HC Deb 23 June 1959 vol 607 cc1059-155
Mr. Jay

I beg to move, in page 1, line 12, to leave out from "as" to "to" in line 13 and to insert: it is in the opinion of the Cotton Board desirable in the circumstances of the finishing section". This Amendment is simply an attempt to introduce rather more precision of language into the Bill and also to set rather more precise limits to the amount of money which can be spent in compensation for the elimination of excess capacity. As the President of the Board of Trade originally introduced the Bill to the House, compensation was to be related to the number of machines of any description which were to be eliminated. In Committee, he proposed to insert the additional words which now appear in the Bill to the effect that 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,

It was pointed out by hon. Members on both sides of the Committee that those additional words gave very wide latitude to the Cotton Board to base compensation not merely on factors other than the number of machines, but on any factor whatever of any kind which the Board chose to consider relevant. When we asked the right hon. Gentleman why he wished to go as wide as that, he replied that there were special difficulties of definition in the case of the finishing section of the industry. He intended these words simply to be used in the case of the finishing section and not to be extended further. He professed himself unable to devise any more precise words which would get him over the difficulty he had in mind without going quite so wide as the words he has inserted in the Bill.

The point of this Amendment is that it seemed to us that if that were the purpose there could be no objection to limiting those wider words to the finishing section. If the President still holds to the argument he advanced in Committee, I do not see why he should not be willing to accept this Amendment, unless he has thought of some better solution and better definition which would circumscribe the powers even more precisely.

Sir D. Eccles

I first mention a very small fault in the Amendment, not that it is serious. In the subsection to which the Amendment relates the word "section" refers to a section as defined in a reorganisation scheme. As was explained in the White Paper, there are likely to be four sections in the finishing trade and, therefore, the last word of the Amendment should be "sections", in the plural.

Even so, I should not recommend the House to accept the Amendment. As the right hon. Member for Battersea, North (Mr. Jay) said, we argued the case in Committee and I then said that reorganisation schemes and compensation in the spinning, doubling and weaving sections would be related to the number of machines as the yardstick, as was done in the Bill in the beginning. That remains the case. Those schemes are going forward and it will be the machine—the loom or spindle—to which the compensation will be related. I have looked at the case of the finishing section again and it is still uncertain precisely how the compensation will be measured, but it will not be on a scale more generous than the compensation in the other sections.

It now appears that it is just possible that one or two firms which had not been thought about before may come forward to the Cotton Board and ask to be included under the Bill. Such a firm or firms would not readily fit into any of the schemes we have already defined. I do not know whether this will be the case, but if it were, I am advised by the Cotton Board that it is not at all certain by exactly what means their compensation, if they are entitled to any, could be measured.

For that reason, I hope that the right hon. Member will not press this Amendment, because I think we can trust the Cotton Board. It understands very clearly the doubts which were raised in Committee. There is no intention at all of introducing elements for measuring compensation that would enable compensation to be "blown up," if I may use that phrase, in respect of particular sections.

Mr. Jay

The right hon. Gentleman has now thought again about this matter and that, perhaps, is a little disturbing. First, he wanted to relate compensation to the number of machines throughout the industry and he told us in Committee that in the finishing section difficulties might arise. Now he has told us that these difficulties might arise in firms which may or may not be within the finishing section.

It is perhaps unfortunate that the Bill is framed in this way. Nevertheless, we have no serious doubts that the Cotton Board means to carry out the job in the most scrupulous and satisfactory manner that it can. Our only desire is to frame the Bill in the most precise and effective manner. If the right hon. Gentleman assures us that with the draftsmen at his command he feels unable to do that, subject to what my hon. Friend the Member for Nelson and Colne (Mr. S Silverman) might say, I do not think that we would press the Amendment further.

Mr. Sydney Silverman (Nelson and Colne)

I agree with my right hon. Friend that nothing much would be achieved by dividing the House now or by discussing the point further, but it would be wrong if I did not record the dissatisfaction which any old Member of the House would feel about accepting in any Statute, and especially a Statute which involves the expenditure of public money, a form of words which is admitted by the Government to go far beyond what is the case.

It may be that the alternative suggested by my right hon. Friend is not acceptable to the Government. It may be that no other form of words ever suggested in Committee or here would be acceptable, but it is clear that the words in the Bill are, or ought to be, wholly unacceptable to any Member of the House who seriously accepts that it is the function of the House to control public money.

I hope that if we do not divide against or in favour of the Amendment the right hon. Gentleman will consider the matter again. I hope that he will ask his draftsmen to find a form of words which will limit the powers of the Cotton Board in this respect to those which the Government think it ought to have, and not give it the wider indeterminate powers now given to it. It cannot be beyond the capacity of Parliamentary draftsmen to find a suitable form of words to do something which everybody can see the Bill does not do. A Bill presented in this clumsy, slipshod way does no credit to the Government, or the House, or to the Bill.

Amendment negatived.

Mr. Ernest Thornton (Farnworth)

I beg to move, in page 2, line 2, to leave out: loss of employment due to and to insert: the loss of the particular employment occasioned by". The Amendment will ensure that where compensation is paid for scrapped machinery, compensation will also be paid to displaced workers. As the Bill stands that is not bound to happen. There is some ambiguity about the interpretation and understanding of the words in the Bill: … in respect of loss of employment due to the elimination of the excess capacity. The aim of the Amendment is to ensure that, where an employer receives compensation for machinery that is scrapped, the operatives who were employed on that machinery will also receive compensation irrespective of where they go or what they subsequently do.

This problem has been highlighted by the news in the Press during the last few days. It has been reported that the 53 years old head of the £3 million Taylor-Walker brewery firm is to be given £60,000 for loss of office consequent on merger. This sum will be paid irrespective of whether this gentleman goes to another highly remunerative job. It is for loss of office.

5.15 p.m.

We are living in a world of false values and false assessments. On the basis of the table of maximum entitlement provisionally agreed between the unions and the employers in the cotton industry, I calculate that this gentleman, who no doubt is a very estimable gentleman, is valued at 240 textile operatives. That is scandalous. The principle that applies to the payment of compensation to high salaried people for loss of office should apply equally to workers who are declared redundant under this scheme in pursuit of which large sums of public money are to be spent.

I do not want to go into a lot of detailed cases, but I should like to quote examples of the problems that will arise. A firm not very far from where I live has declared its intention to close one of its two spinning mills and to transfer the operatives to its other mill and employ them on a two-shift system. That will mean that the firm and the shareholders will qualify for compensation because machinery is being scrapped. As the Bill stands, and without some guidance to the negotiators, it may well be that the workers who are transferred will not get any compensation, although some of the married women will find it inconvenient to accept work on a shift system.

Another interesting case is that of the Cairo Mills at Waterhead. This mill has been closed for one year. The machinery is still in place. As the Bill is framed, I assume that if the firm gives an undertaking to scrap its machinery within the time to be later specified by the Board of Trade it will qualify for compensation. There is a considerable amount of machinery in the mill and the shareholders are expecting compensation of £100,000. One of the directors of the mill stated: The Cairo ceased production in June of last year, and therefore has no operatives to compensate. It is not the intention of the Bill that large sums of money should be paid to shareholders who should be allowed to escape liability, or at least have only a very small liability, for compensating operatives who have been put out of work.

If some differentiation in the basis of compensation cannot be made in respect of mills which closed before 23rd April, some deduction should be made, and this sum allocated to the central pool for compensating displaced workers in other mills. Firms such as I have quoted should not be able to get away with it scot-free, without paying any commensurate compensation for the workers who previously lost their livelihood.

I hope that the President of the Board of Trade will accept the Amendment. It lays down an important principle for the guidance of trade union negotiators. I agree with the right hon. Gentleman that the workers are represented by their trade union leaders, but the ultimate conditions of the agreements must have regard to the Bill. I understand that considerable progress has been made in the negotiations between the trade unions and employers and that the employers have accepted, or are likely to accept, the principle of an unconditional lump sum payment for half the compensation, but the other conditions to which I have referred are basic ones, which should be embodied in the Bill.

Mr. S. Silverman

I beg to second the Amendment.

I, too, have every confidence in the skill and persistence of the trade union negotiators who are now seeking to get the best they can for their men in negotiations with the employers within the four corners of the Bill but, as my hon. Friend the Member for Farnworth (Mr. Thornton) has said, the principle on which that compensation is to be negotiated must be laid down not by the employers or trade union leaders but by the House of Commons, and it is in that spirit that my hon. Friend has moved the Amendment.

What ought the principle to be? There is not a word in the Bill to make it incumbent upon anybody to provide a displaced cotton worker with any other employment. I do not know that it would be very relevant to my hon. Friend's Amendment if there were, because, as he has pointed out, in other walks of life, when compensation on a very different scale and scope than this is paid, it is paid unconditionally and without any clog on it, or any interference with the right of the man who receives it to order his life exactly how he thinks fit. In the case to which my hon. Friend referred the man concerned could, if he chose, never do another day's work in his life—and he could well afford not to—but he could equally choose to do any other work and earn as much as he was able to earn, without his compensation for the loss of his former office being affected.

The anomaly in the case referred to is that, apparently, the man concerned will receive £60,000 compensation for loss of an office that he is not in fact going to lose. As I understand the newspapers, he will remain in full enjoyment of it and become almost a tenant for life of it. But he guts the compensation just the same, on the basis that he has devoted a part of his life to a particular job; that that job has been taken away from him for reasons for which he is not personally responsible, and that it is therefore right that in the general financial arrangements he should be compensated for his loss.

All that my hon. Friend is asking is that the principle shall be applied to cotton workers who are displaced from their employment as a result of the operation of a scheme under the Bill. What can there be against that proposal, in principle? What is wrong with it? Why should there be any difficulty about it? Why was it not readily accepted? Why was it not put into the Bill in the first place? If, after spending 10, 20, 30, 40 or even 50 years in an industry, and even in one factory, a man loses his job, although he may find some other employment outside the industry—and more likely outside it if its excess capacity is being reduced—he must begin again with all his roots pulled up, and all his associations and background, and the skills that he has painfully acquired and developed in a lifetime, taken from him. That is why he is compensated. We should not interfere with that payment of compensation simply because he is resilient enough and has the guts enough to adapt himself to the new circumstances, and make a new life for himself in the new world which the Bill has created for him.

Mr. Douglas Houghton (Sowerby)

I was hoping that by this time the right hon. Gentleman or his Parliamentary Secretary would have been able to tell us more about the negotiations which have been taking place. We are in difficulties in trying to define certain principles in the compensation terms when the trade unions and employers are actually engaged in working out a scheme, which we hope will be an agreed one. For all I know, the trade unions may have rather different ideas than have hon. Members in this House about the form and nature of the compensation. It is obvious that many questions may be asked, not only on the Bill but on the Amendment.

I had assumed that the words in subsection (2, b) meant "the loss of the employment" in which the worker was engaged at the time, but if the unions are proposing that there shall be a modification or even a cessation of compensation for a displaced cotton worker who obtains suitable alternative employment, my interpretation is clearly not necessarily correct.

Mr. Thornton

If I remember rightly, the Minister gave it as his interpretation that the words "loss of employment" meant the loss of the particular job at the particular firm. I called the right hon. Gentleman's attention to a case where one of two mills owned by the same firm was closed and its operatives transferred to work double shifts in the other mill. As I understand the Minister's interpretation, no compensation would be payable to the displaced operatives, although compensation would be payable to the shareholders of the firm in respect of the machinery made redundant.

Mr. Houghton

I wondered what attitude would be taken up by the trade unions in those circumstances. Generally speaking, compensation in respect of redundancy is not granted if the employer is able to offer the man concerned a comparable job in the same field of employment without loss of pay. It is merely a transfer from one place to another.

I am connected with the public service, where redundancy gratuities are not paid if one job ceases and another is offered in the same sector of employment for the same remuneration but in a different place. An employer pays redundancy compensation only if he says "Goodbye" to the worker. That is really what compensation is for. It is the discharging of an employer's liability towards an employee when his employment with him ceases. I do not know what view the unions will take about that sort of situation if it comes about under the reconstruction scheme.

5.30 p.m.

Mr. Jay

My hon. Friend will notice that in the case of the brewery firm the gentleman in question is to be transferred to another job within the same group of breweries. It is a case parallel to the one mentioned by my hon. Friend.

Mr. Houghton

Yes, but with great respect, unfortunately what happens in the case of a brewery chairman and other V.I.Ps. and business tycoons cannot be the basis of compensation of other workers. It seems to me that it really does not take us anywhere. Much as we may deplore some of the things that happen and though we may regard them as ludicrously generous, especially if they result in an untaxed gain, they have nothing to do with the realities of the situation in this industry or with the compensation terms of, possibly, a large number of workers.

I am genuinely seeking light on what the Bill will do in certain eventualities and more light still on what the unions want done in certain eventualities. If the Parliamentary Secretary can assist the House in the matter I am sure that we shall all be very grateful to him.

Mr. Arthur Holt (Bolton, West)

Perhaps when the Parliamentary Secretary replies to the debate he could clear up one point raised by the hon. Member for Farnworth (Mr Thornton). It seems to me, as I understand the method of dealing with the question of compensation, that all spinning mills will receive compensation for the spindles that are destroyed and that all those mills will pay into a common pool to provide compensation for the employees. Otherwise I do not quite understand what subsection (5, a) means when it says for raising by means of charges to be imposed unless it means that all mills are going to pay. That means that the example mentioned by the hon. Gentleman of one mill which was going to scrap spindles but which had already parted a year or so ago with some of its employees will, in fact, have to pay, according to an agreed standard, some money into a common pool to be eventually paid out to all the employees in the cotton trade whose services will be dispensed with. If that is not the case, then the hon. Gentleman has raised a point which needs dealing with.

It seems quite inequitable for a firm which closed down six months ago to get a large sum of money for spindles which are going to be put under the hammer compared with a firm which has attempted to keep going and has lost, possibly, £50,000 in the last six months, a firm with a realisation of public service and a feeling of responsibility towards its employees, which has endeavoured to weather the storm, has lost a lot of money and has, finally, decided that it must close down, That firm will get the same compensation for its spindles but may lose an amount equal to half that compensation by way of payment to its employees which it will have to put off.

If that is what is to happen, it seems that we ought to endeavour to correct it, but if my first interpretation is correct, it seems to me that the case mentioned by the hon. Gentleman will not arise.

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

Hon. Members on both sides of the House will appreciate the spirit which motivated the hon. Member for Farnworth (Mr. Thornton), who moved the Amendment, and the hon. Member for Nelson and Colne (Mr. S. Silverman), who seconded it. The Amendment follows on exchanges which hon. Gentlemen had in Committee with my right hon. Friend on the question of whether operatives who were made redundant through the operation of this Measure would be adequately compensated. We all appreciate the necessity for that. There is no doubt at all, I think, on this point. As my right hon. Friend told hon. Members in Committee, the words at present in the Bill would enable the arrangements to provide for compensation to be paid to persons who lose their existing jobs irrespective of whether they find new ones, if that is how the unions and the employers want them to be framed.

The Government's view, however, is that the arrangements must be settled between the two sides and not imposed upon them by the Board of Trade. We are not prepared, as my right hon. Friend made abundantly clear in Committee, to compromise on this fundamental principle which is really a matter for negotiation between the unions and the employers. Indeed, the arrangements now in contemplation as the result of recent meetings between the representatives of employers and unions in the spinning, doubling and weaving sections will include provision for compensation partly in the form of unconditional payments and partly of weekly instalments subject to termination or reduction in the event of the operative obtaining other employment. As I said earlier, it is not for the Board of Trade to lay down the conditions.

With reference to the two points raised by the hon. Member—

Mr. S. Silverman

I wonder if the Parliamentary Secretary would explain further why he thinks that this particular principle ought to be left to be negotiated instead of being laid down by Parliament. Is it not the case that it leaves it open to the negotiators to assess compensation on this basis, but does not make it mandatory upon them to do this? There being only a limited amount of money at stake and the argument being a very long and difficult one about how much money one can get for compensation and how to apportion it, that puts the negotiators on the trade union side in an extremely difficult position and makes it difficult for them to stand out for the principle which they would like in case it affects the amount of money which they are likely to get. If we laid down in the Bill this principle as a principle of compensation, then that would be outside the area of negotiations and the negotiators would be free to discuss the amount and methods, and all the rest of it.

Mr. Rodgers

We spent a great deal of time arguing why the Government had taken this line. It was because in their wisdom they thought that it was a method which the unions and employers would prefer and, indeed, that it would be better for both parties. Indeed, I think that to date the results in the three sections which I have mentioned falsify the doubts expressed by the hon. Member for Nelson and Colne. I do not think that the unions have found themselves inhibited or in any great difficulty in applying the principle on which we have operated, that is voluntary agreement between the two sides of industry, as is traditional.

I turn now to say a word or two about the two points raised by the hon. Member for Farnworth. Again, I would like to stress that both matters are really for the unions and the employers. But I think, in the first case, that where one of the mills is closed down and the operatives have been offered alternative employment in another mill owned by the same company, no compensation would he paid unless the man was asked to take a lower paid job. I think that is the case there, but I should not like to be dogmatic about it.

With regard to the case of the Cairo Mills where the machinery is standing but where the operatives have been laid off for some time, this is a matter for Mr. Burney and the Special Committee to see what steps ought to be taken. It is not for the Board of Trade to lay down compensation conditions in a case like that any more than it is overall, as I told the hon. Member for Nelson and Colne.

A further snag in the Amendment is that if it is accepted, the scope of the condition under subsection (2, b) on which the Board of Trade must be satisfied would, we believe, be somewhat restricted. The effects of the Amendment are uncertain and might be quite different from what hon. Members opposite expect. The limitations to loss of the particular employment occasioned by might be construed as implying that Parliament was interested only in ensuring that an operative had compensation for the period between losing his job and getting a new one at the same or a higher wage and did not envisage the possibility of compensation payments being resumed if he lost the new job during the period over which his entitlement to compensation would otherwise have continued. We believe that it might be so construed. It might be construed that an operative should lose his instalment payments—not his lump sum—if he got another job. In view of the ambiguity and for the reasons I have stated, I very much hope that hon. Members opposite will either withdraw the Amendment or that the House will reject it.

Mr. Jay

I am rather puzzled by the speech of the Parliamentary Secretary and I am now left in considerable doubt as to what the Bill means on this point. The broad principle which my hon. Friends want to put forward, and on which we all agree, is that compensation should be available to the employee who loses his job even though he gets another and should not be available only if he is left unemployed.

It seems to me that the argument introduced by my hon. Friends is relevant and that, since this is the principle which is applied in the case of those highly-paid personnel of whom we have heard, it ought to apply also in the case of ordinary cotton workers in Lancashire. I cannot quite agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that the case of one or other of the highly-paid company chairmen is irrelevant, if only for this reason.

When these large sums are paid for loss of office, even though the director concerned immediately takes some other job in the firm or out of it, it is not just a question of a private arrangement being made in a private firm, as nobody knows better than my hon. Friend. The normal practice, we understand, of the Inland Revenue is not to charge tax on these sums which are described as compensation for loss of office. Therefore, it is recognised as public policy by the Treasury, through the Inland Revenue, that tax should not be paid in that case, even though it is perfectly well known that it is compensation simply for losing the individual or particular office, or however it is described, even though another job is at once obtained.

Mr. Houghton

My right hon. Friend has been kind enough to refer to my observations. He will recall that in Committee I spoke emphatically in favour of unconditional compensation, notwithstanding the fact that the evidence we then had of what the unions were prepared to agree to did not include unconditional compensation. So I am at least pure in heart on that.

As regards tax, my right hon. Friend knows that these payments would not be subject to tax either. His reference to the brewery chairman—it is a great pity we cannot all be brewery chairmen—

Mr. S. Silverman

Or brewery shareholders.

Mr. Houghton

—was a matter of scale and amount and not, it seemed to me, of principle. I hope that there is no rebuke implied in my right hon. Friend's observations, otherwise I would wish to join issue with him a little more strongly.

Mr. Jay

It is a great pity we cannot all change round from being one brewery chairman to another brewery chairman. However, on the principle, I think, we are all agreed.

I am slightly puzzled by the Parliamentary Secretary's doctrine now that what the Bill does, and what we ought to do, is to leave this point to be wholly determined between the trade unions and the employers in each section of the industry. Looking at the Bill, as I always do, not as a lawyer but as somebody hoping to understand English, even if not plain English, it seems to me that what subsection (2) now says is that if these schemes are to be approved and public money is to be paid, the Board of Trade must be satisfied of certain conditions. One of the conditions under subsection (2, b) of which it has to be satisfied is that arrangements have been made within the section of the industry for the payment of compensation in respect of loss of employment due to the elimination of surplus capacity. That is to say, if the Board of Trade is not satisfied of that, it does not pay the money and the scheme does not go forward.

In Committee, in answer to my question as to what the phrase in respect of loss of employment now meant in the Bill, I understood the President of the Board of Trade to give an answer in line with what we have proposed: that is to say, that it means that a person gets the compensation even though he obtains another job. It may be that we have to add the qualification "another job in another firm".

5.45 p.m.

If that is so, the Bill appears now to say that the scheme cannot go forward unless the Board of Trade is satisfied that there is an arrangement of that kind in force, in which case, surely, it is not open to the employers and the unions to make a different arrangement, because if they did, it would not qualify for the receipt of public money. If the Bill does not mean that, can we be told exactly why not?

Mr. J. Rodgers

The right hon. Gentleman is quite right that before accepting any scheme which is put forward by one of the sections in the cotton industry and laid before this House, my right hon. Friend the President of the Board of Trade must be satisfied that the condition that adequate compensation has been paid to displaced workers is met. The decision on what is adequate compensation, however, is left to the two sides to negotiate. If it is proved, it will then be part of the scheme which my right hon. Friend would consider.

The right hon. Member for Battersea, North (Mr. Jay) must have missed the point I mentioned concerning the arrangement that already has been reached in the spinning, doubling and weaving sections, where, I understand, the unions and the employers have agreed to pay compensation in two forms. One is unconditional payments whether a man gets another job immediately or not. The second is weekly instalments, subject to termination or reduction in the event of the operative obtaining other employment. That, I understand, is the agreement which has now been reached in those three sections. In a sense, that partly answers the right hon. Gentleman as to whether compensation will be paid irrespective of the fact that a man gets another job.

Mr. Jay

It may well be—do not dispute it for one moment—at that agreement has been reached in those sections and that compensation is to be paid in both forms. This in itself, however, does not affect the meaning of the Bill. Why am I wrong in supposing that the Bill as it stands, assuming that the interpretation given by the President of the Board of Trade of the words "loss of employment" is right, must mean that at least some compensation must be paid in such a form that a man gets it regardless of whether he takes another job? If this is so, some of our anxieties at least would be met. I speak subject to correction by the more legally learned Members of the House, but is it not the case that that is what the Bill now means?

Mr. Rodgers

As I understand it, it means that the compensation can be paid irrespective of whether a man gets a job, if that is what both sides of the industry so recommend.

Mr. S. Silverman

If I understand correctly the point made by my right hon. Friend the Member for Battersea, North (Mr. Jay), he is saying that the words of subsection (2, b) mean more than that a scheme of compensation can cover loss of employment even though other employment is obtained. What my right hon. Friend is saying is that the words mean that it must cover that, at least to some degree. He is further saying that, as he understood the President of the Board of Trade in Committee, the President was also of that opinion.

It makes a great deal of difference to what the House might like to do with the Amendment whether the point is, in fact, covered by the existing words of the Bill. I hope I have made myself clear. It is sometimes difficult to do so when dealing with semantics rather than with the principles of the Bill. The point is whether the principle of compensation for loss of employment due to the elimination of excess capacity, irrespective of what happens afterwards, is to be compulsorily applied as the Bill now stands or whether it is open only to those who negotiate compensation to cover it if they like.

Mr. Rodgers

As I understand the Bill, it is only open for the compensation to be paid irrespective of what happens afterwards if both sides feel that is a correct solution in the particular case.

Mr. Thornton

We are pursuing an interesting point. I have had a long negotiating experience with the employers, and our relationship is quite good. I say, not in any critical sense, that from the outset the employers were determined not to pay anything in the

nature of a lump sum settlement, and that it was only after it became apparent that the unions were not prepared to accept that position and that the proposal in the Bill was that unconditional compensation should be paid, that the employers changed their position. On the point raised by my hon. Friend the Member for Sowerby (Mr. Houghton), I was very grateful to him for his powerful plea about unconditional lump sum payments because it was most helpful support to the case which I was attempting to put. The scheme we are discussing now is, to use the phrase of the President of the Board of Trade, rather unique, in that unconditional payments for scrapped machinery may be made. My contention is that unconditional payments should be paid also to the workers who are displaced.

Mr. Rodgers

What has happened in negotiations between the unions and the employers is a vindication of the attitude of the Government, which is that these matters are best left to unions and employers. The illustration given by the hon. Member for Farnworth is better than anything I could have said at this Dispatch Box.

Question put, That "loss of employment due to" stand part of the Bill:—

The House divided: Ayes 251, Noes 210.

Division No. 145.] AYES [5.53 p.m.
Agnew, Sir Peter Brewis, John Eccles, Rt. Hon. Sir David
Aitken, W. T. Brooman-White, R. C. Eden, J. B. (Bournemouth, West)
Allan, R. A. (Paddington, S.) Browne, J. Nixon (Graigton) Elliott,R.W.(Ne'castle upon Tyne.N.,
Alport, C. J. M. Bryan, P. Emmet, Hon. Mrs. Evelyn
Amory, Rt. Hn. Heathcoat (Tiverton) Butler, Rt. Hn.R.A.(Saffron Walden) Errington, Sir Eric
Arbuthnot, John Campbell, Sir David Erroll, F. J.
Armstrong, C. W. Carr, Robert Farey-Jones, F. W.
Ashton, Sir Hubert Channon, H. P. G. Fell, A.
Astor, Hon. J. J. Chichester-Clark, R. Fisher, Nigel
Atkins, H. E. Clarke, Brig. Terence (Portsmth, W.) Fletcher-Cooke, C.
Baldock, Lt.-Cmdr. J. M. Conant, Maj, Sir Roger Forrest, G.
Baldwin, Sir Archer Cooke, Robert Foster, John
Barber, Anthony Cooper, A. E. Fraser, Hon. Hugh (Stone)
Barlow, Sir John Cooper-Key, E. M. Freeth, Denzil
Barter, John Cordeaux, Lt.-Col. J. K. Gammans, Lady
Batsford, Brian Corfield, F. V. Garner-Evans, E. H.
Baxter, Sir Beverley Courtney, Cdr. Anthony Glover, D.
Beamish, Col. Tufton Craddock, Beresford (Spelthorne) Glyn, Col. Richard H.
Bell, Philip (Bolton, E.) Crosthwaite-Eyre, Col. O. E. Godber, J. B.
Bennett, F. M. (Torquay) Crowder, Sir John (Finchley) Goodhart, Philip
Bennett, Dr. Reginald Cunningham, Knox Gough, C. F. H.
Bevins, J. R. (Toxteth) Currie, G. B. H. Cower, H. R.
Bidgood, J. C. Dance, J. C. G. Graham, Sir Fergus
Biggs-Davison, J. A. Davidson, Viscountess Grant, Rt. Hon. W. (Woodside)
Bingham, R. M. Deedes, W. F. Grant-Ferris, Wg Cdr. R.(Nantwich)
Bishop, F. P. de Ferranti, Basil Green, A.
Black, Sir Cyril Dodds-Parker, A. D. Grimston, Hon. John (St. Albans)
Body, R. F. Donaldson, Cmdr. C. E. McA. Grosvenor, Lt.-Col. R, G.
Bossom, Sir Alfred Doughty, C. J, A. Gurden, Harold
Boyd-Carpenter, Rt. Hon. J. A. Dray son, G. B. Hall, John (Wycombe)
Boyle, Sir Edward du Cann, E. D. L. Harris, Frederic (Croydon, N.W.)
Braine, B. R. Duncan, Sir James Harris, Reader (Heston)
Braithwaite, [...] Albert (Harrow, W.) Duthie, Sir William Harrison, Col. J. H. (Eye)
Harvey, Sir Arthur Vere(Macclesf'd) Maclay, Rt. Hon. John Ridsdale, J. E.
Harvey, John (Walthamstow, E.) Maclean, sir Fitzroy (Lancaster) Roberts, Sir Peter (Heeley)
Hay, John McLean, Nell (Inverness) Robertson, Sir David
Heald, Rt. Hon. Sir Lionel Macleod, Rt. Hn. Iain (Enfield, W.) Robinson, Sir Roland (Blackpool, S.)
Heath, Rt. Hon. E. R. G. Macleod, John (Ross & Cromarty) Robson Brown, Sir William
Henderson, John (Cathcart) Macmillan, Maurice (Halifax) Rodgers, John (Sevenoaks)
Henderson Stewart, Sir James Macpherson, Niall (Dumfries) Roper, Sir Harold
Hicks-Beach, Maj. W. W. Maddan, Martin Ropner, Col. Sir Leonard
Hill, John (S. Norfolk) Maitland, Cdr. J. F. W. (Horncastle) Sandys, Rt. Hon. D.
Hirst, Geoffrey Maitland, Hon. Patrick (Lanark) Scott-Miller, Cmdr. R.
Holland-Martin, C. J. Markham, Major Sir Frank Sharpies, R. C.
Hornby, R. P. Marlowe, A. A. H. Shepherd, William
Horobin, Sir Ian Marples, Rt. Hon. A. E. Simon, J. E. S. (Middlesbrough, W.)
Horsbrugh, Rt. Hon. Dame Florence Mathew, R. Smithers, Peter (Winchester)
Howard, Hon. Greville (St. Ives) Maudling, Rt. Hon. R. Spearman, Sir Alexander
Howard, John (Test) Mawby, R. L. Speir, R. M.
Hughes, Hallett, Vice-Admiral J. Maydon, Lt.-Comdr. S. L. C. Stevens, Geoffrey
Hughes-Young, M. H. C. Medlicott, Sir Frank Steward, Harold (Stockport, S.)
Hulbert, Sir Norman Milligan, Rt. Hon. W. R. Steward, Sir William (Woolwich, W.)
Hurd, Sir Anthony Molson, Rt. Hon. Hugh Stoddart-Scott, Col. Sir Malcolm
Hutchison, Sir Ian Clark (E'b'gh, W.) Morrison, John (Salisbury) Storey, S.
Hutchison, Sir James (Scotstoun) Nabarro, G. D. N. Stuart, Rt. Hon. James (Moray)
Hylton-Foster, Rt. Hon. Sir Harry Nairn, D. L. S. Studholme, Sir Henry
Iremonger, T. L. Neave, Airey Sumner, W. D. M. (Orpington)
Irvine, Bryant Godman (Rye) Nicholls, Harmar Taylor, Sir Charles (Eastbourne)
Jenkins, Robert (Dulwich) Nicholson, Sir Godfrey (Farnham) Taylor, William (Bradford, N.)
Jennings, J. C. (Burton) Nicolson, N. (B'n'm'th, E. & Chr'ch) Teeling, W.
Jennings, Sir Roland (Hallam) Noble, Comdr. Rt. Hon. Sir Allan Thomas, Leslie (Canterbury)
Johnson, Dr. Donald (Carlisle) Nugent, Richard Thomas, P. J. M. (Conway)
Johnson, Eric (Blackley) O'Neill, Hn.Phelim (Co. Antrim, N.) Thompson, Kenneth (Walton)
Jones, Rt. Hon. Aubrey (Hall Green) Ormsby-Gore, Rt. Hon. W. D. Thorneycroft, Rt. Hon. P.
Joseph, Sir Keith Orr, Cant. L. P. S. Thornton-Kemsley, Sir Colin
Kaberry, D. Osborne, C. Tiley, A. (Bradford, W.)
Kerby, Capt. H. B. Page, R. G. Turton, Rt. Hon. R. H.
Kerr, Sir Hamilton Pannell, N. A. (Kirkdate) Vane, W. M. F.
Kimball, M. Partridge, E. Vickers, Miss Joan
Kirk, P. M. Peel, W. J. Vosper, Rt. Hon. D. F.
Lancaster, Col. C. G. Pickthorn, Sir Kenneth Wakefield, Sir Wavell (St. M'lebone)
Leavey, J. A. Pike, Miss Mervyn Wall, Patrick
Leburn, W. G. Pilkington, Capt. R. A. Ward, Rt. Hon. G. R. (Worcester)
Legg-Bourke, Maj. E. A. H. Pitman, I. J. Ward, Dame Irene (Tynemouth)
Legh, Hon. Peter (Petersfield) Pitt, Miss E. M. Watkinson, Rt. Hon. Harold
Lindsay, Hon. James (Devon, N.) Pott, H. P. Williams, Paul (Sunderland, S.)
Lindsay, Martin (Solihull) Powell, J. Enoch Williams, R. Dudley (Exeter)
Linstead, Sir H. M. Price, David (Eastleigh) Wills, Sir Gerald (Bridgwater)
Lloyd, Maj. Sir Guy (Renfrew, E.) Price, Henry (Lewisham, W.) Wilson, Geoffrey (Truro)
Longden, Gilbert Prior-Palmer, Brig. Sir Otho Woollam, John Victor
Low, Rt. Hon. Sir Toby Profumo, J. D. Yates, William (The Wrekin)
Lucas, P. B. (Brentford & Chiswick) Rawlinson, Peter
Lucas-Tooth, Sir Hugh Redmayne, M. TELLERS FOR THE AYES:
McAdden, S. J. Rees-Davies, W. R. Mr. Finlay and Mr. Whitelaw.
Macdonald, Sir Peter Renton, D. L. M.
Abse, Leo Castle, Mrs. B. A. Forman, J. C.
Ainsley, J. W. Chapman, W, D. Fraser, Thomas (Hamilton)
Albu, A. H. Chetwynd, G. R. Gaitskell, Rt. Hon. H. T. N.
Allaun, Frank (Salford, E.) Cliffe, Michael George, Lady Megan Lloyd'(Car'then)
Allen, Arthur (Bosworth) Clunle, J. Gooch, E. G.
Allen, Scholefield (Crewe) Craddock, George (Bradford, S.) Gordon Walker, Rt. Hon. P. C.
Awbery, S. S. Cronin, J. D. Greenwood, Anthony
Bacon, Miss Alice Crossman, R. H. S. Grenfell, Rt. Hon. D. R.
Balfour, A. Cullen, Mrs. A. Griffiths, David (Rother Valley)
Benson, Sir George Dalton, Rt. Hon. H. Griffiths, Rt. Hon. James (Llanelly)
Beswick, Frank Davies, Harold (Leek) Griffiths, William (Exchange)
Bevan, Rt. Hon. A. (Ebbw Vale) Deer, G. Grimond, J.
Blackburn, F. de Freitas, Geoffrey Hale, Leslie
Blenkinsop, A. Delargy, H. J. Hall, Rt. Hn. Glenvil (Colne Valley)
Blyton, W. R. Diamond, John Hamilton, W. W.
Boardman, H. Dodds, N. N. Hannan, W.
Bottomley, Rt. Hon. A. G. Donnelly, D. L Hastings, S.
Bowden, H. W. (Leicester, S.W.) Dugdale, Rt. Hn. John (W. Brmwch) Hayman, F. H.
Bowen, E. R. (Cardigan) Ede, Rt. Hon. J. C. Healey, Denis
Bowles, F. G. Edelman, M. Henderson, Rt. Hn. A. (Rwly Regis)
Boyd, T. C. Edwards, Rt. Hon. John (Brighouse) Herbison, Miss M.
Brockway, A. F. Edwards, Rt. Hon. Ness (Caerphilly) Hewitson, Capt. M.
Brown, Rt. Hon. George (Belper) Edwards, Robert (Bilston) Hilton, A. V.
Brown, Thomas (Ince) Edwards, W. J. (Stepney) Hobson, C. R. (Keighley)
Burke, W. A. Evans, Albert (Islington, S.W.) Holman, P.
Burton, Miss F. E. Evans, Edward (Lowestoft) Holmes, Horace
Butler, Herbert (Hackney, C.) Fernyhough, E. Holt, A. F.
Butler, Mrs. Joyce (Wood Green) Finch, H. J. (Bedwellty) Houghton, Douglas
Callaghan, L. J. Fletcher, Eric Howell, Charles (Perry Ban)
Carmichael, J. Foot, D. M. Hoy, J. H.
Hughes, Cledwyn (Anglesey) Mort, D. L. Sparks, J. A.
Hughes, Emrys (S. Ayrshire) Moyle, A. Spriggs, Leslie
Hunter, A. E. Neal, Harold (Bolsover) Steele, T.
Hynd, H. (Accrington) Oliver, G. H. Stewart, Michael (Fulham)
Hynd, J. B. (Attercliffe) Orbach, M. Stonehouse, John
Irvine, A. J. (Edge Hill) Owen, W. J. Stones, W. (Consett)
Jay, Rt. Hon. D. P. T. Padley, W. E. Strachey, Rt. Hon. J.
Jeger, George (Goole) Palmer, A. M. F. Summerskill, Rt. Hon. E.
Jenkins, Roy (Stechford) Pargiter, G. A. Swingler, S. T.
Jones, Elwyn (W. Ham, S.) Parkin, B. T. Sylvester, G. O.
Jones, J. Idwal (Wrexham) Paton, John Taylor, John (West Lothian)
Jones, T. W. (Merioneth) Pearson, A. Thomas, George (Cardiff)
Kenyon, C. Peart, T. F. Thomas, lorwerth (Rhondda, W.)
Key, Rt. Hon. C. W. Pentland, N. Thomson, George (Dundee, E.)
King, Dr. H. M. Popplewell, E. Thornton, E.
Lawson, G. M. Prentice, R. E. Tomney, F.
Lee, Frederick (Newton) Price, J. T. (Westhoughton) Ungoed-Thomas, Sir Lynn
Lee, Miss Jennie (Cannock) Price, Philips (Gloucestershire, W.) Vlant, S. P.
Lewis, Arthur Probert, A. R. Warbey, W. N.
Lipton, Marcus Proctor, W. T. Watkins, T. E.
Logan, D. G. Pursey, Cmdr. H. Weitzman, D.
Mabon, Dr. J. Dickson Randall, H. E. Wells, Percy (Faversham)
McAlister, Mrs. Mary Rankin, John Wells, William (Walsall, N.)
McCann, J. Redhead, E. C. Wheeldon, W. E.
MacColl, J. E. Reeves, J. White, Mrs. Eirene (E. Flint)
McInnes, J. Reid, William White, Henry (Derbyshire, N.E.)
McKay, John (Wallsend) Reynolds, G. W. Wilkins, W. A.
MacMillan, M. K. (Western Isles) Robens, Rt. Hon. A. Willey, Frederick
MacPherson, Malcolm (Stirling) Roberts, Albert (Normanton) Williams, David (Neath)
Mahon, Simon Roberts, Goronwy (Caernarvon) Williams, Rev. Llywelyn (Ab'tillery)
Mann, Mrs. Jean Robinson, Kenneth (St. Pancras, N.) Williams, Rt. Hon. T. (Don Valley)
Marquand, Rt. Hon. H. A. Ross, William Williams, W. R. (Openshaw)
Mason, Roy Shinwell, Rt. Hon. E. Willis, Eustace (Edinburgh, E.)
Mayhew, C. P. Silverman, Julius (Aston) Winterbottom, Richard
Mellish, R. J. Silverman, Sydney (Nelson) Woodburn, Rt. Hon. A.
Mendelson, J. J. Skeffington, A. M. Woof, R. E.
Messer, Sir F. Slater, Mrs. H. (Stoke, N.) Yates, V. (Ladywood)
Monslow, W. Slater, J. (Sedgefield) Zilliacus, K.
Moody, A. S. Snow, J. W.
Morris, Percy (Swansea, W.) Sorensen, R. W. TELLERS FOR THE NOES:
Morrison,Rt.Hn.Herbert(Lewls'm,S.) Soskice, Rt. Hon. Sir Frank Mr. Short and Mr. Simmons.
Sir D. Eccles

I beg to move, in page 2, line 3, at the end to insert: and (c) that bodies representing the interests of a majority of the persons employed in the section have agreed to those arrangements so far as they relate to persons whose interests are represented by those bodies".

Mr. Deputy-Speaker (Sir Gordon Touche)

With this Amendment we can discuss that in page 2, line 3, at the end to insert: and that such arrangements have been agreed to by organisations which in the opinion of the Board of Trade represent the majority of the employed persons affected by the arrangements".

Sir D. Eccles

The Amendment is designed to meet the wishes expressed in Committee last week, and I think that we have found words which carry out the intention of both sides of the House.

We have already heard from my hon. Friend the Parliamentary Secretary that agreement in principle has been reached among the spinners, doublers and weavers on both sides that the lump sum unconditional payment shall be one-half of the compensation and the other half shall be in weekly payments at a rate which is abated so as not to conflict with a man's entitlement to unemployment benefit. That is what the unions have decided to be best for their members, and, as I said previously, I am glad that there is an element of lump sum payment in it, because I think that that is a good thing.

This change in the principles of compensation, which was agreed last Thursday and which has since been agreed by the bodies representing both employers and operatives, very considerably increases the liability of the employers. I pay tribute to both sides for having modified the previous set of principles and coming together in the way that they have. It gives us good hope that in all other matters in which co-operation between the two sides is essential to the success of the Bill, that co-operation will be forthcoming.

Mr. Anthony Greenwood

The President of the Board of Trade has substantially met the point which we put to him in Committee. We are grateful to him for the consideration which he has shown to the arguments which we advanced on that occasion. It is true to say, I think, that the position of the trade unions in these negotiations is now stronger than it was and I hope that some of the speeches which have been made in our debates on the Bill may have helped in that direction. We appreciate the gesture which the right hon. Gentleman has made, and in the circumstances, I do not propose to move our Amendment.

Amendment agreed to.

Mr. S. Silverman

I beg to move, in page 2, line 3, at the end to insert: and (c) that consultation has taken place with the appropriate local authorities in any area to be affected and that every practicable step has been taken to meet such objections as they may have".

Mr. Deputy-Speaker

With this Amendment it will be convenient to take that in page 2, line 3, at the end to insert: and (c) that adequate consultations have taken place with the local authorities in the areas affected".

Mr. Silverman

I regard this as an Amendment of principle to the scheme of the Bill. As the Bill stands, it is a cotton industry Bill alone. All the factors which have to be taken into account are factors strictly and narrowly within the area of cotton industry problems, namely, whether capacity is excess capacity or not, and whether, when capacity has been determined to be excess or surplus capacity so that it is eliminated, compensation shall be paid both to the owners of the eliminated mechanical capacity and to the labour which is eliminated or made redundant. As the Bill stands, no other consideration is taken into account.

It was repeatedly said from this side of the House on Second Reading that we regarded that as one of the main defects of the Bill. I do not know what was said on this matter by hon. Members opposite, since we heard very little from them on Second Reading or in Committee. The point we have always to bear in mind—and it is something which the Government must have had in mind when they decided to introduce the Bill—is that the present state of the cotton industry has social consequences of a fundamental kind. Yet, in the measures which they propose in the Bill, the Government pay no attention to them.

Among the bodies to be consulted one would have thought that the local authorities would have taken a high place, because if the Bill works at all it will have a disastrous effect in many towns and small villages of Lancashire. There are villages which depend solely on the work done in a solitary mill. If that mill is regarded as being excess, if, in the scheme which the Minister confirms and the House adopts, that mill disappears, it means that the whole livelihood of the village has gone. It must be somebody's duty to have regard to consequences of that kind.

During the Committee stage we asked the Government to make these social changes one of the factors to be taken into account when deciding whether a scheme was good or not. The Government would not do it. We are now asking them to do something less than that, but something which still takes it into account to some extent. We say, "At least, when the scheme is being formulated, have a look at what the social consequences will be. Go to the local authority and say to it, 'If the scheme is carried out in this form, what will it mean to you? What objections have you, as a local authority, to the scheme's being carried out as it has been formulated?'".

The Amendment does not ask the Government to make the local authority the judge of whether or not a scheme shall go forward. It does not say that if the local authority has objections that is the end of it. It does not even say that if the local authority has objections which the Government cannot overcome that shall be the end of it. It asks for something short of those two propositions. It says, "At least, find out what the objections of the local authorities are, find out whether they are good objections, find out whether there is any way of overcoming them, and do not approve the scheme in the end until at any rate you have consulted the local authorities in some way and their objections have been considered."

It is impossible to understand why the Government boggle about that. Clause 1 provides almost in its very first words that some bodies shall be consulted by the Cotton Board and the Board of Trade. It does not expressly provide that local authorities shall be among them. The Amendment asks that they should.

I referred a moment ago to the problem of the small village with only one mill. That is not the whole problem. On the first Amendment, dealing with the clearing of sites where there are derelict factories, one of my hon. Friends talked about finding houses for workers. That is not the problem in many Lancashire towns. The chief problem is to find tenants for the empty houses which are there now. There is already a considerable rating problem in many of the towns in the North-East Lancashire area. Nelson is losing about £5,000 a year in respect of rates for empty houses. Colne is losing a proportionate amount. I am sure that Burnley is losing in the same way, but perhaps losing less because it has more alternative industry. Other towns are in the same position.

Suppose that in towns like those in my constituency, where cotton is certainly the basic industry and almost the only industry, the excess capacity elimination schemes have the result of closing down one-third of the cotton mills. Is it not clear that that creates an enormous social problem? We have already said that a Bill which was doing the job properly would seek to plan not only the cotton industry, but the area. The Amendment does not go as far as that, but it says that that should be taken into account.

The North-East Lancashire area is a Development Area. It has a development committee on which all the local authorities are represented, and the committee tries to attract new industries into the area within or outside the distribution of industry legislation. It is enormously concerned if the Government are proposing to reduce cotton producing capacity in the area. Why cannot the Government consult it?

6.15 p.m.

There is not merely the area development committee. Nearly all the towns in the North-East Lancashire area have their own development committees. Nelson has had one for many years, and it has been not altogether unsuccessful within the limits of the powers which the Government have accorded it. Colne has had one more recently, and it is a very active committee. Its chairman is the prospective Conservative candidate who will be opposing me at the next General Election. Why should he not be consulted? His committee is concerned, the Nelson committee is concerned and every local authority in the area is trying to assess what will be the effect on our development problems of a Bill which is to contract the cotton industry still further, whether it will increase the migration of population from the area, whether it will increase the wastage of social capital, whether it will lead to more empty houses and more empty shops as well as more empty factories, and whether it will increase the rate at which the population becomes an ageing population.

They are not going to sit back and do nothing about it. They are active already, and they are doing reasonably well using their own powers, using their energies, using their initiative and using their imagination, inviting people to go there and to some extent succeeding; but all these are matters which have to be related to what their fate will be when the Bill is passed.

All we are saying to the Government is, "Do not imagine that you can act in this way so as to introduce an element of still greater subversiveness into the social machinery of a whole area, and do not think that you, as a Government, are entitled to spend public money on doing that without taking into account at all the elected representatives of the population of the area and the problems for which they are responsible to the people who elected them."

I hope that the Government will consider this matter a good deal more sympathetically than they have any of the Amendments with which we have so far dealt. I do not want to be emotional about this subject, but one could easily be emotional about it. The House has heard many speeches about this area, about its past and about the contribution which it has made to the national glory as well as to the national wealth, its increasing and accumulating sufferings, and its attempt to rehabilitate itself while the Labour Party was in office between 1945 and 1950 when people were assured that the future of the cotton industry was secure.

The Government cannot ignore these things. For the young people leaving school, there are already apprenticeship and juvenile employment problems.

What are the children to do? Are they to remain there, or are they to go out of the area, and if so, are their parents to go with them? The Government must pay attention to these matters. They must act with a sense of responsibility to the area as well as with a sense of responsibility, if they have one, to the industry. They were slow enough in doing anything for the industry itself. Let them at least at this stage make it clear that they will not ignore the problems of the area.

Mr. Anthony Greenwood

I beg to second the Amendment.

Sir D. Eccles

I explained on the Committee stage that any proposal to write social factors into the conditions for determining which capacity shall be eliminated would cut right across the whole plan of reorganisation of the cotton industry. The object which we are seeking to achieve by the Bill is very difficult. Let no one think that it will be easy to reorganise this industry and leave it confident, compact and competitive. As one looks round the world, keen competition is to be seen everywhere. We know that if a Free Trade Area for Europe comes into being competition will become even keener.

We shall not be able to restore confidence in this industry or secure that very large sums of new money are invested in it unless we cut out the dead wood. That can be done in two ways. First, it can be done by compulsion. We could make a survey in London, with such technical advice as we could obtain from Lancashire, and we could then, by Order, concentrate the industry, as was done during the war when it was necessary that workers should go to armament factories. Secondly, it can be done by a voluntary scheme, bearing in mind that voluntary action is in peacetime most likely to attract the real co-operation of the people concerned. The Government have rejected compulsion and have decided to undertake reorganisation of this great industry on a voluntary basis. Mills will be given a short time in which to qualify for the compensation terms being worked out by the Cotton Board's special committee.

When considering the Amendment, which would introduce another concept into the choice of mills to close down. it is important to remember that the Cotton Board will not select any mills to close down. Indeed, the risk is that not enough owners of mills will apply for compensation to achieve the first object of the Bill, which is to leave the industry in an efficient shape.

What would happen if we accepted the Amendment and placed on the Cotton Board the duty of consulting local authorities about accepting an application for compensation from any particular mill owner, if on social grounds an owner who applied for compensation was refused that compensation and told that his application could not be entertained? The mill might then close of its own accord, in which case its workpeople would receive no compensation. Alternatively, the mill owner will say that he must have a subsidy if he is to keep open. We cannot compel a mill to keep open. If we once stray into the realms of subsidies for operating cotton mills, gone for ever is our hope of reducing the surplus capacity, of cutting out the dead wood.

Mr. Boardman

Is it not a point, also, that a private company has no social responsibility?

Sir D. Eccles

Indeed not. If the hon. Member for Leigh (Mr. Boardman) will look round the great bulk of our firms today, he will find that the boards of directors have a very great social responsibility.

Mr. S. Silverman

Perhaps the right hon. Gentleman has not seen my hon. Friend's point. We agree that very many private firms have a great sense of social responsibility. In Lancashire many of them have shown it. But they cannot show it after they go out of existence. The point is who will show any social responsibility for the consequences of their closing down?

Sir D. Eccles

A mill cannot continue if it is making a loss. If the owner of such a mill applied for compensation under the terms of the Bill, it would be impossible to refuse the compensation and then tell him that he must stay in operation.

If we consulted local authorities, naturally their advice would be that certain mills should not close. It is open to local authorities to make their views known to the Cotton Board. I know that the Cotton Board is ready to hear them. The House must examine what it would mean if we accepted the Amendment. In the Lancashire area of the cotton belt there are eighty-five local authorities. There is the county council. There are eight county boroughs, twenty non-county boroughs, forty-six urban districts and ten rural districts. It is not possible that the interests of all those local authorities would coincide.

Mr. W. A. Burke (Burnley)

Is a mill going to close down in each one of them?

Sir D. Eccles

I cannot tell the hon. Member that. I know that it would wreck the possibility of a rational reorganisation of this industry if the Cotton Board had to take into account the views of eighty-five local authorities in Lancashire as well as some in Yorkshire. Todmorden and three or four other local authorities in Yorkshire would have to be consulted also.

Mr. S. Silverman rose—

Sir D. Eccles

The hon. Member keeps rising. He must let me continue.

Mr. Silverman

The right hon. Gentleman should talk about the Amendment.

Sir D. Eccles

The anxieties of local authorities are very well known to us and appreciated by us. As I said in Committee, the mayors of many of these towns have been down to London to see either the Prime Minister or myself. We understand their anxieties. We understand what it means when the population has diminished—loss of rates, loss of custom for their shops and a feeling that their town is on the downgrade.

The first thing to do for all these local authorities is to stop that deterioration. The first thing that it is right to do in their own interests is to produce an efficient cotton industry with a good hope of expansion hereafter. If we were to take into consideration now the kind of social factors which the hon. Member for Nelson and Colne would have us take into consideration, we should not do that which is our first duty, namely, to leave the cotton industry in a thoroughly healthy condition.

I fully agree that we must not stop at making the cotton industry compact and efficient. We have a second duty, which is to look after the casualties. The casualties will not be anything like as numerous as the hundreds of thousands of people whose livelihoods will be assured if the Bill is a success. So I am very ready indeed to consult the local authorities but, as I have already said this afternoon, we shall be in a much better position to talk to them about the future of their population when we know where the mills are to close and when we have some estimate of the residual unemployment that will result.

We have a number of powers in the Development Area part of North-East Lancashire—more powers than we have in an area that is not scheduled—but we are prepared to look at the problem, and to do an exercise as soon as the size and nature of the problem becomes apparent. On the other hand, I think that I should be doing a grave disservice to Lancashire by accepting an Amendment that sounds very nice when put to an individual authority but which would have the effect of blurring, and, I think, of spoiling, any chance that we may have—and I think that it is quite a good chance now—of shaping this industry so that it becomes competitive and expanding once again.

6.30 p.m.

Mr. Anthony Greenwood

Perhaps I may say a few words with the leave of the House, Mr. Speaker. The President of the Board of Trade was as a dove of peace on the last Amendment, but I am disappointed with his latest reply.

We all agree that it is not easy to reorganise the cotton industry, and I do not think that anyone has suggested that it is. The right hon. Gentleman will have noticed that, although it was tempting to do so, we did not table Amendments in Committee relating, for instance, to the need for the regrouping of units in the industry, or other Amendments directed to rather more radical reorganisation than is likely to take place. We have not suggested that there should be a compulsory scheme. We have agreed to give the attempt of the right hon. Gentleman to procure a voluntary redeployment of industry a chance, although we have expressed grave doubts whether this Bill will achieve the ends that we know he has in mind.

I want to put to the House, very simply, what we are trying to do by this Amendment. We are saying that if a firm suggests to the Cotton Board that one of its mills should cease to operate, and that mill is in a village whose whole livelihood and social life depends on it; and if, at the same time, the firm has another mill of approximately the same size in a town where there is a diversity of industry, the Board should say to the firm, "We think that it will be much better for you to close the mill in the town, where there is full employment. If you wish to close the mill in the village, we cannot agree to that proposal, and no compensation will be available." We believe that that would have the general effect of serving the social interests of the area without doing any harm at all to the structure of the industry. The case is as simple as that.

We appreciate, of course, the readiness of the President of the Board of Trade to consult the local authorities on these and other matters. The difficulty is that, so far as we can see, he will talk to them about their future when, perhaps, a future will not any longer be available to them. Unless we can have a much more helpful reply from the right hon. Gentleman, I shall certainly ask my hon. Friends to vote in support of the Amendment.

Mr. John McCann (Rochdale)

The Minister has made quite a lot of play with the number of authorities that are affected in the textile area. To us on this side, the number stresses the seriousness and size of the problem.

The Amendment is simple. It says that the appropriate local authorities must be consulted. The important thing is to know that every practical step has been taken to meet such objections as the local authorities may have, and we can tell the right hon. Gentleman here and now that they are already viewing with seriousness any contraction in the areas affected. It is the complete and utter responsibility of a local authority to bear in mind the social implications of unemployment in its area.

Hon. Members opposite will recall that during municipal elections they have made great play with the importance of local government—" Keep local government local"; "Take local government out of the hands of the Ministry." I fully agree that the local authorities should have the responsibility for the social and cultural amenities of their town or area. My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) has said that the local authorities should not be the final arbiters. In page 7 of the White Paper we find: The Government for their part will assist through the machinery of the Ministry of Labour and, where appropriate, by use of their powers under the Distribution of Industry Acts. It goes on to say: Judging from past experience (see paragraph 4) the numbers who will have a continuing difficulty in finding new work will be much less than might be feared. That might have been the case in the contraction of 1952, but in the last twelve months the number of jobs available in the Lancashire textile towns has fallen to the point, where, in some cases, there are 26 unemployed for each vacancy. It is against that background that Lancashire has to look at the problem.

The Rochdale local authority, recognising the problem a year ago, tried to get inserted in its local Bill a Clause giving it the power to encourage industrialists to come to the town by making loans to them, but the town clerk writes: At the hearing before the Lord Chairman of Committees on 7th May the representative of the Board opposed these provisions and based his objection on the grounds that it was the province of the Board of Trade to secure a proper distribution of industry and he mentioned the Distribution of Industry (Industrial Finance) Bill which, it was claimed, would solve the problem.

Rochdale still has 45.5 per cent. of its population engaged in the textile and ancillary trades. Against that background we face mill closures. New industries are obviously a factor, but one finds that in the last two months of last year and the first month of this year, in the Rochdale spinning sub-area, provision was made for one new factory of 8,000 sq. ft.—20 ft. by 400 ft. I do not think that we shall get much machinery or employment out of that in an area in which 45.5 per cent. of the people are in the textile industry.

Migration is the most important reason for providing that local authorities should be consulted. Time and time again my hon. Friends and I have complained of migration. I know that I have given the following figures to the House on previous occasions, but all we can do is to keep drumming them in until the Government realise that migration is essentially a social as well as an economic matter. In 1950, Rochdale had a population of 89,530. That figure had dropped to 85,310 at the end of 1957, last year we lost another 800, and all the indications are that this year the rate of migration is accelerating.

Perhaps the right hon. Gentleman will now realise why it is that we want him to consult the local authorities. The local authorities may now be planning services for people who will not be there to use them, or by taking account of migration they may be running the risk of not having adequate services should there be a fresh influx of population. Before the war, one of Ireland's main exports was young men. Unfortunately, the position in Rochdale is becoming the same. Therefore, I beg the President of the Board of Trade favourably to consider this Amendment.

This is not an attempt to delay the Bill, which we agree will make for a more efficient industry. The right hon. Gentleman must remember that this more efficient textile industry will not operate evenly over the whole of industrial Lancashire. While it operates efficiently in one area, it can, in the name of efficiency, completely denude another area of work. That is the problem we face. We ask the right hon. Gentleman to look at it through the eyes of the local authorities. The local authorities, in the last analysis, have the problem of looking after the welfare of their people.

Mr. Burke

I merely wanted to ask the President of the Board of Trade a question. I agree with him entirely that the big problem is, first, to get rid of the dead wood in the cotton industry. As he knows, every local authority is

very much concerned about what is to take the place of the dead wood. He knows also—I raised this question on the Distribution of Industry (Industrial Finance) Act—that, to a large extent, the power to build new factories now lies with him. If an area is a Development Area, the power lies with the Board of Trade.

If a factory in a certain area is closed, will the right hon. Gentleman agree, if the Amendment is withdrawn, to consult the local authorities about putting another factory in its place? That is the kind of thing that we really want. If the industry itself decides to go out, will the Minister then consider putting something in its place?

Sir D. Eccles

I would remind the hon. Member for Burnley (Mr. Burke) that Burnley is in North-East Lancashire and, therefore, is in the Development Area. I have said that we are ready to build factories there with Government money, if we can find an industrialist. We have better hopes now that trade is picking up. Certainly, the Parliamentary Secretary and I will give this and other areas in the United Kingdom where there is the problem of unemployment continuous attention and high priority.

I quite understand the point made by the hon. Member for Rochdale (Mr. McCann), but, with great respect to him, an efficient cotton industry could not be evenly distributed over Lancashire. That is one of our difficulties. To have an efficient industry, we are bound to have a lack of balance in distribution between certain areas. It is better to achieve an efficient industry with that lack of balance and then make it good in the kind of ways which the hon. Member for Burnley suggests. That is what we intend to do.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 205, Noes 246.

Division No. 146.] AYES [6.42 p.m.
Abse, Leo Beswick, Frank Brockway, A. F.
Ainsley, J. W. Bevan, Rt. Hon. A. (Ebbw Vale) Broughton, Or. A. D. D.
Albu, A. H. Blackburn, F. Brown Thomas (Ince)
Allaun, Frank (Salford, E.) Blenkinsop, A. Burke, W. A.
Allen, Arthur (Bosworth) Blyton, W. R. Burton, Miss F. E.
Allen, Scholefield (Crewe) Boardman, H. Butler, Herbert (Hackney, C.)
Awbery, S. S. Bottomley, Rt. Hon. A. G. Butler, Mrs. Joyce (Wood Green)
Bacon, Miss Alice Bowden, H. W. (Leicester, S.W.) Callaghan, L. J.
Balfour, A. Bowles, F. G. Carmichael, J.
Benson, Sir George Boyd, T. C. Castle, Mrs. B. A.
Chapman, W. D. Hynd, J. B. (Attercliffe) Rankin, John
Chetwynd, G R. Irvine, A. J. (Edge Hill) Redhead, E. C.
Cliffe, Michael Jay, Rt. Hon. D. P. T. Reeves, J.
Clunie, J. Jeger, George (Goole) Reid, William
Coldrick, W. Jenkins, Roy (Stechford) Reynolds, G. W.
Craddock, George (Bradford, S.) Jones, Elwyn (W. Ham, S.) Rhodes, H.
Crossman, R. H. S. Jones, J. Idwal (Wrexham) Robens, Rt. Hon. A.
Cullen, Mrs. A. Jones, T. W. (Merioneth) Roberts, Albert (Normanton)
Dalton, Rt. Hon. H. Kenyon, C. Roberts, Goronwy (Caernarvon)
Davies, Harold (Leek) Key, Rt. Hon. C. W. Robinson, Kenneth (St. Pancras, N.)
Davies, S. O. (Merthyr) King, Dr. H. M. Ross, William
de Freitas, Geoffrey Lawson, G. M. Shinwell, Rt. Hon. E.
Delargy, H. J. Lee, Frederlok (Newton) Silverman, Julius (Aston)
Diamond, John Lee, Miss Jennie (Cannock) Silverman, Sydney (Nelson)
Dodds, N. N. Lewis, Arthur Simmons, C. J. (Brierley Hill)
Donnelly, D. L. Lipton, Marcus Skeffington, A. M.
Ede, Rt. Hon. J. C. Logan, D. G. Slater, Mrs. H. (Stoke, N.)
Edelman, M. McAlister, Mrs. Mary Slater, J. (Sedgefield)
Edwards, Rt. Hon. John (Brighouse) McCann, J. Snow, J. W.
Edwards, Rt. Hon. Ness (Caerphilly) MacColl, J. E. Soskice, Rt. Hon. Sir Frank
Edwards, Robert (Bilston) McInnes, J. Spriggs, Leslie
Evans, Albert (Islington, S.W.) McKay, John (Wallsend) Steele, T.
Evans, Edward (Lowestoft) MacMillan, M. K. (Western Isles) Stewart, Michael (Fulham)
Fernyhough, E. MacPherson, Malcolm (Stirling) Stonehouse, John
Finch, H. J. (Bedwellty) Mahon, Simon Stones, W. (Consett)
Fletcher, Eric Mann, Mrs. Jean Strachey, Rt. Hon. J.
Foot, D. M. Marquand, Rt. Hon. H. A. Summerskill, Rt. Hon. E.
Forman, J. C. Mason, Roy Swingler, S. T.
Fraser, Thomas (Hamilton) Mayhew, C. P. Sylvester, G. O.
Gaitskell, Rt. Hon. H. T. N. Mellish, R. J. Taylor, John (West Lothian)
George, Lady Megan Lloyd(Car'then) Mendelson, J. J. Thomas, George (Cardiff)
Gooch, E. G Messer, Sir F. Thomas, Iorwerth (Rhondda, W.)
Gordon Walker, Rt. Hon. P. C. Monslow, W. Thomson, George (Dundee, E.)
Greenwood, Anthony Moody, A. S. Thornton, E.
Grenfell, Rt. Hon. D. R. Morris, Percy (Swansea, W.) Tomney, F.
Griffiths, David (Rother Valley) Morrison,Rt.Hn.Herbert(Lewis'm,S.) Ungoed-Thomas, Sir Lynn
Griffiths, Rt. Hon. James (Llanelly) Mort, D. L. Viant, S. P.
Griffiths, William (Exchange) Moyle, A. Warbey, W. N.
Hale, Leslie Neal, Harold (Bolsover) Watkins, T. E.
Hall, Rt. Hn. Glenvil (Colne Valley) Noel-Baker, Francis (Swindon) Weitzman, D.
Hamilton, W. W. Oliver, G. H. Wells, Percy (Faversham)
Hannan, W. Orbach, M. Wells, William (Walsall, N.)
Hastings, S. Owen, W. J. Wheeldon, W. E.
Hayman, F. H. Padley, W. E. White, Mrs. Eirene (E. Flint)
Healey, Denis Palmer, A. M. F. White, Henry (Derbyshire, N.E.)
Henderson, Rt. Hn. A. (Rwly Regis) Parkin, B. T. Wilkins, W. A.
Herbison, Miss M. Paton, John Willey, Frederick
Hewitson, Capt. M. Pearson, A. Williams, David (Neath)
Hilton, A. V. Peart, T. F. Williams, Rev. Llywelyn (Ab'tillery)
Hobson, C. R. (Keighley) Pentland, N. Williams, Rt. Hon. T. (Don Valley)
Holman, P. Plummer, Sir Leslie Williams, W. R. (Openshaw)
Holmes, Horace Popplewell, E. Willis, Eustace (Edinburgh, E.)
Houghton, Douglas Prentice, R. E. Winterbottom, Richard
Howell, Charles (Perry Barr) Price, J. T. (Westhoughton) Woodburn, Rt. Hon. A.
Hoy, J. H. Price, Philips (Gloucestershire, W.) Woof, R. E.
Hughes, Cledwyn (Anglesey) Probert, A. R. Yates, V. (Ladywood)
Hughes, Emrys (S. Ayrshire) Proctor, W. T. Zilliacus, K.
Hunter, A. E. Pursey, Cmdr. H.
Hynd, H. (Accrington) Randall, H. E. TELLERS FOR THE AYES:
Mr. Short and Mr. Deer.
Agnew, Sir Peter Bingham, R. M. Cooper-Key, E. M.
Aitken, W. T. Bishop, F. P. Cordeaux, Lt.-Col. J. K.
Allan, R. A. (Paddington, S.) Black, Sir Cyril Corfield, F. V.
Alport, C. J. M. Body, R. F. Courtney, Cdr. Anthony
Arbuthnot, John Bossom, Sir Alfred Craddock, Beresford (Spelthorne)
Armstrong, C. W. Bowen, E. R. (Cardigan) Crosthwalte-Eyre, Col. O. E.
Ashton, Sir Hubert Boyd-Carpenter, Rt. Hon. J. A. Crowder, Sir John (Finchley)
Astor, Hon. J. J. Boyle, Sir Edward Crowder, Petre (Ruislip Northwood)
Atkins, H. E. Braine, B. R. Cunningham, Knox
Baldock, Lt.-Cmdr. J. M. Braithwaite, Sir Albert (Harrow, W.) Currie, G. B. H.
Baldwin, Sir Archer Brewis, John Dance, J, C. G.
Barber, Anthony Brooman-White, R. C. Davidson, Viscountess
Barlow, Sir John Browne, J. Nixon (Craigton) Deedes, W. F.
Barter, John Bryan, P. de Ferranti, Basil
Batsford, Brian Butler, Rt. Hn. R. A.(Saffron Walden) Dodds-Parker, A. D.
Baxter, Sir Beverley Campbell, Sir David Donaldson, Cmdr. C. E. McA.
Beamish, Col. Tufton Carr, Robert Doughty, C. J. A.
Bell, Philip (Bolton, E.) Channon, H. P. G. du Cann, E. D. L.
Bennett, F. M. (Torquay) Chichester-Clark, R. Duncan, Sir James
Bennett, Dr. Reginald Clarke, Brig. Terence(Portsmth, W.) Duthie, Sir William
Bevins, J. R. (Toxteth) Conant, Maj. Sir Roger Eccles, Rt. Hon. Sir David
Bidgood, J. C. Cooke, Robert Eden, J. B. (Bournemouth, West)
Biggs-Davison, J. A. Cooper, A. E. Elliot,R.W.(N'castle upon Tyne,N.)
Emmet, Hon. Mrs. Evelyn Joseph, Sir Keith Pitt, Miss E. M.
Errington, Sir Eric Kaberry, D. Pott, H. P.
Erroll, F. W. Keegan, D. Powell, J. Enoch
Farey-Jones, F. W. Kerby, Capt. H. B. Price, David (Eastleigh)
Fell, A. Kerr, Sir Hamilton Price, Henry (Lewisham, W.)
Finlay, Graeme Kirk, P. M. Prior-Palmer, Brig. Sir Otho
Fisher, Nigel Lancaster, Col. C. G. Profumo, J. D.
Fletcher-Cooke, C. Leather, E. H. C. Rawlinson, Peter
Fraser, Hon. Hugh (Stone) Leavey, J. A. Redmayne, M.
Freeth, Denzil Leburn, W. G. Rees-Davies, W. R.
Gammans, Lady Legge-Bourke, Maj. E. A. H. Renton, D. L. M.
Garner-Evans, E. H. Legh, Hon. Peter (Petersfield) Ridsdale, J. E.
Glover, D. Lindsay, Martin (Solihull) Roberts, Sir Peter (Heeley)
Glyn, Col, Richard, H. Linstead, Sir H. N. Robinson, Sir Roland (Blackpool, S.)
Godber, J. B. Lloyd, Maj. Sir Guy (Renfrew, E.) Robson Brown, Sir William
Goodhart, Philip Longden, Gilbert Rodgers, John (Sevenoaks)
Gough, C. F. H. Low, Rt. Hon. Sir Toby Roper, Sir Harold
Gower, H. R. Lucas, P. B. (Brentford & Chiswick) Ropner, Col. Sir Leonard
Graham, Sir Fergus Lucas-Tooth, Sir Hugh Scott-Miller, Cmdr. R.
Grant, Rt. Hon. W. (Woodside) McAdden, S. J. Sharples, R. C.
Grant-Ferris, Wg.Cdr. R. (Nantwich) Macdonald, Sir Peter Shepherd, William
Green, A. Maclay, Rt. Hon. John Simon, J. E. S. (Middlesbrough, W.)
Grimond, J. Maclean, Sir Fitzroy (Lancaster) Smithers, Peter (Winchester)
Grimston, Hon. John (St. Albans) McLean, Nell (Inverness) Spearman, Sir Alexander
Grosvenor, Lt.-Col. R. G. Macleod, Rt. Hn. Iain (Enfield, W.) Speir, R. M.
Gurden, Harold MacLeod, John (Ross & Cromarty) Stevens, Geoffrey
Hall, John (Wycombe) Macmillan, Maurice (Halifax) Steward, Harold (Stockport, S.)
Harris, Frederic (Croydon, N.W.) Macpherson, Niall (Dumfries) Steward, Sir William (Woolwich, W.)
Harris, Reader (Heston) Maddan, Martin Stoddart-Scott, Col. Sir Malcolm
Harrison, Col. J. H. (Eye) Maitland, Cdr. J. F. W. (Hornoastle) Storey, S.
Harvey, Sir Arthur Vere (Macclesf'd) Maitland, Hon. Patrick (Lanark) Stuart, Rt. Hon. James (Moray)
Harvey, John (Walthamstow, E.) Markham, Major Sir Frank Studholme, Sir Henry
Hay, John Marlowe, A. A. H. Sumner, W. D. M. (Orpington)
Heald, Rt. Hon. Sir Lionel Marples, Rt. Hon. A. E. Taylor, Sir Charles (Eastbourne)
Heath, Rt. Hon. E. R. G. Mathew, R. Taylor, William (Bradford, N.)
Henderson, John (Cathcart) Maudling, Rt. Hon. R. Teeling, W.
Henderson-Stewart, Sir James Mawby, R. L. Thomas, Leslie (Canterbury)
Hicks-Beach, Maj. W. W. Maydon, Lt.-Comdr. S. L. C. Thomas, P. J. M. (Conway)
Hill, John (S. Norfolk) Medlicott, Sir Frank Thompson, Kenneth (Walton)
Hirst, Geoffrey Milligan, Rt. Hon. W. R. Thorneycroft, Rt. Hon. P.
Holland-Martin, C. J. Molson, Rt. Hon. Hugh Thornton-Kemsley, Sir Colin
Holt, A. F. Morrison, John (Salisbury) Tiley, A. (Bradford, W.)
Hornby, R. P. Nabarro, G. D. N. Turton, Rt. Hon. R. H.
Horsbrugh, Rt. Hon. Dame Florence Nairn, D. L. S. Vane, W. M. F.
Howard, Hon. Greville (St. Ives) Neave, Airey Vickers, Miss Joan
Howard, John (Test) Nicholls, Harmar Vosper, Rt. Hon. D. F.
Hughes Hallett, Vice-Admiral J. Nicholson, Sir Godfrey (Farnham) Wakefield, Sir Wavell (St. M'lebone)
Hulbert, Sir Norman Nicolson, N. (B'n'm'th, E. & Chr'ch) Wall, Patrick
Hurd, Sir Anthony Nugent, Richard Ward, Rt. Hon. G. R. (Worcester)
Hutchison, Michael Clark (E'b'gh, S.) O'Neill, Hn. Phelim (Co. Antrim, N.) Ward, Dame Irene (Tynemouth)
Hutchison, Sir James (Scotstoun) Ormsby-Gore, Rt. Hon. W. D. Watkinson, Rt. Hon. Harold
Hylton-Foster, Rt. Hon. Sir Harry Orr, Capt. L. P. S. Williams, Paul (Sunderland, S.)
Iremonger, T. L. Osborne, C. Williams, R. Dudley (Exeter)
Irvine, Bryant Codman (Rye) Page, R. G. Wills, Sir Gerald (Bridgwater)
Jenkins, Robert (Dulwich) Pannell, N. A. (Kirkdals) Wilson, Geoffrey (Truro)
Jennings, J. c. (Burton) Partridge, E. Woollam, John Victor
Jennings, Sir Roland (Hallam) Peel, W. J. Yates, William (The Wrekin)
Johnson, Dr. Donald (Carlisle) Pickthorn, Sir Kenneth
Johnson, Eric (Blackley) Pilkington, Capt. R. A. TELLERS FOR THE NOES:
Jones, Rt. Hon. Aubrey (Hall Green) Pitman, 1. J. Mr. Hughes-Young and
Mr. Whitelaw.
Mr. Jay

I beg to move, in page 2, line 3, at the end to insert: and (c) that in respect of every excess capacity proposed by the reorganisation scheme to be eliminated adequate consideration has been given to the need of providing employment in the area affected and of the appropriate distribution of industry". The House has now decided that we should not in the Bill require the Board of Trade to consult with local authorities in the cotton areas before selecting mills for closure under the scheme. What we propose, leaving aside local authorities, is that there should be consultation within the machinery of the Board of Trade and

the Cotton Board to ensure that before individual mills are selected for closure the effect on employment and unemployment in the neighbourhood is taken into account in additon to the technical facts and figures within the firm and mill.

Although the President of the Board of Trade has been conciliatory on some subjects today, he is still inclined to be a little stubborn on this point. I ask him not to turn down this principle so dogmatically that he is unable to give effect to it in carrying out the Bill. I regard this point as the most important in the discussions on the Bill, since we are all agreed that what matters to displaced employees, even more than compensation, is that they should get jobs. We propose, leaving aside the local authorities, that there should at least be some consultation by the committee which the right hon. Gentleman proposes to set up under the Cotton Board with individual firms about which mills should close and that in the course of that consultation the employment situation should also be considered.

I assure the right hon. Gentleman that we are not suggesting—it would be quite foolish to do so—that in making this selection the relative efficiency or inefficiency of an individual mill or the comparative costs between one mill and another should be left out of account. We propose that, in addition to those extremely important factors, the need for employment and the distribution of industry, or lack of it, in an area should also be taken into account and that these factors should be weighed one against the other.

Throughout our discussions, the right hon. Gentleman has repeatedly said, "You cannot do this because what we are aiming at is an efficient cotton industry, and, therefore, the issue of the efficiency in each mill must be the determining factor". What I think he has not fully realised is that often—this has been the experience in the concentration of this and other industries—one can find an enormous gap between mills in terms of efficiency and costs. In some cases there is a large gap, but it may be that between one, two or three mills there is very little in it either way. I should like the right hon. Gentleman to consider this point. It may be immaterial for an individual firm whether it closes this mill or that.

If this situation is not considered from the employment point of view, the result may well be something that nobody intended or foresaw, namely, that a mill is closed where unemployment is probable and where it can be foreseen. A firm will not close a mill in another area which is fully employed and much more fortunate even though, from the point of view of efficiency and costs, there is no material difference between the two.

I assure the right hon. Gentleman that that has been the experience in many cases, and it follows that if there is no consultation we are likely to get the most haphazard results which nobody would wish. Three or four mills may be closed in a heavily concentrated cotton area which is already suffering from unemployment. On the other hand, mills may continue to work in other areas which are fairly fully employed and not nearly so dependent on the cotton industry. I will not give examples of different areas in Lancashire, but there is every prospect that this will happen if there is no consultation, whereas, with a little thought and examination, it may well be possible to avoid it.

I do not think that our proposal departs from the spirit of the White Paper, which states that the committee, agency, or whatever it is to be called, under the Cotton Board is to approve details of reorganisation schemes. If it is to approve other details, surely it can at the same time consider the point to which I have referred. I do not believe that Lord Rochdale or his colleagues, still less the Ministry of Labour and the Board of Trade authorities, would regard our proposal as impracticable or undesirable. It clearly can be done and the irony of the situation is that it was done with, one might almost say, meticulous care when the industry was concentrated in wartime. Although we are not operating under the same conditions as we were during the war, the principle is the same, namely, that there is an uneconomic result if manpower is released where it cannot be re-employed, whereas there is a more economic result if the operation is so planned that manpower is, so far as practicable, released where it can be used in alternative productive work.

I hope that the right hon. Gentleman, in spite of what he has said hitherto, will not close his mind to our suggestion. As I have said, I do not think that it is inconsistent with the White Paper or with the Bill as it stands. If the right hon. Gentleman would at least keep the matter open and make an effort to maintain the principle of consultation and to weigh one factor with another, we may achieve what I should have thought every hon. Member would want to achieve, namely, the quickest and fullest possible re-employment of those who will inevitably lose their jobs as a result of reorganisation under the Bill.

7.0 p.m.

Mr. H. Hynd (Accrington)

I wish to support the Amendment. To emphasise the need for it I will quote an illustration from my own division. This process has been going on for some time and that is the reason for the production of this Bill. Industry in Lancashire has been moving. Cotton mills have been closed and other work has taken their place, unfortunately not in sufficient quantity to fill all the gaps. But there has been this change which in Lancashire is recognised as necessary. People are prepared to see further movement of that kind, and a further change-over from cotton to some other industry, but all the time we have been trying to do what this Amendment suggests, which is that where it becomes necessary to close cotton mills, for example, every effort should be made to provide alternative employment.

Unfortunately, there is a lack of coordination in this work. The circumstances I am about to relate are not the fault of the President of the Board of Trade. There is a firm which wishes to build offices and workshops in my Division in the famous town of Oswaldtwistle, but it has been refused permission by the Ministry of Housing and Local Government. The Ministry should have consulted with the President of the Board of Trade before reaching such a decision, because Oswaldtwistle depends on the cotton industry, and every opportunity should be seized to bring in fresh work. Instead, this project has been turned down, against the wishes of the local urban district council. It has been told that the Minister has decided that this area is not scheduled for industrial purposes.

That is strictly true. It is not scheduled for anything. On the town map the area was shown as one not likely to be developed in the foreseeable future. It has no amenity value at all. It is backed by a rubbish dump 20 ft. high. On one side it is bounded by an evil-smelling stream. Opposite is a cotton mill and an engineering company, and in the next block there is a soft drinks preparation plant.

One would have thought that in an area where cotton workers are being displaced, if a firm said, "We are prepared to build works to provide immediate employment for 50 people and possible employment for 100 people," any Ministry would give permission straight away; or, at any rate, approach the President of the Board of Trade and say, "I understand that you are introducing this cotton reorganisation scheme. Would it help to give this permission?" But no, the permission is refused. That is an example, which I do not wish to elaborate, of the sort of thing that is going on. I suggest that it shows the need for some provision to be inserted in the Bill such as suggested in this Amendment, which I hope the Minister will accept.

Sir D. Eccles

The hon. Member for Accrington (Mr. H. Hynd) has evidently discovered, as have most of us, that planners are good when they are on one's own side. Regarding the case he mentioned, I will do my best to discover whether there is any chance that these people can find a site where they can start to build.

The right hon. Member for Battersea, North (Mr. Jay) said this was a different principle. But the principle in this Amendment does not differ from that in the last one. We are asked to consider the level of unemployment when persuading mills either to stay open or to shut. I think the right hon. Gentleman was wrong when he said that very often there will be cases in which there is little difference between two mills. That is not the advice which I have received, and I have inquired carefully on that subject. To start with there would have to be a firm which had several mills and was ready to shut one of them, and that mill would have to be more or less comparable with another of its mills. I am told that such a circumstance is very rare, and I notice that the hon. Member for Ashton-under-Lyne (Mr. Rhodes) agrees with me. That being the case, I do not think it would be very easy to bring this kind of condition or qualification to their notice.

On the other hand, the employment situation in the cotton belt is such that I think employers will consider seriously whether it is to their advantage to continue to have this or that mill in operation. If I can, I should like to reassure the right hon. Gentleman about this problem by giving the facts as we now know them. I have been able to get the unemployment figures for June in respect of the twelve D.A.T.A.C. areas in the cotton belt. The national figures are not yet ready, but I have secured this information. It is striking when one remembers that the D.A.T.A.C. areas were selected because of the high and persistent level of unemployment there, and only for that reason. Now one sees the change in the position. I will quote the figures for one or two towns at random. Let us take Oldham to start with. In June, 1958, a year ago, the figure for Oldham was 3.5 per cent. In May, 1959, it had risen to 4.8 per cent. The June figure is 3.1 per cent., well below the figure for a year ago. Perhaps I may take the figure for Colne. I am sorry that the hon. Member for Nelson and Colne (Mr. S. Silverman) did not stay in the Chamber after he had delivered his last speech. The figure of unemployment for Colne in June, 1958, was 3.3 per cent. In May, 1959, it was only 2.6 per cent. It is now 1.7 per cent. In June, 1958, the figure for Nelson was 5 per cent. In May, 1959, it was 2.2 per cent., and in June of this year it was 1.5 per cent.

I should like to give the figure for Rochdale because the hon. Member for Rochdale (Mr. McCann) has been very good and has stayed in the Chamber all the time during our debate. In June, 1958, the figure for Rochdale was 3.1 per cent. In May, 1959, it was 2.2 per cent., and in June it was 1.9 per cent.

Mr. McCann

Can the right hon. Gentleman say how much of that reduction is caused by people leaving the town? A lot of people are moving out and emigration is our main worry. The reason for these figures is not that more people are finding jobs but that people are leaving the town.

Sir D. Eccles

When the hon. Gentleman sees the figures for vacancies for last month, I think that he will take a rather more optimistic view of the situation.

What is interesting about these figures is the very big drop in the numbers of people temporarily stopped. One hon. Member was afraid that the number of those temporarily stopped was increasing, but the very opposite is happening. There is a sharp drop in that number. Indeed we know that at the moment the cotton industry is picking up very well, and that is one of the reasons why it will be quite a struggle to get a sufficient number of firms to agree to go out of the industry. Therefore, if we introduced any additional conditions such as have been asked for in this Amendment and the two previous Amendments, we should make it even more difficult.

Mr. Jay

Do not these figures illustrate my point? Do not they show how quickly unemployment figures go up and down in the areas? Whatever the level in a particular area, does it not remain true that if five mills suddenly closed down, in, say, Nelson, there would be heavy unemployment in that area, whereas if the same number closed down in Preston, it would have little effect on the general employment situation? Surely that remains true.

Sir D. Eccles

When the right hon. Gentleman considers the magnitudes he will realise that we are talking about a spread of only 1 per cent. or 2 per cent. It is a curious fact about unemployment in this country—where it is so much lower than in other countries—that if the figure goes over 3 per cent. to 3.5 per cent., the Government are supposed to be in danger, but if the figure goes down to 1.5 per cent. they are supposed to be facing inflation and a boom. It is a remarkable thing that the whole reputation of the Government depends, as it were, on only 1½ persons out of 100.

The right hon. Gentleman says it is wonderful how the unemployment figures go up and down. I accept that, provided that he will congratulate the Government on the fact that they have now come down again and if he is as pleased as we are about the very remarkable results in these very D.A.T.A.C. areas. I do not know what we shall have to do with a D.A.T.A.C. area in which there is only 1.5 per cent. unemployment.

I would conclude by saying that it is a good thing that unemployment should have fallen in these areas, and that that will make it easier for us to do what all hon. Gentlemen on both sides of the House want to do, namely, to bring new and alternative work for those who are not likely to get permanent jobs in cotton in the future.

Mr. McCann

Some of us are quite concerned about the fact that only one week's notice is necessary in order to close a mill, whereas eighteen months are required to bring a new industry into the area. As I understand it, the operation of the new Bill will be spread over five years. The reorganisation will be determined by the amount of machinery which we can get, and if the Board of Trade could say that a mill could be left open for twelve months, and, in the meantime, could bring in industry and spread that operation over five years, would not that help this particular project?

Sir D. Eccles

This is a tough problem and we have to pursue a tough policy if we are to get the results we want. Therefore, although I have great sympathy with the hon. Gentleman, I think the real answer to him is that if general trade keeps good, as it is now, we shall be able to absorb those in the cotton industry who lose their jobs, and, if it does not keep good, nothing that any Government can do could entirely meet the question. Therefore, with those considerations in mind, I hope the House will reject the Amendment.

Mr. Rhodes

May I draw the attention of the right hon. Gentleman to one further point? We have an area which has been scheduled as a D.A.T.A.C. area, for whatever reason. It has been brought to the attention of the Government, and it may be that action is taken because of a slight difference between one area and another—a difference of 1½ per cent, such

as the right hon. Gentleman mentioned a few minutes ago. The right hon. Gentleman suggested that a difference of 1½ per cent, in unemployment can make a Government think very hard about changing the status of a whole area.

This is precisely what we have been saying for a long time. An area which adjoins an area which has been designated may approximate to that situation at one time, and at another time may be above or at another time below that percentage. That is a point of consideration in designating a complete area. It is only likely that Members like myself, who represent areas of the kind which I was describing this afternoon, feel rather hurt about this indiscriminate scheduling of areas, when the problem in the adjoining area in another month's time might be precisely the same, from the criteria point of view.

I ask the Government to think in terms not so much whether the unemployment is just below or just above, but of the actual intrinsic need, and to decide whether to get rid of the rubbish in the shape of old buildings or bring in more industry, rather than apply a rigid criterion.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 200, Noes 237.

Division No. 147.] AYES [7.15 p.m.
Ainsley, J. W. Chetwynd, G. R. Grenfell, Rt. Hon. D. R.
Albu, A. H. Cliffe, Michael Griffiths, David (Rother Valley)
Allaun, Frank (Salford, E.) Clunie, J. Griffiths, Rt. Hon. James (Llanelly)
Allen, Arthur (Bosworth) Coldrick, W. Griffiths, William (Exchange)
Allen, Scholefield (Crewe) Craddock, George (Bradford, S.) Hale, Leslie
Awbery, S. S. Crossman, R, H. S. Hall, Rt. Hn. Glenvil (Colne Valley)
Bacon, Miss Alice Cullen, Mrs. A. Hamilton, W. W.
Balfour, A. Davies, Harold (Leek) Hannan, W.
Benson, Sir George Davies, S. O. (Merthyr) Hastings, S.
Beswick, Frank de Freitas, Geoffrey Hayman, F. H.
Bevan, Rt. Hon. A. (Ebbw Vale) Delargy, H. J. Healey, Denis
Blackburn, F. Diamond, John Henderson, Rt. Hn. A. (Rwly Regis)
Blenkinsop, A. Dodds, N. N. Herbison, Miss M.
Blyton, W. R. Donnelly, D. L. Hewitson, Capt. M.
Boardman, H. Ede, Rt. Hon. J. C. Hilton, A. V.
Bottomley, Rt. Hon. A. C. Edelman, M. Hobson, C. R. (Keighley)
Bowden, H. W. (Leicester, S.W.) Edwards, Rt. Hon. John (Brighouse) Holman, P.
Bowles, F. G. Edwards, Rt. Hon. Ness (Caerphilly) Houghton, Douglas
Boyd, T. C. Edwards, Robert (Bilston) Howell, Charles (Perry Barr)
Brockway, A. F. Evans, Edward (Lowestoft) Hoy, J. H.
Broughton, Dr. A. D. D. Fernyhough, E. Hughes, Cledwyn (Anglesey)
Brown, Rt. Hon. George (Belper) Finch, H. J. (Bedwellty) Hughes, Emrys (S. Ayrshire)
Brown, Thomas (Ince) Fletcher, Eric Hunter, A. E.
Burke, W. A. Foot, D. M. Hynd, H. (Accrington)
Burton, Miss F. E. Forman, J. C. Hynd, J. B. (Attercliffe)
Butler, Herbert (Hackney C.) Fraser, Thomas (Hamilton) Irvine, A. J. (Edge Hill)
Butler, Mrs. Joyce (Wood Green) Gaitskell, Rt. Hon. H. T. N. Jay, Rt. Hon. D. P. T.
Callaghan, L. J. George, Lady Megan Lloyd(Car'then) Jeger, George (Goole)
Carmichael, J. Gooch, E. G. Johnson, James (Rugby)
Castle, Mrs. B. A. Gordon Walker, Rt. Hon. P. C. Jones, Elwyn (W. Ham, S.)
Chapman, W. D. Greenwood, Anthony Jones, J. Idwal (Wrexham)
Jones, T. W. (Merioneth) Paton, John Storehouse, John
Kenyon, C. Pearson, A. Stones, W. (Consett)
Key, Rt. Hon. C. W. Peart, T. F. Strachey, Rt. Hon. J.
King, Dr. H. M. Pentland, N. Summerskill, Rt. Hon. E.
Lawson, G. M. Plummer, Sir Leslie Swingler, S. T.
Lee, Frederick (Newton) Popplewell, E. Sylvester, G. O.
Lee, Miss Jennie (Cannock) Prentice, R, E. Taylor, John (West Lothian)
Logan, D. G. Price, J. T. (Westhoughton) Thomas, George (Cardiff)
Mabon, Dr. J. Dickson Price, Philips (Gloucestershire, W.) Thomas, Iorwerth (Rhondda, W.)
McAlister, Mrs. Mary Probert, A. R. Thomson, George (Dundee, E.)
McCann, J. Proctor, W. T. Thornton, E.
MacColl, J. E. Pursey, Cmdr. H. Tomney, F.
McInnes, J. Randall, H. E. Ungoed-Thomas, Sir Lynn
McKay, John (Wallsend) Rankin, John Viant, S. P.
MacMillan, M. K. (Western Isles) Redhead, E. C. Warbey, W. N.
MacPherson, Malcolm (Stirling) Reeves, J. Watkins, T. E.
Mahon, Simon Reid, William Weitzman, D.
Marquand, Rt. Hon. H. A. Reynolds, G. W. Wells, William (Walsall, N.)
Mason, Roy Rhodes, H. Wheeldon, W. E.
Mayhew, C. P. Robens, Rt. Hon. A. White, Mrs. Eirene (E. Flint)
Mellish, R. J. Roberts, Albert (Normanton) White, Henry (Derbyshire, N.E.)
Mendelson, J. J. Roberts, Goronwy (Caernarvon) Wilkins, W. A.
Monslow, W. Robinson, Kenneth (St. Pancras, N.) Willey, Frederick
Moody, A. S. Ross, William Williams, David (Neath)
Morris, Percy (Swansea, W.) Short, E. W. Williams, Rev. Llywelyn (Ab'tillery)
Morrison,Rt.Hn.Herbert(Lewis'm,S.) Silverman, Julius (Aston) Williams, Rt. Hon. T. (Don Valley)
Mort, D. L. Silverman, Sydney (Nelson) Williams, W. R. (Openshaw)
Moyle, A. Simmons, C. J. (Brierley Hill) Willis, Eustace (Edinburgh, E.)
Neal, Harold (Bolsover) Skeffington, A. M. Winterbottom Richard
Noel-Baker, Francis (Swindon) Slater, Mrs. H. (Stoke, N.) Woodburn, Rt. Hon. A.
Noel-Baker, Rt. Hon. P. (Derby, S.) Slater, J. (Sedgefield) Woof, R. E.
Oliver, G. H. Smith, Ellis (Stoke, S.) Yates, V. (Ladywood)
Orbach, M. Snow, J. W. Zilliacus, K.
Owen, W. J. Soskice, Rt. Hon. Sir Frank
Padley, W. E. Spriggs, Leslie TELLERS FOR THE AYES:
Palmer, A. M. F. Steele, T. Mr. Holmes and Mr. Deer.
Parkin, B. T. Stewart, Michael (Fulham)
Agnew, Sir Peter Corfield, F. V. Grosvenor, Lt.-Col. R, G.
Aitken, W. T. Courtney, Cdr. Anthony Gurden, Harold
Allan, R. A. (Paddington, S.) Craddock, Beresford (Spelthorne) Hall, John (Wycombe)
Alport, C. J. M. Crosthwaite-Eyre, Col. O. E. Harris, Frederic (Croydon, N.W.)
Arbuthnot, John Crowder, Sir John (Finchley) Harris, Reader (Heston)
Armstrong, C. W. Crowder, Petre (Ruislip—Northwood) Harrison, Col. J. H. (Eye)
Ashton, Sir Hubert Cunningham, Knox Harvey, Sir Arthur Vere(Macclesf'd)
Atkins, H. E. Currie, G. B. H. Harvey, John (Walthamstow, E.)
Baldock, Lt.-Cmdr. J. M. Dance, J. C. G. Hay, John
Baldwin, Sir Archer Davidson, Viscountess Heald, Rt. Hon. Sir Lionel
Barber, Anthony Deedes, W. F. Heath, Rt. Hon. E. R. G.
Barlow, Sir John de Ferranti, Basil Henderson-Stewart, Sir James
Barter, John Dodds-Parker, A. D. Hicks-Beach, Maj. W. W.
Batsford, Brian Donaldson, Cmdr. C. E. McA. Hirst, Geoffrey
Baxter, Sir Beverley Doughty, C. J. A. Holland-Martin, C. J.
Beamish, Col. Tufton du Cann, E. D. L. Holt, A. F.
Bell, Philip (Bolton, E.) Duncan, Sir James Hornby, R. P.
Bennett, F. M. (Torquay) Duthie, Sir William Horobin, Sir Ian
Bennett, Dr. Reginald Eccles, Rt. Hon. Sir David Howard, Hon. Greville (St. Ives)
Bevins, J. R. (Toxteth) Eden, J. B. (Bournemouth, West) Hughes Hallett, Vice-Admiral J.
Bidgood, J. C. Elliott,R.W.(Ne'castle upon Tyne,N.) Hughes-Young, M. H. C.
Biggs-Davison, J. A. Emmet, Hon. Mrs. Evelyn Hulbert, Sir Norman
Bingham, R. M. Errington, Sir Eric Hurd, Sir Anthony
Bishop, F. P. Erroll, F. J. Hutchison, Michael Clark(E'b'gh, S.)
Black, Sir Cyril Farey-Jones, F. W. Hutchison, Sir James (Scotstoun)
Body, R. F. Fell, A. Hylton-Foster, Rt. Hon. Sir Harry
Bossom, Sir Alfred Finlay, Graeme Iremonger, T. L.
Bowen, E. R. (Cardigan) Fisher, Nigel Irvine, Bryant Godman (Rye)
Boyd-Carpenter, Rt. Hon. J. A. Fletcher-Cooke, C. Jenkins, Robert (Dulwich)
Boyle, Sir Edward Fraser, Hon. Hugh (Stone) Jennings, J. C. (Burton)
Braine, B. R. Freeth, Denzil Jennings, Sir Roland (Hallam)
Braithwaite, Sir Albert (Harrow, W.) Gammans, Lady Johnson, Dr. Donald (Carlisle)
Brewis, John Garner-Evans, E. H. Jones, Rt. Hon. Aubrey (Hall Green)
Brooman-White, R. C. Glover, D. Kaberry, D.
Browne, J. Nixon (Craigton) Glyn, Col. Richard H. Kerby, Capt. H. B.
Bryan, P. Godber, J. B. Kerr, Sir Hamilton
Butler, Rt. Hn. R. A.(Saffron Walden) Goodhart, Philip Kirk, P. M.
Campbell, Sir David Gough, C. F. H. Lancaster, Col. C. G.
Carr, Robert Gower, H. R. Leather, E. H. C.
Clarke, Brig. Terence (Portsmth, W.) Graham, Sir Fergus Leavey, J. A.
Conant, Maj. Sir Roger Grant, Rt. Hon. W. (Woodside) Leburn, W. G.
Cooke, Robert Grant-Ferris, Wg Cdr. R. (Nantwich) Legge-Bourke, Maj. E. A. H.
Cooper, A. E. Green, A. Legh, Hon. Peter (Petersfield)
Cooper-Key, E. M. Grimond, J. Lindsay, Martin (Solihull)
Cordeaux, Lt.-Col. J. K. Grimston, Hon. John (St. Albans) Linstead, Sir H. N.
Lloyd, Maj. Sir Guy (Renfrew, E.) Ormsby-Gore, Rt. Hon. W. D. Stoddart-Scott, Col. Sir Malcolm
Longden, Gilbert Orr, Capt. L. P. S. Storey, S.
Low, Rt. Hon. Sir Toby Osborne, C. Stuart, Rt. Hon. James (Moray)
Lucas, Sir Jocelyn (Portsmouth, S.) Page, R. G. Studholme, Sir Henry
Lucas,P.B.(Brentford & Chiswick) Partridge, E. Sumner, W. D. M. (Orpington)
Lucas-Tooth, Sir Hugh Peel, W. J. Taylor, Sir Charles (Eastbourne)
McAdden, S. J. Pickthorn, Sir Kenneth Taylor, William (Bradford, N.)
Macdonald, Sir Peter Pilkington, Capt. R. A. Teeling, W.
Maclay, Rt. Hon. John Pitman, I, J. Thomas, Leslie (Canterbury)
Maclean, Sir Fitzroy (Lancaster) Pitt, Miss E. M. Thomas, P. J. M. (Conway)
MacLean, Neil (Inverness) Pott, H. P. Thompson Kenneth (Walton)
MacIeod, Rt. Hn. Iain (Enfield, W.) Powell, J. Enoch Thorneycroft, Rt. Hon. P.
MacLeod, John (Ross & Cromarty) Price, David (Eastleigh) Thornton-Kemsley, Sir Colin
Macmillan,Rt.Hn.Harold(Bromley) Price, Henry (Lewisham, W.) Tiley, A. (Bradford, W.)
Macmillan, Maurice (Halifax) Prior-Palmer, Brig. Sir Otho Turton, Rt. Hon. R. H.
Macpherson, Niall (Dumfries) Rawlinson, Peter Vane, W. M. F.
Maddan, Martin Redmayne, M. Vickers, Miss Joan
Maitland,Cdr.J.F.W.(Horncastle) Rees-Davies, W. R. Vosper, Rt. Hon. D. F.
Maitland, Hon. Patrick (Lanark) Renton, D. L. M. Wade, D. W.
Markham, Major Sir Frank Ridsdale, J. E. Wakefield, Sir Wavell (St. M'lebone)
Marlowe, A. A. H. Roberts, Sir Peter (Heeley) Wall, Patrick
Marples, Rt. Hon. A. E. Robinson, Sir Roland (Blackpool, S.) Ward, Rt. Hon. G. R. (Worcester)
Maudling, Rt. Hon. R. Robson Brown, Sir William Ward, Dame Irene (Tynemouth)
Mawby, R. L. Rodgers, John (Sevenoaks) Watkinson, Rt. Hon. Harold
Maydon, Lt.-Comdr, S. L. C. Roper, Sir Harold Whitelaw, W. S. I.
Medlicott, Sir Frank Ropner, Col. Sir Leonard Williams, Paul (Sunderland, S.)
Molson, Rt. Hon. Hugh Scott-Miller, Cmdr. R. Williams, R. Dudley (Exeter)
Morrison, John (Salisbury) Sharpies, R. C. Wills, Sir Gerald (Bridgwater)
Nabarro, G. D. N. Shepherd, William Wilson, Geoffrey (Truro)
Nairn, D. L. S. Smithers, Peter (Winchester) Wolrige-Gordon, Patrick
Neave, Airey Spearman, Sir Alexander Woollam, John Victor
Nicholls, Harmar Speir, R. M. Yates, William (The Wrekin)
Nicolson, N. (B'n'm'th, E. & Chr'ch) Stevens, Geoffrey
Nugent, Richard Steward, Harold (Stockport, S.) TELLERS FOR THE NOES:
O'Neill, Hn. Phelim (Co. Antrim, N.) Steward, Sir William (Woolwich, W.) Mr. Chichester-Clark and
Mr. J. E. B. Hill.

Motion made, and Question proposed, That the Bill be now read the Third time.

7.24 p.m.

Mr. Rhodes

Just formally to move the Third Reading of a Bill of this description is not good enough. I say again, as I did on Second Reading, that if I could find tellers who would stand by I would very willingly vote against this Measure. It has been ill-conceived; it has been introduced at the wrong time; the money which is made available has not enough strings to it; and it is unworkable, because it is indefinable.

It may be that one or two people who know their business on that side of the House will now, on Third Reading, give us the benefit of their experience and, perhaps, an analysis, from an economic point of view, of how it will benefit any one of these sections of the trade. I shall listen with great interest and humility if they are able to prove to me that there is anything in this question of increase of efficiency likely to ensue from this Bill.

I do not know whether hon. Members read the Manchester Guardian last Saturday morning, but if they did they will have read the speech of Mr. Harrison, who is the head of English Sewing Partners, a gentleman for whom I have the greatest regard, whose judgment I have always respected because it has been sound. He is not the sort of man who would badger either a Government Department or anybody to achieve a temporary advantage. His position is one of analyst; he has the ability to assess what is likely to be beneficial in terms of change.

Mr. Harrison told the organisation which assembled last Friday—as my hon. Friend the Member for Leicester, South-West (Mr. Bowden), were he in the House, would bear out, because he was with me at the same place—that he could not see from the inquiries and research which had been made by that organisation how, even if the new machinery were put in and worked as it is likely that it will be worked—with 38-hour shifts, too—and with the price the machines are, the members of the organisation could do anything but break even with the cost of producing a similar yarn on one shift with the old machines.

It is the most depressing thought that up to this point we have not had a sufficiently accurate analysis from an economist's point of view—and I do not mean the point of view of an academic person: I mean the point of view of a person who knows his job—of what the machines are likely to yield in terms of years. It makes one wonder why we have not had it. However, the reason is not far to seek. We had a reflection of the real reason in this Chamber during the passage of the Bill.

When I said that the Bill was born wrong I meant that the inception was from the wrong premise. We on this side of the House took great advantage of the fact that the cotton industry became a depressed industry some months ago and we repeatedly pressed the Government to act. It is the duty of the Opposition to tell the Government where they think the Government are going wrong, but it is the Government's duty to assess the situation in terms of economic need and not to give way to something which may be crudely put forward as a vote-catcher.

We did not vote on the Bill on Second Reading, and we shall not be voting on Third Reading. I must repeat that if common sense had prevailed on both the Socialist and Conservative sides of the House, a discipline in terms and conditions could have been written into the Bill, had we been wise enough, so as to leave politics out of this subject. We on this side, because of the compensation which it provides for the workers, have not voted against the Bill. But that is not a sufficient basis for putting an industry on a proper economic footing. Provision is not made for altering the structure of an industry and for giving money to people who do not need it for the sake of accepting "lolly", to quote a colloquialism. But that is what the Bill amounts to, and we shall very much regret what is being done under the Bill. It will not succeed.

I hope sincerely that we shall be able to say that the Bill has really benefited trade, but I am sure that it will not benefit it in the way desired by those who are best equipped to think about these matters. I should like to show to the House a little exhibit in the form of the proceedings of the 44th Annual Conference of the Textile Institute held at Scarborough this year. The conference was devoted entirely to the subject of machines. Its purpose was to ventilate ideas about machinery in the industry.

In the light of Mr. Harrison's comments I have looked up some of the statements made at that conference, and in the light of the experience which the hon. Member for Preston, South (Mr. Green) and I had in Japan, I have made some interesting comparisons. One of the experts in this trade gave in his paper two instances of the productivity of machines. According to his figures, the machines which are available in the country at present in a highly efficient mill are 20 per cent. down in productivity already compared with what we saw in Japan. If that is the case, it is the Government's duty and the duty of those who are paying the money to see that money is not spent foolishly.

I regret that up to now there has been no semblance of an economic argument for the installation of this machinery, either in the course of debates in the House or from either side within the industry. The Government, unpopular in Lancashire, wipe out the yarn spinners in England. The spinners must fend for themselves. Competition cuts right through at a time when they are in difficulties and it makes haywire of their prices. The industry needed discipline, and a stiff one, but I wonder whether it is thoroughly understood that what is likely to be created under the Bill is another monopoly. We are likely to substitute one monopoly for another, but without the ability in this case to do anything about it through the Monopolies Commission.

We as a Parliament are saying that the industry would be best worked as a monopoly, but we have had no guarantees that the machines will be worked for the best. I ask the House to imagine the kind of desultory argument which will proceed for many months on whether a 38½-hour or 40-hour week should be worked, or whether two shifts should be worked at all. The Bill is founded on the belief that everybody will be co-operating for the best inside the industry, but there is no agreement on that point.

This is why I say to the industry at this point, "For goodness' sake, when the schemes are put up see that they are such as will bear investigation and critical analysis." It is the duty of all of us in the House to see that these schemes are subjected to the most rigorous examination. Things have gone so well for the Government in terms of timing that it was suggested last week that schemes for sections of the industry might be brought forward towards the end of the Session. I do not want to be too vitriolic on this subject, but I would remind the House that we have spent all this time on a Bill which has been described time and again as nothing more than an enabling Bill and yet we may reach the last week of this Session without sight of the arrangements or schemes which are to be put forward by any of the sections in the industry.

We can all be busy scurrying about on this, that or the other, whether it is holidays or elections, while the real point of the Bill, and our responsibility to the taxpayer, is lost. I am not likely to get anybody to assist me in opposing the Third Reading, but I think that it behoves the House to insist that we have a day on which we can discuss the details of each scheme, because it is in the schemes that the importance of the Bill resides.

I think, too, that we shall have to do some rethinking in terms of the entry of machines. Do not let us start off, this time, lagging behind the productivity of machinery manufactured in any part of the world. I warned the Government on the Second Reading of the Bill that this could only mean postponing the time when we shall again be faced with the same problem, and then we shall either have to face it in the way we are doing now, with another reduction, or else we shall have to introduce protection. It is as simple as that.

The present spurt of trade is the seasonal one which usually comes one year in three when there is good weather. I beg the Lancashire cotton trade not to be beguiled into thinking that because we are having a good summer, and stocks are being shifted, they can sit back and wait for the next man to do something about the position. It will not work that way. Every one of the upturns in trade has been followed by something worse than has been known before.

I hope that the President of the Board of Trade will think over these things. He has dealt with the Bill very fairly and he has been as accommodating as a President of the Board of Trade could be who has already committed himself up to the hilt. I warn him not to expect too much. Let him take this as a lesson in the encouragement of productivity of the machines of Lancashire and of housing those machines as they should be housed.

7.43 p.m.

Mr. William Shepherd (Cheadle)

The House always listens with attention to the hon. Member for Ashton-under-Lyne (Mr. Rhodes), and I do so with special attention because I know that in his own business, which is wool, he has applied the highest levels of efficiency and has risked his own money in getting first-class equipment. When people do that, we listen all the more attentively to what they say to other people about what they should do in their businesses.

The hon. Gentleman challenged us to advance an economic argument for the Bill and I must say, frankly, that there is not one; that is to say, there is not one worth £40 million.

Mr. S. Silverman

Or 6d.

Mr. Shepherd

If it were the case that all we hoped to derive from this legislation was the activity and the change represented by £40 million of investment, it would be money almost thrown away. I will try to tell the House why I support the Bill, although I believe it is dangerous and I wish that we had not got to pass a Bill of this nature.

In my view we would not be having the Bill had not the post-war history been what it was. The real reason why the cotton industry got into its present state was that (a) we had far too much easy trade in the years 1946 to 1951 and (b) we had far too splendid a result from out attempts to recruit more labour to the mills in the early years after the war. Had we had a harder time in those five years after the war, or had there been a failure in the recruitment of labour, I feel certain that we should not be facing in Lancashire the present serious situation.

None of us on this side of the House who believes that the Bill is justified wants to avoid facing the facts of the situation.

Mr. Thornton

Before the hon. Gentleman leaves that point, whilst I agree with him that the industry was rebuilt too quickly between the years 1945 and 1951, surely he will give credit for the large contribution made by the cotton textile industry to Britain's export drive in those crucial years?

Mr. Shepherd

I am not one of those who wish to write off the cotton industry What I want to do is to get it into a position where it can face competition, at any rate in Western Europe, and we have not reached that situation yet. I do not write off its export value because, even though last year we imported more yardages than we exported, the net value of the imports as against exports was £22 million. That was because we export more expensive fabrics and import less expensive ones, so it has its merits in that direction.

However, we should not try to ignore the fact that unless there is a facing of the facts by both sides of the industry, as a consequence of the Bill £40 million will be poured down the drain.

Mr. S. Silverman

Is it not £30 million?

Mr. Shepherd

It will be £30 million or £40 million. One of the objections to this procedure is that commitments are made before getting the other side of the bargain, and that is not normally the way I like to see business done.

I have said that we must face the situation. The situation now is that we in Lancashire cannot compete with the countries in Western Europe. I am ignoring Asia. Productivity in spinning is about 7 per cent. below what it was before the war. Our entire cotton industry is in a deplorably unsatisfactory state, and if I were asked why we are in this situation I would say that there are mainly two reasons.

The first is that owing to the restrictive practices of the yarn spinners the price of yarn was kept up at an unduly high level. On the other side, the restrictive practices of labour made it virtually uneconomic to spend huge sums of money on investment in new machinery. I was appalled the other day to hear one of the leaders of Lancashire say that if he put another £1 million into his business, he would go outside Lancashire. The truth is that if there are, on the one hand, restrictive practices by the yarn spinners and, on the other, restrictive practices by labour, one embarks on new machinery with huge risks to the capital and burdens the business with a cost of production not much less than that of the man who has machinery dated 1808. This is not a state of affairs which should be tolerated, and if we tolerate it after the Bill becomes law, all the money that will be spent by the Government will be wasted.

We have to face up to the fact that labour has to give a new deal in Lancashire. I am not one of those people who criticise the Lancashire workers. I think that the only people who criticise the Lancashire workers are those who do not know them. One will not find a better crowd of people anywhere in the world than the Lancashire textile operatives, male or female.

It is nevertheless a fact that in a situation such as we have today, involving enormous capital costs, we cannot get sufficient production to cover our outlay unless we have new arrangements in respect of labour, including shift working and the like. I wonder if hon. Gentlemen opposite realise how much this business costs. Let me give one example. If we were involved in a textile business here and we wanted to set up a spinning mill to employ 400 workers it would cost us £2 million to do it. That is £2 million to employ 400 workers—200 on two shifts. We should turn over in that mill during the course of a year about £1 million worth of business, and it would take us two years to turn over our initial capital. The conversion value of the material that we were handling would be about £400,000. These are stupendous figures.

If this enormous weight of capital is not matched by some forward-looking ideas on the part of labour, the Bill is a sheer waste of time, because we shall not be able to operate effectively against Western European competition on the basis of the present arrangement. Indeed, it would be better that we should not try, because it is no good pouring down the drain millions of pounds of private shareholders' money and millions of pounds of Government money which would only result in our being shut out of the markets of the world.

Therefore, I say that the Bill is justified only if it means that each side of the industry realises that it cannot go on as it has been going on in the past and that we must have a new start in Lancashire from which we can hope to achieve a better showing than we have achieved in the post-war years. We can do this. There is nothing that is done in Holland, Germany or Belgium that cannot be done as well, or better, here.

Mr. McCann

Is being done.

Mr. Shepherd

That is true in many respects, but if there had been more satisfactory conditions, more of the mills would have been in operation. The pressure against doing something by way of modernising and keeping our house in order has been so great that there has been no real incentive to those who have tried to do it.

Mr. McCann

I have followed the hon. Member's argument with great interest. I can go a long way with him, but, surely, he is missing two points. One is the competition from the Far East, which created a lack of confidence here, and the other is the fact that since the war £150 million has been spent on the Lancashire industry in doing exactly the thing that he is saying has not been done.

Mr. Shepherd

When one realises how little £150 million buys and that this is the gross invested figure, not the net, and that to employ two shifts of 200 men one has to put down £2 million, one realises how small on a total labour force of 200,000 that total investment has been.

I think it would be wrong to argue that this industry has had the capital investment which was necessary to meet the conditions of competition in the world today. So far as the East is concerned, I am quite prepared to believe that the Bill is justified because, coming on top of dealing with the Asian problem and the restrictive practices problem, and in the anticipation of getting more flexibility in the matter of labour operations, there is a chance of the industry realising where its future lies and of going forward.

I am not a pessimist about this industry. I know that there are men in it who are operatives and men in it who are directors of the highest level, and managers as well who are the equal of any in the world. We have, however, to realise the fact that if we take this £40 million from the Government and say that it is another sop to keep us going for another couple of years, all this money will have been of no avail.

I have one final point to make on Asian competition. We are proposing to spend money in an attempt to build up this industry to something like competitive efficiency. I hope that the Government will not take the view at the end of three years that Asian competition is to come back. There, again, I feel that this would be a waste of money. I do not want to argue this case because I should be out of order in doing so on this Bill, but I am not satisfied that the Government's stand against any regulation of imports from a Commonwealth territory is sound or necessary. I think that we shall not throw over the whole concept of the Commonwealth by doing this. When I think of how India, for example, altered the treaties of 1939, I realise that other Commonwealth countries do not regard the position as so immutable as we do.

I hope that my right hon. Friend in his capacity as President of the Board of Trade, realising that he is spending a dubious £40 million—[An HON. MEMBER: "£30 million."]—£30 million or £40 million—will try to safeguard this expenditure by seeing that we do not at the end of three years find Asian competition once more flooding in.

I am satisfied in my own mind that some reasonable regulation is not inconsistent with our responsibility as a colonial Power. Therefore, I give the Bill a not entirely unqualified blessing. Whether it succeeds or not does not depend on this House; it depends on those outside in Lancashire. If we can make them realise the opportunities before them and that they have in this House a great deal of good will, and particularly if labour will realise that there must be more flexibility and that the out-of-date wages lists must go and that machinery has to be worked two shifts, and if possible three shifts a day, then I think that the Bill will do some good. It must not be regarded as a form of public assistance. It must be merely a starting point for a new deal in Lancashire, and I hope that will be so.

8.0 p.m.

Mr. Houghton

The hon. Member for Cheadle (Mr. Shepherd) says that he brings to this Bill a not unqualified blessing. I listened very carefully to his speech and I did not hear any words of blessing at all. We have listened to two well-informed and challenging speeches, both of a somewhat pessimistic nature, and that is disturbing on Third Reading of the Bill. If the Bill does anything at all of use it is to invest money in the future of the cotton industry. That is something to be noted by those who say that the Government should not invest money in private industry. That is precisely what we are doing in a somewhat unconventional way.

Another observation that I would make in passing is that the two other national industries falling on difficult times like cotton have, fortunately from many points of view, already been nationalised, so that their problems can be dealt with on a national scale with a full sense of public responsibility and with a knowledge that whatever investment is made in those industries will return to the national good and not go to private profit. I am sorry to introduce this somewhat partisan note on the Third Reading of this Bill, but the occasion for enabling people to get something straight are so rare that one has to seize the opportunity when it occurs, and it seems to me that the opportunity occurs now.

Mr. S. Silverman

I take it that my hon. Friend is not apologising for doing so.

Mr. Houghton

I am certainly not apologising for it.

It is important to note that the Bill deals with private enterprise in decline, and it is a very unpleasant spectacle with many grievous consequences—social, human and economic. Private enterprise in prosperity is most peremptory and imperative in telling the Government "Keep out. Do not interfere. We do not want help or interference. We want to be left alone, and we can then prosper." However, when industry falls on evil times, the assistance of the State in one form or another is called for persistently.

The cotton industry is suffering mainly from the expansion of cotton textile industries in other countries which are competing with us in world markets and of late have successfully invaded our home market. To protect the industry from the latter, a demand was repeatedly made for the imposition of tariffs and quotas to enable the home industry to have the full benefit of the home market. The Government took the view that, having regard to our Commonwealth obligations, they could not assent to the imposition of tariffs or quotas on imported Commonwealth goods and were not prepared to create diffi- culties within the Commonwealth on the general question of trading relations even for the sake of protecting an important industry like cotton.

I do not say that the Government were wrong in taking that view. To have consented to the imposition of tariffs and quotas would have been a marked departure from our traditional policy of trading relations within the Commonwealth, although it can, of course, be urged that other countries within the Commonwealth cannot indefinitely expect to send their goods here free of quota and duty if they are going to take what we may regard as unreasonable steps to protect their own industries to the damage of ours.

Furthermore, the problem of the cotton industry arises because it is heavily concentrated in one part of the country. Too many people are dependent upon it in too few places. The effect on the social, municipal and economic life of the cotton towns has been fully described in moving terms by many of my hon. Friends.

Mr. Cyril Osborne (Louth)

How does the hon. Gentleman propose that the poorer peoples in the underdeveloped parts of the Commonwealth should be able to raise their standard of living if we deny them the right to sell what they produce?

Mr. Houghton

I have great sympathy with the point of view expressed by the hon. Member for Louth (Mr. Osborne). During the past two years I have had the opportunity of going to India and Pakistan twice, and I have had that question put to me by people with whom I have discussed the problems of the cotton textile industry in Britain. They have said, "How can we raise our standard of life, how can we buy the things we want in world markets for capital development, if restrictions are to be placed on the export of about the only thing we can for the time being export to other countries, including your own?"

It is very difficult indeed to meet that point having regard to the big differences between our standard of living and theirs, and their economic problems and our own. Yet we cannot be oblivious to what is happening in our own cotton areas. It can, of course, be urged to some extent in reply to the hon. Gentleman's question and the question which was put to me many times in India and Pakistan that a prosperous Britain is probably as good a support of their economy as an enlargement of their export trade, for they will at least need from this country help with their capital equipment and we shall have to give it by loan, grant or special facilities of one kind and another. However, it is most important, I admit, that we should refrain from doing anything which may impair the opportunities of those other Commonwealth countries to improve their economic position and standard of life.

As I was saying, the Government decided, for reasons which seemed to them to be overwhelming and which were certainly of great weight, not to impose tariffs or quotas on Commonwealth imports. If private industry is suffering from the effect of the competition of other textile industries elsewhere and the Government decline to give the industry some measure of protection against that competition, then, clearly, decline on account of natural causes, as one might say, is aggravated by the Government's refusal to adopt conventional methods of protection.

Having reached that decision, the Government undoubtedly had an obligation towards the industry. I do not object to the provisions of the Bill to give compensation to those who will go out of business. It was the only thing in this or a similar form that the Government could do at this stage, and it seems to me that there is little profit in going back over the past into what might have been done in recent years. We are faced with a situation for which the Government had some responsibility.

Therefore, the aim of the Bill, which, as my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) said, is purely an enabling Bill, is to enable Ministers to approve schemes of reorganisation and use Government money for the purpose of implementing them so that the industry may be smaller, more efficient and more competitive at the end of the day.

If that aim is not achieved, then I agree with the hon. Member for Cheadle that the money will have been wasted. This is not in its ultimate purpose merely the giving of money to people who will agree to go out of business. It is not just compensation for loss of their assets or goodwill—whatever may be left of that—or an effort to save their private fortunes. This is a means to an end and if it does not achieve that end, it will have failed and the money will have been wasted.

As my hon. Friend the Member for Ashton-under-Lyne said, it is rather disappointing that we have not had more convincing and tangible evidence that the Bill will bring about the purpose which it seeks to achieve. We have not seen any of the reorganisation schemes. We have had only a glimpse of the compensation terms. Everything is on trust.

The Minister will have a very big responsibility for the schemes which come forward, and the House will have a responsibility, too. Notwithstanding what my hon. Friend the Member for Ashton-under-Lyne said, it will be extremely difficult for the House critically to examine the merits of particular schemes. Which of us will be able to say that particular schemes are good or bad, or ought to be different, or bigger or smaller, or in different areas, or in different sections of the industry? There will be a few hon. Members who may have views on the matter, but the House as a whole will not.

Mr. S. Silverman

I remind my hon. Friend that even if the House came clearly to the opinion that a particular scheme had many defects, there would be absolutely nothing whatever that the House could do about it, because the scheme would come before the House in the form of an Order in Council which could be accepted or rejected only as a whole.

Mr. Houghton

I am much obliged to my hon. Friend for mentioning that. It shows that the House will have little effective power over the results of the Bill.

I am sure that both sides of the industry will go into the scheme determined to make it work if they possibly can. This is a supreme challenge not only to this industry, but to private enterprise, which is asking for Government help to reorganise itself and to make itself more efficient and more competitive. We shall certainly wish from time to time to hear what the industry is doing to meet that challenge. If the industry is basing its hope merely on being smaller for the trade which will come to it easily and without effort and without improvement in efficiency, the expenditure of public money will not be justified.

The industry has to be more efficient and more competitive in the hope that it will be able to expand in the future, for there will be an unlimited world market for textiles as the standard of life of the poorer countries improves. Those countries will want more clothing and in many Asian countries that will mean cotton textiles.

As one goes about the world one can see that half the people are not properly clad, and it will be cotton textiles which will give them the raiment they require. There will be a tremendous market for cotton textiles and there is no reason why this country should not have a share of it.

Those are my thoughts on the Third Reading of the Bill and there is nothing more that I can usefully say. I have no special knowledge of the cotton industry except that one part of my constituency is heavily involved in this operation. I listened to my hon. Friend the Member for Ashton-under-Lyne with close attention. There is no doubt that he and the hon. Member for Cheadle made observations which both sides of the industry should read and which the country should note. I hope that before we finish with the Bill we shall hear something from the right hon. Gentleman, now that it is all over bar the final speeches, to give us greater reassurance than has come from all the debates which we have had on the Bill.

8.15 p.m.

Sir John Barlow (Middleton and Prestwich)

I do not propose to keep the House for very long, but I should like to say a few words since this is a Bill of importance to the north-western part of England and to Lancashire in particular. The hon. Member for Sowerby (Mr. Houghton) laid great a stress on the fact that the Bill is a supreme challenge to the cotton industry. In that, I agree with him entirely. This is a method which has been conjured up to try to resuscitate and make efficient and economic an industry which, owing to world and national conditions, has been in decline for generations.

We have a great responsibility to this industry. Personally, I think that it has been overlooked by successive Governments for far too long. Over the last twenty years, various Governments have tried to make a stab at doing something about it, but substantially they have all failed. Whether this scheme will meet the case remains to be seen. I think that it will. I think that the time is ripe and that the Government have got hold of something which will meet the situation provided that there is proper and adequate co-operation and a sense of responsibility among all the parties concerned, that being of the utmost importance.

On Second Reading, I said that labour had great responsibility to come to terms with employers. It was suggested that I was holding a pistol at the head of labour. It was nothing of the kind. All sides have equal responsibility to make the scheme work. Several people could frustrate it altogether, but it would be deplorable for Lancashire and the industry if that were allowed to happen.

The hon. Member for Ashton-under-Lyne (Mr. Rhodes), to whom we all listened with the greatest respect, seemed to be the one man in the House who was marching in step. He was full of criticism of this venture, but I thought that it was undue criticism. As he pointed out, this is an enabling Bill. This is only the first part, a small part, of the Government's policy for meeting the situation in Lancashire.

Mr. S. Silverman

What are the other parts?

Sir J. Barlow

I was coming to that. They have been pointed out by the hon. Member for Sowerby and they are most important. I am referring to the schemes to which the Board of Trade will subsequently agree. The different sections of the industry and the Board of Trade will have to agree on something which will eventually result in an efficient industry. Otherwise, the whole scheme will be a complete flop.

The President of the Board of Trade has been rather courageous in bringing forward this scheme at this time. Successive Presidents of the Board of Trade in this and former Governments have been most bitterly criticised by Lancashire. It may be that this is the first opportune time at which the industry has been ready for such a scheme. In any case, the industry now has an opportunity of helping itself, provided that it agrees to reasonable schemes for each of the seven or eight parts of the industry.

It was suggested by the hon. Member for Ashton-under-Lyne that far more discipline was required than appears in the Bill. There may be some discipline in the schemes out forward. We on this side do not like too much discipline, because it savours too much of planning and we dislike that. We agree that money must not be wasted, and I and other people have said time and again that if this scheme does not result in an efficient economic industry money will have been wasted. We have all tried to avoid that.

It has been suggested that there might be heavy unemployment. That aspect has been over-emphasised. In many parts of Lancashire there are vacancies in the textile industry. There may be cases of hardship resulting from the Bill, and I would be the first to say that we ought to meet those in a reasonable way. We do not want to create hardship, but we must take a fair view of the whole scheme. I do not believe that there will be any material hardship. The schemes that will be worked out, and are being worked out now, will meet that difficulty. At the same time, we do not want money wasted in any direction in these schemes.

I welcome the Bill as giving the industry a chance to help itself with Government backing. I dislike the idea of a Government pouring money into an industry in difficulty, but there are cases when it is right and proper that it should happen. This is one of those cases, due largely to our responsibilities in our Commonwealth policy in this country. It is more important to uphold our Commonwealth policies as a whole and spend a few million pounds than it is to let down the Commonwealth.

Having said that it is admirable that the President of the Board of Trade has introduced the Bill and that I am very glad to see it going through with such little opposition, I was disappointed when my right hon. Friend at an earlier stage, somewhat decisively criticised the designs and methods of salesmanship in Lancashire. That has been a common criticism by some people for a long time, but it has been overdone. Many of the more up-to-date and modern firms have admirable designs. They search the world for the best designs. They have some of the best salesmanship in the world and if my right hon. Friend gives me the opportunity I shall be delighted to try to prove those facts to him. What my right hon. Friend said in criticism of those two aspects may be true in some cases, but as a whole it is far less true today than it was twenty years ago; indeed, it is substantially untrue today.

One question that the President of the Board of Trade has not fully answered to my satisfaction is how these payments will be affected by taxation. When he made his statement on 23rd April I asked him what the position would be. Obviously, it was too soon then for him to give a categorical reply, but he said that the matter was being looked into. Before any of these schemes are being put forward, in many cases the one all-important factor will be how these payments will be affected by taxation. I hope that my right hon. Friend can give us a categorical answer tonight. If he does not do so, the trade will be disappointed.

This Bill is only a beginning, but it is a good beginning, and I and my hon. Friends on this side on the back benches welcome it as giving a great chance to Lancashire, and we wish to thank the President of the Board of Trade.

8.19 p.m.

Mr. S. Silverman

The hon. Member for Middleton and Prestwich (Sir J. Barlow) said that the Bill was welcomed by the back benchers on that side of the House. At the moment there are four back benchers on that side. One hon. Member is conspicuously asleep. Two hon. Members have spoken, one of whom backed the Bill with faint praise, and the other was the hon. Member himself. A fourth hon. Member is waiting to speak and we shall see the measure of his enthusiasm if he catches the eye of the Chair.

The Bill is capitalism's confession of failure and breakdown. Here is an industry which confesses that it cannot pay its way in the world, that it cannot maintain itself, that it cannot look after after its casualties, that it cannot re-equip itself to compete with other people, that it cannot compete with its Far Eastern competitors because of their low standard of living, and that it cannot compete with its Western competitors because of their high standard of living. It is after a century and a half of great opportunity, during the majority of which time it had a virtual world monopoly in this trade, that this situation has arisen. One can only imagine what right hon. and hon. Members on the other side would have to say about a nationalised industry that had put itself in that position.

Having confessed itself bankrupt and defeated, the industry now comes to the State and says, "Give us money" and the State does. It is given money by the State under a Government which, like the hon. Member for Middleton and Prestwich, rejects planning, rejects control, and believes in discipline only when it is at the giving end, but never when it is at the receiving end. The character of our criticism of the Bill has been expressed on Second Reading, throughout a long Committee stage, on Report and notably in the Third Reading debate so far. The Bill is misconceived. It is too little and too late.

It is misconceived because it deals with only one aspect of the malaise which affects the whole area; because it deals with it by giving money without retaining any control, and because it deprives itself of any capacity for seeing that any of its measures will take account of the social necessities which alone provide the justification for the expenditure of public money.

It is too little because no one can conceive that this amount of money, spent in this kind of way, is really going to put the industry in a position, three years hence, to compete with all the forces which have driven it to its present condition—and it is too late because it endeavours to deal with the situation when it is almost past recovery.

Mention has been made, especially by the hon. Member for Cheadle (Mr. Shepherd), of mistakes made between 1945 and 1951. What mistakes were they? He said that we ought not to have been building up the industry in those five or six years.

Mr. Shepherd

I did not say anything of the kind. I said that it was unfortunate that in the years 1945–51 there was such a tremendous demand for Lancashire textiles, almost irrespective of cost. Secondly, it was unfortunate that we succeeded in recruiting so much labour. Had we been less successful we might have been driven to improving the mechanical set-up in the industry more than we did.

Mr. Silverman

I thought that that was what I said. It is no use saying that something is unfortunate unless one means that it should not have happened. Does the hon. Member mean that it should not have happened, and that the Labour Government were wrong in doing what they did between 1945 and 1951? Never mind about the unfortunate situation for the cotton industry; we know what an unfortunate situation the whole country was in during that period. The hon. Member ought not to use a word like "unfortunate" in such a vague way. I say that he means it ought not to have happened, and I ask him now to say whether it should have happened or not.

Mr. Shepherd

I will try to enlighten the hon. Member. When I said that it was unfortunate I meant that if an industry has things very easy it is likely to take things rather easier in its forward-looking attitude towards development than would otherwise be the case. The trouble was that between 1945 and 1951 Lancashire had it too easy.

Mr. Silverman

It is now 8.31 p.m., and I do not think I can pursue the argument with the hon. Member in this way much further, but I still say that he has not discharged the onus that rests upon him of saying whether the Labour Government were right or wrong. I say that we were abundantly right. We could not have achieved any success unless we had gone to Lancashire at that time and joined the production committees. We could not have done it unless employers, trade unionists, and politicians on both sides had not joined these committees and told the people to come back into the industry.

It is no good saying now, ten years later, that it was unfortunate. We had to do it because, as Lord Woolton told us from the "Business" Cabinet before the General Election, we were then, at the end of the war, a bankrupt country. We had no export trade. The first thing we had to do was to build up our export trade as quickly as we could, in any way we could, in order to provide ourselves with some foreign currency with which to get the rest of our industry going. Lancashire and the cotton industry bore the whole burden of that effort for three years after the war, and the hon. Member now tells us how unfortunate it was.

Lancashire was then carrying the burden of the whole country, and we undertook moral obligations to the workers in the industry in what we then did. We have never fulfilled those obligations and we never can fulfil them. The Bill is a denial of those obligations. We encouraged people to bring back their youngsters into the mills—people who had said that they would never go back to the mills or allow their children to suffer the privations and insecurity which they themselves had suffered, if they could prevent it.

Furthermore, at that time other people were having it a lot easier than was the cotton industry. There was a demand for light industry all over the country. If Lancashire people had resisted the Government's appeal to them to go back into the cotton industry and rescue the country from the bankruptcy in which the war and twenty years of Conservative Government had left it—[Interruption.] It was bankrupt in 1945, was it not? The former right hon. Member for Epsom said it was, and so did the then Minister of Reconstruction, Lord Woolton. We all knew it, and when we went into Lancashire with those industries both sides of the House joined in making these appeals. If that had not been done, Lancashire could have diversified its industries between 1945 and 1951 as easily as Birmingham or the south. One of the main defects of the Bill is that it does nothing to diversify industry in the cotton areas while it is contracting the cotton industry.

What happened from 1951 onwards? There has been much airy talk about Commonwealth obligations. India and Pakistan have been mentioned. However, the principal problem which has accentuated and accelerated the decline in the cotton industry over the past seven or eight years is not India and Pakistan. It is Hong Kong. Before 1951 there was no Hong Kong cotton industry. It was created for the first time in 1951, not for the purpose of Commonwealth development, but for partly philanthropic and partly political reasons connected with refugees from China. Between 1951 and 1958 the Hong Kong cotton industry grew very rapidly. By 1957 cotton provided about 60 or 70—I am not sure that it was not 80—per cent. of all exports from Hong Kong. Those textile exports from Hong Kong provided 20 per cent. of all the cotton imports into this country in seven years.

I ask hon. Members to read in the Government's White Paper what was happening to the cotton industry in Lancashire during those seven years. Four hundred and fifty mills closed in those seven years. This was not the natural growth of a Commonwealth industry. It was an artificially created textile industry in Hong Kong, largely subsidised by the Government. We were subsidising Hong Kong for the purpose of building up the textile industry when we were declining to give any help to Lancashire, either in competing with it or in finding something else to do.

During all those years we were appealing to the Government, the President of the Board of Trade and all his predecessors. We asked them what they would do about this competition; what they would do about the cotton industry; had they any plan and why did they not make up their minds what the future of the industry was, arrange for it to have sufficient capacity to deal with that and provide Lancashire with other industries to take the place of the part of the cotton industry taken away? We were met with stalling and evasive answers week after week, month after month, year after year for seven years.

Now we have the scheme. Whose scheme is it and why do we have it now? There are two reasons for having it now. The first is that the Yarn Spinners' Agreement has been declared illegal. If it had not been declared illegal, we should not have had the Bill. The second reason is that a General Election is coming in a few months' time and the Government cannot afford to leave Lancashire to say that it has been thrown overboard altogether by them. Therefore, the Government come along with a scheme and talk cheerfully, airily and quietly about how wonderful everything will be in three years hence.

This is a bad Bill. It does not face the problem. The Government do not picture what the social necessities of the case are and try to devise an attractive plan to deal with them. The Government do not like plans. They do not like compulsion. They do not like to know where they are going, or what they ate doing, or why. But they have no right whatever to legislate for an industry, and still less to provide that industry with millions of money, unless they do know exactly what they are doing, and where they are going, and why—and keeping control of the expenditure.

If the Government believe in private enterprise and say that neither Government nor State has any interest in the matter, or any right in the matter, they should keep out of it and leave the industry to make the best of the mess it has made, But the Government dare not do that. We all know now that this kind of looking the other way and washing one's hands of the business will not do. Some kind of Government interference there must be. Some kind of Government assistance there must be. Some kind of Government—I hesitate to say control or plan, but some sort of Government scheme there must be.

In those circumstances, how do the Government act? They provide the industry with money with which the better off or the more hopeful can buy out their less optimistic competitors. They provide a scheme whereby, without their taking any share or interest or control in it, money can be provided for these people, who have earned hundreds and hundreds of millions of pounds in the last twenty or thirty years, to reequip their industry. But there is nothing whatever for those more public-spirited elements of the industry who have re-equipped themselves already—

Mr. Holt

They pay the levy.

Mr. Silverman

They pay the levy, yes, and the body of taxpayers provides the rest.

Is this really a satisfactory way to deal with what is rapidly becoming a national catastrophe of the first water? We begged the Government during all those years to give us the advantages of the Development of Industry Act. It took us years to persuade the Government to make this a Development Area at all, and after six or seven years they had not lifted a little finger to do anything about it.

When they introduced the 1958 Measure, we begged and prayed of them to make this an area that could profit by it—to the extent that anybody could profit from so futile and puny a piece of legislation. They resisted that. We had to bring the mayors in their chains of office, and thousands of workers to parade in the Lobbies, and in the streets of London, and we got a negative reply from the Government all the time.

Then we get a Measure of this kind; a Measure that does not even begin to deal with any of the admitted evils whose existence alone justifies Government interference. If the right hon. Gentleman really thinks that Lancashire people will be deceived by this Bill, he has a rude shock coming to him.

8.44 p.m.

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

I have aways approached the Third Reading stage of any Measure in the belief that there cannot really be very much more to say—or perhaps I should qualify that by saying not very much more that is new to say. Invariably, I find myself wrong, and I have made the same mistake this evening. After a full Second Reading debate, and after careful consideration of the Measure in Committee and on Report, one could be forgiven, perhaps, for assuming that there was not much more ground to rake over, but I have learned, once again that that assessment of the position at this stage is wrong. We have had powerful speeches from both sides in this Third Reading debate.

Knowing, as I hope I do, my own limitations, I shall confine myself to a few observations. I shall not seek to go over the ground which has been covered by hon. Members who have spoken so far, either at this stage or earlier. I will acid, too, if I dare, that more particularly might one expect there to be little new to say on the Third Reading of an enabling Bill. We have been reminded throughout our discussions that this is an enabling Bill, and I hesitate to use the word again.

Three or four months ago, before the idea of this reorganisation scheme had been mooted, those of us representing Lancashire constituencies faced, as we had faced for several years, a very difficult situation for the people we represent. I believe that we had made some impression upon right hon. and hon. Members representing other parts of the country, who had been inclined, over the years, to take the view that Lancashire's troubles were the fault of Lancashire, or, more specifically, that the troubles in the cotton industry were due to shortcomings in the cotton industry. I think that we had, by the turn of the year, convinced many of those who were very critical of the cotton industry that their criticisms were probably not well founded.

Then came this scheme and the Bill. We have heard from the hon. Member for Nelson and Colne (Mr. S. Silverman) severe criticism of it. We have had qualified support for it from the hon. Member for Ashton-under-Lyne (Mr. Rhodes). We have heard a fairly pungent analysis of it from my hon. Friend the Member for Cheadle (Mr. Shepherd). No doubt there are other hon. Members who would criticise it, as economic theorists, if they chose to take part in the discussion. I see the Bill in a somewhat different light. I support the Bill and the schemes which are to follow.

As my right hon. Friend said on an earlier occasion, the alternatives are limited. It is the easiest thing in the world to offer purely destructive criticism. We could allow things to job along as they were. I do not think that anyone in the Chamber now would support that course, with all the social and economic evils which would inevitably follow. We could have protected the industry by quota or by tariff from the competition which was proving so damaging. I judge that neither Opposition nor Government supporters seriously contemplated that as the cure for Lancashire's troubles.

We were faced with a third possibility, that a scheme of this sort should be introduced. I have no doubt that it could have taken a dozen different forms. The form it has taken has been to persuade, to bribe, to encourage—a variety of words could be used—the industry to reorganise itself. The assistance, encouragement or temptation has been Government help and the taxpayers' money. In my judgment, £30 million is big money. It has been scorned by one hon. Member. I am thankful for small mercies, in the sense that we have seen schemes of this kind involving somewhat less than the £30 million proposed.

Moreover, it is quite misleading to assume that this is the limit of the new money which will be spent in the industry during the next five years. The hon. Member for Rochdale (Mr. McCann) quite rightly checked my hon. Friend the Member for Cheadle when he said that the sum was £40 million, though the specific number is not known. It may be 30 or it may be 40. The point that I seek to make is that the industry will itself be contributing a substantial sum.

The hon. Member for Ashton-under-Lyne, my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), on Second Reading, and my hon. Friend the Member for Cheadle have suggested that on economic grounds one may be able to shoot holes in this scheme. That may be true. On purely economic and social grounds, of course, it is not perfect. I do not imagine that the House has ever put on the Statute Book a Measure of this sort which could claim perfection on economic or social grounds. I believe that this Bill is as good a compromise as it is reasonable to expect, and that in its application through the various schemes which will come forward we shall see the industry given the opportunity, which I believe it will grasp, to be more efficient—to spin a pound of yarn for less than it is either possible to do or is being done today and to weave a yard of cloth for less money in real terms with a smaller use in real resources than is the case today.

Mr. Holt

I have listened closely to the hon. Member and I thought that at last we should hear from an hon. Member opposite, not excepting the President of the Board of Trade, what is envisaged by some of these schemes. I tried to obtain this information from the President of the Board of Trade on Second Reading, but I could not obtain anything. May I ask the hon. Gentleman, as he has a personal knowledge of the spinning trade, what he expects to be the nature, for instance, of the spinning scheme and how he expects it to work out?

Let me remind the hon. Gentleman of the figures which the President of the Board of Trade gave in the White Paper. It was stated that 10 out of 25 spindles are now idle. Does the hon. Gentleman envisage that merely 10 out of 25 spindles will be smashed or that more than 10 will be smashed? If the latter, what will happen to the workpeople who are now running these spindles? They will lose their employment. Are those spindles to be replaced by new and modern ones? If they are, from where will the workpeople be found to run them, because this will happen twelve months later and we hope that the work-people in the meantime will have found another job?

It is this kind of thing which I find utterly frustrating about the Bill. We have had no details about how the Government visualise these schemes. Can the hon. Gentleman tell us how he visualises them?

Mr. Leavey

I shall gladly try to help the hon. Gentleman. I envisage that a proportion of the existing spinning plant will be destroyed. I do not know whether it will be 10, 11, 12, 13 or 14 of these notional spindles out of 25.

Mr. S. Silverman

Does anyone know?

Mr. Leavey

I do not think that anybody knows. Nobody can know at this moment, because it is largely in the hands of those who now own the plant to decide how much of it they believe it is expedient to scrap.

It has been said so often that I hardly dare repeat it, but this is not a matter of the Government, the Cotton Board, or anybody else selecting spinning mills and weaving sheds for closure. I believe that in the process of eliminating what has been termed dead wood we shall reestablish confidence in the industry—not confidence for a particularly rosy future, but we shall re-establish a feeling in the industry that there is a new chance, and I believe that that is the first thing that the Bill will do. The same arguments apply to the other sections. The hon. Member for Bolton, West (Mr. Holt) did not ask me for my views about the weaving side of the industry, but no doubt his question embraced that point.

I am conscious that crystal-gazing and forecasting is as dangerous in the economic sphere as in the political sphere, but I believe that we shall see the reinvestment of money, which is to be paid by the industry and partly by the Government, in new modern plant which will be run, I hope, on a two-shift and perhaps three-shift basis.

I know that it is easy to stand here and talk about the shift system and the need in economic terms to operate a shift system. But it has serious social implications for people working regularly at night; for people sometimes working at night and sometimes on the second or the third shift. But I believe that the alternatives are even worse and I think that there are hon. Members opposite who would support me in that view. I say to the hon. Member for Bolton, West that that is how I see the thing developing. I believe that by the application and the full use of new and modern plant there may be a reduction in the cost per unit and an increase in the competitive strength of the industry, which will at least be part of what my hon. Friend wants to achieve.

I have touched on the social implications. During the Committee and Report stages of the Bill we have had some discussion on the obligations that rest on the Government, on employers, and also, I believe, on the trade unions, in that connection. What will be the impact in terms of employment? The very fact that we have recognised the absolute need to provide for compensation is an admission that we believe that there will he some people who, if they lose their job under the scheme, will find it difficult to get another.

We know that there is a high age level in the industry and that a fairly high proportion of the workers are women. There is real concern that some of them will not get new work. I would sooner face this fact than try to gloss over it. I hope that the compensation scheme will go as far as it is possible to go to meet the needs of those people.

If we adopt a "lie down and die" attitude to this scheme; if we say that it will not work because not enough money is coming from the Government; that it is unsound economically; that the social implications are more than we can face; that some other scheme ought to be devised; that for two, three or four years we should impose tariffs or quotas on foreign competition—if we proceed on those lines, which are very easy lines on which to argue, we shall arrive back at the first alternative. We shall have done nothing. I do not believe that any right hon. or hon. Member of the House really believes that we should leave things exactly as they are.

The point has been made—and I seek to make it again—that we are now looking to the industry and those engaged in it to produce details of individual schemes. I join with hon. Members who have stressed that a heavy responsibility will rest on them. Lancashire, or the cotton industry, is "on the spot" in this respect. Schemes are to be produced and I hope that they will command general support. There will be arguments. Perhaps argument and haggling is going on at the moment about the value and amount to be paid for spindles or looms.

There have been negotiations between the trade unions and the employers on the exact terms and the details of compensation and it is right that there should be such negotiations. It is right that those negotiations should be robust. I believe it is right, when the Government are paying out a considerable sum of the taxpayers' money, that their view should he known. I hope that we shall not damage the opportunities provided for Lancashire in the Bill by condemning it before the really operative parts of many of the schemes can be made known and put into effect.

Of course, there will be difficulties. Viscount Chandos was quoted in the newspapers recently as saying that in the particular sphere to which he was referring there was what he called a lot of "me, too-ism." We must face the danger that in the application of re-organisation schemes there will be what perhaps I can call "the other fellow-ism", in which we shall find some people suggesting that it should he the other mill which should close down or the other man who should scrap his plant, but not the person in question.

I dare say that we shall see what we see in other walks of life—a general acceptance of the theory, economic and social, except when there is disagreeable application to oneself. That is a possibility, but while we can pick holes in this scheme and the Bill, I think that, on balance, it stands the best chance of doing what everybody has been crying out should be done, namely, helping the Lancashire cotton industry. If I may borrow some words of my right hon. Friend, it is likely to succeed in making the Lancashire cotton industry more confident, more compact and more competitive, and with these very sound aims in mind I commend the Bill to the House.

9.2 p.m.

Mr. Thornton

I am glad that the hon. Member for Cheadle (Mr. Shepherd) has returned to the Chamber, because I want to join issue with him on one or two of the comments he made during the course of his interesting and, as usual, very lucid speech.

I submit, from a long experience of the cotton textile trade union movement—and I am still the vice-chairman of the largest cotton textile trade union—that in recent years I have known of no single case in which a union has refused to operate double-shift working—and, in some cases, they are operating treble-shift working—where new plant has been installed and the working conditions were reasonable for shift operation. There are, of course, many cases on record in which the unions, quite rightly, in my opinion, have refused permission for shift working in old mills, which, without air conditioning, are virtually industrial slums by modern standards.

Mr. Shepherd

I thank the hon. Gentleman for giving way. I did not suggest—at least I hope I did not create the impression—that the trade unions had opposed shift working. What I said was that the unions demanded about 20 per cent. for redevelopment, and something like 20 per cent. premium for double-shift working, and by the time one has paid these premiums, plus the amortisation of the plant, the total end cost is almost as high as if one was working old machines one shift a day.

Mr. Thornton

As I understood it, and I listened very carefully to the hon. Gentleman's speech, I did not hear him make that point, though he did refer to restrictive practices. I will, however, take up the point he has made. It is quite true that the unions insist upon a 20 per cent. premium for double-shift working, but the purpose of that is merely to give to the worker a full week's wage.

When one realises from Ministry of Labour earnings statistics that the average wages of men in the cotton textile industry are 30s. a week lower than the average for the whole of British manufacturing industry, and that the average earnings of women are just about equal to the average in all manufacturing industry, then, by the hon. Gentleman's suggestion, if less than a 20 per cent. premium were paid the gap between the weekly earnings of cotton operatives and those in the rest of British industry would be widened. It is not reasonable that anything less than that should be accepted, because if a new industry were to go into the cotton area and establish a modern plant operating a shift system, the wages it would have to pay would have to have regard to the weekly pay packet of the operative, entirely apart from the hours that were worked.

I suggest that the main reason why Lancashire has not re-equipped has been the lack of confidence in the future of the industry. This Bill does not go far enough. It deals only with the effect and not with the cause of Lancashire's decline. It does not deal with what is likely to cause a further contraction in the industry. As the White Paper points out in paragraphs 1 to 8 quite succinctly, the main cause of the decline in the cotton textile industry over the last 45 years has been the continuing loss of export trade.

Most of that loss was inevitable. It was due to the changing world and to industrialisation in different parts of the world, and was an inevitable decline. Part of that loss of export trade could have been avoided, but it was due, no doubt, to the fact that under those contracting conditions, where confidence was never strong—it cannot be in a contracting industry—our industry lost export trade, due to its being uncompetitive even with Western European producers.

I think it is fairly true to say that in each decade since 1914 the exports of the Lancashire cotton industry have been halved, and since the post-war peak of 1951 our exports have been halved again, in this last decade. This trend may continue during the next ten years. Seeing that exports are now only 400 million yards of cotton textile fabrics against 7,000 million in 1914, the halving during the next ten years of our present level of exports will be about 200 million, spread over ten years. That would mean an average decline of about 20 million yards a year, or roughly 1 per cent. of Lancashire's present level of production.

A further decline of exports of that size is manageable, and is, indeed, ascertainable, and that is not the reason for the lack of confidence in the future of the industry now. It has, I believe, been true in years gone by that the lack of confidence which has always been there has been due to the contraction of the industry based upon the lack of export trade.

We come now to the second stage of this decline which, as has been said earlier, has been due to the increase in the level of imports, chiefly from Asian Commonwealth countries. These two factors in the last six or seven years have overlapped and have been responsible, as I said in the Second Reading debate, for the most rapid rate of contraction in the history of the industry.

The importance of the impact on our industry of these Asian exports, I say quite frankly, has often been exaggerated from Lancashire quarters. They have an important adverse effect, I agree, but the impact of these Asian imports has been often exaggerated from Lancashire quarters. If the average level of imports in the period 1949–52 is compared with the average level of exports from Lancashire during those years and the years up to 1958, one finds that for every two yards of production lost in Lancashire due to increased Asian imports, five yards have been lost due to the continued loss of export trade.

I believe that that is a fair statement of the position in the last seven or eight years, but in 1958–59 the position is very different. The whole balance of confidence rests upon the uncertainty which the future has to offer if these imports come in again, uncontrolled and unrestricted, because it is not 400 million yards of exports that are at stake—that problem is ascertainable and manageable—but the hoped for demand for 2,000 million yards of home production as the maximum further decline that can take place. I hope that I have made the point that there has been a shift in the reason for lack of confidence in the future.

After the voluntary agreement lapses, if it does, in two years' time, these imports could suddenly increase, as they have done, by 100 million yards in one year, and that would be equivalent to 5 per cent. or more of our present level of production. This is an unpredictable and unmanageable position and it is not surprising that with this threat to the industry confidence remains considerably shaken.

I should like to quote from what I think is an authoritative source, namely, Mr. O. L. Jacks, the chairman of Ashton Brothers & Company of Hyde, as reported in the Manchester Guardian on 11th March this year. Ashton Brothers has completely re-equipped. It has the most up-to-date machinery in every department of production. It has been my privilege to see cotton textile mills in many countries in Europe and in Asia, but I do not think that there is anywhere a more efficient firm than Ashton Brothers, and there are mills in Lancashire which are equally efficient and well-equipped.

Mr. Jack says: If any misconception exists that Lancashire is likely to re-equip mills in an effort to produce at Asiatic prices it can be categorically stated that the most modern equipment available could not neutralise the disparity between European and Oriental wages after making normal capital recovery charges. I believe that is a true statement of the situation and that our most efficient firms, completely re-equipped and working on a shift basis, cannot compete with Asiatic prices because of the difference in wages.

Unless this basic problem of Asian imports is grappled with, and we must agree that the Bill does not attempt to grapple with it, confidence will not be restored, large-scale re-equipment will not take place, and in several years' time there is the danger that the same problem of excess capacity will re-emerge and £30 million or more will have gone down the drain.

The clear trend of the last fifteen years has been that Asia will produce a larger proportion of the world's textiles and that Europe and North America will produce a smaller proportion. I am not one of those who believe that Asian imports should be excluded or cut back. We in the Western world have to make our contribution to industrialisation in the East, and we must assist the people there to raise their living standards. There is a distinct danger, however, that some of the Asian countries, including Hong Kong, India and Pakistan, will over-expand their textile productive capacity, if they have not already done so, and there are definite lessons to be learned from a study of the textile industries of the world over this century.

The trend is quite clear. Whilst the production of cotton textiles continues to expand, roughly, by 1 per cent. per year, in line with the growth of world population, the world trade in cotton textiles continues to decline. Japan, in ignoring the advice given by the Anglo-American Textile Mission of 1950, of which I had the honour to be a member, re-expanded her textile capacity to 10 million spindles. In consequence, as my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) and the hon. Member for Preston, South (Mr. Green) will confirm, 2½ million spindles in Japan are sealed because the Japanese cannot sell their capacity. There is the danger that Hong Kong, Pakistan and India will do the same thing, because the expectation of an expanding world market in cotton textiles will not be realised. As demand expands, new industries are created in the markets that give the biggest offtake.

I submit that there is need for a gradual and orderly adjustment, as is happening in Western Europe and in North America, both of which are tending to take larger quantities of Asian cotton textile goods, but only very gradually. For example, the United States of America limits the imports of Japanese cotton textiles to a figure equal to only 1½ per cent. of American domestic production.

Mr. Alan Green (Preston, South)

Will the hon. Gentleman allow me to interrupt? I am not dissenting from his argument. I think he is right in saying that we must govern the rate at which change takes place, so that it is tolerable to those affected. At the same time, I hope he will not overlook the fact that we have a different relationship with Hong Kong and India from that of America with Japan. It is more difficult for us to govern the rate of change of our relatives, so to speak, in Asia than it is for those who are outside the Commonwealth. It is a real problem, and we must not confuse the two.

Mr. Thornton

I accept the hon. Gentleman's point. I am not confusing the two. I am attempting to show that this trend in the acceptance of Asian manufactured goods is a gradual movement in a II the rest of the Western world, except in the United Kingdom. I should have thought that the relationship of Japan with America was in many respects something of a colonial relationship. I want to emphasise the trend that is taking place. It should be gradual and one in which orderly adjustments can take place. Unless this is done in the United Kingdom, notwithstanding the present Bill and the giving of £30 million of public money, confidence will not be re-established in Lancashire because of the threat that the door can be re-opened at any moment.

The White Paper suggests that Lancashire's future lies in moving into new types of goods and meeting new markets. That is good so far as it goes. This, however, is a continuing process in all countries and in all industries. Hong Kong and India are moving into higher quality goods and they will be confronting us with a further challenge in qualities and ranges of fabrics which they have not yet tackled.

There needs to be, as I see it, an orderly reduction of productive capacity and a residual efficiency in the plant and the mills that remain. These are important objectives. The Bill aims at these objectives, but I very much question whether they will be attained. It is very doubtful in my opinion. The Bill gives only negative types of control. There is no guarantee at all in the Bill that the most obsolete mills will close. In fact, obsolete mills can remain running. I think that some of them will, and that some of the relatively efficient and medium-range mills will close.

Between the wars, these objectives of orderly reduction and residual efficiency were not achieved. There is the same danger now that we shall have a large-scale scrapping of machinery and of mills with little or inadequate re-equipment. Again, there is this lack of confidence which itself will determine the degree of re-equipment that takes place.

The hon. Member for Preston, South (Mr. Green) on Second Reading made some critical references to the plan for cotton. That plan did at least attempt to face up to some of the several problems with which the Bill does not cope—basic problems which ought to be tackled.

There is one basic problem at the beginning of the industry's processes and that is the problem of raw cotton supplies and the hazards which now confront the spinners in their purchases of raw cotton. I do not think that the best supporters of free enterprise on the benches opposite can say that the Liverpool Cotton Market has been a great success. It is well known that even those employers who supported the winding-up of the Raw Cotton Commission now bitterly regret it. Many of them in recent years have spent sleepless nights over the risks that they have been running on a falling market and the very big losses that have often resulted.

Another important problem which must be tackled if confidence is to be restored is, at the end of the process, that of merchanting and marketing. Unless this is tackled adequately and effectively, I visualise in the future no great confidence in our industry. Paragraph 11 of the White Paper says: The Government, however, believe that action can be taken to establish a compact, up-to-date and efficient industry able to take full advantage of changes in demand and fashion at home and abroad. I doubt very much whether this will be achieved as the result of the Bill, I doubt very much whether there will be the necessary degree of re-equipment, and I doubt whether our merchanting organisation is effective enough as at present organised to give those results.

There is no single, easy solution for the problems of our industry, for it has many problems. The Bill poses one, but in the opinion of many on both sides of the industry the Bill is motivated as much by political and electoral expediency as by a desire resolutely to solve the industry's problems. Even here the Government may have miscalculated, because Mr. Alec E. Higham, chairman of Highams Limited, was reported in the Evening News on 9th June as saying: I must say that in many respects the Government's textile scheme savours much more of a memorial service than a revival meeting. The speeches on both sides of the House in this debate have savoured more of a memorial service than of a revival meeting.

As I said on Second Reading, the best that can be said of the range of debate is that we have had a tepid enthusiasm from the Government benches while from the Opposition benches we have had a rather cautious pessimism. In spite of that, and notwithstanding my own criticisms and misgivings, I hope that the Bill will contribute more than I dare expect to easing and resolving the problems of the hard-pressed textile areas of Lancashire. I have been associated with the industry all my life and I have a rather sentimental attachment to its constitution, its work, its people and all that is associated with it. I hope that the Bill will make a contribution.

I should like to express my appreciation to the President of the Board of Trade for his unfailing courtesy and consideration and his conciliatory attitude, which has been shared by the Parliamentary Secretary.

I wish the Bill success. I do not think it is the answer to our problems. In so far as it makes a contribution, it will be only a small one. Unless the Measure is followed up far more resolutely, and unless there is a real determination to deal with the problem of Asian imports—it is not that I am unsympathetic to the needs of those in other countries, but this is a problem which needs careful consideration and gradual adjustment to avoid catastrophic rates of contraction—I very much fear that in five, six or seven years' time we shall hear another story in this House of the need to cut out dead wood and shall be taking part in another major contraction of what was once Britain's greatest industry.

9.30 p.m.

Mr. Jay

Although I cannot quite agree with my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) in recommending the House to vote against the Third Reading, I think that we were right not to give this Measure a perfunctory Third Reading. We have finished all the proceedings on the Bill in moderately quick time and although it is far from perfect or even adequate, as has been made abundantly clear in speeches by my hon. Friends today, and although it is a melancholy comment on the failure of the Government's policy towards Lancashire over the last five years, it remains better than nothing. The mistakes are now largely irrevocable and the Bill is far from being what it might have been—a revival of the cotton industry and the provision of new employment in Lancashire.

However, I agree with the final sentences of the eloquent speech of my hon. Friend the Member for Farnworth (Mr. Thornton) that we can now express the hope that the Cotton Board and the industry will make the best possible use of this rather meagre and rather belated assistance. I agree with my hon. Friend the Member for Farnworth that at times we have had an almost unusually conciliatory attitude from both the Parliamentary Secretary and the President of the Board of Trade in the course of these proceedings. Nevertheless, before we part with the Bill I think that Parliament and the public should mark clearly what we are doing and the precedent which we are creating.

We are empowering the Government to pay out as a free gift about £30 million—I hope that it will not be £40 million—of public money to persuade private firms to scrap redundant plant and to install new plant. We are asked to do that, as the hon. Member for Cheadle (Mr. Shepherd) rightly said, without any guarantee that we will get greater efficiency or full employment in the areas concerned. Whatever this is, it is certainly not private enterprise, or Tory freedom, or keeping the Goverment out of business.

In fact, it is State aid to private firms which are assumed in the Bill not to have the resources or the initiative to help themselves. This aid is given as a free gift without any control or participation by the State or by the public in return. The trouble is that this is neither laissez-faire nor planning, which, we have been told again today, the party opposite does not like. The Government admit that laissez-faire in this case would have been quite unworkable, but they do not have the courage or intelligence to introduce a plan in which the re-equipment of the cotton industry and the development of new industries in Lancashire could have gone side by side, so as both to improve efficiency and to give us full employment over the whole area. To that extent, this is the loss of a considerable opportunity.

Some hon. Members, particularly my hon. Friend the Member for Ashton-under-Lyne, who was also very eloquent this afternoon, have expressed grave doubts about the grant of public money as a free gift to private interests. We are now seeing—and it is a remarkable commentary on the Bill—all sorts of private industries queuing up and asking for State aid—steel, shipbuilding, shipping, aircraft and many others as well as cotton. They all turned up cap in hand at the moment when the Institute of Directors was telling us all that any form of financial investment by the State in industry is ruinous and dangerous to the industry in which the investment is made.

I do not believe that the use of public money to assist the cotton industry, particularly after the damage done by Government policies over recent years, is necessarily wrong in itself, but I think that we should have greater safeguards in return for the use of these public funds. At this stage I will mention only two. First, I ask the President of the Board of Trade again—and I emphasise this because the rules of order made it a little difficult to discuss it during the Committee stage—why should public money supplied to these firms for re-equipment be given as a free gift and not as a loan or in return for issues of shares or securities? Why should the Government lend £100,000 to a firm to install new machinery on the assumption that greater efficiency and profitability will result? I cannot understand why there should not be some form of participation by which, if the situation is improved and higher profits are earned, some of those profits would accrue to the taxpayer who has lent the money.

In all these matters State investment may well be a good principle but State subsidy is an extremely dubious one. I agree with my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) who at one point compared this arrangement with D.A.T.A.C. Where State financial aid is given to firms in Development Areas under D.A.T.A.C. that help is given as a loan. A rate of interest has to be paid and the firm is under an obligation to pay the money back. I think that the Minister will agree that there have been no cases of a free grant under D.A.T.A.C. That is a better bargain for the taxpayer, and I suspect that in many cases better use would be made of the money because the firm would know that it was under a financial obligation to return it.

The other aspect of the financial operation that we have not touched on is the payment of compensation for scrapping the machinery. What will happen to the scrapped machinery? Is the scrap value of it to accrue to the firm in addition to the compensation, or is that to he returned to the Exchequer to save at least some of the public money? We ought to know what will happen to the machinery that is scrapped.

The other failure of the Bill is the absence of any real scheme by which the distribution of industry activities of the Board of Trade in this area could have been coupled with this reorganisation of the cotton industry. If, as we repeatedly urged, the President of the Board of Trade had been willing to bring the Cotton Board in to select the individual mills on the one hand, and if, simultaneously with this operation, he had been willing to schedule the whole of these areas under the Distribution of Industry Act on the other, we should have had a real plan, the two parts of which would have interlocked with one another. Although the Minister has not been willing to put anything into the Bill to that effect, I hope that he and the Parliamentary Secretary will do all they can to see that such efforts as the Board of Trade is making to bring new industries into these areas are in some way integrated with the changes in the cotton industry that we will have under this Bill.

Whatever doubts we have about the merits of the Bill. I think that we can all now wish Lord Rochdale and those responsible every success in using even the rather inadequate means that we are putting in their hands. After all, Lancashire has had a good many shocks in the last twenty years, what with the depression of the thirties, the drastic concentration during the war—which was an upheaval for Lancashire but of enormous value to the war effort at that time—and then the very rapid expansion of exports after the war and, incidentally, the employment of many overseas workers—something which the hon. Member for Cheadle failed to mention. There was also the depression of 1952 and the imposition of a quota on Asiatic imports afterwards.

As for the comment of the hon. Member for Cheadle about the years 1945–51, it may be that the rapid expansion left some problems, but I am quite convinced, as my hon. Friend the Member for Nelson and Colne said, that it was then absolutely right to organise and accelerate that expansion. If we could get those exports from the cotton industry in those years it was right to do so. The war left many problems, but there is no doubt that it was right to fight the war, and the same thing can be said about the expansion of the cotton industry in the years immediately following.

As to present and recent imports from Asia, I say nothing about the question of quotas but I have never been able to understand the right hon. Gentleman's opposition, as a matter of principle, to any form of tariff on textile imports from the Commonwealth. If we examine the tariff schedules we see that we impose tariffs on many other Commonwealth imports, including other textiles, such as rayon. I do not think that the Minister can adduce a valid argument for not at least putting cotton in the same class as textiles, such as rayon, which bear a tariff even if they come from Commonwealth sources.

I was a little inclined to feel that the Minister was rather gay in quoting some of the much better employment figures. We are all glad to hear about them, but I think that he may be taking an unduly optimistic short-term view of the industry. We must remember two things: first, that the recent summer weather has had a good deal to do with the present recovery and, secondly, and more important—as my hon. Friend the Member for Farnworth pointed out—that the present arrangement with Hong Kong is a temporary one and may have disappeared in three years' time, when the present troubles may re-appear. We must not be too complacent.

Despite all that, however, there is no basic reason why, with the re-equipment of the cotton industry and a real influx of new industries into these areas, Lancashire should not soon be as expansionist and as fully employed as are the Midlands or the London area.

I want to ask the Minister one question about the Orders to implement the reorganisation schemes, which are still to come before the House. They will presumably be presented to us between now and the summer Recess. The House should have plenty of time to consider those Orders, and not have them rushed through with insufficient time for consideration. Hon. Members on this side of the House would have liked the Bill to be a very much bigger step towards the transformation we want to see in Lancashire—towards greater efficiency and full employment—but, such as it is, for the sake of the people of Lancashire we wish it at least a speedy and a thorough trial.

9.45 p.m.

Sir D. Eccles

I wish to thank the right hon. Member for Battersea, North (Mr. Jay) for his closing words. The Government are grateful, because there is no doubt that this is a great experiment on which we are embarking and the good will of both sides of the House is an important factor in giving this experiment a chance to succeed.

I will deal with one or two special points which the right hon. Gentleman and other hon. Members have raised and then try to deal with the main criticism which has been made against the Bill. Dealing with the right hon. Gentleman's last point about the Orders for reorganisation, I appreciate that the timetable is very short, but we are up against it. We will do our very best to lay the spinning, doubling and weaving reorganisation schemes before the House shortly before the middle of July, which will give us a chance to consider them. I hope that that will be possible.

I feel that the good will expressed towards this experiment means that the Government can count on the co-operation of the House in trying to approve these Orders before we go away for the Summer Recess. Otherwise, as I said the other day, it means a delay until about November. During that time some of the good will which has been generated, and which is carrying forward these schemes today, may evaporate. I am not referring to a General Election. I see hon. Members smiling. A General Election is no doubt in their minds. I am thinking of nothing but cotton. Therefore, I will do my best to bring these Orders forward in good time, but we shall need the co-operation of the House to put them through before we rise for the Summer Recess.

The right hon. Gentleman then asked what will happen to the machinery which is to be scrapped. I am told that a spindle, for example, will be worth about 5s. scrap value at the maximum. That money will acrue to the mill owner. In fixing the compensation terms, we are trying to screw down the maximum amount, and the fact that there will be just that very small realisation from the scrap merchant will be taken into consideration by the Cotton Board when proposing the terms for compensation.

I hope that I may trouble the House with two small points, because they are important to those working out the reorganisation schemes. The first relates to the industry's share of the costs of compensation for the elimination of excess capacity. As the House knows, that is to be raised by a levy upon all firms in the industry. Naturally, these people desire that the levy payments be spread over a certain period, perhaps two or three years. Therefore, if the money is to be paid out in a shorter time than that, it is necessary to borrow in order to make the payments at the correct time. The Cotton Board is, therefore, proposing to borrow from the banks the necessary funds to meet the industry's contribution.

I understand that there will be no difficulty in making the necessary arrangements with the banks, and the Government do not propose to lend to the Cotton Board or to give guarantees on its borrowings from the banks. But in the very unlikely event of the Cotton Board finding itself in a situation where there was a possibility of loss to the banks arising in respect of their loans the Government would be prepared to consider with the Cotton Board how best any such obligations could be met. I do not think that it will arise, but it is part of the efficient working out of this scheme that the Cotton Board should be in a position to borrow before the moneys from the levy come in.

The second point is that I moved an Amendment—

Mr. Jay

I think that we should be quite clear on the point just mentioned by the right hon. Gentleman. I take it that he means that the Government might conceivably lend to the Cotton Board to cover the gap—not that they contemplate a further free payment?

Sir D. Eccles

No, I do not mean any further free payment. It is simply a question of acting in the very unlikely event of difficulty as between the Cotton Board and the banks. After all, one cannot tell what might be the country's monetary situation in a few years' time. If there should be any difficulty, I think that it is right to have told the Cotton Board in advance that since these levies are part and parcel of the whole scheme we will be prepared to talk with the Board and see what should be done.

The second point is that the House was good enough to give us an Amendment which ante-dated the work now being done by the Board's special committee. One of the reasons for asking for that power was that I wanted to appoint, as soon as possible, the two new independent members to the Cotton Board. I should like to tell the House that I have invited—and I am glad to say that they have accepted—Mr. Edwin Hall, of the National Union of Mineworkers, who is a member of the General Council of the T.U.C., and Mr. Cuthbert Robinson, of Messrs. Thomas Robinson, which is a leading firm of woodworking machine makers. I believe that these two gentlemen will make a great contribution to the Cotton Board in the carrying out of the provisions of the Bill.

I was very much struck by speeches made by the hon. Member for Ashton-under-Lyne (Mr. Rhodes), and by my hon. Friends the Members for Cheadle (Mr. Shepherd) and Heywood and Royton (Mr. Leavey) and others, because, in a way, they brought out the essence of the difficulty. The hon. Member for Ashton-under-Lyne said that the Bill is badly timed, that it will not do any good, and that it will not succeed because the conjuncture of events and past history makes it really impossible, in this day and age, for a great reorganisation scheme of this kind to succeed. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) said that he thought that this was possibly the first time that such an idea of an industry-wide reorganisation could succeed.

That reminds me very much of the origins of the Bill. I, in a very modest relationship with the cotton industry as long ago as when I was trying to get together the decorations for the Coronation, took a fairly poor view of some parts of the Lancashire industry. I did not think much more about it until it fell to me to go to the Board of Trade. When I got to the Board of Trade I found that the cotton industry—which is, after all, of immense importance to our economy—was, if I may say so, in rather low spirits.

At the same time, going to textile exhibitions, which I had not done for a year or two, it seemed to me that the quality of the best British cottons at the exhibitions was rising. I asked myself, "Is it not possible that with all this increase in taste, through the secondary schools and in other ways, there may be a new age opening for the cotton industry?"

Then, of course, a series of events occurred, the conjuncture of which must, I think, be accepted by the House as very extraordinary. First, there is the question, and it has been touched on by many hon. Members, of our Commonwealth policy of duty-free imports. By sticking to that policy—I am sure it is right that we should—we demonstrate our faith in the Commonwealth association of nations in different stages of economic maturity. We show that the developed country and the underdeveloped country understand the obligations between the two and prefer trade to aid.

I assure hon. Members that, if we did not take this step, it would be almost certain that other members of the Commonwealth would erect between each other barriers higher than they have now and that the example to the rest of the Western world of the United Kingdom going back on generous treatment to the developing countries of the Commonwealth would be a severe, possibly a fatal, blow to the economic association of our great family. That was one thing which suddenly loomed up.

After that came the Free Trade Area negotiations. One almost forgets when they started; it must have been nearly two years ago. Directly the Free Trade Area negotiations started, I saw that this development was very important for the British textile industry. I went to Manchester at that time, two years ago. We had a great meeting of all the cotton employers, who very kindly came to hear about the very beginnings of the Free Trade Area idea.

I was abused up hill and down dale by the older members of the cotton industry. They said that they could not stand this competition, that free trade with Europe was a great mistake, and that it would be very bad for their businesses. After the meeting, four or five of the younger managers, none of them, I would say, more than 35 years of age, came to me and said, Give us a chance. Let us have free trade with Europe, and we shall do better than we have ever done before. Do not listen to the older gentlemen here. We will put the industry on the map".

If I may quote just one and a half lines from Shakespeare's Richard 11, I felt then that … even through the hollow eyes of death I spy life peering". It seemed to me that I saw the emergence of a new kind of manager. From that time onwards, it became clear, in a most interesting manner, that in the cotton industry there was a division of opinion about whether it was a good thing to have a Free Trade Area in Europe or not and, gradually, those who were in favour of the Free Trade Area increased as a proportion among those concerned. That was the second thing which occurred.

The third factor, which has been mentioned by hon. Members, was, of course, the judgment of the Restrictive Practices Court. I do not think that it took very much prescience to see that that case was likely to be decided against the Yarn Prices Agreement. Nor did it take particular intelligence to realise that, if that judgment was given, it would create a new urge towards rationalisation in that part of the industry.

Fourthly, as I think the House will agree, the increase in incomes in the richer nations of the world was opening up markets for quality textiles in a very interesting manner.

Putting all those things together, the fact that we had our Commonwealth policy, that we were expecting a Free Trade Area, that the Restrictive Practices Court was likely to pronounce against the Yarn Prices Agreement, and that, in general, the demand for higher quality cotton fabrics was increasing, there was a situation being created in which, if one could not then induce the Lancashire industry to reorganise, there never would, it seemed to me, be a chance. If I may ask a rhetorical question: what sort of people are they in Lancashire? I reckon that the hon. Member for Ashton-under-Lyne is not a bad sample. They are extremely individualistic.

Mr. Rhodes

I thought that I was a bit more than a sample, but, then, I am not from Lancashire at all. I am a Yorkshireman.

Sir D. Eccles

I really knew that the hon. Gentleman came from Yorkshire. The characteristic of these people, when one tried to get them together at first, was their extreme individuality. Not only are they extremely individual, but, with the organisation of the industry into this curious horizontal organisation which is reflected at the moment in seven or eight sections, and which, I hope, before long will lead to combinations of one kind or another, it is very difficult to get them to come together and agree upon a great scheme of this kind. I thought that unless we caught this tide which was flowing for the reasons which I tried to outline to the House it might never flow again.

I therefore agree with my hon. Friend the Member for Middleton and Prestwich, at least within my limited experience—I accept that it is very limited—that this is about the first time that we have ever had a chance. That is why I have driven very hard the carrying out of the Bill and why I am grateful to the House for having accepted the Amendment which allows the work which is now going on to be regularised if the Bill becomes law. This is a chance which we should try to take, although I do not know whether we shall succeed. I think that my hon. Friend the Member for Cheadle made a most valuable speech, because he pointed out that we must do more than give money—much more. There must be a willingness to co-operate on both sides of the industry which will carry this programme and the utilisation of the new machinery to success. We cannot dodge the fact that the costs on our most modern machines are not satisfactory. I shall not say who is at fault or whether the premiums for the second shift are too much or too little. It is not for me to say that. All I know is that, on an international comparison, our costs today are not satisfactory, but I believe that we should not have obtained what we have obtained from both sides of the industry if that kind of problem was not now to be solved.

I think that some hon. Members were rather sceptical whether the trade unions and employers would so quickly work out an agreed settlement of compensation for displaced workers. The trade union leaders who came to see me showed a very great realisation of the problem and a great sense of responsibility. So have the employers. It is because I believe that that is not just a flash in the pan that the people from Lancashire, having regard to all the various things which have hit them, are now prepared to make a drastic reorganisation that I feel we ought to give the Bill every possible chance to succeed.

Mr. Houghton

The right hon. Gentleman will appreciate that there is a much stronger urge behind the move to agreement on compensation because in default of it the schemes for reorganisation could not receive the Minister's approval. Will there be the same urge to get the costs of production down?

Sir D. Eccles

I know that the hon. Gentleman is right to be cynical, because we who give our lives to politics become a little cynical. But in this case I am not cynical. I believe that there is in Lancashire a real desire on both sides of the industry to give this great industry a new chapter of life. That being the Government's view, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.