§ 6.44 p.m.
§ LORD DRUMALBYN rose to move, That the Draft Textile Council (Disssolution) Order 1971, laid before the House on November 16 last, be approved. The noble Lord said: My Lords, I beg to move that the Draft Textile Council (Dissolution) Order 1971, laid before the House on November 16 last, be approved. I suggest that, with the leave of the House, at the same time as we deal with this Order we should discuss the next one, the Textile Council Committee (Discharge) Order 1971. Both these Orders will come into operation on January 1, 1972, if approved by your Lordships and by another place.
§ The purpose of the first Order is to dissolve the Textile Council. In 1967 the name of the Cotton Board was changed to that of the Textile Council. The Cotton Board, as the noble Lord, Lord Brown, will remember very well, which operated during the war, was re-constructed as a development council under the provisions of the Industrial Organisation and Development Act 1947. The change of name in 1967 marked the enlargement of the scope of the Cotton Board to cover man-made fibre production and other materials outside those of the traditional Lancashire cotton industry. The Government are required under the 1947 Act to review development councils at five-yearly intervals in consultation with industry, to see whether they should continue and, if so, whether changes should be made in their constitutions. The Government have made a review of the Textile Council over the past 17 months. Out of the review has emerged a consensus that the Council is no longer suited either to the present needs of the industry or to those likely to develop in the future. The industry as a whole thought that those needs could best be met by a new non-statutory, voluntary, 965 policy-making body representing a wider range of textile interests. The Textile Council itself recommended its own dissolution provided that adequate arrangements were made to maintain those of its activities which it was in the industry's interest to continue. Accordingly, last February the Minister announced his decision that the Council should be wound up.
§ My Lords, the activities of the Council which are to be continued are these. First of all, a new non-profit-making company is to be formed to carry on the Council's Productivity Centre, and is to take over the buildings and equipment, plus a grant from the Council's surplus funds towards the provision of working capital. The centre should become self-supporting quite quickly. A large part of its income is at present derived from its own earnings. Secondly, the Council's statistical services will be carried on by the British Textile Employers' Association, aided also by an initial grant from the Council's surplus in the first place. Thirdly, small initial grants will be made from the same source to launch the new representative bodies, the British Textiles Confederation and the Cotton and Allied Trades Joint Committee, which will take over many of the policy-making and representational functions of the Council. Fourthly, the Shirley Institute will receive the full year's grant which it has been receiving through the levy to help it on its way, although the Council is not imposing any levy for the last six months of its life; that is to say, the Council is at present collecting the levy which was due in September. The Institute will also get a further payment of £50,000 out of the Council's surplus, subject to the availability of funds. Thereafter, the Institute will have to rely for revenue on charges made for its services together with voluntary subscriptions and the Government grant payable on these.
§ The Draft Order, my Lords, is quite straightforward. Article 2 provides for the dissolution of the Council on March 31, 1972, or such later date as the Secretary of State may direct, and for the vesting of property, rights and liabilities of the Council in the Secretary of State on that date. Article 3 provides that the last accounting year of the Council will end on February 29, 1972, so as to allow the Council a month to prepare 966 its report and accounts for the year. Article 4 provides that the Council's activities, other than those necessary to wind up its accounts, will terminate on February 29, 1972. Transactions during March will be taken into final dissolution accounts prepared by the Department of Trade and Industry. Article 5 gives the Council power, with the approval of the Secretary of State, to impose a last levy on persons carrying on business in the industry consisting of activities specified in Schedule 1 to the Cotton Industry Development Council Order. This is to cover any liabilities which cannot be covered by its remaining balances.
§
My Lords, the Special Orders Committee has drawn attention to the power conferred on the Council in this Article of the Order to impose a charge for this purpose. The power is exercisable only if the assets of the Council are insufficient to meet their liabilities and the expenses of winding up, and only with the approval of the Secretary of State. Your Lordships will recognise that vires are ultimately a matter for the courts, but the Committee expressed doubts whether Article 5 is intra vires because no maximum is specified to the amount of the levy so to be made. The Committee refers to Section 4(2) of the Act of 1947 which requires that
An order providing for such charges shall contain provision for limiting the amount of the charges that may be imposed, either by providing for their being computed so as not to yield more than a specified maximum amount during a specified period or by providing for their not being levied at more than specified maximum rates.
§ The Government are grateful to the Committee for having brought attention to the point, but the advice which the Government have received is that on a proper construction of the Act the doubt is not well founded. Perhaps noble Lords will allow me to explain why.
§
The Draft Order before your Lordships is made under Section 8(1) of the Act which allows the Secretary of State or Minister concerned to make an order for the dissolution of a Development Council, after consulting it and subject to the approval of both Houses. And Section 8(4) requires, inter alia, that the order shall make provision
for the imposition and recovery of charges as under Section 4 for the purpose of raising any amount by which the assets of the Council
967
may be insufficient to meet their liabilities and the expenses of winding up".
§ These are the very words used in Article 5 of the Order before your Lordships. It would seem that the Order would not comply with the Act unless such provision were made.
§
At first sight your Lordships' Committee has discovered what I may call a most ingenious paradox. Parliament has provided for the dissolution and winding up of a Development Council, but has made it impossible for it to be dissolved and wound up because it has attached an impossible condition; namely, that the dissolution order should prescribe a maximum amount to he raised by a winding-up levy before it is known what amount is required. However, Parliament, according to the advice I have received, did not err in 1947. I am advised that the words "as under" do not have the effect of requiring that the order should prescribe a maximum amount. They merely mean that there should be a power to raise a levy in the same way as under Section 4; that is, in the words of Section 4(1),
in such manner and through such channels, if any, as may be specified in the Order".
§ It may reassure your Lordships to know two things. First, that this is not the first dissolution order to be made under the Act; two earlier ones, which provided for a final levy in the same terms, were not challenged either in Parliament or in the courts; and, second, that there is in any case little likelihood of there being any need for such a levy, as the assets of the Textile Council are likely to exceed their liabilities on winding-up by a very considerable sum, as I have indicated. Nevertheless, I should again like to thank the Committee very sincerely for its vigilance and for the care with which it has examined the order.
§ My Lords, I turn now briefly to the second Order. The reason why the discharge of the Textile Council Committee needs a separate Order is that it was set up under a different Act of Parliament, the Cotton Industry Act 1959, introduced in another place by my noble friend Lord Eccles. The Committee, composed of the three independent members of the Cotton Board and two additional independents, was set up to prepare and administer schemes for the reorganisation 968 of the industry. Noble Lords will remember that the schemes provided for the scrapping of surplus machinery and for compensating both firms who did the scrapping and also workers who lost their jobs. The compensation was financed as to two-thirds by the Government and one-third out of levies imposed by the Cotton Board. Manufacturers were given two months in which to decide whether and what to scrap and five years to complete re-equipment projects qualifying for grant. All this gave the Committee a lot of work up to the middle 1960s, but recently it has had rather less to do. It has continued in being because the trusts established to look after the funds paid in by the industry were set up for ten years. The last trust deed lapsed this year, and the Committee, having disposed of its residual surplus, has now completed its task. This Order, if approved, will give it an honourable discharge.
§ I should like to express on behalf of Her Majesty's Government our very warm appreciation of the services of my noble friend Lord Rochdale, who was Chairman of the Cotton Board and of the Committee at the time, and of Sir Anthony Burney, who was the prime mover in devising the administrative and financial arrangements. Our thanks arc due to all who served on the Committee. I cannot speak too highly of the service rendered by the Cotton Board and the Textile Council over nearly 25 years. Their members included employers, trade union leaders and independents. How well and truly they laid the foundations and built up the edifice is shown by the anxiety shown by the industry that much of what they began and developed should continue—especially the Productivity Centre and the Statistical Service. By no means the least of the Council's achievements, perhaps the most important at this time, was the detailed study of the productivity and efficiency of the cotton and allied sector, carried out in response to a request made by the Board of Trade in 1966—no doubt made by the noble Lord himself.
§ The study took two and a half years to complete, and was published in March, 1969. It represents probably the most searching analysis of the position and prospects of the industry that has ever been produced. I should like, in particular, to pay tribute to Sir Frank Rostron, Chairman of the Board when 969 the study was undertaken; to Sir James Steel, the present chairman who carried it through; to Mr. T. D. F. Powell, the Director-General; and to Mrs. Caroline Miles, one of the independent members, who was responsible for much of the basic economic analysis. In inviting your Lordships to approve this Order, I hope that I am speaking for you all when I express our sincere gratitude to all the members of the Cotton Board, the Textile Council and the Committee, past and present. I beg to move.
§ Moved, That the Draft Textile Council (Dissolution) Order 1971, laid before the House on November 16 last, be approved.—(Lord Drumalbyn.)
§ 6.57 p.m.
§ LORD BROWNMy Lords, when I sat for five years on the Benches opposite it was my good fortune to be faced from these Benches by the noble Lord, Lord Drumalbyn. I continuously find him helpful, co-operative and, if critical, courteous. It is distressing to me to find on my occasional appearances on the Front Bench of my Party that I seem always to be dealing with something on which it is necessary for me to be critical. These two Orders are no exception. This is a destructive Government; but their destruction of the sort of things that I am particularly concerned with comes in a series of small doses. If we had been faced with one Bill which sought to abolish the Prices and Incomes Board, the Industrial Reorganisation Corporation, N.E.D.C., the Consumers' Association, investment grants, industrial liaison officers, regional employment premiums and the selective employment tax there would have been a great deal of opposition in your Lordships' House. People would have realised that a tremendous attack was being made on something which had been built up, with great effort, over the preceding years. But these things come in dribs and drabs.
Here we are faced with the dissolution of the Textile Council and the disintegration of its activities, some of them, to lesser bodies at a time when I think co-ordination of these activities should be the lesson of the day. This is extremely distressing. I am not over-impressed with the argument that the consensus of opinion in the industry was in favour of this dissolution. For some fifteen years I 970 was an independent member of the Furniture Development Council—probably now the only remaining Council of this kind. On two occasions, as one of a body of three representing the Council, I remember having to call upon the noble Lord, Lord Erroll of Hale (who was in the House earlier), to persuade him to take the necessary action to see that this Furniture Council continued. On those occasions, too, I believe that the consensus of opinion in the industry was against its continuance. Had it not continued we should not to-day have a furniture industry, for it benefited greatly from these activities. We have to-day, in the Furniture Industrial Research Association, quite the best research association of its kind in the world; and we have a country which is relatively free from the disgraceful furniture that used to be put on the market by manufacturers before the war.
I do not know too much about the operations of the Textile Council. I have heard some good things; I have not heard any criticisms. I took the trouble to look up the Order, and I read through it before getting on to my feet to-day. There are 18 parts to it, and if it had not been so late I should have read them all to your Lordships; for I think you would have agreed that there is not a single one of them which has not an objective that we all heartily endorse. Yet some of these are to be allocated to lesser bodies; some will be forgotten, and we well know that once these things become voluntary the keen members of the industry tend to pay while others do not pay, and the thing gradually runs down. This has happened repeatedly.
The reason for the original Act, the Industrial Organisation and Development Act 1947, was to rectify a situation which had grown up in this country and in which a zealous few struggled along to provide funds from which the lazy majority benefited. In the long run this resulted in co-operative endeavours to up-grade the standards of the industry and all the rest of it dwindling and disappearing. To-day, my Lords, we are in greater need of co-operative endeavour to make sure that our industries really get together and face the requirements of the situation; particularly because we are to enter the Common Market and we shall face much greater competition. This 971 seems to me a moment in history when to agree to the dissolution of the Textile Council is a very sad decision.
I am going to end what I have to say in criticism of this Order by quoting from a contribution made to The Times in January, 1968, by a man who knows a great deal about administration and organisation, Robert MacNamara, one-time boss of General Motors, I think, and then United States Defence Secretary, and now, I think, in charge of World Aid. In the article he said:
Some critics to-day worry that our democratic societies are becoming over-managed. I would argue that the opposite is true. Paradoxical as it may sound, the real threat to democracy comes not from over-management but from under-management. To under-manage reality is not to keep it free, it is simply to let some force other than reason shape reality. That force may be unbridled emotion, it may be greed, it may be aggressiveness, it may be hatred, it may be ignorance, it may be inertia, it may be anything other than reason. But whatever it is, if it is not reason that rules man, then man falls short of his potential.He goes on at a later stage to make the statement that:The observable fact is that most forms of social organisation are growing more complex, but complexity itself is not necessarily inferior to simplicity, and simple arrangements, by the mere fact of their simplicity are not invariably more democratic.My Lords, I think that this is a Government drive for simplicity; a drive to save a puny amount of money. The abolition of the Textile Council will save the industry, at an absolute maximum, £625,000—indeed it will not save that amount because, presumably, they will go on paying some proportion of that for voluntary endeavours. To banish a Council, whose reputation has stood enormously high for many years—the noble Lord, Lord Drumalbyn, was good enough to acknowledge that—in relation to an industry which needs help to a greater extent than possibly ever before, seems to me to be an act of the greatest folly. I wish it were customary that I should move to divide the House against this Order, but it is not and I shall not do so. But I hope that I have made my protest quite clear.
§ 7.3 p.m.
§ LORD DRUMALBYNMy Lords, the noble Lord, Lord Brown, has not 972 asked me to answer a case, but I would say that I quite understand his point of view when he says that he is not over-impressed with the argument that the Council was in favour of its own dissolution. But the fact is that it was, and it is taking steps to adapt its own voluntary arrangements in a way that it thinks should be done. As I said, the British Textile Confederation is to be a company limited by guarantee. The new company is in the process of being formed, and I hope that the noble Lord will reserve judgment until it has been formed and to see how it does. The Cotton and Allied Trades Joint Committee will be operating in the Lancashire sector alone, and the British Textile Confederation will, I understand, cover the whole sphere. If I remember rightly, I can recall the noble Lord, Lord Rhodes, regretting that the existing Textile Council, or rather, the Cotton Board, did not cover a wider area of the textile field. This, as I understand it, is what is going to happen now, and I hope that the noble Lord, even though he has not a right to speak again, will wish the new Confederation well, as I certainly do on this occasion.
§ On Question, Motion agreed to.