HL Deb 06 May 1948 vol 155 cc690-700

4.30 p.m.

Order of the Day for the Second Reading read.

LORD CHORLEY

My Lords, in asking for a Second Reading of this Bill I do not think that I need take up a great deal of your time—not that this is not a significant Bill, but it is one of which the purpose is clear and the terms are not too long. As its title indicates, the object of the Bill is to provide assistance for the rebuilding of the cotton industry in Lancashire. Your Lordships recently had before you an Order for the setting up of the new Cotton Board. This is the second Bill which comes before your Lordships' House as part of the Government's reconstruction proposals for the cotton industry. There is no need for me to emphasise in this House the importance of this industry, and the vital part which it can play—and, indeed is already playing—in the great export drive on which the future prosperity and standard of life of this country so much depend.

In order that that export drive may be successful, we need a substantial increase in the production of cotton piece goods in Lancashire. And not only do we require a substantial increase in the quantity of cotton goods manufactured, but it is also equally essential that they should be produced more economically, at a price which will enable us to compete successfully in the world markets after the sellers' market has come to an end, as it already shows signs of doing. As your Lordships are probably aware, the most pressing need in the industry at the present time is recruitment of workers. It has so far proved impossible to build up the army of cotton operatives to the number at which it stood before the outbreak of the Second World War. Although substantial progress has been made, we are still something like 30,000 below the figure required. A good deal of progress has been made with the recruitment of workers from abroad; already numbers of them are successfully at work in the cotton mills in Lancashire, but it is obvious that this is a source of supply that cannot be relied upon much longer.

Moreover, from the point of view of recruitment in Lancashire itself, there are obvious difficulties. The workers in the mills are growing older. The younger generation in Lancashire are not displaying a great deal of enthusiasm for entering the mills, and it is obvious that in the future recruitment will not be easy. However, even if there were no particular difficulty about recruitment, it would still be essential, in the interests of Lancashire and of the export trade of this country, that there should be a great deal of re-equipment and modernisation in the industry, in order to make the best use of the labour which is available, labour of high skill and of fine tradition. So I suggest to your Lordships that the solution, or at any rate the first part of the long-term solution, of this problem is that the machinery in the Lancashire cotton industry should be brought up to date, and made thoroughly efficient, as quickly as possible; and at the same time that the labour forces in the industry should be redeployed, in order that full and effective use may be made of this new machinery. A great deal of attention has been given over recent months to the redeployment of the labour force, and in some of the more progressive mills in Lancashire remarkable achievements have already been secured.

Your Lordships may have heard about the Musgrave Mill, for example, where scientific redeployment has been going on, and where already remarkable achievements have been obtained. I will not take your Lordships into the details but, per £100 of production, the hours which before redeployment stood at 10.48 have been reduced already to the figure of 7.58, a reduction of something like 25 per cent., which I am sure your Lordships will agree is a very encouraging figure. The Working Party which produced a most interesting and instructive Report not long ago on the Cotton Industry made it clear that it was their opinion—and I think there can be no question that it is right—that in future the cotton industry of Lancashire will have to rely upon a smaller and more highly paid labour force. The scope for this re-equipment and redeployment is evident throughout the industry.

As your Lordships are aware, this particular Bill deals only with one section of the industry, the spinning section. This has been chosen as the first part of the industry to be dealt with, not because it is behind the others but partly because the problem here is simpler—the number of concerns occupied in spinning is not so large—and partly because yarn not only has an outlet in the weaving mills but is also a very saleable article in other parts of the country—as in Leicestershire for hosiery—and overseas. Therefore, if we could step up the production of yarn from the spinning mills, there should be no difficulty about selling it. Indeed, over the last months very favourable results have been achieved. Yarn is coming forth well. Only last week, for the first time since the Second World War, a figure of over 18,000,000 lb. was produced, which again, I am sure your Lordships will agree, is a most encouraging sign.

The history of the cotton industry between the First and the Second World Wars is only too well known, and I do not propose to take your Lordships again over that rather gloomy era. But, for various reasons, it meant that there was comparatively little modernisation and re-equipment of the mills with up-to-date machinery. This was due partly to difficulties of finance, but even more, I think, to difficulties of psychology. At any rate, the context of this Bill is a twin one: it is a context of new machinery and redeployment. The installation of new machinery is important not only on its merits, from the point of view of increased material production, but also from the psychological angle. It is necessary, in order to convince the workers of Lancashire that the managements really intend to put their house in order and to have the mills in an up-to-date and efficient condition. Only when they are satisfied in that respect, can the best will and the most efficient efforts be obtained from the workers. On the other hand, however, from the point of view of the management, if a great deal of money is to be spent on new and up-to-date and very expensive machinery, the management must be clearly satisfied that the workers are prepared to play their part. Therefore this Bill is important from both points of view.

I have referred to the great expense of modern machinery. Many of the mills (possibly most of them) are still equipped with spindles which were installed before the First World War, when the cost was something like £1 per spindle. Nowadays, the cost has risen to something like £9 per spindle. That is a very substantial increase indeed and, therefore, the cost of re-equipping the mills with the new spinning machinery is heavy. This drain on the nation's resources cannot possibly be justified unless the machinery is to be fully worked, and the machinery cannot be fully worked unless a two-shift system is introduced. The object of this Bill is to enable this new equipment and machinery to be put into the mills and, we hope, to enable the two-shift system to be worked there.

The essence of the Bill, which is contained in Clause 1, is to provide a 25 per cent. subsidy to manufacturers who re-equip or modernise the machinery in their mills. Naturally, that subsidy will be forthcoming to the manufacturers only if certain conditions are satisfied; and, broadly speaking, those conditions are two in number. Before applying for ass stance under the Act, the applicant will have to show that there has been he formation of a group—that is to say, that a certain number of mills have formed a group, which must consist of not less than three mills. Not only must there be a group of mills in this scheme for the re-equipment and modernisation of that particular little section of the industry, but it must also be shown that the group is operating no fewer than 400,000 equivalent mule spindles. Where there is a vertical set-up, that number may be reduced to 250,000, which I think your Lordships will agree is a reasonable proposition.

There has been a certain amount of criticism in another place of the grouping proposal, but I believe that your Lordships will agree that that is an essential part of the proposals under this Bill, and that it is necessary if an efficient two-shift system is to be introduced. It is necessary for this reason: that as the operative force stands at the present time, it will not be possible for one mill to run a two-shift system without bringing in he workers from another mill and, therefore, it will be necessary, on the proposals which are contained in the Bill and which the Board will operate, to have three mills. It is proposed to go forward in two steps. The workers from the less efficient mill (if there be a less efficient mill) will go into the two more efficient mills, and eventually in that way the industry will be concentrated into a smaller number of more efficient mills. I am sure your Lordships will agree that it would be wasteful to spread modernisation thinly over the whole industry; it is much better to concentrate on the most efficient and up-to-date mills where the largest production can be achieved with the smallest labour force.

I think those are all the observations of a general character which I need address to your Lordships. I do not think it is necessary to ask you to go through the Bill clause by clause. The substance of the matter is contained in Clause 1, and if your Lordships would look at that for a moment you will see that it requires not less than three in the grouping. Sub-section 2 (b) lays down that the group must be organised with a view in particular to making the best use of the more efficient mills. That is, so to speak, the acid test of the reorganisation. I should perhaps point out to your Lordships that the subsidy is in respect of re-equipment with machinery. It is not limited to the actual spinning machinery; it covers the whole area of machinery which leads up to, and works in connection with, the spinning. It does not, however, mean the rebuilding of the mills themselves. It does not cover the structural side of the matter; only the machinery. The other clauses deal with matters which are necessary to the carrying out of this main clause.

Your Lordships will see that further down in Clause 1, there are various dates within which the application has to be made, and within which the modernised machinery must be installed, and that no subsidy will be forthcoming until the machinery has, in fact, been installed. But I would like your Lordships to look at subsection (7) of Clause 1, which was inserted in another place and which is directed to the provision of better arrangements for the safety, health and welfare of the operatives in the mill. Owing to the fact that many of these mills are so old, they have fallen behind the more up-to-date engineering works, and other works of that kind which have been built during the present generation. It is necessary that a good deal of improvement should be effected in this matter, and this clause gives the Board power to see that effective arrangements are made to that end before the subsidy is forthcoming.

I need not ask your Lordships to look in detail at any of the other clauses. If there are any points which are not clear, or upon which I can assist your Lordships, I shall be glad to do so in reply. I hope that your Lordships do not think, from anything I have said, that there is dismay or downheartedness in Lancashire. Such figures as I have been able to give you, indicate, I think, that they are pulling their weight; but it is undoubtedly necessary that there should be a considerable amount of re-equipment and modernisation, which can be done only if the nation comes in and helps. Undoubtedly, very great energy, vitality, skill and inventive capacity are left in Lancashire, the home of a great industry which was for many years our pride, and which, with the assistance of the Government and the hard work and ingenuity of the people of Lancashire, will, I am sure, once more take its place in the van in British industrial progress. I beg to move that the Bill be read a Second time.

Moved, That the Bill be now read 2ª.—(Lord Chorley.)

4.49 p.m.

VISCOUNT SWINTON

My Lords, the noble Lord has given us a clear and concise explanation of this Bill, but really the justification for it could be summed up in a sentence—that the re-equipment and redeployment of this industry, the basis of all Lancashire textile industry (and indeed, of all textile industry) is so vital that we must do everything we can to expedite that dual process. I do not suppose any of your Lordships are greatly attracted by a subsidy Bill, particularly when the subsidies are irrecoverable. I may have missed it, but I do not think the noble Lord told us how much this is going to cost. I have seen an estimate—I do not know whether it is correct—that the cost will be about £12,000,000.

LORD CHORLEY

That is the estimate: not more than £12,000,000.

VISCOUNT SWINTON

I do not think any limitation is put in the Bill. But that is the estimate, and it seems rather noteworthy to me that of the two sections of the industry, spinning and weaving, the weaving side appears to have placed all its orders for re-equipment without a subsidy, but there has to be a subsidy for the spinning side. We gather that the argument is that this subsidy is needed as a sort of carrot or inducement to bring about the right kind of amalgamations and groupings. I entirely agree with the noble Lord that if we spend this money we must spend it as effectively as possible. It is not desirable to spread a little margarine over a lot of bread. What is desirable is to give an increased butter ration, so to speak. Incidentally, I observe that when one ration goes up the other comes down. What is required is that a good pat of butter should be applied where the bread is of the highest quality.

I would add that I hope the Government will not try to use a sealed pattern for these amalgamations or groupings; that the process will not be carried out entirely on a rigid blue-print plan. I am sure that it is necessary to have flexibility. I do not set myself up as possessing special knowledge of the textile industry. I have never been connected with it apart from my six or seven years' tenure of the office of President of the Board of Trade, but I have sufficient knowledge of it to be aware that this reorganisation cannot be properly carried out according to a sealed pattern. All the different firms and factories must be considered on their merits. Flexibility is becoming one of the latest clichés, and it is a very good one. I hope that in this case it will be something more than a cliché—that it will be embodied in practice.

Little as I like subsidies, and preferring much more, as I do, the discarded profit motive as an incentive, it is clearly so vital to stimulate production in this industry, both in quantity and quality, that I expect that we shall all be prepared to swallow this dose and—to mix the metaphors—to put our hands in our pockets. But it is essential—and I am glad that the noble Lord, himself, has stressed this fact—that the best use should be made of this machinery in the factories in which it is to be installed, that there should be no restrictive practices, and that management should be brought to the highest pitch of efficiency. There can be no fear of unemployment in this industry. The only fear is that there may be a failure to produce the almost unlimited quantities of goods necessary to meet the demand for export and the home market. Nor is there any doubt, as the noble Lord also fairly said, that, if there is this redeployment and this abolition of old practices, the workers will earn more.

That extraordinary system on which wages were calculated has, I hope and believe, gone by the board. I never could begin to understand the system of calculating wages in the mills. I understood the system employed in the coalfields because I spent nine months in the mines, and at one time I had a considerable coal practice at the Bar. Therefore, in the old days, I could calculate miners' wages. But I doubt whether any of your Lordships, unless you happen to have been connected all your lives with the industry, could calculate wages in the cotton trade. However, I understand that as the result of a sensible joint trade arrangement a great deal of the old complexity has gone, and, as a result, he or she who runs may now read. I am sure it is true that redeployment and re-equipment have to go forward together. Each is necessary to the other. And as we are priming the machine to this very considerable extent we have the right to ask management and workers alike for a great combined effort. I must say that I wish this could have been brought about sooner.

I have only two other observations to make. They are rather more general than those I have made, but I think they are relevant and, perhaps, worth making. This great demand for textile goods comes from all over the world now, but I would like the people of Lancashire to realise that by increased production not only can they make a great general contribution to the national economy, but they can make a large contribution—as no one else can—to food production and development in the great African territories. There is a direct link in this matter. Lancashire needed the market of our great African territories before the war, and will need it again. We need greatly increased food production in Africa. It became char to me when I was Minister in West Africa, during the war, that if we were to get maximum production, not out of the great plantations, of which we have very few in West Africa, but out of the millions of small native farms which, in the aggregate, have a colossal production, we must give the people there textile goods. I must say that my colleagues in the Government were extraordinarily good to me over that matter. They took steps to keep up a most remarkable flow of cotton textiles to West Africa. I do not think that I am putting it too high when I say that it was that flow of goods, coupled with—and I must stress this—a genuine appreciation of the war effort by the people of West Africa, that kept the fat ration going in this country during the war.

We want all the development we can get to-day, and the people of Lancashire can greatly help to increase the food supplies of this country by increasing their production. I agree with the noble Lord, Lord Chorley, in believing and trusting that this industry can be as efficient in the future as ever it has been in the past. But I hope that more than efficiency will be promoted. I hope that we shall see a closer partnership within the industry. The Lancashire cotton industry, re-equipped, with the right spirit, with able management and taking full advantage of the latest inventions, will, I am sure, hold its own against any fair competition. I want to add this, however. Before the war there was competition which no European country, or the United States for that matter, could meet. That was the competition of Japan with its frightfully low wages and standard of living. No country (I was going to say no civilised country) with anything approaching decent standards of living and labour could compete with the products of those Japanese mills. Both Britain and India had to take measures. In concert with India, I had to take measures to safeguard ourselves against Japanese competition, and we took them with the greatest good will of the African consumers, who saw Japan importing nothing from them whereas other countries—ourselves first and then other European countries—took a great deal. There was no difference of opinion between us, even before the war. By the most stringent measures—a tariff was not enough, and quotas had to be imposed—we had to safeguard our trade against that competition. After all we have suffered at the hands of the Japanese, it would be a travesty of justice if that competition were allowed again to swamp this industry and the cotton industry of other countries in the concert of Europe. I am glad to see that recently the cotton industries of this country and America have been getting together, as I understand, to study this problem, which is of common interest to both. Noble Lords on this side must accept this Bill and will certainly expedite its passage. I express the hope that the re-equipment and redeployment of this industry will proceed as expeditiously as the passage of the Bill through your Lordships' House.

5.3 p.m.

LORD CHORLEY

My Lords, I am grateful to the noble Viscount, Lord Swinton, for the way in which he has welcomed this Bill. He has left me very little to answer. I would point out that in the Financial Memorandum the expenditure on this subsidy is limited to £12,000,000. As he has done in the past, the noble Viscount referred to the need for avoiding a sealed pattern in this co-operation with industry. I can assure him that we on this side of the House appreciate the importance of that. I am sure that during the time the noble Viscount was President of the Board of Trade, he saw enough of Lancashire to know that it would be the most difficult county on which to impose a sealed pattern, even if anybody wanted to make the attempt. I had the pleasure of working with the people of Lancashire on Civil Defence during the war years, and I found they were not people who took easily or readily to a sealed pattern—individuality of character is of the essence of that great county, and of the men who work and earn their living there.

The noble Viscount's excursus to Africa was interesting. He spoke with great knowledge of that Continent, on which so much hope is now rested, and I am sure he is right in his view that there must be much greater exports of cotton textiles to Africa, so that food of one kind or another may be forthcoming in larger quantities from that Continent. It is my own impression (though I speak without great knowledge) that in the future Lancashire will have to rely more and more on Africa for the raw materials for its industry. Again, the most obvious way of purchase will be by the return to Africa of the completed cotton articles. The noble Viscount invited me to follow him even further, into the Far East. I hope he will forgive me for not being prepared to make so distant a voyage. As he said, these problems are very much in the minds of the industry in Lancashire and of His Majesty's Government. I conclude by thanking him for his support and ask your Lordships to give the Bill a Second Reading.

On Question, Bill read 2ª, and committed to a Committee of the Whole House.