HL Deb 24 July 1939 vol 114 cc373-92

3.20 p.m.

Order of the Day for the House to be put into Committee read.

LORD TEMPLEMORE

My Lords, in making the Motion that the House do resolve into Committee on this Bill, I would point out to your Lordships that a great many—I think about 75 per cent.—of the Amendments on this Bill are drafting, and with the consent of your Lordships I would propose, in order to save time, when we come to such a clause—and there are a great many clauses on which there are nothing but drafting Amendments—to ask the Lord Chairman to put those Amendments en bloc. Of course, I need not say that I am ready at all times to answer any questions on any Amendment that may be raised. I beg to move.

Moved, That the House do now resolve itself into Committee.—(Lord Templemore.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clauses 1 and 2 agreed to.

Clause 3 [The Representative Advisory Council]:

LORD TEMPLEMORE

The first Amendment in my name is drafting.

Amendment moved— Page 2, line 25, leave out ("to be called") and insert ("hereinafter referred to as").—(Lord Templemore.)

On Question, Amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 [The Export Development Committee]:

LORD TEMPLEMORE

Both Amendments on this clause are drafting, and with your Lordships' permission I shall move them together.

Amendments moved— Page 2, line 42, leave out from the beginning to the second ("the") in line 43 and insert ("The Cotton Industry Board shall appoint a committee (hereinafter referred to as") Page 3, line 22, leave out ("(j)") and insert ("(i)").—(Lord Templemore.)

On Question, Amendments agreed to.

Clause 4, as amended, agreed to.

Clauses 5 to 7 agreed to.

Clause 8:

Provisions as to redundancy schemes.

(3) A redundancy scheme— (b) may contain provision for the making of payments by the board administering the scheme to persons of any class specified in the scheme who, having been employed in or about a mill to which the scheme applies, have lost that employment, if the loss of employment appears to that board to be ascribable to the operation of the scheme;

LORD TEMPLEMORE

The first five Amendments to this clause are drafting Amendments, and I beg to move.

Amendments moved— Page 7, line 14, after ("elimination") insert ("or reduction") Page 7, line 31, leave out ("or other property") Page 8, line 5, leave out ("purchasing") Page 8, line 6, after ("scheme") insert ("to acquire plant") Page 8, line 18, leave out from ("committee") to ("consisting") in line 19.—(Lord Templemore.)

On Question, Amendments agreed to.

3.25 p.m.

LORD STRABOLGI moved, in subsection (3), at the beginning of paragraph (b), to substitute "shall" for "may." The noble Lord said: On behalf of my noble friend Lord Snell and myself, I beg to move this Amendment, which is rather more than a drafting Amendment. It is to leave out "may" and insert "shall." Your Lordships will see that this would have the effect of making it obligatory to bring forward some scheme of compensation for operatives who are displaced by schemes of amalgamation. On the Second Reading I indicated on behalf of my noble friends that we should be moving some such Amendment, and I am glad to say we got approval from the noble Lord, Lord Cawley, and from some other noble Lords. I hope we shall get the support of noble Lords on this occasion in the event of the noble Lord in charge of the Bill not being able to accept this Amendment.

It may be said that it cannot be helped if people suffer as a result of a scheme of amalgamation. There must be progress, rationalisation, and so on, and in that case, if people are displaced, it is bad luck on them; they must go on the "dole," and so on. Against that we maintain that when Parliament itself encourages, or indeed insists, on these schemes of amalgamation, then Parliament has the obligation to see that the innocent victims do not suffer unnecessarily. That principle was accepted in three major Bills in all of which the the noble Viscount, Lord Runciman, and the noble Lord, Lord Harlech, both had a part. These Bills were brought in by a Conservative or Coalition Government, and in each case there was to be compensation not only for directors but also for the workpeople. These three Bills which I would cite—there are others—are, first, the great Railway Amalgamation Bill, brought in by Sir Eric Geddes as Minister of Transport soon after the War. There was compensation for those who lost their offices or positions by reason of these amalgamations. The second was the Electricity Supply Bill. There was there the same principle of compensation for engineers and others displaced as the result of an act of your Lordships' House. The third leading case was the London Passenger Transport Bill, where the same principle applied. When the Coal Mines Bill was before your Lordships' House last year we attempted to bring about the same safeguard for working men displaced by amalgamations forced by an Act of Parliament. Then we got a great deal of support from members of your Lordships' House sitting in other parts of the House, not only verbal support, but voting support, on the question of principle.

The cotton industry, we suggest, has a particularly strong claim for this safeguard, especially where the older operatives are concerned. This was referred to by Lord Cawley on the Second Reading. Men and women who have reached mature years—forty or fifty years of age—as cotton operatives, are at the height of their skill, but it is most difficult for them to get other employment. Your Lordships are aware that it is most difficult for the old workmen in any industry to get entirely new employment. It is particularly difficult for cotton workers because of the highly specialised, almost hereditary skill they have. We consider it right that they should get some compensation, and no doubt some of the schemes could make differentiation on the ground of age. We do not wish to lay down what a scheme should be. We do not want to make amalgamations impossible because of expense. We realise the difficulty which might be created in that way. We would be quite prepared to accept a scheme under which the older people got compensation.

Compensation in a Bill of this kind, as in the case of the railways, is very different from the ordinary allowances paid by the labour exchange to people out of work. The man who has been in steady employment for many years does not relish going to the labour exchange. These Lancashire workmen are proud people, and it would hurt them to go to the labour exchange, but if they got compensation as a matter of right, because their mill had closed down for the good of the industry, that would be different—their pride would be salved. We believe that this Amendment is necessary on the ground of justice, and I appeal to your Lordships to support it.

Amendment moved— Page 8, line 37, leave out ("may") and insert ("shall").—(Lord Strabolgi.)

LORD CAWLEY

It is a little unfortunate that the word "may" should appear in this connection. It has induced the belief among the workers that they also are going to get something out of the Bill. On the other hand, there are certain people on the other side, among the employers, who think this clause will never come into operation because the word "may" is there. I do not say that of all the employers, or of any large section of them, but I know the feeling does exist that this will never be carried out. This redundancy scheme will, if it works out as the promoters of the Bill believe, be an advantage to quite a number of people. A number of employers will get for their works a price which they could not possibly get now, when probably they would have to close down in a comparatively short time and get only scrap prices, whereas now they will get the price of a willing seller. The operatives who are not displaced will get presumably full work or at any rate much more work than they do at present, and a corresponding advantage in wages. Even the banks will get something out of it, because some of their loans which are in a very precarious position at present will be repaid, and others will be put in a better position because of the removal of competition from the firms who had that money advanced to them. It seems rather hard that the displaced operatives should not be definitely assured under the Bill of getting some slight compensation. I, like the noble Lord who has moved the Amendment, do not think that the compensation could be very widely extended, but I do think they have a right to the sympathy of your Lordships in this matter.

LORD TEMPLEMORE

Your Lordships will remember that the Bill now under consideration is based very largely on proposals which were put forward by the Joint Committee of Cotton Trade Organisations. I made that clear in my speech on Second Reading. That Committee, which is representative of all sections of the employees and operatives in the cotton industry in Lancashire, included in their proposals the provision that in any scheme compensation for operatives "might" be provided. No doubt the representatives of the operatives had good reason for consenting to this and it seems that they were wise in doing so. It is far from certain that a provision that schemes "must" provide for compensation would improve the position of the operatives. Indeed it might have an entirely contrary effect.

It must be borne in mind that this Bill does not make it compulsory for any scheme of price fixing or of redundancy to be brought forward at all. It only enables those sections wishing to do so to prepare schemes and to send them forward for proper consideration. In some sections of the industry it might well be found impracticable to find the money necessary to provide compensation to operatives. If compensation were a compulsory feature for all schemes, in the opinion of the Government it would mean that a great many schemes would not be brought forward. If this happened the operatives in the section as a whole would lose one of the benefits which should accrue under redundancy schemes without obtaining any compensatory advantage. It must not be assumed that a redundancy scheme without compensation for the operatives is of no value to the operatives themselves. One of the evils in the cotton industry in recent years has been not only total lack of employment of some employees, but also the underemployment and irregularity of employment of many others. The main purpose of a redundancy scheme is to adjust productive capacity to the demand for the products of the industry.

The noble Lord opposite has mentioned in support of his Amendment what was done in the Railways Act of several years ago and the Electricity Act. He mentioned that provision was made in those Acts for compensation for employees, but I think that he overlooked the circumstances which gave rise to those Acts. Those provisions find no parallel in the redundancy scheme which we now have under consideration. There are three important points of difference. In the first place, the reorganisations with which those Acts were concerned were compulsory reorganisations ordered by Parliament; secondly, they related to industries like railways and electricity undertakings of a quasi-monopolistic character in which the question of competitive power does not loom so large and where there is no question of finding and maintaining export markets. Also, it must be remembered that, certainly in the railway industry, the employees are not included in the unemployment insurance and are unable to obtain unemployment benefit during their period of unemployment. I think your Lordships will agree that those provisions relate to very different circumstances and do not really afford any guidance in dealing with this Bill. It is clearly desirable to consolidate the industry on a sound and stable basis with

Resolved in the affirmative and Amendment disagreed to accordingly.

the expectation that more economical production will pave the way for an expansion of trade and further employment. I confidently recommend this to your Lordships as the best service they can render to the cotton industry and for reasons I have stated I am afraid I cannot accept the Amendment.

LORD STRABOLGI

I am afraid my noble friends will have to ask your Lordships to divide on this matter. It is a great question of principle, and the noble Lord would not expect us to accept his reply as disposing of our case.

VISCOUNT SAMUEL

As this matter is going to a Division I should like to say in a few words why I intend to support the Amendment which has been moved. The arguments used by the noble Lord, Lord Strabolgi, and enforced by my noble friend Lord Cawley, are potent and valid in this case. Although it is true the Bill does not itself compel the adoption of redundancy, it gives statutory powers to the authorities set up under the Bill to impose such a scheme, and that being so the measure is, in effect, one of State action. Therefore Parliament has its responsibility for seeing that hardship is not inflicted upon those persons who are concerned. For those reasons I propose to vote for the Amendment.

On Question, Whether the word "may" shall stand part of the clause?

Their Lordships divided: Contents, 26; Not-Contents, 16.

CONTENTS.
Maugham, L. (L. Chancellor.) Feversham, E. Askwith, L.
Grey, E. Cranworth, L.
Runciman of Doxford, V. (L. President.) Lucan, E. [Teller.] Dunleath, L.
Minto, E. Ebury, L.
Radnor, E. Harlech, L.
Zetland, M. Stanhope, E. Mancroft, L.
O'Hagan, L.
Doncaster, E. (D. Buccleuch and Queensberry.) (L. Steward.) Bertie of Thame, V. Rankeillour, L.
Bridgeman, V. Rushcliffe, L.
Bridport, V. [Teller.] Templemore, L.
Airlie, E. Halifax, V. Teynham, L.
NOT-CONTENTS.
Crewe, M. Cawley, L. Marley, L.
Clanwilliam, L. (E. Clanwilliam.) Noel-Buxton, L.
Samuel, V. Rea, L.
Denman, L. Snell, L.
Salisbury, L. Bp. Gainford, L. Stanmore, L.
Harmsworth, L. Strabolgi, L. [Teller.]
Addison, L. [Teller.] Hastings, L.
LORD TEMPLEMORE

The next Amendment in my name is drafting. I beg to move.

Amendment moved— Page 8, line 41, after ("applies") insert ("or applied.")—(Lord Templemore.)

On Question, Amendment agreed to.

3.43 p.m.

LORD CAWLEY moved, in subsection (3) at the end of paragraph (b), to insert: Provided that such payments need not be uniform for every individual operative, but may be varied to meet their differing conditions. The noble Lord said: I think it will be agreed that, bad as may be the lot of some of the younger men, the lot of the older men is worse. I need not waste time by labouring that point. It may be said that my Amendment is quite unnecessary, and that discrimination between one class of operatives and another can be carried out ender the wording of the clause. I agree that that may be so, and that any committee appointed under the Cotton Industry Board will probably take the same view as I do, and as I think your Lordships do, about the need of these men. I have a strong belief also that when a number of men are displaced there will be a feeling among the younger element that there should be share and share alike in anything that there is to divide. My purpose in putting down the Amendment is to strengthen the hands of any committee that is giving out relief in the determination to help those who suffer most. That was my sole idea in putting this Amendment on the Paper. It would also, I think, be welcomed by the leaders of labour who might sit on such a committee as a help when they had to go back to explain their actions to their own people.

Amendment moved— Page 9, line 3, at end, insert ("Provided that such payments need not be uniform for every individual operative, but may be varied to meet their differing conditions.")—(Lord Cawley.)

LORD TEMPLEMORE

In many ways the Government have every sympathy with the Amendment moved by the noble Lord, but they are advised that the present wording of this clause gives full power to the framers of the scheme to include any such variation in the rates of compensation, and that it is quite unnecessary to make special provision for it. Moreover, if special provision of the kind proposed were made, it might throw doubt on the scope of the clause otherwise, and might result in unduly restricting the clause in regard to other matters. I should like to refer again to the fact that the Bill itself only provides the authority for schemes of this kind to be prepared and examined. The framers of the scheme must themselves decide on the details, and the best service we can render is to leave them as free as possible to make any provisions that may be appropriate to their particular section of the industry. The Government, for these reasons, cannot accept the Amendment.

LORD CAWLEY

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 8, as amended, agreed to.

Clause 9:

Provisions as to price schemes.

(5) The provisions of Part II of the Third Schedule to this Act shall have effect for the purpose of authorising the sale of any product or the subjection of any product to any process at a price or for a charge less than the normal minimum price or charge determined in relation thereto under a price scheme.

LORD TEMPLEMORE

The next five Amendments are drafting. I beg to move.

Amendments moved— Page 11, line 21, leave out ("the next following paragraph") and insert ("paragraph (f) of this subsection") Page 11, line 29, after ("price") insert ("which is") Page 11, line 30, leave out ("not less than the price") and insert ("does not fall short thereof by more than the amount") Page 11, line 35, after ("charge") insert ("which is") Page 11, line 36, leave out ("not less than the charge") and insert ("does not fall short thereof by more than the amount").—(Lord Templemore.)

On Question, Amendments agreed to.

3.45 p.m.

LORD TEMPLEMORE moved to insert at the end of subsection (5): and, in relation to any person who, by virtue of Part II of the said Schedule, is authorised to sell that product or subject it to a process at a price or for a charge lower than the said normal minimum price or charge, any determination made in relation to that product under provisions of the scheme having effect by virtue of paragraph (e) of subsection (1) of this section shall have effect as if any reference in that determination to that normal minimum price or charge were a reference to the said lower price or charge.

The noble Lord said: This Amendment relates to subsection (5), which gives effect to the provisions of Part II of the Third Schedule. These provisions permit any producer to apply to the Cotton Industry Board on the ground that his costs of manufacture, with the addition of the appropriate allowance for depreciation and profit, enables him to sell his goods at a lower price than the normal minimum price. If the Cotton Industry Board, on examination, find that his claim is justified they authorise him to sell his goods at the lower price. As the clause is drafted in the Bill at present, this special allowance can be made only from the normal minimum price. It is provided, however, in Clause 9 (1) (e) that a general reduction of the minimum price may be made, in regard to large orders, by all producers. The purpose of the present Amendment is to enable the exceptionally efficient producer to obtain the advantage of his lower costs of production on the large orders also.

Amendment moved— Page 15, line 17, at end insert the said new words.—(Lord Templemore.)

On Question, Amendment agreed to.

LORD TEMPLEMORE moved, after subsection (5), to insert: (6) If, with respect to any price scheme, it appears at any time to the Cotton Industry Board that a normal minimum price or normal minimum charge for the time being determined under the scheme exceeds the price or charge to the determination of which at that time the Cotton Industry Board could lawfully have consented, the Cotton Industry Board shall forthwith serve on the board administering the scheme a notice in writing specifying the sum which by virtue of Part I of the Third Schedule to this Act would have been the maximum limit in relation to any determination of that normal minimum price or normal minimum charge made at that time, and requiring the last-mentioned board to reduce the normal minimum price or normal minimum charge to an amount not exceeding the sum so specified in the notice: and if, at the expiration of the period of fourteen days beginning with the date of the service of the said notice, the board administering the scheme have not complied with the requirements of the notice, the Cotton Industry Board shall themselves determine a normal minimum price or normal minimum charge in accordance with the said requirements, and that determination shall have effect as a determination of the board administering the scheme.

The noble Lord said: Clause 9 (1) (d) requires the Cotton Industry Board, in authorising the normal minimum price determined under a price scheme by the price board and any subsequent increases, to satisfy themselves that the price does not exceed the "maximum limit" prescribed in Part I of the Third Schedule (which is made up from the sum of the amount specified in the scheme for depreciation and profit and the cost as determined by the Cotton Industry Board). It may happen, however, that owing to a change in circumstances after the price has been authorised, as for example, a fall in the price of raw materials or a decline for some other reason in the cost of production, the normal minimum price may at a particular moment exceed the "maximum limit" if calculated at that moment. If that occurs the normal minimum price should obviously be reduced. There is at present however no power in the Bill for the Cotton Industry Board to revoke their consent in such circumstances. This Amendment empowers the Cotton Industry Board to review any minimum price if it appears to them at any time to exceed the maximum limit prescribed in Part I of the Third Schedule, and if they find it exceeds that limit to notify the board administering the price scheme. If within fourteen days that board have not reduced the price, the Cotton Industry Board are empowered themselves to determine the reduced normal minimum price.

Amendment moved— Page 15, line 17, at end insert the said new subsection.—(Lord Templemore.)

On Question, Amendment agreed to.

3.50 p.m.

LORD TEMPLEMORE

The next two Amendments are both drafting. I beg to move.

Amendments moved— Page 15, line 20, after ("provision") insert ("(a)") Page 15, line 27, at end insert ("and (b) for determining the powers of the arbitrator on any such reference") (Lord Templemore.)

On Question, Amendments agreed to.

Clause 9, as amended, agreed to.

Clause 10 agreed to.

Clause 11 [Provisions for securing due operation of price schemes in relation to merchants, &c.]:

LORD TEMPLEMORE

The Amendments on this clause are purely drafting, and I beg to move.

Amendments moved— Page 18, line 7, leave out ("any determination of the board administering") Page 18, line 33, leave out ("powers") and insert ("power") Page 18, leave out ("in relation to") and insert ("to delete any entry made in the general register in respect of") Page 19, line 14, leave out ("a determination of the board administering").—(Lord Templemore.)

On Question, Amendments agreed to.

Clause 11, as amended, agreed to.

Clause 12 [Initial poll in relation to a sectional scheme]:

LORD TEMPLEMORE

The Amendments on this clause are drafting. I beg to move.

Amendments moved— Page 20, line 18, leave out ("of the") and insert ("on which the Cotton Industry Board publish the said") Page 21, line 9, leave out from the beginning to ("apply") in line to and insert ("the period of twenty one days beginning with the date on which the notice under subsection (1) of this section relating to the scheme was published") Page 21, line 23, leave out ("until") and insert ("during the period beginning with the date on which the notice referred to in paragraph (a) of this subsection was published and ending with").—(Lord Templemore.)

On Question, Amendments agreed to.

Clause 12, as amended, agreed to.

Clauses 13 and 14 agreed to.

Clause 15 [The Rayon Committee]:

LORD TEMPLEMORE

This Amendment is drafting.

Amendment moved— Page 26, line 23, after ("from") insert ("staple").—(Lord Templemore.)

On Question, Amendment agreed to.

VISCOUNT BERTIE OF THAME

On Clause 15 I should like to ask a question. Your Lordships will notice in subsection (2) the words: If, upon a Motion made in each House of Parliament on behalf of His Majesty's Government … I have never seen that provision in a Bill before and I should be much obliged to my noble friend if lie would explain the reason for its inclusion here.

LORD TEMPLEMORE

I very much regret that I cannot, at the moment, give the explanation desired by my noble friend, but if he will give me time I will of course, find out and then let him know at the next stage or send him a note about the matter.

VISCOUNT BERTIE OF THAME

I am very much obliged to my noble friend.

Clause 15, as amended, agreed to.

Clause 16 [Consideration of sectional schemes by Board of Trade and submission to Parliament]:

LORD TEMPLEMORE

These amendments are drafting.

Amendments moved— Page 27, line 37, after ("Board") insert ("and shall, as soon as may be after so doing, publish, in such manner as they think best adapted for informing persons affected, a notice stating that the Cotton Industry Board will cause a poll to be taken on the question whether it is expedient that the scheme as modified should have statutory effect, if, within the period of seven days beginning with the date of the publication of the notice, a request in that behalf is made in writing to the said Board by the requisite proportion of persons named in the said list") Page 27, line 38, leave out from ("within") to ("the") in line 2 on page 28, and insert ("the said period of seven days such a request is so made to them") Page 29, line 34, leave out from the first ("the") to the end of line 36 and insert ("mills to which the scheme applies").— (Lord Templemore.)

On Question, Amendments agreed to.

Clause 16, as amended, agreed to.

Clause 17 agreed to.

Clause 18 [Revocation, suspension of operation and expiration of sectional schemes]:

LORD TEMPLEMORE

This is drafting. I beg to move.

Amendment moved— Page 34, line 4, leave out ("which has come into") and insert ("for the time being in").—(Lord Templemore.)

On Question, Amendment agreed to.

Clause 18, as amended, agreed to.

Clause 19 agreed to.

Clause 20 [Fees and contributions payable to Cotton Industry Board by the industry]:

LORD TEMPLEMORE

I beg to move the first drafting Amendment

Amendment moved— Page 35, line 13, leave out ("woollen and worsted") and insert ("wool textile").—(Lord Templemore.)

On Question, Amendment agreed to.

LORD TEMPLEMORE

I beg to move.

Amendment moved— Page 35, line 19, leave out from ("the") to ("research") in line 20 and insert ("objects of which are or include".)—(Lord Templemore.)

On Question, Amendment agreed to.

LORD TEMPLEMORE

I beg to move.

Amendment moved— Page 35, line 23, leave out from the first ("the") to ("as") in line 23 and insert ("wool textile industry or the silk industry").—(Lord Templemore.)

LORD STRABOLGI

May I ask a question on this last Amendment? "Silk Industry" comes in here. We have been talking earlier about rayon or artificial silk. Am I right in saying that this is the first time the silk industry comes in in this form? I want to make certain on that point.

LORD TEMPLEMORE

I am afraid I cannot answer that question at short notice. I will find out and let the noble Lord know either privately or at a later stage.

LORD STRABOLGI

There may just be a misprint. It seems rather incongruous in this context, that is all.

LORD TEMPLEMORE

I will make inquiries.

On Question, Amendment agreed to.

Clause 20, as amended, agreed to.

Clause 21 agreed to.

Clause 22 [Exchequer assistance to boards administering redundancy schemes]:

LORD TEMPLEMORE

Both these Amendments are drafting. I beg to move.

Amendments moved— Page 36, line 42, leave out ("employees") and insert ("persons") Page 36, line 43, leave out from ("employment") to the end of line 44.—(Lord Templemore.)

On Question, Amendments agreed to.

Clause 22, as amended, agreed to.

Clause 23 agreed to.

Clause 24 [Form, publication, validity and commencement of orders confirming sectional schemes]:

LORD TEMPLEMORE

This is drafting.

Amendment moved— Page 40, line 7, after ("the") insert ("period of").— (Lord Templemore.)

On Question, Amendment agreed to.

Clause 24, as amended, agreed to.

Clause 25 [Power of the Cotton Industry Board and of the Board of Trade to obtain information]:

LORD TEMPLEMORE

This is drafting.

Amendment moved— Page 40, line 34, leave out subsection (2).—(Lord Templemore.)

On Question, Amendment agreed to.

Clause 25, as amended, agreed to.

Clauses 26 to 28 agreed to.

Clause 29:

Special provisions as to persons engaged in certain businesses.

29.—(1) The provisions of this section shall apply to every person who satisfies the condition that, in the preceding calendar year, or (if in that year he did not carry on business by way of any of the activities which by virtue of this Act are to be treated as part of the industry) in the last calendar year in which he so carried on business, at least two-thirds of the total quantity of products of the industry manufactured by him consisted of one or more of the following products, that is to say,—

  1. (a) one or more of the following commodities, that is to say, sewing thread, Lancaster cloth, American cloth, surgical dressings and any such commodities as the Cotton Industry Board, with the approval of the Board of Trade, may from time to time designate for the purposes of this section;
  2. (b) fabrics which, in fact, have not been used otherwise than in the manufacture of tyres, rubber hoses or such other articles made partly of rubber as the Cotton Industry Board with the approval of the Board of Trade, may from time to time designate for the said purposes, and
  3. (c) goods which, in fact, have not been used otherwise than as ingredients of such commodities or fabrics as aforesaid,
and the further condition that he possesses a certificate of a qualified accountant that in the preceding calendar year he satisfied the first-mentioned condition.

LORD TEMPLEMORE moved to leave out subsection (1) and insert: (1) The provisions of this section shall apply to every person who holds a certificate, given by a qualified accountant, that of the value of the total quantity of products of the industry manufactured by the first mentioned person in the preceding calendar year at least two-thirds was the value of one or more of the following produces, that is to say,—

  1. (a) sewing thread, Lancaster cloth, American cloth and any such commodities as the Cotton Industry Board, with the approval of the Board of Trade, may from time to time designate for the purposes of this paragraph;
  2. (b) surgical dressings, and
  3. (c) products which—
    1. (i) in a case where the said person is not a company, have not been sold by that person, and have not been used otherwise than in the manufacture by him of one or more of the following commodities, that is to say, commodities mentioned in paragraph (a) of this subsection, surgical dressings (whether products of the industry or not), tyres, rubber hoses and such other commodities as the Cotton Industry Board, with the approval of the Board of Trade, may from time to time designate for the purposes of this subparagraph, or
    2. (ii) in a case where the said person is a company, have not been sold by that company otherwise than to a related company for the purpose of being used by that or another related company in the manufacture of one or more of the commodities mentioned in subparagraph (i) of this paragraph, and have not been used otherwise than for the purpose of the manufacture, by the first-mentioned company or a related company, of one or more of those commodities.
(2) In the preceding subsection—
  1. (a) the expression 'surgical dressings' includes any articles designed to be worn on, or applied to, the body for curative, prophylactic or hygienic purposes only, but does not include handkerchiefs; and
  2. (b) the expression 'related company' means—
    1. (i) a company which is subsidiary to the company in question, or a company to which the company in question is subsidiary; or
    2. (ii) a company subsidiary to a company to which the company in question is also subsidiary or a company subsidiary to a company being itself subsidiary to a company to which the company in question is also subsidiary;
and for the purposes of this paragraph, a company shall be deemed to be subsidiary to another company if, in relation to that other company, it is a subsidiary company as defined by Section one hundred and twenty-seven of the Companies Act, 1929.

The noble Lord said: Clause 29 makes provision for persons mainly engaged in the manufacture of special products such as sewing thread, American cloth, etc., which are outside the ordinary range of the cotton industry, and of products used in the manufacture of those special products. Such persons are exempted from redundancy schemes and price schemes so far as the special products are concerned. The original intention was to include in this class the makers of the special products and their associated concerns suplying yarn or cloth for manufacture into these products, but considerable difficulty was encountered in drafting the clause so as to cover "associated concerns." Accordingly in the Bill as introduced it was provided that any concern with an output comprising, as to at least two-thirds, these products of the yarn or fabric used in their manufacture, should be covered by the exemption in the clause.

During the Committee stage of the Bill in another place the point was made that firms whose output of the ingredients was above the two-thirds limit would not be subject to price schemes although they would be selling in competition with firms whose proportion was below the two-thirds and therefore subject to price schemes. The Government promised to consider the matter further, and on Report stage in another place they introduced an Amendment entirely exempting suppliers of yarn and fabric for the special products—whether they were above the two-thirds limit or below it. In the discussion on this Amendment it became clear the exemption was now on too wide a basis in that it would leave outside price schemes a very considerable quantity of yarn and fabric and that this in some cases might well render price schemes unworkable. The Government, therefore, undertook to give further consideration to this matter, and following considerable discussion with the interests concerned during the past few days it was decided to return nearer to the original conception and to limit the exemption to the makers of the special products and their "related" companies.

This is the purpose of the Amendment, which defines "related company" by reference to the definition of subsidiary company in the Companies Act, 1929—that is, a company being subsidiary if another company appoints a majority of its directors or has more than 50 per cent. of the voting power. As now amended the clause reflects the understanding reached before the Bill was introduced between the cotton industry and the makers of the special products. Many difficulties have been encountered in giving effect to this understanding but the Government feel that the clause is now on a more satisfactory basis. I beg to move.

Amendment moved— Page 44, line 40, leave out subsection (1) and insert the said new subsections.—(Lord Templemore.)

On Question, Amendment agreed to.

LORD TEMPLEMORE

The next Amendment is drafting.

Amendment moved— Page 45, line 5, leave out from ("commodities") to end of subsection and insert ("and products as are mentioned in paragraphs (a), (b) and (c) of subsection (1) of this section").—(Lord Templemore.)

On Question, Amendment agreed to.

LORD TEMPLEMORE

This is drafting also.

Amendment moved— Page 45, line 23, leave out subsection (4).—(Lord Templemore.)

On Question, Amendment agreed to.

Clause 29, as amended, agreed to.

Clauses 30 to 32 agreed to.

Clause 33 agreed to.

LORD TEMPLEMORE moved, after Clause 33, to insert the following clause:

Incidental provisions as to Committees.

"34. The Cotton Industry Advisory Committee, the Representative Advisory Council, the Export Development Committee and the Rayon Committee may act notwithstanding a vacancy among the members thereof; and all acts done at any meeting of any such committee or of the said council shall, notwithstanding that it is afterwards discovered -that there was some defect in the appointment or qualifications of a person purporting to be a member of the committee or council, be as valid as if that defect had not existed."

The noble Lord said: The proposed Amendment enables the Cotton Industry Advisory Committee, the Representative Advisory Council, the Export Development Committee and the Rayon Committee to act notwithstanding a vacancy among their members. It also prevents acts of these bodies being invalidated if it is discovered afterwards that there was some defect in the appointment or qualifications of the members. These are incidental provisions customarily made with regard to Committees. I beg to move.

Amendment moved—

After Clause 33, insert the said new clause.—(Lord Templemore.)

On Question, Amendment agreed to.

Clauses 34 to 36 agreed to.

Clause 37 [Interpretation]:

LORD TEMPLEMORE

These three Amendments are drafting. I beg to move.

Amendments moved— Page 51, line 15, leave out ("a") Page 51, line 15, leave out ("distributor") and insert ("distributors") Page 51, line 23, leave out from ("includes") to the end of line 28 and insert ("in relation to any time when the scheme has not yet come into operation, or any time during the continuance in force of the scheme when the provisions of the scheme empowering the board administering it to acquire plant are not in operation, a cotton mill any plant in which that board could lawfully acquire if the scheme or those provisions thereof, as the case may be, were in operation at that time; and mill to which the scheme applied shall be construed accordingly;").—(Lord Templemore.)

On Question, Amendments agreed to.

Clause 37, as amended, agreed to.

Remaining clauses agreed to.

First Schedule: