HL Deb 31 July 1961 vol 234 cc7-13

COTTON DOUBLING REORGANISATION SCHEME No. 2 (CONFIRMATION) ORDER, 1961

COTTON FINISHING (WOVEN CLOTH) REORGANISATION SCHEME No. 2 (CONFIRMATION) ORDER, 1961

COTTON SPINNING REORGANISATION SCHEME No. 2 (CONFIRMATION) ORDER, 1961

COTTON FINISHING (YARN PROCESSING) REORGANISATION SCHEME No. 2 (CONFIRMATION) ORDER, 1961

2.49 p.m.

THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE)

My Lords, these five Cotton Orders make an identical drafting Amendment to each of the five main Orders which were approved in 1959 and in 1960. Under subsection (4) of Section 1 of the Cotton Industry Act, 1959, the Cotton Board, which acts as the agent of the Board of Trade, is entitled to have its expenses with regard to reorganisation schemes reimbursed by the industry; and the original five Orders provide for that. The Cotton Board has been informed that reorganisation schemes do not necessarily include re-equipment schemes which are not specifically mentioned in the original Order, and these five amending Orders repair that omission. As provided for in the Act these Orders have been drafted after consultation with employers and employed, or their representatives, and they have agreed to them. I beg to move.

Moved, That the Draft Cotton Weaving Reorganisation Scheme No. 2 (Confirmation) Order, 1961; the Draft Cotton Doubling Reorganisation Scheme No. 2 (Confirmation) Order, 1961; the Draft Cotton Finishing (Woven Cloth) Reorganisation Scheme No. 2 (Confirmation) Order, 1961; the Draft Cotton Spinning Reorganisation Scheme No. 2 (Confirmation) Order, 1961; and the Draft Cotton Finishing (Yarn Processing) Reorganisation Scheme No. 2 (Confirmation) Order, 1961, be approved—(The Earl of Dundee.)

LORD BARNBY

My Lords, while reeognisine, that the noble Earl has just said, that in substance these are merely drafting matters, I feel it right to remind your Lordships that Parliament, in its wisdom, voted a substantial sum of money for the reorganisation of the cotton industry. That necessarily has taken time and has involved much negotiation, but I think it right that a voice be raised on this matter, because there are in process to-day negotiations of a very important character having a great bearing on this whole subject. It is known that these matters in connection with G.A.T.T. in Geneva are of importance to the textile industries of the country. I need not remind your Lordships that if you aggregate all the textile industries of this country, the subsequent making up industries that follow from them and the machinery industry that precedes them, employment involved is very great. The importance to the economy is great also, and while it is perhaps popular momentarily to regard the textile and some other light industries as expendable, the effect on the country's economy cannot be treated lightly. The spirit of nationalism in developing countries stimulates competing industries.

My Lords, I have been associated with the textile industry all my life. I know it intimately. I regard this question as of profound importance. The basic feature is that sooner or later there must be recognition that the import of products from countries with a low Asiatic wage content will require statesmen to develop treatment different from that hitherto.

To return particularly to Lancashire, there is great alarm at the present moment in connection with the negotiations currently taking place, and the reported proposals with regard to imports cause the concern. I am told that the base period of June, 1960, to June, 1961, saw cotton textile imports, concerned with these Orders, rise to 770 million square yards, the highest ever. It will be within the knowledge of all Members of the House that recently the President of the United States admitted the importance of this matter and instructed his Ambassador at large to formulate plans for meeting it. In the case of the United States the imports for the chosen period were less serious, because owing to special circumstances they did not attain the proportionate amount which applied to this country.

The basic fact with regard to the cotton textile industry is that these large imports from all quarters, mostly from the Asiatic low-wage countries, coupled with the productive capacity of this country, will mean total supplies in excess of consumption here, and that surplus production would then endanger the whole cotton scheme. In the amounts voted by Parliament there was a sum which was to be applied to the re-equipment of the industry, but with this menace facing them the heads of these big corporations responsible for shareholders money cannot be expected lightly to embark upon these expenditures with the grim prospect which I have ventured to report to your Lordships.

LORD OGMORE

My Lords, may 1 ask the noble Lord why it should be a grim prospect for people to be able to buy cheaper cotton goods than they are able to buy at present?

LORD BARNBY

My Lords, perhaps I did not express myself well. Perhaps the noble Lord will give those thoughts in regard to agriculture and the Common Market. I understand that if we threw the whole of this country's agriculture open to imports without restriction, as some recommend, that would produce a similar situation. I was thinking of employment in this country, because excessive imports from abroad will not help employment in the textile industries in this country. It is that to which I venture to draw your Lordships' attention in connection with what has been voted by Parliament; indeed, I am told by those familiar with the cotton textile industry that the whole scheme may well be in jeopardy.

THE EARL OF DUNDEE

My Lords, I am most interested in what your Lordships have to say on these subjects, which are very important. But I do not know whether your Lordships really want on a draft Amendment Order to a cotton reorganisation scheme to have a debate upon the whole question of cotton imports and the cotton trade. Although it is not for me to say that it is out of order, I should have thought it was entirely inappropriate on an Order of this kind.

LORD STONHAM

My Lords, perhaps I may address a question to the noble Earl without in any way dealing with the point raised by the noble Lord, Lord Barnby.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Perhaps before my noble friend continues I might say this. I am not quite following the noble Earl in his suggestion as to what the rule is. I am interested in paragraph 3 of the Schedule, and I think my noble friend Lord Latham will perhaps be speaking on it; that is the paragraph headed,"Variation of the Principal Scheme". I should have thought when that appears on the paper the debate can go fairly wide by way of question as to what the particular effect of this will be and what possible other circumstances may arise.

LORD STONHAM

My Lords, my understanding of these Orders is that they are concerned with one single narrow point. The Government have provided sums of money for re-equipment of cotton mills. That money is being expended by the Cotton Board on behalf of the Government. The Board will incur certain administrative expenses in paying out this money, and the existing Orders do not provide for the Cotton Board to be reimbursed for any money it may spend in disbursing these grants. I believe it also to be the case that it is not yet known, and cannot be known for quite some time, what those expenses of administration will be—indeed, it may be that at the end of the day no further amounts will be required from employers in the industry; and they might even get a refund. Perhaps the noble Earl will confirm whether that is a correct interpretation of these Orders.

LORD LATHAM

My Lords, before the noble Earl answers that question may I put a related one? That is, whether the variation proposed, if enacted, would cast any additional burden on the Exchequer, and if so of what amount.

THE EARL OF DUNDEE

My Lords, the noble Lord, Lord Stonham, is quite right in his interpretation. In case there is any doubt, perhaps I may explain exactly what is done by these draft Orders. The Act of 1959 provides, in Section 1 (4), that: the amounts required by the Cotton Board to defray … any other expenses.… incurred by them under this Act in relation to any section of the industry for which a reorganisation scheme is brought into force, shall be raised by means of charges to be imposed under the reorganisation scheme relating to that section on persons registered with the Cotton Board as carrying on business in the section … Each of the five cotton reorganisation schemes which we approved—the spinning, weaving and doubling ones in July, 1959, and the finishing sections about a year later—provides that the Cotton Board shall raise by means of an annual charge imposed on all persons for the time being carrying on business in the (relevant) section of the industry … the amounts required by the Board to defray … that proportion of the total expenses incurred by the Board in connection with the preparation and administration of all schemes under the Act as in the opinion of the Board is attributable to this Scheme. When, subsequent to the coming into operation of these Schemes, the Board of Trade were advised that the specific authority so conveyed by each Scheme for the apportionment of expenses did not include those incurred in relation to re-equipment grants, as distinct from reorganisation schemes as such, it was agreed that the omission should be corrected, and that is all that these Orders do, as your Lordships will see from the Schedules which in all five Orders are identical in wording. They provide that these expenses shall be similarly reimbursed in relation to the re-equipment schemes which it has been held are not part of the reorganisation schemes. I cannot give the noble Lord, Lord Latham, any precise figure as to the amount of the expenses of the Board which will be reimbursed under these Orders either concerning reorganisation or concerning re-equipment, but they are all being paid under the Cotton Act, 1959, which is intended to cover all of them. It is simply a technical omission that the original Orders did not specify re-equipment, as distinct from reorganisation.

LORD LATHAM

My Lords, I am obliged for the information which the noble Earl has been good enough to give the House; but does it not mean that, although the proportions may remain unaltered, the sum which the Exchequer will have to pay will be larger by bringing in this expenditure which formerly was not, I gather, within the sum which was apportioned between the Fund and the Exchequer? Is that so?

THE EARL OF DUNDEE

No, my Lords it is all provided for under the Act. So far I do not think anything has been paid out under the re-equipment schemes. It would have been had it not been for the omission. The people who drew up the schemes were probably under the impression that "reorganisation" included "re-equipment". When the schemes came into operation we were legally advised that it would put the matter beyond doubt if "re-equipment" were separately provided for in the schemes.

LORD LATHAM

My Lords, do I apprehend that not a single farthing will have to be provided by the Exchequer as the result of this new reorganisation?

THE EARL OF DUNDEE

I do not quite follow the noble Lord's point"as a result of this variation". They are not variations; they are simply the full implementation of what is provided for in Section 1(4) of the Act, which had not been properly provided for, according to our legal advice, under the original Order.

LORD LATHAM

Is it not the case that the former Order is now being varied, therefore there is a variation?

THE EARL OF DUNDEE

There is a variation, in the sense that an unfortunate omission is being corrected; but that is all.

LORD LATHAM

Will that cost the Exchequer anything?

THE EARL OF DUNDEE

I should have thought it would cost the Exchequer the amount of the Cotton Board's expenses specifically related to the re-equipment schemes.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, at the time we were discussing the Bill I understood that there was a global maximum figure. May I take it that that global maximum will not be exceeded?

THE EARL OF DUNDEE

My Lords, no Order of this kind could cause a maximum laid down by an Act of Parliament to be exceeded.

On Question, Motion agreed to.