COTTON INDUSTRY BILL

HL Deb 30 June 1959 vol 217 cc452-91

3.11 p.m.

Order of the Day for the Second Reading read.

THE EARL OF DUNDEE

My Lords, I beg to move that this Bill be now read a second time. This is an enabling Bill which empowers the President of the Board of Trade, who will be advised by a special committee of the Cotton Board, to do certain things, which are not specified in detail in the Bill and which I cannot specify in detail to-day, although they may be rather clearer in outline when the reorganisation schemes to which the Bill refers are submitted, as they will have to be, for your Lordships' approval, before the end of next month. The purpose of the Bill is not to reorganise the cotton industry, but to help the cotton industry to reorganise itself by applying certain limited grants of public money at the points where we think it will do most good, and at a moment of time which seems to us to be the most favourable moment at which to take this action.

I am not an authority on cotton. I know very little about it and I am not going to try to give a lecture on the historical causes, or on the recent causes, which have led to the difficulties with which the industry is now confronted. Some authorities think, or say, that the real trouble is that the cotton industry had far too long a start over the rest of the world. It had an almost unchallenged monopoly of export markets for too many generations before it had to face any kind of competition. Other people say that those who work and manage the industry are too conservative and not sufficiently disposed to change their methods. And there are some authorities who say that everything would have been all right if it had not been for the sellers' market after the war, which created too easy and deceptive conditions and led to the postponement of methods of reform which ought to have been taken earlier and which have now become extremely urgent.

I prefer to start with what everybody appears to agree ought to be done now, and on which there seems to be agreement not only with the Government, but among all sections of the industry, both management and labour. That is, that what the industry needs is a great deal more modern equipment, up-to-date machinery—for instance, automatic looms instead of Lancashire looms, ring spindles instead of mule spindles, and so on—in order to compete with the very much more up-to-date machinery which is now established both in Asia and in Europe.

It is agreed, moreover, that it is no use trying to encourage more up-to-date machinery in the cotton industry unless you can first get rid of redundant capacity. As the White Paper on Reorganisation of the Cotton Industry says in paragraph 16, referring to redundancy: While this exists there is no possible way to restore the confidence necessary to modernise and re-equip on the scale needed to give the industry the strength to compete in world markets. Unless this excess capacity, very often obsolete but still in existence, is removed, production will continue to be inefficiently distributed over a large number of mills working below capacity. The stifling atmosphere of weakness will continue to pervade the industry and even efficient firms will have neither the means nor the confidence to modernise and re-equip.

If the Government did nothing, would it be possible for the cotton industry to do these things itself? I have no doubt that in the long run it would. But I think it would be a very long and painful process, during which many skilled workers would lose their jobs without compensation. The livelihood of those who remained in the industry would go on being insecure, and it would be unlikely to attract young people or those, whether on the labour or management side, with enterprise and ability. What the Government hope to do by the measures we are proposing to take is to enable the industry to carry through this necessary process of re-equipping itself much more quickly, a great deal less painfully and, we hope, a great deal more efficiently than would otherwise be the case.

It was eight months ago, last October, when the Prime Minister gave an assurance to the cotton industry that if they put forward plans which involved a measure of direct help, the Government would give them sympathetic attention. The Prime Minister chose that time to say this because it seemed probable that the agreement which has since been concluded with Hong Kong would be made; and, as your Lordships know, it is hoped that it will be followed by voluntary agreement with India and Pakistan to restrict imports, which are hurting Lancashire, from Commonwealth countries. We cannot give any protection by duties or quotas against Commonwealth imports because of the Ottawa Agreement which is so important to our trade, but it is acknowledged that in the interests of the Commonwealth as a whole it is not a good thing that Lancashire cotton should be knocked out. That is why Hong Kong agreed to do this and why we hope that Pakistan and India will make similar arrangements.

The Government felt that the timing of this matter was very important; when dealing with the very hardworking, but hard-headed, realistic and sometimes, perhaps, a little obstinate people managing the cotton industry, timing is important. The present moment, with the agreement with Hong Kong and the coming agreements with Pakistan and India, is the most favourable time at which to take the action we are now proposing.

My Lords, what this Bill does is to give sanction—partly, as it will be, retrospective sanction—to the plans and procedures which were first announced to your Lordships on April 23 and subsequently embodied in the White Paper. The first clause of the Bill provides for reorganisation schemes in which the Government will pay two-thirds of the amount of compensation to be received by the owners of plant which is scrapped. The second clause provides for a Government grant of 25 per cent. towards the installation of new, up-to-date machinery. The third clause sets up the administration through which the scheme will be run—that is, a special committee of the Cotton Board. That committee is already at work and the Bill provides that what it is doing now shall have effect as if the Bill had already been passed when it was done. The special committee consists of my noble friend Lord Rochdale, Chairman of the Cotton Board, the two other independent members of the Board, and two new outside members—one a leading North of England manufacturer of woodworking machinery, Mr. J. C. Robinson; and the other a leading trade unionist, Mr. E. Hall, of the National Union of Mineworkers.

This special committee, whose executive officer will be Mr. Burney, as has already been announced in the White Paper, is now busily engaged in discussions with representatives of the various sections of the industry in order to produce, as we hope will happen next month, three reorganisation schemes: one for the spinning section, one for the doubling section, and one for the weaving section. The finishing section is more complicated, and will probably come later; but it is urgently desired to get the reorganisation schemes for those three sections of the industry approved before August. These reorganisation schemes will deal with the amount of surplus capacity which, in the opinion of our advisers, is the minimum amount necessary to make the scheme worth while. Then it will impose a time limit during which people who want to apply for a grant for scrapping their machinery may do so; and it will also decide the amount of compensation to be paid.

I cannot, of course, give any figures now on any of these subjects. Some of your Lordships expressed a good deal of interest, I remember, on what sort of proportion of equipment in the industry was redundant and was likely to be scrapped. I was very careful at that time not to give any figure. The White Paper was not quite so careful, and in paragraph 12 it gives one estimate from the Cotton Spinners' and Manufacturers' Association, who suggest that the aim should be to reduce capacity in the weaving section by at least 70,000 looms. I would remind your Lordships that that figure is not one for which the Government are responsible. We are merely quoting an early estimate which was given by the Cotton Spinners' and Manufacturers' Association.

Since then, of course, they have spent a lot of time discussing this matter with the special committee of the Cotton Board. Whether they have revised that first estimate or not, I do not know; but the figures which will be fixed in these reorganisation schemes will be minimum figures, not maximum figures. They may be exceeded. The figure laid down of the number of looms or spindles, as the case may be, to be scrapped, will be the minimum figure which is considered worth while; and if that minimum figure is not in fact reached, if there are not enough applications to reach the minimum figure, then the scheme will fall to the ground and cannot be proceeded with. So it is very important from the point of view of the industry that enough people will take advantage of the opportunity of getting this grant for scrapping their surplus plant, in order to make the scheme worth while. That is the first thing that the draft reorganisation schemes will lay down—the minimum: not necessarily the final amount, but the minimum amount of machinery to be scrapped.

Then they will lay down a maximum time during which people may apply for a grant, which will be short. The White Paper says, "say, a month"—and I do not quite know what qualification is intended by the word "say". Probably it will depend a great deal on the estimated effect of the holiday season on the timetable; but, at any rate, the period will be short. The President of the Board of Trade will not recommend the draft schemes to Parliament unless he is satisfied that the minimum amount of redundant machinery proposed to be scrapped is enough to justify the expenditure of public money on it, and the schemes will be then submitted to both Houses of Parliament.

Outside the scheme there is another kind of compensation—compensation to displaced employees. There will be two levies on the industry, which will be compulsory levies. One will be to provide the remaining one-third of the cost of the scrapping of redundant machinery, which is not to be paid by the Government. That levy will be paid to the Cotton Board, who will act through their special committee as the agents of the Government. The other levy, for compensating workpeople who may be displaced, will be paid to a committee consisting of representatives of employers and trade unions, which will administer the fund and pay out compensation. The Government have always taken the view that they are not going to prescribe any particular conditions for the payment of compensation, because we think it is far better that it should be worked out and agreed on entirely between the representatives of the trade unions and the employers.

I think the agreement which has so far been reached is very encouraging indeed. In fact, I did not think they would reach so much agreement in so short a time. Agreement in principle on arrangements for compensation has been reached between the employers and the unions in the spinning, doubling and weaving sections. One half of the compensation is to take the form of unconditional lump sum payments; the other half is to be in weekly payments at a rate which will not conflict with the worker's entitlement to unemployment benefit, and these weekly payments will be affected by the extent to which an operative obtains new employment. There are still a few details which have not yet been agreed, but I think it is satisfactory that so much agreement in principle has already been reached.

My Lords, if these draft reorganisation schemes are judged to be satisfactory, if they are approved by Parliament, and if the necessary amount of surplus, redundant machinery is scrapped, then we come on to the next purpose of the Bill, which, although it is secondary in time, is far more important, and that is the re-equipping of the industry with new machinery. The Government will provide a grant of 25 per cent. in cases where the installation of new machinery is approved; and in this case there is a fixed time-table put in the Bill. In the case of the reorganisation schemes, it is all left to negotiation between the special sub-committee and the industry. In the Bill three years is fixed as the limit during which application for grant may be made for new machinery and five years is the limit during which the machinery may actually be installed. Compensation for loss of employment can be paid if it results from the installation of new machinery in place of old machinery, but it is not expected that that will be great. Indeed, even in the case of reorganisation schemes, although it is an important part of policy that compensation should be paid, I think it may be found that the number of people affected may not be quite so large as we may be apt to think at the beginning; but perhaps that may be optimistic—I do not know.

The reasons which justify this limited and temporary amount of assistance to the cotton industry are that it is suffering this peculiarly difficult competition, largely from members of the Common wealth, against whom no protection can be given on account of the Ottawa Agreements, and made possible by Asiatic labour, and that the industry is so much concentrated in one part of the country. The assistance we are able to give cannot go on for ever and cannot be an unlimited amount, and I hope very much that full advantage will be taken of the opportunity which this Bill will provide. Your Lordships will all have been delighted to see in the last month or two, for various reasons which I will not take up your Lordships' time by going into, that there has been an improvement in the cotton industry. We are glad to see that, but we hope that the result of this temporary improvement will not be to discourage the industry from taking advantage of the provisions of this Bill.

I do not know whether your Lordships have seen an article in the Financial Times of this morning, which concludes by saying: The real danger of the present improvement in textiles is that it may lull Lancashire into a state of forgetfulness of its problems. Companies which so recently were preparing to quit the industry because of their difficulties would be well advised to take advantage of the Indian summer and accept the opportunities now offered by reorganisation proposals. I would earnestly recommend those words to the leaders of the cotton industry in Lancashire.

Although our assistance on economic grounds can be justified only by the special conditions I have mentioned. I am sure that your Lordships will be anxious to give this kind of help to the cotton industry on much wider grounds. Whether we live in Lancashire or somewhere else, whether we know Lancashire or do not know it—and I am afraid that I do not know Lancashire very well—we have all read about the great history of the Lancashire cotton industry, of the inventions of Arkwright which started off the Industrial Revolution, of the enormous wealth which it brought to this country, of the way in which the cotton workers all tightened their belts during the American Civil War because they were determined not to do anything which might support the institution of slavery, and of all that Lancashire cotton has meant to the political and the industrial life of this country. Whatever new industries may be established in Lancashire, and many are being established, it would be very sad to see this old one going downhill. It seems fairly certain that we are now entering into a new Industrial Revolution, which may mean more to the wealth and prosperity of human beings than the former Industrial Revolution of the 19th century. I hope that it may be carried through in a more humane way and with better distribution of wealth. I am sure that your Lordships will all hope that the spinners and weavers of Lancashire, who led the world in the old Industrial Revolution, will prosper and flourish in this new one.

Moved, That the Bill be now read 2^a.—(The Earl of Dundee.)

3.37 p.m.

LORD WILMOT OF SELMESTON

My Lords, I should like to thank the noble Earl for the clear exposition he has given of this complicated Bill. I wish that it were possible to respond by more enthusiastic approval of this proposal than I feel able to give, although I must welcome the somewhat feeble and belated recognition by the Government that the cotton industry is in a bad way and that some degree of national planning is the only thing that is going to save it. I regret very much that this was not recognised before and that years have gone by with this industry languishing worse and worse without the Government doing anything at all.

Since the present Government came into office, to go back no further, the export of cotton yarn has gone down from 65 million to 27 million lb. and linear yards of cloth from 858 million to 371 million. There has been a startling decline in the number of operatives in this basic British industry from nearly 300,000 to under 200,000. All this has gone on for everybody to see and the reasons for it have been well known for a long time. At last the Government come along with a plan, which must be welcomed as some attempt, but it still leaves a great deal to be hoped for, though one cannot be at all sure that there is any reasonable chance of those hopes being justified.

The scheme falls into three phases, as I understand it. I would ask your Lordships to excuse me if I am inexpert in this matter as I know more about the worsted industry than about cotton. The first phase deals with the redundancy of machinery and work-people and it is in this connection that the compensation proposals are made. It seems to me dangerous to separate in point of time, and make separate schemes to deal with, redundancy and re-equipment, which is the vital thing. It is necessary to deal not only with redundancy, but also with the organisation of the industry. There is far too much piecemeal organisation in this industry, and all the horizontal arrangements really need reorganising on a vertical basis. I should feel much happier about this scheme if it were an integrated scheme, and if everything depended from the beginning on re-equipment with modern machines, being used by a modern vertical organisation which could cope with modern conditions. As it is, this scheme pays out, it may be, large sums to compensate for the elimination of excess capacity, without any guarantee that it will be followed by really thorough reorganisation and re-equipment with up-to-date machinery. The elimination of excess capacity by itself will do nothing but put public money into private pockets. The only hope of the industry is that it shall be re-equipped and reorganised to cope with modern conditions. There is no guarantee in this scheme that the second phase will follow the first.

There are already some misgivings that the scheme will not work. The behavior of various elements in this industry is quite different. Some cotton firms have made a distinguished attempt to reorganise and re-equip their industry. They will be called upon to pay heavy sums for these levies to re-equip their less efficient competitors; and they may be reluctant to do so. There seems to me to be no guarantee, unless you integrate the two main parts of the scheme, that the elimination of excess capacity will automatically be followed by re-equipment and reorganisation. I beg the Government to pay some attention to this aspect of the matter, because unless they do, the whole thing may go the same way as the pre-war attempt—I think it was called the Cotton Spindles Act—by which public money was paid out to eliminate excess capacity, but which did nothing at all to modernise the industry; and here we are again faced with the same problem.

I should like to say a word or two about the method by which the payments are going to be made to the operatives who are displaced from their jobs by reason of the elimination of the excess capacity. It is, I think, unfair and undesirable that these weekly payments should be conditional upon not securing other employment. The payments for redundant, excess or scrapped plant will be cash payments. The payments to officials who are displaced will, I assume, be cash compensation payments. But the payments to the operatives who lose their jobs will be weekly doles, as I understand it, conditional in part at any rate, upon their not getting other employment. This is a most undesirable feature of the scheme, which will discourage people from seeking new employment, and I think it should be eliminated.

The second point that I think we should consider is whether it is safe and desirable to leave this entirely to voluntary agreements. Are we not going to be entitled to see the kind of plan upon which public money is to be expended? Did I understand the noble Earl to say that later on these schemes would come before the House for approval? If that is so, it is most welcome.

THE EARL OF DUNDEE

They have to go before both Houses for approval. And what I think I told your Lordships was that in regard to the three main sections of spinning, doubling and weaving, it is hoped that they will all be ready before the end of July.

LORD WILMOT OF SELMESTON

That is most welcome information. And I take it that it will be open to Parliament to criticise and express a view. Therefore, perhaps we can leave this part of the examination of the matter until we actually see the schemes. It is, in my view, important that the nature of the scheme should be examined by Parliament before public expenditure is embarked upon.

A further matter is that there is no mention in the Bill of the social aspect of the redundancy provisions. This industry, as the noble Earl rightly said, is concentrated in one part of the country; and not only that, but in many cases whole communities are almost wholly dependent upon it. In closing down these plants there are considerations to be borne in mind other than the actual financial or efficiency standards of the various units concerned; there are the social effects. To close down plants which would involve the virtual loss of employment by a large part of a whole old-established community is a serious thing to contemplate, particularly if it takes place as the result of an imposed scheme. I think the Government would be wise to insist that that aspect of the matter should be well borne in mind when these schemes come up for examination.

I wish it had been possible for the noble Earl to say something also about what steps the Government are taking to provide alternative employment. The record of the Government in Lancashire and territories adjoining is, in this regard, not a very good one; the provision of alternative employment and the encouragement of the growth of development areas in this part of the country has been most disappointing. It would be a sad thing if, with the expenditure of this amount of public money on a major attempt to deal with this industry, there were not side by side with it a really big scheme for the provision of alternative employment. That is a policy which has proved highly successful in other parts of the country. In Cumberland, in South Wales and on the North-East Coast this policy of the development area has been a resounding success; and this is the sort of lesson that we should apply to dealing with this problem of Lancashire.

In making these comments on, and possibly criticisms of, this plan, I do so in a constructive sense. I regret very much that the Bill is not of a more cohesive type; that it is not a more courageous attempt to enter into partnership with this industry and to see it through over a longer term. It is most undesirable that we should continually see this spectacle of the refusal of the Government to recognise the problems of an industry until it has almost expired, and then to come forward with doles and help in this form. A constructive partnership through the years, it seems to me, would have been a much better policy. But perhaps this is the beginning of something new and something better, and I think we all have a duty to try to make it so.

3.49 p.m.

LORD BARNBY

My Lords, I am happy to find myself in the position of following the noble Lord who has just sat down, because we should at least be in agreement that this is not a Party question. He speaks as one who has in the past been a guardian of the workers' interests, when in the Socialist Government, and he now speaks with the knowledge of a large employer in the textile industry. I am glad to see in his place my noble friend Lord Rochdale, who is to be charged with a high role of great responsibility in the carrying out of this measure, and we wish him well in his efforts. The noble Earl, in moving this Bill, succeeded, in the time at his disposal, in explaining to us with clarity its provisions, and I am sure they will have convinced all who heard him of the justification for action.

For myself, I intervene to say that I support the Bill but with misgivings of some of its proposals, and with reservations about others. I have no financial interest in the cotton trade, but I have alt my life been associated with the wool textile industry. The problems which are dealt with in the Bill will raise precedents which, let us not deceive ourselves, will have possible great effects in many of the light industries in this country at some future time. It is because of my interest in light industry that I intervene, and also because we are rightly the guardians of the taxpayer. This is a proposal to spend £30 million-plus of the public money in subvention to an industry. The noble Earl made reference to the urgent need for it. He also made reference to the great historical achievements of this industry and its great contribution to our past industrial greatness. Some are apt to forget the great contribution it made to our resources in its early days and how it added to our international competitive power. At any rate, to-day there will be no argument that it merits some action.

The White Paper gave indication of the desirability of its contraction. There appears to be some confusion. We talk of contraction in the industry, and yet hope for increased volume. There have been full discussions on the Bill in another place. Indeed, with great diligence I have read all the Hansard reports on it, and I found them extremely interesting, because so many angles of the effects of this proposal were naturally brought up. My right honourable friend the President of the Board of Trade dealt with skill, patience and clarity with most of the problems that were raised in this matter. The causes which bring about this situation are increasing development of the industry and also, to some extent, increasing imports. The cotton trade is necessarily one dependent upon the triangular and multiangular trade. But it brings up all sorts of questions—basically, as the noble Earl said, respect for the Commonwealth Preferences. He avoided reference to the shackles of G.A.T.T., and uncertainties now arise about the European Free Trade Area proposals. He referred to the Hong Kong Agreement, but there is no specified duration for that. There is no assurance that it will be implemented, and still less that Pakistan and India will follow, as hoped.

Frankly, it is really tariff making which brings this problem about, and I want to emphasise that statesmen will need to recognise that there is a fundamental point here. Low-cost Asiatic wages are something which will have to be recognised in tariff making at some point. That strikes us at this moment when we are proposing to vote a large amount of public money to assist the reorganisation of this industry. There must be recognition in tariff making that you can have a low freight and high wage content product or a high freight and a small wage content product. Textiles are an example of the former; cement and metal products of the latter. Freight gives them a larger protection which is not afforded to the low freight content in the light industries.

May I remind your Lordships that public money has been voted—I quote from another place—amounting to £260 million a year in subsidies to agriculture and in other subventions. The amount dealt with in this scheme is £30 million-plus spread over five years. It is not big, but it is an important precedent. The principle of compensation to workers is accepted. It is not a large amount, and undoubtedly requires to be agreed to as the Government have asked. But surely the hardships have been exaggerated, and also the specialised skill. The noble Earl referred to mule spinning, which has been obsolete for years. The operatives have been continuing to work in an industry which they know is bound to be faced with death. There is no obligation for operatives to work in those conditions.

On this question of skill, I cannot avoid supporting my suggestions by an illustration from the United States. We have the example there of the tremendous shrinkage in the equipment which has taken place, admittedly contributed to, to some extent, by the movement from the Northern to the Southern states. It emptied whole towns like Fall River and New Bedford, and the same problem arises elsewhere as has been growing here. But it was different because there was a tariff protection. In Amoseag, New Hampshire, there was one mill with over 600,000 spindles and 23,000 looms (and that is probably three times as big as anything in Lancashire) which was completely dismantled.

Lurid pictures have been drawn of the rapacious employers exploiting oppressed workers. But who are the managers and owners of these mills? The managers in the main are men who have risen from the bottom themselves to positions of responsibility. All honour to their achievement! Who are the owners? They are millions of small shareholders, largely workers in Lancashire, who have subscribed to the capital of these mills, and it is being wrongly represented that it is the wealthy owners who control all the mills. Attention has also been drawn to the high salaries of these managers and also to the compensation of directors. There are contractual agreements under a three-years' election of directors. After all, these amounts are small compared with the fantastic earnings of well-known entertainers, those curvacious sexy sirens who get these high monies from the T.V. viewers and the readers of the pornographic high-circulation Press. There should be no misunderstanding about who are the people concerned.

I turn to the provisions of the Bill and my own objections. There is no time to cover the whole industry, and I will take the opportunity of confining myself to one section as an illustration; that is the spinning, which is a pivotal section in the industry. I would here insert that I hope the noble Earl, in replying, will indicate what is going to happen if the amounts of machinery offered for elimination fail to come up to the minimum required. Is the Whole scheme then to fall to the ground? The White Paper suggested that, out of 24 million spindles, 12 million were considered redundant. I venture to suggest that it is not a question of the number of spindles or the amount of machinery: the real point is that there should be measurement by the running time of the machinery which is installed. There should, of course, be measurement of the output of the workers, but the operation of these machines must be multi-shift. International competition decides this matter.

I must ask your Lordships' indulgence if I quote in order to make clear what I am trying to bring out: that it is not the amount of machinery that is installed; it is the hours that that machinery operates. That is obvious. It is recorded that in the United States, in cotton spinning, the active spindles worked, on an average, in 1956–57 6,000 hours-odd; in Germany 4,000 hours; in Japan 4,800 hours; in Hong Kong 8,000 hours; and in the United Kingdom 2,100 hours. This means that the machinery, if it is to be properly used, must run multi-shift. That, of course, raises many social problems. Until recently there was in Lancashire, among the organised workers, a refusal to work shifts, even to work overtime; they refused to take the money when it was being offered. Fortunately, wisdom has now come, and that attitude has recently been modified.

But, again, if this means that there is now to be a 40-hour shift to be paid at 45 hours, obviously the money we propose voting today or supporting today is going to be thrown away. I do not know whether or not it can be argued that much of the agricultural subsidies are wasted, but in this case it would be clear that that would happen. There are social inconveniences which have got to be faced. Very naturally, people do not like starting work at six o'clock in the morning, which means an early start from home, or finishing at ten o'clock at night in the case of women.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

I wonder why they should like it.

LORD BARNBY

The only comment I would make on that to the noble Viscount is that, curiously enough, in a high standard state like the United States, where there is a high standard of living, it is readily accepted that people work round the clock; and, of course, in many cases, six days a week. It seems to suit their convenience that they earn the money. That must be the answer. I make no defence of it; I am stating facts. The whole thing is whether we can meet the competition from abroad. That is the point.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I do not think this applies specifically to the weaving and spinning industries; but when we talk about hours like that the fact is that we keep in touch with trade union friends in the United States of America, and we get bulletins from the American Embassy here. There are many trade union agreements being operated in the United States with hours of no more than 34 or 35 a week.

LORD BARNBY

I take it that the noble Viscount is referring to hours worked by individual operatives. The point I was making was the hours for which the machinery runs. It cannot compete with foreign competition unless there is this full running.

Another point I wish to make is that the import of machinery is essential if it is evident to employers that, in spite of the high efficiency of much British machinery, foreign machinery is particularly suitable. I hope the noble Earl will give some assurance on that point, because there have been suggestions that this will be accompanied by steps by Her Majesty's Government to limit the importation of particularly suitable foreign machinery.

I have two further points, and I would ask your Lordships' indulgence in putting them. The first is (this has been emphasised very strongly in another place, and it is an obvious thing to anybody who looks at it intelligently) that if we are going to use public money to put new machinery into an old shell, where it cannot possibly run continuously or effectively, we might as well throw the money away. That fact must be recognised. I earnestly hope that the noble Earl will consider, with his colleagues, some supplementary arrangements whereby public assistance will be made available in some way, as has been done through the development areas, so that suitable appropriate single-storey buildings are available to house the machinery which it is intended shall put the industry on its feet.

That brings me to the question of what is going to be the future of the multi-storey building. There was much stress in another place too, on the problem of the disused obsolete mills. It was suggested that they should be removed at the cost of the owners. I am glad that my right honourable friend the President of the Board of Trade pointed out the inequity of such a course, as against the removal of slag-heaps or old dwellings, which, in the interests of the community, might appropriately be removed. Surely it would be unfair to place on individuals, in this case on the individual mills which would be affected under this scheme, responsibility for removing these old mills when manifestly it must be something for which the community as a whole should take responsibility. It is obvious that in many of these towns the space occupied by these old buildings could well be used for housing, and I think that under Section 26 of the Town and Country Planning Act, 1947, there are powers.

I hope that in the course of the Passage of the Bill the noble Earl may give some reference to up-to-date thoughts of the Government, beyond those in their minds when it left the other place, and will tell us what are the intentions which my right honourable friend the President of the Board of Trade promised to look into with regard to this matter. The Commons debate contained a moving picture of amenity devastation and human anxieties of a sad past. In spite of some proposals in the Bill, it is a worthy attack on a vital problem and it gives a promise for the future. All those who are associated with the textile industry must have a strong sense of concern about how this scheme will work out. I think that they will hope that there will be a response to the appeal which the noble Earl has made, and for which the noble Lord has such a high responsibility. Perhaps the words of the familiar hymn would seem appropriate: The strife is fierce, the warfare long; Falls on the ear the distant triumph song, Then hearts are stout again, and arms are strong. May that be the future of the cotton industry! My Lords, I support the Bill.

4.12 p.m.

LORD DARWEN

My Lords, my noble friend Lord Wilmot of Selmeston has already dealt very ably, if I may say so, with the detailed provisions of the Bill before your Lordships' House, and I should prefer to look at this matter from a slightly different angle. I do not know whether the noble Lord, Lord Barnby, is going to find any answer to his comments in what I have to say; I think possibly he may do so. I began my working life as a weaver in a cotton mill. I was 16 at the time, and for ten years—the ten most impressionable years of young manhood—I had as my place of work a cotton mill. I was at that time the sole representative of the fourth generation of my family to be engaged in the cotton trade.

I hope noble Lords will forgive me for these autobiographical details, and if they detect a certain note of pride in the mention of them they will not be wrong. On the other hand, I must not mislead your Lordships into supposing that, because I speak from these Benches, and because I have mentioned the fact that I began my working life as a weaver, I am an ex-trade union member. In fact my great grandfather founded the firm of which my grandfather and my father were, in turn, managing directors, and of which eventually I myself became a director. So that, whatever first-hand experience I have of the cotton trade—I am afraid that it is not very profound and not very recent—is that of an employer, rather than an employee. I hope that these few introductory remarks will lend a kind of perspective to the attitude that I adopt towards the Bill. In short, my attitude is that the Bill is belated and perpetuates a state of uncertainty which prevails, and has prevailed, in the industry for many years.

The White Paper shows that the principal cause of the decline in the cotton industry has been the continuous loss of export trade. Roughly speaking, despite minor booms, this process has been going on since 1914. In this connection, I well remember the vituperative comments which were heaped upon those Lancastrians who ventured out into the countries of the Far East, into India and China and Japan, and sold their heritage of skill to those peoples. But, looking back, the industrialisation of these and other parts of the world was inevitable; and whether the motive of these pioneers was a handful of silver or better living conditions for starving millions is, in the particular context in which I am speaking, hardly relevant. The point is that the changes had to come and the markets were bound to be lost to Lancashire.

During the 'thirties my father invited Gandhi to visit our factory and to stay with us at our home. He did so with a view to discussing with the Indian leader the possibility of raising the boycott. At that time, things were far from good in Lancashire. The average wage for weavers was something around 35s. for four looms—a good weaver might earn £2—and there was a good deal of unemployment. Gandhi asked to see some of the dwellings in which the cotton workers lived and of course this was arranged. But in the way that these things happen, the best and neatest homes were chosen, and the house-proud Lancastrians made sure that, whatever hardships they might be suffering, they still maintained a high standard of housewifery and were the best of hosts. The result was that Gandhi was not at all impressed; and he told us later in discussion that if we called this poverty we had no conception of the poverty in the Far East, and he compared the conditions of the Lancashire weaver, in receipt of 35s., with the conditions of the peasant in India. He suggested that the peasant would regard the conditions of the weaver as absolute luxury compared with the mud huts and mats and the empty rice bowl which were the lot of the Indian at that time—and, in many cases, I am afraid, still are to this day.

I have digressed a little, but perhaps what I have said illustrates the inevitableness of the shrinkage of Lancashire's trade. During the 1930s many employers hung on, using obsolete machinery, unable to re-equip, always "in the red" with the bank and taking orders at less than cost, but—and I would emphasise this—feeling a responsibility towards their workers to keep going as long as possible. In my experience, this feeling was a very real thing. Even the miserable wages of the cotton operatives at that time were wealth compared to the dole. A great deal of criticism has been levied against Lancashire employers and your Lordships will be aware that although I am no longer a cotton employer I am speaking very much as if I were one, because I have that sympathy.

The employers have been freely criticised, and I should like to say a few words in defence of their action, or inaction. They have been criticised for lack of foresight and initiative in re-equipping with modern looms, of which we have heard a great deal. It should be remembered, however, that when automatic looms were being installed abroad Lancashire was losing trade at a crippling rate; and to-day the value of exports of textiles is little more than one-twentieth of what it was in 1914. I have seen it stated that the exports have been halved in each decade since that date. So not only was there a lack of money, but there was also, very naturally, a lack of confidence. Thus there was no statistical or psychological inducement for capital to be attracted into the industry from outside.

In the 1920s machinery was still sound and, in the hands of skilled operatives, versatile; and the unions, as we have heard from the noble Lord, Lord Barnby, were opposed to the two-shift system, which was essential to the re-equipment with automatic looms. By the 1930s most employers were well aware of the desirability of re-equipping but, as I have said, they had not the money. The war years provided no opportunity, and then came a chance in the peak period—1951. But there was still a great deal of uncertainty as to the degree to which the Asian countries were going to take over the markets in this country. This state of affairs perpetuated the lack of confidence in the future of the Lancashire cotton trade so that most manufacturers adopted a wait-and-see policy. Admittedly this may have been a moment when there might have been more action. Possibly it was a mistake not to go in for more wholesale re-equipment at that time; but the failure to do so is very understandable in the circumstances. Had all the mills been re-equipped at that time, we should not have seen a situation so greatly different from that which we have to-day, because there would still have been the great loss of export trade which nothing in the way of re-equipment could have arrested; and the extent to which we should have been in a position to compete with the cloth produced in Hong Kong, India or Pakistan is doubtful.

That brings me to the second major factor in the decline of the trade—namely, the rising imports from the Asian Commonwealth countries. During the last six or seven years the two processes—the shrinking export markets and the increasing imports—have taken a dual toll of trade from the industry, and they are responsible, or mainly responsible, for its present plight. So my point is that, even if employers had taken a bold course in 1951 and re-equipped, given the lack of consideration which Her Majesty's Government have displayed most of them would have been no better off, and would perhaps have been even worse off, than they are to-day. The Asian countries would still have reached the point where they could not only satisfy their home markets but could enter the European markets, with cloth produced on better machinery and with much lower labour costs.

One third factor which is responsible for the decline in trade concerns the home market. The increasing use of synthetic fibres has meant that where the demand for textiles has greatly increased, as indeed it has in the home market, largely because of the improved standard of living, cotton has not been able to claim a share of the increased trade to the extent which might have been expected if the new developments had not come. What is now proposed by Her Majesty's Government may—I hope will—do something to improve the position of the cotton trade; but, as I have said, it is ill-timed and laced with uncertainty. If it had come sooner much more might have been achieved, possibly without cost to the taxpayer. If it were more certain in operation I believe there would be a better chance of restoring confidence in an industry which has done so much to provide this country with the sinews of our greatness.

As it is, however, what confidence can the industry have in the present Agreement with the Asian part of the Commonwealth?—because it is quite un-certain how long that Agreement can last. It is a purely temporary agreement and there is no certainty that it can be continued. The question arises whether it can continue long enough for the re-equipment that is necessary to be paid for; or whether, to look at the matter from the individual worker's standpoint, the cotton worker who is courageous enough to stay on in the trade until he is too old to make a change may not be laid off without even having the compensation to which, under somewhat uncertain conditions, under the Government's plan he would be entitled. I admit that there is a great difficulty here, because in our view—I think I may speak as from these Benches—it is only right that we should allow the Asian countries to raise their standard of living. Indeed, it can be said that until they do so there cannot be any parity of competition. As it is now, the most modern mill will not be able to compete with Asian products until wages in places like Hong Kong and India reach a level which approximates to that of our own.

Other industries—agriculture has been mentioned; and of course the nationalised industries of coal and the railways—have received a considerable amount of Government help; and there are yet other industries which I believe are hoping to get it. But Lancashire, it seems to me, has all along been treated almost as an outsider, and this belated recognition of a responsibility by the present Government smacks to me of a sort of pension scheme—though this time it is not for old people but for an industry which has, in truth, deserved better. My Lords, although I am not confident that the present Bill is sufficiently thoroughgoing or clear-cut, I nevertheless very much hope that, in spite of my misgivings, it may achieve something to improve the position of the industry.

4.33 p.m.

LORD BALFOUR OF INCHRYE

My Lords, only for a moment, and through the courtesy of the noble Viscount, Lord Alexander of Hillsborough, will I detain your Lordships on two points. The first main point is that the Bill does not breach the principle of free entry of Commonwealth goods which was laid down in Ottawa in 1932. It must have been a difficult decision for Her Majesty's Government to take, because one is aware that the implementation of that principle is indeed one of the causes of the need for the present Bill. Indeed, we know that there is a voluntary agreement with Hong Kong and prospects of voluntary agreements with India and Pakistan. As my noble friend Lord Barnby said, there is no security in those agreements as to their execution; nor is there certainty of the length of time which the Hong Kong agreement will be in operation. But, in spite of those unknowns, I think that those of us who believe in the entity of the Commonwealth, economic and political, must rejoice that Her Majesty's Government have faced that difficulty and have come down without any doubt at all upon the side of maintaining that principle.

The second point I would touch on for a moment is the question of compensation for redundancy. It seems to me that here Lancashire has a chance of being in the van of what I would term the new industrial outlook, where men have, as far as possible, security of work and compensation when they are deprived of work through the change of economic circumstances of our country. I believe that many of your Lordships, like myself, must have felt shocked in days gone by that a man who had worked hard all his life in industry was very often only one hour away from unemployment. Later on it was a week. Now it is—and I think we all, on all sides of your Lordships' House, must rejoice—in the thoughts of all those who are responsible for trade unions, who are in management, or who are partners and shareholders in industry, that their partnership should be expressed in terms of advantage for all and security for all; and this Bill gives a chance of Lancashire being in the van of the movement of what I would term the new outlook on industrial security. So, with those two comments, I should like to give support to the Bill which Her Majesty's Government now bring forward.

4.37 p.m.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, may I first say that I associate myself with the previous speakers in the tribute to the clarity with which the Bill was explained. We could be under no illusion at all as to the limited nature of the Bill, after we had listened to that explanation. We have had a most interesting speech from my noble friend Lord Darwen, based upon not only his personal experience but the traditions and experience of his father and forbears. I have not any experience like that to offer, but I am bound to say that I have a certain nostalgic feeling about these discussions to-day, because I sat in the chair of the Committee set up by Mr. William Graham in 1929 for about six or seven months, inquiring into the difficulties of the cotton industry.

I have the Report of that Committee in front of me to-day. I promise your Lordships at once that I am not going to quote from it. I have re-read it again very carefully, and I am the only surviving member of the Committee. It seems to have had in its set-up much of the kind of feeling that is behind the words that have been spoken to-day with regard to cotton. There was serving on it a leading finance, shipping and commercial magnate who became a great friend of mine afterwards, Sir Alan Anderson; there was an accountant, Sir William McLintock; and there was a trade unionist who also happened to be a friend of mine and who was associated with the miners' union, just as the trade union representative who, it is now forecast, will be on the new body—the same sort of thing. We went into the whole position of the cotton industry month after month. Finally, because of the London Naval Conference, the chair was taken over by the late John Clynes.

I must say that as I hear the reports of the condition of the industry which are really summarised in the White Paper which preceded the Bill, I am not surprised. The 1929 depression was the first really deep depression that had come upon the industry in a cumulative form. Up to 1914 and the opening of the war, the cotton industry in Lancashire was growing all the time. It seems strange to look back upon it. Then came the war. When you deal with some of the great industrial problems of Britain you must not forget that the disturbance of the two great wars which we have had to fight for liberty and the cost it has entailed, has had a remarkable effect on both our industrial organisation and our industrial and financial resources. Nevertheless, there was the usual sort of thing that you get after a war and the period of recession from the purchase of this or that type of commodity produced by industry.

There was a boom in 1920, and it is as well for us to remember that the cotton industry to-day still suffers from the damage done to the industry then—the boom of 1920 and the awful financial manipulations. Still, as I look at it to-day, I find that in the basis structure of the industry none of the things that we discovered as a Committee in 1929–30 have really been remedied to any great extent. Mind you, I agree with my noble friend Lord Darwen that very unfair criticism was levelled at individual managers and directors or owners of certain mills, because some of them had been sufficiently enterprising, in the face of the greatest possible difficulty, in introducing some form of modernisation.

On the other hand, I am bound to say from my recollection that all the witnesses that came before the inquiry of 1929 struck me, whether they came from the labour or the capitalist side, as being extraordinarily conservative. We suffer now from the very things we pointed out then. You talk about the reducing of capacity, which is the first phase of the objective of the Bill. You deal with spindles and you find that there are to-day millions of spindles which are said to be surplus to present requirements. In those days of 1929 we were urging upon the industry, in order to get into some markets from which we had been largely driven, to adopt a wider use of the ring spindles instead of the mule. But mule spindles are still working to-day.

It is true that a good many additions have been made in the meantime in the use of ring spindles, and in automatic loom there have been some developments. But in the limited time since those days in which I have been able to pay attention to the cotton industry, I have not seen the advance in the substitution of the automatic loom that could have been made if the problem had been tackled properly. Noble Lords may say, why did we not make a more firm and comprehensive Report in 1930? It was largely because we did not have a Labour majority in the Government to be able to recommend the type of policy which some of us then would have liked to see initiated.

The other question raised by my noble friend Lord Wilmot of Selmeston in his interesting speech to-day was the need, so greatly stressed in our Report, for getting the industry on a different basis of structural organisation. How did it appear to us, who examined and cross-examined the witnesses on the question? First, there was the raw cotton and the treatment of raw cotton up to the stage of its being handed over to the spinners, all the overheads, profits, transport in between, having to be met. There were the spinners with a separate organisation but always with the same problem: separate overheads, merchanting, costs and profits to be handed on to the weaver. The weavers were in exactly the same position, having all these overheads, profit to be added, and to be passed on to the finishers, dyers, printers and the lot. As if that were not sufficient, they too had their overheads and profits which had to be passed on to the next stage. At every stage there was the addition of profit and the cost of transport and the special packing firms who did nothing but packing. Added to that, at the end was the whole line of merchants to take their share of the product before passing it on to an export market.

I am not at all surprised to learn to-day that a great deal of the fierce competition we are meeting is because in many places the textile industry has become vertically organised and many of these other costs can be eliminated. Take a look at the Asian trade and markets which have been referred to. It may well be that we have lost markets in India, Pakistan and Japan; but it has not always been because of special Commonwealth arrangements. In the case of India, Pakistan and Hong Kong I remember very distinctly the evidence that came before us in 1929. Even in those days a lot of British markets, in India for example—which was then, of course not divided into Pakistan and India—were lost because of the fierce competition in India from the product of the Japanese automatic loom, which had hardly been introduced to any extent in Lancashire.

When I look at the hopeful thoughts arising from the good work done by Lord Rochdale to get arrangements with Hong Kong, which may lead to similar arrangements with India and Pakistan, I am reminded that that is just what we said in 1929–30. And it is now thirty years on. In the years 1945 to 1950–51 we had here again something of the same sort of thing as happened after the other war—quite a boom in industry, and maintained for much longer than would have otherwise have been the case because of the continuance of certain measures of control, helping them in what was admittedly, of course, a sellers' market. In my view, and in the view of many other people, it has been the failure to keep some of that control in operation, despite the condition of the industry, that has helped to speed what many of us foresaw would be the inevitable result after the post-war boom had begun to decline. I think that what really closed the door was the winding up of the Raw Cotton Control and the reopening the brokers' markets, instead of collective purchase and controlled distribution.

That leads us, therefore, to the present situation. I am quite sure that we cannot maintain the cotton industry in the export markets of the world at the position it holds to-day unless we can have much more modern equipment; so that one objective of the Bill is to be welcomed. But I am quite sure we cannot expand it to any great extent unless the whole basis of the industry is reorganised and we eliminate all these other intervening processes, and so on, and come into straight competition with the conditions that we, together with other people who are sending their exports abroad, have to face.

But that leads us to a great social question; because nobody who knows Lancashire at all will be able to forget how the communities have grown up in villages, in small urban districts, around what is only one of the horizontal sections of the industry. If you were to try to secure an arrangement under which you had a vertical organisation of the industry, if you were going to have it all in one centre, or in a limited number of centres, you would have to change entirely the whole communal life of those villages or urban districts. But you could go a long way towards what would be equal to vertical organisation by seeing that there was adequate amalgamation of the processes, and you could put them under the control of one firm. I do not know what the position is to-day, but I should be extremely interested to know, for instance, to what extent the Lancashire Cotton Corporation, which was already in existence after the war, has been able to cover any of this ground in its wide and often successful operations.

As to the general conditions which are to be operated under the Bill, the noble Lord, Lord Barnby, has argued with some success that £30 million spread over five years does not seem a very large sum. I think that if he had put it separately, without comment upon other subventions, we could have accepted his words much more easily. But certainly he will not expect us to agree with what he said, almost as a sort of interlude in his speech, when he suggested that a subsidy such as that given to agriculture is largely wasted. Believe me, the subsidy to agriculture is not wasted. It has meant an enormous fillip to industry, including some of the light industries in which the noble Lord has been interested, and in the provision of modern equipment for the farmer.

LORD BARNBY

If the noble Viscount would permit an interruption, would he care to express a view whether, should this country unfortunately be faced with an industrial depression anything like that to which he has referred as existing in 1929, the industrial population would be prepared to accept the continuance of a burden on its exports equal to the amount required to pay high subsidies on agriculture, which would raise the cost of living considerably?

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Of course, if we had a depression of that kind, many people would be just as anxious to keep up the orders of the farmers to the industries of this country which, in a modern agriculture, they still need. Otherwise, there would be an even greater depression in the heavier industries of the country. As to the possibility of a depression, let me be quite frank about my gradual change of view over thirty years—and I have mentioned it once before in this House. If it had not been for the protective duties given to a large range of our industries in the last thirty years we should never have recovered from the great depression after the First Great War. Farmers and agriculture, with the exception of a small section of agriculture, would not have any protective tariff—none at all. Representatives of the Government the noble Lord supports have again and again suggested—up till now, at any rate—that a subsidy was perfectly justified in the absence of a protective tariff such as has been afforded by this country to other industries; so I hope the noble Lord will not keep that particular bee in his bonnet.

When he comes to talk about the conditions of work and labour, I think I must say this: that one thing that always comes back to me like a boomerang when he talks like that is Lancashire. It was in Rochdale in 1844 that the weavers of Rochdale gathered together, twenty-eight of them, and said, "We are poor because we are robbed; and we are robbed because we are poor"; and they proceeded to lay the foundation stone of the constitution of the British consumers' Co-operative Movement—now an enormous organisation. It was not because of the subsequent two generations of success in the cotton industry; it was because of the famine of the hungry 'forties: and if anybody wants to try to deal with the present situation by reducing the standard of life, or the hours of work, or the conditions of shifts in employment, then I think he would be making a vast mistake, because it would do the industry no good.

I was not at all surprised to see a Member of Parliament say—I must not quote too much from another place, but I may make just a passing reference to it—that he had never yet reconciled himself to the adoption of a three-shift system for women. In discussing the question of modernisation, such matters as that have to be taken into close account; for in the last few weeks, since the White Paper has been issued, there has been a great deal of talk about the three-shift system as well as the two-shift system. In fact, it is already necessary, as everybody knows, if the automatic loom is to be operated.

LORD BARNBY

My Lords, will the noble Viscount permit me to intervene? Is he suggesting that the three-shift system, if worked, must necessarily be worked by females, instead of having two shifts worked by females and one by males?

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I am not suggesting anything in detail on a matter like this. I am talking on principle. I am saying that many people hold that it is a bad thing to work three shifts in an industry where women are employed. It may well be that many people do not agree with me on that. The only women who have to work on a three-shift system are those in the nursing profession. There they certainly have to do that. But in this matter of employment, I should think the answer is, "No."

With regard to administration, I was struck by what my noble friend Lord Wilmot of Selmeston said about the phasing of these proposals; and this point was emphasised by what my noble friend Lord Darwen said about uncertainty. If any real good is to be done by this scheme, then we must pay attention to this question of uncertainty. I do not think anybody can deny that the scheme is belated. If we look at the debate in another place in 1954, in the time of the previous Conservative Government, and read the case put on behalf of the cotton industry for something being done immediately, and consider how the position has deteriorated since then, it is hard not to accuse the Government of being very belated in their operations. As regards uncertainty, it seems to me that under the scheme so much depends on whether or not individuals in the industry are willing to co-operate in it. If they are not willing, then the scheme falls, and we go on to the next stage of the general decline of the industry. I do not think that the scheme is capable of giving us much hope for the recovery of the industry to enable it to begin to expand again in production and export. But if the schemes are to be laid before us in four or five weeks' time, and we know then what is the response within the industry, perhaps we shall be able to begin to form a better judgment on the matter.

The other point I want to raise concerns compensation. When I heard the noble Earl, Lord Dundee, explain how compensation to the workers is to be worked, I thought that, whilst it is perfectly true, as the noble Lord, Lord Balfour of Inchrye, said, that there has been a vast change in conditions, and workers can be made mobile, in an industry like this, rooted for generations in families of workers, to pay compensation, where mills are closed down, on the basis of a weekly payment for a few weeks, as a sort of addition to unemployment benefit, seems a very mean and niggardly way of dealing with the matter. It certainly is not good enough, and I hope that something more will be done. I would add only one other word. To-morrow week we shall have the opportunity, on the Motion of the noble Lord, Lord Ebury, of debating the question of the continued uncertainty of the limits of State control. When he comes to consider what he is going to say on this uncertainty, I hope that he will be able to say something about the uncertainty in the cotton industry without control.

5.4 p.m.

THE EARL OF DUNDEE

My Lords, I am grateful for the support which your Lordships have given to this Bill. The only general criticisms have been that it is too late—that it ought to have been introduced, long ago; and that it is too limited—it does not go far enough. As there was no general vein of opposition running through the debate, I think the best I can do is to try to deal separately with the various interesting questions which have been raised by those of your Lordships who have spoken.

The last matter raised by the noble Viscount, Lord Alexander of Hillsborough, was also alluded to by the noble Lord, Lord Wilmot of Selmeston, near the beginning of his speech—namely, the compensation to be paid to operatives who are displaced by a redundancy scheme. The noble Lord, Lord Wilmot of Selmeston did not approve of weekly payments being made or being in any way dependent on the subsequent employment of the operatives in other industries. The Government feel very decidely, and always have, that they ought not to interfere or try to impose any ideas of their own on the arrangements which are made about compensation. What we insist upon is that before any compensation is paid to the owners of scrap machinery under a redundancy scheme, the President of the Board of Trade shall first be satisfied that arrangements have been made to compensate the workers and that these arrangements have been agreed to by the trade unions and the employers.

I would call your Lordships' attention to Clause 1, subsection (2) (c), because it was not in the Bill when first printed. It was an Amendment inserted in another place. It provides: that bodies representing the interests of a majority of the persons employed in the section have agreed to those arrangements so far as they relate to persons whose interests are represented by those bodies. We feel that it is very important that the agreement should be freely arrived at by the people concerned, the employers and the trade unions, without Government pressure and interference. Therefore I am not expressing any view of my own on the merits of the different kinds of compensation. What I understand has been agreed to is that half the compensation shall be in a lump sum and the other half in weekly payments. Although I do not want to go into details, which may not yet be fully worked out by the parties concerned, I think that what they have in mind is that the amount of compensation should depend on the number of years during which a worker has been employed. A worker aged 30 would get less than a worker aged 50, who in turn would get less than a worker aged 65. After compensation has been ascertained, the idea is that half should be paid in a lump sum and the other half in weekly payments. I have no doubt that when the discussions are finally concluded—I 'understand that there are still a few points to be cleared up—we shall be able to study the proposals as a whole: but the Government do not propose, provided they are agreed to by the trade unions, to criticise the results or do other than make it a condition, as we certainly shall do, that compensation is paid on those agreed plans.

LORD WILMOT OF SELMESTON

My Lords, before the noble Earl leaves that point, may I say how grateful I am to him for making that clear? I understand that the Government will not insist that some part of the payment shall be by weekly payments.

THE EARL OF DUNDEE

No, my Lords, certainly not. The Government will agree to that because it has been agreed to by the trade unions, but the Government will not take the initiative in prescribing the nature of the compensation. The noble Lord, Lord Wilmot of Selmeston, spoke about the social aspect of the redundancy provisions, and if I may I would say a word on that. I know that suggestions have been made that account should have been taken of the local unemployment position or the extent to which a locality is dependent on cotton in determining which mills shall be closed under reorganisation schemes, but we do not think that this is acceptable as part of this policy. While we are fully aware of the importance of bringing new employment to the cotton areas, any proposals to write social factors into the conditions for determining which capacity shall be eliminated would, I think, cut right across the whole object of bringing about reorganisation of the cotton industry on really efficient lines. If we did not stick to the principle of achieving an efficient industry when the job is done, it would, in our view, endanger the jobs of many thousands of people who will continue to work in the cotton industry. I think it must be left to firms themselves to decide whether or not to accept the offer of compensation for scrapping excess capacity; and I think it would be wrong to withhold compensation from firms which came to the conclusion that their interests lay in accepting the offer rather than struggling on in the industry.

Perhaps this question should be considered together with the other matter dealt with by the noble Lord, Lord Wilmot of Selmeston, in his speech—namely, measures to provide alternative employment. I was grateful to hear the noble Lord say that the other development area schemes apart from Lancashire have been a resounding success, because that is not always said by the Party opposite; I am glad to hear that he thinks that they have. However, I do not think that the development area in North-East Lancashire has been other than a success; a great deal has already been done there towards establishing new industries.

LORD WILMOT OF SELMESTON

It is rather small.

THE EARL OF DUNDEE

Yes. But the D.A.T.A.C. provisions, as the noble Lord knows, have been extended to a large number of cotton towns, and we are hoping to do a good deal more there. I should perhaps have said something about this in my opening speech if I had not felt that it might be better to wait and see if any of your Lordships were interested. It is, I think, wrong to overlook the great diversification of economy in Lancashire which has taken place in recent years. The total numbers of those wholly unemployed in the cotton towns at the present time is less than in a good many other areas, and short-time working in the cotton industry has been falling considerably, as have the unemployment figures, in a number of cotton towns. So we cannot necessarily be expected to give absolute priority to the cotton areas over other areas in Great Britain where existing unemployment is much higher. But with that proviso, Lancashire's need for more new industry to deal with whatever lack of employment may eventually arise from reorganisation schemes is recognised and everything will be done to meet it.

Some particular figures and examples were given by my honourable friend the Parliamentary Secretary in another place. He mentioned the Michelin and Mullard factories at Burnley, in particular, one of which is employing 1,000 men; and he also referred to the D.A.T.A.C. list, which includes Accrington, Blackburn, the Oldham district and the Rochdale district, and to which has now been added Todmorden. The D.A.T.A.C. procedure is still in its early stages, but a number of applications are being considered and it is certainly a fundamental part of our industrial policy that we should do whatever we can to create a greater diversity of employment in these towns.

The noble Lord, Lord Barnby, asked a number of questions about various matters, and perhaps the most important was that of working two or three shifts, which was also referred to by the noble Viscount, Lord Alexander of Hillsborough. I entirely agree with what the noble Lord, Lord Barnby, said about the necessity, as far as possible, of making the machines work all the time in order that we may be really competitive. With regard to the operatives, again I did not deal with this in my original remarks because I do not think the trade unions in Lancashire have ever made any difficulty, except in cases where they think that the machinery is out of date, about agreeing to a two or three shift system of working. I think it is generally recognised in Lancashire that the future of this industry and its ability to compete will depend on having new automatic machines which can be worked all day, and possibly all night, and that will involve a shift system.

But with regard to the particular question of women, which was raised in the course of the speech of the noble Viscount, Lord Alexander of Hillsborough—and I think he was interrupted by the noble Lord, Lord Barnby, on this point—I must make it clear that under the Factories Acts women are not allowed to work a night shift. I know they do in hospitals—and I do not know how we should get on without them—but a hospital is not a factory. So far as factories are concerned, I think the noble Viscount, Lord Alexander of Hillsborough, referred to a Member of another place who said that he could not agree with women working at night. It does not matter whether this Member agreed or not; it is contrary to the law and cannot be done under the Factories Acts.

The noble Lord, Lord Barnby, referred to Hong Kong, saying that he was not sure whether the agreement would be implemented. I think that it is only right and fair to Hong Kong to say that everyone should realise that their undertaking is working now. I do not know whether the noble Lord was suggesting that it might not be renewed after the end of the period.

LORD BARNBY

My Lords, it is not that I criticised whether it would be implemented, but that I wanted to know for what duration its existence would continue.

THE EARL OF DUNDEE

For the duration that has been agreed. I hope the noble Lord is not suggesting that Hong Kong will run out of the agreement before the expiry of the agreed period, because that would be unfair to Hong Kong, and it might be undesirable if the impression were given that any of us thought that. I do not think there is any likelihood of that happening.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

It is only for three years.

THE EARL OF DUNDEE

Yes. That is why I mentioned the agreed period, which is three years.

LORD BARNBY

I do not think I insinuated that Hong Kong would discontinue with that agreement, but I was referring to the expiry of the time of three years.

THE EARL OF DUNDEE

I am grateful to the noble Lord. I only wanted to make it clear that when the noble Lord asked if the idea was going to be implemented, there was no question of anybody suggesting that Hong Kong intended to break it and not to carry out their undertakings. The noble Lord, Lord Barnby, also asked what would happen if the minimum target of excess machinery scrapped under a reorganisation scheme is not reached by the number of applications which will be made. Technically, of course, there is power in the Bill for a scheme to be revoked and a new one introduced. But, as I have explained, the President of the Board of Trade does not intend to agree to the expenditure of public money on this scheme unless he is satisfied that a sufficient amount of excess machinery is going to be scrapped to justify the expenditure. If, in the event envisaged by my noble friend—which I hope will not occur—there were not enough applications and not enough decisions to scrap in order to reach the minimum target set by the scheme, then the result would be that the scheme would fall down and not be implemented, and the cotton industry would have lost the opportunity which it now has of ridding itself of this excess machinery. Therefore, I hope very much that they will not miss that opportunity. Perhaps the alternative might be that another scheme, imposed later by a different Government upon the industry, would be tried. I do not know. But it would mean that the industry would have missed the bus so far as this Bill is concerned.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, may I ask the noble Earl a question I intended to ask on scrapping? I am quite satisfied with the answer the noble Earl has made on that point. When the schemes are made for scrapping, is there to be anything in them with regard to the use made of the machinery which is to go out of use? Are the machines to be sold to competitors abroad? Are they to be finally broken up, or what? Is there any plan as to what you are going to do with them?

THE EARL OF DUNDEE

They must be scrapped. They must not be sold and used again. I understand that it is also the intention of the special committee of the Cotton Board to recommend in their schemes that if later on new machinery is put in, in applying for the 25 per cent. grant more old machinery must be scrapped in order that the new machinery may replace it. It must not be in replacement of old machinery for whose scrapping the two-thirds grant has already been paid. If it is proposed to put in new machinery in place of old which has already received a scrapping grant, then a condition will be made that the greater part of the first grant must be refunded—what is called, I believe, the "claw-back."

I am grateful to the noble Lord, Lord Darwen, for giving us the benefit of his most interesting experience as an employer, and in many other ways. When he told us about the great discrepancy between the living standards of the Indian workers and Lancashire workers at time of Gandhi, it occurred to me that the gap was even wider now, and probably a great deal wider. It certainly ought to be part of our general policy to try to raise the standard of living of backward peoples, both in the Commonwealth and elsewhere. It certainly is our hope to work towards that end. The noble Lord, Lord Darwen, ended up—this is one point on which I must disagree with him—by alluding to this Bill as a pension scheme. That is very far indeed from what it is intended to be. It is intended to be an injection, giving new life to the industry, and not to pension it off as an old out-of-date concern; in the words of my noble friend Lord Balfour of Inchrye, who I thought expressed it very well, to put it in the van of a new industrial outlook. That is what we are intending, and not to pension it off.

I was most interested in the debate on agriculture which took place between the noble Viscount, Lord Alexander of Hillsborough, and my noble friend, Lord Barnby. I found it just as interesting as the debate on cotton, but I do not think I had better enter into it.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Why not?

THE EARL OF DUNDEE

Because we are talking about cotton. What I thought while the noble Viscount was speaking, and also when the noble Lord, Lord Wilmot of Selmeston, was opening, was this. In general, noble Lords opposite and we are entirely agreed both about what ought to be done and on the priorities. We are both agreed that scrapping of excess machinery should come first, and after that should follow re-equipment. Perhaps the difference is that noble Lords opposite, quite understandably, feel that a comprehensive plan should be made by the Government and carried out. When the noble Viscount, Loud Alexander of Hillsborough, was speaking, he spoke about the witnesses he had interviewed in 1929. He told us how all witnesses, whether employers or workers, were the most conservative people he had ever heard. I think that that is probably still true. The people in Lancashire in the cotton industry, whether they are employers or workers, all seem to be the most conservative and individualistic people in the world, and I should not care to be the Minister in charge of a Bill imposing a comprehensive scheme of reorganisation on the cotton industry.

What the Government feel is that if you want a reasonable chance of a reorganization scheme succeeding, you must let the industry make its own scheme and help it where you can. Ideally, it may not be so logical, and it may not look so well on paper, but I think it is far more likely to work in practice, and that is what we are trying to do. We have asked the industry to prepare its own scheme, and we have told them exactly how we can help them. We have given them this chance—it may be their last chance—and I hope and pray that they will take it.

LORD SHEPHERD

My Lords, before the noble Earl sits down, I should like to apologise to him that I was not here to hear his introduction of this important Bill. I should like to ask him whether it is the Government's intention to issue White Papers prior to laying the various Orders for the different sections of the cotton industry before Parliament. I think the noble Earl would agree that the industry is a very complicated structure, and I feel that the House should be nut into the picture as to what are the Government's proposals for each section before we are asked to pass those orders. I wonder whether the noble Earl can give us that information?

THE EARL OF DUNDEE

My Lords, I do not think that there would be time for another White Paper. We have had this general White Paper. We hope that these three schemes for the three sections, spinning, doubling and weaving, will be ready to be laid on the Table of both Houses before the end of July. We feel it is very important that they should be approved, if they are satisfactory, before Parliament rises for the Summer Recess. I have no doubt that everything will be done to arrange for a reasonable interval between the time they are published and the time they are discussed. Obviously, we must have time to read them and learn exactly what details they contain. But that time cannot be very long, because it is now June 30, and our timetable will probably contemplate their being approved within the next three weeks, although they have not yet been drafted.

LORD WILMOT OF SELMESTON

My Lords, would the noble Earl forgive just one other question? In laying the schemes before the House, will he ask his right honourable friend to give us, if possible, some indication not only of the scheme for compensation, but of what amount of refitting of the industry will follow it in the section?

THE EARL OF DUNDEE

The noble Lord is referring to the compensation for scrapping machinery, and not to the compensation for displaced workers?

LORD WILMOT OF SELMESTON

For scrapping machinery.

THE EARL OF DUNDEE

Details of compensation for scrapped machinery will be in the draft reorganisation schemes. But I do not think there will be any indication in these schemes as to the number of applications which will be made later on for grants for new machinery, because the period allowed in the Bill for the making of an application is three years.

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