HL Deb 23 April 1959 vol 215 cc933-41

3.37 p.m.


My Lords, with your Lordships' permission I will now give the House a statement on the Government's proposals on the cotton industry: it is an identical statement to that which is being made in another place by my right honourable friend the President of the Board of Trade.

In recent years the cotton industry has been exposed to formidable and increasing competition from textile industries established inside its traditional export markets. Moreover, Commonwealth countries have emerged as large exporters to the United Kingdom itself where they meet no tariff barrier. These changes have brought distress and anxiety to Lancashire. The result is a situation complicated and worsened by the existence of a large volume of surplus and obsolete equipment. The outlook, however, is by no means all black. The growing purchasing power in industrialised economies opens up excellent prospects for the better fabrics and made-up goods. Special measures are therefore called for to make the industry compact, up-to-date and efficient.

Following the Hong Kong undertaking to limit exports, the industry has been working out plans to adapt itself to changed conditions and to reorganise and re-equip its capacity. Leaders of the different sections have been discussing with my right honourable friend a contribution from the Government which they feel to be essential to the success of their plans.

The Government have no doubt that the circumstances of the cotton industry which I have just described justify the exceptional course of direct financial assistance from public funds. Accordingly we shall seek powers from Parliament to meet the industry's request for help.

The first step must be to remove surplus capacity. The Government are ready to contribute from public funds two-thirds of the cost of bringing this about under schemes to be approved by the Board of Trade. The balance will be met by the industry by statutory levy. A severe time limit will be set for qualifying for assistance and, in order to start without delay, arrangements will be made whereby, subject to the fulfilment of the necessary conditions, a firm which scraps machinery after to-day can qualify for assistance.

The Government have agreed to bear a high proportion of the cost of eliminating surplus capacity, on the clearly understood condition that the industry itself will compensate operatives faced with loss of employment as a result of the schemes. This is a matter for the employers to settle directly with the trade unions concerned. The Government will, of course, do everything in their power to assist those displaced by the reorganisation schemes to obtain alternative work.

After the elimination of surplus capacity, the next step is to encourage re-equipment. Provided the Board of Trade is satisfied that enough surplus capacity in the industry will be eliminated, the Government will be prepared to pay a grant of one-quarter of the cost of modernising existing and providing new machinery. Orders for machinery placed after to-day will he eligible for this grant, subject to the fulfilment of the condition to which I have referred, and to the granting of powers by Parliament. Re-equipment and modernisation completed during the next five years will rank for this assistance.

My Lords, it is not possible to estimate at the present moment how much the total charge on public funds will be. This depends on the extent to which the industry takes advantage of the assistance now offered, and on such factors as the terms which are settled for eliminating surplus capacity. I can only say that, given a favourable response from the industry, the cost to the Exchequer might well be of the order of £30 million over five years.

These arrangements will require detailed administration. For this purpose the Bill which we propose to introduce will contain provisions for setting up a special agency under the Cotton Board to carry out the schemes in accordance with directions from the Board of Trade.

The House will see that this set of proposals forms a comprehensive whole. We shall meet with problems that we cannot see in advance. But with good will from both sides of industry they can be solved. I know that the employers will bring the trade unions into the fullest possible consultation at all stages. The Government will follow closely the reorganisation schemes, and will do all they can to maintain the impetus to carry them through speedily and effectively. These joint endeavours will reshape the cotton industry and equip it to compete in the expanding markets of the world with the types of cloth that are wanted where-ever living standards are high.


My Lords, we are grateful to the noble Earl for giving us the statement made in another place by the right honourable gentleman the President of the Board of Trade. The subject matter of the statement is so important that it obviously requires a great deal of study, and my only concern at the moment is whether I could get a little guidance now, or perhaps very soon, privately, as to exactly what is meant by "reorganisation"—because the statement does not really indicate it.

Perhaps the noble Earl will forgive me if I say that I have always been interested in the structure of the cotton industry, not because I have technical knowledge, but because a Committee set up in 1929 had as Chairman my late friend William Graham; but he could hardly take the chair, and I substituted for him for eighteen months in the chair, and we examined the subject at great length. What struck us was the extraordinary gaps between the sections of the organised industry: spinning in one place. weaving in another, dyeing in another, printing in another, even packing, in some instances, in another. We do not get any indication here, except the question of wiping out inefficient machinery and perhaps helping to get new or improved machines; and many matters here require great study. I should like to get some early information to see whether we could save the time of your Lordships' Houseby not having to ask for a day—because I think it might be necessary to ask for a day—to discuss this subject before the Bill in final draft is ready for submission to Parliament.

The other thing I would say with regard to this statement is that the Cotton Board are apparently to have under them, and from the way it is worded I suppose they will have the appointment of. the body to be set up to administer the scheme. I believe that the trade unions are represented on the Cotton Board. But what will be the position of the Government in this special administration of what is going to cost a vast sum, and will it be certain to include not only representatives of experienced industrialists in the cotton industry but of trade unions upon the actual administering body that is contemplated? If we could get some guidance in advance on this subject, and avoid having a special day, and work out the detailed discussion, it might save time. If not, I think we ought to ask for a special day.


My Lords, I have some very long interest in this trade, and, indeed, looking back over the last thirty years, the Government have often been called upon to come in to do something for the Lancashire cotton trade. I am glad to know that the present Government are prepared to spend this very considerable amount of money. But I am quite certain that there is much more involved than spending money and the destruction of machinery. The issue is one of such importance to Lancashire that I find myself in agreement with the noble Viscount opposite. I hope the Government can give us a little more information than the statement which the noble Earl has already put before us, so that before we discuss the problem in all the seriousness that it demands we may know a little more about what the Government propose and what the manufacturers' organisations propose, before we are committed to the expenditure of this large amount of money. I am in favour of the expenditure of the money if it is going to be of value. I wonder whether we might not ask the President of the Board of Trade if he does not think it is worth while producing a White Paper, giving us some detailed information before we come to discuss it.


My Lords, may we know at this stage what is meant by the Government's expression "traditional markets", and do the Government think that in this time of changing economy it is conceivable that we shall go back to the old 100 per cent. supremacy of our cotton industry as against that of the rest of the world? In other words, is it not necessary to go rather more fundamentally into the whole economy from the world point of view?

3.50 p.m.


My Lords, the Government were anxious to give your Lordships and the other place all the information they could at this early stage, and I am sorry that to-day I cannot go much beyond the generalities contained in my right honourable friend's statement which I read to your Lordships. We have been given by the various sections of the industry a general idea of the kind of target at which they are aiming and of the probable cost involved, but at this stage no detailed plans have yet been prepared. It is hoped that as much of the preparatory work as possible will be done before the Bill becomes law. I will certainly consider what the noble Viscount the Leader of the Opposition has said in regard to supplying your Lordships as soon as possible with more information, and also the suggestion of my noble friend Lord Woolton that the issue of a White Paper might be considered.

The noble Viscount, Lord Alexander of Hillsborough, I think suggested that the issue of more detailed information as soon as possible might make it unnecessary for a debate to be held. I cannot say anything about that. Perhaps when it is discussed through the usual channels noble Lords opposite may feel that it would be a good thing to have a debate before the Bill is brought in, and of course that suggestion will naturally be considered sympathetically by the Government. I cannot make any statement now about the possibilities of the issue of a White Paper, but I will certainly convey to my right honourable friend what the noble Earl, Lord Woolton, and the noble Viscount opposite have said, and will report their natural anxiety for more detailed information about this matter as soon as possible.

In reply to the noble Lord, Lord Amwell, I would say that I think that the phrase "traditional markets" means very largely the Asiatic markets, where we used to send cotton manufactured goods from Lancashire, but which have now not only established their own industries but are competing with us here. As the statement that I read out implied, our hopes for the future of the industry are rather directed to the possibility that it will regain its supremacy in the higher class, more finished, type of cotton goods, which are increasingly in demand in those countries where purchasing power is rapidly growing and where the standard of living is rising.


My Lords, I do not want to press the noble Earl to-day on this subject, but, as someone who is interested in the industry, I should like to echo what has been said. We have been told very little so far. If the Government envisages spending £30 million it must have some idea of how many spindles arc going to be scrapped and how much new machinery is going to qualify for grant, otherwise the £30 million is based on nothing. I hope that Her Majesty's Government will let us have much more detail about this subject, because we cannot possibly appreciate the programme by what has been said to-day.


My Lords, may I thank the noble Earl for his answer and his promise to try to convey to Parliament the meaning of this scheme, we hope through a White Paper, because it is something that Parliament really has the right to expect. If the Government are from to-day, this very day, being committed to some of the operations under this scheme, and committed to some of the finance, surely it is something that Parliament should have information upon at once. If, of course, a Bill and the Money Resolution are already prepared and are going to be printed within, say, twenty-four or forty-eight hours, that is different. Even then, either the Explanatory Memorandum to the Bill should be very detailed or a White Paper should accompany it.


My Lords, I am not in a position to give your Lordships the date on which the Bill will be introduced, except to say that it will not be until after Whitsun, which is only a few weeks ahead. It could not be before Whitsun anyhow, and I do not at this moment know whether or not the publication of the Bill will be soon enough to make a White Paper superfluous. But I will most willingly convey what the noble Viscount and the noble Earl, Lord Woolton, have said, to the President of the Board of Trade, and will represent to him that if the Bill is not going to be published for some time your Lordships have expressed the view from both sides of the House that a White Paper would be most helpful to you.


My Lords, I beg to thank the noble Earl for the observations he has just made. I hope that he will assure the President of the Board of Trade that, if one may venture to speak for people in Lancashire, those people will be very glad to know of the Government's interest, and I hope that he will not think that my intervention in the discussion was intended to be by way of disagreement with what he has said. Obviously, the Government have to make a statement at the earliest possible moment. I only hope that they will let those of us who are Members of this House help in the solution of what indeed is a most difficult problem.


My Lords, we shall indeed be most anxious to have the help of all of your Lordships from all parts of the country, and particularly those who have such a great experience of the industry as the noble Earl.


My Lords, may I just say that the answer given to the last question but one makes me feel that it is important to press for the White Paper now? If we are not in fact going to have the Bill itself, with the Money Resolution which is necessary, before Whitsuntide, and if people in the industry are already expected to start making some of the changes in respect of which Parliament has not yet given its approval, then a very dangerous situation is being created. I think that we ought to have a White Paper before Parliament almost immediately.


My Lords, I appreciate what the noble Viscount has said. I know that the Bill cannot be introduced until after Whitsun, but I do not know whether or not it will be published, as distinct from being introduced, before the Whitsun Recess. For that reason, I was reluctant to say anything more definite about the possibility of a White Paper. But, as I have said, I will most certainly convey your Lordships' expressions of opinion on this matter to the President.


My Lords, I am so sorry to prolong this point, but an important week-end newspaper said that it had been accepted by the Government that there was to be a substantial contraction in the cotton industry. Can the Minister say anything about that?


I have, I think, dealt fully in the statement with the question of eliminating surplus capacity. We cannot give any estimate—or at least not an estimate which would be detailed or scientific enough to satisfy your Lordships—of the precise amount of estimated surplus capacity for which provision is being made.


My Lords, this is not the occasion upon which to go into detail, but when the noble Earl is referring this matter to his right honourable friend I would ask him to remember the interest of Hong Kong in this matter. When Lancashire was in trouble. for some reason which was never fully clear to me we looked around the Empire until we found somebody who was sufficiently prosperous, so to speak, to fleece, and Hong Kong was asked voluntarily to give up some of their profit to support the sad conditions which were obtaining in Lancashire. This they did. Whether or not there was any quid pro quo I have never understood. May I ask whether, if this reorganisation scheme comes into being and is successful, as we hope it will be, Hong Kong may be relieved of the arrangement which was come to on a rather one-sided basis?


My Lords, the noble Lord will bear in mind that under the Ottawa Agreements all members of the British Commonwealth have a favoured position in our markets, and that we have tried to get a voluntary agreement on the subject of cotton since it was clear that it was in the general interest of the Commonwealth that the whole economy of Lancashire should not be undermined by these cheap imports. The noble Lord may be aware that similar agreements with India and Pakistan were to be conditional on an agreement first being made with Hong Kong. The Hong Kong Agreement came into force on February 1, and it is hoped that, in consequence, similar agreements may shortly be confirmed with India and Pakistan.