COTTON INDUSTRY

HC Deb 28 June 1962 vol 661 cc1366-494

Mr. Sydney Silverman (Nelson and Colne)

On a point of order. For the assistance of the House, Mr. Speaker, could you indicate whether you are prepared to call any of the Amendments on the Order Paper and, if so, which?

Mr. Speaker

I am obliged to the hon. Member for Nelson and Colne (Mr. S. Silverman). It is my intention to call the Amendment in the name of the Prime Minister and no other.

3.45 p.m.

Mr. Douglas Houghton (Sowerby)

I beg to move,

That this House notes the conclusions of the Estimates Committee (in their Fourth Report 1961–62) that failing a speedy and satisfactory solution to the related problems of imports, marketing and fuller use of plant and machinery, much of the expenditure incurred under the Cotton Industry Act, 1959, will have been to no purpose, and calls upon Her Majesty's Government to take positive steps without delay to promote the stability and prosperity of this important industry. As the Motion refers to the Report of the Estimates Committee, I wish, first, sincerely to thank that Committee for making such a thorough inquiry into the operation of the Cotton Industry Act, 1959. It is reassuring to read in paragraph 16 that the terms of the Act have been carefully interpreted and efficiently administered, because large sums of public money were, and still are, involved. Both the Cotton Board and the Board of Trade have deserved the thanks of the industry and the House for their part in a very difficult operation.

It is, however, disturbing to note that the Committee felt obliged to go out of its way to record its "conviction"—an emphatic word to use—that failing a speedy and satisfactory solution to the problems of the industry, much of the expenditure incurred will have been to no purpose. In other words, £10 million to £15 million of public money is in danger of being wasted.

The Committee's Report was signed on 3rd May. How much nearer are we today towards finding a speedy and satisfactory solution to the related problems of imports, marketing and the fuller use of plant and machinery? No nearer at all, not a bit. There are only ten days left before the closing date for applications for re-equipment grants. In paragraph 20, the Estimates Committee drew attention to the disappointing rate of applications which was due, so it was told by witnesses, to the crisis of confidence in the industry. It has got worse since then.

Both sides of the industry are deeply moved. Feeling is running high. Protests, memoranda, resolutions and telegrams have been showered upon hon. Members on both sides of the House and cotton textile workers have been pouring into London to demonstrate their anxiety. Employers are making no secret of their loss of faith in the Government. A feeling of despair is creeping over the cotton industry. More mills are closing down or going on short time and in many cases the official Ministry of Labour figures of unemployment are quite misleading because of the thousands of married women who have lately lost jobs in the cotton industry and who do not appear on the register. What is their feeling about this extremely worrying state of affairs? For months the industry has been feeling that the rug was being pulled from under its feet. Distrust of the Government has been growing and the culminating point was the statement to the House by the President of the Board of Trade on 6th June.

To get to the bottom of this upsurge of discontent we have to go back to 1959, although the beginnings go back further still. The year 1959 was the year of stocktaking, the year of fresh hope and renewed confidence. Why has all that gone sour within three short years? What has gone wrong and who, if anyone, is at fault? Let us look for a moment at the aims of the 1959 Act. They were fully set out in the White Paper at the time and the concluding paragraphs ask for the co-operation of both sides of the industry with the Cotton Board to achieve a definite objective of national importance, namely, a compact, up-to-date and efficient cotton industry". This was to be done, first, by eliminating what was called excess capacity, machinery idle, or underused, or never likely to be wanted again, and, secondly, by replacing out-of-date machinery by modern equipment. Although a great deal had been done—more, perhaps, than is generally realised—in that direction before the 1959 scheme, this further encouragement to bring the industry up to date was every bit as important as getting rid of excess capacity.

As the White Paper stressed at the time, all this was voluntary. No one was compelled either to scrap or reequip, but substantial financial inducements were given, the 1959 Act enabled the Government to pay two-thirds of the compensation for scrapping machinery. The remaining one-third was to be met by compulsory levies on the firms remaining in business. This was all conditional upon displaced workers also being compensated on terms agreed between the employers and the unions and financed by compulsory levies on the firms in the several sections of the industry concerned.

Re-equipment grants up to one-quarter of the cost may be made by the Board of Trade. Here, it is appropriate to ask how the industry has responded to these desires for cutting it down to size. How far have we got towards achieving the compact, up-to-date and efficient cotton industry which was the aim of the 1959 scheme? How much has been scrapped? How much is being re-equipped? Paragraph 12 of the 1959 White Paper says: Opinions vary about the extent of the excess capacity". But estimates were made then which were taken by the Government as the broad preliminary assumptions upon which their proposals were to be based. These were as follows: in the spinning section, an estimated extra capacity of 50 per cent.; actually scrapped, 48 per cent.; in the doubling section, an estimated extra capacity of 60 per cent.; actually scrapped, 34 per cent.; in the weaving section, an estimated extra capacity of 30 per cent.; actually scrapped, 38 per cent.

The total compensation for this was £15¾ million, of which the Government's share was £10½ million. In the spinning and weaving sections the response was fully up to estimate. In the weaving section it was higher than the estimate. The short-fall in the doubling section was not as bad as it looks on the face of it, because of the very much smaller number of spindles involved. Therefore, I think that we can say justly and fairly that the industry did what was expected of it in this respect.

What about re-equipment? How far have we got in bringing the industry up to date? This is more difficult to say, because the last day for applications for re-equipment grants is ten days ahead, 8th July. The Estimates Committee gave figures up to the end of April. The total value of applications at that time was £43 million. That was said to be disappointing. By 1st June it had risen to £51 million. I have no doubt that the President of the Board of Trade will tell us later today what the present position is. In April, applications seemed to be running at the rate of £500,000 a week. More recently, they appear to have been running at the rate of £1 million a week. If so, that is encouraging.

On this summary I think that the House can say that the industry did what the 1959 scheme asked it to do. The industry did not let the Government down. Have the Government let the industry down? The almost unanimous verdict of both sides of the industry at this moment is, "Yes". We on these benches endorse that verdict. The indictment goes back well before 1959. Time and again we on this side warned the Government of the dangerous conditions ahead. Years ago we saw what was coming.

My right hon. Friend the Member for Huyton (Mr. H. Wilson) was asked by the main union concerned to prepare a plan to meet the situation which it foresaw and which came upon the industry all too swiftly. Had the Government bestirred themselves in 1955, or even in 1957, subsequent events could have been less serious. But the Government let things drift until the Prime Minister threw out a lifeline on the eve of the last General Election. That was the White Paper of May, 1959, and the Cotton Industry Act which followed.

The Government then gave the industry a lead and an inducement to contract. Public money and the good faith of the Government were pledged to the achievement of a compact, up-to-date and efficient cotton industry. I shall keep on repeating the objectives set out in the 1959 White Paper. The industry responded and played its part, though everyone knew all the time that whatever the industry did it would be unable to withstand the competition of low-cost Asian imports.

Now, in 1962, the Government have accepted a ceiling on those very imports at a level which events have proved does not leave a big enough market to keep our smaller industry fully active. That is the charge we make. The Government misled the industry into believing that, once the 1959 concentration scheme became fully effective, the Government would protect its reasonable interests. The Government have failed to do that. Instead, they are now forcing further contraction without openly admitting it and without compensation.

There is a pungent letter in The Times of 14th June from a Mr. Gartside on this very point. He says: A Government policy which sponsors this complete dissipation of both public and private money in re-equipping an industry at a level of activity it has no intention of maintaining is highly reprehensible and is to be condemned. What the cotton industry needed was a period of stability which would have given it time to consolidate itself and brace itself for the challenges ahead. We know that the real solution to the difficulties of our cotton industry is to widen and expand the opportunities of trade between Asia and the West. The long-term plans to achieve this should proceed with all speed. We fully support the Government's intention to accept the Geneva arrangement, because implicit in that arrangement is the very desirable objective of opening up wider channels for Asian textiles to come to Europe and America.

We are already taking our share. We are already taking a much higher percentage of domestic production from low-cost countries than any other Western country. The Government should now strongly urge other participants in the Geneva talks to accept fully and speedily their obligations to liberalise their import policies and relieve the United Kingdom of the heavy strain of importing over 500 million square yards of cotton piece goods a year for home consumption.

The Americans took the initiative in the Geneva talks. What are they doing now to show the way? The news we hear is that they are moving rather in the opposite direction. There is the strongest obligation resting on the United States to point the way to the objectives of the Geneva arrangement. As it is, no other country can remotely compare with what we are doing to absorb the growing output of the textile industries of these Asian countries, particularly those of the Commonwealth. We know that they are in desperate need of foreign currency and capital goods. We know that they are so eager to earn them by their own toil and skill.

The whole of the richer industrialised Western world has a plain duty to facilitate this expansion of trade. The strain of trying to do it alone has brought our own cotton industry near to breaking point. Other countries must share this duty with us and do it quickly and liberally. The Geneva arrangement also contains provision for speedy action against new inroads into our home market from non-Commonwealth sources with whom we have no restraint agreements. We hope that the Government will not hesitate to use them if the occasion arises.

In the Brussels negotiations with the European Economic Community the Government have a clear duty to bring home to other members of the Community our desire to see the new, stronger and richer European Economic Community liberalise its import policies towards low-cost textiles. The present members of E.E.C. are doing remarkably little in that direction. Whether the news this morning offers better hope that accommodation can be made for an expanded export trade with Europe from Asian countries, I am not sure. But these are the longer-term remedies for the present difficulties which we should like to see shortened in time very drastically indeed. We must press on with that. Meanwhile, we are faced with immediate problems. I turn now to how they should be met.

The Government have announced the acceptance of an offer through the Government of Hong Kong to continue until the end of 1965 the present ceilings on their exports of cotton piece goods and made-up goods for retention in this country, in addition to limit-yarn exports, the present rates—that is to say, the ceiling of 185 million sq. yds. of cloth and made-up goods from Hong Kong alone. If India and Pakistan fall in with this arrangement, India will have a ceiling of 195 million sq. yds. and Pakistan 42 million sq. yds., making a total of 422 million sq. yds.

These are the current ceilings, which were due to expire at the end of this year and then be subject to renewal or modification. Those ceilings are 45 million sq. yds. higher than the 1959 ceilings, fixed at the time of the White Paper on cotton industry reorganisation. The lower 1959 ceilings were those in regard to which the industry had to make its decisions about scrapping and re-equipping. The 1959 ceilings were the background to the White Paper. When they were increased soon afterwards, the success of the concentration scheme was impaired.

A marginal increase though it may seem to be, the extra 45 million sq. yds. cannot be brushed off as being only 3 per cent. of the total quantity of cloth consumed in this country. It is 3 per cent. added to 25 per cent. of our total consumption already taken up by imports.

The President of the Board of Trade said on 6th June: … there is no case for going back to the 1959 levels …".—[OFFICIAL REPORT, 6th June, 1962; Vol. 661, c. 470.] We believe that there is, and both sides of the industry are certain that there is. The President of the Board of Trade should recall the circumstances in which the ceilings were increased and tell us whether the conditions upon which they were increased justify retaining the higher levels subsequently accepted.

We believe that the Government have made a mistake in accepting the offer of Hong Kong to stabilise the present ceilings for the next three years. We ask the Government to reopen the matter and press for acceptance of the 1959 ceilings for Hong Kong, India and Pakistan. That is the first step to take. It would give a little extra room for home production in the home market.

But there are two things to say about it. The President of the Board of Trade may say that the present level of imports is below the 1959 ceiling. That may be because things are slack just now. But when the upturn comes in the three-year cycles which are so customary in this industry, the limits, whatever they are, will be just as important to us as they are to the countries from which we import these goods. They are all equally important to us. The fact that the present levels are below the ceilings is not a material point against restoring the 1959 ceilings.

But the second and more material question is, of course, the effect on the interests of Hong Kong, India, and Pakistan of going back to the 1959 levels. How serious would it be to them? We have read recently of the heavy strain put on the whole resources of Hong Kong by the flood of refugees from China. The population of Hong Kong is going up and up. Hong Kong has a problem of people. The solution there appears to be in more and more industrialisation.

Mr. Claude Burgess, the Colonial Secretary there, is reported in The Times of 14th June to have expressed apprehension at the prospect of cutting back the opportunities for Hong Kong to export to other countries. Mr. Burgess said: Not from choice but from necessity we are a manufacturing, commercial community. Indeed, the prosperity of our industry provides the reason why the world does not have an additional million refugees on its conscience. In a further comment, he said: … the stifling of our exports would transform this dynamic community into an international pauper and create conditions in which massive wholesale relief would be the only remedy. We have to take careful note of the plight of a member of the Commonwealth. The President of the Board of Trade referred to these figures in justification for setting aside the objections of the industry here in favour of the higher ceilings that he was prepared to accept.

We understand, too, that India has exceptional difficulties at present. The Commonwealth Relations Minister has just been there. India has a serious balance of payments problem at present. It is true, of course, that it would be very much more damaging to the economy of India if we stopped drinking tea than if we stopped importing Indian textiles, because her exports of tea are very much more important to her than her exports of cotton textiles. Nevertheless, even a little is of importance to a country which is seeking a stronger external position. Pakistan is engaged in a tough struggle for economic viability.

These factors must carry weight with us very heavily indeed in our consideration of the matter. We on this side of the House are the last people who would wish to do anything to harm any part of the Commonwealth, least of all those countries on low living standards which are working hard to improve conditions. There has to be, however, mutual understanding of our respective difficulties. They have theirs; we have ours. We must try to find the point of mutual tolerance.

I see possible harm to the Commonwealth in two directions unless we can get acceptance of some lower levels of imports from those concerned. Our own textile industry can be discouraged beyond recovery. We may be damaging our competitiveness in European and other markets by destroying confidence at home. That is one danger. It would be a bad thing for the Commonwealth as well as this country if our own textile industry lingered, declined and died.

The other is that, unfortunately and regrettably, feelings of bitterness against our Commonwealth friends are showing themselves in much of the reading that has been sent to us in the last few days.

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

Justifiably.

Mr. Houghton

In my judgment, it would be deplorable if a sense of hostility towards our Commonwealth countries were to grow out of this situation.

We are equally anxious to avoid any similar feelings developing there towards us. This is essentially a matter to be settled between friends—good friends, candid friends. We really want to help, and that desire is in no way diminished or to be called into question when we say that there is a point beyond which it would be harmful for both of us to go. With energetic and persistent effort, it should be possible for the Government to persuade the signatories to the Geneva arrangement to show willing by taking the 45 million sq. yards of cloth goods to relieve the strain here.

The special and growing problems of Hong Kong may well need the early and particular attention of Her Majesty's Government and of the world generally, because there are all sorts of dangerous possibilities there.

None of this relieves the cotton industry of its own responsibilities. We hear criticisms of the out-of-date structure and marketing arrangements There is room, we are informed, for more verticalisation—something for which a better word should be found. At present, it is said that the grower looks for a spinner, the spinner looks for a weaver, the weaver for a finisher, the finisher for a wholesaler, the wholesaler for a retailer, and the retailer for a customer—all the way down the line.

Goods in various stages of manufacture are carted about from place to place for the several processes to be completed. The industry must strive hard to repay in higher efficiency all the attention and public money which has been spent upon it of late. This is not only a Lancashire problem. This is the first time that I have mentioned Lancashire in the course of my speech, mainly because I represent a Yorkshire constituency, in which there is an important part of the cotton textile industry. There is cotton in Yorkshire as well as in Lancashire.

This, however, is not a little local difficulty. This is a matter of national importance. The White Paper of 1959 said that it was a definite matter of national importance Some aspects of it call for Government action, for they alone can do what is needed. Textiles are in Commonwealth and world affairs, no industry more so. Textiles figure largely in political and economic discussions everywhere. They are part of the movement now being made, all too slowly, to redress the imbalance of human welfare between richer and poorer countries.

But here at home the country cannot expect one industry and particular localities to make unduly heavy sacrifices in the course of the fulfilment of obligations which rest upon the nation as a Whole. That is the issue, and it is one which the Government and the House must face. The 1959 schemes fully accepted that principle. It should be carried further to arrest the decline in the cotton towns. The Government cannot drive people out of business, and men and women out of employment, and towns out of a healthy civic life in the name of the Commonwealth without doing a good deal of repair work.

The cotton industry is not walking about with a chip upon its shoulder, as I have seen suggested. It has been caught up in the march of history. Realising that, the Government accepted a special responsibility for the future of the industry, and if they go back on that now there will be great indignation. This debate will tell—more confidence or less, one way or the other, will come out of it. The right hon. Gentleman's speech is awaited with keen interest not only in the House, but widely outside in the country and in the Commonwealth, and all the indications so far are that he will mock the anxieties of the whole industry by now moving an Amendment to turn our Motion calling for positive action into a pious and complacent incantation.

4.14 p.m.

The President of the Board of Trade (Mr. Frederick Erroll)

I beg to move to leave out from "1961–62)" to the end of the Question and to add instead thereof: and welcomes the assurances on import policy contained in the Government statement of 6th June as providing the basis upon which the cotton textile industry can work for future efficiency, stability and well being within a prosperous national economy". The Amendment stands in the name of the Prime Minister and the names of other of my right hon. and hon. Friends.

On 6th June I made a statement about the cotton textile industry and the imports of cotton textiles, and I now welcome this debate, which provides me with a further opportunity of explaining the Government's policy towards this important industry. I say "important industry" deliberately, because, despite its difficulties, the industry can certainly retain a valuable place in Britain's expanding economy, provided that it grasps the opportunities which still lie before it. The cotton textile industry now knows the extent of the restraints which have been set on imports for the next three and a half years. It can draw fully on Government funds provided by the taxpayer for modernisation and re-equipment. It still has a large home market and many opportunities for winning back lost export markets. No other manufacturing industry in Britain has the same definite safeguards.

There are opportunities for the future, and yet the industry is passing through a crisis of confidence which one must recognise. I believe that the industry is capable of passing through this crisis of confidence successfully, and I think that it will. Although Lancashire now possesses a highly diversified industrial structure, and a very prosperous and a successful one, too, Lancastrians still think of cotton as the county's main industry. In fact, of an insured population in the North-West region of just over 3 million people, only 277,400, or 9.2 per cent., are today employed in textile manufacture. Nor are former textile workers unemployed. Unemployment in the cotton belt, at 1.5 per cent., is well below the national average of 1.8 per cent.

Mr. S. Silverman

Does the Minister regard the contraction of the industry which he has described as a good thing? On the degree of unemployment, is he not aware that in my constituency, where more than 50 per cent. of the working population still live by cotton, the present percentage of unemployment is as high as 8 per cent.?

Mr. Erroll

I am not proud or pleased about the contraction of any industry, but the contraction which has taken place is a fact. In Colne, the unemployment is 193 wholly unemployed, or 2 per cent., and in Nelson, which is more serious, the total is 617, or a percentage of 3.3.

Mr. Silverman

The figures are wrong.

Mr. Erroll

Hon. Members always say that the figures are wrong when they do not like the figures which they get.

Mr. Silverman rose—

Mr. Erroll

I did not interrupt the hon. Member for Sowerby (Mr. Houghton) when he moved the Motion, and I have already given way once to the hon. Member for Nelson and Colne (Mr. S. Silverman).

Mr. Silverman

This is to put the facts right.

Mr. Erroll

The hon. Member will have his opportunity during the debate.

Although Lancashire now possesses a highly diversified industrial structure, Lancastrians still think that cotton is the country's main industry, but the figures of employment show the position to be very different, and it is a good thing for the prosperity of Lancashire that so much diversification has taken place. I know that the record of percentage of unemployment which I quoted relates to the wholly unemployed and that there are special difficulties about short-time working, particularly at present, and the re-employment of older people from the textile industry. I shall say a word or two about that later.

I have said that the industry is suffering from a crisis of confidence. This is a plain fact, and I am sorry that it is so. The industry, I know, has a simple, one-word explanation for this—the word "imports". I will, therefore, deal with this matter at once and in some detail, although there are other factors, too.

Looking at Britain's trading policy in general, with only a few exceptions goods of all sorts may be freely imported into this country from all parts of the free world. We protect domestic industries by means of a protective import tariff, which tariff also enables us to give preferences to the Commonwealth countries and to our Colonies under the Ottawa and other agreements. In return, many of our exports, including cotton textiles, obtain preferential treatment in the Commonwealth. British cotton exports benefited greatly from these arrangements before the war, and such exports, when they are made today, still secure some benefit over those of foreign competitors.

When, therefore, cotton cloth and later yarn began to enter England from India, Pakistan and Hong Kong in the late 1950s we were bound to admit it free of duty and without quantitative restrictions. We recognised that these developing countries, for which Britain has a special responsibility, must find export outlets, as was pointed out by the hon. Member for Sowerby, if they were to earn the money to pay for their imports. Indeed, many of their purchases are exports from Lancashire's own engineering and chemical industries.

But because these textile imports were adversely affecting the cotton industry, the Government supported the negotiations which led to the inter-industry agreements for voluntary restrictions on imports from India, Pakistan and Hong Kong in 1959. The Government went further than this. We realised that excess and idle capacity was overhanging the industry and impeding the necessary processes of modernisation and reorganisation. In the Cotton Industry Act, 1959, therefore, which had the full support of the House, the Government were empowered to make payments for scrapping plant under redundancy schemes and towards the re-equipment of firms deciding to remain in the industry.

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

I contracted out of that because I was bitterly opposed to it.

Mr. Erroll

I do not recall the hon. Member voting against the Bill on Second Reading.

Mr. Rhodes

I could not get a Teller.

Mr. Erroll

That certainly proves the accuracy of my statement about the full support of the House.

The year 1960 and the early part of 1961 was a period of high domestic demand for cotton textiles. There were rising prices and lengthening delivery dates, which showed that the cotton industry could not satisfy this demand. Imports from Asiatic Commonwealth countries were already restricted, so the obvious thing happened. Imports came in from other sources. Indeed, without those imports the British public might have suffered a shortage of cloth.

When the time came for the renewal of the inter-industry agreements—the story is complicated and I will not go into too much detail—the Commonwealth countries requested an increase in their permitted ceilings. This is germane to the question of going back to the 1959 ceilings. They did that because their ceilings had been held down while other countries had been able to take advantage without restriction of the then existing opportunities in the British market.

The present arrangements are due to expire at the end of this year. I could have waited, but I wanted, if possible, to secure a further extension of the agreements well before the final date of closure for the re-equipment grant applications. I wanted the industry to know how it stood in the years immediately ahead.

Mr. Leslie Hale (Oldham, West)

The right hon. Gentleman must not do this on us. We have had three Presidents of the Board of Trade over this period, all personal servants of Her Majesty. The use of the personal pronoun is an abuse of the procedure of the House, because it passes the problem to the right hon. Gentleman personally. He is speaking on behalf of Her Majesty and Her Majesty's advisers. He should do it collectively, and we will attack them collectively.

Mr. Erroll

I am sorry if I have offended the hon. Member. I was only varying the style so as not to make it too tedious. I will revert to the third personal pronoun if the hon. Member wishes it.

In any event, I wanted personally to know that the industry would be able to see how it stood ahead. The Government were greatly helped by Hong Kong's offer to continue with the present ceilings up to the end of 1965. These ceilings Include made-ups, together with an offer to limit yarn exports for the first time to the 1961 level, provided that India and Pakistan do the same. I am glad to be able to tell the House that India has now agreed to a similar limitation. Pakistan is still considering the matter, but I expect to secure her agreement shortly. The ceiling on exports of yarn from India and Hong Kong will operate as from 1st July.

I should like to say this to those who urge a return to the 1959 ceilings. The difference in the combined ceilings—not necessarily the actual imports, because imports are running at a lower level than that prevailing in 1959—is only 45 million yards, or about 3 per cent. of current consumption. The Commonwealth countries would have strongly opposed any proposal to reduce the present ceilings. We should have had uncertainty and rumour until the end of the year and, perhaps, no agreements at all thereafter. In any case, it would hardly be appropriate when urging other countries to share the burden more equitably if we were in the process of forcing the Commonwealth countries to reduce their ceilings, and against their own free will.

Mrs. Barbara Castle (Blackburn)

The right hon. Gentleman dismisses the 3 per cent. as totally insignificant. If it is such a small percentage as not to matter to Lancashire, why is not France prepared to increase her imports by 3 per cent.? Why does the United States slap a complete ban upon Hong Kong imports when she has had barely a 1 per cent. increase in imports? Is not this the whole background against which Lancashire is complaining and should not the President of the Board of Trade compel those countries to consider that a 3 per cent. increase is only a small thing?

Mr. Erroll

I cannot compel other countries to think that way. I am not saying that 3 per cent. is nothing. I know what it is—it is 45 million yards in a ceiling figure. This does not necessarily mean actual imports.

It would not make sense to insist upon trying, and perhaps not succeeding, voluntarily to cut back Commonwealth ceilings to the 1959 levels at the very time when we are trying to persuade other countries to increase their share of Commonwealth imports. The action of the United States was taken under the terms of the short-term Geneva arrangement as the United States was perfectly entitled to do.

Mr. J. T. Price (Westhoughton)

Will the right hon. Gentleman help me to clarify the figures about what the 3 per cent. involves? I have often seen this figure quoted and I regard it as a serious one on top of the existing levels that were implicit in the 1959 Act passed by this House. This is what I should like the right hon. Gentleman to explain. In 1959, taking the yardage of cloth as distinct from yarn, the figures recorded in the documents which have been sent to me from the same reliable source show that 370 million yards were imported and that last year the figure was 524 million yards. I do not quite know how the 3 or 3½ per cent. is calculated.

Mr. Erroll

I hope that I can help the hon. Member. He is quoting a figure of total retained imports from all sources. The figures which I have been discussing are the ceilings of imports from the three Asiatic Commonwealth countries—India, Pakistan and Hong Kong. The 3 per cent. and the 45 million yards relate to the ceilings from those three countries.

As an alternative to continuing with uncertainty during a difficult period for the future of the cotton industry we have secured an early agreement for a further three years, the continued inclusion of made-ups within the ceiling—there will be no extra for them—and an altogether new benefit which we have not had before, namely, a three and a half year limitation on yarn supplies. This surely is worth far more to the cotton industry than a belated return, if it could have been arranged, to the 1959 figures.

The Commonwealth countries concerned have far more serious employment and foreign exchange problems than we have. India and Hong Kong have shown real consideration of our industry's difficulties despite their own very real problems. Naturally, it is open to them to reconsider their position if we join the Common Market in the light of the outcome of the negotiations. Nevertheless, the arrangements represent a striking and practical example of Commonwealth co-operation.

I was interested to hear what the hon. Member for Sowerby said. If I quote him correctly, he said that we have to show mutual understanding of each other's difficulties. I quite agree and I think that the arrangements which have been negotiated by and on behalf of Her Majesty's Government demonstrate that degree of mutual understanding of each other's difficulties.

I want now to say a word about imports from other countries. Supplies from China and other Communist bloc countries are severely restricted by quota. Supplies from Japan are governed by quota, as are those from Formosa, whose exports were cut back from over 30 million to 12 million yards. Supplies from Spain are regulated by an inter-industry agreement. The E.F.T.A. countries apart, supplies from Western Europe and the United States of America have to surmount a 17½ per cent. tariff. Union leaders and mill owners alike have told me that if they cannot compete with the high wage countries over such a tariff, the industry does not deserve to survive. I welcome that spirit, because a real threat comes from those countries. I shall say more about this presently.

There remains only the fear of a sudden rush of imports from a new supplier. This is a fear rather than a reality, but Her Majesty's Government wanted to dispel the fear and so help to rebuild confidence. That is why Her Majesty's Government announced a changeover to individual import licensing. The officials of the Board of Trade will be able to keep a much closer watch, with this system, on imports from all countries other than those already quota-ed or operating voluntary restriction schemes, and we will know exactly what is being imported and by whom. If there is a sudden upsurge of imports from any new supplier I will immediately consult the industry, with a view to making a protest to the Government concerned and invoking the long-term Geneva arrangement if appropriate.

The industry now knows where it stands in relation to imports for the next three-and-a-half years, subject only to possible changes consequent upon our joining the Common Market. With imports from low-cost producers controlled in one way or another, the industry can plan for holding the rest of the home market and for winning its share of the many export markets which are still open to it. My hon. Friend the Minister of State, Board of Trade, who is winding up the debate, will refer to some of these export opportunities in his speech.

The Government have done all that they promised to do for the industry, and much more besides. There is no question of the Government writing off the industry, as some people have wildly stated. But there is a great deal that the industry must now do for itself, as was pointed out by the hon. Member for Sowerby. I cannot agree with the conclusion of the Select Committee that much of the expenditure under the Act so far incurred may have been to no purpose. This was mainly redundancy payments. Much idle capacity was eliminated and firms remaining in the industry were able to plan ahead. Indeed, the redundancy scheme would have been worth while even if there had been no re-equipment scheme.

Despite the well-advertised lack of confidence, applications for re-equipment grants have been flawing in. On the day of my announcement they totalled about £52 million. Since then they have been coming in at a much greater rate and by last night the total was £73 million. I expect that by the closing date they will amount to £80 million or more. The Government, as the House will know, contribute 25 per cent. of the cost, while the applicants pay the rest. There is, therefore, still enough confidence in the industry to make applications in time, and the rate has accelerated since my statement was made.

I know that the industry dislikes being lectured on what it ought to do, and I shall resist that temptation today. I would just urge the industry to read the full Report of the Estimates Committee, and perhaps I might add my congratulations to those given by the hon. Member for Sowerby to the Chairman of the Committee on what is probably the most informative document to be produced about the cotton industry since the Working Party Report of 1946. In particular, I should also like to thank the hon. Member for Sowerby for his very kind remarks about the officials of the Board of Trade.

Two propositions stand out clearly from that Report. First, reorganisation, a move from horizontal to more vertical organisation. Secondly, shift working. Leaders of the industry have indeed been saying the same thing and I could quote a number of examples, particularly from chairmen of firms who have done these very things and have no doubt that they were right.

The Government are helping with re-equipment, but only the industry can reorganise its structure and introduce shift working. It is unrealistic to think that every spindle and every loom now installed can be staffed for shift working. The workpeople for these shifts must come largely from among those already within the industry. The industry's labour resources must therefore be concentrated in modern, efficient mills.

These are the sort of changes which we as a nation must be prepared to make. I hope that the older people in the industry will be prepared to travel some miles, where necessary, to some new place of work in the industry. If there is no work in the textile industry for them to go to, the Ministry of Labour has arrangements for the retraining of workers for entry into other industries. There is a training centre in Lancashire itself.

The textile industries of Western Europe are, on average, ahead of ours. I should mention here—and something has already been said in an intervention about the restrictive outlook of other European countries—that there are no restrictions on Hong Kong imports into Holland, Belgium, Germany and Luxembourg. I take comparative figures for 1960, which was a prosperous year for the British cotton industry. In that year spindles were worked 104 hours per week in Belgium, 100 hours in Holland, 86 hours in France, and 78 hours in Germany. In Britain, they were worked only 50 hours. Is it surprising, therefore, that production per operative in Belgium was 18,300 lb. for that year and only 10,000 lb. in Britain? This surely helps to explain why the countries of the Six sent us 72 million yards in 1961 and we sent them only 6 million yards.

But it is not only a question of yardage. I received a report last week from Australia, where British textiles enjoy a substantial preference. It said: Italian, French, Swiss, German, American and Japanese cottons appear to be more popular than British cottons. British cotton fabrics have a good name for durability but not for colour or design. If local agents handling British cotton fabrics had stocks available instead of merely samples for indent purposes, far more business opportunities could be followed up. This report speaks for itself, and it underlines what I have been saying about the sort of thing that industry must do for itself.

The industry has a Cotton Board, about which I want to say a few words. It represents all parts of the industry and it can help to ensure that the efficiency of the best firms—and they are amongst the best in the world—can be achieved by others as well. The Board, at its meeting with the Prime Minister and at its two meetings with me, forcefully pressed the industry's case for reduced imports. I look forward to co-operating with the Cotton Board in future and to discussing with it the industry's plans for the future as soon as it is able to do so.

In short, the Government have done their part, and the industry must now do its part. Within a prosperous national economy I firmly believe that the British cotton industry can find its rightful place.

4.38 p.m.

Mr. Anthony Greenwood (Rossendale)

I hope that the House will reject the disappointing and inadequate Amendment, disappointingly and inadequately moved by the right hon. Gentleman the President of the Board of Trade. I hope that on this occasion many hon. Members from both sides of the House will be able to speak and, therefore, I hope to set an example by speaking very briefly. My position is made the easier by the fact that I last spoke on this subject on 23rd January and the proposals and criticisms which I made on that occasion still hold good. The only difference is that the situation in the industry has further deteriorated since that time.

Over the last sixteen years I have probably made as many speeches on the cotton textile industry as anybody in the House. The difficulty is that for the past eleven years, whether speeches have come from my hon. Friends or from hon. Members opposite, and whether they have been addressed to the present Minister of Aviation, the present Home Secretary, the present Minister of Education or the present Prime Minister or any of the other right hon. Gentlemen on the Government Front Bench whom Mr. Cyril Lord once described as "the hangmen of Lancashire", all these appeals have fallen on deaf ears. I believe that the Government have a shameful record in respect of the cotton industry over the last eleven years.

I confess that I am a little tired of the subtleties that the President of the Board of Trade and his junior Ministers bring to bear on this subject. In spite of what the right hon. Gentleman said, I do not think there is any doubt that the Government's view is the same as that which was expressed in the Observer on 20th May when, under the heading "The case for letting cotton stew", it said: … there is a good case for allowing this industry to go to the wall. No question of unemployment arises, as the displaced workers could easily find other jobs in present-day Lancashire. I shall come to that point in a moment, but because the Government have adopted that point of view the process of liquidating cotton has been viciously speeded up during the last few years.

I should like to read to the House the views of Mr. Lewis Wright, the General Secretary of the Amalgamated Weavers' Association and one of the most responsible leaders of the workers' side of the industry. Writing in Textile Mercury and Argus in March this year, he said: The British Government has done more damage to our cotton mills over the past four years than British bombs did to German mills over the whole period of the last war. Last night I read through the debates that we have had in this House during the last ten years. It was with a good deal of sadness that I appreciated that what we referred to in 1952 as being a recession in the cotton industry would now be regarded as a period of roaring prosperity, so great has been the decline in the fortunes of the industry during that time.

My reasons for speaking in this debate today are really twofold. The first is that unemployment in my constituency is running at a high level. On 14th May, for example, the percentage of unemployment was 7.1 in Bacup, the second highest in Lancashire. There has been some improvement in Bacup since that time, but in the meantime the position in Haslingden has deteriorated and so has the position in Ramsbottom.

The second reason why I feed justified in taking up the time of the House is because of the heavy dependence of the Rossendale constituency on the textile industry. Roughly one-third of the insured workers in the constituency are employed in the manufacture of footwear, an industry which is subject to seasonal fluctuations and which has also been the victim of the importation of cheap goods from overseas, and another third of the insured workers are employed in the cotton textile industry. The proportion varies from place to place in the constituency. In Bacup, for example, of 20 cotton mills which existed a few years ago, only six now stand. In Haslingden, on the other hand, the position has remained fairly stable.

The Evening Telegraph, the paper which covers the cotton textile area, quoted recently the Cotton Board figures for employment in cotton textiles. It said that in the eight towns of east Lancashire 28,343 have been lost from textiles for one reason or another since 1954. It goes on to say: Blackburn has lost 6,455 and Burnley 6,769—more than half in both cases—Accrington has 4,197 fewer, Colne 3,814 and Nelson 5,055, Haslingden, which had 7,656 textile workers in 1954, has lost only 643 and now heads the list of these eight towns its number of textile employees, with Burnley second, Blackburn third and Nelson fourth. It is for that reason that my constituents view with a good deal of apprehension what appears to be the current decline in the textile situation.

I should like now to tell the House what is happening in the Rossendale constituency at present. Mr. Robert Hill, the Secretary of the Rossendale Valley Textile Workers' Association, has told me that the general situation is one of uneasiness and lack of confidence and that order books are very short. Mr. Ivey, who will be well known to my hon. Friend the Member for Sowerby (Mr. Houghton) as the Secretary of the Todmorden and Bacup Weavers' and Winders' Association, says that two firms in Bacup have reduced their labour force and many workers have been made redundant without compensation.

Perhaps here I may interpolate, as an example of the tragedy which is afflicting this area, the fact that recently I met a lady who, after fifty-two years in the cotton textile industry, had been declared redundant without receiving a penny compensation for the services she rendered to the industry during that long period. Mr. Ivey goes on to tell me that three of the six surviving mills have been working a four-day week since late last year and that during that period there have been a number of weeks when full stoppages have taken place.

Mr. Joseph King, the General Secretary of the Accrington Card and Blowing Room Operatives' and Ring Spinners' Association, has written to me: The position has not been so serious since 1945 as it is at present and has been since September, 1961. This Association has paid more temporary stoppage benefit than at any previous time since the last war. Mr. King adds that since September two of the principal mills in my constituency have constantly had a four-day week notice on the notice-board, although in some weeks longer hours may have been worked. He tells me that one mill has had six weeks of full stoppages during that time.

It is, therefore, not surprising that I had a petition from nearly 300 workers in the Ross Mill, at Bacup, protesting against the present situation and concluding with this paragraph, which, perhaps, I may bring to the attention of the Government. It comes from the staff and the workers in the mill: We realise that we need not ask you to vote against the Government, but would like to express an opinion that we do not think any Member, who now represents a textile constituency, will have any chance of being returned at the next General Election, who abstains from voting, or votes against our plea. I believe that is a widely-accepted point of view throughout East Lancashire.

I conclude by saying that I am sick and tired of watching this steady murder of the textile towns in East Lancashire. The Government's acceptance of the 1961 ceiling is the final blow to the cotton textile industry. The 1959 ceiling is the very least that we can accept as a solution to the industry's immediate problem, and I confess that I would find the 1958 figure a great deal more acceptable than 1959.

But I do not believe that we shall get security and stability on the basis of these bilateral agreements for three-year periods. I believe that unless the view of the Estimates Committee is to be proved true—that the industry is in for a further decline and that public money will be wasted—the only way that we can avoid that and give the industry the confidence it so badly needs is by accepting the solution put forward previously by my right hon. Friend the Member for Huyton (Mr. H. Wilson) and establishing a cotton purchasing commission. Only that can give security to Lancashire and, at the same time, enable us to discharge our obligations to the backward areas which everybody in Lancashire is anxious to discharge.

Appeals to reason, to economic good sense, to humanity and to social responsibility have all been equally unavailing. Let us hope that an appeal on more ignoble grounds—an appeal to the instinct for self-preservation of the Government—will at last produce results. Let them realise that if they persist in this policy, and in their campaign to destroy what remains of the cotton industry, not a Tory Member will be left in the textile towns after the next General Election.

4.49 p.m.

Sir John Barlow (Middleton and Prestwich)

I will try to be brief, as I know that there are so many knowledgeable hon. Members who wish to take part in the debate.

First, I should like to welcome the Report of the Estimates Committee. It is an admirable Report containing an enormous amount of useful information and statistics. The Committee was fortunate in getting such valuable and knowledgeable witnesses.

The history of this industry is well known to most hon. Members here today. There has been a deplorable diminution in size in the last fifty years. I suppose that cloth production is now about one-sixth what it was fifty years ago. At that time it was the best organised exporting industry of any kind in the world, and I do not suppose that even now any other industry has attained the efficiency which the cotton industry had fifty years ago, even with all the difficulties of communication.

When I hear words of exhortation from the President of the Board of Trade, I wish that he could have been with me in the East, thirty years ago, walking through the bazaars trying to sell cloth, when we were even then up against cheap Eastern competition. Perhaps then he would not be so keen on making exhortations to people who have been through that difficult period.

Mr. S. Silverman

Does not the hon. Gentleman recall that twenty-five years ago he and I and the President of the Board of Trade all sat on the very first of these contracting adventures, the Committee stage of the Cotton Industry Act, 1938?

Sir J. Barlow

I do not propose to follow that, if the hon. Gentleman will forgive me for not doing so.

The diminution of the industry and the import of cheap foreign cloth has assumed serious proportions. In 1953, about 36 million yards of grey cloth were imported into this country. By 1959, that figure had increased to 371 million yards, and it must be remembered that from 1956 onwards, when the situation could have been well and properly controlled, Lancashire Members had been trying to get the Government to do something real about it. In spite of that, the Government dithered and procrastinated, and it was not until 1959 that we had the cotton redundancy scheme.

Unfortunately, the Board of Trade has always seemed to have a jaundiced eye when it has looked at the cotton industry. Same of us think that the Board of Trade has, for the last ten years, regarded the cotton industry as expendable. We wish to goodness that the Board of Trade would be more honest and forthright, that if it regards this industry as expendable it should say so, so we can get on with the job in the proper way. It should not lead us up the garden path and then let us down at every stage.

When the Government introduced the redundancy scheme, in 1959, it was based entirely on the imported yardage at that time. There were agreed quotas with Commonwealth countries, and a certain very limited amount of foreign cloth was imported. It was said at the time, and everyone knew, that if that yardage was increased the scheme as it was offered and accepted would not work. When the Government allowed the doors to open, and dribs and drabs of little yard-ages to come in from here and there, they stabbed the industry in the back, rather like the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport) was stabbed the other day, only in another place. The assailants probably had different motives, but the result has been similar in both cases.

Let us look at the increase in the import of cloth since the scheme was propounded in 1959. There has been an agreed increase from the Commonwealth countries. Owing to the difficulties and lack of demand, we know that that quota has not been taken up. Can quotas which have not been taken out one year be carried forward and added to the quota of the next year? This is an important question, and I hope that my hon. Friend will answer it tonight.

I referred to other imports from different countries. An increasing amount, which people in the trade knew was subsidised, came from Spain. The evidence about that is fairly well agreed, although it was questioned at the time by the Board of Trade. There was delay after delay, and agreement could not be achieved for a long time. I maintain that when sufficient evidence about this was provided the Board of Trade had a duty to stop immediately the dumping of this subsidised cloth.

There was also the question of the large and growing imports from Portugal, but no one realised the importance of this in 1959. Also, imports suddenly increased from Formosa and the Iron Curtain countries. In many cases the Board of Trade took the view that it was a small increase, merely a few million yards here and there, which were negligible. But if the Board of Trade had had the business experience of some of us, it would have known that a small amount sold on a very weak market can do a vast amount of damage.

I remember that during the 1930s, with a weak wheat market, a small shipment of cheap wheat which came to Liverpool and had to be sold could devastate the home market for some time. The same thing holds good in all spheres. If we sell a small amount on a weak market, it can have devastating effects for months. We are taking from cheap Eastern producers the equivalent of about 35 per cent. of our home consumption. Does the Board of Trade recognise that, remembering that United States consumption is in the region of 5½ per cent. and that of the Common Market countries about 2 or 2½ per cent.?

The Minister of State, Board of Trade (Sir Keith Joseph)

I think that my hon. Friend referred to Commonwealth Asian exports to this country—that is the duty-free low-wage ones. They constitute far less than the figure given by my hon. Friend. I think that he has included in that figure all sorts of other exports to us. I think that the actual figure is about one-quarter.

Sir J. Barlow

I am glad that my hon. Friend has put me right about that. These figures were given to me, and I had every reason for believing them to be correct.

I was referring to the Common Market countries which take a small proportion of this Eastern cloth. I understand that many manufacturers in those countries have stated quite definitely that they have no intention of sacrificing their home textile industries and taking in cheap cloth from overseas. If we continue to take in this Asian cloth, which may well ruin our industry, we shall be in a very weak position to compete in the Common Market if and when we join it. It may put us in a very serious position.

Two of my hon. Friends and I have tabled an Amendment because we do not think that the Opposition Motion meets the case. It is too general. It is not sufficiently factual and we wish to raise certain points. Mr. Speaker, in his wisdom, has not called the Amendment, but that does not prevent my saying something about it. The Amendment was to add, at the end of the Question: by applying the new licensing arrangements so as to limit duty free imports of cloth and yarn to the ceilings prevailing in 1959, to prevent the import of dumped or subsidised cloth and control the import of finished and made-up goods in suitable categories". If the President of the Board of Trade does not prevent these increasingly large dribbles coming in from foreign countries our difficulties will be worsened. I believe that even some of the Commonwealth countries are subsidising their cloth. A friend of mine received a letter from an Indian firm the other day which stated: As you are aware, the Government of India is encouraging the export of piece goods. In order to earn foreign exchange for those who export, import incentives are given in the way of import licences for machinery, dyes, chemicals, etc., with the result that the exporters, although they lose a lot of money in the actual export, make a lot of profit in the import of machinery, etc. The result is they are able to compete successfully and offer attractive rates. That letter came to Lancashire a few days ago and I have heard similar sentiments expressed from other sources.

The matter does not end there. There are imports that are coming from other unexpected quarters. I am told that a hosiery yarn manufactured in Eire is being sold in the Midlands, delivered, at 47½d. per 1b. and that the same yarn is being sold in Eire at 68½d. per 1b. That sounds very much like dumping to me. If that case could be proved, and I think the Board of Trade knows something about it, what is it doing?

I believe that in 1959 Malaya and Singapore exported no grey cloth at all to this country. I am informed that last year they exported 4½ million yards. Is anything being done in this connection? Is the volume to be allowed to grow until hard feelings are expressed if we have to prevent it? I wonder what would have happened if other industries had been treated in the same way as the textile industry has been treated by the Board of Trade. What would have happened had this treatment been meted out to the motor car and other industries? Their time is bound to come as other countries become more industrialised. It is only a question of waiting. Why should the textile industry be the first, and probably the greatest, to be sacrificed?

I wish to refer to another matter that was dealt with in my proposed Amendment: the question of categories of made-up goods. It will be remembered that there is to be a quota on the yardage of made-up goods. An enormous number of dresses and other goods are coming into this country at very cheap prices and there is evidence that the manufacturers are taking one category first, perhaps small children's dresses, sending thorn in at extremely cheap rates. This puts the British manufacturers out of business and is followed by the overseas manufacturers having the market to themselves—and up go their prices. Having done that they switch to another category of made-up goods and repeat the operation.

I would like my right hon. Friend to say that he intends to place made-up goods into various categories so that this sort of thing cannot happen. In any case, how much cloth does my right hon. Friend think will be imported in goods which are not in categories? For example, I believe that a large number of umbrellas—about 1 million a year—are coming in from the Far East, that quite a lot of cloth is used in their manufacture and that they are not in any category. There are probably many other 'articles of this kind taking cloth away from the mills of Lancashire.

The speech of the President of the Board of Trade today seemed like a repetition of the speeches I have heard so many times from different right hon. Gentlemen who have held his office. It contained a few new figures, but I can remember only too well one of his predecessors, an able and knowledgeable man, paying a visit to Lancashire. On that occasion he made himself most unpopular, partly because he thought he knew all the answers. I wish that right hon. Gentlemen in that position, and other Board of Trade spokesmen, had a little more experience of the difficulties of commerce before they tried to teach traders their business.

I very much welcome the activities of the Textile Action Group. That body was not easily formed. It is comprised of people who feel keenly on this subject and I have every sympathy with them. They may not have put their case in the way that other people might have done, but they have served a very useful purpose and it was a good thing that Londoners in Regent Street yesterday had the opportunity of seeing some Lancashire caps and clogs. I hope that it will help them to realise that Lancashire is still a great place.

Having listened carefully to my right hon. Friend's speech, I must say how disappointed I was at what he had to say. As I said earlier, it seems that this industry, in the eyes of the Board of Trade, can be depressed—if not entirely eliminated. I can assure the House that I am a loyal supporter of my party, but in view of the circumstances I feel, very reluctantly, that I must vote against the Government tonight.

5.8 p.m.

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

The speech of the President of the Board of Trade, which was a mixture of platitudes and Ministerial jargon, reminded me of the story of the old woman with a cow who used to live in our village. She did not feed it very well—she was being economical—and boasted after it had died, "Just as it started living without eating it died." The same sort of story might be applied to some industries in this country.

The President of the Board of Trade is an engaging person, but unless he begins to put up a better performance than his effort today we shall soon have another right hon. Gentleman in his place. To make a speech of that description is totally against what his Department should now be doing. It should, instead, be looking after every industry and fighting the battle yard by yard. The speech he made today was not in a fighting spirit. We need to pull through.

Much has been said about the past and the hon. Member for Middleton and Prestwich (Sir J. Barlow) recalled events fifty years ago. I need go back only three years, because in 1959 a Bill was introduced to give assistance to the cotton industry. At that time, the hon. Member for Middleton and Prestwich was saying that it would solve the difficulties of the textile industry. It did not, because the assistance given to the industry in 1959 was tainted with politics, and this is well-known in Lancashire.

It was as nothing but a "put up job" so that seats could be kept for the Tories in Lancashire. This has been said time and again, both by leaders of the cotton industry and others.

Sir Robert Cary (Manchester, Withington)

Does not the hon. Member agree that at that time, not only here but elsewhere, it was thought to be an excellent plan? For instance, the German Government thought so, and intended to copy it themselves.

Mr. Rhodes

But it never came to anything. If it had come to anything of the sort in Germany, they might have had room to complain about it. We have to view this matter against the background of the economic circumstances of the day, whether of 1959 or now.

It was introduced without any inquiry into why the industry was reluctant to re-equip. There was no inquiry whether the industry was competent enough in the managerial sense, or whether, if re-equipment was done, it would pay t not at all. Not a single inquiry was made as to whether it was a good thing to do or not, except from the point of view of bringing in the Bill to do a political job. It was brought in too quickly, and without the necessary thinking and guarantees which should have gone with it.

At that time, the Government also accelerated the boom by helping other industries. In 1959 the motor car industry also received a boost, which was done through the Distribution of Industry Act. From £10 to £12 million was lent to the motor car industry in the early part of 1960. Multiplicity of orders and general boom conditions which prevailed made entirely false conditions in the industry.

There was no problem about these imports in 1960–61, because everybody was busy. Everybody had work to do, and good profits were made in the industry all round. Everybody was satisfied, but as soon as the boost for the General Election was over difficulties began with the balance of payments, culminating in the action of the Chancellor of the Exchequer last July. Then it became obvious that we were in for another depression in the cotton industry, heralding another depression throughout the length and breadth of Britain.

I would remind the House that it is possible that this recession could be the worst of the lot. It could very well be that the trick of boosting up the activity of the country through increased manufactures of consumer goods or durables has had its day. The United States of America is already finding that it is very difficult to boost the economy on consumer durables and consumer goods. It could very well be that this is the most serious depression that we have ever had.

So we come to last year, when the agreement was running out. The old agreement was carried forward to the end of 1962, and a new agreement was desirable with the three Commonwealth countries. I am very glad to know, according to what the President of the Board of Trade said this afternoon, that India has agreed the terms, but I understand that Pakistan has still not made up its mind. I do not want to repeat the figures that have been on the desks of everybody during the last few weeks, and which have already been adequately stated in the House. I should now like to approach this matter from a slightly different angle.

When we have fixed a figure for Hong Kong, India and Pakistan, there must, somewhere, be a reasoned basis for it—a basis upon which the Board of Trade is prepared to stand by a decision. I take it that the Board of Trade is assuming a figure of 1,850 million sq. yds. as the amount which is used in the home trade. If we add to that another 100 million sq. yds., which is the part of the exports which we do not import to re-export, if the Minister is following me, that is a total capacity of 1,950 million sq. yds. It happens that in 1960–61 the amount that the cotton textile industry produced in its own mills was 1,450 million sq. yds., so that, in theory, that would mean that something over 500 million sq. yds. could be imported and nobody would take any harm.

But that would be all right if we never had a slump or a recession of any sort, because one could go merrily on, basing one's production on being flat out on 1,450 million sq. yds. The difficulty about accepting the Minister's figures for the next three years on the basis of 1961 is that they provide a guaranteed market for cheap goods irrespective of conditions. There is nothing so wonderful for a manufacturer, I have always found, as having part of his production guaranteed. It is marvellous, because on that he can plan. Tory Members, and Labour Members, too, who have been arguing about the difficulties that they have been experiencing with the Purchase Tax, have always said, "Give us a guaranteed home market, so that we can build up our export trade upon it."

This is one of the conventional arguments. If we have a recession—and we do not know how far this one will go—and if the fashion or the tendency to change over to artificial or man-made fibres goes further than it has done, it will mean an unfair advantage to Commonwealth producers.

I suggest to the President of the Board of Trade that instead of putting down an arbitrary figure for the imports of cloth on the 1960–61 basis he should make it a percentage. I would accept his figure of 25 per cent. as being near enough to the 1959 level. That means that if there is a boom it can go up, and if there is a depression it can come down.

During the various conversations that were held on the question of the arrangement made under G.A.T.T. for taking in Commonwealth cloth, I understand that representatives of the Lancashire cotton industry were present, and also that a definite agreement was arrived at by the officials of the Board of Trade that a protocol would be put into the agreement enabling this country to opt out of the arrangement for an increase of 5 per cent. per annum. How far has the Board of Trade got with the ratification of that agreement, and what is happening about it? Does it take the view that we can opt out of the increase of 5 per cent. per annum at will, according to the difficulties being experienced by the trade?

My next question concerns the Common Market. I understand that in respect of textiles there is to be a Common Market external tariff of 18 per cent., and that a reduction of 30 per cent. in this tariff will take place on entry; a second reduction of 30 per cent. in 1965, and the remainder by 1970. I suggest that this is not good enough. The tariff should be introduced at once upon our entry. Not only that; it should be applicable to Commonwealth imports, also. Can that possibility be considered? Is there any truth in the suggestion, reported in the Press, that if there is any diminution in Commonwealth trade, as a result of the external Common Market tariff, a review of the situation will take place? Our entry should be based upon a more permanent arrangement. The trade must know where it stands.

Out of all this difficulty and trouble good could come, if the President of the Board of Trade and the Government applied themselves to the task. I am glad to know that they set such store by the Report of the Estimates Committee. The members of that Committee are glad to have a little pat on the back this afternoon for the work that they have done. Time and time again evidence was given before the Committee, even by the most optimistic supporters of the industry, that there were not more than 10 spinning mills in this country which could compete on equal terms with the Dutch. That is very serious. I want to know what action the Government intend to take about it. Time and time again, in evidence before the Committee, it was made clear from different sources that during the last three years more technical progress has been made than in the previous thirty. What are we going to do about that?

When I say that good could come out of it, I mean that if we act quickly now and do something in the next three years we may be able to take advantage of that technical progress and be able to compete on equal terms with our rivals.

Sir Cyril Osborne (Louth)

The hon. Member says that he wants to get Lancashire spinners on the same level of competition as the Dutch. Up to the last six months, through a woollen company, I have been buying Dutch yarns at 8d. and 10d. a lb. cheaper than comparable Lancashire yarn. Can Lancashire jump as big a barrier as that?

Mr. Rhodes

Yes, because there is no evidence that that is an authentic case. I can show that connection. The Japanese are importing into Canada, and the Canadians are importing here, yarns and goods on the same sort of differential as that mentioned by the hon. Member for Louth (Sir C. Osborne). The Canadians are simply transferring here what they bought from Japan. That may be only £2 million per quarter, but that is what is happening.

Mr. John McCann (Rochdale)

Is it not a fact that it takes three months before these facts appear in the statistics, by which time it is too late to do anything about it?

Mr. Rhodes

Yes. I thank my hon. Friend for making that point.

The President of the Board of Trade has talked about meeting representatives of the trade. I appeal to him to do so now; this time at a totally different level, in a different manner, and with a different agenda. The Report of the Estimates Committee should be circulated to every mill in Lancashire, so that textile men can have an opportunity to read the evidence before attending the meeting. The Minister should then call upon the industry to report upon its own efficiency. Let it tell the President what it considers its efficiency to be, and what proportion of it is capable of competing on equal terms with Common Market countries.

Many years ago the late Sir Stafford Cripps referred to the necessity of establishing what should be the ultimate size of the industry. Let the industry say now what size should production plants be to produce 1,450 million square yards in the best way. That is an item that should be put on the agenda. The industry should be asked to tell the President of the Board of Trade what the answer is. But what the Board of Trade must think of before it meets the cotton people is what contribution it will make. The right hon. Gentleman will know that I bitterly opposed the assistance which has been given to the cotton industry, but speed is now so essential that action must be taken within the next two months, in order that a programme can be thought out fog the next three years, covering the period of the agreement to give the confidence to the industry to make a fight for it.

If the industry says that it wants another scrapping scheme the right hon. Gentleman should seriously consider it. Can he extend the old scrapping system for one or two months? Can he give the industry statutory powers to enable it to do the job on its own? Or can the industry be given a loan, almost interest-free, for some years—perhaps ten years—so that it can get on with the job? All these points should be seriously considered, and fully discussed when the right hon. Gentleman meets the industry again.

I am disappointed that more hope has not been given to the industry this afternoon. However, I hope that my questions will be answered. I should like an answer to the question which I have asked about speed. The President of the Board of Trade should really challenge the industry this time on its own efficiency, what it needs, and then proceed, by one of the means which I have mentioned, to give them the help which they will need to do the job.

5.30 p.m.

Sir Douglas Glover (Ormskirk)

I am very happy and fortunate to follow my old friend the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I hope that my right hon. Friend the President of the Board of Trade has taken a great deal of notice of what he has said.

My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) went back fifty years in time. What people seem to forget is that from 1830 to 1912 the great textile industry, of which every Lancastrian—and I am one of them—is so proud, was in the position of Hong Kong today. We were a cheap cost production country and we were dumping textiles all over the world. We are now only being paid back in our own coin, because since those years—

Mr. Ellis Smith

Our trade unions dealt with that. That was slave labour.

Sir D. Glover

Perhaps the hon. Gentleman will allow me to make my speech in my own way.

Since those years, quite rightly, the trade unions and other organisations in this country have raised the standard of living of the British people, and other activities have grown up, including the growth of the engineering industry in Lancashire. It is a very good thing for the people of Lancashire that the engineering industry has grown while the textile industry has contracted. As a Lancastrian, I say that if there is to be a contraction in the textile industry I would sooner that it took place in semi-boom conditions, when people can get jobs in other occupations very quickly, than that it should take place in slump conditions, as it easily might have done.

I think that the Government have just as much right to be critical of the textile industry as Lancashire has to be critical of my right hon. Friend. My right hon. Friend should not think that he will get away Scot-free before I sit down, because he will not, but I propose to say a few things which he will find comforting in his lonely splendour of isolation.

The textile industry has a great deal of responsibility in connection with the redundancy and re-equipment scheme of 1959. I had a lot to do with the negotiations in that scheme, and I was very glad that it was passed into law. But it was passed into law on the basis of the industry saying: "If you provide a scheme which will scrap the surplus capacity of the industry, provide us with some assistance in re-equipping and put a limitation on imports for three years, at the end of those three years, when we have re-equipped, we shall be in a position to compete." I was very doubtful at the time whether that would turn out to be correct. In the event, it has not turned out to be correct. This was perhaps inevitable.

The Government are not responsible for many of the troubles which have occurred since then.

Mr. Hale

Are not they?

Sir D. Glover

The hon. Gentleman makes brilliant speeches in the House. I do not pretend to be able to emulate him. Perhaps he will allow me to make my speech in my own humble way.

I have not any experience on the production side of the textile industry, but I have a life-long experience on the consumer side. I know how much the weather and other conditions affect this trade in this country. In 1959 the Government introduced a modernisation and re-equipment scheme, and the sun came out and shone for months. The whole trade went crazy. Orders were placed months in advance, and the industry worked throughout 1960 on the sunshine of 1959. In 1960, we had a poor summer so that all that stock was not taken off the shelves. In fact, the stock multiplied. In 1961, we had another poor summer. In 1962, up to now we have had the worst summer in almost anyone's living memory.

Of course, inevitably this has some effect on the amount of trade done in the textile industry. Everyone is blaming the Government for the volume of imports when, in fact, they are running at a ceiling far below the ceiling figure of 1959.

Mr. S. Silverman

They are not.

Sir D. Glover

They are. [An HON. MEMBER: "This is like I.T.V."] This is nothing to do with I.T.V. This is "whiter than white" on B.B.C. As I say, at this moment imports are running at a figure considerably less than the ceiling figure of 1959.

Mr. Silverman

At the first "natural break", I should like to ask about that.

Sir D. Glover

In view of the Pilkington Report, the hon. Member will not expect me to provide a natural break.

I now wish to deal with the problems of the future. If I may give a misquotation, "If blood is the price of empire, Lord God we have paid in full". Because of our obligations to the Commonwealth, the Lancashire textile industry has taken the brunt of the support of the developing countries overseas.

I cannot understand—and I am sorry that the right hon. Member for Belper (Mr. G. Brown) is not here because he would support me with his cry of "brother" across the Floor of the House—members of the Opposition Front Bench, who all the time talk about the brotherhood of man, objecting to raising the standard of living in this country.

Mr. Houghton

The hon. Gentleman is seriously misrepresenting the case which I made when he says that we on this side want to reduce or object to raising the living standards of the people. He was present when I made my speech. He will see when he reads it tomorrow that the version which he is giving is a distortion of my words.

Sir D. Glover

I am very glad that I gave way to the hon. Gentleman. If a person spends all his time saying that the believes in purity and then goes straight off to a house of ill-fame, his actions are those by which people will judge him. If the hon. Gentleman spends the major part of his speech saying that imports should not come in, it is not a weighty argument to say that we should not do anything adverse to people overseas.

I now come back to the Board of Trade. I do not think that the industry can do what we want it to do in three years. If I were contemplating re-equipping, it certainly would not give me enough time to do it. If I were given five years, then, what with delivery times of machinery and so on, perhaps two years of it will have passed before I am fully re-equipped and in production. I then have three years in which I can be assured of a profitable business. Under conditions such as those, I might consider re-equipping. If I were asked to do it with only one year of security of production left, I doubt whether I would take the risk of spending money on re-equipping. While I understand—

Mr. McCann

Will the hon. Member give way?

Sir D. Glover

I shall not give way to anybody else. I am sorry to be so rough on the hon. Member who is a friend of mine and we get on well together.

It is a big thing for these firms to know when they are to re-equip. I do not think that my right hon. Friend could give a categorical assurance because there is the pretence of interindustry agreements. But I am certain that it would go a long way if the industry could have an assurance from the President that he would try to secure that this sort of figure was the one with which industry would have to deal, not for the next three years but for the next five years. That would increase confidence in the industry with regard to re-equipment.

The hon. Member for Rossendale (Mr. Greenwood) referred to a mill closing at Haslingden. That sort of thing is going on all the time. If our textile industry is to compete against modern mills which hon. Members have seen in Hong Kong, in Japan and in other developing countries—where it would seem almost that the cotton flower goes in at one end and a suit of clothes comes out at the other, the whole process going on under one roof—I do not think it is sufficient just to talk about re-equipping. It will mean the redevelopment of the whole industry. I do not think it much use just re-equipping a shed holding about 100 looms and thinking that with it we can compete against a shed in Hong Kong where there may be, perhaps, 5,000 looms. The whole of the structure of our buildings and the siting of them and everything else will have to be tackled in a fundamental fashion if the textile industry is to face the challenge confronting it in the second half of the twentieth century.

I believe that this nation owes a tremendous debt to the textile industry. But for cotton, a great deal of the wealth of Britain would never have been created. Now is the time, I believe, when the nation has to pay some of that debt. I do not think that today we can create a modern industry merely by putting some new looms or spinning machinery into an old shed. The industry needs a new building programme such as was provided for the motor car industry when new and modern buildings were built with aid from the State. That is what is required if the textile industry is ever to be in a position properly to compete.

I must tell my right hon. Friend that I do not consider that with its present set-up the textile industry would be able to compete in Europe if we enter the Common Market, when we should find ourselves undercut by Holland, Italy and other European countries. It is vital to its future that the industry should be modernised so that it may take its share of the growing European market. My right hon. Friend said that there was no limitation on the import of Asiatic textiles into Germany, Holland and Belgium. I think that he mentioned one other country.

Mr. Erroll

I meant from Hong Kong.

Sir D. Glover

If that is so, I suggest to my hon. Friend the Member for Middleton and Prestwich that a great many of the so-called merchant converters in Manchester, who are at present under-employed, might do a good job of work by exporting Hong Kong textiles to Germany, Holland and Belgium. If these textiles cannot jump the 17½ per cent. tariff barrier they are not as cheap as everyone seems to be making out, and if somebody had the wit and energy to exploit it there is a big market which could be opened up and someone would make money. I am almost sorry that I am tied to the House of Commons because I think that there would be a great future for an operation of that sort.

I hope my right hon. Friend will appreciate that I support the Government and approve of the steps to be taken. But I want a longer period of assurance and some deep thought to be given to this matter. I think that a conference such as has been suggested would be wise. If that happens, I think that a great many of the fundamental problems of the industry could still be overcome. But I do not think that they can be overcome just by putting some new machinery into a lot of old sheds.

5.45 p.m.

Mr. Charles Mapp (Oldham, East)

The only thing said by the President of the Board of Trade with which I can agree is that there is a long-term policy and a short-term policy.

The hon. Member for Ormskirk (Sir D. Glover) thought that the industry would not be sustained on the basis of re-equipment. He thought that new buildings were required. I wonder whether new shelves and machinery is all that he has in mind. The President of the Board of Trade said that only the industry could reorganise itself. That is a basic problem in Lancashire. I am not prepared to see many of the electors of Oldham neglected because of the existence of built-in difficulties in the cotton trade which makes the industry incapable of reorganising itself.

I admit that there may be built-in difficulties in the trade union organisation. But stratification and fragmentation exists in the industry, despite appeals such as those from the President or from hon. Members on either side of the House, and despite the sensible approach of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) who would ask the Cotton Board to find a sensible and rational answer. There are built-in deficiencies in the Cotton Board which arise from the built-in difficulties in the industry.

I know that hon. Members opposite will disagree when I say that by their short-term policy the Government have failed the industry. But let us also say frankly that the industry has failed the nation, although there are reasons for that which we need not spend much time discussing. In London yesterday were people with no political background who were worried about the future of their jobs. They know that there are anxieties in the boardrooms and in their trade union branches. They feel that representatives from the boardrooms and the union have been knocking on the proper doors, writing the right kind of letters and seeing the right people, but that in spite of that no progress has been made.

The constituency of the President of the Board of Trade is so near Lancashire that one would have thought that the right hon. Gentleman would have acted in a different manner. A short time ago the ceiling was lifted beyond what was hardly tolerable when it was accepted by the industry in 1959. I am one who takes pride in the "know-how" of our people. I believe that the industry would be prepared to accept the discipline of reorganisation—we are not arguing about nationalising this vital industry—and that it would probably be a vertical reorganisation.

It is no use the industry having internal quarrels between one sub-contractor and another. Frankly this is Victorian management in an era when the industry is facing the 1970s. The Minister and his Department have been negligent. The industry has a great record and our attitude must be that it has a part to play in the future. Are hon. Members willing to endure a balance of payments problem because of the situation in which the textile industry finds itself?

The people in Lancashire and in the industry do not want synthetic details or precise figures. When the 1959 Act was passed I was not then in the House, but I disagreed with it because it was for political ends and not an Act to deal with the industry. The people of Lancashire accepted even the adverse figures of 1959, but they have said that that is enough, and that the industry must reequip itself and be prepared to face competition. That is a straightforward proposition.

The hon. Member for Ormskirk suggested that the cotton industry is expendable, and that would appear to be the basic philosophy of the party opposite. Is Hong Kong expendable? I know that it would be impolite and unpolitical for the party opposite to contemplate it. The Prime Minister, a few days ago, talked about this country being an offshore island to Europe. Does anyone deny that Hong Kong is offshore to Communist China? Are we in this House prepared to permit the industry of Lancashire to become so distraught that it cannot even provide 70 per cent. of the home market? Are we prepared to see it sacrificed, not for India and Pakistan, but for Hong Kong, which is not a Colony within the normal meaning of the word?

Everyone knows that Hong Kong is an area of opportunity for finance and merchanting. I believe that this industry can be brought to its feet and given a fair chance. I am not prepared to do less than challenge my county and the industry to pull itself together. The President of the Board of Trade must do his job. I ask for nothing more than that the "hose" should be turned off and that during the next three or four years the industry be given a chance to do its job.

5.55 p.m.

Mr. J. A. Leavey (Heywood and Roy-ton)

I hope that it is not a presumption to start by saying that this is essentially a timely debate, in view of what has preceded it. Although I do not often seek the indulgence of the House and am not often able to offer my congratulations to the Opposition it would be ungracious to say that I do not appreciate the fact that they have chosen this topic for debate. Most hon. Members have received a good deal of correspondence about this matter and there has been a good deal of national publicity. The anxiety of those of us who have constituencies in which the cotton industry is still a matter of great significance has emerged during the course of the debate.

I must say at the outset that I am gravely disturbed by the Government's decision which was explicit and implicit in the announcement made by my right hon. Friend on 6th June. I must say, too, that I am also quite unsatisfied with the terms of the Government's Amendment. I feel with my hon. Friends that the wise words of the Estimates Committee, which have been taken from the Report and used as the basis for the Opposition's Motion, do not go quite far enough. That is why we have sought to make it more explicit and to carry it somewhat further in the Amendment in the name of my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow).

As many aspects of the industry have been discussed already in speeches from both the Front and back benches, I propose to follow the good example set by my right hon. Friend and deal primarily with the question of low-cost, duty-free imports. I hasten to say that this is not the whole problem. It is a complex problem and tribute has been paid to that complexity by my hon. Friends. There is, indeed, a crisis of confidence. There are many other matters on which I should like to speak, but to be brief I will concentrate on this one point—the problem of duty-free, low cost imports. Before doing so I must make one or two general observations.

First, I declare an interest. It may be known to hon. Members, but I think that it would be wise to say that I am associated with a group of companies which, although not recognised as textile companies, have textile interests.

I want also to say to hon. Members who may not be particularly associated with the cotton textile industry that this is a grave crisis for that industry. I hope that hon. Members will not regard this as just another in the series of complaints by the industry which have been brought to the Floor of the House. The industry quite genuinely feels that it is overwhelmed by cheap imports.

I have enough knowledge of, and certainly enough respect for, those whom I have the honour to represent to know that they are not easily whipped up on a purely political basis. Nor are they easily persuaded to travel overnight by coach to London at some expense and a great deal of discomfort and to march through the streets of London and present themselves in a mass lobby here. There is an element which finds a little exhibitionism to its taste, but I assure the House that this is not just a stunt.

There is genuine concern and anxiety about unemployment. It is easy to bandy figures, and there was some dispute between my right hon. Friend and the hon. Member for Nelson and Colne (Mr. S. Silverman). I can speak only for by own constituents. We have extensive short time and two mills have already closed down. I put it to hon. Members that if they were in this industry and had been through this sort of thing before, and if they had been at pains to warn their children what might occur if they sought to follow in their footsteps and enter the industry, they would find it of little comfort to be told that the unemployment level in their part of the country was below the national average.

Many of my constituents—and, again, I say that I speak only for them—have been on short time for a long time. When they can see around them a very high demand for labour and when earnings generally are higher in the engineering industry, to quote that which has been mentioned, it is almost more unbearable and almost more difficult to endure short time when one is not quite in and not quite out. Earnings are down and one fears the consequences of the present level of imports, let alone the level which is to be permitted when demand is resumed in the industry in which one works.

Mr. S. Silverman

I am very grateful for what the hon. Member has said about short time, and I agree entirely with him. But he still leaves the impression that short time means only temporary unemployment, not to be included in the main figures. That is not so. The short time goes on all the time, and the only difference between being on short time and being permanently unemployed is that different sets of people are unemployed for shorter periods. But the extent of the unemployment is exactly the same as in the permanent category.

Mr. Leavey

I will not dispute what the hon. Member has said. If he is seeking to offer clarification for the benefit of the House, I will leave it there.

I hope that the House as a whole and hon. Members who may not be particularly intimately concerned with this matter will not swallow the idea that this is an old-fashioned and out-of-date industry, because there is ample evidence—and I do not ask them to accept it entirely from me—that the best in the cotton textile industry in Lancashire today is as good as the best in the world. About the worst I will say only that it ought to have gone out under the redundancy scheme.

On the good side, there has been vast investment, and one can talk of figures in excess of £100 million, money not spent lightly but in the belief and hope that the industry would be brought up to levels of efficiency comparable to those of competitors, efficiency which would produce goods at prices which the British public and the overseas public were willing to pay. The industry has a remarkably good record of industrial relations and can teach some other industries a few lessons about that.

The industry has remarkably good research facilities, to which the industry contributes, and which have made contributions on a worldwide basis—through the Shirley Institute. I pay tribute to the Cotton Board, a statutory body which speaks for and represents the industry, and does so very well. I sense that in recent weeks there has not been absolute accord between the representations made on behalf of the industry by the Cotton Board and those by other bodies. I do not wish to get involved in those differences which I believe to exist. I will say only that those who have adopted more spectacular tactics can at least claim that they have drawn public attention to a difficulty and a series of difficulties and a prospect which deserve public attention.

I want to quote words used in evidence to the Estimates Committee and used in its admirable Report as further evidence of the industry's standing and quality. These are the words of Mr. C. E. Harrison, and I believe that they are compelling evidence that the industry has a very high standing. He said: Lancashire is well ahead of British industry in work study. I am sure that any hon. Member concerned with industrial matters will realise the value of and need for work study. This is not a group of old fuddy-duddies who are out of touch and not willing to face up to new problems. Without labouring the matter too much, I should like to impress on my hon. Friends this image of the Lancashire textile industry, but something else must also he said, for while making criticisms, in a sense, one can claim to be constructive. We are not faultless, but what industry is?

It has been said that we suffer from horizontal organisation. It could also be said that there are merits in horizontal organisation if one is looking for long runs and high employment of highly expensive automatic machinery if one is specialising. But we do suffer from it and there are enormous economies to be made from the vertical organisation. In common with the hon. Member for Sowerby (Mr. Houghton), I agree that there must be economies at each stage. The industry has moved some distance in that direction, and while it is not easy and there are other difficulties, the lack of vertical organisation in the world as it is is one of the industry's bad marks.

There are also still a few in the industry who adopt the old principle, "When things are going well there is no need to re-equip, and when things are going badly you cannot afford to." There are also those in other industries who take that view, but I confess that there are still some in this industry and we will render the whole industry a service, all who work in it, employers and employees, if we make that plain. That leads me to something else on which I have something critical to say.

I think that the industry is a trifle more reluctant than others to accept criticism and proposals about how it should improve its levels of efficiency, although that may be understandable because a great deal of advice has been thrown at the head of the textile industry over the last few years. But where are we to find industrialists, or any others, who will say that they are unable to meet competition because they are inefficient? That animal has been extinct a long time.

The man or industry—at what level does not matter—who succeeds, claims that it is largely his own acumen, his own energy and his own skill which have brought him success. Those who fail say that it is the Government's fault. This attitude is becoming more and more widespread. It is linked to the view, which is implicit in what is often said, that if somebody cannot afford something, somebody else must pay for it; there is no question of going without it.

I have touched on a number of points which may have been in doubt in the minds of some of my hon. Friends and also pointed out some of the weaknesses. I turn now to the central problem which was dealt with very fairly by my right hon. Friend. When the Cotton Industry Bill was introduced, the two objectives were clearly understood. There was the redundancy scheme to get surplus plant out of the way. That was followed by proposals for re-equipment with a 5s. in the £ grant from the Government. I welcomed the scheme. I think that everyone recognised its deficiencies.

I have refreshed myself by reading some of the speeches made at the time. I must give the hon. Member for Ashton-under-Lyne (Mr. Rhodes) credit for consistency, because, as he has reminded us, he said at the time that if he could have found Tellers he would have voted against the Bill. He has consistently taken that view. I do not agree with everything that the hon. Member has said, but I must give him credit for that.

Then followed a fear that there would be a shortage of cloth. Because of the curious structure of the industry, there was some grotesque over-buying or over-ordering. Order books filled. Long deliveries were the order of the day. The industry felt justified in doing this in the sense that it thought that confidence had been re-established. When the scheme was introduced I suggested to my right hon. Friend who was then President of the Board of Trade that, even though it was not stated specifically at the time, there must have been an assumption on all sides that the consumption potential and the production potential were known and would he maintained. When the scheme was introduced the element of confidence, which had to be based on some known or probable set of figures, was stressed.

In moving the Second Reading of the Cotton Industry Bill, my right hon. Friend the present Minister of Education said this: The blows have fallen on Lancashire so rapidly and in such continuous succession that it has never seemed possible, as I understand, to pause to take stock and to face all those readjustments which are called for by such drastic changes in the market conditions. Now, at last, an opportunity occurs. The conclusion of an agreed limitation on imports from Hong Kong, and the prospect of a similar limitation on imports from India and Pakistan, create a favourable situation for reorganising the cotton industry on a definite plan … I submit that the only conclusion is that the scheme for scrapping and the re-equipment scheme which was to follow were based on certain assumptions.

My right hon. Friend said a little later: I cannot get out of my mind the disastrous effect upon labour and management if we do not create that confidence in the future of cotton which will attract young people to enter the industry."—[OFFICIAL REPORT, 4th June, 1959; Vol. 606, cc. 377–8.] The burden of my case is that it was on the 1959 ceiling figures, which were reluctantly accepted, that the scheme was based and was assumed by all concerned to be based. I hope that no one will split hairs and say that no such statement was committed to paper. The Hong Kong arrangement lapsed twelve months before the Indian and Pakistani arrangements. It was, therefore, necessary to renegotiate the Hong Kong arrangement. The industry is saying justifiably that it has been let down. My complaint is that it was not necessary in the middle of last year to negotiate with Hong Kong increased ceilings which were followed inevitably by demands from India and Pakistan that their ceilings should be likewise increased.

Sir K. Joseph

My hon. Friend is making a most interesting point in an absorbing speech. He no doubt recognises that Hong Kong, India and Pakistan had restrained themselves during the boom and had seen new suppliers pouring goods into our markets while our cotton industry was fully occupied. Has my hon. Friend got that in mind?

Mr. Leavey

Yes. I assure my hon. Friend that I have it very much in mind. I am sure that it was within the knowledge of my right hon. Friend's advisers at the time that the reason for this inflated demand was that there had been this grotesque over-ordering and overbuying, for which the industry cannot be blamed.

A false situation existed. The negotiations based on that argument were based on a false premise. The first part of the scheme went quite well. We were waiting for the development of the second part—namely, the re-equipment—on the basis of the ceilings established in 1959.

I remind the House that the ceilings were as follows: for Hong Kong, 164 million square yards; for India, 175 million square yards, and for Pakistan 38 million square yards. Then instead, as we might have expected, of negotiating reduced levels, we had this very substantial increase, an increase of 12 per cent. on the then prevailing ceilings. Up went the Hong Kong, Indian and Pakistani figures. Therefore, we now have ceilings of 422 million square yards against the ceilings of 377 million square yards which we then had.

I remind the House, also, that, while that in itself is a very substantial increase, the increase on the actuals of that previous year is about 27 per cent. This destroyed, and understandably destroyed, the basis on which the Cotton Industry Bill received the support of the House. The Bill was subsequently roundly condemned by some hon. Members opposite in the course of the General Election, but at the time they did not see fit to vote against it. I shall not pursue this point and I shall not embrace all hon. Members opposite in that condemnation, only some of them.

Mr. J. T. Price

I should like to get the record straight. Some hon. Members, including myself, were hostile to the Bill at the time. I agree that we did not vote against it, for the simple reason that every factor had to be considered, including the question of compensation to operatives who would be rendered redundant. That was the only reason why we restrained ourselves. We spoke against it, but we did not register our votes in the Lobby.

Mr. Leavey

I am glad, as the House will be glad, to have the hon. Gentleman's personal statement.

I do not welcome the criticism which has been made on the basis that the Bill was entirely an electoral matter. If it had been seen only in that light, perhaps hon. Members opposite would have been more honourably advised to have voted against it, and then when making the maximum mischief about the Measure during the course of the ensuing General Election they would perhaps have been on better ground.

I was speaking of the quantities and of the impact that these increases have had on the industry. I should like to say here, almost as an aside, that at the time that India, understandably, claimed that she must have her increased share of an increased cake, she was cutting down the negligible export of cotton yarn and certain special cloths from this country to India. Previously, we had exported some quantity of cloth and yarn. It was very much reduced on the ground of India's balance of payments problem. Between 1949 and 1952, the base years, the import quotas were reduced by India to 7½ per cent. of what they had been, and they have since been further reduced until they are now1¼ per cent. of the moderate quotas of the base years.

That makes it very difficult for me and those I represent to welcome and accept with much good grace the claim which was made by India that her quota should rise from 175 million square yards to 195 million and continue at that level for another three years.

As to whether the 3 per cent. increase in the total of our domestic consumption represented by the increase is substantial or not, I would remind the House of the relevant figures, which other countries regard as significant. Mr. Kennedy found himself under some pressure last year from the cotton lobby in America. His reaction was somewhat different from that of my right hon. Friend. He sent representatives to Geneva to negotiate a quite new agreement on the ground that 4 per cent. of domestic consumption in the United States came from imports.

That was enough to justify starting a series of negotiations at Geneva for, on the face of it, a greater acceptance of low-wage, low-cost Asian textiles among the industralised countries. But within a few weeks the United States Government took action under the agreement to eliminate certain exports from Hong Kong to the United States. That sort of thing makes me and those I represent very suspicious, and in stating that I am using the most moderate language I can find.

There were some things which I welcomed in my right hon. Friend's statement on 6th June. I feel that in criticising his policy and what has been said by him I am less likely to impress him if I avoid altogether recognition of the good points. In the first place, I believe that it is a substantial advance to have introduced the licensing arrangement. I am glad that we are to ratify the long-term Geneva agreement. I also welcome the protocol which says that the United Kingdom will not be required to accept increased quotas. I also welcome the statement that newcomers to this market should not expect to walk freely into the United Kingdom market. I am also glad that we have included in the new agreement the provision about yarn which was previously not ratified.

Finally, I must refer to the Common Market. I feel that we cannot speak on any industrial matter today without making some reference to the Common Market and its impact. The fear exists in Lancashire—and there are good grounds for it—that if and when we join the Common Market the United Kingdom textile industry will not be effectively protected by the common external tariff. The Lord Privy Seal was somewhat "dodgy" on this when the point was raised with him during the Common Market debate a few weeks ago. I do not altogether criticise him for that. Clearly, at this stage in the negotiations it would hardly be possible for him to be very explicit. But it has caused great anxieties, if not suspicions, in my mind.

There is fear that our textile industry will get the worst of both worlds, that we shall no longer enjoy the 17½ per cent. tariff protection which we enjoy on certain imports—that that will be dispensed with—and that at the same time we shall have to face low-cost, duty-free imports from Hong Kong, India and Pakistan.

The French industry has recently made its position clear. It has said what I am sure has been said by many of us in a strictly limited domestic field, "We are quite ready to welcome you, but we are not all that keen on having your relations." This attitude on the part of the cotton industry on the Continent is qutie understandable. I am not confident that the solutions which my right hon. Friend is seeking to these very complex problems will have sufficient regard to the needs of the cotton industry. I leave it at that.

I conclude by telling my right hon. Friend that I cannot bring myself to feel that the real problem that faces the industry, and the anxieties of Lancashire and the justifiable grounds for those anxieties, are even now understood by my right hon. Friend and the Government. I am very disappointed by the lukewarm, almost meaningless words which the Government have chosen to set down in their Amendment. I feel that the words of the Opposition Motion are more encouraging, taken as they are from the Report of the Estimates Committee, but, as I have already said, my hon. Friends and I think that they do not go far enough. I believe that the addition of certain words—which curiously enough have been used by the hon. Member for Nelson and Colne—are necessary.

It is an unusual experience—and I mean this in no offensive way—to find myself in the company of the hon. Member for Nelson and Colne. I remember the hon. Gentleman once saying that he was glad of support from any quarter. Perhaps I shall not be misunderstood if I almost go as far as to reciprocate that observation. It is unusual for many of us to find the hon. Member for Nelson and Colne wearing a Union Jacket waistcoat and supporting us strongly.

Mr. S. Silverman

Why not?

Mr. Leavey

I was saying that it was unusual—not obscure or wrong, but unusual. The hon. Member has a very active mind, and he should not be too sensitive.

I am gravely disappointed at the reaction of my right hon. Friends to the position in which we find ourselves, and I must tell my hon. Friend the Minister of State that I shall have to reserve my position until he has spoken, and I very much suspect—indeed, I very much fear—that I shall not be able to support him in the Lobby.

6.28 p.m.

Mr. F. Blackburn (Stalybridge and Hyde)

There was nothing in the speech by the hon. Member for Heywood and Royton (Mr. Leavey) with which I wish to argue. I enjoyed much more his speech on 6th June, when the President of the Board of Trade made his first statement. The speech was much shorter and the result of spontaneous combustion. Today, the fire seemed to have died down.

Since I represent what I think is the largest cotton textile constituency outside Lancashire, I am very glad to have an opportunity to speak. Since I have been a Member of Parliament, in the industrial field cotton has always been my greatest anxiety. During the past few years while we have been indulging in the luxury of a Conservative Government, 14 cotton textile mills in my constituency have closed down. I am always worried about where the next blow is likely to fall. Only last week the managing director of a firm in my constituency told me that at present he was running at a loss because, to keep the factory going, he had been compelled to accept a contract at Hong Kong prices.

Every hon. Member knows that that cannot continue for very long, and if that mill closes down in that part of my constituency, there is no alternative employment. We do not find in the cotton constituencies the glossy factories which we find in the South. In fact, the Board of Trade will not give I.D.Cs. for them. Of course, there are new industries in many of our former cotton mills, and we are grateful to industrialists who have come there and taken them over.

The President of the Board of Trade's statement on television the other night, that all of the 250,000 people who have left the industry have been found alternative employment, is only half-true, because many of the married women who have left have not returned to industry at all. Moreover, as must be known to the Board of Trade, there has been a great migration from the cotton towns into the Midlands and the South. The right hon. Gentleman must realise that this is a social as well as an industrial problem. What chance is there for women in their forties and fifties, who have spent the whole of their working life in the mills, to find alternative employment?

I wonder whether the Minister still thinks that Lancashire was not disappointed when it read his speech of 6th June. Does he think that Lancashire will not be disappointed when it reads what he said today? Personally, I have never known the management and workers in the cotton industry so angry and so frustrated as they are at present, and if the Government have no more to say than the President of the Board of Trade said on 6th June or than he said today, we are wasting our time in having this debate.

What are the Government's views? Is it true, as some have said, that they have written off the cotton industry but for political reasons dare not say so? Does the President of the Board of Trade think that his statement of 6th June or his statement today will overcome the present crisis of confidence? There is only one way to restore confidence, and that is by putting a ceiling on imports. Has the right hon. Gentleman received any other advice, or have any other views been expressed to him from any quarter?

I should like to call attention to the last sentence of the Report of the Estimates Committee and I join with all other hon. Members in expressing my gratitude for the work which the members of that Committee did in producing their Report. The sentence reads: Nevertheless, they feel bound to record their conviction that, failing a speedy and satisfying solution to the related problems of imports, marketing and the fuller use of plant and machinery, much of the expenditure incurred will have been to no purpose. These words have been incorporated in the Opposition's Motion. I do not know what hon. Members opposite feel about the Amendment in the name of the Prime Minister, but I think that it is an insult both to hon. Members and to workers in the cotton industry if the Government expect us to welcome the assurances on imports policy which have been given in their statement.

The concluding sentence of the Estimate Committee's Report refers to "the related problems of imports", on which I will say more in a moment, and to "marketing"—and I will not deal with the latter point, because to be brief I shall limit my remarks to criticisms of the Government and not deal with points which could be put right by the industry. We have a self-denying ordinance, and we are trying to make short speeches so that as many hon. Members as possible may take part in the debate. I will, therefore, leave that aspect.

The third point made by the Estimates Committee is the fuller use of plant and machinery", and that is dependent upon the level of imports. We cannot have plant and machinery working full out on three shifts if imports are at too high a level. Has the President of the Board of Trade received any advice or heard any views expressed other than the fact that unless a ceiling is put upon imports we shall never restore the confidence which the industry lacks? Have not they received that advice from every single body with knowledge of the industry—for example, the British Spinners and Doublers Association, the United Kingdom Textile Manufacturers' Association and the United Textile Factory Workers Association.

Le Syndicat Général de l'Industrie Cotonnière Française regárds Britain as a country which has accepted the destruction of one of its most traditional industries. That, I think, is a measure of the general criticism of the Government. The hon. Member for Heywood and Royton objected to someone saying that the Cotton Act, 1959, was a political stunt. Let us leave that there, but was it an attempt to help the industry, or was it an attempt to reduce the industry in size in order to leave the field open for cheap Commonwealh imports, or was it a mixture of both?

If it were to help the industry, then the scheme was based on the then level of imports. The hon. Member for Heywood and Royton said that although it was not said in so many words, it was generally understood that there was a distinct connection between the level of imports being received at that time and the reorganisation and re-equipment scheme.

I remember that when we were discussing the Bill I said that unless the voluntary agreement with Hong Kong, India and Pakistan were renewed at the then level of imports at the end of the three-year period, the whole problem would arise again. I think that my words have been proved true. Now the Government want us to accept a much higher level of imports. The least that the Government can do is to impose the 1959 ceiling to give back to the industry a measure of confidence.

Personally, I am in favour of a much lower figure, and I say that the least that the Government can do is to impose the 1959 ceiling—and I use the word "impose" because I strongly believe that that is the way in which it should be done. Let us have no more of this bargaining either by the two industries or by the Government. I think that the Government have a duty towards the industry, and it is to impose a ceiling.

We all wish to help the underdeveloped countries. Every hon. Member subscribes to the idea that we must do our best to help underdeveloped countries. But who decided that the best way was to murder one of our own industries? It is no good the Government saying that the arrangements must be voluntary because of the Ottawa agreement. That argument is no longer valid, because the Government are prepared to sacrifice Ottawa in order to join the Common Market, and they have made the first inroads into it.

What does the President of the Board of Trade mean when he says that countries with no traditional trade in cotton textiles should not count on being able to build up a new market in Britain? Was he referring to the Commonwealth countries which have recently gained their independence? If so, does that mean that they will not have the same favourable treatment as Hong Kong, India and Pakistan? If he does not mean them but means other countries, are we to expect a flood of imports from the newly-independent countries, such as Nigeria, which are developing their cotton textile industries?

No one can say that the British cotton industry has not done more than its share in helping India, Hong Kong and Pakistan. Must it now be called upon to make still further sacrifices? No one under-estimates the problem of Hong Kong, with its huge mass of Chinese refugees but should the major burden be thrown upon our cotton industry?

We cannot be expected alone to solve the Commonwealth problems and at the same time to solve the Chinese refugee problem. The time has surely come to put an end to voluntary agreements and to say that generous as we have been in the past, there is a limit beyond which we cannot go and we must fix a ceiling. We are prepared to give quotas up to the 1959 level, but without murdering our own industry we cannot do more than that. That will be the test of the Government's sincerity, for in no other way can confidence be restored. If the Government fail to respond, the industry will know how to judge.

The French Cotton Association was right when it said: So long as a system of quotas is not adopted by the British, the crisis of the cotton industry in Lancashire will continue. If we are to have nothing more than the barren statement which has been made on two occasions by the President of the Board of Trade, the outlook for Lancashire is gloomy. I hope that when the Minister of State replies to the debate he will have more comforting words to say than have been said before.

6.41 p.m.

Mr. John C. Bidgood (Bury and Radcliffe)

I am glad to have the opportunity of making my contribution this evening, more particularly as I am a Member of the Estimates Committee, a Sub-Committee of which interviewed the various witnesses in connection with the cotton industry. Naturally, I fully support the conclusion reached in the Report of the Sub-Committee, whose conclusion was not arrived at lightly. It refers to imports, marketing and the full use of plant and machinery, or, to put it more bluntly, shift working. The first of those items—imports— is quite outside the control of the industry. The second two—marketing and shift working—are within the control of the industry. I hope in the short time I detain the House to be non-partisan and constructive.

We are talking about a sick industry that genuinely believes, rightly or wrongly, that it has had a raw deal from the Government. After what was said by my right hon. Friend the President of the Board of Trade on 6th June and this afternoon, I do not believe that anybody in the cotton industry will have reason to modify that view.

Having said that I propose to be nonpartisan, it would be as well, to get the record straight, to quote what was said from the other side of the House on this issue during our debate of 3rd November, 1958. My first quotation is from a speech by the Liberal Member for Bolton, West (Mr. Holt). I am extremely surprised that none of the Liberal Members has been present this afternoon at a time when the future of a vital industry is being discussed.

During that debate, the hon. Member for Bolton, West said: I do not think the cotton industry can be saved in any practical or reasonable measure by any Government.… No Government can save cotton, and I do not believe that the Lancashire cotton industry can save itself. The hon. Member went on to say: Putting on quotas really will not help In the same debate, the hon. Member for Leigh (Mr. Boardman), whom I know to be very fair-minded on all these issues, said: I must say that I very seriously doubt whether this House can do much to help cotton that cotton cannot do to help itself. I doubt very much whether any formula evolved in this House or in the Cabinet could possibly solve Lancashire's problems.…It strikes me as being wrong that there is all this hullabaloo about imports from Hong Kong when, as any school child knows, before Hong Kong sells a yard of cloth someone in the cotton trade here has bought it"—[OFFICIAL REPORT, 3rd November, 1958 Vol. 594, c. 662–3, 698–9.] I believe those to be sound and practical words and they are sentiments to which I heartily subscribe.

That debate in 1958 was preceded by a debate in June, 1958, in which I referred to a firm in my constituency which, during the previous ten years, had spent £600,000 of its shareholders' money on re-equipment. That was before the introduction of the Cotton Industry Act. The firm therefore did not spend the taxpayers' money. It spent £600,000 of its shareholders' money.

Last week, that firm was completely shut down and its 400 employees were signing on at the employment exchange. That is one of the reasons why I say that the industry is very sick. There is nothing either in the Opposition Motion or the Government Amendment which denotes something that has been brought out again and again in this debate today; that is, that what the industry wants above anything else is not particularly money or rules, regulations and quotas. It wants confidence.

Governments can at times be very restricted as to the measure of help which they can give to an industry, but I believe that it is the duty of a Government to try to provide a climate in which industries can help themselves. I therefore suggest that what we have heard so far today from the Government Front Bench has done nothing to engender that confidence in the cotton industry which it so desperately seeks.

I would not wish to go on record as suggesting that the cotton industry is completely blameless and is perfect in all its parts. What might be a good operation would be, as another hon. Member has done earlier in the debate, to go back fifty years and to look at the decline and fall of this great industry.

In 1913, the year before the First World War, production in Lancashire was 8,000 million sq. yds., of which 7,000 sq. yds. was exported. Ninety per cent. of production went for export. In 1957, production had dwindled from 8,000 million to 1,600 million sq. yds., of which 285 million sq. yds., or less than 2 per cent. of Lancashire's production, was exported.

In 1959, when the Cotton Industry Act was introduced, production had dwindled further to 1,300 million sq. yds., and 196 million sq. yds. were exported, which was less than 2 per cent. Last year, 1961, production was at about the same level of 1,600 million sq. yds and exports had gone down to 117 million sq. yds., which was less than 1 per cent. of Lancashire production. That is the size of the problem which is hitting Lancashire at present.

The reasons for these difficulties are not far to seek. There have been marked developments in Europe and Asia so far as those parts of the world are able to produce their own manufactured goods and to export them. As those members of the Estimates Committee quickly discovered during their deliberations, there are very definite marketing deficiencies within the industry and there are very definite design deficiencies about which we have heard this afternoon. As the Opposition Motion, in effect, says, production costs are far too high due to the non-utilisation of Plant and machinery to the maximum extent.

Those of us who are honest will admit that the growth of the textile industry in Europe and in Asia is something which we cannot stop. The Opposition could do no better even if they were in Government from the point of view of stopping development in these various parts of the world. I do not wish to strike a political note and I do not mean this as a political point, but hon. and right hon. Members opposite are committed to spending 1 per cent. of the national income on under-developed countries. I cannot see the slightest sense in spending that amount of money on the under-developed countries to enable them to set up their own industry if at the same time we turn round and say, "Here is the money to produce, but do not expect us to buy What you produce." That is the problem which somehow or other we must try to solve.

As to the fuller use of plant and machinery, some figures have been quoted about the utilisation of looms and spindles, but I should like to refer to the firm in my constituency which I quoted earlier as having spent £600,000 on new equipment. This new plant and machinery in order to pay for itself should be working to its maximum capacity. It ought to be working 168 hours every week to pay for itself in the shortest period of time. If it was in Europe it would most certainly work 120 hours a week. Even if the owners of the plant were lucky enough to get men to work a nightshift the limit to which they would be able to work would be 112½ hours a week, as this is the maximum period laid down at present by the trade unions. But it is more than likely, from experience we have had in this country already, that those machines will run only for about 75 hours weekly. I have quoted these figures from a reliable source.

We have in this country 180,000 ring spindles working three shifts but we have over 4 million still on the old-fashioned one-shift system. We have 16,000 looms on three shifts but we have nearly 100,000 working one shift. I am given to understand that for every 100 hours a German spindle turns, a Lancashire spindle runs for only 66 hours. We know that the Lancashire industry cannot possibly compete with low labour conditions in Asia, but how can the industry compete with Europe in the face of the facts which I have just outlined?

This explains why European firms can sell cotton textiles in Lancashire, against Lancashire competition, after having paid a 17½ per cent. tariff when the goods come into the country. The blame for this cannot be put on any Government, but the Sub-Committee was left in no doubt that there is very much which the industry can do to help itself.

I propose deliberately to keep my remarks short because I know that many hon. Members are anxious to participate in the debate. What we must endeavour to do, if the industry is to regain its confidence, is not to give the impression that the Cotton Industry Act, 1959 was brought into being in order that money could be handed to the Lancashire textile industry so that it could provide for itself a decent funeral. What we ought to try to get across to people in the industry is that this money was contributed as a shot in the arm to the industry rather than to further its own demise. I am afraid that I have heard nothing this afternoon that could give the industry the encouragement which it is seeking at present.

I have on the Order Paper in my name an Amendment, which you were not able to call this afternoon, Mr. Speaker, to add at the end of the Motion: by affirming that acceptance of future imports from Commonwealth countries based on quantities imported in 1961 is conditional upon future imports not exceeding the proportion to home production which Commonwealth imports in 1959 bore to the estimated production on which the Cotton Industry Act, 1959, was based". I commend my right hon. Friend the President of the Board of Trade to give it the earliest consideration, because I believe it provides him with an escape clause should he care to use it. I do not think that it is being unreasonable to suggest to my right hon. Friend that, whilst the 1961 figures are retained, the imports which are allowed to come into Lancashire shall not be a bigger proportion of home market production than was envisaged in 1959 when the Act came into being.

We are a nation noted for compromise. I look upon this as being a sensible compromise, fair to our Asian and Commonwealth partners and to the people of Lancashire. I believe that this would give them that shot in the arm and that encouragement which they are so desperately seeking at present.

My position with regard to events which are to take place at ten o'clock tonight is very simple. As a member of the Estimates Committee and also of the Sub-Committee which did most of the work in connection with it, I heartily endorse the Report. Therefore the question whether the Motion on the Order Paper is in the name of the Opposition or in the Government's name does not interest me in the slightest. The fact remains that I shall support the Motion because I believe in every word published in the Estimates Committee's Report. That is, in effect, what the Motion is all about, and that is why I shall have to give it, with pleasure, my support tonight.

7.0 p.m.

Mr. Harry Randall (Gateshead, West)

The hon. Member for Bury and Radcliffe (Mr. Bidgood) is to be congratulated on the stand that he proposes to take at the end of the debate. It is, of course, for him to make that decision. For myself, I should like to express my appreciation of his work on Sub-Committee F of the Estimates Committee.

Whilst it is in my mind, I should like to express my thanks to the President of the Board of Trade, to my hon. Friend the Member for Sowerby (Mr. Houghton) and other hon. Members for their comments on the Report. I had the privilege of serving as the Chairman of that Sub-Committee.

Again, lest I should forget, I should like to place on record the appreciation of my colleagues on that Sub-Committee to the representatives from the Board of Trade who attended its meetings. They were most helpful, and the other witnesses who appeared before us contributed considerably to our discussions. In addition, there were representatives from the Cotton Board. Theirs was a difficult role in that inquiry, but, as Chairman, I was satisfied that their desire was to give of their best in assisting us in our work. The reception which the Report has had has pleased me very much indeed.

I do not want at this stage to refer to the 1959 Act and its implications. That is well known to the House. All I would like to say now is that the Estimates Committee was satisfied that the terms of the Act and the schemes had been carefully interpreted and efficiently administered. It is the conclusion of the Estimates Committee Report which, I think, has been highlighted. Our Report was short; the inquiry was short, but it was intensive and, if I may say so, the timing of its publication was appropriate. It coincided with the eve of the meeting between the Prime Minister and the 19-man delegation from the Cotton employers and workers, led by Lord Rochdale, Chairman of the Cotton Board. The timing of the issue of the Report could not have been better.

However, not all Reports from Estimates Committees are without recommendations. This was such a Report. There were no recommendations in it, though the conclusion was surely strong enough in itself. It was a direct conclusion and it did not mince words. The conclusion arose from what was said in the course of our inquiries. It became very clear to us that under the re-equipment scheme there was a lack of response in the ordering of new machinery. When the President of the Board of Trade talked this afternoon about reaching £72 million—

Mr. Erroll

About £72 million.

Mr. Randall

—the House must remember that that represents only applications. There is 1964 to come yet, and we may well have an entirely different situation. Much will depend upon whether we can get rid of this crisis which is ahead of us. That will determine whether those applications are going to be picked up.

We in the Estimates Committee wanted to know Why firms were not responding and putting in their applications. We were told that this was due to lack of confidence in the industry and to the import situation. It was on that point that we continued our inquiries. It is perfectly true that for a number of years I represented a cotton constituency, and now I have had the opportunity of sitting in on this inquiry, but I still cannot claim to be an expert in this industry. It is an extremely complicated one.

All the same, I do not think it needs an expert, having read our Report, to appreciate the inevitable conclusion at which we arrive, namely: that, failing a speedy and satisfactory solution to the related problems of imports, marketing, and the fuller use of plant and machinery, much of the expenditure incurred will have been to no purpose. This is one of our oldest and most famous industries. It is in a precarious state. Government assistance to the tune of £30 million was offered, although under the Act £30 million is not necessarily the ceiling, but it was in mind at the time of the Second Reading debate that £30 million would probably be advanced from Government funds. Surely this £30 million was offered in the belief that such expenditure would enable the industry to put its house in order and make itself competitive. I cannot believe that when the Government asked the House to confirm an expenditure of that kind, it was not done in the expectation that the industry would be enabled to become competitive and to put its house in order.

What do we find? On the one hand, £30 million is offered to enable the industry to become competitive. On the other, a level of imports is permitted which, without doubt, prejudices the very survival of the industry. It is a paradoxical situation. In fact, it might even be called a dishonest one. No wonder there is a crisis of confidence in the industry. No wonder full advantage has not been taken of the Government's offer. The cotton industry, above all else, if it is to succeed, must have the basis of a sound home market if it is to survive. The industry rightly feels that the Government could not commit themselves to the tune of £30 million if it was not intended that the industry should survive. Yet experience does not support this view. The high level of imports is allowed to continue and a fair and reasonable home market is denied to the industry.

Considered in isolation, it would seem that the money has been well spent. We were given evidence of modernisation which had taken place. Improvements have resulted in output, lower costs and better working conditions. But this must be set against the whole picture, and one fact emerged quite clearly. All the experts, including the witnesses, were quite unanimous in the belief that British cotton will never be able to compete with Asiatic imports at their present level.

One witness, Mr. Cartwright, of Barlow and Jones, Ltd., said, as will be seen in answer to Question 471 in the evidence: … in view of the Government's policy of unrestricted imports from Asia we must face the fact that no matter how efficient we become, we shall never compete with the Asiatic imports. Colonel Whitehead, the President of the British Spinners' and Doublers' Association, was asked if he thought that we could compete without import restrictions. His answers to Questions 757 and 758 make his view quite clear. He said: … no, even with the new machines … Because of the wages paid in India, Pakistan and Hong Kong. In a memorandum which Colonel Whitehead submitted to the Estimates Committee, and which appears on page 128 of the Report, there is this statement: It was made clear by the industry's representatives … that any scheme of Government assistance and any efforts by the industry itself would be rendered useless, if low-price imports, from whatever source, were not strictly limited;… there was a serious danger that money already spent on modernisation would be thrown away. Colonel Whitehead is one of the experts in the industry and he gave us that evidence.

What else did we find? We found that, for the first six months of 1961, 36 per cent. of home demand was supplied from imports from abroad, and that the main suppliers were the Asian Commonwealth countries. This must put our industry at a disadvantage, even compared with European, for their markets are not swamped with goods as ours are, and Sir Cuthbert Clegg, of Clegg and Orr Ltd., made the point in this way: Our continental competitors have had the benefit of insulation from imports and low cost countries and have, therefore, been able to maintain continuous production better than we have. I could go on quoting from the evidence that was given, but surely it is ludicrous to talk of financial assistance and the present import levels in one and the same breath? It just cannot be done. All the modernisation in the world will never put us on an equal footing with our Asian competitors. Even our ability to compete with Europe is prejudiced while these present levels remain.

I should like now to say a few words about marketing arrangements. This problem gives further cause for concern. I agree that it is probably largely a matter for the industry, although I am bound to say that as a result of sitting on these inquiries. I consider that this problem cannot be divorced from the question of imports. Marketing appears to be a hit-and-miss affair. In fact, I think that Mr. Harrison put it very well indeed when he said: The tendency in the past was this. Someone grew some cotton and then looked for a spinner. The spinner did the spinning and then looked round for a weaver, and the weaver wove the cloth and then looked round for a customer. That may be over-simplifying the situation, but it is largely what is happening in the industry today.

We find ourselves with a market which has been overstocked and even fashion dictates and determines the markets. How many industries can plan an approach to marketing of this order? How many can expect, deserve even, to survive if they carry on in this way? This is why we say in the Report that the industry should make a contribution towards reorganising itself, and I hope very much—and this follows something said by the President of the Board of Trade—that the industry will take note of that part of our Report and set about the task of reorganising itself.

I now come to the question of the fuller utilisation of plant and machinery. This, again, is a matter for the industry, for the employers and the workers. This is extremely important. Such is the cost of the new machinery that if installation is to be worth while, it must be used to the fullest extent, because in any event it is likely to be obsolete in ten years.

To quote Mr. Harrison again, he says, in paragraph 374: My company in the United States runs a minimum of 120 hours and regularly 144 hours per week, three shift operation, five or six days. We find that the bulk of our continental competitors are running a minimum of 120 hours and many are running in excess of that. In Hong Kong, 144 hours is probably the minimum. What do we find in this country? In some mills—and, in fact, in the majority—it seems that a single shift is worked for five days, making a total of 37½ hours per week. In other mills, two shifts are run, making a total of about 75 hours a week. But in a few, a very few, there are three shifts totalling perhaps 112½ hours. Really, no more need be said about this. Obviously, the new installations will not be an economic prospect under such conditions.

It is no good blaming the industry. It is no good saying that it is up to the management or workers to deal with this. The problem again cannot be considered in isolation. The industry realises that shift work is necessary, but, because of the recession in the industry, is having to discontinue shift work. We had evidence that some of the new machines which have been brought in as a result of the re-equipment scheme—25 per cent. of the cost being provided from Government funds—are lying idle, and, therefore, something must be done so that, first, the industry can reorganise itself and, secondly, see that the maximum use is made of the new machinery.

It all comes back to the question of imports. This is the crux of the matter. This is why we said in our Report that if this problem can be solved it will create the confidence which is necessary as a prerequisite to tackling these other problems. We have today had a statement from the President of the Board of Trade. He has taken note of the comments of the Estimates Committee. He appreciates what we had to say. He went on to say that the Government recognise the serious difficulties caused by a large volume of imports. He says that the Government are aware that the industries consider the present level of imports excessive, and yet he goes on to accept the offer to continue the present ceilings until the end of 1965, although, it is true, with some modification with regard to yarn. This is the impossible situation facing the industry.

The industry has been told by the President of the Board of Trade that it has been given much special help, but the industry has a great deal to do. Is the statement of the President of the Board of Trade the Government's considered reply to the Report of the Estimates Committee? The Committee has been praised and been told that it has made a greater contribution than any other made over the past few years. Is this the considered reply of the President of the Board of Trade to the Committee's Report? Is this the considered and final reply of the Government to an industry which could well be facing extinction?

Perhaps I might make a final quotation from one of the memoranda we received. It says: What is now needed in Lancashire is full blast production which can only be obtained from higher technical and commercial efficiency based on confidence in the future. I regard that as one of the most important statements made to the Committee. If the statement of the President of the Board of Trade is the considered view of the Government, all I have to say is that there will be no confidence in the future of this industry in Lancashire, no higher technical and commercial efficiency, certainly no full blast of production, and, if we are not very careful, no cotton industry worthy of the name in this country.

7.18 p.m.

Sir Arthur Vere Harvey (Macclesfield)

I am sure that the House has listened with great interest to the hon. Member for Gateshead, West (Mr. Randall) and is indebted to him and to the other hon. Members who formed the Estimates Committee and made such an interesting and constructive Report. I find it difficult to differ with very much of what the hon. Gentleman said today.

Perhaps I might at this stage say a word about my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Sir Bromley-Davenport), who is a constituent of mine. I am sure that the House was sorry to hear about the dastardly act that was perpetrated on him, and will be relieved to know that he is very much better.

I am sure that the House also extends its sympathy to the hon. Member for Bolton, West (Mr. Holt), but I am surprised that no other hon. Member of the Liberal Party is present. We are now debating this great industry, which is in trouble, and there has not been a single Liberal Member present. I hope that the country will take note of this, because we read a lot about what the Liberals are going to do, and yet time and again one looks across at the benches opposite and finds that no Liberals are present, even though there are now seven of them. I am sure that it would have been easy for one of them to be here, if not more.

Having said that, I turn to the speech of the President of the Board of Trade. It did not impress me any more than did his statement of 6th June. On that occasion he said that he thought that the cotton industry, when it read his statement, would be well satisfied. I then said that I thought he was wrong, that it would not be satisfied, and subsequent events have shown that I was right. Certainly, the people in my constituency were not satisfied.

I tried hard today to read into my right hon. Friend's speech some encouragement for the industry. I found it lacking. My right hon. Friend has overlooked many revelant problems, for this is an up and down industry. The year 1960 was almost a boom year and in some ways an unfortunate one, because the industry was encouraged to think that those almost boom conditions would go on for ever and large stocks were built up. This was all followed by the trade going right down to its present position. My right hon. Friend has ignored many points, including the seasonal factor. If there is a late spring, for example like this year, the industry can be seriously affected. This sort of thing can set it right back for the whole of the trading year.

The cotton industry is still a great industry. It was a tremendous one in the past and, perhaps, no one would expect, considering the cycle of events, that it should continue at the strength of previous years. Nevertheless, we must have a textile industry, for the country cannot afford to get along without one. I am certain that if things drift on as they are, we may finish up without one and this is most alarming.

The industry must decide just how large it is to be. I would rather have a contracted but healthy, flourishing industry in which everyone knows where they stand rather than the situation we have at present. There needs to be continuity of employment and good sound business. The redundancy scheme and the encouragement being given does anything but that.

The industry considers that it has been misled. Two fine mills in Bollington, in my constituency, which made probably the finest yarn in the world, have closed down. Material that we were once proud to have has disappeared and many of the people affected live in my constituency. I have received many letters from industrialists and workers and the thing that comes out prominently is the fact that they need confidence. The industry is undoubtedly sick at the present time. It needs bolstering up and as I said privately to my right hon. Friend some time ago—I hope that he will not mind my repeating it—"Can you do something for this industry? Please come to Lancashire and spend some time there. Do not just receive deputations in London, but, with the Minister of State, get among the people in this industry, hear their problems, let them see that you are on their side and tell them that you will do everything you can to help within the framework of Government policy."

One does not like to say certain things to Cabinet Ministers, but I say this with respect to my right hon. Friend, for he is an old friend of mine. We came to the House together about seventeen years ago and he is highly respected in the north of England. He has entered the Cabinet, and, I am sure, will have a great future, but it needs a young man to grapple with these sort of problems—a man who will probably have to take an unorthodox line in many directions.

I recognise that there are pockets of unemployment in some areas—Nelson and Colne and other places—'but if we did not have a general position of full employment the conditions that prevail in the textile trade today would resemble those of 1931. The conditions would be virtually identical, if not worse. It is only because there is relative full employment and the workers, with the exception, perhaps, of married women, are going to other industries and, in many cases, are receiving better conditions and pay, that the terrible difficulties of the industry are not more fully realised.

That does not mean that the textile industry cannot be built up to a high level at which it can give reasonable continuity of employment. The Estimates Committee's Report, as I read it, indicates the failure of the Government's policy regarding the redundancy scheme and indicates the need for a speedy solution to the import problem.

The closing remarks of the hon. Member for Gateshead, West concerned imports and this is the crux of the problem. It has been said time and again that fuller use must be made of plant and machinery, but it must be remembered that we are at a disadvantage compared with other nations, in which women are allowed to work on night shift. In Britain, they are not and I realise that, despite this, the industry must help itself. Some firms have done this and are as modern as any plant in the world, but not enough have done so. Can one blame them for not following suit at the present time in view of the insecure future that appears before them?

It is unrealistic in present conditions to think of the industry in watertight compartments of cotton, wool and man-made fibres. All these sections are becoming more dependent on each other and it is useless to try to find a solution for one section without considering the other. The industry must be considered as a whole. At present, the main thing missing is confidence. If one wants to raise money in the city in the form of debentures or new capital, one must create a feeling of confidence that one is going in the right direction and that the industry or firm one represents is being built up so that a reasonable return will be received on that money.

That is completely missing in the textile industry. How many hon. Members would be willing to buy textile shares today, if they were making an investment? I suggest that the number, if any, would be very small. Imports of manufactured textiles into the United Kingdom in 1954 were worth £71 million, while in 1961 the figure was £146 million. The amount of cotton piece goods imported in 1961 totalled 731 million square yards, more than 50 per cent. of home production.

It has been said today that when cotton imports into the United States amounted to 6 per cent. of home production there were immediate demands for an inquiry to limit these imports. It is all very well for President Kennedy and his colleagues to tell this country what to do. It has been made repeatedly clear in relation to the size of this country and its population that we are spending more in the underdeveloped countries than the United States, but despite this, the United States is constantly telling us what we should do and how we should do it. It would be a good thing for the Americans to look after their own affairs. They have plenty of problems in their own country, such as Wall Street, and the world would have a great deal more confidence if they sorted out their own difficulties and did not so much interfere with other things, such as the steel industry. However, I must not dwell on this point, or I will be out of order.

In 1961, there was a great increase in imports of low-priced nylon stockings from Italy. The increase in that year represented the total imports of 1960. Attempts were made to check it and the Government were asked to invoke the anti-dumping legislation, but these attempts were unsuccessful. It seems extraordinary that imports should have come in to that extent and nothing was done about it.

Macclesfield, which I have the honour to represent, used to be known for its high-quality silk and still is to some extent. Silk squares from Japan and Italy are coming into this country in very large quantities and are selling at prices much below the cost of printing them in Britain. I am told that some of the squares are made in Japan, taken to Italy, printed and stamped there and are then sent to this country. Are these things being looked into?

Hong Kong have limited their exports to the United Kingdom and I have considerable sympathy in this connection. After all, they buy £8 to £10 million worth of goods from us, more than we take from them. The same cannot be said of India. Only last week the Indian Government halved their import licences. I realise that they have got themselves into difficulties over their lack of foreign currency, but when Britain handed India over there was a considerable amount of gold in that country and those reserves are certainly not there now. We cannot afford to give the same treatment to India as we have given to Hong Kong, which is a Crown Colony, where we have great responsibilities and where there is a large refugee problem and other factors to be considered.

Hong Kong has voluntarily limited exports to the United Kingdom, and I think that they are too high, but this has allowed the non-Commonwealth countries to increase their exports to us of equally cheap goods. It has been said that some of these countries have no traditional trade in cotton textiles, and they should not be allowed to get away with it. This is where we look to the Government and the President of the Board of Trade to take action.

Time and time again, evidence is brought to this House of too many eggs coming from Poland when there is an excess in Britain, or of bacon from elsewhere, and four or five months elapse before something is done about it. The Minister has the power, and I should like to see him use it rather more frequently and sooner. If he has not got sufficient legislation to deal with the problem, I am sure that the House would readily give it to him in a matter of days.

Our entry into the Common Market, if it is achieved, will certainly encourage European countries to increase their exports to the United Kingdom. I know that it will be said that we shall have equal opportunity to export to them, but let it be remembered that, at the moment—and regarding the Common Market, I change my mind almost every week; I am swayed by events, and I should like to be more definite than I am—Britain offers a better market for Europe than Europe offers for Britain where textiles are concerned. We should take that into account very seriously.

I wish to refer quite briefly to Japan, which is a serious menace, with its vast production, its low wages, considerably higher than they were, but still comparatively low, and its very long hours of work. People say that the people of Japan are now earning £6 or £7 a week, but they are doing 60 or 70 hours' work a week for it. That is the difference. That, combined with modern techniques, installed under United States supervision, is the main problem for the rest of the world, and it will rapidly increase. Before the war, Japanese fabrics disrupted the home market, and many of us have very unhappy recollections of what happened because of the ridiculously low prices for their lightweight fabrics of a fairly low quality.

Today, these Japanese fabrics, covering the whole range of Western production, very well designed and extremely well cut, are offered here at prices which make competition quite impossible. I am all for my right hon. Friend going out to Japan and increasing trade, provided that it is evenly spread. He cannot afford to kill the textile industry even to sell motor cars, or whatever it may be. He must look after this industry.

Is it too much to hope that Her Majesty's Government can be persuaded to see that their policies meet the minimum requirements of the United Kingdom industry? I can understand the policy of the liberalisation of trade; I recognise it and think it is a good thing. We all want peace in the world and if we get along better with one another and improve trade, even with Soviet Russia, that will be the better for everybody, provided that irreparable injury is not inflicted on home industries. They will suffer up to a point, but not beyond it. I say that any further liberalisation of trade must exclude textiles and clothing.

On its part, the industry must ensure the full use of plant and machinery, and that can only be brought about by establishing import quotas related to home production, by the introduction of some form of anti-dumping legislation operating more quickly, as well as by the effective use of the present legislation. I say to my right hon. Friend with great respect that he and the Minister of State should go to Lancashire. It is true that the industry must help itself, and I am sure that it is quite capable of doing so, because there is no worthier body of people, whether employers or workers, than those in the textile trade. They are marvellous people, with a record of good labour relations. There is nothing wrong, and, fundamentally, it is a very sound business.

Quite recently, members of the Cotton Board and representatives from the cotton textile industry have been in Europe. They are not dragging their feet, but are examining what the possibilities are for the future. I conclude by saying that unless the Minister of State can make a more convincing speech than did my right hon. Friend this afternoon, for the second time in seventeen years—although I think that I am a good party man—I shall find it very difficult to support the Government in the Lobby tonight.

7.35 p.m.

Mr. H. Boardman (Leigh)

We are discussing today a situation which stems from the natural and logical development of one of our greatest industrial achievements.

Over the years, this country has produced and has exported some of the finest textile machinery that has ever been produced, and it has so happened that not only have we exported these fine textile machines but we have also exported highly skilled operatives to teach native labour how to use them. It is not unnatural, therefore, that as the wheels turn these countries are now quite capable of meeting us in competition in the markets of the world, and this is the situation in which we find ourselves.

We have, of course, a very great disadvantage because most of these countries which we are discussing today have a natural ability to produce their goods very much cheaper than the prices at which we can possibly produce them. As a consequence of what has happened and of the inaction of the Government, there has been created industrial despair and political disillusionment which is without precedent in this industry.

Over the years, I thought and believed that the best thing that could happen for the Lancashire cotton industry was to have a planned contraction of that industry because, like the hon. Member for Macclesfield (Sir A. V. Harvey), I have always believed that it would be very much better to have a smaller industry, giving greater security to the people who remained in it, than to have the sort of industry which we have had since the post-war boom, when we see daily the lifeblood of the industry running out. Undoubtedly, the industry has undergone a contraction, but it has not been the sort of planned contraction that many of us had envisaged.

What has happened has been completely crazy and chaotic. It so happens that, because there seems to be nobody who cares about the cotton industry, certainly not in the Government, the industry has been failing to attract the boys and girls from school to provide it with new blood. Not only that, but some of the people who have spent many years in the cotton industry and have been in it long enough to be greatly skilled have thought that they would get out while the going was good and while they could still get into another job, even such unskilled jobs as bus conductors, school caretakers and what-have-you; at any rate, a job with greater security. The Government must certainly accept some blame in this connection.

The rising imports from the low-cost production countries has struck an enormous blow at the confidence of the people in the industry, both employers and employees. It is this which has been responsible for the failure to attract young workers into the industry and to keep the experienced ones. Some firms have done everything possible for their workers, but we cannot expect a man in the mill, if he sees the writing on the wall, to stay until the place closes its doors, if he sees that there is to be no other job open to him for many years to come, and that is precisely what is happening. In Lancashire today men of 50 and 55 years of age, who have given years of loyalty to the textile industry, are eating their hearts out because they can find nothing worth doing.

Nobody wants to interfere with international trade. What we must do is to work for an intelligent expansion of that trade. The crux of the problem is that we have provided many of our competitors with the tools and the know-how of this great industry, and we must ask ourselves whether we are to allow them now to scuttle the industry which gave them birth.

On many occasions employers and trade unionists in the industry have said that they do not fear fair competition. They are not asking to be coddled, but they point out that they simply cannot compete with a rice-bowl economy. Once we start trying to compete with such an economy we come down, in the end, to seeing who can live on the smallest bowl of rice. That is not much good for either employers or operatives.

Much has been said about the deficiencies of the industry, but it is not a matter of pouring in money for new capital equipment, or of saying that the industry must make itself efficient. Since 1947 a firm in my constituency has put £1¾ million into new equipment. For fourteen years this firm has been working two shifts a day, and for the last few months three shifts a day in certain departments. It has a very effective deployment of labour because of the use of efficient work study teams. Yet its latest annual report concludes with these words: The outlook is not good, and gives cause for anxiety. This firm has done everything. It has re-equipped without Government aid. It has helped its staff. It is using its staff and machinery as effectively as is possible. What do the wags of Whitehall suggest that this firm should do now? There is no point in its taking further action if it has to compete with this flow of low-cost imports from Asia.

One thing has puzzled me for a very long time. This country has sent out to the Far East a high-powered and highly competent delegation to talk to the people in Hong Kong who are selling us this cloth and to discuss how much they should sell to us. I have said before, and I repeat, that not a yard of cloth comes into this country that somebody here has not bought before it arrives. Merchants are making money and are cutting the ground from underneath the feet of the Lancashire cotton manufacturers.

Mr. Dan Jones (Burnley)

Converters.

Mr. Boardman

Yes. Would it not have been much more logical and simple if, instead of sending Lord Rochdale and his very competent delegation to Hong Kong, he had been asked to meet the people in this country who are buying this stuff? Therein lies the trouble. If these people do not trust each other and cannot make arrangements between themselves, the Government ought to discuss the setting up of a central buying agency for these goods.

Some people fear that the industry will be sacrificed for other exports. I hope that that will not be the case. In any case cotton is not the end of the story; it is the beginning. Within the last few days we have all had a circular from the wool textile delegation. Although the woollen industry has not previously complained, it is now expressing the very fears that Lancashire has been expressing for a very long time. It is cotton today, and if it is wool tomorrow, which industry will be able to speak with confidence about the day after tomorrow?

The Government must make up their mind not merely whether the Lancashire cotton industry is expendable but what we ought to do in order to be able to live with these cheap-cost producing countries, because their ability to produce cheaply will increase, and the problem will become increasingly serious. The Government have been telling Lancashire what it should do for long enough; it is now Lancashire's turn to tell the Government what to do. The people of Lancashire are telling the Government, "If you cannot or will not help Lancashire to help itself, for God's sake get out and make room for a Government that can."

7.46 p.m.

Sir Alexander Spearman (Scarborough and Whitby)

I believe that I am the first speaker to take part in the debate who does not represent a cotton constituency. I do so with the more diffidence because everyone who has spoken knows a great deal more about cotton than I do. That would not be difficult. I am glad that the debate has not been confined entirely to Lancashire. This is a very grave issue, and the proposals put forward can affect not merely Lancashire but the whole country. I may come out of this debate a little battered. I cannot expect from hon. Members opposite the easy ride that some of my hon. Friends have had, because I shall take a different line.

Hon. Members on both sides of the House have said that the cotton industry, which is a vary great one, and which has rendered so much help to the country in the past, will decline very severely unless it is further subsidised or protected. I want to examine, not in a defiant but in an inquiring spirit, what sort of case can be put forward for further subsidy or protection. First, there is the question of our policy of helping the underdeveloped and poorer areas of the world. It is widely agreed Chat, wherever possible, this is far better done by trade than by aid. It is more efficient, more self-respecting, and it costs the taxpayer a great deal less.

The Guardian, which might be called the local paper of the cotton industry, and has frequently Championed it in the past, said, on 7th June: To give special protection to the cotton industry would hurt Britain more than it could help the industry, to say nothing of being a wounding blow at the economic and social development of parts of the Commonwealth that need to raise living standards. Next, I should like to know whether in this industry we are making the best use of our very scarce manpower resources. Unlike many other European countries, we have not great reserves of labour to call upon. A highly developed and industrialised country like ours cannot hope to compete in the production of simple and straightforward goods—for example, cotton cloths, on which so much of the industry was based in the past. It must surely depend on concentrating its resources on the more complicated and sophisticated products, those which require the maximum technical skill, the highest ratio of capital to labour and the greatest extension of research.

Lancashire used to have two assets which gave it a tremendous natural protection—the terrific inherent skill of its labour and its climate which, perhaps, is not entirely ideal from an amenity point of view, but is most favourable to the cotton industry. Now, automatic machinery has entirely and, perhaps, sadly, displaced the craftsmanship which was so unique to Lancashire, and the fact that air conditioning can be installed anywhere in the world means that Lancashire no longer has its former climatic advantage.

Has the industry sufficiently adapted itself to these changing circumstances? I observe from the White Paper that between 1912 and 1958 exports fell from 7,000 million yards to 455 million yards—to less than 7 per cent Has this been entirely due to circumstances outside the industry's control, or has not it been as efficient as it could have been? Has there been, perhaps, a failure to integrate production so that one factory spun, wove, dyed and finished the goods rather than that they went from one factory to another? Can it be that the industry has not spent enough on research and modernisation? Are enough shifts being worked?

The International Federation of Cotton and Allied Textiles Industries publishes a six-monthly bulletin in which the following comparisons for the first half of 1961 are given. The United Kingdom figure of 49 hours per week per spindle worked is the lowest in all Europe and reflects the relatively small extent of shift-working in this country. The United Kingdom figure of yarn production per spindle per week is the lowest in Europe. The figures for the E.E.C. countries are between two and three times greater than ours. With 25 per cent. fewer looms than we have, Germany produces 16 per cent. more cloth. Although shift working is more extensive in weaving than in spinning, the United Kingdom figure of 57 hours worked per loom per week is lower than that of any other country except Portugal. Only Spain and Portugal have a worse performance than the United Kingdom in production per loom per week.

If we go into the Common Market, as I very much hope we shall, our textile manufacturers will have the opportunity of competing on level terms with the very large and, I believe, very prosperous textile manufacturers on the Continent. I know quite well that the best mills in this country have adopted methods similar to those adopted on the Continent and have obtained results comparable with the very best achieved there. But cannot the industry as a whole become economic on its own? Those of us who are asked to support further measures of protection wonder why it is that the whole industry cannot do what parts of it have done.

Mr. McCann

The tragedy is that some of the most modern mills are closing down.

Sir A. Spearman

I do not propose to discuss the details of the matter. As I have said, I have not the advantage of having the detailed knowledge of hon. Members opposite who know this industry so intimately. Also, the hon. Member for Nelson and Colne (Mr. S. Silverman) is getting very impatient.

Cannot the industry as a whole become economic? If it cannot, is it really in the interests of the country to bolster it up? In the inter-war years, I should have said unquestionably "Yes", because surely it is much better to employ people, however uneconomical it may be, than not to employ them at all. The expansion of industry generally in Lancashire shows that there is a net gain in the employment available. That emerges clearly from a Written Reply given to my hon. Friend the Member for North Fylde (Mr. Stanley) on 23rd May.

Of course, there may be exceptional pockets of unemployment, but, taken as a whole, Lancashire is not facing tragic unemployment but the need is for people to change jobs. However, I realise that there is harshness in that, and I am not satisfied that the Government are taking every possible step to retrain men and to facilitate the change-over of jobs. If we were in the position which we were in at the beginning of the century, it might well be that we could afford this indulgence and bolster up the industry not merely to provide people with jobs, but to keep them in the same job.

But today surely we all realise that if we are to maintain, let alone increase, our standard of living, we must get more growth into the economy. What makes growth? I diffidently suggest that hon. Members opposite sometimes think that it is something which a clever, enterprising Government should be able to conjure out of the skies. Of course, investment is vital to growth, and the Government can influence investment in various ways. However, the part which investment plays in growth is very much exaggerated. Let me give one example. Industrial investment other than housing has doubled in the last ten years and the growth has increased from about 2½ to 3½ per cent. I am sure that a dramatic way in which we could get greater growth on a vast scale quickly would be by working more shifts, getting rid of restrictive practices, whether on one side of industry or the other—

Mr. S. Silverman

How can men work more shifts in a factory which is closed?

Sir A. Spearman

I am talking about growth in the economy as a whole and saying that, although it happens in some industries in this country, we are not working as many shifts in industry as a whole as are worked abroad.

Secondly, we need more mobility of skilled labour and investment, not to maximise production and employment, as employers always tend to do when it is very easy to sell, but to minimise costs. If we are to have growth, we must drive resources into the most economic industries. I accept that one cannot be doctrinaire about this. Where there is acute local distress, measures must be taken to mitigate it.

But do not let us deceive ourselves. When we bolster up declining industries, inevitably we slow down growth. We cannot have the cake and eat it. We must not play a game of pretence that growth is all important and we shall get it when we support sectional interests. Measures which damage the economy as a whole in the long run often hurt those interests which they are designed to help. I should want more evidence than we have had today that the people engaged in this industry are suffering severe hardship which they cannot avoid before I supported plans to give them more protection.

8.0 p.m.

Mr. Dan Jones (Burnley)

I am not an expert on this industry, but I am privileged to take part in this debate because a number of my constituents are involved in the industry and that, I feel, may be an even greater justification for my taking part than being a so-called expert.

I listened to the Minister giving his figures. I dare say that the right hon. Gentleman would claim to be an expert, but I think that he has whitewashed the situation. I do not propose to repeat a lot of figures. I support those which were given by my hon. Friend the Member for Sowerby (Mr. Houghton) which, I think, crystallise the situation.

It ought to be emphasised that the textile industry has made a monumental contribution to the economy of this country through the years. At one time the output from the Lancashire textile industry supplied the needs of the whole world. Today, despite an increase in world demand, we find that the industry is on its knees. If the help now promised by the Government is to be regarded as a yardstick with which to judge the future of the industry, I say with dismay that it will not be long before the industry is on its face.

There are those of us who attack the Government without apology because we feel that they have let down the industry. I am firmly of the opinion that a far greater measure of help could be given to the textile industry and for several good reasons the industry has a right to expect such help. Not least of those reasons is the one given by the President of the Board of Trade in 1959 when he said: I am convinced that the reorganisation scheme is going to give a new lease of life to Lancashire industry. There is without question a feeling of more security and confidence that better times are ahead. I referred to those words during a debate on the cotton and textile industry in the House on 16th March, 1962. There is no question of qualifying the terms. The words used by the Minister are clear. Employers and people working in the industry accepted them at their face value, and there are employers, whose families have been connected with the industry for 150 years, who poured hundreds of thousands of pounds into the industry.

I do not wish to overstate the case, but in some instances millions of pounds were put into the industry. Today, those people face bankruptcy. I have spoken to some of them who will be in need of psychiatric treatment unless something is done, so great an impact has this made upon their nervous condition. That is not surprising because if you show me a man who, having lost almost his all, can accept it with detachment, I will show you a fool. These people are not fools. They have served this country well in the past and they desire to continue to serve.

Following these promises there was a period of contraction in the industry. I do not think that any other industry in the country has had to accept measures similar to those imposed on the textile industry. There was a contraction and there was redundancy. New techniques were introduced. But still there was no question but that the industry would co-operate 100 per cent. Despite that, we now face a situation where, with these promises still in mind, after the expenditure of hundreds of thousands, indeed millions of pounds, and after wholesale co-operation from the trade unions, the textile industry is on its knees and employers and workers find themselves in a dire position.

What can be done? The Minister, who would claim to be an expert in these matters, has referred to an increase in imports of only 3 per cent. since 1959. I detected a sense of detachment, even complacency, about that statement; as if 3 per cent. was nothing much. I have here a statement by the employers who say that cloth imports into this country in 1959 equalled 370 million sq. yds. In 1961, the figure was 520 million sq. yds. The statement adds; These are for retention in the home market. These figures represent approximately 40 per cent. of the total consumption of cotton textiles in the whole of Great Britain. No single industry can stand up to such unfair and withering competition and as a result two-thirds of our cotton mills have closed down since the war and over 250,000 people have left the industry to seek employment elsewhere. The employers could have added that some of those people are still looking in vain for employment. That is what must be recognised by the House.

If I speak with a sense of indignation about this parlous state of affairs, it is because I, too, have been unemployed. I should like hon. Members opposite, who speak with a sense of detachment about being unemployed, to be unemployed themselves for a period and be obliged to live on what they receive. I warrant that then their attitude to unemployment would take a revolutionary turn. It is inhuman, and I shall never cease to protest about it as long as I am priviledged to come to this revered Chamber. How dare people speak of the unemployed as though they were units which might be dispensed with?

What can be done to assist the textile industry? I support the Motion. We should go back to the 1959 level of imports. The authority for that figure is the Estimates Committee which analysed the industry. I am not an expert, but the members of this Committee are. The Committee stated: The purpose behind the Cotton Industry Act, 1959, is clear enough. It was intended so to promote the modernisation and efficiency of the industry as to render it competitive both in the home and in the export markets. To this end large sums of money have been voted by Parliament, and your Committee are satisfied that the expenditure has been applied in the manner intended by Parliament. It is no part of the duty of your Committee to comment upon the policy which underlies the Act. Nevertheless, they feel bound to record their conviction that, failing a speedy and satisfactory solution to the related problems of imports, marketing, and the fuller use of the plant and machinery, much of the expenditure incurred will have been to no purpose. We set up a body of this description and then ignored the recommendations that it made. I believe that they are wise men. The country owes a debt of gratitude to them and the Government should pay a similar salutation to them by honouring the recommendations they make.

I would add that bulk buying should be instituted. This was something that was set up by the Labour Government in 1945–51 so that the raw materials could be sold to the industry without people making very good profits and not making a good contribution to the industry. I believe that that could be done and that it should be done. I believe, also, that all the cotton textile goods sold in this country should be stamped with the name of the country of manufacture. I am convinced that, whatever the House does about this tonight, the British public will not willingly contribute to a situation which means economic sacrifices in Lancashire.

When talking about the development of the Commonwealth—and I do not object to that as a member of the Commonwealth Parliamentary Association—why cannot we develop a greater diversification in the economy of Commonwealth countries so that the impact of their exports will not have such a great effect on one industry but will be shared? Why has it to be on only one industry in one section of our nation?

Why is it that we are not prepared to ban imports from other than Commonwealth countries? I ask that question with some intensity of feeling. What do we owe to Spain and to Portugal? I am prepared to admit that imports from each of those countries may be comparatively infinitesimal, but in the aggregate they are substantial. Why do we allow these countries to send their imports to us and thus menace the economic existence of a part of the nation which has served our country so well in the past?

Finally, let me come to the human problem associated with this industry. I do not apologise for doing so. Unless we can relate these figures to the human problem, I think that the House has missed the point. I spoke yesterday to men of 50 to 60 years of age who know perfectly well that in the next year or two they will be redundant. They have served the industry well and are good technicians. Many of them know that there is very little chance of their securing alternative work.

I have already spoken about the employer and the horrible possibility of his facing bankruptcy, as a good many employers will. Let me speak about the Lancashire girl. [Laughter.] Hon. Members may laugh, but I think that she is a very charming girl. Much more than being charming, one of them said to me, "Tell me, Mr. Jones, why the Government seem to perpetuate the system in which the debutante in society is not only patronised, but put on a shelf for the adulation of the people, and we, by contrast, are in the industrial gutter?" I have not the answer to that.

What I do say is let the Government beware. This knowledge will percolate more and more to the people of the nation. The Lancashire lass is a fine economic unit and of real value to the nation. The debutante does not produce a "ruddy" carrot from January to December. I tell the Government that, whatever happens tonight, I shall, in the interests of the people whom I am proud to represent, hound and harry the Government on this question so long as I am privileged to come to this House and a situation is maintained in which this industry is denied the elementary justice that other industries get.

8.15 p.m.

Mr. Ian Percival (Southport)

I have listened to almost the whole of the debate, and I feel that it has had two notable and wholly desirable characteristics which can do nothing but good. The first was the readiness on the part of nearly everyone who has spoken to admit that it is necessary for all parties concerned in this problem to play their part. It is not a matter just for the Government alone. It is not a matter just for the industry alone. If we are to find a solution to the problem, it has to be one which somehow harnesses and combines the efforts of the Government, management and labour.

I believe that it is of tremendous importance that everyone who is concerned to find a solution should adopt that approach to the problem. The one hope must lie in everybody playing his part and in the restoration of a spirit of co-operation and confidence to take the place of the present bitterness, which undoubtedly exists, and which could very easily lead to deadlock and therefore to nothing but detriment for everyone concerned.

The second notable characteristic has been the numerous efforts which have been made to get rid of some of the immense confusion with which this problem is almost completely bedevilled. I listened with great interest and pleasure to those hon. Members who have done a good deal to remove some of the confusion by drawing so clearly the distinction between imports from low-cost countries and imports which come in over a tariff. As the industry freely concedes, it is not the imports that come in over a tariff with which it is concerned. The industry accepts that it must compete with those. What it is concerned about are the imports from the low-cost countries. This debate may have served a useful purpose in drawing that distinction. I am sorry that I did not have a chance to say my next sentence before the hon. Member for Burnley (Mr. D. Jones) left the Chamber, for I think he may perhaps, unwittingly of course, have introduced a note of confusion.

My recollection is that he compared two figures which were not comparable, one of £377 million in 1959 and then one—he was quoting from a letter—that imports had increased to £525 million. The figure of £377 million was the ceiling in 1959 for Hong Kong, Pakistan and India and not the actual. One of the important things in considering the subject is to consider the actuals as well as the ceilings. The figure of £525 million was not the figure to which the £377 million increased but the total imports from all sources in that same year.

I think that the hon. Member for Burnley was quoting from a letter and such confusion, if any, as there was was quite unintentional, but I mention it because it is comparisons of figures like that which are perhaps not comparable which in so many instances have created confusion and obscured the problem. The problem of imports is that of imports from low-cost countries. Of course, those are of tremendous importance and significance, and any increase is to be regretted, but the Government, the industry and the House must see the present increase in its proper perspective. I find it difficult to accept that the current increase over the 1959 ceiling, which is a difference of 3 per cent. in total consumption—

Mr. McCann

I rise to refer to the continued use of this figure of 3 per cent. The hon. Member for Southport (Mr. Percival) is doing exactly what he accused my hon. Friend the Member for Burnley (Mr. D. Jones) of doing—comparing figures which have no relation. When the President of the Board of Trade said earlier that the increase was 3 per cent. of home consumption, or only 45 million square yards, he forgot to equate that to the complete production of perhaps fifteen modern mills, which means the closing down of fifteen mills in addition to those which have already closed. That is what happens from this "only 3 per cent.".

Mr. Percival

The hon. Member may not agree with me, but he may rest assured that I shall not add to any confusion. The increase in the ceiling is 45 million square yards. I have conceded that any increase is undesirable, but there having been an increase it is necessary, in order to see the whole problem in its proper perspective, to see what relationship that increase bears to total consumption, and in fact it is 3 per cent. of total home consumption. Therefore, it makes a difference of 3 per cent. and about that we are all agreed and, as I say, I concede that we would be better off without any increase. But, as there has been some increase, let us see it in its proper perspective. The maximum possible increase over the 1959 ceilings is the equivalent of 3 per cent. of total home consumption, and that is a fact which one cannot escape. Undesirable as that is, I find it difficult to believe that this is by itself what it is so often made out to be—a body blow to the industry.

Mr. H. Hynd (Accrington)

It is on top of the other increases.

Mr. Percival

It is regularly being said that 1959 would be all right, and I am taking my increase against the 1959 figure. Practically the whole of the industry is saying, "If only we could have 1959, we should be all right". This is an increase against 1959. I would have thought that it was overstating the case and being over-dismal—and we do not do anybody any service by being over-dismal or overstating the case—to regard that as a body blow to the industry. I would have thought that when that increase was seen in its proper perspective, in which I have tried to put it, and against the advantages of a 3½-year period, plus the inclusion of yarn as a restricted commodity, the disadvantages of the new agreements were perhaps being slightly exaggerated and the advantages somewhat overlooked.

To that extent my right hon. Friend is, I feel, to be congratulated on what he has done, and it is wrong for the industry to say that he has done nothing to achieve any advantage for the industry. But from then onwards I part company from my right hon. Friend, and I do so on three principal issues. I think, with respect, that he has under-estimated the confusion which has been caused by the highly artificial situation which has existed in the industry during the past three years and which has gone far to bedevil what was a very worthy plan which at first had a very fair chance of doing just what it was intended to do—giving confidence and stability to the industry.

That artificial situation has arisen because, just as the plan was getting under way, the merchants apparently had a fit of midsummer madness and over-ordered, not only at home but all round the world, thus creating a highly artificial and most misleading situation and bringing about the direct consequence that we were choked with stocks. That, followed by two bad years, which at least had the effect that the stocks were not depleted as fast as they would otherwise have been, coupled with the rise in imports over the tariff barriers which occurred in 1960 and 1961, created a situation which nobody had anticipated when seeking to put this new plan into operation. It created a highly artificial situation of great confusion the effects of which have not worked themselves out of the system and which will take a little longer to work out of the system.

Secondly, I think that my right hon. Friend under-estimates the problems facing the industry. I have already said that one of the things I have been so pleased to hear is the almost universal acceptance of the fact that the industry must play its part. We in Lancashire fully accept and recognise that, but I do not think that my right hon. Friend recognises quite how great our difficulties are. It is all very well to talk about verticalisation. Some concerns have gone a long way along that road. Others are going along the road, but it is not something which is achieved overnight. It needs planning, capital and time. When we talk about re-equipping with machines, we are not talking about putting in little electric motors or things costing £100. We are talking about putting in machines which may cost £6,000 and upwards apiece. We are also living in an era of rapid technological change. Who knows what machines are just around the corner? We cannot be sure that any machines we buy now will be the best to serve us for the next ten years. We must choose with care.

The industry has another quite different job to tackle. I have already referred to what I call the artificial situation created largely by the excessive ordering of the merchants. It may well be that the industry will feel that the time has come when the complete split between merchanting and production should be attended to. It cannot be attended to overnight. It will take time. Unhappily there appears to be not merely a complete lack of co-operation. It goes much further than that. This must be broken down. One hon. Member opposite referred to other inbuilt difficulties. All told, there are great problems indeed.

I believe sincerely, otherwise I should not be taking up the time of the House, that the industry genuinely wants to meet the problems and overcome them and is willing to make its full contribution. If it is to have a fair chance of doing so, it needs two things, a little more time and a lot more confidence. As to the former, since time is short now, I will merely say that I associate myself with the remarks of my hon. Friend the Member for Ormskirk (Sir D. Glover), who suggested that a minimum period of five years' stability is a not unreasonable request. I have conceded, as it is only fair to concede, that stability on low-cost imports, which is the one thing that matters, for three and a half years is an advance, but it is not a big enough advance. It will take longer than that to solve the kind of problems which the industry must tackle.

I join my hon. Friend the Member for Ormskirk in asking the Government to give serious consideration to the question whether they cannot now come straight out and say, "We will do everything we can to give you stability and ensure that the present position does not deteriorate further for five years". This is one of the things which appears to be sapping confidence more than anything else. I do not think it is the 45 million square yards or the 3 per cent. in itself. It is the fact that there has been an increase and the fear that, there having been one increase, there may be another one soon and another after that. There is the fear that the doors may be opened time and time again. It seems to me that it is reasonable for the industry to ask for a guaranteed five years and to say, "You can see the size of our problems. They cannot be overcome in two or even three years. Give us time". If that were done, it would give the industry a far better chance to make its plans and solve its problems.

It would also go a long way towards meeting the second requirement which I mentioned, that is to say, the necessity for more confidence. If we did that it would be the first step in the right direction and it would give more confidence to the industry. I agree with what was said by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey). The lack of confidence which is felt by people in the industry must not be underestimated. It is the very heart and soul of the matter. Nothing useful will be done until some degree of confidence is restored. This is the last point on which I part company from my right hon. Friend. I think he has underestimated the lack of confidence. I think that he does not appreciate, as those of us who serve this part of the country do, the real bitterness that there is. It is not bitterness just from a few. It is not bitterness from the kind of people who are always crying out for someone else to do things for them.

It has already been acknowledged in the debate that the best of our industry are equal to the best in the world in their management, their organisation and their labour force. I am happy to pay tribute to all three, because it is merited. But even among the best in the industry, who are equal to the best in the world, this bitterness and lack of confidence is now felt. These people are experienced, many have spent a lifetime in the industry. They are very reasonable. They are not heathens from north of Cambridge who get excited at the first sign of difficulties. They are phlegmatic people Who know their job, like it and get on with it and do not get bitter like this unless there is a good reason for it.

I can mention my personal experience in support of my statement that they are not people who complain the moment anything goes wrong. Until recently, I never had a letter of complaint from any of the many mill owners and executives who live in my constituency.

Mr. Ellis Smith

There is a good number.

Mr. Percival

It is an excellent number. They have not come complaining to me about little or great matters. They have been getting on with things themselves. I have had to go to them to get what information I wanted. They have gone into their re-equipment and so on in great detail and have put in a great deal of their own money and have got on with their own problems. But now even they feel this bitterness and lack of confidence.

I do not pretend to know exactly why it is or whose fault it is. The worst thing that could happen would be for there to be endless recrimination. To find a solution we must stop recriminating and start co-operating. The fact is that I do not really care much why it is or whose fault it is. That is not important. What is important is to get rid of the feeling somehow. I believe that we can get rid of it if we recognise a little more the difficulties and problems of the industry instead of just telling it that that is its own business and that it must get on with it, and if we say we will give it a little more stability for, say, five years, which would not be unreasonable. The Government ought now to say "Here is an earnest of good faith. Let us now stop backbiting and recriminating, and co-operate and get on with it." The Government might well say that a little more clearly and, perhaps even more important, a little more warmly than was done in my right hon. Friend's speech today.

For these reasons and because I feel obliged to part company from my right hon. Friend on those matters which I consider go to the heart of the problem, I am unable to accept my right hon. Friend's approach to the problem as it appears from his statement on 6th June and his speech today—namely, that he has done all he can do and all he proposes to do, and now the industry must get on with it. I believe that my right hon. Friend can do more and that he should show a willingness to do more and at least a willingness to try to find further and better ways of making a contribution to solving the problem. I feel that if only he would do this and set a lead he would find that the people of Lancashire would respond generously to such leadership.

I therefore feel obliged to adopt the same position as has previously been indicated by my hon. Friend the Member for Heywood and Royton (Mr. Leavey) and my hon. Friend the Member for Macclesfield, and to reserve my position until the end of this debate in the hope that there may yet be some glimmer of hope that the Government do propose to do something more, but with the feeling that I, too, regrettably, will be unable to support my right hon. Friend.

8.41 p.m.

Mrs. Barbara Castle (Blackburn)

I listened with great care to the speech of the hon. Member for Southport (Mr. Percival), and I was very disappointed with his concluding words. I thought that he had heard enough evidence already from the Government, repeated by the President of the Board of Trade this afternoon, to enable him to make up his mind now which side of the argument he is on, and I can assure him that the only thing which will register in Lancashire as a result of the debate is votes.

It is no good saying that back-biting will get us nowhere. I can assure the hon. Gentleman that general speeches of sympathy with Lancashire will get us nowhere, either. The only thing which will get us somewhere in the succession of debates which we have had on the problems of the cotton industry is if hon. Members opposite who know what the situation is in Lancashire have the courage of their knowledge and vote with the Opposition for this Motion.

I am sure that the Government have had very little consolation from the succession of back-bench speeches which have been made on their own side. Some hon. Members have already had the courage to say outright that they will go into the Division Lobby with us tonight. Others are still wavering. But there has hardly been an hon. Member from the Government back benches who has failed substantially to support the case which lies behind the Opposition Motion.

Mr. S. Silverman

My hon. Friend is being unjust to one hon. Member—the hon. Member for Scarborough and Whitby (Sir A. Spearman), who supported the Government fully. He was the only one who did, and he began his speech by saying, first, that he knew nothing about the industry and, secondly, that he had no constituency interest.

Mrs. Castle

If I had had time and it had not been so late in the debate I intended to deal with the hon. Member for Scarborough and Whitby (Sir A. Spearman), but I must leave him in peace in his little backwater and get on to more important things.

A speech which gave us one of the key-notes to the debate was that of the hon. Member for Macclesfield (Sir A. V. Harvey). He said something which struck us all as being the kernel of this affair. He said that "this country has got to have a textile industry". That is the central issue which we are discussing, and I want to say "Hear, hear" to that remark not merely as a Lancashire M.P. with a constituency interest and not merely because a local cotton representative at the beginning of the debate sent me these three red roses from Lancashire to wear—I know that they are wilting a little under their disappointment at the President's speech, but they started in good heart and it was a very effective gesture.

But it is not only from a constituency point of view that I state that this country must have a textile industry. I say it as a consumer—and this is a point which has not been put tonight. It was put to me rather aptly just before I came into the Chamber by the person who gave me the red roses. She has been in the Lancashire textile industry all her working life, and she brought me this piece of cloth which she obtained today in Gillingham High Street. It was being sold in this shop in Gillingham High Street under the heading, "Special shipment of Eastern cotton, 5s. a yard." It is no longer a question of trying to sell this stuff under a British label; it is being openly sold as Eastern cotton.

It is pretty, gay and charming stuff, and I do not for a moment deny that it has its place in the cotton consumption of this country. But when I look into it as a consumer I find that it is rubbishy stuff compared with that which Lancashire can produce, and at 5s. a yard it is not a cheap import at all; it is an expensive import, and it is not worth the cost of making it up.

It is not worth all the cost of distribution and retailing, because it does not have the value that most women would want in a cotton garment. It does not begin to compare with the quality of the cotton which I am wearing. Within a matter of days it would look like a piece of old rag.

This is of importance to women. Although I agree that this cotton can have a place in the total consumption, its place is not to crowd out the high-quality home-produced material. The tragedy is that owing to the total lack of planning on the importing and merchanting side of the industry, this kind of stuff is having a disproportionately disruptive effect.

We are now in the middle of the paradox that the Lancashire cotton industry is being destroyed by goods which are not even competitive. It is not a question even simply of unfair competition. It is not a question of competition at the manufacturing level at all taking value for value, quality for quality, wear for wear or price for price. It is not that our manufacturers and operatives are failing to produce value for money. In a large number of cases, British women would not choose to give priority to this cheap material.

What we are suffering from in the industry is the short-sighted get-rich-quick merchant. It is not that the manufacturers and the operatives are being outwitted by better or cheaper producers overseas. They are being outwitted by a powerful independent merchanting section which is guided by one criterion, that of buying in the cheapest market, even when it is not the best one.

When I say that I want control of imports, I mean that I want control of the merchanting section of the industry. That is the loophole through which the protective measures fail. That is the only way in which we can solve what is undoubtedly a challenging problem and reconcile the conflicting interests involved.

We are today discussing one aspect of the biggest problem in the world. We all know that world trade cannot expand unless we take a rising level of exports from the developing countries. We all know that it is nonsense to imagine that we can have freedom-from-hunger campaigns, gifts for refugees, grants and loans and imagine that that will meet the problem. To give aid without trade is to expect the under-developed areas of the world to be the perpetual remittance men of the West.

This is Lancashire's sole case, and we object to being called the benighted and reactionary element of the community when we put it, Why should Lancashire be selected to be the solitary vestal virgin on the altar of this country's responsibility to the under-developed areas? We try to bring the inescapable facts before the House. No other industry in the country is expected to make this contribution to underwriting the trade of under-developed areas, and there is no other country in the Western world which is even beginning to make such a contribution as ours.

Let us pay tribute to what Lancashire is doing now towards helping the trade of the under-developed areas. The latest figures which I have been able to obtain from the research department of the Library go back to 1960. They show that in 1960 Asian imports of cotton textiles, including imports from Japan, into this country amounted to over 32 per cent. of our domestic production. The equivalent figure for the United States was 2.6 per cent. Other figures were Belgium 1 per cent., Western Germany 1.2 per cent., Italy 0.2 per cent., and France nil. In 1960, according to my information, France was not importing a single yard of cloth from Asia, including Japan, yet she is a member of the G.A.T.T. Ministerial conference which solemnly placed on record its recommendation to every member to assimilate a fair share of exports from these countries.

It will not do for the President of the Board of Trade to ask, "What is 3 per cent. for Lancashire?" What about starting to put 3 per cent. on top of nil instead of on top of our 32 per cent.? This is Lancashire's argument. It is no good the hon. Member for Scar-borough and Whitby asking us how it is that Lancashire is less efficient than European countries and how we cannot compete with them. My answer is that he must ask the question, "Which comes first, security or efficiency?" Not one of the countries which are so efficient in the hon. Member's estimation dares expose its industry to the challenge which industry in Lancashire is having to face.

We are, therefore, tired of being lectured about the need for Lancashire to accept the facts of world development, and we are getting a little tired of the unctuous references of the President of the Board of Trade to our obligations to the Commonwealth. Never let us forget that it is the present Government who have given away the principle of the free entry of Commonwealth goods. They have done it in the voluntary limitation arrangements and, above all, in the negotiations to enter the Common Market. They are selling that principle down the river. My complaint is that the Government have done the maximum psychological damage to the Commonwealth by these negotiations with the minimum practical consequences for Lancashire.

As a manufacturer has pointed out to me, there is a very nasty snag in the Common Market negotiations as they affect Lancashire. This assumption that, by going into Europe and applying the common external tariff to cotton textiles from India, Pakistan and Ceylon, we shall somehow be getting security for Lancashire will not work. The proposals at present being made by the British negotiators are that we should accept the imposition of one-third of the common external tariff on those goods immediately, that is 6 per cent., which means that we in Britain would have a 6 per cent. tariff protection against Asian and Commonwealth cotton textiles, but when these were re-exported to Europe they would met the internal tariff of 10 per cent. between us and the rest of the Six. Therefore, the countries of the Six would still be enjoying a tariff protection of 16 per cent. against Commonwealth Asian textile imports, compared with Britain's 6 per cent. They would be having that advantage over us at the moment when Lancashire was going into Europe to face a reduction of tariff against imports from Europe.

It is, therefore, a snare and a delusion to imagine that going into the Common Market will save the situation. We say that this problem can be solved only by the planned integration of these imports into our own home economy in a way that will not put Lancashire in a totally ruinous position relative to everybody else. That is all we are asking. Lancashire is willing to accept a generous level of these imports. She always has been. Even when she asks for the 1959 figure she is still prepared to accept a level of imports of 30 per cent. Therefore, we cannot be lectured about disregarding the needs of these other countries. We say that the time has come when, if there is to be any industry in Lancashire at all, the integration of these imports must be carried out in the context of an overall import control.

Here, I want to draw attention to a very alarming footnote to the proposed new ceilings which the President of the Board of Trade mentioned in the table at the end of his statement on 6th June. The footnote is this: Provision is made in the present arrangements for the issue of supplementary quotas, on certain conditions, if this is necessary to ensure that the voluntary restraint exercised by these countries does not prejudice their share of the United Kingdom market in relation to other exporting countries. In other words, unless the control over imports from other sources than the Commonwealth proves to be effective, if once again the restraint of Commonwealth countries through their voluntary agreements is by-passed by increasing imports from elsewhere, the President of the Board of Trade has held himself free to increase the ceilings by supplementary quotas. That means that the door is still open for the whole of the effect of the voluntary limitation to be destroyed by an increase in imports from elsewhere, leading in return to an increase in demand by the Commonwealth countries for higher ceilings.

There is only one way out of this dilemma, and it is this. The effective protection of the European countries does not lie merely in quotas and tariffs on these imports. It lies in the fact that the merchanting sector is integrated into the rest of the industry and acts as a voluntary censor in the interests of the home industry. That is why, although there is no quota in Holland for Asian textiles, her industry has not been ruined by this invasion because of the different structure of her industry.

It is crying for the moon for us to say to Lancashire, "Reorganise your structure by verticalisation." Emergency action is needed, and the emergency action that I call for is for the Government without delay to set up a Government-sponsored import commission with the duty of supervising all the import trading in cotton textiles. It will then release those controlled imports, including generous levels of imports from the Asian countries, on to the home market at prices which take account of the needs and the costs of production both at home and of our imported textiles, and at prices which do not have a disruptive effect on the industry.

Finally—and I hope that the right hon. Gentleman will have the courage to do this because cotton manufacturers have suggested this as a way out of this fundamental problem—I suggest that any profit thus made by the import commission should be ploughed back to the under-developed countries who are exporting these textiles, in the form of contributions to their development programmes, and thus give them the foreign exchange they so badly need. A planned purchasing arrangement of that kind would manage to reconcile our duty to the rest of the world with our fundamental and undying duty to Lancashire.

9.1 p.m.

Mr. Ernest Thornton (Farnworth)

This has been an extremely interesting and informative debate, and what emerges is that all hon. Members who have spoken, with the exception of possibly two, have been extremely critical of the Government's policy on this important issue.

I want to deal, first, with the charges about the inefficiency of the cotton textile industry. Those of us who have been long associated with it get rather tired of these often unsubstantiated charges. Our best mills are as good as any in the world, and in comparatively recent years I have been privileged to have the opportunity of seeing cotton textile mills in most of the European countries and in many of the Asian countries about which we have been talking so much today.

The President of the Board of Trade in his statement this afternoon repeated without qualification the statement that he has made several times, that in 1961 the Common Market countries exported to the United Kingdom about 70 million yards of cloth, whereas United Kingdom exported to the Common Market Six only about 6 million yards. By this bald statement, which, as I say, he has made several times, he attempts to highlight the alleged inefficiency and uncompetitiveness of the Lancashire industry compared with Western Europe which has living standards comparable to ours.

I think that the right hon. Gentleman has been less than fair in the way in which he has presented this picture on several occasions. Was not his Government substantially responsible for this exceptional condition in 1960 and 1961? Did not the Cotton Industry Act result in mill closures and the scrapping of machinery to twice the extent anticipated or tentatively forecast by the Government? Did not the Government at that time reject all the Amendments tabled by the Opposition in an attempt to have some selectivity about the closures which should take place? Did not their obstinate attitude in rejecting selectivity result in a temporary shortage of machinery for some categories of cloth?

To make matters worse, the closures coincided with the cyclical upturn of trade in textiles throughout the world. In the classical tradition of the private enterprise system, anticipated shortages produced a sellers' market and prices soared. The Common Market countries with excess capacity were better able to meet the exceptionally temporary demand.

About 7½ million yards of the 70 million yards referred to was grey cloth sent here for processing and re-exported to designated non European markets while a further 9 million yards was Asiatic grey cloth which was sent into Holland, processed, and exported to the United Kingdom as Dutch cloth. Therefore, about a quarter of the amount sent was in this exceptional and rather doubtful category. The industry is not afraid of straight and fair competition with the E.E.C. countries so long as it does not have to fight a war on two fronts and our own market does not continue to be eroded by duty-free imports with which no European country can compete.

It is true that there are no quantitative restrictions on Hong Kong imports into Germany and Holland. That is another statement which the right hon. Gentleman has repeated, I think without qualification, on previous occasions. But as my hon. Friend the Member for Blackburn (Mrs. Castle) pointed out, there are other factors and methods apart from the protective duties preventing the entry of these goods. However, into the United Kingdom they come, quota and duty free.

I agree that there are grave weaknesses in our merchanting system and it is right and proper that we have paid regard to this. Although we have dealt primarily with the problem of imports, it is right that we should consider the weaknesses that exist in some sections of the industry, and the merchanting section is undoubtedly one of them.

We must also consider the maximum use that can be made of the new machinery that is installed. This is essential, as the Estimates Committee pointed out and as has been emphasised on many previous occasions. The House should be reminded that in recent years great progress has been made. In almost every case where new machinery has been installed, two-shift and, in some cases, three-shift working has been operated. But the great tragedy of the situation now is that these highly efficient mills that have been operating two and three shifts have had to revert from three to two or from two to one shift because there is not the market for their highly efficient production.

This is the great problem confronting the industry and the one that tremendously worries me. It is not so much the fact that mills that have not re-equipped and which are working single-shift systems on comparatively old but good machinery are in difficulties. I am greatly concerned that our highly efficient shift operating mills are now in great difficulties and do not know which way to turn. Their greatest possible difficulty is the maintenance of their labour forces.

It is on this issue of shift working which has been referred to by many hon. Members today that there is a danger of becoming obsessed with the three-shift system. In some cases two shifts are sufficient, with one or two sections operating a third shift through the night. It is a mistake to argue that the best results can only be obtained by operating the three-shift system.

Many references have been made to Japan. I have had the privilege of visiting mills in Japan on three occasions and have seen something of their postwar progress in building up from 4 million spindles in 1950 to the present total of about 10 million spindles. Let us make no mistake. Japan produces cotton textile fabrics more efficiently than any country in the world, and its big mills operate a two-shift system of two shifts of 7¾ hours. Yet these are highly efficient productive units, with machinery which is magnificently maintained.

Before I pass to my next point, may I add my appreciation to that which has already been expressed to the Estimates Committee, and particularly to my hon. Friend the Member for Gateshead, West (Mr. Randall), the Chairman of the Sub-Committee, and the members of that Committee, who did a first-class job? I would also add my thanks to the officials of the Board of Trade and to the many expert witnesses who appeared and gave evidence before that Committee.

Inevitably, this debate has turned mainly upon the level of imports. If I may be permitted to put a different slant on this matter in order to bring it home in its stark reality, I should like to reduce it to the terms of another of our great industries—the coal industry. On the basis of an annual consumption of coal in this country of roughly 200 million tons, our industry is importing 60 million to 70 million tons per year. I put it to the House seriously: what would be the situation in that industry if anything like that level of imports were coming in and pits were being closed in consequence of it? I often wonder what the policy of the Government would have been if the products and exports of Hong Kong, India and Pakistan had been coal instead of cotton.

Much reference has been made to this increase in the level of the ceiling, and again the President of the Board of Trade pointed out that it represented only 3 per cent. of the level of domestic consumption, which is, of course, a very small percentage figure. But, again to reduce it to the terms of our coal industry, it represents additional imports of 6 million tons per year, and we can remember the outcry when an attempt was made to import 1 million tons into South Wales, and how the President of the Board of Trade promptly clamped down on it.

Mr. Erroll

Fuel oil imports come in freely from all the countries of the free world.

Mr. Thornton

I do not think that at all destroys the strength of my argument. I am coming to the point that the attitude of this Government to our industry down the years has been one of being strong with it because it was weak economically and politically, and being weak with the strong coal industry because it is powerful, economically and politically. I take second place to none in my concern for the developing countries of the world, particularly the developing Commonwealth countries. This House has a great responsibility towards them and for them.

But we must not forget that we also have responsibilities to our own people—to Lancashire, which is also part of the Commonwealth. Sacrifices are easy if the other fellow is called upon to make them. For the present, and for the next few years, Lancashire has had a bellyfull of sacrifices. If she is to survive she must be given adequate time to digest them. This burden must be carried by the United Kingdom as a whole and not primarily by one geographical area or one industry.

The Government seemed to show some appreciation of this fact by their £30 million Cotton Industry Act of 1959, but their subsequent actions have led responsible employers to allege that it now appears to have been an election stunt. No responsible person in the industry claims that its size should be frozen or permanently maintained at its present level. We live in a changing world. But at least let us make an effort to give the industry an opportunity to obtain a foothold on the steep, slippery slope that Her Majesty's Government have done so much to create for it. For the next few years an opportunity for stability ought to be offered.

The Government's proposals and assurances referred to in the Amendment do not provide such a basis. The problem of importing manufactured goods from the developing countries cannot be solved even if Lancashire is completely sacrificed. It is a problem which Britain as a whole cannot solve; it is one for the whole developed Western world. I welcome the G.A.T.T. arrangements—both short-term and long-term—as being a move in the right direction, but I warn the House that for many European and American countries the base from which expansion is to take place is very low. If progress is to be made on a percentage basis it will take a long time to achieve any worthwhile objectives.

I believe that in the long run, if not in the short-term, the advanced Western countries will respond to the needs of the developing nations. If they do not, the political consequences will be profound. In effect, they will be the unconscious allies of Mr. Khrushchev. Britain—which, in this context, means Lancashire—cannot continue to carry a totally disproportionate burden. This means that there is a too rapid social and industrial change, involving the loss of capital assets and of skilled labour resources at a rate which we cannot afford.

I have never taken a narrow and parochial view of this issue. We live in a changing world, and change is inevitable. What is important, as I have stated on several occasions, is the rate of change. It has been too rapid in the Lancashire textile industry. Over the last eleven years, in terms of employed personnel in the spinning, doubling and weaving sections, the industry has contracted by more than one-half—from about 350,000 employed persons to less than 170,000. This is too rapid a rate. Chaos, uncertainty, apprehension and despair have resulted. The opinion of all the witnesses who appeared before the Estimates Committee is that there has been a "crisis of confidence". This is apparent from paragraph 20 of its Report.

If this rapid contraction of an industry such as cotton is good for our national economy, as sometimes has been argued, why is it that other countries have not copied this procedure? If the President of the Board of Trade went to Geneva or elsewhere and advised them to contract their cotton textile industries because it would be such an advantage to their national economies, I imagine that he would certainly get a horse laugh, because countries which have closely protected their cotton textile industries have had, by and large, a better economic performance and better rate of growth in the last ten or eleven years than the United Kingdom.

I come back to the Geneva agreement I think it a pity that Britain left the initiative on this issue to the United States. May I tell the House the origin of this agreement, because I do not think that it is well known? It had its origin at the conference in Copenhagen, about three years ago, at which I was privileged to be present, of the International Federation of Textile and Garment Workers' Unions, and the Textile Workers' Union of America impressed the need for it on President Kennedy. That is how the Geneva agreement originated. It is another example of the imaginative efforts of the trade union movement in the international field.

I wish to refer to the open individual licence. Is the intention of the Government to act on the information which they have gathered? We in Lancashire are very suspicious that the exercise will be one of gathering additional information and then doing "nowt" about it. We hope that we can have some assurance on this issue. I welcome the Government's decision to ratify the long term agreement on international trade in cotton goods finalised by G.A.T.T. earlier this year. But there are serious doubts in the industry about the Government's intention to apply the restrictions which they will be able to apply. Can we be assured on this point? Are the Government prepared to take advantage of the Geneva agreement in the way, for example, that America has taken advantage of it if our industry is threatened with further disruption?

Reference has been made several times to Hong Kong and India. These countries, in their different ways, are very important parts of our Commonwealth, and, having been to Hong Kong on several occasions, I am conscious of the peculiar difficulties with which they are faced. But Her Majesty's Government and the Hong Kong Government have pursued a. very dangerous line in making this Colony so utterly dependent on one industry—the cotton textile industry. Hong Kong must export 90 per cent. of the products of her cotton textile industry since only 10 per cent. of her products are needed for colonial requirements.

We know from bitter experience that the cotton textile industry is one of the most difficult export industries in the world. The Japanese have found that. They have had to seal 2 million spindles. While the consumption of cotton textiles in the world continues to expand roughly in proportion with population growth, the long-term trend is definitely towards a diminution of world trade in cotton textiles. Hong Kong is now utterly dependent on this very fragile industry.

The economic position of India is very difficult. But let me remind the House that cotton textile exports to the United Kingdom represent only 2 per cent. of India's total export of commodities to all the world. The reduction of the increased ceiling for which the industry is asking would represent only a small part of the 2 per cent., probably not more than a quarter of 1 per cent. of India's exports. I say that merely to put the matter in perspective.

Sir A. V. Harvey

Will the hon. Gentleman say how about 3½ million people, living on a small island, could sustain themselves without their textile industry, coupled with other industries—rubber, boots, gloves, and so on?

Mr. Thornton

I recognise that the point raised by the hon. Member is a formidable one. I am suggesting that a greater effort should have been made centrally by the Government to diversify the industry, to try to prevent the island from becoming over-dependent on this single industry. I know that the problem is an extremely difficult one, but the situation in Hong Kong could become explosive if there were a serious collapse in world trade in textiles. I give that warning to the House.

I have been intimately associated with this great industry all my working life. I started work in a weaving shed on the day I became 13 years of age. I worked 10 hours a day, 55½ hours a week. I experienced the great depressions of the 1920s and the 1930s, when the once massive trade, to which reference has been made, inevitably withered away. My grandparents and forebears worked in the industry as weavers during the great cotton famine resulting from the American Civil War and they knew the hunger and privations of that period. I have read the personal diaries of a Lancashire weaver who worked during that cotton famine period.

I am sure that the House will forgive this personal note. I record it only for the purpose of saying that never have I known my people in this industry so angry, so apprehensive and so frustrated as at present. Organised by the Textile Action Group, vast numbers of people have visited London in the last few days. This organisation is largely a spontaneous manifestation of those feelings which are incapable of being roused synthetically among our fine and stoic Lancashire people. This Group is not an officially organised body. It has no connection with the official leadership either of the employers' organisations or the trade unions. But, significantly, the younger members of management are playing a prominent part.

I say this in no derogatory way. I should not like to be responsible or to accept responsibility for all their actions or utterances. But I emphasise that these activities prove conclusively to me that our fine Lancashire people feel a deep and burning sense of injustice.

They bore the burdens and the sufferings of the past. They bore them patiently and stoically. Deep down they felt that they were the victims of extraordinary happenings over which we in this country have no control. To use a Lancashire expression, they could "do nowt about it." But now they feel deep down that this is a problem which is largely within our control—that "summat could be done" and "summat ought to be done." So often in our country's history the deep human feelings of our people have been right; and the judgment and decisions of highly educated and sophisticated Governments have been wrong. I suggest to the House, feelingly and simply, that this is such a case.

9.30 p.m.

The Minister of State, Board of Trade (Sir Keith Joseph)

The last words of the hon. Member for Farnworth (Mr. Thornton) will have, I think, held and moved the whole House. To me they represent something of a challenge because, as the House will realise, I cannot possibly emulate the experience and knowledge that the hon. Gentleman brings from his whole life and background to this industry. All that I can say is that I have studied the documents in the case and I shall not presume to tell the industry or the House anything from my own knowledge, but I guarantee that everything that I shall say about the industry comes from reliable witnesses who have been before the Select Committee or from reliable publications, such as those of the Cotton Board conferences.

We have had a series of remarkable speeches. I should like to congratulate hon. Members on the benches opposite on getting so many speeches into the debate. That has been most valuable to the House. The speeches have been notable for their feeling and knowledge. This great industry certainly arouses passion among those who talk about it, and, undoubtedly, among those who have worked, or want to work, or are working for it. I do not think that I shall be able to answer all the points raised, but on those to which I fail to reply I shall certainly write to the hon. Members concerned.

I regret that I missed the speeches of my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) and my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman), but I am aware, of course, of what they said. I should like particularly to say how impressed I was by the notable speech of the Chairman of the Select Committee, who is the hon. Member for Gateshead, West (Mr. Randall), and his hon. Friends the Member for Ashton-under-Lyne (Mr. Rhodes) and the hon. Member for Oldham, East (Mr. Mapp). If I may say so, a mixed bag of speeches from my own hon. Friends were also most memorable, including those of a rather critical nature from the hon. Member for Heywood and Royton (Mr. Leavey) and the hon. Member for Bury and Radcliffe (Mr. Bidgood), but I was quite comforted by some of the remarks, so vigorously put, by my hon. Friend the Member for Ormskirk (Sir D. Glover).

We have had behind the detailed speeches two great themes underlying the debate, one explicit and one silent. The explicit one is the implication for the cotton industry of this country of the growing world population and the trend of so many countries to industrialise themselves. We cannot either deplore or resist this trend. We started it. Nor can the cotton industry of England be surprised if, having pioneered the industrialisation of this country, it finds that countries abroad have learned that one of the ways to industrial takeoff is via cotton.

Lancashire when it was a cotton county, as it is no longer—only 10 per cent. of the wage-earners in Lancashire work in cotton—was of great service to this country, and I agree with my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) in admiring the phenomenal contribution to world industry and exports which it made at the beginning of this century. But, of course, the implications, which are familiar to all hon. Members, of this industrialisation and population explosion in the world, face us in this country with a double duty, first, to our own citizens and, next, particularly, to the under-developed countries of the Commonwealth. I believe that we can reconcile those duties. We have in this country still the greatest single concentration of industrial skill and experience in the world, and the way to reconcile this conflict is that we should make familiar things better and new things first. This is the path of enlightened self-interest which enables us to sell abroad the goods where we lead and to buy from abroad the goods that can be made cheaper than they can be made here.

And let us not forget that so many countries far away, like India and Pakistan and the Colony of Hong Kong, are markets for our own workpeople. Last year, Hong Kong, India and Pakistan sold to this country £215 million worth of goods and bought from this country £215 million worth of goods, and from that coincidence I am excluding £25 million worth of extra exports from this country to India and Pakistan which in fact we paid for, as it were, by grants and loans.

There is that great theme, to which most hon. Members have referred, and then there is the silent theme which has not emerged so much but which is, none the less, strongly there. This is the theme expressed by a fashionable word today, an important and key word for the Government, the word "growth". We grow as a community in our resources by putting our resources to the fullest possible use. It is no good hankering after the past. As the hon. Member for Farnworth himself said, we live in a changing world. As my hon. Friend the Member for Middleton and Prestwich said, the cotton industry led the world, but now, because of all the factors with which we are all familiar, some parts of it need to catch up.

It is no good hankering for the old days when we had 90 per cent. of the export of cotton to the entire world. Now our old markets make cotton cloth themselves. If we want to buy tea from India, and of course we do, we have to sell to her in exchange goods other than cotton. Of course there has been a shift in resources and a switch in our export and production effort, and the House would agree that, though there are obviously occasional pockets where for a time this is not true, as this process of trading up has gone on, as we have grown, so employment has became more secure, earnings have gone up and the standard of living has improved. Of course change and growth are not always painless, but they are the only way in this world to do what we want—to improve the standard of living of the citizens of this country. In a fully employed economy, as my hon. Friend the Member for Ormskirk put it so crisply, the inevitable hardships which must occasionally result are, blessedly, generally temporary and for a short time.

Mr. Thornton

Why is it that other countries have not copied this pattern if it is so good for our growth and our economy?

Sir K. Joseph

I am coming to that. I shall try not to avoid awkward questions, and I will come to the first now.

Of course it is true that the cotton industry of this country has borne the brunt of our obligations to the Commonwealth and in doing so it has served the wider interests of the nation as well as the citizens of the Commonwealth. I have been asked, "Why not other industries, too; why have they not been exposed in this way?". As I have said, the answer is history. It was the cotton industry which showed the way. For one hundred years the cotton industry dominated the trade and exports of this country, and it has exported its own success.

Then, I am asked, "Why not switch the burden from its shoulders to the nation's, to the taxpayer in general?". But we ourselves were the first to claim from America that we wanted trade, not aid. We have to see that these people also have jobs, if possible. They are human beings and they are our obligation. Her Majesty's Government are the Government of Hong Kong as well as the Government of this country.

Then I am asked, "Why do the Government allow it?". The answer, as I was trying to explain—and I am not trying to say that everything is perfect, of course not—is that the country and the County of Lancashire are better off, more secure and earning a better living as a result. Against this background of efficiency and re-organisation, the cotton industry has a major part to play.

The explicit theme of the debate has been confidence. In 1959, the year of the Cotton Industry Act, the taxpayer came to help the cotton industry to re-equip and concentrate. In 1959, the year of the voluntary agreements, I am told that there was in general a critical attitude but one of confidence. People said, "We wish the voluntary agreement ceilings had been lower", but on the whole they accepted 1959 as a turning point.

I regard this debate as calling upon the Government to explain why the industry still should have the confidence that it had in 1959, because the cry of hon. Member after hon. Member on both sides of the House has been, "Back to the ceilings of 1959. At worst, back to those ceilings". The difference between the ceilings today and the ceilings of 1959 is 45 million yards. That is the most important figure in the debate. I shall come back to the figure at the end of my speech, because it is a very important one.

The industry has been described by hon. Members on both sides in much the same terms. Hon. Members have said—I entirely agree with them; the evidence is in all these publications—that the best of this industry is as good as the best anywhere in the world. However, even the most passionate advocates of the cotton industry have gone on to say that the average performance of the industry is perhaps not as good as it needs to be if it is to be competitive.

The individual management and men in the firms concerned are skilled, experienced, hard working and conscientious. However, I suggest, on the evidence of the experts, that the people in these firms are to some extent hamstrung by the inheritance of the past. Marketing is one of the three points emphasised by the Estimates Committee. The House will remember that imports, marketing and the fuller use of plant and machinery are the triple emphasis at the end of the Report. The hon. Member for Farnworth referred to marketing when he mentioned the great weakness of the merchanting function.

I wonder whether the House and the members of the industry themselves fully realise what a grave influence the horizontal structure, which served the industry so well in the past, has today on the sales and the security of employment of the industry. The hon. Member for Oldham, East called it stratification. That is a very good description to explain it to a layman. The expert says that there are far too few links between the different processes, the different stages.

This has several evil consequences. First, when demand is rising, each stage, not being responsible for the previous stage, over-orders grotesquely, to use the word employed by my hon. Friend the Member for Heywood and Royton. That is partly the result of the stratification, the horizontal nature of the structure of the industry. What is even more important is that a horizontally organised industry can neither market nor promote. We all know that in a buyer's market such as exists today promotion and marketing are essential. Production is no longer the key. It has to be production of what the public wants and will buy.

I do not maintain for a moment that verticalisation is a panacea. Of course I do not maintain that the whole industry should become vertical. That would be absurd. It is just impractical. The hon. Member for Blackburn (Mrs. Castle) said so cogently, vigorously and correctly that often the paradox is that Lancashire is being beaten by goods which are not even competitive with her own products, but she does not take the point that this is a reflection on the marketing. This is something which can be put right.

Why are so many people on short time today? Seven thousand people in the cotton belt are working short time. An unknown number of married women in the cotton belt have left work because there is no work for them. I hope that very few of them suffer hardship. I hope that earnings are coming into their homes. Why are some people unemployed in the cotton belt? It is not because of imports. Imports have fallen. It is because of boom and slump and because of the stocks overhanging the market as a result of the 1960–61 boom and the consequent slump. I say nothing that is new to any hon. Member. The point is that more integration, more links between producer and distributor, will iron out the worst fluctuations in these slumps.

What we need today is a new strategy for the industry which will enable it, because of a reformed structure, either to discover what the consumer wants and then set about engineering its production in the most efficient way possible or to make the goods it can make most efficiently and then set about promoting their sale to the public. Those two methods are largely impossible for a horizontally organised industry.

The slump will, of course, end. If I may refer for a moment to the employment situation, there are meanwhile other jobs, though not so near, not so familiar, not so congenial. In the Northwestern Region there are 63,000 wholly unemployed people, 1.5 per cent. of the wage earners, and roughly 27,000 unfilled vacancies, which is very nearly half the number unemployed. The national average of wholly unemployed is 1.8 per cent., which is higher than in the cotton belt.

I do not for a moment minimise the hardship, but I suggest that this is a situation which the end of the slump will largely put right. As to the older people who are in difficulties—there are some— I would point out that sitting on the Government Front Bench are my right hon. Friend the Minister of Labour and also the Parliamentary Secretary, who has been here to listen to some of the speeches, and I know that they have schemes for retraining and will take the utmost trouble with each individual case.

So the slump will, everybody agrees, come to an end, the stocks overhanging the market will dwindle and jobs will be there again. But the point is that a more vertical structure will stop this sort of boom and slump occurring so drastically again.

I now take the third recommendation of the Select Committee—fuller use of plant and machinery. Why does Western Europe sell cotton textiles in this country at a rapidly increasing rate during a recession when Asian imports are dropping and over a 17½ per cent. tariff? The answer is clear, again from the Select Committee. It is because Western Europe has more post-war machinery, uses it more intensively and, incidentally, pays higher wages to its workers.

But this is no reason for despair on our part. There have been grants from the taxpayers, something to which I will come in a moment. There is, again according to the Select Committee, a great revolution in the technical capacity of the plant and machinery available to our industry to buy. We are told that in the last three years since Europe did its industrialisation, much more effective, efficient and speedy plant has been produced in this country and is waiting to be installed by our industry.

The applications under the scheme are coming in very fast. They may reach £80 million. I see the hon. Member for Gateshead, West smiling. He puts "applications" in quotation marks, saying that what really matters is the installation of the plant. The House will be glad to know that a large proportion of the £80 million has reached the claim stage. About a quarter has already been installed and about a quarter is being installed, and of the half for which applications are now being made, the major part of them represent well thought out and serious schemes, often by companies which have already had a first slice and are coming back for a second go at new plant.

Therefore, I think we can take it that by and large plant and machinery worth £80 million will be installed. The figure of applications is nearly £72 million to date. We hope that the applications will be maintained during the next few weeks. These installations will make a significant contribution to the efficiency of the industry.

I do not pretend that there are not difficulties about new plant. It is expensive and needs to be worked intensively. Shifts are difficult in a fully employed economy, particularly with a ban on women working night shift. But it can be done. As the hon. Member for Farnworth said, three shifts is not the only method of improving things. One can work two shifts or two and a half shifts. Two day shifts plus a housewife shift would make quite a difference to the cost.

In a race it is often not bad not to be in the lead if one has a reserve of power. I believe that the cotton industry is in that position today. The major part of the industry is not leading the world race at the moment, but it knows the reasons why. It has things to do with machinery and with the structure of the industry—things which can be done; and that is why I believe there should be confidence.

All this, I shall be told, is of no possible use because when demand rises the Asian Commonwealth will cream it off and the cotton industry of this country will be left only with the residue. Why should the Asian Commonwealth have it all their own way? Of course price is important. Of course it is unlikely that we shall be able to equal the price from Hong Kong, India or Pakistan. But let us not exaggerate it. Wages are an element in total costs but they are a quite small part, and the more efficient and more automatic the machines, the smaller is the part of the cost which wages represent. Even if there is a 50 per cent. difference in wages compared with those in Hong Kong, it represents far less than that when translated into final costs.

If the industry reorganises its structure and, as the hon. Member for Blackburn said, gets more of the distribution under its own power; if many more firms have marketing departments with the sole job of keeping their own plant busy; if the price differential is not too large; and if the design of our products is good, then I believe that we need not let the Asian Commonwealth even rise to their ceiling when demand rises again.

There are other things to which the industry can look forward in this country. When it is re-equipped and when it has reorganised its structure, why should it not claim back its own home market from Europe and America? The figure of the imports into this country from America and Western Europe, high-wage countries if ever there were any, was 50 million square yards more in 1961 than in 1959, and Europeans are still putting up their exports to us this year. That 50 million square yards is far more than the 45 million extra square yards which apparently represent the touchstone of this debate.

Not only, therefore, do I believe that a re-equipped and modernised industry can keep some of its home market from the Asian Commonwealth; not only can it reclaim a lot of its home market, running at a substantial share, about 10 per cent. of consumption, from the high-wage countries; but there is virtually a ring fence around the country now against other low-wage imports and my right hon. Friend has erected a sign to new suppliers saying, "Keep off the grass".

These are not conditions in which the industry needs to be discouraged. To add to this, let me give two more encouraging points. Consumption at home is rising—not every year and not every month, but the broad trend of the consumption of cotton goods is rising. The one field which I have restrained myself from mentioning, although it is my prime responsibility, is exports. I believe that the exports of the cotton industry ought to increase remarkably when it has modernised itself and put its marketing functions in order.

I can understand how large the figure of 45 million square yards seems, but in the light of all these factors I feel that it is not quite so crucial. We know why this figure was agreed. It was agreed because we could not get the approval of the Asian Commonwealth to hold back to their 1959 ceiling of 370 million square yards in the light of the spree by new suppliers selling their goods to this country during the boom of 1960–61 while they were voluntarily restraining their exports. I hope that the House does not under-estimate the difficulty of voluntarily cutting back imports from these Asian Commonwealth countries. It represents a considerable achievement by those who did the negotiating that they voluntarily agreed to this figure.

Let the House not under-estimate, either, the burden which it would be to many millions of people to impose a solution on Hong Kong, with all its difficulties, and on India and Pakistan. Some hon. Members on the back benches on both sides of the House have said that what we want is an imposed cut. But that was not said by the hon. Member for Farnworth, who wound up the debate, or the hon. Member for Sowerby (Mr. Houghton), who opened it. They did not even try evasion. They have never mentioned imposed cuts, and it is to their credit that they have not done so. I do not believe that the 45 million square yards is the crux of this situation. With all the ground which there is to recover in their own market and abroad, and with all the technical, mechanical and organisational weapons at the industry's command, I believe that the point is simply the will to survive of those firms which have not yet tried to modernise themselves. They have been shown the way. Many firms are doing splendidly in this country and will do better still as demand rises.

I believe that it is possible for our cotton industry to give good conditions to its workers, a better chance of earnings for them and good service to the country by way of repelling imports and increasing exports. I have explained some of the ways by which this can be done. We have, as I have said, the finest industrial manpower in the world. There is in the cotton industry some of the finest management in the world. The two can be brought together to restore the cotton industry to a place among the finest cotton industries in the world.

Let us, however, face the corollary. If some firms in the industry will not use their resources—including, at the moment, those of the taxpayer—to the full, either other firms in the cotton industry will take up those resources and use them, I hope, on more than one shift or other firms who are looking for more labour, particularly the skilled sort of labour which is available in the cotton industry, will certainly take up that labour.

To many of my hon. Friends, I come back again to the 45 million yards because it appears to be a touchstone. In the light of all the prospects for the industry, in the light of our Commonwealth obligations, in the light of what can be done by the industry, in the light of the three and a half years behind what is virtually a ringed fence with the sign "Keep off the grass", in the light of what some firms have already shown to be possible, imports or no imports, I hope that my hon. Friends will reconsider their views.

Of course we would like other countries to share the burden with us, but we must face the facts as they are today. A strong, modern cotton industry is in

birth and can, I believe, be made and do great good to the workers of the nation. The cotton industry has had its eyes fixed on imports from underdeveloped countries, and this is understandable. They account for about one-quarter of our own consumption, far more than in any comparable country, but no comparable country has a textile-producing Commonwealth and obligations to its members. The fact that the imports from this Commonwealth have grown to their present level is a fact that must be accepted. It has fallen heavily on the cotton industry because the cotton industry, for historical reasons, pioneered our development and showed the Commonwealth the way.

But let not the industry take its eyes off the main threat—the threat from the high-wage countries of the West. These countries, despite recession, despite lower imports from the East and despite a 17½ per cent. tariff, are increasing their share of our home market. Our cotton industry can now, to any extent that it wishes, get the machinery, the marketing and the organisation to do at least as well as they. The taxpayer is helping to re-equip. The Government have played their part in seeing that there is a limit on low-wage and duty-free imports.

I do not quite see what we shall be voting about this evening, because no responsible hon. Member opposite has suggested either that we should freeze the industry at its present size or impose cuts upon the Commonwealth. I ask the House to reject the Motion, which disregards what has been done to safeguard the cotton industry against further disruptive low-wage competition and to help it financially, and I ask the House to accept the Amendment in the name of my right hon. Friends and myself which looks forward to a stable, prosperous future for a reorganised cotton industry within a prosperous national economy.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 189, Noes 266.

Division No. 220.]	AYES	[10.0 p.m.
Abse, Leo	Allen, Scholefield (Crewe)	Barlow, Sir John
Ainsley, William	Bacon, Miss Alice	Bellenger, Rt. Hon. F. J.
Allaun, Frank, (Salford, E.)	Baird, John	Bence, Cyril
Benson, Sir George	Hewitson, Capt. M.	Paton, John
Bidgood, John C.	Hill, J. (Midlothian)	Pavitt, Laurence
Blackburn, F,	Hilton, A. V.	Peart, Frederick
Blyton, William	Holman, Percy	Plummer, Sir Leslle
Boardman, H.	Houghton, Douglas	Prentice, R. E.
Bottomley, Rt. Hon. A. G.	Hoy, James H.	Price, J. T. (Westhoughton)
Bowden, Rt. Hn. H. W.(Leics, S.W.)	Hughes, Emrys (S. Ayrshire)	Probert, Arthur
Bowles, Frank	Hunter, A. E.	Proctor, W. T.
Boyden, James	Hynd, H. (Accrington)	Pursey, Cmdr. Harry
Braddock, Mrs. E. M.	Hynd, John (Attercliffe)	Randall, Harry
Brockway, A. Fenner	Irvine, A. J. (Edge Hill)	Rankin, John
Brown, Thomas (Ince)	Janner, Sir Barnett	Redhead, E. C.
Butler, Herbert (Hackney, c.)	Jay, Rt. Hon. Douglas	Reid, William
Butler, Mrs. Joyce (Wood Green)	Jeger, George	Reynolds, G. W.
Castle, Mrs. Barbara	Jenkins, Roy (Stechford)	Rhodes, H.
Chapman, Donald	Johnson, Carol (Lewisham, S.)	Robertson, John (Paisley)
Cliffe, Michael	Jones, Dan (Burnley)	Robinson, Kenneth (St. Pancras, N.)
Collick, Percy	Jones, Elwyn (Kest Ham, S.)	Rodgers, W. T. (Stockton)
Corbet, Mrs. Freda	Jones, Jack (Rotherham)	Ross, William
Craddock, George (Bradford, S.)	Kelley, Richard	Shinwell, Rt. Hon. E.
Cronin, John	Kenyon, Clifford	Short, Edward
Crosland, Anthony	Key, Rt. Hon. C. W.	Silverman, Julius (Aston)
Crossman, R. H. S.	King, Dr. Horace	Silverman, Sydney (Nelson)
Dalyell, T.	Lawson, George	Skeffington, Arthur
Darling, George	Leavey, J. A.	Slater, Mrs. Harriet (Stoke, N.)
Davies, G. Elfed (Rhondda, E.)	Ledger, Ron	Small, William
Davies, Harold (Leek)	Lee, Frederick (Newton)	Smith, Ellis (Stoke, S.)
Delargy, Hugh	Lee, Miss Jennie (Cannock)	Snow, Julian
Diamond, John	Lever, L. M. (Ardwick)	Sorensen, R. W.
Dodds, Norman	Lewis, Arthur (West Ham, N.)	Spriggs, Leslie
Donnelly, Desmond	Lipton, Marcus	Steele, Thomas
Drayson, G. B.	Loughlin, Charles	Stewart, Michael (Fulham)
Driberg, Tom	Mabon, Dr. J. Dickson	Stonehouse, John
Dugdale, Rt. Hon. John	MacColl, James	Strachey, Rt. Hon. John
Ede, Rt. Hon. C.	MacDermot, Niall	Stross, Dr. Barnett(Stoke-on-Trent,C.)
Edelman, Maurice	Mclnnes, James	Swain, Thomas
Edwards, Robert (Bilston)	McKay, John (Wallsend)	Swingler, Stephen
Edwards, Walter (Stepney)	Mackie, John (Enfield, East)	Taverne, D.
Evans, Albert	McLeavy, Frank	Taylor, Bernard (Mansfield)
Fitch, Alan	MacMillan, Malcolm (Western Isles)	Taylor, Edwin (Bolton, E.)
Fletcher, Eric	MacPherson, Malcolm (Stirling)	Thomas, Iorwerth (Rhondda, W.)
	Mallalieu, E. L. (Brigg)	Thompson, Dr. Alan (Dunfermline)
Forman, J. C.	Mallalieu, J.P.W. (Huddersfield, E.)	Thomson, George (Dundee, E.)
Fraser, Thomas (Hamilton)	Mapp, Charles	Thornton, Ernest
Galpern, Sir Myer	Mayhew, Christopher	Warbey, William
Ginsburg, David	Mendelson, J. J.	Weitzman, David
Gordon Walker, Rt. Hon. P. C.	Milne, Edward	Wells, Percy (Faversham)
Gourlay, Harry	Monslow, Walter	White, Mrs. Eirene
Greenwood, Anthony	Moody, A. S.	Wigg, George
Grey, Charles	Morris, John	Wilkins, W. A.
Griffiths, Rt. Hon. James (Llanelly)	Moyle, Arthur	Willey, Frederick
Griffiths, W. (Exchange)	Mulley, Frederick	Williams, W. R. (Openshaw)
Gunter, Ray	Oliver, G. H.	Williams, W. T. (Warrington)
Hale, Leslie (Oldham, W.)	Oram, A. E.	Willis, E. G. (Edinburgh, E.)
Hall. Rt. Hn. Glenvil (Colne Valley)	Oswald, Thomas	Wilson, Rt. Hon. Harold (Huyton)
Hamilton, William (West Fife)	Owen, Will	Winterbottom, R. E.
Hannan, William	Paget, R. T.	Woof, Robert
Harper, Joseph	Pannell, Charles (Leeds, w.)	Wyatt, Woodrow
Hay man, F. H.	Pargiter, G. A.	Yates, Victor (Ladywood)
Healey, Denis	Parker, John
Henderson, Rt.Hn.Arthur(Rwly Regis)	Parkin, B. T.	TELLERS FOR THE AYES:
		Mr. Ifor Davies and Mr. McCann.
NOES
Agnew, Sir Peter	Bourne-Arton, A.	Clark, Henry (Antrim, N.)
Allan, Robert (Paddington, S.)	Bowen, Roderic (Cardigan)	Clark, William (Nottingham, S.)
Allason, James	Box, Donald	Cleaver, Leonard
Amery, Rt. Hon. Julian	Boyd-Carpenter, Rt. Hon. John	Cole, Norman
Arbuthnot, John	Boyle, Sir Edward	Cooper, A. E.
Ashton, Sir Hubert	Brewis, John	Costain, A. P.
Atkins, Humphrey	Brown, Alan (Tottenham)	Coulson, Michael
Balniel, Lord	Browne, Percy (Torrington)	Courtney, Cdr. Anthony
Barber, Anthony	Bryan, Paul	Craddock, Sir Beresford
Barter, John	Buck, Antony	Crawley, A. M.
Batsford, Brian	Bullard, Denys	Critchley, Julian
Beamish, Col. Sir Tufton	Bullus, Wing Commander Eric	Cunningham, Knox
Bevins, Rt. Hon. Reginald	Burden, F. A.	Currie, G. B. H.
Biffen, John	Butcher, Sir Herbert	Dance, James
Biggs-Davison, John	Butler, Rt.Hn.R.A.(Saffron Walden)	d'Avigdor-Goldsmid, Sir Henry
Bingham, R. M.	Campbell, Sir David (Belfast, S.)	Deedes, W. F.
Birch, Rt. Hon. Nigel	Campbell, Gordon (Moray & Nairn)	de Ferranti, Basil
Bishop, F. P.	Carr, Robert (Mitcham)	Digby, Simon Wingfield
Black, Sir Cyril	Channon, H. P. G.	Doughty, Charles
Bossom, Clive	Chataway, Christopher	du Cann, Edward

Eccles, Rt. Hon. Sir David	Kerans, Cdr. J. S.	Profumo, Rt. Hon. John
Eden, John	Kerby, Capt. Henry	Proudfoot, Wilfred
Elliot, Capt. Walter (Carshalton)	Kerr, Sir Hamilton	Pym, Francis
Elliott, R. W.(Nwcastle-upon-Tyne, N.)	Kershaw, Anthony	Quennell, Miss J. M.
Emery, Peter	Kimball, Marcus	Rawlinson, Peter
Emmet, Hon. Mrs. Evelyn	Kirk, Peter	Redmayne, Rt. Hon. Martin
Errolll, Rt. Hon. F. J.	Kitson, Timothy	Rees, Hugh
Farr, John	Lagden, Godfrey	Renton, David
Fell, Anthony	Lambton, Viscount	Ridley, Hon. Nicholas
Fisher, Nigel	Lancaster, Col. C. G.	Ridsdale, Julian
Foster, John	Langford-Holt, Sir John	Rippon, Geoffrey
Fraser, Hn. Hugh (Stafford & Stone)	Leather, Sir Edwin	Roberts, Sir Peter (Heeley)
Fraser, Ian (Plymouth, Sutton)	Leburn, Gilmour	Robinson, Rt. Hn. Sir R.(B'pool, S.)
Freeth, Denzil	Legge-Bourke, Sir Harry	Robson Brown, Sir William
Gammans, Lady	Lilley, F. J. P.	Roots, William
Gardner, Edward	Lindsay, Sir Martin	Ropner, Col. Sir Leonard
Gibson-Watt, David	Litchfield, Capt. John	Royle, Anthony (Richmond, Surrey)
Gilmour, Sir John	Lloyd, Rt.Hn.Geoffrey(Sut'nC'dfield)	Russell, Ronald
Glover, Sir Douglas	Lloyd, Rt. Hon. Selwyn (Wirral)	Sandys, Rt. Hon. Duncan
Glyn, Sir Richard (Dorset, N.)	Longbottom, Charles	Scott-Hopkins, James
Goodhart, Philip	Longden, Gilbert	Sharples, Richard
Gough, Frederick	Lubbock, Eric	Shaw, M.
Gower, Raymond	Lucas, Sir Jocelyn	Shepherd, William
Grant, Rt. Hon. William	Lucas-Tooth, Sir Hugh	Smith, Dudley (Br'ntf'd & Chlswick)
Green, Alan	McLaren, Martin	Smithers, Peter
Gresham Cooke, R.	McLaughlin, Mrs. Patricia	Smyth, Rt. Hon. Brig. Sir John
Grimond, Rt. Hon. J.	Maclean,SirFitzroy(Bute&N.Ayrs.)	Spearman, Sir Alexander
Grosvenor, Lt.-Col. R. G.	McLean, Neil (Inverness)	Stanley, Hon. Richard
Gurden, Harold	Macleod, Rt. Hn. Iain (Enfield, W.)	Stevens, Geoffrey
Hall, John (Wycombe)	McMaster, Stanley R.	Stodart, J. A.
Hamilton, Michael (Wellingborough)	Macmillan,Rt.Hn.Harold(Bromley)	Studholme, Sir Henry
Hare, Rt. Hon. John	Macmillan, Maurice (Halifax)	Summers, Sir Spencer
Harris, Frederic (Croydon, N.W.)	Macpherson, Niall (Dumfries)	Talbot, John E.
Harris, Reader (Heston)	Maddan, Martin	Tapsell, Peter
Harrison, Col. Sir Harwood (Eye)	Maitland, Sir John	Taylor, Sir Charles (Eastbourne)
Harvey, John (Walthamstow, E.)	Markham, Major Sir Frank	Taylor, Frank(M'ch'st'r, Moss Side)
Hastings,Stephen	Mariowe, Anthony	Teeling, Sir William
Heald, Rt. Hon, Sir Lionel	Marshall, Douglas	Temple, John M.
Hendry, Forbes	Marten, Neil	Thatcher, Mrs. Margaret
Hicks Beach, Maj. W,	Matthews, Gordon (Merldan)	Thomas, Leslie (Canterbury)
Hiley Joseph	Maudling, Rt. Hon. Reginald	Thomas, Peter (Conway)
Hill, Dr. Rt. Hon. Charles (Luton)	Mawby, Ray	Thompson, Kenneth (Walton)
Hill, Mrs. Eveline (Wythenshawe)	Maxwell-Hyslop, R. J.	Thompson, Richard (Croydon, S.)
Hill, Mrs. Eveline (Wythenshawe)	Maydon, Lt.-Cmdr. S. L. C.	Thorpe, Jeremy
Hill, J. E B. (S. Norfolk)	Miscampbell, Norman	Tilney, John (Wavertree)
Hirst, Geoffrey	Montgomery, Fergus	Touche, Rt. Hon. Sir Gordon
Hobson, Sir John	More, Jasper (Ludlow)	Turner, Colin
Hocking, Philip N.	Morgan, William	Turton, Rt. Hon. R. H.
Holland, Philip	Neave, Airey	Tweedsmuir, Lady
Hooson, H. E.	Nicholson, Sir Godfrey	Van Straubenzee, W. R.
Hope, Rt. Hon. Lord John	Nugent, Rt. Hon. Sir Richard	Vane, W. M. F.
Hopkins, Alan	Oakshott, Sir Hendrle	Vaughan-Morgan, Rt. Hon. Sir John
Hornby, R. P.	Orr, Capt. L. P. S.	Vickers, Miss Joan
Hornsby-Smith, Rt. Hon. Dame P.	Osborn, John (Hallam)	Wade, Donald
Hughes Hallet, Vice-Admiral John	Osborne, Sir Cyril (Louth)	Walder, David
Hughes-Young, Michael	Page, Graham (Crosby)	Walker, Peter
Hulbert, Sir Norman	Page, John (Harrow, West)	Wall, Patrick
Hurd, Sir Anthony	Pearson, Frank (Clitheroe)	Ward, Dame Irene
Hutchison, Michael Clark	Peel, John	Webster, David
Iremonger, T. L.	Pickthorn, Sir Kenneth	Wells, John (Maidstone)
Irvine, Bryant Godman (Rye)	Pike, Miss Mervyn	Whitelaw, William
Jackson, John	Pilkington, Sir Richard	Williams, Paul (Sunderland, S.)
James, David	Pitman, Sir James	Wilson, Geoffrey (Truro)
Jenkins, Robert (Dulwich)	Pitt, Miss Edith	Wise, A. R.
Jennings, J. C.	Pott, Percivall	Wolrige-Gordon, Patrick
Johnson, Dr. Donald (Carlisle)	Powell, Rt. Hon. J. Enoch	Woollam, John
Johnson, Eric (Blackley)	Price, David (Eastleigh)	Worsley, Marcus
Jones, Rt. Hn. Aubrey (Hall Green)	Price, H. A. (Lewisham, W.)
Joseph, Sir Keith	Prior, J. M. L.	TELLERS FOR THE NOES:
Kaberry, Sir Donald	Prior-Palmer, Brig. Sir Otho	Mr. Chichester-Clark and
		Mr. Finlay.

Question put, That those words be there added:—

The House divided: Ayes 258, Noes 185.

Division No. 221.]	AYES	[10.11 p.m.
Agnew, Sir Peter	Balniel, Lord	Biggs-Davison, John
Allan, Robert (Paddington, S.)	Barber, Anthony	Bingham, R. M.
Allason, James	Barter, John	Birch, Rt. Hon. Nigel
Amery, Rt. Hon. Julian	Batsford, Brian	Bishop, F. P.
Arbuthnot, John	Beamish, Col. Sir Tufton	Black, Sir Cyril
Ashton, Sir Hubert	Bevins, Rt. Hon. Reginald	Bossom, Clive
Atkins, Humphrey	Biffen, John	Bourne-Arton, A.
Box, Donald	Hirst, Geoffrey	Pearson, Frank (Clitheroe)
Boyd-Carpenter, Rt. Hon. John	Hobson, Sir John	Peel, John
Boyle, Sir Edward	Hocking, Philip N.	Pickthorn, Sir Kenneth
Brewis, John	Holland, Philip	Pike, Miss Mervyn
Brown, Alan (Tottenham)	Hope, Rt. Hon. Lord John	Pilkington, Sir Richard
Browne, Percy (Torrington)	Hopkins, Alan	Pitman, Sir James
Bryan, Paul	Hornby, R. P.	Pitt, Miss Edith
Buck, Antony	Hughes Hallett, Vice-Admiral John	Pott, Percivall
Bullard, Denys	Hughes-Young, Michael	Powell, Rt. Hon. J. Enoch
Bullus, Wing Commander Eric	Hulbert, Sir Norman	Price, David (Eastleigh)
Burden, F. A.	Hurd, Sir Anthony	Price, H. A. (Lewisham, W.)
Butcher, Sir Herbert	Hutchison, Michael Clark	Prior, J. M. L.
Butler, Rt.Hn.R.A. (Saffron Walden)	Iremonger, T. L.	Prior-Palmer, Brig. Sir Otho
Campbell, Sir David (Belfast, S.)	Irvine, Bryant Godman (Rye)	Profumo, Rt. Hon. John
Campbell, Gordon (Moray & Nairn)	Jackson, John	Proudfoot, Wilfred
Carr, Robert (Mitcham)	James, David	Pym, Francis
Channon, H. P. G.	Jenkins, Robert (Dulwich)	Quennell, Miss J. M.
Chataway, Christopher	Jennings, J. C.	Rawllnson, Peter
Chichester-Clark, R.	Johnson, Dr. Donald (Carlisle)	Redmayna, Rt. Hon. Martin
Clark, Henry (Antrim, N.)	Johnson, Eric (Blackley)	Rees, Hugh
Clark, William (Nottingham, 8.)	Jones, Rt. Hn. Aubrey (Hall Green)	Renton, David
Cleaver, Leonard	Joseph, Sir Keith	Ridley, Hon. Nicholas
Cole, Norman	Kaberry, Sir Donald	Ridsdale, Julian
Cooper, A. E.	Kerans, Cdr. J. S.	Rippon, Geoffrey
Costain, A. P	Kerby, Capt. Henry	Roberts, Sir Peter (Heeley)
Coulson, Michael	Kerr, Sir Hamilton	Robinson, Rt. Hn. Sir R. (B' pool, S.)
Courtney, Cdr. Anthony	Kershaw, Anthony	Robson Brown, Sir William
Craddock, Sir Beresford	Kimball, Marcus	Roots, William
Crawley, A.M.	Kirk, Peter	Ropner, Col. Sir Leonard
Critchley, Julian	Kitson, Timothy	Royle, Anthony (Richmond, Surrey)
Cunningham, Knox	Lagden, Godfrey	Russell, Ronald
Currie, G. B. H.	Lambton, Viscount	Sandys, Rt. Hon. Duncan
Dance, James	Lancaster, Col. C. G.	Scott-Hopkins, James
d'Avigdor-Goldsmid, Sir Henry	Langford-Holt, Sir John	Sharples, Richard
Deedes, W. F.	Leather, Sir Edwin	Shaw, M.
de Ferranti, Basil	Leburn, Gilmour	Shepherd, William
Digby, Simon Wingfield	Legge-Bourke, Sir Harry	Smith, Dudley (Br'ntf'd & Chiswick)
Doughty, Charles	Lilly, F. J. P.	Smithers, Peter
du Cann, Edward	Lindsay, Sir Martin	Smith, Rt. Hon. Brig. Sir John
Eccles, Rt. Hon. Sir David	Litchfield, Capt. John	Spearman, Sir Alexander
Eden, John
Elliot, Capt. Walter (Carshalton)	Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)	Stanley, Hon. Richard
Elliott,R.W.(Nwcstle-upon-Tyne,N.)	Lloyd, Rt. Hon. Selwyn (wirral)	Stevens, Geoffrey
Emery, Peter	Longbottom, Charles	Stodart, J. A.
Emmet, Hon. Mrs. Evelyn	Longden, Gilbert	Studholme, Sir Henry
Erroll, Rt. Hon. F. J.	Lucas, Sir Jocelyn	Summers, Sir Spencer
Farr, John	Lucas-Tooth, Sir Hugh	Talbot, John E.
Fell, Anthony	McLaren, Martin	Tapsell, Peter
Finlay, Graeme	McLaughlin, Mrs. Patricia	Taylor, Sir Charles (Eastbourne)
Foster, John	Maclean,SirFitzroy(Bute&N.Ayrs.)	Taylor, Frank (M'ch'st'r, Moss Side)
Fraser, Hn. Hugh (Stafford & Stone)	McLean, Neil (Inverness)	Teeling, Sir William
Fraser, Ian (Plymouth, Sutton)	Macleod, Rt. Hn.Iain (Enfield, W.)	Temple, John M.
Freeth, Denzil	McMaster, Stanley R.	Thatcher, Mrs. Margaret
Gammans, Lady	Macmillan,Rt.Hn.Harold(Bromley)	Thomas, Leslie (Canterbury)
Gardner, Edward	Macmillan, Maurice (Halifax)	Thomas, Peter (Conway)
Gibson-Watt, David	Macpherson, Niall (Dumfrles)	Thompson, Kenneth (Walton)
Gilmour, Sir John	Maddan, Martin	Thompson, Richard (Croydon, S.)
Glover, Sir Douglas	Maitland, Sir John	Tilney, John (Wavertree)
Glyn, Sir Richard (Dorset, N.)	Markham, Major Sir Frank	Touche, Rt. Hon. Sir Gordon
Goodhart, Philip	Marlowe, Anthony	Turner, Colin
Gower, Raymond	Marshall, Douglas	Turton, Rt. Hon. R. H.
Grant, Rt. Hon. William	Marten, Neil	Tweedsmuir, Lady
Green, Alan	Matthews, Gordon (Meriden)	Van Straubenzee, W. R.
Gresham Cooke, R.	Maudling, Rt. Hon. Reginald	Vane, W. M. F.
Grosvenor, Lt.-Col. R. G.	Mawby, Ray	Vickers, Miss Joan
Gurden, Harold	Maxwell-Hyslop, R. J.	Walder, David
Hall, John (Wycombe)	Maydon, Lt.-Cmdr. S. L. C.	Walker, Peter
Hamilton, Michael (Wellingborough)	Miscampbell, Norman	Wall, Patrick
Hare, Rt. Hon. John	Montgomery, Fergus	Ward, Dame Irene
Harris, Frederic (Croydon, N.W.)	More, Jasper (Ludlow)	Webster, David
Harris, Reader (Heston)	Morgan, William	Wells, John (Maidstone)
Harrison, Col. Sir Harwood (Eye)	Neave, Airey	Williams, Paul (Sunderland, S.)
Harvey, John (Walthamstow, E.)	Nicholson, Sir Godfrey	Wilson, Geoffrey (Truro)
Hastings, Stephen	Nugent, Rt. Hon. Sir Richard	Wise, A. R.
Heald, Rt. Hon. Sir Lionel	Oakshott, Sir Hendrle	Wolrige-Gordon, Patrick
Hendry, Forbes	Orr, Capt. L. P. S.	Woollam, John
Hicks Beach, MaJ. W.	Osborn, John (Hallam)	Worsley, Marcus
Hiley, Joseph	Osborne, Sir Cyril (Louth)
Hill, Dr. Rt. Hon. Charles (Luton)	Page, Graham (Crosby)	TELLERS FOR THE AYES:
Hill, Mrs. Eveline (Wythenshawe)	Page, John (Harrow, West)	Mr. J. E. B. Hill and
		Mr. Whitelaw.

NOES
Abse, Leo	Hannan, William	Pargiter, G. A.
Alnsley, William	Harper, Joseph	Parker, John
Allaun, Frank (Salford, E.)	Hayman, F. H.	Parkin, B. T.
Allen, Scholefield (Crewe)	Healey, Denis	Pavitt, Laurence
Bacon, Miss Alice	Henderson,Rt.Hn.Arthur(Rwly Regis)	Peart, Frederick
Baird, John	Hewitson, Capt. M.	Plummer, Sir Leslie
Barlow, Sir John	Hill, J. (Midlothian)	Prentice, R. E.
Bellenger, Rt. Hon. F. J.	Hilton, A. v.	Price, J. T. (Westhoughton)
Bence, Cyril	Holman, Percy	Probert, Arthur
Benson, Sir George	Houghton, Douglas	Proctor, W. T.
Blackburn, F,	Hoy, James H.	Pursey, Cmdr. Harry
Blyton, William	Hughes, Emrys (S. Ayrshire)	Randall, Harry
Boardman, H.	Hunter, A. E.	Rankin, John
Bottomley, Rt. Hon. A. G.	Hynd, H. (Accrington)	Redhead, E. C.
Bowden, Rt. Hn. H. W.(Leics, S.W.)	Hynd, John (Attercliffe)	Reynolds, G. W.
Bowles, Frank	Irvine, A. J. (Edge Hill)	Rhodes, H.
Boyden, James	Janner, Sir Barnett	Robertson, John (Paisley)
Braddock, Mrs. E. M.	Jay, Rt. Hon. Douglas	Robinson, Kenneth (St. Pancras, N.)
Brockway, A. Fenner	Jeger, George	Rodgers, W. T. (Stockton)
Brown, Thomas (Ince)	Jenkins, Roy (Stechford)	Ross, William
Butler, Herbert (Hackney, C.)	Johnson, Carol (Lewisham, S.)	Short, Edward
Butler, Mrs. Joyce (Wood Green)	Jones, Dan (Burnley)	Silverman, Julius (Aston)
Castle, Mrs. Barbara	Jones, Elwyn (West Ham, S.)	Silverman, Sydney (Nelson)
Chapman, Donald	Jones, Jack (Rotherham)	Skeffington, Arthur
Cliffe, Michael	Kelley, Richard	Slater, Mrs. Harriet (Stoke, N.)
Collick, Percy	Kenyon, Clifford	Small, William
Corbet, Mrs. Freda	Key, Rt. Hon. C.W.	Smith, Ellis, (Stoke, S.)
Craddock, George (Bradford, S.)	King, Dr. Horace	Snow, Julian
Cronin, John	Lawson, George	Sorensen, R. W.
Crosland, Anthony	Leavey, J. A.	Spriggs, Leslie
Crossman, R. H. S.	Ledger, Ron	Steele, Thomas
Dalyell, T.	Lee, Frederick (Newton)	Stewart, Michael (Fulham)
Darling, George	Lee, Miss Jennie (Cannock)	Stonehouse, John
Davles, G. Elfed (Rhondda, E.)	Lever, L. M. (Ardwick)	Strachey, Rt. Hon. John
Davles, Harold (Leek)	Lewis, Arthur (West Ham, N.)	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Delargy, Hugh	Lipton, Marcus	Swain, Thomas
Diamond, John	Loughlln, Charles	Swingler, Stephen
Dodds, Norman	Mabon, Dr. J. Dickson	Taverne, D.
Donnelly, Desmond	MacColl, James	Taylor, Bernard (Mansfield)
Drayson, G. B.	MacDermot, Niall	Taylor, Edwin (Bolton, E.)
Driberg, Tom	Mcinnes, James	Thomas, lorwerth (Rhondda, W.)
Dugdale, Rt. Hon. John	McKay, John (Wallsend)	Thompson, Dr. Alan (Dunfermline)
Ede, Rt. Hon. C.	Mackie, John (Enfield, East)	Thomson, G. M. (Dundee, E.)
Edelman, Maurice	McLeavy, Frank	Thornton, Ernest
Edwards, Robert (Bilston)	MacMillan, Malcolm (Western Isles)	Warbey, William
Edwards, Walter (Stepney)	MacPherson, Malcolm (Stirling)	Weitzman, David
Evans, Albert	Mallalieu, E. L. (Brigg)	Wells, Percy (Faversham)
Fitch, Alan	Mallalieu, J.P.W. (Hudderfield, E.)
Fletcher, Eric	Mapp, Charles	White, Mrs. Eirene
Forman, J. C.	Mayhew, Christopher	Wigg, George
Fraser, Thomas (Hamilton)	Mendelson, J. J.	Wilkins, W.A.
Galpern, Sir Myer	Milne, Edward	Willey, Frederick
Glnsburg, David	Monslow, Walter	Williams, W. R. (Openshaw)
Gordon Walker, Rt. Hon. P. C.	Moody, A. S.	Williams, W. T. (Warrington)
Gourlay, Harry	Morris, John	Willis, E. G. (Edinburgh, E.)
Greenwood, Anthony	Moyle, Arthur	Wilson, Rt. Hon. Harold (Huyton)
Grey, Charles	Mulley, Frederick	Winterbottom, R. E.
Griffiths, Rt. Hon. James (Llanelly)	Oliver, G. H.	Woof, Robert
Griffiths, W. (Exchange)	Oram, A. E.	Wyatt, Woodrow
Gunter, Ray	Oswald, Thomas	Yates, Victor (Ladywood)
Hale, Leslie (Oldham, W.)	Owen, Will
Hall, Rt. Hn. Glenvll (Colne Valley)	Paget, R. T.	TELLERS FOR THE NOES:
Hamilton, William (West Fife)	Pannell, Charles (Leeds, W.)	Mr. Ifor Davies and Mr. McCann.

Main Question, as amended, put and agreed to.

Resolved,

That this House notes the conclusions of the Estimates Committee (in their Fourth Report 1961–62) and welcomes the assurances

on import policy contained in the Government statement of 6th June as providing the basis upon which the cotton textile industry can work for future efficiency, stability and well being within a prosperous national economy.