HC Deb 04 March 1970 vol 797 cc555-77
Mr. Speaker

I suggest to the House that, unless there is opposition, we take the two Orders together.

10.1 p.m.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Ernest A. Davies)

I beg to move, That the Wool Textile Industry (Export Promotion Levy) Order 1970, a draft of which was laid before this House on 2nd February, be approved. With your permission, Mr. Speaker, and for the convenience of the House, I should like at the same time to move the second Order— That the Wool Textile Industry (Scientific Research Levy) Order 1970, a draft of which was laid before this House on 2nd February, be approved.

Mr. Speaker

The hon. Member can talk about the second Order but he does not move it now.

Dr. Davies

Thank you for your guidance, Mr. Speaker. If I may, I should like to address the House on the two Orders since the provisions of the two Orders are closely connected, but it is necessary to have two separate Orders as the purpose of the two levies is different. Consequently the body to whom the levy is paid is not the same in each case, and each body has to account separately through the Ministry of Technology to Parliament.

These Orders, if approved by Parliament, will be made under the authority of Section 9 of the Industrial Organisation and Development Act, 1947, as amended by the Minister of Technology Order, 1969, which provides that charges may be imposed by Order on persons engaged in an industry if it is expedient for funds to be made available for certain purposes; scientific research and promotion of export trade are two such purposes.

The draft Orders will supersede the Wool Textile Industry (Scientific Research Levy) and (Export Promotion Levy) Orders, 1957, as subsequently amended, and these Orders will then cease to impose charges in respect of any period after 30th September, 1969.

Levy Orders for scientific research and export promotion in this industry were first made in 1950, and since then have been amended on six occasions, the last time being in 1966. The first Order was brought in in response to a request from the industry, and it was supported by both manufacturers and trade unions. The same is true of the subsequent amendments which have been brought forward at the request of industry to accommodate changing circumstances. The previous amendments to the Orders have dealt with the addition of new processes, have taken account of technical advance, or have allowed variation in the rate of the levy to ensure that the Levy is equitably spread across the various activities in the industry, and, of course, to allow for changes in the value of money.

Since the last revision in 1966 there has been a great change in the extent to which man-made fibres have come into use within the wool textile industry. This was unexpectedly large and was not, nor indeed could not have been, foreseen at that time. Additionally there has been a considerable increase in productivity in the industry, with a corresponding reduction in manpower. It is these two major points, and their effects on the levy yield that the present draft Orders are designed to accommodate.

Before bringing the present draft Orders before the House, the Ministry of Technology has held extensive discussions with representative bodies from the wool textile industry. Chief amongst these was the Wool Textile Delegation. From these discussions I know that the wool textile industry is fully in support of the present draft Order. I should make it clear to the House that under the terms of this Order, the Ministry of Technology is acting as a "collecting agent" on behalf of the industry. The industry is willing to provide the money, the Ministry of Technology is responsible for collecting it, and then for directing the funds to the two organisations, namely, The Wool Industries Research Association, and the National Wool Textile Export Coporation, on an agreed basis for the promotion and benefit of the industry. As I am sure hon. Members will know, these two organisations are owned and operated by the Industry.

However, Mr. Speaker, hon. Members will have noticed that the Seventh Report from the Select Committee on Statutory Instruments, which appeared recently, was critical of each of these Orders on the grounds that

it purports to have retrospective effect where the parent statute confers no express authority so to provide. In view of this criticism, the Orders have been given most careful scrutiny, and after taking the best legal advice available to me, I am satisfied that the Orders are not retrospective in the sense of being retroactive, and that there is therefore no question of their being subject to successful challenge before the courts on the grounds that they are ultra vires. This assurance will, I hope, satisfy the House on this major point. However, I propose to deal later in my speech with the question whether, from the view point of public policy, the way in which we propose to determine and raise the levy under the Order is reasonable.

Returning to the substance of the Orders, the principal changes introduced by them are as follows. First, the area of industrial activity on each levy is v., be enlarged to include processing of man-made fibres within the wool textile industry. These are processes which are not at present subject to any levy, and it is an area of activity which has grown sharply in recent years. Second, instead of charging the levy on a proportion of the number of persons employed, it is now proposed to substitute a charge based on the emoluments paid by the employer to his employees. Third, in order to make the distribution of the levy equitable to all sections of the industry, a change in the rate of levy on the weight of fibres supplied is proposed. In addition, there is a proposal which applies to the scientific research levy only, that is that the proceeds of the levy shall be paid to the Wool Industries Research Association instead of to the Wool Textile Research Council.

The change to the Wool Industries Research Association as the body to receive the scientific research levy money results from a recommendation of management consultants that the governing structure of the Research Association should be simplified by the elimination of the Wool Textile Research Council, most of whose functions were a duplicating of those of the Association. I am satisfied that the change will in no way result in less control over the use of levy funds.

The money raised from these two levies will be put to very good use. On the one hand, this industry is very much alive to the need to remain competitive by keeping in the forefront of technological advance, and is therefore prepared to support its own Research Association financially. And, secondly, it wishes to maintain its very fine export record in the face of increasing competition.

Exports in 1969 were valued at about £150 million out of a total production of about £350 million—a percentage figure higher than most other industries in this country. We must beware, however, of thinking that exports of this size can be expected to continue merely because export customers have bought British wool textiles in the past. The world textile scene is changing very rapidly with new producers, new fibres, new products, and new methods of making traditional products. It is only by being in the van of technical change, and by positive export promotion, that the British wool textile industry can hope to maintain its position, and, if possible, improve on it. The British wool textile industry is very conscious of these facts. For this reason it is the industry itself, through its representative body, the Wool Textile Delegation, which has proposed alterations in the method of calculating these levies so as to ensure that adequate resources continue to be available for research and export promotion.

The justification for including the processing of man-made fibres lies in the fact that these fibres are being increasingly used in this industry, either alone, or more generally, as blends with wool. At present about 25 per cent. of the fibre used in this industry is man-made and this is expected to increase to 40 per cent. by the mid-1970s. It was put to us by the Wool Textile Delegation that it was anomalous that the processing of the wool content should attract levy whilst the processing of the man-made fibre content of the yarn, cloth, and so on did not. This we accept, and have rectified the anomaly in the draft Orders.

As regards the question of calculating levy on the basis of emoluments, rather than on numbers of employees, there has been, as I have indicated, a fall in the number of people employed in the industry since the last revision of these Orders in 1966. In 1966 total number of people employed in the industry was about 155,000; in November 1969, the last period for which figures are available, there were 146,000 people in employment. It has recently been forecast by consultants that by the mid 1970s numbers employed will fall still further, mainly by natural wastage, to about 121,000 persons.

Hon. Members will appreciate, therefore, that any levy based on numbers employed is bound to yield less and less money unless the rate of levy is continually raised. To counteract this movement without having to revise the Orders at relatively short periods, we accepted the Wool Textile Delegation's proposal that the levy should be put on a new basis. It is now proposed, therefore, to base the levy on a percentage of emoluments. This gives a more stable base for the levy because as productivity increases so do emoluments. This also seems to be a more equitable arrangement than the existing one. The third, though minor change, which I listed is the change in the rate of levy charged on the weight of fibre supplied. This refers only to fibres which are already liable to levy under the existing Orders; the draft Orders do not extend the "supply" levy to man-made fibre. We are satisfied that the reduction in the rate of levy on supply is equitable as regards the spread of yield between suppliers and processors.

The estimated total levy yield on the new basis will in present circumstances be about £450,000 to £500,000, which cannot be regarded as immoderately large for an industry with the production and exports of, for 1969, £350 million and £150 million of goods respectively. The levy figure is to be compared with the figure of £441,000 raised in the year 1st October. 1968, to 30th September, 1969.

Consequential to the proposed changes which I have just described are certain appropriate changes in the conditions for exemption from the Levy Orders. Chief among these proposals is that any person whose business is such that the emoluments on which levy charges are to be calculated do not exceed £2,500 in the base year, is exempt from the Order. One effect of this provision is to free most of those engaged in the Harris Tweed industry from the effect of the Order.

Finally, I should like to take up an aspect of the criticism which has been reported to the House by the Select Committee on Statutory Instruments. The difficulty arises in the following way. Under the draft Order the base year for calculation of levy charges in respect of process work is the last full financial year ending 31st March preceding the levy period. The levy charge so determined may be paid in two instalments falling due to be paid from the end of the period terminating on 30th September and 31st March respectively. I hope the House will agree that to use the figures for the last full financial year as a basis for calculation is a reasonable way to proceed. However, the House will have noted that this draft Order is proposed to come into effect on 16th March this year, if the House so agrees. If it does so, then levy charges, based on the year ending 31st March 1969 will fall due to be paid from next April in respect of the period beginning 1st October last. It is at this point that the criticism is directed.

In judging this issue, I would ask the House to take account of the following points. Firstly, no one will be liable to levy because of some activity on his part undertaken before the Orders come into operation. Correspondingly, anyone ceasing to be active prior to 16th March would not be liable for payment. The question then arises as to whether some person in the industry might be faced quite unexpectedly with an expense which he had not foreseen. I can assure the House that this is extremely unlikely, since the widest consultations have been going on for almost a year with every section of the industry. Everyone in the industry must be aware of the provisions in this draft Order. No objections on this point have been raised by the industry—indeed I am aware that the industry very much desires the Levy money to be collected for the period in question.

Perhaps the best answer to the criticism on the element of retrospection lies in the history of the draft Orders. The Wool Textile Delegation applied to the then President of the Board of Trade for the amendment of the existing levy Orders at the end of 1967. Discussions and clarification of the proposals and the effects of the new basis took some time. At each stage, the delegation had to satisfy the Government that it had consulted the bodies which represented each sectional interest likely to be affected by the proposals. The Government in May, 1969, then started individual consultations with all sectional organisations representative of substantial numbers of employers and employees who might be affected by the new Order. These consultations were essential in order to ensure that so far as possible the incidence of charges as between the different classes of undertaking in the industry was in accordance with a fair principle. This is required by the enabling Act. I mention this to show the House that at every step the industry has been fully consulted about the proposals and its views have so far as possible been reflected in the final draft Orders. It is possible to argue that the consultations took too long and that, if they had been curtailed there would have been no grounds for criticism on retrospection. I am sure, however, that, in the circumstances of the wool textile industry, shortened consultations would not have served the end of equity so well.

In the Government's view and in the industry's view it would be unfortunate if, at this stage, when the industry's programmes are now dependent on the increased levy yield, we were not to proceed with the Orders. This could only penalise the industry through no fault of its own. It would be a pity if the industry were to be prevented from having its own moneys collected and directed to beneficial ends of its own choosing, because as a result of the rather lengthy, but essential, discussions which were carried through, these Orders could not be brought before this House at an earlier time.

I am accordingly satisfied that it is expedient that funds should be made available to the wool textile industry by these Orders for the purpose of export promotion and scientific research. I am further satisfied that the amended charges as detailed in the draft Orders are in accordance with a fair principle and I therefore ask the House to approve them.

Sir Douglas Glover (Ormskirk)

On a point of order, Mr. Speaker. I deliberately did not interrupt the hon. Gentleman's speech, but there is a long tradition in this House that hon. Members are not allowed to read their speeches. If I had made a speech in this House and read every word, as the hon. Gentleman has done tonight, you would have called me to order and pointed out that I was reading.

I do not want to take this too far, because I think that the hon. Gentleman was rather nervous when he was making his statement to the House. But we ought to try to stop the increasing occasions when Ministers come to the Dispatch Box and read statements which have been given them by their civil servants. They have an obligation to the House to have mastered their briefs before they make their statements.

Mr. Speaker

I hope that hon. Members on all sides will note the very wise advice given by the hon. Member for Ormskirk (Sir D. Glover). He is quite right. I would call him to order on almost any occasion.

10.19 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

We welcome the Order, which is a prime example of the value of the affirmative procedure. I marvel at the Minister, who is a Lancashire Member like myself, speaking with such authority on an industry the other side of the Pennines, but he did so with great charm and skill.

Of course, he is right to say that the wool industry has been consulted exhaustively on this subject and that the change from assessment of this levy by reason of the numbers employed to—this rather strange word—"emoluments" is accepted on all sides. I do not much care for the word "emoluments", which smacks of the academic world rather—I am not sure what it means—but all the wool textile industry likes it and who am I to say that they are wrong?

Man-made fibres in the modern world should obviously be included in any consideration of textile Orders because they are an increasingly important element in any textile industry. Therefore, shortly, on the substance of the Order we have no objection to it.

But, of course, judging from the amount of his speech which he devoted to the constitutional position, the Minister protested too much. There is here a pretty serious constitutional point on the retrospective, if not retroactive, effect of an Order which has no warrant for retrospectivity or retroactivity in the parent Act. My hon. Friend the Member for Crosby (Mr. Graham Page), who is the great expert in the House on this subject, will be delivering a broadside any minute now at the Treasury Bench.

But this is not wholly a laughing matter. It is true that it is important to get all sides of industry agreeing, but if their agreement is to be at the expense of the British Constitution, all I can say is that the British Constitution should prevail. Therefore, the broadside receives my proleptic support. We are grateful for the presence tonight of the Solicitor-General, arrayed in tremendous plumes. Whether the conventions of the House will allow him to intervene dressed as he is I do not know, but I hope so, because this is a constitutional matter.

On the best advice which I have taken, I think that this is a welcome Order. The change from the employment to the emoluments position is supported on all sides. It is right to bring man-made fibres into the equation, and, apart from this rather unfortunate constitutional mistake by the Government, we would like to give it a very fair wind.

10.23 p.m.

Mr. Graham Page (Crosby)

As has been said, the Select Committee on Statutory Instruments has reported the Order to the House as appearing to be retrospective, when the parent Act gave the Minister no power to make a retrospective Order. As is usual in these cases, the Select Committee asked for a memorandum from the Department concerned and had a most helpful memorandum in reply. Not being entirely satisfied, the Committee asked for evidence to be given by the Department and, as is usual, received great help from those who came to give evidence. If the Committee disagreed eventually with that evidence, I wish to say that the Committee nevertheless was greatly indebted to those officers of the Department who gave that evidence.

The Parliamentary Secretary has made some distinction between retrospection and retroactivity, though I personally cannot see it. It is a very narrow distinction, if a distinction at all, and it seems to me to be splitting hairs. He also stressed the fact that there had been extensive consultations with representative organisations of the industry before the Order was laid in draft before the House.

Again, I am not very impressed. Of course it is the right thing to do. In fact, under the parent Statute, the Minister is obliged to consult representative organisations before he lays that draft. But, to come and say that this Order has been discussed for a long time and that everybody concerned must have been aware of its contents is an impertinence to the House. It is not law until we in this House pass the draft and until the Order is duly made. To say that people shall be governed and shall govern their businesses and their lives by what they have discussed with the Minister before it comes before the House or becomes law is not the right way to run legislation.

Although in this case and in this industry there may be entire agreement with the contents of the Order, it is setting a precedent for an occasion when there may not be that agreement but where the Minister may wish to override the wishes of industry. Here is the precedent perhaps to enable him to do so and to bring in retroactive and retrospective legislation.

These draft Orders are made under powers given to the Minister by the Industrial Organisation and Development Act, 1947, Section 9 of which provides that, for the purposes of scientific research, promotion of export trade or the improvement of design, the Minister can make an Order imposing on persons carrying on the business of producing or dealing in materials of an industry—in this case the wool textile industry— such charges as may be specified in the order". That is a wide phrase. The Act gives no guidance upon the way such an imposition is to be computed, except in Section 9(2), which states that the Minister must satisfy himself, that the incidence of the charges as between different classes of undertakings in the industry will be in accordance with a fair principle. It would probably not be a fair principle to charge a poll tax, to make a standard charge across the board, when the charge is made on the basis of the size of any particular business one way or another, whether it is judged by the number of people employed, by the materials manufactured and supplied, or by the emoluments paid.

From the first Orders made relating to the wool textile industry under the 1950 Act, the computation has been made on the number of persons employed in the business plus a fraction of a penny charge on every 100 lbs. of fibre supplied. These computations are made by reference to the number of people employed and the amount of fibre supplied during a certain period. For example, in the 1950 Order for an export promotion levy, it was 2d. per person employed plus a certain fraction of a penny per 100 lbs. of fibre. That was for three months from 1st August to 31st October, 1950, and thereafter for six-monthly periods.

The date is of considerable importance. That period started on 1st August, 1950. The Order imposing that levy was made on 31st July, 1950, to come into operation on 1st August, 1950, so the Order was made before the levy period started. It was in no way retroactive or retrospective.

The 1950 Order imposing the scientific research levy was similarly made before the start of the levy period. In that case, it was made on 27th October, 1950, to come into operation on 1st November, 1950, which was the start of the first six-months levy period.

These Orders have been amended or replaced in 1952, 1954, 1956, 1957, 1962 and 1966. In every case except that in 1956, the Order was made before the levy period started. The exception in 1956 was a brief Order exempting certain persons from the levy, and no one worries about retrosective legislation when it exempts the citizen from a liability. In every other case until we come tonight to these draft Orders the Order has been made before the levy period started.

The 1957 Orders which are to be repealed by these draft Orders were made on 31st July, 1957, and in that case the levy period did not start until 1st October, 1957. Those 1957 Orders are at this moment still in force. They will not be repealed until 16th March, if we pass these draft Orders tonight and they become effective on that date. So the law at present, as I stand here, is the law under the 1957 Orders.

Under the 1957 Orders the levy for the period from 1st October last to 31st March of this year is computed at 4.5d. per person employed plus a fraction of a penny for every 100 lbs. of fibre supplied, and producers will have taken these figures into account in calculating their overheads, which have to be covered by the price they charge for the goods they produce and supply. They have been entitled to order their business under the law as it exists.

If one reads no further than article 1, paragraph (2) of the Orders before us one might think that such producers would be well in pocket, because that paragraph says that no levy shall be charged under the 1957 Orders. Indeed, anyone who has gone out of business between 1st October last and 16th March next will get off paying the levy altogether. Well, good luck to him, but that is the sort of anomaly that arises when one embarks on retroactive legislation. But, again, because this is a case of relieving someone of a liability, I do not complain of retrospection or retroactivity in the imposition of a new levy for the period starting 1st October last.

I remind the House that at present the levy is based on the number of persons employed plus a fraction of a penny per 100 lbs. of fibre supplied. Under these draft Orders, not only are the rates changed, as has been exlained to us by the hon. Gentleman—the fraction of a penny per 100 lbs. of fibre—but the basis of computation is changed. Instead of its being calculated on the number of persons employed, it will now be calculated on the total amount of wages paid—and for what period? It is the total amount of wages paid for a year, two years ago.

Let us apply the rates for a moment. By an Order coming into operation on 16th March, 1970, wool textile producers will be required to pay levy in respect of a period beginning nearly six months ago—1st October, 1969—calculated on wages they paid during a period which started two years ago—31st March, 1968. They will be required to do this, but during all that period there was another law in operation, another rate, another basis of calculation—indeed, not only was another basis of calculation in operation but, in certain cases, they could carry on processes which are given under the new Order but which were not under the old Order.

It is not only in respect of the rates that the law is changed, not only in respect of the basis of computation that the law is changed retrospectively, but new processes are now to become subject to the levy even when these were carried on in the last six months and were not subject to the levy. The process of needling which the Parliamentary Secretary stressed as of considerable importance in the use of man-made fibres is now to be brought in and made subject to the levy. It is not brought in for the future, but we now calculate the levy on that process during two years ago. Someone who was carrying on the process of using man-made fibres to produce wool textiles from March, 1968, to March, 1969, could not then have dreamt that he would have been charged a levy on the men he employed in that industry.

Sir Harmar Nicholls (Peterborough)

The question I ask may have been answered by the Parliamentary Secretary when I was not present in the Chamber. My hon. Friend the Member for Crosby (Mr. Graham Page) is indeed delivering a broadside. That is no exaggeration. He said at the beginning of his speech that he had had a memorandum which was in front of the Select Committee on Statutory Instruments which the officials had attended and had given evidence. Did they say that this was not retrospective or were they excusing it? If they were trying to argue that it was not retrospective, were none of the Law Officers brought before the Committee? If not, are we to have them here to answer this broadside?

Mr. Page

I will endeavour to put the case which the officials put to the Committee for saying that the Order is neither retroactive nor retrospective. The rate of levy is changed retrospectively, the basis of computation is changed retrospectively by adding the numbers of wages paid, not the numbers employed. The period by reference to which the computation is made is changed retrospectively. It is on a base year instead of the levy period as it had always been before, and the processes attracting levy are changed in that there has been the addition of the manmade fibre process and the needling process. It is said, and this was the evidence given to the Select Committee on Statutory Instruments, that in spite of all this the Orders are not retroactive because they apply only to persons in business on 16th March this year although one calculates the levy on what those persons were doing two years ago.

Dr. Ernest A. Davies

It is quite right to say in strict truth two years ago, but the year started two years ago if one goes now to 1st April, but in fact the year ended less than a year ago and it is the last full year prior to the levy year to be used as the base. I should have thought that to have used the last full financial year prior to a levy period would be not only reasonable but sensible.

Mr. Page

The hon. Gentleman does not appreciate the point if he gives that as an explanation. Paragraph 5 is extremely difficult to understand. I had to read it several times before I understood it. It says: The levy periods shall be the periods of six months ending with 31st March and 30th September respectively in each year and the base year in respect of any levy period shall be the year ending with 31st March next preceding the commencement of that period. When one translates that, the levy payable for the period from October last is calculated on the amount of wages paid during the year from 31st March 1968, to 31st March, 1969. Therefore a person carrying on the process of using man-made fibres to produce wool textile could not have known that he would be charged a levy on the men he employed between March 1968 and March 1969.

It is also said, as I understand it, that this is not retrospective or retroactive, because the levy is not payable until after the end of the levy period; it is chargeable only on those who were in business on 16th March and it is not payable by them until after the levy period is ended—after 31st March of this year.

Those are the arguments for saying that the Order is not retroactive, but this involves a very narrow definition of retrospection or retroactivity. A person is surely entitled to order his life or his business on the law as it exists at the time when he is carrying out that activity. The House should protect him against retroactive changes in that law.

10.40 p.m.

Mr. Geoffrey Hirst (Shipley)

I yield second place to no one in my admiration of the diligence of the hon. Member for Crosby (Mr. Graham Page). No subject requires the attention of a Select Committee more than that of Statutory Instruments. Tonight, however, the hon. Gentleman seems to overlook a fundamental consideration, namely, what the industry wants. This is a consideration which should weigh with the House.

There are two aspects—first, the nature and content of the Order; second, its validity. I am in no position to argue about the latter. I support what the Joint Parliamentary Secretary said. Like the hon. Member for Ormskirk (Sir D. Glover), I do not like read speeches, but I do not quarrel with the content of the Minister's speech tonight. It expressed exactly what the industry wants. I speak with privileged knowledge. In the 20 years that I have been in the House I have spoken on many occasions for the wool textile trade. I know full well that the Minister was speaking absolutely correctly and in the interests of the wool textile industry. I will not repeat all the arguments. I well remember, from my earliest days in the House, the beginning of this story.

It has been of immense benefit to our trade that there has always been an absolutely first-class relationship between those engaged in the wool textile industry and the Government of the day. I stress "the Government of the day", because the matter is entirely nonpolitical. There has always been consultation and a willingness to make levies voluntarily and without difficulty. Other hon. Members connected with the wool textile industry will agree that not one complaint has arisen about these Orders. I have made representations on many subjects, but not on this one.

There is no complaint about the nature of this Order. Those in the industry recognise only too well that the additional consultations, which were at the root of the delay, were for their benefit. If the House has been placed in the position of doing something which is invalid, it must correct itself. I am in no position to argue that. Either the Minister is right or, in the interests of the trade, some form of indemnifying Act should be passed. It would be nonsense for us not to agree to this Order. Its whole purpose is to benefit the trade. The evidence given to the Select Committee indicated that the industry wanted it done this way and accepted the peculiar reason for it being done in this way. If anyone wonders why it was done in this way and why it could not have been done six months ago, the evidence is there for all to read. It is because the discussions took about nine months. I might question whether they should have taken so long, but the industry and all who work in it are satisfied that it is worth everything to them to have good and satisfactory consultations with the Government of the day in their trade matters. The House should try to oblige them.

10.45 p.m.

Mr. Richard Wainwright (Colne Valley)

Representing as I do a large concentration of people working on wool and synthetic fibres, I have two points to make, both of them in commendation of the Orders.

First, I congratulate, the wool textile delegation and the Government on getting away at last from the crude and primitive basis of simply charging a levy upon the numbers employed. For too long the wool textile industry has been judged by outsiders on the basis of numbers employed instead of on the amounts which those employed manage to produce and, above all, to sell to our foreign customers. At last, a more sensible basis, that of emoluments, has been adopted, and that is a matter for congratulation. I hope that it foreshadows a general shift, as Professor Reddaway suggests today, by the Government away from various forms of taxation on numbers employed—the so-many " bobs-a-nob " basis—to a percentage pay roll tax.

Secondly, without questioning in any way the learned opinion of the hon. Member for Crosby (Mr. Graham Page), I must say that, although my constituents in this trade are meticulous—some might think occasionally to the point of pedantry—in questioning the slightest extra charge, and they are right to do so, I give testimony that I have not had the slightest vestige of any complaint on this matter, although they are quick to inform me of grievances about any kind of increase of charges which they consider unwarranted.

I emphasise that the reason for this delay has been the admirable one of extensive consultations. My right hon. and hon. Friends are often concerned at the way industry is almost being pushed into a monolithic organisation because of the pattern of Government consultation. In this case, it would be fatal to the export work of the wool textile industry if its very numerous separate organisations were to be put under any pressure to amalgamate in order to present a common monolithic front by the Government. Although it has taken time, and no doubt involved certain difficulties for consideration tonight, I am glad that, on balance—we have not heard much about any alternative from those who have argued the legal point—there have been patient consultations in the fullest sense of term and not merely in the narrow sense required by the enabling Statute. The result is a happy one for the wool textile industry.

10.48 p.m.

Sir Douglas Glover (Ormskirk)

I am surprised that the independent Member for Shipley (Mr. Hirst)—I do not think that I have ever referred to him before as an independent Conservative Member—took the line he did. However, I agree with nearly everything he said, apart from the fact that I think it right that this matter was raised on the Floor of the House. I think that the Orders are justified and they are welcomed by the industry. But our job in this House does not just stop there. We are not here to support pressure groups or particular interests, whether it be in their immediate interests or not. We have the more fundamental job of looking after the interests of freedom, the constitution and how things are done. My hon. Friend the Member for Crosby (Mr. Graham Page) was right in his criticisms.

On balance, the Government probably have a very good case. The negotiations have gone on. This is agreed by the industry concerned. But it would be wrong if we allowed to go through something which has an element of retrospection about it without querying whether it could be justified, because only under the greatest pressure is the House ever justified in passing any retrospective legislation or any retrospective Order. As my hon. Friend said, people have a right to carry out their affairs in our society conscious that they are, at the time, working within the law as it is then imposed by this House, and it is wrong, except in the most exceptional circumstances, for this House to put them into a position where they may have been acting outwith the law because we alter that law retrospectively.

My hon. Friend was, therefore, thoroughly justified in his strictures on the Government. One of our last remaining duties is to keep a quick eye on the Executive to see that, for administrative convenience, they do not get away with establishing a principle which we might learn to regret.

10.50 p.m.

Sir Harmar Nicholls (Peterborough)

On a similar note. I am not concerned whether the wool industry is happy or unhappy with the contents of the Order. Nor am I concerned at the industry not having made representations about the Order because it has no complaint to make about it. The people who should be making representations are hon. Members, and I was delighted to hear my hon. Friend the Member for Crosby (Mr. Graham Page) make them in such an effective way.

Although the wool industry might be damaged if it does not get the benefits that are likely to flow from this Instrument, it would be in the best interests of the nation not to add to the retrospective legislation which, from time to time, the House passes. I have always voted against retrospective legislation. I did so on two occasions when my party was in power. It is bad, dangerous and undemocratic to pass laws making actions illegal which were previously legal. We should take a stand on this issue.

In addition to hon. Members, the legal profession should be protesting against this type of legislation. And as we have a leader of that profession, in the person of the Solicitor-General, with us, he should address the House. Are we not to have the support of lawyers in protecting the citizen when inroads are made by legal means into his freedom?

The principle behind any sort of retrospective legislation is so great that even the wool industry should suffer inconvenience if it means protecting the citizen. After all, one can safely predict that when a future Government wish to introduce retrospective legislation, this Instrument will be quoted as a precedent for it being desirable and respectable. I hope, therefore, that the Solicitor-General will join us in protesting in the strongest possible terms.

10.53 p.m.

The Solicitor-General (Sir Arthur Irvine)

I respond gladly to the invitation to deal with the retrospective point. As, I am pleased to say, hon. Gentlemen opposite have welcomed the content of the Order—the hon. Member for Crosby (Mr. Graham Page) put his case clearly and uncontentiously and other hon. Members have covered the ground well—I intervene only on the narrow point that has been raised.

Broadly speaking, under the Order the amount of levy will be calculated on a new basis. It will be computed by reference to a base year instead of a levy period, and by reference to chargeable emoluments instead of to the number of persons employed. The payment of the levy will become due in April and May after the end of the current levy period.

The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) spoke about this not being wholly a laughing matter. I thought that that was an odd way of putting it. It is not at all a laughing matter. It is very important that this matter of retrospection should be watched with the greatest care. My respectful advice to the House is that this point is covered by authority, and that the effect of the authority is that what is proposed in the Order is not, as a matter of law, retrospective at all.

I do not want to weary the House—because it would not be right to do so—with long references to reported cases and judgments, but in view of the importance of this matter it is perhaps desirable to call attention to what I regard as a binding authority of the judges covering this point. I should welcome the opportunity of doing so. It is the case mentioned before the Select Committee. I know that the hon. Member for Crosby has probably had careful regard to what it contains. It is the case of the Master Ladies' Tailors Organisation and Another v. Minister of Labour and National Service and it is reported in All England Law Reports, 1950, Volume 2, at page 525.

In that case what the courts were concerned with was the Wages Council Act of 1945, Section 10 of which empowered the Minister of Labour and National Service to make Orders giving effect to proposals submitted by a Wages Council established under the Act. On 25th July, 1949, the Minister of Labour and National Service made a Holiday Remuneration Order for workers engaged in the wholesale mantle and costume making industry, which came into ford on 15th August 1949.

Paragraph 8 of the Schedule to the new Order provided that: When a worker ceases to be employed after the provisions of this Schedule become effective, accrued holiday remuneration shall immediately on the termination of employment be paid to him by his employer in accordance with the next following paragraph. In that following paragraph it was provided that: holiday remuneration shall accrue to a worker during the period of twelve months commencing on 1st May, 1948, and thereafter in each successive period of twelve months commencing on 1st May, and such remuneration shall accrue in accordance with the provisions of a table, which is set out.

The House will appreciate the closeness of the parallel here. I have to tell the House that the judgment of the court was read by Lord Justice Somervell, and in the course of the judgment he referred to another case—Rex v. St. Mary, Whitechapel (Inhabitants), and what he regarded as the relevant principle was stated by Lord Denman, at that time Lord Chief Justice. That case was concerned with the Poor Removal Act, 1846, and Section 2 of that Act provided that >"no woman residing in any parish with her husband at the time of his death shall be removed … from such parish, for twelve calendar months next after his death, if she so long continue a widow.' This is what the Lord Chief Justice had to say on the point with which the House is concerned—I invite careful consideration of it— … we have before shown that the statute is in its direct operation prospective, as it relates to future removals only, and that it is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing. The House will appreciate I am sure, the relevance of that. Lord Justice Somervell went on to say in his judgment: I have come to the conclusion that the effect of these provisions as to remuneration accruing, being, as I hold, to determine and limit the quantum of prospective payments, do not make this Order retrospective in the sense which has to be given to the word in this issue. This is, I suggest in all seriousness to the House, the answer to the point by the hon. Member for Crosby: the provisions as to remuneration accruing, being, as I hold, to determine and limit the quantum of prospective payments". That precisely covers the provisions of this Order and does not make this Order retrospective. That is the answer which I give, with great respect, to the hon. Gentleman. I think the cases are very close to each other, and, after giving to this matter careful consideration, on the basis that this is a serious matter, I believe that these Orders are not tainted by the element of retrospection which has been alleged about them.

Sir D. Glover

As a non-lawyer, I hate to challenge the Solicitor-General, but I really cannot accept this. As I understand it, the problem really is that a firm may have 200 employees in the year 1967–68, and that is the number affected by the Order. Another time there may be 100. The case that the right hon. and learned Gentleman is citing is of a widow—multiplied by 200; all right, 200 widows. That is a static figure. Here we are dealing with a moveable figure, and the firm has to pay a levy on a labour force which no longer exists. I do not think the two cases are analogous.

The Solicitor-General

What I invite the hon. Gentleman to consider is this, not so much the case that I mentioned about the Poor Removal Act—I mentioned that because I felt the passage in the judgment of Lord Denman which I read was a helpful one—but the closer parallel, but the facts, in my view, and I so advise the House, are to be found in this case of the Master Ladies' Tailors. I hope that the hon. Gentleman will, in the company of his hon. Friend the Member for Crosby, consider that case and perhaps acknowledge its relevance.

Mr. Graham Page

I agree that the right hon. and learned Gentleman might have a reasonable case on the alternative of quantum if this were based merely on the change of rate of the levy, not the mere basis of the levy. Here it is a question of the introduction of two substantially new processes on which levy is charged, and on a completely different basis—not on the number employed but on wages.

The Solicitor-General

I would say to that that the only relevance of the basis is the quantum which results from that application, and, as I say, my advice to the House, which I ask the House to consider, is that the matter is covered by the case I have quoted.

Mr. Fletcher-Cooke

May I put to the right hon. and learned Gentleman a hypothetical case? I quite agree that this is a wholly unreal case, because I do not think that in this industry which we are discussing this would be a motive which would be active; but we are going much wider than the wool industry at the moment because this is, as the right hon. and learned Gentleman has admitted, a very important constitutional point. The base year is March, 1968–69. One must consider the case of a wool manufacturer, who has read the Orders—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. The hon. and learned Gentleman has already spoken. This is an intervention, not a speech.

Mr. Fletcher-Cooke

May I, with the leave of the House, put this point, as it is of great importance? The hypothetical wool manufacturer considered these matters and decided to reduce the numbers he employed, although increasing their emoluments enormously, in order to avoid the incidence of the levy as it then was. This is not a wholly unreasonable thing to do if the levy was onerous—I do not think it was, but let us suppose it was. Does the right hon. and learned Gentleman say that in 1970, when the Order is passed, it is not retrospective upon that man who has considered the arrangements as they were in the base year of 1968–69 and has consciously cut his staff by half and paid the remainder double so as to attract the least amount of levy, and then finds the rules are altered?

The Solicitor-General

With the leave of the House I will answer that point in this way. I recognise that there may be a certain hardship and inconvenience applying to a producer or manufacturer who in a given levy period has adjusted and arranged his affairs on the assumption that the levy will continue to be computed on the current basis. The fact that the industry has agreed on a matter has a bearing upon the equity of that. None the less, I acknowledge that there might be some hardship. But, having dealt with the matter with every seriousness and careful inquiry, I do not think that factor takes it outside the ambit of the authority in this case.

Sir Harmar Nicholls

rose—

Mr. Deputy Speaker

The right hon. and learned Gentleman has already resumed his seat.

Sir H. Nicholls

Before he sits down, may I ask the Solicitor-General whether his Department was consulted when the Order was in draft form? One would like to know whether it went through without the cognisance of the Department or was drafted in the knowledge of the dangers likely to be inherent in it.

Question put and agreed to.

Resolved, That the Wool Textile Industry (Export Promotion Levy) Order 1970, a draft of which was laid before this House on 2nd February, be approved.

Resolved, That the Wool Textile Industry (Scientific Research Levy) Order 1970, a draft of which was laid before this House on 2nd February, be approved.—[Dr. Ernest A. Davies.]

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