HC Deb 17 June 1959 vol 607 cc446-584

3.47 p.m.

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

I beg to move, in page 1, line 12, after "compensation", to insert: which, except in so far as the circumstances of the section make it desirable in the opinion of the Cotton Board to relate the compensation to other factors, shall be". On Second Reading I mentioned to the House that it would be necessary to put down an Amendment to make wider the conditions on which compensation for eliminating capacity could be granted. As it stands, the Clause relates to compensation in respect of specified types of machinery. The words are: … a scheme providing for the payment by the Cotton Board for the elimination of excess capacity, of compensation related to the number of machines of any specified description eliminated. That is quite a good criterion for the spinning, doubling and weaving sections, and in each of those sections it is the intention to select one or more types of machine, which will be an effective yardstick for the purpose, that is, machines which determine the volume of output, and therefore, by reference to that kind of machine—it might be a spindle or a loom—it is possible to calculate how much capacity is being eliminated.

We intend to go on with that criterion in those sections, but further consultation has revealed that in the finishing section this would not be a suitable criterion. The reason is that there are in the finishing section a great many different types of machine, and the processes are complex. The Cotton Board has advised the Board of Trade that it would not be practicable to relate its compensation grants to machines or types of machine. It has not yet definitely decided the basis on which the compensation payments will be offered in the finishing sections, but I am sure that we are right to give it flexibility, and then, when it has examined the problem, it will bring forward the schemes to the Board of Trade, and the House will have complete control because the orders will have to be approved.

In moving the Amendment, which widens the criterion for compensation in respect of an important section of the cotton industry, I should like to make it clear that there is no intention whatever that the degree of compensation for the finishing trades should be any more generous than that which is offered for the spinners, doublers or weavers. It may happen that in the finishing trades, because they wish to effect certain larger groupings of units, they may decide that it would be right to give compensation in respect of a variety of assets. It might be water rights and sites and all kinds of things which would not really come within the scope of the Bill. We need the Amendment in order that the additional money required for compensation for types of assets not comparable with those which we select for the spinners and weavers, for example, may be raised by the finishers themselves through the levy. Without the Amendment they could not do it.

I apologise to the Committee that we did not realise exactly the position of the finishers when we first drafted the Bill. This has come to light since. I am sure that it is in the interests of the reorganisation of the industry as a whole that we should give the Cotton Board this amount of flexibility when fixing compensation for this very important section.

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

I am sure that the soundness of this proposal is obvious to most people. However, I should like to carry the right hon. Gentleman's mind back to the beginning of his explanation, when he mentioned the criteria to be used in respect of surplus capacity. I should like to know where he got the criteria, whether it was from the trade or from the Shirley Institute, or where else he got them from. I should also like to know whether his criteria are to be used for the spinning industry and the weaving industry only, and whether the process will begin right away in respect of claims for compensation made by firms which are going out.

Mr. F. Blackburn (Stalybridge and Hyde)

I am not quite certain of the question which was asked by my hon. Friend. I should like the President of the Board of Trade to make clear whether this applies only to the finishing side of the trade and whether he has other criteria in mind for the other sections of the industry. Also, I wonder whether it will be necessary for the Explanatory and Financial Memorandum to the Bill to be amended to cover the point.

Sir D. Eccles

In reply to the hon. Member for Stalybridge and Hyde (Mr. Blackburn), it is just possible that there might be an exceptional firm not easily grouped in one of the sections which the Cotton Board has already identified and that it might wish to have, as it were, a scheme of its own, in which case it will be brought to us and we shall consider it. I should not think that there would be any question of amending the Explanatory and Financial Memorandum. I think it covers this matter.

In reply to the hon. Member for Ashton-under-Lyne (Mr. Rhodes), it is not the Board of Trade which has got these criteria from anywhere. I think 1 should make it clear at the beginning of this debate that it is the Cotton Board and its expert people who come to us and say, "We think this is the best measuring rod for capacity in this or that section." The Board is doing very well, and is discussing with various sections of the industry the precise definition of the capacity to be eliminated.

I do not know any other way in which this can be done. The Board has certain estimates for the amount of capacity it thinks there should be, and when schemes come before the House they will contain not only the conditions of compensation but also a minimum amount of the capacity in that section which must be eliminated in order for us to be satisfied that a reduction adequate to the purposes of the Bill will take place. All I can say is that the Board is getting on fairly well, and I hope that when we reach a later Amendment I may have a better chance of describing the situation.

Mr. W. R. Williams (Manchester, Openshaw)

Does that mean that up to now the trade itself has had no criterion at all? There must be some yardstick in the Board of Trade which would assist not only the Cotton Board but hon. Members when we discuss the question of exactly what criteria the Cotton Board has in mind. We should have that information, not only in the interests of the industry but of the taxpayers.

Mr. J. T. Price (Westhoughton)

I do not want to appear to be difficult or tendentious about this matter. I am in favour of flexibility if it can be shown that it does not involve hidden risks to public money. Cannot the Minister be a little more specific as to what is implied by the words: in the opinion of the Cotton Board to relate the compensation to other factors …"? Are the other factors physical factors related to the machines, economic factors, or financial factors, or do they relate to the consequential loss arising from machines being put out of commission?

This phrase can be construed in a hundred and one different ways by a committee dealing with technicalities, and, without a more adequate explanation than the right hon. Member's brief one. I should be extremely reluctant to vote for the Amendment "on the nod". It can open the floodgates to all kinds of other considerations. We are dealing with the expenditure of a large part of £30 million of public money, which is to be voted for distribution under the administration of a lay board set up by private enterprise. That is a serious matter.

This is only a pilot Bill, which will be followed by another which will deal with all kinds of other considerations, and if we go wrong in this one we shall deserve the criticism of our constituents. I would ask the President to go part of the way to meet us and to recognise that to grant a kind of omnibus power of this kind to the Board or to any other lay body which has to administer the terms of the Bill is to open the floodgates to all kinds of considerations outside those decided or required by this situation. I am a little dismayed by this development. We are asked to agree to an Amendment which, without proper safeguards, could have the most adverse consequences for the public exchequer.

4.0 p.m.

Mr. Leslie Hale (Oldham, West)

The Amendment raises some extraordinary questions. I hope that my right hon. Friends will consider moving the adjournment of the debate in view of the fact that we are being asked to proceed with a Bill the details of which have been altered and the whole scope of which has been widened. Indeed, the alteration affects every provisional Ruling that you have made, Sir Charles, because it is introducing a wholly new principle of assessment. I apologise for using the word "principle", because it is really a complete lack of principle which is being introduced. The wording is very obscure.

The late Walter Bagehot once said that a great financial expert—I am not referring to anybody in the Board of Trade—had told him that if anybody wanted to make a popular speech in the House of Commons he should pronounce a panegyric on economics, and if he wanted to get support he should propose spending money. If he proposed spending money, Members representing constituents who would benefit would be present, and other hon. Members would not turn up because they would feel it would make things a little awkward for their comrades, and anyway they might get some benefit later on.

The Bill has had its Second Reading, and we have had a discussion upon its proposals. A number of questions have been asked of the President of the Board of Trade, some of which he has answered and some of which he has not. We have now reached a stage similar to that reached on one occasion in court, when I remember that a somewhat verbose counsel said to a rather terrified witness, waggling his eyebrows as he said it, "Did you or did you not on the night in question or at any other time say to the plaintiff or any other person that the words complained of in the plaintiff's statement of claim and denied in the defence were matters of little or no moment or otherwise? Answer me 'Yes' or 'No'". The witness answered, "'Yes' or 'No' what, Sir?" I feel rather like saying, "Yes' or 'No' what, Sir?" to the President of the Board of Trade. What are we discussing?

In an interjection in the Second Reading debate I asked the President of the Board of Trade this question: if we are going to compensate the people who have nothing but bad machines, what will happen to those persons who have nothing but good machines but a lot of hire-purchase instalments to pay? Is the Amendment an attempt to deal with that question? I have a later Amendment on the Order Paper—I hope I am not abusing privilege in referring to this, Sir Charles, but I have been told that it is likely to be ruled out of order.

The Chairman

It has been ruled out of order because it goes beyond the terms of the Money Resolution.

Mr. Hale

Exactly; that is the very point I am making. We are now discussing an Amendment which says that any other factor may be considered. The Amendment does not conform with the Money Resolution—or are we to understand that the Money Resolution controls the factors? This seems to involve a very difficult point of constitutional law. We have a limited Money Resolution, and the right hon. Gentleman is now pushing in a very wide Amendment. Does the Money Resolution control all expenditure, so that if money is expended outside the terms of the Resolution there can be a surcharge, or does the Act control the Money Resolution?

The Resolution is not part of the Act. It is not printed, and is not available to anyone who studies the Act. Presumably the wording of the Act rules the Money Resolution. To talk about "other factors" without the use of any other adjective is to say to the Board of Trade, in its infinite and collective wisdom—and that in itself is a curious thing to say, because we know that there is no Board of Trade, or that if there is it has not met for heaven knows how long, and the Archbishop of Canterbury has never posed as an expert on cotton even if he has ever attended a meeting of the Board of Trade—is to say "What principle shall be applied?" The right hon. Gentleman, with a frankness which is singular for him, says that the Board is still talking it over. It has not a clue at the moment. The Amendment is proposed, not to provide for something we have in mind, but to provide for anything we might have in mind in future.

Dr. Gallup comes into this question. It may be that there are other factors which the Board thinks ought to be considered, having regard to the delicate position of the Conservative Party in the country.

Mr. J. T. Price

My hon. Friend is quite rightly concerned about the elasticity implicit in the power which the Minister is seeking. I would remind him and the Committee that when the Money Resolution was put to the House at 10.10 p.m. on 4th June, I challenged it and invited the right hon. Gentleman to say whether the £30 million given as an estimate of the cost to public funds was a ceiling or was a figure which could be exceeded or underspent, and he said that it was merely an estimate. That means that the Money Resolution itself places no definite limit on the amount of public money required to be spent under the terms of the Bill. In those circumstances this kind of Amendment is a danger to the public purse, because it gives unlimited power to the Cotton Board to exceed the terms of the Money Resolution.

Mr. Hale

I accept what my hon. Friend has said, and I am very grateful to him for his assistance, which I always welcome. It is as well to remember what the position is. Up to now we have known what to do. We started by looking at the Bill and then, if we wanted to know how the Bill was controlled, we looked at the Money Resolution. Then, having read the Money Resolution and found out what it meant, we read the White Paper. But the White Paper in this case is out of date. The Board of Trade is considering issuing a new one. The House of Commons is therefore being asked to agree to the expenditure of a very large sum, first, without knowing who the recipients or beneficiaries will be; secondly, without knowing what it is going to cost or whether any limit will be put upon the the cost, and, thirdly, without knowing the reasons which will guide the Board of Trade, in its infinite wisdom, in allocating the money. Surely we are entitled to a better explanation than we have received.

Would it not be a good idea for the President of the Board of Trade to say, "While the Board of Trade is thinking, or trying to think, or making the motions of consideration—at any rate, until it comes to some conclusion which may be put on paper, it will be better for us not to waste time by discussing this matter." We may find that there are merits in the Money Resolution, if only the right hon. Gentleman will give us the details. It may be that this was a rotten Clause to start with, and that it requires amending.

Hon. Members on this side of the Committee have accepted the fact that cotton workers have had a rough time and have been paid very poor wages, and anything which might compensate them should be welcomed. We know that if Mr. Clore took over the industry he would produce some surplus capacity and reduce the industry intelligently, but we also know that this is an ill-considered Bill and is in many ways a silly Bill. It may prove to be a Bill which will cause the spinners—and I can talk only about the spinning section, because it is one of the few sections that I know anything about, and I do not know a lot about that—to say that it is not worth their while to operate it, with all its restrictions, humbug and regula- tions. At the moment there is some suspicion that it is being so devised that it will help only one or two of the large firms.

A short time ago the Manchester Guardian printed something extremely important. It pointed out that closures of mills recently had been almost completely confined to the closure of one mill by a company owning three or four. There is an advantage in that, because if a mill has to be closed as many of its workers as possible can be transferred to working a two-shift system in order to keep the other mills going. Does that qualify for compensation?

The Chairman

Whether it does or not, I hope that the Minister will not reply to the question, because it does not concern the Amendment.

Mr. Hale

You can understand my difficulty, Sir Charles, in knowing what are the "other factors". I would have thought that what I have just mentioned would be a factor. If it is not a factor, it is a factory. I hope that the right hon. Gentleman will give an answer at some stage. In the meantime, I do not know what we are discussing. The whole thing is now very vague and nebulous.

It is not a question of elasticity, as my hon. Friend the Member for Westhoughton (Mr. J. T. Price) said it was, because even elastic has some bounds, as oversized women frequently demonstrate. This is a floating nebula in outer space, limitless, expanding, unexplorable and almost ununderstandable. I therefore ask the President of the Board of Trade to explain it a little more, although I do so without a great deal of hope and certainly with no confidence.

Mr. Sydney Silverman (Nelson and Colne)

On a point of order. I would ask you, Sir Charles, to consider the effect of the Amendment, having regard to the Money Resolution, to see whether it can really be within it. The considerations which I would respectfully draw to your attention are these.

The Money Resolution, of course, does not specify any total sum to be expended. It infers such sums as may be necessary for certain defined purposes, and the purposes defined are the purposes of the Bill as the House accepted it on Second Reading. At that stage the matter was clear beyond argument. It was for the elimination of excess capacity, of compensation related to the number of machines of any specified description eliminated. That was perfectly clear. So long as we are paying compensation related to the number of machines of any specified description eliminated as being excess capacity we are within the Money Resolution, whatever the total global sum may turn out to be. So far, so good. But if the right hon. Gentleman's Amendment is carried, what will then be the position? We are then going to pay compensation not merely related to the number of machines of any specified description eliminated, but to an unknown and undefined and unascertainable quantity, because we are adding to the number of machines in the subsection as it stands other things which, except in so far as the circumstances of the section make it desirable in the opinion of the Cotton Board to relate the compensation to other factors, shall be. So not only are there the machines eliminated because their capacity is excess capacity, but other factors, too, to ascertain which we have first of all to look at the circumstances of the section. We have then to consider what is desirable in those circumstances and then we have to get the opinion of the Cotton Board that they are proper factors to relate to the compensation, and there is then absolutely nothing whatever to limit the number of factors which can lead to the compensation. It is undefined and unlimited in any way— other factors which in the circumstances of the section make it desirable in the opinion of the Cotton Board … What in the world is that?

A Money Resolution designed to meet the needs and the cost of the Clause as it was on Second Reading is clear enough. It is limited by express terms, but it now becomes, if the Amendment is carried, wholly unlimited and unascertainable. How, therefore, can the Amendment be within a Money Resolution which the Committee, first, and then the House accepted as being right for the Bill as it then stood?

I am not saying that if the Government think it right to do this thing we ought not to consider it on its merits, but before we do so we ought to understand quite clearly whether the Money Resolution which we have adopted so far is sufficient to cover what we are doing.

The Chairman

I am advised that it is.

Mr. Douglas Jay (Battersea, North)

I do not think that we would object to the President of the Board of Trade, if necessary, widening the terms of the Clause so as to enable special conditions of the finishing section of the trade to be taken into account. I do not think that anyone would wish to exclude that section of the trade from the benefit of the Clause if we are going to have it. But I think that the Amendment which the right hon. Gentleman is now suggesting is an example of extraordinarily slipshod legislation.

If we look at the words in the Bill and then at the words which we are asked to accept, we find the most extraordinary change in the whole conception of the Clause. I am not saying that my hon Friend is right in his argument about the Money Resolution. You, Sir Charles, have said that it is not so, and I will leave that aside. But the Bill as it is at present, and as it was on Second Reading, contains the words: compensation related to the number of machines of any specified description eliminated. 4.15 p.m.

We are now asked to accept the words: compensation which, except in so far as the circumstances of the section make it desirable in the opinion of the Cotton Board to relate the compensation to other factors, shall be. This, of course, would not simply apply to the finishing section of the trade. It would apply to any section and would allow the Cotton Board to make its decision on any factors whatsoever, which is an enormous jump from the quite specific criterion which we had before of the number of machines involved.

As far as the words of the Amendment are concerned, the other factors might be anything. They might be the spiritual and psychological factors which the Colonial Secretary was asking us to consider yesterday. As far as the words are concerned, they might be those of the Foreign Secretary. I am not, of course, suggesting that the Cotton Board would take into account any frivolous or irrelevant considerations. It is a highly reputable and respectable body, but I would point out to the Committee that the words desirable in the opinion of the Cotton Board would enable the Board, which, after all, is distinct from the Board of Trade and is, quite naturally, more closely associated with the industry than is the Board of Trade, to come to a decision that it thought some factor or matter was relevant. Then, even if the Board of Trade disagreed, it would have no power to disallow, because the words in the opinion of the Cotton Board would make it unable to do so. But however that may be, it surely emerges that the words are much too wide for the Committee to approve at this stage.

Mr. William Shepherd (Cheadle)

I want to get this point clear. Is the right hon. Gentleman saying that all that is required to be done is for the Cotton Board to formulate a scheme and that then the whole thing is binding on the President of the Board of Trade and on the House? Does not he understand that an Order has to be laid before the House?

Mr. Jay

That is true, but the hon. Gentleman is surely not suggesting that that is an argument for putting completely vague and slipshod phraseology into the Clause. If that is the case, what was the point of having the original words?

Mr. Shepherd

Surely the right hon. Gentleman would agree that if we have the safeguard that the House is required to pass a subsequent Order, we can have a much looser interpretation in the Bill?

Mr. Jay

Surely that is not enough. It is no argument for the Committee abrogating its duty to see that there are precise words in the Clause and to see that at a later stage the Board of Trade could act as a long stop.

I do not think that there is any difference of opinion in the Committee about the objective which we want to achieve, but I would ask the President of the Board of Trade, between now and Report, to look at these words to see if h can find something rather less vague, but nevertheless rather wider than the original words, which would enable the difficulties in the finishing section of the trade to be taken into account without putting into the Bill words which seem to me, and I think, to many of my hon. Friends, to be really intolerably vague and clumsy.

Mrs. Barbara Castle (Blackburn)

You, Sir Charles, have ruled that the Amendment is within the terms of the Money Resolution, and, of course, when one looks at the Money Resolution, one finds that it is very wide indeed. But if the Money Resolution is vague, that, surely, is all the more reason why the Clause should be precise because, of course, the Committee is not dealing at any stage of the Bill with any fixed estimate of public money involved.

In the Bill before us we have no figures, and no financial limit is fixed in the Money Resolution. As my hon. Friend the Member for Westhoughton (Mr. J. T. Price) pointed out to the Committee, he seized on this point when the Money Resolution was before the House and asked the President of the Board of Trade whether the figure which had been given to us as a working basis for our approval of this whole cotton scheme, namely, a figure of some £30 million, was a ceiling or an estimate.

The President replied: As the hon. Member knows, this figure is an estimate. The right hon. Gentleman went on to add: It had to be made up from the estimates of the various sections based on what they thought would he the cost of compensating surplus capacity."—[OFFICIAL REPORT, 4th June, 1959; Vol. 606, c. 495.] In other words, we have the position that the House of Commons has been told that it is being asked to pre-empt £30 million of public money. We are given that figure on the basis of an estimate made on the unamended Bill, on the basis that the factors taken into account in compensating are the very limited factors set out in the Bill in its present form. Therefore, when the President says that there are all sorts of other factors which may be taken into account, we may, in effect, be enormously increasing the estimate. This estimate is no longer correct. In fact, the sky is the limit.

It may be argued by the President that there is a second check, because when any scheme of reorganisation is drawn up by the Cotton Board, it must first be submitted to him for approval, and then by him to the House in a draft Order which will have to be subjected to the affirmative Resolution procedure in the House. I wish to point out to the Committee that giving the Cotton Board carte blanche to take into account unspecified additional factors means that if we are not very careful to keep within the financial ceiling of £30 million which has been laid down—a ceiling which must be exceeded if wider factors are to be taken into account—we shall be adopting a policy of "First come, first served."

The Cotton Board will prepare its earliest scheme of reorganisation. The people who get in early, and make up their minds smartly, will come to the Cotton Board and say, "Well, now, we have decided to create a surplus capacity and we want to be compensated on the basis of factors A, B, C, D and E." The Cotton Board is being given carte blanche—a term with which we are getting a little familiar in the House of Commons in various other contexts—to make compensation.

The Cotton Board may produce a scheme which the President may find it difficult to fault on the merits of his own Amendment. If that scheme is made the subject of affirmative Resolution by the House, and approved, we may get reorganisation schemes 2, 3 and 4. At some point someone will say, "But the cost of this is not adding up to £30 million; it is adding up to £50 million. That is not the basis on which we discussed this plan for cotton and the estimate which you gave us." We can say to the President of the Board of Trade, "The estimate of £30 million was based on an entirely different Bill from the one which in the end became an Act of Parliament."

I say seriously to the President that if he does not give us an assurance that he will reconsider this matter before the Report stage and give us specifications of the additional factors which he wishes to be taken into account, he is asking us to treat with what is really shocking levity our responsibilities for controlling the use of public money. For that reason strongly support what has been said by my hon. Friends.

Mr. H. Hynd (Accrington)

Like most of my hon. Friends, when I saw these words I wondered what they meant. We need a great deal more light than has been shed on them up to the present. Incidentally, while I am making my protest about the amount of light shed on these words, I should like to protest also about the amount of light shed on this Chamber. I do not think it right that we should sit in artificial light with the blinds drawn to prevent the beautiful sunlight coming in.

The sort of enlightenment we want about these words is in relation to what was said to us by the President of the Board of Trade when moving the Amendment. The right hon. Gentleman explained that he had in mind the finishing part of the industry. I wish to draw attention to the fact that nowhere in the Amendment is that section of the industry referred to. These words are very wide indeed, as has already been pointed out, so wide that almost anything could be brought in.

The President may think that my hon. Friends and I are being a little too pernickety about the wording of this Clause, but we have had painful experiences which have convinced us that it is necessary to be so. Only this afternoon there was an example which, perhaps, I may be permitted to mention in passing. As a result of a piece of legislation, passed in all good faith by the House of Commons, many people who thought they were under the protection of this House now find that they are left to the tender mercies of Sir Roy Welensky. That illustration may be thought to be a little far-fetched, but it does show what can happen, and indicates how careful we must be in deciding on the actual wording of an Act of Parliament.

I suggest that these words will not do for the purpose which the President of the Board of Trade had in mind and which he explained when he moved the Amendment. I appeal to the right hon. Gentleman to have another look at this and to try to find other words which will represent more clearly what he told us he had in mind.

Mr. A. J. Irvine (Liverpool, Edge Hill)

In supporting the contention that this Clause should be looked at again with a view to improving the drafting and the effect of it, I wish to put this point to the Committee. If the Amendment had taken the form of adding, after the reference to the number of machines, "and other factors", the ejusdem generis rule—with which we are all familiar—would have applied and would have had a restrictive effect. It is very interesting that here the Government have not referred to that form of words but that the Amendment is in the form of exceptions. They have selected a form of words which gives the widest possible construction. It would seem plainly desirable that the Bill should not go forward in a shoddy form. When hon. Members on both sides of the Committee are largely agreed on the objective, for heaven's sake let us agree on an appropriate form of words.

Mr. Philip Bell (Bolton, East)

My right hon. Friend will remember that I asked a question about how the payments made for excess capacity were to be treated for tax purposes. In other words, were they income, and subject to tax? If that is so, it might influence a number of firms in the attitude they should take over the Bill. It would seem to me—perhaps my right hon. Friend will confirm it—that this Amendment meets that point, although nobody seems to have realised that yet, and so I am probably wrong.

A person may have a number of spindles, and out of that number decide to discard some and to carry on with the rest. All he would lose would be a number of spindles and all he would get is compensation for that number of spindles. But suppose a small firm gets rid of all its spindles. It loses not only its spindles but a lot of other things. This Clause says that where companies have ceased we must face reality. Are these people losing cotton machinery or something more? It does not seem to me unreasonable that the Cotton Board, when considering how to relate the compensation, should look at the exact facts. That is my interpretation—

Mr. H. Hynd

That has nothing to do with the finishing section of the trade which is what the President of the Board of Trade told us this Amendment is designed to help.

Mr. Bell

I am obliged to the hon. Gentleman, but, like the hon. Member for Oldham, West (Mr. Hale), the little I know about the industry—which we may agree is very little—is confined to the spinning side, and so I must not be asked to make an answer to my hon. Friend.

If I am right, there seems to be a good reason for this Clause. It seems manifestly wrong that we should treat with equality a man who is losing machines and a man who is losing his whole business. Perhaps the Clause makes that clear. It may well be that where a man is losing his whole business, any payment made to him is not subject to tax. At any rate, that is my interpretation, and perhaps my right hon. Friend, if he can spare the time from the questions from the Opposition, will deal with it.

4.30 p.m.

Mr. S. Silverman

The speech which the hon. and learned Member for Bolton, East (Mr. Philip Bell) has just made is very useful to the Committee. It has pinpointed and underlined exactly why an Amendment in these words is so dangerous. What did the hon. and learned Gentleman say? He said that if we are to compensate people, we must compensate them for all that they have lost. For instance, he said that if a man goes out of business altogether, we ought to compensate him for his loss of goodwill. I have no doubt that the hon. and learned Gentleman is perfectly right, that if we passed this Amendment the Cotton Board would be perfectly within its rights if it regarded in a particular case or a particular section the loss of goodwill as another factor within the words of the Amendment. We should like to know whether the President of the Board of Trade accepts that interpretation of what he is intending to do.

If the answer is "Yes", I am sure that all my hon. and right hon. Friends and many hon. Members on the other side of the Committee would vote against an Amendment which was designed to do that. If the answer, as I anticipate, is "No, I do not mean any such thing", then the point made by my right hon. Friend the Member for Battersea, North (Mr. Jay) is surely emphasised, that the words are slipshod and ill-considered in that they import into the calculation of compensation a multiplying factor of an unspecifiable and unascertainable cost which the Minister does not intend, and which is probably not within the purpose of the Bill at all, because goodwill is not capacity and, therefore, there cannot be an excess capacity.

I am not saying for a moment—this may have been in the right hon. Gentleman's mind—and there may not be exceptional circumstances in which we may have to have some regard to something other than the actual number of machines that are eliminated. If we are to introduce exceptions which, as my right hon. Friend has pointed out, are not exceptions by way of reducing the amount to be spent, but exceptions by way of increasing it, then at least we must do it, if we are to have any regard whatever for public control over the expenditure of public money, by wording the Amendment in such a way as not to open the floodgates wide to every kind of compensation to everyone who may, however remotely, be considered to have suffered a loss.

What is the purpose of this compensation? It is an extraordinary thing—I am not saying that it is a wrong thing in the circumstances—and quite a new thing that people who wish to remain in the industry are to be given statutory powers to buy out their competitors. That is what the Bill is about. Ultimately it becomes a form of compulsion. We are out to reduce the excess capacity of the industry. That means to say that some people have to go out of business, or some machines have to go out of business, or some part of the industry has to be destroyed, and it is being done in order that those who remain in the industry shall be able to make better profits and run the industry more economically than they would be able to run it if we did not do this. That is one extraordinary thing.

The second extraordinary thing is that while for the first time in our history we are giving to those who remain in the industry public money with which to buy out their competitors, we are proposing to give them public money not merely to buy out their competitors but to re-equip the industry. I know that is not dealing with the question of compensation, hut it is part of the total funds covered by the Money Resolution and we are proposing to give it to those who have been inefficient enough or greedy enough not to re-equip at their own expense, as many of their competitors have done over the last few years.

Surely, if we are doing these extraordinary things the general community—because all this comes out of the general tax fund, the Consolidated Fund—will bear this burden. It comes out of general taxation and we are using the taxation which we levy from some people in order to enable some people in the industry to buy out other people in the industry so that those who remain in it shall have a better time. It may be a proper thing to do. I do not say that we on this side of the Committee accept it as the right thing to do, but at any rate we acquiesce in it and we do not oppose it. We are prepared to let it have a run and see what happens. That is the only way in which we can see that the workers who lose their livelihood as a result of the contraction of the industry get any kind of compensation at all and so we do not oppose it. But if we do that, surely we ought not to relax controls over where the money is going we ought to strengthen controls. What the right hon. Gentleman is doing by this Amendment is to sacrifice that control altogether.

Mr. Rhodes

There never was any.

Mr. Silverman

It was suggested that there was an ultimate control, because if a section had agreed a scheme and the Cotton Board accepted that scheme, it would then be presented to the Board of Trade and the President of the Board of Trade, at that stage, would have a discretion and would not be bound to present an affirmative Order in Council, without which it would not become law. I doubt that. I should like the President of the Board of Trade to tell me in what circumstances he would feel entitled in the future when an agreed scheme was presented to him that was within the terms of the Measure to decline to present to Parliament the necessary Order in Council. I should have thought that once an agreed scheme had been presented to him and he had examined it to see whether it was a scheme properly within the provisions of the Measure and had found that it was, he would have no discretion at all—he would be bound to present the necessary Order in Council and invite Parliament to accept it.

Mr. H. Hind

Then the Whips will be on.

Mr. Silverman

With the Whips on, no doubt.

The contrary would make nonsense of the whole Bill. If, indeed, it is true that a scheme which is agreed and is within the four corners of the Bill is something which the Board of Trade need do nothing about so as to render it completely abortive, that would make nonsense of the whole Bill, and, therefore, there is no such check as has been suggested.

I should like to know what is the right hon. Gentleman's view about this. We take it for granted that the Government of the day, whenever a scheme is presented and agreed which is within the terms of the Measure, would take the necessary steps to obtain Parliamentary sanction for that scheme and only in the most exceptional circumstances, and only, indeed, where there was some reason for thinking that the scheme went outside the four corners of the Measure, would they think it right to refrain from taking whatever measure was necessary to implement the scheme. There is no check in that way at all. If the Amendment were accepted, once a scheme was agreed, Parliament itself could turn it down, no doubt, but, as pointed out, it would be a Government Measure, the Government Whips would be on and sanction in the form of an affirmative Order in Council would have to be given.

I urge the right hon. Gentleman to reconsider the matter at this stage. It is not a question of saying, "Let the thing go through; we shall look at the words again." He ought to withdraw the Amendment now. There is plenty of time to put it down again either now or at a subsequent stage. If he wants to provide a form of words which is a little less rigid than that in the original scheme, that should be perfectly possible without adopting this ill-considered, slipshod and—in the context of our duty to protect public finance—highly dangerous method.

Sir D. Eccles

I think this has been a useful discussion because it reveals that the methods by which the reorganisation schemes are being worked out have not been made clear by myself to the Committee. I should like to try to clear that up.

First, this is essentially an enabling Bill. Nothing happens under this Bill at all unless various proposals grouped together in schemes are first approved by the Board of Trade and then receive the approval of Parliament. If hon. Members look at the Money Resolution they will see that it says: That for the purposes of any Act in the present Session which enables schemes made with a view to eliminating excess capacity in the cotton industry to provide for paying compensation … It does not define in any way how the excess capacity shall be determined, but it shows that the first of the two great objects of the Measure is to get rid of excess capacity. We proceeded to get rough estimates from the various sections of the industry of the size of excess capacity in their sections, which are set out in the White Paper. We then had a discussion with them about what they thought it might be necessary to pay to get that volume of capacity eliminated. That turned to some extent on the Government's contribution and we finally agreed upon two-thirds from the Government and one-third which the industry itself has to raise. That is a brake of some kind on the amount which the industry will be willing to pay to any particular firm.

Having arrived at those rough estimates, we then said we must find some criteria so that it will be fair as between one firm and another in each of these sections—so that the amount they are paid will be fair. Immediately the spinners and weavers said, "As regards our section, the machines which we use, spindles in the one case and looms in the other, in fact provide a very good measure of our productive capacity". Therefore, when considering how to cut up the total amount of compensation which those sections would be willing to provide on the basis of what they know the Government two-thirds is likely to be, they related it to the machines and said that that would give a fairly accurate picture.

The reason why we put the words "number of machines" into the Bill was a negative one. It was because we wanted to exclude buildings, for which certain people in those sections would like compensation. [HON. MEMBERS: "Why not?"] We saw endless trouble, and in the end they agreed that a good enough yardstick of the amount of capacity which was being eliminated by one particular firm could be provided by relating it to those machines. At that time the finishers thought they could do the same. The White Paper says on page 5, paragraph 12 (iii), referring to the finishers: The various Associations concerned assess the extent of excess capacity at from 25 per cent. to 40 per cent. 4.45 p.m.

They know more or less what it is going to cost to get out a range of capacity of that kind. The problem is, how can we divide that sum so that one firm shall think it is fairly treated as against another? When they looked at the actual methods by which they would get this excess capacity out, it immediately appeared that what they wanted to do was to group a number of firms together into larger units in the finishing end of the trade, eliminating one or two of the weaker ones on the way. That meant that they did not expect to deal in the finishing sections with the elimination of part capacity but in all those firms it would be whole units. They said that, if whole units were going out, it would be very difficult to measure one against another simply on the basis of machines for finishing because they differ so much. They are, in fact, almost entirely different between one works and another.

They said, "We are not asking for any more money in compensation for the capacity to be eliminated at the finishing end of the trade. What we want to find by talking among ourselves is a yardstick which will appear fair between one firm and another." At that point I said to them exactly what the hon. Member for Nelson and Colne (Mr. S. Silverman) has rightly said, that they might run away with this and begin to offer very much more in respect of the finishing capacity than was being offered for the spinners and weavers. They undertook not to do that.

If hon. Members look at Clause 1 (4, a), they will see that the Cotton Board can raise by way of a levy sums which are not to be paid out in the relation of two-thirds to one, but extra money which part of the finishing section say they may wish to raise to compensate for good will, for instance, which naturally is a difficult factor to define. I very much appreciate the care the Committee has for defining what we do in the Bill, but this is an enabling Bill and, if we want to get the swiftest and most economic result—that is, the least possible contribution from the taxpayers—in respect of the finishing section, I am advised by the Cotton Board that it would like this form of flexibility.

I give the Committee this assurance. When this particular scheme comes before me I shall look at it very carefully on this very point—to see whether or not the compensation given to the finishers is out of line with that given to the other sections. I can tell hon. Members that, whatever may be the appearance of the Bill and whatever they think about the Board of Trade, I am certainly not going to lay before Parliament any one of these schemes just as it comes to me from the section concerned. I think it my duty to the House to look at these schemes with extreme care because here is an industry with a peculiar horizontal structure which has to be dealt with.

Someone has to see whether these various schemes are fair between one and another. The Board of Trade must do that. I certainly intend to do that, but, even when I have done that, it will not be the end of the matter. A scheme will then come before the House, and, if the House does not like the basis of compensation, we can have a debate and the House can have its way. The House could throw the scheme out.

Mr. Hale

We cannot throw out a scheme because we do not like the detailed provisions about the finishing industry. That is precisely the unfair point that has been mentioned.

Sir D. Eccles

When it is Government business it is actually the same thing. In the end we have to decide whether the majority of the House supports it or not.

Mr. S. Silverman

Does the right hon. Gentleman realise that when it comes to the stage of Parliament considering it, Parliament will have no right to amend the scheme? If Parliament agrees with the whole scheme except one particular factor it will be faced with the unenviable task of deciding whether it dare throw out the whole scheme because it is not satisfied with one particular aspect.

Sir D. Eccles

With respect to the hon. Gentleman, even if we define this more carefully, and I do not know how it could be done, it still leaves the situation he described. For example, the weavers' scheme will come forward and it may well be that certain hon. Members will say that the amount which is calculated per loom is either too much or too little. All I can assure the House is that the Government have no intention of wasting money. We would prefer to see a larger proportion of the money—and the larger the better—going for re-equipment grants afterwards.

Mr. W. R. Williams (Manchester, Openshaw)

The right hon. Gentleman has been telling the Committee that when the schemes come to him from the Cotton Board he can do practically what he likes with them, irrespective of what the House can do afterwards. Would the right hon. Gentleman look at paragraphs (a) and (b) of subsection (2), which seem to specify very clearly how schemes can either be accepted or rejected? It seems to me that by those two paragraphs the right hon. Gentleman is confining his examination to certain specific points.

Sir D. Eccles

Those who are conducting preliminary conversations with the industry know very well that we are watching the financial side the whole time. If a scheme is brought to us which appears to ask for an unreasonable amount of compensation, I give an assurance that we will not accept it.

Mr. Williams

The right hon. Gentleman can challenge the amount but his examination seems to me to be related to "eliminating excess capacity." As long as the scheme does that, the only criterion in the examination by the Board of Trade will be to see that the amount of money involved is satisfactory. The real criterion is that of "eliminating excess capacity."

Sir D. Eccles

If the proposal to eliminate excess capacity appears unjust the scheme will not be brought before the House. It will be returned to the Cotton Board. If I do not like the scheme I can put it back, and that is what we shall do.

This is essentially an enabling Bill. We have to see how these experts get on with their work, and when they have worked out the details we shall have to look at them in two stages.

As I listened to the debate, I wondered whether there was any way in which I could change the words of my Amendment. I have come to the conclusion that there is not because I know of no way of defining those factors which would have to be set down to see that justice was done between one finisher and another. I must therefore ask the Committee to let me have the Amendment.

Mr. Jay

I do not want to prolong the discussion, but would the President of the Board of Trade at least say that he will think over this again between now and Report? I say that because I do not think we want the debates on the Bill in Committee to become too controversial. We are looking at this in a constructive spirit to try and improve the Bill in the interests of the cotton industry. In that spirit I should like the President to say that he will at least give further consideration to this before it comes up again.

It really is not enough to say that the Cotton Board has asked for these powers. Naturally the Board would like to have as flexible powers as it can—that is quite reasonable from its point of view—but it is asking Parliament to agree. We are not satisfied that we ought to agree. Nor is it sufficient for the President to say that his intentions are excellent and that he would not dream of wasting public money. The President is not eternal, and it is not good practice for the House or this Committee to legislate on the ground that the present President has no improper intention. It is our duty to pass a Bill in a proper, reasonable and precise form.

Again, I must ask the President to say that he will consider this. If he still finds it impossible to do so he can come back on Report and say that it cannot be done. I think that it would be reasonable if he gave us that assurance now.

Sir D. Eccles

I am quite ready to look at it again, but I think the right hon. Gentleman knows that it is going to be exceedingly hard to define the precise factors which will effect a just distribution between one finisher and another.

Mr. Jay

If the President withdrew the Amendment there would be no need to vote against it.

Mr. Blackburn

Surely it is not necessary for the President to define the factors. It is probably right that the President needs some additional words in the Clause, but the words he has here are very nebulous and no one can really understand them. What is needed is some words like "except where the Cotton Board with the approval of the Board of Trade considers that some other factor ought to be taken into consideration." There would then be much greater control than there is at present.

I appeal to the President to withdraw the Amendment and consider this further before Report. The President will lose nothing at all. If he decides he must have his form of words, with the majority that he has behind him he can carry the Amendment through and we shall have an unsatisfactory form of words in the Bill. I ask the President to withdraw the Amendment and bring forward a different set of words on Report.

Mr. W. A. Burke (Burnley)

The right hon. Gentleman said that if a scheme were presented to him by the Cotton Board in which too much compensation was being asked for by the finishers he would reject it. Does that mean that all the schemes have to be before the right hon. Gentleman before he can decide on any one scheme? I understand that the essence of the Bill is speed, and if the President has to wait for all the schemes to be in before he can move, the speed will go out of it.

Sir D. Eccles

That is an important point. We thought that we ought to divide the industry into two major sections. We thought that the spinners', doublers' and weavers' schemes should come forward together because there is a certain obvious similarity between them, but that the finishing end of the trade should be dealt with separately, because it is so very different, partly for the reasons that we have been discussing. It would not be unreasonable to wait a bit longer for the scheme for the finishing end of the trade because in fact it is not nearly as far forward as the schemes of the first three sections.

Mr. Hale

When the President is considering the points put to him, would he also consider the wording of the Clause to which my hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams) referred? My hon. Friend made an extremely important point, but it goes further. The President, according to the wording of the Clause, has to be satisfied that compensation is adequate but he has no power to be satisfied that it is not more than adequate. He can say that it is too little, but he cannot say that it is too much. It is a very surprising proposition.

The Temporary Chairman (Mr. John Diamond)

I think that the hon. Member is now discussing the details of another subsection.

5.0 p.m.

Mr. Hale

I am discussing this Amendment, which mentions "other factors". We are discussing the question of other factors and asking which factors should be taken into consideration. I was simply putting a question to the President. He must make up his mind. He has made a very fair statement, which I liked, but what he has given is an assurance by a Minister, and the House must be satisfied that these things will be done.

I suggest that the right hon. Gentleman has two alternatives. The first is that he should reconsider these words and consider amending the later words of the subsection. The second is that he should beg leave, on Report, to move a manuscript Amendment to withdraw Clauses 1, 2 and 3 and to insert some such words as, "The Board of Trade shall have power on the advice of the Cotton Board to make such payments as they think fit of such sums as they deem appropriate to such sections as to them seem desirable on such dates as they may think suitable and on such conditions as they may prescribe."

Question put, That those there inserted:—

The Committee divided: Ayes 239, Noes 198.

Division No. 139.] AYES [5.3 p.m.
Agnew, Sir Peter Glover, D. Molson, Rt. Hon. Hugh
Altken, W. T. Goodhart, Philip Nabarro, G. D. N.
Allan, R. A. (Paddington, S.) Gough, C. F. H. Nairn, D. L. S.
Alport, C. J. M. Gower, H. R. Nicholls, Harmar
Anstruther-Gray, Major Sir William Graham, Sir Fergus Nicholson, Sir Godfrey (Farnham)
Armstrong, C. W. Grant, Rt. Hon. W. (Woodside) Nicolson, N. (B'n'm'th, E. & Chr'ch)
Atkins, H. E. Grant-Ferris, Wg Cdr. R. (Nantwich) Noble, Michael (Argyll)
Baldock, Lt.-Cmdr. J. M. Green, A. Nugent, Richard
Baldwin, Sir Archer Gresham Cooke, R. Oakshott, Sir Hendrie
Balniel, Lord Grimond, J. Ormsby-Core, Rt. Hon. W. D.
Barber, Anthony Grimston, Hon. John (St. Albans) Orr, Capt. L. P. S.
Barlow, Sir John Grosvenor, Lt.-Col. R. G. Orr-Ewing, C. Ian (Hendon, N.)
Barter, John Gurden, Harold Osborne, C.
Batsford, Brian Hall, John (Wycombe) Page, R. G.
Baxter, Sir Beverley Hare, Rt. Hon. J. H. Partridge, E.
Beamish, Col. Tufton Harris, Reader (Heston) Peel, W. J.
Bell, Philip (Bolton, E.) Harrison, A. B. C. (Maldon) Pickthorn, Sir Kenneth
Bennett, F. M. (Torquay) Harvey, Sir Arthur Vere(Macclesf'd) Pike, Miss Mervyn
Bennett, Dr. Reginald Harvey, John (Walthamstow, E.) Pilkington, Capt. R. A.
Bevins, J. R. (Toxteth) Hay, John Pitt, Miss E. M.
Bidgood, J. C. Heald, Rt. Hon. Sir Lionel Pott, H. P.
Biggs-Davison, J. A. Heath, Rt. Hon. E. R. G. Powell, J. Enoch
Bingham, R. M. Henderson, John (Cathcart) Price, David (Eastleigh)
Bishop, F. P. Hesketh, R. F. Price, Henry (Lewisham, W.)
Black, Sir Cyril Hicks-Beach, Maj. W. W. Prior-Palmer, Brig. Sir Otho
Body, R. F. Hill, Rt. Hon. Charles (Luton) Profumo, J. D.
Bonham Carter, Mark Hill, Mrs. E. (Wythenshawe) Ramsden, J. E.
Bossom, Sir Alfred Hill, John (S. Norfolk) Rawlinson, Peter
Bowen, E. R. (Cardigan) Hirst, Geoffrey Redmayne, M.
Boyd-Carpenter, Rt. Hon. J. A. Hobson, John(Warwick & Leam'gt'n) Ridsdale, J. E.
Boyle, Sir Edward Holland-Martin, C. a. Roberts, Sir Peter (Heeley)
Braine, B. R. Holt, A. F. Robertson, Sir David
Brewis, John Hope, Lord John Rodgers, John (Sevenoaks)
Bromley-Davenport, Lt.-Col. W. H. Hornby, R. P. Roper, Sir Harold
Brooke, Rt. Hon. Henry Hornsby-Smith, Miss M. P. Ropner, Col. Sir Leonard
Brooman-White, R. C. Horobin, Sir Ian Scott-Miller, Cmdr. R.
Browne, J. Nixon (Craigton) Howard, Gerald (Cambridgeshire) Sharples, R. C.
Bullus, Wing Commander E. E. Howard, John (Test) Shepherd, William
Burden, F. F. A. Hughes-Young, M. H. C. Simon, J. E. S. (Middlesbrough, W.)
Butcher, Sir Herbert Hulbert, Sir Norman Smithers, Peter (Winchester)
Butler, Rt. Hn. R. A.(Saffron Walden) Hurd, Sir Anthony Spearman, Sir Alexander
Campbell, Sir David Hutchison, Michael Clark (E'b'gh, S.) Speir, R. M.
Carr, Robert Hutchison, Sir Ian Clark (E'b'gh, W.) Stevens, Geoffrey
Cary, Sir Robert Hylton-Foster, Rt. Hon. Sir Harry Steward, Harold (Stockport, S.)
Channon, H. P. G. Iremonger, T. L. Steward, Sir William (Woolwich, W.)
Cole, Norman Irvine, Bryant Godman (Rye) Stoddart-Scott, Col. Sir Malcolm
Conant, Maj. Sir Roger Jenkins, Robert (Dulwich) Stuart, Rt- Hon. James (Moray)
Cooke, Robert Jennings, J. C. (Burton) Studholme, Sir Henry
Cooper, A. E. Jennings, Sir Roland (Hallam) Summers, Sir Spencer
Cordeaux, Lt.-Col. J. K. Johnson, Dr. Donald (Carlisle) Taylor, Sir Charles (Eastbourne)
Corfield, F. V. Johnson, Eric (Blackley) Teeling, W.
Courtney, Cdr. Anthony Joseph, Sir Keith Temple, John M.
Craddock, Beresford (Spelthorne) Kerr, Sir Hamilton Thompson, Kenneth (Walton)
Crosthwaite-Eyre, Col. O. E. Lancaster, Col. C. G. Thompson, R. (Croydon, S.)
Crowder, Sir John (Finchley) Langford-Holt, J. A. Thorneycroft, Rt. Hon. P.
Crowder, Petre (Ruisilp—Northwood) Leavey, J. A. Thornton-Kemsley, Sir Colin
Cunningham, Knox Leburn, W. G. Tiley, A. (Bradford, W.)
Currie, G. B. H. Legh, Hon. Peter (Petersfield) Tilney, John (Wavertree)
Davies, Rt. Hn. Clement (Montgomery) Lindsay, Hon. James (Devon, N.) Turton, Rt. Hon. R. H.
Deedes, W. F. Lindsay, Martin (Solihull) Tweedsmuir, Lady
de Ferranti, Basil Lloyd, Maj. Sir Guy (Renfrew, E.) Vosper, Rt. Hon. D. F.
Dodds-Parker, A. D. Longden, Gilbert Wade, D. W.
Donaldson, Cmdr. C. E. McA. Loveys, Walter H. Wakefield, Edward (Derbyshire, W.)
Doughty, C. J. A. Lucas-Tooth, Sir Hugh Wall, Patrick
du Cann, E. D. L. Macdonald, Sir Peter Ward, Rt. Hon. G. R. (Worcester)
Duncan, Sir James McLaughlin, Mrs. P. Ward, Dame Irene (Tynemouth)
Duthie, Sir William Maclean, Sir Fitzroy (Lancaster) Watkinson, Rt. Hon. Harold
Eccles, Rt. Hon. Sir David McLean, Neil (Inverness) Webbe, Sir H.
Eden, J. B. (Bournemouth, West) McMaster, Stanley Webster, David
Elliott, R.W.(Ne'castle upon Tyne, N.) Macmillan, Rt. Hn. Harold (Bromley) Whitelaw, W. S. I.
Emmet, Hon. Mrs. Evelyn Macpherson, Niall (Dumfries) Williams Paul (Sunderland, S.)
Errington, Sir Eric Maitland, Hon. Patrick (Lanark) Wills, Sir Gerald (Bridgwater)
Farey-Jones, F. W. Manningham-Buller, Rt. Hn. Sir R. Wilson, Geoffrey (Truro)
Fell, A. Markham, Major Sir Frank Wolrige-Gordon, Patrick
Finlay, Graeme Marlowe, A. A. H. Wood, Hon. R.
Fisher, Nigel Marples, Rt. Hon. A. E. Woollam, John Victor
Fraser, Hon. Hugh (Stone) Marshall, Douglas Yates, William (The Wrekin)
Freeth, Denzil Maudling, Rt. Hon. R.
Gammans, Lady Mawby, R. L. TELLERS FOR THE AYES:
Garner-Evans, E. H. Maydon, Lt.-Comdr. S. L. C. Mr. Bryan and Mr. Gibson-Watt.
George, J. C. (Pollok) Medlicott, Sir Frank
Abse, Leo Hamilton, W. W. Paget, R. T.
Alnsley, J. W. Hannan, W. Paling, Rt. Hon. W. (Dearne Valley)
Albu, A. H. Hastings, S. Palmer, A. M. F.
Allaun, Frank (Salford, E.) Hayman, F. H. Parker, J.
Awbery, S. S. Healey, Denis Parkin, B. T.
Bacon, Miss Alice Herbison, Miss M. Paton, John
Balfour, A. Hewitson, Capt. M. Pearson, A.
Bellenger, Rt. Hon. F. J. Hilton, A. V. Pentland, N.
Bence, C. R. (Dunbartonshire, E.) Hobson, C. R. (Keighley) Plummer, Sir Leslie
Benson, Sir George Holman, P. Popplewell, E.
Beswick, Frank Holmes, Horace Price, J. T. (Westhoughton)
Bevan, Rt. Hon. A. (Ebbw Vale) Howell, Charles (Perry Barr) Probert, A. R.
Blackburn, F. Howell, Denis (All Saints) Proctor, W. T.
Blenkinsop, A. Hoy, J. H. Rankin, John
Bottomley, Rt. Hon. A. G. Hughes, Cledwyn (Anglesey) Redhead, E. G.
Bowden, H. W. (Leicester, S.W.) Hughes, Emrys (S. Ayrshire) Reeves, J.
Bowles, F. G. Hughes, Hector (Aberdeen, N.) Reid, William
Braddock, Mrs. Elizabeth Hunter, A. E. Rhodes, H.
Brockway, A. F. Hynd, H. (Accrington) Robens, Rt. Hon. A.
Broughton, Dr. A. D. D. Irvine, A. J. (Edge Hill) Roberts, Albert (Normanton)
Brown, Rt. Hon. George (Belper) Isaacs, Rt. Hon. G. A. Roberts, Goronwy (Caernarvon)
Brown, Thomas (Ince) Janner, B. Robinson, Kenneth (St. Pancras, N.)
Burke, W. A. Jay, Rt. Hon. D. P. T. Ross, William
Burton, Miss F. E. Jeger, George (Goole) Royle, C.
Butler, Herbert (Hackney, C.) Jeger, Mrs. Lena(Holbn & St.pncs, S.) Shinwell, Rt. Hon. E.
Butler, Mrs. Joyce (Wood Green) Johnson, James (Rugby) Short, E. W.
Carmichael, J. Jones, Jack (Rotherham) Silverman, Julius (Aston)
Castle, Mrs. B. A. Jones, J. Idwal (Wrexham) Silverman, Sydney (Nelson)
Champion, A. J. Kenyon, C. Simmons, C. J. (Brierley Hill)
Chapman, W. D. Key, Rt. Hon. C. W. Skeffington, A. M.
Chetwynd, G. R. King, Dr. H. M. Slater, Mrs. H. (Stoke, N.)
Cliffe, Michael Lawson, G. M. Smith, Ellis (Stoke, S.)
Clunie, J. Lee, Frederick (Newton) Snow, J. W.
Coldrick, W. Lee, Miss Jennie (Cannock) Sparks, J. A.
Cronin, J. D. Lever, Leslie (Ardwick) Spriggs, Leslie
Crossman, R. H. S. Lewis, Arthur Stewart, Michael (Fulham)
Darling, George (Hillsborough) Lindgren, G. S. Stones, W. (Consett)
Davies, Ernest (Enfield, E.) Lipton, Marcus Strachey, Rt. Hon. J.
Davies, Harold (Leek) Logan, D. G. Strauss, Rt. Hon. George (Vauxhall)
Davies, S. O. (Merthyr) Mabon, Dr. J. Dickson Summerskill, Rt. Hon. E.
de Freitas, Geoffrey McAlister, Mrs. Mary Swingler, S. T.
Donnelly, D. L McCann, J. Sylvester, G. O.
Dugdale, Rt. Hn. John(W. Brmwch) MacColl, J. E. Taylor, Bernard (Mansfield)
Ede, Rt. Hon. J. C. MacDermot, Niall Thomas, Iorwerth (Rhondda, W.)
Edwards, Rt. Hon. Ness (Caerphilly) McInnes, J. Thornton, E.
Edwards, Robert (Bilston) McKay, John (Wallsend) Tomney, F.
Edwards, W. J. (Stepney) McLeavy, Frank Viant, S. P.
Evans, Albert (Islington, S.W.) MacMillan, M. K. (Western Isles) Warbey, W. N.
Fernyhough, E. Mahon, Simon Watkins, T. E.
Finch, H. J. (Bedwellty) Mallalieu, E. L. (Brigg) Weitzman, D.
Fitch, A. E. (Wigan) Mann, Mrs. Jean Wheeldon, W. E.
Foot, D. M. Marquand, Rt. Hon. H. A. White, Mrs. Eirene (E. Flint)
Forman, J. C. Mason, Roy White, Henry (Derbyshire, N.E.)
Fraser, Thomas (Hamilton) Mayhew, C. P. Wilkins, W. A.
Gaitskell, Rt. Hon. H. T. N. Mitchison, G. R. Willey, Frederick
George, Lady MeganLloyd (Car'then) Moody, A. S. Williams, David (Neath)
Gibson, C. W. Morrison, Rt. Hn. Herbert (Lewis'm, S.) Williams, W. R. (Openshaw)
Gooch, E. G. Moss, R. Williams, W. T. (Barons Court)
Gordon Walker, Rt. Hon. P. C. Moyle, A. Willis, Eustace (Edinburgh, E.)
Greenwood, Anthony Neal, Harold (Bolsover) Wilson, Rt. Hon. Harold (Huyton)
Grenfell, Rt. Hon. D. R. Noel-Baker, Francis (Swindon) Winterbottom, Richard
Grey, C. F. Noel-Baker, Rt. Hon. P. (Derby, S.) Woodburn, Rt. Hon. A.
Griffiths, David (Rother Valley) Oliver, G. H. Yates, V. (Ladywood)
Griffiths, Rt. Hon. James (Llanelly) Oram, A. E. Zilliacus, K.
Griffiths, William (Exchange) Orbach, M.
Hale, Leslie Oswald, T. TELLERS FOR THE NOES:
Hall, Rt. Hn. Glenvil (Colne Valley) Owen, W. J. Mr. Rogers and Mr. Deer.
Mr. Anthony Greenwood (Rossendale)

I beg to move, in page 2, line 9, after "made" to insert: and agreed to by the representatives of those employed". It would, perhaps, be convenient if we discussed at the same time the next Amendment, in page 2, line 10, after the first "of" to insert "reasonable".

In view of the fact that many hon. Members have constituency points which no doubt they will wish to make, I will try to keep my own contribution as brief as possible. I want to refer the Committee to paragraph 25 of the White Paper, Reorganisation of the Cotton Industry, in the section dealing with employment. There we are told, It will be a condition of the Exchequer grant that compensation is paid to the displaced operatives under arrangements for the particular section settled between the employers and the trade unions. We are also told, In their discussions with the Government the industry have throughout recognised the need to compensate those who lose employment. We are a little surprised by the latter statement, although we are delighted to know that the employers have been so co-operative with the Government, because there has been no evidence over the past twelve months that they have been equally co-operative in their negotiations with the representatives of the workers in the industry. I remind the Committee of what the employers said less than a year ago, in July, 1958: The protection of workers against the effects of unemployment by the payment of Unemployment Insurance Benefit and National Assistance is a matter for the State; it is not a responsibility of an individual industry in which firms may be reducing or reorganising their labour force or closing down the whole or part of their manufacturing capacity, and it is not a subject on which it would be either suitable or practicable to enter into a joint agreement. It is a little surprising to find that the Government are relying upon the employers to be 100 per cent. co-operative in reaching the kind of agreement which less than a year ago the employers said would not be practicable.

We are also a little surprised that the first point to which I referred in paragraph 25 does not appear to have been included in the Bill—and that is the need for the Exchequer grant to be conditional upon arrangements being made and settled between the employers and the trade unions for compensation in respect of loss of employment. It is true that a preliminary agreement has been reached between the two sides of the industry, but I want the President to realise the weakness of the trade unions' bargaining position in negotiating such an agreement. They had no economic force behind them in the way that unions normally have in industrial negotiations of this kind, and the trade union leaders must have known that if they pressed their case for compensation for redundancy too hard the scheme would collapse and workers would continue to be discharged from the industry, as they have been discharged over the last four or five years, with no compensation whatever. I believe that from a negotiating point of view the trade unions' position was impossible, and it is surprising that the scheme is as good as it is.

5.15 p.m.

Nevertheless, we are bound to take note of the fact that it is a good deal less generous than the compensation for which the trade unions originally asked. Indeed, it falls far short of the ideal redundancy scheme which we should like to see. I think we are entitled to remember what happens to a man who loses his employment in an industry in which he has spent a great part of his life. There are various possibilities. He may have to take a job at a lower wage which means, of course, loss of money and loss of prestige in the locality in which he lives. If he moves away, his wife or other members of the family may also have to take jobs which are not as good as those in the area in which he was originally employed. If he finds a job in a neighbouring town he has to find the expenses of travelling to and fro, or of finding accommodation in that town. Ultimately, of course, he may have to face the cost of removing his whole household to the other town, in which case we should not overlook the fact that since the Rent Act was put on the Statue Book it is quite impossible for him to move into a dwelling where the rent is controlled, as it would have been two years ago.

He may have to suffer other losses. He may have to suffer the loss of pension and insurance rights, and—perhaps the greatest hardship of all—he may have to face the break up of family life. I believe—and about this I speak in a quite disinterested way—that the 40–50 age group will be placed in an especially serious position. Many in that age group have exceptionally heavy expenses. For example, they may be educating their children. They may have heavy hire-purchase payments in respect of their furniture and other belongings. Perhaps they have to pay the mortgage on a house. They are not so easily retrained as are younger men, and it is much more difficult for them to get a job in competition with younger rivals.

Therefore, there is likely to be a good deal of hardship resulting from the ensuing redundancy. It is interesting to note that in other industries there are examples of redundancy agreements that are more generous than the agreement now being discussed between the textile unions and the cotton employers. The Civil Service provides an outstanding example of generosity of treatment when civil servants—and particularly industrial civil servants—are moved from one part of the country to another. That being so, we believe that the tentative agreement that is still under negotiation between the two sides falls very short of what we should like to see a compensation agreement provide.

One point to which I hope the President of the Board of Trade will direct the attention of the employers' representatives is the desirability, in many cases, of compensation being payable in a lump sum, and not on a weekly basis dependent on the man being unable to obtain further employment. It is to that sort of thing that the right hon. Gentleman should direct the minds of the employers, and he should urge upon them the need for generosity and flexibility in their handling of the discussions on compensation.

We should not forget that many details of the scheme have still to be worked out; that the scheme has not yet got out of the wood, and, indeed, may still founder because agreement between the trade unions and the employers cannot be found. I hope that the President of the Board of Trade will use his good offices to ensure that the employers meet the reasonable demands of representatives of the trade unions.

There are two hurdles to be overcome. The first is the hurdle of the discussions going on in the working party that has been jointly set up by the trade unions and the employers. Later, there will be the hurdle of the scheme having to be approved by the House. I think that we should all save a lot of trouble and help the industry and those who will be damaged by this Bill if, at this stage, we could agree on the need for ensuring that any agreement reached between the employers and the trade unions is reasonable, and that it is one that is really freely and gladly entered into by the trade unions and not merely accepted by them because there is little practicable alternative before them.

Mr. H. Hynd

The wording of the subsection, as it stands, is quite unsatis- factory. Paragraph (b) of Clause 1 (2) says: … arrangements have been made within the section for the payment of compensation … That obviously means any arrangement. It means that if in any section there were failure to agree, the employers could simply lay down their own conditions, though those conditions might be totally unsatisfactory, yet be able to satisfy the President of the Board of Trade that an arrangement had been made.

The paragraph does not even say "reasonable arrangements" or "satisfactory arrangements". In order to make the paragraph acceptable there must be some qualifying adjective or words. It is surely not the intention of the right hon. Gentleman to leave it as it is, and if he cannot accept this Amendment I hope that he himself will suggest some better form of words. The present wording leaves the workers in a section entirely at the mercy of the employers.

Mr. Shepherd

The principle set up here is a remarkable one, and we ought not to overlook, as some of us are inclined to do, the—I will not say the generosity, but the fact that the cotton employers have agreed to this scheme. It is easy to mention, as did the hon. Member for Rossendale (Mr. Anthony Greenwood), that the Civil Service makes generous compensation. The Civil Service, of course, does it with public money, and it is much easier to do something with other people's money than with one's own. It is also easy to quote, as I have done in the past, the tinplate agreement in South Wales, but in that case there were only a few firms, and those few firms were all very well placed, which made the task of providing compensation for displaced workers relatively easy.

Here we have at any rate the tentative agreement of employers in circumstances that are by no means easy, and we are seeing, I think for the first time, the establishment, in a competitive industry, the acceptance, as a principle, of compensation for loss of employment by the ordinary manual worker. I think that we should repoice that we have got thus far. In many ways, it is a milestone in our social history. We may complain of this little part of the scheme or of that—very few are ever satisfied with Compensation—but whether we complain of the details or not, we should recognise this as a decisive and notable step in our industrial and social history and should he grateful to the cotton trade employers, of whom some of us from time to time have had hard things to say.

Mr. W. R. Williams

I agree with the hon. Member for Cheadle (Mr. Shepherd) that this is a landmark in industrial relationships, but when for the first time we face such a new situation it is very necessary that we should deal with the present scheme more as a pilot scheme. Although one might agree that there may be some degree of generosity on the part of the employers, one has also to remember that on the other side there is the extreme generosity shown by the Government to the employers over the loss of machinery. I do not say anything against that.

It is possible that in the future we will have to consider a large number of schemes of contraction of this kind. It may be that a large number of other industries will have to face entirely new conditions in this nuclear age, with the rapid developments and conversions that will take place. A scheme that today seems rather exceptional will have to become commonplace. It is important, therefore, that in dealing with this pilot scheme we should not only establish the right of the employer to a square deal from the Government, but also ask the Government to give a square deal to the trade unions, not through the employers but as a direct matter of morality as between Government and trade union memberships.

If we are to allow the employers to make quite sure of adequate compensation in respect of material losses incurred as their contribution towards a concentrated and more efficient industry, we must also establish the inherent right of the worker to have reasonable compensation, not as a matter of right between the employer and himself but as something established by the Government. The worker, ever since he started work, has been as responsible as the employer for what has happened in the industry. We are not just dealing with the cotton industry but with men and women who have done as much for the material prosperity of the industry as has the employer—and certainly more than did those shareholders who, in the depression years, left the industry almost high and dry.

There is another important point, and although it does not concern the textile industry, Mr. Diamond, I hope that you will permit a momentary deviation—

Mr. Douglas Glover (Ormskirk)

The people who did not leave the industry during the depression were the shareholders. They could not. There was nobody to buy their shares, and in many cases during that period shareholders were getting calls on shares that were at a minus quotation on the Stock Exchange.

The Temporary Chairman

Nobody realises better than the hon. Member for Openshaw (Mr. W. R. Williams) the difficulties that stem from a little deviation. It leads to a bigger deviation—I rely on his knowledge and support for the Chair.

Mr. Williams

I accept that gentle admonition, Mr. Diamond, in the spirit in which it was given. I could answer the hon. Member for Ormskirk (Mr. Glover) very effectively, but in deference to you I will leave it there.

The best part of my life has been connected with trade union affairs. I spent many years in negotiations with Government Departments on reorganisation, mechanisation and rationalisation of industries, and other matters of that kind. The thing that has delighted me more than anything else in many years of close consultation has been that, at the end of the lane, came the acceptance that the worker is something more than just a machine in industry, and that the trade unions are an integral part of any industry.

With that in mind, I believe that in this pilot scheme the trade unions should be treated as an integral part of the textile industry, and if, under the terms of this subsection the President of the Board of Trade is not satisfied that the compensation scheme gives, not only the employers, but the workers in the industry a square deal, he must reject it. He must reject it as peremptorily as he would reject it because of the number of spindles or anything else involved.

5.30 p.m.

I believe that there should be a compensation for the loss of office. Compensation is to be given to the employer because he has lost his business, but it is not to be given to the operative because he has lost his living. As my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) said, a large number of workers in Lancashire have lost their living. They cannot go into other industries and expect to pick up big money. Many of them have told me that the best they can hope for is labouring and unskilled work.

These people have lost their old trade, craft and mode of living. I regard that as much more important than losing money or losing machines, because there is nothing worse for a man of 50 or 55 than to believe that he has come to the end of his working life as a craftsman and skilled man and that he must accept less money and worse conditions in work for which he has not been trained and in which he is not so vitally interested as he was in his old trade.

Perhaps the form of words of the Amendment may not be entirely suitable, but I think that the President of the Board of Trade knows the purpose behind it. I hope that he will at least take note of the sentiment which we are trying to put before him even if he cannot agree to the precise form of words.

Mr. Burke

I want to reinforce what has been said by my hon. Friends about making the same provision in the Bill for the employee as for the employer. Subsection (2, a) provides that the reorganisation scheme must make adequate provision for the elimination of machinery, but there is not such provision for the employee. We ask the President of the Board of Trade to ensure that the employers and employees are treated in the same way.

It has been said that this is the first time that we have a redundancy scheme for the whole of an industry. There have been redundancy schemes for firms, but I think it is true that this is the first scheme for the whole of an industry. For that reason the Board of Trade might have ensured that it was a scheme which would commend itself to the trade unions and not one which they had to accept because they were not in an economic position to fight.

I hope that when the scheme comes before the right hon. Gentleman he will remember the very difficult times that the operatives in Lancashire have had, not merely since the war but before the war. When the war broke out and factories were concentrated, many cotton operatives went into aircraft and engineering work. They got cleaner, healthier, and better-paid jobs. After the war, we had to ask those people to come back into the cotton industry. They did not want to do so. The Ever-shed Commission made some very revolutionary proposals about pay and conditions, which had to be implemented to some extent before we could get the people to come back into the industry.

The employment record of the cotton trade is very bad. It is very strange that today it should find itself in a position where it is almost beaten to its knees by rice bowl wages, long hours and wretched conditions. There is now an opportunity to ensure that the people who have to leave the industry—I do not know whether there will be many or few—are guaranteed a better deal than it appears they will get under the Bill. I should therefore like the President of the Board of Trade to make a change which will ensure decent treatment for these people. They have had a very difficult time because of the calamitous decline in the cotton trade in Lancashire.

When I was in the industry and when we had a holiday, on Friday night the cry went up, "Grease the machinery", but there was no greasing of the employees. Apparently the same thing is going on today. It seems that adequate provision should be made for the machinery, but not for the employees. I suggest that the Minister should accept the Amendment and make certain that the operatives get a fair and square deal.

Mr. Blackburn

I do not want to detain the Committee because I think that my hon. Friends have made the case most eloquently. What we are trying to do in these Amendments is to keep in spirit with the White Paper. I want to call the attention of the President of the Board of Trade to paragraph 25 of the White Paper, which reads: It will be a condition of the Exchequer grant that compensation is paid to the displaced operatives under arrangements for the particular section settled between the employers and the trade unions. There is nothing in the Bill which says that they must be settled between the employers and the trade unions. It merely says that arrangements shall be made. It does not make clear whether it should be with the full agreement of the operatives and that it is not something imposed on them by the employers.

I shall not repeat what I said on Second Reading about compensation, but I think that the scheme which is being discussed at present is wrong. I hope that the employers will realise this and will rephrase any scheme that they put forward on a cash basis and not on a weekly basis. I hope that the President of the Board of Trade will agree to the Amendment in order to incorporate the spirit of the White Paper in the Bill.

Mr. Ernest Thornton (Farnworth)

These Amendments are important and I hope that the President of the Board of Trade will agree to write into the Bill what is in the White Paper. It is perhaps an undesirable and dangerous precedent that the operation of legislation should be dependent on private interests outside Parliament. This is a point to which the Manchester Guardian has made reference on more than one occasion. If it is to be left to interests outside Parliament to determine the scale and conditions of compensation, then those interests should be clearly defined. The White Paper is specific, but the Bill is far from clear on the point that arrangements shall be made within the section.

I should like to pose this question to the right hon. Gentleman: can the Cotton Board make arrangements with or without the agreement of the employers and the trade unions? Is that the intention? It seems possible within the terms of the Bill as at present framed. Can the employers alone make the arrangements in agreement with the Cotton Board?

Reference has been made to the tentative or provisional agreement that the unions have made with the employers, but that agreement is only a scale of payments, and even that is back in the melting pot because of the complications about unemployment insurance benefit. All the terms and conditions have yet to be agreed. In my opinion, those terms and conditions are going to be very difficult.

On the Second Reading it was argued from the Front Bench opposite—I am not sure whether by the right hon. Gentleman the President of the Board of Trade or the Parliamentary Secretary—that the unions were in a very powerful bargaining position. But I think it is equally true to say that the employers are in a very powerful position also, and, to some extent, the position has reached something of a stalemate. The unions' primary responsibility is always the wellbeing of their members and they have a powerful incentive to see that some compensation payments are obtained for their members, because in any case mills are going to close down. That is self-evident. This Bill, if it is successful, will merely speed up that process.

These people who are going to be displaced have a very natural desire to get some form of compensation. This is a relatively urgent issue concerning compensation for plant, but the problems of these men and women when displaced will have to be met more urgently than the financial problems of the shareholders. Therefore, it is of paramount importance that Parliament should have some control and should express some opinion on the terms and conditions that are to be tied to the compensation. I suggest to the right hon. Gentleman that as these words are in the White Paper, it would be to the advantage of the Committee and would help us to make progress if he would agree that they should be written into the Bill and that the two Amendments which we are discussing should be accepted.

Sir D. Eccles

I consider that this is a very important Amendment. It is the first one which the Opposition have tabled dealing with compensation of the operatives, and it is a matter which we must get right.

I was impressed by what my hon. Friend the Member for Cheadle (Mr. Shepherd) and the hon. Member for Manchester, Openshaw (Mr. W. R. Williams) said. We have had this point in our minds all the time. We were going into rather new territory, in fact, in insisting upon a compensation scheme on an industry basis as part of our reorganisation and re-equipment plan. I do not think there is any difference of opinion between the two sides of the Committee that there must not be money for compensation for machinery unless there is money for compensating the men and women who lose their jobs. The problem is how to get the best settlement for the purpose.

I can see how the hon. Member for Burnley (Mr. Burke) came to read subsection (2, a) in the way that he did, but, in fact, it does not mean what he thought it did. It there says that the Board of Trade must be satisfied that the scheme makes adequate provision for eliminating excess capacity. That refers only to the quantity of the capacity to be eliminated and not to the financial terms.

Mr. Burke

I understand that, but my point is that the right hon. Gentleman said, with regard to excess capacity, that one must be satisfied about the adequacy, and I want to be equally satisfied about the adequacy of this arrangement.

Sir D. Eccles

The parallel would be that the President of the Board of Trade had to be satisfied that enough men were displaced. But that is not what we mean. What we are now talking about is the suggestion that each individual worker displaced should get adequate financial compensation. Since we are agreed upon the necessity to get this, one has to consider what is the best way to do it. There is in the industry the established machinery of the trade unions and the employers, and they said to us that they were the people who ought to have first go at settling these terms and conditions. I agreed and asked them to do it.

5.45 p.m.

Then the point is raised: Given the circumstances of the Bill, were the trade unions in a strong enough bargaining position, if left to themselves in that way, to get a fair settlement for their members? We take the view—and I am bound to say that such trade union representatives as I saw did not deny it—that we put them in a very strong position because we said that no re-organisation scheme would be approved unless we were satisfied that the compensation arrangements had been settled, and that there would be no money for the owners if they did not come to terms with the men. We also told the employers that we should have to be satisfied that the arrangements had been settled for all those employed, whether they had a regular channel through which to put their case or not.

That is a very different thing from saying, as the Amendment does—and I have given this a great deal of thought because I am really in sympathy with the Amendment—that we shall not approve a re-organisation scheme unless the arrangements for compensation have been agreed by all the representatives of those employed. That is the effect of the Amendment.

Suppose a splinter group—even quite a few men—were formed and it appointed a representative who said that he did not agree with one or other of the terms of the arrangements which had been settled with the trade unions. If we accepted this Amendment he, or the splinter group, would be in a position to hold up the whole scheme. That, I think, would not be in the interest of either side of the industry.

On the other hand, if the persons who have been appointed by the section concerned fully to represent it and the trade unions with whom they regularly negotiate did not come to an agreement, I could not possibly approve the scheme or bring it before the House. I think that is a pretty fair proposal. The owners get no grants unless they have settled with the unions. They know that. I have told them that over and over again, and, as has been said, some progress is being made.

As it is a basic condition of the Bill that the owners want to eliminate surplus capacity, and the Government are offering them quite generous help towards eliminating capacity, it puts the unions in a pretty strong position. They are in a position to hold up these re-organisation schemes if the settlement is not made.

This question of the timetable is now becoming very important because, beyond our expectations, the preliminary talks on the spinning, doubling and weaving re-organisation schemes have gone much faster than we thought. It is even hoped that these schemes will be ready for presentation to the Board of Trade early next month, in a very few weeks from now. The employers—indeed, all interested in the future of the cotton industry—have a very great interest in the presentation of these schemes because the schemes must be left for a certain time for the House to consider them before we bring forward the Order. Of course, we may have to do it fairly quickly, but I hope that we shall have reasonable time. But if we do not get these schemes approved before the Houses rises for the Summer Recess, it is clear that they cannot be approved until late in the autumn. Everyone in the cotton industry that I have talked to on both sides wants to see whether they can have the spinning, doubling and weaving schemes approved before we rise for the Summer Recess. That puts a fairly strong pressure on those who are negotiating the indispensable condition of satisfactory settlement between the employers and the unions on the subject of this compensation.

Mr. Burke

It is a great responsibility, too.

Sir D. Eccles

I agree; it is a great responsibility, and we shall have to see that it is properly discharged.

Turning to what has been going on, the negotiations are, as some hon. Members opposite know, in mid-stream. There was a constructive meeting yesterday, and there is to be another meeting tomorrow. There is a quite considerable problem here because, if a worker feels that he or she is not likely to find another job, obviously his or her interest is to have weekly payments and to have the payments so arranged that they do not interfere with the entitlement to unemployment pay. If, on the other hand, a worker feels that he will find another job fairly quickly, his interest is to have a lump sum. It is rather difficult, I suspect—I do not wish to take sides on it—to come to a fair compromise between the interests of those who prefer the lump sum and those who would prefer the weekly payment.

Who are the best people to come to this compromise? I feel sure the Committee will agree that it is for the trade unions and the employers to try to do this. I believe that, with the pressure of the time-table and because the industry, as my hon. Friend the Member for Cheadle said, has grasped that it is doing something new and there is a sense of responsibility towards the industry as a whole which has grown in recent months, it is better to let those concerned go through with these negotiations and go forward with the schemes.

The second Amendment being discussed, to which I think the hon. Member for Accrington (Mr. H. Hynd) spoke, is intended to put in some word like "reasonable" or "satisfactory" before the word "arrangements".

Mr. W. R. Williams

It is to put "reasonable" before "compensation".

Sir D. Eccles

I am sorry; the hon. Member is quite right.

It is difficult to do this because it brings in the judgment of Parliament as to what exactly is reasonable or satisfactory. Our view is that, given the known desires of the employers to carry this Bill through and given the known views of the Board of Trade on this point, which are well known, and the pressure of the time-table, the settlement which the employers agree with the unions will, in fact, be a reasonable one and will be more likely to be a reasonable one than something which the House, with all its wisdom, is likely to be able to devise. I think that it would be very difficult for anyone in the Board of Trade to decide, for instance, the relative merits of a lump sum or weekly payments. I do not think that the Board of Trade is quite the right arbiter for a matter of that kind, nor do I quite see where we should go.

To sum up, the Government exactly agree with the spirit of the two Amendments. The Amendments express our own views precisely. But because I do not wish to put into the Bill words which would enable a small splinter group to hold up the whole thing, and because I think that if the employers and the unions come to a settlement it will, by definition, be as reasonable as can be reached, I hope that hon. Members will not press these two Amendments on the assurance that, as far as it is in our power, we shall see that what they want is carried out.

Mr. J. T. Price

I honestly believe that, given a little encouragement, the President of the Board of Trade could charm the ducks off almost any water. In this context, with the water we are discussing, the "ducks" on this side of the Committee are not that kind of duck at all. The water is too deep and too murky.

Mr. Glover

Just dead ducks.

Mr. Price

I will deal with the hon. Member for Ormskirk (Mr. Glover) later on, if he will see me outside. [HON. MEMBERS: "Oh."] By sweet reasonableness, of course.

It is going a little far, I think, for the President of the Board of Trade, at this stage of our Parliamentary life, to say that the House of Commons should boggle at the word "reasonable" when "reasonable" is in almost every Statute which passes out of this Chamber. I know that certain people can weave very intricate arguments about the word "reasonable". I shall not add to the confusion by attempting to define it now. I merely say that, although I disagreed with some of the things which the President of the Board of Trade said—I listened most carefully to his speech—one thing he said struck me as very reasonable. He agreed with the general purpose and intention of these Amendments which had been put down by my hon. Friends.

The only substantial point which emerged from the right hon. Gentleman's speech was the argument that, if some splinter group, as he called it—a small group of disaffected people in the industry—set out to wreck any agreement, this would be undesirable. I agree that it would be undesirable. I do not wish to see the purposes of this Clause frustrated by the activities of any splinter group. But, having listened to the right hon. Gentleman's remarks very carefully, my judgment, for what it is worth, is that he did not advance any other reason for sustaining his objection to our Amendments. He said that he agreed with the Amendments in their intention, but, he said, if a splinter group came along, it would be undesirable. As I say, I agree that it would be.

If the President of the Board of Trade will say to my hon. Friends this afternoon that the words and agreed to by the representatives of those employed would open the gate to a splinter group, we can very easily put in a manuscript Amendment, with your permission, Sir Gordon, to say and agreed by the legislative council of the Cotton Trade Unions which is the representative body, and which contains in its membership responsible people representing every responsible section of the industry. If the President of the Board of Trade will accept that, it will dispose of all the argument, and we can pass on to the next business.

We must not fall down in considering what it is desirable to write into the Bill as a safeguard for the operatives. So far as we agree in principle, we must not fall down on that merely as a result of a disagreement about the form of words.

If you will accept a manuscript Amendment, Sir Gordon, I will put it in now, and then perhaps the President of the Board of Trade can amend what he said. With your permission, Sir Gordon, I should like a Ruling on that because, if it were done, it would completely dispose of the objection the right hon. Gentleman made to the Amendment.

The Deputy-Chairman (Sir Gordon Touche)

I should have to consult the Chairman before I could accept a manuscript Amendment.

Mr. S. Silverman

Listening to the President of the Board of Trade, I thought that he probably had a reasonably good point about the actual words of the Amendment, but I did not think that the point was so good when one considered the spirit of the Amendment instead of the actual words which appear on the Notice Paper. As my hon. Friend the Member for Westhoughton (Mr. J. T. Price) has just said, it would not be very difficult to alter the words—it could be done now or at a subsequent stage—if the Government accept the principle, as I understand they do. This would meet the only difficulty which the President of the Board of Trade advanced against accepting the Amendment, with the spirit of which he said he was in full agreement.

6.0 p.m.

Therefore, I should have thought that the President of the Board of Trade might have accepted, as Ministers often do in such circumstances, the spirit of the Amendment. He might have said that he could not accept it in the form in which it was on the Notice Paper. He might have undertaken to find suitable words between now and the Report stage, so that he could then place before the House a form of words which would fulfil the spirit of the Amendment, which he accepted, and at the same time meet the procedural difficulty, because it is no more than that, which he had in mind. I will say no more than that about it, because I have no doubt that my hon. Friends will have something to say on that aspect later.

I want very shortly to make two general points. The first concerns the principle of affording compensation to workers for loss of employment due to deliberately effected changes in the industry in which they have invested their lives. Perhaps I might, on this point, be impertinent enough to do what I do not think I can remember ever doing before, and that is to congratulate the Conservative Party on at least having learned one thing in twenty-five years. I say that deliberately, because this is not the first occasion on which Parliament has been asked to intervene in order to get rid of surplus capacity in the cotton industry.

I entered the House of Commons in 1935. The first Bill in respect of which I served on a Standing Committee was the Cotton Spinning Industry Bill, afterwards the Cotton Spinning Industry Act, 1936. Its object was exactly the same as the object of this Bill. It was said then, as it has been said ever since and as it is being said now, "The real trouble in the cotton industry is that it has too much capacity. Let us do something to destroy part of the machinery. The capacity will be less. Many people will lose their jobs, but that cannot be helped and, in the end, the cotton industry will assume a normal, healthy, economically viable and profitable form".

Mr. Hale

I am sure that my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) will forgive me, because it is the first time in fourteen years that I have had the opportunity of correcting him with some certainty. My hon. Friend used the word "destroy". The first proposal was not to destroy. It was sold at a profit to Hong Kong.

Mr. Silverman

I hate to interfere with any of the innocent pleasures in which my hon. Friend the Member for Oldham. West (Mr. Hale) indulges himself and confers upon his colleagues from time to time. However, I was not unaware of that point, but, as I cannot speak as rapidly as my hon. Friend and therefore have to say only one thing at a time, I had not quite reached the point.

Mr. Glover

On a point of order, Sir Gordon. Does this concern the proposal now before the Committee?

The Deputy-Chairman

The hon. Member for Nelson and Colne (Mr. S. Silverman) is straying a little far from the Amendment and is dealing with rather wider issues.

Mr. Silverman

Subject to your Ruling, Sir Gordon, I want to make a general comment on the nature of the compensation. I am referring to this past history, which is very live history in the minds of the workers in the cotton industry in Lancashire today, only in order to reinforce the point to which I am coming. I do not intend to be very long, but I want to present a connected case.

In 1935 we were dealing with only one section of the industry. The Bill applied only to the spinning section. It was directed to the reduction—I use a neutral word, in view of my hon. Friend's intervention—of the number of spindles. There was a levy on the industry, and with that levy spindles were bought up. It was intended that they should be destroyed, though some very dishonest and sinister use was made of the spindles at the time.

In Committee we tabled an Amendment to the Bill dealing with the matter with which the Committee is concerned this afternoon. Then, as now, the result of the elimination of machine capacity was the elimination of people's jobs and livelihoods. We tried then to have the principle adopted which everyone now accepts without question, namely, that if one destroys a man's livelihood by destroying the tools of his trade, one dare not, if one is acting in the interests of the whole community as one pretends to be, leave it just like that. One should compensate the man for the loss of his labour and his livelihood, just as one compensates the owner of the machine for the loss of his machine.

Every Conservative and Liberal Member of the House of Commons in those days voted against that proposition. I admit that I must not labour the point, and I do not propose to labour it; but I think that it is not out of order to remind the Committee how far we have come in those twenty-five years and how much preventable human misery we have allowed to happen because the principle which we unanimously accept today was not then accepted. If the principle had been accepted then, what a difference it would have made to the lives and livelihoods of so many tens of thousands of workers in Lancashire and elsewhere.

Secondly, we are dealing only with that part of the compensation which can be paid in money. I hope that the Committee will not lose sight of the fact that, if in middle or advancing years a man is deprived of the opportunity of using the only skill he knows, he is not compensated by being given a small lump sum or a number of weeks' wages.

You take my house, when you do take the prop That doth sustain my house; you take my life, When you do take the means whereby I live. One of the weaknesses of the Bill, accepting unanimously the principle of compensation, is its failure to apply that principle in any adequate way to the people concerned. We are dealing with negotiations and pressure being brought to bear upon employers; the scheme cannot go through unless they agree beforehand on some pounds a week for so many weeks to people in certain circumstances. This is not compensation.

Mr. Rhodes

It is not good economics either.

Mr. Silverman

The only adequate compensation would be to provide people prevented from earning their livelihood in the future with some other suitable way in which they could earn it. The great weakness of the Bill—which I hope that we may have an opportunity of discussing later, subject to your Ruling, Sir Gordon, as to what Amendments can or cannot be debated—is that there is absolutely no check of any sort or kind anywhere in the Bill from beginning to end to see what socially useful purpose is to be served by the public money and compensation paid to manufacturers for destroying people's livelihoods and productive capacity and introducing into communities whose life has always depended on this industry a subversive and disruptive effect the ultimate results of which no man can foresee.

Mr. Anthony Greenwood

My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was right in saying that we had come a long way in twenty-five years. I hope that the President of the Board of Trade will make more rapid progress and come a long way in the next few minutes. I see no reason why the President of the Board of Trade should not accept the principle embodied in the Amendment. The right hon. Gentleman talked about the strong position which trade unions have in these negotiations because they can hold up schemes, but he knows perfectly well from his personal knowledge of members of the Legislative Council of the United Textile Factory Workers' Association that they are responsible men who want to do two things. In the first place, they want to help the cotton industry. Secondly, they want to try to secure justice for their own workers. They know that if they hold up the schemes, all that will happen is that we shall revert to what has been happening over the last four or five years. There will be an unplanned running down of the industry, with no compensation for the people whom they represent. That is not a strong position for any trade union to find itself in.

From many viewpoints, this is the most important part of the scheme. We feel strongly that the safeguards must be written into the Bill, as the White Paper led us to expect would be the case. There is no reason whatever why the very proper principle contained in the White Paper should not be enshrined in the Act of Parliament also. The President of the Board of Trade rightly said that we are all agreed about the need of compensation for loss of employment. We are all agreed, of course, about the need, but we are not necessarily agreed, any more than are the workpeople and the employers, about exactly how that compensation scheme is to be worked in practice.

Although we agree about the principle, we may not agree about the basis upon which the payment is to be made. If, however, the principle is accepted that trade union agreement must be forthcoming, there is no reason why the President should not write it into the Bill. It would be a guarantee that the right hon. Gentleman accepted that as a statutory obligation laid upon himself and upon his successors.

The present President of the Board of Trade may not hold his office indefinitely. We hope that there will be events within the next few months which will cut short his tenure. Suppose, however, that the right hon. Gentleman left his office tomorrow and were succeeded by another right hon. Gentleman from the benches opposite. There is no guarantee whatever that he would not find exceptional circumstances operating which would make him approve a scheme although the compensation had not been agreed to by the unions involved.

A President of the Board of Trade could make a plausible case if one section of the industry were falling behind and holding up the general reorganisation of the industry. He could come to the House and make a persuasive case as to why, for that one section of the industry, the ordinary obligations should be dispensed with and that it should not be necessary first to secure the approval of the trade unions in that section.

My hon. Friend the Member for Nelson and Come may be right when he says that there is substance in the complaint by the President of the Board of Trade that our Amendment would mean securing the approval of all the representatives of those employed. That is not my view. If, however, it is an accurate interpretation of what we have put on the Order Paper, it should not be beyond the ability of the right hon. Gentleman to find a different form of words without the weakness to which he has drawn attention and which would have the effect of putting this principle firmly upon the Statute Book.

The right hon. Gentleman's suggestion that "reasonable" was not a proper word to use in these circumstances was not up to his usual debating standard. Over and over again during the time that all of us have been Members of the Committee or of the House, we have had to discuss whether "reasonable" is or is not a proper word to use in Measures which we were discussing. It is a perfectly ordinary word to use and it does not lead to the kind of difficulties that the right hon. Gentleman suggested.

The President said that we all agree that these schemes must be negotiated between both sides. That is true. There is no suggestion from these benches that we should do anything otherwise. We want the negotiations to take place and we want to have provision in the Bill which states that there must be agreement between the employers and the trade unions before the President gives his approval. We want to tie the President's hands. If he is reluctant to be tied, I, equally reluctantly, shall have to ask my hon. Friends to divide in support of the Amendment.

6.15 p.m.

Mr. Rhodes

This part of the Bill makes history. That is a platitudinous remark after what has been said, but it is true. After these proposals have been inserted into an Act of Parliament, I cannot imagine how we can possibly hold back any further from making a national plan for redundancy. That is the logical outcome. Hon. Members may not have realised it, but I think it will happen.

Let hon. Members think back to Second Reading and remember the things that were said and those that were omitted. I cannot conceive of a Bill shorn of compensation to the employer which would not have had rough handling from the benches opposite. I cannot imagine a Bill giving compensation to employers but not to the workers which would not receive rough handling from this side. In relation to that kind of element, which has been a feature of the Bill, I say that the sooner the question of redundancy and compensation for it becomes a national obligation, the sooner we will take the politics out of redundancy schemes. If one side is quietened because some of its elements want the Bill and the other side wants it because of certain elements that it contains, sooner or later there will be a ganging-up. In some degree, that is what has been happening on this Bill outside.

I warn the President of the Board of Trade that this may not be the last occasion of this kind. If the same principles are adhered to, in another few years' time the motor car industry can be asking for the same sort of assistance if exports to the Dominions, from, say, India, assume dimensions similar to those with which our cotton industry now has to contend. This really is the start of something that the present or a future Government must shortly think out.

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

It is time they did.

Mr. Rhodes

I agree. It is also time that there was criticism of the Bill on its intrinsic demerits instead of hanging back simply because the supporters of one party will derive benefit and the supporters of the other side will get benefit from it, too. The purpose of the House of Commons is to ventilate problems for the public good. If we are to be tied down by this business of ad hoc or industry-by-industry negotiation on redundancy, this sort of political element will come into it every time the subject is raised.

Mr. John McCann (Rochdale)

Some of us recognise the point which has been so rightly made by my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes). It has been said, on both sides, that the Bill is a milestone because we are moving into new territory. Some of us prefer to regard it, not as a milestone, but as a foundation stone, because the Bill that we are considering today is the structure upon which all other schemes will be built in the future.

To use a word which this afternoon has been misunderstood, we are asking for something fairly reasonable. We are asking that the compensation should be reasonable, a request which has been made many times in the House of Commons, and that the representatives of the men should be consulted before agreement is reached.

The President of the Board of Trade is rather looking for somebody under the bed when he is afraid of the question of splinter groups. If he looks at the Amendment, he will see that it does not include the word "all". It does not say and agreed to by all the representatives of those employed". Even if the manuscript Amendment mentioned by my hon. Friend the Member for Westhoughton (Mr. J. T. Price), concerning the Legislative Council, were effected, that would not alter the fact that the workmen have a tendency to have confidence in the negotiating committee they set up, and if that negotiating committee agrees the workmen will agree.

I am confident that that would remove the objection of the President of the Board of Trade. He said that he is very close to us in this matter, and I hope, therefore, that he will be able to accept this Amendment. We want this principle of fair play to be enshrined in the Bill for future reference.

I will do again what many of us did on Second Reading, that is, draw attention to paragraph 41 of the White Paper, which says: A large responsibility must also fall on the operatives. The reorganisation of the industry will fail unless management and labour are willing to co-operate in the introduction of new methods … It goes on to talk about extended shift working.

All we are asking is that the cooperation which the President of the Board of Trade and the country so rightly expect between management and men who remain in the industry will be extended to exist between management and the people whom we are going to rob of the right to work in the industry in which they have spent their lives.

Mr. Jay

Since the President of the Board of Trade has not responded to my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), I would put this point to him. We are discussing what is really a very narrow point, although an important one. We all agree that we want it to be in practice a condition of these schemes that there should be agreement between the unions and the employers. We are now merely discussing whether or not that should be written into the Bill. The President of the Board of Trade does not object to the principle of writing it into the Bill, but says only that our words would not be appropriate because they might enable a splinter group to wreck a whole scheme.

I suggest to him that we can get round that difficulty simply by omitting the word "the" in our Amendment, which at present reads: and agreed to by the representatives of those employed. As my hon. Friend the Member for Rochdale (Mr. McCann) said, the word "all" does not appear. If there is a legal argument that the term "the representatives" may be taken to mean "all the representatives" I suggest that one possible solution, which may not be the only one, is simply to omit the word "the" and not to let one word stand between us and what we all want to achieve.

If the right hon. Gentleman finds some snag in that, I ask him to consider whether it is really beyond the powers of the Parliamentary draftsmen to find some other phrase, such as "representatives of the majority of the workpeople", which, according to my memory, I have seen in more than one Act of Parliament.

Sir D. Eccles

I do not think the suggestion of the right hon. Gentleman the Member for Battersea, North (Mr. Jay) would work, because I think it would leave it to the Board of Trade to say which representatives, and leave the matter entirely to us. I think it would. I do not think the suggestion would work.

I suggest that as negotiations are going on and we shall have some more information about them by the time of the Report stage of the Bill, the Committee should leave this as it is now and see how things go forward, and I will consider whether it is possible to put something in this place in the Bill, but always on the assumption that it is a very real danger, this giving power to a splinter group. I do not know if it is possible, but we shall have to find words which really do carry out what both sides of the Committee want. If the Committee will allow me to do that, then on Report I will tell the House how we have got on.

Mr. Anthony Greenwood

I am grateful to the right hon. Gentleman for having met us in this way. In view of what he has just said and of his promise that he will try to find a way of dealing with the difficulty, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Deputy-Chairman

With the next Amendment we can consider the Amendments in the name of the hon. Member for Rosendale (Mr. Anthony Greenwood): In page 3, line 27, at end insert: No order of revocation made under this section shall have the effect of relieving those carrying on business in the industry who had been parties to the scheme of reorganisation from any obligation previously entered into for the payment of compensation to persons employed by them. In page 3, line 35, after "fifty-nine)", insert: and where provisions are contained as aforesaid provision shall also be made for the payment of compensation in respect of loss of employment due to the elimination of such excess capacity and the new Clause dealing with conditions of compensation.

Mr. Thornton

I beg to move, in page 2, line 11, at the end to insert: the amount of such compensation to be unaffected by the circumstance, if it occurs, that a person losing employment as aforesaid subsequently proceeds to other employment whether in the place of the employment he has lost or elsewhere".

Mr. Jay

On a point of order, Sir Gordon. Do I take it that the Amendment immediately before the Committee is the first of the Amendments proposed to page 2, line 11?

The Deputy-Chairman

Yes, and we can discuss with that the Amendments to page 3, lines 27 and 35, and also the new Clause (Conditions for compensation.) in the name of the hon. Member for Rossendale (Mr. Anthony Greenwood): [No person shall qualify for compensation under this Act who shall not, before the payment of such compensation, have entered into an agreement for the compensation of persons employed by him on terms agreed within the section of the industry to which he belongs between the employers in that section and the representatives of the employees. Such terms shall apply to all such persons who have been employed by him and who have lost their employment since the twenty-fourth day of April nineteen hundred and fifty-nine.]

Mr. Hale

On a point of order. It is not possible here below the Gangway to hear what is being decided. I do not want to interrupt my hon. Friend the Member for Farnworth (Mr. Thornton), but we here did not hear what you said, Sir Gordon, and we do not know what is to be discussed. It is vital we should know what is under discussion.

The Deputy-Chairman

I apologise to the hon. Member. I will repeat what I said. With the Amendment which has been moved we can discuss the Amendments in the name of the hon. Member for Rossendale (Mr. Anthony Greenwood) in page 3, lines 27 and 35, and also the hon. Member's new Clause dealing with conditions of compensation.

Mr. Douglas Houghton (Sowerby)

On a point of order, Sir Gordon. When we were in Committee on the Finance Bill we had the advantage of numbered Amendments and numbered new Clauses, making for easy reference. Why have we not got that advantage now?

The Deputy-Chairman

It was agreed that that should be done for the Finance Bill only this year as an experiment and that then consideration should be given to whether it should be applied to other Bills later.

Mr. Houghton

Since the experiment was so successful so quickly, why could not the lesson have been learned equally quickly and applied on this occasion?

The Deputy-Chairman

That is not a matter for me but a matter for the Select Committee on Publications. No doubt, the Select Committee will pay attention to what the hon. Member has said.

Mr. Thornton

The Amendment which I have moved raises an important issue of principle, and the principle at issue is the interests of capital and the interests of labour. I should think that in this second half of the twentieth century no one on either side of the Committee would be prepared to say that the interests of capital were greater than the interests of labour, but the Clause as it is framed attaches more importance to the compensation of capital than it does to the compensation of labour, and as it stands it will result in treating dispossessed capital on more favourable terms than dispossessed labour.

The employers, I understand, are objecting strongly to workers being compensated on the same terms and conditions as shareholders and directors, and as things stand at present, with the Bill and with the negotiations, it would appear that directors will be compensated for loss of office even though they walk straight into more remunerative jobs. That will be their system of compensation. The shareholders will be compensated, and there will be no restriction whatever, as we know, and they will put the capital to work in other directions, and the capital will come mainly from Treasury sources. The workers will be faced with receiving no compensation—let us face it—but unemployment supplements. It is discriminatory treatment.

6.30 p.m.

The Economist, to which I referred on Second Reading, said on 20th May: Should compensation cease or be reduced when a worker gets another job? The treatment of labour should be on the same footing as capital. Shareholders in mills that are compensated for closing down will be able to put their capital to work elsewhere, and an executive is compensated for loss of office irrespective of subsequent employment. … A worker who subsequently obtains the same kind of job—sometimes in the same firm—may suffer no loss of expectation, but people who have to take different jobs will. The scheme confuses a severance payment for compensation with a kind of supplementary maintenance provision during unemployment: the two should be kept separate. This issue is quite simple. Directors and shareholders will receive compensation unconditionally. Workers will probably get compensation conditional upon their remaining unemployed.

The Committee should bear in mind, in considering this point of principle, that £30 million of public money will be involved and will be going to the advantage of shareholders in the cotton textile industry. Parliament has a very serious responsibility to see that there is fair play between labour and capital. Employers may receive £30 million with one hand and, with the other, pay out only £2 million. I believe that that is the employers' estimate of the scale of payments tentatively agreed, on terms and conditions which the employers have in mind.

On the assumption that 40,000 workers will be displaced—I do not mean that they will be out of a job, but that they will lose the jobs they now have at the mills where they are employed—and taking an average age of 44 years and an average wage of £10 a week, which is on the top side, this would cost £4 million. That is my arithmetic and I think that it is correct, though I believe that the President of the Board of Trade and the Parliamentary Secretary think that a figure of 40,000 workers is an overestimate.

Is this sum of £4 million unreasonable against £30 million of public money involved? It would cost only £4 million if payments to operatives were made on the same conditions and on the same principle as the proposed compensation to capital. The Manchester Guardian, to which I referred a little earlier, said on 14th May: It is to be a condition of the Government grant that compensation is paid to men and women who lose their jobs when mills close, on terms to be agreed between employers and trade unions. In many ways, those terms—still to be fixed—are more important than questions of compensation for scrapping the machinery or grants for re-equipment … but it remains strange that the expenditure of large sums of public money should be left dependent on private arrangements. The Government should insist that the proposed terms of compensation must be approved by Parliament, as well as by the unions. I believe that this is a principle which Parliament cannot ignore. The Committee should give very close consideration to this point.

The Bill will be a precedent, whether we like it or not, and whether the President of the Board of Trade thinks so or not, for other rapidly contracting industries. My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) has referred to this point. Other claims will follow, and if the present claims are not met on a fair basis and principle as between capital and labour, there will be critical repercussions. I do not think that the presentation of the Bill to the House of Commons at this time is altogether devoid of connection with political repercussions in Manchester.

The cotton industry, with which I have been associated all my life, is the first of the casualties of the industrialisation of Asia and the under-developed countries. Let us remember that Asia, in particular, where there are the vast populations of the world, has passed through its first stage of industrialisation and is entering the second stage. With its entering that second stage, we are on the threshold of a tremendous expansion in a wide range of light and heavy industry in Asia.

As hon. Members on both sides of the Committee have doubtless done, I have been privileged to make six separate visits to the Far East during the post-war period. Those hon. Members who have made similar visits, spaced by five, ten and fifteen years, as I have, will have seen the tempo of the industrialisation that is taking place in Asia. It is part of the policy of this Parliament that assistance should be given to the industrialisation and the expansion of the economies of these under-developed coun- tries. It is vital to the wellbeing of the free world that that should be done.

I am sorry for this diversion in my speech, but it leads me to the point that we are on the brink of a great revolutionary change in the pattern of trade and industry, greater perhaps than at any time since the Industrial Revolution. There are also the proposed European Free Trade Area and the European Common Market, whether the little or the larger Free Trade Area, associated with the Common Market Six. These will all lead to an acceleration in the rate of expansion of some industries and of the contraction of others. Without doubt we shall see a speed-up in the tempo of change in industry.

Parliament should ensure that labour is treated on fair basic principles in relation to capital in these changes. This Measure will set the pattern for compensatory payments in a whole range of industries, whether it be in a national scheme, such as that to which my hon. Friend the Member for Ashton-under-Lyne referred, or in a whole chain of industrial agreements. This is something which the country must face and which Parliament cannot ignore. We ought to take a firm stand on this basic principle that labour should be compensated on the same terms and conditions as capital. I hope that the Committee will accept the Amendment.

Mr. A. J. Irvine

I rise to support the case put by my hon. Friend the Member for Farnworth (Mr. Thornton). I think that the expression "compensation in respect of loss of employment" is really much too vague a phrase for our purposes to go into this Bill. I am aware that this is an enabling Bill, I am aware that what is provided for is that arrangements shall be made within the Clause, and I am aware of the fact that these two circumstances justify a somewhat looser drafting than might otherwise be called for. Even bearing that factor in mind, I should have thought that the expression was too loose, and that those who will become engaged in trying to determine what arrangements are to be made within the meaning of the Act will have great difficulty in knowing what Parliament really intended by the expression "compensation in respect of loss of employment".

For example, if an operative leaves employment because of excess capacity and goes to work elsewhere at a higher wage, the question at once arises, is there to be compensation for loss of employment in such a case? Again, if he goes to another job and is paid a lower wage, the question will arise, was it the intention of Parliament that he should recover the difference over a period of years? I am not venturing to suggest at the moment what is the best or most desirable interpretation of these questions. What I am objecting to is a phrase going into the Bill which leaves it so much open to doubt what Parliament really intended.

In this connection I notice a distinction between the formula used in this Bill and the form of words used in the Transport Act, taking that example from among many that come to mind. In the compensation provisions of the Transport Act reference is made to the position of those who suffered loss of employment or loss or diminution of emoluments or pension rights or whose position was worsened. For myself, I do not see why words of that kind which, in the Transport Act, were designed to indicate the character and nature of the compensation which Parliament intended, should not be appropriate in this Bill. I would like consideration to be given to that point, for the reasons I have ventured to put forward as well as for the reasons put forward by my hon. Friend.

The effect of this Amendment clearly would be that compensation would be paid in the example I gave, albeit that the employee who is rendered redundant by the elimination of excess capacity proceeded to higher paid remuneration. In principle we think that is right, because what the State and industry in co-operation are doing in this Measure is to take steps to deprive employees of the possibility of employment at certain plants and on certain machines by their elimination. Redundancy arising in that setting seems to me to be entirely different in character from redundancy arising from ordinary termination of employment under contract of service. Here is redundancy, a change of employment at the best, induced and encouraged by the State and the industry operating together. We say, first, that it is of vital importance in these circumstances that there should be adequate compensation. We say that this background is a good reason for providing that compensation will be paid regardless of such circumstances as are referred to in the Amendment, such as a change to better-paid employment.

6.45 p.m.

That is our view. I am sorry to see that the hon. Gentleman the Member for Cheadle (Mr. Shepherd) has left the Chamber, because in a debate upon an earlier Amendment he referred to the Bill as a milestone in social history and spoke about the generosity of the employer. I would be the last person to presume to deny that here and there will be found instances of generosity, and that from some points of view, though not from those in the mind of the hon. Member for Cheadle, this Bill is something of a milestone. Yet I feel that we must see the matter in perspective, and recognise that this scheme, under which employers are levying money for the payment of compensation for loss of employment, is married to and part of a scheme which is giving the self-same employers compensation for the elimination of excess capacity. It is a fairly melancholy conception of milestones in social history to regard such a carefully balanced arrangement as a demonstration of generosity.

This is a closely-knit scheme and one thing must always be seen in the light of the other. Each reorganisation scheme will deal with all these matters together and en bloc, and in supporting my hon. Friend's Amendment, which would involve the payment of compensation for loss of employment even in cases where the result was a change to a job with a higher wage, I do so mindful of the fact that we are dealing with novel and special circumstances here. These are circumstances in which the redundancy is induced by industrial action encouraged by the State, and we are doing it in a setting in which the employers and the mill owners are receiving substantial compensation. That last circumstance is one which would make it unreasonable and open to objection, certainly by us on this side of the Committee, if equivalent safeguards for compensation were not clearly forthcoming for those who were compelled by these provisions to change their employment.

Mr. Houghton

I support this Amendment. In its narrow terms it relates to only one aspect of compensation but it raises the entire question of the basis of compensation. As I understand the Amendment, it proposes to write into the Bill that, whatever compensation payments are made, they shall be given irrespective of whether the displaced employee gets another job, how soon he gets that job and the pay he gets for it when he obtains fresh employment. In other words, it is the conventional form of compensation for loss of office, and when company directors and others in executive positions receive lump-sum payments or payments made by instalments for loss of office, it is rare for any condition to be written into the compensation terms that they shall be surrendered or modified if the person concerned obtains other employment. It is outright compensation for loss of office and is regarded as a contractual obligation; when it is over it is finished with, and the person concerned can go round the corner and offer his services at double the salary and still keep the compensation in his pocket.

This principle is also applied in the public service. In Section 1 of the Superannuation Act, 1957, a new set of gratuities was given the approval of the House of Commons for temporary and unestablished civil servants who are discharged on grounds of redundancy after a period of not less than five years. This House passed the improved scale of gratuities for displaced temporary and unestablished civil servants discharged on the ground of redundancy, and the scale was applied to those who were declared redundant on the closing down of ordnance factories. The principles in the Civil Service gratuity system are a combination of length of service and rate of pay, which is the usual way in which these compensation terms are arranged.

I agree with my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) that we are probably doing more in this Clause than we realise. I believe that the time is rapidly approaching when the whole country will have to deal with the question of compensation for redundancy. As my hon. Friend the Member for Farnworth (Mr. Thornton) said, we are on the threshold of revolutionary changes in industrial technique, in the pattern of our trade and commerce, and in the shape of our industrial production, and things are happening today, particularly in the coal industry, which we should have regarded as unthinkable five years ago. Also, who would have believed that our transport industry would be in such dreadful difficulties as it is today?

The time is coming when the nation will have to take on more responsibilities in this field than merely the meagre compensation for being out of a job, which is unemployment benefit. The mineworkers have, by agreement in the industry, their own redundancy compensation scheme. Whether it is adequate and whether it measures up to the Civil Service scheme I do not know.

In the context of the cotton industry we shall be spending public money in compensation. In those circumstances, is it right and fair to leave the compensation terms wholly for negotiation between the employers and the workers? I do not think it is. We ought to have a say in the matter, even if we limit ourselves to laying down some principles upon which the compensation terms should be arranged.

I am a secretary of a trade union and my hon. Friend the Member for Farnworth is closely connected with the trade union movement in the cotton industry, and we both appreciate how jealous trade unions are of the right to negotiate the conditions of service for their members with their employers, whether they be the Government or private employers, and I am suggesting nothing which would seek to injure that general principle. However, when public money comes into it, and when a public responsibility is assumed by this House, such as we are now discussing, I believe Parliament has a right to say something about the way in which the money shall be spent.

In the debate on an earlier Amendment, the President of the Board of Trade suggested that he had put the unions in a fairly strong position by declaring that approval to a scheme would be withheld unless satisfactory terms were arranged between the representatives of the workers and the employers for compensation for redundancy. However, my hon. Friends felt that not only were the safeguards for the position of the workers not strong enough, but that the workers were scarcely in a very strong position anyhow.

All I know about the suggested compensation terms is what I have read in the newspapers. I see that proposals have been made which base compensation not on length of service but on age, irrespective, so it seems, of length of service in the industry. That may be one method—it may be the only practicable method—of arriving at a compensation scale in these circumstances, though, frankly, I cannot see the case for giving compensation of a week's wages to a girl of 22 who has been in the industry for only twelve months. That does not make sense to me, but my thinking may be too conventional. I cannot, however, see what basis there is for compensation for a young worker after very short service in one industry. What we want to do is to compensate the people who have devoted their lives to an industry. We want to give them the weight of this compensation, for they are the people who will suffer socially and financially.

I must not presume to lay down the terms upon which the whole structure of compensation should be fixed, but I believe that the principle embodied in the Amendment should be enforced. We cannot have compensation paid which is subject to withdrawal if a person gets a job a week or two afterwards. We cannot have compensation which has to be modified if a worker gets a job afterwards at a lower rate of pay—like some kind of special hardship allowance written into the compensation. I do not call that compensation; it is something quite different. The latter arrangement would be more comparable with the special hardship allowance under the Industrial Injuries Scheme, and this compensation is not to be put on that basis at all.

Under the proposed scale of compensation, not a single person, no matter what his age or length of service is, will get compensation amounting to one year's pay. Temporary clerks in the Civil Service get no compensation during the first five years. If they serve between five and ten years, they get one week's pay for each year of the first five years and two weeks' pay for each year of the second five years. If they have more then ten years' service they can get four weeks' pay for each year beyond ten years, with an overall maximum of one year's pay. That is a scale of compensation more generous than we are discussing. Why should it be? Why should the workers in ordnance factories and temporary workers in Government offices get more generous compensation than workers in the cotton industry when public money is to be used for both? If it were compensation arranged between the employers and the workers without calling on the State to come to their aid, and if we were not asked to assume a national responsibility for that operation, entirely different considerations would arise.

Therefore, the Amendment is most important. It lays down at least one condition—I should like to see it lay down half a dozen more—and that is that compensation should be paid unconditionally, which is most important. If it is said, "If this is how it is to be done, there will be less compensation to pay out", I suggest that the structure of the compensation scheme could be adjusted to give the emphasis where it is most needed. That is all I can say, but I feel that this is one of the most important things that we are discussing in connection with the Bill.

I repeat most emphatically that we are approaching the stage when the question of redundancy in industry will have to be looked at entirely afresh and apart from the normal inadequate compensation for loss of employment which we give under the National Insurance Scheme. We must assume our national responsibilities where they are appropriate in order that our industries may reshape themselves, that we may embrace new techniques, change the pattern of our industry and go forward fearlessly in meeting the challenge of the future. We can then ensure that those whose livelihood is affected by these changes are adequately dealt with out of the rising national wealth which should be the consequence of these big changes in our industrial activity.

7.0 p.m.

Mr. Arthur Holt (Bolton, West)

I should like to put a question to the President of the Board of Trade so that we may get the position clear. When schemes are put before him, does he intend to look at the compensation provisions? Does he intend to make any judgment as to whether the scheme which has been agreed—we will assume that it has been agreed—between the two sides of the industry meets the ideas the Government had in mind when they proposed that there should be a compensation scheme for the employees of the industry?

This is a very important matter. Earlier in the debate the right hon. Gentleman pointed to the White Paper which says that it shall be a condition of the Exchequer grant that compensation is to be paid to displaced operatives. Presumably, the Government could not have meant that it should be just nominal compensation. They must have had some idea of what they considered to be adequate.

The truth of the matter is that the whole of the compensation comes from the Government. The hon. Member for Cheadle (Mr. Shepherd) seemed to be right off the line when he talked about the generosity of employers. The employers will make a levy, but they will get a net gain for themselves after they have paid the compensation to the work-people. Consequently, all the compensation for the employees comes out of Government money. We must know whether the President of the Board of Trade conceives it to be his duty to look at the compensation schemes for employees or whether he will say, "This has been agreed within this section of the industry. Therefore, it is not a matter for me, and not a matter for Parliament."

If the right hon. Gentleman is going to look at the schemes, and if a scheme for one section of the industry is nothing like as generous as the schemes for the other sections, he may consider this a reason for sending it back for the trade to have another look at it. If he decides that he has an obligation to look at a scheme, will Parliament be able to have a look at it? My reading of the procedure when a scheme is submitted is that it will be by Order, and it seems to me unlikely that anything to do with employees' compensation will appear in an Order. Consequently, it will probably be out of order for Parliament to discuss employees' compensation when discussing an Order dealing with a scheme, unless it is accepted and understood that the President of the Board of Trade has an obligation to see that it is a reasonable scheme and that phrases appropriate to that are included in the Order.

I hope the President of the Board of Trade will make clear whether he considers that he has an obligation to see that a compensation scheme is adequate in the eyes of the Government on the basis of their originally-conceived idea of compensation for employees.

Mr. Tom Brown (Ince)

I support the Amendment, and would like a little more clarification of the position from the President of the Board of Trade. The subsection with which we are dealing is confusing employees in the cotton industry, particularly the elderly employees. As my hon. Friend the Member for Sowerby (Mr. Houghton) said, there is no point in providing compensation to any large degree for someone who has been engaged in the industry for only twelve months. On the other hand, we have to remember the men who have been engaged in the industry for forty or fifty years and who will find it extremely difficult to secure work of a character similar to that which they have done in the industry, or work with similar wages. As they grow older that difficulty will be intensified.

I hope that the Government will not regard the Amendment with fear and trembling. It is not something of which they need to be afraid. The principle has already been established in many branches of the Civil Service, and in the Army, the Navy and the Air Force. Redundancy has been paid for, in many cases on a very generous scale. I know that we are discussing not scales of compensation, but the question of compensation embracing as many employees as possible.

After the warning given by my hon. Friend the Member for Farnworth (Mr. Thornton) of what lies in the future, my hon. Friend the Member for Sowerby pointed out that the signs of the times indicate that the pattern of industry will continually change, and that the results of those changes will have to be faced. The Amendment asks the Government to face this fact. Who would have dreamt in 1947 that we should have a redundancy payment scheme in the mining industry in 1959? Now we have to face the fact that the cotton industry must contract. That being so, to what extent are we going to provide for those unfortunate people who become redundant? There may be an expansion in certain branches of the industry, but an overall contraction must take place, and it will bring hardship in its train. That hardship can be minimised if we apply the right principle of compensation.

I know that there is an element of risk, and some question whether the Government are doing the right thing, but those people who are made redundant must have somebody to care for them in the transition period, while they are moving from one industry to another. The Clause does not give a clear interpretation of the Government's intention in the matter of the payment of compensation. The Government should make the Clause as wide as possible, and should ensure that the ordinary man who finds himself with very little hope of getting employment in any other industry, at the age of 45 or 50, does not have to have recourse to the unemployment exchange or the National Assistance Board. We can do that only if the right hon. Gentleman makes the Clause as simple, generous and far-reaching as possible.

That is all the Amendment seeks to do, and I hope that the right hon. Gentleman will have no hesitation in accepting it. If he cannot accept the present wording perhaps he will undertake to consider the question between now and the Report stage.

Sir D. Eccles

This is a very important matter, and I am grateful for the way in which hon. Members have seen, in what the Government are trying to do, a new step in the direction of dealing, upon an industry basis, with a contraction of this kind. In present circumstances the cotton industry is probably unique, although no doubt from time to time in the future similar problems will come before Parliament. I should be glad to feel that the first effort had been made from this side of the House, in this Bill.

The Amendment would provide that compensation payments to displaced workpeople should be unconditional, and that whether a man got another job or not would make no difference to the sum he was paid. I appreciate the point of that. When we first considered this matter, we said that the compensation payments must not attract tax. Next, we said that they must not be arranged in such a way that they reduced a man's entitlement to unemployment benefit. That is quite a difficult thing to do, as the trade unions and employers have discovered in conversations they have had with the Department of my right hon. Friend the Minister of Pensions and National Insurance. Nevertheless, I believe that that difficulty can be overcome.

I now turn to the question of the method to be used. There is not an unlimited sum to be paid out in compensation, as is recognised by everybody on both sides of the industry. Some of the money will be paid by firms which get nothing back from the other part of the Bill. There are some firms which will neither claim anything for scrapping machinery nor apply later for a re-equipment grant. It is not correct to say that all this compensation money will merely shift from one hand to the other. We are dealing with the industry not as one unit but as a series of firms, upon all of which the levy will fall.

There is a certain sum to be paid out in compensation, and I would ask the Committee whether it thinks it reasonable to take the view of the hon. Member for Ince (Mr. T. Brown), namely, that the whole emphasis should be put upon the older people, who, on his definition—and he is right—will find it more difficult to get another job, especially at the same wage. If that is to be the emphasis, we do not want the Amendment, and neither do the trade unions, because they say that since the sum is limited it will place those people who have difficulty in getting another job on the same footing as those who get another job at once. The unions say that the latter should not be allowed to take so much out of the kitty.

If we were to adopt the principle of wholly unconditional compensation, such as is asked for by the Amendment, it follows that there would be less for those who were unfortunate and did not get another job very quickly.

7.15 p.m.

Mr. S. Silverman

Is that so?

Sir D. Eccles


Mr. Silverman

That argument assumes that a specified sum is earmarked for compensation, but there is no such earmarked sum.

Sir D. Eccles

The hon. Member cannot have followed my argument. Although there is not a figure in £ s. d., there is a limit to it.

Mr. Hale

What is the limit?

Sir D. Eccles

The limit is the subject of negotiations now going on between the two sides of the industry, but both sides know that the sum is not unlimited. Therefore, whatever sum is agreed as being reasonable to devote to the compensation of workpeople, we are left with the question of the method of distributing it. People engaged in the industry have told me that they do not want to have all the payments of compensation made unconditionally because, however big the total sum, in certain cases that system would result in payments being made to people who immediately got another job. In the view of some representatives of the workpeople it would be better for such persons not to receive an unconditional payment, thereby getting more from the total sum than those who did not get another job immediately.

Mr. Thornton

I accept that the view which the right hon. Gentleman has put represents the opinion of one union, but I very much question whether it represents the view of the majority of unions concerned in these negotiations.

Sir D. Eccles

It is difficult for me to put something into a Bill when I know that at least one union is against it. Is it not better to allow the representatives of the men and the employers to see if they can agree on a method of distributing the compensation money?

I am not sure that the compensation method will be exactly the same for each section. As I understand it, some trade unions feel that the basis for compensation in their section should be rather different from that of other sections. It seems to me sensible to allow people who have spent their lives representing their members to bring forward a scheme which they regard as the best.

It is not the wish of the industry that the details of compensation schemes should be included in the terms of the Orders put before the House for approval. They want to settle these matters themselves, according to their tradition, and if they do settle them, as I very much hope they will, will not that content hon. Members? I should have thought we could have confidence in them, as representative of their members.

Mr. Hale

Is not this a somewhat romantic description of a scheme which provides that the Government shall not give a farthing to the workers but will offer money to the employers on terms that when the employers have worked out their possible putative profits, subject to tax, they shall, as a condition, have to make some gesture to the workers out of those putative profits or estimated net profits, and make such scheme as best they can, the representatives of the workers not having been consulted by the Board of Trade and not having been drawn into the negotiations—having virtually no recourse to the terms of the Act, but being put in a position that, with a little luck, they can get something out of the employers if the employers decide that the Bill will work?

Mr. J. T. Price

What the right hon. Gentleman has said appears to be sweet reasonableness. I know that he wants to obtain an agreed solution to this most difficult tangle, and to have the concurrence of the trade unions, but I do not think he realises the inconsistency of his argument. He resisted an earlier Amendment on the ground that an agreement might be wrecked by a splinter group, or a minority of people who would not agree. Now the right hon. Gentleman is resisting this Amendment on the ground that perhaps a minority of people want it and the others do not. It is the mule spinners who are particularly anxious about this. Let me not mince words in the matter. I do not believe that the majority of trade unions want the sort of tentative settlement which the right hon. Gentleman has quoted, and for it to be quoted as a splinter group argument in the opposite direction to the splinter group argument he has raised is wrong.

Sir D. Eccles

I wonder whether the trade union representing the mule spinners would like to be called a "splinter group." Perhaps the hon. Gentleman can answer that himself.

I undertook not to disclose the basis on which tomorrow's discussion will take place, but I can assure the Committee that it is not a basis of unconditional payments all the way round. I advise the Committee to let the two sides meet tomorrow to see whether they can find a basis which gives the best interpretation to their wishes. I do not think it wrong to say that there is some modification taking place in the original views, which I welcome, because I did not think that the original proposal was perhaps quite the right one. But the indications are—I do not wish to be over-optimistic—that we are getting somewhere near it.

Mr. Jay

I am sure we all wish to see what the two sides conclude when they meet tomorrow. I do not think it is unecessarily sound to say that there is a limit to the total amount of compensation, and that therefore if more compensation is granted to those who do get another job there will be less available for those who do not. No doubt there is some absolute limit beyond which it is impossible to go, but there is no guarantee that that limit will be reached. Were it the case that as a result of extending compensation to those who get alternative work as well as to those who do not the total amount of compensation was increased, the President's argument would not be valid. I would have thought that by including those who get alternative employment it would actually increase the total amount of compensation. Then they would be better off and the others would not necessarily be worse off.

As to the President's intimation about the view of the unions on this matter, I can only say that it is the view of my hon. Friend the Member for Farnworth (Mr. Thornton)—who ought to be at least as well-informed—that the majority of those concerned certainly favour the principle of unconditional compensation both for those who get alternative work and those who do not. In addition, there is, after all, validity in what was said by my hon. Friend the Member for Sowerby (Mr. Houghton), that this is not just an arrangement between two sides of industry; it is an arrangement in virtue of which public money is being paid out by Parliament. So I think that we have a right to express a view about it.

I wish to ask the President what the Bill means as it now stands. Whether we vote on this Amendment or not, we ought to be clear about what the Bill now means. The essential words which we are discussing in subsection (2, b) are: … compensation in respect of loss of employment due to the elimination of excess capacity. Do the words compensation in respect of loss of employment now in the Bill mean compensation after a man loses his existing job, even though he gets another one? Or does loss of employment in this sense mean loss of the present job resulting in unemployment? I think it essential that both this Committee and those concerned in the industry should know what the Bill means as it is now drafted.

Sir D. Eccles

The exact definition of loss of employment is one of the things being discussed. But I have always taken it that it would actually mean losing a job in that particular firm. Even though the person concerned went to another part of the industry, that would not debar him from compensation. But I must make plain that I think it right for employers and trade unions to see what suits their own members best and to tell us.

Mr. Jay

I am sure that is so, but the question of what the President now means is not one to be decided by the unions and the employers. It is something about which the President should inform the Committee. I understand that he is saying that the form of words in the Bill means that a person is eligible for compensation if he loses his existing job, even though he gets another one.

Sir D. Eccles

Yes, it does mean that. But if between them they wish to say that the compensation is reduced if a person gets another job, and if that is what they want, that is their affair.

Mr. Hale

I do not wish to hold up this debate, Mr. Arbuthnot, but when your predecessor gave a Ruling from the Chair we were told that we were discussing three Amendments together. I was deputed to move the second of those three Amendments. I assumed that it would be moved formally. But I have been suffering from a physical defect because I had breakfast at seven o'clock this morning and had no more food until 6.30 this evening. I felt what the witness at the Hola Camp called "a call of nature" and I departed from the Chamber for a few minutes. Upon my return I found that apparently the second Amendment had not been formally moved and my view seems to be confirmed by the fact that the right hon. Gentleman—

The Temporary Chairman (Mr. John Arbuthnot)

The hon. Member will be aware that an Amendment cannot be moved until we reach it.

Mr. Hale

With respect, that is a completely and diametrically opposite Ruling to the one given from the Chair not only in the debate but before the debate, which was—

The Temporary Chairman

I think that the hon. Member has misunderstood. The Amendment to which he refers may be discussed together with this one but not moved until it is reached.

Mr. Hale

I am much obliged. I should not like to waste the time of the Committee for a moment in discussing what is, after all, a formality. But, apparently, the President of the Board of Trade has felt himself inhibited until this moment in dealing with this matter because it was not moved.

Sir D. Eccles

I did not feel inhibited.

Mr. Hale

But the right hon. Gentleman did not refer to it, he made no reply to it. He did not deal with this extremely important proposition for one moment. [Interruption.] It is not right when Government Whips pop into the Chamber almost by accident for them to intervene without knowing the facts. The fact is that the right hon. Gentleman made a perfectly fair, decent and respectful announcement in which he kept saying, "This Amendment," and "This Resolution", from start to finish. He never suggested to anyone, in case they were listening, that we were supposed to be discussing three. Therefore, it becomes necessary to ask whether, before the debate concludes, he will remember that we are discussing three Amendments, the second of which says: No order of revocation made under this section shall have the effect of relieving those carrying on business in the industry who had been parties to the scheme of reorganisation from any obligation previously entered into for the payment of compensation to persons employed by them. I know very little about procedure and I am sure that the Ruling just given is probably right, and I accept it with humility. But, just in case of error, let me say that if it is right to move it now, I move it now; but if it is wrong to move it now I do not move it now, and that I am prepared to move it at any time convenient to the Committee.

If it is clear that we may discuss it now, I should like to say that I think this is an Amendment which seems to have been marvellously drafted. It is a great improvement on many which we have discussed from the point of view of draftsmanship. I think that it is absolutely clear and that no one can quarrel with it. I now recall something I forgot when I made those remarks, which is that I drafted it myself.

What arguments can be put against this? The right hon. Gentleman says, "I want to have a reserve power to alter the scheme," and that is reasonable. It is a reasonable, hypothetical proposition for discussion and I do not regard it as so wholly revolting that it should be rejected out of hand. I do not think that if we lay down terms for compensating individuals for their loss of employment we should be able, six months later, to say to those people, "We are very sorry, but we have had second thoughts."

7.30 p.m.

I beg hon. Members on both sides of the Committee to believe that I am a gentle-minded man, and whenever I have to suggest the possibility of some mild duplicity I find it very difficult and painful to do so. If, however, we are to have power to make a proposal for a reorganisation at one moment we should not have the power to make a proposal for a new reorganisation which does not provide the same compensation for employees afterwards.

I submit that if that is the proposal which this Amendment is covering, the erudite Dr. Gallup might promise that there would be an election between the two operations. Surely it has happened before. There is every sympathy for the man who is taken in once by a trick. Some of us were in 1955. It is asking a lot to say that we should pass a Bill which gives power before an election to make a scheme for reorganisation which might provide that some of my constituents would have compensation and leave power after the election for the scheme to be withdrawn and the compensation cancelled. I do not suggest that that is in the mind of the Government. I do, however, suggest that if by any chance the election went wrong and they got in it might occur to them.

The right hon. Gentleman up to now has been most courteous and frank with the Committee. He has made perfectly reasonable and fair explanation, and I think that he should get up at once and say, "Nothing is further from our thoughts." We recognsie that it would be monstrous to say to a man who has never had much money in his pocket that we are now making an arrangement which will enable him to pick up £100 and then, when all his plans have been built up, treat him like a man whose winning application for the football pools had gone astray owing to the mishandling of a Conservative Postmaster-General. [Laughter.] I am not trying to be funny. I know this is difficult to believe, but I know of men committing suicide over the loss of £15 or £20. I have known men who have endured poverty to the extent that the sort of payment envisaged to them means something of tremendous importance. Unfortunately there are only a small number of payments to be made to a regrettably small number of people, but, nevertheless, the sort of payment that could be made to a man of 60 or 65 who has spent his life in the industry is something of tremendous importance.

We cannot envisage the misery, the depression and the disappointment which would occur. The President has power to say, "In considering these other factors, in considering the various schemes, in having regard to the events which have transpired since, re-exploring every avenue and turning over every stone, and looking the facts firmly in the face, I have come to the conclusion that I will now make a new scheme and that Mrs. Jones of Bolton, with her fifty years' service, is not going to get £300 or £400 compensation, she is going back into the pool and we will reconsider her case." That would be a terribly cruel and really cynical thing. I do not believe that the President of the Board of Trade would wish to do so. I therefore hope that he will take the opportunity of saying that this is the simplest Amendment in the world to accept, that it is admirably drawn, well put, and that he is going to accept it.

Sir D. Eccles

I should like to satisfy the hon. Member for Oldham, West (Mr. Hale) as soon as I can. There are two separate points in these other Amendments which I think that you, Sir Charles, said we could discuss together with the one moved by the hon. Member for Farnworth (Mr. Thornton).

The first is that if a firm scraps its machinery between 23rd April and the date on which the Measure comes into operation, will the labour displaced by that elimination of surplus capacity be on all fours with that displaced by elimination of surplus capacity after the date when the Measure comes into operation? The answer is, "Yes, it will", and the Cotton Board, as we say in the White Paper, paragraph 36, will see that is so. I shall not approve any reorganisation scheme brought forward by any section which does not, in fact, see that the workpeople displaced between 23rd April and the date on which the Measure comes into operation will be entitled to it. That is accepted, and the Cotton Board will do it.

There is a more difficult point, and that is the one for which the hon. Member for Oldham, West was really pressing the Committee. He asked, if we had a revocation order for any reason, would those workpeople who were still in receipt, let us say, of weekly payments of compensation feel secure? Of course, we want them to be secure—of that there is no doubt. The first thing to be said about it is that the compensation payment will not be an obligation on a particular firm. There will be a central pool for each section and the Cotton Board will collect a levy over the whole of the members registered in that section and the moneys will be paid out centrally through the agent that it appoints.

Therefore, the firm itself is not in question because it will not have the obligation; the obligation will rest on the central pool. The only thing that might go wrong is if the Cotton Board ceases to collect the levies still outstanding because of a revocation order and, therefore, the central agency is not in funds to continue the payment to the workpeople displaced. I cannot conceive that the Cotton Board would do anything of the kind. In Clause 1 (8) it is possible to make a saving clause to a revocation order, which, in fact, we should do to see that the levies were still collected.

I do not know whether the Committee will take that as an assurance from me. If so, I do not think that we need it in the Bill. It is really not conceivable that we should make a revocation order, which I think very unlikely in any case, and not put into that revocation order a saving proviso that, if levies still have to be collected which are then to be paid out to individuals, that should be done.

Mr. Hale

I apologise for interrupting because it is my fault entirely on this occasion. The second new Clause on the Notice Paper—"Conditions for Compensation"—is also, I believe, being discussed with this Amendment. I understand that the Chairman's Ruling was that discussion on it was open.

The real point of that, apart from seeing that these obligations continue, is to see that the compensation payable to workers will be in respect of workers displaced from 24th April, 1959, and not, as the Bill seems to read, from the date of the passing of the Act. The argument in favour of that is the simple one that if we are compensating employers back to 24th April—a difficult and complicated procedure—we must do the same for the workers. I apologise for the fact that I failed to mention this when discussing the second Amendment. I had overlooked the fact that we were discussing three Amendments and the new Clause together.

Mr. Frank Allaun (Salford, East)

I think the Committee is in real danger of overlooking a most serious threat to the operatives concerned. There are a number of them in my constituency and I hope that they will not be unemployed at all, but, if they are, the main danger to them is this question of weekly payments.

I should bitterly oppose the passing of the Bill unless we in this Committee made it clear that on this question the operatives were entitled to lump sum compensation. It is no secret that this is one of the main bones of contention between the unions and the employers. I put it to the Committee that it is vital that we should lay it down that if £30 million of public money is to go to the industry there should be this essential principle. I think that very little of the money will reach the operatives. As the President of the Board of Trade rightly said, difficulties have already arisen on the ground that if compensation is paid in the form of weekly amounts there are, first, difficulties with the Income Tax authorities. The President has said that efforts are being made to overcome those difficulties, but secondly, there are difficulties of reduction of compensation through unemployment benefit. Both those kinds of difficulty can be overcome quite simply if compensation is paid by way of a lump sum, as it is paid to directors of big companies when they retire.

Another reason for the importance of the principle is that if a man or woman in Salford aged 50 becomes redundant after thirty-five years in the industry and gets a job, possibly at a lower wage, for a week or two elsewhere, but then becomes unemployed, there is a danger of that man or woman getting nothing unless we insist on lump sum compensation. This is a vital issue and I am amazed that we are letting it go through without insistence on this point. The President said that a certain sum is to be given in compensation to operatives. Does that mean that if weekly payments are made instead of lump sum compensation being paid and that if some of these people get jobs shortly afterwards and then become unemployed, they will lose their compensation? I hardly believe that those who get continual compensation will have it greatly increased to make up for the reduction in the payment of compensation to those who lose it. I do not believe that it is the intention, but I think that the operatives will come out almost with "nowt" unless lump sum compensation is paid.

I appreciate the motives of hon. Members on both sides of the Committee, but I feel that unless we insist on this principle we shall be selling out the operatives and that they will get almost nothing.

Amendment negatived.

Mr. Jay

I beg to move, in page 2, line 11, at the end to insert: and (c) that the reorganisation scheme makes adequate provision to ensure that not less than seventy-five per cent, of the compensation provided for thereby shall, within three years of the payment being made, be invested in an area which, in the opinion of the Board of Trade, is likely to suffer loss of employment as a result of reorganisation schemes under this Act".

The Chairman

This Amendment can be discussed with the next two Amendments:

In page 2, line 11, at end insert: (c) that in deciding which capacity is to be eliminated on the ground that it is excess capacity due regard has been had to the social consequences including employment of such elimination, bearing in mind the extent to which the district concerned is dependent upon cotton and to the existence or otherwise of other industries in the area affected. In line 11, at end insert: (c) that the reorganisation scheme makes adequate provision for the application of any moneys paid as compensation for the elimination of excess capacity to providing alternative employment in alternative industries in respect of employment lost directly or indirectly as a result of such elimination.

Mr. Hale

On a point of order, Sir Charles. We have been discussing three Amendments and a new Clause. I had an official Ruling from the Chair that I could not move an Amendment in the group until the discussion on the first of the group had taken place. I do not want to do more than move the Amendment formally, but I think that at least the President of the Board of Trade might reply to it when I do so, because we have not had a reply, and one of the Amendments in the group is vital. It may be that we take them in the order in which they appear on the Notice Paper and that I am wrong and ought to wait to move an Amendment when we reach it by numerical order.

7.45 p.m.

The Chairman

The Amendments are taken when we come to them. Although we can have a Division, there can be no more speeches on them.

Mr. Hale

I was wondering whether we could have an answer from the President of the Board of Trade.

The Chairman

I am afraid not. The agreement was that they should be discussed together with the new Clause, "Conditions for Compensation".

Mr. Hale

With the utmost respect to the Chair, I must press this matter. I intervened earlier to point out that the second new Clause, "Conditions for Compensation", raises an important new principle that compensation for workers should be ante-dated to 24th April, 1959, the same date as that for compensation to be paid to employers. The President of the Board of Trade did not say a word about that. Perhaps with the leave of the Committee he could say something about it?

Sir D. Eccles

The hon. Member appeared to be listening to me when I made a speech before he rose for the second time and explained that point. He got up then and, with remarkable courtesy, thanked me for dealing with the point. I dealt with it before he got up on the second occasion.

Mr. Hale

That really is not correct. The right hon. Gentleman is wrong. Three Amendments and a new Clause were being dealt with together, and I made a speech about the second Amendment in the group and overlooked the new Clause. The second Amendment was the one I rose to move, and I overlooked the fact that I had failed to mention the second new Clause. The answer may be hidden in the observations of the President of the Board of Trade, but several of my hon. Friends have expressed doubt about the attitude of the President to that new Clause. Surely it would be simple for him to say whether he is accepting ante-dating to 24th April, 1959, or is not. I thought the second new Clause was selected, and it may be that we can raise this question in that way.

Mr. Jay

I understand that there is to be an opportunity to divide on the other Amendments later on.

The Chairman

Certainly there will be an opportunity to divide on the paving Amendment to the new Clause, the Amendment to page 3, line 27.

Mr. J. T. Price

I do not want to add to the confusion, but to get on with the business. There will be chaos if we go on like this. Your predecessor in the Chair, Sir Charles, said when the first Amendment in page 2, line 11, was moved that with it we could discuss the Amendment in page 3, line 27, the Amendment in page 3, line 35 and also the second new Clause, "Conditions for Compensation". Am I to understand that because of the mere fact that the first Amendment in that group has been negatived without a Division the Committee is precluded from having a vote and recording a decision on the subsequent Amendments I have mentioned? If that is the intention, it was not clearly indicated by the Chair at an earlier stage in the debate.

The Chairman

I can make it perfectly clear. What the hon. Member has said is exactly what was arranged. We have finished with the first Amendment in page 2, line 11, and we can have a Division, if desired, when we get to the paving Amendment to the new Clause, the Amendment in page 3, line 27.

Mr. Hale

With great respect, Sir Charles, that does not cover the point. Your predecessor ruled specifically in the hearing of everyone present that I could not move that Amendment until we had completed the debate on the first Amendment.

The Chairman

It cannot be moved until we get to it.

Mr. Hale

I am not challenging that, but I was making an introductory sentence, and my second sentence is the one which matters. The Chair having ruled that I could not move it, the President of the Board of Trade did not deal with it because it was not moved. There has been no answer to the second new Clause, and in those circumstances, in view of a genuine misunderstanding and as we cannot press the Committee to divide on a matter we have accepted in discussion and negotiation, surely we are entitled to know what the answer of the President is.

The Chairman

The answer has been given to the proposed new Clause.

Sir D. Eccles

The whole Committee, except the hon. Gentleman, heard what I said, and we must bring him with us. I gave an undertaking that it would be antedated to 23rd April and the compensation payment would be payable to men who lost their jobs between that date and the coming into operation of the Act.

Mr. Hale

I am very grateful to the right hon. Gentleman.

Mr. Jay

If I have not become confused, I think we are now back to the second Amendment in page 2, line 11.

Mr. S. Silverman

As the announcement has not yet been made from the Chair, may I ask which, if any, of the other Amendments on the Notice Paper are to be discussed at the same time as the one which my right hon. Friend has moved.

The Chairman

The right hon. Gentleman has moved the second Amendment in page 2, line 11. After the disposal of this Amendment a Division may take place on the next Amendment, also in page 2 line 11 without further discussion. The next Amendment, in the name of the hon. Member for Nelson and Colne (Mr. S. Silverman), is not selected for Division, and there will be no Division on it. There will be two Divisions at the end of this discussion.

Mr. Jay

We are, then, discussing three Amendments together.

The purpose of the first Amendment is the relatively simple one of securing that some part, at any rate, of the public money paid in compensation for the scrapping of machinery is expended in the Lancashire area for the development of new industry and the provision of new employment.

Mr. Houghton

I hope my right hon. Friend will not confine himself strictly to Lancashire. The West Riding of Yorkshire is also concerned.

Mr. Jay

I hope my right hon. Friend will not exclude Scotland, which contains certain cotton areas. We need not be perplexed over that point, because the Amendment contains a formula which we hope will cover the problem of which areas are to be eligible for the sort of schemes that we have in mind.

The general principle that some of the money paid out in compensation should be spent on new industry in Lancashire was put to me by both sides of the industry, by representatives of local authorities, and by people of all schools of thought concerned with this problem when I was in Lancashire recently. There is both logic and practical sense in this idea. We must remember that Parliament is voting large sums of public money for the destruction of industrial capacity and for re-equipment. There are some who are prepared to argue—and my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) put forward this point of view on Second Reading—that it is doubtful whether we are justified in expending public money for this purpose at all. That is a view which can be very cogently argued, and is one which is held by many people in the areas concerned.

I do not go as far as that. A case can be made for spending the money provided, and provided only, that we impose stringent conditions for the expenditure of this public money. The President can tell me if I am wrong, but this is probably the first time that public money has been voted by Parliament for the elimination of productive capacity in industry. In the Cotton Spinning Industry Act, 1936, to which my hon. Friend the Member for Nelson and Come (Mr. S. Silverman) referred, although spindles were to be destroyed, the money came from a levy on the industry and not from the Exchequer.

In Sir Stafford Cripps's scheme immediately after the war, a scheme in which public money was involved, the money was used wholly for re-equipment and not for the elimination of capacity. In the tinplate industry, where there was a scheme for the elimination of capacity which involved compensation for workers, again no public money was used. This is the first time, or at any rate almost the first time, that we have voted public money for the destruction of productive capacity.

There must be a strong argument for using large sums of the taxpayers' money. When all is said and done, other industries could advance the argument: "If this is being done for cotton, why cannot it be done for us also?" There are other industries which are contracting. I will not give a list now, but we can think of the cinema industry right away. I suggest to the President that it is for his benefit as well as the benefit of Parliament that we should be able to say to these other industries:" This money in the case of the cotton industry was expended only with very stringent conditions. You could have it, too, if you were prepared to accept similar conditions."

The Amendment suggests the expenditure of 75 per cent. of the compensation provided in investment, but I am not being dogmatic about that. The argument is put moderately, because it might be said that it was not practicable to use all the money. I think we all agree, in spite of the importance of the discussion we have been having about compensation, that, from the point of view of the workpeople who lose their jobs, it is more important that they should get another job than that they should receive compensation immediately for loss of their previous one. We are, therefore, suggesting that some part of the money paid to destroy the spindles and looms should be used for the introduction of new work in the area.

I do not think the President will contest the attractiveness of this idea in principle. He will probably be disposed to argue that it will be very difficult to carry it out in practice. There may be the objection that if we made this a condition some firms might say: "We just have not any scheme. It is not in our power to produce a scheme for introducing new work, although many firms in Lancashire and other cotton areas are doing so."

If an Amendment of this kind were included in the Bill, the answer would be that if they were not able to produce such a scheme they would not receive public money for scrapping the machinery. That would not necessarily be a tragic consequence, because there are some firm arguments against that in principle anyway.

The President might also argue that administratively and financially this would be a very difficult idea to put into practice; and also that it would be very hard to enforce an undertaking that some proportion of the actual sums paid out in this way had to be reinvested in some identifiable physical scheme of industrial development. There has been at least one precedent for this. If the President is frightened by that line of argument there is the precedent of the Excess Profits Tax refund at the end of the war from 1945 to 1956 onwards.

8.0 p.m.

I expect that the President will recall that Section 28 of the 1941 Finance Act provided that 20 per cent. of the money paid during the war in Excess Profits Tax would be refunded by the Inland Revenue after the war to the firms concerned in virtue of particular re-equipment schemes which were put into operation by the firms after the war. At first sight it might have been argued that it was very difficult for the Inland Revenue to return this money in virtue of schemes of re-equipment worked out by the firms, but in fact it was done, and about £400 million was returned from the Exchequer in the immediate postwar years.

Roughly speaking, the method by which that was carried out was that the firm had to say, "Here is a specific scheme of re-equipment. We will build these buildings and install this machinery, and it will cost so much." If the Commissioners of Inland Revenue were satisfied that it was a reasonable and genuine scheme, the money was paid to the firm, otherwise it was not paid. I will not go into that at length, but I quote it to suggest that we cannot turn down the idea suggested by the Amendment, for which there is much support in the area, simply on the argument that it is administratively impracticable. That is at least one precedent, and others could be mentioned.

The essential point is that the most important element in this problem is the introduction of new work into the area. New work can be introduced partly by new firms and partly by existing firms which are not cotton firms. In the British Northrop factory, for instance, new capacity is being installed to make school furniture in association with firms in the south of England. This is an excellent scheme, which is under way and which we ought to encourage, by a firm which hitherto has made only textile machinery. In addition, it is quite possible—and this has occurred in many instances—for cotton firms themselves to introduce new work, whether in textiles or in a different industry. There are many examples of that.

We commend this idea to the President because it has the merit that in so far as public money is spent for this unprecedented purpose of eliminating productive capacity, it would also be used for the introduction of new work and new employment in the areas concerned.

Mr. J. T. Price

I rise briefly to support the Amendment. Whatever the President may tell us in reply, he will at least be generous enough to concede that the principle and the intention which lie behind the Amendment are in the interests of the cotton areas.

In my limited spare time, when I am not carrying out my duties in the House, travelling about a scattered county division or perhaps mowing the lawn on a Sunday, I try to take an interest in one or two of the organisations which exist for promoting the welfare of Lancashire, part of which I have the honour to represent. I have been thinking seriously about the practical difficulties which might be met in trying to put into effect the terms of the proposal contained in the Amendment. I do not wish to put it forward merely as a debating point which has intrinsic merits ethically and economically but which may he difficult to apply in practice, because I know that that difficulty will have to be met.

One of my hobbies is to pay some attention, when I have time, to the affairs of the Lancashire and Merseyside Industrial Development Association. This body is doing good work for my native county. I have always been proud and happy to support it, as far as I have been able to do so, and other hon. Members have supported it, too.

Whenever we have discussed industrial development in those areas of Lancashire which are hit by the decline of cotton, we have placed emphasis on the need to introduce new industries into those areas. In the long term, that is a sensible course for any public man to advocate. When we have come to the practicalities of introducing new industry we have often been faced with the limitations of the Distribution of Industry Act and the lack of power on the part of the Government to direct industry. I am not making a party point, because this applies to any Government, whether it is a Conservative or a Labour Government. We have always come up against the obstacle that the Government of the day are not equipped with sufficient powers to direct industry into the areas which need more industry. That is a fact of our legislation.

Indeed, if we look at it broadly, it would be very difficult to apply direction of industry unless we also applied direction of labour, which nobody wants to entertain in peace-time. It is bad enough to have to be directed in wartime. I fully appreciate and acknowledge the limitations which are placed upon even the most well-disposed Government in trying to direct industry to areas which need an infusion of new industry.

Let me return more specifically to the Lancashire and Merseyside Industrial Development Association. We have pressed these arguments in our local discussions in the county to the point of saying that in some of the bad areas, where unemployment is high, the population is falling and people are moving to other parts of the country, the Government ought at least to be ready to build new factories and to attract new industries by the inducement of having clean, well-equipped modern buildings, which would be more compatible with modern requirements than are some of the old dungeons and worn-out industrial premises which disfigure our native county and which are a disgrace to the county and also to any Government. It is a disgrace that we should tolerate them any longer.

When we have looked at this problem as practical men of affairs, we have a limited knowledge—because we all admit our limitations—we have been told that there is an organisation called Lancashire Industrial Estates, which is an agency created under the aegis of the Board of Trade to do just what I am requesting, which is to build new factories in areas which need new factories and new industries.

Mr. Rhodes

My hon. Friend is discussing one of the new Clauses.

Mr. Price

If I am out of order, the Chairman will tell me. I might tell my hon. Friend that Sir Charles seems to be quite happy at the moment, if my hon. Friend leaves him alone. I am coming to the kernel of the Amendment, and I am sorry if I have perhaps led up to it in a roundabout way. Thoughts on these matters are diffused over a wide area. I try to keep in order. No one has yet told me that I am out of order.

When we suggest that Lancashire Industrial Estates should do this job, we are told that it has no money. I suggest to the President and to hon. Members who are genuinely interested in the point that if we are to make the best use of this compensation and to see that some of the money, if not all of it, is ploughed back into the cotton areas, we ought to give the compensation not in £5 notes or £1 notes but in shares in Lancashire Industrial Estates or, if there is such a comparable body, in West Riding Industrial Estates, or Scottish Industrial Estates, or any other similar body in an appropriate area.

This may seem to be heresy, but I put it quite seriously to the Committee that it could be done, if we have accepted in principle that the payment of compensation should be for this purpose. By all means let us pay a rate of interest on the bonds or shares in these organisations. We could pay 3½ per cent. or even 5 per cent.—any rate which compared reasonably with that normally paid on blue chip securities. It must be remembered that the cotton mills which are to be closed down are not worth anything. If they are to be closed down, then in any case they are not going concerns and there is no certainty that they will produce 3½ per cent. What is wrong with offering to these displaced persons shares at a rate of interest of 3½ per cent. or even 4½ per cent. in lieu of money? The money then received by Lancashire Industrial Estates could be applied to building new factories in Lancashire to replace some of the rotten, old, broken-down premises which we have to tolerate at present. I am sorry that I have been a little longwinded about this—

The Chairman

The hon. Member has not been long-winded, but is he not dealing with an Amendment in page 4, line 14, on the transfer of shares?

Mr. Price

I am dealing with the Amendment in page 2, line 11, which asks that 75 per cent. of the compensation provided shall, within three years of payment, "be invested in an area." I am suggesting a practical way of investing the compensation in an area. That is all I have to say, and I will sit down.

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

The right hon. Member for Battersea, North (Mr. Jay) suggested that the Amendment was concerned primarily with the question of attracting new industries to the cotton areas, and to that extent I support that approach. The Committee is well aware of all the arguments about the need for these areas to have new industries, which will to some extent take over where the cotton industry is shrinking. It is my belief that not a very large number of people will be made entirely unemployable as a consequence of these re-equipment schemes—that is certainly everyone's hope—but that does not remove the need of new industries in those areas.

If we were to take the Amendment apart, criticisms might be made of it because it was either inapplicable or its meaning was not clear. The right hon. Gentleman fairly admitted that it might be criticised. There is a danger, in the Amendment as worded, that if this were a condition for accepting compensation money, some people would not be able to accept it because they could not undertake to re-invest the money under the terms of the Amendment. If, as a consequence, we were to stop the process, it would result in obsolete plant being retained, to use a term which the hon. Member for Ashton-under-Lyne (Mr. Rhodes) used on Second Reading. It would be a great disadvantage if people who were prepared to scrap their redundant plant felt unable to do so because of this provision.

There is also the difficulty of defining the area. The wording of the Amendment is be invested in an area which, in the opinion of the Board of Trade, is likely to suffer loss of employment. It is difficult to decide which areas would be likely to suffer loss of employment. I give my support to the principle which the right hon. Gentleman has put forward and I hope that, when my right hon. Friend comments on the speeches which have been made, he will give recognition to the need of attracting new industries to the cotton areas.

8.15 p.m.

Mr. S. Silverman

To my mind, this group of Amendments is the most important attempt to reshape the Bill that the Committee will make. I think that for the reason that I gave in some remarks I made on an earlier Amendment when we were dealing with compensation, and with the scope and purpose of the Bill. What we say in this group of Amendments is that it is not enough just to have a scheme, even if it is a successful one, which, by reducing what is decided to be the excess capacity of the industry leaves a smaller cotton industry more prosperous.

I do not say that it is not better if the whole of the cotton industry cannot recover and be made prosperous to have a more contracted and redeployed industry economically viable paying its way in the world with a degree of security for the capital and labour employed in it and with a contribution to give to the general wealth of the country than to have an inchoate industry with disparate units fighting each other for an ever-diminishing amount of trade.

I do not say that it is not better. I say that it is not enough. It is not enough unless there goes with it, as part of it and integrated with it, some scheme for making certain that the productive capacity, whether mechanical or human, that we are removing from the industry because we cannot profitably use it in that industry, shall be employed in some other industry that is socially useful, economically productive, and which can be made profitable—as I have said, economically viable.

If we are not to plan at all, that is a different thing. In his Second Reading speech, the President of the Board of Trade talked about not any longer supporting the economic doctrine of laissez-faire. The Government are not to leave the industry to go tumbling down the stairs, to leave it to itself to contract in any way that economic anarchy may force upon it. Of course, the Government have chosen a peculiar moment for doing that. At the moment when the Conservative Party decides to desert the doctrine of laissez-faire, the industry is not falling down the stairs. They do not let it fall: they give it a hefty kick to help it out of the house.

If we are embarking on this kind of Government planning, it must not be merely negative planning but positive planning to fill the gaps deliberately produced. In other words, if the Government wished to rescue this area that has lived on the cotton industry, they would not be planning merely the industry but the area; planning the area as an area, as a social unit, as an integrated community or part community. That is what they should be doing. We seek to do that in this group of Amendments in two ways. I suppose it is for that reason—although it is not for me to say so—that the Chair decided that, although they deal with different subjects, these Amendments can nevertheless be discussed together.

Let us look at the Amendment moved by my right hon. Friend the Member for Battersea, North (Mr. Jay). If the State is to provide or contribute to a fund which is to be used for contracting the industry, or reducing capacity, it cannot divest itself from the social and moral duty of seeing what becomes of the money. That is the object of the Amendment. Perhaps I may be permitted to say, with all respect, that I do not think that it is a particularly good Amendment. I have an Amendment lower down on the Notice Paper. It was put down before my right hon. Friend's Amendment was tabled. I do not quite understand the mechanism by which my Amendment now appears lower in the Notice Paper.

The Amendment standing in my name and that of my hon. Friend the Member for Oldham, West (Mr. Hale) does not say that 75 per cent. of the money should be used in this way but that the whole of it should be so used. We do not say that those getting the money can wait for three years. We do not mention a period. We only say that it must be part of the scheme and that the President of the Board of Trade in approving the scheme and presenting it to the House of Commons must be satisfied that adequate provision was made for that—whether in three years' time, in two years or in one year does not matter. We do not say, either, … in an area which, in the opinion of the Board of Trade, is likely to suffer loss of employment … but relate it to the area where contraction would take place.

However, I shall not now discuss the comparative merits of the two Amendments. My right hon. Friend's Amendment embodies the principle that we all support; namely, that the State ought not to provide money for the contraction of an industry, and all the social consequences flowing from that, without seeing to it that the money contributed is used to repair the social damage of the contraction.

I speak with some feeling, because I represent a constituency which is affected to a more extreme degree than any other part of the affected area. In part of my constituency, of every three who work at all two are employed in cotton. In the other main part of the constituency, the proportion is not quite so high, but it is certainly not so very different. Any substantial contraction of the cotton industry in Nelson and Colne, unless accompanied by alternative industry, will produce a social catastrophe of the first magnitude.

I read the White Paper, and I know the flattering unction which the Board of Trade has laid to its soul about the "resilience"—I think that was the magic word—with which the area has borne the economic disasters of the industry without producing mass unemployment.

Sir Charles, the Government are deceiving themselves. The mass unemployment is not there in North-East Lancashire or in these towns, but that is not because the mass unemployment has not been produced. The mass unemployment has, as it were, transposed itself into a drifting, migrating population. Those who have become unemployed have not chosen to remain and parade their unemployment on the streets. They have taken their courage in both hands and have gone out and sought to earn their livelihood by other means and in other places—good luck to them. They showed resilience—

Mr. Ellis Smith

And initiative.

Mr. Silverman

And initiative, yes.

But what of the towns that are left behind? A lessening population means an ageing population. In 150 years, a great deal of social pride and social responsibility has gone into building up communities that are not less valuable to the national life than communities in any other part of the country. If we do no more than to spend public money to contract the industry still further, we shall give a tremendous new impulse to the migration of populations and to the tragic waste of a lot of accumulated and developed social capital.

Therefore, we say that we should, if we are doing this, take some account of what becomes of the money afterwards. It will not be spent, one hopes, in riotous living. It is not to be used as non-taxable income. It is a taxable payment. It will, presumably, be invested somewhere in order to make some productive use of it. What would there be so wrong or so difficult in saying, "If you are getting this capital payment you will invest it somewhere, so invest it here. Otherwise, make your own arrangements, and do not come cap in hand begging for public or national assistance and using other taxpayers' money in order to protect yourself from loss that you do not intend to suffer in any case."

The other proposal is this. When we are considering which excess capacity shall be reduced, removed or contracted, we must have regard to the state of industry in the area that is under discussion. What might be excess capacity in an area with a rich diversification of industry may not be excess capacity in an area that has all its eggs in one basket. There is nothing whatever in the Bill—not a word, not a punctuation mark—to ensure that those who make the scheme, the President of the Board of Trade when he examines the scheme, Parliament when it legislates for the scheme for the elimination of excess capacity shall have any regard whatever to the result in the area affected of what it is proposed to do.

That is not planning; it is anarchy. It is to ignore the main social problem for whose sake alone the whole scheme is worth considering to say that where a town has only one industry one can take away one-half, one-third, 10 per cent. of it on the basis that that is excess capacity without making any provision whatever for the people who are being displaced, and without paying any regard whatever to the social consequences. This is worse than laissez-faire. It is mere mischief. A workable scheme cannot be devised for the cotton industry by dealing with the cotton industry alone.

Therefore, my right hon. and hon. Friends and I beg the President of the Board of Trade to look at these matters carefully and sympathetically. They are well within the scope of the Bill. The right hon. Gentleman could accept these Amendments, or Amendments like them. He would not be sacrificing one jot or tittle of what he wants to do. He would be adding something to the Bill which would ensure that he produces a balanced scheme which pays some regard to the needs of the community and the welfare of the nation. I beg the right hon. Gentleman not to regard these as debating and academic points. They are practical realities. Any sensible Government, any Government intending to be just—we do not ask anyone to be generous—would not tolerate for a moment such a scheme without taking these matters into consideration.

8.30 p.m.

Mr. Blackburn

Anyone who listened to the eloquence of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) would be fully convinced that these are not academic problems but very serious social problems which we must face. The President of the Board of Trade knows full well that throughout all the textile areas unemployment is at present already high. As a result of the Bill it is bound to be higher. Even looking at it from the most optimistic point of view that eventually the workers displaced will be re-absorbed into the reorganised industry, there will be increased unemployment immediately.

On Second Reading, the President of the Board of Trade said that this was not a Bill providing for the distribution of industry. That is what we need to be working side by side with this Bill for the contraction of the industry. Apart from the Bill, which will create further unemployment, we definitely need new industries in the textile areas. We want new industries not only for the present unemployed but for those who will be displaced by the Bill. We shall want new industries for greater diversification so that never again will these areas be dependent upon only one industry. I believe that contraction and the development of new industries should be taking place side by side. It should be a phased and planned operation.

I do not know whether the suggestions in the first Amendment are practical. It would be wrong if the public money paid for compensation for the contraction of industries in the textile areas is used to set up industries in some other part of the country.

Mr. H. Hynd

Or in Hong Kong.

Mr. Blackburn

Or in Hong Kong. I do not know whether a practical scheme can be worked out. The Amendment may not be worded sufficiently clearly to achieve exactly what we have in mind. I repeat that it would be wrong for the money paid for the destruction of industries in the textile areas to be invested in some other part of the country.

On Second Reading, I asked a number of questions. I listed about six criteria and asked whether any one of those was to be the principle upon which contraction was to take place. One of them was the question of the social consequence. My hon. Friend the Member for Nelson and Colne is right in emphasising that when plans are being prepared for the contraction of the industry it is essential that the effects upon the area generally should be taken into account. I hope that when the President of the Board of Trade replies to these Amendments he will give the answers to the questions which I asked on Second Reading. He should give us some indication of the principles upon which contraction will take place.

The essential point is in the first Amendment, namely, whether we are to have new industries within our areas in order to deal with the present problems and the problems now being created.

The people of our area will look very dimly upon any money being paid out which they find later is invested in some other part of the country.

Mr. Houghton

I strongly support my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) in the speech he made a few moments ago. He said so much and felt so deeply on this subject that that will shorten my own speech, but I would remind the Committee of the estimated contraction in the several branches of this industry as set out in paragraph 12 of the White Paper. They are really startling figures. On the spinning side, in the doubling section, the estimated excess capacity is 60 per cent.; in weaving, the estimated surplus capacity is 29 per cent.; in finishing, the estimated surplus capacity is from 25 per cent. to 40 per cent.

The death knell which these figures sound in the ears of some of these towns cannot yet be measured. We do not know how many of the mills are going to close. What we do know is that more mills are going to close more speedily than ever before. This scheme, indeed, is designed to get them out of the business.

The changes, the readjustments which will be necessary in these towns, will come upon them in a rush, and one cannot really see how they will manage to cope with the problems which will be thrust upon them, not only in terms of local unemployment but of local finance, in schemes for housing, for municipal development and reconstruction. Some of these towns wonder whether they face bankruptcy.

The one bit of good news for me which came out of the Second Reading debate was the announcement by the Parliamentary Secretary that the cotton town in my constituency, Todmorden, was to be included in the scope of the Distribution of Industry Acts. That was very welcome news. I thanked him for it at the time, and I renew my thanks to him. Todmorden has suffered the disability of being just inside the West Riding of Yorkshire and has not qualified for the sentimental—what shall I say? —

Mr. Rhodes


Mr. Houghton

—value attaching to the Lancashire towns. There are shops to let there, there are mills to let there, and further closures will come because of this Bill. This is not, of course, exceptional; nor is it the worst there is to show, as my hon. Friend the Member for Nelson and Colne mentioned, but these towns in varying degrees are to share the same treatment—one might almost say the same fate.

It would be reprehensible if compensation paid out of public money to people who might have had to close down without any compensation is just taken out of the area and put somewhere else. I do not want to see compensation paid in my constituency invested in an ice-cream parlour in Blackpool. The people who have made their money—and they have made money in the past—and who are now on evil times and who are now to get this compensation should he loyal to the area in which they have conducted their business.

Mr. Rhodes

And loyal also in terms of their own money, apart from the compensation about which my hon. Friend is talking and which comes from the Government. If they have made money in an area they should support that area in which they have made it.

Mr. Houghton

I quite agree with my hon. Friend. He has stated it better than I could. I am sure that my hon. Friend will agree with me that many of them will. I hope they will.

What we are afraid of is that some of these mills which are owned by people who have come in from outside and have no ties or roots in the area may take their compensation, pack up and go. I think that many of the family businesses and businesses which have grown up in the area over the years will feel the loyalty to which my hon. Friend has referred and will stay there and try to do something else for the town in which those in the business have worked and lived so long. But it will have to be done quickly.

As my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) said, this is an operation which ought to be running side by side with what we are doing this evening. This is not the end of anything, except of an industry in its present size. For the towns, the citizens and the workers it is the beginning of the next phase, whatever it may be. We hope that there will be some hint about that. Is there any reason for not setting it out in the Amendment itself? I prefer the Amendment in the names of my hon. Friend the Member for Nelson and Colne and my hon. Friend the Member for Oldham, East.

Mr. Hale


Mr. Houghton

My hon. Friend the Member for Oldham, West (Mr. Hale). I also associate my hon. Friend with the East.

Mr. Hale

Oldham, Left.

Mr. Houghton

That Amendment is free of some of the restrictions and weaknesses of the Amendment which we are now considering, but it is not the words that matter; it is the principle of the thing, and whether the Government believe that this should be done as a matter of principle and, if so, whether the President of the Board of Trade can find suitable words to express these requirements. This is an important aspect. There is little else that matters about all this except the question "What of the future?" The Bill makes no provision for the future.

Sir D. Eccles

I appreciate the depth of feeling on these three Amendments. They certainly bring us to an aspect of this whole scheme which was so well summed up by the right hon. Member for Battersea, North (Mr. Jay) when he said that, of course, another job is really the most important thing for a worker who is displaced as a result of the reorganisation which we are now discussing. This reorganisation, if it comes about, will benefit very much the great majority of those who are employed in the cotton industry today. There is no doubt that if we can get this industry into a compact, efficient, creditworthy structure, the jobs and the future will be very much improved for those who are left in the industry. They know it, and that is why we are getting co-operation from both sides.

It has to be done as an economic operation, because if we did not do it as such we should not be able to achieve the first object, namely, a prosperous, solid cotton industry with good hopes of expanding on the more modern lines. That does not mean that a further problem, which we might call the residual problem, will not arise. If we did not have the Bill it would be far worse, because mills would go out of operation, as they have been doing in recent years, in a haphazard manner, and no one would get compensation. Furthermore, we should not be able to identify those mills in good time in order to make arrangements, as best we could, to find new jobs for those who did not get work in the neighbourhood in a short time. One of the advantages of pressing this scheme through quickly is precisely that it will enable us to know what is going to happen where, as we have not been able to do before. The question is, how can we best help those people and those areas which will suffer as a result of the contraction of the industry?

8.45 p.m.

The Opposition have made two suggestions. The first is that part of the money paid in compensation to firms that are going out of the business should be reinvested in the area concerned. The main ground for that suggestion has been that it is Government money. I would point out to the Committee that we have asked the Cotton Board to arrange the compensation terms as cheaply as possible. The less taxpayers' money is required to induce the various mills to go out of production, the better for everybody. In effect, what we are doing is buying plant for it to be scrapped. When one is bargaining hard with a man to buy something from him he will look carefully at the conditions of the bargain that is being made. It must be clear to the Committee that if we attach any other conditions which reduce his freedom to use compensation monies, he will require more to go out.

Mr. S. Silverman

Is not the right hon. Gentleman overlooking what it is that we are buying and from whom we are buying it? He said a moment ago that without this scheme workers would be unemployed without compensation. He is right if the industry goes on contracting, but that is equally true of the excess capacity which we are proposing to buy. If it were not for this scheme the mill owner would be forced out of production. Some 450 mills have closed down in Lancashire in under seven years, so it is not really such a hard bargain.

Sir D. Eccles

I had hoped that the hon. Gentleman would have listened to the argument made on that point previously. It is necessary to restore the confidence that this industry has a future into which it is worth putting fresh money. For that, one must cut out the dead wood over a short period and I know of no way of cutting out the dead wood except by some compensation scheme of this kind, worked by the industry itself, to which it will contribute one-third of the compensation of the machinery and the whole of the cost of the compensation of labour. If we did not do that, the run down would continue in a demoralising manner. It is true that no Government money would be required because the mills would merely cease to produce, but that is not in the best interests of Lancashire. It is in the best interests of Lancashire that we should now attempt, and I am confident that we shall succeed, a deliberate surgical operation. That is the first part of all this plan.

Supposing we attached to the compensation payments the condition that some or all of them must be reinvested in the area, the first thing that would happen would be that we should have to offer a great deal more compensation. That is because a man who would be willing to accept £1,000, if that amount were free for him to do what he liked with, would say, "No thank you, I must have more because I am not getting the value" if he were told that he had to take shares in the Lancashire and Merseyside Development Corporation or in Lancashire Estates.

Mr. Jay

Might not the result be that he would not get any compensation at all but would go out of business without having compensation?

Sir D. Eccles

Then he would not be in the scheme and his workpeople would get nothing. That is a point about which we have to be careful.

Mr. J. T. Price

Before the right hon. Gentleman leaves this important point, can he give me any information about who will value the assets for which compensation is being paid? Is this to be a Dutch auction, by personal bargaining in each plant? If we are to grant compensation by an operation of this kind there should be a public valuer. I would not accept a Dutch auction, because the terms ought to be fixed universally as regards the industry, and not arranged in a hole-and-corner way in a back street. am astonished that that sort of thing should be envisaged by the President of the Board of Trade.

Sir D. Eccles

If the hon. Gentleman had read the White Paper and the Second Reading debate, he would have learned that we are setting up this Special Committee under the Cotton Board. It consists of five men not concerned in the cotton industry, men chosen for that reason because they will have to deal with money and valuations, and they are having as their chief executive, I think I can fairly say, one of the best chartered accountants in the country. That is the valuation machinery which we have created to meet the hon. Gentleman's point.

Suppose, for the sake of argument, that we accepted the first Amendment about reinvesting the money. What will the man do? There are two things that he could do. He could invest the money in another business already in the area, and, as I understand it, he would have to say. "You must employ some ex-cotton operatives." He might or might not find something in which to invest—I cannot say—but if he did not do that, he would have to start a business of his own. Is it really likely that managements going out of the cotton industry will start an alternative business? That is the proposition here.

Mr. S. Silverman

That is what the workers will have to do.

Sir D. Eccles

It is rather difficult with the management. Such a man might well lose his money. I am suggesting that this is not a sensible way to spend Government money.

We have the general obligation as a Government to deal with the problem of individual or area unemployment as it results, and I think the Committee might consider that, if public money is to be spent—and it will no doubt have to be spent under the D.A.T.A.C. scheme or the other powers that we have—it would he better spent in that way than left to the judgment—it can only be a very individual judgment—of this or that man who received compensation.

Mr. Silverman

D.A.T.A.C. leaves it to individuals.

Sir D. Eccles

D.A.T.A.C. receives applications from people who already want to do something. The proposition in the first Amendment is that the individual mill owner who has been compensated should reinvest the money in the district. I say that that is quite unworkable. First of all, it would require much more compensation money. Secondly, I do not think that that additional money from the taxpayers—if the money is to be forthcoming at all—would be as well invested by this method as by using the other powers which the Government possess to diversify industry or help a certain area.

Mr. Jay

Our proposal is that this should be done in addition to the use of the other powers, not instead of them. Is not the right hon. Gentleman aware—he must be—that a number of cotton firms are at this moment introducing new work into the existing cotton mills?

Sir D. Eccles

The right hon. Gentleman should be delighted about that. I often spend my time arguing with these people and asking them to introduce different kinds of employment. It is being done all the time. Nothing in the Bill will stop that continuing.

Mr. Silverman

The right hon. Gentleman was saying that it could not be done.

Sir D. Eccles

I am saying that we cannot do it by compulsion, and we will not in the Bill compel people to reinvest their money in Lancashire. If we did that, many mills which it would be possible—

Mr. Hale

The compensation could be refused.

Sir D. Eccles

That is exactly the point. If they refused it—

Mr. Hale

The right hon. Gentleman said that the workers would not benefit.

Sir D. Eccles

No; I am not saying that. If they refused to take compensation money with the string attached to it in the Amendment, they would be—

Mr. Silverman

They would be forced to close.

Sir D. Eccles

The hon. Gentleman then has to meet the case that the workers would get no compensation.

This would be a thoroughly inefficient way of spending more Government money for the purpose of providing employment in Lancashire.

Let me take the second argument, that we ought to pay attention to the social needs of the area. We have said that there should be two conditions for passing a reorganisation scheme. One is that there should be enough capacity taken out. If that is not so, then we shall not be benefiting the other men who are left in the cotton industry. There must be compensation for workers. If we introduce the third condition, that in considering which mills should close we should have regard to their situation, to the employment in the area, and to the great difficulties which many of the Lancashire towns have—many Lancashire mayors came to London and explained these difficulties to the Prime Minister and to me on more than one occasion—we should get right away from the prospect of making an efficient industry.

What would happen? The owner of a mill in a town where there was not much alternative employment would say, "I wish to qualify for a compensation grant". The Board of Trade would have to say, "You cannot have that grant because of the employment situation in your area". That is what would have to happen. If that occurred, I think the mill owner would say, "We are making a loss. We will not continue on this basis. Will you subsidise us?" Before we knew where we were, we should be in the realm of subsidising firms which wanted to close and take the compensation but were told by the Government that they must not close.

In those circumstances, we should never get enough capacity out because everyone would come along and say, "Give me a big enough subsidy and I will stay in the business." We should perpetuate the very thing that we want to remove; at the root of all our plans is the desire to cut the deadwood out of the industry. Consequently, the second Amendment would hinder, and not help, the security of employment in the cotton industry, and it would render it impossible to carry through the Bill.

If we tried to choose which mill was to close, on the basis of its situation and not because the mill owner said, "I must go, because I can no longer make a profit," we should not be able to have a reorganisation scheme of the kind we propose. We should not be able to secure voluntarily the required amount of elimination. We should have to go right over to a compulsory scheme, planned in Whitehall, with directions sent to mill owners telling them that they were to close, or were to stay open.

Mr. Jay

This is the most important point in the discussion. Will the President of the Board of Trade address himself to our argument? We say that account should be taken of the situation of the individual mill as well as of the other factors. We are not saying that account should be taken of that only.

Sir D. Eccles

It sounds very attractive, but it would be quite impossible to work. If the Cotton Board's technical experts are to be able to present plans to the House within a short enough time to make the Bill worth implementing they must be allowed to do so on the basis of stating their terms to the industry and telling it that if a mill goes out of operation compensation will be paid. If they tell a certain mill owner that he is not to apply because of the social circumstances of the mill, the whole scheme will break down.

That does not mean that we should do nothing about the problems created by the elimination of capacity as outlined in the Bill. We intend to watch the situation, and we shall be in a much better position to do so, because we shall know which mills will close. Now that trade in general is picking up, I expect that it will be considerably easier to persuade existing firms to expand, and to move to places where they have not been before. I repeat the assurance I have given that we will use all our powers to see that where an isolated mill closes down the maximum amount of help will be given. I believe that such help, which could be given after talks with local authorities and industrialists seeking industrial development certificates, is much more likely to lead to successful results than would be achieved by the methods provided in either of the Amendments. Either Amendment would remove all possibility of having an efficient reorganisation scheme for the whole industry.

9.0 p.m.

Mr. Burke

The Minister has said that he will bear in mind the problems created when a mill closes down, and he has mentioned D.A.T.A.C. It may be true that the first Amendment is not practicable as it stands, but it would be practicable if the Minister would ensure that when a mill closed down, with all the social consequences involved, D A.T.A.C. would step in and replace the closed down mill with something which would maintain employment in the area.

Mr. Ellis Smith

Universal Stores.

Mr. Burke

That is essential to the cotton trade. I want to explain to the Minister what the position is in Burnley and other cotton towns. I do not wish to refer particularly to my own constituency, but as a consequence of the closing down of mills in Burnley, which is a weaving area, many of the families have left, and this is an area where a high proportion of the labour is female labour. At present there are 800 vacant premises in the area. When the men leave Burnley because work is not available the female labour goes with them. One reason why cotton employers were opposed to the diversification of industry in the beginning was that they thought it would rob them of their labour. They found that when the men went they were also robbed of female labour. The best thing for the cotton industry would be for the Government to say, "If we want to keep the female labour in these areas we must provide work for the other members of the family."

The Minister has said that hon. Members on this side of the Committee are concerned only with the expenditure of Government money, and that is why all this noise is being made about it. I agree that it is Government money, but we believe that if Government money is to be spent to cut down further the industries of Lancashire the first place which should receive the benefit of that Government money is Lancashire, and the best way to arrange for that is to make it possible for some of the money to be invested in the area. That would be a good thing for the cotton industry, because in the weaving areas it would keep available the female labour for such of the industry as continued to thrive.

Mr. Anthony Greenwood

Hon. Members on both sides of the Committee who represent textile constituencies will have been disappointed with the attitude of the president of the Board of Trade and his inability to go any way towards meeting the two points of the Amendments. First, there is the suggestion that 75 per cent. of the compensation money should be reinvested in the areas where the mills are to be closed down, and, secondly, that in deciding which mills are to be closed some regard should be had to the social consequences involved. And by that we mean, for example, the collective prosperity of other industries in the area, the availability of alternative employment and facilities for technical training in the area, the percentage of young people in the population and, not least important, the social capital which will be sacrificed if some of these cotton towns are to dwindle and die away.

I found the right hon. Gentleman's answer quite unconvincing. There is no suggestion at all of a subsidy being involved if one mill in a village, which is dependent entirely on it, is closed down. I understood the whole purpose of this scheme is to have a more compact, more efficient and more creditworthy industry than we have at present. If we have an isolated mill in a village, it will benefit just as other parts of the industry, and if we have a more efficient and creditworthy industry I should have thought the chances of survival for that mill, if the Cotton Board allows it to exist, would be better than at present.

The right hon. Gentleman made rather heavy weather of the difficulties which would be involved in deciding which mills were to close down. All we are asking is that, other things being equal, if there are two mills, one upon which a whole community is dependent for the livelihood of the people, and another located in a prosperous town where there is well-diversified industry, it would he sensible for the Cotton Board to decide that the mill in the prosperous and well-diversified industrial area should be the one to close down.

The hon. Member for Heywood and Royton (Mr. Leavey), who I know has a good deal of sympathy with the point of view advanced by hon. Members on this side of the Committee, said that the whole Committee was well aware of the need for new industries in the textile areas. I should like to cite the position in my own constituency where, broadly speaking, one-third of the insured workers are engaged in the textile industry, one-third in the footwear industry—another industry very susceptible to fluctuations and which for some time recently has been in difficulty because of competition from overseas exports—and one-third in the distributive and transport industries. So that two-thirds of the population is dependent for its livelihood on two main industries and the ancillary industries which have grown up round them. When we get a recession in such an area, where there is uncertainty in the footwear industry and a recession in the cotton industry, we begin to get a falling population.

I asked the town clerk of Rawtenstall to consult with other town clerks in the area and compile figures for the last few years. I find that back in 1951 the population in my constituency was 72,905, and in 1957 it had dropped to 70,580. I find that at the moment the number on the electoral register is 50,698, which I think is large in proportion to the total population, and must mean that there is a fairly high average age among the electors. Gradually, over the last few years—this is typical of the whole of North-East Lancashire—we have had a reduction in the population, a fall in the insured population and a steady rise in the average age of the people in the area.

In such a situation, especially in areas not eligible for the kind of assistance which other areas are supposed to get, it is very galling to see public money, or money of which two-thirds is subscribed from public funds, being used to close down mills on which these towns are dependent, and going into the pockets of people who will invest it overseas or in other parts of the United Kingdom. I hope that the President of the Board of Trade—I am sure that he is not unsympathetic to the case which we are putting forward—will be more cooperative that he has been. If we could settle this problem with the minimum of bitterness and acrimony, it would be much better for the people of Lancashire and the textile industry. If the right hon. Gentleman could give us a rather less academic reply and a rather more sympathetic reply, it would benefit this discussion and be for the benefit of Lancashire and the cotton industry.

Mr. Hale

In 1938 I found myself, after a hectic night in Warsaw, locked up in the refreshment room of a very small station on the German frontier in the custody of a guard. I could not speak German, he could not speak English, and he had a rifle. I have never had a similar feeling again until I listened to the speech of the President of the Board of Trade and realised that neither of us spoke the same economic language, that no understanding was possible between us, and that at the moment he has the governmental power.

Oldham is a proud town and it is a town of nice people. When the President speaks in the terms that he does about the future of industry, the planning of industry, he is referring to the whole concentrated hopes of a collective and recently thriving community. When he speaks as if it were just a question of local unemployment, as if the only people concerned were the workers who may be displaced, does he not know that this will affect the whole social life of the town? This affects every shopkeeper, every sporting organisation. In point of fact, the town itself is desperately concerned about the rating situation that will result.

The rating of mills was postponed for a time. We have not the figures. I am told that something like £70,000 a year in rates is involved. I was asked to put down an Amendment to the Bill. I said that I had already put down an Amendment about refugees which might come near to the bounds of order, and it seemed to me that an Amendment dealing with rating might go a little outside the limits of the Bill. If I had known about the first Amendment, I would have said that it was well inside the terms of the Bill as a factor in considering what we are to do with this money.

The right hon. Gentleman must face this. If this is to be a Bill to provide for the payment of compensation in the interests of a community, it is one thing. If it is merely to give equity shareholders a bob or two compensation for a bad year, it is quite another thing. The only justification for this Bill is that it can be of social benefit to the general community in the cotton areas. Otherwise, it is a bribe—a silly bribe, because a lot of these shares go to the benefit of London now.

Lancashire and the cotton towns have an interest in this—all of us are concerned. There came moments in the right hon. Gentleman's speech when he really surprised us. He started off with a forestry metaphor and said that we were just cutting out the deadwood. I would remind him that it is a bad choice of metaphor because in very big forest areas, particularly in Canada, one is not allowed to cut down a tree unless a new one is planted in its place. No one can reduce the vital stocks of raw material on which Canada depends so much for her prosperity.

The right hon. Gentleman then altered the metaphor and said that we were amputating a limb. What about a crutch; why not some help? It is unacceptable to say that, in a town that depends on cotton, we are going to encourage people to close down their mills, on the basis of a hypothetical computation of future world purchasing demand made by a Ministry which has always been wrong in its estimates and was 100 per cent. wrong the last time it made one, and are not going to suggest that anything should be done.

Is it the right hon. Gentleman's view that compensation to workers would make the unions take the view that they are prepared to go on seeing their towns gradually rot away as they rotted away before and that the Distribution of Industry Act, passed last year, and the Act, the name of which I forget, to provide for special areas, is the right solution?

9. 15 p.m.

I asked the right hon. Gentleman to schedule Oldham. He was very courteous and helpful, and I was grateful to him for it, but what has happened since? Has anyone done anything? Another few mills have closed down, the great factory at I3ardsey, owned by the Ministry of Supply, is closing down this year. The Ministry of Supply says, "We have nothing to do with letting it", and refers inquiries to some odd people called the Lands Tribunal. It was let on the most fantastic terms last year to a dying local industry without any terms for maintaining employment and it was allowed to be given up on a twenty years' tenancy at the end of the first twelve months. That is the sort of organisation to which we have to look.

Oldham is a fairly virile community. It has had a very effective industrial development committee. It has had many worth-while men doing what they could, and we did have our successes. They were not terribly striking. Many of the industries which came were very welcome, but on the whole they employed a high percentage of women labour—and not highly-paid women workers—on fairly easy, not very skilled, work.

What is the plan now? The right hon. Gentleman approaches this as though he were squaring the circle on each occasion he gets up. His main argument is that something has to be done for the cotton industry because it cannot sell goods, but then he says that if we do not pay it enough compensation it will go on selling goods. The immutable laws of supply and demand are singularly interchangeable in the arguments of the President of the Board of Trade.

I beg him to remember that we are not only talking about the question of a considerable number of unemployed. There are 5,000 unemployed and an increasing number of disabled unemployed, a tragedy which inevitably follows, and there is the running down of social services because the revenue at the town hall goes down in consequence of the gradual, slow, not noticeable, decay which spreads through the town until it produces the sort of situation we know so well. We are not only talking of that, but of towns which might have been big towns but now are small, towns which used to boast of their buildings and civic centres and now have to make to do and mend. We are talking of towns which have suffered in every way from such decay over the years, but the right hon. Gentleman does not seem to have any conception of it at all.

I do not know whether he has ever been north of the Trent. I presume he has. I say it not in any sense of hostility, not in any sense of criticism, but one cannot live in Lancashire for a week without beginning to feel these things and without beginning to know that they are the concern of everyone. We come to know that Bills of this kind tend to become non-party Bills, and even those prepared to put their hands in their pockets say that the major consideration has to be the welfare of the town.

Reference has been made to investment of money outside Lancashire, and of course that happens. Years before the war we used to talk about houses being built at Southport. I think that, on the whole, Lancashire people have a better record in this respect than others. On the whole, among all classes in the community, the sense of civic community life and obligation is as strong there as anywhere else in the country. If a man has asthma I do not see why he should not go to live in Torquay. I sometimes consider where I shall spend the rest of my life when I leave this place—I sometimes think the sooner the better. Their whole life is bound up with that community in a way that the President does not understand.

What are the difficulties? The Amendment in the name of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) is a perfectly specific one. I am not in any sense criticising the other Amendments. I am limiting myself to the one I have in mind. The Amendment provides that, as a condition of the payment of compensation for closing down the whole or part of a mill, the money paid shall be suitably invested in productive work in the same area. It does not say that it must be done forthwith. The Board of Trade can get permission for a postponement where grounds are established. One has only to show that one is trying decently to carry that out, and that one is prepared to co-operate in doing it.

The President must face the real facts of the situation. As mills have closed down in Oldham they have been bought by speculators. Until Bardsey closed down one of our problems was that we had nowhere to offer anyone. When the mills were bought there was no provision for ensuring the supply of productive industry. The mills were bought for stores, and mills in Oldham now hold tractors from Coventry. Huge mills that used to be part of the life of the town, the arteries of labour, are now clogged with this Midlands industrial thrombosis. That may not be a very facile metaphor. I am not sure.

Surely this is the moment when we could do something about this problem. A member of the industrial development committee of Oldham wrote to me and asked me to try to table an Amendment which would provide that when mills became empty there would be an opportunity for the town to purchase them at a reasonable price. I know that does not suit every town. Each town has its own problems, but it would suit Oldham. We want premises readily available to offer to new industry.

Will the President tell me, or shall I tell him, how many offers have been made since Oldham was scheduled? So far as I know, the answer is none. How many inquiries have been made to the Ministry of Supply since that factory became available? The last information I had from the Ministry of Supply was that there has been none. That is our problem. That is our difficulty, and here my hon. Friend the Member for Nelson and Colne, and my right hon. Friends are making a suggestion which means, and ought to mean—and we have a right to it—that industry shall be provided in Lancashire.

After all, what is the alternative? Over the years our population has drifted South. The attractions of London, the climatic advantages and so on, are gradually bleeding the arteries of the North. I say to hon. Membrs on this side of the Committee, "Here is your chance". It is not much use saying that to those on the other side because not many of them were present during this important discussion. There may have been two hon. Members present on the opposite side, or, at the most, four.

This is a vital Socialist principle. I hope we shall vote on it. I hope that we shall press this, and continue to press it, until the President understands the point, because there is more joy in Heaven over one sinner who repenteth than over ninety-nine virtuous men on the Opposition benches who have been adumbrating this principle for seven years.

Mr. Jay

I want to make a final appeal to the President because this is a vital point and his reply was lamentably disappointing. Let us leave aside the proposal that some of the compensation money should be spent in Lancashire. I want to ask him to reconsider his refusal to agree that the Cotton Board should at least take into account the employment situation in each area before a decision is taken on the closure of a single mill. This is a most important part of the proposal, and it is entirely in the spirit of the President's scheme and of the words of the White Paper.

The President's only objection to this was that it might not mean the selection of the least efficient mills. I ask him to reconsider the matter. What happened in the concentration of the cotton industry during the war showed that in a great many cases there was no choice in the efficiency of individual mills between one, two, three, four or even five or more mills. Yet one mill is in an area where extra employment is intensely needed and another is in an area where its closure hardly matters at all.

If those factors are not taken into account, what will happen is that mills will be closed down in the wrong areas, where alternative work is not available, when, simply through consultation on the point within the Cotton Board, that mistake could have been avoided. I assure the right hon. Gentleman that this is the experience of all those who dealt with concentration in this and other areas in the war. By a little intelligent consultation it was possible to work out a plan which integrated the introduction of the new works with the closing down of the old.

All experience reinforces this. It is quite practicable to do it, and it is within the ambit of the scheme. All that is necessary is for the right hon. Gentleman to say that at least among other factors the Cotton Board will take this into account. I ask him to say that at least he will not refuse to take that into account, as well as other factors, in order that we may have some kind of plan under the Bill.

Sir D. Eccles

I am afraid that the analogy of the war-time concentration scheme does not apply, because at that time the Government had the power to reduce the industry to the size which was considered appropriate. They were able therefore to choose which units should be concentrated.

Mr. S. Silverman

Why not do that now?

Sir D. Eccles

Because the whole principle of the Bill is that we are not trying to impose compulsion on Lancashire.

Mr. Silverman

And are making the scheme impossible.

Sir D. Eccles

The Cotton Board Committee, having settled the terms of compensation in general, will receive applications from various units in the industry saying, "We are willing to accept your offer". I intend to give only a very short time during which they can qualify for this grant in order that we may carry out this operation efficiently. If we were to accept the Amendment the Cotton Board would have to say that a certain mill should not be allowed to have the compensation for which it had asked. It is not correct, as the hon. Member for Rossendale (Mr. Anthony Greenwood) said, that it would mean that the Cotton Board would simply be in a position not to allow the mill to close. It would be in a position to compel it to keep open, because the owners of the mill would have asked that it be closed and would have sought to qualify for the grant. I do not think that we can put on the Cotton Board the responsibility for making that kind of decision. If the right hon. Gentleman wishes to carry the Amendment to a Division, therefore, that is what must happen.

9.30 p.m.

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

I have listened to my hon. Friends who represent Lancashire constituencies making constructive suggestions to the Government, and I had not intended to intervene, but I consider that it would have been wrong of me to have remained seated and not to have associated myself with all that they have said.

There live in Lancashire over 5 million men and women who have made relatively—I stress the word "relatively"—a greater contribution to producing Britain's greatness than has any other similar area in the country. For generations they have produced mountains of wealth which has been poured out all over the world, and relatively little has been put back into the county. There live within a 50-mile radius of that great cotton capital, Manchester, approximately 11 million people. Of that number about 120,000 are totally unemployed. There live in the county twice as many people as in one country which I could mention and as many as in another country which I could mention.

Many of us who were born in the midst of this industry still live in the same houses. In spite of all that has happened, those of us who are of the people and belong to the people cannot look forward with any degree of confidence when it is proposed to deal with a basic industry in the manner which the Government have proposed. I therefore feel compelled to speak about it. We cannot do much more at present because we have no power, but I hope that when we have power we shall determine to deal with things as the people who built up the Labour Party intended us to deal with them.

In the area in which one of my hon. Friends and I live, our wives and all our other relatives and their friends used to be employed in the cotton industry. My wife was speaking about this industry on Sunday morning with great bitterness. It is true that these people are aware that the degree of exploitation of the Lancashire cotton industry, speaking relatively, has been greater than the exploitation in other parts of the world. Let me emphasise that. In spite of that, they want to continue to make their contribution, but they will not be given an opportunity to do so because in the area in which we live, where once there were mills in almost every centre, all except one have been closed down.

I have in mind a mill which was one of the most modern in Lancashire. It was the pride of all who worked there, and the pride of their relatives. It was closed down. The machinery was sold and dispersed to all parts of the world.

What was left was sold for scrap. We have heard all this talk about the need to increase exports, but what happened to that mill is typical of what is now taking place. It has been taken over by the Great Universal Stores, and is used as a warehouse.

The consequences of such events can be seen in low wages, great temptations—but I shall not develop that further. We all know what is taking place at certain mills. We are finding the windows being broken, and the places used as playgrounds by children. The consequences of the economic devastation that is now creeping like a paralysis through the very heart of Lancashire has to be seen to be believed. Therefore, no one was more pleased than I to hear my hon. Friends' pleading tonight.

I am reminded of an occasion a few weeks ago when some hon. Friends and I were entertaining cotton industry trade union officials. After a cup of tea, one of them said to me, "Ellis, I feel that on this deputation I have been to a funeral". That sums up the pessimistic outlook now prevailing. The trade union officials and their membership feel that adequate attention is not being given to this great industrial area.

The reply of the President of the Board of Trade was most disappointing. I hope that we on this side will draw our lesson from what is now going on and that when we get the power to deal with the nation's affairs we will translate our theoretical ideas of planning into concrete reality. As a consequence, we may still have an opportunity of saving this country.

Question put, That those words be there inserted:—

The Committee divided: Ayes 171, Noes 201.

Division No. 140.] AYES [9.36 p.m.
Ainsley, J. W. Burke, W. A. Deer, G.
Albu, A. H. Burton, Miss F. E. de Freitas, Geoffrey
Allaun, Frank (Salford, E) Butler, Herbert (Hackney, C.) Donnelly, D. L.
Awbery, S. S. Butler, Mrs. Joyce (Wood Green) Dugdale, Rt. Hn. John (W.Brmwch)
Bacon, Miss Alice Carmichael, J. Ede, Rt. Hon. J. C.
Bence, C. n. (Dunbartonshire, E.) Castle, Mrs. B. A. Edwards, Rt. Hon. Ness (Caerphilly)
Benson, Sir George Champion, A. J. Edwards, Robert (Bilston)
Beswick, Frank Chapman, W. D. Edwards, W. J. (Stepney)
Blackburn, F. Chetwynd, G. R. Evans, Albert (Islington, S.W.)
Blenkinsop, A. Cliffe, Michael Fernyhough, E.
Bowden, H. W. (Leicester, S.W.) Clunle, J. Finch, H. J. (Bedwellty)
Bowles, F. G. Coldrick, W. Fitch, A. E. (Wigan)
Braddock, Mrs. Elizabeth Crossman, R. H. S. Fletcher, Eric
Brockway, A. F. Darling, George (Hillsborough) Foot, D. M.
Brown, Thomas (Ince) Davies, Ernest (Enfield, E.) Forman, J. C.
Fraser, Thomas (Hamilton) Lever, Leslie (Ardwick) Robinson, Kenneth (St. Pancras, N.)
Gaitskell, Rt. Hon. H. T. N. Logan, D. G. Rogers, George (Kensington, N.)
George, Lady Megan Lloyd (Car'then) Mabon, Dr. J. Dickson Ross, William
Greenwood, Anthony McAlister, Mrs. Mary Royle, C.
Grenfell, Rt. Hon. D. R. McCann, J. Short, E. W.
Grey, C. F. MacColl, J. E. Silverman, Julius (Aston)
Griffiths, David (Rother Valley) Mclnnes, J. Silverman, Sydney (Nelson)
Griffiths, Rt. Hon. James (Llanelly) McKay, John (Wallsend) Skeffington, A. M.
Griffiths, William (Exchange) MacMillan, M. K. (Western Isles) Slater, Mrs. H. (Stoke, N.)
Hale, Leslie Mahon, Simon Smith, Ellis (Stoke, S.)
Hamilton, W. W. Mallalieu, E. L. (Brigg) Snow, J. W.
Hannan, W. Mann, Mrs. Jean Sorensen, R. W.
Hayman, P. H. Marquand, Rt. Hon. H. A. Sparks, J. A.
Healey, Denis Mitchison, G, R. Spriggs, Leslie
Herbison, Miss M. Monslow, W. Stewart, Michael (Fulham)
Hilton, A. V. Moody, A. S. Stones, W. (Consett)
Hobson, C. R. (Keighley) Morris, Percy (Swansea, W.) Strachey, Rt. Hon. J.
Holman, P. Moss, R. Summerskill, Rt. Hon. E.
Holmes, Horace Moyle, A. Swingler, S. T.
Houghton, Douglas Neal, Harold (Bolsover) Sylvester, G. O.
Howell, Charles (Perry Barr) Noel-Baker, Rt. Hon. P. (Derby, S.) Taylor, Bernard (Mansfield)
Howell, Denis (All Saints) Oliver, G. H. Thomas, Iorwerth (Rhondda, W.)
Hoy, J. H. Oram, A. E. Thornton, E.
Hughes, Cledwyn (Anglesey) Owen, W. J. Tomney, F.
Hughes, Emrys (S. Ayrshire) Padley, W. E. Ungoed-Thomas, Sir Lynn
Hughes, Hector (Aberdeen, N.) Paget, R. T. Viant, S. P.
Hunter, A. E. Paling, Rt. Hon. W.(Dearne Valley) Warbey, W. N.
Hynd, H. (Accrington) Palmer, A. M. F. Watkins, T. E.
Hynd, J. B. (Attercliffe) Paton, John Wells, Percy (Faversham)
Irvine, A. J. (Edge Hill) Pentand, N. Wheeldon, W. E.
Isaacs, Rt. Hon. G. A. Popplewell, E. White, Henry (Derbyshire, N.E.)
Janner, B. Prentice, R. E. Wilkins, W. A.
Jay, Rt. Hon. D. P. T. Price, J. T. (Westhoughton) Williams, David (Neath)
Jeger, George (Goole) Price, Philips (Glouoestershire, W.) Williams, Rev. Llywelyn (Ab'tillery)
Johnson, James (Rugby) Probert, A. R. Williams, W. R. (Openshaw)
Jones, Jack (Rotherham) Pursey, Cmdr. H. Willis, Eustace (Edinburgh, E.)
Jones, J. Idwal (Wrexham) Rankin, John Winterbottom, Richard
Jones, T. W. (Merioneth) Redhead, E. C. Woodburn, Rt. Hon. A.
Kenyon, C. Reeves, J. Yates, V. (Ladywood)
Key, Rt. Hon. C. W. Rhodes, H. Zilliaous, K.
King, Dr. H. M. Robens, Rt. Hon. A.
Lawson, G. M. Roberts, Albert (Normanton) TELLERS FOR THE AYES:
Lee, Frederick (Newton) Roberts, Goronwy (Caernavon) Mr. Pearson and Mr. Simmons.
Agnew, Sir Peter Courtney, Cdr. Anthony Harvey, John (Walthamstow, E.)
Aitken, W. T. Crosthwaite-Eyre, Col. O. E. Hay, John
Alport, C. J. M. Cunningham, Knox Heald, Rt. Hon. Sir Lionel
Amery, Julian (Preston, N.) Currie, G. B. H. Heath, Rt. Hon. E. R. G.
Anstruther-Gray, Major Sir William Dance, J. C. G. Henderson, John (Cathcart)
Armstrong, C. W. Deedes, W. F. Hesketh, R. F.
Ashton, Sir Hubert de Ferranti, Basil Hicks-Beach, Maj. W. W.
Atkins, H. E. Dodds-Parker, A. D. Hill, Mrs. E. (Wythensnawe)
Baldock, Lt.-Comdr. J. M. Donaldson, Cmdr. C. E. McA. Hirst, Geoffrey
Baldwin, Sir Archer Doughty, C. J. A. Holland-Martin, C. J.
Balniel, Lord du Cann, E. D. L. Holt, A. F.
Barber, Anthony Duncan, Sir James Hornby, R. P.
Barlow, Sir John Eccles, Rt. Hon. Sir David Horobin, Sir Ian
Barter, John Elliott,R.W.(Ne'castle upon Tyne.N.) Howard, Gerald (Cambridgeshire)
Batsford, Brian Errington, Sir Eric Hughes-Young, M. H. C.
Beamish, Col. Tufton Farey-Jones, F. W. Hulbert, Sir Norman
Bell, Philip (Bolton, E.) Finlay, Graeme Hurd, Sir Anthony
Bennett, F. M. (Torquay) Fisher, Nigel Hutchison, Michael Clark (E'b'gh, S.)
Bavins, J. R. (Toxteth) Fraser, Hon. Hugh (Stone) Hylton-Foster, Rt. Hon. Sir Harry
Bidgood, J. C. Freeth, Denzil Iremonger, T. L.
Biggs-Davison, J. A. Gammans, Lady Irvine, Bryant Godman (Rye)
Bingham, R. M. George, J. C. (Pollok) Jenkins, Robert (Dulwich)
Bishop, F. P. Gibson-Watt, D. Jennings, J. C. (Burton)
Black, Sir Cyril Glover, D. Jennings, Sir Roland (Hallam)
Body, R. F. Godber, J. B. Johnson, Dr. Donald (Carlisle)
Bossom, Sir Alfred Goodhart, Philip Johnson, Eric (Blackley)
Bowen, E. R. (Cardigan) Graham, Sir Fergus Joseph, Sir Keith
Boyle, Sir Edward Grant-Ferris, Wg Cdr. R. (Nantwich) Keegan, D.
Braine, B. R. Green, A. Kerby, Capt. H. B.
Brewis, John Gresham Cooke, R. Kerr, Sir Hamilton
Bromley-Davenport, Lt-Col. W. H. Grimond, J. Lancaster, Col. C. G.
Brooman-White, R. C. Grimston, Hon. John (St. Albans) Langford-Holt, J. A.
Browne, J. Nixon (Craigton) Grimston, Sir Robert (Westbury) Leavey, J. A.
Bryan, P. Grosvenor, Lt.-Col. R. G. Leburn, W. G.
Burden, F. F. A. Gurden, Harold Legh, Hon. Peter (Petersfield)
Carr, Robert Hall, John (Wycombe) Lindsay, Hon. James (Devon, N.)
Conant, Maj. Sir Roger Hare, Rt. Hon. J. H. Lindsay, Martin (Solihull)
Cooke, Robert Harris, Reader (Heston) Lloyd, Maj. Sir Guy (Renfrew, E.)
Cordeaux, Lt.-Col. J. K. Harrison, A. B. C. (Maldon) Loveys, Walter H.
Lucas, P. B. (Brentford & Chiswick) Peyton, J. W. W. Summers, Sir Spencer
Lucas-Tooth, Sir Hugh Pickthorn, Sir Kenneth Taylor, Sir Charles (Eastbourne)
Macdonald, Sir Peter Pike, Miss Mervyn Teeling, w.
McLaughlin, Mrs. P. Pilkington, Capt. R. A. Temple, John M.
Maclean, Sir Fitzroy (Lancaster) Pitt, Miss E. M. Thomas, Leslie (Canterbury)
McLean, Neil (Inverness) Pott, H. P. Thomas, P. J. M. (Conway)
McMaster, Stanley Powell, J. Enoch Thompson, Kenneth (Walton)
Maitland, Hon. Patrick (Lanark)) Price, David (Eastleigh) Thompson, R. (Croydon, S.)
Manningham-Buller, nt. Hn. Sir R. Prior-Palmer, Brig. Sir Otho Thornton-Kemsley, Sir Colin
Markham, Major Sir Frank Ramsden, J. E. Tiley, A. (Bradford, W.)
Marlowe, A. A. H. Rawlinson, Peter Tilney, John (Wavertree)
Marshall, Douglas Redmayne, M. Turton, Rt. Hon. R. H.
Maudling, Rt. Hon. R. Ridsdale, J. E. Tweedsmuir, Lady
Mawby, R. L. Roberts, Sir Peter (Heeiey) Vosper, Rt. Hon. D. F.
Maydon, Lt.-Comdr. S. L. C. Rodgers, John (Sevenoaks) Wakefield, Edward (Derbyshire, W.)
Medlicott, Sir Frank Roper, Sir Harold Wakefield, Sir Wavell (St. M'lebone)
Nabarro, G. D. N. Ropner, Col. Sir Leonard Wall, Patrick
Nairn, D. L. S. Scott-Miller, Cmdr. R. Ward, Dame Irene (Tynemouth)
Nicholls, Harmar Sharples, R. C. Webster, David
Nicholson, Sir Godfrey (Farnham) Shepherd, William Williams, Paul (Sunderland, S.)
Nicolson, N.(B'n'm'th, E. & Chr'ch) Smithers, Peter (Winchester) Wills, Sir Gerald (Bridgwater)
Noble, Michael (Argyll) Spearman, Sir Alexander Wilson, Geoffrey (Truro)
Nugent, Richard Speir, R. M. Wolrige-Gordon, Patrick
Oakshott, Sir Hendrie Stevens, Geoffrey Wood, Hon. R.
Orr, Capt. L. P. S. Steward, Harold (Stockport, S.) Woollam, John Victor
Osborne, C. Steward, Sir William (Woolwich, W.) Yates, William (The Wrekin)
Page, R. G. Stoddart-Scott, Col. Sir Malcolm
Partridge, E. Stuart, Rt. Hon. James (Moray) TELLERS FOR THE NOES:
Peel, W. J. Studholme, Sir Henry Mr. J. E. B. Hill and Mr. Whitelaw.

Amendment proposed: In page 2, line 11, at end insert: (c) that in deciding which capacity is to be eliminated on the ground that it is excess capacity due regard has been had to the social consequences including employment of such elimination, bearing in mind the extent to which the district concerned is dependent upon

cotton and to the existence or otherwise of other industries in the area affected.—[Mr. Anthony Greenwood.]

Question put: That those words be there inserted:—

The Committee divided: Ayes 169, Noes 200.

Division No. 141.] AYES [9.45 p.m.
Ainsley, J. W. Fitch, A. E. (Wigan) Jones, J. Idwal (Wrexham)
Albu, A. H. Fletcher, Eric Jones, T. W. (Merioneth)
Allaun, Frank (Salford, E.) Foot, D. M. Kenyon, C.
Awbery, S. S. Forman, J. C. Key, Rt. Hon. C. W.
Bacon, Miss Alice Fraser, Thomas (Hamilton) King, Dr. H. M.
Bence, C. R. (Dumbartonshire, E.) Gaitskell, Rt. Hon. H. T. N. Lawson, G. M.
Benson, Sir George George, Lady Megan Lloyd (Car'then) Lee, Frederick (Newton)
Beswick, Frank Greenwood, Anthony Lever, Leslie (Ardwick)
Blackburn, F. Grenfell, Rt. Hon. D. R. Logan, D. G.
Blenkinsop, A. Grey, C. F. Mabon, Dr. J. Dickson
Bowden, H. W. (Leicester, S.W.) Griffiths, David (Rother Valley) McAlister, Mrs. Mary
Bowles, F. G. Griffiths, Rt. Hon. James (Llanelly) McCann, J.
Braddock, Mrs. Elizabeth Griffiths, William (Exchange) MacColl, J. E.
Brockway, A. F. Hale, Leslie Mclnnes, J.
Brown, Thomas (Ince) Hamilton, W. W. McKay, John (Wallsend)
Burke, W. A. Hannan, w. MacMillan, M. K. (Western Islet)
Burton, Miss F. E. Hayman, F. H. Mahon, Simon
Butler, Herbert (Hackney, C.) Healey, Denis Mallalieu, E. L. (Brigg)
Butler, Mrs. Joyce (Wood Green) Herbison, Miss M. Mann, Mrs. Jean
Carmichael, J. Hilton, A. V. Marquand, Rt. Hon. H. A.
Castle, Mrs. B. A. Hobson, C. R. (Keighley) Mitchison, G. R.
Champion, A. J. Holman, P. Monslow, W.
Chetwynd, G. R. Holmes, Horace Moody, A. S.
Cliffe, Michael Houghton, Douglas Morris, Percy (Swansea, W.)
Clunie, J. Howell, Charles (Perry Barr) Moss, R.
Coldrick, W. Howell, Denis (All Saints) Moyle, A.
Crossman, R. H. S. Hoy, J. H. Neal, Harold (Balsover)
Darling, George (Hillsborough) Hughes, Cledwyn (Anglesey) Noel-Baker, Rt. Hon. p. (Derby, S.)
Davies, Ernest (Enfield, E.) Hughes, Emrys (S. Ayrshire) Oliver, G. H.
Deer. G. Hughes, Hector (Aberdeen, N.) Oram, A. E.
de Freitas, Geoffrey Hunter, A. E. Owen, W. J.
Donnelly, D. L, Hynd, H. (Accrington) Padley, W. E.
Dugdale, Rt. Hn. John (W. Brmwch) Hynd, J. B. (Attercliffe) Paget, R. T.
Ede, Rt. Hon. J. C. Irvine, A. J. (Edge Hill) Paling, Rt. Hon. W. (Dearne Valley)
Edwards, Rt. Hon. Ness (Caerphilly) Isaacs, Rt. Hon. G. A. Palmer, A. M. F.
Edwards, Robert (Bilston) Janner, B. Paton, John
Edwards, W. J. (Stepney) Jay, Rt. Hon. D. P. T. Pentland, N.
Evans, Albert (Islington, S.W.) Jeger, George (Goole) Popplewell, E.
Fernyhough, E. Johnson, James (Rugby) Prentice, R. E.
Fifth, H. J. (Bedwellty) Jones, Jack (Rotherham) Price, J. T. (Westhoughton)
Price, Philips (Gloucestershire, W.) Slater, Mrs. H. (Stoke, N.) Viant, S. P.
Probert, A. R. Smith, Ellis (Stoke, S.) Warbey, W. N.
Pursey, Cmdr. H. Snow, J. W. Watkins, T. E.
Rankin, John Sorensen, R. W. Wells, Percy (Faversham)
Redhead, E. C. Sparks, J. A. Wheeldon, W. E.
Reeves, J. Spriggs, Leslie White, Henry (Derbyshire, N.E.)
Rhodes, H. Stewart, Michael (Fulham) Wilkins, W. A.
Robens, Rt. Hon. A. Stones, W. (Consett) Williams, David (Neath)
Roberts, Albert (Normanton) Strachey, Rt. Hon. J. Williams, Rev. Llywelyn (Ab'tillery)
Roberts, Goronwy (Caernarvon) Summerskill, Rt. Hon. E. Williams, W. R. (Openshaw)
Robinson, Kenneth (St. Pancras, N.) Swingler, S. T. Willis, Eustace (Edinburgh, E.)
Rogers, George (Kensington, N.) Sylvester, G. O. Winterbottom, Richard
Ross, William Taylor, Bernard (Mansfield) Woodburn, Rt. Hon. A.
Short, E. W. Thomas, Iorwerth (Rhondda, W.) Yates, V. (Ladyood)
Silverman, Julius (Aston) Thornton, E. Zilliacus, K.
Silverman, Sydney (Nelson) Tomney, F.
Skeffington, A. M. Ungoed-Thomas, Sir Lynn TELLERS FOR THE AYES:
Mr. Pearson and Mr. Simmons.
Agnew, Sir Peter Graham, Sir Fergus Maudling, Rt. Hon. R.
Aitken, W. T. Grant-Ferris, Wg Cdr. R.(Nantwich) Mawby, R. L.
Alport, C. J. M. Green, A. Maydon, Lt.-Comdr. S. L. C.
Amery, Julian (Preston, N.) Gresham Cooke, R. Medlicott, Sir Frank
Armstrong, C. W. Grimond, J. Nabarro, G. D. N.
Ashton, Sir Hubert Grimston. Hon. John (St. Albans) Nairn, D. L. S.
Atkins, H. E. Grimston, Sir Robert (Westbury) Nicholls, Harmar
Baldock, Lt.-Cmdr. J. M. Grosvenor, Lt.-Col. R. G. Nicholson, Sir Godfrey (Farnham)
Baldwin, Sir Archer Gurden, Harold Nicolson, N. (B'n'm'th, E. & Chr'ch)
Balniel, Lord Hall, John (Wycombe) Noble, Michael (Argyll)
Barber, Anthony Hare, Rt. Hon. J. H. Nugent, Richard
Barlow, Sir John Harris, Reader (Heston) Oakshott, Sir Hendrie
Barter, John Harrison, A. B. C. (Maldon) Orr, Capt. L. P. S.
Batsford, Brian Harvey, John (Walthamstow, E.) Osborne, C.
Beamish, Col. Tufton Hay, John Page, R. G.
Bell, Philip (Bolton, E.) Heald, Rt. Hon. Sir Lionel Partridge, E.
Bennett, F. M. (Torquay) Heath, Rt. Hon. E. R. G. Peel, W. J.
Bevins, J. R. (Toxteth) Henderson, John (Cathcart) Peyton, J. W. W.
Bidgood, J. C. Hesketh, R. F. Pickthorn, Sir Kenneth
Biggs-Davison, J. A. Hicks-Beach, Maj. W. W. Pike, Miss Mervyn
Bingham, R. M. Hill, Mrs. E. (Wythenshawe) Pilkington, Capt. R. A.
Bishop, F. P. Hill, John (S, Norfolk) Pitt, Miss E. M.
Black, Sir Cyril Hirst, Geoffrey Pott, H. P.
Body, R. F. Holland-Martin, C. J. Powell, J. Enoch
Bossom, Sir Alfred Holt, A. F. Price, David (Eastleigh)
Bowen, E. R. (Cardigan) Hornby, R. P. Prior-Palmer, Brig. Sir Otho
Boyle, Sir Edward Horobin, Sir Ian Ramsden, J. E.
Braine, B. R. Howard, Gerald (Cambridgeshire) Rawlinson, Peter
Brewi8, John Hughes-Young, M. H. C. Redmayne, M.
Bromley-Davenport, Lt.-Col. W. H. Hulbert, Sir Norman Ridsdale, J. E.
Brooman-White, R. C. Hurd, Sir Anthony Roberts, Sir Peter (Heeley)
Browne, J. Nixon (Craigton) Hutchison Michael Clark (E'b'gh, S.) Rodgers, John (Sevenoaks)
Burden, F. F. A. Hylton-Foster, Rt. Hon. Sir Harry Roper, Sir Harold
Carr, Robert Iremonger, T. L. Ropnor, Col. Sir Leonard
Clarke, Brig. Terence (Portsmth, W.) Irvine, Bryant Godman (Rye) Scott-Miller, Cmdr. R.
Conant, Maj. Sir Roger Jenkins, Robert (Dulwich) Sharpies, R. C.
Coolie, Robert Jennings, J. C. (Burton) Shepherd, William
Cordeaux, Lt.-Col. J. K. Jennings, Sir Roland (Hallam) Smithers, Peter (Winchester)
Courtney, Cdr. Anthony Johnson, Dr. Donald (Carlisle) Spearman, Sir Alexander
Crosthwaite-Eyre, Col. O. E. Johnson, Eric (Blackley) Speir, R. M.
Cunningham, Knox Joseph, Sir Keith Stevens, Geoffrey
Currie, G. B. H. Keegan, D. Steward, Harold (Stockport, S.)
Dance, J. C. G. Kerby, Capt. H. B. Steward, Sir William (Woolwich, W.)
Deedes, W. F. Kerr, Sir Hamilton Stoddart-Scott, Col. Sir Malcolm
de Ferranti, Basil Lancaster, Col. C. G. Stuart, Rt. Hon. James (Moray)
Dodds-Parker, A. D. Langford-Holt, J. A. Studholme, Sir Henry
Donaldson, Cmdr. C. E. McA. Leavey, J. A. Summers, Sir Spencer
Doughty, C. J. A. Leburn, W. G. Taylor, Sir Charles (Eastbourne)
du Cann, E. D. L. Legh, Hon. Peter (Peterfield) Teeling, W.
Duncan, Sir James Lindsay, Hon. James (Devon, N.) Thomas, Leslie (Canterbury)
Eccles, Rt. Hon. Sir David Lindsay, Martin (Solihull) Thomas, P. J. M. (Conway)
Elliott, R. W. (Ne'castle upon Tyne, N.) Lloyd, Maj. Sir Guy (Renfrew, E.) Thompson, Kenneth (Walton)
Errington, Sir Eric Loveys, Walter H. Thompson, R. (Croydon, S.)
Farey-Jones, F. W. Lucas, P. B. (Brentford & Chiswick) Thornton-Kemsley, Sir Colin
Finlay, Graeme Lucas-Tooth, Sir Hugh Tiley, A. (Bradford, W.)
Fisher, Nigel Macdonald, Sir Peter Tilney, John (Wavertree)
Fraser, Hon. Hugh (Stone) McLaughlin, Mrs. P. Turton, Rt. Hon. R. H.
Freeth, Denzil Maclean, Sir Fitzroy (Lancaster) Tweedsmuir, Lady
Gammans, Lady McLean, Nell (Inverness) Vosper, Rt. Hon. D. F.
George, J. C. (Pollok) McMaster, Stanley Wakefield, Edward (Derbyshire, W.)
Gibson-Watt, D. Maitland, Hon. Patrick (Lanark) Wakefield, Sir Wavell (St. M'lebone)
Glover, D. Manningham-Buller, Rt. Hn. Sir R. Wall, Patrick
Godber, J. B. Markham, Major Sir Frank Ward, Dame Irene (Tynemouth)
Goodhart, Philip Marlowe, A. A. H. Webster, David
Williams, Paul (Sunderland, S.) Wolrige-Gordon, Patrick Yates, William (The Wrekin)
Wills, Sir Gerald (Bridgwater) Wood, Hon. R.
Wilson, Geoffrey (Truro) Woollam, John Victor TELLERS FOR THE NOES:
Mr. Bryan and Mr. Whitelaw.
Mr. Rhodes

I beg to move, in page 2, line 32, after "disposal", to insert: (including disposal for the purpose of advancing research in the cotton industry)". I do so with great pleasure because this is about the only part of the Bill to which I can readily agree. This is the most constructive Amendment we have had today and I think that the President of the Board of Trade can readily accede to it, because I know from experience that he is in sympathy with the idea.

There is a lot of natural apprehension about what will happen to the research institute associated with the cotton industry. I am referring to the Shirley Institute. During the last few years it has worked hard and produced many useful things of the cotton industry. It has seen 400 mills close during the last few years and has seen potential revenue being lost each year, because the Institute is run mainly on the basis of a levy on the members of the trade. In the case of the spinning section the criterion is represented by the spindles, in the case of weaving it is looms, in the case of the finishing trade it is wages and in the case of the merchant converters it is yardage. The levy is imposed by the Cotton Board which sends out invoices to the members of the trade.

If by the levy and subscriptions the amount of money raised is £280,000 or more, the Institute can look forward to a grant of £80,000 from the Government. In theory it does not matter if most of the cotton industry closes, because in budgeting for the year's work the Institute submits a budget to the Cotton Board for, let us say, £230,000, which the Cotton Board collects. In theory, I suppose, the levy would be imposed on one firm if only one firm remained in the industry, though in practice that could not happen.

There is apprehension because the more mills which close down the more money has to be found by the remaining firms to provide the same amount of money to carry on this work, otherwise the work of the Institute will suffer. We do not want that to happen. We want to feel that if during the next few years there is any money left over from what is needed to effect concentra- tion in the cotton industry, it will relieve the finances of the Shirley Institute instead of going to relieve the National Debt.

I do not want to speak any longer about this because I think it does not call for a long debate, although we could easily make it one, and I might be tempted to join in for half an hour later if it goes on for long. This is an interesting subject and it is one which I have very much at heart. I will conclude by hoping that the President of the Board of Trade will give us something after working all day until 10 o'clock at night.

10.0 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)

I am sure that hon. Members on both sides of the Committee will agree with the hon. Member for Ashton-under-Lyne (Mr. Rhodes) in paying tribute to the importance of the work of the Shirley Institute. A great deal of the future of the Lancashire cotton industry depends on technical research over the next few years, and the reorganisation scheme will fail unless tremendous attention is paid to research.

The Amendment specifies the advancement of research as one of the purposes to which the residuary funds left in the Cotton Board's hands after the reorganisation scheme is wound up could be devoted. These funds have been contributed by the industry under compulsory levies, and what should be done with them will no doubt depend on how large the amounts are that are left in the hands of the Cotton Board. If they are very large, it might be that the Board would feel that they should be returned to the firms which had paid the compulsory levy.

As at present drafted, the subsection gives complete freedom as to the purpose for which the funds may be spent. It is true that the power in the Bill is permissive, and it may well be that the Board, in agreement with the industry, will decide that use need not be made of it in the original reorganisation scheme. The problem of disposal will not arise in practice until the end of the period when the compulsory levies are raised, and this will not occur for several years.

We think the Amendment adds nothing to the Bill as at present drafted, but, frankly, there are no strong reasons for resisting it, and, although we believe that the powers are already in the Bill, if hon. Gentlemen opposite feel strongly on the subject we will not resist the Amendment.

Amendment agreed to.

Sir D. Eccles

I beg to move, in page 2. line 41, after "capacity", to insert: or to the re-equipment of businesses in the section, being arrangements made in contemplation of or in connection with the passing or operation of this Act ". The purpose of the subsection is to enable the Cotton Board to raise levies on the section of the industry concerned to provide the funds necessary for the compensation of the displaced employees. As drafted, the subsection would limit these levies to payments to workpeople displaced as a result of the reorganisation scheme; that is, displaced as a result of the elimination of capacity.

However, when the employers and the trade unions discussed the principles of

compensation for work people, they agreed between them that, in respect of the spinning and weaving sections, compensation should also apply to operatives displaced as a result of re-equipment; that is to say, if a re-equipment grant is given, perhaps for ring spindles, and the result is that a number of men who had been working on mule spindles may not be re-employed on the ring spindles, they will rank as if they were men displaced as a result of a reorganisation scheme. This is something which improves the Bill.

Amendment agreed to.

Amendment proposed: In page 3, line 27, at end insert: No order of revocation made under this section shall have the effect of relieving those carrying on business in the industry who had been parties to the scheme of reorganisation from any obligation previously entered into for the payment of compensation to persons employed by them.—[Mr. Anthony Greenwood.]

Question put, That those words be there inserted:—

The Committee divided: Ayes 147, Noes 182.

Division No. 142.] AYES [10.6 p.m.
Ainsley, J. W. George, Lady Megan Lloyd(Car'then) McAlister, Mrs. Mary
Albu, A. H. Greenwood, Anthony McCann, J.
Allaun, Frank (Salford, E.) Grenfell, Rt. Hon. D. R. MacColl, J. E.
Awbery, S. S. Grey, C. F. Mclnnes, J.
Bacon, Miss Alice Griffiths, David (Rother Valley) McKay, John (Wallsend)
Bence, C. R. (Dunbartonshire, E.) Griffiths, Rt. Hon. James (Llanelly) MacMillan, M. K. (Western Isles)
Benson, Sir George Hale, Leslie Mabon, Simon
Beswick, Frank Hannan, W. Mallalieu, E. L. (Brigg)
Blackburn, F. Hayman, P. H. Mann, Mrs. Jean
Blenkinsop, A. Healey, Denis Marquand, Rt. Hon. H. A.
Bowden, H. W. (Leicester, S.W.) Herbison, Miss M. Mitchison, G. R.
Bowles, F. G. Hilton, A. V. Monslow, W.
Braddock, Mrs. Elizabeth Holman, P. Moody, A. S.
Brockway, A. F. Holmes, Horace Morris, Percy (Swansea, W.)
Brown, Thomas (Ince) Houghton, Douglas Neal, Harold (Bolsover)
Burke, W. A. Howell, Charles (Perry Barr) Noel-Baker, Rt. Hon. P. (Derby, S.)
Butler, Mrs. Joyce (Wood Green) Howell, Denis (All Saints) Oram, A. E.
Castle, Mrs. B. A. Hoy, J. H. Owen, W. J.
Champion, A. J. Hughes, Cledwyn (Anglesey) Padley, W. E.
Cliffe, Michael Hughes, Hector (Aberdeen, N.) Paget, R. T.
Coldrick, W. Hunter, A. E. Paling, Rt. Hon. W. (Dearne Valley)
Crossman, R. H. S. Hynd, H. (Accrington) Palmer, A. M. F.
Davies, Ernest (Enfield, E.) Hynd, J. B. (Attercliffe) Pearson, A.
Deer, G. Irvine, A. J. (Edge Hill) Pentland, N.
de Freitas, Geoffrey Isaacs, Rt. Hon. G. A. Popplewell, E.
Dugdale, Rt. Hit. John (W. Brmwch) Janner, B. Price, J. T. (Westhoughton)
Ede, Rt. Hon. J. C. Jay, Rt. Hon. D. P. T. Price, Philips (Gloucestershire, W.)
Edwards, Rt. Hon. Ness (Caerphilly) Jeger, George (Goole) Probert, A. R.
Edwards, Robert (Bilston) Johnson, James (Rugby) Pursey, Cmdr. H.
Edwards, W. J. (Stepney) Jones, Elwyn (W. Ham S.) Rankin, John
Evans, Albert (Islington, S.W.) Jones, Jack (Rotherham) Redhead, E. C.
Fernyhough, E. Jones, J. Idwal (Wrexham) Reeves, J.
Finch, H. J. (Bedwelity) Jones, T. W. (Merioneth) Rhodes, H.
Fitch, A. E. (Wigan) King, Dr. H. M. Robens, Rt. Hon. A.
Fletcher, Erlo Lawson, G. M. Roberts, Albert (Normanton)
Foot, D. M. Lee, Frederick (Newton) Roberts, Goronwy (Caernarvon)
Forman, J. C. Lever, Leslie (Ardwick) Robinson, Kenneth (St. Pancras, N.)
Fraser, Thomas (Hamilton) Logan, D. G. Rogers, George (Kensington, N.)
Gaitskell, Rt. Hon. H. T. N. Mabon, Dr. J. Dickson Ross, William
Short, E. W. Strachey, Rt. Hon. J. White, Henry (Derbyshire, N.E.)
Silverman, Sydney (Nelson) Summerskill, Rt. Hon. E. Williams, Rev. Llywelyn (Ab'tillery)
Skeffington, A. M. Swingler, S. T. Williams, W. R. (Openshaw)
Slater, J. (Sedgefield) Sylvester, C. 0. Willis, Eustace (Edinburgh, E.)
Smith, Ellis (Stoke, S.) Taylor, Bernard (Mansfield) Winterbottom, Richard
Snow, J. W. Thomas, Iorwerth (Rhondda, W.) Woodburn, Rt. Hon. A.
Sorensen, R. W. Thornton, E. Yates, V. (Ladywood)
Sparks, J. A. Tomney, F. Zilliacus, K.
Spriggs, Leslie Ungoed-Thomas, Sir Lynn
Stewart, Michael (Fulham) Watkins, T. E. TELLERS FOR THE AYES:
Stones, W. (Consett) Wheeldon, W. E. Mr. Wilkins and Mr. Simmons.
Agnew, Sir Peter Green, A. Nugent, Richard
Aitken, W. T. Gresham Cooke, R. Osborne, C.
Alport, C. J. M. Grimston, Hon. John (St. Albans) Page, R. G.
Amery, Julian (Preston, N.) Grimston, Sir Robert (Westbury) Partridge, E.
Armstrong, C. W. Grosvenor, Lt.-Col. R. G. Peel, W. J.
Ashton, Sir Hubert Gurden, Harold Pickthorn, Sir Kenneth
Baldock, Lt.-Cmdr. J. M. Hall, John (Wycombe) Pike, Miss Mervyn
Baldwin, Sir Arthur Harris, Reader (Heston) Pilkington, Capt. R. A.
Balniel, Lord Harvey, John (Walthamstow, E.) Pitt, Miss E. M.
Barber, Anthony Heald, Rt. Hon. Sir Lionel Pott, H. P.
Barlow, Sir John Heath, Rt. Hon. E. R. G. Powell, J. Enoch
Barter, John Hesketh, R. F. Price, David (Eastleigh)
Batsford, Brian Hill, Mrs. E. (Wythenshawe) Prior-Palmer, Brig. Sir Otho
Ball, Philip (Bolton, E.) Hirst, Geoffrey Ramsden, J. E.
Bennett, F. M. (Torquay) Holland-Martin, C. J. Rawlinson, Peter
Bidgood, J. C. Holt, A. F. Redmayne, M.
Biggs-Davison, J. A. Hornby, R. P. Ridsdale, J. E.
Bingham, R. M. Horobin, Sir Ian Roberts, Sir Peter (Heeley)
Bishop, F. P. Howard, Gerald (Cambridgeshire) Rodgers, John (Sevenoaks)
Black, Sir Cyril Hughes-Young, M. H. C. Roper, Sir Harold
Body, R. F. Hulbert, Sir Norman Ropner, Col. Sir Leonard
Bowen, E. R. (Cardigan) Hurd, Sir Anthony Scott-Miller, Cmdr. R.
Boyle, Sir Edward Hutchison, Michael Clark (E'b'gh, S.) Sharpies, R. C.
Braine, B. R. Hylton-Foster, Rt. Hon. Sir Harry Shepherd, William
Brewis, John Iremonger, T. L. Simon, J. E. S. (Middlesbrough, W.)
Bromley-Davenport, Lt.-Col. W. H. Irvine, Bryant Godman (Rye) Smithers, Peter (Winchester)
Browne, J. Nixon (Craigton) Jenkins, Robert (Dulwich) Spearman, Sir Alexander
Bryan, P. Jennings, J. C. (Burton) Speir, R. M.
Burden, F. F. A. Jennings, Sir Roland (Hallam) Stevens, Geoffrey
Carr, Robert Johnson, Dr. Donald (Carlisle) Steward, Harold (Stockport, S.)
Clarke, Brig. Terence (Portsmth, W.) Johnson, Eric (Blackley) Steward, Sir William (Woolwich, W.)
Conant, Maj. Sir Roger Joseph, Sir Keith Stoddart-Scott, Col. Sir Malcolm
Cooke, Robert Keegan, D. Stuart, Rt. Hon. James (Moray)
Cordeaux, Lt.-Col. J. K. Kerby, Capt. H. B. Studholme, Sir Henry
Courtney, Cdr. Anthony Kerr, Sir Hamilton Summers, Sir Spencer
Crosthwaite-Eyre, Col. O. E. Lancaster, Col. C. G. Taylor, Sir Charles (Eastbourne)
Cunningham, Knox Langford-Holt, J. A. Teeling, W.
Currie, G. B. H. Leavey, J. A. Temple, John M.
Dance, J. C. G. Leburn, W. G. Thomas, P. J. M. (Conway)
Deedes, W. P. Legh, Hon. Peter (Petersfield) Thompson, Kenneth (Walton)
de Ferranti, Basil Lindsay, Hon. James (Devon, N.) Thompson, R. (Croydon, S.)
Dodds-Parker, A. D. Lindsay, Martin (Solihull) Thornton-Kemsley, Sir Colin
Donaldson, Cmdr. C. E. McA. Loveys, Walter H. Tiley, A. (Bradford, W.)
Doughty, C. J. A. Lucas, P. B.(Brentford & Chiswick) Tilney, John (Wavertree)
du Cann, E. D. L. Lucas-Tooth, Sir Hugh Tweedsmuir, Lady
Duncan, Sir James Macdonald, Sir Peter Vosper, Rt. Hon. D. F.
Eccles, Rt. Hon. Sir David McLaughlin, Mrs. P. Wakefield, Edward (Derbyshire, W.)
Elliott, R. W.(Ne'castle upon Tyne, N.) McLean, Neil (Inverness) Wakefield, Sir Wavell (St. M'lebone)
Errington, Sir Eric McMaster, Stanley Wall, Patrick
Farey-Jones, F. W. Maitland, Hon. Patrick (Lanark) Ward, Dame Irene (Tynemouth)
Finlay, Graeme Manningham-Buller, Rt. Hn. Sir R. Webster, David
Fisher, Nigel Markham, Major Sir Frank Whitelaw, W. S. I.
Freeth, Denzil Marlowe, A. A. H. Wills, Sir Gerald (Bridgwater)
Gammans, Lady Mawby, R. L. Wilson, Geoffrey (Truro)
Garner-Evans, E. H. Maydon, Lt.-Comdr. S. L. C. Wolrige-Gordon, Patrick
George, J. C. (Pollok) Medlicott, Sir Frank Wood, Hon. R.
Gibson-Watt, D. Nabarro, G. D. N. Woollam, John Victor
Glover, D. Nairn, D. L. S. Yates, William (The Wrekin)
Godber, J. B. Nicholls, Harmar
Goodhart, Philip Nicholson, Sir Godfrey (Farnham) TELLERS FOR THE NOES:
Graham, Sir Fergus Nicolson, N.(B'n'm'th, E. & Chr'ch) Mr. Brooman-White and
Grant-Ferris, Wg Cdr. R. (Nantwich) Noble, Michael (Argyll) Mr. J. E. B. Hill.
Mr. J. Rodgers

I beg to move, in page 3, line 36, to leave out "arising" and to insert "if the question arises".

This is a purely drafting Amendment. The word "arising" is in the wrong place. It relates to the question of excess capacity and not to capacity itself. The Amendment removes the ambiguity, and I hope that the Committee will accept it.

Amendment agreed to.

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. Blackburn

I wish to raise a point—

10.15 p.m.

Mr. Hale

On a point of order. This is a dilemma that has occurred before. I endeavoured to move an Amendment earlier, but I was told that it could not be moved until it was reached in its proper order on the Notice Paper. I should like to know why I should not be allowed to do so now.

The Deputy-Chairman (Sir Gordon Touche)

The Amendment was not called because it is out of order.

Mr. Hale

On the contrary, Sir Gordon. We discussed it at length earlier, and the President of the Board of Trade replied to it. Sir Charles said that it could be discussed with another Amendment which had been moved. I am referring to the Amendment in page 3, line 27. It was discussed at length, and I was told that it could not be formally moved until we reached it, when we could have a Division on it.

Mr. Anthony Greenwood

We have just divided on it.

Mr. Hale

When I came back, having left the Chamber for five minutes for the first time for four hours, I read on the indicator some completely erroneous information. After all, Sir Gordon, there are many hon. Members engaged in many different duties who are concerned about this. I came back and I told my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) what I saw on the indicator, and that I would move this Amendment "on the nod."

I do not want to waste time arguing, because it does not matter now; but it is true that we saw on the indicator that we were dealing with my hon. Friend's Amendment, and I did not know that the President of the Board of Trade had moved his Amendment. I came back after the Division ready to move this Amendment "on the nod", and that is the situation.

Mr. S. Silverman

Further to that point—

The Deputy-Chairman

I cannot deal with the question of the indicator, for which I have no responsibility.

Mr. Hale

It is part of the machinery of the House.

Mr. Silverman

I think it ought to be recognised that a mistake was made. What appeared on the Annunciator was, "President of the Board of Trade, Clause 1, page 2, line 41, after 'capacity' insert…"

Mr. Anthony Greenwood

Perhaps I can assist you, Sir Gordon, and my hon Friends. The situation was that the President of the Board of Trade, through his Parliamentary Secretary, was most conciliatory about the Amendment to Clause 1, page 2, line 41, and therefore the Amendment to which my hon. Friend the Member for Oldham, West (Mr. Hale) refers came up early. Even had the information on the Annunciator been right, my hon. Friend would not have been here to move his Amendment formally.

Mr. Blackburn

After those interventions, may I start my speech again. Sir Gordon?

I wish to call attention to a matter which I raised during the Second Reading debate. On that occasion I asked for an answer and had I received an answer it would have saved me from having to make a speech tonight; and it would have saved putting on the Notice Paper an Amendment which has not been selected. I cannot blame the Chairman of Ways and Means for not selecting it, because he must have listened so many times to explanations of the difference between "may" and "shall", as I have myself listened as a Chairman of Committees. I have heard a great many different explanations, including the one that "may" means "shall".

The question which I asked on Second Reading was in relation to line 35, where the word "may" is used, while in other parts of the Clause the word "shall" appears. As anyone who reads it through carefully will agree, this Clause is dotted with "may" and "shall"— there are nine "shalls" and fourteen "mays". Obviously, "may" is correct in a number of cases—for instance, in subsections (7), (8), (10) and (11). In other cases there is some doubt about it. The question may be asked why we put down an Amendment to line 35 to alter "may" to "shall" and did not put down Amendments relating to other occasions when that word is used. But it will be clear why that was done from what I am about to say.

If the Committee will look at subsection (2) of this Clause, it will be seen that there the position is mandatory. It states: Any scheme prepared by the Cotton Board under this section … shall be submitted by them to the Board of Trade … In subsection (2, b) it states: that arrangements have been made… There is nothing doubtful about it. In subsection (4), when it comes to raising money to get rid of excess capacity, we have the word "shall". The money shall be raised by means of charges… But when we come to subsection (5) it states: provision may also be made by the reorganisation scheme… In this case it is not mandatory, but "may". I hope that we shall not have the answer on this occasion that "may" means "shall".

I wish to raise this matter because it seems rather strange that when it comes to raising money for compensation for surplus capacity we have the word "shall". It is mandatory upon the Cotton Board and upon the Board of Trade. But when it comes to raising money for compensation for the employees in the industry, we have the word "may". There may be an explanation quite different from the thousand and one that I have already heard as a Chairman of Committees. I should like to have from the President or the Parliamentary Secretary an explanation why, on this occasion, it is the word "may" and not the word "shall".

Mr. S. Silverman

Before the President of the Board of Trade replies to the point raised by my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn), may I remind the Committee that it has a direct bearing upon a point which was in controversy between us on an earlier Amendment?

We were then considering whether the President of the Board of Trade had any discretion, once a scheme had been agreed and he was satisfied that it complied with subsection (2, a and b), whether or not he would then lay the necessary Order to give effect to the scheme. The President of the Board of Trade assured us—and he repeated it more than once—that he had a discretion at that stage and that even when a scheme had been agreed and he was satisfied that it was within the four corners of the Bill, it was for him to decide whether or not he would allow the scheme to go forward and present the Motion which had to be accepted by the House before legislative sanction was given to the agreed scheme.

If the word "may" in line 13 means "shall", then the President was quite wrong; he has no such discretion. If it means "shall", it is perfectly clear that the President of the Board of Trade misunderstands the duty that is laid upon him under this Clause. I must assume that the Chair was right in not calling the Amendment which would have substituted "shall" for "may". If the Chair was right, it is because "may" means "shall" in this case. If "may" means "shall" in this case, then, as my hon. Friend said, it is mandatory upon the President to present to Parliament an agreed scheme as soon as he is satisfied about paragraphs (a) and (b). It looks as if the President of the Board of Trade has been under a very serious misconception. I hope that he will look at this again and that if he said what he did not mean on the last occasion, he will tell us now what he understands the position to be.

As I understand it, he has no discretion of any kind once a scheme has been agreed and it has satisfied all these things. He has no option whatsoever and it becomes his clear, statutory duty, without discretion of any kind, to present to Parliament the scheme in an Order and leave Parliament to accept or reject it.

Sir D. Eccles

We desire the word "may" and not the word "shall" for this reason. If we had the word "shall"—"provision shall be made by the reorganisation scheme"—the effect would be that all the moneys to be paid out for compensation—

Mr. Silverman

On a point of order. The President of the Board of Trade is now debating the merits of the question whether the word "may" or the word "shall" ought to be the word in the subsection. I submit to you, Sir Gordon, that that question is not before the Committee. The Chair has decided that that Amendment is not to be called, and my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) is raising this matter on the Motion, That the Clause, as amended, stand part of the Bill.

Mr. Blackburn

I hope it will be in order for the President of the Board of 'Trade to reply, because I have asked for an explanation.

Mr. Silverman

I am much obliged to my hon. Friend. I was wrong in thinking that it did not arise, for my hon. Friend asked the question. The point I am making is that it is really out of order to discuss why we prefer one word to another if the Ruling of the Chair is already quite clear that the two words mean the same thing.

Mr. Blackburn

Further to that point of order, Sir Gordon. As the one who was going to move the Amendment, I have no knowledge that the Chair has ruled that the words mean the same thing. I was merely told that this Amendment had not been selected. I have asked that when the answer is given I shall not be told that "may" means "shall".

Mr. Silverman

I think my hon. Friend is very wise to raise the point to enable us to have an explanation of it. What I am saying is that the Chair decided that this Amendment should not be selected. I cannot conceive that the Chair would have so decided if there were all the difference in the world between the two words in that the word "may" is permissive whereas the word "shall" is compulsory. The Amendment, in my respectful submission to the Chair, could only not have been selected if it were one of those cases in which "may" in fact means "shall".

The Deputy-Chairman

I do not think we can go into the speculative reasons why the Amendment was not selected. The hon. Member for Stalybridge and Hyde (Mr. Blackburn) asked for an explanation, and I thought it proper to hear him on that.

Sir D. Eccles

The reason the word "may" is in the subsection is that cases may arise where a firm wishes to provide from its own funds money for compensating displaced workpeople over and above its quota to the levy. By putting it in this way, the provision may be made and it means that they can make it in another way as well. In other words, it will be possible for a firm to supplement the levy moneys.

On the point raised by the hon. Member for Nelson and Colne (Mr. S. Silverman), I can only repeat what I said before. In subsection (2) there are two conditions under paragraphs (a) and (b) which I must see have been fulfilled in a reorganisation scheme before I present it to the House, but it does not say what other things I may look at. Indeed, I will look at a great many other things. I assure the hon. Member that it is the firm intention of the Board of Trade to give these reorganisation schemes a thorough examination.

Mr. Blackburn

May I thank the President of the Board of Trade for the explanation he has given? [Interruption.] I was waiting until the other speeches which are being made in the Committee had finished. I am delighted that the information is not that "may" means "shall". The right hon. Gentleman will agree that there was reason for suspicion when in one case it was "shall" when dealing with payment for equipment and it was only "may" for compensation for employees.

Mr. Hale

I appreciate that my hon. and right hon. Friends want to proceed to a Division. I sympathise with them and agree with them. Therefore, with something like twenty pages of notes of the only speech I intended to make in the Committee stage and after three hours of research on the only subject I thought important, I shall content myself by making my point in a maximum period of three minutes. I was taught to believe that goods should be made for use and not for profit. I have stood on three-legged stools addressing half-witted kids at street corners on that and seen more light in their eyes than I have seen in the eyes of hon. Members opposite today. It is a fundamental theory, but somehow it seems to have slipped out of our consciousness. I said this in 1952.

10.30 p.m.

My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), formerly of Heywood and Radcliffe, made a fine speech on that occasion in which he propounded various steps which could be taken to help the cotton industry. None of them has been taken. The President tonight has said that we must not move too quickly. I read with great admiration the speech of my hon. Friend the Member for Farnworth (Mr. Thornton) on Second Reading, which I missed, unfortunately, because I went home early through illness.

I agreed with every word of that speech by my hon. Friend the Member for Rossendale—every word but one. I ventured to disagree that there was a world slump in cotton. There was no slump in cotton. There was more cotton being consumed in the world than ever before, in spite of the temporary recession referred to in a few Western European countries.

I suppose that after my speech in debate people said, "This is only Hale, with his old-fashioned economics about being kind to everyone. Let us have more H-bombs and let us have arms, and let us spend our money sensibly." The next year there was an international cotton conference in which they suddenly started to think about these things. They prepared a plan of the output of the countries of the world for the following year, and Britain was about 100 per cent. out in the estimate.

The purpose of this Bill is to have a new plan prepared by the same people and to hope that it will be right. We cannot expect that it will be right unless we know what the Government will do. The Government did certain things, such as abolishing Imperial Preference and abolishing cotton control and introducing restrictions on credit and introducing higher interest rates and reducing purchases and—

The Temporary Chairman (Mr. John Arbuthnot)

Order. I must ask the hon. Member to keep more closely to the Clause.

Mr. Hale

I do not want to prolong the discussion and I promise to sit down in a minute, but under that Ruling, Sir, I should not sit down for a long time. We are discussing the preparation of a plan to decide what is excess capacity. In doing that, cannot we take into account the revelant facts? In doing that, must we not know what the demand will be?

I do not want to extend the debate. I know that I am out of date. I know that I am just a rather emotional crank. I think that perhaps my time is served. But there were times when we all used to say that there were 20 million people in the world who were short of cotton and that the consumption of cotton per head in Asia had fallen from 19 yards to 13 yards per man. We know that on the North American Continent the consumption per man is 17.5 kilogrammes and in Asia it is 1.5 kilogrammes and in Africa about the same. The plan to smash up machines without a little rethinking in terms of the United Nations Organisation and the planning of consumption is open to precisely the same objections as my hon. Friends used to launch against the scheme for destroying food in the 1930's and against the saying, "Even tho' there is a need, we will destroy things to hold prices".

That is the point which I wanted to make, and I think that I have made it in the time I promised to occupy. I apologise for detaining the Committee for as long as a few minutes.

Question put, and agreed to.

Clause, as amended, ordered to stand part of the Bill.