§ 10.18 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson)
I beg to move,That the Cotton Industry Development Council (Amendment No. 4) Order, 1961, a draft of which was laid before this House on 28th March, be approved.The draft Order amends the Cotton Industry Development Council Order, 1948, which was made under the Industrial Organisation and Development Act, 1947. Its main purpose is to enable the Cotton Board to collect a statutory levy from firms processing man-made fibres, the proceeds of the levy to be used to promote scientific research conducted by a new organisation, the British Cotton, Silk and Man-Made Fibres Research Association, which came formally into existence on 1st April.
The industry as defined in the Order as it stands at present comprises both cotton and man-made fibres, but only a limited number of the Cotton Board's activities may be exercised for the industry as a whole. The others, which include the promotion of scientific research, apply only to the cotton section. Accordingly, almost all the levies have been raised from firms in the cotton section, other firms being required to pay a charge of £1 each year only. The total amount raised from the cotton section has recently been just under £400,000 a year.
The Cotton Board has in recent years contributed some £230,000 of its levy income for the promotion of scientific research by the Shirley Institute, which has been for over forty years the research institute of the British Cotton Industry Research Association. The Institute has also received contributions from other sources, as well as grants from the Department of Scientific and Industrial Research. As hon. Members know, the Shirley Institute deservedly enjoys an international reputation of a very high order.
In 1946, in view of the growth in the importance and variety of man-made fibres, a separate research institute dealing with those fibres was established at Heald Green by the British Rayon 174 Research Association. This institute received no support from the Cotton Board's levy funds; it has been maintained by voluntary contributions together with a grant from the D.S.I.R. In the fifteen years of its existence, the institute has carried out much valuable work.
Recently, however, the two branches of the industry have become more and more closely intermingled. More and more firms are processing both cotton and man-made fibres, and all sorts of combinations of the two. It seems clear that this tendency will continue. In consequence, the industry has come to feel that its research can more efficiently and economically be carried on in a single research institute rather than by two separate bodies.
A working party was appointed in 1959 by the councils of the research organisations, with D.S.I.R. and Cotton Board representation and an independent chairman, to consider the question, and last year recommended that the two research associations should be merged, that their work should be concentrated in a single research institute, and that the industry's contribution to the expenses of the joint research association should be collected by the Cotton Board by means of a statutory levy. The recommendation received the approval both of employers and of workers in the industry.
The Cotton Board already has the necessary powers to promote scientific research for the benefit of the cotton section, and to use the funds raised from the cotton section for that purpose, amongst others. So far, the Board has not had powers to promote scientific research for the benefit of the man-made fibre section or to raise funds from it. It is therefore necessary to amend the Order so that it may do so. That is the object of the draft Amendment to Article 6, and the First and Second Schedules, to which I now come.
By Article 6 as amended, the Cotton Board will be empowered to collect from the man-made fibre section an amount which is as near as possible 11 per cent. of the total being collected from the whole industry. The amounts collected in 1959–60 and in 1960–61 were £385,000. For 1961–62, it is proposed that £400,000 shall be collected from the industry as 175 a whole for all the Cotton Boards activities.
Of this, £45,000—which is as near as possible 11 per cent.—will be collected from the man-made fibre section and, together with £200,000 of the amount collected from the cotton section, will be contributed to the research association. That these amounts are the appropriate contributions has been agreed by the two sections, by the Cotton Board, by the research association and by the Department of Scientific and Industrial Research. The research association will also have other sources of income, including a grant from the D.S.I.R.
The draft Amendment to the Second Schedule of the Order—sub-paragraph (d) in page 6—enables the Cotton Board to assist scientific research on the man-made fibre side by including the function of promoting and undertaking scientific research among the functions which the Cotton Board may exercise on behalf of the whole industry.
The Amendment to the First Schedule, in sub-paragraph (c) in page 5, defines the man-made fibre section. The definition of the industry as a whole remains unchanged, and the effect is therefore simply that that part of the industry that is not in the cotton section is now collectively described as the man-made fibre section. In case anyone is wondering why only rayon is mentioned, by virtue of paragraph (3) of the Schedule of the Order, rayon includes other man-made fibres.
No firm which has not hitherto been liable to register with the Cotton Board will become liable to do so as a result of this amending Order. The scope of the Cotton Board remains unchanged, but firms which hitherto paid the registration levy of £1 will in future contribute towards the £45,000 being raised for the research association. The first collection of the levy under this Order, if the House affirms it, will take place next October.
The opportunity of this draft Order is being taken to make a small Amendment which has no connection with the financing of scientific research, which is its main purpose.
The Fourth Schedule gives a table of conversion factors for ring and flyer spindles in connection with the charging of levies on firms in the doubling section. 176 At the request of the Yarn Doublers' Association, this table is being extended to provide for larger sizes of spindles to take account of technical developments.
With this explanation, I hope that the House will approve this Draft Order, which has been made at the request of the industry, after full consultation with the Cotton Board and appropriate industrial organisations, as required by the Act.
§ 10.27 p.m.
§ Mr. Ernest Thornton (Farnworth)
Hon. Members on this side of the House welcome this Order, with one or two reservations, on which I wish to comment. We are grateful to the Parliamentary Secretary for the explanation he has given of this rather complicated Order.
As he said, the purpose of the Order springs from the merging of the British Cotton Industry Research Association and the British Rayon Research Association into a new Joint Research Organisation, with the rather awkward name of the Cotton Silk and Man-Made Fibres Research Association. I hope that it will continue to be known as the Shirley Institute, which has a world-wide reputation.
This merger is overdue and, in retrospect, it was probably a mistake for a separate rayon research association ever to have been established. I admit, however, that I am being wise after the event. Long before I came to this House I had a period of service as a member of the Lord President's Advisory Council for Scientific and Industrial Research. I was a member of its Industrial Grants Committee which considered the case of the British rayon organisation and I thought that it made out a case at that time, and I agreed to the recommendation that a separate research association should be established. Perhaps, in the light of conditions then prevailing, it was the correct decision but, as events have shown, there must have been a lot of duplication in the work of the British Rayon Research Association at its institute and the Cotton Industry Research Association at Shirley Institute.
The merged activities are, I understand, to be carried on at Shirley Institute, the long-established home of the British Cotton Industry Research Association. In 1953, there was an Amendment Order, 177 No. 2, which authorised an increase in the maximum levy to be raised by the Cotton Board—from £300,000 to £450,000 a year. That extra £150,000, in 1953, was for purposes of research, to enable Shirley Institute to expand its activities and also to take the place, by statutory levy, of the voluntary levies then collected. In 1953 we had Amendment Order No. 3, which raised the maximum levy that the Cotton Board could raise from £450,000 to £525,000, the extra £75,000 being for sales promotion activities. Amendment Order No. 4, as I understand, retains the maximum levy at £525,000.
That brings me to the question: does it mean that within this maximum levy there will not be more spent on research in the merged association than was spent hitherto at Shirley Institute, financed by the levy on the cotton section only? I hope that now that there is to be a merged association it is intended that even more will be spent at Shirley Institute, and spent wisely, as has so far been the case.
I am led to believe—though I hope I am wrong—that with the smaller number of firms in the cotton textile industry, the amount of the levy collected will be reduced, the remainder being found from the contribution from the man-made fibres section of the industry.
The Order indicates that 11 per cent. of the total borne by the industry as a whole will come from the rayon section. I wonder whether the Parliamentary Secretary could explain what this means. Does it mean, for example, that, taking the cotton section levy at present as represented by an index of 89, the man-made fibres section will raise that index to 100, or will it find 11 per cent. of the present levy raised? In other words, is it intended to raise the total amount of levy by approximately one-eighth?
I come to the question of these statutory levies which are a form of special taxation, in which I think the House should take more interest than apparently it does. This form of special taxation is imposed on a specific section of the community. It seems that Parliament fairly effectively loses all control of the position. It is extremely difficult for hon. Members to find out exactly how much is being raised by this form of taxation. One cannot get a Question past the Table to ascertain what is actually being raised in any industry by this form of statutory 178 levy, and it is becoming in some sectors of our economy an important aspect of taxation.
Let me cite an example. From this Order one can see that by statutory levy on the cotton and rayon sections of the industry as much as £525,000 per year can be raised. There is also imposed on the cotton textile industry, including the rayon section, a statutory levy resulting from the operation of the Cotton Industry Act, 1959. We understand that in the spinning, doubling and weaving section a once-for-all levy of £5½ million will be imposed on the industry for the purpose of meeting the cost of scrapping machinery. We understand also, though we cannot find out by Questions in the House, that about £3¾ million will have to be raised by statutory levy authorised by the House for the purpose of compensating redundant workers.
Under the same Act, it is proposed—again, we cannot find out by Questions in the House—that £4 million for scraping machinery is to be raised from the finishing section by statutory levy, with a further £750,000, approximately, for compensation for workers in that section. These are very large sums. I think that many hon. Members on both sides will agree that we should know more about the amounts which are being collected in this way, and that there should be some ministerial responsibility on these questions.
I join the Parliamentary Secretary in paying compliments to the work of the Cotton Board and the Shirley Institute. Nothing that I have said about the difficulty of obtaining information in the House about levies collected by the Board implies any criticism of the work of the Board. It is doing an excellent job. Its statistical department is recognised as a world authority on cotton textile statistics. Its productivity department, also, is doing a first-class job.
A few weeks ago, I was a member of a European Productivity Agency trade union project team which went to France to study the commendable French productivity organisation in the textile industry, financed to 100 per cent. by the Government and operated and administered by the textile trade unions. From my own limited experience, I say without hesitation that the productivity department of the Cotton Board is doing a better job more effectively and 179 efficiently than is being done by the organisation in France.
In the Cotton Board, we have wise leadership and efficient administration, but it may not always be so. There is a need for the House of Commons, which authorised these special forms of taxation, to have closer control over the administration and the spending of the moneys collected. I pay compliments, also, to the work of the Shirley Institute. I agree with the Parliamentary Secretary when he says that it is an organisation of world renown. Without doubt, it is the finest textile research organisation in the world. We hope that this Order will help it to carry on its work and that the marriage of the two research associations will be to the benefit of the industry as a whole. We support the Order.
§ 10.38 p.m.
§ Sir John Barlow (Middleton and Prestwich)
I support the Order. As the hon. Member for Farnworth (Mr. Thornton) said, the Shirley Institute has been a magnificent research institute, renowned the world over. Those of us who are closely connected with the cotton industry have recognised this for very many years. When I was the first deputy chairman of the Cotton Board, over twenty years ago, I was in very close touch with the Shirley Institute. I knew the magnificent work that it was doing then, and, naturally, I have followed it since.
At that time, when rayon production was gradually increasing, it was, perhaps, natural that the young and the old industries should each seek to have its own research organisation. But as time has gone on it has become more and more clear that they had so many problems in common that it was the natural and right thing to do to combine the two. For that reason, I wish well of this Order, and I hope, and feel sure, that the Shirley Institute will carry on in the future the great traditions which it has maintained not only in Lancashire, but throughout the whole world.
§ 10.40 p.m.
§ Mr. N. Macpherson
If I may speak again by leave of the House, I should like to reply to the question put by the hon. Member for Farnworth (Mr. Thornton). I am grateful to him for the welcome which he has given to the Order. 180 I fully agree with him that the merging of these two organisations is overdue.
The hon. Member asked about the maximum levy. As he said, the maximum levy under the Order as it is now amended remains that to which it was raised in 1957.
The hon. Member asked whether more was to be spent on research. Perhaps I might just give him the figures. The Cotton Board levy in 1960–61 was £385,000, and in 1961–62 it will be £400,000, which will include the £45,000, the 11 per cent. The expenditure of the institutes has been considerably more than that, of course, but one of the objects of the merger is to reduce the expenditure. The income of the Shirley Institute was £462,000 in 1959–60, and it is expected that it will amount to £531,000 in the first year of the next quinquennium. As against that, the British Rayon Research Association was receiving £376,000.
The hon. Member asked how Parliament can find out what is being spent. The answer is quite simple. As I think he is aware, the Cotton Board's Report is bound under the Act to be laid before Parliament. Its last Report was laid for the year ended 31st March, 1960, and it gave a full account of its revenue and expenditure.
The hon. Gentleman went on to speak of the Cotton Re-organisation Scheme, which is rather outside the scope of the Order, but perhaps I might be allowed to take the opportunity of saying what I did not say in answer to a Question by him the other day, that separate accounts will be laid before the House dealing with the raising of the levy and its distribution.
In conclusion, I join once again with the hon. Member and my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) in the tributes which they have paid to the Cotton Board; and, on this occasion, I do not think we should leave out the British Rayon Research Association, which has also done very good work in the course of its existence.
§ Question put and agreed to.
That the Cotton Industry Development Council (Amendment No. 4) Order, 196,1 a draft of which was laid before this House on 28th March, be approved.