Lords Sitting of 23 March 1954

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

SWINTON AND WORSLEY BURIAL BOARD BILL [H.L.]
Read 3, and passed, and sent to the Commons.

BUSINESS OF THE HOUSE
2.36 p.m.
THE PAYMASTER GENERAL (THE EARL OF SELKIRK): My Lords, on behalf of my noble friend Lord Home, I beg to move that the Food and Drugs (Scotland) Bill be re-committed to a Committee of the Whole House. Your Lordships will recall that on Thursday last my noble friend the Chancellor of the Duchy of Lancaster introduced the Slaughterhouses Bill into this House. This Bill will cover the whole of the United Kingdom, and as it will be a simple Bill it is hoped that there will be no essential difficulty in its making its way through Parliament in time for the necessary arrangements to he made when control of meat supply by the Ministry of Food comes to an end in July. Accordingly, it is no longer necessary that clauses dealing With slaughterhouses should be contained in the Food and Drugs (Scotland) Bill. These clauses become redundant because of the new provisions now contained in the Slaughterhouses Bill, and it becomes necessary to re-commit the Food and Drugs (Scotland) Bill in order to omit them from the latter Bill. I may also add that as the slaughterhouse provisions are to be omitted from the Food and Drugs (Scotland) Bill, it is considered more suitable that the law relating to knackers' yards should remain, as at present, under the Public Health (Scotland) Act. 1897. I beg to move.
Moved, That the Food and Drugs (Scotland) Bill be re-committed to a Committee of the Whole House.—(The Earl of Selkirk.)
EARL JOWITT: My Lords, I would just say one thing. I notice that the noble Earl, in making the observations which he has just made, relied far more than he usually does on a piece of paper in front of him. That is indicative of the fact that this is an exceedingly complicated matter. So far from the Slaughterhouses Bill being, as the noble Earl suggested a simple Bill, my noble friends who have studied it (I am afraid I have been studying other things) feel that it is one of very great complication. I hope that the noble Earl will not be under the impression that all is going to be easy about this Bill, or that it is an easy Bill to understand. Having said that, I have no objection to the course which the noble Earl now proposes.
THE EARL OF SELKIRK: My Lords, may I take the opportunity of thanking the noble and learned Earl, and also of welcoming him on his return from his sojourn abroad and saying how glad we are to see him back in this House? We are grateful for his warning, and we will bear it in mind.
On Question. Motion agreed to, and ordered accordingly.

UNITED STATES VISA REGULATIONS
2.39 p.m.
VISCOUNT ESHER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what further steps they propose to take to obtain reciprocity in visa regulations and to remove the humiliating exaction of finger-prints by the United States Government.]
THE MINISTER OF STATE, FOREIGN OFFICE (THE MARQUESS OF READING): My Lords, it will be recalled that the visa requirement for United States citizens coming to the United Kingdom was waived in 1948, in pursuance of the late Government's policy of reducing to a minimum the formalities connected with private travel. This was unilateral action on the part of Her Majesty's Government, but the hope was expressed to the United States Government at the time that they would feel able to reciprocate in some measure.
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The United States Government responded by abolishing visa fees and doubling the period of validity of the visas for British subjects, but they explained that their special immigration problems made it impossible for them to go further. Her Majesty's Government see no reason to depart from the policy pursued in this matter by their predecessors.
As regards visa formalities in general, the United States Government is entitled, as is every Government, to lay down such rules as it thinks fit for the admission and registration of aliens. Applicants for United States visas were first required to have their finger-prints taken under the Aliens Registration Act of 1940. Her Majesty's Government had no valid grounds for making representations on the subject, either at the time or later. We have, however, expressed the hope that visa formalities for British subjects visiting the United States can be reduced to the minimum consistent with American law.
VISCOUNT ESHER: My Lords, arising out of the noble Marquess's reply, I should like to ask him whether he can confirm that Venezuelans and other South American nationals are exempt from these Police State regulations, and, if that is so, whether Her Majesty's Government acquiesce in the assumption that we, who are friends and Allies of the United States, are a greater security risk than these nationals of South America.
THE MARQUESS OF READING: My Lords, I have no knowledge that the position is as the noble Viscount states it to be, but I will look into the matter and communicate with him. However, of course it is for every Government to make its own regulations, and, provided that they do not unduly discriminate, it is difficult for any other country to take exception to them.

TELEPHONE SERVICE MAINTENANCE
2.41 p.m.
THE EARL OF LUCAN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the saving in costs achieved in a telephone service in the

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United States by the practice of "qualitative maintenance," they will consider introducing the system into this country.]
LORD MANCROFT: My Lords, I should like, on behalf of my noble friend the Postmaster General, to thank the noble Earl, Lord Lucan, for putting down this Question, if only because it gives Her Majesty's Government the opportunity to thank publicly those who are responsible for an interesting report which is likely to prove extremely useful. The report to which I refer is that recently published by the team of Post Office engineering staff which visited the United States last year, and the recommendations of which are already being closely studied. Consultations will shortly take place with the interests concerned in order to see how the system of qualitative maintenance, to which the noble Earl, Lord Lucan, refers in his Question can most effectively be adapted to conditions here.
I think I ought to explain to your Lordships that the General Post Office's present policies of what are called preventive maintenance are practised almost everywhere in the world—including America, until 1953. They are based on maintenance attention and the overhaul of equipment at regular intervals, irrespective of the frequency with which faults occur. On the other hand, qualitative maintenance means attention in accordance with the actual needs of the apparatus as revealed by the occurrence of faults. I should also perhaps add that, as American experience shows, the new policy cannot be introduced rapidly, so that in any event it would be bound to take some time to apply.
THE EARL OF LUCAN: My Lords, may I thank the noble Lord for his fall reply and his explanation of the methods. May I also ask him whether he anticipates that, if the system were introduced it to this country, it would result in a saving similar to that in America, which is alleged to be the equivalent of about £1 million a year?
LORD MANCROFT: My Lords, the noble Earl is quite right. The saving in America is something like 20 per cent. Whether that saving would be reflected in this country, if the same methods were
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adopted, would be purely speculative, but I know of no reason at the moment why it should not be reflected.

BRITISH HONDURAS
2.44 p.m.
LORD OGMORE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what are the term; of reference for the Commission relating to British Honduras; what is the name of the Commissioner, and by what date is it expected to report.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER): My Lords, Sir Reginald Sharpe, Q.C., has been appointed Commissioner. His terms of reference are:
"to investigate and report on allegations brought to his notice by the Government of British Honduras of contacts between the People's United Party or its members on the one hand, and authorities, organisations or persons in Guatemala or their representatives in British Honduras on the other hand."
Sir Reginald Sharpe arrives in Belize to-day, and the inquiry will start at once. I cannot say when it will report, but should not be long delayed.
LORD OGMORE: My Lords, while thanking the noble Earl for his reply may I ask whether the fact that this inquiry is proceeding will in any way affect the holding of the elections which are to take place on April 23
THE EARL OF MUNSTER: My Lords, no change is contemplated in the date of the elections.
VISCOUNT STANSGATE: My Lords, have the Government considered the possible effect of this inquiry on the resolution passed at the Caracas Conference relative to the Western Colonies in the American hemisphere?
THE EARL OF MUNSTER: Certainly we have examined the resolution which was passed.
VISCOUNT STANSGATE: Does it mean that inquiries will be made by our officials in Guatemala?
THE EARL OF MUNSTER: As this inquiry is sub judice, I would much rather that it proceeded normally, without being cross-questioned too much in Parliament about the results of the inquiry. I think that the best procedure now would be to let Sir Reginald Sharpe inquire into all these details and make his report in due course.
VISCOUNT STANSGATE: My Lords, the terms of reference cannot be sub judice, and it was with the terms of reference that my question dealt
THE EARL OF MUNSTER: My Lords, I read out the terms of reference, and I have nothing to add. Sir Reginald Sharpe is to make inquiries into allegations that have been made against certain political Parties in British Honduras, that they have links with Guatemala, and I think it would be well to see what Sir Reginald Sharpe says in his report.
LORD OGMORE: My Lords, may I say that I think the reply of the noble Earl, according to his answer to me, is" Yes." Under the terms of reference Sir Reginald Sharpe will have power to make such inquiries as he thinks fit about what is happening in Guatemala. Surely the answer is," Yes."
THE EARL OF MUNSTER: My Lords, I would much rather leave it to Sir Reginald Sharpe. I do not know what he has done out there. I would much rather leave it to him to decide what evidence he should call.
THE EARL OF LISTOWEL: My Lords, I should like to be certain—although I take it to be the case—that Sir Reginald Sharpe's report will be published.
THE EARL OF MUNSTER: Certainly his report will be published.

CIVIL DEFENCE (ELECTRICITY UNDERTAKINGS) REGULA- TIONS, 1954
2.48 p.m.
LORD HAWKE: My Lords, nearly three weeks ago your Lordships gave a Second Reading to the Civil Defence (Electricity Undertakings) Bill, and subsequently duly passed it. On the Second Reading I stated that the draft regulations would be laid speedily, and to-day I have to move their approval. Their
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objects are simple and are precisely the same as those of the draft regulations for gas and transport which we have already approved—namely, to enable the Minister to make grants to electricity undertakings in respect of works carried out by them to enable them to function under enemy attack. The rate of grant is to be up to 52¾ per cent., a rate which I have already explained when dealing with the gas regulations. With the power of grant goes the power of calling for information the power of giving directions and the power of imposing penalties for noncompliance. We have already had some debate on the principles involved, when your Lordships approved the Bill itself and the draft orders relating to gas and transport, and I take it that the House would not wish me to say more at present but rather to reply to any specific points made by any noble Lord. I beg to move that the regulations be approved.
Moved, That the Civil Defence (Electricity Undertakings) Regulations. 1954, reported from the Special Orders Committee on Wednesday last, be approved.— (Lord Hawke.)
On Question, Motion agreed to.

CIVIL DEFENCE (NORTH OF SCOTLAND HYDRO-ELECTRIC BOARD) REGULATIONS, 1954
LORD HAWKE: My Lords, whereas the British Electricity Authority and the Area Boards have responsibility for the generation and distribution of electricity in England and Wales and the Southern part of Scotland, in the North of Scotland the North of Scotland Hydro-Electric Board have these responsibilities. In their case, the responsible Minister is the Secretary of State for Scotland, and not the Minister of Fuel and Power. For this reason, separate civil defence regulations are necessary for the sphere of authority of the North of Scotland Board. The regulations follow what I may call the English regulations precisely in effect, though naturally the language and details are not identical. I think all matters of substance have already been dealt with on the gas, transport or English electricity regulations, but I will venture to answer any points raised by any noble Lords. I beg to move that these regulations be approved.
Moved, That the Civil Defence (North of Scotland Hydro-Electric Board) Regulations, 1954, reported from the Special Orders Committee on Wednesday last, be approved—(Lord Hawke.)
On Question, Motion agreed to.

COTTON BILL
2.50 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee—(Viscount Woolton.)
On Question, Motion agreed to.
House in Comimittee accordingly:
[THE EARL OF DROGHEDA in the Chair]
Clauses 1 to 3 agreed to.
Clause 4:
Provision for dissolution of Commission
4.—(1) The Board and the Minister,:if at any time they are satisfied that it is in the public interest to do so, may by order jointly provide for the winding up and dissolution of the Commission; and if such an order is made the following provisions of this section shall have effect.
(4) The power of the Minister to make periodical advances to the Commission under section fifteen of the principal Act shall continue to have effect notwithstanding the coming into operation of the order; and for the purposes of that section the outgoings of the Commission properly chargeable to revenue account shall include the expenses of the winding up.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to add to subsection (1):
"Provided that no such order shall he made until three months after the Board and the Minister shall have jointly certified that suitable arrangements have been made to ensure the making of hulk purchases on long-term contracts for the supply and distribution to manufacturers in Great Britain of raw cotton from Her Majesty's Colonial territories, and other countries, and such arrangements have been approved by Parliament."
The noble Lord said: I should like to preface my remarks on this Amendment by offering my apologies to the noble Viscount, Lord Woolton, who is in charge of the Bill, for altering one of the Amendments at the last minute. I have had some difficulty in drafting these Amendments. I wanted to keep as near as I could to order—or such order as your Lordships insist upon, which is not very much—and I did not want to do anything
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to disturb the principle of the Bill. In none of these Amendments do I seek to frustrate the desire of the Government to disband or dissolve the Raw Cotton Commission. The whole of my case in putting down these Amendments is this: that it is the intention under this Bill to dissolve the Raw Cotton Commission and to put nothing in its place, and to sacrifice the interests of the Lancashire cotton industry to the play of a speculative market at a time which I feel is ill-chosen. As I said on Second Reading, this Bill—and the whole of the Bill really is contained in the one clause which I am seeking to amend—could be called an effort of de-nationalisation. The noble Viscount, Lord Woolton, came to your Lordships with complete honesty and said: "The reason why the Government are introducing this Bill is because for them it is an act of faith"—as I said, the Ark of the Covenant of the Conservative Party. I do not think that a problem of this size can be treated as all black or all white. I said that I thought future events—and I think those future events are slightly nearer to-day than they were a fortnight ago—
THE CHNNCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT WOOLTON): They must be —a fortnight nearer.
LORD LUCAS OF CHILWORTH: Yes, that is so; but nearer, let me say, in reality than in anticipation—perhaps the noble Viscount will grant me that. I said that I thought future events were going to make look foolish the dogmatic or doctrinaire nationalisers, and equally foolish the anti-nationalisers. It is really a simple problem that I pose to the Committee. We believe that the best interests of this country in the future are to build up by all means the prosperity of our Colonies and the Commonwealth. This Bill shatters confidence, and I think the times ill become the action. I would say straight away that I have been in industry and commerce far too long to become dogmatic, even on bulk purchase and long-term agreements: in some cases they are good and in some cases they are bad. I believe that cotton growing in the Colonies and the Commonwealth has been materially assisted by the long-term contracts and hulk purchase arrangements that were instituted by the Raw Cotton Commission. The facts are on

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my side, and the figures are on my side. I believe that the Government have got to face this issue. It has been, in principle, the will of Parliament, as expressed up to date, that the Raw Cotton Commission should be dissolved. But I hesitate to think that it is the wish of Parliament that we should do away completely with an instrument that has built up so successfully the cotton growing of the Empire, and contributed to the welfare of the Colonies and the Commonwealth. The noble Viscount who introduced this Bill was quite frank with your Lordships. He said that, while the Government intend to carry on with those two or three long-term contracts which have two or three years to run—how, he does not know, and by whom he does not know—
VISCOUNT WOOLTON: I do know.
LORD LUCAS OF CHILWORTH: The noble Viscount knows now. We have progressed one stage. The Secretary of State to the Board of Trade said that it should not be beyond the wit of man to devise a means; but a fortnight ago the wit of the Government had not found a way. I congratulate the noble Viscount. That helps considerably, because the same machine that is going to carry on the existing long-term contracts can, surely, be the machine that will enter into new contracts when those now in force expire. We on this side of the House view that matter with great seriousness. We believe that in many parts of the world the good name and commercial integrity of this country are at stake.
I see the noble Marquess, Lord Reading here, and he will not mind my mentioning this. We have for years been building up cotton production by the methods I have described. It has been said by Government spokesmen that nobody really objects to the doing away with bulk purchase or long-term contracts; but the one man who has raised his voice against it is the chairman of the Gezira Board. The noble Marquess, Lord Reading, holds a responsible position in Her Majesty's Foreign Office, and, if he will allow me to say so with respect, he has impressed this House by the manner and method with which he has dealt with some of the difficult problems in the Sudan. It would be unfair of me
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to ask him what he thinks of the action of the Sudanese cotton growers who are now selling practically the whole of the Sudanese crop to Egypt. Immediately the Government proposals contained in this Bill were published, the Sudanese lost confidence in their future market in this country. These are serious matters. Take Uganda. We are just turning Uganda cotton into Japan.
VISCOUNT WOOLTON: "We?"
LORD LUCAS OF CHILWORTH: The Government, by this Bill. My information comes from what I think is an unimpeachable source, and I have spent the last two weeks in making a number of inquiries about it. I quoted the figures on Second Reading. Not many years ago we were buying £10 million worth of Uganda cotton and the Japanese were buying £250,000 worth. To-day the Japanese have increased their purchases hundreds per cent., while ours have fallen to £2 million. Why?—because there is no security. This Bill completely destroys the security that bulk purchase, long-term agreements and other agreements of a verbal nature have offered to the cotton growing countries that are so closely attached to us. The imports of Empire cotton have increased in this country from 8 per cent. of our total pre-war imports to 28 per cent. In some other places such as Nigeria and Nyasaland, they have increased by 100 per cent.
The right honourable gentleman the Colonial Secretary gave an interesting review of the long-term prospects in many of these countries. He said (OFFICIAL REPORT. Commons, Vol. 495, col. 174):
"In Uganda … it is hoped that it may be possible to raise annual production by 50 per cent. to about 450.000 bales per annum in the near future … In Tanganyika … by these means it is hoped almost to raise the annual cotton crop by about 80 per cent. to 90,000 bales. In Nigeria … it is hoped to expand Nigeria's production of American type cotton by about 300 per cent. to some 200,000 hales per annum in the next two years. In Nyasaland … an expansion of production to about 100 per cent. to 20,000 bales per annum should be possible."
He then went on to use these words, which I have quoted before to your Lordships:
"Certain Colonial producers, namely Nigeria, Nyasaland and the Aden Protectorate, have entered into long-term contracts with the United Kingdom Raw Cotton Commission …"

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All that is now to be in speculation. I will not say that there will be no Empire cotton imported into this country, but it will never stand a chance until Colonial cotton is put on the futures market of the Liverpool Cotton Exchange.
Here, I must ask the indulgence of your Lordships; I shall have to touch upon a subject which is mentioned in another Amendment, but it is all wrapped up together. Before the war, the market in Colonial cotton on the Liverpool Exchange was practically nil, the reason being that traders could not tender Colonial cotton against a futures contract.
VISCOUNT WOOLTON: Does the noble Lord include Egyptian in Colonial?
LORD LUCAS OF CHILWORTH: No; I am talking about Colonial cotton. I do not make that statement without authority, because I quote as my authority the Chairman of the Council of the Empire Cotton Growing Corporation. He said this in June last year, so it is recent:
" Before the last war, and for many years, Colonial cottons were not allowed as tender-able against the Liverpool Contract and, in consequence, laboured under a serious handicap, which in effect drove the cottons into the mills of India and Japan instead of, as was intended, their coming to Lancashire. It is true to say that before the war a separate contract was made available for them, but it never really functioned, as, in effect, it placed a penalty on the cottons included in it, as compared with American cotton.
"I wish to submit that such growths as Uganda, Nigeria and Tanganyika, for instance, are not inferior in grade, staple, character or spinning qualities to American cotton. If I am right—and I have no doubt about it—I submit that the Committee that will have very soon to be appointed to deal with the matter, should take into its most serious consideration the inclusion of cottons equal: to American under the Contract on an equal footing."
But that is not going to happen. The best we have had from the President of the Liverpool Cotton Association is that in twelve to eighteen months' time it might be considered feasible to make Colonial cottons tenderable against futures on the Liverpool Exchange. The reason why Colonial cotton was always at a discount before the war is because there was no security and no futures. All I seek by this Amendment—I am not wedded to its wording, because I am not a Parliamentary draftsman; I am but an amateur—is to have inserted in the Bill
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a provision saying that the Raw Cotton Commission, with its cover scheme and with its contracts, shall not be dissolved until the Government have provided some machinery, either at the Board of Trade or in the Ministry of Munitions, by which it will be possible, if so desired (and, after all, contracts, long-term or otherwise are as between two parties and they have to be willing parties) to arrange for these long-term contracts and bulk purchases—because bulk purchase in cotton is essential, since cotton has to be bought in about six weeks, while the auctions are on, for the twelve months' crop. It is not an ordinary business transaction of buying throughout the year. What I want to see in the Bill is that.
VISCOUNT WOOLTON: What is it the noble Lord wishes to see in the Bill?
LORD LUCAS OF CHILWORTH: wish to see in the Bill the promise of some machinery whereby, if the Colonial growers desire, and if it is in this country's interest, provision is made for long-term contracts and bulk purchases, so that security may be given to Colonial growers. I think, and my noble friends agree with me, that this is a matter of vital interest. I do riot seek to upset the principle of the Bill, but I wait to ensure that when the Raw Cotton Commission go out of business the future and the fate of the cotton growers in our Colonies and Commonwealth shall not be left at the mercy of speculators and of a contract which is essentially American. I do not think that that is an unreasonable request. We, on this side of the House, will not permit it to go out that we are willing to allow the Colonies and the Commonwealth, upon which so much of the future of this country depends, to be dealt this blow. We may see a recession in the dollar position before the end of this year. Informed opinion is very apprehensive, and if the Liverpool Cotton Exchange does open on September 1, and is tied to an American base, then I say we are dealing a blow to the Colonial interest which we on this side of the House are not prepared to permit.
I hope, therefore, that the noble Viscount will accept my Amendment. As I say, I am not tied to the words. If he can accept it in principle, more qualified draftsmen than I am can work out the details. One thing is certain. I believe that current opinion in Lancashire is hardening on this point. Current opinion

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in Lancashire is waking up to the fact that some of the mills must have this cotton and that it is in Lancashire's interest that they should have it. But we shall never have it until there is a machine providing for a system of long-term contracts, and until British Colonial cotton is brought to the futures market. I beg to move.
Amendment moved—
Page 3, line 14, at end insert the said proviso—(Lord Lucas of Chilworth.)
3.9 p.m.
LORD OGMORE: In place of the present system the Government is instituting a remarkable system under which a man buys with money he has not got goods he does not want and, in fact would not know what to do with if he had them never having seen the goods, and never expecting to have any physical contact with them while the man who sells, not having had the goods and never expecting to have them, would in all probability not be in the position even to recognise the goods he sells if they were shown to him. In an uncivilised community that would be regarded as on the same basis as the operation of pin tables and fruit machines at fun-fairs. It appears to those of us who are perhaps still somewhat uncivilised as a purely gambling transaction. I do not know whether the noble Viscount, Lord Woolton, has a Nonconformist background like my noble friends Lord Alexander of Hillsborough and Lord Stansgate and myself; but, if he has, I am surprised to find that his name is associated with this purely gambling transaction. It is all very well for those noble Lords who are descended from cavaliers to come forward with a plan of this kind, but those of us who are spiritually descended, as I am sure the noble Viscount, Lord Woolton, is, from the Roundheads, must have a shudder of horror at the proposal.
Now, the long-term contracts, as my noble friend Lord Lucas of Chilworth has, very ably in my opinion, put before your Lordships in an excellent speech, are essential for primary producers. I see on the Benches opposite the noble Earl, Lord Munster, who occupies the post which I formerly occupied, and I am sure he has had exactly the same experience that I had when I was in his office
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—namely, that if you want the development of primary products you have got to promise the producer bulk purchase and long-term contracts. Time after time I myself, and I am sure that he has had to do the same—incidentally he is, if I may say so, very active in his office and doing very well—tried to encourage production of cotton, tobacco, oil seeds, beef, pork, bacon, sugar, oil palms and oil kernels, and also cocoa. But on no single occasion in my experience, when I put forward a development plan of this kind either to a Colonial Government or to Colonial producers, did I have any response other than: "You must guarantee us a long-term contract. We must have guaranteed prices and bulk purchase." Invariably they said: "We cannot get the capital to develop these primary products or to extend their production unless we have the security of a long-term contract." And we cannot ask the native (if I may use the term, to distinguish the locally-born inhabitant from the European company producer) to invest his time, skill, land and so on in producing this particular product that we want without giving him security. To my mind this will be a crippling blow to the production of Colonial produce which it is so necessary we should see expanded.
It is not only I who say this: the Government said it, too. I will prove that out of their own mouths. The last Report before Parliament on the Colonial territories—a Report laid before us by the Secretary of State for the Colonies which is a review for the whole year—points out the sort of conditions under which the Colonial peoples are operating. They say—I quote from page 4:
"With the passing of the Korean boom and some deflation in the sterling area—and. indeed, in the world at large—the prices for many colonial commodities fell sharply and the value of trade declined. Despite this, production was well maintained, revenues continued buoyant, and reserves were increased. Development plans proceeded vigorously; ways and means of diversifying and strengthening local economies were the subject of intensive research."
Now comes the operative part, but I wanted to read the first portion so that I could not be accused by the noble Viscount of reading only a part—
"Economic progress and the pace of development must, however, be viewed against a background of low standards of living, of

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economies perilously tied to single products, and of agricultural systems already unable to grow all the food they need for increasing populations. Development is a conscious attempt to balance these factors, but it is a continuing process which cannot easily be measured from year to year."
That is the assessment of the Government in a Report presented a year or so ago; and this is the system, of bulk purchase and long-term contracts, which they propose to end, with a devastating effect on the (as they themselves say) already low standard of living and the perilous economy of Colonial peoples.
On Page 44 the Report goes on:
" The implementation by Her Majesty's Government of the recommendations of the Hopkins Report (Cmd. 8510) whereby United Kingdom spinners were given the option of purchasing their requirements of cotton privately or through the Raw Cotton Commission, is of importance to colonial producers. Existing long-term contracts are of course unaffected"
I want your Lordships to note this—
"but, where they do not exist or when they terminate, fresh marketing arrangements will have to be considered. The main sources of production, Uganda and Nigeria, are fortunate in having strong marketing organisations backed by considerable price stabilisation funds. These will facilitate the maintenance of the policy of expanding production and guaranteeing each season's prices in advance. The West Indian Sea Island cotton producers are however in a more difficult position, and maintenance of production will depend en marketing arrangements now being negotiated with the United Kingdom fine spinners."
But when they know that, far from existing long-term contracts being unaffected, in fact no more are to be made, I guarantee that those Colonial producers of cotton will be very upset indeed. In fact, they are already, as we know. In Jamaica, the public and the producers have commented in no uncertain terms on the Government's present policy of breaking bulk purchase agreements and no longer entering into long-term contracts. Unfortunately, I have not seen a report in the Press of a resolution passed in Jamaica last week.
VISCOUNT WOOLTON: About cotton?
LORD OGMORE: Generally about the Government's policy, not so much with reference to cotton.
VISCOUNT WOOLTON: I only wanted to know whether the noble Lord was speaking to the Amendment about cotton or not.
LORD OGMORE: Surely the greater includes the less. I was going to say that it was on the B.B.C. news that I heard a reference to protests from Jamaica. I have looked in the various newspapers, but I have been unable to find a reference. Therefore, I do not know to what products the protests refer; but I assume they refer to all Colonial products, including cotton, West Indian Sea Island cotton, which is produced in Jamaica—and not only cotton, but sugar and bananas also. I am open to be corrected, but I understand that is the position. This is a very serious matter indeed. Here we have Jamaica and the West Indies already protesting in no 'uncertain words at: the policy of this Government. It was this Government who, on every platform up and down the country when we were in office, used to talk about "bringing chaos into the Empire" and "scuttling from the Empire." These were the Prime Minister's words. We were told that there would be no Empire left after we had done. But what are the Government doing now? There are protests from Jamaica at their actions. If this Amendment is refused, that fact, in itself, will handicap the producers, and will be a very great blow to the Colonial territories.
When we were in power we did everything we could to support and maintain the primary producers. This Bill is an indication of what is happening to the Conservative Party: it has been captured by the business men who have so much to say in its affairs. I am sure that many of the old Tories do not like this sort of practice, but the Conservative Party has been captured by the business men who finance it. They are smashing up a large part—the noble Marquess need not say "Oh, no."
THE MARQUESS OF READING: I did not say" Oh, no."
LORD OGMORE: The noble Marquess probably agrees with me.
THE MARQUESS OF READING: No, I merely did not want to interrupt the noble Lord.
LORD OGMORE: I see; I am sorry. A large part of the Colonial Empire and the poor people the poor peasant producers whose standard of living is

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already so low, are going to be prejudiced —for what? To enable some bright young boys to make money on the futures market. That is the only reason for it.
LORD TEYNHAM: May I interrupt the noble Lord for one moment. Why is he so down on the business community of this country which carries the trade of this country on its shoulders?
LORD OGMORE: I am not at all down on it. I have every respect for the business community, but I do not regard gambling in futures as being a legitimate exercise of the business community. It will affect very few members of the business community. They will gamble in cotton futures, and generally speaking, people who gamble in cotton futures are not the sort of people of whom the business community are particularly proud. That is the sort of thing we have now. If one says," We do not like this aspect of commercial life; we do not like gambling in futures if it is going to prejudice the producer," immediately one is charged with making an attack on business. It is nothing of the kind. I object not to good business but to bad business. I regard this as bad business. This is not good private enterprise; it is bad private enterprise, the worst possible private enterprise.
LORD TEYNHAM: The Cotton Commission have lost something like £40 million. Does the noble Lord claim that that is good business?
LORD OGMORE: It may be necessary—I do not know. It may be worth while on the basis of supporting the primary producer. I do not know. You may lose ten times £40 million in the Colonial Empire if you do not enable the producers to produce the goods you need. You cannot measure this matter in terms of money. There is a great moral side to it. If you allow these people once more to become slums of Empire, as they were before the war, then you lose far more: you lose the souls of men. I would rather save the souls of men than enable a few "bright boys" to make an easy profit by gambling on the Cotton Exchange. The same thing has happened with television. This little gang have got hold of the Tory Party and are landing us in trouble all round the place. The
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television debate was a very good example of that. We know very well that a great many people who are the old type of Conservatives hated and disliked the television proposals. I dare say that in their hearts many noble Lords opposite who have at heart the interests of the Colonies and these poor people—and there are many such noble Lords opposite; it is not only noble Lords on this side who have regard to the interests of the poor people in the Colonies—would agree with my noble friend and myself.
3.30 p.m.
VISCOUNT WOOLTON: My Lords, I did not think that such a subject as cotton could produce so much eloquence, and that it could go so far from the Bill.
LORD OGMORE: No. We are on the Bill.
VISCOUNT WOOLTON: We have dealt with many materials, including television and my spiritual ancestry. With the very best intentions in the world, I do not think I need join with the noble Lord opposite in a discussion as to what my spiritual ancestry was.
LORD OGMORE: It might be very revealing.
VISCOUNT WOOLTON: It might be very revealing, but just a little off the target, if I may say so. What I am surprised at is this. The noble Lord who has just spoken is, after all, a responsible ex-Minister, a man whose words are followed with great care in the country because he has a long record of accomplishment behind him. I wonder whether he is serious when he suggests that the people who are engaged in the Liverpool Cotton Exchange are properly only comparable with people who gamble on pin-tables? He speaks here beyond my knowledge, because I do not know much about pin-tables, and I could not follow his analogy completely. But does the noble Lord really think that those people who have conducted a very responsible part of the cotton trade for many years in this country can in your Lordships' House be compared with gamblers on pin-tables?
LORD OGMORE: Is that a question?
VISCOUNT WOOLTON: If I may say so, I think the noble Lord would not like that to go out from the House as his opinion.
LORD OGMORE: Quite frankly, it is my opinion. It is no good saying that it is not my opinion. Provided that it does no harm to the Colonial people I do not mind if these people gamble. Presumably they will not be doing any harm to the people of this country. But if this harms the Colonial people, as I really think it does, then it is my duty to say so. I cannot believe in the idea that one has got to keep quiet about these things. If I feel strongly about something I say so. I very much regret if it upsets the noble Viscount's friends, but it is my opinion.
VISCOUNT WOOLTON: My friends will recover. I merely thought that perhaps the noble Lord's language and his analogy were not quite the best of choices. The noble Lord has compared a body of really rather distinguished people in many walks of life, who happened in the past to be also on the Liverpool Cotton Exchange, with the "bright boys" anxious to make money, and has posed himself as the person who is anxious to save people's souls. In doing that I think the noble Lord's native eloquence has rather run away with him. But when one comes down to the facts of the position, I do not think there was very much substance in what he was saying, although he spoke in such an attractive manner and, I am bound to say, held all our attention. If I may respectfully advise the noble Lord, I would not advise him to worry about the Conservative Party. The Party is quite capable of looking after itself, and is not looking to be financed by the people from the Liverpool Cotton Exchange. I make no further observation on that matter.
When I come to the noble Lord, Lord Lucas of Chilworth, I am riot quite clear just what he does want to do. He reminded me of the saying in regard to the person who was willing to wound but was afraid to strike. He says that he does not seek to interfere with the principle of this Bill, but that he thinks we want to subject this trade to certain risks. He claims, for some reason which I am sure is well founded, to know what is happening in Lancashire opinion. I spent a large part of my life trying to know what was happening in Lancashire opinion, and it varies a good deal. He says that he does not want to subject this trade to a speculative market, and,
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although it was expressed in more measured language, I thought his point of view was not dissimilar from that of the noble Lord, Lord Ogmore, on this point. Let us be quite clear about the matter. If the noble Lord thinks that we are going to put the trade of this country to the risk of a speculative market which has no other interest than to aid "bright boys" to make money—he did not say that—
LORD LUCAS OF CHILWORTH: The noble Viscount is referring to what I said. I hope that he will confine himself precisely to what I did say.
VISCOUNT WOOLTON: I am glad to recognise that there is some division of opinion among noble Lords opposite: but the principle remains: that if the noble Lord thinks that this is wrong, there is no doubt where his duty lies—it is to vote against it, and I presume that is what he is going to do. But I beg him not to deride this fill because I said that it was an act of faith. It is a good thing that people in politics should have faith and should have firm beliefs. I have a firm belief in rescuing trade from the detailed control of Government; I have no belief in monopoly trade by Governments. That, if you like, is a matter of faith, and I am not in the least ashamed to confess that I have that faith, or to repeat the statements that I made on Second Reading. The noble Lord, Lord Lucas of Chilworth, says that he does not seek to interfere with the principle of this Bill. What does his Amendment come to? When we get down to the facts, he wants an arrangement to ensure, by bulk purchase, supplies of cotton both from the Colonies and from other countries. That is what he is asking for. I say that fiat goes right to the principle of this Bill, arid we on this side of the House, and certainly the Government, are bound to resist any Amendment that seeks to do that. The noble Lord has had the distinction and satisfaction of making for himself a position in the commercial world. He did not ask us to consider whether it was a good thing for the country that we should have this form of bulk purchase, long-term contracts and monopoly trading that in the last two years has involved us in a loss of close on £50 million. That is a proposition of which. I think we must

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take account, especially when, fortunately, we have an alternative method.
Let us be quite clear about this. Long-term contracts, purchase on a large scale (I have never quite understood what the phrase" bulk purchase" means), are quite possible under this Bill. There is nothing to prevent the Lancashire spinners, if they so desire, from entering into long-term contracts with suppliers, or from entering into what the noble Lord calls bulk purchases, if they think this would be to the mutual benefit of themselves and the people from whom they buy. Let us, as I say, get the facts quite clearly in our minds. It is not true to say, as the noble Lord has said (I am sure with complete conviction; I have no doubt about his sincerity in this matter), that this Bill shatters faith in the Colonies. There is no reason why it should. The Raw Cotton Commission abandoned bulk purchase from the Sudan and Uganda in the last two years. Neither of those Territories, nor the spinners of Lancashire, suffered as a result. The noble Lord says that we are putting them to the risk of speculation in the future. If he will forgive my saying so, I think he has slipped a little here, because he said that he would be happier if these cottons were quoted on the Liverpool market—in this speculative pin-table area. Well, that would be putting them to speculation. I do not think the noble Lord can have it both ways. But perhaps they will.
We in this House do not open the Liverpool Cotton Exchange; that is a matter for the Liverpool Cotton Exchange to determine. All that we do is to give them the opportunity of opening. I have had conversations with them, as I gather the noble Lord opposite has, and they have indicated that they will seek to provide some means whereby this speculative cover can be obtained on Colonial cottons. They say that they may take twelve months to do it, or they may take eighteen months. If the noble Lord will join with me, I would say to the Liverpool Cotton Exchange that we shall be glad if they will do it a little more quickly than that, because we believe that the cover that they are providing for American cotton is a good thing and. therefore, we shall be glad to see it provided for the other growths of cottons. But do not let us get carried away by a
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too depressive view about the Colonial cottons. They have come to stay. In this country they have established themselves on their own merits. In my view, neither long-term nor uneconomic contracts are necessary in order to maintain their position.
Look at the facts. The facts are these. In 1938, we were using in this country 13,000 metric tons of Colonial cotton; in 1951, 41,000 metric tons in 1952, 46,000 metric tons, and in 1953, 41,000 metric tons again. The figures have grown, and if noble Lords will acquaint themselves with the information which can be provided by Lancashire spinners, and by the people who will operate the Liverpool Market, they will find that those individuals have no doubt that on their merits and without adventitious support, these cottons have earned their place and will continue to hold it. The noble Viscount who is acting as Leader of the Opposition, said, I think," rubbish."
LORD LUCAS OF CHILWORTH: No, he said" bulk purchase."
VISCOUNT ALEXANDER OF HILLSBOROUGH: I was merely trying to indicate that these figures showing increases relate to periods when bulk purchase has been in operation.
VISCOUNT WOOLTON: I am glad to be assured that the noble Viscount did not say "rubbish"—it would have been unlike him to do so. I was ready for the point which he has just made. He will realise that, so far as Uganda is concerned, bulk purchase was voluntarily abandoned two years ago, and the people are still prospering. We could go on for a very long time with this defence that I am making of the Bill. I recognise from the closing words of the speech of the noble Lord, Lord Lucas of Chilworth, that he was concerned not so much with the political aspect of this question, as with the question of what really was going to happen to the Colonies. And that, of course leaving aside the general political banter of the noble Lord, Lord Ogmore, was what he, too, had mainly in mind.
But my Lords, how can anyone speak with absolute certainty about the future? All I can tell your Lordships is that the 'existing contracts will be carried out. The Ministry of Materials, has powers—

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which, be it remembered, are powers conferred by Parliament—and although it may be that in the not too distant future the Ministry of Materials may cease to exist as an independent Ministry, there is no doubt that its powers will continue to exist. If it should be thought advisable that that Ministry should be amalgamated with some other Ministry, its powers will go with the amalgamation. That answer is preliminary to my next remark, which is that the Minister of Materials has the power to take over from the Raw Cotton Commission assignments into which they have entered, and—these are significant and deliberate words—will do so if desired by the Colonies. Negotiations are at the present moment taking place with Her Majesty's representatives in the Colonies with a view to seeing what they desire. I am quite satisfied that, once you give the freedom of the market that we are proposing in this Bill, it will be found that neither the master-spinners, the operatives in this country, nor the producers of cotton overseas, will be damaged by it. I hope that the assurances which I have given to the noble Lords opposite on this Colonial issue will set their doubts at rest—at any rate for the time being. But I greatly regret that I cannot accept the very far-reaching Amendments they are proposing, and I must ask your Lordships to reject them.
3.46 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I must say that in listening to the noble Viscount one is always tempted to give way to him because of the general benevolence and charm with which he puts his case but we have had evidence that that benevolence and charm in the past have not always been followed by the results which we expected. I think that that might be said with regard to an even wider circle than this House. When the noble Viscount tried to persuade us, at the last moment, that nothing would be done by the Spinners' Association, the operatives, or anyone else, that would be liable to prejudice the situation so far as Colonial peoples were affected in the future, I just wondered whether that was, after all, to use the noble Viscount's own phrase" an act of faith." With regard to what the noble Viscount said about the manner in which Lord Ogmore put his case, may I say that I could see
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nothing whatever to complain of in Lord Ogmore's presentation of his case.
VISCOUNT WOOLTON: I did not complain.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I do not know about that. The noble Viscount seemed absolutely shocked that the noble Lord associated with his criticism of Colonial policy the suggestion that it is either for or against the souls of men. I say that my noble friend has put himself right in the line of all reformers. I know that the noble Viscount, Lord Woolton, has himself a record in this respect. I know what a reformer he was before he became attached to a specific political movement. All reformers have had in the past the kind of charge made against them that is now made against my noble friend Lord Ogmore. That is nothing to be ashamed of. Indeed, it is something to be proud of. If you endeavour to get reforms brought about, you will always be put in a sort of special box in which you can be attacked. But that does not matter at all. What I am concerned about is that grave consequences to out country and to the Colonies may occur because of adherence to the belief that a return to free competition is bound to bring the right results.
In my experience, extending over a long lifetime, I have long since moved away from things about which I learned in my younger days. I have moved a long way from what I might perhaps call the Adam Smith type of economics. It really does not work at all. If you want to encourage recovery in the world at large, you have to see that the primary producers of the world have something at which to aim, and that they have the means of obtaining the necessary capital which is required to meet the situation to-day. Without the long-term view, without long-term guarantees—which the representatives of the Government seem determined all the time to upset—you are not going to get that investment in machinery and plant and in long-term programmes generally, without which there can be no recovery in this country or development of further production and prosperity in the Colonies and other countries overseas. That is why I think my noble friends have been right to put down this Amendment.

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As regards likening dealings on the Cotton Exchange to pin-table gambling, I do not think we should be too tenderhearted about that being said. I am astonished that the noble Viscount, with his academic record and knowledge of this subject, has not replied to the charge made by my noble friend, that this means reverting to a system in which somebody is going to buy what he does not want himself from somebody else who has not got it and does not know whether he is going to be able to get it. That is the state of affairs on which our argument relies. My sixty-odd years of life have proved to me that we have not had successive booms and slumps, periods of comparative prosperity and of unemployment and poverty, because of the adoption of bulk purchase as a long-term policy, but because of the squeezing of the markets by persons for financial reasons, in commodities which ultimately they are not concerned in handling themselves. That is fact, and I would challenge anybody to disprove that that has been the situation over the last 100 years. That is the actual record of the position. We are not asking for any drastic amendment at this stage of the Bill. All we are asking in this very mild Amendment is that the Government should make a provision in the Bill that those who are going to have the freedom which the Government are now going to give them should be required at least to do something which will give the Colonies some hope in the future. Why should they not do so? It is not fundamentally against the principle of the Bill, much as I dislike it. It gives some sense of security, some guarantee to the Colonies, for whose interests we have such a great regard.
3.52 p.m.
VISCOUNT HAILSHAM: When I was a little boy of seven my father used to come up and say "Good-night" to me, and often he would explain some of the simpler questions which occurred in the course of his legal practice. I can remember with the utmost clarity that in the course of one of his lectures he taught me the difference between buying on the futures market and gambling. I thought I understood it then and I think I understand it now. I am sorry I shall not have an opportunity of seeing the noble Viscount when he goes to bed and being able to explain it to him at greater length.
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I pass from this very elementary point in economics, but I think it right that your Lordships should not pass from this Amendment without your attention being drawn to the extraordinary divergence of views and the remarkable inconsistencies in the three speeches in support of the Amendment to which we have listened. The noble Lord, Lord Lucas of Chilworth, who has some business experience, was at pains to claim that his Amendment was not designed in any way to hit at the underlying principle of the Bill. He rightly divined that if it had been designed to do so, it would have been pointed out to him that we are now in Committee, having given the Bill a Second Reading. When we come to analyse the arguments of the noble Lord, Lord Ogmore, and still more those of his Leader, we ascertain beyond any possibility of doubt that the purpose of the framers of the Amendment was to overthrow the underlying principle of the Bill. It was not that there was anything special about the long-term contracts of a particular class to which the Amendment purports to apply; it was that all forms of purchases of future goods on commodity markets in general, and possibly the cotton market in particular—although I understood the noble Lords' observations to be of a more general character —were gambling transactions which no good Nonconformist ought to accept and which were to be condemned as pin-table owners were to be condemned. In other words, the underlying purpose of the Bill to reopen this commodity exchange was wrong. Noble Lords cannot have it both ways. If the noble Lord, Lord Ogmore, is right in saying that that is the real justification for this Amendment, the noble Lord, Lord Lucas of Chilworth, is wrong in claiming that he does not wish to overthrow the underlying principle of the Bill.
The next thing which is rather remarkable about these speeches from the Opposition Front Bench is this. The noble Lord, Lord Lucas of Chilworth, drew a pitiful picture of the fate of Empire cottons in not being allowed to be tendered on the futures market. That was his complaint, and I must say I was very touched by it. I found it highly moving that our Empire cottons could not be tendered for in fulfilment of futures contracts in the market. But what is the noble Lord, Lord Ogmore, saying? Lord Ogmore

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says that what his noble friend wants is something fundamentally immoral, which should not be allowed in any commodity at all. Again noble Lords cannot have it both ways. We must have a little plain thinking and a little consistent statement on the fundamental outlook of the Party opposite. One cannot say that Empire cottons are not capable of being tendered on the market in this way and then say that the market is something which should not be allowed in any condition. The Party opposite must say something all the time, even though we know it says a great number of divergent things most of the time.
When I come to look at the Amendment itself, I see why it is that there have been so many remarkable differences in the speeches in support of it. The Amendment is one of the most unintelligible I have seen intended to be inserted in a Statute. Before the commodity market is opened two sets of people, the Board and the Minister, must jointly certify "that suitable arrangements have been made" (how are they to know what arrangements are suitable?— we are not told)" to ensure the making of bulk purchases." What are bulk purchases? How can these words be inserted in a Statute? Would two tons of cotton be a bulk purchase, or 200 tons, or 200,000 or 2 million?
LORD LUCAS OF CHILWORTH: Would the noble Viscount like me to save his time? Unfortunately, I do not think he was here on Second Reading and he will not be able to follow the argument. His noble leader Lord Woolton has completely answered him, if he has listened to what the noble Viscount said. The noble Viscount, Lord Woolton, has assured us that for the purpose of carrying on the existing bulk purchase the Ministry of Materials are quite adequate. That is the arrangement envisaged for carrying on any future bulk purchase. We are not in court and we are not the subjects of a forensic display. Nothing to the purpose is served by trying to play off one against the other. This matter is far too serious for that. That is the answer the noble Viscount, Lord Woolton, has given us.
VISCOUNT HAILSHAM: The noble Lord is perfectly correct in saying that I have not followed the argument. That is because the argument is fundamentally
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unintelligible. And is one not entitled to point out in Parliament that an argument is not intelligible, that the views in support of it are inconsistent, and that the language of an Amendment is unintelligible? After all, I must remind the noble Lord, in all seriousness, that these words may one day have to be interpreted in a court, where sense will have to be made of this Amendment, if it is inserted in the Bill and passed by another place. It is because I think your Lordships will be concerned, in spite of what the noble Lord says, with what a court may have to say about language of this kind when it conies to interpret it, that. I came to ask one or two questions about it. So far from being an answer to the points I was putting, the noble Lord's suggested answer, in fact, is an illustration of exactly why the Amendment is unintelligible.
Of course I was aware of what the noble Viscount. Lord Woolton, said, because I heard him say it with perfect lucidity and cogency. The noble Viscount in charge of the Bill said that existing contracts will be carried out. That is because they mean something definite. An existing contract is an existing contract. But I am discussing a proposed Amendment to the Bill which talks about the issue of a certificate by the Board and the Minister that suitable arrangements will be made to ensure the making of future contracts; and before they can issue that certificate they have to be satisfied that the contracts are for bulk purchases. I asked the noble Lord—and he has not answered the question —what is" bulk purchase" for this purpose. Is it 10 tons, 10,000 tons or 10 million tons? We do not know. The Amendment says," on long-term contracts." What is a long-term contract? Is it five years, ten years, twenty years, thirty years, one hundred years, or six months? We do not know. But at some time the Board and the Minister have to certify that suitable arrangements have been made for the making of bulk purchases on long-terms contracts.
One of the odd things I find in the Amendment is that these contracts have to be made—between whom we are not told—
"for the supply and distribution to manufacturers in Great Britain of raw cotton from

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Her Majesty's Colonial territories and other countries …."
What other countries? What does that mean? What has become of all this glorious intention to preserve the souls of the suffering peoples of the Empire, when we find that contracts have to be made for the distribution" from Her Majesty's Colonial territories, and other countries"? The real truth about this Amendment is that it is designed for the purpose of having a second Second Reading debate; and, to some extent, it has succeeded in that objective. Nobody complains that such an attempt should be made. But one hopes that the Party opposite, having regard to the extraordinary confusion which has fallen upon their counsels, will not carry the matter to a Division and have it seriously put down on record that these are the terms which the Labour Party would seek to be incorporated in this proposed Statute.
I close on this note. I quite agree with the noble Lord, Lord Ogmore, that there is a great deal too much ideology about political debate at the present time. For that reason, I must say that I deprecate the attack on the futures contract, as such. It is not true, as the noble Viscount, Lord Alexander of Hillsborough, suggested, that the futures contract is something which is responsible for the fluctuation in prices. The fluctuation in prices is something which is accentuated when there is -no market in future commodities; and it was precisely because of the intolerable effect of fluctuation in prices which existed without such a market that this country—and particularly the City of London, in other commodities, but Liverpool in cotton—during the course of our rise to commercial greatness, founded not only the commercial prosperity of this country but also the growth of agricultural enterprise abroad by the institution of commodity markets, the purpose and effect of which was to modify and reduce the fluctuation in prices.
As my father told me when I was seven—and I now venture to repeat it to noble Lords opposite, although it is not yet their bedtime—there is no more truth in the sneer that the purchase of futures is, of necessity, gambling, than there is in the sneer that life insurance is, of necessity, gambling. All those who have been
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connected with the law know of life insurance contracts which have, in fact been pure wagers; and most of us have known contracts which, although on the face of them contracts for the purchase of goods in the future, have really been pure wagers, because they were not carried out for the primary purpose for which they were intended. But a life insurance contract, and, indeed, any contract, although, in a sense, a wager, because you wager on a future event which may happen at a particular time, is yet really the opposite of a wager because it is designed to cover the insecurity of human life and human chance. That is the purpose of these commodity markets. It is a melancholy reflection that in this House of Parliament, in this country, which has grown great upon the development of commerce based on institutions such as those, we should, in the middle of the twentieth century, be treated to an argument on economics which really could be ridiculed by a small boy of seven.
I must add this. It is true that many arguments may exist in future as between Government purchase on contracts over an extended period and as between the finance of industry and agriculture by a private entrepreneur. These are matters of high politics between us. But it is a matter that ought not to be darkened and cheapened by foolish sneers at those who take part either in the one or in the other. So far as these Empire agriculturists are concerned, it must be stated, and stated quite plainly, that the reason for the market in futures, in the absence of bulk purchase over extended periods (which, as I say, is a matter of high politics), consists in the fact that after the completion and harvest of his crop the farmer requires cash, very often before the merchant is prepared to sell to the consumer. Those who come in and take up the slack between the date at which the merchant sells to the ultimate consumer and the farmer requires his cash, so far from being sneered at as the owners of pin-tables, are among the very people who built up the commercial reputation of this country.
4.9 p.m.
LORD OGMORE: I must say that I was pleased to see the noble Viscount, Lord Hailsham, on his feet. We have had quite a good debate to-day. It is

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always interesting to listen to the noble Viscount. We always like to hear him, whether it is on the television screen or in this House; and the fact that be so rarely agrees with his own Party makes it an added pleasure to find him doing so to-day. Of course, one is told things at the age of seven; but at the age of seven one has perhaps a gullibility and innocence which is not present at a later age. The arguments of the noble Viscount are nineteenth century arguments.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON): Some truths are eternal.
LORD OGMORE: I agree with the noble Viscount that some truths are eternal—but not this one. This is not an eternal truth. This is a nineteenth century argument when, in economics as in everything else, the machinery which man had evolved was primitive. To-day, with our marketing arrangements, our bulk purchase and our long-term contracts, and with the sort of marketing boards that we have in the various Colonies to cushion the producer, we do not need the sort of service that the noble Viscount is talking about, which in any case very often did not operate on the Lancashire Exchange at all. It operated in West Africa through Armenian and Levantine merchants who, at all events, whatever their qualities, were never regarded in quite the same light as the noble Viscount regards them to-day. They would have been surprised to hear themselves described as he has described them, and it will no doubt warm them in their nineteenth century graves to learn that they performed such a useful service for such a high reward. The point is that this is twentieth century mechanism. We are not claiming all the credit for it. It was partly evolved by the late Colonel Oliver Stanley who knew a great deal about it. I have no doubt that the noble Viscount, Lord Swinton, also helped when he evolved the economic department of the Colonial Office. But it was Colonel Stanley who did a good deal of work in this field.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): Is the noble Lord arguing for or against the closing of the Liverpool Cotton Exchange?
LORD OGMORE: I am sorry. The noble Marquess has not been here very long, and has not followed the argument What I am saying is that this mechanism is a new mechanism, evolved in the twentieth century. We make no claim to be the sole originators of it. It has been partially contributed to by Colonel Stanley. He did a lot of work in this field in the way of supporting the crop—subsidising the crop, if you like—of the primary producer, which is done in three ways. It is done, first of all, by the marketing boards which cushion him and pay him as soon as the crop is reaped or even before this stage—they have a reserve for that purpose. Secondly, it is done by long-term contract and, thirdly, by bulk purchase. Now why, when we have a perfectly efficient system, to which contribution has been made by both the great Parties, should we go back to the nineteenth century inefficient system which did not do nearly as well as the twentieth century system? I cannot understand it, and neither the noble Viscount, Lord Woolton, nor the noble Viscount, Lord Hailsham, has persuaded me one iota that we are wrong in our attitude.
VISCOUNT SWINTON: I had not the least intention of intervening in this debate—it is in very able hands—but the noble Lord has been good enough both to challenge me and to pay me a compliment by saying that I had something to do with cotton-growing in East Africa.
LORD OGMORE: I said the noble Viscount did considerable work when he evolved the economic department in the Colonial Office, which was built upon by Colonel Stanley.
VISCOUNT SWINTON: I am obliged. I will tame it down a little. It is quite true that there was no economic department when I went into the Colonial Office. Bat, believe me, I had nothing whatever to do With bulk purchase. I do not know why it is relevant to this discussion.
LORD OGMORE: It is relevant in this way: that I did not want noble Lords opposite to think I was claiming that my Party were the only people who had done anything in this field. I said that it was a continuous process to which both Parties had contributed. I was trying to be fair. It now seems to me that I have done something wrong. I was agreeing that

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both Parties had contributed in this field, and the noble Viscount himself had contributed by bringing into the Colonial Office the machinery which, to some extent, operated in this way. Without that machinery, the plan which was started in Colonel Stanley's time would not have evolved. Colonel Stanley was of a good Tory family, and not one of the" bright boys" who are now coming into the Party.
VISCOUNT SWINTON: I do not know whether my noble friends Lord Woolton or Lord Hailsham are included among the" bright boys" who are now coming into the Party. They are all bright and they are all welcome. Some of them have been in the Party quite a long time and, oddly enough, stay in the Party quite a long time. It is nice of the noble Lord to join us all up in this family party, and I am sure we all like that. It is rather a change to listen to a number of the orators on Imperial affairs in another place. You would think the Labour Party had discovered the Empire—like young Columbuses. It is always nice to find a new Party learning something about an old subject. I do not wish to make exaggerated claims, but I was father of the economic department in the Colonial Office. That is true, and I am glad that everybody who went there carried it on. All I was venturing to say was that it had nothing on earth to do with bulk purchase. What we are concerned with to-day in this Bill—and the debate on each Amendment seems to range extraordinarily wide—is whether or not we should reopen the Liverpool Cotton Exchange or conduct a business of bulk purchase which, incidentally, as my noble friend has shown, has cost not the Government but the taxpayer (in whom I am rather interested) an enormous amount of money. I am sorry if the noble Lord is shocked at the idea that private enterprise, private venture and individuals should take some risk. There are quite a lot of people, not only in the Labour Party, who find themselves in the transitional stage—just occasionally in the Conservative and Liberal Parties—who would like to be kept and cushioned and would like never to have to undertake any risk. Believe me, that was not the way in which ventures were undertaken, or the way that the British Empire or
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British enterprise, or anything else, was built up.
We are dealing to-day with the individual subject of cotton, and what the noble Lord is really saying is that you cannot have successful cotton-growing in the British Empire, the British Commonwealth or the British Colonies, unless you have bulk purchase. With the greatest respect, that is absolute nonsense. I was greatly concerned in the 'twenties and 'thirties, both when I was President of the Board of Trade for seven years or more and as Colonial Secretary, with the development of cotton-growing in Uganda, which is where the great bulk of the cotton was grown. I am glad that that is now spreading elsewhere. The Liverpool Cotton Exchange existed at that time. People engaged in private enterprise. There was never any bulk purchase. I never bought any cotton. The Chancellor of the Exchequer (there was no Minister of Materials at the time) never bought any cotton. What did happen was an admirable thing. Under the auspices of the local Government, and under the æegis of the Cotton Growing Corporation, wise systems of growing cotton were established. The growers were taught, with the combination of private enterprise and a benevolent Government, the kind of cotton to grow, and co-operative ginneries were established. It was a co-operative undertaking. The noble Viscount, Lord Alexander of Hillsborough, must teach Lord Ogmore and his colleagues the difference between co-operation and bulk purchase. They are really not the same thing at all.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I would also wish to teach them the difference between co-operative and collective buying and gambling on Change.
VISCOUNT SWINTON: The co-operative societies have from time to time taken part in—I will not call it a gamble, but, shall I say, in a somewhat speculative enterprise, and have not always been wholly successful. Really, the noble Lord must not mislead the House. He is too intelligent to do that. We know the way in which places like the Liverpool Cotton Exchange and the London Metal Exchange function. Go to Mr. Strauss in another place and ask him whether the operations of the London Metal Exchange

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(in which Mr. Strauss was such a distinguished ornament) were a shocking example of pin-table gambles. Of course they are not. They are necessary markets which exist in this country for the convenience of traders. You cannot prevent a man every now and again having a little bit of a" flutter." The amateur who goes in and has a" flutter is the gentleman who generally burns his fingers by so doing. We have built up the whole of our cotton growing in the Empire, not in the least on a system of bulk purchase or Government trading or anything of that kind but by teaching people the right kind of cotton to grow. I should like to draw on my own experience of twenty or thirty years ago to tell the House that, whatever may be the merits of this Amendment, it has not the slightest thing to do with developing cotton-growing in the Empire. Cotton-growing in the Empire was well developed before the noble Lord even began to learn about bulk purchase, and it will go on very well after the Liverpool Cotton Exchange has been reopened.
4.23 p.m.
LORD LUCAS OF CHILWORTH: We have had an interesting debate. I think many of us are better informed now than we were at the beginning. There is one comment that I should like to make on Lord Hailsham"s speech. Doubtless he was carried away by the force of his own eloquence but I felt that his speech was rather below his usual standard of fairness. I began my remarks to the noble Viscount in my first preamble by saying that I was not wedded to these words: I am not a Parliamentary draftsman; I am an amateur. The noble Viscount is an eminent member of the Bar. It did not seem to be quite playing the game to make such sport of somebody who was trying to do something which he was ill-equipped to do. So, when the noble Viscount talks about the Amendment being" unintelligible," perhaps on reflection he may think that he might have used a more suitable term. I will leave it there.
VISCOUNT HAILSHAM: If the noble Lord will tell me a more suitable term for" unintelligible" than" unintelligible," I will certainly substitute it.
LORD LUCAS OF CHILWORTH: Perhaps the noble Viscount will get
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somebody else to tell him that that kind of thing can be, at times, cheap. May I now turn to the real discussion and get back to the point which I tried to get the noble Viscount to see. If he will forgive my saying so, the noble Viscount was not quite in accord with the facts.
VISCOUNT WOOLTON: Oh!
LORD LUCAS OF CHILWORTH: I did not quote my knowledge of the facts; I (rioted people who were far more informed. The noble Viscount's right honourable friend the Colonial Secretary will answer the noble Viscount, Lord Swinton, too. The noble Viscount, Lord Swinton, said that it was not long-term contracts that built up Colonial cotton-growing. His right honourable friend in another place said this:
"Certain Colonial producers, namely Nigeria, Nyasaland and the Aden Protectorate, have entered into long-term contracts with the United Kingdom Raw Cotton Commission which, by offering a stable market for some years ahead, serve to encourage expansion of production."
So, when the noble Viscount says there is a divergence of view between my noble friends—I am answering the noble Viscount, Lord Swinton —
VISCOUNT WOOLTON: I am sorry. Let us be precise about this. The noble Lord said that I spoke without the facts.
LORD LUCAS OF CHILWORTH: I am coming to that.
VISCOUNT WOOLTON: Is the noble Lord talking about me or about my noble friend Lord Swinton? Let us know who is" in the dock."
LORD LUCAS OF CHILWORTH: I am coming to that in a minute. So, when great play is made about the supposed differences between my noble friends Lord Ogmore, Lord Alexander and myself, perhaps the members on the Front Bench opposite had better remove the mote—
VISCOUNT HAILSHAM: The beam.
LORD LUCAS OF CHILWORTH:—from their own eyes before they attempt to get the beam from ours—or vice versa. No doubt the noble Viscount, Lord Hailsham, is an authority on motes and beams. The facts are—and the figures have been published by Her Majesty's Government—that in 1938 Empire cottons were 8 per cent. of the

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total of our cotton imports, and they are now 26 per cent. It has been stated by authorities that that growth in these last ten years has been due to the encouragement, continuity and stability given by long-term contracts and bulk purchase. If there are any noble Lords—except, of course, the noble Viscount, Lord Hailsham—who do not know what bulk purchase is, I will give them an example. The Raw Cotton Commission purchased every year the whole crop of Sea Island cotton from the British West Indies before it was planted. That is bulk purchase.
To come down to the essence, what I said (and this is where I think the noble Viscount was not quite accurate) was that there was no market for Colonial cotton in Liverpool before the war because there were no futures. That was stated—I quoted my authority—by the Chairman of the Council of the Empire Cotton Growing Corporation. There will be no market for Colonial cotton in Liverpool until it is tenderable against futures because nobody will dare take the risk. The noble Viscount was quite right there. The noble Viscount has said that there might be one—he repeated my words—in twelve to eighteen months' time. What is going to happen in the meantime? If his friends have been showing during the past two years, when the ban has been lifted, when they had the option of opting out of the Raw Cotton Commission, the enterprise he fondly imagines they are going to show in the future, why is it that in Lancashire to-day the warehouses of Liverpool are not full of Sudanese and Uganda cotton? My information is that the only stocks of Sudanese and Uganda cotton in Lancashire to-day are those held by the Raw Cotton Commission. His friends who opted out have had two years, and they could have done all this. Why did they not purchase American cotton for sterling, as they could have done during these last twelve months under American aid cotton? They did not even have the enterprise to do that. I am informed by the authorities that there is no stock—and I will deal in a minute with the question of stocks—in Liverpool to-day outside those of the Raw Cotton Commission. There can never be any real hope of any Colonial market in Liverpool until Colonial cotton
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is tenderable against futures—and immediately the Raw Cotton Commission is wound up the only futures market will be based upon an American standard.
With all the interesting by-play that we have had this afternoon, that is the simple issue. We on this side of the House say, quite frankly, that we are not prepared to let go, without a protest, what we consider to be, and what a lot of the best informed opinion considers to be, the stability of a long-term contract, which has been the main cause of the growth of Empire, Commonwealth or Colonial cotton—call it what you will—in these last ten years. We say that it is a simple thing for the noble Viscount to do. The Committee may argue very sweetly, with a practised legal mind, in regard to the wording of this Amendment. I ask the noble Viscount, Lord Woolton, to accept the principle of the Amendment. I accept what he says—and I am grateful to him for saying it—that the existing contracts will be carried on under the machinery which exists at present in his Ministry, the Ministry of Materials.
VISCOUNT WOOLTON: If necessary.
LORD LUCAS OF CHILWORTH: Yes, if necessary. And if, as I put it rather humorously to the noble Viscount, he commits suicide as Minister of Materials, he has said that this responsibility will quite probably be transferred to his right honourable friend the President of the Board of Trade. I am sure that everybody will be grateful to the noble Viscount for what he has said. He has given us that assurance, that these contracts will be carried on by that method. That is the simple method that I was asking for. The purpose of my Amendment was to make provision whereby it would be possible, if it were so desired, to have future long-term or bulk purchase contracts. I asked simply that this be incorporated in the Bill. Now we have parted company. The noble Viscount has said, quite frankly, that he cannot accept that. We on this side of the House must therefore ask the Committee to express in the Division Lobbies, their opinion as to whether or not we support the Colonies.
VISCOUNT WOOLTON: With the indulgence of the Committee, may I correct an error that I made? I believe I

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spoke of millions of tons; I should have said thousands.
A NOBLE LORD: We understood so.
VISCOUNT WOOLTON: With your. Lordships' consent I will arrange for the correction to be made in the OFFICIAL REPORT. I apologise to the Committee for the error. May I say just one other thing, following the very conciliatory speech of the noble Lord, Lord Lucas of Chilworth? Do not let us get unduly alarmed if the stocks of cotton are in the hands of the spinners who are going lo use them, rather than in the Liverpool warehouses. The noble Lord is quire right in saying that at the present time the stocks in Liverpool, where a futures
4.45 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, after subsection (4) to insert:
"(5) The Minister and the Board shall be charged with the duty of ensuring a supply of suitable raw cotton to any person who on the first day of September, 1953, bought the whole, or a substantial part of his total purchases of raw cotton from the Raw Cotton Commission. And it shall be the duty of the Board and the Minister to ensure that none of the stocks
market does not operate, are much smaller than they were when a futures market did operate. But I inquired yesterday, and I am advised that the stocks in the hands of spinners, at present, run to anything from ten to fifteen weeks' supply, which is ample for the security of employment in which, after all, we are all interested. I am sorry that I cannot oblige the noble Lord by accepting his Amendment. At any rate, we have had rather a sparkling debate on the subject of cotton.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 64.

CONTENTS

Alexander of Hillsborough, V.

Hare, L. (E. Listowel.)

Mathers, L. [Teller.]

Stansgate, V.

Hungarton, L.

Ogmore, L.

Kenswood, L.

Pakenham, L.

Bingham, L. (E. Lucan) [Teller.]

Kershaw, L.

Wise, L.

Crook, L.

Lucas of Chilworth, L.

NON-CONTENTS

Salisbury, M. (L.President.)

Aldenham, L.

Hawke, L

Ashton of Hyde, L.

Hindlip, L.

Wellington, D.

Baden-Powell, L.

Howard of Glossop, L.

Baillieu, L.

Jeffreys, L.

Reading, M.

Belstead, L.

Killearn, L.

Birdwod, L.

Layton, L.

Buckinghamshire, E.

Brassey of Apethorpe, L.

Leconfield, L.

De La Warr, E.

Burnham, L.

Lloyd, L.

Fortescue, E. [Teller.]

Chesham, L.

Luke, L.

Lindsay, E.

Derwent, L.

Mancroft, L.

Munster, E.

Digby, L.

O'Hagan, L.

Onslow, E. [Teller.]

Dormer, L.

Rea, L.

Selkirk, E.

Dovercourt, L.

Rochdale, L.

Stanhope, E.

Dowding, L.

Rockley, L.

Ebbisham, L.

Saltoun, L.

FitzAlan of Derwent, V.

Ellenborough, L.

Sandhurst, L.

Goschen, V.

Fairfax of Cameron, L.

Sandys, L.

Hailsham, V.

Foxford, L. (E.Limerick.)

Savile, L.

Leathers, V.

Freyberg, L.

Strathcona and Mount Royal, L.

Margesson, V.

Gifford, L.

Swinton, V.

Grantchester, L.

Teynham, L.

Woolton, V.

Hacking, L.

Webb-Johnson, L.

Hampton, L.

Wolverton, L.

Aberdare, L.

Resolved in the negative, and Amendment disagreed to accordingly.

of cotton remaining in their control after the winding up of the Commission shall be disposed of to other persons until all stated requirements of the aforesaid undertakings have been made."
The noble 'Lord said: Perhaps I had better say straight away, for the benefit of the noble Viscount, Lord Hailsham, that I am not wedded to the words of this Amendment. I am not a Parliamentary draftsman and I have not studied law. All I want to try and obtain from the noble Viscount, Lord Woolton, is the

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acceptance of a principle, and that principle is that there shall be adequate stocks held in Liverpool for the benefit of the Lancashire cotton industry. Now I think the noble Viscount will agree with me when I say that the carrying of stocks in industry as a whole, whether it is stocks of raw materials on the manufacturing side or the finished article in the distributive trades is one of the biggest problems that we have in this country to-day. The financing of these stocks calls for a large amount of capital—capital has not been freely available and, when it has been, the cost has been high. I do not think I have said anything controversial up to date.
Now it has been estimated—I have tried to get authoritative opinions on this point—that for Lancashire to work to its full capacity the stocks of raw cotton should be one million bales of all kinds and grades. That is an expert opinion. That quantity represents a value of approximately £75 million. When we were discussing the last Amendment, the noble Viscount spoke about spinners' stocks being about six to fifteen weeks' supply. I should think that would mean, for a relatively small mill of the unit type (I am not talking about the big cotton mills) about £60,000. At the present time, so my information goes, the Raw Cotton Commission, which had practically the total stock in Lancashire, have about 265,000 tons which I understand is going to be sold to any buyer. The first thing this Amendment says is that that cotton shall be reserved, first of all, for those who remained loyal, if I may use the word without offence, to the Raw Cotton Commission; that those who opted out should not have the first call upon that cotton; and that there should always be a supply of cotton of Colonial growths held in Lancashire. Those Colonial growths, I would argue, can be carried and purchased only if there is a futures market. But there cannot be a futures market yet in those growths on the Liverpool Cotton Exchange. I am glad the noble Viscount has my argument and I think he agrees with me. I say you will not get any Colonial cotton or Commonwealth cotton—let us call it Empire cotton—worth talking about, or sufficient to satisfy the grower and the Lancashire cotton industry, unless you
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have a futures market which, as I understand it, when operated properly, is only an insurance against price fluctuation.
The noble Viscount, Lord Hailsham, is not so simple as he would have your Lordships believe he was in those seven o'clock talks, when father used to tell him the facts of life. I am sure he did not tell him all the facts, or only the facts the noble Viscount has told your Lordships this afternoon. Any speculative market will attract the pin-table element, and the noble Viscount is not so innocent, no one who has had any dealings in industry is so innocent, as to believe that good, straightforward methods of futures insurance cannot be prostituted by some of the people who get into the business to do what my noble friend has described.
VISCOUNT HAILSHAM: That is exactly what I said. What I was objecting to was that the noble Lord's noble friend, so far from recognising the distinction, proceeded to splash any one who indulged in a futures market with exactly that kind of opprobrious language which the noble Lord has now quite correctly reserved for those who abuse it.
LORD LUCAS OF CHILWORTH: I did not read that into what my noble friend said. Of course, if one wanted to make a very good debating point—and of such matters the noble Viscount, Lord Hailsham, is a past master; we all admire the way he makes them—one could pursue this matter further. The noble Viscount, Lord Woolton, knows as well as I do that there were speculators who came into the Liverpool futures market before the war and, as my noble friend said, never saw the goods. They just came in to make a quick "rake-off." That was not what the futures market was ever intended for. But let no one be so simple as to think that it did not happen. I am not one of those people who think that the Stock Exchange is a den of vice. But, heaven knows, some pretty shady things go on in it! So let us look at this futures market as it was operated by the Raw Cotton Commission.
You cannot get anyone to buy Colonial cotton on a long-term basis unless he can hedge. I have made investigations into some of these facts. Two speeches were made during Second Reading from the Back Benches on the Government

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side of this House—I will not mention the names of the noble Lords who made them because they are not here now—by speakers who wanted your Lordships to believe that the banks would quite readily finance these stocks. Nothing of the kind is true. A futures contract is as much a bank security as it is an insurance for the spinner or the manufacturer against a future fluctuation in price, and the banks will adopt the attitude—unless of course some other security is offered— "No futures contract, no money." And you could not blame them. It is difficult to understand how anyone can stand up and say, as was said in your Lordships' House, that the banks would find a way of doing this. The banks will not do any such thing. The banks do not give money away. They are not in business to back gambles, and it would be backing gambles if they provided finance in those circumstances. So I have great apprehension as to whether these small unit mills will get the finance to carry these stocks. Twice or three times the amount of money which was required before the war will be required to-day.
A futures market, like an insurance company, can operate only on a wide spread of risk. I do not believe for one moment that the big spinners' combines that are now in existence will ever use the Liverpool Cotton Exchange. They will be able to finance their own risks. They will not want insurance against price fluctuations. What will they do, as they will be tied very largely to America? And do not forget that the alteration of the rules of the Liverpool Cotton Association is such that they can now have 49 per cent, of foreign capital. We may find that these big spinning combines will go direct to America and make their purchases there, direct, without any recourse to Liverpool futures. On that, I am certain that the noble Viscount, Lord Woolton, will agree with me. These are some of the legitimate fears that we have. So this Amendment seeks to ensure simply that there shall be stocks for some of the mills of the small unit type, and that the Board of Trade shall run a cover scheme. I think I am right—the noble Viscount will correct me if I am wrong—in saying that before the advent of tie Raw Cotton Commission, before it was formed, the Board of Trade did run a coverage.
VISCOUNT WOOLTON: I will try to satisfy you on this.
LORD LUCAS OF CHILWORTH: After all, the Board of Trade do it with overseas business. There is the Export Credits Guarantee Department of the Board of Trade, which is, in effect, only an insurance company, and the Board of Trade are quite competent to run futures: cover. That is why I was rather disappointed that the noble Viscount did not accept my first Amendment. I consider that it really offered a way out of this difficulty of getting Colonial and Empire cottons; and would help to keep them established in Lancashire, and to supply Sudanese cotton to the mills of Bolton, where till fine cotton is spun. And if you have got to do this to help the industry, you cannot afford to throw away an organisation like the Raw Cotton Commission which has carried stocks for so long.
What are we going to do? Arc we going to have spot buying? There must be stocks. What I am afraid of—and I tell the noble Viscount this quite frankly—is that if we have a trade recession the tendency will be for the Lancashire people to run their stocks down. That will not be so in the case of the big spinning combines, but it will be done, I think, by the small unit mills. Therefore, the purpose of this Amendment is to see whether we cannot carry a sufficient pool stock of cotton. If people want to buy it direct, let them. But all those who want to do so should he allowed to contract-in to buy their cotton from a central exchange that will run a futures market until such time as the Liverpool Cotton Exchange does have a Colonial futures contract. It will be in the interest of Lancashire that we ensure that Colonial and Empire cottons continue to be served. The business has always been run on credit, and it always will she run on credit. The noble Viscount, Lord Woolton, knows as well as I do that the financing a stock before the war was always done by the hanks on a 10 per cent. deposit and a futures contract. If there is no futures contract, the banks will not advance the money. Of that I am certain because that is their security that the cotton will eventually be sold. That is the simple point of this Amendment.
I am apprehensive about one thing. At the present time there is a carrying commission

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of 2d. in the pound on spot buying. That means increased prices. I have an unhappy feeling that so soon as the Raw Cotton Commission are dissolved, the price of cotton will soar. After all, merchants are not in business for the benefit of their health, and if the commission is 2d. a pound now, it may become higher. Before the war, when Sudanese cotton was 7d. a lb., the discount was 2d. a pound, because there was no futures market—I am talking now about pre-war days. The whole thing is wrapped up in futures coverage, adequate stocks and continuous supplies. Until all these safeguards can happen in the ordinary way of trade, somebody should be responsible for seeing that the relatively small spinner has adequate stocks and coverage. I beg to move.
Amendment moved—
Page 3, line 41, at end insert the said subsection.—(Lord Lucas of Chilworth.)
5.3 p.m.
VISCOUNT HAILSHAM: I intervene to make one or two observations about the noble Lord's Amendment, since he referred to me at the beginning of his speech. The last thing I want to do is to criticise the drafting of the Amendment, as drafting. The noble Lord was so disarming about the incompetence of the draftsmanship that I can add nothing whatever to what he has said in its dispraise. In my experience, deficiency in draftsmanship is almost always not simply incompetence but a cloak to muddled thinking. One can nearly always detect muddled thinking in an Amendment when the deficiencies in draftsmanship are pointed out. The noble Lord has said frankly that the purpose of this Amendment is to encourage the holding of adequate stocks by small spinners. But that is not its effect. I cannot quarrel with the noble Lord when he assures us that that was its purpose, but, as I read it, the object of the Amendment is to give a privileged position to a class of person who may want stocks of cotton. There is nothing in the Amendment about his being a small man, or about his wanting Empire cotton. He gets this privilege if, prior to September 1, 1953, he bought all or a substantial part of his total purchases of raw cotton from the Raw Cotton Commission.
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Apparently, that mystic date, like the Flood, is to go on dating things for ever, because, if this Amendment be passed, for ever after that class of person is to have a privileged position. One thing the noble Lord has not said is why he should get a privileged position at all.
LORD LUCAS OF CHILWORTH: May I tell the noble Viscount now? Perhaps the noble Viscount is not conversant with all that has been going on. This is the date when the option to contract out was legalised. The people who contracted out were, in the main, big spinning combines. The people who were left in were those who had not the finance to carry their own stocks, so they continued to buy them from the Raw Cotton Commission. That is perfectly legitimate. I said jokingly to the noble Viscount that that was the date on which he and his right honourable friend were made honest men, because that is the retrospective date on which contracting out became legal. There is nothing mystic about it.
VISCOUNT HAILSHAM: The noble Lord has anticipated the wrong point. I was not interested in the date of September 1, 1953, of the significance of which I was fully aware. What puzzled me was why there should be brought into existence a privileged class, and why, apparently, that privileged class should go on enjoying its privilege for eve'. The Amendment says that the Minister and the Board shall be charged with the duty of ensuring a supply of suitable raw cotton for this privileged class. The question was not why the noble Lord chose September 1, 1953, as the date on which the privileged class would be defined, but why there should be a privileged class at all; and, if there should, why it should go on for ever to enjoy this privilege when, as I understand it, far from perpetuating the Ministry and the Board, the object of the Bill is to provide an opportunity for the early demise of both.
VISCOUNT WOOLTON: The Commission, not the Board.
VISCOUNT HAILSHAM: I am much obliged: the early demise of the Commission. At any rate, the noble Lord desires to create a privileged class defined, not in the relation to the size of business or to the type of purchase but in

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relation to whether they opted out on a particular date. The option was a perfectly legal one. Those who opted out, did that which they were authorised by Parliament to do. Why should they now be penalised and under the Amendment made second-class citizens? Why should they not be treated as people who did a perfectly honourable thing? Why should a privileged class of past customers of the Commission be created? Why should that privilege be perpetuated? These are questions the noble Lord did not answer. Instead, he went on to express a number of vague fears which I think would have disappeared had he reflected upon the probable course which events would take should this Bill become law.
The object of reintroducing the commodity market is, among other things, to attract business to this country have no doubt at all that, if the Bill goes through, stocks will be attracted. As regards price, it is vain for the noble Lord to express anxiety lest prices should soar, since in his last speech he was, full of terrors lest producers should not be able to sell their cotton. Prices do not soar in a free market, because, as the noble Lord puts it, merchants are not there for their health. The interest of merchants is not to charge particularly high prices but to anticipate prices which will be the result of the working of the market. It cannot be true at one and the same time that prices will soar and producers will not be able to sell their cotton, because that is a situation which could not obtain in a free market. If prices soar, they will soar because there is a shortage, because there is a sellers' market. And if there is a sellers' market, it will not be true that producers will not be able to sell their cotton.
The truth is that the noble Lord is racking himself with totally imaginary terrors. He is so satisfied that this Bill is not going to work that he tries to find out all the worst things that can happen and anticipates them all. He should at least be selective in his misery. He should make up his mind whether the difficulty is going to be that the price is going to fall, and cotton is going to be unsaleable, or whether the price is going to rise so high that spinners will not be able to obtain it. It is no good worrying about both happening. because life is not so bad
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as that. As a business man, the noble Lord should not be so afraid of a free market. Of course, it is an impossibility—or, if possible, is undesirable—in moments of acute political crisis, dangers of war, and the immediate aftermath of war. But, in principle, the free market is something which, when things are going right—which we have every reason to hope they will—is the natural expression of the price mechanism; and as a business man, nobody should be more aware of that than the noble Lord. He should not be afraid of freedom when it is reintroduced. In point of fact, we have been terrorised by the Opposition for the last three years. We were terrorised for months with the hideous spectre of the 9d. and 1s. egg. When we see shops selling eggs at 2d. and 3d. each, as we do in every town in the country, noble Lords opposite are so unhappy that they simply will not believe it; and they then go on to the other tack arid complain that we are not giving the farmers a certain market. So it is that I am extremely doubtful about the advantages of this Amendment; and despite the fact that the noble Lord has disclaimed any virtue in its draftsmanship, I venture to think that its demerits consist, not in bad draftsmanship but in fundamental confusion of economic thought.
LORD ROCHDALE: When the noble Lord, Lord Lucas of Chilworth, first moved this Amendment it was on the principle, as he said, of carrying stocks. He doubted whether, first of all, there would be stocks in general adequate, in particular, I. gather, for the smaller firms; and then he took it a stage further and doubted whether there would be stocks of various Colonial growths. My noble friend who has just sat down referred to the noble Lord's many imaginary terrors—I think that is the phrase he used. In my view, that is just the point upon which one should comment, because, while we all agree that the conditions under which the Liverpool Market operated in 1938 may be very different from those under which it may have to operate in 1954 and onwards, surely that is a good argument for suggesting that we ought not to be discussing this Amendment to-day at all. Surely, what we are discussing is a proviso which qualifies the order which the Minister will in due course make for dissolving the Raw Cotton Commission.

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When that order has been laid and comes up for discussion, some time will have elapsed, and we shall be wiser than we are now; certain details and problems which may confuse us, or the noble Lords opposite, to-day may have become clearer. The time to discuss this sort of Amendment is not in Committee on the Bill, but when we discuss the more detailed order that will have to be laid before the Raw Cotton Commission can be wound up. Therefore, all I want to say is this. I cannot help thinking that the noble Lord, Lord Lucas of Chilworth, although he said it was purely on principle that he raised this matter on the question of stocks, does not really like the Bill at all, and wants to remove out of the market a substantial body of people, those who have contracted-in, and a substantial variety of different Colonial growths that would otherwise come into the market. I hope that my noble friend Lord Woolton will not accept this Amendment, and that we may have a discussion on the details of this matter when the order is laid.
5.25 p.m.
VISCOUNT WOOLTON: I am afraid that I cannot accept this Amendment. Do not let us bother any more about this gambling business on the Cotton Exchange and the futures market. We have had a most interesting debate on that, and I am grateful to noble Lords who have spoken for enlivening what I anticipated would be rather a dull debate—it certainly has not been that. What the noble Lord, Lord Lucas of Chilworth, is asking by this Amendment is that when the Raw Cotton Commission has been wound up the Government—through the Board of Trade or the Minister of Materials, or whatever combination of Ministries we may have responsible for this—should be compelled to ensure a supply of cotton to those who have been loyal, as I think he put it, to the Commission throughout their operations. That would mean that the Government would take over the major part of the existing work of the Raw Cotton Commission. In that case, why go to all this fuss, and occupy your Lordships' time for so long, if all we are going to do is to get rid of the Raw Cotton Commission and put a Minister in its place? During the Second Reading debate the noble
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Lord, Lord Lucas of Chilworth, wisely said that it would be inadvisable for us, in this particular Assembly to go into the intricate details of the futures market and how it should operate—though we are all grateful to the noble Viscount, Lord Hailsham, for the information that he has derived on the subject from paternal sources. The noble Lord, Lord Lucas of Chilworth, was good enough on Second Reading to say that he thought I understood this market a little.
LORD LUCAS OF CHILWORTH: Something more than that.
VISCOUNT WOOLTON: The large combines, when they are making their purchases, as many of them do, direct from the cotton growers, do use the futures market, too, for the particular purposes referred to by the noble Viscount, Lord Hailsham, as an insurance. Whilst I cannot accept this Amendment, because I feel that it would involve a complete denial of the policy we have in hand, I am quite sure about one thing—namely, that the noble Lord, Lord Lucas of Chilworth, is actuated by a concern about what is to happen to the spinners in the future. If your Lordships will forgive me, I propose to read a statement. It is not a long statement, but I feel it is right that it should be given wide publicity, and it may do something to relieve the anxiety of the contractors-in during the transitional period. This is the statement:
" The Commission has asked its present customers to state how much cotton of the various growths they need to tide them over until the new season's crops become available for private purchase. That is October-November, 1954 for the United States and the Egyptian crop. February-March. 1955, for Pakistan and East African and May, 1955, for Peruvian and Sudanese. The Commission is taking the necessary steps to ensure that as far as possible it can meet these requirements either from stock or from fresh purchases that it will make. When the Bill becomes law, the Commission will invite its customers to enter into firm contracts for the forward delivery of this cotton even after 31st August. The contracts will, of course, have to be entered into some little time before the Commission ceases active trading on the 31st August, but a sufficient interval will be allowed to allow contracting-in spinners to make adequate provision for their needs. Until the final date stipulated for the conclusion of these contracts the Commission will not offer to contractors-out any cotton likely to be needed by contractors-in. Under these contracts spinners will have the choice of

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buying the cotton at a fixed price or on call,' that is, on terms which leave the final price to be fixed in relation to the market price at the time when delivery is required."
If I may interpose, they will enter into firm contracts as to quantity, and the price will be fixed either at the time they purchase it or, if they prefer it, at the time they take delivery of it.
The statement goes on:
"If a spinner buys at a fixed price for future delivery he will be able to hedge his purchase on the Liverpool futures market, If he buys ' on call ' he will not need to hedge: he is covered against fluctuation in price, because he only fixes this when he takes up cotton or sells his yarn."
I thought it wise to make that statement. Obviously it could not come into the Bill, but I though it might do something to alleviate some of the concern the noble Lord has lest the contractors-in should find themselves in a bad position. Without being too meticulous about the language of the Amendment, the noble Lord is inviting me to arrange that after the period of winding-up the people who have been "loyal"—I do not like Mat word, because loyalty suggests almost disloyalty—the people who have been contractors-in shall have the call on What is over. Do not let us delude ourselves about this matter. When we arrive at the winding-up stage, I shall be glad if there is nothing for anybody to have. If, in fact, the winding-up has been complete, the stocks will all have been taken out, and that is why I have asked and arranged that in the future the contractors-in shall state the amount Mat they require.
By what I have said, I think I should have given the noble Lord some consolation, and that is what I should like to do. But, of course, this is public property, and I cannot possibly agree that we should restrict the disposal of public property to the 44 per cent. of the people engaged in the trade who have contracted-in. Perhaps your Lordships will forgive me if I do not go into the economic argument as to whether prices are going to drop or whether they are going to rise, because I think the Asquithian retort is the only one I could possibly make. I have pretty firm views on the subject but why enter into prophecies when you do not have to? I should like to leave it there. I am sorry that I cannot accept the noble Lord's Amendment, but perhaps he would like
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to put it to the vote for the purposes of the record. I am entirely in the hands of the Committee.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Viscount for giving the Committee that information. May I deal with that in a moment? First, I wish to deal with the noble Viscount, Lord Hailsham. In a fairly long industrial and commercial career I have listened to homilies, exhortations—call them what you like—on commercial economics from lawyers. They have invariably been wrong, and I have then had to employ a lawyer to get me out of the mistakes I made through following that advice. One day I will give the noble Viscount, Lord Hailsham, a homily on law which will be just as ignorant as his to me on industrial economics. I will now turn to the noble Viscount, Lord Woolton. Perhaps I did not make myself clear, I do not wan; these stocks held by a Government agency indefinitely after the Commission is wound up. I thought I made that clear.
VISCOUNT WOOLTONThe Amendment does not. The noble Lord will forgive me. I am not being pernickety about the Amendment, but if it passes it becomes law and, therefore, we have to be careful about the language.
LORD LUCAS OF CHILWORTH: May I tell the noble Viscount that I never expected him to accept the Amendment. What I wanted him to do was to accept the principle and then, as I said originally, a professional draftsman could put it into acceptable language. The principle is this. I want a Government agency to carry stocks of cotton for those who wish to carry on contracting-in for as long as it is impossible to buy cotton of Colonial growth on the Liverpool market.
VISCOUNT WOOLTON: Does the noble Lord really mean that, or does he mean "to cover it with a futures contract"?
LORD LUCAS OF CHILWORTH: Yes, to cover it.
VISCOUNT WOOLTON: That is not the same thing.
LORD LUCAS OF CHILWORTH: It combines the two, because there is another Amendment—the third Amendment. It is difficult to argue the case

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without referring to that. I think these purchases should be on a cover scheme.
VISCOUNT WOOLTON: Yes, I see.
LORD LUCAS OF CHILWORTH: The noble Viscount now sees what I mean. The whole argument is this. The dilemma is that there is no futures market in Liverpool to-day and will not be, at the best guess, for eighteen months, for Empire growths of cotton. It is essential that there should be stocks. You will not get stocks until you have a cover scheme. The Liverpool Exchange cannot give a cover scheme. The Raw Cotton Commission has a cover scheme. When that goes out of existence, I want the Board of Trade to have a cover scheme as they had before the Raw Cotton Commission came into existence. I want them to carry these growths of cotton which are not tenderable on the Liverpool Exchange against futures. Have I made myself clear? The noble Viscount has met me halfway.
VISCOUNT WOOLTON: I have met the noble Lord a good deal more than halfway. The noble Lord is not generous.
LORD LUCAS OF CHILWORTH: I do not desire to be ungenerous—perhaps I do not understand the noble Viscount.
VISCOUNT WOOLTON: I shall have to read the statement again. I shall have to burden you again with the language.
LORD LUCAS OF CHILWORTH: I am much obliged.
VISCOUNT WOOLTON: It is important that I should stick to the precise language that has been demanded.
" The Commission has Asked its present customers to state how much cotton of the various growths they need to tide them over until the new season's crops …."
Then I go on to define the period to May, 1955, for the Sudanese crop, and to March, 1955, for the Pakistan and East African crops. The cotton so purchased will be on call all that time, so they are, in fact, covered. If I may respectfully say so, I think the noble Lord is really rather flagellating himself in his anxiety about this. We have covered a great deal of the troubles that are in his mind. I only apologise for
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the fact that the document I have read was not in his possession beforehand. It would have helped him, but I received it myself only yesterday afternoon.
LORD LUCAS OF CHILWORTH: I was going to ask the noble Viscount that question. I do not want to cross-examine him now. I should like to study what he has said because at this moment I am puzzled. If the noble Viscount exercises the statutory right that he will have when this Bill becomes law, to wind up the Raw Cotton Commission, I am slightly puzzled as to how it can hold those stocks. If he dissolves the Commission at the end of August or September of this year, I do not know how it can carry out what he just stated, because the Commission will not be in existence.
VISCOUNT WOOLTON: That is what I meant when I said that the noble Lord was really flagellating himself, because I will not wind it up while the stocks are there and while it is still operating.
LORD LUCAS OF CHILWORTH: In view of that, what I should like to do, if the House will allow me, is to withdraw this Amendment until I have had time to study exactly what is the position. If the noble Viscount will consent and I am then in any doubt, perhaps he and I could have a consultation about it, because I do not want to put your Lordships to further trouble if I think that it covers substantially the point I have in mind. Therefore, with those words, if your Lordships will allow me, I will withdraw the Amendment for the present, and if I am not satisfied, or think it will serve a useful purpose to have any further discussion about it, I can put an Amendment down at a further stage of the Bill.
VISCOUNT WOOLTON: I shall be very glad of the opportunity to discuss the matter privately with the noble Lord. If he is not satisfied as a result of the discussion, in which I shall not give way on principle, then he can raise the issue again on the Report stage.
LORD LUCAS OF CHILWORTH: I shall not be able to do it on Report stage, because, if no Amendment is made to the Bill there will not be a Report stage. I shall have to do it on Third Reading.
VISCOUNT WOOLTON: I am obliged to the noble Lord for withdrawing his Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 4 shall stand part of the Bill?
LORD LUCAS OF CHILWORTH: Before we pass from Clause 4, I want to say one or two things and ask the noble Viscount a question. Subsection (1) of Clause 4 says that the Board of Trade and the Minister of Materials
"if at any time they are satisfied that it is in the public interest to do so, may by order jointly provide for the winding up and dissolution of the Commission; and if such an order is made the following provisions of this section shall have effect."
Will the noble Viscount tell me what is" the public interest in this particular case? The noble Viscount can interpret that in any way. Then we have not a date given. Why is there no date? Why is it left with that loose phraseology "if at any time"? I do not know whether official statements have given credence to it, but it has been popularly supposed that the noble Viscount will think that the appropriate time is at the beginning of the next selling season, which is at the end of August—or in September. I think the Liverpool Cotton Exchange will come into operation, and only come into operation, when the Raw Cotton Commission is dissolved. I want to ask the noble Viscount: might that possibly be two years ahead? Is it going to be in August? The noble Viscount has said, when we were discussing the previous Amendment, that the Raw Cotton Commission will not be wound up until all those things that are contained in the document he has just read out are fulfilled. But that may be in two years' time.
I want to know, if the noble Viscount will tell me, and many other people also would like to know: What is the meaning of "at any time" and of "in the public interest"? In the document he has just read out, which I can assure him will have careful study, he seems to me to have gone a long way in appreciating the various arguments that have been made, because he now says that it certainly will not be in the public interest to wind up the Cotton Commission until these folk have been able to obtain adequate supplies of crops to the
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season ending in 1956. I ask him that question in all sincerity—it is not a trick; I should like to know—first of all, why there is not a date. I asked the noble Viscount on Second Reading, is this an escape clause? If it is, I am grateful for it, as it gives the noble Viscount room for second thoughts—and recently Her Majesty's Government have had many second thoughts on legislation. I hope they are going to have second thoughts on this, and are not going to dissolve the Raw Cotton Commission in the fall of this year. That is the popular supposition, as I think the noble Viscount will agree.
VISCOUNT WOOLTON: The noble Lord told me that he knew what Lancashire was thinking.
LORD LUCAS OF CHILWORTH: The noble Viscount is not quite so simple as that. It has been stated in another place by the President of the Board of Trade or the Minster of State, in these words—and I now trust to my memory—that the opening of the Liverpool Cotton Exchange has nothing to do with this Bill, but that the Exchange will be opened on the day that the Raw Cotton Commission is closed down, and the Liverpool Exchange is going to open on September I of this year. That is pretty authentic. Does the noble Viscount think that the Liverpool Cotton Exchange can operate as well as the Raw Cotton Commission? Can the activities on the lines that he has laid down overlap?
VISCOUNT WOOLTON: Certainly.
LORD LUCAS OF CHILWORTH: I am glad the noble Viscount agrees. I have never agreed that it is either one thing or the other. I think that they can run side by side for a sufficient length of time for one to absorb the functions of the other, to the benefit of everybody concerned. If that is what the noble Viscount means, I can assure him that I accept it with great gratitude; I think it may be a happy ending to what has been a most controversial Bill. But there is just one thing further that I should like to say to the noble Lord. Lord Teynham. The noble Lord wanted to know just now whether we thought it was right for the

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Raw Cotton Commission to lose up to £40 million. I do not know whether the noble Lord was here on Second Reading when, without excusing in any way the loss of £40 million, I tried—
VISCOUNT WOOLTON: It is nearer £50 million.
LORD LUCAS OF CHILWORTH: I think I said then that "£40 million is £40 million." If I had said that in front of the noble Viscount, Lord Hailsham, perhaps he would have said that he agreed. But I have been making inquiries during the two weeks since the Second Reading debate, and I have looked up the records of some of the concerns who contracted-out. Do not let us forget that the time when they started contracting-out was just when the post-Korean slump was in full swing. One of the firms that contracted-out was Messrs. Coates. I think I am right in saying (the noble Viscount will know) that Messrs Coates engage in about 3 per cent. of the cotton business, and in the first year of contracting-out they lost £5 million on Egyptian cotton. If those who engage in the business to the extent of 3 per cent. lose £5 million, I do not think the Raw Cotton Commission did too badly. I am going to say to the noble Lord, Lord Teynham, without excusing for one moment the loss of £40 million or whatever it was, that if the post-Korean slump had hit the Lancashire cotton market and there had not been a Raw Cotton Commission, I should think all the jobbers in Liverpool would have been in the bankruptcy court.
Perhaps the noble Lord would care to look at some other balance sheets—I simply picked out this particular firm that lost £5 million in the first year. But in looking at the 1952 accounts of that company or any commercial concern, whether State-owned or not, in the exceptional circumstances that applied then, I think it behoves all of us to be a little fair without trying to make Party capital out of it. So, on the Motion that the clause shall stand part of the Bill, I should like the noble Viscount to answer, if he would, the questions which I have asked, as to the elasticity of the words "at any time" that the noble Viscount and his right honourable friend think is "in the national interest." I should like some definition of that.
VISCOUNT WOOLTON: Let me first deal with the Raw Cotton Commission. If the noble Lord is good enough to remember what I said on Second Reading, he will recall that I paid a compliment to the officers of the Raw Cotton Commission. I said that they had lost approaching £50 million of public money during the last two years, not because of incompetence, but because it seemed to me that it was inevitable in the process of trading in which, of necessity, they had, by Statute, been indulging. I have no objection at all, except in a very minor way. I regret to say, to Messrs. Coates losing money, if they feel like that about it. That is their affair; it is the shareholders' business. But it is a very different matter when you are losing taxpayers' money. I do not want to make any Party capital, and I do not think my noble friend Lord Teynham was making Party capital out of it. But we have talked about the facts of life this afternoon. We have just got to face the facts of economics as well. On the point of drafting, the noble Lord has asked me what I mean by "in the public interest." That means what Her Majesty's Government think at the time is in the public interest. The noble Lord really cannot expect me to enter into a definition of that. There may be many circumstances, and we have given ourselves a certain latitude there. On the occasion of the Second Reading the noble Lord welcomed that.
LORD LUCAS OF CHILWORTH: Yes, I did.
VISCOUNT WOOLTON: At the close of his speech to-day he did the same thing. Well, you cannot back the horse both ways. If you welcome the fact that we have put it in. then let us leave it like that. If you ask me, "When are you going to wind it up?", the answer is," As soon as the occasion arises for a public announcement to be made." How foolish I should be at this stage to enter into a statement of a precise nature! I understand that there are various rumours about it. In my official capacity I do not know what they are, so we will leave it. I will notify your Lordships as soon as ever the occasion arises for a public announcement to be made on the subject.
LORD LUCAS OF CHILWORTH: I take it that the noble Viscount really

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answered my question when I asked him whether he considered that it was quite possible for the Raw Cotton Commission to operate at the same time as the opening of the Liverpool futures market.
VISCOUNT WOOLTON: I should like to he more definite and say, without doubt.
LORD LUCAS OF CHILWORTH: That is all I can expect from the noble Viscount, and I hope he will interpret it to be in the public interest to have all the safeguards he has mentioned in. the document given to the spinners and the contractors-in. If that is so—and that is what I believe he means in that document—I do not think we can be other than satisfied.
VISCOUNT WOOLTON: It would be useful for the purposes of the record if I made it clear that when the liquidator of the Raw Cotton Commission is working over a definite period, that will be the same thing.
LORD LUCAS OF CHILWORTH: What I mean is that the function of the Raw Cotton Commission will be carried on. I do not care whether it be by the liquidator, the Ministry of Materials or the Board of Trade.
VISCOUNT WOOLTON: I made the statement merely for the sake of accuracy.
Clause 4 agreed to.
Remaining clauses agreed to.
House resumed:
Bill reported without amendment.

HILL FARMING BILL
5.52 p.m.
House in Committee (according to Order): Bill reported without amendment.

PENSIONS (INCREASE) BILL.
5.53 p.m.
Order of the Day for the Second Reading read.
THE EARL OF SELKIRK: My Lords, this Bill is introduced to implement the statement of policy contained in the White Paper (Cmd. 9092) on the retired pay
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and pensions of former forces' officers and civil servants affected by the stabilisation and consolidation in 1932 to 1935. So far as retired officers are concerned, this policy will be implemented by prerogative instrument, and no legislation is required. The position is, however, different in the case of civil servants, and in order to place them in the same general position it is necessary that action should be taken by legislation: that is the object of this Bill. In form, it is an amendment of Section 2 of the Pensions (Increase) Act, 1944, as amended by the Act of 1947. That section provided for a special scheme of increase applicable only to certain Civil Service pensions. These Acts authorised increases of 10 per cent. on original pensions up to £400, 7½ per cent. between £400 and £600, 5 per cent. between £600 and £750, and no increase over £787 10s. The 1944 and 1947 Acts also contained a provision for a general hardship scheme which remains entirely unaffected by the present Bill, as also does the Pensions (Increase) Act, 1952. The broad effect of this Bill will be to remove the limit of £787 10s. on pensions up to which increase can be given and to give a flat rate of 10 per cent. increase on all pensions concerned, to the extent that they have not already got as much, or more, under the 1944 and 1947 Acts to which I have already referred.
What this Bill does is accordingly fairly simple. On the other hand, the background leading up to it is of considerable complexity. It is, however, set out as clearly as it is possible to set it out in the White Paper, paragraphs 8 to 25, to which I have already referred, and there is no need for me to expound it again now. The Bill will not, of course, put every individual Civil Service pensioner concerned in exactly the same position as the corresponding officer of the Forces, because civil servants, unlike Forces' officers, do not get flat rate pensions but pensions based on their pay at or near retirement. In consequence, some civil servants had cuts greater than 9½ per cent—indeed, in some cases they were as high as 24 per cent. The Government are, however, following the precedent set by tie Coalition Government in 1944, and by the Labour Government in 1947, in applying the same flat rate increase to civil servants as is being applied to Forces' officers.

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The Bill is confined in its effect and applies only to those civil servants who retired after February 21, 1922; that is, the date on which the system of variation of Civil Service pensions with the cost of living was first introduced. Moreover, it does not apply to any pension based on actual pay received on or after April 1, 1947, or on average pay over a period beginning on or after April 1, 1946. The Bill, which will have effect from April 1 next, is likely to affect about 3,000 people and will probably cost about £60,000 a year. It has, as I have said, a limited purpose, to meet circumstances which are special and peculiar. It is a modest attempt to meet what I know is a deep sense of grievance which a number of Crown servants feel because the stabilisation and consolidation in 1932 to 1935 turned out unfortunately for them, and I ask the House to give it a Second Reading.
Moved, That the Bill be now read 2.—(The Earl of Selkirk.)
5.58 p.m.
THE EARL OF LUCAN: My Lords, may I congratulate the noble Earl on his lucid explanation of the purposes of this Bill, and also on his discretion in refraining from going too deeply into the background which, as he says, is exceedingly complicated. We on this side of the House welcome this Bill as an instalment of justice within a strictly limited field. Although it does not remove all sense of grievance among pensioners from Government service, it does remove on one section of the front that sense of
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grievance, and I think we can congratulate the pensioners concerned on having been able to prevail upon the Government to remove this sense of grievance. Reading the White Paper, up to the end of paragraph 45, out of 50 paragraphs, it is clear that Her Majesty's Government were firmly fixed in their intention not to give way on this matter. The arguments are all there and the Government's determination is all there. However in the last five paragraphs the story has a happy ending, and I think we can all welcome the Bill and give it a Second Reading.
On Question, Bill read 2, and committed to a Committee of the Whole House.

SUMMARY JURISDICTION (SCOTLAND) BILL [H.L.]
Read 3 (according to Order), and passed, and sent to the Commons.
INSTITUTION OF MECHANICAL ENGINEERS BILL CREWE CORPORATION BILL
Brought from the Commons; read 1. and referred to the Examiners.

NORTHERN ASSURANCE BILL [H.L.]
Returned from the Commons, agreed to.
House adjourned at six o'clock.