketed by the Nigerian Produce Marketing Company Limited, with offices in London. Though London may be the best place for selling commodities of various kinds, it is certainly not the best place for selling cotton. The best place is in Lancashire, either in Liverpool or Manchester, on the doorstep of the man who has to use it. If colonial cottons are made easily available to Lancashire spinners and are comparable in price for equal types of quality—

Mr. Leslie Hale (Oldham, West)

The hon. and gallant Gentleman did not deal with the point put by my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman). What he has to face is that if we get a Tory Government in Nigeria there will not be a produce board at all or a marketing organisation. There will not be a shopfront either in London or Liverpool. We shall be back with the old system of competition, battling about price and bartering about transport charges, and so on. Is the hon. and gallant Gentleman in favour of that? Is he in favour of bulk purchasing, or is he not? Is he in favour of collective marketing, or is he not? The idea that we should be competitive buyers and the whole world should provide us with collective sellers is putting it a little high.

Lieut.-Colonel Schofield

The position is that there are these marketing boards in the Colonies.

Mr. Silverman

We have a Cotton Commission.

Lieut.-Colonel Schofield

We had a Commission. The whole system has changed. We should consider how we can best bring cotton to the industry. Our cotton trade should not be the shuttlecock of politics, as some hon. Gentlemen seem to want it to be. I am trying to show how best we can get the cotton here. These cottons are comparable in quality to American cottons of similar staple. The producers can sell them to the spinners if they want to because the spinners like colonial cottons, but if they are made difficult to acquire the valuable goodwill which has grown up will disappear.

It is in the power of the colonial marketing boards, if they wish to retain that goodwill, to set up some organisation for getting the cotton into this country. In that way they can retain the goodwill. I hope that the day is not far distant when every one of these Colonial Territories will have some kind of selling organisation in this country, whether collective or individual. I do not care which it is so long as they sell the cotton to us. If they do that I believe that the future for colonial cottons is very bright indeed.

10.49 p.m.

Mr. F. Blackburn (Stalybridge and Hyde)

The hon. and Gallant Member for Rochdale (Lieut.-Colonel Schofield) has not relieved my anxieties any more than the Minister did. I believe that the hon. and gallant Member is interested in colonial development, but I think that we ought to cast a veil over his comments about the marketing of colonial cottons.

First, I want to pay a compliment to the Government. Some of my hon. Friends may be a little surprised that I should do that, but I think that the Government deserve to be congratulated on the Explanatory Note, which explains that the Raw Cotton Commission (Dissolution) Order is an Order for the dissolution of the Raw Cotton Commission. Otherwise we might have thought that it was a Conservative attack upon the cotton industry and upon colonial development.

Recently, speaking of a Bill where one of the Schedules was being deleted, I said that I hoped that it could be preserved in the archives of Parliament as a dread warning to future draftsmen of Parliamentary Bills of what could really be done with the English language when one is trying. I should like this Explanatory Note to be preserved side by side with that Schedule, for entirely different reasons, of course.

I suggest that the Minister take this Order back and have it re-written. It is evidence of the confusion of thought which exists on the Government Front Bench. It may, of course, be that they do not know from day to day what are the demands of the 1922 Committee. Here we are presented with an Order which says that the Minister shall do this and that, meaning, of course, the Minister of Materials. Then we have an Order transferring the functions of the Minister of Materials. So every time in this Order that we see "Board or Minister" we have to read it as "Board," and every time we see "Minister" we have to read it as "Board."

In his remarks, the Minister, quite fairly, outlined the fears we expressed during the various stages of the Bill. I still have those fears. First there is the question of dollars; second of stocks, and third of colonial cottons. Though there has been some improvement in the dollar position, we have only got back to the state of our gold and dollar reserves which existed when this Government came to power in 1951. Any upset in the world might have serious consequences for us. We must be careful how we use whatever dollars we have.

With regard to stocks, I sincerely hope that our fears will prove unfounded. It would be a tragedy if once again Lancashire were thrown on the scrap heap of unemployment because of a shortage of stocks. The Minister agrees that the stocks at present are the lowest known in the history of the industry since records were kept.

Coming to the question of colonial cotton and referring to Article 3 (2) of this Order, it states: Unless at any time the Minister otherwise directs, the liquidator shall cam out all subsisting contracts with the Nigerian Produce Marketing Company Ltd., the Abyan Development Board and the Governor of Nyasaland for the purchase of raw cotton. When I pressed the Minister on Committee stage about what organisation was to take over these contracts, he said it could easily be done either by the Board of Trade or the Ministry of Materials. We left it at that. But now a liquidator is to take them over.

I think it interesting to trace briefly the history of the deterioration of the views of the Government with regard to these colonial contracts, going back to January, 1952. Then the Secretary of State for the Colonies, replying to my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), referred to a plan for increasing production in Uganda by 50 per cent., in Tanganyika by 80 per cent., Nigeria by 300 per cent., Nyasaland by 100 per cent. and the Aden Protectorate by 60 per cent. He was rather boasting of the development which is taking place, and 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 years ahead, serve to encourage expansion of production."—[OFFICIAL REPORT, 30th January, 1952; Vol. 495, c. 175.] Coming to 1953, the Minister, in reply to my right hon. Friend, the Member for Huyton (Mr. H. Wilson), said: The long-term contracts between the Raw Cotton Commission. 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."—[OFFICIAL REPORT, 17th November, 1953: Vol. 520, c. 139.] By the following day we had the Second Reading of the Bill, and the Minister of State said: 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."—[OFFICIAL REPORT, 18th November, 1953; Vol. 520, c. 1851.] The wit of man has operated—and we have got a liquidator.

Mr. Amory

I am sure the hon. Gentleman will not have forgotten Article 3 (3) of the Draft Order. If he will look there, he will see that the liquidator has to act subject to any direction given him by the Minister.

Mr. Blackburn

Yes, certainly. It is still the liquidator who is acting. If I were to find out all the times when the Minister or the board have to give directions, I should have to take every item. But we are referring in this particular subsection to long-term contracts. There is absolutely no mention of the bulk purchasing made of the Uganda and Tanganyika crops, nor of the West Indian crops, where we bought the crop even before it was sown. Surely it is vitally important, not only from the point of view of Colonial Development, but from the point of view of providing alternative supplies of raw cotton, that we should have these alternative supplies. I say that those three fears, of the dollar position, the stocks, and of the colonial cotton position, still remain very much in my mind, and nothing that has been said at any stage of the Bill, and nothing that has been said tonight, has helped to relieve me of those fears.

Finally, I want to call attention to Article 15. I am told that this is a very usual form of words to be found in Orders of this kind, but I must admit that I do not personally like them. They are: … shall release the liquidator, and such release shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the Commission or otherwise to his conduct as liquidator. I do not know the gentleman who is to be appointed as liquidator. He is no doubt a man of very high reputation and integrity, but the words. I think, are very dangerous, and even if they are used regularly in an Order of this kind it is a mistake that they should be put in. If a man should make a mistake, even if he is occupying a high position, he should be responsible for any acts or default that he has made.

My hon. Friends and I, knowing that our fears are the fears that we had at the beginning, can only regret that the Government have shown this indecent haste in bringing forward this Order at this time.

11.0 p.m.

Mr. Richard Fort (Clitheroe)

With regard to the last point raised by the hon. Member for Stalybridge and Hyde (Mr. Blackburn) on Article 15, I should have thought that it was simpler to put in an indemnity Article in an Order of this sort instead of having to ask the House at some later date, perhaps in a year or so hence, to pass an Indemnity Bill indemnifying the unhappy liquidator who, by some legal mischance, found himself in a position where his own fortune might be involved, even though he himself was only incidentally concerned. I should have thought it showed more foresight to cover that contingency in this way.

Mr. Blackburn

Am I to understand that the hon. Gentleman is anticipating that happening?

Mr. Fort

We have had plenty of indemnity Acts passed by this House even during my short time here, and the hon. Gentleman, with his longer association with the House, must have seen several indemnity Acts passed by it, and must realise the difficulty with which liquidators may be confronted.

Mr. S. Silverman

Not in advance.

Mr. Fort

It is as well to provide in advance for these things.

Hon. Members opposite have talked at some length about Empire cotton which, as my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) said, is of great concern to everyone connected with the industry, as well as to those directly concerned with Empire development. There are many ways of selling cotton to this country, even though there are marketing boards in the country where the cotton is grown.

The hon. Member for Stalybridge and Hyde talked as though the only way of dealing with raw cotton is for one marketing board to deal with another marketing board in this country, while overlooking the fact that one of the largest and most prosperous of all the colonial marketing boards, the Cocoa Marketing Board in the Gold Coast, sells in the free markets of the world without any difficulty at all. What can be done with cocoa can quite certainly be done with cotton.

Mr. Blackburn

Would not the hon. Gentleman agree that if we want to develop the growing of Empire cotton it is far better to have an Empire market?

Mr. Fort

But there is an Empire market whether the cotton is bought and sold by strict bilateralism with a marketing board in England or by buying and sale on the Liverpool or other markets of Bombay, or even eventually, perhaps, in European markets. Buying and selling raw cotton is really not quite as inflexible as the hon. Gentleman tries to make out.

Mr. Hale

I did not quite follow the hon. Gentleman's earlier remarks about the liquidator. I was wondering why he thinks his position an unhappy one. If this Order is passed—I hope it will not be—we are surely not going to appoint the liquidator of the Raw Cotton Commission with the cynicism with which we appointed the inquiry into Crichel Down or the Land Tribunal of the Minister of Agriculture.

Mr. Fort

I am surprised that the hon. Gentleman with his usually nimble wit should have reverted to some remarks from which I have moved on, and, having moved on, I think I will stay moved on.

Turning to the last question which so disturbed the hon. Member for Stalybridge and Hyde—the size of stocks—it is quite true that stocks have been reduced. But when we talk about reduced tonnage, we should remember that we still have something like five months' stocks in this country, and probably rather more than that, which are at least as large, and probably larger, than the stocks carried before the war.

The only reason there were such large stocks under the Raw Cotton Commission was that the Commission was legally bound, having a monopoly, to meet any demand which was made upon it in this country. With the more flexible arrangement of the Liverpool Cotton Exchange, it is certain that five or six months' stock is large enough, especially as the spot market working has been one of the most successful features of the few months' experience of the exchange which we have had so far. I think that shortage of stocks is one of the least well-founded fears.

Even if all the fears were justified, there is one point on which hon. Members opposite have been silent so far. It was a point constantly referred to during earlier debates. That was, that the Raw Cotton Commission had in recent years been costing the country more than £20 million yearly.

I would be the first to argue that the textile industry requires all the help it can get in this wicked world; but a direct subsidy of that order is more than even we can ask for without going into the causes for it more deeply than we have in discussing this measure. We come back to what was said in earlier debates, namely, that the sooner we get rid of a Commission costing such enormous sums, the better for the industry and for the country.

11.12 p.m.

Mr. Sydney Silverman (Nelson and Colne)

The hon. Member for Clitheroe (Mr. Fort) has made a speech which had little to do with the Order. There may be differences of opinion on whether it was a convincing or persuasive speech; but it was a speech in support of the Second Reading of the Bill, not in support of this Order. I should like to endorse what was said by my right hon. Friend at the beginning of his speech, and to protest at this Order having been brought before us late at night in this way.

No one on either side of the House will regard this Order as being anything but an important matter. For it to be brought before us at a time when it is not possible for it to be discussed adequately or reasonably is one more proof of the many we have had in these matters of the Government's cynicism and humbug in dealing with the cotton industry. They might have been a little more considerate for the Tory hon. Members who represent Liverpool constituencies. If there is a city which is vitally concerned in this matter, I should have thought it was Liverpool. Yet there is not a single Tory representative of Liverpool in the House.

Mr. William Shepherd (Cheadle)

Will the hon. Gentleman tell the House how many Labour Members from Liverpool are present?

Mr. Silverman

This is a Government Order. The position is by no means the same. The abolition of the Raw Cotton Commission and the restoration of the Liverpool Cotton Exchange are Government policy. The Order that we are considering is an affirmative Resolution and requires a positive vote of the House of Commons. It cannot become operative without it. The obligation of the Government is surely to see that there are enough hon. Members present to carry its policy on the affirmative Resolution.

Notice taken that 40 Members were not present;

House counted, and 40 Members being present—

Mr. Silverman

I notice that even—

Mr. Graham Page (Crosby)

Would the hon. Gentleman allow me? He referred to the Liverpool Members. No doubt he recognises Crosby as part of Liverpool—it is next door, at least—and that is the constituency which I represent.

Mr. Silverman

The hon. Member has lived too long near Merseyside to suppose that we regard Crosby as being part of Liverpool. If that is the best that he can do in defence of the Liverpool Members, I think he might better retain his seat. [An HON. MEMBER: "What about Nelson and Colne?"] Nelson and Colne is vitally interested, and when it is then its representative attends the House. I thought Liverpool was vitally represented, but where are the Liverpool Members? Where are those Members who so enthusiastically acclaimed the Prime Minister's inadvertent speech from a Liverpool platform during the General Election, without which this Act would never have become law and this Order would never have been presented?

Mr. Harmar Nicholls (Peterborough)

On a point of order. Is it in order for the hon. Member to assert for the record that there is not an hon. Member with Liverpool interests in the House when there is one such hon. Member sitting on the Government Front Bench at the moment?

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

That is not a point of order, but I think that we should come to the Order now.

Mr. Silverman

In any case, the hon. Member to whom reference has been made is here, not to take part in the discussion, but at a suitable moment to see that the discussion comes to an end. That is why he came to the House, and in a few minutes he will do it.

The Parliamentary Secretary to the Treasury (Mr. Buchan-Hepburn)

Who said so?

Mr. Hale

It has become a habit.

Mr. Silverman

The Order which we are considering is made under and by virtue of Section 4 (1) of the Cotton Act, 1954. That Section reads: The Board and the Minister, if at any time they are satisfied that it is in the public interest to do so, may by order jointly provide for the winding up and dissolution of the Commission; and if such an order is made the following provisions of this section shall have effect. It is of some interest to note who is the Minister referred to in that subsection, because in this way we get some light on the necessities which drove the Government to put this important Order before the House at apparently so unfortunate a time. The Minister referred to in that subsection is the Minister of Materials If the Government had wanted to put this Order before the House at a more material time, they would have had to wait until next week. Next week there will not be a Minister of Materials, and therefore no joint opinion of the Board and the Minister of Materials could be reached, and therefore I suppose the Government were compelled to bring this Order before the House this week because next week there will be no competent authority in the Government to enable them to bring the Order at all.

Mr. Amory

indicated dissent.

Mr. Silverman

The right hon. Gentleman shakes his head. I am quite willing to hear any objection to that view. Having made that point, may I make another derived from the same Section?

In its language the Section appears to mean that under the Act there is no obligation at all ever to propose or promulgate an Order bringing the Raw Cotton Commission to an end. There is a discretion in the President of the Board of Trade jointly with the Minister of Materials. He may propose such an Order as this only if at any time they are satisfied that it is in the public interest to do so, and that appears to mean that they are not bound ever so to decide, that there may never come a time when it is in the public interest to bring the Raw Cotton Commission to an end, but that if there ever came such a time then they would be empowered under this subsection to propose such an Order as this.

But although those are the words of the subsection, we know from other parts of the Act that it is completely insincere, that this pretence that there was some discretion in the Government to decide to bring the Raw Cotton Commission to an end or not to do so, depending on their view of what the public interest required at any particular moment, is totally untrue.

Proof of that is to be found in Section 1 of the Act. Section 1 provides: The following provisions of section one of the Cotton (Centralised Buying) Act, 1947 … shall cease to have effect, on the enactment of this Measure and not on the adoption of an Order. It then states the provisions which shall cease to have effect, as follows:

1. "(a) in subsection (1) (which provides that there shall be a Raw Cotton Commission who shall be charged with the duty therein mentioned),
2. (b) subsection (2) (which makes provision as to the quantities, growths, types and qualities of the raw cotton to be bought and imported by the Commission), and
3. (c) subsection (4) (which imposes restrictions on the prices to be charged by the Commission)."

All that was abolished by the Act itself, and those are the main purposes which have been discharged with great satisfaction to everybody ever since 1940, or between 1940 and a date which I will mention in a moment. The later Section, under which this Order is proposed, although purporting to deal with what the national or public interest requires, really has no bearing upon the matter, because if the public interest at any time required the existence of a Raw Cotton Commission it would require it for just those functions which, in the main, are abolished by Section 1 of the Act.

Moreover, when one looks at Section 1 (5), one finds that it says: This section shall be deemed to have come into operation on the first day of September, nineteen hundred and fifty-three. So that, since 1st September, 1953, all the main functions of the Raw Cotton Commission have in fact been in abeyance. It has had no useful functions to perform, apart from one or two which have been referred to. In the light of that fact, to refer to the public interest in the matter is merely to attempt to mislead the House and the public into believing that some questions of public interest have been considered by the Government when, in fact, no such questions have been so considered.

The opening words of the Order are: The Board of Trade and the Minister of Materials, being satisfied that it is in the public interest to provide for the winding up and dissolution of the Raw Cotton Commission and in exercise of the powers conferred upon them by Section 4 of the Cotton Act, 1954, hereby make the following Order … When were they satisfied? The main obligation of the Commission had been abolished since 1st September, 1953. We know that in recent weeks the President of the Board of Trade has paid a visit to the United States of America, where he has been discussing generally the question of restrictions on trade. I suppose that the only new influences that could possibly have been brought to bear upon him in this matter since 1st September, 1953, must have been communicated to him by Mr. Stassen during that visit.

Mr. Hale

Or Mr. Cohn, or Mr. Schine.

Mr. Silverman

That is perhaps an unfortunate reference, because Mr. Cohn has lost his office; the Minister of Materials has lost his office, and the 1922 Committee would like a number of other Ministers to lose their offices. Rumour has it that the President of the Board of Trade is one of them. So we know that if the Government had waited a few days there would have been no Minister of Materials to come to a joint opinion with the President of the Board of Trade about the matter—and who knows how many days after that it would have been before there was a new President of the Board of Trade, who would have had to consider the matter again from scratch, and consider what was required in the public interest about the functions of a Raw Cotton Commission which had been abolished in any case on 1st September, 1953?

Mr. H. Nicholls

The hon. Member's arguments are as ill-founded as his rumours.

Mr. Silverman

The hon. Gentleman is a much better authority on the proceedings of the 1922 Committee than I ever pretended to be, and I am sure that his right hon. Friend the President of the Board of Trade would have been greatly relieved to hear that intervention. I only hope that the hon. Member is prepared to give his right hon. Friend that guarantee in writing, and to pay the proper compensation if he turns out to be wrong. The hon. Member must be careful. If he goes on distributing unfounded and unauthorised pledges of this kind he might find himself outside the 1922 Committee, and what his future in politics would be then heaven only knows. I know one thing, he will not come and try to unseat me in Nelson and Colne.

The whole history of this matter shows that the public interest has never been in the Government's mind with regard to the Commission. The origin of all this is that the Prime Minister, in the course of the General Election, went down to Liverpool and got intoxicated, as he often does, by the enthusiasm of his audience. It was a Liverpool audience, made up of people who were seeking to re-establish the Cotton Exchange, and the Prime Minister thought that the best thing to do was to give them the pledge they wanted. Having made so many pledges during the General Election and finding one at least that he might be able to carry out with the full approval of the 1922 Committee, he set in being the Cotton Bill under which this Order is made.

There has never been an example in my Parliamentary life-time, now extending to some 19 years, in which it has been clearer that the policy of the Government has been dictated purely by ideological considerations with no reference whatever to the facts of the situation or the public interest. All those circumstances which made the House of Commons in 1939 abolish the Cotton Exchange in Liverpool and substitute for it a system of public collective buying on a collective basis by people with no personal interest in the matter except the public interest are as important today as they were in 1940.

Mr. Charles Fletcher-Cooke (Darwen)

Except there is no war.

Mr. Silverman

There is no war it is true, and in 1940 there was one, but I am thinking now not so much of the question of whether there is a war going on or not but of the world market conditions which, though caused in 1940 by the war, have not been greatly eased nearly 10 years after the end of it. Do hon. Members opposite think that the economic state of the world is such that we can really rely for the public interest on the jungle buying of Liverpool?

Look at the speech of the hon. and gallant Gentleman the Member for Rochdale (Lieut.-Colonel. Schofield). He is a man who knows the cotton trade and is a man of great experience and great responsibility. He made a most eloquent speech in defence of collective marketing of cotton by the Colonies and collective selling. It was a most extraordinary speech to make, because it was a persuasive, convincing speech about the merits of collective selling made in support of an Order design to abolish collective buying.

I am persuaded that, but for the political background to all this and the ideological doctrinaireness which has inspired the Government in all these matters, the hon. and gallant Member for Rochdale would have been the last Member of this House to advise us at this time and in these circumstances to abolish the public safeguards which the Raw Cotton Commission provided, and provided with the common consent of the House under an emergency in 1940, which emergency, so far as these matters are concerned, is by no means at an end. I hope, therefore, that the House will reject this Order.

11.30 p.m.

Mr. Ernest Thornton (Farnworth)

I have followed the debate with great interest, as no doubt the whole of Lancashire will do. I do not think it can be denied that I speak with the voice of Lancashire, if I do not speak for Lancashire. I believe that I represent what is overwhelmingly the public interest of the County Palatine of Lancashire, and I speak from a lifetime's experience in our great industry which has known so many ups and downs, sufferings and vicissitudes.

I was interested to hear the Minister refer to the pronouncement of the American Government that there would be no export subsidies for cotton during the ensuing 12 months. Doubtless there was some connection between that important pronouncement and the efforts to initiate successfully the working of the Liverpool futures market. I am not quarrelling with that, but the fact remains that, in the opinion of many experts, raw cotton prices still remain as brittle as the prices of any raw commodity in the world. Therein lie great dangers in the months ahead. I am pleased to note that at its initiation the futures market has run more smoothly than I had feared, but it must be acknowledged that the testing time has not yet come and that the period ahead is one of considerable uncertainty.

The hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) said that there was not a shortage of long staple cottons. I have my doubts about that, but it must be remembered that while stocks are still substantial in Lancashire they are now dispersed and privately held, as compared with centrally held stocks of much larger quantity. Anyone can appreciate that the maximum utilisation of cotton and the maximum choice of quality and variety comes from one centrally held stock rather than from separately owned stocks dispersed in various parts of the country. Whatever its disadvantages may have been, its centrally held stocks was unquestionably one of the great advantages of the Raw Cotton Commission.

I want to draw attention to the Report of the Operative Cotton Spinners' and Twiners' Provincial Association of Bolton and Surrounding Districts and what was said in the Report by Mr. Gregson, a highly competent and responsible official of the cotton trade unions. Mr. Gregson said: We are satisfied that the Raw Cotton Commission has succeeded in the main in supplying a better quality of cotton for all ranges of counts than private enterprise ever supplied in the whole of its history. That is the opinion of a man of very great experience in looking into operatives' complaints.

He went on: Anyone who takes the trouble to read our Annual Reports of 30 years or so ago will find that there was scarcely a week when your secretaries had not to visit from one to six mills on bad spinning complaints. Even as recently as 1938. the total number of disputes in our Province was 72, of which approximately half arose from bad spinning. During 1953, the secretaries have examined spinning conditions at three mills only. At one of these mills it was found that certain cardroom faults were preventing out members from producing a yarn of the high quality expected by the management, but the spin was not bad. At the other two mills, the spinning was well below a passable standard. The fact that at both of these mills cotton had been bought privately, throughout the year, may or may not have been the reason for the bad spin. If it was not, then it was a remarkable coincidence. My information from the spinning trade unions is that these complaints of bad spinning are coming back again. That is an important fear in the minds of textile operatives. Rightly or wrongly, as the "Manchester Guardian" pointed out, the cotton operatives of Lancashire have come to associate good spinning and good weaving with the Commission.

Reference was made by the Minister to the fact that soon there will be choice and freedom of selection. I say, with respect, that we have had some and that we did not like it. During the '20s and '30s when the markets of the world were free, when choice was free, and these men were in the saddle, we had nothing but bad spins and bad weaves throughout the whole of Lancashire.

It has been in the post-war period, during the life of the Commission with its centrally held stocks, that these complaints have almost been eliminated, because it has been possible for managements to get the identical grade and quality they wanted for their jobs. With the best will in the world that choice will not be available under the new system. I forecast that we shall drift back to bad spinning and bad weaving. That is of great importance, because the bulk of the operatives in the industry are paid on a piece-rate system. If the work is bad and the quality low, that means more work for less wages.

Inevitably that will cause trouble. Further trouble in the labour market will mean that operatives will get fed up and leave the mills to find other jobs. In most of the post-war period the limiting factor to increased production has been the shortage of operatives. This matter of the satisfaction of labour is of paramount importance if the industry is to continue to make its contribution to the well-being of the nation.

Reference was made to the £20 million loss of the Commission. The Commission made mistakes. There is no doubt about that. One of its mistakes was that it sold its cotton too cheaply. It did that at a time when profit margins were fantastic, when the profit margins of the spinners and weavers were the highest in recorded history. During that time the spinners exerted pressure on the Commission to reduce its prices. That was one of the reasons why a substantial amount of that £20 million was lost.

The winding up of the Commission is one of the most important, significant and far-reaching events in our industry since the concentration of production in the war-time years in specified mills and the closing of others. The Cotton Act, 1954, whether we like it or not, provides for the winding up of the Commission. That Act was a reckless gamble with the future of an industry employing 300,000 people.

As my hon. Friend the Member for Nelson and Come (Mr. S. Silverman) pointed out so effectively, Section 4 of the Act requires the Minister to act in the public interest. Several months ago it was announced that the public interest would be served by the Commission being wound up on 31st August. And now in July the Government announce that their former guess was correct. I am not convinced that the decision has been made in the public interest. I think that it is the Liverpool Cotton Association and certain important cotton spinners connected with that Association who have been responsible for determining what is the public interest.

I wish to ask the Minister if the cotton trade unions, who represent the people who spin and weave and produce the wealth, believe that the public interest will be served by winding up the Raw Cotton Commission on 31st August, 1954. I am sure that they do not. Not many months ago the Prime Minister made a statement referring to the fact that the future holds many risks and unknowable factors. This is the period when the Government are taking this risk with a great exporting industry. Is this the time to make so fundamental a change? I suggest that this is not the time for such an action. Even if the Government are determined to get rid of the Commission, they should keep it for some while yet to see how events unfold.

There has been built up a myth, largely from Liverpool sources, that what we need today is to get back to the good old free market and free enterprise period; to the Liverpool futures market of the years before the war, which would be of great benefit to the cotton textile industry. Although it is argued that that period served the industry well and that the futures market was a wonderful organisation, the history of the industry is full of responsible complaints and grievances about the operations of these gentlemen in Liverpool who are now being put back into control of the supply and distribution of raw cotton.

I wish to refer to colonial cotton supplies, and particularly to the supply of Nigerian cotton. I understand from well informed quarters that there is danger of great difficulties in this market. I wish to quote from a letter sent to me from a responsible person in the industry, who states: The foremost cotton I have in mind at the moment is Nigerian cotton, for the Raw Cotton Commission contracted for the whole of the crop … I understand that this country, the United Kingdom, subsidises Nigerian cotton to the extent of £4 per bale. The position now arises, how is the next year's crop to be disposed of? No scheme has yet been put forward which is satisfactory to the Nigerian Produce Marketing Company. I wish to ask the Minister if that is correct, that no scheme has yet been put forward which is satisfactory to the Nigerian Produce Marketing Company, of which Sir Eric Townsley is the managing director, who is over here to try to arrange as best he can a satisfactory market scheme. My correspondent continues: The Nigerian cotton crop is best dealt with in the whole bulk, rather than in piecemeal lots. The Raw Cotton Commission have made a good job of sampling Nigerian cotton. paid a good price for the cotton, and sold it in reliable lots to cotton spinners at prices below its equivalent in American dollar cotton. There is a grave danger of Nigerian cotton eventually reaching foreign spinners, who in turn would look for reciprocal trade in Nigeria. We can take the whole of the Nigerian cotton crop and I am of the opinion that the Raw Cotton Commission are the only people capable of dealing with it in bulk. One can readily appreciate from the terminology and phraseology of that communication that he is a man who knows what he is talking about.

I should like to call attention also to the very guarded statement made by Lord Derby several days ago at the annual meeting of the Empire Cotton Growing Association. Lord Derby is a free enterpriser, but it was obvious from his guarded statement that he was very much concerned about the course of Empire cotton and the consumption of Empire cotton in this country.

Mr. Blackburn

He needs to be.

Mr. Thornton

He does need to be, without any doubt. I would like to point out that for 50 years the development of Empire cotton was a very painfully slow process. It expanded hardly at all. And yet, during the period of cotton control and the Raw Cotton Commission, you had consumption of Colonial cotton, and Empire cotton increased two-fold or three-fold in the mills of Lancashire. I forecast, if this scheme goes through and the Raw Cotton Commission as a centralised buyer is eliminated, we shall not see a further expansion of colonial cotton growing. You will see a decline, and a substantial decline of importations into this country.

Mr. Beresford Craddock (Spelthorne)

As far as the figures for Uganda cotton were concerned, from 1929 to 1939 the growth of Uganda cotton was from 300,000 to 350,000 bales each year, and that has not diminished at all since 1940.

Mr. Thornton

I am not questioning the figures of the hon. Gentleman. I was talking collectively about the whole of Empire cotton production and colonial cotton production. The point made by the hon. Gentleman opposite does not upset the line of my argument. It cannot be denied. It is not a case being manufactured from this side. There is widespread concern, not only in Lancashire, but among all people who have at heart the future of our Colonial Territories. There is widespread concern about what the elimination of the Raw Cotton Commission will mean in the terms of colonial cotton development and the use of colonial cotton in the Lancashire spinning mills.

For good or evil—probably the latter—the old system is being reintroduced. I hope it succeeds. I say that advisedly, because, now that the course has been set on, the consequences of its failing are too serious and too great for too many people. Therefore, we can only hope that it succeeds. But there is need for caution, and I do urge the right hon. Gentleman and the Government to take every possible precaution. Our industry has been kicked about too much and too often. In these last 10 years it has had a prosperity to employers and to workers alike that it has never known before, and we are very jealous that nothing should be done to upset that situation.

Finally, I wish to put this point to the Minister in all seriousness. I understand that the Government believe in competition. In that case, why not have a bit of competition? Why not allow the Raw Cotton Commission to operate as merchant and seller for a year or two and let there be competition as between private merchant and private merchant and as betwen private merchant and the Commission? Why not keep the Raw Cotton Commission in existence in a modified form during this difficult transition period, having regard to the bad record of these Liverpool operators in the years between the wars and as a stimulus and a warning to those gentlemen that if they do not perform better in the post-war period than they did in the pre-war period then the Raw Cotton Commission is there to do the job properly, and to ensure the future prosperity of the cotton textile industry?

11.51 p.m.

Mr. Ian Horobin (Oldham, East)

Though one may only agree with the hon. Member for Farnworth (Mr. Thornton) in some of the things he has said, at least his speech was in shining contrast to that of the hon. Member for Nelson and Colne (Mr. S. Silverman), on which I will make only one comment. In the course of an involved and singularly unconvincing account of the bona fides of the Government in this matter, he committed himself to a statement that, from September, 1953, until now, the Raw Cotton Commission had had no useful functions left to perform.

The value of that speech as a contribution to a cotton debate can be judged from the simple fact that, from September, 1953, until the opening of the Liverpool market in May last, whether for spinners contracting in or for spinners contracting out, there was no form of cover for any of their activities except that provided by the Raw Cotton Commission. If that is not a useful function to perform, I do not know what we are discussing.

Mr. S. Silverman

I am sure the hon. Gentleman will allow me to point out that this reference to September, 1953, was not an invention of mine, but was taken from Section 1 of the Cotton Act. 1954, which I will not repeat now, and which took away from the Raw Cotton Commission all the obligations of control and the other matters to which reference has been made. I said that since that date none of these obligations had been a legal obligation on the Commission.

Mr. Horobin

I think that I can leave it there.

Returning to the Order, I think it very necessary to remind hon. Members that, since the passing of the Act under which this Order is proposed to be made, the question of the dissolution of the Raw Cotton Commission has really not been in dispute. I am speaking now, not as a lawyer, but as a practical politician. What we are discussing is whether this is the appropriate time to issue this Order.

We had, in Committee on Clause 4, when this matter was subjected to a debate, the record of which occupies no fewer than 340 columns, a discussion whether the Raw Cotton Commission should have a permanent existence. At this hour and at this stage of the debate, it is, I submit, even if it were in order, a waste of time to re-hash all these general arguments on whether the Commission should be retained. We on this side appreciate that hon. Members opposite regret the dissolution of part of their Socialist structure for unified buying for the industry. As Shakespeare said: The cloud-capped towers, the gorgeous palaces … dissolve, And, like this insubstantial pageant faded. Leave not a rack behind. Actually the figure is about 87,000 bales.

Mr. H. Wilson

Will the hon. Member say how many of the 340 columns to which he referred were taken up by assurances by the Government that points which we had raised would be answered on the dissolution Order? Will he also say how many of the 340 columns took the form of statements by the Government that they had not reached any final decision on dissolution of the Commission but that there would be an obligation laid down that it should be debated at the appropriate time when the Bill received the Royal Assent?

Mr. Horobin

That is what we are doing. If the right hon. Gentleman cares to go through all those columns he can answer his own question. I am reminding the House that we have had an enormous amount of discussion. I am not complaining. What we are discussing tonight is whether this is an appropriate time to take a step which was implicit in the Act we have passed.

Before coming to the main point we have to consider, I want to say something about two subsidiary but important matters. First, there is the question of the colonial contracts. Existing contracts clearly are protected in this Order. If it is said that under the new system the Government might prevent new contracts. I would point out that it could have done that even if the Order were not passed. A contract is entered into by two people, and whether this or any other Government, for good or bad reasons, refuses to enter into a new contract, whether this Order is passed or not, is irrelevant. Therefore, a good deal of what has been said tonight on this important question of colonial contracts is not relevant to the decision we have to reach.

The other matter to which I wish to refer is the question of staff. It might be argued, though I am glad to say that it has not been very seriously put forward, that this is not a good time to take this step because the position of the staff of the Commission has not been adequately protected. The answer to that is two-fold. The redundancy scheme, unanimously put forward by the Commission, of which two eminent trade unionists were members, has been held to be an extremely generous one. Secondly, I understand from such inquiries as I have been able to make that more than 50 per cent. and probably more than 60 per cent. of those going into the new organisation are from the Raw Cotton Commission. It seems that matters are working smoothly in regard to the staff.

Before I leave this matter of staff, I want to say this. If I am right in saying that, whatever our views, we are for the immediate future moving towards a state of things where more of the cotton is to be dealt with outside any conceivable Cotton Commission, are we really doing the remaining staff a good turn by encouraging them to hang on, so to speak to the very last gasp, to something which is quite clearly on the way out? For all those reasons, I do not think that any convincing case has been made out that we have not taken care, to the best of our power, of the remainder of these men and that this is a bad time to take this step.

Mr. Marquand

The liquidator is to continue operations on some contracts for three years at least. What sort of staff is he to have, and who is to be encouraged to apply for the jobs on his staff if the hon. Gentleman is right in what he said just now?

Mr. Horobin

Surely the staff which the liquidator will require will be very different from that required by an organisation by which it is attempting to keep in being, so to speak, a complete alternative system of buying Lancashire's cotton. Along those lines, therefore, I do not think we need have any fear.

I want now to turn to what is much the most important part, the real crux, of what we have to consider. Have we reason to think that the new system is now so sufficiently assured of doing the job that we are well-advised to take this final step? That is linked up really with the question of stocks. Oddly enough it is linked with that in two ways, and there has been a good deal of confusion apparent in some of the remarks from hon. and right hon. Gentlemen opposite.

It has never been altogether clear whether hon. Members opposite are afraid of there being too much or too little cotton. Sometimes the argument proceeds, roughly, on the lines that there will not be enough cotton in Lancashire and that the mills may be stopped through lack of it, and sometimes on the lines that there may be such terrific stocks of cotton overhanging us from America that the cover scheme will break down. I am not here taking a debating point, because theoretically it is possible that both of those apparently contradictory things could be true. I merely point out that there are two quite different—and indeed at first glance opposite—points to which we have to direct our attention. If the House will bear with me, I shall deal with them in turn.

Firstly, the question of whether there will be cotton available under this system—directly, physically present—for the mills to spin. I would put these conclusions very briefly to the House as conclusive. At the moment, anyone knowing Lancashire will agree that prima facie it is an odd argument, because the problem is not lack of cotton but lack of labour—not lack of cotton to spin but of people to spin it. There is nothing at the moment, in this year of 1954, to indicate that lack of cotton is an urgent reality or probability.

Secondly, we have now had two months' experience of the cotton market. I have made such inquiries as I can, and it is very significant that in all that time there has rarely been more than one point difference between buyer and seller. And a point, as I need hardly remind the House, is one-hundredth of a penny. Such a close market as that surely indicates that there cannot have been any very urgent demand for cotton which was not easily available. I can carry this argument further. If the people who are really concerned—the people who are buying this cotton—were getting anxious about their position could it possibly happen, as has been the case, that week after week since the market opened Liverpool cotton has been below parity? If it was the case that people were really getting anxious and were trying to get cotton across the Atlantic in a hurry, cotton would not be below its New York—Liverpool parity. It would be above it.

I admit that there are all sorts of complications in this matter that I cannot make that argument conclusive, but it is very strong prima facie evidence for saying that the people who really have to find the cotton, the people who buy the cotton on behalf of the mills, do not as a body think that they are going to be in a position wherein they will not be able to get it in the autumn.

The truth is that the whole pattern of buying has changed, and stocks are not required to the extent that they were. Here I should like to correct a mistake, which has been, somewhat to my surprise, fortified by the usually extremely careful approach of the right hon. Member for Huyton (Mr. H. Wilson). I do not remember his exact words, but I do not think he will challenge me when I say that the substance of them was that stocks were now lower than they had ever been since the Civil War, or something to that effect. But that statement is completely misleading.

Unfortunately, in most of those years that he was talking about, the consumption of cotton in this country and the whole scale of the cotton industry was much bigger than it is now. It is true that before the war, for very good reasons, stocks varied immensely from one time of year to another. I have looked up the 1937 figures and the 1938 figures. The 1939 position obviously was distorted. Roughly speaking, as against the 5½ months stocks that we have now, at the end of 1937 there were seven months stocks, and in 1938 there were six months stocks.

This is what has been misleading hon. Members opposite. Stocks are very much lower in proportion to what they were in the immediately post-war years, and that very fact was the cause of these enormous losses which the Cotton Commission has made. They are now very much less, and it is a very good thing. These enormous stocks were an extremely expensive and, in the result, terribly damaging way of dealing with cotton supplies in Lancashire. All that is happening, by and large, is that we have gone back very roughly to the sort of level of stocks in relation to consumption that we were used to before the war.

In fairness to the Raw Cotton Commission, it is true to say that one part of those very greatly inflated stocks was due to what one might call the strategic stock of Egyptian cotton which they held for reasons which are not altogether material. But by and large my point is incontrovertible.

Mr. H. Wilson

I am glad the hon. Gentleman mentioned the question of strategic stocks, because it is difficult to reconcile the argument that we are now listening to with the great emphasis which the Minister of State always places on maintaining large and excessive strategic stocks of many other raw materials. When the hon. Gentleman is talking about those pre-war stocks, does he not recognise two things; first, they were regarded in those days by the Board of Trade as inadequate, and the Board of Trade had to take very special measures to build up those stocks in 1938 and 1939, and indeed the Liverpool Cotton Exchange let the Board of Trade down. Secondly, does he not recognise that in those days there was no dollar crisis or prospective dollar crisis? Our reserves of gold and dollars were much higher than they are today, and it was always possible in those days to go out into the world and buy raw cotton which is not the position today.

Mr. Horobin

I do not think I would accept the right hon. Gentleman's suggestion that before the war cotton stocks in this country could be held to be, by and large, too low. I think hon. Members opposite have never really quite appreciated that the really important thing is not stocks that are physically present at any one moment in this country, but the stocks which are available to be got when spinners ask for them for any particular situation. That is what is happening now. Spinners have to make up their minds when they want their cotton. They have only to go to Liverpool, which will and is buying it for them, and it will be and is being delivered. The figures I have quoted prove that in fact the cotton has been available when it has been wanted, and not kept here in warehouses years before it is wanted, or when it may never be wanted and may have to be liquidated at an enormous loss.

I go further; I ask the House whether it is not a fact that now, under the conditions in which the Raw Cotton Commission will in any case have to work even if this Order is not passed, its continued existence is not an actual danger to the industry. The Commission is now in a dilemma; either it has to issue very frequent statements of the sizes of its stocks—in which case it is a sitting bird and the taxpayer is liable to immense losses—or it does not issue statements, in which case it is a direct threat to the operations of the organisation which in any case is now dealing with the majority of the cotton purchases.

That fact has been demonstrated within the last few days, when the first statement of its remaining stocks was made and it was found to be very much less than had been imagined. If hon. Members opposite are saying that the Raw Cotton Commission, handling the small amount of the market that it does, is going to be a safe repository of large stocks which can suddenly be called upon, they are leading Lancashire up the garden path, because the stocks will be very much less, and are very much less, than people imagined. I say that it is proved, as far as it can be, both by argument and experience, that this claim that we have chosen the wrong moment is not made out.

I should like to say a word about the danger of too much cotton breaking down the cover scheme. Once we pass this Order the only alternative cover for Lancashire spinners will very shortly be the Liverpool market. If it is argued that this is a bad moment to pass this Order, because the Liverpool cotton market will not be able to give cover because it will not be able to absorb all the offerings—does the experience of the last few months bear out that argument? Certainly not. Over half a million straddles have been dealt with since the cotton market opened. It is working very smoothly. There has never been a 16 points change in price in a day, and about half the business has been done with New York, which is a complete vindication of the policy of the Government in relying on purely American contracts, because if it had not been for those American contracts 50 per cent. of the straddles would have come down in the Liverpool market, lowering the premium even further than it is now. Experience shows what those of us who know Lancashire would expect, that the opening of the Liverpool market has been surprisingly smooth; it is doing its job. Therefore, on this ground also the case against this Order is not made out.

I end with an appeal to hon. Members opposite. They have made their protests, and we quite understand their views, but would they not be serving Lancashire best by not pursuing their opposition further? It is immensely important that this new system should have a fair start and a fair trial. Lancashire has endless problems in front of it, with Japanese and Indian competition and the rest. We really cannot have this battledore and shuttlecock over the purchase of its raw material. We believe that it has got off to a fairly good start. We may be wrong, and if we are that may have to be put right, but why not give it a trial?

I would put this matter in its very simplest form, cutting out all the technicalities and the obligations. All we are doing in re-opening this Liverpool market and giving it a chance to work without this danger hanging over it from the continued existence of the Commission, is, as it were, to mobilise the collective judgment of the people concerned as to the best place and the best price at which to buy cotton upon which Lancashire lives. For my part, when it comes to collective judgment upon a matter exclusively concerned with cotton, I would take Lancashire's judgment against anybody's in the world.

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn)

rose in his place, and claimed to move," That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, and agreed to.