COTTON INDUSTRY BILL [H.L.] (Hansard, 15 February 1940)

§ LORD TEMPLEMORE
My Lords, this is a Bill to promote export trade. As has been often said export trade is of the greatest importance to this country, particularly in time of war, and it is very vital to every industry, especially to the cotton trade. The exports of cotton goods are, as your Lordships may be aware, greater than those of any other single manufacturing industry. If I give a few figures they will illustrate this. Exports in 1937 amounted to over £68,000,000 and in 1938–9 to over £49,000,000. As against this the cotton trade is very vulnerable to foreign competition. In prewar days, I think I am right in saying, four-fifths of the products of the industry went abroad and these constituted nearly three-quarters of the world's international cotton trade. The history of the industry, I regret to say, has really been for the last twenty years a long and unsuccessful attempt to regain ground which was lost during the last war. I think it is common knowledge that a great deal of thought has been given to this matter and much discussion has taken place. From this discussion has, emerged the conclusion that whatever else may be necessary the first step is to secure exact and detailed information about any possible overseas markets. This will require the appointment of skilled and zealous investigators who will regard themselves as essential agents of the industry as a whole.
The Joint Committee of Cotton Trade Organisations, in their pamphlet Lancashire's Remedy, which was published towards the end of 1937, stated that any scheme of reorganisation necessarily implied some central organisation in the industry for carrying out these schemes, and placed first among their proposals one for constituting a Cotton Industry Board whose main function should be to watch over and assist in the development of the export trade and for this purpose to encourage or initiate schemes for the benefit of the industry, especially in such matters as market research and propaganda. Such a Board, charged as its first dirty to perform certain services with a view in particular to the maintenance and extension of the export trade, is set up by the first clause of the present Bill. 534 This is not the first Bill in which such a provision appears. I think your Lordships will remember that there is already on the Statute Book an Act called the Cotton Industry Reorganisation Act, 1939, which I had the honour of taking through your Lordships' House last summer, just before the adjournment in August. That Act is at present in suspense, but I should like to note in passing that a Cotton Board somewhat similar in constitution was set up jointly by the President of the Board of Trade and the Minister of Supply soon after the outbreak of war and has since been actively and helpfully collaborating with the Ministry and the Board of Trade, not least in submitting proposals for the present Bill.
Now if I may deal with the clauses of the Bill, the first clause establishes a Cotton Board and defines its functions. The idea of such a Board originated with the Joint Committee of Cotton Trade Organisations and was embodied in the Cotton Industry Reorganisation Act, 1939, where it was called the Cotton Industry Board. The composition of the two Boards can be compared by your Lordships if you look at the Schedules. Clause 2 is a very important clause. It sets out under five heads the services which may be performed by the Cotton Board. Those services are the same as those prescribed under Section 20 of the Act of last year, but there is this significant difference that the service relating to advertising is brought from the third to the first place and related specifically to the export trade. That insistence on the export trade is one of the characteristics of the present Bill. The Cotton Industry Board under the Reorganisation Act had numerous functions in connection with schemes which might be put forward by sections of the industry with regard to redundancy and price fixing. Those are not found in this Bill, because in case of the first they are not necessary in war-time and in the second case because prices will be controlled as far as necessary by Orders made by the Ministry of Supply.
Clause 3 provides the Board with the necessary funds. A levy is to be made on all spinners of a prescribed amount on each amount of raw cotton bought by them or for their account. This is not a new principle. It has been used for years as a means of providing funds for the development of Empire cotton grow- 535 ing. The new rate of levy will, however, necessarily be of a different order from the old one, which in fact it incorporates I come now to Clause 4, which deals with payments to the Empire Cotton Growing Corporation, and I have to inform your Lordships that in this clause there is a clerical error. In the Bill as printed it is provided that the levy shall be "a sum equal to one penny in respect of each hundred pounds or fraction of one hundred pounds." That should read "each five hundred pounds or fraction of five hundred pounds." I propose to put this right by moving an Amendment at a later stage, and I should like to inform your Lordships now that in order to save the expense of reprinting the Bill I am going to indulge in what is perhaps something of an irregularity, which I hope your Lordships will excuse. Instead of putting down an Amendment on the Committee stage the Government propose to put it down on the Third Reading stage. I hope your Lordships will approve of this laudable desire for economy and will not object to that course being taken. The remaining clauses are, I think, consequential.
The Cotton Industry Reorganisation Act of 1930 has been found too elaborate for war-time conditions. That Act had three main purposes, the first of which was to provide means for dealing with the problems of redundancy, the second to make arrangements for the institution of price schemes, and the third to deal with research and market investigation. The first problem does not arise in the cotton industry in war-time; the second can be and is being dealt with under the Defence Regulations; and provision for the third is being made in the present Bill. This is a war-time Bill. I said at the beginning it was a Bill which would promote export, but I think I would rather go a little further than that and say that it is a Bill to promote immediate export. The opportunities at the moment are exceptional; the need for action and early action is very great; but nothing can be done until this Bill becomes law. Therefore I hope your Lordships will give the Bill a Second Reading to-day, so that we may take the remaining stages next week and send it down to another place. I beg to move.

LORD STRABOLGI
My Lords, on behalf of my noble friends may I first of all congratulate the Government on introducing so important a Bill in your Lordships' House? The other place is only meeting now on three days a week, and your Lordships are probably aware that there is already congestion of business there. I was wondering when the Government would remember the existence of your Lordships' House and ease the pressure a little by introducing measures in this Chamber. With regard to the main objects of the Bill, the trade unions concerned, as well as all the employers' organisations, are in agreement with this Bill, and the Labour Party desire to facilitate its passage into law as soon as possible. There are one or two matters, however, which I would venture to raise with the noble Lord, Lord Templemore. First of all he spoke of Part I of the Cotton Bill of last year being suspended. That dealt with the suppression of so-called "redundant" spindles, and he said it was inapplicable in war-time. What a blessing it is that that Bill was not agreed to earlier and rushed into law earlier and the so-called redundant spindles suppressed earlier! We should now be suffering in the cotton industry just what we are suffering in the shipyards, which under another ill-fated measure were suppressed because they were supposed to be redundant. Now, of course, we need every cotton spindle which can operate in the North of England and in Scotland. I hope that, when the noble Lord speaks about suspension, he means that the Government have learnt their lesson, and that one thing, at any rate, which the war has taught them is that the production of cotton cannot be redundant when there are immense markets all over the world which could absorb our goods if they were properly presented and sold at the right price.
Another matter is that, although it is true that there is at the present time what is known as a "sellers' market"—there is a great demand for cotton goods—we nevertheless have to face a great deal of competition abroad, especially in the cheaper counts. Japanese competition is still very intense, and we have lost a great deal of trade owing to the cheaper cotton goods of Lancashire being too dear for the native buyers. This is particularly the case in the tropics, Africa, and so on. 537 I hope that the fact that there is a sellers' market will not lead to any yielding to the temptation to snatch quick profits now while neglecting the great basic markets which we can perhaps recapture by keeping prices low and keep after the war. In other words, do not let us have a repetition of what happened in the last war: the cotton industry boomed, prices went up, and after the war there was a terrible slump because competitors came in with very cheap goods and were able to undersell us.
The third matter which I wish to put to the noble Lord, and of which I gave him notice this morning, is this. The Board is to deal with the exports of the cotton industry; and, as the noble Lord says, the British textile industry is our greatest exporting industry in this country. But we have also had an Export Council set up by the new President of the Board of Trade, Sir Andrew Duncan, with an imposing galaxy of names on it and four gentlemen of great eminence in business as wholetime executives. This is to be the Government's means of intensifying our drive for exports. Is there to be any overlapping here? In other words, what is to be the relation between, on the one hand, Lord Templemore's Cotton Board which he is setting up under this Bill, the primary object of which is to help the expert of textiles, and on the other hand Sir Andrew Duncan's Export Council? Where do they meet, where do they part? I think that question is worthy of a little attention.
The only other remark I venture to make to your Lordships in connection with this very important matter is this. The Bill is really the result of peace-time preparation. It was all prepared before the present war in different circumstances. It is very useful, of course, but it is a small piece of machinery to deal with our present problems. We may have to export cotton goods in bulk. That is quite possible, as the need of foreign exchange grows and as our necessary imports increase. I prophesy—it may be rather rash of me—that we may have to take farther-reaching steps to sell cotton goods abroad. That is one of the assets we can sell abroad and for which we can get foreign exchange to pay for the necessary imports. This peace-time measure may not be quite wide enough. I therefore hope that the Government are alive to that possibility and are already think- 538 ing about greater machinery to help our exports under modern conditions. I am thinking, for example, of barter and preemption, and the possible need of selling cotton goods in certain countries in exchange for their products as part of our economic warfare. I do not need to particularise; I am sure the noble Lord, Lord Templemore, understands entirely what I mean, and I am sure the Board of Trade have had this in mind; but the Government, as we know, have no economic member of the War Cabinet. That body is overloaded with Defence Ministers and people of that kind, all very admirable in their way; and though the admirable experts at the Board of Trade, I am sure, have not lost sight of these considerations, our fear is that the War Cabinet will lose sight of them. I hope, therefore, that the noble Lord, with his great influence, will be able to give us some reassurance on this point. With regard to the Bill itself, so far as it goes it is welcome to my Party, and we shall do all we can to help its passage into law.

§ LORD TEMPLEMORE
My Lords, I think I can answer the noble Lord in a very few words. I am grateful to him for his favourable reception of the Bill. He could not help in the end bringing forward the point which he frequently mentions and probably will again: about the economic member of the War Cabinet. I would remind the noble Lord that my noble friend the Leader of the House spoke on this matter a week or ten days ago, and I should have thought he ought to have put the noble Lord's mind at rest about it. He gave a very clear idea of how the War Cabinet worked with the President of the Board of Trade, or whoever it was, being called in for consultation. However, I dare say the noble Lord did not hear that. With regard to the question which he asked me about the relations of the Export Council and the Cotton Board set up under this Bill, I have to say that the cotton industry is already represented on the Export Council in the person of the Cotton Controller, Sir Percy Ashley, and I can assure your Lordships that suitable arrangements are going to be made to establish very close contact between the new Board and the Council. The noble Lord asked me where they were going to sit, but I am afraid I do not know that. The Govern- 539 ment are aware of the great importance of close contact being maintained, and I can assure the noble Lord that that will be done. I think your Lordships are ready to come to a decision, and I hope that the Bill may now have a Second Reading.