§ 7.40 p.m.
§ The Minister of State, Board of Trade (Mr. George Darling)
I beg to move,That the Cotton Industry Development Council (Amendment No. 6) Order 1966, a draft of which was laid before this House on 10th November, be approved.The purpose of the draft Order is to make amendments to the Cotton Industry Development Council Order originally introduced in 1948. The House will know that the Cotton Board was established by Order as a Development Council under the 1947 Industrial Organisation and Development Act. For a number of years, the Development Council, or Cotton Board, has carried out important and valuable activities on behalf of the cotton industry. Since 1964, it has included the users of man-made fibres. The House will also be aware that the principal Act provides for a review of the position of the Development Council after three years and then at five-year intervals.
The review which has led up to this latest Order began in July last year and is the fourth of its kind. The Act requires the Board of Trade to consult organisations representing both employers and employees in the industry on the question whether the council should con- 338 tinue in being and, if so, whether the Development Council Order should be amended in any respect. We have consulted the Board and the organisations representing employers and employees and have been told that they all wish the Cotton Board, or—to give it the title in the Order—the Development Council, to be continued for a further period.
There was, however, substantial opinion in the industry—because of the increasing use of man-made fibres, the development of new textile processes and the increasing part played in the industry by large firms with wide-ranging interests in textiles—which was in favour of extending the council to cover all textiles. But it was not unanimous. It did not commend itself to all the interests concerned.
On the one hand, the man-made fibre producers, the yarn processors and the warp knitters have agreed to join the council and the narrow fabrics industry may join later. On the other hand, the wool and hosiery industries have declined to participate in the council. Nevertheless, the door remains open, if any of them changes his mind.
The object of the amending Order, therefore, is to provide for the new members by adding to the definition of the industry certain activities in the manufacture of man-made fibres, filament yarn and warp-knitted fabrics and by renaming the Development Council the Textile Council, with, as a sort of sub-title in brackets (for the Man-Made Fibre, Cotton and Silk Industries of Great Britain). There are some other changes which include a revision of the basis on which the levy is to be calculated, an increase in the maximum amount which may be imposed on the industry from £525,000 to £625,000 for the year beginning 1st April next.
There is also an increase in the number of employer members from four to eight and of employees from four to six and also a revision of the functions of the Development Council to exclude some activities which, upon examination, were found to be unnecessary.
The House will, I think, wish me to explain briefly some of the proposed changes to the principal Order which, I repeat, has been agreed to by all the parties in the industry. First, an increase 339 in the maximum amount of levy which may be imposed on the industry is necessary because of the increase in the membership of the Textile Council. We have widened the council and, therefore, there are more activities on which the money may be spent. The figure of £625,000 is a ceiling designed to give the council some room for manoeuvre in the next five years.
Secondly, the increase in the number of council members reflects the increase in the council's responsibilities. It was recognised that if the number of trade union members was to be increased, in the line with the number of employers' members, the council would then have 90 members and it was thought that that would be rather too many; that it would make for a somewhat unwieldy body. The trade unions have, therefore, agreed to smaller representation than the employers, on the understanding that the employers will not have a majority on the council. The trade union and independent representatives together outnumber the employers' representatives by one, nine to eight.
In the setting up of the new Textile Council, the employers' and work-people's representative associated with it have shown a real appreciation of the changes in the structure and organisation of the textile industry, changes which have taken place since 1948. I feel sure that the new council can and will play a major part in assisting and guiding a wider industry in the years ahead.
If the Order meets with the approval of the House, the membership of the new Textile Council will be announced before 2nd January, 1967, when the Order is due to take effect. In saying this, I feel sure that the House would wish me to pay a well deserved tribute to the valuable work which the Chairman, Mr. Frank Rostron, and the members and staff of the Cotton Board have done for the industry over many years.
The proposed Amendments to the principal Order are contained in Schedule 1 of the draft Order, on pages 3 to 9. I agree that the changes in this form are not easy to follow, but Schedule 2, pages 9 to 21, sets out for the convenience of all concerned the fully amended version of the principal Order. The amending Order requires an affirmative Resolution 340 of both Houses and hon. Members will know that a Resolution has already been passed in another place.
I am sure that the House will welcome this widening of the scope of the original Development Council It is more than an extension of its activities; in a very real sense this is a new organisation. It is not merely a bigger Cotton Board. The Textile Council will cover, and do much to assist, the development of a large and growing industry, one of the major industries of the country.
I do not think that hon. Members would wish me now to comment in detail on Schedule 2. I appreciate that many hon. Members who take a keen interest in the textile industry will wish to speak in the debate, to make their own comments and, perhaps, seek explanations of these provisions. If they do, I shall do my best to answer their questions.
§ 7.50 p.m.
§ Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)
I wish, first, to thank the Minister for his explanation. Having done that, may I say that while we hold him personally in high regard, and appreciate the way in which he always addresses himself to points raised in debate, we feel that the presence tonight of the right hon. Gentleman the President of the Board of Trade would have been appreciated by the House and, perhaps more important, would have been taken as an encouragement and reassurance by the industry. This is particularly so because the debate on this Order comes at a time when an opportunity for the House to consider the work of the Cotton Board and its relation to the present position of the textile industry is very welcome.
There are today comparatively few hon. Members who can themselves remember the time when coal and cotton, by their exports, underpinned the economy of the United Kingdom. Yet those of us who come from or represent the traditional textile areas of Lancashire can recollect only short periods when the cotton textile industry—and I use the term in its broad sense—has not been engaged in the difficult and often painful process of adjusting itself, first, to the disappearance of many of its overseas markets, and. secondly, to the arrival on the home market of an increasing flow of textiles from low wage countries enjoying tariff-free entry into the United Kingdom. The 341 textile industry operates today, as, on the whole, it has operated for many years, in as keenly competitive market conditions as any industry in Britain. It is against this background that we must consider the Order.
As the Minister explained, the Order affects almost every section of what is still, even after a long period of contraction, one of our most important industries. But I also believe—and this should be brought out clearly—that the Order reflects the new realities of the textile industry.
When we passed the Cotton Industry Act, 1959, it was the intention to open a new chapter for the textile industry. It was hoped that certain highly desirable consequences would flow from that Measure. I believe that, on the whole, those hopes have been fulfilled. Changes have subsequently occurred which have greatly strengthened the industry. Those changes can be listed under three main headings and they are reflected in the terms of the Order, not once but time and again.
First, there are the structural changes that have occurred in the organisation of the industry. A number of major new groupings have emerged, often with a greater vertical range of units within a single ownership than was previously usual, and with financial and technical links to supplement their own verticalisation. Perhaps the most important consequence of this has been to establish a greater and closer contact between the man-made fibre producers and the other sectors of the industry. The Minister referred particularly to this change in the composition of the Textile Council and it is, I believe, likely that the most important innovation in the Order is the provision for direct representation on the council of the man-made fibre producers.
There have also been major technical developments in recent years and these, too, are reflected in the terms of the Order. We find references to bulking, stretch fabrics and warp knitting. The financial changes in the industry's position, following the vertical and horizontal linking to which I referred, have given it much readier access to new capital. This must be of great benefit in a period of rapid technical development and innovation, such as I believe lies ahead.
342 The present state of the industry was described with clarity and brevity by the chairman of the Shirley Institute at the annual general meeting of that organisation in November, 1965, when he said:It is commonplace and true to say nowadays that the changes of recent years have transferred the trade into a multi-fibre, multiprocess and capital intensive industry.I am sure that there is a new, more positive and vigorous outlook in the industry today, largely as a result of developments flowing from the 1959 Act.
I believe, therefore, that it is also against this more recent background that we should discuss the Order. I hope that nothing we say here will appear to detract from the achievements of, or in any way dull the new image of, a modern progressive industry—an image which is being increasingly successfully created by those who work in it. It is, therefore, in a constructive spirit that I address a number of points to the Minister on which it would be helpful for us to have his comments.
In Schedule 2, one of the functions of the new council is to promote or undertake arrangements for encouraging the entry of persons into the industry. This is an important function, because it is a strange contradiction that the industry, even during a period of contraction, has been faced by difficulty in maintaining an adequate strength of skilled personnel. Without doubt, one of the biggest obstacles has been the long-standing and deep-rooted uncertainty about the industry's future. There is today a danger that this uncertainty may grow again, and this could have a particularly unfortunate effect on recruitment at a time when the industry is seeking increasingly to attract men into it and to become primarily a male employing industry.
I have seen Press reports of references by the general secretary of the Weavers' Amalgamation to more than 30 closures in recent months. Within my knowledge, in a comparatively small area of Lancashire 13 mills have gone out of production during the past year.
§ Mr. Hall-Davis
I hope that the hon. Gentleman will have an opportunity to express his concern about this later.
343 Most of these units were small. Announcements of closures at this rate must create uncertainty and hinder recruitment to the industry. These closures also have social consequences disproportionate to the numbers involved, often being situated in communities of some remoteness or in areas faced with an urgent need to increase the attractiveness of the general environment. They should not have such depressing news showered on them.
In reply to a supplementary question last Thursday, the President of the Board of Trade said that he was in touch with the Cotton Board on this matter. Can the Minister of State say how many mills or units have closed in the last 12 months, how many small units remain, and whether the Board of Trade anticipates these closures continuing at the recent rate?
I have no doubt that there is a permanent place for small, specialist units in the textile trade. This is the general view of those best qualified to judge the industry. However, constant publicity for these closures will not help that great part of the industry which is today preparing to face the future successfully. Less apprehension would be felt and expressed and less harm would be done to the recruitment prospects of the industry if those living and working in the areas where these closures are occurring had more grounds for confidence that the Government understand the problems and needs of those districts.
The President of the Board of Trade should take a new and hard look at the desirability of extending to further districts of Lancashire development district status. I have to some extent a personal interest in this matter, which I declare and which is known to the Minister. I am convinced that the case for development area status is as strong in some of these areas of Lancashire today as it is in many areas of the United Kingdom to which the Government have recently extended it. By restoring confidence locally in the economy of these areas, it would assist the progressive textile concerns and be welcomed by them. However, the textile industry is by no means confined within Lancashire.
344 I will now, as concisely as I can, put some points of wider implication to the Minister of State. I am sure that the council and the industry will, as he has said, be strengthened by the bigger coverage and representation resulting from the wider definition of the industry in the Order, particularly with regard to manmade fibre producers and warp knitting. But, as he suggested, there are many who feel that the council could fulfil its functions better and the industry generally would be strengthened if, in due course, a body could be constituted embracing also the hosiery, lace and woollen textile industries. It would seem that technical evolution will point in this direction.
I therefore hope that the Government will do nothing in their own administrative arrangements and in the allocation of departmental responsibilities to make more difficult the coming together, under the aegis of a single body, these various elements in the broader textile industry if they at some future time decide that it would be to their mutual advantage. We on this side—and this probably applies to the right hon. Gentleman—hope that there will be no question of transferring the Board of Trade's responsibility for the industry and its rôle as sponsoring Department to the Ministry of Technology.
When I was talking to people in the shipbuilding industry the other week, they had very mixed feelings about being removed from what they considered to be—and I pay tribute to it—the careful attention of the Minister of State. I believe that the Ministry of Technology is in grave danger of contracting "takeover indigestion", and the textile industry is an industry in which for some years ahead trade considerations must be paramount.
I hope also that, having widened the composition of the new Textile Council, it will be established that the normal channel of communication between the industry and the Government will be via the council and the Board of Trade as the normal sponsoring Department and there will be no question of bringing into existence further "little Neddies". If one looks at this aspect in relation to the Order, possibly the significance of what I am saying becomes more apparent.
345 The Cotton Board, with its sub-committees, and now to an even greater extent the Textile Council, has available men with a sufficient breadth of experience to give the Government all the advice which they may need. We hope, also, that the Board of Trade will seek the advice of the council freely and frequently to enable the council to discharge Function 9 in Schedule 2.
May I quote an example where consultation seems to have broken down. There has recently been marked resentment in the industry at the Government's decision to suspend the arrangements for duty-free imports of machinery. It seems ridiculous that when an industry such as the textile industry is trying to make itself capital-intensive to be able to meet low-wage competition, itself enjoying duty-free entry into this country, it should be called upon to pay a 14 per cent. import duty on, say, knitting machinery, which is not available in this country.
I am sorry that the Board of Trade needs a new bureaucracy to administer the investment grants. The risk of this was pointed out by some of us when the Bill was in Committee. But why take it out of industry by dismantling the duty-free import arrangements? If it is not the Board of Trade's need to reshuffle its personnel which is at the root of this decision, I hope that in future the Board of Trade will be more alert to represent this industry's needs to the other Government Department.
Finally, I hope that the Board of Trade will, with this new organ of consultation which is more broadly based available to it, improve its ability to act quickly on the advice which it receives from the council. Industrial and commercial reflexes are becoming faster every day over a world-wide network; so is the speed of transporation of goods. It may be that before very long the industry's biggest difficulties may arise from low-wage sewing machines which are much more difficult to counteract by increased intensification of capital employed in the industry. If the Board of Trade is to be able to give the industry the help which it needs and which its efforts deserve, I believe that the Board will have to quicken the pace of its own actions and reflexes accordingly. Nowhere other than in the textile industry is it easier to be guilty of bolting the door after the horse 346 has gone, or has switched itself to some other equally comfortable loose box in which to spend its time.
I hope that the Minister will be able to give the House assurances on these points. This is an industry which is very rarely free of cares. I believe, as I have said, that largely due to the 1959 Act the fundamental position today is not perhaps anything like as depressing as some people may think, but for individual areas, individual sectors, there are very real difficulties. I therefore think that it is proper that the House should be given the assurances which I have requested when it is asked to approve an Order of such a comprehensive nature.
§ 8.5 p.m.
§ Mr. Robert Howarth (Bolton, East)
Before I turn to particular parts of the Order, I trust that it is in order to make a few general observations to set the debate in its true context. I take the opportunity of paying tribute to the work of the Cotton Board since its inception. It is significant that the Board was established by the first majority Labour Government. It has undoubtedly been very useful and a great help to the industry, and its rôle has been very positive. I wish to place it on record that, while the change to this wider Council will be an improvement, the Cotton Board has, in the last 15, 16 or 17 years, performed a great service for the cotton textile industry.
The cotton textile industry has suffered, not uniquely since the war, but certainly to a degree almost unknown among the old-established industries. There was a period before the early 1950s when, because of the drive on exports, the industry was very much a favoured and busy industry, but since then, under the pressure of cheap textile imports, it has entered a very difficult phase. The rundown has, to say the least been exceedingly drastic.
In my constituency in Bolton, the representation of which I share with my hon. Friend the Member for Bolton, West (Mr. Oakes), we have seen a once great industry more than halved in manpower and certainly in the number of textile mills. The number of 140 mills which we had in Bolton at the end of the war is now down to approximately 60. This figure is hardly credible until one realises 347 the changes wrought in the towns of South and South-East Lancashire. I wonder how many areas have had to face this degree of closure in a basic industry. There are constituencies in which the degree of dependence on cotton was even greater than in Bolton and where undoubtedly the changes have been even more painful than in my constituency.
It is worth noting that, despite the most urgent pleas, the Governments of the Conservative Party appeared to ignore the problems of the textile industry —that is, until 1958. Whether this had any connection with the impending election of 1959 is best left to the psephologists, but it was significant to me that for nearly a decade the Governments in London appeared to ignore the great problems of the textile industry in Lancashire. It was only in 1959, when we had this compensation Act, that steps were taken and money was used to try to bring some assistance to this once great industry.
I had the impression that that Act seemed to be more concerned with machines than with people. I recognise that one has to establish the basis of the industry to ensure the prosperity of the people in it, but the Act always seemed to me to operate in such a way that people more easily obtained money for scrapping machines than did the operatives in the industry for their services. I have had occasion in the past, both in this House and in my constituency, to recount the experiences of many of my constituents who lost their jobs, not the younger people, but people of middle-age and older. They lost their jobs after a lifetime of service in the textile industry, and were faced with taking alternative employment at a much lower salary than before, with compensation that was derisory.
When I think of some of the sums being paid under the Redundancy Payments Act of last year, I wish that this Act had been in operation during the time about which I am talking. When people drew about £50 for 50 years' service, we had about reached the bottom in industrial relations in the textile industry. I know that valiant efforts were made by the textile unions, but, working in this difficult situation, they were limited 348 in what they could do in the way of extracting better compensation terms. The operation of the Redundancy Payments Act has at least assisted many of the people who have been affected by the changes which are still taking place in this industry.
I draw a comparison between the record of this industry and that of the nationalised industries on this problem of contraction. I have read of the great efforts made by the Coal Board to make provision for miners who lose their jobs. I am no expert in this, and I would defer to anyone who is able to enlighten the House on this matter. The terms of compensation and the inducements offered to miners are extremely generous—I hope that I do not embarrass any of the mining union negotiators on this score—compared with the terms offered to textile workers in Lancashire up to the early 'sixities. I hope that we have entered a period in the textile industry in which, even if the changes are to continue, these changes will be more humanely implemented.
I come now to the contemporary period, during which, undoubtedly, the actions of the Labour Government since 1964 have been prompt and relevant, and have engendered a better feeling within the industry. I think it should be said that the Government have made valiant attempts to get a quota system which will give more stability to the industry. Such attempts were totally lacking during the years of Conservative Administration. At least the attempt has been made, and it has been relatively successful in respect of the Commonwealth countries. It is only in respect of countries outside the Commonwealth that many of us are complaining.
We recognise that over the years Britain has taken a very high proportion of cheap textile exports from the developing countries. This has undoubtedly helped them, and no one is suggesting that we should cut these down to the level which many industrial countries permit under their import schemes. The level of consumption of imported cloth in this country is 30 per cent., compared with about 5 per cent. in the E.E.C. countries. It can be seen from that that the burden which we are undertaking is out of proportion to what I think is reasonable.
349 The difficulties which we now face are a compound of a number of factors. There is first, the point that I made about the global quota. Unfortunately, this does not include countries outside the Commonwealth. Questions have been asked in this House by myself and by other hon. Members about the position of Portugal. The matter is complicated by the fact that as she is a member of E.F.T.A., there are certain restrictions on the action that we might take. Perhaps I might give the House some figures to illustrate the extent to which we have increased the import of cloth from Portugal. The monthly average last year, 1965, was just over 1 million yards. In the first nine months of this year the monthly average was 2½ million yards, and I believe that for September it was more than 3 million yards. It can be appreciated, I hope, that this increase in the level of imports from Portugal is one of the things which is causing problems for the industry.
It is claimed that the Portuguese mills enjoy certain advantages with regard to a possible subsidy for exports to this country, and I should like my right hon. Friend to deal with this when he replies. I am referring now to a report in The Guardian of Tuesday, 15th November, which claimed that certain people in the industry here in this country had information which led them to believe that subsidies of some form were given to textile exports to this country. I imagine that this contravenes the agreements of G.A.T.T. and those between the E.F.T.A. countries.
Coupled with the problem of increased imports from Portugal, there is the problem of increased imports from Formosa. Over the last few years the increase has been quite staggering. From about one million square yards, it has risen in recent times to about 10 million square yards. These may in themselves be relatively small increases in relation to the total amount of cloth used in this country, but if the rate of increase is maintained, they will very quickly come to represent a serious inroad into our textile industry.
The other problem which is worrying the industry at the moment is that of substitution, and I do not doubt that many of my hon. Friends will have something to say about this. We now have, I was going to say a strengthened Cotton Board. We now have a body with a new 350 title, and a rather clumsy one. I am only sorry that in Committee we could not have worked out a better title for it. We have kept the word "cotton", but I do not see why we could not have retained the old title. Anyway, we now look forward to the Cotton Industry Development Council, and I hope that it will be able to play its part in bringing some further stability into an industry which for so long has been plagued with exceedingly difficult problems.
Paragraph 3 of Schedule 2 of the Order refers to co-operating with the appropriate industrial training boards. I hope that this paragraph will be taken very much to heart by the new Council, and will he quickly implemented so that the training of, and opportunities for, young people are equivalent to those in other industries.
One of the problems has been that for a generation opportunities for employment in the cotton industry have been regarded as of a low standard. They have not always attracted the best-educated youngsters. The level of pay has not always provided an incentive to well-trained and well-educated youngsters to enter the industry. But I hope that on the basis of a planned and well-thought-out training scheme the industry will benefit, as will the people who enter it.
My other comment on Schedule 2 concerns paragraph 17. The only weakness that I want to draw to the attention of the House is that although paragraph 17 talks aboutPromoting the developing of export trade including promoting or undertaking arrangements for publicity overseasit makes no reference to the problem of imports. I do not suggest that the Council could take over any of the functions of the Board of Trade in respect of imports but I had hoped that it might be charged in the Order with the task of watching closely the level of imports, scrutinising the position from month to month, and having express authority to draw to the attention of the Board of Trade certain situations—for instance, the situation that arose this year concerning imports from Portugal. I suppose that the Council will do this in any case, but I think that it should have been written into this document.
I end on a note of optimism. Although the textile industry is again going through 351 a somewhat difficult period a good foundation has been laid by the efforts of the Government to date on getting agreement on a global quota from Commonwealth countries. If only this could be extended into all those areas in respect of which a danger arises from possibly subsidised imports, or where the level of wages is so low that we cannot possibly compete, even with the most modern machinery, we could look to the future with much more confidence.
Although we have had these difficulties—and my experience is confined primarily to Bolton—where we have lost 70 or 80 mills in this period, we have, owing to our own energy and the money that the local town council was prepared to spend, been able to attract alternative employment on quite a large scale. We have taken over many of these mills. Private individuals and local authorities have rented out space in them. This has brought employers and employment to Bolton. But there are limits to what can be done in this way. Most of these are old buildings, and although we have been successful up to now there is a diminishing return on this type of activity.
We have extended the industrial estate in Bolton and brought new industry into the town, but unless we receive the sort of assistance that an hon. Member opposite mentioned, by which not only development areas benefit but all those old, large industrial towns which are wrestling with difficult problems, we shall not have a viable and attractive future. This stark difference between the assistance given to development areas and to regions outside them is undesirable. There should be shades of assistance. It is all very well to have grandiose plans for new towns such as Skelmersdale and Chorley-Leyland—which latter proposal some people view with great misgivings—but we should also think of existing large towns. Bolton, with its population of 150,000, is not insignificant, and there are other towns with populations between 50,000 and 100,000, which together provide homes for millions of people. The Government should be prepared to divert some resources to these towns in South and East Lancashire.
I hope that, arising from this debate, we shall have assurances, not necessarily on the wider points which have been made—
§ Mr. Deputy Speaker (Sir Eric Fletcher)
Order. The hon. Member's argument does not arise under the Order. The Order is limited to the cotton industry.
§ Mr. Howarth
I am on my last sentence, Mr. Deputy Speaker. I appreciate your tolerance. I was only trying to set the stage for a discussion on the Order.
§ Mr. Howarth
I am merely saying, as a representative of a cotton town, that our interest in the Order is very direct and intimate. I hope that I have not strayed from the subject under discussion.
Can we look forward to the sort of assurances that have been asked for concerning greater protection in the industry, because of the great inroads of foreign competition, and also concerning the type of assistance that I have just mentioned for the old towns of East and South Lancashire which are facing a very difficult problem?
§ 8.26 p.m.
§ Sir Frank Pearson (Clitheroe)
I shall not follow in great detail the speech made by the hon. Member for Bolton, East (Mr. Robert Howarth), nor do I share his optimism in respect of the future of the cotton industry. I cannot help feeling that many hon. Members representing cotton constituencies who will wish to contribute to the debate will find it extremely difficult to be as optimistic as the hon. Member has been.
In general, I welcome the Order, but I have certain reservations. It does not begin to touch upon the real problems of the Lancashire textile industry. I listened to the Minister of State with care, but also with considerable surprise. He introduced the Order in a calm and almost routine tone. I asked myself, "Has the hon. Member ever been to Lancashire in the last fortnight, or even the last two months? Is he aware of the present situation in the industry?" Not a single word of his speech indicated that he had one shred of understanding of the problems facing the Lancashire textile industry today. When he concluded his introduction by saying that the Lancashire textile industry was a large and growing one, I very nearly fell from my seat. Large it may be, but for 353 a Minister of the Crown to say that the Lancashire textile industry is a growing one will stretch the credulity of even his most ardent supporters.
§ Mr. Gordon Oakes (Bolton, West)
My impression was that my right hon. Friend was referring to the textile industry, including the man-made fibre industry, when he described it as a growing one. I would agree with much of what the hon. Gentleman says about the cotton industry alone, but I am sure that my right hon. Friend was referring to the whole textile industry.
§ Sir F. Pearson
I am sure that the Minister of State will be able to defend himself.
Before we agree to the Order, it is important that we recognise the situation within the industry that the new Council must cope with. It is an extremely serious situation. Hon. Members opposite will throw back in our faces the situation in the textile industry in 1961–62. They may even throw back at us the state of the industry in the years before the 1959 reorganisation, but it must be recognised that the reorganisation measures introduced in 1959 did a magnificent job.
I take this opportunity of paying a genuine and heartfelt tribute to the manner in which the Lancashire industry has reorganised itself on the basis of the 1959 provisions. It has done a magnificent job. The fact that hundreds of mills had to go out of production in those years has in the end been justified. The fact that hundreds of mills re-equipped themselves has also been justified.
The situation today is vastly different from that which existed in 1961–62, when many old, worn-out mills filled with old Lancashire looms were going out. It was right that they should. Today it is mills of substantial size, mills on which hundreds of thousands of £s have been spent during the past six years, which are closing down and going out of business. I urge the Minister of State to recognise that he has a very different situation on his hands today from that which obtained in 1961–62.
The type of mill which is running on short-time, the type of mill which is closing down, is all too often a mill which has been modernised. This is very 354 worrying. Until I am given some indication that the Minister of State appreciates what the real trouble is, I shall not be able to express the all too optimistic views which we have heard expressed tonight.
What is the situation in my own area, in the Blackburn area, and in the areas which the hon. Members for Nelson and Colne (Mr. Sydney Silverman) and Burnley (Mr. Dan Jones) knows so well? Out of 38 mills in that area, 27 are on short shift. In those mills shifts have been knocked down. Short-time has been worked. In that area in the last year alone three mills of substantial size have closed down and three more are in the process—
§ Mr. Sydney Silverman
I do not know whether the hon. Gentleman noticed the Answer which my right hon. Friend the Minister of Labour gave me less than a week ago, not about short-time, but about fully registered unemployed. My right hon. Friend showed that in the last three months the number of unemployed in my own constituency has risen by 101 per cent. whereas unemployment in the country as a whole has risen by 71 per cent.
§ Sir F. Pearson
I thank the hon. Gentleman for that contribution, which underlines the seriousness of the situation. In the mills which have been closed in this area alone, no fewer than 500 textile operatives have been made redundant. This is no small matter in a small area. The terms in which the Minister of State introduced the Order showed that he is out of touch with the situation in the Lancashire textile industry at present.
I want to quote one further instance to the House. I have in my constituency one of the most modern, one of the best, one of the most efficient, one of the most highly mechanised, mills in the country, producing specialist sheeting which is sold under a branded name known world-wide. It is a mill into which hundreds of thousands of £s have been poured since 1959. What did the firm do the other day? It shut down the whole of one new shed and paid off 160 operatives, and it can see no hope at the present time of being able to set that shed going again—
§ Mr. Arnold Gregory (Stockport, North)
In dealing with a sheeting material, which is the most vulnerable of weaving processes in the industry—with 40 per cent. 355 imports and only 8 per cent. penetration into European markets—from low-cost importing countries would not the hon. Gentleman think that the Government with which he was identified between 1951 and 1959 bore a tremendous responsibility for that kind of exposure?
§ Sir F. Pearson
I do not accept that suggestion at all. Why have we this situation today? Why is the industry in this weak trading position? It is more or less the same old story that we had in 1961 and 1962. There are three factors —the downturn in the world textile cycle, which coincides with a freeze and a squeeze in the home economy, together with the full use of the quota flooding the country with imports. Those are the basic reasons.
We will never set the situation right, we will never find a solution, as long as we try to depend on the quota system. With the quota system, one thing happens and one thing only. When the country is in a situation of weak trading owing to a contraction of the home economy, or to any other reason, the quotas are invariably used to their fullest extent and dominate the market, and they dominate the market on the price structure of the imported commodity. We will invariably get short-time, retraction, and instability in the home industry as long as we try to operate on a quota basis.
Measures could be taken to improve what is basically an imperfect method. Far too often, new imports flood in and ruin the market before the Board of Trade even knows that they are coming in. Is it not possible so to improve the machinery that the Board of Trade becomes aware of what is coming into the country very much earlier than has been the case in the past. I say quite frankly that by the time the Board of Trade wakens up to excessive imports, the imports have come in and the damage has been done.
There is another vitally important point. Today, the people who are importing cotton textiles into this country are concentrating on one type of cloth, one category, and knocking it out of the market. That is happening with sheetings. When we were in power we introduced a system of categorisation. It was not perfect, but I urge the Board of Trade to 356 see whether it cannot be made more perfect. Unless we can put a check on this system whereby specific and narrow categories of cloth are attacked by imports and knocked out of the market we shall never get stability in the Lancashire textile industry.
I have mentioned this firm in my constituency which has had to close down this modernised shed for the manufacture of sheetings which have ben sold throughout the world under a branded name. What has knocked it out? It is not Portugal, but an attack from the Hong Kong end concentrating on the sheetings market. Until the Board of Trade wakens up to this fact and take measures which will prevent categories of cloth being knocked out altogether, we shall not get any stability at all.
The hon. Member for Bolton, East mentioned Portugal. Portugal is outside the all-in quota—which I never thought would work, and still do not think will work. The problem of Portugal is two-fold—the rates of wages there are about a sixth of ours and, secondly, Portugal is a member of E.F.T.A. We cannot do this except by voluntary agreement, and voluntary agreement must be achieved. It is no good the President of the Board of Trade saying he is having talks—all the time he is having talks the cloth is coming in and ruining the market. I believe that a figure of 3 million yards in September has been mentioned. This will go on. This is a matter of the greatest urgency, and it is no good the Minister of State coming to the House tonight and putting this Order before us—
§ Sir F. Pearson
If the hon. Gentleman will allow me to finish my sentence, I will give way.
It really is no good the Minister of State coming to the House and introducing this Order in calm, measured, routine terms. There is a real problem which has to be dealt with. If it is not dealt with, the Lancashire textile industry will contract and contract. I give way to the hon. Gentleman.
§ Sir F. Pearson
There is one other aspect of this textile question which I would ask the House to consider. We have talked about the profitability of the industry and the efficiency of the industry, but there is the human side of the people who have been flung out of work. I would make one appeal: I do hope that the Minister will recognise the fact that in the textile industry we have a very high proportion of older people, and when those older people are flung out of a job—a woman of 58 or a man of 61—under present-day conditions there is practically no hope of fitting them in anywhere else, and these men and women will probably have to face a number of years of unemployment pay, waiting for the time when they will be due to receive their pensions.
In an industry like this, where it is running down, where old labour is being put off, would it not be reasonable to give advance payment of pension? Cannot we make the age for men 60 and the age for women 55? The Treasury would benefit, and this is something which genuinely ought to be considered.
I do not wish to detain the House much longer, but I have one further point to make. It is in regard to paragraph 9 of Schedule 2 of the Order. I am a little worried about the words in brackets:Advising on any matters relating to the industry (other than remuneration or conditions of employment)…My recollection of the old Cotton Board is that When the industry was worried or concerned about the state of trade it would present the view of the industry. It would come down to the House and would tell us exactly what the situation was.
Am I to understand, from paragraph 9 of Schedule 2, that it will no longer be the function of the new Council to state the case of the profitability of the industry to the Board of Trade? This is an important point, because if the Council is not the mouthpiece of the industry, and if the Council is not in a position to argue the case, then I cannot think that the Council will be able to perform one of its most important and vital jobs.
I therefore hope that the Minister will give us an assurance before the debate 358 ends that this Council is the mouthpiece of the industry as a whole in placing the case of the industry before the Government. If he cannot give us that assurance, and I do not see it written in specific terms in the Schedule, then the textile industry in Lancashire will have no mouthpiece, and that will be a tragedy.
§ 8.43 p.m.
§ Mr. J. T. Price (Westhoughton)
I do not propose to detain the House for more than a few moments, because I think that already my right hon. Friend the Minister of State may be viewing with some surprise the size of the gate he has opened tonight by presenting this rather innocent Order. I was looking at it before the debate began, and I was thinking how non-controversial the Order appeared to be. There are so few occasions for Lancashire Members to present on the Floor of the House what are real bread-and-butter problems of our people that we seize upon any straw that falls on to that Table in order to get a word in edgeways.
I do not wish to say anything disrespectful to other colleagues in the House, on whichever side they sit, but we have Scottish days, we have Welsh days, we have all kinds of special categories of days, and I have no doubt that we shall have an Irish day before long. I do not object, but my point is that the County Palatine of Lancaster. with all its great historical and industrial traditions, the part of Europe where the Industrial Revolution began, where the commercial supremacy of this country was founded, has had to face its difficulties without half the consideration which other pressure groups in the House have been able to bring upon the counsels of Parliament. I shall not pursue that theme, Mr. Deputy Speaker. You have heard me often enough get rather passionate about matters which some people prefer to talk about in a genteel way and sotto voce. I would prefer vigorous debate in this House on anything coming before us which has real life in it.
We have had one or two party cracks tonight. When we began, I hoped that we might have a bipartisan approach to this matter and that we should forget the animosities which, naturally, flow from that side of the House to this and vice versa on occasions. We are here 359 discussing a great basic industry and a very important section of the community, and I hoped that we might still view many of these matters in a bipartisan frame of mind.
I look at these questions, I hope, without passion. I look upon them in the light of my experience in the House since I first came here. In the past, I have sat up all night in the Chamber, with my hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman)—I do not know whether any others were with us who are here now—
§ Mr. Price
I remember one occasion when my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) was suspended from the House for five days because of a row which developed during an all-night sitting on the Lancashire textile industry.
But enough of reminiscences tonight. We are looking to the future, and the Order presents some hope for the future in the machinery of administration. But, as I took the opportunity to say to my right hon. Friend the President of the Board of Trade last Thursday, I think it was, when he was sitting there looking like Pontius Pilate and he would not be drawn to say anything, the way in which the cotton industry is being treated now, with neglect by the Government in certain respects, if I may say so, is producing a situation in which there may not be sufficient industry to which to apply the elaborate machinery in the Order to in the years to come. I hope I am wrong, but that is my fear.
The hon. Member for Clitheroe (Sir Frank Pearson) spoke of what ought to be done. He thinks that the quota system is breaking down. To a large extent, I agree. The global quota system is breaking down because of the ruthless substitution and the clever technical devices being adopted by exporters in the Far East, in Portugal and in other parts of the world, to the detriment of the Lancashire cotton industry. But the hon. Gentleman did not go very far in the direction of telling us what ought to be done.
360 I remember times in the past when conditions were bad, when we had had periods of recession, the sort of thing with which we are all familiar, but, when we pressed previous Tory administrations, we did not get very far. We had a long period under Conservative Government before this Labour Government came in, and whenever we pressed them for physical controls they always resisted pretty strongly. They resisted very strongly the imposition of an import board. Many of us regard this as the real solution to the problem, an import board under Government control which could bring some sense into the industry. We are not asking for protection in the crude sense—
§ Mr. Price
All right, have it your own way. I am not being fussy about phraseology tonight. I want to sit down in a short time to let somebody else make a contribution to the debate. I know that an hon. Member from Cheshire is sitting behind me and that Cheshire adjoins Lancashire and is a very important part of the world. Let me not be deflected by my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn). I know that he wants to help us later on.
I want to say something now on the practical remedies: (a) we should have an import board; (b) there should be an end to substitition, the clever devices being used by legalistic means to get round the machinery already established; and, (c) we should never have any more bilateral trade agreements, even under Government supervision. They were a complete fiasco in the case of Hong Kong and some Far Eastern countries.
§ Mr. F. A. Burden (Gillingham)
The hon. Member seems to lose sight of the fact that Hong Kong imports more from us than she exports to us.
§ Mr. Burden
That is the real position, and in accounting for these things we have to consider this balance.
§ Mr. Price
I am very grateful to the hon. Member for giving me such valuable information. I know the situation, and I know the alibi of every Government. 361 Let us be honest about it. No party has clean hands in this. The Tory Party's record was bad in its years in office and ours is not as good as I would like it to be up to the present. Therefore, we are pressing the people who have control in the Government Departments to stir themselves, pull up their socks and do a hit more.
The hon. Member for Clitheroe developed the idea of the quotas. I consider that in the near future some of our friends at the Board of Trade will be called upon to deal with the Kennedy Round. That is the system inaugurated by the late President Kennedy to liberalise the trade of Europe, to bring down the tariff barriers lower than they have been brought down in the European Economic Community, of which we are not members at present.
But that is in the future. Some of the stuff at present flooding British markets is from Portugal, where there are very low wage standards of manufacture, to which other hon. Members have referred. Labour in this country could not compete, and even the most modern machinery in certain categories could not compete. We shall not be able to compete and yet Portugal is getting over a tariff wall of 17½ per cent. ad valorem now imposed by the Board of Trade upon her imports into this country. I think that I am correct in saying that. If I am wrong, the Minister of State will put me right. Portugal is, of course, a member of E.F.T.A., and I am asking that there should be investigation of—[Interruption.] If the hon. Member for Gillingham will restrain his impetuosity, if he wants to make a contribution to the debate, let him stand up and try to catch Mr. Speaker's eye.
I put seriously to my right hon. Friend that when the negotiations take place we must have in mind that a crude application of the Kennedy Round on existing tariffs might further aggravate the adverse position in Lancashire vis-à-vis imports into this country. I shall not say anything more illiberal than that, and I hope that I shall be forgiven for saying it tonight.
I know how sensitive Board of Trade Ministers always become, whatever side of politics they originate from. Every Board of Trade Minister that I have 362 known—I have known very many and have had pretty good relations with most of them after a bit of knocking about—has been very sensitive when anybody uses the word "dumping" here. It is a dirty word. But I maintain that a great deal of the dumping of goods in this country falls within the existing legislation if only some Ministers would bestir themselves and undertake the use of those instruments, if they could do so in accordance with the law.
I believe that a great deal of cotton goods are being dumped and that we are getting many imports that we do not need. They are disrupting our domestic market, taking 30 per cent. of it as against 4 per cent. in Europe. It is not fair competition —it is unfair.
If the Minister of State had full rein, if he had full charge of the horse, as he has not, I believe that he would agree that we are justified in bringing to his notice, in as vigorous a fashion as we can without being unfair, that Lancashire is not having a fair crack of the whip at present. We support this Order and we hope that the industry will be helped to get out of its present troubles and that the Order will be really effective under the new Development Council.
§ 8.55 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
Whatever the title of this new body may be, I feel sure that it will always be known as the "Cotton Board". This is, perhaps, the best tribute that could be paid to the work of an organisation which has been for many years unique, uniquely successful in presenting to the world a united front of capital, management and labour. The differences in this industry, as far as industrial relations are concerned, are so small as to be a model to the rest of the country. Even though it has been contracting and there have been redundancies, there have been none of the acerbities and abrasive qualities which, in other industries, seem to produce a great many strikes.
Therefore, the Board and those engaged in the industry have a great deal to congratulate themselves about and it is right that their power and activities should be extended. I do not think that the proportions of numbers of trade unionists, employers or independents matters much because, in fact, we look 363 at these things through the same pair of spectacles—and no one could call those spectacles rose-tinted tonight.
It was not recognised in the Minister of State's speech that there has been a fairly sudden collapse over the last month in confidence and in the state of the order books, particularly at the weaving end of the industry, and this has come upon the industry at a time when the number of alternative jobs available is at its lowest. This, I think, is what distinguishes this slump—I have to use the word, but I hope that the slump will be short—from many other slumps. First, it comes at a time when it is not possible to get jobs in other industries and, secondly and even more important as a distinction, as my hon. Friend the Member for Clitheroe (Sir Frank Pearson) pointed out, it comes particularly to concerns which have modernised themselves.
When the Cotton Reorganisation Scheme went through, a great deal of private and public money was spent and invested in new machinery in the mills that survived. A great deal of shift working was initiated and, therefore, a slump now is far more serious than before 1959, when the machinery did not require to be serviced as far as capital charges were concerned and when one could shut down a shed consisting largely of Lancashire looms without the enormous overheads that now fall upon a concern that has put in very expensive two or three-shift working machinery.
That is why I do not think that it really assists us to hark back to the past. This is now a high-geared industry instead of a low-geared industry. The consequences of not running continuously are different in kind as well as different in quantity from what they used to be.
This situation also comes at a time, ironically, when the world consumption of cotton and the use of cotton is growing. A great many people seem to think that the cotton industry and the cotton trade are doomed to extinction through the march and progression of events. That is not borne out by the experience of the world as a whole—very much the reverse. Even here, the proportions of cotton found to man-made fibres and other modern substitutes is still very high. In any case, the whole of the textile industry is one in which consumption is growing.
364 There are, therefore, three reasons to my mind as to why this sudden slump comes at the worst possible time, and I suggest that measures which would not normally be considered ought to be taken by the Government as a matter of urgency. We are coming also to a time when many of the barriers to foreign imports are suddenly being lowered. There is the elimination of the E.F.T.A. tariff walls and the removal of the imports surcharge. A whole lot of water is up against the dam which, in these next few weeks, is about to burst.
For that reason, I seriously suggest to the Minister of State that he takes back to the Government the message that it is not enough, as the hon. Member for Westhoughton (Mr. J. T. Price) so eloquently said, to produce machinery for the governance of an industry which will not be there to govern unless some action is taken soon. There is nothing in the Order to give any encouragement.
It behoves us all, when we make these criticisms, to make suggestions, and I echo the suggestion of the hon. Member for Westhoughton—and always have—that the Board of Trade should abandon its attitude of being a sort of passive umpire on the question of dumping. Whenever one sends to the Board of Trade complaints about dumping or unfair competition, it immediately takes a neutral position. "Show me your evidence", it says, knowing quite well that it is only through the Government, through Government sources of intelligence and through the Government machine, that most people can find out the evidence of dumping.
Yet people feel it in their bones. I believe that 75 per cent. of the time they are right but it cannot be proved to the satisfaction of the Board of Trade. It is really for the Board of Trade to help people to prove it, to be active in helping them to prove their case and to take the initiative. It should say, "We have received your complaint, and will follow it up, and if we can find any evidence, will let you know".
Portugal has been mentioned during the debate, and I would like to mention another E.F.T.A. country, about which there is great suspicion that there is concealed subsidy and dumping. It is Austria. It is particularly easy for Austria to do 365 this because a certain amount of the Austrian textile industry is nationalised. One knows very well that accounting in nationalised industries is often on a different basis, and can be presented in a different form. I am trying not to be partisan about this, but accounts can be presented in such a way as to conceal the true position much more easily than in a privately-owned concern.
For that reason I particularly ask the Minister of State to see whether the Austrians are not manipulating, to use a pejorative word—but he knows what I mean—the accounting system of their nationalised textile industry to secretly subsidis,— perhaps not so seceretly—the imports into this country, which have grown up very suddenly, of Austrian yarn and cloth. We must ask the Minister of State to do this tonight. I hope that in his reply he will at least say that in future the Board of Trade will abandon its neutral attitude towards complaints about dumping and secret subsidies.
There, without any breach of international agreements that may have been entered into, or of the complex of E.F.T.A. and the global quota and all the rest of it, the Board of Trade could strike a great blow for the domestic manufacturer. It would be a perfectly legal blow, because there is nothing in any of these agreements forcing the Board of Trade to take this passive, neutral, almost suspicious attitude to many complaints about dumping and secret subsidies. If he can make a declaration of intent that in future the Board of Trade will constitute itself the prisoner's friend rather than the prosecutor, the Minister of State will have done a good turn.
§ 9.5 p.m.
§ Mr. Joel Barnett (Heywood and Royton)
I agree with much that the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) has said, certainly that there will be a serious effect upon the cotton textile industry in Lancashire because of the removal of the surcharge and the fact that on 1st January the E.F.T.A. tariffs will become nil. In addition, my hon. Friend the Member for Westhoughton (Mr. J. T. Price) has referred to the Kennedy Round, which is very important. I honestly wondered what it was the hon. and learned Gentleman had in mind to 366 deal with those matters. I hope that he was not suggesting, as indeed, I hope my hon. Friend was not suggesting anything other than a liberal, with a small "I" approach to these matters. I am sure that he was not suggesting that we do not proceed as fast as we can to bring the Kennedy Round negotiations to a successful conclusion.
§ Mr. Fletcher-Cooke
One of the advantages of the lowering of the tariffs, in Europe, for example, to the outside world would be to take away some of the load that we bear upon imports into this country from other continents. Once the Kennedy Round is agreed, if it is, then the Continent of Europe will be obliged to take more than a derisory amount of 5 per cent., or whatever it is, as against our 40 per cent.
§ Mr. Barnett
The hon. and learned Gentleman is very optimistic about the Kennedy Round negotiations. I hope that he is right, but I fear that it is unlikely that the outcome will be as he envisages. The best that we can look for is perhaps a cut in the tariffs. There is no question of touching quotas in the present negotiations' as I read them. However, I agree entirely with his point about the burden being borne by Lancashire. He spoke about the surcharge and E.F.T.A., but I do not know what he was suggesting should be put in its place.
§ Mr. J. T. Price
Unless other adjustments are made, when we become more closely linked with Europe, as many people think we ought to be, I shall consider it my duty to raise my voice against further discrimination against our native industry in Lancashire by the removal of tariffs which are the only safeguard that we have against unfair competition. I shall want wide adjustments making, including the liberalisation of the share of trade absorbed by Europe as against the 30 per cent. that we are absorbing. I hope that I will not be a Liberal any more.
§ Mr. Barnett
I would add my voice to that of my hon. Friend. Something should be done for the Lancashire that we both represent.
The hon. and learned Gentleman referred to Austria and I would like to take up this point. There is ample evidence that many textile made-up goods coming from Austria are certainly not produced 367 in that country—at least not in their entirety. They may well have come from Eastern European countries and elsewhere. I hope that my hon. and right hon. Friends, will look very closely into this. This is something about which we in Lancashire and those of us who represent Lancashire feel very strongly.
In presenting this Order the Minister of State stuck rather rigidly to his brief. I object to nothing in the Order. What I object to is what is not in it. My right hon. Friend said that this is not merely another Cotton Board. That may be, but those of us who have read the Order would be tempted to say that it is not much else to deal with Lancashire's problems. I have no wish to exaggerate the situation, which can be done if we are not careful. The percentage of unemployed in Lancashire is lower than the country's average. We should be grateful for that, but those of us who were home last weekend will know that there is coming about already a degree of short-time and unemployment in various mills. It certainly applies in my constituency.
In introducing an Order like this, when we have very little opportunity to discuss Lancashire's affairs or the textile industry, I was surprised that my right hon. Friend did not refer to the industry's present fears. I know that the Order does not specifically deal with these other matters, but he should have been aware of them.
In my constituency I was recently at a dinner of Lancashire and Yorkshire textile employers, who were frightened by the present situation and gave me their grounds for their fears. Of course, this is nothing like so depressing as the situations we have experienced, but we should not be complacent about the present situation. In answer to a series of Questions about Portuguese imports, on 8th December, the President of the Board of Trade said:…. I have very much in mind"—the question of the problem of the Portuguese imports.…I have discussed this with the Portuguese Minister of Trade… I am constantly reminding the Portuguese Government…"—[OFFICIAL REPORT, 8th December. 1966; Vol. 737, c. 1549.]He is constantly doing something and has it in mind, but what is he doing about this problem?
368 Reading and re-reading his Answers to these Questions, I could find evidence of no positive action which he is taking to allay the fears of hon. Members for Lancashire constituencies or the people in its textile industry. One must be inclined to ask, apart from what the President of the Board of Trade has in mind and is discussing with Portuguese Ministers, exactly what will happen? The hon. Member for Clitheroe (Sir Frank Pearson) said that anything we do must be based on voluntary methods, and he added that we have got to do something. Precisely what that was intended to mean, I do not know—
§ Sir F. Pearson
My point was that the Government have no other methods available than voluntary methods. If they cannot get the Portuguese to limit their exports voluntarily, they will not get those exports limited at all.
§ Mr. Barnett
The hon. Gentleman may be prepared to accept that if the Portuguese Government do nothing about it we should simply allow it to go on, but I certainly am not. If we cannot get voluntary agreement, I should be prepared to suggest that we take some action other than voluntary. Many people in Lancashire will find it odd that, while we stand by and watch the Portuguese Government take action against our efforts to obtain a reasonable settlement in Rhodesia, at the same time we allow them to ruin the Lancashire textile industry.
If we are told that we should leave it to voluntary methods to allow whatever the Portuguese are prepared to send into Lancashire—incidentally, using similar methods to those used in Austria, with goods coming from Eastern Europe and being made up in Portugal and then exported to Britain at the expense of Lancashire—I am not satisfied to accept whatever voluntary agreement we can get with with the Portuguese and the people of Lancashire are entitled to expect us not to settle for that voluntary agreement.
I hope that my right hon. Friend will be able to assure us that the agreement which we get with Portugal will be satisfactory. If we cannot get a satisfactory one under voluntary arrangements, I hope that he will do something off his own bat. We have been trodden on too much by Portugal, even though it is our 369 oldest ally. When the Portuguese can please themselves, and we have to take whatever exports they choose to send, voluntary agreements are not something to which we can agree.
I hope that my right hon. Friend will show more energy. I advise him to reread the debate in August, 1962, on the industry, which was very interesting. There were some interesting speeches from a few of the present Cabinet Ministers —my right hon. Friends the Members for Sowerby (Mr. Houghton), Blackburn (Mrs. Castle) and Rossendale (Mr. Greenwood), for example—I am sure they will be interesting to my right hon. Friend. I hope that he will take them to heart.
This question of Portuguese exports of textiles is not, of course, the whole answer. Another suggestion was made by my right hon. Friends, to whom I referred—the arguments for an import commission, for example.
I put a Question to my right hon. Friend the President of the Board of Trade a few days ago and the Answer I received was, to say the least, somewhat discourteous. I asked:Can he tell us when he expects to be able to fulfil the pledge to set up an Imports Commission?He replied:I would refer my hon. Friend to the Order on the Textile Council which we shall be moving in this House next week."—[OFFICIAL REPORT, 8th December, 1966; Vol. 737, c. 1549.]What did that have to do with the Question I asked? To put it mildly, my right hon. Friend was evading the point, which is discourteous when one considers that this is not a matter that should be evaded, particularly as it is one of the pledges we gave. The argument for the establishment of an Imports Commission has been adduced for many years and is as valid today as it ever was. The need for some control over the quantities being released at any one time—assuming that one allows even the present level of imports—is obviously necessary.
One must consider the effect of a great volume of imports coming in, in relation to prices, for example. I hope that the Minister will tonight give a valid reason why the Government have not introduced legislation to set up an Imports Commission. So far we have merely had references to something which in 370 no way deals with the fact that we gave a specific pledge to establish such a commission.
To introduce this Order and not, at the same time, to refer to the need for such a Commission and the other problems of the industry is astonishing. I trust, therefore, that my right hon. Friend will say more in reply to the debate than he said in his opening speech. What action do the Government envisage to help the Lancashire textile industry, which has suffered in the hands of successive Governments?
That does not mean that employers should simply sit back and complain.
I hope that mill owners, small and large, who have for a long time complained at the fact that manufacturers making up garments have taken foreign goods, will bear in mind that they, too, have a responsibility in this matter. Anybody with knowledge of the industry knows that when the trade is busy the attitude of mill owners and executives to the makers-up is, "Take it or leave it. It will be probably nine months before we can deliver. If you do not like it, go elsewhere". And then, when a slump comes, they are surprised to find that the manufacturers have literally gone elsewhere. Mill owners should change their attitude in the conditions that exist today.
Having said that, and without wishing to exaggerate the state of the industry, there is a need for the Board of Trade to assure the whole industry, and those we represent in Lancashire and Cheshire, that they will see that the textile areas are not allowed to suffer as they have in the past.
§ 9.22 p.m.
§ Mr. F. A. Burden (Gillingham)
I intervene briefly and, in doing so, declare my interest because while I am not a manufacturer of piece goods, my company has for 150 years been one of the biggest distributors of textiles in Britain. Whenever we possibly can, we always buy British textiles. I fully understand the passion with which hon. Members who represent Lancashire constituencies speak about the industry and the interests of their constituents. At the same time, we must try to bring a sense of reality into this debate; and as a big distributor perhaps I will be able to make certain useful observations.
371 The dumping of textiles into this country has been mentioned. How does one determine whether goods are dumped? It is all very well to talk about dumping, but if wages are lower in another country or if the workers in that country are prepared to work longer hours than we are—so that the goods from that country can be sent here more cheaply—is that dumping? Must they not send anything to us unless they are working the same number of hours as we are and unless they carry out the same restrictive practices as we do? In other words, can we insulate the Lancashire textile industry from the liberalisation of world trade that is fast coming about?
With our desire to join the E.E.C., should we not realise that duties will be lifted and that there will be a far greater freedom of trade? Should all the goods coming from the factories in other countries be jeopardised because we refuse to buy them? Should the people of Portugal and other E.F.T.A. countries not send us goods because they can produce them more cheaply or because they can offer better value for price than we can? Why are textile distributors forced to go abroad to buy grey cloth to turn into sheetings? The answer is because they are of a standard and type that can be bought more cheaply overseas. That is why we are importing grey cloth and converting it into sheets in this country.
We are doing this only because we are forced to do it. If we did not do it, we should run into the position which the hon. Member for Heywood and Royton has said we have experienced in the past: deliveries would clog up; we should have to pay higher prices; we certainly would not be competitive in the world markets with our sheets; and the British public would have to pay more.
Hon. Members opposite have referred to Hong Kong, which is a British Crown Colony. If the people there can produce certain cotton textiles cheaply, then Hong Kong gets a Commonwealth Preference Certificate. In future, they will be no better off than Portugal or any other E.F.T.A. country which sends us textiles. Hong Kong is a very good market for British merchandise.
§ Mr. Burden
Yes, it is. I have been through the factories in Hong Kong. I was there two months ago. There is a very considerable import of British goods into Hong Kong. Would the hon. Gentleman prefer that Hong Kong should not be prosperous and that we should pour out money to Hong Kong in aid?
§ Mr. Barnett
I, too, have visited Hong Kong. I accept that it is no fault of the Hong Kong Government that we are not exporting more to them. But we have an unfavourable trade balance with Hong Kong. All that I am suggesting, and all that the people in Lancashire would suggest, is that other countries should take a fair share. That is all we are asking for, not that we in Britain should be taking a much greater proportion of imports from under-developed countries.
§ Mr. Burden
What does the hon. Gentleman mean by "a fair share"? Does he mean a fair share of Lancashire's products? Is that what he is saying?
§ Mr. Sydney Silverman
What we on this side of the House who represent Lancashire constituencies want is that Lancashire people should not remain unemployed in order to keep people in Hong Kong employed.
§ Mr. Burden
This is very interesting. Hon. Members opposite might like to know that Hong Kong is earning enormous amounts of American dollars. All the big American buying houses which have moved into Hong Kong are buying in a very big way.
It is all very well for hon. Members opposite to say, "But look at Portugal. Portugal is a member of E.F.T.A., but we demand that something should be done to stop her sending to us her cotton exports". Are we to do this with every industry which is threatened as a result of our going into E.F.T.A.? If so, then we should get out of E.F.T.A. and become an isolated trading unit. If that were to happen, we should soon be in very considerable difficulties. The position will not be improved if we go into the Common Market. It will become even more competitive and difficult.
Lancashire should go out of the ordinary weaves and into high quality cottons such as are still produced and sold by Switzerland where costs are just as high as they 373 are here. If Lancashire goes in for high quality fashion cottons, there is a future for her. But I do not believe that there is a future for her if she tries to compete in the same categories in which the Portuguese and the lower-cost countries produce their goods.
§ Mr. Geoffrey Hirst (Shipley)
What we have argued in the House time and again, and what we are arguing again, is whether this country should be called upon to take so large a share of the world's markets vis-à-vis other countries. That is the point.
§ Mr. Burden
It is difficult to say how we are to determine what these amounts should be. We are endeavouring to extend our exports everywhere and at the same time Members are saying, "But we must restrict the exports of other countries to us". This is the analogy of that remark. But surely what hon. Gentlemen opposite are complaining about so bitterly is merely a continuation of the policy of shake-out, of which the Prime Minister said the Government were in favour? He said that we must accept that many of our older and old-established industries would disappear in the shape of things to come, and that people in industries which could no longer compete in world markets would have to leave them and go into industries which could compete in world markets and provide us with our exports.
This is part of the tragedy, and the responsibility for much of it lies on the benches opposite.
§ 9.30 p.m.
§ Mr. Sydney Silverman (Nelson and Colne)
I am very grateful for the opportunity of contributing to this debate, and I am grateful to my right hon. Friend for giving us the opportunity of having it at all, not because I have anything very profound or intelligent to say about the Order which he is asking the House to approve tonight, but because, as has been said already, it gives the House of Commons one of its very rare opportunities of discussing a local problem which is rapidly approaching catastrophic conditions.
The constituency which I represent in this House is not Hong Kong. I have represented it for a generation, and until very recent years out of every three 374 people in that constituency who worked at all, two worked in the cotton textile industry. We are not quite so badly off today. It is no longer two-thirds of the working population, but it is still 50 per cent., or nearly so.
When the hon. Member for Gillingham (Mr. Burden) talks about the Government's policy of a shake-out, of getting people out of inessential industries into more essential ones, will he endeavour to bear in mind that Lancashire has been doing this for the better part of 50 years? We are not an over-manned industry. We have never been an overmanned industry. Until June of this year we had reached a situation when there was a shortage of labour, and a policy designed to produce a shake-out will presumably not be regarded as necessary in an industry or a constituency where there is already a shortage of labour.
It is very tempting on one of these very rare opportunities to review the whole dismal and lugubrious tale, but I must resist the temptation to do so. I want to focus on the present position, and on the Government's direct responsibility for it.
We were doing well. Whatever may be thought of the reconstruction scheme which began in 1958, or whatever may be said about the motivation of it, or the prior neglect, by both major parties, of what used to be the principal exporting industry of this country, what is true is that it was producing an improvement, and by June of this year there was not merely a shortage of labour, there was not merely rapid and quite extensive modernisation, which is what we have been crying out for for 30 or 40 years, but there was a certain degree of prosperity.
I am sorry that my right hon. Friend the President of the Board of Trade is not here. He should have been. His answers to Questions not merely of mine, but of others, show a lamentable complacency and a lamentable ignorance of the present situation in Lancashire. It would have done him a lot of good if he had been here and heard the valuable speeches that have been made by non. Members on both sides of the House in this debate. I did not agree with all of them. I agreed with many, but with some I did not agree at all. But whether or not I agreed I want to avoid any danger of 375 repeating points which have already been valuably and usefully made.
What is the position today, compared with the much more satisfactory one which existed as recently as June of this year? I asked the Minister of Labour a week ago what the increase in unemployment in Nelson and Colne had been over the last three months and how it compared with the rate of increase in the United Kingdom as a whole. The reply was quite shocking. Over that three months, unemployment in Nelson and Colne increased by 101 per cent. In the country as a whole over the same period it increased by 71 per cent. So, in this constituency, unemployment rose half as much again as it did for the whole country.
What is the good of the hon. Gentleman's saying, as the President of the Board of Trade said to me the other day, that the rate of unemployment is still below the national average? If that rate of increase goes on, for how long will it be below the national average? Are we to wait until it is above the national average before we do anything to stop it? It is time that the President of the Board of Trade turned his attention to this matter. It is time that he knew what was going on.
In an Answer to me my right hon. Friend said that although some mills had been closed they were old-fashioned mills —mills that were not modernised. This is not true. The figures that the Minister of Labour quoted were the figures of registered unemployed. Anyone who knows anything about this problem knows that the figures of registered unemployed in the Lancashire cotton industry are misleading and unrepresentative, for two reasons. First, they do not include part-time work, and secondly, they do not include women workers, because they do not usually contribute in their own right to social security provisions and are therefore not included in the Ministry of Labour registered figures. But they are still unemployed.
If a man and a woman are working, and both lose their jobs, it is not only one income that has gone; both have gone. No figure of unemployed is realistic which does not have some method of correction or adjustment in respect of 376 workers who are not registered—women workers, on the one hand, and part-time workers, on the other. There was an element of truth in my right hon. Friend's statement that some of the factories that closed were the old-fashioned and unmodernised ones, but the most highly modernised and really wealthy ones are the ones which have gone off on short time.
The Government have a special responsibility for this, because every one of their Measures—I am not debating now whether they were right or wrong in general, though everybody knows that I was no supporter of them in any case—for dealing with the economic imbalance in our trade has been especially damaging to the cotton industry. I will take them one by one. First, I have already pointed out—I need not repeat it—that, in so far as S.E.T. was intended to shake out workers from industries where they are not necessary so that they would find new and different employment in industries where they are more necessary, it could not possibly have applied to the Lancashire cotton textile industry where there was already a shortage of labour.
In this industry many of the producers are small family concerns with limited financial resources. I know that it will be said that the S.E.T. taxes paid by them will ultimately be repaid.
§ Mr. Silverman
Yes, but when? Where are these people to get the money in the meantime in circumstances when the Government prevent them from borrowing it from the banks?
§ Mr. Barnett
Perhaps my hon. Friend is not aware that banks, in my experience, have not been backward in helping to provide finance to manufacturing industries.
§ Mr. Silverman
That is not my information. My information is that the credit squeeze has been one of the direct causes of many of the smaller factories closing down and going out of business altogether.
§ Mr. Silverman
All I am saying is, not that my information is correct, but only that it is my information. It comes 377 to me from the mouths of people who are most directly concerned. [Interruption.]
§ Mr. Speaker
Order. The hon. Member for Heywood and Royton (Mr. Barnett) must stop making interruptions from a sedentary position.
§ Mr. Silverman
The Government's Measures have been especially hard to bear in an industry of this kind. There has been no attempt by the Government to relieve the industry of any of the burden with which it is faced. Even now, the Board of Trade offers subsidies and grants for re-equipment in manufacturing industries, but only where they are in development areas—or are the grants available elsewhere?
§ Mr. Silverman
I am greatly relieved to hear this. I assure my right hon. Friend, who has corrected me on this fact, that steps ought to be taken to make this more widely known than it is in Lancashire.
Another of the things which is said to me is that, because it is not a development area, it is deprived of the benefit of these grants. If my right hon. Friend is saying—if it is so, I hope that he will take steps to make the facts more widely known that they are—that the grants are available to firms which want to re-equip, whether they are in a development area or not, this will do something to relieve anxiety, certainly in my constituency and throughout North-East Lancashire.
I do not want to add anything more than this. Enough has been said in this debate to show that there is wide anxiety, and justified anxiety, about what could be the beginning of a new economic paralysis in the cotton industry. This is what people fear. This is what is alarming them. This is what is making the rate at which mills close accelerate—because confidence is oozing away. If the Government can do anything to restore that confidence, they ought to do it quickly.
My right hon. Friend the First Secretary, speaking in Blackpool very shortly before the General Election, said that a Labour Government would treat the prob- 378 lems of the cotton trade as a first priority. I am inviting my right hon. Friends to redeem that pledge. I do not think that they will claim to have done it yet. This constituency has been loyal to the Labour Party, it has been loyal to the Labour movement, and it has been loyal to successive Labour Governments over very many very difficult years. I hope it is not out of place to call on this Labour Government at this time to be loyal to this constituency.
§ 9.46 p.m.
§ Mr. F. Blackburn (Stalybridge and Hyde)
The hon. Member for Gillingham (Mr. Burden), who breezed in late into the debate and has now breezed out, felt that he should apologise for intervening. Having been born in a Lancashire textile constituency and having represented for many years a famous Cheshire textile constituency, I do not feel that I need to make any apology for entering into this debate.
There has been a note of pessimism in the speeches tonight, even in those which professed a certain measure of optimism. I confess that I take a much gloomier view of the position than did the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis). I do not underestimate what has been done by those firms in the industry that have managed to survive, nor do I underestimate the problems still facing them.
Let me start with the pleasant part of my speech. I must express appreciation to the Cotton Board for what it has done over the past years and sound a note of welcome to—what is it called?—the Textile Council (for the Man-Made Fibres, Cotton and Silk Industries of Great Britain). Perhaps it was advisable that the Cotton Board should be extended in order to include these other matters.
By doing this, however, we have not by any means solved the problem of the industry. The functions which the Textile Council is to have are splendid—functions such as methods of production, management and labour utilisation, training and recruitment of employees, safety, industrial diseases, accounting and costing practices, collection of statistics, scientific research undertaking measures for the improvement of design, marketing research, promoting the development of 379 the export trade. These are all wonderful but, as has been said, they do not touch the main problem of the industry.
The main problem of the industry is imports and dumping. Mention has been made of dumping, and I shall refer to it myself in a moment. The industry is having to struggle. In spite of the structural, financial and technical changes that have taken place in the industry, as mentioned by the hon. Member for Morecambe and Lonsdale, the industry is still struggling. It used to be said of the industry that in good times people did not invest money in the industry because they thought it was not necessary, and in bad times they could not afford to do so. That is no longer true. The industries which have survived have survived through their own great efforts.
I thought the hon. Member for Clitheroe (Sir Frank Pearson)—he has disappeared at the moment—looked at what happened under the last Conservative Government through rather rosy tinted spectacles, but apart from that, I share his pessimism. This is what one managing director has to say about it:We have tried to do everything that Mr. Wilson has said will have to be done if Britain is to be 'dragged kicking and screaming into the 20th century'.We have recruited scientists and technologists on a scale considered inappropriate to textile production.We have invested an average of £600,000 per annum for the past eight years in capital intensive equipment.We have sent salesmen to sophisticated markets to sell, and a subsidiary does £500,000 in U.S.A. and Canada.We have gone completely vertical and spinning, weaving, dyeing, bleaching, finishing and garment making.We have acquired other units to reach the scale associated with maximum production economies and marketing strength.Yet in spite of having done all that, they are faced at the present time with difficulties, and the reduction in sales over the past five months has been 26 per cent. down on the previous five months. He does not blame everything on the Prices and Incomes policy or the Selective Employment Tax—and it is good to have a letter that does not blame it on those things. He continues to say:We have had this superimposed on a textile dumping situation of the most barefaced proportions.380 The hon. Member for Gillingham asked how do we judge? What evidence was there of dumping? Let me give him some. The letter continues:We have today had offered a dress fabric f.o.b. Hamburg at 17.5d. per yard. Our manufacturing cost is 29.75d. per yard. Portuguese sheeting is landing at 39d. per yard, and our cost is 48d. per yard. The above 48d. is manufactured in an automated spinning mill, woven on sulzer shuttleless looms and finished in a continuous automated bleachery.He continues:Furthermore, you cannot find any cheap textiles in either Germany or Portugal.I took this matter up with my right hon. Friend the Minister of State, who always tries to be very helpful. It is a pleasure to write to him. This is what he had to say in his reply:As you know, the Customs Duties (Dumping and Subsidies) Act, 1957, empowers the Board of Trade to impose anti-dumping countervailing duties on goods which have been dumped or subsidised, if they are satisfied that these are causing or threatening material injury to an industry in this country and consider that such action would be in the national interest.…. I should emphasise that the question of material injury must be considered in relation to an 'industry' as a whole.…The question of dumping could refer in that case only to sheeting and dress fabrics.
…and we have therefore to decide what production or range of production can be considered as constituting an industry within the meaning of the Act. Whether the production of the two different types of textiles mentioned by your constituents can each be separately described as an 'industry' cannot be decided without further information, and I suggest that the firm should have an exploratory meeting with the officials concerned here, when the requirements of the Act can be explained to them and they can be advised how best to proceed with the formulation of an application in concert with any other producers affected.I brought this letter to the attention of my constituent, and this is what he said:Dealing first with the Portuguese sheeting imports, a trade delegation has visited the Board of Trade and was advised that if we cannot manufacture sheeting in the U.K. at Portuguese prices it would clearly be advisable for us to cease making sheeting! My company has £1,150,000 invested in automated plant for the through manufacturing of sheetings.My constituent says that what has happened with regard to sheeting has happened already with other sections of the industry. Of course, since sheeting 381 does not represent a whole industry any more than drill and overall section did, or any more than candlewick base fabric, pillow cottons, cambric and so on represented the whole industry, so, bit by bit, the industry is being eroded until it will be left with—what was it the hon. Member for Gillingham said?—the "best" part of the trade, the selected part of the trade.
The industry cannot survive attacks of this kind. We cannot persuade the Board of Trade under this Government any more than we could under the Conservative Government to appreciate the real problems. It is no good saying that we have made arrangements for the limitation of imports from Hong Kong, India and Pakistan if at the same time we let in floods of imports from every other country which wants to send them in. Yet this is what has been happening.
Something must be done about dumping. Obviously, sheeting is not the whole of an industry. I wish that we could have from the Board of Trade a little more enthusiastic co-operation. It is said that there has not been a great deal of unemployment in the textile industry recently. This is true, but one of the reasons why there has not over the years been heavy unemployment is that so many people have left the area, and, on top of that, as my hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman) said, the women and some of the part-time workers have left the industry and are not counted among the unemployed.
In this industry we have carried a good deal of the burdens for the rest of the country. I believe, and I am sure that my colleagues agree, that we deserve something better than we have had up to now. We deserved more support from the last Conservative Government and did not get it. We deserve it and should have it from this Government.
It is up to the Government to build something more on top of the Order. The Order is very useful for an industry which is expanding, and it has some value, of course, for an industry which is fighting for its life, but, as I said before, it does not deal with the fundamental problem. There is no hope until the Government realise what the industry's fundamental problem is.
§ 9.59 p.m.
§ Mr. Charles Mapp (Oldham, East)
This debate got off the ground after the contribution with the hon. Member for Clitheroe (Sir Frank Pearson), and the longer it goes on the more the Government get the stick. I shall continue in the same critical tone which began on that side of the House and is now building up to greater heat on this side.
I regret that the Minister is not here as I want to tell him quite frankly that it would seem that the Order has been the subject of consultation all across the industry—employer, employee, the Cotton Board—but Members on this side of the House had no consultation and are here presented with a fait accompli. I would have thought that in this day and age at least the Members concerned on the Government side might have had a little consultation on important matters of this kind. I believe that a principle is involved here, and I therefore enter that protest. I would like to feel that this might be corrected when future matters of textile interest are concerned.
We have had a general but necessarily reserved welcome for the wider coverage of the Textile Council. In the main, I think that that would be right. I consider that the wider coverage is the result of events that have not been engineered by Governments. It would be wrong for the present Government, the last Government, or the one before to assume that this is something constructive which they have initiated. It is nothing of the kind. It is merely the development of industry, which could have serious reactions in other spheres. The author of the 1947 Act was my right hon. Friend the Prime Minister. I suppose that he can be proud of some of the comments, particularly of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), who spoke of the consequences of the original thinking in that Act. But, having acknowledged that, I fear that there is some 1947 thinking in the Board of Trade at present.
It is no good relying on past initiatives which were extremely good in themselves. The Cotton Board has had 20 years' experience in which it has grown up to considerable responsibility, but it now has certain limitations and we should recognise those limitations within the new Council we are putting together.
383 May I now refer to some of them. The hon. Member for Gillingham (Mr. Burden) mentioned the merchant people. I have equal reservations about the inherent difficulties of having had on the Cotton Board in the past the converters and the merchant people involved in the end product of Lancashire, or the end product as it comes in from outside the country. They manipulate the market, financially and otherwise, to the disadvantage of Lancashire, and Lancashire should put its house in order.
It should make sure that the Minister will ensure that on the council are people who are intrinsically interested in the production of the final cotton or manmade fibre article. They should be people who are physically interested and not purely interested as merchants of the City of London or some other city. In the main, those people have not done much of advantage to the textile industry.
I come now to what I consider to be the main weakness of the proposal. Schedule 2, paragraph (9) says that a function of the Textile Council isAdvising on any matters relating to the industry (other than remuneration or conditions of employment)"—The hon Member for Clitheroe objected to that exception, but I do not. It goes on:…as to which the Board of Trade may request the Council to advise and undertaking inquiry for the purpose of enabling the Council so to advise.This is nearly paralysis.
Two years ago, and more recently, we on this side of the House went to the country on what I believed at the time to be an honest statement—that we wanted and regarded as essential an import board for the industry. I accept that this may have been overtaken by events, but if my right hon. Friend the Minister of State will read the privileged brief the Cotton Board has sent him he will see that the industry is asking for a committee of high standing, comprising representatives of the industry and independents, who can look at the flowing situation month by month in order to deal with abnormal imports where dumping and so on is involved.
It is all very well for the hon. Member for Gillingham to smile, but Lancashire sometimes looks over the wall and asks 384 why, with its long and cherished history, it does not have the protection for the cotton industry that other industries such as the motor industry and many others have. They get great slices of protection. Lancashire is not asking for that. It is asking for a square deal.
§ Mr. Burden
I smiled because the word "dumping" has been hurled across the House so often. But I have never yet heard a definition of it. If only hon. Members would try and define what is meant by dumping and what is involved.
§ Mr. Blackburn
Surely dumping is when a country is selling abroad at lower prices than at home—which is what has happened with regard to sheeting from Portugal.
§ Mr. Mapp
I agree with my hon. Friend and I am grateful to him. There was a case with respect to Canada only a few months ago and some time before that, to a more limited extent, there was a case involving Eire. There is a profound need not for the Board of Trade to take a retrospective view, but for a committee of high standing to look at the current situation regularly.
The House must read the history of our times. One might think that the verticalisation that has taken place is all to the good. But how has it come about? By the actions of the Government—this Government or their predecessors? It has not come about through governmental action at all, but because the man-made fibre section found mergers a wise course to follow financially. I am not misreading the signs. There have been some advantages to Lancashire through the fortuitous consequences of financial operations and the industry is all the better for them.
But I say frankly to my right hon. Friend—and if we were being asked to support a prayer against the Order tonight I could support it for valid reasons —that the months, perhaps the weeks, are 385 running out for Lancashire and that it expects genuine concerted action about its immediate future. If it is not forthcoming, there will be difficulties on this side of the House.
The most important thing I have to say is that, if we do introduce short-term remedies, which are overdue, it is surely the duty of the Government to give leadership to the new Textile Council. The Cotton Board is rightly commenting on its external relationships with the Government and internationally about imports and the Kennedy Round, and it is being critical. The Cotton Board—and I am sure that this will also be the case with the new Council—wants to cover the nation's needs, but it does not know what the Government are thinking. The Government should set that right in the next few days and tell the Cotton Board, "Let us know your long-term thoughts about the industry generally, its external relations and the organisational and financial set-up so that we may be able to assist the industry to become viable".
Perhaps this will set at ease some of the anxieties the hon. Member for Gillingham has, for he would find that it is just as profitable—and the articles are probably much better—to buy homemade or manufactured articles than to go across the sea for purely entrepreneur purposes.
§ 10.12 p.m.
§ Mr. Eric Ogden (Liverpool, West Derby)
Every Lancastrian has a certain amount of cotton in his veins and I make no apology for intervening in the debate, particularly when the arguments put forward by hon. Members from the cotton belt are also supported by local organisations such as the Lancashire and Cheshire Industrial Development Association. Some hon. Members, including my hon. Friends the Members for Westhoughton (Mr. J. T. Price) and Oldham, East (Mr. Mapp) will be defending the Government's actions and trying to explain them when we meet outside organisations next Friday and on future dates.
Lancashire has received its raw materials, and, I hope, will continue to receive them, through the Port of Liverpool. We are bound up with the prosperity of the Lancashire cotton industry. My hon. Friend the Member for 386 Nelson and Colne (Mr. Sydney Silverman) suggested that an extension of the development areas would help the cotton industry in his constituency and in other areas. My information is that it would not. It would certainly attract new industries to these areas, but the cotton industry has carried out most of its re-equipment and if it is placed in a development area the industry would be fairly low on the list of priorities.
The hon. Gentleman the Member for Gillingham (Mr. Burden) suggested that the only future for Lancashire lay in high-quality and fashion goods. Certainly, there is an expanding future there, but the case can be made out that this country needs a viable horizontal cotton industry, just as it needs a good agricultural industry or any other type of industry. We need a broad base to carry this high-quality stuff.
My right hon. Friend the Minister of State may feel that he has been rather harshly treated by some of his hon. Friends tonight. If this is so it is because the need is great and we hope that when he replies he will give us some more encouragement. On a personal note, may I say that the whole House will sympathise with my hon. Friend the Member for Burnley (Mr. Dan Jones), who lives in a cotton area, and represents the cotton industry, knows it vertically, horizontally, inside and backwards, but who, because he is a Parliamentary Private Secretary, has to keep quiet. I would like to put that on the record in case he gets into any difficulties in his constituency. No doubt, having the ear of a Minister, he has been "in" on this Order.
In conclusion, I would support these proposals and urge the House to accept them.
§ 10.15 p.m.
§ The Minister of State to the Board of Trade (Mr. George Darling)
My hon. Friend the Member for Westhoughton (Mr. J. T. Price) said that he did not expect the debate upon this Order to be non-controversial. I certainly did not expect it to be so, particularly when I saw hon. Members representing Lancashire constituencies coming in, on both sides of the House, to give me what I am sure they think is the pasting that the Board of Trade deserves. May I take up 387 first of all the point raised by the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) and other hon. Members about the absence of my right hon. Friend. He is at a rather important meeting tonight, dealing with export promotion. I am sure that hon. Members, on reading today's trade figures, will forgive him for paying attention tonight to the export drive.
Let me assure hon. Members that we are not complacent about the Lancashire cotton industry. I would point out that we are now dealing with a wider industry, but that does not suggest that the problems of the cotton industry are any the less important. Having been born and brought up in Cheshire, worked in Manchester and now representing a West Riding constituency, I think that hon. Members will agree that I am at least in touch with the textile industries of the North of England.
I will deal almost entirely with the cotton industry and not with the possibilities for the wider textile industries. When I was talking about a growing industry it was with reference to the possible further developments coming from the chemical industries in connection with the development of man-made fibres. There are opportunities here of great scope for future expansion. The debate tonight has been very much about the Lancashire cotton industry and I will confine myself to that subject.
The first point raised concerned dumping of imports into this country. Hon. Members will agree that, with the international obligations, which are not placed upon us alone, but upon all the other countries in the Western world, with whom we trade, to try to take any kind of unilateral action, not just on dumping but on import arrangements of one kind or another, is extremely difficult. Dumping is a special matter. We have authority under international obligations to deal with it.
The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) summed up the views of many hon. Members when he said that the Board of Trade should abandon its passive attitude to dumping and secret subsidies. He went on to say that under the present arrangements, the Board of Trade asks for evidence before it will do anything. He added 388 that the Board of Trade ought to be helping in a far more practical and perhaps speedier fashion to find the evidence.
I do not know what went on in the past, but I can assure hon. Members that we do want the Board of Trade to help find the evidence when we are informed of anything that looks like dumping or secret subsidies. My hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) raised a point about this, and that was why I said that his constituent should get in touch with the Board of Trade officials quickly, so that we could get down to finding the evidence. In parenthesis, I would say that I was very surprised to hear of the views attributed to Board of Trade officials and I would like to have a word with my hon. Friend so that I can take the matter further.
§ Mr. Darling
I am not leaving it, I can assure him. I would be in trouble if I tried to leave dumping at that point.
My hon. Friend the Member for Oldham, East (Mr. Mapp) referred to the representations which we will receive from the Cotton Board. He has an advance copy, which gives him the advantage, as I have not seen it yet. We shall look carefully at the Cotton Board's representations and will examine again the way in which this anti-dumping legislation operates, to see what improvements can be made. We will not delay, as soon as we receive the representations——
§ Mr. Burden
Surely, in assessing dumping, we cannot take into consideration the fact that wages might be lower in another country and that there might be fewer restrictive practices. If so, all the wages and restrictive practices throughout the whole of the liberalised trade area would have to conform and wages in it would have to rise at the same time.
§ Mr. Darling
Some of my hon. Friends have already suggested that a definition of dumping is very clear. The hon. and learned Member for Darwen will probably explain to his hon. Friend that dumping can be measured and can be found where an industry is selling in this country below the cost of production at home. We can look carefully at any allegations of dumping, but we must obviously have the evidence before we can act——
§ Mr. Peter Mahon (Bootle)
Is not the most salutary aspect of dumping the fact that coming into this country are the cheapest possible kind of goods, the most inferior, which do not stand comparison with the production in Lancashire? This is what gives our people most pain.
§ Mr. Darling
That has been brought out clearly in the debate.
The question of closures has been raised. My hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman) expressed this clearly and moderately when he said that, until the middle of this year, they seemed to be going well. Almost certainly, the closures up to the last few months were the results of amalgamations, mergers, modernisation and so on, all of which, of course, will make the industry far better based than ever before. It was rightly becoming—I hope that this is only a temporary halt—a capital-intensive industry.
One would, therefore, expect to see the reduction in employment as the new labour-saving machines come in. My hon. Friend and others were right to point out that, over the years, this process has gone on with the full co-operation of the trade unions. Particularly in the light of the debate, I think that trade unions in the industry deserve a tribute for the way they have accepted modernisation schemes, mergers, closures of mills and the rest to make the industry prosperous for those who will remain—knowing very well that, in the process, thousands of cotton workers will lose their jobs. This almost technical revolution in the industry has gone on remarkably smoothly.
We now come to the downturn. The hon. Member for Clitheroe (Sir Frank Pearson) gave us three reasons why the downturn had come. The first was the downturn in the world textile cycle, which was bound to affect many, if not all, of the major Western textile manufacturing countries next was the contraction in the home economy which we know has come about because of Government Measures to get the economy and the balance of payments straight. He then went on to refer to the excessive—I think that he would use that word—imports into this country.
390 I would not quarrel with any of his reasons. We have been in touch with the Cotton Board to see how it assesses the closures. There is some confusion about the number of closures which actually are closures—as distinct from temporary stoppages—which have happened in the last few months. This is something which we want to consider very carefully. I should think, from the Press reports I have seen, that at any rate some of the closures are not really closures but temporary shutdowns, short-time working and the rest. I hope that the measures which must be taken at some point—what point I cannot say—for reflation will have their effect on the cotton industry, as on others, and that this downturn will be only temporary——
§ Mr. Hall-Davis
I am glad that the right hon. Gentleman is looking into this with the Cotton Board. From my own experience, which is borne out by hon. Gentlemen opposite, there are permanent closures and it is this aspect which is causing so much concern.
§ Mr. Darling
There are many permanent closures, I agree, but to what extent they were due to the reasons which the hon. Member for Clitheroe gave or are still the result of modernisation and mergers, we still do not know. I cannot answer the hon. Member's question about the total, but we are trying to get a clear picture from the Cotton Board——
§ Sir F. Pearson
Would the right hon. Gentleman give an assurance that he will look particularly into the case of modernised mills, which are having to turn down or close down parts of their production? This is what is so worrying.
§ Mr. Darling
The hon. Gentleman interrupted me just as I was about to say that. I was disturbed that he should say that some of the mills which will be permanently closed have been modernised to some extent during the last few years. We will look into that with the Board.
The hon. Member also asked me whether the Textile Council would be able to keep an eye on and give occasional advice on imports. Of course, the council, although it is not completely spelled out in the functions in the Order, will be able to do precisely that.
Then the hon. Member for Clitheroe asked about categorisation. I wish that 391 we could find a better word, but we all know what it means. Categorisation was extended under the global scheme of imports, and whether we can succeed, by extending categorisation, to deal with the import problems which he raised remains to be seen. This is something which we shall look at.
Questions were asked by several hon. Members about Function 9. The form of words used here was used in the previous Order; it is taken from the principal Act. The intention was, presumably, to leave the negotiation of wages to the trade unions and employers. But the Textile Council will remain the mouthpiece of the industry and will be free to make whatever representations it likes on any subject, including the profitability point.
My hon. Friend the Member for Heywood and Royton (Mr. Barnett) brought the discussion about dumping down to two specific issues: Portugal, a member of E.F.T.A., and Austria, a member of E.F.T.A. I assure him that we shall take note of the views which he expressed about coming to a different arrangement with Portugal. But, because Portugal is a member of E.F.T.A., the arrangements must be made voluntarily between us.
The view expressed by my hon. Friend the Member for Oldham, East on the Imports Commission was correct. The idea of an Imports Commission has been overtaken by events, because the Board of Trade has power to carry out all the duties which would have been given to an Imports Commission. Hon. Members, clearly, are not satisfied with what the Board of Trade has been able to do in acting as an Imports Commission, but it will be conceded—in fact, several hon. Members did concede it—that the global quota system is a step in the right direction. My hon. Friends asked that further steps should be quickly taken in the same direction.
§ Mr. Fletcher-Cooke
The right hon. Gentleman said that the Board of Trade now has all the power which an Imports Commission would have had. From where did the power exclusively to buy all cotton imports come? That is what the Imports Commission was to do.
§ Mr. Darling
That is perfectly true. I was referring to the duties of an Imports Commission in relation to the discussions on dumping and import quota arrangements which must be made under the Kennedy Round. I was not going further into the proposals for purchasing. I was dealing entirely with dumping and the imports problem.
§ Mr. Barnett
Perhaps my right hon. Friend would recollect some of the things said by some of his right hon. Friends. For instance, in the debate in August, 1962, his right hon. Friend the Member for Blackburn (Mrs. Castle) referred to a valid point, which is as valid now as it was then, namely, about getting a more even distribution of the imports as a ground for having an Imports Commission.
§ Mr. Darling
I must look at the debate again.
My hon. Friend the Member for Nelson and Colne asked about development grants. I shall come to the development area question in a moment.
It is proposed that in certain industries firms not in development areas will get a grant of 25 per cent. in respect of expenditure incurred after 1st January next year. Those firms in development areas will get a grant of 45 per cent. This raises the issues touched on by many hon. Members including the hon. Member for Morecambe and Lonsdale, who wanted to know why, in view of the running down of the industry, we cannot make places in Lancashire parts of development areas —in other words, give them development area status. This his been discussed again and again.
I think that it was my hon. Friend the Member for Bolton, East (Mr. Robert Howarth) who suggested that there should be a shading of status, as it were, that if we had stuck to the 40 and 20 per cent. grants parts of Lancashire, because of the rundown of the industry and the fact that these gaunt mills which are no longer making cotton, should be turned over to some other more profitable use than warehouses, and should have a development grant of about 30 per cent. This is a proposal which we have considered.
We think that the present circumstances and the fact that we still have not conquered the unemployment problems of many parts of the country and that we 393 have not yet provided redistribution of industry to the places which are in greatest need of it, the present arrangements must stand. But those few Members who were present when we were dealing with the Order defining the development areas will recollect that I said that two problems had arisen during the discussion about the boundaries of the development areas. One is the problem of the grey towns. The other is the problem of what to do with seaside resorts which have too much labour in the winter and not enough in the summer. I said that we should consider both problems. This is the assurance I give to my hon. Friend.
§ Mr. Sydney Silverman
The difficulty might be largely met if the Ministry of Labour could be persuaded to correct its unemployment figures so as to take some cognisance of the degree of partial unemployment and some cognisance of the unemployment of married women, who do not normally figure in the registered unemployed, but who are definitely employed just the same. If a measure of corrective factor were introduced into the figure to make it more realistic, having regard to the background and the facts, there might be less difficulty in what would otherwise appear to be discrimination as between one part of the country and another.
§ Mr. Darling
Although I have said unemployment in what were once the distressed areas must be our main consideration—I am sure my hon. Friend would agree that this is our major problem—unemployment alone now is not the sole criterion on which we work. We can take these other factors into consideration. That is why I said that we shall examine the grey areas and the seaside resorts to see what action needs to be taken, because we do not need to depend on the unemployment statistics alone.
If I may venture a personal view, although our guiding line is the per- 394 centage of unemployment, there are many parts of the country where—forget the percentage figure—we could come to a fairly reasonable assessment of the number of jobs that ought to be available in each of these areas to provide full employment. I think that we can do that. At the moment we must devote our resources, in so far as they are used in the development areas, to the development areas that we have laid down in the Schedule to the Order.
§ Mr. J. T. Price
We are all grateful to my right hon. Friend for having put up a pretty good defence from a very weak brief. He is on a very sticky wicket. I want to ask him one final question before he departs from the scene. If the Board of Trade is as forward-looking and as rational as he says it is, why is Great Britain the only advanced industrial country in Europe which is constantly flooded with imports of textiles from every part of the world. The experience we are complaining about has not been matched in any other European country.
§ Mr. Darling
I have a note of the point my hon. Friend has raised. I can assure him that I have not got a brief here. I have written this myself. I agree entirely with him and with others who have raised this question. The real problem here is that we are taking from the developing countries—every developing country seems to start up by setting up a textile industry—a higher proportion of their output than any other Western nation. It is about time that we got into discussions with those countries to see if they will take their share of the burden. I agree entirely with that.
§ Question put and agreed to.
That the Cotton Industry Development Council (Amendment No. 6) Order 1966, a draft of which was laid before this House on 30th November, be approved.