COTTON INDUSTRY

HC Deb 30 June 1958 vol 590 cc878-1012

3.31 p.m.

Mr. Harold Wilson (Huyton)

This is the first full debate on the cotton industry that we have had for well over three years. Apart from debates on Finance Bill Amendments proposing the restoration of investment allowances for cotton, there has not been a general debate on the industry since 9th March, 1955. I think I may claim, therefore, that the Opposition have shown the very greatest restraint—as has the cotton industry—in the conditions that we have been facing. The reason is that there has been a general desire in the industry to produce a solution to its problems on an industry-wide basis, and that both sides of the industry have been co-operating equally to secure that achievement.

Frankly, however, the situation has now grown too urgent for us to leave it any longer. For four years the industry has been slowly bleeding to death, and the Government have rejected or ignored all appeals for help. I must remind the Committee—and those members of the Front Bench who have been listening—that it is practically four years since the Cotton Board appealed to the then President of the Board of Trade—the right hon. Member for Monmouth (Mr. P. Thorneycroft)—as a matter of urgency. It was on 8th July, 1954.

In that year things were getting serious. Imports from Asia in 1954 rose to a level of 236 million yards of woven grey cloth, compared with only 76 million yards in 1953. That was a very big increase—more than trebling in a single year. That was why the Cotton Board went to see the then President of the Board of Trade, although it must have realised what a futile proceeding it was. The right hon. Gentleman said that Lancashire was squealing before she had been hurt, and in answer to a Question in the House he dismissed this very big increase in imports as "a slight increase."

That was four years ago, and I challenge the present President of the Board of Trade—who has been just as useless on this subject as his predecessor, if that is possible—to tell the Committee what, after four years, the Government have done. I challenge them to tell us one thing that the Government have done for the industry in all that period—apart from two points that I will give them: first, the Purchase Tax concession of April, 1955, which we forced upon the then President of the Board of Trade, now the Lord Privy Seal. [HON. MEMBERS: "Oh."] I do not think that anyone will deny that, least of all the Lord Privy Seal, because he refused to do it in his April, 1955, Budget, and when we tabled a Motion upon the subject he said that it would be dishonest to give way to pressure. But two days later he did give way to pressure, so we may claim to have forced it upon him, however dishonest he may have thought it. The other point I give the Government was their decision, a few months ago, to put controls on imports of cloth from China—although whether that was to please Lancashire or the State Department, I am not quite sure.

I want to give the Government the dates, to remind them what a long time it has been. We had this high-level Cotton Board delegation in July, 1954. In December, 1954, the first suggestion was made that we should have negotiations to secure a voluntary restriction on exports by the countries principally affected—and at that time India was the chief country. That suggestion was made in a leading article in the Manchester Guardian, in December, 1954.

In January, 1955, those of my hon. Friends who represent Lancashire and Cheshire constituencies met a delegation from the Lancashire cotton trade unions which came to London and stressed the extreme urgency of the problem that we were facing, and in February hon. Members on this side of the Committee announced their plan for regulating imports and dealing with any which were the subject or product of unfair competition, such as the subsidising of prices for raw cotton. Looking back over the four years, we see that that has been the only plan produced by any party. We have had nothing from the Government.

In March, 1955, the Cotton Board went to see the then Prime Minister, the right hon. Member for Woodford (Sir W. Churchill), but in April, his successor, Sir Anthony Eden—who had just become Prime Minister—turned the Board down and said that nothing could be done. That was more than three years ago, and still nothing has been done by the Government, despite a clear pledge from them, made by the right hon. Member for Monmouth in the debate on 9th March, and the fact that a Resolution was passed by the House including that pledge.

I invite the Committee to look at the figures of imports of grey cloth. I do not want to weary the Committee with too many figures, but these are too startling to be ignored. I must preface them by pointing out that they exclude processed cloth of any description and also made-up garments, the import of which is rapidly increasing. In 1953, the grey cloth imported amounted to 76 million yards; in 1954, it was 236 million yards; in 1955, it was 268 million yards; in 1956, it was again 268 million yards; and in 1957, it was 372 million yards. In the first five months of this year imports have been running at about the same rate as in the same period last year.

That is serious enough for the industry, in all conscience, as I am sure hon. Members on both sides of the Committee will agree, but the urgency of the present situation is that this is happening at a time when there has been a sharp reduction of exports and a recession in home demand, with stocks piling up. Since we last debated the industry the export record has grown steadily worse. In 1954, we used to have to remind the right hon. Member for Monmouth that exports of cotton, under his stewardship, were lower than at any time since figures of cotton exports were first collected by the Board of Trade, under the famous Mr. G. R. Porter, in 1840. Since then they have fallen by a further 25 per cent. As I say, combined with that we have these heavy imports and a present recession in the textile demand.

This has meant the closure of many mills. The Minister of State, Board of Trade, gave us the figures a few days ago. Fifteen mills closed in 1954; 90 closed in 1955; 96 in 1956; 60 in 1957; and 46 in the first five months of this year. As we know, since the beginning of this month still more have closed. These figures may seem remote, but anyone who travels in Lancashire, for example, from Manchester to Oldham or in any direction from Manchester, can see that many of these mills, the product of some of Lancashire's most confident periods of expansion, just after 1900 or even just after the First World War, have closed.

The tragedy is that some of the most recent closures, as among mills closing this month, is that they are among the most modern, highly efficient and highly equipped mills imaginable. It is all very well for hon. Members not from textile districts to say, "Of course, Lancashire has 'had it'. Many of these are old mills which failed to re-equip when they could." I can assure hon. Gentlemen that some of us have been extremely critical of same of the mills at the time when they should have been re-equipping, and no one pressed them harder than Sir Stafford Cripps. The plain fact is that mills that have been re-equipped since the war, and during the last five or six years, have gone under in the same fashion to this very serious attack from abroad. It is no good anyone saying that Lancashire could avoid this problem if it were more efficient and productive.

From the figures I have given we see that 307 mills have been closed in less than four and a half years and that more than 250 of them have been closed since we last debated the subject in the House. It would be interesting to see how many mills were closed when this party was in charge of the cotton industry. On one occasion I went, as my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) will recall, to the most extraordinary lengths to stop one mill from going on short-time for a fortnight. Since then, we have read of huge modern mills closing. We read it almost every week in the Press.

The reason why we went to great lengths to avoid even temporary unemployment and short-time working is that we really believed in the drive for increased productivity and redeployment in the cotton industry. We knew that it would be an almost fatal blow to that drive for redeployment if unemployment and short-time working were to occur and were to revive memories of the bad old days in Lancashire.

What about the numbers employed? In June, 1951, they were 318,900—or 319,000 in round figures. In June, 1954, the number was 291,000 and in March, 1958, 240,800. In other words, there has been a loss of 78,000 workers from the industry since the present Government came to power. The industry has fallen, in terms of numbers employed, by almost a quarter. This does not allow for the unemployed who are on short-time. We have lost 50,000 in the period of rather less than four years since the Cotton Board appealed to the Government as a matter of urgency.

These are grim figures at a time of what is generally supposed to be full employment. This is, as everybody in Lancashire knows, Tory freedom working in one more industry. Government supporters may say, "At any rate, the unemployment figures are not very high". They show 17,000 registered as wholly unemployed or temporarily stopped, and last month 22,000 were registered as on short-time at the last date from which figures are available. What we know is that the figures do not tell a part of the story. Many of the men who are unemployed find work in other industries. There is no opportunity for many of the older workers to find re-employment, so they just retire from industry altogether. The same is true of the women workers. A very large number of them would work in the cotton industry at the mill round the corner, but they just will not or cannot travel four or five miles to the engineering shop or some other light industry some distance away when their mill closes.

I wonder whether Government supporters realise that whole areas are declining. The cotton towns are beginning to repeat the tragedy of the pre-war depressed areas. There is loss of population to other areas and above all—this is a most serious thing—young people are drifting away because there is no future there for them. There is waste of social capital. There are even houses standing empty in some of the cotton towns when, as we know, in most areas there is a shortage of houses.

Not long ago, my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) invited me to go to his constituency and address a meeting on the cotton industry. We are often told that the days of public meetings are over, but my hon. Friend will confirm that nearly 2,000 people turned up at that meeting that night because of their concern about the future of their industry.

If my hon. Friend the Member for Nelson and Colne catches your eye, Mr. Deputy-Speaker, he will no doubt tell us that when we go to an area like his constituency we see empty houses, evidence of depopulation and of no future for the young people in the area. Although this part of Lancashire was scheduled by the then President of the Board of Trade many years ago as a Development Area, that remained an empty gesture because nothing has been done for it. That has been simply a broken pledge.

I remember going to my hon. Friend's constituency, when I was at the Board of Trade, and appealing for more people to go into the industry. That was Government policy. We said "Britain's bread hangs by Lancashire's thread". We made an appeal to young school-leavers to enter the cotton industry, and we gave them the undertaking that our Government and any future Government would look after the industry and would not let the workers down as their fathers and mothers had been let down. That pledge has been utterly betrayed by the present Government.

I suggest to the President of the Board of Trade that he go to Nelson and Colne, the Rossendale Valley and other cotton towns and see things for himself. Frankly, I think it would do him far more good than some of the joy-rides he goes on, philandering with Fascists. Let him go to some of the cotton towns and see what Tory freedom has brought them in this past few years.

Only this morning, I received a letter from a senior official of a mill in Rochdale. I would like to read two or three sentences from it. Talking about the immediate, present position, he says: I don't suppose there is a mill in Rochdale that can see a fortnight ahead. We are just hoping and hoping that something will turn up. Stocks are piling up and up. We could all close down for a month if we paid any attention to our order books. Something must be done at once for our industry or it will collapse. Then the people of this country will be at the mercy of the foreigner and in the long run prices can get out of hand. I only wish one of the Cabinet represented a Lancashire constituency. Perhaps something would be done. I doubt even that. He goes on to say: As you know the manufacturing side of the cotton trade consists of small and in the most instances family businesses. Rather than lose all their capital they are closing down. It is a natural thing to do. The closures are coming at such an alarming rate that we the spinning side are over-producing. Being larger units and limited companies we are holding on. One of the most serious things is this big pile-up on the spinning side. The Manchester Guardian drew attention to the fact that on the fine spinning and doubling side of the industry these tragedies are taking place whereas any theoretical observer would have said a few years ago that it could hope to survive whatever might happen to the rest of the industry.

What is the solution? I am not suggesting that all that needs to be done is to deal with the problem of imports and Lancashire's future will then be assured. In the long-term, Lancashire's future depends upon the efforts of Lancashire people themselves, on the steps that both sides of the industry can take to increase efficiency and modernisation and to employ productive resources in those products in which Lancashire can and still does lead the world.

I do not intend to weary the Committee with the various proposals that might be made in this connection. I have set them out at some length in "Plan for Cotton", which I was asked to prepare for the cotton trade unions.

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

Where can that document be obtained?

Mr. Wilson

I know that copies are available at the Weavers' Office in Darwen, also at the Labour Party bookshop and, I think, at the Conservative Party Central Office as well. The Parliamentary Secretary to the Board of Trade has a copy because, on my representation, copies were sent to all hon. Members representing Lancashire and Cheshire constituencies.

I shall not go into all the measures to raise efficiency in production, marketing, sales and procurement of raw material which are outlined in the document. I was amused to hear that when the trade unions went to see the President of the Board of Trade about this document all he could say to them was, "Can you tell me which recommendations are supported by both sides of the industry?"

After the Government have sat there for seven years without producing a single idea for the industry, all he could do was quite pathetically to ask what agreement had been reached on both sides of the industry on a plan produced by Her Majesty's Opposition. I do not know whether he wants us to negotiate an agreement with both sides in order to get him something to legislate about.

Obviously, a great deal needs to be done. It is right that we should pay tribute to the many firms which, in very difficult conditions in the past few years, to their great credit have pressed on with imaginative investment schemes and modernisation programmes. After the rather poor record of investing in past years it was said—unkindly, but not altogether unfairly—that the cotton industry never modernised itself because in good times it did not need to do so and in bad times it could not afford to do so. In view of that record and that gibe we should pay tribute to those firms which have so imaginatively mechanised and modernised themselves in recent years, but we cannot expect that effort while the industry is bleeding to death.

As I have reminded the Committee, the tragedy is that some of the most recent closures of mills are those which are among the most modern in the world. A long-term job of rehabilitation is essential, but the bleeding has to be stopped first. That is what we on this side of the Committee want to stress first and foremost in this debate.

I think I can claim that we made that the theme of the debate in March, 1955, when I said: But all our hopes for re-equipment, modernisation, mechanization, redeployment and all these other things which are essential to increased productivity in the industry will receive a great setback if something is not done immediately about the problem of Indian imports. There can never be a progressive attitude in Lancashire when men on both sides of the industry are dominated by the fear of an approaching slump."—[OFFICIAL REPORT, 9th March, 1955; Vol. 538, c. 463.] It was only an approaching slump then but now the slump has been with us for four years. What do the Government intend to do? I must remind the Committee that in the debate on 9th March, 1955, the then President of the Board of Trade moved an Amendment to our Motion of censure. That Amendment called on the House to approve the declared intention of Her Majesty's Government to take such safeguarding action on imports as may prove to be essential and appropriate having regard to the position of the United Kingdom as a world-wide trading nation and went on to welcome the steps which Her Majesty's Government have taken to obtain from the Cotton Board their detailed views of the problems and their specific proposals for action."—[OFFICIAL REPORT, 9th March, 1955; Vol. 538, c. 464.] The Amendment referred to the declared intention of Her Majesty's Government to take such safeguarding action on imports as may prove to be essential and appropriate". In view of that declared intention…to take safeguarding action on imports we have a right to ask the President of the Board of Trade what the Government have done in fulfilment of that pledge, made more than three years ago. Of course, they have encouraged voluntary negotiations.

In March, the President of the Board of Trade sent a high official to Hong Kong. I think I can claim that the way for his visit had been prepared by my hon. Friend the Member for Farnworth (Mr. Thornton) and myself, when we went to Hong Kong in February. When some of these problems were discussed very frankly for the first time with leading textile interests there, it became very clear that the Government had not been very clear in putting Britain's case across to those textile interests. I hope that today the President of the Board of Trade will give us a full account of how those negotiations now stand.

I understand India and Pakistan are willing to agree to a voluntary limitation on the understanding that Hong Kong is included. Obviously, India and Pakistan could not agree to hold down their exports to this country if the position were to be open ended for Hong Kong. We understand that Hong Kong, with the utmost reluctance, would accept a ceiling on exports, provided it was limited to cloth and was not to be a precedent for other goods about which complaint has been made, such as rubber footwear, gloves and so on.

There the matter rests. I hope that the right hon. Gentleman will tell the Committee what he has said in Lancashire during the past few weeks. There are stories circulating—quite specific stories, there cannot be any doubt about them—that many firms in Lancashire are working on voluntary schemes—I do not mean schemes for reducing exports—by which an unofficial tariff or levy is to be placed on imported cotton goods from Asia by the textile finishing trade in this country.

That is the proposal which is being very much canvassed and their understanding is that the right hon. Gentleman has said that the Government cannot do anything for them, but they must do it voluntarily. He may have said that there must be a voluntary agreement with the textile industries of the Asian countries concerned, but some people, including highly placed people, in Lancashire have interpreted his phrase as meaning that if the Government will not introduce quotas or tariffs the industry must introduce a voluntary system of levies, tariffs and quotas.

I hope that the right hon. Gentleman will utterly repudiate the statement, because it is far advanced and it is an utterly fantastic proposal. The first thing that the right hon. Gentleman would have to do if that took place would be to register it under the Restrictive Trade Practices Act. It would break down, because a lot of goods would be processed in Hong Kong instead of in this country, or they would be sent to Germany, Belgium and other countries and dealt with there. I am glad to see from the nodding of the head of the right hon. Gentleman that he is not himself a party to those back door negotiations. I hope that he will make it quite clear that he will repudiate any proposition on those lines if it stems from his original words. I am glad that that is the position.

We made clear our position three years ago and it was repeated in the document to which I have referred. Our plan was for a centralised import commission for woven piece goods, and yarn also should that be necessary. That proposal was turned down by the right hon. Member for Monmouth without his coming forward with any alternative proposal. The Government cannot say that this is contrary to G.A.T.T., or any international agreement, because they have been doing this in the case of the jute industry for six years. If the Government were to announce their willingness to introduce this scheme they would not have to wait very long before the prospect of its introduction—or, if hon. Members like, fear of its introduction—led to an agreement to a voluntary scheme on the part of the countries concerned, including Hong Kong.

When I was in Hong Kong, in February, I felt that it was because of the publicity given to the Labour Party's proposals for a Government import commission that the textile interests there were more willing to contemplate a voluntary restriction. It may be a hard thing to say, but sometimes only when one has a sanction or a scheme are people willing to agree to a voluntary proposal of the kind that has been canvassed.

As I have said, I had some discussions in Hong Kong in February. We all recognise the problem of finding employment and a livelihood for Hong Kong's teeming population. We recognise the political as well as the social necessity of maintaining full employment in that Colony. As we all know, the Hong Kong textile industry is a mushroom industry, built on refugee capital and refugee labour, and in far too many of its establishments there are labour conditions which we ought not to tolerate in a Crown Colony, irrespective of the effect on any of our home industries. Even if those conditions were not involving Lancashire in the crisis which I have been describing, we, as Members of this House, with our trusteeship and our responsibility for Hong Kong, ought not to tolerate those conditions of labour which have been reported to the House by my hon. Friend the Member for Farnworth.

When I met representatives of the textile firms I felt that they would be prepared, with a great deal of reluctance—it would not be easy—to accept a ceiling based perhaps on the average exports of the past three years, but it will be essential—and this is something they have not yet accepted—to include made-up goods on a yardage basis in any ceiling which is worked out. As we all know, all the time more and more of these made-up goods, clothing and even furnishing fabrics, are coming into this country from Asia.

The present position is based on fear and uncertainty. The Hong Kong interests fear that this House is about to impose quotas cutting down their exports almost to nothing. The Lancashire interests fear the open-ended nature of the trade and the dangers of further expansion even above the present figure. In these circumstances, where there are those two fears from opposite directions, I think that a settlement would be possible.

It is impossible, however, to debate the problem this afternoon without reference to labour conditions in Hong Kong. I am glad that the Secretary of State for the Colonies has joined his junior colleague on the Front Bench. As the Committee knows, my hon. Friend the Member for Farnworth spent several weeks in Asia on a mission for the International Confederation of Free Trade Unions earlier this year. In an Adjournment debate in the House just before the Whitsun Recess he gave some alarming details about labour conditions in Hong Kong, details which were not queried or challenged by the Government spokesman in that debate and have not been challenged at any other time. He told us that there are 19 new mills in Hong Kong of which nine operate on three shifts of eight hours each, which is quite satisfactory by any standards in that context. The other 10 mills operate on two shifts of 12 hours each. In addition, there are 149 small weaving mills, some of these relatively old, and nearly all operating on a two 12-hour shift system. My hon. Friend gave his authority for those statements. They were based on the Annual Report of the Hong Kong Commissioner of Labour. My hon. Friend went on to say that These 12-hour shifts are worked in a large number of mills in Hong Kong. Worse than that, it is not 12 hours a day for six days per week but 12 hours per day for seven days per week. These mills operate all the year round, the only holidays most of the workers get being four days holiday at Chinese New Year."—[OFFICIAL. REPORT, 23rd May, 1958; Vol. 588, c. 1744.] My hon. Friend went on to explain that, theoretically, they got a day off every couple of weeks, but that in most cases they were under very heavy pressure to work on that day in return for double wages. I hope, Sir Charles, that my hon. Friend is able to catch your eye and to give to the Committee more information on this subject, because it was his speech which brought these facts to the attention of the House of Commons.

There can be no doubt in any part of the Committee that this problem needs to be tackled urgently by executive action in Hong Kong. I am sure that no hon. Member in any part of the Committee can defend women working for 12 and 13 hours a day. We cannot defend women, or men for that matter, working a seven-day week. We cannot defend the figure which my hon. Friend gave, which he said was probably an understatement, of an average working week of 65 hours, because the conditions existing in Hong Kong at present are conditions which we made illegal in this country more than a century ago.

A serious point about them is that they are not only bad by our standards but, on the basis of my hon. Friend's report, they are worse than any other standards in any other country in Asia except, of course, South Korea. It can be precious little satisfaction to the Secretary of State for the Colonies to say that the conditions which he has to defend are in any case equalled by those in South Korea.

Mr. Philip Bell (Bolton, East)

I am not trying to obstruct the right hon. Gentleman because I, too, feel strongly about this, but I have the report here of a visit to Burma, Hong Kong and Japan. I am sure that the right hon. Member is familiar with it; it was directed and reported upon by Mr. Henniker Heaton. This was in 1955. He devoted a whole paragraph to these conditions, and he does not suggest that they are as bad as the right hon. Member has said. Have they deteriorated in the last three years?

Mr. Wilson

I do not think that Mr. Henniker Heaton would deny the figures which I have given in view of the article by him in the Financial Times this morning, in which he did not attempt to challenge the figures given by my hon. Friend the Member for Farnworth, although he suggested that they referred to a smaller proportion of the industry than my hon. Friend suggests.

Mr. Ernest Thornton (Farnworth)

There has been some subtlety in Hong Kong. It has been the practice, when visitors arrive, for the mill owners to show them the nine new mills which work three eight-hour shifts. It is reasonable to assume from this that eight-hour shift working is the practice, whereas, in fact, it is the exception rather than the rule.

Mr. Wilson

I am sure that my hon. Friend's report, which was prepared for the International Confederation of Free Trade Unions, will command great authority. It is significant that in view of the fact that he sent his report to the Colonial Secretary in March, no attempt was made by the Government spokesman in the debate on 23rd May to suggest that any of my hon. Friend's facts or conclusions were in any way wrong.

What do we say should be done? First, we say to the Government that they should accept our proposal for a Government buying commission to regulate imports. I should be out of order if I pursued that very far, because it would require legislation and I cannot go into it in detail. Secondly, we say, go to the countries concerned. I suggest that we should send a Minister to Hong Kong to speak with the authority of this House, armed with the proposal for a Government buying commission, and to negotiate an agreement. Having announced the intention to introduce this method of regulating imports, the Government will find it not too difficult to negotiate a voluntary agreement. Thirdly, they should deal with the problem of labour conditions in Hong Kong. The Secretary of State has told us that steps are being taken and that a Bill is being drafted. I should again be out of order if I debated that, since it involves legislation in Hong Kong.

I want to make it clear that Lancashire and the cotton unions are not saying, and never have said, "We will not have any imports from countries with lower labour standards than ours." I have heard Lancashire trade union leaders say many times that lower Indian wages, for example, are not of themselves a threat, because Indian productivity is so much lower, and the problem of Indian competition in the main has been one of raw material prices. If we were to say that it is right in all circumstances to place tariffs and quotas on goods purchased by countries with lower labour standards than our own, obviously we could not honestly protest against tariffs put on our exports by the United States and Canada. That is not the question of labour conditions here. The special problem of Hong Kong is one of abnormally depressed labour conditions, amounting in many cases to sheer exploitation and to conditions and hours such as we should not dream of tolerating in this country—conditions not only far below our standards but far below those of the rest of Asia, as my hon. Friend made clear.

Another point which I wish to underline in relation to these Hong Kong standards was again pointed out by my hon. Friend and is very clear from the report of the Labour Commissioner in Hong Kong. It is that the labour conditions in the textile mills are far worse than in other Hong Kong industries such as the dockyards, printing, and footwear. That is why we say that action by both the President of the Board of Trade and the Colonial Secretary is necessary.

The other thing that I want to make clear is that we, as an Opposition, have never called for either tariffs or quotas. We recognise all the difficulties, not to mention the dangers of retaliation against our own export industries. Nevertheless, when some of those other export industries smugly criticise Lancashire, let them realise that some of the most successful of our export industries, especially the motor car industry, enjoy a very high degree of protection in our own home market. It therefore does not lie in the mouths of some of those industries so smugly to criticise Lancashire for the state that we are facing.

It is a historical accident that protection against imports of manufactures from the Commonwealth is so difficult to introduce, simply because, when the Ottawa Agreements were negotiated, when the agreements with India and others were negotiated, imports of manufactured goods from India, Pakistan and Hong Kong were, frankly, never contemplated as a possibility. That is why Lancashire is in so very much worse a position than is the motor industry and other export industries.

We believe that the problem can be solved, and where the Government have failed, we put forward, more than three years ago, our own solution. It is the Government's refusal on, as I believe, doctrinaire political grounds to accept that proposal that has led to the closure of 300 mills and the loss of 50,000 workers; that has led to this depopulation and social decline of whole areas. We therefore challenge the Government either to accept our scheme or, if they reject that, not to seek a way out by a pledge to introduce measures that they have no intention of introducing, but to produce a scheme of their own—very late though it may be—which is adequate to stop the rot in this great industry, and to create the conditions in which it can go forward with those long-delayed plans of reorganisation and modernisation which, in the long run, will be Lancashire's only guarantee of survival and security.

4.12 p.m.

The President of the Board of Trade (Sir David Eccles)

The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) reminded us that we have not discussed cotton fully in the House for three years. I agree with him that it is time we did, because cotton is the gravest problem we have in the private sector of the economy. There is not any other industry that is undergoing such a painful and drastic readjustment as are the spinning and weaving sections of this, Lancashire's traditional undertaking.

I could, perhaps, very quickly give the full picture by going back rather far, and then coming forward. If one goes back to 1913, which was the peak year in the history of the British textile industry, we find that our production then was 8,000 million sq. yds.; our exports were 7,000 million sq. yds., and our retained imports were negligible. If we compare those figures with those of the latest year for which we have full results, 1957, we find our production to be, not 8,000 million, but 1,700 million sq. yds We find our exports of Lancashire woven cloth to be 285 million sq. yds. and, if we add in reexports, 455 million sq. yds. That is one-twentieth of the old figure. In addition, we find that retained imports amount to 250 million sq. yds.

We can see from those figures that it has been the stupendous decline in exports that has revolutionised the scale and the nature of the Lancashire industry. But the export markets have been lost as a result of two world wars, and in ways that do not excite the same indignation as does the current loss of the home market due to competition from cheap imports. Today, as the right hon. Gentleman has said, Lancashire cannot see where this invasion of the home market is to end, and the industry is asking us for a measure of stability. The Government support that demand, as the Committee will see when I give the latest information on what has been done to secure voluntary and effective checks on the increase of retained imports.

I know that some of the leaders in the Lancashire cotton industry feel that the Board of Trade does not appreciate their difficulties. I assure them that that is not so. We watch with real anxiety the cotton industry, with its proud record, suffering these severe and continuous amputations but, like the rest of the Committee, we are thankful that the younger operatives have so easily found work in other growing industries. The unemployment figures in what is loosely called the Lancashire cotton belt have been consistently below the national average, but we know that the older workers and, especially, the women, do not find it so easy to change their jobs when a mill closes. We know, also, that there is no alternative work near some of the mills.

We shall shortly, we hope, have powers to help in cases where local unemployment is seen to be likely and persistent. If the Bill that has gone from this House to the other place becomes law, we shall have the power to assist a mill to adapt its premises or to change to the manufacture of other goods, and we shall use those powers.

We also know that those who have invested in cotton have suffered severe losses. The mayors of six of the cotton towns explained to me how the decline in the spinning and weaving sections of the industry created difficulties for local government. Indeed, that must be so, in those areas where other industry is not expanding, where people move away or, as the right hon. Gentleman said, where premises become empty and rateable value goes down.

Then, of course, those in this House who represent the cotton industry or, indeed, represent any interests that are suffering losses, whether they are financial losses or human losses, naturally expect the Government to do all that is possible to soften the blows and to stabilise the position. I should like to thank the Lancashire Members for two things: first, for the trouble that they have always taken to inform the Board of Trade about what is actually happening in the cotton industry; and, secondly, for all their understanding of what I have already called the most difficult industrial problem that we have to face. If we are not taking today the action that the Lancashire Members would like us to take, we cannot plead ignorance. We really do know what is happening.

I should also like to pay a tribute to the leaders of the industry. I believe that hon. Gentlemen who represent Lancashire would agree that Lord Rochdale, Sir Cuthbert Clegg, and the members of the Cotton Board have given wise, patient and constructive leadership. I do not forget the trade union leaders, who have been troubled by the effect upon their membership of the rapid decline in their industry.

Now I want to describe the situation as I see it. We have to recognise that the cotton textile industry is in grave difficulties in all industrialised countries. The causes are everywhere the same. First, came the immense increase in spinning and weaving capacity in so many countries which had, before, been importers of piece goods. I am sure that every hon. Member who has been abroad has seen one of the post-war, modern cotton mills, equipped with British machinery, and operated by intelligent but not always highly-paid local labour.

Only a few weeks ago I visited such a spinning mill in Brazil, a subsidiary of a great British firm. There, I saw the finest and newest machines made in Lancashire, three large spinning frames operated by one Brazilian girl, the product coming out of the works cheap and protected by a tariff. That can be seen in almost every developing country in the world.

Dr. Edith Summerskill (Warrington)

Did the right hon. Gentleman find out what wage was received by the woman working in that factory?

Sir D. Eccles

I asked that question. It depends upon the rate of exchange. [Laughter.] Hon. Members who know anything about Brazil will know that there are several rates of exchange, but at the most unfavourable rate of exchange I reckon that at a rate of 380 cruzeiros to the£, what she earned is equal to about£3 15s. a week. Three months before, that would have been over£5 a week. I would add that this is a subsidiary of J. & P. Coats, with extremely good Labour relations.

Mr. J. T. Price (Westhoughton)

The right hon. Gentleman has made a serious point. Because of trading difficulties with Brazil there is virtually no trade between that country and Britain in the type of goods which are the subject of today's debate. If a similar situation existed in Hong Kong the clamour which has gone up from Lancashire and which we are voicing in the Committee today would not have been so great. It is inappropriate to quote the worst examples. We are now meeting competition from Portugal, one of the minor backward countries in the world, because we have neglected to consider Lancashire's case. I would not have thought that Brazil was a good example to quote today.

Sir D. Eccles

The fact that Brazil supplies her own requirements and exports a little only shows that there is a different picture today compared with thirty years ago, when we were supplying cotton goods to her. Cotton has had to compete with man-made fibres the development of which goes on from year to year. That has not been wholly bad Some of those fibres can be combined with cotton, and the great cotton firms are doing well out of that combination. I believe that there is more to come in that direction.

Thirdly, although the purchasing power of the world's consumers has been rising, they have not been spending in proportion more on textiles. It seems that they prefer to buy electrical goods for their homes, or a car, or to spend more on entertainment. The result is that despite full employment, the increase in the demand for textiles has not been as great as one would wish or would expect. Standards of taste are rising, and I believe that we shall see a steady increase in the demand for high-quality and well-designed fabrics. There are signs of that happening already, and this is a movement which will help the textile industries in the older industrialised countries where they can afford, as we can, to do more research and to keep ahead in these new developments. I will return to that in a moment.

Lastly, as the right hon. Gentleman said, we have had a recession in world trade this year. The year 1957 was surprisingly good for the production of textiles in the world. In fact, towards the end of the year more textiles were coming onto the market than the market could absorb, so that in 1958 we find a decline in output. We find stocks to be worked off everywhere, and import restrictions have been imposed by quite a number of countries. From all those long-term and short-term changes the Lancashire industry has suffered more than any other in the world, because it had more to lose—that is because it started with by far the biggest export trade.

Coming nearer to our own time, 1951 was the peak year in the Lancashire cotton industry after the war. I think that it is natural that it should be so, because from that year onwards Japan came back strongly into the market and, even more serious, new cotton mills in the Commonwealth were opened in increasing numbers. Our worst losses in exports in the last seven years have been in Australia, South Africa and West Africa.

Over the same period the effect on employment has been roughly as the right hon. Gentleman described it. I would only say that though there has been this very large and serious decline in spinning and weaving, employment in finishing has been almost steady. I should like the Committee to have the latest and not at all agreeable facts; 14th June, I believe, is the date for this figure. There is now in the North-West region short time among about 13 per cent. of the workers in the textile industry. None the less, it still remains true that unemployment in Lancashire is well below the national average. Even if we take weaving and spinning, in May it was 1.5 per cent. or 4,400 workers, not 17,000 which the right hon. Gentleman quoted probably for the whole region and all industries.

Mr. Leslie Hale (Oldham, West)

This is an important point. The right hon. Gentleman ought to appreciate that if a skilled worker leaves the cotton industry he is an unskilled labourer somewhere else. There is little satisfaction in the fact that out of 70,000 men 60,000 are doing casual labour, or something like that. That is Lancashire's bitter grievance.

Sir D. Eccles

That is not so. If one takes the figures for men and women in work in Lancashire over this period—that is, in engineering and other manufacturing industries as well as in the distributive trades—one finds that there are more people in work now than there were seven years ago, in spite of the 100,000 who have left the cotton industry.

Mr. Sydney Silverman (Nelson and Colne)

Fantastically untrue.

Sir D. Eccles

There is no use the hon. Gentleman saying, "Fantastically untrue". These figures are well-known to anyone who studies the facts.

Mr. Silverman

rose——

Sir D. Eccles

I said that the increase in employment in the last seven years in engineering and other manufacturing and distributive industries is over 100,000, showing that the amount of work in Lancashire has increased and not decreased.

Mr. H. Wilson

The right hon. Gentleman is wrong about the unemployed. Would he repeat the figures that he quoted?

Sir D. Eccles

The figure which I gave was the May figure for full-time unemployment in spinning and weaving.

Mr. Silverman

What in the world has that got to do with it?

Sir D. Eccles

Only that my figure is right and the right hon. Gentleman's figure is wrong.

Mr. Wilson

I am quoting from the Ministry of Labour Gazette, published by the Ministry of Labour. It is true that I gave the figures of unemployed, but not wholly unemployed. In this industrial analysis the numbers of unemployed are quoted as 12,185 for cotton spinning and doubling, 5,458 for cotton weaving, making a total of about 17,500. I said that this is the number unemployed; I did not say "wholly unemployed".

No one knows better than the Minister of Labour that these figures greatly understate the real unemployment situation in the industry. The Ministry of Labour Gazette, before the war, used to have a section on textiles every month in which it was stated, "These figures cannot take account of all the forms of under-employment in the industry."

Sir D. Eccles

I agree that the figures understate in one respect; that is, that quite often when women leave spinning and weaving they retire and they do not register as unemployed. I agree that that has an effect which is not measured in those figures.

The fact remains that there has been a greater expansion of employment in Lancashire than the contraction in the textile industry. I should like the Committee to realise that we realise that because the great majority of workers who have left the cotton industry have found other employment, that does not mean that there have been no human suffering or serious losses.

One very difficult problem which always arises when an industry is declining, is, as the right hon. Gentleman said, that the labour force becomes unbalanced because it is not possible to attract young people into it. That we are aware of, and we realise that it is very serious. It is one of the reasons that a period of stability in Lancashire is essential.

At the same time, one should remember, being in mind what has happened, that when a Lancashire operative loses his or her job he or she can nearly always find another fairly quickly, whereas if a cotton operative in India, Pakistan or Hong Kong loses his job he and his family come near to starvation. This brings me to the problem of the import of textiles.

It is quite untrue to suggest that Lancashire enjoys no protection. Our tariff against non-Commonwealth textiles is fairly stiff; it is 17½per cent. against piece goods and about 20 per cent. against made-up goods. Further, we have imposed stringent quotas on textiles originating in Japan and China, and we give very small, merely token quotas for other Communist countries.

It cannot be said that we have done nothing by direct action to protect Lancashire. As soon as I saw that imports of grey cloth from China were beginning to make an impression on this market, I put on a quota at once. That was done in January last. I responded to the very first appeal for help which was made. This shows that the Government are ready to protect Lancashire by direct action when the principle of Commonwealth freedom of entry is not at stake.

Hon. Gentlemen opposite might reflect on this when they press us, as they do, for increased trade with China. It is quite clear that it would be with cotton textiles that China would be most likely to find the finance to buy more from the non-Communist world. However, we all know that it is the duty-free imports from India, Pakistan and Hong Kong which are eating into our domestic market. As recently as 1954, retained imports of textiles amounted to about 3 per cent. of home consumption. I have not the accurate figure, but I estimate that today it must be something over 15 per cent. This is a serious deterioration, and we are resolved to see it checked. We are trying to achieve a stable position by supporting the Cotton Board in its negotiations for voluntary three-year ceilings on imports from India, Pakistan and Hong Kong.

I will not trouble the Committee with all the details of these long negotiations, but I will say something because the right hon. Gentleman asked me about them. At all stages we have tried to assist in bringing them to a successful conclusion. The Cotton Board would give us credit for that, I know. Last year, Sir Cuthbert Clegg led a mission to India and there came to an understanding with the Indian industry conditional upon similar arrangements being made with Pakistan and Hong Kong.

Sir Cuthbert and his associates then went to Hong Kong, where their talks failed, so the scheme broke down. We then sent my Permanent Secretary, Sir Frank Lee, to Hong Kong, where he was well received. He persuaded the Hong Kong industry to agree to renew talks with Lancashire upon conditions which have been published. After hearing Sir Frank Lee's report and consulting the Cotton Board, we asked the Indian and Pakistani Governments to encourage their industries to send representatives to London for talks with the Cotton Board. This they did last month.

Two distinguished industrialists, Mr. Kasturbai Lalbhai and Mr. Shaikh led for their two countries. Agreement was reached with India, and I had hoped to hear today that agreement had been reached with Pakistan also—unfortunately, it is still to come in, but I am very optimistic—on the figures for the three-year ceilings. Assuming that Pakistan agrees, we shall then have to go back to Hong Kong.

This time, I very much hope that the Cotton Board will succeed in reaching an agreement with the Hong Kong industry. As these negotiations are not easy, as the right hon. Gentleman himself said, I hope that nothing will be said in the debate to make it more difficult to get the Hong Kong industry to agree. The industry in Hong Kong is not particularly well organised, and we must remember, I think, that those concerned in Hong Kong are living in a very precarious part of the world.

My right hon. Friend the Paymaster-General, who will wind up the debate, will speak about labour conditions in Hong Kong, with particular reference to the very interesting remarks made by the hon. Member for Farnworth (Mr. Thornton). I want to say something about the constitutional issue only. Clearly, a Colony is in a different position from a Commonwealth country. It does not have the same liberty of action. We have a special responsibility for the Colony's welfare. If we impose restrictions on India's exports to us, India can retaliate by penalising our goods. A Colony is not in the same position because, in the last analysis, we in the House of Commons are responsible for the commercial policy of a Colony.

Again, if for reasons of straight protection—that is what it would be in the case of cotton textiles—we impose a quota on Commonwealth goods, the countries concerned can take us to G.A.T.T. and makes things very difficult for us. A Colony could not do that because we, that is to say, Her Majesty's Government at the time, represent colonial interests in G.A.T.T. It is, therefore, our duty, I submit, to seek for voluntary agreements between industries and not to impose restrictions on the export of goods from a Colony.

Other Commonwealth countries do sometimes put restrictions on exports from a British Colony, but they are not responsible for the Colony's welfare and they do not represent the Colony on international bodies. I should add that Her Majesty's Government in the United Kingdom have had many occasions to urge upon other Governments not to impose restrictions on imports from Colonial Territories. We have had some success in these representations, which mean a very great deal to the welfare of our Colonies. But who would listen to us if we ourselves broke our own obligation to afford duty-free entry to colonial products?

Although these are very strong, even overwhelming, arguments against imposing restrictions on goods of colonial origin, there are other arguments almost equally strong in relation to all Commonwealth countries. The offer of duty-free or unrestricted entry for Commonwealth goods is our side of the system of Imperial Preference. The preferential system, which is under fire today, would collapse if it were not seen to be of mutual benefit. If we shut out goods coming from the Commonwealth, we could not expect the Commonwealth to accord us preferences.

When voices are raised in Lancashire asking us, in one way or another—by tariffs, by quotas, or by the right hon. Gentleman's purchasing commission, which is only a dodge to achieve the same thing—to limit imports from the Commonwealth, they are asking us to strike at the root of the Imperial Preference system.

Mr. Douglas Jay (Battersea, North)

Surely the right hon. Gentleman would not deny that a very large number of other types of manufactured goods from the Commonwealth, including rayon, are subject to a tariff.

Sir D. Eccles

Yes. But that was understood and arranged at the time when the Ottawa Agreements were made. We have a contractual obligation to India not to impose any restrictions on duty-free goods from her. We say, on our side, that the Imperial Preference system is very much in our interest, and that if it were broken it would damage many other industries besides cotton. We are very glad to see that the Canadian Government have stated that, at the Montreal Conference, Canada will support the maintenance of the preference system. So will Her Majesty's Government. But how could we go to Montreal and make our case for maintaining mutual preferences if just before, and unilaterally, we had imposed restrictions on textiles from Asia?

Mr. H. Rhodes (Ashton-under-Lyne)

There is no difficulty, because the right hon. Gentleman has the precedent of the Canadian Government imposing tariffs on wool textiles only a fortnight ago.

Sir D. Eccles

The hon. Gentleman simply does not understand our trading system. We enjoy the very large preferential margin that Canada gives us on woollen goods only because of the duty-free system of admitting Commonwealth goods to this country.

Mr. Jay

The right hon. Gentleman knows that it is quite possible with cotton, as with many other manufactured Commonwealth imports, to have a duty on the Commonwealth products and, at the same time, have a substantial margin of preference. Why does he ignore that?

Sir D. Eccles

Because the obligations that we have not to impose new preferences will at once be contravened. We should have to raise the M.F.N. rate.

Mr. S. Silverman

Will the right hon. Gentleman give way?

Sir D. Eccles

I must get on.

I have just been giving the economic reason for preferring voluntary agreements between Commonwealth textile industries to imposing restrictions. We support that policy to the full. We have shown that we support it by telling the Governments concerned that we would be willing that the Customs and Excise should be used to police such voluntary agreements. But I am bound to say that the situation will be very bad indeed, both for us and for the Asian textile industries, if our industry cannot make these voluntary agreements.

We accept that structural change in our cotton industry is inevitable. The figures show that it has been taking place over many years, and the process is not yet at an end. But the acceptance of gradual change does not mean that we should allow a violent disruption. Indeed, the industries of India and, I hope also Pakistan, have shown that they agree with this view, because they have negotiated three-year ceilings on exports to this country.

Mr. Charles Fletcher-Cooke (Darwen)

Are those agreements dependent upon an agreement being come to with Hong Kong, or do they stand in their own right, irrespective of whether an agreement is come to with Hong Kong?

Sir D. Eccles

Naturally, the Indians and Pakistanis say, "Unless you get an agreement with Hong Kong, too, all bets are off." I was just coming to that point, but I should like to say that the understanding which has been shown by the Indian and Pakistani industries is what we expect between Commonwealth partners. We now look to the industry of Hong Kong to take the same statesmanlike view.

We want agreements, because then there will be a period of three years, the first period of three years, during which it will be possible to bring about a hopeful transformation of the Lancashire cotton industry. I use the word "transformation" deliberately, because so many new ideas are being put into production in textiles that it seems to me to be not an unfair description.

Every month one hears of new finishes, crease, water or flame-resisting new fabrics that do not need ironing, and new fabrics which are partly cotton and partly synthetic fibre. That is due to the fact that we are doing a great deal of research, both in the industry's laboratories and in the Shirley Institute, which has done so much for the industry as a whole.

Mr. James Harrison (Nottingham, North)

Will the President explain why weaving and spinning have declined substantially, yet finishing seems to be holding its own?

Sir D. Eccles

I should have thought that it is fairly clear. The import of grey cloth from Asia, in particular, is taking the place of cloth woven in Lancashire, and, therefore, the through-put of its finishers is not so much influenced.

Then there is the improvement in design. I have long taken an interest in this matter. I first came up against it in a serious way at the time of the Coronation. I was convinced then, and I still am, that if manufacturers, wholesalers and retailers will be a little braver and make modern art their ally they can win new markets all over the world. Indeed, it is happening. Last autumn, in California, there was an international exhibition of fabrics at which our fabrics won over half the medals. When I was in San Francisco, at Christmas-time, people there were delighted at the beauty and excellence of the British exhibits; and our trade in North America is increasing in the finer fabrics.

Finally, I ask the Committee to give us the chance to see these negotiations for the voluntary agreements completed without threatening to impose restrictions on Commonwealth goods. It is here that I part company with the right hon. Member for Huyton. He wants us to hold out a threat against the Commonwealth, "If you do not do this, we will do that". I suggest to the Committee that that is not the way to treat the family when we are now two-thirds of the way to making this voluntary agreement.

Mr. H. Wilson

The Government have had four years in which to carry through these negotiations. Is the right hon. Gentleman aware that the greater willingness in Hong Kong has stemmed from the fact that they know there will be a scheme of this kind in due course—after the next Election, in fact—and that that is why they are more willing to conclude a voluntary agreement? Is he further aware that the producers in Hong Kong, who are quite realistic and not sentimental, are very much moved by things said in this House?

When I was there, they were very worried indeed and were prepared to be more accommodating simply because a Question was tabled by the hon. Member for Belfast, West (Mrs. McLaughlin) calling for restrictions. Any suggestion of quotas from either side of the House tends to make them more likely to conclude a voluntary agreement.

Sir D. Eccles

The Labour Party can have what policy it wishes. Clearly, it now has the policy of ending duty-free entry from the Commonwealth.

Mr. Wilson

That is quite untrue. On that argument, would the right hon. Gentleman say whether or not the Government have ended duty-free entry from the Commonwealth for jute over the last six years?

Sir D. Eccles

We have moved a little on the jute problem. It was a scheme which we inherited and which I dislike very much. It is clear—I was certain that we should find it in the course of the debate—that there are hon. Gentlemen opposite who think that we ought here and now to impose restrictions on the Asian members of the Commonwealth.

I understand that such hon. Gentlemen may not be moved by the thought that they are striking at the root of the Imperial Preference system. They may not believe that such action would destroy much of our influence at the Montreal conference. They may not consider that we ought to look after the welfare of any Colony for whom we are trustees as though it were part of our own country.

None the less, I would advance one last argument against imposing restrictions on Commonwealth goods. There are great populations in the world today hesitating between the Western system of trade for cash and of unqualified mutual aid and the Communist system of rigorous bilateralism and political loans. If we in the free world first lend money to underdeveloped countries and then refuse to buy their goods, is not that a kind of colour bar, is that not a kind of discrimination inside the Commonwealth family?

Is it not true that the advance of science and technology helps the United Kingdom, with our better developed system of education, to keep our economy out in front; that in this age in which we live it is easier than it used to be for us to change to more complicated forms of production while our friends in Asia and Africa are raising their standards by the forms of production which, at present, are most easily within their capacity?

When we go to Montreal I shall be asking the Commonwealth to buy more British aircraft and to buy British nuclear power stations. Do hon. Members really mean me, in the same breath, to have to say, "We have just put on restrictions. We are not going to buy so many of your goods"? I claim that our policy is fully justified on strictly economic grounds. If we departed from it many industries would suffer very much.

But there is the other question. What would be the political and moral consequences of abandoning duty-free entry for Commonwealth goods? That is the great issue, and the Government feel that it cannot be disregarded. Therefore, we set our face against the imposition of restrictions, and we shall go on—and we are nearly there—to securing volutary agreements.

4.53 p.m.

Mr. H. Rhodes (Ashton-under-Lyne)

The President of the Board of Trade reminds me of "Pooh-Bah", who added verisimilitude to an otherwise unconvincing narrative. The arguments that he has deployed will, I am sure, not be supported by Lancashire Members on his side of the Committee, because they have an immediate duty to our constituents in Lancashire.

The President of the Board of Trade kept saying, "I think that we must remember", and every time he said it it was against the interests of Lancashire. I would also draw his attention, when he deploys the argument about how well we are doing in scientific research and technical education in the Lancashire cotton industry, to this morning's Manchester Guardian. Out of all the graduates who qualified in textile chemistry, all were foreigners except one. That shows what the Government have been doing to encourage people to enter the industry.

In answer to what the President of the Board of Trade said about new industries I would tell him this. He must not in any circumstances pin all his faith to prospective new industries. He has got to be looking after the old ones as well all the time.

Just before the Summer Recess last year a group of us went to the National Physical Laboratory, where they have two new electronic devices called DEUCE and ACE, which were absolutely the last word in Western electronic computers. I asked the director of the National Physical Laboratory, "By how much do you estimate we are in front of all other countries, like Japan, whose people are so skilled, and very quick at picking up ideas and putting them into practice?" We well remember the stories which used to circulate in the old days about the Japanese who came to this country and photographed every nut and bolt on a piece of textile machinery. What did the Director reply? He said, "We have got about three years' advance."

So may I say that we cannot plan an economy on the basis of a three years' scientific and technical advance in the hope that that will replace conventional industries? May I supplement what my right hon. Friend the Member for Huyton (Mr. H. Wilson) has said and remind the President of the Board of Trade that the Lancashire cotton industry is part of the whole textile industry? It is not alone in this recession. It is not just the Lancashire cotton industry which is suffering at present, but the wool industry, too. When the right hon. Gentleman gets the figures for overseas exports, particularly to the North American market, in a few months' time, he will have the shock of his life, because the combing industry, at Bradford particularly, is now working only four days a week and practically the whole of the woollen industry is doing the same.

The Board of Trade knows full well the problem in Lancashire. It knows the problem in Yorkshire, too. It is up to date with its information. It is well supplied with it. The President of the Board of Trade knows the position, and, therefore, it is not for me to start going over the whole position again—for instance, about the number of mills in my division on short time, though the number is very considerable.

I come to another aspect of the problem. There are two things now exercising the attention of people in the textile industry. One is the fall in commodity prices, and the other is foreign competition. For those of us engaged in the industry those are the two fears. If one has a long order book and prices start to go down, one is open to a quite considerable loss in terms of contracts not being taken up. So there is automatically a recession in world trade, and if world trade declines, the people who are on very low wages have a strategic advantage in getting what trade is still available. I think that we can accept that as a near-platitude.

Listen to what the Economist said in its edition of 21st June, on the question of commodity prices: The immediate reason why commodity prices broke was the backwash that followed the ending of the Suez crisis. 'War fears and war buying stopped.' But a fall in commodity prices—possibly with a different timing—would have occurred, Suez or no Suez. This was made inevitable for metals particularly, but for some agricultural commodities as well by the large capital investment that stockpile buying had called into being. Sometimes actually aided by Government investment, the production capacity created still existed when the American stockpile programme was substantially completed and when"— and here is the rub— with little thought about the example it was setting the British Government began to unload its stock. This was the basic cause of the crack in commodity markets. It will not be mended until industrial demand expands sufficiently to take care of the productive capacity that was created. That applies to cotton just as much as to wool. Last August, wool that I use was 84d. a lb. Before the trouble in France it was 46d. Since the trouble in France it was and is now 54d. a lb. That is the sort of move that has been going on. From the middle of 1957 the price of long staple cotton dropped by 2s. a lb. That is a factor which is having its effect at present on world trade.

If a man is in business in the textile industry, and the price of his commodity falls, he knows what happens. His order book automatically contracts. If he can, he goes on making stock in the hope that there will be a change. But at the time that they were hoping that there would be a change the Government placed a restriction on bank advances, which made it doubly difficult for people to carry on.

No wonder people in the textile constituencies adopt a cynical attitude. No wonder the sardonic humour of Lancashire is reappearing. The old story that used to circulate before the war is heard again. It is the story of the man who came back from the mill looking glum. His wife said to him, "What is up with you?" He did not reply. She said, "Have they sacked you?" Again he did not reply. She said, "Come on, is mill closing down?" "No," the man said, "it is worse than that; they've gannet me." That is the sardonic humour which circulated before the war, and is current now.

No wonder there is a cynical attitude today. It is epitomised in speeches like the one delivered by Mr. Winterbottom last week. He is a very fine businessman who has done a lot for Lancashire. He said: It is a businessman's duty to safeguard capital and get a proper return for his shareholders. Textile firms try to keep to their traditional background of trade, but now, instead of buying new machinery with an unpredictable future, they are using their capital to earn a revenue for their shareholders in other industries. Mr. Winterbottom then challenged the Government to tell them that the cotton industry is expendable and has no future or limit imports of cloth. I ask the Committee, and particularly hon. Members opposite representing Lancashire constituencies: what about the salary and wage earners in this industry, too? The country has a duty to its workers besides the companies' duty to the shareholder. I ask the President of the Board of Trade if he has ever been sacked.

Mr. H. Hynd (Accrington)

He will be.

Mr. Rhodes

Has the right hon. Gentleman ever been sacked from a job which he was doing well because he was not wanted any more?

Mr. H. Hynd

Yes, from the Ministry of Works.

Mr. Rhodes

As an employer, has the right hon. Gentleman ever looked into the eyes of a chap whom he has to sack? Has he seen the grey lines under the man's eyes? That is happening every day in Lancashire at the present time.

It really is about time that, instead of mouthing the arguments which the right hon. Gentleman used today, some really concrete proposals came from the Government. If hon. Members opposite representing Lancashire constituencies can listen to a speech like the one made by the President today without raising their voices in protest, then they have not the spunk that I think they ought to have.

The President of the Board of Trade spoke about the movement from one trade to another. It is admitted that there has to be a change to fit the times. Even hon. Members opposite admitted that at the time when capital shifted from the railways into other forms of transport. An adjustment has to be made. It comes more pointedly when capital is moved from a public utility because then the Government have to do something about it, as the present Government may have to do something in terms of shipping in a year or two's time. The textile industry is not regarded as a public utility. The circumstances are different, but that does not alter the fact that the human consequences of what is happening are going to be obvious in every town in Lancashire during the next year or two, and any changes should be orderly ones. For instance, did any of the Lancashire Members opposite sit on the old rent and rate arrears committee at the time when things were bad? If any hon. Member did, he would have witnessed the impossibility of a man being able to preserve his dignity. That is what is coming back for some of the older employees.

Governments can do a lot. The Labour Government throughout the whole of their time in office were constructive in their approach to the cotton industry. It started when Sir Stafford Cripps introduced his Cotton Reorganisation Act and put millions into the cotton industry. Some£16 million went into the industry, and, altogether,£24 million were offered. Measures were introduced to supply cotton without risk. I have no doubt that in the course of time we shall see many of the ideas which were put into operation by the Labour Government, perhaps in modified form, brought back again. The Labour Government encouraged productivity councils and organised recruitment. Confidence was given to the industry. Since the advent of the Tory Government, we have had a negative attitude towards the industry. We have seen a relapse into the laissez faire of the nineteenth century in an age which demands Government assistance and which demands more agreement and action on a quid pro quo basis between the industry and the Government.

Governments in the Free World must take more responsibility for economic action, otherwise our democratic system will go under. The Communist countries nowadays are able to play us just like fish. When they enter the big markets, such as the wool market, they can force prices up and when they go out the prices go down. That tendency will increase as more of the world comes under their domination.

The Government used to laugh at out Utility scheme, but it was the sheet anchor of the cotton industry. The industry had a dependable market. All the arguments that were used by hon. Members opposite, however—and they were legion—were adduced to prove how poor a scheme it was. The argument adduced from the Government side when they wiped out the Utility scheme in 1952 was that its removal would help exports. I will not go over the familiar arguments, but ever since then exports have declined. When the Raw Cotton Commission was wound up, the argument was that its winding up would facilitate the cheaper buying of cotton. That has never worked. There has never been any cover for long staple cotton, and the people who use short staple cotton have often been in difficulties, particularly the small firms.

Whatever either Government have done, however, one thing upon which we have agreed is the necessity to re-equip. Successive Governments have assisted the cotton industry and the textile industry generally, as well as most other industries, to re-equip. As my right hon. Friend the Member for Huyton said, however, it is exactly the firms which re-equipped and put in first-class machinery which are in a more vulnerable position than the firms which did nothing at all.

When there has been good trade, many people have said, "No. We will not put in new machinery. We will play the market and we will get out as soon as conditions become difficult." That is why we have to exercise a little bit of discretion in assessing the amount of importance that we place upon the number of mills closing. I ask the Committee to note, however, that we as a country have no right to let the people go out of business who have ploughed back their resources and put in new machinery at the behest of successive Chancellors of the Exchequer and Prime Ministers. If we do, we are traitors to our own textile industry.

Unless the import of goods from Hong Kong is tackled in a realistic way, and if free imports are allowed from Colonies with low standards of living, there is not one consumer goods industry in the country which is not under notice—they have "had it". It is not a bit of use using academic arguments about this whilst Lancashire is bleeding to death and whilst Yorkshire is vulnerable to the same type of competition.

I put this to the President of the Board of Trade to bear in mind when he goes to Montreal in September. The Canadians will sympathise with this. Hong Kong is an anachronism. If one compares the population of Hong Kong several years ago with today, one sees that it was only a fraction of what it is today. No one on either side of the Committee knows how much the position in Hong Kong is aggravated by refugees being injected into Hong Kong. If the argument is on a humane basis, that we are to raise the standard of living of all these people so that they will be less competitive, we have a job on hand that will take the youngest man all his life to try to achieve, if ever. How can we lift the standard of living of 600 million Chinese? In any case, they will take over Hong Kong as and when it suits them.

I ask the Government to realise that we are in Hong Kong on suffrance, and that if it took the Japanese ten days to take Hong Kong it would not take the Chinese more than twenty-four hours.

Mr. S. Silverman

Does my hon. Friend realise that, on the argument of the President of the Board of Trade, the only salvation for Lancashire is that Hong Kong shall cease to be a Colony?

Mr. Rhodes

That is precisely what I am getting at. I think it would be a good thing if it ceased to be a Colony forthwith. My right hon. Friend the Member for Huyton was perfectly correct in saying that the argument that we adduce and the attitude that we take, on both sides of the Committee, to this problem will be reflected in the attitude of the Hong Kong manufacturers when it comes to making agreements with our people here. If this country has nothing better to look forward to than part of its colonial and Commonwealth structure depending on sweated labour, it is about time that we faced the problem realistically and acted courageously for our own people.

5.17 p.m.

Mr. Richard Stanley (North Fylde)

I find myself in complete agreement with most of what the hon. Member for Ashton-under-Lyne (Mr. Rhodes) said, except towards the end of his speech, when probably he got a little excited by a question from his own side of the Committee. It is obvious to all Lancashire Members and those who represent textile constituencies that the decline in the industry is becoming more and more serious.

We have been put off, not only by my right hon. Friend the President of the Board of Trade but by his predecessors, with soft and honeyed words. We have had absolutely nothing but promises that negotiations were going on and that if we were patient, in three months' time everything would be all right. I am sorry to say that we have had absolutely no results.

When Sir Anthony Eden was Prime Minister he came up to Lancashire and gave a great speech, which cheered everybody immensely, by saying that he could not announce everything at that moment but soon would announce great improvements.

Mr. H. Hynd

Another Tory pledge.

Mr. Stanley

They will still come about, we hope. We thought, therefore, that things would be all right. The Government must make up their mind what they want to do.

Mr. S. Silverman

They have.

Mr. Stanley

There is no doubt that the industry had a good jab in the arm during the war. In the 1914–18 war it got into the same position; it was not going too well, a war came along and everything was wonderful, but then down it went again. We must try to hope that that will not be the injection we shall get this time. It is no good the Government simply going on hoping for the best.

The hon. Member for Ashton-under-Lyme said that one of the most serious aspects of the closing down of factories was that among them were factories in which brand-new machinery had been installed. This is what frightens most of us. We all knew that quite a large number of looms which were making large profits immediately after the war could not continue to operate for very long because the machinery was so very old, but it seems a great pity that the employer who has spent large sums of money to lay out new machinery should have to close down his factory and put his employees out of work. The Government, therefore, must make up their mind. Either they want the industry to run down even further, and if so they should say so and should indicate where the process is to stop, or else they must inject new life into the industry.

There is talk of people being stood off rather than being unemployed. It is quite true that we have had very good employment figures in Lancashire. My right hon. Friend has mentioned people who lost their jobs in the cotton industry but obtained work elsewhere, but he must remember that all these skilled people will never return to the industry. There is absolutely no recruitment of young, competent men and women into the industry. Those who obtain reasonably good degrees at the universities go into heavy engineering. Why should they enter an industry like cotton which is gradually going down? Unless we obtain the services of these young men and women the industry will become an incompetent, not a competent, industry, and parents will make every effort to put their children into some other industry with a safer future.

It is easy to criticise the Government and to say that they must do something. I and, I am sure, most hon. Members who represent constituencies in the textile-producing areas feel that a quota must be imposed on India, Pakistan and Hong Kong. My right hon. Friend the President of the Board of Trade spoke of how important it is that we should treat our Colonies properly. Hon. Members from Lancashire are just as good Imperialists or lovers of the Empire as my right hon. Friend or anyone else. We all believe in the Empire, but we do not believe that one of the major counties of England should have to suffer for the sake of one Colony. We must keep a proper sense of proportion in these matters.

There has been talk of the difficulties of imposing a quota on Hong Kong, but if we in this country have to take all the various kinds of goods exported from Hong Kong, why is it that Hong Kong does not import ours? Why is it that the machinery in most of the mills in Hong Kong have come from Germany and Switzerland? I know that the excuse is given that machinery imported from England is not properly maintained and that equipment has to be bought elsewhere, but it seems silly that we should let Hong Kong buy machinery from our opponents in other fields so that Hong Kong can manufacture goods which it knows that we in this country must import. All these statistics seem to me to be crazy, mixed-up figures.

We wish my right hon. Friend success in his negotiations with business people and others in Hong Kong. It surely should help him if the people of Hong Kong can read in HANSARD the feelings of hon. Members on both sides of the Committee as expressed in today's debate. One hon. Member has mentioned how frightened those concerned in Hong Kong were when one of my hon. Friends put a Question on the Order Paper about a quota. How much more frightened would they be if they learned from a report of this debate that all hon. Members representing constituencies engaged in the textile industry were of the same opinion on this subject. Therefore, it should help and not hinder my right hon. Friend in his negotiations in Hong Kong to have the feelings of both sides of the Committee fully expressed today.

Again, when my right hon. Friend goes to Montreal, would it not be easier for the Canadians to understand his position if we express ourselves freely here? I should have thought that the people of Australia and of other Commonwealth countries were in exactly the same position as we are and that it would be of assistance to my right hon. Friend if they knew that great pressure had been put upon him to seek the adoption of a quota system in certain parts of the Empire when exceptional circumstances prevail.

Obviously, we all want to do everything we can to help trade within the Empire. One hates to keep stressing the need for this quota but, as in so many other spheres, there must be certain exceptions. When an exception to the rule is needed in the interests of the health of the patient, it is better to apply that exception early rather than wait until the patient is so ill that the help given by applying the exception—in this case, the quota—will be too late.

One of the causes of the present difficulties has been the rather unfortunate mud-slinging which has been carried on between leaders of the industry in Lancashire and Hong Kong. Neither side has been helpful. It would have been much better if they had proceeded quietly with their negotiations instead of talking so much about them in public. Time is running out. The industry is getting in a serious way. It will make a great difference to the textile industry in Lancashire if my right hon. Friend can give it a shot in the arm as quickly as possible.

5.26 p.m.

Mr. Ernest Thornton (Farnworth)

If I do not follow the hon. Member for North Fylde (Mr. Stanley) in the detail of his remarks, it is because I find myself in substantial agreement with many of the things that he said. I am sure that the speech of the President of the Board of Trade will not have allayed disquiet in Lancashire. It would appear that the future of the Lancashire textile industry will be largely in the hands of the Hong Kong mill-owners. I have a respect for some of the owners of Hong Kong mills, but there are others for whom I have very little respect at all.

The Lancashire textile industry, and this side of the Committee, have behaved with very great restraint during the last five or six years in the hope that some agreement might transpire. I am not optimistic, unless the Government make it quite clear that an end must be called to this erosion of Lancashire's basic home trade. That must be made clear if confindence is to be restored. Disaster is fast approaching the industry.

I was interested in the historical review of the decline of Lancashire's textile industry which was given by the President of the Board of Trade. The figures which he gave are perfectly correct and are well known to anyone who has studied this great industry, but I should like to add to the picture that when Lancashire exported 7,000 million yards in 1913 the world trade was 9,000 million yards. During the last 45 years the world trade in cotton textiles has continued to decline, and the trend continues further.

Therefore, the loss of much of Lancashire's export trade was inevitable, and the trend of the last ten or fifteen years has been for Asia to be the main supplier of world trade in cotton textiles as distinct from the West. There is no major industrial country in the world that has not a substantial cotton textile industry, and with this contraction of world trade and the growing productive capacity more and more pressure will be applied to the weakest spot, which, of course, is the United Kingdom market.

The great development in the cotton textile industry in Asia during the post war period has been in India, Pakistan and Hong Kong. Those have been the new additions to textile capacity in Asia, and they have had full access to our market. I believe that in India and Pakistan there is an appreciation of the danger of over-reliance on cotton textiles as a means of earning foreign exchange, because of the declining trend of the past 45 years to which I have referred. But I am by no means sure that the Hong Kong mill owners appreciate the significance of that trend. They feel fairly certain that there always will be a safe and growing market for them in this country. They have to be disabused. If Hong Kong long-term interests are to be served—assuming that Hong Kong has a long-term future—it is important that her economy should not be developed on the lines of an over-reliance on an industry where there is a declining world trade in that commodity. She should be encouraged to diversify.

Reference has been made to conditions of work in Hong Kong. I want again today to make the definite assertion that the hours of work for women in Hong Kong textile mills are the longest in Asia, and I want again to make the definite assertion that the labour laws of Hong Kong are the worst in Asia and probably the worst in the world. I hope that the Minister will reply to that assertion and not to the assertion which I did not make and to which the Under-Secretary of State for the Colonies replied in an Adjournment debate.

I did not say that conditions of work in Hong Kong were the worst in Asia and the worst in the world. I said that the hours of work were the longest for women of any of the Asian countries. These excessive hours of work take place within the laws of Hong Kong. The Government and the House of Commons are responsible for Hong Kong. We have often been told from the Government Front Bench that the House of Commons has special responsibilities for Hong Kong. I think that we all accept that, but the responsibilities have regard to the industrial workers as well as to the commercial and industrial interests in Hong Kong. We in the House of Commons have a special responsibility for those industrial workers.

When I was in Hong Kong earlier this year and found that women were working twelve hours a day seven days a week, I felt thoroughly ashamed of this legislative assembly's responsibility for this Colony. Something must be done and done quickly. Otherwise, in my opinion, Great Britain can be pilloried at the International Labour Organisation for the scandalous hours of work women are allowed to work.

From my reading of the labour laws of Hong Kong, it is not only possible for a woman to work thirteen hours a day for seven days a week; it is possible for her to be working that period without a meal break. There is no provision in the labour laws of Hong Kong for a compulsory meal break even in a thirteen-hour day. This can only be applied to young persons and not to women. That is really a scandalous situation.

The right hon. Gentleman has told us that agreement in negotiations is near with India and Pakistan, but the nigger in the woodpile is, apparently, Hong Kong. I cannot understand why the Government should have a soft spot for the mill owners of Hong Kong. In my condemnation of these conditions, I want to make it perfectly clear that conditions in some Hong Kong mills are quite good by any standards.

There are nine new mills there which operate a three eight-hour shift system, and the working conditions are good by any standard. My only criticism would be that they operate for a seven-day week and are putting almost impossible conditions on the factory inspectorate there to ensure that the women have a rest day each week. The other nine or ten new mills operate on a two twelve-hour shift system. My authority for saying that is the 1956–57 Report of the Commission of Labour, where it will be found that the Commission states that nine of the new mills work three eight-hour shifts. It does not refer to the other nine or ten mills. From the information I got, I am fairly certain that the other new mills operate a two twelve-hour shift system. The 149 or 150 small mills operate either thirteen-or twelve-hours shifts, almost without exception, so far as I could gather, and I went into this problem fairly thoroughly.

Some of these small mills are among the worst I have seen anywhere from the point of view of physical working conditions, and I place them in a separate category from the new mills. Working conditions in the new mills should be good. They are modern mills, and I suppose that the factory department of the Hong Kong Government will have laid down certain minimum standards. The ones which I saw were quite satisfactory from the point of view of physical working conditions.

I hope that something will be done quickly concerning the situation in Hong Kong. As I have said before, I should not like it to be thought that the comparisons which I am drawing are between labour conditions and hours of work in this country and those in Asia. There is a world of difference between living standards in Asia and living standards in the Western world. There is an enormous gap, and anyone who is realistic will know that it will be many years before that gap can be closed.

My condemnation of the position in Hong Kong is based upon a comparison between comparable Asian countries. India and Pakistan, self-governing Dominions, have an effective labour legislation which reasonably limits the hours of work of women. The same also applies to Japan, and we may have the Americans to thank for that. In Japan, the big mills now operate on a two seven-and-three-quarter-hours shift system, six days a week, and the labour laws in the big mills in Japan, so far as I can ascertain, are observed.

To come back to the Hong Kong situation, I should like to make reference to a leading article in the Hong Kong Standard, an English language newspaper, dated 28th May, which made a slashing attack upon my speech on the Adjournment debate. I do not mind that. I have been in public life long enough not to mind it. But the significant thing about this article is that it did not attempt to refute one of the facts which I gave in detail on 23rd May. The disturbing thing is that it attempted to justify those facts. I do not know whether right hon. Gentlemen on the Front Bench opposite or the hon. Members sitting behind them have worked in textile factories. I have done so for ten hours a day. I have said this before, and I repeat it, that I knew when I started work on a Monday morning that by Saturday noon I should have finished and have the weekend free for rest and recreation.

It is a devilish system which calls upon women to work in a textile mill, in the heat and noise of the spinning room and weaving shed, for twelve hours a day seven days a week with only four days holiday in the year. It is a vicious system which stipulates that if they take a day off they lose two days' pay. This Committee should insist upon something being done, and quickly, in such a situation.

Now may I return to the article in the Hong Kong Standard? It does not deny these long hours. My estimate was that the average working week of women in all the mills, big and small, those on eight hour and twelve hour shifts, was sixty-five hours a week. The article confirms my former impression that, if anything, this figure is an underestimate. In an attempt to justify those long hours, the article states: Many of the woman workers, most of them young, usually work for only two or three years after which they return to their homes, probably with marriage in view. A correspondent of mine in Hong Kong has sent me a copy of his reply to the editor of the Hong Kong Standard, in which he says that the statement that the women stay there for only two or three years is true— Owing to the fact that the meagre wages paid per shift would not keep the body and soul of a rabbit in condition, even in Tsuen Wan. These young women return to their homes not with marriage in view but to rest their shattered and wasting bodies. That may be an over-statement, but I believe there is some truth in it. Any of us who have had experience of working in a textile factory will agree that if women work in textile factories twelve hours a day for seven days a week 361 days a year they will seriously damage their health.

On the wages question it is important that attention should be paid to establishing a legal minimum wage. I say that advisedly, and on a comparison between Asian countries. I am not using the United Kingdom as a standard of comparison. India has established a minimum wage for her textile workers. Therefore, although wages are low in India as compared with our standards, the minimum wage protects the operative against the worst type of employer. Since we should protect the workers against such employers, I hope something will be done. As far as I could ascertain, average hourly wages in Hong Kong fit fairly well into the Asian pattern. I would say that they are slightly below the average hourly earnings in Japan and India, and probably a little better than in Pakistan. Due, however, to the excessive hours of work, weekly earnings in Hong Kong are probably higher than in many of the Asian countries to which I have referred. Yet it is immoral and wrong that we should expect people to work excessively long hours to have a standard of life which is a little above the average Asian standard.

I hope the Government will treat this as a matter of urgency. In saying what I have done, I am not motivated by a desire to assist Lancashire in solving her problem, because an improvement in these conditions will in the long run increase the efficiency of the mills. The nine mills which work three eight-hour shifts are probably the most efficient mills in Hong Kong. The others—probably due in most cases, not in all, to inefficient or inexpert machine maintenance and lack of skilled personnel—are trying to make up for their shortcomings by working their operatives excessively long hours. Legislation to limit the hours to a reasonable number would result in increased efficiency, so what I am saying will not result in increasing the cost of goods produced in Hong Kong in the long run. I approach this matter mainly from the humanitarian standpoint, based upon my own experience of working in a textile factory.

Now that this Committee knows of these events, which have not been refuted, I hope that action will be taken in the interests of the Chinese workers. Let us remember that they are subjects of Her Majesty just as much as we are. This is really sweated labour. I am not condemning the practice of working twelve and thirteen hour shifts as sweated labour merely because the workers are paid a low wage which fits into the pattern of Asian living standards, because I do not believe that to be sweated labour on this wage issue alone. However, the working of such criminally excessive hours is sweated labour, and so I hope, even at this late hour, Her Majesty's Government will take steps to remedy the situation.

5.47 p.m.

Sir John Barlow (Middleton and Prestwich)

I am glad to follow the hon. Gentleman the Member for Farnworth (Mr. Thornton), because he always talks with great knowledge of the textile industry which he knows so well. We are indebted to him this afternoon for telling us factually about labour conditions in Hong Kong, of the long hours and, in some cases, the bad conditions.

I hope that in this debate we shall keep these facts in the right perspective. The hon. Gentleman said that perhaps nine or ten mills were, for that part of the world, first-class employers. He criticised the remainder severely, as I think all the rest of us do on both sides of the Committee. At the same time, it would be a mistake for us to create unnecessary bitterness and exaggeration about this matter. I feel sure that already sufficient has been said for the Government to take suitable action in a short time. It would be easy for hon. Members on both sides of the Committee to exaggerate the conditions of perhaps a minority, and so make exceedingly difficult the arrangements which we are trying to make with Hong Kong at present.

Mr. Thornton

If the hon. Baronet will forgive me for interrupting, may I say that the reason why I introduced this aspect of the question again today was merely to show that the Government ought not to be so soft, so conciliatory and so considerate towards these Chinese employers.

Sir J. Barlow

I am sure that after what the hon. Gentleman has said today, and after what the Government have said before, action will be taken. [HON. MEMBERS: "What action?"] Suitable action. It is important to have this debate now. It is all too long since we had a similar one, in view of all the circumstances, although it is a little difficult that it should take place in the middle of conferences which are going on at the present time. Undoubtedly it would be generally the most satisfactory thing if voluntary arrangements suitable to both sides could be arrived at without Government interference. We must recognise, of course, that this great cotton industry of ours is open to evolution, rightly, as are other industries in this country. The important thing, however, is that we want to see reasonable evolution and not chaos.

A number of figures have already been given this afternoon. So few people outside the cotton industry seem to realise the gigantic fall in the output of cotton cloth and what it means to Lancashire that I hope the House will forgive me if I outline the figures again. In the last 40 years the industry has been reduced to one-fifth of what it was before 1914. At that time it was producing about 8,000 million yards a year, seven-eighths of which were for export. Now it is producing at the rate of about 1,630 million yards a year, and we are importing 466 million yards a year and, in addition, made-up clothing at the rate of 37 million yards a year. In the past four years 330 mills have closed and the operatives employed have been reduced by 70,000. Many more than those have really gone out of employment in the industry, but the figures are not fully reflected in the returns.

At one time the mills were willing to run at a loss in order to retain labour because it was so difficult to get back cotton operatives if they once left. Now the mills do not worry about it; if they cannot make ends meet they have no compunction about letting labour go. They have to let it go; they know that they can get it back in most cases, though not all, only too easily.

Some people suggest that the industry is antiquated. There is an element of truth in that, but it is largely untrue today. Vast amounts of capital expenditure have been put in since the war, especially large when one considers how little was known about the future of the industry and the future of exports.

I remember this kind of thing.—the diminution of exports and the difficulty of the cotton textile industry—recurring over the last 30 years. When the production was probably about half what it is today, I remember very vividly trying to sell textiles, sweating through the bazaars of Calcutta and other Indian towns and Singapore and other Eastern places. At that time the great competitor was Japan, and it was most difficult to sell Lancashire textiles against Japanese in those days.

I confess that I came back very concerned, but older men in my firm assured me that there was nothing to worry about because the number of spindles and looms in Japan at that time was so small compared with Lancashire that it was only a flea-bite and there was nothing for Lancashire to worry about. I was concerned very much at that time when other competitive firms were selling cloth at a loss in order to keep the connection. I quickly took the line that that was a mistake, and I refused to sell cloth at a substantial loss in order to keep the trade, and I have been thankful ever since that I did so.

The competition of India, Pakistan and Hong Kong is only too well known to us all. The great point is that the difficulty has been continuing for six years and we think the Government have done all too little about it. They have talked and made sympathetic noises, but the net results in terms of benefit for Lancashire are very small indeed. I do not think that any of the other Western countries allow duty-free imports from low-cost Eastern countries to enter their shores as we do.

Because this competition did not exist and there had been no problem previously, no one thought of putting this on the list in the Ottawa Agreement in 1932. At that time attention was given, possibly, to new synthetic fibres, motor cars and motor cycles and other things, but because there was no organised textile industry in any of the Colonies, and very little in the Commonwealth, no one thought fit to mention this subject. It is for that reason that we have the great problem of Hong Kong imports into this country at present.

I hope that when Government representatives go to Montreal this autumn they will consider that question. It is bound to recur in other industries in the next few years. We shall have all kinds of easily-manufactured goods being produced by low labour cost countries and sent to this country. It is a new problem for the Government, one which they have never had to face previously. I hope they will face it fairly and squarely. The Montreal Conference will be much the poorer unless these facts of life are discussed.

The question of double shifts has been mentioned, and treble shifts in Hong Kong; in effect, the long hours of work compared with Lancashire. The whole wage structure—I feel sure that the hon. Member for Farnworth will agree—is complicated in Lancashire, and it is very difficult to prove that two-shift or three-shift working is more expensive or cheaper than single-shift working with different types of machines and mills and so forth. Apparently in this country if two shifts are worked the second shift gets payment for, normally, 45 hours when working only 37½or thereabouts. Therefore, other things being equal, the added cost of a second shift is a 16–20 per cent. premium, which is not helpful for cheap production.

In addition, if a Lancashire loom is in existence it is astonishing how cheaply it can be run on the old system, whereas if one tears it out and puts in modern machinery, with all the expense involved, it is surprising how little saving is made in many cases. However, the industry is so involved and so diverse that I would not be dogmatic about that in any way.

I noticed in the newspapers at the weekend that at the annual meeting of the China Association the chairman, I think, suggested that in Hong Kong people spun and toiled and that in this country people merely spun. That is a very unfair criticism, and I should like the gentleman who made those remarks to repeat them in Lancashire where he would get the answer which he deserves and which, I think, he should get in view of the knowledge that we have of the way the cotton operatives work.

I believe it was at that same dinner that some confusion of thought occurred as to the importance of the imports of cloth to be retained as against those for re-export. The Committee will know that quite a substantial part of the imported grey cloth which comes to this country is finished and re-exported. No one wants to stop that trade; the whole industry wishes to keep it, because it at least saves a certain amount of the traditional Lancashire business of finishing cloth, and if those imports were stopped fewer operatives would be needed.

The right hon. Member for Huyton (Mr. H. Wilson) talked about the policy of the party opposite as set out in the booklet which was issued last year. I cannot agree with his suggestions. They would be in no way suitable. They are based largely upon the re-establishment of the Raw Cotton Commission. We have had experience of that, and we did not find that it worked satisfactorily, generally speaking—and at times it was very expensive to the British taxpayer. The whole idea of the party opposite is to nationalise the cotton industry, with Government control through the Buying Commission.

We know how difficult it is to run any nationalised industry satisfactorily, and I feel sure that it would be much more difficult to run this one than any of the others which have already been nationalised. It would mean that bilateral and barter agreements—which hon. Members on this side of the Committee do not like—would become a commonplace. I agree that in certain exceptional circumstances they may be advisable, but a national policy based upon bilateral and barter agreements would be entirely unsound for a country such as ours.

The right hon. Gentleman further suggested expenditure upon modern machinery. It has already been pointed out that much expenditure has been incurred upon modern machinery. If the Government would only give us some idea what size the industry should be in the future many people would be only too willing to spend more upon capital expenditure. In the last six years the Government have given no such indication to the cotton industry.

Mr. Ellis Smith

This is all in my right hon. Friend's pamphlet.

Sir J. Barlow

The industry has fallen to one-fifth of what it was forty years ago. Do the Government think that it should fall by a further 10 per cent. or 50 per cent.? If they would tell us what they envisage it would help the manufacturers a great deal. They would know where they were, and whether it was worth while to put more money into capital equipment.

The right hon. Gentleman further suggested amalgamation within the industry. That has already happened fairly quickly, and with the number of firms going out there will not be nearly so many to amalgamate. There are 330 fewer than there were four years ago. The right hon. Gentleman says that he considers than in many cases the Government should take a controlling interest. That would mean the complete nationalisation of the industry, from the buying of the raw cotton, through the spinning and weaving, to the finishing. It would be most unsatisfactory, and just would not work.

At the same time, I want to make it abundantly clear that many Members representing Lancashire constituencies are very concerned about the situation. The President of the Board of Trade said that Hong Kong is in a precarious part of the world. I can assure him that Lancashire also seems to be. He said that the Government have special responsibilities to the Colonies. I can tell him that we Lancashire Members have special responsibilities to Lancashire.

Mr. S. Silverman

So have the Government.

Sir J. Barlow

My right hon. Friend further said that the change is not yet at an end. We know that to our cost. But we do not know what the end is, nor the size of it. My right hon. Friend said that a transformation is going on, and that is abundantly clear. But we must have enough vision to see what will be left at the end. He said that there are new and synthetic finishes which will help to tide the industry over a difficult time. That is so; a large number of new finishes have been discovered in the last few years; indeed, a firm with which I am connected has done its share in that way. But those of us who are connected with the industry and represent cotton constituencies are profoundly disturbed.

During the past six years the Government have failed to tackle the problem of cotton and cotton textiles. They have consistently procrastinated, without putting forward any real policy or taking any remedial measures. I listened to the President with the greatest care today, but I could not detect any change of heart or policy. Unless something much more reassuring is said tonight by my right hon. Friend the Paymaster-General I shall feel compelled to abstain from voting. I am not prepared to condone the decline and fall of the cotton industry.

6.6 p.m.

Mr. Leslie Hale (Oldham, West)

The hon. Member for Middleton and Prestwich (Sir J. Barlow) is always listened to as a man of integrity and honesty. He has spoken honestly today, and we respect him for it. But it is time that hon. Members opposite representing Lancashire constituencies did speak honestly; indeed, it is a little overdue. I do not want to be discourteous to the hon. Member, but I would say that part of his speech sounded rather like a political confession on a psychiatrist's couch—the confession of the man who at last realises the error of his political ways.

The history of this matter goes back to a whole series of Acts. I have not the time today, and I have no wish, to indulge in recrimination, although the right hon. Member for Woodford (Sir W. Churchill) once said that the use of recrimination about the past was to enforce action in the present. At least we can learn by looking back upon some things. The hon. Member for Middleton and Prestwich has been in the House long enough to recall the Cotton Spinning Industry Act, 1936, under which compensation was paid out of levied funds for the destruction of spindles, and for the limitation of their use in the cotton industry. After the compensation had been paid most of the spindles were exported to Japan and Hong Kong—some by Conservative Members, including those representing Lancashire constituencies. Those spindles helped to found the industry there. That is a melancholy record.

I would tell the President of the Board of Trade, first, that if ever I were called upon to defend him on a criminal charge, whether or not I thought him guilty I would not in any circumstances advise him to go into the witness box. We have listened today to 35 or 40 minutes of a "Child's Guide to Imperial Preference," with no other reference to the cotton industry at all.

Mr. H. Wilson

The right hon. Member has got it wrong.

Mr. Hale

Of course he has got it wrong. In his booklet on the cotton industry my right hon. Friend made eighteen concrete suggestions and a great many more important tentative ones, but the right hon. Gentleman made no reference to them. He appeared completely unaware of them.

The Paymaster-General (Mr. Reginald Maudling) indicated dissent.

Mr. Hale

My right hon. Friend referred to a great many of them, and in a moment I shall come to them.

Mr. S. Silverman

He wrote the book.

Mr. Hale

He wrote the book, which is rather important.

The right hon. Member ought to apply his mind to this matter a little more. Even the cotton manufacturers in Lancashire are a little concerned about the conflict between the Paymaster-General and his efforts to get a European Free Trade Area and the President of the Board of Trade and his efforts to get an extended Imperial Preference area, with complete uncertainty as to what will happen in either case, and as to what the future may bring.

Mr. Silverman

Except that Lancashire will suffer.

Mr. Hale

I do not accept that. I take the view that if Lancashire considers the report of the O.E.E.C. on cotton it will find that, while European free trade will not help very much, it will probably be of some assistance. I see no reason for the assumption that Lancashire will suffer from European free trade. The experts report that on the whole there is a slightly expanding market in Europe for cotton goods, which is not of very great significance but from which Lancashire can derive some small benefit. I am not, therefore, at the moment criticising European free trade.

I want to deal with one or two things that seem to have been forgotten from the speeches. We have talked about a gradual recession in the cotton industry. It is true—we want to be honest about this and we do not want any unnecessary party recrimination—that when the Labour Government took over and created full employment there was a sellers' market and post-war conditions, but some of the conditions were favourable and some were unfavourable. We had full employment but, in the textile industry, no labour force. We had an industry which had had no re-equipment over the war years and was sadly lacking in re-equipment. The industry had a legacy from the past and was always worried about the future. It had always been one of the problems—events have justified the pessimists—to get people in Lancashire to think in terms of a few years ahead in order to restore confidence.

One can well understand their doubts about it. Minister after Minister over the last six or seven years has been saying, "We took over an unhappy situation"; it is not true. In the Economic Survey for 1950 we were planning a further expansion of the textile industry. In 1951, we secured it. When we commenced our planning of textile employment about 1947 we estimated an optimum employment of 320,000. When the Labour Government went out, there were 321,000 employed, which was 1,000 more than we had thought the optimum. At that time, we were reporting that markets were likely to expand. Conditions were probably slightly expanding. The Paymaster-General shakes his head.

Mr. Maudling

The consumption of textiles was falling before the resignation of the Labour Government in 1951.

Mr. Hale

It is not true. We had to place orders abroad for defence needs because the industry said that they could not fulfil them. In 1951, whether we were right or not, we offered orders to the Lancashire industry, which said it could not fulfil them. It had a surplus of orders and there was delay. That was what happened. Then we had a General Election, and the only thing then was this wretched business of a Conservative Government being returned.

Later we had a debate. The present Leader of the House was then the Chancellor of the Exchequer. In the debate on the Address he said that the Government were attacking the situation. They were going to increase the Bank Rate from 2 per cent. to 2½per cent., to develop our export industries—that was to be a priority matter—and to restrict any increase in the cost of living and reduce public expenditure. When the Leader of the House says that he is going to increase the Bank Rate, maintain the standard of living and reduce expenditure it means that he will increase the Bank Rate.

Sir Arthur Vere Harvey (Macclesfield)

Can we not get this matter into perspective? I think the hon. Member will recall that when Parliament assembled in 1951 there was a short debate—I think it was initiated by ourselves—on textiles. That was within three weeks of the meeting of Parliament. The whole matter was ventilated, and considerable anxiety was expressed from these benches about the state of the textile industry at that time.

Mr. Hale

I can only refer the hon. Gentleman to HANSARD. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) made his maiden speech in that debate and he understood that the then Chancellor of the Exchequer was to increase exports of textiles. The hon. and learned Member said that it was the most encouraging thing that Lancashire had heard for a long time. That was the spirit of the debate. [Interruption.] One of my hon. Friends says that he followed that speech, so he probably recalls it. Whether he recalls it or not, it is recorded in HANSARD.

We had a speech from the then President of the Board of Trade. Heaven knows, we have had some Presidents of the Board of Trade, Chancellors of the Exchequer and even Prime Ministers, in this period. The right hon. Gentleman said: But perhaps our main task in this field is to persuade the British public of the vital importance of exports from this country. It is quite easy for a man who is working in a factory manufacturing a gun or a tank to understand the contribution which he makes to the defence effort. It is not quite so easy sometimes for people to understand the type of effort required to expand exports. There is a great diversity of exports and many small bits of manufacture—perhaps the manufacture of a birdcage for example—for export to some country is not understood to be important. But it may be very important as an export.…I believe that in the last resort the survival of this country and the overcoming of her difficulties will not be achieved by speeches made either from the Despatch Box opposite or the one on this side of the Table, but by the energy, initiative, thrift and courage of the British people. All that any Government in the last resort can do is to give some lead and to smooth the path so that the British people may start upon that road. I believe that the speech of my right hon. Friend the Chancellor of the Exchequer was a very good start in that direction."—[OFFICIAL REPORT, 9th November. 1951; Vol. 493, c. 586.] What was to happen and who was going to smooth the path I do not know, and what that had to do with the export of textiles I do not know. Figures were not given, anyhow. That was the spirit of the thing. That was a reference to the last President of the Board of Trade but one, the penultimate deterrent. I have the words of the then Chancellor of the Exchequer, who is the present Leader of the House. He said: We shall review the thousand-and-one instructions, regulations and manuals of advice which go out from Whitehall to the local authorities, to see that there, too, the same principle of reasoned economy is observed. I must wait until my review of the draft Estimates is completed before I am in a position to decide whether sufficient savings have been made. If not, still more stringent methods will be necessary."—[OFFICIAL REPORT, 7th November, 1951; Vol. 493, c. 203.] The right hon. Gentleman then announced his increase in the Bank Rate and his proposals for preserving the cost of living. He managed to convince both the then President of the Board of Trade and the hon. and learned Member for Darwen that this seemed to mean an increase in textile exports.

That was the position. The President of the Board of Trade has talked today about Imperial Preference in a vague, rather loose way. I came across a letter from the Board of Trade quite by chance in the course of this week-end. It is nearly three years old now. It exemplifies precisely the position and the kind of thinking on this subject that is going on even now in the Board of Trade. I will read from it. It relates to a complaint from a Lancashire manufacturer who was buying viscose staple fibre at 50d. per lb. The letter said: The actual cost of the spun rayon interlock fabric made from this fibre landed from Japan in West Africa, was less than they had to pay for the fibre itself. The cost of our raw materials was 9d. a lb. more than the cost of the manufactured cloth delivered to West Africa. I wrote to the Board of Trade about this and the Minister replied, It appears that the price of the viscose staple fibre in Japan is slightly cheaper than in the United Kingdom, being about 23d. compared with 24d. per lb. While we have had no official information we understand that the price is 50d. per lb. and that the cost of the yarn in Japan is less than this. This price is obviously reflected in all stages. Bearing in mind the low labour costs at subsequent stages —which the letter gives as wages of£15 to£8 6s. per month— it does not seem out of line. We have no means of costing the cloth but so far as we have been able to investigate this we have found no evidence that Japanese interlock fabric averaged at 41d. a lb. must be either subsidised or dumped. It is worth examining that curious document which was signed by a Lancashire hon. Member who was then occupying an office at the Board of Trade. What does it mean? We are now importing an incredible yardage from Hong Kong. It has gone up year by year until it has become rather more than a quarter of our total imports of that material. It is produced by labour working 80 to 84 hours a week in shocking conditions and for very low rates of wages.

I cannot claim many virtues in this House, but I think I can claim that I do not tear out my conscience and dust it regularly and publicly. As one who has been a protagonist of war on want for the Colonial Territories, as one who perhaps has made his foremost consideration in politics the question of trying to fight disease, poverty and want, I cannot understand anyone who says that if we have conditions virtually of slave labour we ought to help those countries to preserve them. I do not understand the argument which says that if we refuse to buy from those people their conditions will get worse. The Colonial Secretary to the Colonies and the Under-Secretary were on the Government Front Bench when that matter was discussed.

Our proposals for the Colonial Territories have always been: No. 1 priority, establishment of trade unions; No. 2, establishment of agricultural co-operatives; No. 3, a drive for a decent standard of living. That is what we want. Then we had this very dishonest argument—it really was a very dishonest argument—that if we believe in investing money in the Colonies we cannot prevent them selling goods to us.

That is the final exposition of the unutterable folly of Tory policy. Immediately after the General Election of 1951 we had the restoration of economic anarchy, accompanied by bay-throated roars of applause from hon. Members opposite. They destroyed every provision we had made for the industry. They destroyed the sanity of long-term buying and destroyed the Liverpool Cotton Market. They destroyed C.O.S.—and in a pretty corrupt way. In relation to imports there was an active campaign for spinners to contract out and, two years later, they abolished it on the ground that the chaps who had contracted out were worse off than those who contracted in. That was the argument, that they had not adequate cover because they contracted out and they had to be put on the same basis, which was worse than before.

They destroyed our marketing arrangements. I would not be too lavish in my comments on the Paymaster-General, but I expect him to approach this matter with more sanity than any of his colleagues. I say to him that there are certain considerations which apply to the whole question of Empire Preference.

Mr. William Shepherd (Cheadle)

The hon. Member said that we destroyed the trade with the Colonies by various means. Is he aware that last year, for example, exports to Hong Kong exceeded imports by more than£80 million? That does not bear out his contention.

Mr. Hale

What was the figure the hon. Member mentioned?

Mr. Shepherd

Eighty million pounds excess.

Mr. Hale

I thought the trade of this country was£27 million. Therefore, it could not be exceeded by£80 million. I believe there was a£12 million surplus.

Mr. Shepherd

We imported from Hong Kong roughly£200 million worth of goods and exported£285 million.

Mr. Hale

I should be very surprised if the hon. Member is right, but I have been wrong before and it may be that I am wrong on this occasion.

Mr. Bernard Braine (Essex, South-East)

I think the figures are not in pounds but in dollars; but the point is still a valid one. We are in fact selling more to Hong Kong than Hong Kong sells to us.

Mr. Hale

If it is reduced to dollars the point is valid because, arithmetically, it comes approximately to the figure I mentioned, which is at least a point. I was not dealing with that, but I was suggesting to the right hon. Gentleman, who takes a serious interest in these matters, that it is anarchic to suggest that in considerations of Empire Preference representations cannot be made between partners in the Commonwealth for the elimination of unfair competition.

Mr. Brainerose——

Mr. Hale

No, I am blowed if I will allow the hon. Member to interrupt again.

What becomes of proposals for a European Free Trade Area? It cannot be done without some arrangements of this kind and some approach to a fair wages clause.

When I came back from Canada in 1946, I suggested that we should have a Consultative Commonwealth Council, with no legislative powers but with powers to get the facts, to know the position in the Commonwealth, to meet throughout the Dominions and to help to cement understanding between the nations. If we had done something like that, these problems could have been considered in the light of give-and-take between nations dealing with complex problems which are always capable of solution by comradeship and understanding. By a series of historic accidents, this exists in Strasbourg, but not in Westminster or Montreal. There is the machinery operating in the seven or the fifteen European countries, but not in the Commonwealth and Colonies.

All the suggestions up to now have been rather in the nature of palliatives. The restriction of imports from Hong Kong cannot cure the problem of the Lancashire cotton industry. I agree with the hon. Member for Middleton and Prestwich that this problem may confront other industries. When we were working together on the pamphlet "War on Want", we found that the two most needed consumer goods in Africa were cotton cloths and bicycles. A bicycle makes a man an aristocrat and good cotton cloth makes a woman a lady. They are the two treasured and needed imports. If we are to approach the problem of finding a permanent solution for Lancashire we have to create new markets. In our African Colonies there are 65 million people, nearly all grossly underpaid and many of them brutally victimised. The slightest increase in the standard of living there would mean expanding the market for Lancashire. People say that when they go from Kenya to Uganda, where the standard of living is only a shilling or two a week higher, the difference in the standard of clothing is noticeable and to be observed at once.

Many of my colleagues want to speak in this debate and I must draw my remarks to a close, not because I want to do so, but because I must apply a self-denying ordinance. The President of the Board of Trade has had three deputations to see him in the course of the last three weeks. One was from workers, another from employers and the third from mayors of Lancashire. He managed to annoy them all. The sort of half-baked answer he has given us today was the sort of reply he made to the mayors of Lancashire—that the matter was under discussion, that negotiations were in progress and that he had nothing further to say. The President of the Board of Trade appears to have failed to satisfy anybody except the hon. Member for Essex, South-East (Mr. Braine).

Mr. H. Wilson

Does not my hon. Friend realise that the right hon. Gentleman satisfied the hon. Member for Essex, South-East only because he managed to convince him that the whole system of Imperial Preference depends on duty-free imports from the Commonwealth and that in fact this is completely untrue, because the principle of duty-free imports does not apply to most of the goods imported from the Commonwealth. The whole of the argument therefore breaks down.

Mr. Braine rose——

Mr. Hale

I think it would be kindest to the hon. Member for Essex, South-East if I did not give way to him again.

Mr. Braine

The right hon. Member for Huyton (Mr. Wilson) is utterly wrong.

Mr. Hale

The President of the Board of Trade has succeeded in Wimbledon week in doing what no other tennis player has done he has committed a treble fault. I dislike personal criticism, but there has been on his part a good deal of preening in the mirror in his gold lamé panties and rather little time spent on practising his service, which both politically and industrially has been singularly unsatisfactory.

The late Mr. Schickelgruber, when he spoke to the Austrians, said, "Give me five years and you will not know the place." The Tory Members who won Lancashire seats might have said the same thing. This great industry, which has a high record of skill and of service to the community, has withered away under this Government. The figures show that for every hour out of the twenty-four hours of every day—every day of a seven-day week—since the Government came into power, one man has lost his employment. Indeed, the figures show that it is more than one man. That has gone on for seven long years. It is a terrible indictment.

Now we have reached the stage when even some of the best-equipped mills in Lancashire are closing down, it may be for ever, and machinery is being destroyed. If the President of the Board of Trade has no more to say than he said earlier today, then I beg him to resign and to make way for someone who may be prepared to try to do something for Lancashire.

6.32 p.m.

Mr. Bernard Braine (Essex, South-East)

I do not think that the hon. Member for Oldham, West (Mr. Hale) should be allowed to get away with one passage of his otherwise interesting and, as always, thought-provoking speech. That was his assertion that the plight of Lancashire started with the change of Government in 1951.

I recall distinctly a debate initiated by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) in November of that year. It was quite clear that the cotton industry had been getting into difficulties throughout 1951 and that those difficulties were coming to a head about the time of the Election. It would have been fairer for the hon. Member, who has a great reputation in the House for fairness, to have asked why the cotton industry was running into difficulties at that time rather than to try to attribute it to a change of Government and, therefore, to a change in policy.

All of us who sit for constituencies outside Lancashire sympathise very much with Lancashire Members today and with the men and women who work in an industry which has contributed so much—nobody needs to tell me that—to the greatness and prosperity of our country in the last hundred years. That is why I hope that the efficient elements in that industry, the forward-looking elements, will be able still to find a niche for themselves in this modern world, despite all their present difficulties, by concentrating on quality production.

But to believe that because we once made stage coaches we must always make stage coaches, and because we were pioneers in railways we must never turn to alternative methods of transport, is the very negation of everything that has happened in this country. We survive here according to our capacity to use our brains and our inventive powers to provide the world outside with goods and services it requires at a price it wants and quality which it expects. There is no alternative.

An examination of the trading pattern of this country in the last fifty or sixty years shows quite clearly that, expressed as a percentage of our national income, our exports have been growing faster than our national income. That is not true of other great States like the United States and the Soviet Union. Their national income has grown faster than their foreign trade. This means that we are in an even more vulnerable position today in these matters than we have ever been before. That is nothing to daunt us or to daunt the people of Lancashire.

I listened carefully for any indication the right hon. Member for Huyton (Mr. H. Wilson) was prepared to give to the Committee of the way in which we should march. He said, first, that the future depends upon Lancashire's own efforts. With that I entirely agree, but it would have been better had he spent some time in explaining how Lancashire's own efforts have already resulted, since the end of the war, in a tremendous diversification of her industry. What has been lost on the swings has been more than gained on the roundabouts.

Mr. F. Blackburn (Stalybridge and Hyde)

We are talking about the swings.

Mr. Braine

But the roundabouts are important, too. When we are talking about Lancashire's skill, what about her skill in the chemical industry, in engineering, in aircraft and in a whole range of new industries which have come up since the war? I do not wish in any way to minimise the plight of the cotton industry or the anxieties or worries which there must be in the home of every cotton operative. That is something on which it is right and proper for Lancashire. Members to focus attention, and they are doing so in the debate with their accustomed skill and eloquence. But when it came to making a positive proposal for dealing with this situation, in the end the right hon. Gentleman came down to restrictions—quantitative restrictions upon imports and, let us face it, upon imports from Commonwealth countries.

Mr. S. Silverman

I congratulate the hon. Member on his great courtesy in giving way, as compared with the President of the Board of Trade. May I put this question to him? One can go into a departmental store in any Lancashire cotton manufacturing town and buy a well-made shirt of good material at a price with which Lancashire could not compete if the workers worked for no wages at all. What does he think Lancashire should do about that?

Mr. Braine

That is a question which cotton manufacturers in Lancashire are asking. Part of the answer is that if those who are making chemicals, plastics, engineering products and all the other things which Lancashire factories are now turning out expect the people of other countries to buy their products, then the people of other countries must surely find the wherewithal to do so by exporting. This is a question of balance.

The hon. Member for Oldham, West, said, very rightly, that with the liberalisation of trade in Europe there is room for the splendid high-quality goods which Lancashire can produce, but I do not believe that there is much room in this world for producing the other kind of goods which other countries can produce, are producing, and intend to go on producing.

Mr. Silverman

I am sure that the hon. Member does not realise the facts, because he always approaches these matters fairly within the range of his knowledge of the facts. Does he not realise that it is precisely those mills which are best equipped, producing the best quality goods, which are closing now, whereas in the past it may have been the other factories? During the last three or four days three mills in my constituency have been affected—mills founded fifty-three years ago and employing the best skilled labour there is. They are closing down, and what chance is there, once they have closed down, that they will reopen? We are dealing with an immediate emergency against the background of a long-term remedy. No matter how effective that may be, there is no time.

Mr. J. A. Leavey (Heywood and Royton)

Before my hon. Friend answers, perhaps it might be helpful to the Committee to realise that those three mills are concerned with rayon, not cotton. That is a slightly different problem, and it would be unfortunate if the Committee were to associate those closures solely with cotton.

Mr. Braine

I hope that I shall be acquitted of any discourtesy if I say that, following that intervention, I do not think that I am called upon to make any further answer. I do not want man-made fibres to cloud this issue, nor, I think, does the Committee. My purpose in intervening in this debate is to draw attention, if I may do so with humility, to some of the broader considerations; considerations that are just as important to Lancashire's future as they are to the rest of the British economy.

I say, with all the force at my command, that at this stage, any plea for discrimination against any Commonwealth country, or group of Commonwealth countries, can do nothing but the gravest possible harm to our long-term interest, especially when we remember that in about two months' time a great Commonwealth economic conference will be gathering at Montreal where trade matters of this kind will be thrashed out in the frankest possible way.

It is not as though that conference will be meeting at a time of general prosperity all round, with just a black cloud hanging over Lancashire. During the last year or two, despite the increasing volume of world trade, the volume of inter-Commonwealth trade has been declining, and I should have thought that that would be a matter of concern to both sides of the Committee. Moreover, the pattern is changing in another way, and this is the basis of my argument that we should not today send out a message that we are in favour of discrimination against a Commonwealth country.

The pattern is changing in this sense. Following a considerable period after the war when the terms of trade were against us, the terms of trade have, for the last two or three years, been moving steadily in our favour. At the beginning of the year, they were about 10 per cent. better than they were two years ago. That means that the British economy has been prospering at the expense, very largely, of Commonwealth countries, and particularly of Commonwealth primary producers.

The fall in the export commodity earnings of the Commonwealth countries has led to a sharp decline in their purchasing power. One sees this happening, not only in New Zealand, Australia and Malaya but nearly everywhere in the Commonwealth. That is bound to have its effect on our own export trade. We are doing all right now but, as many of us can testify, order books are beginning to reflect a contraction in Commonwealth purchasing power.

It is for that reason that I say that any suggestion from this Committee that the Government should move in the direction of restrictions—even of only a narrow restriction against one small Colony in the defence of one industry in this country—would be both selfish and short-sighted. It would be selfish, because it would damage Commonwealth trade at a time when we, taking our economy as a whole, are getting the best end of the stick. It would be shortsighted, because it would inevitably result in retaliation against our exports——

Mr. H. Wilson

We all recognise the hon. Gentleman's sincerity in this matter. What he has just said about the impoverishment of Colonial Territories is something that we warned the House would happen when we debated the economic situation, last October. But does he not realise that if he wants to help Hong Kong he can do it to a far greater extent by removing some of the stupid trade embargoes on trade between Hong Kong and China?

Mr. Braine

It is perfectly true that the cause of part of Hong Kong's difficulty is that she agreed to the contraction of trade with China to suit the strategic convenience of the West. On the other hand, in this particular instance, my own view is that opening up trade with China would not help. What would China be exporting to pay for the manufactured goods that we would be sending to China, either through Hong Kong or direct through Chinese ports? I am open to correction, but I should imagine that this country would be asked to accept in payment a whole range of goods that would not assist our economy in one single respect.

Mr. Wilson

Is the hon. Gentleman aware that China has a trade surplus of£1 million a year with Hong Kong, through the shipment, mainly of food but, to a lesser extent, of raw materials, and that there is no question of dumping Chinese textiles into Hong Kong?

Mr. Braine

We are getting away from the main point. The real issue is that we are now selling more to Hong Kong than she is selling to us. This is the salient fact that has been forgotten. Here we have a proposal from the other side that we should penalise a British Colonial Territory, for which we in the United Kingdom have special responsibility, when, in fact, we are selling more to Hong Kong than we are buying from her.

The figures are interesting. For example, the value of British imports from Hong Kong totalled£20 million last year. The value of British exports to Hong Kong totalled£33 million. And it is interesting to break up the figures, and to see what we sold to Hong Kong.

Mr. S. Silverman

I am following the hon. Gentleman with great interest. If it is not presumptuous on my part to say so, I think that he is making a most interesting contribution to the debate. However, does he not realise that any favourable balance to this country, any profit that we are making as a result of the difference in the figures he has just quoted, is paid for by the unemployment of Lancashire weavers and spinners; that they are bearing the burden out of which the profit is made? Why should they?

Mr. Braine

My whole argument is that the price we would have to pay for the kind of protection for which the other side of the Committee is asking is unemployment in other British industries, and in those industries where we have the best possible chance of paying our way in the world, and of making our mark. This is the crux of the whole issue, and if the Committee does not grasp this—although I am sure that it does—we shall not get anywhere.

Let me now break up the figures I have given. That export figure of£33 million included£3⅓ million worth of woollens and worsted yarn and fabrics. That was Yorkshire's contribution. It included£5½million worth of machinery, and£2½million worth of vehicles and aircraft, some of which may have come from Lancashire. If we were to take the advice of the hon. Member for Ashton-under-Lyme (Mr. Rhodes), who spoke with great force, vigour and feeling, but who wanted to drum Hong Kong out of the Commonwealth, we would lose a market for our woollens, our worsted yarns and fabrics, our machinery, our vehicles and aircraft to a total of£33 million.

Would we go further? Whenever we came against anyone who could undersell us, either because of greater efficiency or sweated labour, what would we do? Would we put up protective barriers and shut them out? One can go part of the way along that road for some time. In fact, in the past we could have done so for quite a long time, but we can no longer do so because the whole pattern of our trade, and of world trade has changed and is changing——

Mr. J. T. Price

The hon. Gentleman is getting along fast, but before he gallops any further along this "Babycham" line of argument, I hope that he will remember that the President of the Board of Trade himself drew our attention this afternoon to the fact that if cotton textile goods which had been made in Hong Kong, under the conditions which we complain about, were being dumped here, he would immediately deal with that situation under the ordinary tariff arrangements, and put on a stiff tariff. What we are, in practice, doing here is taking the product of sweated labour of the refugees entering Hong Kong in an ever-increasing flow, and we are doing nothing about it.

Over the last eighteen months refugee labour has entered Hong Kong from China to the extent of about 1 million people, and we are taking the product of their sweated labour and doing nothing about it. We say that it is wrong to fall back on the compassionate ties that we have with the Commonwealth and colonial countries—and we all share them—and apply them to this situation. It has nothing to do with the basic colonial problem at all.

Mr. Braine

I am not altogether certain that I follow the hon. Member's argument. If he is saying that goods are being dumped here from Hong Kong that is one thing, but the word "dumping" there is not being used in the sense that it is used in our various trade treaties.

Goods are dumped only if they are produced at below the cost of production in the country of origin, or if the export is being subsidised in any way. In fact, Hong Kong exports to this country do not fall into either category. I am at one with the hon. Member if it can be sustained that the conditions in Hong Kong factories are such that they contravene everything that we in this country hold dear—the dignity of labour and decent conditions of work. I agree that we ought to do something about it in that case.

If that is to be the line of advance, however, the better the labour conditions in Hong Kong textile factories the more easily will she be able to compete with Lancashire. No one in his senses believes that cheap sweated labour is efficient labour, or that the goods produced can be sold more cheaply. That is a dangerous line of argument to pursue, if for only one reason. If we are to adopt protectionist devices here on the score that goods coming from some other country within the Commonwealth—let alone from outside it—are being produced at lower wage rates and poorer conditions than obtain here, what is to be the argument where our goods are sold in North American markets?

We at once present to the tariff lobbies in the United States which President Eisenhower has such great difficulty in restraining, a perfect argument for action against us, as being a country manufacturing goods at lower labour costs than those in the United States. I am not dismissing the argument of the hon. Member. I think that there is a great deal in it, and hope that we shall be able to turn our attention at some other time to the whole question of labour conditions in Hong Kong.

There is another reason why, in my view, to impose restrictions on Hong Kong in present circumstances would be unthinkable. I take to task the right hon. Member for Huyton, who a few moments ago, attributed to me certain thoughts which were not in my mind and which I have never uttered in the House. I am sorry that he is not here, because I should have liked to have told him. It has been a cardinal point in our relations with the Colonial Territories that their products should have free and unrestricted entry into the United Kingdom. I do not think it is necessary for me to remind the Committee again, as my right hon. Friend the President of the Board of Trade did this afternoon, that we have special responsibilities for the Colonial Territories. The point is that we could not stop at restricting textiles from Hong Kong. Once we move down that road we cannot stop.

I think I am right in saying that Hong Kong textile imports are only 3 per cent. of the total of British production. Imports of knitted gloves from Hong Kong are 125 per cent. of British production. Does the Committee believe that if a concession is given to the demands of the Lancashire cotton industry the glove industry will not say, "Why stop there? We must take this to its logical conclusion." And that would mean that there must be clear and open discrimination for a whole range of imports hitherto admitted duty-free into the United Kingdom. There must be discrimination against them—a sort of colour bar in trade.

That is a departure from the principles which have guided successive Governments in this country. We have never been frightened of discriminating against the foreigner, and I hope we never shall be, when it serves the interests of the Commonwealth as a whole. But I wonder whether the Committee would seriously advocate discrimination of this kind against one Colony which would be quickly followed by demands for discrimination against other Colonies.

Nor would it end there. Similar demands would be made in other countries for discrimination to be imposed against Hong Kong's exports. The United Kingdom Government has so far successfully persuaded its Commonwealth partners not to impose such restrictions. We have to do that because under the General Agreement on Tariffs and Trade we are the protectors of Hong Kong. Hong Kong is not a contracting party, nor is any British Colony, under G.A.T.T. How can we protect those interests if we damage them ourselves?

Mr. J. T. Price

The hon. Gentleman is asking rhetorical questions, so perhaps I may help him in his difficulty. He is asking how we can protect the Commonwealth and carry out our mandate to the people under G.A.T.T., since they are within British sovereignty. I should like to ask him the other side of the question. How are we to protect our own nationals against the kind of unfair competition about which we are complaining today? Is not our first duty, in the event of a conflict of interests, to the people who sent us to this House as British representatives? We are complaining about this infernally unfair competition based on sweated labour.

Mr. Braine

That may well be the case. It is not true that we are doing nothing about it. We have heard this afternoon a description from the President of the Board of Trade of a course of action which we hope will secure the very thing that the hon. Gentleman seeks. I am not defending the flooding of the British market by Hong Kong textiles. I am trying to get the whole question into some sort of perspective.

The hon. Member talks about difficulties. We are up against two special difficulties. First, we have always accepted the principle enshrined in G.A.T.T. that import restrictions should not be imposed except in balance of payments difficulties. I do not think that there is any argument about that. That is accepted. But there are no such balance of payments difficulties in this case. I may be unpopular in saying this, but I must say it because I believe it to be the case; it would be morally wrong to violate the spirit of G.A.T.T. by discriminating against a Colony the protection of whose interests resides here in this country. Hong Kong has no means of protecting her own interests. As long as we are the protecting Power, as long as Hong Kong is a British Colony, we must accept these obligations. This applies not only to Hong Kong, but to every one of the Colonial Territories.

The second difficulty is that in the process of liberalising trade we have from time to time had representations from various Commonwealth Governments exposed to competition from foreign producers here in the British market. As Chairman of the British Commonwealth Producers' Association, I should like to see a great deal more protection accorded in this country to Commonwealth producers. But this would run us into considerable difficulties indeed. However, I should have thought that it was in Britain's, and especially Lancashire's, best interests not to go down a road which would inevitably lead to restriction and a contraction of international trade. There is no future for Britain in that respect.

The hon. Member for Oldham, West, in his interesting speech, referred to the effect of the European Free Trade Area. Suppose the European Free Trade Area is successfully negotiated. We all know that it has run into difficulties, but suppose the negotiations are concluded satisfactorily and a Free Trade Area comes into operation. This will eventually permit free entry, or reasonably free entry, of European manufactures into the United Kingdom and of British manufactures into Europe. If this takes place, Hong Kong, to take that Colony as an example, will suffer. It certainly cannot gain, because it will find itself up against European competition inside the British market.

How could we possibly justify the imposition of controls upon Hong Kong imports at the same time as making ready for the free entry of European goods into the British market? That is the moral side of the argument. That would be a reversal of Britain's pledge and a reversal of the view of nearly every hon. Member of this Committee that Commonwealth interests should not be allowed to suffer through any economic tie we make with Europe.

There is also the possibility that the European Free Trade Area negotiations may break down. This presents an entirely different situation. That would mean that, as from the beginning of next year, British manufacturers might find themselves confronted with a tariff barrier around the six Treaty of Rome countries over which they would find it difficulty to leap. It would be absolutely fatal to our own interests if, in advance of a situation like that, we served notice on the Commonwealth as a whole—any action against Hong Kong would be regarded by the Commonwealth as discrimination against the Commonwealth—that, when we are in a position of strength, we are prepared to restrict and damage its trade.

To impose restrictions upon textile imports at this stage, to give a little momentary protection to an industry which has been declining in the past would be unfair to both the country and to the larger interests of Lancashire. It would strike a blow at Commonwealth unity and, in my view, it would be a stupid and damaging thing to do.

7.2 p.m.

Mr. W. A. Burke (Burnley)

The hon. Member for Essex, South-East (Mr. Braine) will, I hope, forgive me if I do not follow him very far. I wish to revert to the plight of the cotton trade in Lancashire. I agree that it is necessary for the Government to try to balance the economy. The point we must remember is that it is one large and important group of people, the cotton operatives, which has to bear practically the whole burden of preserving that balance. The other two hon. Members who spoke from the benches opposite both gave an indication of their disappointment with the Government. The only hon. Gentleman who has given them any support does not come from Lancashire.

This debate comes after years of petitions, commissions, negotiations, deputations and delegations from local authorities, from employers and from trade unions. We have the debate now only because the Opposition decided to give up one of their Supply Days for the purpose. It is really the climax of a long series of attempts to get from the Government some statement which we could say was helpful to the cotton industry of Lancashire. Unfortunately, nothing has been said so far by the President of the Board of Trade which gives us any hope, save that he said that negotiations are still going on.

The President of the Board of Trade referred to the fact that, when Lancashire was at its peak, we had 8,000 million yards of cloth as our production and that 7,000 million of those yards were exported. He did not go on to say that very nearly half of the 7,000 million went to India, and now it is the other way around. India is sending us all her stuff because she has a fairly high tariff and her goods come to us free of duty. It may be that these things are necessary, but what Lancashire wants to know is this. Is the present state of affairs to go on and on until there is nothing left of the Lancashire cotton trade?

In 1954, the people of Lancashire became seriously concerned not merely about the immediate threat of foreign competition through sweated labour or subsidised raw materials but also with the potential threat. They saw their industry going down and down. In 1955, the industry met the then Prime Minister, the right hon. Gentleman the Member for Woodford (Sir W. Churchill). He listened to what the deputation from the Cotton Board had to say and promised urgent consideration. Nothing was done. An appeal was made to the next Prime Minister, Sir Anthony Eden, and, two days before the House was dissolved, he made some concessions. He announced a reduction in Indian tariffs and a reduction in Purchase Tax here. But he would not depart from what he said was the long-established arrangement for duty-free imports from the Commonwealth. Deputation after deputation has approached the Government, but the answer given by various Presidents of the Board of Trade has always been negative.

I listened to the speech the President of the Board of Trade made at the Cotton Conference at Harrogate, in which he paid tribute to the skilful and very patient work of Sir Cuthbert Clegg in trying to reach agreement with India and Pakistan. After all these years, from 1954 until 1958, the result of all our petitions and representations is simply this. We have nothing from the Government which is likely to show the people of Lancashire that they can look for a turn for the better in the downward trend of their trade. The arguments have gone on and on, and we have always come to the same conclusion. It is the conclusion we have today. We are told now that, possibly, there will be an agreement with India and Pakistan if agreement can be reached with Hong Kong also. Why should India and Pakistan stand down for Hong Kong, and why should Lancashire have to stand down for Pakistan, India and Hong Kong?

All this time, mills are going out of production. In 1954, 15 mills went out, and the number has continued to grow. We all know the figures by now. The net result of four and a half years of negotiations, petitions, commissions, and delegations is that Lancashire has over 300 fewer cotton mills now than it had before all this talk began.

I attended a meeting in my own constituency in Burnley on Friday afternoon. It was called by the mayor of the town because of the serious state of the cotton industry in Burnley. There were present at that meeting employers in the cotton industry, representatives from the chamber of commerce, representatives from the chamber of trade, representatives from at least two of the political parties—the Conservative representatives did not come for some reason or another—and representatives of the education committee. They were all people very greatly concerned about the conditions developing in Burnley.

I am sorry to say that what most of the employers were concerned about was not how soon they would be able to start again. Most of them have come to the conclusion that they will not be able to start again. What they wanted to know was whether they would have rate relief if they kept their machinery in the mills in the hope that something might turn up when another Government came along. Most of them had come to the conclusion that it was perhaps wisest to get£2 10s. or£3 5s. for their scrap mules and then they would not have to pay any rates. These employers, Conservative and Liberal, have come to the conclusion that the only thing for them to do is to scrap their mills and, while the going is good, get out with their money and put it in the Burnley Building Society because, they said, they can get more security there than elsewhere. We were told that three more mills in the Burnley area would close down this week, in addition to the eight mills that we have already lost.

What does this mean? It means that skilled operatives will drift away into other industries. During the war leaflets which were published with the authorisation of the Government by Sir Raymond Streat were distributed telling the people how important it was to go into the cotton industry and promising them that if they put their youngsters into the industry there would be a happy future for them. That promise has never been fulfilled, and when the school leavers left school at the end of their school period in Burnley I understand that the number of youngsters who opted to go into the cotton mills was practically negligible. I am not sure of the figure, but I think it was only about 5 per cent. of the school leavers in a town which has always been a great centre of the cotton industry.

I hope that the agreements that are supposed to be coming along materialise, but the chairman of the Indian Cotton Mill Federation, when he left Bombay to carry on talks with industrialists here, said in effect that the outcome of the talks on the reduction or limitation of imports depended upon the position taken up by Hong Kong. These talks remind me of what went on when we had the Anglo-American talks. After discussion, it was said, "We have no solution. We have not even a proposition for a solution, and we did not make any decisions."

The cotton industry in Lancashire cannot be expected to wait and wait while nothing is done. When New Zealand asked the President of the Board of Trade to take action because butter was being dumped here from Sweden and Finland, action was taken straight away. Action can be taken to save the motor industry, and we can subsidise the farmers, so why does a great industry like the Lancashire cotton trade have to wait upon the possibility of a voluntary agreement being made by the industrialists between themselves, each one depending and waiting upon what the other fellow is going to do? Surely this is an industry in which the Government should take action.

The employers whom I saw the other day were, I am sorry to say, very despondent about the future, and I was hoping that as a result of this debate we would get some hope that the Government really intend to do something which would turn the tide and help to get some confidence back into the industry.

Burnley was once the greatest weaving centre in the world, and still today one out of every four of our insured workers is engaged in the cotton industry or would be if they were not signing on for the dole. What is true of Burnley is true of all the towns in the weaving belt, particularly those in North-East Lancashire. I quote Burnley because I know the figures more intimately than for other towns, but it is true in the cotton industry generally. What Burnley is going through now is the same kind of experience that we had between the wars, when there were unemployment queues, people on National Assistance and families being broken up.

This is the position in Burnley. In 1952 our insured population was 46,900; we had that number of workers. At the end of four years, the insured population had gone down by 4,600. The population of Burnley is about 83,900, and in that same four years the population has gone down. But it has gone down by only 1,500, which means that the young insured skilled workers are leaving at a rapid rate, and have been leaving at the rate of 1,000 a year, leaving us with an ageing population which is becoming more and more aged.

There was a time when we bad a population of 100,000 in Burnley, together with 100,000 looms. We have services for 100,000 people. We have the best water system in the country. We have good roads. Incidentally, when the Government allowed us to build an estate in Burnley we had to pay for the roads which could have been paid for out of Government money. We have a good sewage system and we are very proud of our education system. At the technical college students are studying the textile trade. But the majority of them are foreigners. They have come from abroad and they are going back home to compete with us. We are doing what we can for the foreigners and we are willing to help.

I live near to the constituency of my hon. Friend the Member for Oldham, West (Mr. Hale). When I was a child in 1896, Platt Bros. of Oldham, the great machinists, sent their first load of looms to China. They were the first looms to go across the Great Wall. We were all very proud of it. When I was in China a few years ago I was told that some of those Lancashire looms were still working, after 50 years. They were well made. But some of the cheap cloth that one buys on the Oldham market is made with those old Lancashire looms which Platt Bros. sent out years ago. That is the kind of balance which now exists and which we think ought to be rectified more fairly in favour of the Lancashire cotton industry.

I have mentioned the fact that eight of our mills have been closed down. What has happened to the people that were employed in those mills? If we look at the figures we find that the insured population of this country in the last six years has increased by 1½million. Of that 1½million, 50 per cent. is in London and in the South-Eastern region. Of that 50 per cent. in this great conurbation 25 per cent. has come from migration. What was the solution that the Minister of Labour offered the other day? He said with regard to pockets of unemployment that he hoped that when the new Bill was passed he would have more power to deal with them. But he has the power under the 1945 Act. All that we want him to do is to use it.

The Minister of Labour tells us that Lancashire must export more cotton and that if we cannot do so we must export ourselves and he will pay the solicitor's fees up to£50 and£10 instead of£2 for incidental expenses if people will move their families south. How can people find houses in this great conurbation? When a man has to leave to find another job, what will happen to his wife, to his children at the grammar school and to the whole of their connections? It is no solution whatever to say that the Government will pay them to shift. The people in Lancashire have had to be shifting for a long time. What they want now is something to be brought to them rather than having to go round the placing looking for it.

Turning briefly to the unemployment figures, we find that in the last few years unemployment in Lancashire has grown so that the figure for Burnley alone is now 1,400. Eight cotton mills have gone. That lost us 1,538 people. Some of the people from those eight mills have drifted away. When I say that 1,400 is the current figure at our employment exchanges in Burnley, let it be remembered that the married women do not sign on and that there is a lot of short-time working and that this is not counted. Remember, also, that in some factories people are working two looms instead of four or six the whole week round and are getting only half wages. This, too, is not shown in the figures. The 1,400 gives by no means a real picture of the trouble in Lancashire.

The Colonial Secretary said the other day that we could not allow the Crown Colony of Hong Kong to be ill treated and that it was the business of the Government to protect Hong Kong. Could Lancashire become a Crown Colony instead of a duchy? Would we get protection then? The Board of Trade has not done anything and all that the Ministry of Labour wants to do is to move our people away still further.

I must not, however, be ungenerous. The Board of Trade has done something for North-East Lancashire. In 1953, we became a Development Area. We have all heard about Mullard's. Every time we mention unemployment in Lancashire we are told that we were given Mullard's, the largest factory ever built by the Board of Trade. It is, however, the only one financed by the Government that we have got. The local authority has done a good deal. The Mullard factory, which is not in Burnley, has been a Godsend, and we are to get another factory—Michelin tyres—in 1960.

The Mullard factory gave work to 1,200 people, of whom, say, 600 are from Burnley. In 1960, when the Michelin tyre factory is completed, there may be another 800 people from Burnley who benefit. From 1953 to 1960, therefore, the Government are giving employment to 1,400 people, but we are losing insured workers at the rate of 1,000 per year.

Mr. S. Silverman

From Burnley alone.

Mr. Burke

I am talking about Burnley, but, as I have said, what is true there is true of Nelson and Colne and many other places.

To sum up briefly, the Government policy concerning cotton is apparently still negative. It is what it always has been. It is dependent still upon getting voluntary agreement, which I do not think is likely to come about, although I hope that it does. If India says that she will not stand down and Hong Kong also will not stand down, must Lancashire go on suffering?

If to balance the country's economy it is necessary to push the motor car trade and other new industries, if the cotton industry must suffer and the policy of the Government is to let it decline, we say that because the Government's policy has caused this decline we are at least entitled to be given some replacement and that the Government should use their powers to ensure that all the burden does not fall upon this great industry, which once was of such enormous importance to the country.

We in Burnley and in Lancashire generally are back now to the position we were in before the war, when Walter Greenwood wrote the play "Love on the Dole." We have our dole queues again. We have our shut-down mills—dark, gloomy places—and National Assistance. All those things upon which we thought we had turned our back have come back to us. I tell the Government that for Burnley Tory freedom does not work, and that never for a long time have the people of Burnley had it so bad.

7.26 p.m.

Mr. Douglas Glover (Ormskirk)

I am honoured to follow the hon. Member for Burnley (Mr. Burke), who, whether or not I agree with everything he says, speaks on this subject from his heart. This is, I suppose, one of the most difficult debates in which any Member from Lancashire has taken part for a long time. Most of us are drawn two ways. We are quite aware that the Lancashire textile industry has been, not in the last five or seven years, but for forty years, a contracting industry. We are aware also of our responsibilities in the House of Commons to the people who make up the Commonwealth, of which we are all so proud; and that applies on both sides.

The first thing I would like to do is to pay a tribute to the people of Lancashire. The hon. Member for Burnley and many other hon. Members in their speeches today have drawn much attention to the fact that in 1913 this great industry, on which the industrial might of Britain was built—I hope that the Committee will remember that—had a production of 8,000 million yards.

The whole of Lancashire inevitably has watched that industry shrink from 8,000 million yards. Nobody, on either side of the Committee, would suggest that that was the fault of the Government. It was the fault of world economic growth. The adaptability of the Lancashire people, however, has altered their economy and the way in which they have earned their living during that forty years, so that even now, while there are these bad spots—I admit that Burnley is a bad one—where unemployment has risen, unemployment is less than the national average. That says a great deal for the adaptability of, and the facing of the future by, the Lancashire people.

Secondly, I should like to pay a tribute to both sides of the industry during the last seven years. Both sides of the industry have realised that this was not a problem with an easy solution. The two sides of the industry have not been nearly as vociferous in their criticisms and in their suggestions, because they knew that this was something that would need delicate handling.

I was most impressed this afternoon, as I am sure was everyone in the Committee, by the theoretical argument made by my hon. Friend the Member for Essex, South-East (Mr. Braine) on the Commonwealth concept, our responsibilities for the Commonwealth and the need for us to have mutual trade.

For a Lancashire man, it is very difficult to see the wood for the trees, but we have to face the fact that we in this country are not only the largest exporters to the Commonwealth, but are the largest percentage exporters in the Commonwealth, and, therefore, we depend on our exports to a far greater extent than any other single country.

Once we start to break and play about with the delicate mechanism that is built up in the Commonwealth by our trading arrangements, then we are asking for the same discrimination to be developed against our favourite product as is developed by us against the favourite product of somebody else.

We are to have a trade conference in Montreal. I think that we should go with our hands very firmly tied behind our backs if we went to that conference and said that we, the Mother Country, had been the first to start discrimination once one of our industries was hurt. I am not saying that the situation may not be serious, but I think that that is something that we in this Committee must be very concerned about. I know that many people in the Lancashire textile industry are just as seized of it as we are.

I would say to the President of the Board of Trade that once some of these problems pass a certain stage beyond the theoretical and the economic they become a matter into which emotion enters. I think that that stage has been reached in Lancashire. Psychologically, textiles are Lancashire. Although we accept that the textile industry accounts for only 20 per cent. of Lancashire's activities, whatever the industry the people in Lancashire are in, they are all conscious of textiles. Psychologically, textiles are their being. They are fearful now that the textile industry is to disappear. That fear, I am quite certain, will not be one about which they need really worry.

I am convinced that the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who runs a first-class business in Lancashire, will not, with his ingenuity, go out of business. He is too shrewd and there are many more people like him in Lancashire today. The shrewdest element in the textile industry will carry on, face the future and expand. Some of the present difficulties are passing ones. I think it only right—and it has not been mentioned in this debate—to say that the textile industry in Lancashire is suffering a worse depression at present than is caused by imports from Hong Kong. It is suffering depression because world textiles are suffering depression.

For instance, it is a very seasonal trade, as the hon. Member for Ashton-under-Lyne knows only too well, and at present there is not nearly the same off-take from the textile industry, because it has been the worst summer in living memory and that has had quick repercussions in the building up of stocks in Lancashire. As soon as that happens, when there is not the confidence, the mills go on to short time and their order books shorten.

That is one of the reasons why the textile industry is now going through this short period of deepening depression compared with what it was six months ago. I would say, therefore, while I have supported the Government in their attitude to textiles all through these last years, I wish that this debate today was not taking place. I have not been able to decide whether this debate was asked for by the Socialist Party foolishly or wickedly, but it is one or the other.

Mr. John McCann (Rochdale)

Honestly.

Mr. Glover

If it was foolishly I forgive them, because I understand the difficulties, but if it was wickedly I will never forgive them.

I believe that the reason the Opposition asked for a debate on cotton was to try to get hon. Members to take up a position from which they could not withdraw, issuing threats to our Commonwealth associates in Hong Kong which would make it very difficult for them to negotiate. It would have been far better if we had waited until those negotiations had been concluded and then had a debate on their outcome.

I hope that these voluntary negotiations will be successful. I believe that they will be successful, but I do not think that the success of the negotiations will be helped if we, in this Committee today, issue threats of the alternative if the negotiations are not successful. Moreover, we shall make our position at any economic conference, at which we are trying to build up and extend Commonwealth trade, far more difficult if we threaten without reaching the point of performance.

It is for that reason that I hope that everyone who speaks in the Committee today will not issue any more threats, because that is not the way in a free society in the Commonwealth to get agreement. I think that we are on the verge of agreement. Everyone who comes from Lancashire must sincerely hope that we shall get agreement. I believe that we shall. I close my remarks tonight by sending my best wishes to all those engaged in the negotiations, with the hope that they may be carried out in the spirit of good will which will knit the Commonwealth together and not destroy it.

7.38 p.m.

Mr. John McCann (Rochdale)

It is a pleasure to follow the hon. Member for Ormskirk (Mr. Glover), whose knowledge of cotton is far greater than mine. I cannot go with him all the way on his remarks relative to whether we should threaten, whether we should cajole, or whether we should go on just as we have been over the last four years, hanging on, and, like Micawber, waiting for something to turn up.

I can assure the hon. Member that this is neither a foolish nor a wicked debate. It is an honest debate forced upon us by the conditions of the people in Lancashire. We are asking for first-aid for the Lancashire cotton industry. It is too late to apply first-aid when the patient has died. The patient has been in a very seriously declining position for four years, so we think it is time that somethng was done.

I, like the hon. Member, enjoyed the contribution by the hon. Member for Essex, South-East (Mr. Braine). In pointing out that the balance of payments position was in our favour in Hong Kong, he showed that£11½million came from wool, textiles, vehicles, aircraft, etc. He did not go on to draw the parallel as to exactly how much we were buying from Hong Kong. We feel that had that parallel been made it would have shown that the Lancashire industry was bearing a disproportionate percentage of the imports which were coming in compared with industry as a whole.

The hon. Member made one very strange remark, quite true, but strange in the context in which he used it. He said that there was no balance of payments problem between this country and Hong Kong. That is quite true. I can assure the Committee that there is a large number of balance of payments problems in the houses of Lancashire people because of the position in which we find ourselves with Hong Kong.

I want first to kill the idea which is prevalent, I believe, on both sides of the Committee, that the Lancashire cotton industry is finished and that we are wasting our time bothering with it. Since 1945 the industry has spent£150 million on new plant and equipment and was on the way to being, and I believe still could be, one of the most efficient in the world. In spite of this influx of capital expenditure, we are the only major cotton goods producing country which does not protect its own goods against foreign imports, and there lies the root of Lancashire's trouble.

The hon. Member for Farnworth (Mr. Thornton) eloquently explained the root of the trouble in Hong Kong, and I am afraid that the Lancashire cotton industry will get no satisfaction from the remarks of the President of the Board of Trade. Not only in his speech did the right hon. Gentleman refuse to show us even an avenue of hope, but he went out of his way at one point to show that if the cotton industry goes the Lancashire cotton towns have no hope of getting any help from the Distribution of Industry (Industrial Finance) Bill or even the Finance Act. Indeed, the right hon. Gentleman went out of his way to say that unemployment figures in the Lancashire cotton towns are below the national average.

Mr. Glover

I am sure the hon. Gentleman wants to be fair, and the President of the Board of Trade is not here. My right hon. Friend did not say that unemployment in the cotton towns was less than the average; he said, "in Lancashire as a whole." Also, he certainly did not say that if the Lancashire textile industry went, Lancashire would get no help from the Government.

Mr. McCann

I accept that the President of the Board of Trade said "Lancashire," and I am speaking of Lancashire. The point is that unless a high rate of unemployment exists, and is likely to persist, we cannot hope for anything in the immediate future from the new Bill. Stress has been placed on the question of a voluntary agreement, but to conclude one there have to be two consenting parties. In this instance, it might be as well to look at what the other side are saying against us.

I have here a copy of the Trade Bulletin of the Commerce and Industry Department, Hong Kong for April, 1958. In a long dissertation about the visit of Sir Frank Lee, it goes on to talk about the object of his mission and states: The cotton piecegoods industry of Britain, centred in Lancashire, claimed to be in grave difficulty because of competition from India, Pakistan and Hong Kong, whose similar products enjoyed unrestricted, and traditionally duty-free, entry into the United Kingdom. We have heard a lot about traditionally duty-free entries, but it is only fair to remind the Committee that the traditions of the Hong Kong textile industry date back only to the late 1940s, so that I think we can forget long tradition immediately. The article goes on to state that Sir Frank was not the first emissary and that— …a year before Lancashire had sent its own representatives to inaugurate discussions which foundered because Hong Kong representatives suspected the sincerity of Lancashire.… Of course, that would appear to be just a remark designed to cover up their own shortcomings. It continues: The situation confronting Sir Frank was not easy, as Lancashire had, in the opinion of Hong Kong, contrived successfully, but unjustly, to present the Colony to the public in England as the scapegoat for the failure to reach accord with the two independent Commonwealth countries. This is what Hong Kong, this friend of ours, is concerned about, and is saying about us. I believe that there is at this moment a smear campaign against Lancashire starting in Hong Kong to cover up its own deficiencies. The hon. Member for Farnworth read an editorial from one of the Hong Kong papers which attacked him but did not try to refute what he said.

In the Manchester Guardian of 27th June, Mr. John Keswick, the chairman of the China Association, referred at the association's annual dinner to the question of limiting imports of Hong Kong textiles. He said: In Manchester they spin but do not always toil; in Hong Kong they both spin and toil. I wish the people of Lancashire toiled more. I am wondering if Mr. Keswick wants the Lancashire people to work their women thirteen hours a day, seven days a week, for one shilling an hour. I cannot help wondering, too, how long it is since Mr. Keswick was in a mill and how he would stand up to those conditions. That may be the first shot in the campaign which we are expecting.

We have been told about the British aims in Hong Kong. Three years ago the secretary of the Cotton Employers Association in Rochdale, in a newspaper article, stated that the industry in Hong Kong was based on Chinese capital, Chinese technicians and Chinese labour. Mr. Grimwood, in the Hong Kong office in London, emphatically denies that. Yet the Trade Bulletin stated: In the late nineteen-forties, the unsettled conditions of China led far-sighted cotton spinners from Shanghai to transfer part of their business to the protection of the British Crown; subsequent events in China led them to transfer as many eggs as they could to the new incubator; and not long after to hatch out a fully-fledged weaving industry.… So it seems that Lancashire is being sacrificed for Chinese profits.

Mr. Glover

It is kind of the hon. Gentleman to give way again. On the line of that argument his hon. Friend the Member for Burnley (Mr. Burke), a few moments ago, made great play, with great satisfaction, about the fact that Michelins were going to open a factory in Burnley.

Mr. Ellis Smith

That is our factory.

Mr. Glover

I do not think that is much criticism of the factory moving from Shanghai to Hong Kong.

Mr. Ellis Smith

It is American.

Mr. McCann

It can hardly be said that they are going there to be under the protection of the British Crown.

The result of the discussions was that Sir Frank took away with him when he left a statement that Hong Kong's cotton weavers were willing to carry on further negotiations for a ceiling on exports of grey cloth to the United Kingdom. We all know that unless made-up goods and double and single yarns, as well as grey cloth, are included, no agreement is worth the paper it is written on.

Finally, on this part—I am sorry to have to say this in case anybody has any hope of speaking—the Bulletin also stated: The Hong Kong industry also stipulated as part of any agreement reached that it would consider itself released from its obligations if either:—l. The voluntary agreement was used as a precedent by the Governments of other countries for applying restrictions to the import of Hong Kong products. 2. Significant unemployment and unrest resulted from restrictions on the export of textiles. 3. Restrictions were applied to other items of Hong Kong manufactured exports to the United Kingdom. In other words, the agreement would be completely useless and could be terminated immediately they wished.

The cotton employers themselves over the past few years have fought the Government on this very question. It was my intention to read from a pamphlet dated 1st January, 1958, entitled, "The U.K. Cotton Industry and the British Government", in which it bases its case plainly. In fairness, I must say—and I think hon. Members on both sides of the Committee will agree with my submission—that it is the function of government to create a situation in which industry, both employers and employed, can prosper in conditions of fair competition. The pamphlet states: The cotton industry does not ask for special protection, provided that the competition from overseas is fair, i.e., from territories where industries pay the same price for their raw materials and where standards of living are approximately comparable with those of Western Europe. Then it shows how the trade has increased time and time again from India, Pakistan and Hong Kong, and accuses the Government of doing nothing about it in the last four years.

The hon. Member for Burnley rightly used as an example his own constituency because he is very familiar with what is happening there, but the problem in Rochdale, which is a cotton town, is very similar. The flight away from the cotton industry in Lancashire towns is shown by the following figures. In 1956 45.5 per cent. of the total insured population in Rochdale and district were engaged in the textile industry. One must remember that "textile industry" covers not only cottons and man-made fibres but bobbins, machinery and all the aspects of the trade.

In 1929, in Preston, 46.1 per cent. of the insured population were engaged in cotton, and the percentage has now dropped to 16.1. In 1929, the figure in Chorley was 61.4 per cent., and that has now gone down to 30.5 per cent. The Rochdale figure has fallen from 65.1 per cent. in 1929 to 45.5 today. It can be seen how any recession in the cotton industry will hit the Rochdale people severely.

The main difficulty about a recession is, as the hon. Member for Burnley said, that people tend to leave the towns to look for work, and young people do not like travelling, and the result is that they buy a house in the town to which they go and we lose them. In 1945 Rochdale's population was 81,100. It went up to 89,000 in 1950—our private "bulge" and in 1957 it was down to 85,310. Thus, each year 1,000 of our people leave. This creates a problem for the local authority. It means that the administration of local services becomes more expensive per head of the population; with declining population we shall find it very difficult to maintain services.

I appeal to the Government to do something before it is too late. If they want an indication of how Lancashire feels about this, I can speak with a great deal of feeling because I arrived in the House from a by-election in which cotton was the major issue, and the Government, which had the seat, finished at the bottom of the poll because the people of Lancashire were expressing exactly what they thought about four years of doing nothing. Apparently the President of the Board of Trade suggests that we have to go cap in hand to the East for voluntary agreements while Lancashire starves. Very shortly the Government will go to the country for votes, and unless they do something about this they might as well go to the Far East as to Lancashire, because they will get exactly the same treatment in Lancashire as they did in Rochdale.

The Temporary Chairman (Mr. James H. Hoy)

Mr. Bidgood.

Mr. S. Silverman

On a point of order, Mr. Hoy. We are today debating Supply. As I understand the constitutional principle behind debates on Supply, it is that Supply is not granted to the Crown until grievances have been remedied, and the purpose of a debate on Supply is, therefore, to debate grievances. The matter that we are now discussing causes no greater grievances than in my constituency, because, alone among the constituencies in the country so far as I know, my constituency depends almost entirely, up to 70 per cent.——

Mr. G. B. Drayson (Skipton) rose——

Mr. Silverman

I am on a point of order. The hon. Gentleman cannot interrupt a point of order. My constituency depends up to 70 per cent. on the industry, and I do not know any other constituency of which that is true. I have had the honour to represent my constituents for twenty-three years, and they are entitled to have their grievances heard here as are those of any other constituency, and I should like to know whether they will have that opportunity in today's debate.

The Temporary Chairman

All I can say is that, as far as I am aware, hon. Members representing a number of constituencies wish to refer to grievances, and what the Chair has to do is to share the time available as fairly as possible. While the hon. Gentleman is drawing the position of his own constituency to my attention, the same thing could be said about many other constituencies. Mr. Bidgood.

7.45 p.m.

Mr. John C. Bidgood (Bury and Radcliffe)

The hon. Member for Nelson and Colne (Mr. S. Silverman) cannot claim to be the only Member of Parliament with a grievance on the part of the cotton interests in his constituency. I am glad to have the opportunity of rising on this side of the Committee to say what I feel about the problems as they affect my constituency.

I was rather intrigued by the remarks of the hon. Member for Rochdale (Mr. McCann). I know the problems which confront him, but throughout his remarks he was perpetuating the theme which has been running through all the Opposition speeches in that hon. Members opposite regard this as an occasion to criticise the Government without offering any constructive solution. I waited hoping that the hon. Member would put forward some constructive suggestions, but I failed to hear them.

It is easy for hon. Members on both sides of the Committee to seek a scapegoat for the difficulties which confront Lancashire. In the past I have been critical of the lack of action on the part of the Government, and if I thought that the Government were responsible for Lancashire's ills I should say so during my speech. However, I feel sincerely that there are circumstances which are outside the control of the Government and peculiar to the Lancashire textile industry. We know that for seven years Lancashire's export trade has been declining. We also know that if all the imports of Asian cloths were to stop tomorrow Lancashire's problems would not be solved. I feel that if we are to look for the proper nigger in the woodpile we might look only as far as the people who are importing Asian cloths, for the fact remains that if those cloths, which are freely imported, were not imported, we should find that the problem would not be so acute.

The difficulties of the Lancashire textile industry can be summarised and taken back to a date in 1943 when a report was issued by the United Textile Factory Workers' Association which said that inefficient machinery should be scrapped and replaced by modern machinery and that there should be replanning and re-spacing of machinery in many spinning mills and weaving sheds. We all know that that 1943 report set the pattern for very many subsequent reports by every conceivable type of interest.

In 1943 there were two types of employer and two types of operative. First, there was the employer who said "What was good enough for my grandfather is good enough for me", and the operatives whom he employed usually adopted the same line of thought. Those mills have mostly gone out of existence in the intervening years, and I do not think that any hon. Member will have very much sympathy for them, because they were not prepared to adopt modern methods. But there were some people in Lancashire who took to heart the advice that they had been given. As the hon. Member for Rochdale said, since 1945 no less than£150 million has been spent in capital equipment in the Lancashire cotton trade.

I want to give an example concerning a typical firm which has been responsible for a portion of that capital expenditure. It is within my knowledge that the firm decided that unless it brought itself up to date it was doomed to utter and complete failure. Accordingly, in the last ten years it has spent£600,000 on new plant and machinery. That figure does not include buildings.

Mr. Ellis Smith

Is this expenditure in the cotton industry?

Mr. Bidgood

Yes, the firm are spinners. Hon. Members will realise that, having spent a large amount of money, and having gone so far, the firm cannot retract. Its point of view, which is typical of that of many Lancashire cotton people, is, "We have done all we can to make ourselves competitive. We have sunk all we can into bringing ourselves up to date". Having spent that vast amount of money, what does the firm find? It finds that whereas, at the time it embarked upon this modernisation programme, India was sending us 76½million sq. yds. a year, it is now sending us 200 million sq. yds.; Pakistan, which had been sending a negligible quantity, is now sending 7 million sq. yds., and Hong Kong, which had been sending 20 million sq. yds., is now sending 100 million sq. yds.

The firm says to itself, "If we had reciprocal agreements we could export almost anywhere in the world, because we are competitive." Instead, it finds that if it wants to export to India it has to pay a duty of over 25 per cent., and that imports are controlled at 8 million sq. yds. annually, and that if it wan to export to Pakistan the duty is over 50 per cent., if it can obtain an import licence—which is a virtual impossibility. Nevertheless, both those countries and Hong Kong can export to this country free of any quota or tariff restrictions. I am putting the point of view of a firm in Lancashire which has done its utmost to bring what was a dying industry into a competitive state.

Those firms which have looked ahead cannot retract, and they feel that they have a grievance. The first body of people to whom they turn is the Government. That is the fashionable thing to do. We all know the type of mentality that is involved. If the firm is doing very well, it says, "We do not want any Government interference," but the moment things go wrong it says, "What are the Government going to do about it?" This is only natural and we do not decry such people for adopting that attitude.

But those people who have invested large amounts of money go a little further. They say, "We quite understand that the Government are bound by the Ottawa Agreement, and by Imperial Preference in the case of India and Pakistan. We quite appreciate that Hong Kong is in a different category, because it is a Crown Colony, and we quite agree that the Government have a duty to protect the livelihoods of the people in such a Colony. But we also feel that the Government have an equal duty to protect the livelihoods of the people of Lancashire. In view of the fact that the 1½million refugees from the Chinese mainland are largely responsible for the influx of Hong Kong goods into this country, we cannot understand why the Government should be expected to guarantee their livelihoods."

In view of the fact that the exports from Hong Kong to the United Kingdom are comparatively small in relation to their expanding output, and comparatively large to the contracting Lancashire industry, the Lancashire manufacturer also feels that restrictions on imports from Hong Kong would affect Lancashire more favourably than they would affect Hong Kong adversely.

To the Lancashire cotton operative and employer the Government have never been seen to be co-operative in their attitude to the problems of the industry. This is where I become a little critical of Government policy. We know that various consultations have gone on at Government level and other levels throughout the industry, but Lancashire feels that it has been let down and neglected by the Government of the day. I do not go so far as hon. Members opposite, who lay the difficulties at the door of the present Government, and I certainly could not subscribe to the sentiments expressed by the right hon. Member for Huyton (Mr. H. Wilson), who said—I will quote his words—. "When we were the party in charge of the cotton industry, how many mills closed?" I do not think that even the most aggrieved member of the Lancashire textile industry would accept the fact that any Government, of whatever colour, were ever in charge of the cotton industry. The Government can only set the pattern, and the present Government are trying to set the pattern by peaceful negotiations between the interests of Lancashire and those of the two Commonwealth countries and the Crown Colony involved. When my right hon. Friend winds up the debate, I hope that he will give us a little comfort in this respect.

I know the difficulties which confront the Government at present. I know that many of the criticisms which come from Lancashire are not well founded, because some Lancashire people are trying to find a scapegoat and think that the Government are as good as any other. I hope the negotiations which are now proceeding will prove successful, because I know—as south country Members, who think that industrial activity in this country ends at the northern end of the Barnet by-pass will not know—that cotton is Lancashire and Lancashire is cotton.

The question whether or not people are being dispersed to other industries, and leaving the industry which the same family has carried on for generations, does not affect the position one iota. The little man on the corner, selling sweets and tobacco, in Rochdale, Burnley, Bury, or Radcliffe is steeped in the cotton industry, despite the fact that he has never actively engaged in cotton. It is in his blood. If only we can get that fact across to the people in the South of England we shall have achieved something. I will not repeat what I said before. Any north country Member will agree with it.

I hope that the facts will sink in and that the Government will find a solution to this most grave problem, which I am sorry to see dragged into the political arena this afternoon. I am sorry that has happened, because I am certain that we can settle this problem without politics.

8.11 p.m.

Mrs. Barbara Castle (Blackburn)

I am a little bewildered by the speech that we have just heard from the hon. Member for Bury and Radcliffe (Mr. Bidgood) and which I have been trying to understand. At the end, I cannot get clear whom he is trying to comfort, whether it is Lancashire or the Government.

The hon. Member began with the orthodox line of how he would not wish to blame the Government for matters which were not under their control. He lectured us saying that he had been hoping and waiting for constructive suggestions from our side of the Committee. At the end of his speech he seemed to be putting forward the same arguments as we had been advancing a little earlier, in the excellent speeches which have been made from this side of the Committee, except that he was doing it in such a hard-hearted way that will not have benefited either himself or his manufacturers.

It is not a matter of bringing the cotton industry into the political arena; what we want is to bring the cotton industry into the arena of action. The sort of mood we will find among Lancashire manufacturers today has nothing to do with party politics. In my post this morning I received a pencilled note, anonymouse, and scribbled on a torn bit of paper. It is headed, "In haste" and it reads as follows: Mrs. Castle, when will you and all Lancashire M.P.s play hell over our weaving mills closing down 75 per cent.? We are becoming on the rocks, and it's impossible to carry on against foreign cloth prices. I have spent£18,000 on new machines in our weaving department and still lose thousands. We will lose all if we keep on. Is it not time the House did something to stop this rot at once? I am a respecter of all parties, and have even voted for you, too. The note is signed "Manufacturer".

That is not bringing the cotton industry into politics. That note is the desperate heart-cry of a man who has been doing what many cotton manufacturers have been doing, spending money trying to keep abreast of the demands they get, the unctuous demands, from the Board of Trade that they should make themselves efficient.

The problem arises acutely in my own constituency, and that is one of the reasons why I was so anxious to speak. We have heard from the President of the Board of Trade an astonishing speech. It contained the usual business about, "If only Lancashire would face up to competition and keep abreast of new ideas", and the rest of it. In my constituency one of the most modern mills in Lancashire is "weaving up" as they say. It has taken the decision to close completely when the Lancashire holiday starts on 19th July. That is the Newton Street mill, the last mill remaining in Blackburn to Messrs. Thomas Longworth, Ltd. This mill has a shed which was built only three years ago, with 96 automatic looms making high grade fabrics. The auto-shed has the latest arrangement of preparation, weaving and finishing processes under one shed. It is closing.

The same pattern is to be found in other constituencies. Blackburn has lost 20 mills in the last few years. Of the remaining 59, 36 are equipped with automatic looms, yet a large number of them are on a four-day week. It is no answer for the President of the Board of Trade to come along with the old, old lecture about Lancashire keeping abreast of modern ideas if it is to survive.

The Committee has also been listening to a lecture to Lancashire from the security of South-East Essex, of all places. It is all very fine for the hon. Member for Essex, South-East (Mr. Braine)—I wish he were here at the moment—to hold forth in that impassioned way about Commonwealth trade. I have no doubt that he is very sincere about the matter. Both he and the Government say to Lancashire, "We must not do anything to hurt the people in the Colonies".

I do not know which nauseated me more about the speech of the President of the Board of Trade, his sudden concern for the rights of our Colonies—something for which the present Government are not particularly famous—or his prolonged indifference to the human problems and sufferings of Lancashire. We heard a nice, high-moral-tone argument about why there could be no action to help Lancashire at this time. The speeches came back time and again to the colonial theme: what was to happen to poor Hong Kong if restrictions were put on her trade? What would happen to the hundreds of thousands of refugee textile workers if they were to be thrown out of work?

That argument was destroyed by the very people who put it forward, because in the next breath they proceeded to tell us that we did not need to worry because the Government were negotiating voluntary restrictions. If it is immoral to introduce restrictions, it is immoral to press for voluntary ones. The hon. Member for Essex, South-East talked about our wanting to put a colour bar into trade. We have a kind of inverted colour bar at the moment in trade in that we put restrictions on foreign trade and foreign competition of a disastrous kind, but, according to the hon. Gentleman's argument, can never get any kind of planned trade within the Colonies. If it is wrong to restrict imports from Hong Kong because that means a colour bar in trade, it is wrong for the hon. Member to turn round and congratulate the Government upon organising a voluntary colour bar.

So we have the Suez business all over again from the Government. What they do, they do ineffectively. It is nonsense to say that those who represent Lancashire constituencies do not care about conditions in the Colonies because we ask for something to be done to stop the flood of cheap imports. On the contrary, it is those who will not do anything about the flood of imports who are indifferent to conditions in the Colonies and who, by allowing this laissez faire policy to continue are perpetuating those conditions.

This is the same sort of argument that used to be heard about child labour in the last century. It was, "We cannot stop children from working 12 hours a day because their families are dependent upon their wages, and those families would starve." Thank goodness there was a good deal of humanitarian common sense in certain sections of the House of Commons at that time which campaigned against the conditions until they were made illegal.

Experience has shown that we never cure bad conditions by exporting them. That is the moral case that we put against the observations which we have had from Government supporters and the President of the Board of Trade. Theirs was an old, nineteenth century argument that laissez faire will cure bad conditions. Well, it does not cure bad conditions. Only planning will cure those conditions, including restrictions, if lack of restrictions means an open door to the export of goods made under bad conditions. I agree that this House has a tremendous responsibility towards Hong Kong, but this sudden interest by the Government Front Bench in the people of Hong Kong is of very recent date. This concern that the people of Hong Kong should have bread in their mouths has not figured largely in Government statements until recently. It is shown now merely because we demand that Lancashire should be defended, also.

I agree with my hon. Friend the Member for Farnworth (Mr. Thornton), who, in his excellent speech, said it was not enough to pass labour laws to improve conditions in Hong Kong. That in itself will not necessarily deal with the situation. We have to face a fundamental challenge in the excess population with which that territory cannot possibly cope because of the very special conditions there. This problem will need very careful thought. We shall have to do something fundamental and perhaps work out schemes for resettling some of the refugees in other parts of the Commonwealth, schemes on which a lot of money will have to be spent, but that is something we have to face as a national Parliament.

The Government have no right to put that problem on to the shoulders of 50year-old weavers at the Newton Mill in my constituency, who had a tragic tea party when the mill closed the other day, knowing that many of them, who had spent a lifetime in the industry, would never work in it again. It is absolute nonsense for the Government to say that those workers are being absorbed fairly easily. This thing is insidious and it spreads to other industries. It is already spreading throughout my constituency which, as everyone knows, is not predominantly a cotton industry constituency, although cotton plays an important part in it.

I will return to this later but first I wish to return to the Commmonwealth trade agreement, because that is so important. It would be intolerable if the message went out from this Committee that we on this side were trying to solve Lancashire's problems at the expense of a helpless Colony. Of course we are not. We are the people who have called for colonial advance, but we say it will not help the Colonies to keep them in their present state of misery at the expense of Lancashire. Two blacks do not make a white, and never have. If the Commonwealth is to be a reality and to be developed properly, Commonwealth trade must be based on common sense. It is just not common sense to allow a flood of imports made under conditions of this kind to come into our developed society and drag down its standards. Commonwealth trade cannot continue on that basis, whatever the pattern laid down in the past has been. We may have to look at it again with a view to finding a new basis on which we can knit Commonwealth ties together.

I was a little astonished by the argument of the hon. Member for Essex, South-East, when he asked where all this would end. If restrictions are put on the import of cotton textiles from Hong Kong, he said, before we knew where we were the same would have to be done for some other industry. Does he not realise that the argument also works the other way? The speech of the President of the Board of Trade gave the impression that the Government have faced, quite resignedly, a continued contraction of the cotton industry. That was the logic of the speech. What he said was a sentence of death for Lancashire.

The Under-Secretary of State for War may say, at a Conservative garden party at Clitheroe, that there are enough Conservative Members to see that Lancashire is not let down. That is the kind of speech that Conservatives make in Lancashire, but the speech of the President of the Board of Trade today was a sentence of death for the industry on the line of argument that the underdeveloped areas were all developing textiles and there was no means of stopping this kind of low wage competition.

It is true that under-developed countries very often start developing textile industries first because they are some of the easiest industries in which to train unskilled labour, but they are developing all the time and they will not stop there. If the argument is that because an underdeveloped area is developing we must accept an unrestricted flow of its exports, soon there will not be an industry in this country which is not faced with a challenge. The President says Lancashire must switch to other industries. What would happen if Lancashire switched to, say, the production of electrical goods? Before we knew where we were under-developed areas of the world would be producing cheap electrical goods. Then we would be told that that industry was contracting and we must shift to something else. To what could we turn then? Eventually these underdeveloped areas will be producing capital goods. Already Northrops, who make automatic looms in my constituency, have put all the workers in their foundry on short time and declared redundancy in the loom section, because the demand both at home and abroad is contracting. Therefore, we have to plan. That is our approach. We do not believe in the mad laissez faire economics which have always been the foundation of poverty for ordinary people.

I say to the President of the Board of Trade that the really significant thing about the contraction of the cotton industry is not that the contraction has been taking place at a steady pace due to steady changes in the demand for our goods overseas, or to a steady change in the development of overseas competition. The most significant fact about the difficulties of Lancashire is the sudden acceleration in the rate of those difficulties. That is the really important thing which the Government have to face at the moment.

To give an example, in Blackburn, in 1954, we had 79 weaving mills. Since then 20 have closed, but 10 of those have closed since January this year. That is the rate of acceleration, and that is what I have to face in my constituency. There were 27,000 looms in Blackburn in 1954 and today there are 19,400. Eight mills are "weaving up" and they will account for the scrapping of 4,300 more looms. That means a rate of decline in looms of 7,600 in four years rising to 4,300 in four months. As the Secretary of the Blackburn Weavers' Association said in my constituency last week, "If things go on like this, we shall lose another 20 mills by Christmas".

The Government must not think that they can isolate this problem in the cotton industry or in Lancashire, because in addition to 800 fully unemployed signing on the register at Blackburn, which is a significant increase, there are 1,800 to 2,000 temporarily stopped or on short time, and this growing factor of short time has a contracting effect throughout the whole of industry. It is not only cotton that is affected. The very basis of the slump which the country faces is that we have under-used capacity in this country. Productive capacity is standing idle, and the amount of it is on the increase.

I hope that hon. Members read the interesting article in the Observer yesterday by the economic editor, reporting on the United Nations latest World Economic Report. This points out that the Western world is now suffering from the problem that for some time past there has been an increasing gap between available capacity for making manufactured goods and the effective demand for them. It goes on to say, In the light of this evidence, the behaviour of one Western country after another, in trying to curb demand in an effort to beat inflation, begins to look deliberately suicidal. This curb on demand is gaining an increased impetus from the shrinking of the cotton industry. I say to hon. Members from constituencies other than Lancashire constituencies, "It will be your turn next if this goes on".

Just as we believe that the Government are wrong in their deflationary approach to the country's economic problems, so we believe that they are completely wrong in their defeatist approach to the cotton industry. This defeatist approach to the cotton industry is typical of the Government's economic policy. They have a naturally deflationary mind which is not worried by a bit of unemployment or human suffering as one case after another brings its load of human tragedy.

The need for action is urgent. If it is right to restrict these imports voluntarily, then it is right to see that the attempt at voluntary agreement succeeds by any means that are necessary, including the threats which hon. Members have mentioned. The Government had better hurry and make the policy effective. That is what we ask.

In the meantime, the situation is desperate in constituencies such as mine and those of other hon. Members who have taken part in the debate. There is a possibility that 20 mills in my constituency may be closed between now and Christmas, while all this long, argument about voluntary restrictions is going on. Why cannot we have some emergency action now? If the Government cared they could do what was suggested to me by the secretary of the Blackburn and District Amalgamated Power-Loom Over-lookers' Association, who wrote to ask, "Why cannot we have some Government orders placed now while these voluntary talks are going on and while they are taking so much time?"

Why cannot the Government tell local authorities and regional hospital boards that they must buy Lancashire when they are equipping their institutions? There is action which could be taken now if the Government cared, but the answer is that the Government do not care because they are a Government with a deflationary and defeatist mind.

8.32 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

When the hon. Lady the Member for Blackburn (Mrs. Castle) said that the Government Front Bench did not care in the least about this "load of human tragedy", she very nearly succeeded in driving me solidly behind the Government and in support of them on an occasion on which I am not very inclined to support them, because it seemed to me that she so overstated the case and gave the Government so little credit for their good intentions—even if they have not been effective—that it would be only fair on my part to give them some support.

The hon. Lady must realise that it is quite possible for there to be two views on the subject. It happens that I share her view on this vexed problem of imports from Hong Kong and not that of the Government, but I do not think that the cause which we all have at heart is advanced very much by the kind of extravagant language which she used. I hope that even if we do not agree with those who have the responsibility, we can at least give them credit for good intentions and for a clear, if faulty, approach.

I do not believe that this is a problem which ought to receive the amount of hotted-up air which it receives. It seems to me that it is in a small compass and that what we ask should be perfectly possible without introducing the world considerations which are so often raised. We were told today, for example, that the Imperial Preference system would collapse if some restriction on Hong Kong imports were imposed by Her Majesty's Government. That is what was said—that the Imperial Preference system would collapse. That is rather like the sort of awful warnings that are always given when any new suggestion is made.

One remembers how the military strategists used to say during the First World War, and between the wars, and right up to 1940, "If we lose the Channel ports, we are done for"—or something like that. And then we lost the Channel ports, and survived. In the realms of economics and politics these tremendous warnings are often issued, and we later find that they were all unnecessary, and that the whole danger was exaggerated.

Let us see what we are asking. We are not asking, as my right hon. Friend the President of the Board of Trade suggested, that Hong Kong operatives should be thrown out of work. He suggested that it was much more wicked to throw Hong Kong or colonial workers out of work than it was to throw out British workers, because colonial workers cannot find another job whereas British workers can. That was one passage in his argument, but the premise is false.

I do not suggest that the present level of imports from Hong Kong should be forcibly reduced, and I do not think that anyone has claimed that. It may be that there are a few Lancashire industrialists who would like that, but I do not believe that any realist, any serious politician or businessman would suggest that we should reduce them. What we say is that Hong Kong imports should be held at their present level, which is a very different matter because it does not involve the throwing out of work of any of those at present engaged in the trade.

What it would do would be to serve on the Hong Kong Government and on the Hong Kong manufacturers a notice that they must not continue recruiting more cotton workers in Hong Kong, encouraging more refugees from China to come in, with absolutely no finality or limit whatever. If that goes on it will prove of no service, ultimately, to Hong Kong or to anyone at all. What we fear is not so much the present level, high though it is—I am sure that Lancashire, with her great adaptability, can cope with that—but the nightmare that there is never to be a ceiling. That is what we fear.

As long as that nightmare is there, it is quite obvious, from the speeches that we have already heard, that no Lancashire manufacturer, no Lancashire spinner or weaver will do all the things that the Government and everybody else, quite rightly, exhorts Lancashire to do, which is to modernise and re-equip. They have all had the experience of which examples have been given, of those who have re-equipped having to go out of business because their capital costs were so high, whereas the small man who, either through obstinacy or poverty, has soldiered on with his old looms is still carrying on.

To modernise, Lancashire must have at least a temporary umbrella and, above all—because this is all a question of confidence—the psychosis of ever-increasing imports from Hong Kong must be removed. Once we can remove that mental, that psychotic fear, something can be done. A lot of it, I willingly concede, is in the mind rather than in reality, but it has now become a fact, because it has got so firmly into the minds of the men who matter there that no amount of mere persuasion will get it out. Unless we do something about that, I have no doubt that the whole industry will go with a rush. Nobody will modernise as long as this nightmare remains.

That is the Government's task. Would it really harm Hong Kong very much if what we asked was done? I do not believe that it would. If it would harm Hong Kong enormously, then one would have to seriously consider a most difficult dilemma; one would have to decide who would be sacrificed. But I do not think that it would harm Hong Kong if her present level of trade were frozen for a short period. It would be quite a different matter if we asked that Hong Kong should turn off a lot of workers, but that has not been asked. It is merely that her trade should be kept at the present level, and that meanwhile this psychosis in the mind of Lancashire—because they talk of nothing else in Lancashire—should be removed and the industry should have a breathing space in which to transform itself and do the things that my right hon. Friend has so rightly suggested.

I do not understand why that is not accepted as a sensible policy. I fear that I differ from my right hon. Friend when he says that that would not advance the voluntary negotiations which are going on. These are negotiations between businessmen, between our businessmen and Hong Kong businessmen, many of them Chinese, all of them pretty tough and all with an eye to making money—not that there is anything wrong with that, for that is the object of their existence as businessmen, and the same applies to our businessmen.

Are we to remove from our team of businessmen the one card which they have—because in all these commercial negotiations it is the power that one can produce that counts? They are not negotiating, as it were, with racquets across a tennis court or anything like that. They are negotiating with the knowledge of relative positions of power behind each other. We must not deprive our negotiators of their one card, which is that unless the Hong Kong businessmen are sensible and come to some sort of an agreement on what to them is not an unfavourable offer, our businessmen will have behind them the possibility—and all we ask is that it shall be a possibility, that the matter shall remain open, and that the door shall not be slammed—that Her Majesty's Government will be obliged to take some action on her own.

That is not very much to ask when one analyses the situation. Yet over and over again in these debates we hear these phrases, many of them shibboleths, which rouse good emotions, such as Imperial unity, Imperial Preference, the open door, free entry, freer trade—all sorts of words which sound wonderful and which people who have not seen this thing in action feel they must support. If only the Government would not continue to rely on these high-flown, and I think overblown, words our negotiators would have a much better chance than they have had.

Mr. Hale

I agree with almost every word that the hon. Gentleman has said. He will probably agree that many of the Hong Kong businessmen are the right wing end of the Communist partnership in China which split up when the Communists came, one remaining to play with the Communists, one going out to play with the Imperialists. This picture of Hong Kong businessmen singing "There'll always be an England" is a rather romantic picture, in view of the fact that Hong Kong will become Chinese before long, and then the hon. Gentleman's observations about restriction of Chinese imports would certainly apply.

Mr. Fletcher-Cooke

There is a lot in what the hon. Gentleman says, particularly his reference to the fact that we must take not a romantic view but what I would call a classical view of the Hong Kong position. Although it is painted in red on the map, the people whom our negotiators have to meet there are by no means the sort of red which is painted on the map they are perhaps a different sort of red in many cases. That is why at the beginning of my speech I appealed for the matter to be seen through commercial spectacles—perhaps rather abject spectacles—rather than through these high-flown and romantic spectacles which have blinded the Government far too much.

This vague fear that if the principle of free imports is pierced at the slightest point the whole balloon will burst is quite wrong. I have noticed this now for seven years. Ever since I became a Member of the House, I have been increasingly irritated by it. So long as the Government insist, quite unnecessarily, to my mind—if only they would keep absolutely quiet on the subject it would be far better—on proclaiming the sanctity of this principle in such matters as we are discussing on this Vote tonight, I am afraid that I cannot give them my support.

8.45 p.m.

Mr. F. Blackburn (Stalybridge and Hyde)

The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) had to hunt round very carefully to find something to say in defence of the Government, and the best he could do was to say that they had good intentions. There is the well-known saying about the road to hell being paved with good intentions. Possibly, the Government have good intentions, but they have done nothing to carry them into effect.

I entered this debate in a very pessimistic frame of mind. I had very little hope that, whatever was said, we should persuade the Government to take any action at all. The speech of the President of the Board of Trade did not cheer anyone up at all. It confirmed the pessimism. What did his speech add up to? First, he gave us an historical survey. Then he explained the reasons that the Government could not do anything. Finally, he said that if only the Cotton Board would find a solution to the problem the Government would be very pleased.

It is very difficult for a Member representing a textile constituency to speak on this subject without emotion. The problem is not just an economic one. It is a very human one. Since the Government came into office, from 80,000 to 100,000 people have left the cotton industry, many of them men and women who had spent a lifetime in it. Many of the women have been lost to the industry entirely. Being thrown out of work is a tragedy at any time, but when a man realises that, if he is thrown out of work, there will be no possibility of his finding employment again in the industry about which he knows most, it is a double tragedy. There is growing resentment in the cotton towns. If the Government do not know about it, they can take my word for it.

What have this Government and previous Governments since 1951 done? We have had a good many soothing speeches. When things have gone wrong and they thought there was going to be a bit of rebellion in Lancashire, they sent one of their Cabinet Ministers to make another soothing speech. Then they hoped that things would be a little quieter. The Prime Minister recently saw the Cotton Board. It struck me that there was a marked similarity between the statement issued after that meeting and the statement issued after the meeting with the previous Prime Minister.

Lancashire and Cheshire receive plenty of advice from different parts of the country, including South-East Essex, about what should happen to the industry. We are told that we must contract. We have been told to contract since 1914, and we wonder how far we have to go. Have we to disappear altogether before some people are satisfied? The last debate we had was in 1955. Since that date, during years of inactivity by the Government, another 300 mills have closed. Hon Members will remember that that debate took place on an Opposition Motion, to which there was a Government Amendment. I should like to quote a few words from that Government Amendment: …and approves the declared intention"— I stress those words— of Her Majesty's Government to take such safeguarding action on imports as may prove to be essential and appropriate. So the Government are not entirely opposed to taking action about imports. The trouble is that they do not know when a thing is essential or appropriate.

What do those words mean? Were they intended to have any meaning at all? Were they intended to bamboozle the textile industry? Were they intended just to calm down the Government's own supporters from the textile constituencies? Or were those words inserted because they knew that, in a couple of months, there would be a General Election? Has the time since 1955 never been appropriate for action to be taken? The President of the Board of Trade gave us a historical survey. I think that it might be as well to consider the last twenty years.

First, during the war, the industry was concentrated, in the national interest. After the war, it was encouraged to expand; people were encouraged to go into the industry. They were told that Britain's bread hangs on Lancashire's thread, and there was great expansion and development. We thought that conditions were good. Then we had Korea and the rearmament programme and the home demand was so great that even our own industry could not cope with it. Therefore, with the consent of the industry, large orders were placed abroad, and it is no use comparing the imports of those years with present-day imports.

Then we had the 1952 recession. It is quite true that there were, at the end of 1951, first traces of a possible recession, but this recession developed in 1952, and then we had the Japanese Peace Treaty. No sooner was there a slight recovery from the 1952 recession than we had enormous increases in imports from India, Pakistan and later Hong Kong. I will not go into detail about the conditions in Hong Kong; my hon. Friend the Member for Farnworth (Mr. Thornton) has already dealt in some detail with the conditions there.

What I say to the Government is, "Are you quite sure that by leaving things as they are you are doing the best for the industry in those countries? Is not there a danger that you may be giving too much encouragement to India, Pakistan and Hong Kong by saying to them, "Come to this country. Send your goods here. This is the easiest market in the world for you", thereby encouraging them to place too much dependance upon a single industry so that they will make the same mistake that Japan made and have too much of the economy dependent upon the textile industry?

This is not only a problem that concerns the import of gray cloth. In our debate in 1955 I raised the question about the import of yarn and the serious position arising in the doubling section of the industry. That problem tends to be overlooked, because the doubling section is rather small, but it is an important section which has played a great part in the quality section of the textile industry. The problem there is very serious. It is not only the imports from Hong Kong with which they are having to deal, but, of course, changing fashions are also having a serious effect upon the doubling trade.

Not only the gray cloth and yarn, but the finishing trade is also now beginning to feel a little of the breeze, because finished goods are being imported, together with a great many made-up goods. Not only that, but even industrial cotton is coming into the picture. It is the same continuing problem which is growing worse and worse. I know that the Government would be quite happy if somebody else could solve the problem for them, but they are not prepared to take any action themselves.

I have here the details of a great many mills in my constituency. The time is short and I will not go into them. But I suppose that most hon. Members who represent cotton constituencies could bring forward the same sort of figures, about mills running at 25 per cent. of capacity, mills working three days a week, mills working every other week, mills where one-third of the looms are stopped, a mill working on 40 per cent. production last week, 38 per cent. the next, of which half will go into stock, and not having the least idea what they will be able to run the week following. Other factories are either going out of production or, in the hope that there will be some improvement, are trying to continue and are putting material to stock. The Government, however, cannot find that the time is either appropriate or essential.

Finally, I should like to quote what was said by the former Minister of State, Board of Trade, at the conclusion of his speech on 9th March, 1955: …and we have made our own studies and preparations for action if that were to become essential and appropriate."—[OFFICIAL REPORT, 9th March, 1955; Vol. 538, c. 572.]

An Hon. Member

That was before the Election.

Mr. Blackburn

Yes. Is it not about time that we were told the result of those studies? What are the preparations which the Government have made? Will the Paymaster-General, when he replies, please tell us when those preparations will be essential and appropriate? The cotton industry would very much like to know.

8.57 p.m.

Mr. Douglas Jay (Battersea, North)

This debate has certainly shown three things very clearly. First, Lancashire's whole economic life is threatened by the present volume of textile imports. Secondly, everyone with knowledge of Lancashire's problem believes that something energetic and urgent ought to be done. Thirdly, no one who is off the Front Bench, with the possible exception of the hon. Member for Essex, South-East (Mr. Braine), is satisfied with what the Government are doing.

Mr. Braine

The right hon. Gentleman must not be allowed to get away with that. There was nothing in my speech which suggested that I was satisfied with the present position. My plea was that the whole situation should be seen in perspective and that a demand for discrimination against the products of one Commonwealth country at this time would be injurious to the long-term interests of our own country.

Mr. Jay

I apologise. Nobody is satisfied with the Government today.

The hon. Member for Middleton and Prestwich (Sir J. Barlow), who is, I believe, chairman of the Trade and Industry Committee of the party opposite, was speaking for Lancashire and for a very large part of this Committee when he said that the Government had failed to tackle this problem, that they had consistently procrastinated and that he himself could detect no change of heart in what seemed to me the complacent, negative and unconvincing speech by the President of the Board of Trade today.

I have always believed that there is one special reason why we should care about the troubles of Lancashire, and that is the exceptional sacrifice that the Lancashire cotton industry made, both in wartime to release labour for the war effort and in the years after the war when the industry was rapidly expanding, and, incidentally, taking on a large number of displaced persons from abroad to get immediate exports. At those moments, the country was in need and Lancashire loyally came to its assistance. We should not forget that today.

Nor is there any serious dispute between us about the facts. Imports of cotton yarn and woven fabrics have risen by 50 per cent. since 1955 and imports from Hong Kong have doubled. Production in the industry is heavily reduced, and everyone agrees that mills are closing at the rate of 100 a year or two every week. Employment in the industry has been falling fast. Indeed, between June, 1951, and the latest month it has fallen by as much as 80,000 or about 25 per cent. Unemployment—I do not think this has been mentioned today—in the North-West region has risen from 48,000 in December, 1957, to 73,000 in April of this year, when it should seasonally have fallen. Indeed, unemployment in the North-West region now is at the highest level since the war and has risen by 80 per cent. since 1956.

Even more serious are the figures in the Ministry of Labour Gazette of short-time working, which totalled 54,000 workers on short-time at the end of April in textiles as a whole, of which as many as 23,000 were in cotton, a far larger total than for any other industry in this country at the present time.

What should be done to stop all this waste and idleness and avert the even greater threat now impending over Lancashire? Hardly a single speaker, not even the hon. Member for Essex, South-East has been satisfied with the timid, nerveless efforts of the Government to date. There are several practical remedies about which I should have thought there ought to be no controversy between us at all.

The first is a far more vigorous and determined drive to bring new industries to the worst affected parts of Lancashire. Surely, everyone in the Committee would like to see this done. The more the Government hesitate about other remedies the more vigorously they should push forward this part of the campaign.

After all, unemployment in Lancashire and Cheshire would be far worse than even the nominal figure of 2.4 per cent. today if the area had not been very largely diversified over the last fifteen years, partly as the result of the scheduling of Merseyside, Wigan and St. Helens in the immediate years after the war. The trouble is that the Government distribution of industry effort, apart from everything else, has been weary and feeble.

Indeed, in the last quarter of last year, the proportion of new factory space approved for Development Areas was a lower proportion as to the whole country than the population of those areas in relation to the country as a whole. This was the first time since 1939 that that was true. If we look at the new North-East Lancashire Development Area for the latest date available of industrial building under construction, we find that the total was only 338,000 square ft. compared with over 14 million in the London and South-East region. That is simply not good enough, particularly when the Government has no other plan for cotton at all.

I believe that in this aspect of the problem the time has come to do the job properly and resolutely. Surely, since Lancashire already includes three separate Development Areas there is an extremely strong case now for scheduling the whole region as a Development Area and going ahead at once with a vigorous programme of building standard factories in all the worst-hit areas, mainly in the North-East of Lancashire. That at least would bring the work where it is needed as quickly as it humanly can be done. Incidentally, such a policy would enable some of the new plants for the manufacture of the new forms of textiles to be located in those areas. Do not let us forget that cotton is not merely losing to Hong Kong and India; it is also losing to nylon and terylene at the present time. Surely, it would be appropriate to bring some of the expanding plants manufacturing these fibres into the area where all this trained textile labour has existed for generations.

Secondly, I should have thought it would be beyond argument at this late day, and after this debate, that drastic steps should be taken to end the present scandal of excessive hours of work in Hong Kong. Let it be quite clear: it is mainly hours of work rather than wages and conditions there which are open to criticism, and the Government here seem to me to have been deplorably weak, dilatory and evasive. The argument for this is overwhelming, and the facts are not really in serious doubt. The case for enforcing civilised hours of work in a British Colony is unanswerable.

On the issue of limiting exports, about which I will say something in a minute, there is admittedly some clash of interests. There is bound to be, between the people of Asia on the one hand and the people of our own cotton manufacturing areas on the other. Yet it is in the interests of all of them that excessive working hours in Hong Kong should be brought to an end. I believe there is a moral as well as an economic and political issue involved in this challenge of poverty in the underdeveloped areas, and if we are honest we must admit that two things are essential if the standard of living of these people is to be raised. First, they must be allowed to trade. And secondly, simultaneously wages, conditions and hours must be vigorously improved through trade union pressure and legislation. We must have both if living standards are to rise.

In Japan, China, India and Pakistan, of course, the British Government cannot act directly to support trade unions and to improve conditions. But in Hong Kong we can do so. We have the whole responsibility. The President of the Board of Trade talked today about our responsibility for the Colonies, but he did not seem to think there was any responsibility to do anything about working hours. Here is a case where a shortening of these hours will almost certainly mean the employment of more workers and not less, to the advantage of Hong Kong. It will mean a cut, of course, in the present excessive profits, and also a slackening of unfair competition with Lancashire, but not necessarily a savage cut in Hong Kong's total trade.

Nor are the facts about these hours really open to doubt. There is no need for me to quote some of the letters which many of us have been getting from Hong Kong in recent months because my hon. Friend the Member for Farnworh (Mr. Thornton) in his speech today, and in his speech in the House on 23rd May, has left the facts beyond serious dispute. Incidentally, his information comes largely from, or is corroborated by, official sources in Hong Kong. So my hon. Friend has put it beyond doubt that a high proportion of men and women workers in the Hong Kong textile mills are working between sixty-five and eighty hours a week. Indeed, Mr. Henniker-Heaton, in his article in the Financial Times today, does not deny that.

I ask the Government: do the Government deny this themselves? I think they can hardly do so because the Under-Secretary of State for the Colonies, in answer to a recent Question about Hong Kong working hours, said: The maximum daily period of employment is thirteen hours between 7 a.m. and 8 p.m. Overtime may be worked up to 9 p.m. with special permission of the Labour Department…. There is no separate legislation governing weekly hours."—[OFFICIAL REPORT, 17th June, 1958; Vol. 589, c. 885.] That exactly confirms many of the letters we have been receiving and all the information which my hon. Friend the Member for Farnborough has given to the Committee. It means, to put it briefly, that gross exploitation of labour, involving grossly unfair competition with Lancashire, has been going on in Hong Kong with the knowledge of the Colonial Office and of the Hong Kong Government. What a disgrace this is. And what political folly it is that on the very doorstep of Communist China, and at one of the propaganda listening posts of the world, as one might say, we should advertise what we like to call the free world, and, incidentally, the Commonwealth, by putting this scandal right in our shop window.

Under pressure from this side of the Committee, the Under Secretary of State for the Colonies has at last promised an Employment Bill for Hong Kong. The right hon. Gentleman ought, for all the reasons I have given, to have been pushing this forward with the utmost energy. But what did he say in reply to a Question only last Thursday in the House? He said: The Employment Bill may cover a wide field and will certainly be a complicated measure. Its contents are still to be worked out in Hong Kong and the Labour Advisory Board will have to be consulted before final drafting instructions are given. I cannot, therefore, say at this stage what detailed provisions it will contain or when it will be introduced…"—[OFFICIAL REPORT, 26th June, 1958; Vol. 590, c. 607.] That answer seems to reek of the apathy and inertia that we have come to expect from the present Government over so many fields of policy. I can only say that if the Government do not move with far greater energy to end this scandal of Hong Kong hours of work, they will be convicted of shocking indifference to the welfare of the workers of Hong Kong and the people of Lancashire.

Another aim I should have thought we might all agree ought to be pursued energetically is the attempt to get voluntary limitation in exports of cotton goods from India, Pakistan and Hong Kong to the United Kingdom. But we have had an endless series of delays, postponements and evasions, and all that the President of the Board of Trade can tell us today is that we are still waiting to hear from Pakistan. When we hear from Pakistan we shall then have to go back and talk to the industry and Government of Hong Kong.

I believe the time has come when the Government ought to tell the Government and industries of Hong Kong, Pakistan and India that unless voluntary agreement is reached by some named date we shall be forced to act on our own. I entirely agree with the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) that that would be a reasonable thing to do and would have a healthy effect on the minds of the people with whom we are negotiating.

Before asking, as I shall do, what that action should be, it seems to me that there is at least one other practical step which the Government could take at home to help the hard-pressed cotton industry. Let us remember that, whatever happens, this country will have a cotton industry in the future. In my view, the industry is not dying; it is going through a painful period of re-adaptation and readjustment to new world conditions. But readjustment means the installation of new plant as well as the scrapping of old. Therefore, I should have thought that, among other things, the Government might decide now to grant the cotton industry a special investment allowance as it has done for the shipping industry When the cotton industry is hard pressed, as it is, from all directions, surely we might at least do for that industry what the Government have already agreed to do for shipping.

Finally, are we justified, on top of all this, in imposing a direct tariff or quota limitation on cotton imports? Let us be clear about certain of the facts; I thought the President of the Board of Trade muddled them today. First of all, cotton imports from outside the Commonwealth—from China and Japan, for instance—are already limited by quota and tariff. The only issue between us is whether we should directly limit the Commonwealth imports as well as the others by tariff, quota or other form of limitation.

Let me deal first with tariffs. The President of the Board of Trade seemed hopelessly to confuse the issue of tariffs with the issue of quotas. He spoke of—he repeated the phrase several times as if it were the complete answer to what we were saying—the principle of duty-free entry from the Commonwealth. If the right hon. Gentleman thinks that all manufactured and semi-manufactured goods from the Commonwealth come into this country duty-free, he has not taken the trouble to study the duties which he is imposing. A week or so ago he published a new order clarifying and codifying the duties. The merest glance at it shows that Commonwealth preference consists over a vast range of goods, not in duty-free entry but in entry at a preferential rate of duty lower than that for foreign goods.

Indeed, if the Paymaster-General looks at the list he will find that 67 pages are devoted to textile goods which, in the case of the Commonwealth, are subject to import tariffs at present, including silk and rayon yarn and cloth, carpets, and all kinds of made-up goods. All that the cotton industry is asking in the matter of tariffs is to be put upon the level of other textiles for Commonwealth preference purposes. That case at least deserves serious examination. It cannot be ruled out offhand. But the President of the Board of Trade did not seem to be able even to understand the case which was being put.

I agree that to impose upon imports of cotton from the Commonwealth a preferential duty similar to that which silk and rayon imports bear would mean a revision, by negotiation, of some of the Ottawa Agreements and trade treaties. That is not absolutely unthinkable. In the last two years the Government have revised our Ottawa Agreements with Australia and New Zealand, in a sense favourable to them. This is not something to be simply rejected out of hand.

But whether we think that a tariff is right or wrong—and I am only pointing out that the question deserves examination—the situation would not be decisively altered by imposing one. Therefore, we must ask ourselves whether we should limit these imports directly by quota or by Government purchase. It is true that other Commonwealth and sterling area countries have frequently imposed quotas on our goods in the last few years, so that this sort of limitation cannot be ruled out as unthinkable within the Commonwealth, although I believe that those quotas have been imposed for balance of payments rather than protective reasons. It is also true, as my right hon. Friend said, that the Government have maintained a system of Government purchase for jute goods for years. Therefore, they cannot reject that suggestion as unthinkable or as being out of court.

I believe, however, that the paramount issue is our moral obligation to the under-developed countries, with very low standards of living—especially those in the Commonwealth. For that reason, I am convinced that we should not go so far as drastically and suddenly to cut down or cut out these cotton imports—although in the case of India we cannot altogether ignore the double pricing system for raw materials which has been enforced there. To say that we cannot make drastic cuts, however, does not mean that we are bound to stand by and watch imports rise at whatever headlong and unplanned rate may result from laissez faire forces, however great may be the resulting ruin and dislocation in Lancashire. There is no moral, economic or political reason why we should do that.

There was much good sense in what The Times said on Saturday, namely: It is not unreasonable to provide shock absorbers for a strictly limited time, which will allow a breathing space during which competition can be met by efficiency and flexibility. I also agree with the hon. Member for Middleton and Prestwich who, speaking for the industry, asked the Government to give it some idea of the industry's future, so that at least it could plan ahead.

Mr. Hale

I know my right hon. Friend too well to think that he meant what seemed to emerge from a sentence which he just used. He does not mean to say that the maintenance of a working week of eighty hours in Hong Kong is a contribution to the war on want. I hope that he will make it clear that we are against that situation, and want to end it, and that one of the means of doing so would be to put an embargo upon unfair imports produced by these penal conditions of employment.

Mr. Jay

I hardly thought I could have said that louder or clearer. I will just repeat this, because perhaps my hon. Friend was not here. I said that what I thought was necessary, for those living in those countries was, first, to allow them to trade, and secondly, to take direct methods to improve wages and hours.

Summing up the argument which I have tried to put, I would urge the Government to approach now the Governments and the industries of India, Pakistan and Hong Kong and say that if voluntary agreement is not reached by some definite date, then the United Kingdom Government will be forced to regulate imports by a system of Government purchase. That would be simultaneous with measures to enforce proper conditions in Hong Kong—on which I fully agree with my hon. Friend the Member for Oldham, East (Mr. Hale)—and to develop new industries and new work in Lancashire.

Such a programme would have these over-riding advantages. It would enable readjustments and re-equipment in Lancashire and enable the industry to go forward on some sort of phased and regulated plan without upheaval and dislocation. It would not involve a really damaging blow such as we would not wish to give to trade in India, Pakistan and Hong Kong. How infinitely better that would surely be than the present utter chaos and uncertainty which is harmful to the people of Hong Kong, Lancashire and elsewhere. Such a programme would be fair to the undeveloped countries and would give new hope and, incidentally, new employment and new jobs to Lancashire. It would enable the necessary fundamental economic changes to move forward in a planned and orderly manner. Surely that would be far better for everybody than the present drift, waste, bitterness and confusion which we find on every hand.

9.22 p.m.

The Paymaster-General (Mr. Reginald Maudling)

We have been debating a matter of great importance to the country as a whole and particularly to the people who live in Lancashire, which is the centre of our cotton textile industry. I should like to sort out the issues which we have been discussing.

The right hon. Member for Battersea, North (Mr. Jay), who has just addressed us, referred—I think I have his words aright—to a "threat to Lancashire's whole economic life." That is really rather an exaggerated statement. As has been pointed out by my right hon. Friend, employment in Lancashire, compared with that in the rest of the country, has remained at a high level. Over the last ten years there has undoubtedly been a very big movement of the operatives out of the cotton textile industry, but they have found employment in other industries. There has been a big expansion in Lancashire, a very remarkable expansion, of other industries particularly engineering. People like de Havilland, English Electric and Leyland's, already in Lancashire, have expanded, and other firms like H. J. Heinz, the Michelin Tyre Company and other concerns, have gone into Lancashire.

It would be wrong to underestimate what has happened in the way of providing Lancashire people with Lancashire work over the last ten years. I do not claim that that is entirely the responsibility of, or is to the credit of, the Government. On the other hand, it would be wrong to neglect the fact that the policies of my right hon. Friend and his predecessors at the Board of Trade have been very considerably responsible for the expansion of alternative opportunities for employment in Lancashire.

I think every hon. Member in this Committee, if he is realistic about this matter, acknowledges that the cotton textile industry has declined or contracted partly if not wholly for reasons beyond our control. It has been subject to world conditions. Therefore one of the Government's aims has been to ensure that there are alternative opportunities for employment for the people who necessarily, owing to the contraction of the industry, have lost their jobs in cotton textiles. And for the same reason I cannot accept the strictures of the right hon. Member for the general employment position in Lancashire.

The point was made earlier by a number of right hon. and hon. Members opposite, including the hon. Member for Oldham, West (Mr. Hale) and the right hon. Member for Huyton (Mr. H. Wilson) who opened the debate, that a change from one industry to another is not easy. A skilled man moving out of cotton textiles can find a job in engineering, but he will not necessarily be a skilled man in engineering. I think that can be exaggerated because I believe the demand for skilled labour in the Lancashire area has been very strong in recent years. At the same time, I accept that it is not just a simple thing to transfer from one industry to another because everyone must recognise that a man who has spent a lifetime, or part of a lifetime, in an industry obviously finds it very difficult to move to something quite different.

Mr. Hale

The right hon. Gentleman must know that many mule spinners, for example, have been working short-time for years. Most of them, valuing their skill, still remain as mule spinners on short-time rather than transfer to some other industry in which they feel they have less skill, dignity and hopes of a future.

Mr. Maudling

I have had the opportunity of seeing mule spinners at work and it is a most interesting process. I have always observed the relatively high age level of people operating in that industry, which itself creates a difficulty if they are displaced and have to find something else to do. I am rather making the point that in my opinion this is not really a Lancashire debate so much as a cotton textile debate. Were it a Lancashire debate, I would argue that the position is rather different from what the right hon. Member said. He made as the first point of his speech, not what we are doing about cotton textiles, but in his opinion what we are failing to do about other industries.

Mr. Jay

I said that experience showed that this could be done and I urged the right hon. Gentleman to say that the Government meant to do it more vigorously.

Mr. Maudling

I think there is plenty of practical evidence that we are doing that. The first point made by the right hon. Member was missing the spirit of the debate a little because it is the cotton textile industry we are debating, and that is what I want to deal with this evening. These matters are of very great importance. I understood from what the right hon. Member said in opening that we are to divide. Therefore, I think we should know clearly what the issue is upon which we are being asked to divide. In his opening speech the right hon. Member for Huyton made very clearly a case, a simple case which is very important indeed, about the protection of Lancashire against low-cost imports from Asiatic countries.

I do not know whether we are dividing on that or not. The only other thing on which we could divide would be the proposals of the right hon. Member and his friends for the cotton textile industry set out in his pamphlet, "Plan for Cotton". That is a very clear and interesting pamphlet, which I read over the weekend, but which is not acceptable to my hon. Friends on this side of the Committee. Therefore, if we are dividing about the protection of the textile industry by the Government it is a clear issue, but I think that is not the point. The main point, echoed in speeches throughout the day, is how we are to treat this question of the impact on Lancashire of low-cost imports from Asiatic countries. It is to this argument that I will address most of my remarks this evening.

It seems to me that the facts are two-fold. On the one hand, Lancashire is suffering very heavily indeed from a great increase of imports of Asiatic cloth retained in this country, superimposed upon a very heavy loss of exports, which has gone on for many years. That is the fact.

On the other hand, we must recognise the obligations of this country in the Commonwealth system and, in particular, our obligations to Colonial Territories. Those, I suggest, are the two points. In the words of the Manchester Guardian leading article this morning, referred to by the right hon. Gentleman, Those who are clamouring most for restrictions must, however, recognise the quandary in which the Government is placed. That, I think, is true. We are in a quandary, and any Government would be in a quandary here.

I want to put to the Committee what seem to me to be the facts of this very difficult situation. I hope that I shall not be overstating it or be regarded as emotional. I was taught at school that the essence of a tragedy was not the conflict between right and wrong but the conflict between right and right, and that seems to be the point here. We have the rights and the interests of Lancashire and we also have the rights of the Colonies and of the people who live there and the interests of the people who live there. It therefore seems to me that it is a tragic situation in which we must try to make a choice between one and the other, and a choice which is consistent with the duty which we as a House owe to both. I find it very difficult to find the substance of party division in the problem.

It was well put by the right hon. Gentleman in his speech and in his pamphlet that a danger which Lancashire has faced in recent years is the imports from the Commonwealth. Emphasis is laid particularly upon imports from Hong Kong, not only because of the quantity coming from Hong Kong, which is still less than that which comes from India, but because the amount coming from Hong Kong has been rising rapidly and because this question is made in some ways conditional on the negotiations with India. There is also the very important point that Hong Kong is a Colony and not an independent country, but I shall later explain that that cuts both ways.

Mr. Ellis Smith

And because of the conditions there.

Mr. Maudling

The first point to which we must address ourselves is, can we impose quotas upon Commonwealth goods in order to protect our own textile industry? Some mention was made earlier by the right hon. Gentleman of tariffs, and I will argue with him about the origin of the duty-free system in the Commonwealth preference area. I think he will find that such duties as still exist on Commonwealth goods are either revenue duties or McKenna duties which existed before the Ottawa Conference. I think he will accept that on the whole tariffs are not the answer to the problem of Asiatic low-cost competition, because the margin of price is so wide. It is not a matter of tariffs but of imposing quotas.

Can we impose quotas upon Commonwealth goods? What are our obligations under the G.A.T.T. agreement, which we have signed—and which the right hon. Gentleman rightly points out in paragraph 80 of his pamphlet is of very great importance to the whole of British industry, and particularly to the cotton textile industry? We have the right to impose quotas on imports anywhere only if we have a balance of payments difficulty (which we certainly have not with India, Pakistan and Hong Kong), or if there is a question of dumping or subsidised competition, which does not arise in these cases. Under G.A.T.T. and the International Monetary Fund, therefore, we have no right whatever to impose quotas on imports from those countries.

Mr. Jay

What about Japan?

Mr. Maudling

The right hon. Gentleman has himself realised that that is the reason why, under Article 35 of G.A.T.T. we do not accept the position with respect to Japan. That is why we put quotas on China. China is not in G.A.T.T. We cannot put quotas on countries in G.A.T.T. Right hon. Gentlemen opposite signed the G.A.T.T. agreement, and they ought to know. I agree that they were right to sign it and I am sure that it is fundamentally in the interests of this country.

Secondly, there are the Commonwealth agreements. I think that, with the exception of McKenna duties and revenue duties, the free entry of imports from the Commonwealth is basic to the concept of Commonwealth trade. In many cases it is contractual. It is contractual in the case of a number of independent countries. They have a contractual right to free entry into this country. It is not contractual in the case of Colonies. They cannot contract with us, because they are under our control, but if they were independent countries they would have that right. Can we really deny to them that right, which they would otherwise have? I do not think that that is an argument that hon. Members opposite would wish to support.

I think that I am right in saying that this afternoon the right hon. Gentleman the Member for Huyton said that he and his party have never called for tariffs or quotas on Commonwealth imports. Those are his words that I have written down here. It is very important that the Committee should be clear on this. There appears to be no division between us on this matter. Neither side, I agree with the right hon. Gentleman, would propose to call for tariffs or quotas on Commonwealth imports.

I turn now to the question of Hong Kong which has, quite rightly, occupied a great deal of the time of our discussion this afternoon. Many hon. Members on both sides, the hon. Member for Ashton-under-Lyne (Mr. Rhodes), my hon. Friend the Member for North Fylde (Mr. Stanley), my hon. Friend the Member for Bury and Radcliffe (Mr. Bidgood), and many others have said quite a lot about the impact of Hong Kong imports upon our textile industry, but we must bear in mind that, taking the total balance of trade, we sell to Hong Kong twice as much as she sells to us. That really is a very important point——

Mr. Thornton

But is it not correct that Hong Kong's imports are 50 per cent. higher than her exports, and that every country that trades with her has a favourable balance of trade with her? Is it not correct that China, America and Japan all have more favourable balances with Hong Kong than we have ourselves?

Mr. Maudling

I should not like to quarrel with that; but my point is that Hong Kong buys twice as much from us as we buy from Hong Kong. Twice as much value goes into British homes working on goods for Hong Kong than goes into Hong Kong homes working on goods for us. The importance of that is that in all our international obligations like the G.A.T.T., and the Fund, the only reason we can advance for putting on restrictions is balance of payments difficulties. If we look at it from that angle, Hong Kong could put a quota on our goods, but we could not do so with her. It is important to get that clear; that we sell to Hong Kong twice as much, roughly speaking, as she sells to us——

Mr. Thornton

The same applies to ordinary trade.

Mr. Maudling

That may be so, but in terms of employment it is important to bear in mind. It is not the whole story, I quite agree, and I will come to that in a moment.

The imports that have been affecting Lancashire come from India, Pakistan and Hong Kong, but the right hon. Gentleman who opened, both in his own pamphlet and in his speech, has admitted that there is no case on Indian imports at all. He has said in his pamphlet that there is nothing unfair about Indian wage levels, and the only point he made about Indian raw cotton prices is now out of date.

The main point is Hong Kong. What is the complaint there? First of all, is it wages? I think that the hon. Member for Farnworth (Mr. Thornton), who speaks with a great knowledge of these things, says that, in general, Hong Kong wages fit fairly well into the Indian wage picture. So the hourly rate is not out of line, and that is the thing that matters. The conditions in the modern mills, which are those that, by and large, export to this country, are pretty good, although I agree that there is room for improvement in some of the old-fashioned mills.

The real argument here is on hours of work. There, the Government certainly admit that there is a considerable point. As my hon. Friend the Under-Secretary of State for the Colonies said in an Adjournment debate recently, we are urgently considering new employment legislation in Hong Kong. It may interest the Committee to know—and I think that the hon. Member for Farnworth will be particularly interested—that we are sending Miss Ogilvie, whom he knows, an experienced official on the staff of the Colonial Office, immediately to Hong Kong to discuss the whole situation with the Governor. The hon. Gentleman will probably agree that it is a valuable thing to do in the course of devising legislation. Action is in progress on this question. But it would be wrong for the Committee to imagine that action on the question of hours of work in Hong Kong is the solution to the Lancashire problem. The hon. Member for Farnworth made the point very clearly that even if the hours of work in Hong Kong were changed, nevertheless it would have very little effect on the competitive influence of Hong Kong goods on Lancashire.

Mr. Jay

Before the right hon. Gentleman leaves the question of hours, as it is one of the most important points raised today, can he say how soon there will be actual legislation on this question and not just consultation?

Mr. Maudling

No, I should not like to give an answer. Action is in train, and the experienced official whom I have mentioned is going to Hong Kong at once. I can assure the Committee that we have no doubt about the importance of this matter.

I think that the points made by the hon. Gentleman on hours of work are important, and the Government certainly accept this fact. But as the debate has made clear, this is more a matter of social conditions in Hong Kong than it is a matter of the economics of Lancashire. Even if people were to work shorter hours in Hong Kong, competition in Lancashire would be no less severe. That point has been made in the hon. Gentleman's speech.

Mr. Thornton

I am grateful to the right hon. Gentleman, because I thought I made it clear that my main reason for raising the question was on humanitarian and social grounds and not on economic grounds. I should like an assurance, though, from the right hon. Gentleman that it will not take as long to negotiate a new labour code as it is taking to reach a voluntary agreement.

Mr. Maudling

I wish I could give such an assurance. All I can say is that I think the hon. Gentleman will recognise that we are struck by the force of what he has said. We are taking urgent steps to look into this problem. Of course, one can always say, "Why did you not do it before?" That is an easy point to take——

Mr. H. Wilson

This Hong Kong problem has been brought up in debates for many years. Is not it a fact that it was not until the Report of my hon. Friend the Member for Farnworth (Mr. Thornton) that the Government took any action on this at all? Is it any wonder that we want to vote tonight when the Government have allowed the Lancashire cotton industry to decline in this way?

Mr. Maudling

The right hon. Gentleman is trying hard to find a reason for voting. My answer, first of all, is that it is not true. Secondly, if he is voting solely on the date at which people are sent to Hong Kong, let us be quite clear what is the issue on which he is voting.

Mr. Wilson

Three hundred mills are closed. Answer that.

Mr. Maudling

We must bear in mind that Hong Kong is a British Colony, and we have an interest in the people of that Colony. We have a responsibility for their standard of living. The right hon. Gentleman himself in his pamphlet has said that one of the best prospects for increased textile exports is increasing the standard of living of the under-developed countries. How are the people of Hong Kong to increase their standard of living, except by exporting more? That is a fact that we must face on both sides of the Committee. If the people of Hong Kong are to increase their standard of living they must buy more from the world, and in order to do that they must sell more.

My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) made a point about immigration into Hong Kong. I think I can assure him that that is strictly controlled, but there is a large population there. It is one of our Colonies, and there is a natural growth of population. If the people there are to grow in numbers and in prosperity they must sell more goods.

One fact that the party opposite have not faced when they have talked about Colonial products is, how are those people to sell more goods? They will not sell much more in China. The Chinese are short of sterling, and, in so far as they buy anything, it will not be cotton textiles which they can produce probably more cheaply than the Hong Kong people. Are they to sell in other areas of the world? We hope they will sell more in countries other than England. We hope to see them expand their exports to Europe, for example. It is the duty of the Government to assist them to do that; but we shall certainly not assist them to do that if we put restrictions on what we buy from them. If we start putting restrictions on what we buy from Hong Kong, every other country in the world will do it even more. That is a perfectly clear progression of ideas.

Mr. W. T. Proctor (Eccles)

What is the object of trying to negotiate a voluntary agreement? Is it to put restrictions on them?

Mr. Maudling

That is a valid point, and I will come to that. The policy of putting compulsory quotas on what we are prepared to buy from Hong Kong is a policy of refusing to give the people of Hong Kong what will contribute to their well-being. There is no answer to that argument.

I feel, therefore, that no case can be made for the compulsory imposition of quotas upon imports from Hong Kong, which is a Colony. In so far as the Opposition were dividing on that issue, I would hope that my right hon. and hon. Friends would oppose them, but I observe that they are not dividing on that issue because they have taken care not to put a Motion to that effect in issue this evening, and, as I said, the right hon. Gentleman made it perfectly clear in his opening that they were not proposing tariffs on imports or quotas for Commonwealth goods. Therefore, it cannot possibly be in issue this evening whether or not tariffs or quotas should be imposed on Commonwealth goods.

We come then to the question whether we can have a voluntary agreement. I have been putting one side of the case, and the hon. Member for Eccles (Mr. Proctor), very rightly, mentioned the other side. I have been putting our obligation to our Colonial Territories and our international obligations. We have also, it is quite true, an obligation to our own people and an obligation to the textile industry of Lancashire which has been suffering considerably.

The Lancashire textile industry, if I may say so, has been suffering particularly for two reasons, first, because exports of cotton textiles from Asiatic countries have expanded so rapidly—it is the rapidity of the increase which is important—and, secondly, because exports from Hong Kong in particular have very largely concentrated on textiles for this country. About 30 per cent. of the total production of Hong Kong textiles comes to this country. There is, therefore, undoubtedly a case on the other side. There is a case for what my hon. and learned Friend the Member for Darwen rightly called a temporary umbrella. There is a case for doing something to prevent this expansion which has been so rapid recently, particularly in exports from Hong Kong.

The Government believe that it is desirable that there should be a temporary check of this kind to the expansion of imports of these textiles from Asiatic countries. Lancashire says, rightly, I think, "You tell us to adapt, to go in for new products, for new and more 'quality' goods. How can we do that when the tide of imports from Asiatic countries is rising fast and spreading so far?" That is a perfectly valid argument. It is recognised in the Asiatic countries themselves, I think. They can see that it is not in the long-term interest of Hone Kong, India or Pakistan to press this competition so hard and so fast and on such a limited sector of the British economy as to cause really great difficulties.

It can therefore be argued, and I hope it will be accepted in those Asiatic countries, that there is great merit in a voluntary agreement. But we come now to what we meant by a voluntary agreement. I say to my hon. and right hon. Friends that this is a very important matter indeed. This afternoon, the right hon. Member for Huyton gave his version of what is meant by a voluntary agreement. It reminded me of a sergeant-major saying, "I want three volunteers, you, you and you." That is not really our idea of a voluntary agreement. The right hon. Gentleman said that people agree to a voluntary proposal only when one has a sanction. [Laughter.] I really do not know what my hon. Friends are laughing at. The right hon. Gentleman said it. There may be much behind it as a statement of practice, but, as a statement of principle, it is, I think, a little lacking. It is certainly not a statement of principle to which this side of the Committee can agree.

The right hon. Gentleman's argument is a very interesting one. He says, "If you do not agree to a voluntary limitation of exports, the Labour Government, when it comes into being, will impose a quota by the artificial subterfuge of State trading." That is his argument. With respect, I think that it is a deeply disreputable argument. It really is quite impossible for this country, which has responsibility for the people of Hong Kong, to go to them and say, "If you do not agree voluntarily, we shall force you." That is not a voluntary agreement; it is nonsense to pretend that it is. Therefore, our point is that we hope and believe that there will be a voluntary agreement, because we are convinced that it is in the long-term interests of this country and of the Asiatic countries concerned to limit the in-rush of Asiatic competition.

My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) raised two points. The first concerned the state of the negotiations and the second the impending conference at Montreal. I think those are most important points. My right hon. Friend the President of the Board of Trade made it perfectly clear this afternoon that the voluntary negotiations are still at a delicate stage; they are still at a not definitive stage. It would be wrong to do anything to impede those negotiations.

Equally, with regard to the Commonwealth Conference at Montreal, I am certain that it is safe to say that anything that affects trade within the Commonwealth is open for discussion at the conference in Canada in September. Of course, that must be so. We cannot have a conference unless we have it on a no-holds-barred basis. Anything that people want to raise, be it the United Kingdom or any other country, is open to be raised. That conference lies ahead of us, and I think that my right hon. Friend the President of the Board of Trade argued with great force that it would be a pity and a mistake to enter the conference at Montreal having taken unilateral action which breaks all the traditions and rules of Commonwealth preferences and which represents action against the Colony which we could not in international law take against an independent Commonwealth country.

I would ask my right hon. and hon. Friends in considering the Division, which I understand there is to be, to bear this in mind. Commonwealth countries will look at this Division and be concerned with what the issue is. So far as there is an issue, which I rather doubt, it is whether or not we impose now, as a matter of emergency, restrictions and limitations upon Commonwealth imports. The Government say that the voluntary way is the way to do it. Anybody who does not support that point of view is saying that the alternative is right, namely, that we should do it by compulsory methods. I urge upon my hon. Friends that, with these negotiations going on and in advance of the Commonwealth Conference, to do that is really an action which will not do a great deal of good to any of the parties to the dispute.

Mr. Jay

Does the right hon. Gentleman mean, because Lancashire wants to know, that if the Government fail to reach a voluntary agreement they will do nothing at all?

Mr. Maudling

That is exactly the point that I answered earlier. The Opposition would like us to say, "If there is not a voluntary agreement, we will compel it." We are not prepared to say that, because we cannot have a voluntary agreement on that basis. The more doubt there is thrust upon the possibility of a voluntary agreement, the less chance there will be of reaching it. I should have thought that it was in the interests of all concerned to reach a voluntary agreement on this matter.

The right hon. Member for Huyton has produced an alternative scheme. He is not going to have quotas; he is going to have a plan for regulating imports, to use his own words. I presume that "regulating" is another word for reducing, because, unless the aim is to reduce imports, I do not see the purpose of regulating them from Lancashire's point of view.

Mr. H. Wilson

The right hon. Gentleman must be fair about this. I said that a ceiling based on the exports for the last three years should be imposed. The right hon. Gentleman has said that what is needed for Lancashire is to stop expansion in this industry and the insecurity which has been caused by it which has led to the closure of 300 mills. My proposal was to impose a ceiling in order to stop any further expansion.

Mr. Maudling

The right hon. Gentleman used the words—I took them down, although I may be wrong—"plan for regulating imports". His argument is that a State purchasing commission is not the same thing as a quota, but he is now saying that a State purchasing commission would enforce a ceiling. Where is he on this matter? If he wants to reduce Hong Kong and Indian imports by a State regulating machine, let him admit that it is the same thing as a quota. [HON. MEMBERS: "What about jute?"] The jute point is the worst one I have heard from the Opposition today.

I will not say, because the right hon. Gentleman is such a good dialectician, that he is arguing that two blacks make a white, which would be the case if the argument were a good one, but the fact is that there is a monumental difference between continuing temporarily a wartime restriction and imposing de novo a new restriction totally at variance with every national and international practice. The right hon. Gentleman knows that that is true.

The fact is that the right hon. Gentleman's plan for restricting imports by the use of a State purchasing commission is a plan for restricting imports. [Interruption.] We on this side say that we are in favour of a voluntary agreement. We are not in favour of imposing a compulsory agreement. That is the issue between us. If the Committee likes to divide on the issue whether there will be a voluntary or compulsory agreement and the party opposite votes for a compulsory agreement, we on this side know where we stand.

The right hon. Member for Huyton has tried to pretend that his scheme of bulk purchase by a Government commission circumvents the G.A.T.T. provision that quotas can only be imposed in balance of payment difficulties. That is a most bogus argument, and the right hon. Gentleman knows it. If it were accepted generally in the trade of the world, where would this country get to? If every country were entitled to say that if British imports were harming its own industry it would go over to State trading and buy no more British imports, where would we finish up? The right hon. Gentleman's plan for dealing with trade in cotton textiles would be the most deadly blow to Lancashire that could possibly be imagined.

This debate today has been about a difficulty of one of our major industries. This industry has faced serious contractions, and will continue to face difficulties. My case today, however, is a simple one. Let not Lancashire be bamboozled by bogus solutions. This is a real problem and a real difficulty. If the party opposite likes to divide the House on party lines, let it do so, but it will not be contributing to the welfare of Lancashire.

Mr. Jay

I beg to move, That Item Class VI, Vote I (Board of Trade), be reduced by£5.

Question put:—

The Committee divided: Ayes 246, Noes 308.

Division No. 179.]	AYES	[9.58 p.m.
Ainsley, J. W.	Burke, W. A.	Edelman, M.
Albu, A. H.	Burton, Miss F. E.	Edwards, Rt. Hon. Ness (Caerphilly)
Allaun, Frank (Salford, E.)	Butler, Herbert (Hackney, C.)	Edwards, Robert (Bilston)
Allen, Arthur (Bosworth)	Butler, Mrs. Joyce (Wood Green)	Edwards, W. J. (Stepney)
Allen, Scholefield (Crewe)	Callaghan, L. J.	Evans, Albert (Islington, S. W.)
Anderson, Frank	Castle, Mrs. B. A.	Evans, Edward (Lowestoft)
Awbery, S. S.	Champion, A. J.	Fernyhough, E.
Bacon, Miss Alice	Chapman, W. D.	Finch, H. J.
Baird, J.	Chetwynd, G. R.	Fletcher, Eric
Balfour, A.	Clunie, J.	Foot, D. M.
Bellenger, Rt. Hon. F. J.	Collins, V. J. (Shoreditch & Finsbury)	Fraser, Thomas (Hamilton)
Bence, C. R. (Dunbartonshire, E.)	Corbet, Mrs. Freda	Gaitskell, Rt. Hon, H. T. N.
Bonn, Hn. Wedgwood (Bristol, S. E.)	Craddock, George (Bradford, S.)	George, Lady Megan Lloyd (Car'then)
Benson, Sir George	Cronin, J. D.	Gibson, C. W.
Beswick, Frank	Crossman, R. H. S.	Gordon Walker, Rt. Hon. P. C.
Blackburn, F.	Dalton, Rt. Hon. H.	Greenwood, Anthony
Blenkinsop, A.	Darling, George (Hillsborough)	Grenfell, Rt. Hon. D. R.
Blyton, W. R.	Davies, Ernest (Enfield, E.)	Grey, C. F.
Boardman, H.	Davies, Harold (Leek)	Griffiths, David (Rother Valley)
Bottomley, Rt. Hon. A. G.	Deer, G.	Griffiths, Rt. Hon. James (Llanelly)
Bowden, H. W. (Leicester, S. W.)	de Freitas, Geoffrey	Griffiths, William (Exchange)
Bowles, F. G.	Delargy, H. J.	Hale, Leslie
Boyd, T. C.	Diamond, John	Hall, Rt. Hn. Glenvil (Colne Valley)
Braddock, Mrs. Elizabeth	Dodds, N. N.	Hamilton, W. W.
Brockway, A. F.	Donnelly, D. L.	Hannan, W.
Broughton, Dr. A. D. D.	Dugdale, Rt. Hn. John (W. Brmwch)	Harrison, J. (Nottingham, N.)
Brown, Rt. Hon. George (Belper)	Dye, S.	Hastings, S.
Brown, Thomas (Ince)	Ede, Rt. Hon. J. C.	Hayman, F. H.
Healey, Denis	Mason, Roy	Skeffington, A. M.
Henderson, Rt. Hn. A. (Rwly Regis)	Messer, Sir F.	Slater, Mrs. H. (Stoke, N.)
Herbison, Miss M.	Mikardo, Ian	Slater, J. (Sedgefield)
Hewitson, Capt. M.	Mitchison, G. R.	Smith, Ellis (Stoke, S.)
Hobson, C. R. (Keighley)	Monslow, W.	Snow, J. W.
Holman, P.	Morris, Percy (Swansea, W.)	Sorensen, R. W.
Houghton, Douglas	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	Soskice, Rt. Hon. Sir Frank
Howell, Charles (Perry Barr)	Mort, D. L.	Sparks, J. A.
Howell, Denis (All Saints)	Moss, R.	Spriggs, Leslie
Hughes, Emrys (S. Ayrshire)	Moyle, A.	Steele, T.
Hughes, Hector (Aberdeen, N.)	Mulley, F. W.	Stewart, Michael (Fulham)
Hunter, A. E.	Neal, Harold (Bolsover)	Stonehouse, John
Hynd, H. (Accrington)	Noel-Baker, Francis (Swindon)	Stones, W. (Consett)
Hynd, J. B. (Attercliffe)	Noel-Baker, Rt. Hon. P. (Derby, S.)	Strachey, Rt. Hon. J.
Irvine, A. J. (Edge Hill)	O'Brien, Sir Thomas	Strauss, Rt. Hon. George (Vauxhall)
Irving, Sydney (Dartford)	Oliver, G. H.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Isaacs, Rt. Hon. G. A.	Oram, A. E.	Summerskill, Rt. Hon. E.
Janner, B.	Orbach, M.	Swingler, S. T.
Jay, Rt. Hon. D. P. T.	Oswald, T.	Sylvester, G. O.
Jeger, George (Goole)	Owen, W. J.	Taylor, Bernard (Mansfield)
Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Padley, W. E.	Taylor, John (West Lothian)
Jenkins, Roy (Stechford)	Paget, R. T.	Thomas, George (Cardiff)
Johnson, James (Rugby)	Paling, Rt. Hon. W. (Dearne Valley)	Thomas, Iorwerth (Rhondda, W.)
Johnston, Douglas (Paisley)
Jones, Rt. Hon. A. Creech (Wakefield)	Palmer, A. M. F.	Thomson, George (Dundee, E.)
Jones, David (The Hartlepools)	Pannell, Charles (Leeds, W.)	Thornton, E.
Jones, Elwyn (W. Ham, S.)	Pargiter, G. A.	Tomney, F.
Jones, Jack (Rotherham)	Parker, J.	Ungoed-Thomas, Sir Lynn
Jones, J. Idwal (Wrexham)	Parkin, B. T.	Usborne, H. C.
Jones, T. W. (Merloneth)	Paton, John	Viant, S. P.
Kenyon, C.	Peart, T. F.	Warbey, W. N.
Key, Rt. Hon. C. W.	Pentland, N.	Watkins, T. E.
King, Dr. H. M.	Plummer, Sir Leslie	Weitzman, D.
Lawson, G. M.	Price, J. T. (Westhoughton)	Wells, Percy (Faversham)
Ledger, R. J.	Price, Philips (Gloucestershire, W.)	Wells, William (Walsall, N.)
Lee, Frederick (Newton)	Probert, A. R.	West, D. G.
Lever, Harold (Cheetham)	Proctor, W. T.	Wheeldon, W. E.
Lever, Leslie (Ardwick)	Pursey, Cmdr. H.	White, Mrs. Eirene (E. Flint)
Lewis, Arthur	Rankin, John	Wigg, George
Lindgren, G. S.	Redhead, E. C.	Wilcock, Group Capt. C. A. B.
Lipton, Marcus	Reeves, J.	Wilkins, W. A.
Logan, D. G.	Reid, William	Willey, Frederick
Mabon, Dr, J. Dickson	Reynolds, G. W.
McAlister, Mrs. Mary	Rhodes, H.	Williams, David (Neath)
McCann, J.	Robens, Rt. Hon. A.	Williams, Rev. Llywelyn (Ab'tillery)
MacColl, J. E.	Roberts, Albert (Normanton)	Williams, Rt. Hon. T. (Don Valley)
MacDermot, Niall		Willis, Eustace (Edinburgh, E.)
McInnes, J.	Roberts, Goronwy (Caernarvon)	Wilson, Rt. Hon. Harold (Huyton)
McLeavy, Frank	Robinson, Kenneth (St. Pancras, N.)	Winterbottom, Richard
MacPherson, Malcolm (Stirling)	Rogers, George (Kensington, N.)	Woodburn, Rt. Hon. A.
Mahon, Simon	Shinwell, Rt. Hon. E.	Woof, R. E.
Mainwaring, W. H.	Short, E. W.	Yates, V. (Ladywood)
Mallalieu, E. L. (Brigg)	Shurmer, P. L. E.	Younger, Rt. Hon. K.
Mallalieu, J. P. W. (Huddersfd, E.)	Silverman, Julius (Aston)	Zilliacus, K.
Mann, Mrs. Jean	Silverman, Sydney (Nelson)
Marquand, Rt. Hon. H. A.	Simmons, C. J. (Brierley Hill)	TELLERS FOR THE AYES:
		Mr. Popplewell and Mr. Pearson.
NOES
Agnew, Sir Peter	Birch, Rt. Hon. Nigel	Conant, Maj. Sir Roger
Aitken, W. T.	Bishop, F. P.	Cooper, A. E.
Allan, R. A. (Paddington, S.)	Black, C. W.	Cooper-Key, E. M.
Alport, C. J. M.	Body, R. F.	Corfield, Capt. F. V.
Amery, Julian (Preston, N.)	Bonham Carter, Mark	Craddock, Beresford (Spelthorne)
Amory, Rt. Hn. Heathcoat (Tiverton)	Boothby, Sir Robert	Crosthwaite-Eyre, Col. O. E.
Anstruther-Cray, Major Sir William	Bossom, Sir Alfred	Crowder, Sir John (Finchley)
Arbuthnot, John	Boyd-Carpenter, Rt. Hon. J. A.	Crowder, Petre (Ruislip—Northwood)
Armstrong, C. W.	Boyle, Sir Edward	Cunningham, Knox
Ashton, H.	Braine, B. R.	Currie, G. B. H.
Astor, Hon. J. J.	Braithwalte, Sir Albert (Harrow, W.)	Dance, J. C. G.
Atkins, H. E.	Bromley-Davenport, Lt.-Col. W. H.	Davidson, Viscountess
Baldock, Lt.-Cmdr. J. M.	Brooke, Rt. Hon. Henry	D'Avigdor-Goldsmid, Sir Henry
Baldwin, A. E.	Brooman-White, R. C.	Deedes, W. F.
Balniel, Lord	Browne, J. Nixon (Craigton)	Digby, Simon Wingfield
Barber, Anthony	Bryan, P.	Donaldson, Cmdr. C. E. McA.
Barter, John	Bullus, Wing Commander E. E.	Doughty, C. J. A.
Batsford, Brian	Burden, F. F. A.	du cann, E. D. L.
Baxter, Sir Beverley	Butcher, Sir Herbert	Duncan, Sir James
Beamish, Col. Tufton	Butler, Rt. Hn. R. A. (Saffron Walden)	Duthie, W. S.
Bell, Ronald (Bucks, S.)	Campbell, Sir David	Eccles, Rt. Hon. Sir David
Bennett, F. M. (Torquay)	Carr, Robert	Eden, J. B. (Bournemouth, West)
Bennett, Dr. Reginald	Cary, Sir Robert	Elliott, R. W. (Ne'castle upon Tyne, N.)
Bevins, J. R. (Toxteth)	Channon, Sir Henry	Emmet, Hon. Mrs. Evelyn
Bidgood, J. C.	Chichester-Clark, R.	Errington, Sir Eric
Biggs-Davison, J. A.	Clarke, Brig. Terence (Portsmth, W.)	Erroll, F. J.
Bingham, R. M.	Cole, Norman	Farey-Jones, F. W.

Fell, A.	Langford-Holt, J. A.	Ramsden, J. E.
Finlay, Graeme	Leather, E. H. C.	Rawlinson, Peter
Fisher, Nigel	Leburn, W. G.	Redmayne, M.
Forrest, G.	Legge-Bourke, Maj. E. A. H.	Rees-Davies, W. R.
Foster, John	Legh, Hon. Peter (Petersfield)	Renton, D. L. M.
Fraser, Hon. Hugh (Stone)	Lennox-Boyd, Rt. Hon. A. T.	Ridsdale, J. E.
Fraser, Sir Ian (M'cmbe & Lonsdale)	Lindsay, Hon. James (Devon, N.)	Rippon, A. G. F.
Gammans, Lady	Lindsay, Martin (Solihull)	Roberts, Sir Peter (Heeley)
Garner-Evans, E. H.	Linstead, Sir H. N.	Robertson, Sir David
George, J. C. (Pollok)	Llewellyn, D. T.	Robinson, Sir Roland (Blackpool, S.)
Gibson-Watt, D.	Lloyd, Rt. Hon. G. (Sutton Coldfield)	Robson Brown, Sir William
Glover, D.	Lloyd, Maj. Sir Guy (Renfrew, E.)	Rodgers, John (Sevenoaks)
Glyn, Col. Richard H.	Lloyd, Rt. Hon. Selwyn (Wirral)	Roper, Sir Harold
Godber, J. B.	Low, Rt. Hon. Sir Toby	Ropner, Col. Sir Leonard
Goodhart, Philip	Lucas, Sir Jocelyn (Portsmouth, S.)	Russell, R. S.
Gough, C. F. H.	Lucas, P. B. (Brentford & Chiswick)	Sandys, Rt. Hon. D.
Gower, H. R.	Lucas-Tooth, Sir Hugh	Scott-Miller, Cmdr. R.
Graham, Sir Fergus	McAdden, S. J.	Sharples, R. C.
Grant-Ferris, Wg Cdr. R. (Nantwich)	Macdonald, Sir Peter	Simon, J. E. S. (Middlesbrough, W.)
Green, A.	Mackeson, Brig. Sir Harry	Smithers, Peter (Winchester)
Gresham Cooke, R.	McKibbin, Alan	Smyth, Brig. Sir John (Norwood)
Grimond, J.	Mackie, J. H. (Galloway)	Soames, Rt. Hon. Christopher
Grimston, Hon. John (St. Albans)	McLaughlin, Mrs. P.	Spearman, Sir Alexander
Grimston, Sir Robert (Westbury)	Maclean, Sir Fitzroy (Lancaster)	Speir, R. M.
Grosvenor, Lt.-Col. R. G.	McLean, Neil (Inverness)	Spence, H. R. (Aberdeen, W.)
Gurden, Harold	Macleod, Rt. Hn. Iain (Enfield, W.)	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Hare, Rt. Hon. J. H.	MacLeod, John (Ross & Cromarty)	Stanley, Capt. Hon. Richard
Harris, Frederic (Croydon, N. W.)	Macmillan, Rt. Hn. Harold (Bromley)	Stevens, Geoffrey
Harris, Reader (Heston)	Macmillan, Maurice (Halifax)	Steward, Harold (Stockport, S.)
Harrison, A. B. C. (Maldon)	Macpherson, Niall (Dumfries)	Steward, Sir William (Woolwich, W.)
Harrison, Col. J. H. (Eye)	Maddan, Martin	Stoddart-Scott, Col. Sir Malcolm
Harvey, Sir Arthur Vere (Macclesf'd)	Maitland, Cdr. J. F. W. (Horncastle)	Storey, S.
Harvey, John (Walthamstow, E.)	Maitland, Hon. Patrick (Lanark)	Stuart, Rt. Hon. James (Moray)
Harvie-Watt, Sir George	Manningham-Buller, Rt. Hn. Sir R.	Studholme, Sir Henry
Hay, John	Markham, Major Sir Frank	Summers, Sir Spencer
Head, Rt. Hon. A. H.	Marlowe, A. A. H.	Sumner, W. D. M. (Orpington)
Heald, Rt. Hon. Sir Lionel	Marples, Rt. Hon. A. E.	Taylor, Sir Charles (Eastbourne)
Henderson, John (Cathcart)	Marshall, Douglas	Taylor, William (Bradford, N.)
Hesketh, R. F.	Mathew, R.	Teeling, W.
Hicks-Beach, Maj. W. W.	Maudling, Rt. Hon. R.	Temple, John M.
Hill, Rt. Hon. Charles (Luton)	Mawby, R. L.	Thomas, Leslie (Canterbury)
Hill, Mrs. E. (Wythenshawe)
Hirst, Geoffrey	Maydon, Lt.-Comdr, S. L. C.	Thompson, Kenneth (Walton)
Hobson, John (Warwick & Leam'gt'n)	Medlicott, Sir Frank	Thompson, R. (Croydon, S.)
Holland-Martin, C. J.	Milligan, Rt. Hon. W. R.	Thorneycroft, R. Hon. P.
Holt, A. F.	Molson, Rt. Hon. Hugh	Thornton-Kemsley, Sir Colin
Hope, Lord John	Moore, Sir Thomas	Tiley, A. (Bradford, W.)
Hornby, R. P.	Morrison, John (Salisbury)	Tilney, John (Wavertree)
Hornsby-Smith, Miss M. P.	Mott-Radclyffe, Sir Charles	Turner, H. F. L.
Horobin, Sir Ian	Nabarro, G. D. N.	Turton, Rt. Hon. R. H.
Howard, Gerald (Cambridgeshire)	Nairn, D. L. S.	Tweedsmuir, Lady
Howard, John (Test)	Neave, Airey	Vane, W. M. F.
Hudson, W. R. A. (Hull, N.)	Nicholls, Harmar	Vaughan-Morgan, J. K.
Hughes Hallett, Vice-Admiral J.	Nicholson, Sir Godfrey (Farnham)	Vickers, Miss Joan
Hughes-Young, M. H. C.	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Vosper, Rt. Hon. D. F.
Hurd, A. R.	Noble, Comdr. Rt. Hon. Allan
Hutchison, Michael Clark (E'b'gh, S.)	Noble, Michael (Argyll)	Wade, D. W.
Hyde, Montgomery	Nugent, G. R. H.	Wakefield, Edward (Derbyshire, W.)
Hylton-Foster, Rt. Hn. Sir Harry	O'Neill, Hn. Phelim (Co. Antrim, N.)	Wakefield, Sir Wavell (St. M'lebone)
Iremonger, T. L.	Ormsby-Gore, Rt. Hon. W. D.	Walker-Smith, Rt. Hon. Derek
Irvine, Bryant Godman (Rye)	Orr, Capt. L. P. S.	Wall, Patrick
Jenkins, Robert (Dulwich)	Orr-Ewing, Charles Ian (Hendon, N.)	Ward, Rt. Hon. G. R. (Worcester)
Jennings, J. C. (Burton)	Osborne, C.	Ward, Dame Irene (Tynemouth)
Jennings, Sir Roland (Hallam)	Page, R. G.	Watkinson, Rt. Hon. Harold
Johnson, Dr. Donald (Carlisle)	Pannell, N. A. (Kirkdale)	Webbe, Sir H.
Johnson, Eric (Blackley)	Partridge, E.	Webster, David
Johnson, Howard (Kemptown)	Peel, W. J.	Whitelaw, W. S. I.
Jones, Rt. Hon. Aubrey (Hall Green)	Peyton, J. W. W.	Williams, Paul (Sunderland, S.)
Joseph, Sir Keith	Pickthorn, K. W. M.	Williams, R. Dudley (Exeter)
Kaberry, D.	Pike, Miss Mervyn	Wills, G. (Bridgwater)
Keegan, D.	Pilkington, Capt. R. A.	Wilson, Geoffrey (Truro)
Kerby, Capt. H. B.	Pitman, I. J.	Wood, Hon. R.
Kerr, Sir Hamilton	Pitt, Miss E. M.	Woollam, John Victor
Kershaw, J. A.	Pott, H. P.	Yates, William (The Wrekin)
Kimball, M.	Powell, J. Enoch
Kirk, P. M.	Price, David (Eastleigh)	TELLERS FOR THE NOES:
Lagden, G. W.	Price, Henry (Lewisham, W.)	Mr. Heath and Mr. Oakshott.
Lambton, Viscount	Profumo, J. D.

Original Question again proposed.

Mr. Ray Mawby (Totnes) rose——

It being after Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress; to sit again Tomorrow.