§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]
§ 12.47 a.m.
§ Mr. F. Blackburn (Stalybridge and Hyde)
I apologise to everyone who has been kept here tonight because of the Adjournment debate, but I can assure you, Mr. Speaker, that I should have been much happier if I could have made this speech at an earlier hour. I would also apologise in advance to the Minister if by any chance I take up more than my share of the allotted time. I will try to speak as quickly as I can, but I think it is advisable that the full account should be given because it is a very long story.
I regret that it is necessary to raise the case, which has now been going on for sixteen months. It is a story of delay and procrastination by the Board of Trade. In spite of any protestations, there is every appearance of discrimination against the firm of Ashton Brothers and Co. Ltd. in my constituency.
Everyone is fully aware of the difficulties of the cotton industry at the present time, and there is no need for me to recapitulate them, but to me it does not make sense to be spending £30 million of public money and then to discriminate 1476 against a firm which is trying to achieve maximum efficiency.
Command Paper 744, Reorganisation of the Cotton Industry, says:Firms will retain their freedom to buy machinery which is best suited to their needs.'If suitable machinery is available in this country, then I believe it should be used, and Ashton Bros, would agree with that, but in the case that I am going to outline I maintain that there was no British machinery available.
It is very important, too, that the textile machinery industry in this country should set about trying to make itself as efficient as possible and be prepared to produce the machines that the industry requires and not the machines that it thinks the industry ought to have.
I think that the efficiency and the progressive outlook of Ashton Bros, are well known to the Board of Trade. The firm was the first United Kingdom manufacturer to introduce automatic looms in 1905, and during the last three years it has built up an installation of Sulzer shuttleless looms, which is considered by the makers to be second to none in Europe for technical efficiency, and is the only installation of any size in Lancashire and Cheshire. The unit is operating three shifts five days a week weaving high quality fabrics for export to North America. The commitment in equipment installed and on order for the project amounts to £150,000. As the trade is very diverse the problems are often considerably more complex than those which have to be solved by German, Swiss and Belgian users of the Sulzer, who, in the main, are producing highly rationalised simple fabrics of coarse and medium counts. With the introduction of shuttle-less looms, parallel development was necessary in the spinning and preparation and they had to develop a completely new technique for production of required packages. After two years of experiment and research work in conjunction with other firms, the Schlafhorst B.K.N. machine was evolved, and that is the machine in question.
With the packages from these Schlafhorst B.K.N. machines, Ashton Bros. are running twenty looms per weaver, but they assume that if they had to use the British Ozri they could run only seven looms per weaver at less than 82 per cent. efficiency. That should satisfy the 1477 Board of Trade requirement (hat the imported machine must have a definite and marked technical superiority in performance. Application was made for dutyfree importation of the Schlafhorst B.K.N. machine, the grounds being that the machine was required to wind yarn for shuttleless weaving machines in the count range tens to twenties. This count range was clearly stated on the application. They knew these machines would he satisfactory on high and medium counts for most types of weft package, but that this count range required a machine which must have special characteristics. This was confirmed by an original prototype unit and the results are fully substantiated in the independent research project undertaken by Sulzer Bros.
Appropriate sections of this report were made available to the Board of Trade in the early stages of the inquiry. On 14th April, 1958, Ashton Bros, received a letter from the Board of Trade stating that their application had been rejected because the application had been received before the machine had cleared Customs charges. No reference at all was made to the extensive technical case. After protracted correspondence between Ashton Bros, and the Board of Trade, Ashton Bros, formally wrote on 1st May to the Board of Trade, and the reply merely reiterated all the Department had said, but suggested a re-examination of the Customs form. On 19th May, Ashton Bros, wrote to the Board proving that the documents were properly endorsed at entry. This was conceded by the Board of Trade on 2nd June, that is after three months, that they had filled up the correct forms, and it was agreed that the application should be considered on its technical merit. Within fifteen days—this was about the quickest work that the Board of Trade has done in the past sixteen months—the application had been rejected. No reason was given except that the Board of Trade understood that Messrs. Stubbs of Ancoats made a suitable machine. On 21st July, Ashton Bros, wrote to the Board of Trade that the comprehensive and highly technical case had been made had not even been referred to and that they would not accept Messrs. Stubbs' claim unless they could prove it in practice as they knew Stubbs' 1478 machine was fundamentally unsuited to the special requirements of the job.
The Board agreed to witness a trial if Ashton Bros, could organise it and Stubbs proved willing to co-operate. It also asked why Ashton Bros, believed the British machine was unsuitable. A completely documented case had already been forwarded to the Board with the application, but they nevertheless gave a broad outline of what the forms in their possession meant. Trials were immediately—I stress the word "immediately"—organised by Ashton Bros, and yarn was delivered to Messrs. Stubbs for winding on their machines. On 30th September, that is, after another two months, they were advised by Stubbs that they had only one machine, which was being specially built for the Textile Exhibition, and thence trials could not take place until after that exhibition. If the machine was being specially built, it could not have been in existence when Ashton Bros, imported their machine. Stubbs cannot have it both ways.
By this time I had been brought into the picture and correspondence had been passing between me and the then Parliamentary Secretary to the Board of Trade, now the Economic Secretary to the Treasury. In a letter written to me on 23rd October, 1958, he said:Since the only machine which could be used for this trial had to be overhauled in preparation for showing at the International Textile Exhibition to be held at Manchester from October 15th to 25th Stubbs asked that the trial should be deferred.I may say that this machine was seen at the exhibition and was a conventional Orzi cone-winder of the type which had been advertised for two years and which was, presumably, in series production.
After further delays, the trials eventually took place in November at Ashton Brothers in the presence of Stubbs's representatives, two representatives from the Board of Trade and two representatives from Ashton Brothers. The trials were carried out so as to give statistical significance to the results of observations which were taken by trained work-study engineers. At no time during the test was any weaving machine adjusted, and material from the Schlafhorst and Stubbs's machines was woven alternately. 1479 The trials followed the experimental layout exactly and when they were completed, the Board of Trade officials returned to London.
If there was any unfairness in the trials which took place, the Board of Trade officials must have been singularly blind, and that I cannot believe. The results showed that the performance of Stubbs's machine was quite unacceptable and that shuttleless weaving machines could not possibly develop acceptable performances if they were restricted by such a technically inferior form of material supply. Stubbs did say that they could wind faster on cop lift packages if they had a winder accelerator, but at no time had the machine ever been advertised with such an accelerator.
Parts of this report, a copy of which I have with me, were too technical for me to understand. I submitted it to another expert quite unknown to Ashton Brothers. In his report to me he said that he was convinced that Ashton Brothers had fully made out their case.
Again letters passed between me and the Minister of State and, as a result of one letter which I received from the hon. Gentleman, I had an interview with him. Following that, arrangements were made for Mr. Ormerod, the production director of Ashton Brothers, to see the technical officers of the Board of Trade. That meeting took place and Mr. Ormerod was accompanied by Mr. Grainger, a member of a firm of consulting engineers. Mr. Ormerod asked me to accompany them on that occasion, but I thought that it would be better if I were not present.
They were asked to satisfy the Board of Trade on three points: first, that the yarn had not been cut on the loom when weaving Stubbs's yarn. As both batches were woven alternately, the Board of Trade representatives agreed that that would not be possible. They further admitted that the machines were not adjusted in their presence. Stubbs had put forward three points. That was the first, and the answer given satisfied the Board of Trade officers.
The second was that the yarn which Ashton Brothers wove from Schlafhorst packages had been subjected to a strengthening process. Mr. Ormerod says that that is easily disproved by reference 1480 to the results of the weaving tests at Stubbs. In writing to me about this interview, Mr. Ormerod said:When Mr. Grainger was pressed by the Chairman as to whether my interpretation was the only one possible from the data he reluctantly agreed that it was.The third point was that they referred to a test that took place when neither the Board's representative nor Ashton Brothers were present. Apparently, Stubbs had had a trial of their own. Before leaving the Board of Trade, Mr. Ormerod asked the Board's representatives if they had any points on which he had not satisfied them technically. Each member present was asked in turn by the chairman, Mr. Pollard, and all answered in the negative.
By 4th June, Ashton Brothers were getting rather worried, and pressed for information about their appeal. After further delay, they were informed that their observations had, again, been passed on to Stubbs, who merely reiterated the three points on which Ashton Brothers had satisfied the Board. Further correspondence took place, and on the 16th of this month I had a letter from the Minister himself which seemed to bring a new element into the matter. This time it is the size of the packages. This is not a matter raised before, or one on which the firm was questioned at the Board of Trade—it is a new element.
Ashton Brothers have the first successful shuttleless weaving installation in the country, and all the material was being supply by Schlafhorst machines. I am informed that no Sulzer shuttleless machine in the world is weaving cotton from any machine other than the Schlafhorst BKN. The production from these machines is exported to the United States, where we can no longer compete on price with conventional automatic loom production. The Board of Trade Journal of August, 1956, carried a glowing account of Ashton Brothers' achievements in the dollar market. The same machine—Schlafhorst BKN—has been imported duty free by two other Lancashire importers for normal loom production. That is why I say that there is discrimination against the firm in my constituency.
At the meeting with the Board of Trade, the Board's representatives said to Mr. Ormerod that since the firm had to some 1481 extent used the machine for the same purpose as one of these other firms the firm could submit a fresh application, to which Mr. Ormerod replied that he refused to do so because he was so convinced that the firm's case was unanswerable.
The Wilson Smith criteria, of which the Minister will be aware, state that a firm must satisfy the Board. It is quite obvious that it is Stubbs who have to be satisfied and not the Board of Trade. Stubbs have never been interested in developing these machines. I do not know whether the Minister is aware that Ashton Brothers offered to help Stubbs to develop the machine and that they have never received any reply.
The Board of Trade representatives supervised a trial, and had an opportunity to check all data recorded. The only criticisms of the tests were disposed of in detail in London. Now the ground has shifted. Having refuted the three complaints by Stubbs, a new element is brought in—the size of the packages. Is it not obvious that Stubbs said they had a machine to do the job when they did not know what the job was? If Ashton Brothers had thought that the Ozri machine—which, as I have said, had been advertised for two years—could do the job, they would not have gone to all the trouble of carrying out intensive research work and subjecting themselves to additional expense by importing a foreign machine.
I believe that the test results show the inadequacy of the Stubbs machine. I believe that Mr. Ormerod and Mr. Godrich satisfied the officials of the Board of Trade on the technical points raised. It is quite obvious that Stubbs will never admit that their machine is inadequate. But it is for the Board of Trade to make the decision and not Stubbs, and I am asking the Board to have the courage to make up its mind to grant the dutyfree licence, a decision which I am convinced is in accord with all the facts.
§ 1.5 a.m.
§ The Minister of State, Board of Trade (Mr. J. K. Vaughan-Morgan)
The hon. Member for Stalybridge and Hyde (Mr. Blackburn) said that he was going to impinge on the time which was allotted to me. He has done so in a very generous measure. I may say straightaway 1482 that I shall not have a chance to answer all his remarks in detail but I should also say, for the record, that I do not in any way accept his version of many of the facts which he has deployed. To begin with, I think he has entirely omitted to set out the full background against which these cases have to be judged.
This is the first chance that I have ever had of explaining the very complicated procedure by which we have to deal with these duty remission cases. The first thing we have to remember—and the hon. Member and Messrs. Ashton Brothers should remember this—is that it is Parliament which has imposed a customs duty on imported textile machinery. But Section 10 of the Finance Act, 1932, now replaced by the Import Duties Act, 1958, grants to the Board a discretionary power to waive protective duties if similar machinery cannot be obtained in the United Kingdom. In fact, Parliamentary imposes the tax but gives the Board of Trade discretionary powers to waive it on terms which are but faintly defined.
These arrangements have never been easy to administer and they were suspended for a time in 1952. They were reinstated in 1954 following the report of the Wilson Smith Committee, to which the hon. Member referred. That Committee recommended that duty remission should be granted only if the imported machine was shown to have a marked technical superiority over the British machine, either in general performance—and this is a point which the hon. Gentleman did not mention—or for the special work for which it is required.
It is obvious to anyone from what I have said that there is ample room for argument in almost every case as to whether a particular foreign machine is or is not thought much better than the British machine and should therefore be able to enter duty free. But someone must decide, and the responsibility rests with the Board of Trade who must be the sole and final judge. Let me make it clear that it is the Board of Trade who decide, and not Messrs. Joseph Stubbs or Messrs. Ashton Brothers.
The task of proving to our satisfaction that a particular piece of machinery has a marked technical superiority over a 1483 British machine is rightly placed fairly and squarely on the applicant. That is very important. It is not for the Board of Trade or the British manufacturer to prove the contrary. It is equally obvious that the Board of Trade cannot just accept the ipse dixit of the importer of a foreign machine that he should be entitled to duty-free importation because he thinks that the British machine is not so good. To say this carries no reflection on the applicant or on his knowledge.
In carrying out our statutory duty, we obviously have to consult the British machinery makers and we do not accept the ipse dixit of the machinery makers either. It will be clear to the House that many occasions arise when the makers and importers do not see eye to eye and it is the duty of the Board of Trade, which has no axe to grind in this matter, to adjudicate on these difficult questions. It is an unpleasant duty, and one which I for my part would gladly shed. It is some evidence of the impartiality with which the task is carried out that it is the first time in my recollection, which extends over two years, that the refusal of the Board to grant duty remission has led to Questions, let alone to an Adjournment debate in this House, and this despite the fact that we receive some 4,000 applications every year.
There is one other general point that I should make. The fact that we do not recommend duty remission is absolutely no reflection on the commercial or technical judgment of a firm in deciding to buy a foreign rather than a British machine. It is no part of our responsibility to try to decide whether imported machinery is more effective for a particular purpose than the British machine, but in carrying out the duty which I have mentioned we have to decide sometimes how much more effective the machine may be and what the margin of superiority is.
Now I turn to the particular case which the hon. Member has raised. It is a very complicated case and I think I must make it clear that I, in common with the hon. Member, am not technically qualified. I have to rely on advice. These particular Schlafhorst BKN winding machines have been the subject of applications for duty remission ever since the arrangements were resumed in 1954. Up to 1957, we issued duty-free licences after tests 1484 had been held which established, in our view, that the foreign machine was much more productive than any British machine then available. In 1957, one of the British textile machinery manufacturers—Messrs. Joseph Stubbs, Ltd.—who have been referred to, brought out a machine which seemed to be competitive. The importers claimed that the Schlafhorst machine had a higher winding speed that the new British machine, and it was decided that there should be trials to test this claim. They were held, but proved inconclusive, and it was then suggested by the British manufacturer that further tests should be held.
There seemed to the Board of Trade, however, to be so much delay in arranging these tests that, in fairness to the importers, we felt that we had no option but to issue duty free licences, even although it had not been established to our satisfaction that the winding speed of the foreign machine was, in fact, superior. It was for this reason that licences were given in October last year to the other firms which the hon. Gentleman mentioned in a Question which he asked the other day. But there was no discrimination between Messrs. Ashton Brothers and the other firms.
Ashton Brothers did not consult the British manufacturers before buying this machine, but they claimed that the Schlafhorst machine which they imported, which incidentally was not, I am advised, precisely the same as the other Schlafhorst machines, enabled the coarse cotton yarn wound on it to be woven better on their shuttleless looms. The claim of the other applicants had been based on the fact that the winding speed of the foreign machine was higher and none of them required the winder for use with shuttleless looms.
The British machinery manufacturers disputed Ashton Brothers' claim and it was arranged by agreement between the two firms that trials should be held. The purpose of the trials was to test the weavability on Ashton Brothers' shuttleless looms of yarn wound on the packages produced by the British machine, compared with that wound on packages produced on the Schlafhorst machine. These tests were held last November but, to our disappointment, agreement on the outcome has not been achieved. According 1485 to Ashton Brothers, the tests showed a great efficiency on the part of the foreign machine for their particular purposes, but the British maker criticised the fairness of these tests. It was claimed that inadequate information had been given by Ashton Brothers about the type of weft packages that were best suited for weaving coarse yarn on a shuttleless loom; and there is very little experience of this in Lancashire.
For our part, we in the Board of Trade can readily understand that Ashton Brothers did not wish to divulge information of this type because they had worked it out in consultation with the German machinery maker, whom they had selected as their supplier. They are, if they so choose, perfectly entitled to do this but, equally, if they do so, they should be well aware that duty is payable on such machinery subsequently imported.
We are bound to take the view that for duty remission purposes, any comparisons between British and foreign machines must give the British manufacturer an equal opportunity of meeting the user's, requirements. We felt, therefore, that the British maker's criticisms had some validity and we could not accept these tests as fair and conclusive.
As I have informed the hon. Gentleman, we are perfectly willing to consider the results of any further tests if the 1486 results are agreed between the two firms and are, in our view, fair to both parties. But the facts now before us are such that we do not feel justified in granting a licence for duty remission, bearing in mind our statutory duty.
The issue amounts to this. We in the Board of Trade have to decide between rival claims submitted by Ashton Brothers and by Joseph Stubbs, both of whom are well known to us, and to the world of industry, as lively, active and progressive firms.
I sincerely hope that this dispute and the publicity now given to it will not in any way worsen or embitter relations between these two firms or, indeed, between the two great Lancashire industries to which they belong. Even if I cannot convince the hon. Member that the decision so far given against his constituent is the right one, I hope that the House will agree that I and the Board have given very full consideration to the case and spent much time on it. I hope, also, that the House will accept that the Board of Trade is in this matter absolutely impartial and is trying only to carry out one of the most tiresome and difficult duties which has been imposed upon it.
§ Question put and agreed to.
§ Adjourned accordingly at a quarter past One o' clock.