WOOL TEXTILE INDUSTRY (LEVIES) (Hansard, 9 July 1956)

§ The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith)
I beg to move, That the Draft Wool Textile Industry (Export Promotion Levy) (Amendment No. 3) Order. 1956, a copy of which was laid before this House on 13th June, be approved. With your permission, Mr. Deputy-Speaker, it might be convenient also to consider the following Order: That the Draft Wool Textile Industry (Scientific Research Levy) (Amendment No. 3) Order, 1956, a copy of which was laid before this House on 13th June, be approved. I think I can indicate to the House in a very few words the purpose and effect of these Orders. Section 9 of the Industrial Organisation and Development Act, 1947, provides for compulsory levies on industries to finance voluntary bodies for scientific research and promotion of export trade. There are two such levies existing in the wool industry, one each respectively for scientific research and export promotion.
158 The existing Orders require all persons carrying on business in the wool textile industry, or carrying on business consisting of the supply of wool fibre, to pay a levy. The levy is collected by the Board of Trade and paid respectively to the Wool Textile Research Council for the scientific research levy and the National Wool Textile Export Corporation for the export promotion levy. There is, however, a difference in the method of calculation. In the case of the suppliers of wool, the levy is based on the amount of wool supplied by them. In the case of those carrying on business in the wool textile industry, it is calculated partly on the wool consumed by them and partly on the number of operatives employed.
In the case of suppliers, there already exists an exemption in respect of very small suppliers from payment of the levy. Those who supply less than 100 lb. of wool a day are already exempted from the payment of the levy. The purpose of these Orders is to give small users an exemption corresponding to that already enjoyed by the small supplier. The method of doing so is to place the manufacturers using only a small quantity of wool material in a position similar to that of those supplying only a small quantity of wool.
Taking the average for the industry as a whole, the amount of the levy payable by manufacturers in respect of persons employed in processing 25 lb. of wool a day is as nearly as possible equal to the amount of levy payable by suppliers in respect of the supply of wool at the rate of 100 lb. a day. Therefore, these amending Orders introduce this new basis of exemption.
As a result of the Orders, about 50 firms now making very small payments may qualify for exemption from both levies and the reduction in yield in a six months' period will be only £20 to £25, or thereabouts, for the scientific research levy and £15 for the export promotion levy as against a product in respect of both levies of £135,000 for the six months' period. It is, therefore, a very sensible exemption at an infinitesimal cost. I 159 would only add that as a result of the statutory consultations held under Section 9 of the Industrial Organisation and Development Act both the principle and level of the proposed exemption are supported by the trade associations, including the Wool Textile Delegation, and also by the trade unions in the industry.

§ Mr. A. G. Bottomley (Rochester and Chatham)
I see no objection to considering the two Orders together. The Parliamentary Secretary has correctly outlined the reasons for them. I disagree with him when he says that it is a minor adjustment. I prefer to look at this as a matter of principle. We are dealing with the need for increased exports in order that we may live as a nation, and for improved facilities for carrying out research in order that we can better hold our own in the world. I should have thought that the Government themselves would have been the last body to discourage that kind of development.
That is what these Orders do. They weaken the principle that employers or certain users should contribute towards the export levy, and likewise limit the contributions to the research levy. I gather that there are difficulties in making the necessary calculations and that the cost is therefore high. I should have thought that it was not impossible to arrange some token payment to overcome that difficulty. I do not want to detain the House, or debate the subject at length. We recently had a discussion about an Order in which the Government agreed altogether to abolish the need for an export levy. I am glad that they have not gone so far on this occasion in the Order dealing with the export levy. I am equally pleased to see that they are to levy substantially for research.
The Labour Government were responsible for the Act under which these two Orders arise—the Industrial Organisation and Development Act. That was a very good Act, and I think that it is being weakened by the action which the Government now propose. I am not suggesting that we should divide on this matter, but I would ask the Parliamentary Secretary whether consideration was given to some other means of raising the levy without placing unnecessary burdens or difficulties on the industry.
160 Perhaps I might ask the Parliamentary Secretary whether everyone concerned, including those responsible for using the levy when it is raised, were in agreement with the Orders, or whether there were any objections from any other source. The hon. and learned Gentleman indicated that the statutory bodies were consulted, but there are others who, while not needing to be consulted in the same way, are intimately concerned. Can the hon. and learned Gentleman say whether those other bodies were in agreement?

§ Mr. Walker-Smith
With permission, Mr. Deputy-Speaker, I would say that no objection to these very reasonable amendments which we are making to the existing procedure was entered from any source. Indeed, that is not surprising because, as the hon. Gentleman will appreciate, the 50 firms or thereabouts which are exempted by these Orders were, in total, paying only £40 a year to both levies. It must surely be common sense to exempt them rather than go to the administrative trouble of having so small a contribution from so many firms, in view of the fact that the amount is only £40 as against a total of £135,000 paid to the levy.

§ Mr. Bottomley
The hon. and learned Gentleman has not answered my question. I agree that the amount is small but I am speaking of the principle; that at this of all times we are saying to an industry, in a psychological sense, that there is not the same need to export. The Government's action may be interpreted as saying that there is not the same need for research. I suggest that there is. I ask again—was not it possible, whilst releasing these firms from what was an obligation, perhaps a burden on them, to have reached an agreement that they should make some token contribution?

§ Mr. William Shepherd (Cheadle)
I support my hon. and learned Friend the Parliamentary Secretary in what is being done. One really does not gain strength by having these marginal contributors to these compulsory levies. In fact, the very reverse is true, and in some industries I know, the marginal contributor, who often has a difficult task in the industry, does a great deal in spreading disaffection. I am quite satisfied that removing him at a very small financial loss represents a very considerable gain in the strength of the support for the scheme.
161 The right hon. Member for Rochester and Chatham (Mr. Bottomley) is worried about export promotion, but really this industry is doing magnificiently. I only wish that all industries would do as well, particularly other textile industries. There is really nothing that this industry can do in that respect which it is leaving undone, and the same can be said about scientific research. I do not know whether the right hon. Gentleman has seen the research that is going on, but one really cannot say that more ought to be done in that field. I think that he is wrong this time, and that the getting rid of some of these rather reluctant contributors will strengthen rather than weaken the scheme.