Sitting of 6 July 1939

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Stirling Burgh Order Confirmation Bill, Read the Third time, and passed.
Port Glasgow Burgh and Harbour Order Confirmation Bill,
Considered; to be read the Third time To-morrow.
London County Council (General Powers) [Money],
Considered in Committee.
[Colonel CLIFTON BROWN in the Chair.]
Resolved,
" That, for the purposes of any Act of the present Session authorising the London County Council, among other things, to construct certain embankments and embankment walls on the River Thames, it is expedient to authorise the payment out of moneys provided by Parliament of such sum as may be necessary to enable the Commissioners of His Majesty's Works and Public Buildings to pay to the London County Council such contribution towards the cost of the construction of the embankment wall (Work No. 1) to be authorised by the intended Act as may, with the consent of the Treasury, be agreed between the said Commissioners and the London County Council."—[The Chairman of Ways and Means.]
Resolution to be reported upon Monday next.

ORAL ANSWERS TO QUESTIONS.
  UNEMPLOYMENT.

    TERRITORIALS (CAMP SERVICE).
    Mr. Windsorasked the Minister of Labour whether he will have inquiry made into the case of an unemployed man, named Jackman, of 14, David's Terrace, Spynes Street, Hull, who, having been directed to an employer by the Hull Employment Exchange, was informed that
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    members of the Territorial Army could not be engaged; and whether he will take steps to ensure that unemployed men, liable for camp service as Territorials, shall not on that account be deemed unsuitable for employment?
    The Minister of Labour (Mr. Ernest Brown): I have made inquiries and find that on 15th June, Mr. Jackman and others were sent by the local Employment Exchange for interview by an employer who had notified vacancies for which they appeared to be suitable. When Mr. Jackman informed the employer that he was due to go to camp with his Territorial unit on 9th July he was told that he would not be engaged but that he would be favourably considered for any suitable vacancy available on his return from camp.
    Mr.Shinwell: Does the right hon. Gentleman regard as satisfactory a state of affairs that men who are about to join the Territorial Army should be refused employment? Does he propose to take any action in the matter?
    Mr. Brown:The firm concerned are the Ideal Boilers, Ltd., Hull, and I am communicating with them.

    GOVERNMENT DEPARTMENTS.
    Mr. Pilkingtonasked the Minister of Labour whether any arrangement with other Government Departments has yet been come to by which all labour shall be supplied through the exchanges?
    Mr. E. Brown: No, Sir.

    EXCHANGES (INFORMATION FROM APPLICANTS).
    Mr. T. Williamsasked the Minister of Labour why employment exchange managers demand particulars of marriage from persons who make no claim for their wives; and for what purpose this information is collected?
    Mr. E. Brown: It is frequently essential for the exchange to have such particulars if it is to give the applicant the fullest assistance of which it is capable; but it is not the practice to insist on these particulars being given unless they are required for the purpose of establishing a claim to benefit. I shall be glad to make inquiries if the hon. Member has any particular case in mind.
    Mr. Williams: Will the right hon. Gentleman ascertain why employment exchange managers desire this information—for what purpose it is required, when no claim is made?
    Mr. Brown: I shall be very glad to do so.

    DISTRESSED AREAS.
    Mr. Dingle Footasked the Minister of Labour whether the Government will invite Parliament to pass into law before the summer adjournment, or alternatively, before the end of the present session, the proposed Bill for providing assistance to distressed areas which are not at present scheduled as special areas under the Special Areas Act?
    Mr. E. Brown: I would ask the hon. Member to await the reply which is to be given by my right hon. Friend the Chancellor of the Exchequer to a question on the same subject by the hon. Member for Pontypool (Mr. Jenkins).
    Mr. Rhys Davies: Does not the right hon. Gentleman realise the unfairness as between those areas which are not scheduled but which are much more distressed now than some of the areas which are scheduled?
    Mr. Brown: That is another question. This is a loans facilities Bill, and it does not affect me.
    Mr. Foot: The right hon. Gentleman has said that this will be dealt with in a later question. What will happen if the hon. Member who has put down the question is not present when it is reached?

    ALLOWANCES.
    Mr. Errington: asked the Minister of Labour whether the sums of money paid during peace time to volunteers for the Auxiliary Fire Services will be excluded from the assessment of income for the purposes of the Unemployment Assistance Board?
    Mr. E. Brown: I assume that the hon. Member has in mind the bonus which local authorities are authorised to pay to members of the Auxiliary Fire Service who satisfactorily complete their course of training. The Board inform me that this bonus will not be brought into account as income in determining any allowance payable by the Board.
    Mr. George Hall: Can the right hon. Gentleman say why this should be treated differently from blind persons pensions and old age pensions?
    Mr. Brown: I will send the hon. Member the memorandum on the point.
    Mr. Gallacherasked the Minister of Labour whether he is aware that in certain areas Unemployment Assistance Board officers are refusing exceptional needs grant, even where such exceptional need is recognised, except on condition that the applicant submits to an officer of the Board a companying to supervise the purchases; and will he take steps to stop this practice?
    Mr. Brown: The Board inform me that the normal practice is to leave the applicant free to purchase the goods required, but that exceptionally it has been thought desirable to exercise some measure of supervision over the expenditure of the money in certain cases. I do not think any action on my part is necessary.
    Mr. Gallacher: Is it not a shameful thing that applicants should be forced to go and ask for assistance, and then have an officer accompanying them to see how they spend the money?
    Mr. Brown: There are certain cases where it is not a shameful thing. For instance, a case came to my notice recently where there were five children sleeping in one bed and a grant was made to enable another bed to be purchased. The applicant spent the money on other things, and it was necessary for a second grant to be made, and on that occasion, very properly, an officer went to see that a bed was bought.
    Mr. Gallacher: Is it not the case that in all walks of life one gets exceptional cases, and is it right that those exceptional cases should be used in order to encourage a practice that is growing, where it is not at all necessary?
    Mr. Brown: I do not accept the hon. Member's statement. The figures show that the practice, far from growing, is less than it was, but there are cases such as the one I have mentioned.
    Mr. Gallacher: Is it not the case that a whole lot of children would be left without care if hon. Members opposite had their way?

    TEESSIDE.
    Mr. Leslieasked the Minister of Labour what has been done in connection with the suggestion of the deputation from Teesside local authorities with respect to establishing industries in the area and securing a fair share of Government contracts?
    Mr. E. Brown: It is not possible by question and answer to deal adequately with the action taken upon or the consideration given to the numerous suggestions which were put before me by the deputation to which the hon. Member refers. The various items have since been discussed in some detail with the leader of the deputation, Sir William Crosthwaite, who had promised to send me some supplementary information about the manufacturing capacity of firms in the area.
    Mr. Leslie: Can the right hon. Gentleman give any idea as to whether anything has been done to get Government contracts for that area and to bring new industries to it?
    Mr. Brown: I should be glad to let the hon. Member have further information if he wishes to have it.

    NEW EXCHANGE, SOUTHWARK.
    Mr. Day: asked the Minister of Labour whether the working drawings for the erection of the new Employment Exchange for the borough of Southwark have now been completed; and when it is proposed to start work on the erection of the same?
    Mr. E, Brown: I would refer the hon. Member to the replies given to his questions of 4th May, 8th June and 15th June last on the same subject.
    Mr. Day: Can the right hon. Gentleman say when it will be convenient for him to give some further information to that given in the previous replies?

    BRANCH EXCHANGE, HUCKNALL.
    Mr. Cocksasked the Minister of Labour whether he is aware of the inadequacy of the premises used as a branch Employment Exchange at Ogle Street, Hucknall, Notts, and that insufficient shelter is provided for the men signing on; and whether he will take steps to secure more suitable premises?
    Mr. E. Brown: I am hoping to rehouse the Hucknall Employment Exchange in one building as opportunity permits, but I am not aware that the Ogle Street premises, which have housed the men's and boys' departments for over three years, are inadequate for their purpose. The timing system in operation is normally effective in eliminating congestion if adhered to punctually.
    Mr. Cocks: Is not the Minister aware that locally the premises are regarded as being very inadequate and that a day or two ago 56 men were kept waiting in pouring rain outside the building?
    Mr. Brown: I am not aware of that. Until the question appeared on the Order Paper, I had heard no complaints, although the building has been used since February, 1936.
    Mr. Day: Is not this very general at many exchanges?
    Mr. Brown: No, Sir.

    SPENNYMOOR.
    Mr. Bateyasked the Minister of Labour whether he is aware that unemployment in Spennymoor is increasing; that on 13th June, 1939, there were 2,864 persons unemployed against 2,480 on 12th June, 1938; and what steps he intends to take to provide employment in this district?
    Mr. E. Brown: I am aware that unemployment in Spennymoor was higher in June, 1939, than it was in June, 1938, but I would remind the hon. Member that it increased in July and August last year, when the unemployment percentage reached a figure of 29.8 per cent. Since then there has been a noticeable improvement and the percentage now stands at 23.1 per cent. In reply to the second part of the question, I would refer the hon. Member to the first part of the answer I gave the hon. Member for Houghton-le-Spring (Mr. W. J. Stewart) on 27th June.
    Mr. Batey: Will the Minister look again at the increase in the figures on the Order Paper and tell us what the Government or the Commissioners are going to do for this district, seeing that the Government and the Commissioners have not done anything so far?
    Mr. Brown: The hon. Member knows that I could not answer that question without having a Debate.

    TRAINEES.
    Mr. Gallacherasked the Minister of Labour whether he will make inquiries into the case of Mr. S. B. Horwood, 15, St. Francis Flats, Bridgway Street, N.W.I, who has had training at Belmont but for whom the Employment Exchange has made no effort to find employment; and will he take steps to see that more and better consideration is shown to this applicant?
    Mr. E. Brown: I am having inquiries made and will communicate with the hon. Member as soon as possible.
    Mr. Gallacher: Is the Minister aware that this applicant has a whole series of justifiable complaints that have been investigated by the National Unemployed Workers' Movement, and if I submit this material to him, will he go carefully into it?
    Mr. Brown: If the hon. Member will submit it, certainly I will go into it carefully.

  MILITARY TRAINING.
  Mr. Manderasked the Minister of Labour whether he is now able to make a statement with regard to the position of men at Willenhall, Staffordshire, who have been refused employment on the ground that they are liable to be called up under the Military Training Act, particulars of which have been furnished to him?
  Mr. E. Brown: I assume that the hon. Member is referring to the cases of two young men submitted by the Employment Exchange to a firm who had notified vacancies for locksmiths. I made certain preliminary inquiries and have written to the firm to invite their observations.
  Mr. Mander: Would the Minister regard with strong suspicion any action of this kind if it were taken by an employer?
  Mr. Brown: I prefer not to answer a hypothetical question. The firm is in the hon. Member's constituency, and perhaps he also will get into touch with it.
  Mr. Thorneycroft: Does the right hon. Gentleman realise that the Government
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  themselves are actively discouraging the police authorities accepting applicants who are likely to be called up under the Act, and with that example before them how does he expect private employers to do otherwise?
  Mr. Brown: Perhaps the hon. Member will put that question on the Order Paper.
  Mr. Shinwell: Where a man who has been called up has been refused employment, what action do the Government propose to take?
  Mr. Brown: We take the action laid down in the instructions I have drawn up with regard to evading the application of the Act. First of all it has to be established that the case is proved after both sides have been heard, not on an ex parte statement.
  Mr. Wedgwood Benn: How long does it take to make these inquiries? I have had two cases before the right hon. Gentleman for a fortnight.
  Mr. Brown: It is sometimes much more difficult to establish the truth than it is to make an ex parte statement.
  Mr. Mander: If I put down a question in a week's time will the right hon. Gentleman be able to give me an answer?
  Mr. Brown: I dare say I shall.
  Mr. Sorensenasked the Minister of Labour the estimated number of young men in the Borough of Leyton originally liable for Militia service and the number becoming liable each month; and whether he will give particulars respecting the number registered, their classification, the number rejected, the number already serving in His Majesty's forces and in the Territorial Army, the number of applications to hardship courts and the postponements and rejections, and the number of conscientious objectors?
  Mr. Brown: I regret that these statistics are not available for the Borough of Leyton.
  Mr. Sorensen: Cannot the right hon. Gentleman see his way to get statistics of this kind which are certainly required by many hon. Members, and would serve a very useful purpose?
  Mr. Brown: The hon. Member will understand the great pressure on my Department in this matter. We have an

  1465
  important and difficult task to do, and although at the moment I cannot promise the information, I will look further at the various types for which numbers are asked, and, in the light of our experience, see on which particular type it is best for the House to have the information.
  Mr. Sorensen: Do I understand that there is some possibility of this information being available sometime in the future?
  Mr. Brown: It cannot be in terms of boroughs, because, as the hon. Member knows, we are doing this through exchange areas.
  Mr. Dayasked the Minister of Labour whether he is aware that many militiamen will be deprived of their holidays through their training period falling during the time they are entitled to them; and will he introduce legislation ensuring that employers do not deprive militiamen of their holidays, or that they are postponed until the Militia service is completed?
  Mr. Brown: I would refer the hon. Member to the reply given to the hon. Member for South Nottingham (Mr. Markham) on 5th June.
  Mr. Day: Has the Minister no power to issue regulations covering this matter?
  Mr. Rhys Daviesasked the Minister of Labour whether he is aware that some men who have recently become unemployed, passed A.I for the Militia, and due to be called up for service in a month or two, are finding it difficult to secure work through employment exchanges merely because their employment would be for a comparatively short period; and will he issue instructions to employment exchange managers so as to ensure that these men may not be thus penalised?
  Mr. Brown: Arrangements have been made to meet as far as possible the position of men who are unemployed and therefore wish to be called up early, and the employment exchanges will in the meantime make every effort to put them in touch with employment.
  Mr. Lipson: Is my right hon. Friend aware that there are some unemployed men who have not yet received their medical examination, and will he take steps to expedite it, as it is impossible
  1466
  for them to get work until they have finished their training?
  Mr. Brown: If my hon. Friend knows of any cases, I should be glad if he would let me or the local exchange know. Normally, we would call them up according to their age, the upper age group first.
  Mr. Arthur Greenwood: Is it not the case that unemployed youths between 19 and 20 will find it increasingly difficult to obtain employment and that they will be debarred from receiving the advantages of reinstatement as there will be no job for them to be reinstated in after their military service, and will he consider this, as it seems to be increasingly clear that boys reaching the age of 19 are likely to be dismissed by employers?
  Mr. Brown: We shall do everything we can to meet the facts that arise from the calling up as it develops.
  Mr. Greenwood: Is it not a fact that the right hon. Gentleman has no power to deal with this problem, apart from legislation?
  Mr. Manderasked the Minister of Labour whether militiamen called up under the Military Training Act will be permitted to bring before either the Military Training (Hardship) Committees or the Military Service (Special Allowances) Advisory Committee, loss and hardships they have suffered through having been dismissed from their employment by reason of the fact that they are liable to be so called up, or through being refused employment for the same reason?
  Mr. Brown: The functions of the Military Training (Hardship) Committees are limited to determining applications for postponement of the liabilty to be called up for military training. Application for special monetary assistance may be made to the Military Service (Special Allowances) Advisory Committee by those who are unable, by reason of their being called up for training, to meet their financial obligations, whereby serious hardship is caused.
  Mr. Mander: If one of the reasons why hardship was caused was dismissal because the man was liable to be called up under the Act, would an allowance be granted in that case?
  Mr. Brown: Again, the hon. Member has put a hypothetical case. No such case has been sent to my right hon. Friend the Secretary of State for War.
  Mr Mander: Would this be a proper case to put forward for consideration?
  Mr. Dobbieasked the Minister of Labour whether he is aware that certain employers in the engineering industry are refusing to grant credit for holidays to young men in their employment for the six months period of Militia service; and what action he intends to take in the matter?
  Mr. Brown: The circumstances in which holiday credits are allowed in the engineering industry are determined by a voluntary agreement made between the employers' federation and the trade unions concerned; and any question of adjusting the agreement to meet new circumstances is a matter for the parties concerned.
  Mr. Dobbie: Where there is no agreement and where evidence is given of this practice, would the Minister be prepared to consider the position, from the standpoint of striking such firms off the list of Government contractors?
  Mr. Brown: I would like to look into it. I have no power myself about that matter.
  Mr. Dobbie: Would the Minister be prepared to consider it from a favourable angle on the lines I have indicated?

  INTERNATIONAL LABOUR ORGANISATION.
  Mr. James Hallasked the Minister of Labour whether Great Britain will now ratify the necessary conventions in implementation of the promise made at Geneva that no effort would be spared to bring about international co-operation to remove poverty from the lives of millions, and give direction to the general rise of standards of living?
  Mr. E. Brown: Great Britain has ratified 31 conventions, this number being exceeded only by Belgium, Spain and Chile. Other conventions are still under consideration and of those which it has not been found possible to ratify, there is in the majority of cases legislative provision and practice which substantially achieves the object of these conventions.
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  The most important exceptions are those relating to the reduction of hours of work which, having regard to their probable effect on wages, cannot be considered as being designed to combat poverty. The statement I made, to which the hon. Member refers, is in keeping with the frequent suggestions of the British Government that more attention should be devoted to the question of the remuneration of workers which is the basic factor affecting poverty. I am glad to say that at the recent conference, on the initiative of the British Government representative, a discussion took place on the subject of minimum wage fixing machinery.
  Mr. Hall: Does the right hon. Gentleman realise that the words are taken from a speech which he himself made at Geneva, and does he not think that special attention should be given to them by his Department?
  Mr. Brown: I have no doubt about the words, and I am glad to see that the hon. Member realises the good work we are doing there.
  Mr. Hallasked the Minister of Labour what views were expressed by His Majesty's Government at Geneva with regard to the functioning of the International Labour Organisation in the event of any future international crisis; and whether a copy of the report of the proceedings is available to Members of this House?
  Mr. Brown: His Majesty's Government have concurred in the principle that the International Labour Organisation should endeavour to function as completely as possible if an international crisis should intervene and even if such a crisis should unfortunately develop into war. The Governing Body's communication on this subject to the International Labour Conference appears in issue No. 5 of the Provisional Record of the Conference, copies of which are available in the Library.
  Mr. Mander: Is it intended that the International Labour Organisation should continue to function at Geneva in the event of a crisis?
  Mr. Brown: Not necessarily, though that, of course, is a matter for the International Labour Organisation itself. What we have done in common with other

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  Governments is to tell the International Labour Organisation that we will back them up in either circumstance.
  Mr. Leslieasked the Minister of Labour whether he will submit to the House a report of the proceedings at the International Labour Conference held recently at Geneva, showing what action British representatives took on the various motions, conventions and recommendations?
  Mr. Brown: A full record of the proceedings of the conference is given in the provisional records published each day during the conference by the International Labour Organisation, copies of which are in the Library.

  DISTRIBUTIVE TRADES, SCOTLAND (WAGES AND CONDITIONS).
  Mr. Thornton-Kemsleyasked the Minister of Labour whether he has considered the proposals of the joint conference of employers' and employés organisations of the distributive trades in Scotland regarding machinery for the regulation of wages and conditions of labour; and whether he will publish these in the same form as he intends to publish the English proposals?
  Mr. E. Brown: In the case of the proposals for England and Wales both the employers' and employés' organisations agreed to their publication. In the case of Scotland, however, certain of the employers' organisations are not in agreement with the proposals which have been sent to me and the employés' organisations have expressed a desire for a further meeting of the Joint Committee before any proposals are published.
  Mr. Thornton-Kemsley: Does my right hon. Friend agree that this conference was convened at his own request, that it did a great deal of work, and that there would be great indignation in Scotland if it were felt that my right hon. Friend was attempting to shelve these proposals?
  Mr. Brown: I agree that there would be indignation. I should be the first to feel it.

  ICE-CREAM VENDORS.
  Mr. R. J. Taylorasked the Minister of Labour whether in view of the recent
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  evidence respecting the conditions of employment by those engaged in the sale of ice-cream, he will hasten the introduction of legislation to give effect to the findings of the Retail Distributive Trades Conference?
  Mr. E. Brown: I would refer the hon. Member to the reply given to the hon. Member for the Sutton Division of Plymouth (Viscountess Astor) on 29th June.
  Mr. Taylor: Does the right hon. Gentleman appreciate the difficulties that this form of trading creates?
  Mr. Brown: Of course, I appreciate the difficulties, and I also appreciate that this is an issue affecting every shopkeeper and every one of the 2,000,000 distributive workers in the country. It is that problem that is before me in the joint report on Scotland and Wales of the Conference to which reference has been made.
  Mr. Leslie: Is there any hope of anything being done before the end of the Session?
  Mr. Brown: Decidedly, yes.

  NAVY, ARMY AND AIR FORCE INSTITUTE (EMPLOYéS).
  Mr. Gallacherasked the Minister of Labour whether he is aware that employés of the Navy, Army and Air Force Institute have continual pressure brought to bear upon them to prevent them joining their appropriate trade union; and will he take up the matter with the Canteens Board in order to recognise the trade unions affected and negotiate an agreement that would clarify the position of these workers?
  Mr. E. Brown: I am informed that employés of the Institute are at liberty to join a trade union if they so desire and that no pressure is being or has been applied to prevent them from doing so.
  Mr. Gallacher: Is not the Minister aware that, while there is no actual restriction against their joining, there is created an atmosphere in which there is intimidation, and will he not consider the last part of the question, and arrange for a trade union agreement through the Canteens Board?
  Mr. Brown: My information does not agree with the general assertions of the hon. Member.
  Sir Frank Sanderson: Can the Government be expected to control the atmosphere?

  SILICOSIS.
  Mr. James Griffithsasked the Secretary of State for the Home Department whether he has now received the reply of the Mining Association with reference to the operation of the Various Industries (Silicosis) Amendment Scheme, 1939; and whether he will state the nature of the reply?
  The Under-Secretary of State for the Home Department (Mr. Peake): As previously explained, my right hon. Friend was advised that he had no power to make the scheme retrospective. A collective undertaking of the kind indicated in the reply given to the hon. Member on 22nd June has been found to be impracticable; but I trust that, in view of the representations which have been made, any individual case that may arise will be sympathetically treated.
  Mr. Griffiths: Are we to gather from that reply that the Mining Association has refused to give an undertaking and have only indicated that if individual applications are made to certain colliery companies, they will raise no objection, but will encourage individual companies to operate the scheme?
  Mr. Peake: My approach was made through the Mining Association to the South Wales Coalowners' Association, because it is in that area that all the hard cases have arisen. The answer which I received was that some concerns were not members of the association, that, therefore, a collective undertaking could not be given and that the matter must be one for each individual colliery concerned.
  Mr. Griffiths: Are we to understand that the procedure now is that the representatives of the men in all these cases make application to the individual collieries concerned?
  Mr. Peake: I very much hope, in view of the representations which I have made on this subject, that individual cases will be sympathetically treated by the collieries concerned.

  FIRES, LONDON.
  Mr. Thorneasked the Secretary of State for the Home Department whether he can now give more information in connection with the fire at the offices of Messrs. Schenkers, shipping agents, Queen Victoria Street, on Monday, 26th June, when a young girl lost her life; and whether there were proper iron escape staircases at the back of the building?
  The Secretary of State for the Home Department (Sir Samuel Hoare): I understand that the coroner's investigations under the City of London Fire Inquests Act are not yet complete, and I cannot make any further statement at present.
  Major Procterasked the Home Secretary whether he has yet received any report from the city police authorities with regard to the numerous outbreaks of fire which have recently occurred in warehouses and other buildings in the city; and whether he is satisfied that these fires were accidental and not caused by the so-called Irish Republican Army?
  Sir S. Hoare: The answer to the first part of the question is in the affirmative. Inquests in the case of two of the recent series of fires are being held by the City Coroner on the 7th and 13th instant respectively; inquiries in the case of the third fire are still proceeding and the date of the inquest in that case has not yet been fixed. I regret, therefore, that I am not in a position to make any statement at present as to the causes of any of these fires.
  Major Procter: Can we be assured that every step is being taken to prevent these lawless bombsters from injuring British property?

  REFUGEES (AGRICULTURAL EMPLOYMENT).
  Mr. Hannahasked the Home Secretary whether, in view of the present conditions in the countryside, he will take steps to facilitate the entry of refugees desiring to work on the land?
  Sir S. Hoare: I would refer my hon. Friend to the reply given to the hon. Member for Cheltenham (Mr. Lipson) on 12th June by my right hon. Friend the Minister of Agriculture. The question of the temporary employment of refugees

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  already in this country to meet any shortage of agricultural labour has been considered in consultation with the Ministry of Agriculture and the Ministry of Labour. Arrangements have been made whereby refugees admitted to this country pending emigration will be allowed to assist in harvesting operations during the summer and autumn months on payment of not less than the appropriate statutory minimum wage where the Ministry of Labour report a shortage of agricultural workers for seasonal work or where vacancies for such work which have been notified cannot be filled.
  Mr. Hannah: Would it not be desirable that old England should follow New England in filling up her countryside again with really desirable immigrants?
  Viscountess Astor: Is it not true that there has been great difficulty in getting Jewish immigrants to go on the land, because that race is not particularly given to agriculture?
  Sir S. Hoare: I do not think that statement is borne out by our own experience. There is a camp at Richborough for Jewish refugees, and I understand that a large number of those young men are anxious to work upon the land and are training themselves to be fitted for that work.
  Viscountess Astor: Is it quite certain that that is the case? I have been in touch with this camp, and I am informed that they do not find it easy to get these young men to go on the land.
  Mr. Foot: Is it not a fact that there are many refugees not of Jewish origin, and should they not be considered also?

  JUVENILE COURT, WEST HAM.
  Mr. Thorneasked the Home Secretary how many juveniles have appeared before the West Ham Juvenile Court from 1st January, 1935, to the latest available date; how many were acquitted; how many dismissed on payment of costs; how many put on probation; and how many sent to approved schools?
  Sir S. Hoare: As the answer contains a table of figures I will, with the hon. Member's permission, circulate it in the Official Report.
  Following is the answer:
  I am informed by the clerk to the justices that the number of children and young persons brought before the West Ham Juvenile Court during the period 1st January, 1935, to 30th June, 1939, either as offenders or as being in need of care or protection was 1,477. I am also informed that they were dealt with as follows:

  Acquitted

  76

  Dismissed under the Probation of Offenders Act, 1907, with or without costs

  918

  Placed on probation under the Probation of Offenders Act, 1907

  293

  Placed under supervision under Section 62 of the Children and Young Persons Act, 1933

  15

  Committed to the care of a Fit Person

  22

  Parents bound over

  4

  Charge withdrawn

  6

  Adjourned sine die

  5

  Sent to Approved Schools

  138

  1,477

  ALIENS.
  Mr. Thorneasked the Home Secretary the number of aliens registered in this country from Japan, Spain, Italy, Austria and Germany?
  Sir S. Hoare: As the answer contains a table of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
  Following is the answer:
  The numbers on 30th May, 1938, were as follow:

  Country.

  Males.

  Females.

  Total.

  Japan

  900

  193

  1,093

  Spain

  1,516

  1,312

  2,828

  Italy

  12,173

  8,116

  20,289

  Austria

  2,845

  13,161

  16,006

  Germany

  9,939

  11,932

  21,871

  The figures for 1939 are not yet available.

  CHIEF CONSTABLES (CONFIDENTIAL INFORMATION).
  Mr. McGheeasked the Home Secretary whether, before he gives final approval to the proposed increase in the salary of the chief constable of Sheffield,

  1475
  he will cause investigation to be made into the circumstances in which a private and confidential letter addressed by the hon. Member for Attercliffe (Mr. C. Wilson) to the chief constable asking for investigation into the conduct of a constable was disclosed to the constable concerned, with the result that the hon. Member for Attercliffe has been threatened with a writ for libel; and whether he will circularise chief constables with a view to the prevention of the disclosure of confidential information in such circumstances?
  Sir S. Hoares: As I have already informed the hon. Member for Attercliffe (Mr. C. Wilson), I fully recognise the importance of the question raised in this case, but as legal proceedings are pending it would be wrong for me to make any comment at this stage on the particular case to which the hon. Member refers. I may say, however, that I am in complete sympathy with the view that a person should be able to make a bona fide complaint against a member of a police force without exposing himself to the risk of legal proceedings. I believe the importance of this is generally recognised, but I propose to issue to chief constables a circular of advice on the subject.

  FACTORY ACT, 1936 (REGULATIONS).
  Mr. Rhys Daviesasked the Home Secretary whether, under the provisions of Section 71 of the Factory Act, 1936, he intends to lay regulations before Parliament; and, if so, when?
  Mr. Peake: The making of regulations under Section 71 (2) depends on the results of the public inquiries directed under the Section, some of which have not yet been held or completed. Proposed regulations have to be published in draft under the Rules Publication Act, and copies of the draft would be available to hon. Members in the usual way. If, after considering representations as to the draft, my right hon. Friend makes the regulations, they would then be laid before Parliament as provided for in the Factories Act. Regulations relating to the cotton, woollen, and carpet industries have been issued in draft.
  Mr. Davies: We may take it, therefore, that the final word as to whether these
  1476
  regulations shall become operative rests with Parliament?
  Mr. Peake: That is so. Under Section 129 of the Factory Act, the regulations have to be laid before Parliament.

  CONVICTION, SUNDERLAND.
  Dr. Edith Summerskillasked the Home Secretary (1) whether it has been brought to his notice that a 21-year-old Sunderland woman, mother of three children, whose husband has been unemployed for nine years, has been sent to prison with her baby three weeks old for stealing 13s. 11d. from a gas-meter; and whether, as this woman has neither physically nor mentally recovered from her confinement, he will order her release;
  (2) whether his attention has been drawn to the comments of the magistrate who sentenced Florence McDonald, together with her three-weeks-old baby, to prison; and, as this is the second case of its kind within a few months in this court, whether he will now issue a circular to all magistrates informing them that no woman is fit to plead her case in a law court within two or three weeks of child-birth?
  Sir S. Hoare: As the case in question has aroused considerable interest, I hope the House will excuse the length of my reply.
  I am informed that Mrs. McDonald, who is 24 years old and not 21 as stated in the question, pleaded guilty to the offence of stealing from a gas-meter. She had previously been convicted on six occasions and on 21st January, 1937, had been placed on probation for two years for stealing from a gas-meter. While on probation, and when there was no question of her suffering from the effects of child-birth, she committed another offence of stealing from a gas-meter and was sentenced in respect of that offence to three months' imprisonment. Before deciding how to deal with her in respect of the present offence the Justices made full inquiries as to her home conditions and her general character. They were informed that the home conditions were deplorable and that although Mrs. McDonald had received assistance and advice there had been no improvement in her home. Probation had been tried but that had failed to deter the defendant from repeating her

  1477
  offences. In these circumstances the Justices came to the conclusion that it was in the defendant's own interests that she should receive a sentence of imprisonment.
  There are obvious objections to sentencing to imprisonment women with young babies, but there are, as the House will appreciate, circumstances which may make such a course inevitable notwithstanding the objections. In the present case I regret that after the most careful and sympathetic consideration of all the circumstances I can find no grounds which would justify me in advising any interference. Mrs. McDonald and her baby are located in the Women's Hospital at Durham Prison and the Medical Officer reports that there is nothing to indicate that Mrs. McDonald is suffering from any ill effects from her confinement.
  As regards the question of issuing a circular to the courts about defendants who may be suffering from the effects of childbirth, I have no doubt that if it were represented to a court, whether by a prison doctor in the case of persons remanded in custody or by the defendant's own medical adviser in the case of persons released on bail, that the defendant was temporarily unfit from any cause, the court would adjourn the case until the defendant had recovered. In cases of women recovering from childbirth an arbitrary standard of two or three weeks would seem unsuitable and would imply that after a period of three weeks such women are fit in all cases to plead. I am, however, in sympathy with the point of view of the hon. Member and I am considering the question whether any advice could usefully be given to the courts as to the method of dealing with women with young babies who are charged with offences.
  Dr. Summerskill: Is it not a fact that there is not one medical authority who, perhaps, has advised the right hon. Gentleman who has stated that women are physically and mentally normal two or three weeks after childbirth? Therefore, would he not regard it as a cardinal principle in administering justice that no woman within two or three weeks of her confinement should be asked to go near a. court of law? May I ask, further, whether the right hon. Gentleman will expedite this circular?
  Sir S. Hoare: I certainly contemplate no delay in issuing the circular. I have
  1478
  given very careful and sympathetic consideration to this case, and I think, on the whole, I had better not add anything to the very full answer I have given.
  Mr. Gallacher: Will the right hon. Gentleman arrange to have this woman and baby sent to a home instead of to prison?
  Viscountess Astor: I have had six babies—[Interruption]
  Mr. Gallacher: You never had to steal from a gas meter to get something to eat?
  Hon. Members: Shut up !
  Mr. Gallacher: You are a gang of blackguards.
  Mr. Speaker: If the hon. Member for West Fife (Mr. Gallacher) cannot behave himself, I shall have to deal with him, severely.

  MINISTERS (MILITARY SERVICE).
  Mr. Manderasked the Prime Minister whether he will state the number of Members of the Government for whom arrangements will have to be made for carrying on their duties in case of war owing to the fact that they hold commissions in the Navy, Army, or Air Force?
  The Prime Minister (Mr. Chamberlain): No, Sir.
  Mr. Mander: Will the right hon. Gentleman be good enough to indicate what Ministers, in addition to the Civil Lord of the Admiralty and the Under-Secretary for India, come within the category of Ministers for whom special arrangements would have to be made?
  The Prime Minister: I cannot answer that.
  Mr. Mander: Can the right hon. Gentleman answer it if I put a question down?
  The Prime Minister: I have given consideration to it, and I do not see the necessity for it.

  CRIMINAL JUSTICE BILL.
  Mr. Vyvyan Adams: asked the Prime Minister when it is proposed to take the remaining stages of the Criminal Justice Bill?
  The Prime Minister: I regret that I cannot at the moment add to the answer which I gave to my hon. Friend on 22nd June last.
  Mr. Adams: If this Bill is not to be taken before October, could my right hon. Friend suggest to any hon. Members who may be in need of holiday literature that they should refresh their memories by rereading the report on flogging?

  MINISTERS AND DIRECTORSHIPS.
  Mr. Ellis Smithasked the Prime Minister whether he has now considered the memorandum submitted to him by the hon. and learned Member for North Hammersmith (Mr. Pritt), and what action is it proposed to take?
  The Prime Minister: I hope to be in a position to make a statement shortly.

  CIVIL DEFENCE.

    AIR-RAID SHELTERS (COST).
    Mr. Stokesasked the Lord Privy Seal whether, in view of the facts disclosed on prices being paid for punched angle-irons for Anderson shelters, he will obtain a review of prices for all uncompleted contracts and ensure a reduction of price in all future contracts?
    The Lord Privy Seal (Sir John Anderson): I do not know to what disclosures the hon. Member refers, but it was part of the arrangement made when the first comparatively small contract was placed that there should be such a review and that the price to be paid under subsequent contracts should be adjusted in the light of the facts thereby ascertained.
    Mr. Stokes: Does the Minister remember stating that he had ordered 1,400,000 shelters at £7 apiece when it was stated by competent authorities that they should not cost more than £5, and that on that account I asked for a revision?
    Sir J. Anderson: I do not think the hon. Gentleman's recollection is correct. I do not think I said that 1,400,000 had been ordered at any particular price. The first contract was much smaller than that. The revision of price based on the cost investigation to which I have referred will apply to the remaining
    1480
    contracts, amounting in total to 2,400,000.
    Mr. Stokes: Is the Minister in a position to say at what price these new contracts are to be placed?
    Sir J. Anderson: It was stated some time ago that it is contrary to long-established practice to give prices.

    FABRICATED STEEL (PRICE).
    Mr. Stokesasked the Lord Privy Seal which of the members of the Import Duties Advisory Committee is advising him on the price of fabricated steel; and what are his qualifications for this task?
    Sir J. Anderson: The Import Duties Advisory Committee as a whole are responsible for cost investigation and for advising upon prices. For some years past they have been engaged in work of a similar nature. They are assisted by a staff of experienced civil servants, and have the benefit of the services of an independent accountant of high standing.
    Mr. Stokes: Is not the Minister aware that not one member of the Import Duties Advisory Committee is competent to advise on the price of fabricated steel?

    COMPENSATION CLAIMS.
    Mr. Thorneycroftasked the Lord Privy Seal whether he will include in any scheme for the compensation for death or injury sustained by members of Civil Defence organisations, or for their dependants, a provision entitling any person aggrieved by a decision of the Treasury to seek his remedies under such scheme, in a county court?
    Sir J. Anderson: No, Sir. I do not think that such a provision would be appropriate, even if it were within the terms of the Clause, which I am advised is more than doubtful.
    Mr. Thorneycroft: Is my right hon. Friend aware that there is a growing body of opinion which dislikes this system whereby Ministers set themselves up as judges in their own courts, and will he either reconsider the matter or give a reasonable explanation for refusing this request?
    Sir J. Anderson: The request in the question related to a specified tribunal. I said in reply to a previous question that persons who may be aggrieved by the

    1481
    decision of the Treasury could have recourse to the courts. I think the matter is better left there until the draft scheme is available and can be discussed.
    Mr. Silverman: Can the right hon. Gentleman say what recourse an aggrieved person can possibly have to the courts when the Act under which the regulations are made expressly excludes any litigation in the courts for these matters?
    Sir J. Anderson: Perhaps the hon. Member will put a question down.

    TRENCHES.
    Mr. Shinwellasked the Lord Privy Seal whether he can make a statement on the progress made in the construction of air-raid trenches; and when he expects the work to be completed?
    Sir J. Anderson: If, as I presume, the hon. Member is referring to the reconstruction of the trenches dug in September last, I am informed that over the country as a whole the position is now satisfactory. There are, however, some areas in which the work of reconstruction has been held up, because of special local difficulties, and I am not in a position to say when the work will be finally completed in all these areas.
    Mr. Shinwell: Is the right hon. Gentleman aware that recently work was commenced on some of the trenches in public parks, particularly in the London area, and has now been suspended; and can the right hon. Gentleman arrange for some supervision by his own Department?
    Sir J. Anderson: I have been in touch with the situation, and I think I know the case which the hon. Gentleman has in mind. It was a case where a contractor, after starting the work, defaulted and the local authority had to make a further contract and had to take special steps to ensure that work under the new contract would be completed.
    Mr. Shinwell: In order to reassure the public, is it not desirable that the right hon. Gentleman should give some approximate date when the work will be completed?
    Sir J. Anderson: Perhaps the hon. Gentleman will put a question down with regard to that.
    Mr. Shinwell: Is not the right hon. Gentleman aware that that is exactly what I have asked in the last part of the question?
    Sir J. Anderson: The hon. Gentleman will appreciate that I cannot give within the limits of a reply the dates for all these works.
    Mr. Pilkington: Is my right hon. Friend aware that there are also congested areas in South Lancashire where there are no trenches at all, and can he expedite the creation of trenches there?
    Sir J. Anderson: That is a different question.

    SCHOOLCHILDREN.
    Mr. Sutcliffeasked the Parliamentary Secretary to the Board of Education whether it is the intention of the Board that in neutral areas air-raid shelters for schoolchildren should be provided by the education authorities, or whether on the warning of an air-raid the children should be sent home; and if shelters are to be provided, in what respect their provision by an education authority differs from the provision of similar shelters by a public authority which obtains a much higher grant.
    The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): As regards the first part of the question I would invite the attention of my hon. Friend to paragraph 8 of the Board's Circular 1467 which I sent to him last week, in which strong emphasis is laid on the undesirability of sending children home from school after an airraid warning is received. As explained in the Circular, the responsibility for providing suitable protection for the children at the schools rests with the local education authority. With regard to the second part of the question, I would refer my hon. Friend to the replies given by my right hon. Friend the Lord Privy Seal on 25th May and 8th June to the hon. Members for Farnworth (Mr. Tomlinson) and for Cheltenham (Mr. Lipson).
    Mr. Sutcliffe: In view of the great additional responsibility which is incurred by education authorities, should they not receive a much larger grant on similar lines to the grant received by local authorities?
    Mr. Lindsay:I think there is a difference in the case of the additional accommodation provided by education authorities, which is on top of the general responsibility of the local authorities. It is a matter which we did discuss at some length previously.

    EVACUATION.
    Mr. W. Joseph Stewartasked the Minister of Health whether he is now in a position to state which additional areas in Durham are to be evacuated in the event of war; and what parts of this country are to be listed as receiving areas?
    The Minister of Health (Mr. Elliot): In accordance with the review mentioned in my answer to the hon. Member for Everton (Mr. Kirby) on 18th May, plans are now being made for evacuation to take place in the event of war from portions of the following additional areas in Durham: the county boroughs of South Shields, Sunderland and West Hartlepool, the boroughs of Hartlepool and Jarrow, the urban districts of Hebburn, Felling and Whickham. As regards the second part of the question, the receiving areas in the county of Durham have not been altered. They comprise the urban districts of Barnard Castle, Bishop Auckland, Brandon and Byshottles, Crook and Willington, Shildon, Spennymoor and Tow Law, and the rural districts of Barnard Castle, Chester-le-Street, Darlington, Durham, Easington, Lanchester, Sedge-field, Stockton, Sunderland and Weardale.
    Mr. Stewart: In formulating these plans for evacuation is the Minister working in conjunction with the local authorities in the areas affected?
    Mr. Elliot: Oh, yes, I am working closely with them.
    Mr. Shinwell: Does the Minister regard the Easington area as a suitable reception area, seeing that it was bombarded during the last War and is on the sea coast?
    Mr. Elliot: As has been frequently explained the object is to disseminate people from congested areas into more scattered areas. They will certainly be safer in the more scattered areas than in the more congested areas.
    Mr. Dayasked the Minister of Health whether he has now reviewed the
    1484
    possibility of extending the scheme for the evacuation of children under five years of age; to what further areas he now proposes to extend it; and will he give particulars of what records are kept at present of mothers who have registered their children?
    Mr. Elliot: Children under five are one of the priority classes included in all official evacuation schemes. The general scheme of evacuation is being extended to parts of the areas mentioned by name in the reply that I gave on 18th May to the hon. Member for Everton (Mr. Kirby) and to certain of those areas referred to but not named in that reply. I am not yet in a position to give complete details. As regards the last part of the question the registers of those who wish to be included in the plans are compiled and kept by the evacuating local authorities, and I am asking each evacuating authority to let me have a report showing the number of each priority group registered for evacuation.

    CAMPS.
    Mr. Graham Whiteasked the Minister of Health what progress has been made in implementing the provisions of the Camps Act?
    Mr. Creech Jonesasked the Minister of Health how many camps under the Camps Act have been started, and where; how many are likely to be constructed and to what purpose they are to be put; and whether he has given any direction to the Camps Corporation to proceed only with school camps?
    Mr. Hepworthasked the Minister of Health whether any of the evacuation camps have yet been started; whether all the sites have been selected; and whether he is certain, both in the interests of public protection and of employment for the younger people, that sufficient energy is being shown in their provision?
    Mr. Elliot: As the answer is somewhat long I will circulate it in the Official Report.
    Following is the answer:
    The National Camps Corporation, Limited, which has been recognised as the operative company for England and Wales under the Camps Act, 1939, has considered 155 sites for camps, all of which have been personally inspected by either the 'chairman or the managing director,

    1485
    and the majority also by departmental officers. Between 30 and 40 camps are likely to be constructed in England and Wales. They are to be used as school camps in peace time and as evacuation camps in time of war The Camps Corporation are required, by the terms of their agreement, so far as possible to give preference in letting the camps to education authorities desiring to use them as school camps. Thirty sites have so far been found suitable. Two have been given to the corporation, and the others have either been purchased, or are the subject of negotiations for purchase. The camps are being built of standardised units which have been designed by Mr. Tait, of Messrs. Sir John Burnet Tait and Lone, consulting architects to the corporation. All the buildings are of Canadian cedar with cedar shingle roofs. Each camp will be laid out on the site by an architect chosen from a panel drawn up in conjunction with the Royal Institute of British Architects. The contracts for making the woodwork for 30 camps were let on 22nd May to four different firms. The delivery of these units has already begun, and, proceeding at the rate of two or three a week, will be spread over some four months. The construction of four camps has been started, one in Hampshire, one in Buckinghamshire, and two in Oxfordshire. It is hoped that seven more will be begun in the course of the next fortnight. The contracts for the other camps will be let as the plans for the layout of the camps are approved. In all cases the local authorities are being consulted, in accordance with the provisions of Section 3 of the Camps Act. It is anticipated that the first camp will be completed by the end of August, and I am satisfied that all possible expedition is being used.

  EDUCATION.

    LAND ACQUISITION, ABERYSTWYTH.
    Mr. J. Griffithsasked the Parliamentary Secretary to the Board of Education the reasons for the price of £800 per acre paid for land purchased for school purposes at Panglaid Road, Aberystwyth, and whether his officers are satisfied that the price is a reasonable one in such an area?
    Mr. Lindsay: The land was acquired by compulsory purchase and the price was
    1486
    fixed by the official arbitrator. No information is available as to the reasons for the price fixed, but I see no ground for questioning the price having regard to the scarcity of land suitable for building in Aberystwyth.
    Mr. Griffiths: Does the hon. Gentleman regard £800 an acre as a reasonable price in a place like Aberystwyth, and does his Department fully approve the payment of such a price in that area?
    Mr. Lindsay: The hon. Gentleman will understand that this price is fixed by the arbitrator and there are geographical reasons in Aberystwyth which make the purchase of suitable land particularly difficult.
    Mr. Griffiths: Does the hon. Gentleman really suggest that the arbitrator has definitely fixed this price, and does the Department approve a price of this kind, which is regarded in all ways as fleecing the public?
    Mr. Foot: Could the Minister say the amount of rates on this land?
    Mr. Lindsay: The land is agricultural land.
    Mr. Griffiths: Do I gather that the official arbitrator has fixed £800 per acre as the value of agricultural land in Aberystwyth?
    Mr. Lindsay: That was the price fixed, and I can only say that the original price was a very much larger one. I said on an earlier occasion that this was agricultural land, so there is nothing new in that.
    Mr. Griffiths: I wish to give notice that, owing to the unsatisfactory nature of the reply, I shall raise this matter on the Adjournment at the earliest opportunity.

    SCHOOL-LEAVING AGE.
    Mr. Whiteasked the Parliamentary Secretary to the Board of Education whether he has any information as to the extent to which employers have decided not to employ young persons under the age of 15, in view of the coming into force of the appointed day under the Education Act, 1936?
    Mr. Lindsay: I understand that a number of employers have decided not to employ children under the age of 15, but the Board have no information of the extent to which this has been done.
    Mr. Gordon Macdonaldasked the Parliamentary Secretary to the Board of Education the number of children for whom provision has been made in the Lancashire County Council area as the result of raising the school-leaving age on 1st September next; the number of applications for exemptions; and how many of these were granted?
    Mr. Lindsay: The policy of the Lancashire County Council is to provide for all children between the ages of 11 and 15 in reorganised senior schools. There are 47,000 children of these ages in the county area. Before the passing of the Education Act, 1936, 19,000 places had been provided in reorganised senior schools, and since that date about 14,000 additional places have been or are in course of being provided. It is expected that the remainder of the senior school places required will be provided in the next three years. In the meantime accommodation is available in departments which also take younger children for those children of 11 to 15 for whom senior school places are not yet available. I understand that no applications for employment certificates under the 1936 Act have yet been received by the authority.

    BLACKLISTED SCHOOLS.
    Mr. Dunnasked the Parliamentary Secretary to the Board of Education how many elementary schools are still on the black list; where they are situated; what education authority is responsible; and how many are provided or non-provided schools?
    Mr. Lindsay: The number of public elementary schools still on the Board's list of schools with defective premises is 797, of which 225 are provided schools and 572 non-provided schools. I will circulate in the Official Report a list showing the number of schools in the area of each local education authority.
    Mr. Dunn: Will the hon. Gentleman say what steps are being taken at the present time to correct the position?
    Mr. Lindsay: A very great variety of steps is being taken. The main reason for defective schools being in existence at the present time is the failure to complete the reorganisation, and the only answer to that is to press on with reorganisation. In the case of schools which can be slightly altered, where reorganisation will
    1488
    not affect the problem, the answer is to do away with the obvious difficulties, and that work is being proceeded with.
    Following is the list:

    Number of Public Elementary Schools on the "Black List" in England and Wales on 30th June, 1939.

    Number of Schools.

    Local Education Authority.

    provided.

    Non-Provided.

    Bedfordshire

    2

    2

    Buckinghamshire

    —

    3

    Cambridgeshire

    1

    3

    Isle of Ely

    2

    —

    Cheshire

    —

    7

    Hyde

    —

    1

    Birkenhead

    —

    5

    Stockport

    —

    2

    Wallasey

    —

    1

    Cornwall

    3

    —

    Cumberland

    18

    31

    Whitehaven

    —

    1

    Workington

    —

    3

    Derbyshire

    6

    15

    Chesterfield

    —

    3

    Derby C.B

    —

    4

    Devon

    18

    31

    Plymouth

    8

    3

    Dorset

    1

    1

    Poole

    —

    2

    Weymouth and Melcombe Regis

    —

    1

    Durham

    26

    9

    Hartlepool

    1

    —

    Stockton-on-Tees

    —

    1

    Hebburn

    —

    1

    South Shields

    —

    1

    Essex

    —

    —

    Colchester

    —

    1

    Southend-on-Sea

    2

    —

    West Ham

    3

    4

    Gloucestershire

    2

    2

    Hampshire

    —

    —

    Aldershot

    —

    1

    Gosport

    —

    1

    Portsmouth

    —

    1

    Southampton

    —

    1

    Herefordshire

    1

    2

    Hertfordshire

    1

    7

    Huntingdonshire

    2

    5

    Kent

    6

    7

    Chatham

    —

    1

    Dover

    —

    2

    Gillingham

    1

    —

    Gravesend

    1

    —

    Royal Tunbridge Wells

    —

    1

    Lancashire

    2

    29

    Ashton-under-Lyme

    —

    1

    Chorley

    —

    3

    Crosby

    —

    2

    Darwen

    —

    1

    Eccles

    —

    2

    Middleton

    —

    2

    Mossley

    —

    2

    Radcliffe

    —

    1

    Swinton and Pendlebury

    —

    1

    Chadderton

    1

    2

    Blackburn

    —

    2

    Bootle

    —

    2

    Burnley

    1

    2

    Liverpool

    2

    29

    Manchester

    —

    28

    Number of schools.

    Local Education Authority.

    Provided.

    Non-Provided.

    Lancashire—cont.

    Preston

    —

    1

    Rochdale

    —

    3

    St. Helens

    —

    6

    Salford

    1

    5

    Southport

    —

    2

    Warrington

    1

    3

    Wigan

    —

    3

    Leicestershire

    1

    5

    Lincs-Holland

    1

    4

    Lincs-Kesteven

    —

    4

    Lincs-Lindsey

    2

    4

    London

    —

    2

    Middlesex

    1

    —

    Enfield

    —

    1

    Norfolk

    1

    1

    King's Lynn

    —

    1

    Northamptonshire

    3

    14

    Northampton C.B.

    —

    4

    Northumberland

    5

    7

    Wallsend

    —

    1

    Newcastle-upon-Tyne

    —

    3

    Tynemouth

    1

    1

    Nottinghamshire

    2

    15

    East Retford

    —

    2

    Newark

    —

    3

    Nottingham C.B.

    —

    3

    Oxfordshire

    —

    7

    Banbury

    1

    1

    Salop

    —

    10

    Somerset

    7

    17

    Staffordshire

    3

    5

    Bilston

    —

    1

    Wednesbury

    —

    1

    Cannock

    —

    4

    Coscley

    1

    —

    Smethwick

    —

    1

    Stoke-on-Trent

    —

    1

    Suffolk (East)

    —

    7

    Suffolk (West)

    1

    11

    Surrey

    1

    2

    Sussex (East)

    —

    —

    Hastings

    —

    1

    Warwickshire

    —

    2

    Nuneaton

    —

    1

    Birmingham

    —

    5

    Coventry

    —

    1

    Westmorland

    1

    1

    Wiltshire

    3

    5

    Worcestershire

    —

    10

    Kidderminster

    —

    1

    Worcester C.B.

    —

    1

    Yorkshire (East Riding)

    —

    —

    Kingston-upon-Hull

    —

    2

    Yorkshire (North Riding)

    1

    1

    Middlesbrough

    1

    1

    Yorkshire (West Riding)

    18

    26

    Batley

    1

    1

    Keighley

    —

    3

    Ossett

    1

    1

    Spenborough

    —

    2

    Bradford

    —

    1

    Dewsbury

    —

    1

    Doncaster

    1

    —

    Huddersfield

    —

    1

    Sheffield

    3

    9

    Wakefield

    —

    2

    Breconshire

    2

    2

    Caernarvonshire

    —

    3

    Cardiganshire

    3

    6

    Number of Schools.

    Local Education Authority.

    Provided.

    Non-Provided.

    Carmarthenshire

    3

    5

    Carmarthen B.

    1

    —

    Llanelly

    2

    —

    Denbighshire

    —

    4

    Flintshire

    2

    5

    Glamorgan

    4

    1

    Neath

    3

    1

    Aberdare

    2

    —

    Rhondda

    3

    —

    Cardiff

    —

    1

    Swansea

    7

    —

    Monmouthshire

    13

    1

    Abertillery

    3

    1

    Ebbw Vale

    2

    1

    Montgomeryshire

    —

    1

    Pembrokeshire

    2

    13

    Radnorshire

    —

    2

    Totals

    225

    572

    MILK IN SCHOOLS.
    Mr. Dunnasked the Parliamentary Secretary to the Board of Education how many schools, elementary or secondary, there are where fresh milk is not available for the children, in England and Wales; what is the reason for this and what he proposes to do to correct it?
    Mr. Lindsay: The number of public elementary school departments in England and Wales in which it is known that milk was not available in any form on 31st March last was 1,574 out of a total of over 29,000. There were also certain other departments, the number of which it has not been possible to ascertain in the short time available, in which only dried milk was provided. On the same date there were 132 grant-earning secondary schools in which no liquid milk was available. The principal reasons for the failure to provide liquid milk are the difficulty of finding a supplier for small and remote rural schools, the inability of the medical officer of health to approve as safe the only milk available, and in a small minority of cases the unwillingness of the teachers to operate the scheme. An analysis of all these cases is being made with a view to ascertaining the reason in each case.
    Mr. Dunn: Is this due in any degree to the operations of the Milk Marketing Board?
    Mr. Lindsay: No, Sir, I do not think so. In so far as the small rural schools are concerned, we are now engaged with the Milk Marketing Board in trying to overcome this difficulty. If I explained

    1491
    the matter at greater length I could show that there are many other factors which enter into the question.
    Viscountess Astor: Is it not the result of our wrong milk policy?

  MATERNITY HOSPITALS.
  Mr. G. Macdonaldasked the Minister of Health what hospital accommodation for maternity cases exists in the Lancashire County Council area, giving separate figures for the Wigan county area; whether he is satisfied that such provision is adequate to meet requirements and, if not, what action he proposes to take to increase such accommodation to the necessary extent?
  Mr. Elliot: Maternity accommodation in the county council's area is available at 46 voluntary and municipal institutions. This provision appears to be generally adequate, but further accommodation is desirable in some particular districts. Five extension schemes are already contemplated. In the Wigan area, where seven beds are available at Billinge infirmary, the need for extension is realised and is under joint consideration by the county and county borough councils. I am keeping the position under review.
  Mr. Duncanasked the Minister of Health (1) whether he is now prepared to give an emergency grant to the London voluntary maternity hospitals to enable them to tide over the difficulties which have arisen as a result of the passing of the Midwives Act, and in consequence of the new rules of the Central Midwives Board;
  (2) whether he is now in a position to give a reply to the points raised by a deputation representing the London Maternity Services Joint Committee, which interviewed him on 19th April last?
  Mr. Elliot: The question of grants to training institutions is receiving consideration in connection with the recommendations of the Inter-Departmental Committee on Nursing Services, but I am not yet in a position to make a statement.
  Mr. Duncan: Did not my right hon. Friend say nearly three months ago that he would soon be ready?
  Mr. Elliot: I really could not give a date.

  HOUSING.

    REPAIRS, LONDON.
    Sir Percy Harrisasked the Minister of Health whether his attention has been called to the dilapidated condition of much of the property in London and the inability of sanitary inspectors to enforce repairs urgently required because of the present law which limits the responsibility of landlords for repairs to those rented below£ 40 a year; and whether he will consider introducing amending legislation to deal with this problem?
    Mr. Elliot: I am not aware that the position is as suggested by the hon. Member, who no doubt has in mind the provision of Section 2 of the Housing Act, 1936, under which it is an implied condition in any contract for the letting of a house in the county of London at a rent not exceeding £40 that the house will be kept by the landlord in all respects reasonably fit for habitation. I would point out, however, that the powers and duties of local authorities under the Housing Acts of requiring repairs, and their powers under the Public Health Acts in relation to various matters affecting sanitary conditions, are not limited by the rental but apply to all working-class dwellings. In the circumstances, I am not satisfied that amending legislation is necessary, but, as stated in my reply to the hon. Member's question of 15th June, I shall be happy to communicate with the local authority concerned on any particular case which he brings to my notice.
    Sir P. Harris: Will the right hon. Gentleman point out to the local authorities that they have such powers and suggest that they should exercise more vigour than they do at present?
    Mr. Elliot: I shall be glad to communicate with them in respect to any matter which is brought to my notice.
    Mr. Silverman: Is the right hon. Gentleman aware that the usefulness of the Section of the Housing Act, 1936, to which he referred has been seriously limited by a decision of the House of Lords which gives the advantage of that Section to the tenant himself, but excludes from its benefit his wife or children or anyone else living upon the premises?
    Mr. Elliot: That question does not arise out of the original answer.

    RENTS, EAST LONDON.
    Sir P. Harrisasked the Minister of Health whether he proposes to do anything to deal with the serious unrest in East London owing to the increase in rents for rooms and houses which are decontrolled; whether he will consider appointing a committee to inquire into the problem of rent levels in East London; and, in the meantime, whether he will send down a Ministry of Health inspector to inquire into the subject on the spot and report to him without delay?
    Mr. Elliot: As regards the first and second parts of the question, I would refer the hon. Member to my reply to his question of 15th June. For the reasons given in that reply I am not prepared to adopt the suggestion made in the third part of the question.
    Sir P. Harris: Is not the right hon. Gentleman aware of the very serious discontent that is arising and of the appalling suffering resulting from conditions that are not only unpleasant but injurious to the health of the tenants and to their children; and would not he consider getting his inspectors to examine conditions on the spot with a view to establishing the necessity for some drastic action?
    Mr. J. Hallasked the Minister of Health whether he is aware of the intensity of feeling which is being created by the increase of rents of decontrolled houses in London; and whether, in consequence of the many disturbances which have taken place owing to the high level of rents, he will be prepared to consider what steps might be taken to deal with the present unsatisfactory state of affairs?
    Mr. Elliot: For the reasons contained in the reply on the same subject which I gave to the hon. Member on 15th June, I do not consider that action by me is called for.
    Mr. Hall: Is the right hon. Gentleman aware of the amount of discontent that is being expressed in the East End of London almost daily, and would it not be better for him to deal with this matter by legislation rather than to allow troubles to arise whereby the tenants bring about a reduction of rent which the right hon. Gentleman could have done by legislation?
    Mr. Elliot: The hon. Gentleman knows that the matter was very carefully inquired into and that legislation was pased in this House only last year.
    Mr. Hall: Did not that legislation lead to the present trouble?
    Mr. Buchanan: Is not the right hon. Gentleman aware that experience has shown various loopholes in that legislation, and will he not reconsider the matter in the light of the experience?
    Mr. Elliot: If the hon. Member will communicate with me in regard to any specific case he has in mind, I shall be very glad to look into it.
    Sir P. Harris: Would the right hon. Gentleman consider receiving a deputation of tenants affected by that legislation to hear their stories, as they are the real sufferers from that legislation?

    QUEENSBURY ESTATE.
    Sir Reginald Blairasked the Minister of Health whether he has considered a communication from the Queensbury Householders Association which contained a report from their surveyor regarding faulty construction of houses on the Queensbury Estate which renders them inimical to public health; and what steps he is taking to protect the health of the residents on that estate?
    Mr. Elliot: Yes, Sir. I have received representations from the association to which my hon. Friend refers and I have asked the local authority for their observations.

  NATIONAL HEALTH INSURANCE.
  Mr. Benjamin Smithasked the Minister of Health the number of foreign going health and pensions contributions paid by shipowners in the last year for which such figures are available; the amount credited to approved societies; the deposit contributors' fund and to any other body to which contributions may be appropriate; and the difference in the amount so credited and the amount that would have been credited if the employers' share of the contributions were the same as that of the employers of shore workers?
  Mr. Elliot: The number of health and pensions contributions paid in respect of foreign-going seamen for the year ended

  1495
  31st December, 1938, was approximately 3,980,000 and the credits to health insurance funds and the pensions accounts in that year on account of such contributions amounted to approximately £284,000, made up of credits to approved societies £97,000, to the Deposit Contributors Fund £6,000, the Royal Seamen's Pensions Fund £2,000, and the pensions accounts £179,000. If the health contribution had been payable at the ordinary employed rate the amount credited to the health insurance funds would have been greater by about £40,000.

  PUBLIC ASSISTANCE (LANCASHIRE).
  Mr. G. Macdonaldasked the Minister of Health the number of public assistance authorities in Lancashire that have taken advantage of the Poor Law (Amendment) Act, 1938, to grant pocket money to old age pensioners in their institutions and the amount of money involved?
  Mr. Elliot: According to such information as I have, the only authority in Lancashire that has taken advantage of the power conferred by the Poor Law (Amendment) Act, 1938, to grant a personal allowance to persons aged 65 years or upwards who are inmates of Poor Law institutions is the county council. I have no information as to the cost.
  Mr. Macdonald: Has the Minister circularised all the Poor Law authorities on this matter?
  Mr. Elliot: Yes, Sir, my circular called attention to the coming into operation of the Act.
  Mr. Day: Did not the Minister mention that there were only 33 reception areas; has that number been extended since that date?
  Mr. Elliot: There is a very large number of reception areas but I did not quite understand the hon. Member's question.
  Viscountess Astor: Has not this matter of evacuation brought home to local authorities the benefits of open air nursery schools and of working in organised units, and is not the problem of evacuation made much easier if they are organised in some such way?

BUSINESS OF THE HOUSE.
Mr. Greenwood: May I ask the Prime Minister for what purpose it is intended to suspend the Eleven 0'Clock Rule to-day and whether he will state the business that it is proposed to take next week?
The Prime Ministers: We hope to obtain to-day the Report stage and Third Reading of the Cotton Industry (Re-organisation) Bill. It is proposed to suspend the Eleven o'Clock Rule for that purpose. The business for next week is as follows:
Monday—Second Reading of the British Overseas Airways Bill, and Committee stage of the necessary Money Resolution; consideration of the Amendments to the Civil Defence Bill, and to the Ministry of Supply Bill, which are expected to be received from another place.
Tuesday and Wednesday—Until Half -past Seven, Report stage of the Finance Bill; after Half-past Seven on Wednesday, Committee stage of the Milk Industry (No. 2) Bill.
Thursday—Third Reading of the Finance Bill until Half-past Seven; Second Reading of the House of Commons Members' Fund Bill; conclusion of the Committee stage of the Milk Industry (No. 2) Bill, if not already concluded.
The Business for Friday will be announced later.
If there is time, on any day, progress will be made with other Business, including the remaining stages of the Air Ministry (Heston and Kenley Aerodromes Extension) Bill and Lords Amendments to the Wheat (Amendment) Bill.
Mr. Greenwood: As the House has not been informed of the extent or the importance of the Amendments which are to come from another place, may I take it that there is no intention of running the House very late on, say, the Lords Amendments to the Ministry of Supply Bill if the Amendments to the Civil Defence Bill take a reasonable amount of time, as they well may?
The Prime Minister: The Amendments from another place will be here to-night and will be in Members' hands tomorrow. I cannot give any complete undertaking as to what will happen. We hope to make good progress.
Mr. Greenwood: I do not know how long hon. Members will wish to debate

1497
the British Overseas Airways Bill, but if the Amendments to the Civil Defence Bill are to be properly considered it may well be that there will be no opportunity at a reasonable time for discussing the Amendments from another place.
The Prime Minister: I quite appreciate the right hon. Gentleman's point. I do not think I am in a position to give a definite pledge, but I will do my best to see that the House is not driven too hard.
Mr. Benn: Did not a Government spokesman in another place say, in response to pressure, that it might be necessary to make substantial Amendments in the Ministry of Supply Bill? That is what we have in mind.
Mr. Foot: In view of the fact that the question to the Chancellor of the Exchequer to-day has not been reached with regard to the terms of the Bill to deal with distressed areas which are not scheduled as Special Areas, may I ask whether we are expected to pass that Bill into law before the Recess or during the remainder of the present Session?
The Prime Minister: The hon. Member will have to give me notice of that question.
Mr. Maxton: As there are still nine or 10 Supply days outstanding, may I take it that we are not going to lose any one of those Supply days? There is none on the programme for the coming week.
Mr. Foot: May I point out to the Prime Minister that earlier in the afternoon I
asked a question on the subject of the proposed Bill to deal with distressed areas, and was told to await the reply which would be given to Question No. 84? As some Minister on the Front Bench must be in possession of that reply, could he not be allowed to state it to the House?
The Prime Minister: The hon. Member will see the reply in the ordinary course. I propose later to make a statement about future business.
Mr. Ammon: Will the right hon. Gentleman be able to arrange for time to be given for the London Government Bill?
Mr. Benjamin Smith: May I ask whether it is expected that the Shipping Subsidy Bill will be brought in before the Adjournment?
The Prime Minister: I could not answer that question without notice.
Mr. Mander: Can the Prime Minister say when the Official Secrets Bill is to be taken? Is it proposed to take it before the Adjournment or not?
The Prime Minister: The hon. Member had better await the statement which I propose to make on future business.
Motion made, and Question put,
"That the Proceedings on Govenment Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 236; Noes, 113.

Division No. 220.]

AYES.

[3.54 p.m.

Acland-Troyte, Lt.-Col. G. J.

Burton, Col. H. W.

Crooko, Sir J. Smedley

Adams, S. V. T. (Leeds, W.)

Campbell, Sir E. T.

Cross, R. H.

Aflen, Col. J. Sandeman (B'knhead)

Cary, R. A.

Crossley, A. C.

Amery, Rt. Hon. L. C. M. S.

Castlereagh, Viscount

Crowder, J. F. E.

Anderson, Rt. Hn. Sir J. (Sc'h Univ's)

Cayzer, Sir C. W. (City of Chester)

Cruddas, Col. B.

Anstruther-Gray, W. J.

Cazalet, Capt. V. A. (Chippenham)

Davidson, Viscountess

Aske, Sir R. W.

Chamberlain, Rt. Hn. N.(Edgb't'n)

Davison, Sir W. H.

Astor, Major Hon. J. J. (Dover)

Channon, H.

De la Bère, R.

Astor, Viscountess (Plymouth, Sutton)

Chapman, A. (Rutherglen)

Denville, Alfred

Balniel, Lord

Chapman, Sir S. (Edinburgh, S.)

Despencer-Robertson, Major J. A. F.

Beauchamp, Sir B. C.

Chorlton, A. E. L.

Dodd, J. S.

Beaumont, Hon. R. E. B. (Portsm'h)

Christie, J. A.

Donner, P. W.

Bennett, Sir E. N.

Clarke, Colonel R. S. (E. Grinstead)

Drewe, C.

Bernays, R. H.

Clarry, Sir Reginald

Duncan, J. A. L.

Blair, Sir R.

Clydesdale, Marquess of

Dunglass, Lord

Bossom, A. C.

Cobb, Captain E. C. (Preston)

Eckersley P. T.

Boyce, H. Leslia

Colman, N. C. D.

Edmondson, Major Sir J.

Bracken, B.

Colville, Rt. Hon. John

Elliot, Rt. Hon. W. E.

Brocklebank, Sir Edmund

Cook, Sir T. R. A. M. (Norfolk, N.)

Emery, J. F.

Brooke, H. (Lewisham, W.)

Cooke, J. D. (Hammersmith, S.)

Emmott, C. E. G. C.

Brown, Rt. Hon. E. (Leith)

Cooper, Rt. Hn. A. Duff (W"st'r S. G'gs)

Emrys-Evans, P. V.

Brown, Brig.-Gen. H. C. (Newbury)

Cooper, Rt. Hon. T. M. (E'burgh, W.)

Entwistle, Sir C. F.

Browne, A. C. (Belfast, W.)

Courthope, Col. Rt. Hon. Sir G. L.

Errington, E.

Bull, B. B.

Cox, H. B. Trevor

Erskine-Hill, A. G.

Burgin, Rt. Hon. E. L.

Croft, Brig.-Gen. Sir H. Page

Evans, Colonel A. (Cardiff, S.)

Evans, D. O. (Cardigan)

Lennox-Boyd, A. T. L

Ruggles-Brise, Colonel Sir E. A.

Evans, E. (Univ. of Wales)

Levy, T.

Russell, S. H. M. (Darwen)

Everard, Sir William Lindsay

Lipson, D. L.

Salmon, Sir. I.

Fildes, Sir H.

Little, J.

Salter, Sir J. Arthur (Oxford U.)

Findlay, Sir E.

Loftut, P. C.

Sanderson, Sir F. B.

Fleming, E. L.

Mabane, W. (Huddersfield)

Sandys, E. D.

Foot, D. M.

MacAndrew, Colonel Sir C. G.

Scott, Lord William

Fremantle, Sir F E.

M'Connell, Sir J.

Shaw, Captain W. T. (Fortar)

Furness, S. N.

McEwen, Capt. J. H. F.

Simon, Rt. Hon. Sir J. A.

George, Major G. Lloyd (Pembroke)

McKie, J. H.

Smith, Bracewell (Dulwich)

George, Megan Lloyd (Anglesey)

Maclay, Hon. J. P.

Smith, Sir R. W. (Aberdeen)

Gluckstein, L. H.

Macmillan, H. (Stockton-on-Tees)

Smithers, Sir W.

Glyn, Major Sir R. G. C.

Maitland, Sir Adam

Snadden, W. McN.

Gower, Sir R. V.

Makins, Brigadier-General Sir Ernest

Southby, Commander Sir A. R. J.

Graham, Captain A. C. (Wirral)

Mander, G. le M.

Spens, W. P.

Grant-Ferris, Flight-Lieutenant R.

Manningham-Buller, Sir M.

Stanley, Rt. Hon. Oliver (W'm'ld)

Granville, E. L.

Margesson, Capt. Rt. Hon. H. D. R.

Stewart, J. Henderson (Fife, E.)

Grattan-Doyle, Sir N.

Marsden, Commander A.

Strickland, Captain W. F.

Gridley, Sir A. B.

Maxwell, Hon. S. A.

Stuart, Lord C. Crichton- (N'thw'h)

Grigg, Sir E. W. M.

Mellor, Sir R. J. (Mitcham)

Stuart, Rt. Hon. J. (Moray and Nairn)

Grimston, R. V.

Mellor, Sir J. S.P. (Tamworth)

Sueter, Rear-Admiral Sir M. F.

Gritten, W. G. Howard

Mellor Sir F. (Leyton, E.)

Sutcliffe, H.

Guinness, T. L. E. B.

Mitchell, Sir W. Lane (Streatham)

Taylor, C. S. (Eastbourne)

Gunston, Capt. Sir D. W.

Morgan, R. H. (Worcester, Stourbridge)

Taylor, Vice-Adm. E. A. (Padd., S.)

Hacking;, Rt. Hon. Sir D. H.

Morris-Jones, Sir Henry

Thomas, J. P. L.

Hammersley, S. S.

Morrison, G. A. (Scottish Univ's.)

Thorneycroft, G. E. P.

Hannah, I. C.

Morrison, Rt. Hon. W. S. (Cirenester)

Thornton-Kemsley, C. N.

Hannon, Sir P. J. H.

Munro, P.

Touche, G. C.

Harris, Sir P. A.

Neven-Spence, Major B. H. H.

Train, Sir J.

Harvey, T. E. (Eng. Univ's.)

Nicholson, G. (Farnham)

Tree, A. R. L. F.

Haslam, Sir J. (Bolton)

Nicolson, Hon. H. G.

Tufnell, Lieut.-Commander R. L.

Heilgers, Captain F. F. A.

O'Connor Sir Terence J.

Turton, R. H.

Hely-Hutchinson, M. R.

Orr-Ewing, I. L.

Wallace, Capt. Rt. Hon. Euan

Hepburn, P. G. T. Buchan-

Peake, O.

Ward, Lieut-Col. Sir A. L. (Hull)

Higgs, W. F.

Peat, C. U.

Warrender, Sir V.

Hoare, Rt. Hon. Sir S.

Petherick, M.

Watt, Lt.-Col. G. S. Harvie

Holdsworth, H.

Pickthorn, K. W. M

Wayland, Sir W. A.

Holmes, J. S.

Pilkington, R.

Webbe, Sir W. Harold

Hopkinson, A.

Plugge, Capt. L. F.

Wedderburn, H. J. S.

Horsbrugh, Florence

Ponsonby, Col. C. E.

Wells, Sir Sydney

Hudson, Rt. Hon. R. S. (Southport)

Porritt, R. W.

White, H. Graham

Hume, Sir G. H.

Procter, Major H. A.

Whiteley, Major J. P. (Buckingham)

Hunloke, H. P.

Raikes, H. V. A. M.

Williams, Sir H. G. (Croydon, S.)

Hunter, T.

Ramsbotham, Rt. Hon. H.

Willoughby de Eresby, Lord

Jarvis, Sir J. J.

Rankin, Sir R.

Wilson, Lt.-Col. Sir A. T. (Hitchin)

Jennings, R.

Reed, A. C. (Exeter)

Windsor-Clive, Lieut.-Colonel G.

Jones, Sir G. W. H. (S'k N'w'gt'n)

Reed, Sir H. S. (Aylesbury)

Winterton, Rt. Hon. Earl

Keeling, E. H.

Rickards, G. W. (Skipton)

Womersley, Sir W. J.

Kerr, Colonel C. I. (Montrose)

Roberts, W. (Cumberland N.)

Wood, Hon. C. I. C.

Kerr, Sir John Graham (Sco'sh Univs.)

Ropner, Colonel L.

Wright, Wing-Commander J. A. O.

Keyes, Admiral of the Fleet Sir R.

Rosbotham, Sir T.

York, C.

Knox, Major-General Sir A. W. F.

Ross, Major Sir R. D. (Londonderry)

Lancaster, Lieut.-Colonel C. G.

Rothschild, J. A. de

TELLERS FOR THE AYES.—

Law, R. K. (Hull, S.W.)

Rowlands, G.

Captain Waterhouse and Captain Dugdale.

Leighton, Major B. E. P.

Royds, Admiral Sir P. M. R.

NOES.

Adams, D. M. (Poplar. S.)

Dobbie, W

Johnston, Rt. Hon. T.

Adamson, Jennie L. (Dartford)

Dunn, E. (Rother Valley)

Jones, A. C. (Shipley)

Adamson, W. M.

Edwards, Sir C. (Bedwellty)

Kennedy, Rt. Hon. T.

Alexander, Rt. Hon. A. V. (H'lsbr.)

Edwards, N. (Caerphilly)

Lathan, G.

Ammon, C. G.

Frankel, D.

Leach, W.

Anderson, F. (Whitehaven)

Gallacher, W.

Lee, F.

Banfield, J. W.

Gardner, B. W.

Leonard, W.

Barnes, A. J.

Garro Jones, G. M.

Leslie, J. R.

Barr, J.

Gibson, R. (Greenock)

Logan, D. G.

Batey, J.

Green, W. H. (Deptford)

Macdonald, G. (Ince)

Bellenger, F. J.

Greenwood, Rt. Hon. A.

Menthe, V. La T.

Benn, Rt. Hon. W. W.

Grenfell, D. R.

McGhee, H. G.

Benson, d

Griffiths, G. A. (Hemsworth)

McGovern, J.

Bevan, A.

Griffiths, J. (Llanelly)

Mainwaring, W. H.

Broad, F. A.

Guest, Dr L. H. (Islington, N.)

Marshall, F.

Brown, C. (Mansfield)

Hall, G. H. (Aberdare)

Mathers, G.

Buchanan, G.

Hall, J. H. (Whitechapel)

Maxton, J.

Burke, W. A.

Hardie, Agnes

Messer, F.

Cluse, W. S.

Hayday, A.

Montague, F.

Cooks, F. S.

Henderson, J. (Ardwick)

Morrison, Rt. Hon. H. (Hackney, S.)

Collindridge, F.

Henderson, T. (Tradeston)

Morrison, R. C. (Tottenham, N.)

Daggar, G.

Hills, A. (Pontefract)

Naylor, T. E.

Davidson, J. J. (Maryhill)

Hopkin, D.

Noel-Baker, P. J.

Davies, R. J. (Westhoughten)

Jagger, J.

Oliver, G. H.

Davies, S.O.(Merthyr)

Jenkins, A. (Pontypool)

Paling, W.

Day, H.

John, W.

Parkinson, J. A.

1500

1501

Pearson, A.

Smith, T. (Normanton)

Watkins, F. C.

Pethick-Lawrence, Rt. Hon. F. W.

Sorensen, R. W.

Watson, W. MoL.

Quibell, D. J. K.

Stephen, C.

Westwood, J.

Ridley, G.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Whiteley, W. (Blaydon)

Riley, B.

Stokes, R. R.

Williams T. (Don Valley)

Sanders, W. S.

Strauss, G. R. (Lambeth, N.)

Wilson, C. H. (Attercliffe)

Sexton, T. M.

Summerskill, Dr. Edith

Windsor, W. (Hull, G.)

Shinwell, E.

Taylor, R. J. (Morpeth)

Woods, G. S. (Finsbury)

Silverman, S. S.

Thorne, W.

Young. Sir R. (Newton)

Simpson, F. B.

Thurtle, E.

Smith, Bon (Rotherhithe)

Tinker, J. J.

TELLERS FOR THE NOES.—

Smith, E. (Stoke)

Viant, S. P.

Mr. Groves and Mr. Charleton.

Smith, Rt. Hon. H. B. Lees- (K'ly)

Walker, J.

Question, "That the Clause be read a Second time," put, and agreed to.

BILL PRESENTED.
  OVERSEAS TRADE GUARANTEES BILL,
  " to extend the powers of the Board of Trade to give guarantees for the purpose of establishing or encouraging overseas trade; to enable the Board to acquire and dispose of securities guaranteed by them under this Act or under the Export Guarantees Act, 1939, and for purposes connected with the matters aforesaid," presented by Mr. Stanley; supported by the Chancellor of the Exchequer and Mr. R. S. Hudson; to be read a Second time upon Monday next, and to be printed. [Bill 189.]
NEW MEMBER SWORN.
Ness Edwards, Esquire, for the County of Glamorgan (Caerphilly Division).

WEST SURREY WATER BILL [Lords]
Reported, with Amendments, from the Committee on Unopposed Bills (with Report on the Bill).
Bill, as amended, and Report to lie upon the Table; Report to be printed.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Ministry of Health Provisional Order (York Water) Bill,
Ministry of Health Provisional Order (Newhaven and Seaford Water) Bill,
Ministry of Health Provisional Order (Corsham Water) Bill, without Amendment.
Marriage Bill, Wheat (Amendment) Bill, Civil Defence Bill, Ministry of Supply Bill, Sunderland Corporation Bill, with Amendments.

MARRIAGE BILL.
Lords Amendments to be considered upon Monday next, and to be printed. [Bill 193.]
WHEAT AMENDMENT BILL.
Lords Amendments to be considered upon Monday next, and to be printed. [Bill 194.]
CIVIL DEFENCE BILL.
Lords Amendments to be considered upon Monday next, and to be printed. [Bill 191.]
MINISTRY OF SUPPLY BILL.
Lords Amendments to be considered upon Monday next, and to be printed. [Bill 192.]

BUILDING SOCIETIES (No. 2) BILL.
Reported, with Amendments, from Standing Committee A.
Bill, as amended (in the Standing Committee), to be considered upon Monday next, and to be printed. [Bill 190.]
Minutes of Proceedings to be printed. [No. 146.]

ORDERS OF THE DAY.

  COTTON INDUSTRY (REORGANISATION) BILL,
  Order for Consideration, as amended (in the Standing Committee) read.
  4.4 p.m.
  The President of the Board of Trade (Mr. Oliver Stanley): I beg to move,
  "That the Bill be re-committed to a Committee of the Whole House in respect of the new Clause (Amendment of 26 Geo. 5& 1 Edw. 8, c. 21), standing on the Notice Paper in the name of Mr. Stanley."
  The reason why it is necessary to consider this new Clause in Committee and not in the House as a whole is that in an indirect way it increases the charge on the Exchequer. Under the Cotton Spinning Industry Act the Exchequer has power to make up any deficiency which may occur—none has hitherto occurred—between the income and expenditure under the scheme. The new Clause which I shall move later extends the operation of that scheme for another two years, with the result that the power of the Treasury to guarantee this deficit is extended for another two years. The amount of money which the Government can guarantee is not increased, but the period during which the guarantee can be given is extended. For that reason it is held to impose a charge and must be considered in Committee.
  Bill accordingly considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  COTTON INDUSTRY (REORGANISATION) BILL,

    NEW CLAUSE—(Amendment of 26 Geo. 5 & 1 Edw.8, c. 21.)
    (1)At any time before the fourteenth day of September, nineteen hundred and thirty-nine, the Board of Trade may, by order, extend by two years the period during which are exercisable the powers conferred by Subsection (1) of Section two of the Act of1936, as amended by order of the Board of Trade under Sub-section (2) of that Section on the board established under that Act(hereinafter referred to as "the Spindles Board") and, if an order is made under this Sub-section, Sub-section (1) of Section four of the said Act (which enables the Spindles Board to borrow during a period of three years) shall have effect as if in the last-mentioned Sub-section for the word "three" there were substituted the word "five."
    (2)The Cotton Industry Board shall have power to act as agents of the Spindles Board
    1528
    for the purpose of the recovery of sums payable to the Spindles Board by way of a levy under the Act of 1936 (hereinafter referred to as "the spindles levy").
    (3)The Board of Trade, if satisfied that they can properly do so without disabling the Spindles Board from discharging and paying all liabilities and expenses (including the expenses of winding up) incurred or likely to be incurred by the Spindles Board, may, with the consent of the Treasury, make an order directing that Sub-section (2) of Section five of the Act of 1936 (which provides that the spindles levy payable for any year in the case of a cotton mill shall be one and one-sixth pence for each unit which, at the beginning of that year, was comprised in the spindle capacity of the spinning machinery then in the cotton mill) shall, in relation to any year beginning after the date on which the order is made, have effect as if for the reference in that Sub-section to one and one-sixth pence there were substituted a reference to such less sum as may be specified in the order.
    (4)At any time before the last of the four instalments in which the spindles levy for any year is payable under Sub-section (2) of Section five of the Act of 1936 becomes payable the Board of Trade, if satisfied that they can properly do so without disabling the Spindles Board from discharging and paying all liabilities and expenses (including the expenses of winding up) incurred or likely to be incurred by the Spindles Board may, with the consent of the Treasury make an order deferring the payment of all or any of the said instalments being instalments or an instalment, as the case may be, which will become payable after the date of the order.
    Any such order may at any time be revoked by a subsequent order made by the Board of Trade.
    (5)Where an order deferring the payment of any instalment is made under the last preceding Sub-section, then, unless and until the order is revoked, the Spindles Board shall, not withstanding anything in Section seventeen of the Act of 1936, have neither the duty nor the power to enforce payment of that instalment.
    (6)The Spindles Board may by order direct that the returns of information which owners of cotton mills are required by Sub-sections (1)and (3) of Section fourteen of the Act of 1936,to send to the Spindles Board shall be sent instead to the Cotton Industry Board; and, in relation to the period for which any such order remains in force, the said Sub-sections shall have effect subject to the modification that references therein to the Spindles Board shall, except so far as those Sub-sections authorise forms of returns to be prescribed by that board or refer to the purchasing powers of that board, be construed as references to the Cotton Industry Board.
    Any such order may be revoked at any time by a subsequent order of the Spindles Board.
    (7) It shall be the duty of the Cotton Industry Board to transmit forthwith to the Spindles Board any returns made to the first—mentioned board under Section fourteen of the Act of 1936, as amended by this Section; and a person shall not be guilty of an offence under this Act by reason only of a disclosure of in-

    1529
    formation made in pursuance of this Subsection.
    (8)Sub-section (4) of Section fourteen of the Act of 1936 (which requires the Spindles Board to transmit in the form of general statistics to the advisory committee constituted under the said Act information obtained by the Spindles Board from the returns made to them under Sub-section (3) of that Section) shall have effect as if the reference in the said Subsection (4) to the returns made to them under Sub-section (3) of that Section included a reference to any returns transmitted to them under Sub-section (7) of this Section.
    (9)The Spindles Board may delegate to the Cotton Industry Board the functions of the Spindles Board under Section fifteen of the Act of 1936 (which confers powers of entry and inspection on members and officers of the Spindles Board); and, in relation to any period during which the said functions remain so delegated, that Section shall have effect as if references there in to the Spindles Board included references to the Cotton Industry Board.
    (10) In this Section the expression "the Act of 1936" means the Cotton Spinning Industry Act, 1936 and the expression "year" has the same meaning as in that Act.—[Mr.Stanley.]
    Brought up, and read the First time.
    4.6 p.m.
    Mr. Stanley: I beg to move, "That the Clause be read a Second time."
    The main purpose of this Clause is to extend for another two years the period during which, under the Cotton Spinning Industry Act, 1936, the Spindles Board will be enabled to purchase redundant plant. Under the provisions of that Act the powers would expire in September of this year. Of course if the House finally approves the Bill which we are now considering, as soon as that approval is given the spinning section of the industry, under the machinery of this Bill, will be able to start a new scheme if they so desire. But it seems a cumbersome process to allow the existing power under the redundancy scheme to lapse if the industry desire to get on with the redundancy, and to make them in a few weeks go through all the machinery of the Act and start again. Therefore it was proposed in Standing Committee that I should include in this Bill this New Clause, which will enable me to make an Order extending the powers under the Cotton Spinning Industry Act for another two years. I made it plain in the Standing Committee, and I should like to do so again now, that I should exercise that power only if satisfied that it was the desire of the section that these powers should be continued.
    1530
    I wish to repeat the statement I made then, that I propose immediately, should the House approve the inclusion of this Clause in the Bill, to take a ballot of the spinning section of the trade. Unless I am convinced that there is a majority of the persons actually voting and at least 66⅔of the spindles in favour of the extension of these powers, I shall not operate the power given in this New Clause. I propose to issue the ballot papers to-morrow—they are all ready—and have them returned by 21st July. It is just possible that if there is a hostile verdict by the spinning section I shall receive it before this Bill finally passes away from the hands either of this House or another place, and in that case I shall propose to delete so much of this Clause as gives me power to extend the time.
    Sir Percy Harris: Under what authority will the right hon. Gentleman take the ballot? Will it have the force of law, or will it be a private ballot taken by the Minister?
    Mr. Stanley: A private ballot; it is merely my way of satisfying myself that my exercise of this power is desired by the spinning section. In the new Clause there are certain other provisions which are of value. Once the Cotton Industry Board is set up it will have a certain staff and general office machinery, and it will be possible for them to do a number of things which are now done by the Spindles Board. This Clause will enable them, for instance, to act as agents of the Spindles Board for the recovery of the levies under the Act. It will also give them certain powers now used by the Spindles Board with regard to returns of information. It is intended only to prevent the duplication of machinery. Lastly, under Sub-sections (3) and (4) we take powers for the Board of Trade, with the consent of the Treasury, either to reduce the levy from the amount laid down in the Act, or in certain cases to postpone the instalments of that levy being called up during the year. This is to prevent—in the closing years of this scheme, when the expenses falling on the scheme are getting less—levies having to be raised from the industry in much greater amount than is required and, therefore, putting an unnecessary burden on them. These powers can be exercised only with the consent of the Treasury, who will satisfy themselves that

    1531
    the levies are being raised and that the times at which they are being raised are sufficient to make certain that the guarantee of the Exchequer will not be called upon.
    4.11 p.m.
    Mr. Rhys Davies: This new Clause is, of course, moved to carry out one of the several promises that the President of the Board of Trade made in Standing Committee, where we had rather protracted Debates on this very complex Measure. To that extent the Opposition will have no criticism to offer. One thing I would ask the Committee to bear in mind: The proposal of the right hon. Gentleman includes something that is peculiar to Lancashire, in that the Treasury arrange to make up any deficit that may occur in connection with these financial transactions. Lancashire is the only county in the Kingdom, and the cotton industry is the only industry that could come to the House of Common sand accept a provision of this sort inserted in a Bill. In agriculture, in the case of milk, beef, beet and barley, there is always money to be provided by the Government, but the Spindles Board are not asking a penny piece from the Treasury. It shows how well the Lancashire textile industry is managing its affairs when it is entitled to borrow £2,000,000 for this purpose and does not exceed that amount. On this side we naturally support the President of the Board of Trade in his proposal.
    4.13 p.m.
    Mr. Hammersley: The new Clause carries out the undertakings giving in Standing Committee. The Cotton Spinning Industry Bill of 1936, when it was discussed in this House, was discussed on terms which indicated that it should be in existence for two years, or perhaps three years. There was never any proposal that the period of time should be extended. In fact in the Standing Committee it was suggested that the period of time should be decreased. I am not suggesting that it is wrong for the President of the Board of Trade to take powers to increase the length of time during which the Spindles Board may be allowed to extend the purchasing period, but there is a danger which it is incumbent on me to point out, that if there is an absence of any incentive to the in-
    1532
    dustry to deal with its surplus capacity, you may find that the rate of deterioration in the industry is greater than the rate at which the surplus capacity is absorbed; and if that is so you may find a situation in which fewer and fewer mills are called upon to pay levies for dealing with more and more machinery. That is a situation which is perfectly clear to the Board of Trade and it is important that it should be pointed out before we pass this new Clause.
    However, we here are not called upon to take any decision in the matter. It is for the trade itself to decide, in accordance with the ballot which my right hon. Friend has said he proposes to take immediately. He proposes to require a 66⅔ per cent. majority if he is to act on any such ballot; but 66⅔ per cent.—leaving one-third of the industry, which may be, perhaps, the most virile section of the industry, dissentient—may not be a very good majority. Having pointed that out, and having pointed out that when the Bill was introduced it was never suggested that the industry should not be considered capable of dealing with its surplus spindles properly in three years, that is all I have to say. It is important that Lancashire should deal with this question of surplus spindles as soon as possible, and that there should not be a vested interest created in favour of keeping them.
    Clause read a Second time, and added to the Bill.
    Bill reported with an Amendment: as amended (in the Standing Committee and on re-committal), considered.

    NEW CLAUSE—. (Amendment of price schemes in relation to persons carrying on business in certain parts of the United Kingdom.)
    (1) If, at any time while a price scheme is in force, it is represented to the Cotton Industry Board by any body appearing to them to be representative of the interests of persons registered under the scheme who carry-on business in the industry at a place in the United Kingdom outside the area within which the majority of the persons so registered carry on business in the industry, that the operation of the scheme is having the result that persons so registered who carry on business as aforesaid at that place are under a disability in respect of their so carrying on business by reason of matters arising

    1533
    on account of the distance of that place from that area, it shall be the duty of the Cotton Industry Board to inquire into the question whether the operation of the scheme is having that result, and to report to the Board of Trade their decision on that inquiry; and, if they decide that the operation of the scheme is having that result, they shall specify in the report the amendments (if any) which they think ought to be made in the scheme for the purpose of avoiding the said result.
    (2) The Board of Trade shall consider any report made to them under the preceding Sub-section; and, if it appears from the report that the Cotton Industry Board have decided that the operation of the scheme is having the result mentioned in that Subsection, the Board of Trade may lay before Parliament the draft of an order making such amendments in the scheme as they consider necessary for the purpose of avoiding that result.
    (3) If each House of Parliament, after a draft of an order is laid before it under the last preceding Sub-section, resolves that the order should have effect, the Board of Trade shall make an order in the terms of the draft.—. [Mr. Cross.]
    Brought up, and read the First time.
    4.17 p.m.
    The Parliamentary Secretary to the Board of Trade (Mr. Cross): I beg to move, "That the Clause be read a Second time."
    I think it would be for the convenience of the House, subject to your permission, Mr. Speaker, if we could discuss at the same time a number of Amendments which relate to the question of an allowance for geographical disability. The cotton industry in Northern Ireland embraces most of the activities which there are in Lancashire, and, in particular, the activities of dyeing and bleaching. The dyer, for instance, urges that he is subject to a disability owing to the distance his works are situated from the main centre of the cotton industry, which is Lancashire. There are additional charges for transport, special packing, and so on, and it is felt that the minimum price should be reduced in his case to compensate him. At present there is a voluntary price scheme between Lancashire and the Northern Irish dyers which makes allowance for this disadvantage. The Northern Irish are entitled to quote below the price of Lancashire.
    The Northern Irish attach great importance to receiving an allowance for this geographical disability, and the Lancashire industry, through the Joint Committee of Cotton Trade Organisations, are anxious that the Bill should cover North-
    1534
    ern Ireland, because otherwise there would be a danger of price-cutting and the upsetting of minimum price schemes. There have been long and rather difficult negotiations between the Northern Irish industry and the Joint Committee of Cotton Trade Organisations and the Board of Trade. It has been agreed that there should be provision in the Bill for geographical disability, and that the President of the Board of Trade should consult the Minister of Commerce for Northern Ireland before submitting to this House any scheme which, in his view, would affect the Northern Irish industry. There is no specific reference in this Clause or in any of the Amendments to Northern Ireland, because geographical disability might well apply to other remote regions, although we have not in fact any reason to suppose that there are any other sections of the industry which would be in a position to claim compensation for geographical disability.
    The Amendment in the name of my right hon. Friend to Clause 9 permits the inclusion of provisions for reduced prices in the price schemes themselves. This, therefore, caters for the case in which there is already a voluntary agreement between the representatives of the industry in Lancashire and their opposite numbers in Northern Ireland. The Amendment on Clause 13 provides for where there has been no voluntary agreement previously arrived at. Under this Amendment, when a price scheme is under consideration by the Cotton Industry Board, the interests affected may make representations to the board, the board must report upon the situation, and recommend any modification which they think should be made. Their report goes forward to the Board of Trade with the scheme, and will, of course, finally come before the House if the Board of Trade approves the modification which is recommended. The new Clause provides for the third situation, where a price scheme is already in force, when the interests claiming compensation for geographical disability come forward to make their claim. Under this Clause. the interests concerned have in a similar manner to make representations to the Cotton Industry Board, there is a similar procedure for that board, the Board of Trade have to lay before Parliament the draft Order if they approve the regulations, and the matter has to be considered by the House.

    1535
    An Amendment on Clause 16 makes provision for the Board of Trade to consult the Northern Irish Minister of Commerce before laying before Parliament the draft of a scheme which appears to the President of the Board of Trade to affect Northern Irish interests. There are a few consequential Amendments and one other Amendment to which I ought to refer, on the First Schedule—in page 46, line 27, to insert, at the end certain words. These provide that in the case of a scheme for reduced prices because of geographical disability, it shall be the duty of the three independent members of the Cotton Industry Board, and not of the board as a whole, to make a decision. It is clear that the industrial members might be competitive of the Northern Irish interests, and might, therefore, be subject to a conflict of interests on a matter on which they were adjudicating.
    Clause added to the Bill.

    CLAUSE 4.—(The Export Development Committee.)
    4.25 p.m.
    Mr. Stanley: I beg to move, in page 3, line 6, to leave out paragraphs (a), (b) and (c), and to insert:

    "(a) one of the members of the Cotton Industry Board appointed thereto under paragraph 1 of the First Schedule to this Act as being independent persons, who shall be chairman of the committee;

    (b)four members selected from the members of the Cotton Industry Board appointed thereto in accordance with sub-paragraphs(a) to (h) of paragraph 2 of the said Schedule, of whom two shall be persons appearing to that board to have special knowledge of the business of spinning yarn from staple rayon fibre, weaving rayon yarn or finishing fabrics woven from rayon yarn;

    (c)the member of the Cotton Industry Board appointed thereto in accordance with sub-paragraph (j) of the said paragraph 2;

    (d) two additional members being persons who appear to the Cotton Industry Board to have special knowledge of the business of selling fabrics woven from rayon yarn; and

    (e) four other additional members."

    Mr. Barnes: Does this mean, Mr. Speaker, that we are now on Clause 4 of the Bill? Shall we go back to the earlier Clauses 1, 2 and 3?
    Mr. Speaker: We are on Clause 4 of the Bill.
    Mr. Barnes: On a point of Order. I observe that you passed over the Amendment on Clause 1—in page 1, line 8, leave out "Board" and insert "Commission"—in the names of my hon. Friends and myself. May I submit to you, for your consideration, that during our Committee proceedings that Amendment secured the widest measure of support of any Amendment that was considered? In so far as this represents a definite point of view of certain hon. Members, not reflecting necessarily either the official Government position or the official Opposition position, it may, if we are prevented from putting this case for consideration to the House, prevent any hon. Member bringing forward a special point of view upon the matter. I ask you to consider whether that Amendment should not have the opportunity of being considered by the Whole House.
    Mr. Speaker: I gave all these matters consideration, and I came to the conclusion not to select the Amendment.
    Mr. Stanley: This Clause deals with the position of the Export Development Committee, which is a sub-committee of the Cotton Industry Board. It will advise that Board on matters connected with the export trade and with the minimum price in connection with sales for export markets. Hon. Members will realise that that committee is important; it has functions which will be important enough to begin with, but which I venture to hope, as the machinery settles down and there is an increasing amount of unity in the industry, may become more and more important in the future. The position of this committee becomes a matter of great interest. We had considerable discussion on this question during the Committee stage, and a number of suggestions were put forward as to how this committee could be strengthened, from two particular points of view, by interests who must naturally have substantial representation on a committee of this kind.
    One of the interests is the merchants, who, as the ultimate sellers of the goods, the last link in the chain of exports, are intimately connected with the whole question, and it was felt that they ought to receive bigger representation than is given under the scheme as originally drafted. The view was put forward also, that there were not enough people on the

    1537
    committee who were interested in, or knew about, rayon, and that, therefore, the interests of rayon in export matters might be overlooked. There was a general consensus of opinion that it would be as well that, between the Committee stage and this stage, I should look into the position again, and submit any proposals I thought fit in view of the discussions. I promised to do that, and this Amendment is the result.
    The simplest thing would be if I gave to the House the composition of this committee as it was under the original Bill and as it would be now. Under the old Bill the independent members of the Cotton Industry Board would have had two members on the committee; under this system they will have only one member. There would have been no merchant member of the Cotton Industry Board under the old plan; under this plan the merchant member of the board must be a. member of the Export Development Committee. There were to be four producer members of the Cotton Industry Board under the old scheme, and there will still be four producer members under the new scheme; the only alteration is that, of those four producer members, two must be people who have some knowledge of the rayon industry. There were two rayon producers under the old scheme, and there will still be the same number under the new scheme. There were three merchants under the old scheme, and there will be four under the new scheme, and of those four two must have some knowledge of the merchanting of rayon or mixed rayon and cotton goods.
    That means that the committee will be slightly enlarged; there will be 12 members instead of 11. The merchanting interests will have five representatives now, including one representative who is already a member of the Cotton Industry Board, instead of the three originally allotted to them, and although the actual representatives of the rayon interests re main unchanged, a certain number of people representing other interests, either producers or merchants, will have to be people who have some special knowledge of rayon production or merchanting. I think the new composition of the committee meets the criticisms which were made in the Standing Committee, and I believe that it will commend itself to the House.
    Mr. Ellis Smith: Have the various interests been consulted in regard to this Amendment, and have they approved it?
    Mr. Stanley: They were all consulted. I cannot say that all of them exactly wanted this composition, but I think, on the whole, they are now all prepared to agree that this composition is the best possible.
    4.33 p.m.
    Mr. Levy: The House will recognise that this Amendment, and one almost might say the whole Bill, is of a very complicated and controversial character, but I would like to pay my tribute to the Joint Committee on the public spirit and broad mind which they have shown in endeavouring to come to agreement. Owing to the tact and skill of my right hon. Friend and the Parliamentary Secretary, together with their advisers, we can say now that all these Amendments, and this Amendment in particular, are really agreed measures of compromise on matters in regard to which undertakings were given by my right hon. Friend and implemented here after consultation with all the parties concerned. I want again to say how much I appreciate the work that everybody who has had anything to do with this Bill has done, with the object, and the only object, of trying to make an agreed Measure, so that when it is on the Statute Book it will be worked harmoniously instead of with a degree of hostility.
    4.35 p.m.
    Sir P. Harris: I realise that the right hon. Gentleman has had a very difficult task in trying to get this Bill on the Statute Book. I think the whole House realises that and is anxious that there shall be no unnecessary delay. I recognise that the time of the House is very much booked ahead, and that if we do not get this Bill through its Report stage to-day, there will be serious danger of jeopardising its passage. I like tbi3 spirit of good will, but I cannot help making this criticism, that this powerful, pushing, energetic, self-advertising section of the industry, the rayon section of the textile trade, has met with a consider able degree of success. A good deal depends on the spirit in which they carry out their work. If they will display something of the sectional attitude which they did in Committee upstairs, it bodes badly for the future of the cotton and

    1539
    rayon textile trade, because we ought to link the two sections together, but if they pool their resources and aim at co-operating in helping the cotton trade to meet some of its difficulties, this may be a right gesture and may mean success. I am one of those who think that the real test of this Bill—and I would go further and say the only justification for it—is that it should help the export trade. It is the export trade which has had to face the terrific competition from the Far East in the last 10 years and which has felt this undermining of the foundations of the whole industry, whose prosperity so much depends on extending its markets abroad. But I say, in all seriousness, that the whole success of this Clause and of the whole Bill, with all its complicated boards and committees, depends on getting the right men, men of good will, men who will approach these problems with which they have been entrusted, not from a selfish point of view, not from the point of view of their own or of sectional interests, but from the point of view of the general well-being of the cotton trade, and of the export trade in particular.
    I hope the right hon. Gentleman, when he has to take his share in appointing independent as opposed to elected members, will take the greatest care to see that the right man is appointed. If I may say so without offence, there must not be any patronage, or any desire to pick a man in order to please him, or to give him a useful or interesting occupation, or because he has been a political supporter. I know the right hon. Gentle man will not be influenced by any interest of that kind. The man who is appointed must be that very rare person in industry, a man of business capacity who at the same time will not have any interest of his own to serve. The real trouble, of course, is that the man of energy and initiative is in most cases busy in his own trade, because there is such a demand for business capacity, in the textile trade as in any other industry, that a man with youth and energy is quickly snapped up by the industry it-self. It will not be easy to find the right kind of man, but the right hon. Gentleman, when he comes to make these selections, will, I am sure, see that the right man is appointed—and he will be lucky to find him—for on that will de-
    1540
    pend the success of the Clause and of the Bill as a whole.
    4.39 p.m.
    Mr. Rhys Davies: I too would like to congratulate the right hon. Gentleman on his achievement. What a different atmosphere prevails to-day from that which we experienced upstairs on this very complicated problem. What the right hon. Gentleman has done, of course, has been to placate the people who are interested in the rayon industry; and when he is able to silence the hon. Member for South Croydon (Sir H. Williams) and the hon. and gallant Member for Coventry (Captain Strickland), whom I do not see in his place, he has indeed achieved very much. I join with the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) in hoping that these good people may be able to work together as comfortably and as amicably as they are able to fit together in printed numbers in this Amendment. If they are able to do that, they will in deed have got over a very difficult stile. The two things in connection with this Bill that frightened me most were the price scheme and the problem of this Export Development Committee, and I think I speak for Members on this side when I say, Good luck to the right hon. Gentleman when he comes to set up this committee, and good luck also to the committee if they can work together and achieve the object which we all have in mind.
    4.41 p.m.
    Mr. McLean Watson: I should like to join with the hon. Member for South-West Bethnal Green (Sir P. Harris) and my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) in commenting on the changed atmosphere in the House to-day as compared with that in the Standing Committee room. When this Bill was presented to us upstairs, we were told that it was an agreed Measure, that the Joint Committee that had been dealing with the matter had come to a complete agreement, not only on behalf of the manufacturer and the producer, but on behalf of the workers as well. I was surprised yesterday when I saw on the Order Paper pages of Amendments in the name of the President of the Board of Trade, Amendments which made, to be quite frank, considerable changes in the Measure. As my hon.

    1541
    Friend the Member for Westhoughton has pointed out, the powerful rayon interests have been placated, and it seems that during the Report stage you, Sir, will have a much easier and pleasanter time than the Chairman of the Standing Committee had upstairs. He had a pretty difficult task in trying to hold an even balance between these violent conflicting interests of rayon and cotton, but this afternoon we start right away on the Report stage in an entirely new atmosphere. I think it will be to the advantage, not only of the cotton industry in Lancashire, but of the rayon industry in the country as a whole.
    Question, "That the words proposed to be left out stand part of the Bill," put, and negatived.
    Question proposed, "That the pro posed words be there inserted in the Bill."
    4.43 p.m.
    Mr. Petherick: I beg to move, as an Amendment to the proposed Amendment, in line 11, to leave out "Cotton Industry Board," and to insert "Board of Trade."
    My right hon. Friend has done his very best all through this Bill to meet minority cases wherever he possibly could. On many occasions he has shown willingness to put down Amendments, of which this is one, but willingness is not everything. Obviously, it is extremely difficult some times, in a highly complicated Measure, to carry out what you wish to do. My right hon. Friend has not only shown willingness, but he has also carried out in the most admirable way the intention. I do not think it will be difficult in this Amendment, because my right hon. Friend has met the interest of one important minority, namely, the merchants, but there is one flaw in the Amendment, and that is that the four additional members are to be appointed by the Cotton Industry Board. That board will not be an independent body, but a body consisting partly of independent members and partly of persons concerned with or interested in the trade. Therefore, it seems to me that it may have some bias, though I hope it will not. The four members to be appointed by the Cotton Industry Board will, I imagine, consist of merchants. That is the intention, but would it not be better—I put it no higher than this—to have those four additional members who are to be merchants appointed
    1542
    by an entirely independent body, namely, the Board of Trade itself, rather than handing these appointments over to the Cotton Industry Board? Therefore, I would ask my right hon. Friend whether he would consider this possibility and, if he thinks fit, when the Bill goes to another place, to make such an Amendment.
    Sir Reginald dairy: I beg to second the Amendment to the proposed Amendment.
    4.45 p.m.
    Mr. Stanley: This is an Amendment which it is impossible to accept. The proper arrangement is that this Export Development Committee should be a sub committee of the Cotton Industry Board. If there is a body which has a sub-committee of this kind, surely the normal procedure is that the parent body appoints those of its own members who are to be members of the committee and also those people who are to be co-opted from out side. That is an arrangement from which one cannot depart without very good reason. What are the reasons which the hon. Member puts forward? His only reason is that he thinks the Cotton Industry Board may be biased. Although they have a statutory duty to consult bodies representing the merchants, he feels that, having consulted them, they would simply ignore their views and appoint somebody else. That is a suspicion of the Cotton Industry Board which I am not prepared to admit by accepting an Amendment of this kind.
    If, in fact, it were the case that the Cotton Industry Board composed, as it is to be composed, of people of high standing in the trade, and independent members as well, cannot be trusted, after they have consulted a body representing the merchants, to appoint the right people, then they cannot be trusted with anything under this Bill, and we had much better not have the machinery that is laid down. I cannot adopt that view. I believe that the board when appointed will act fairly, sensibly and judiciously, and that when it has had consultations with representative organisations, and has entered into those consultations sincerely, it will be guided by those consultations in the appointment of people. Therefore, the method in the Bill which allows these people to be appointed by the Cotton

    1543
    Industry Board, after proper consultation with representative associations, is the right one and should remain.
    4.47 p.m.
    Sir Cyril Entwistle: I should like to point out that the members of the Cotton Industry Board themselves have to be appointed by the Board of Trade, and as this is a sub-committee of that board, indirectly it is a sub-committee of the Board of Trade. It will be appointed by members of a board who have themselves been appointed by the Board of Trade, as representing the whole industry. That Board will not represent any one section, but will be a board governing all the sections and representing all the various interests. Therefore, as the Cotton Industry Board will have been appointed by the Board of Trade and this committee will be a sub-committee of that board, I hope the House will see the reasonableness of the proposal in the Bill.
    Mr. Petherick: In view of the explanation of my right hon. Friend, and appreciating the way he has met us, although I am sorry he cannot accept the Amendment, I beg to ask leave to withdraw the Amendment.
    Amendment to the proposed Amendment, by leave, withdrawn.
    Proposed words there inserted in the Bill.
    Further Amendment made: In page 3, line 21, leave out "three members," and insert:
    "four members (including the two members to be appointed in accordance with paragraph (d) of the last preceding sub-section)."—[Mr. Stanley.]

    CLAUSE 5.—(Registration of persons carrying on business in the industry and of merchants.)
    4.48 p.m.
    Mr. Stanley: I beg to move, in page 4, line 31, after "business," to insert:
    "or an application to be so registered has been duly made by him and is under consideration."
    During the course of our Debate on this Clause in Committee, I think the hon. Member for Penryn and Falmouth (Mr. Petherick) pointed out a defect in drafting which I confess at the time I did not appreciate. It was that we had
    1544
    got into a sort of vicious circle, because we had laid it down that nobody could be registered until they had carried on business, while in another place it was laid down that nobody could carry on business until they had been registered. That was an unfortunate dilemma which I thought should be resolved. The way it is to be resolved by this Amendment is to make certain that anyone who carries on business after he has applied for registration, and while the registration application is being considered, cannot be subject to penalty. That seems the simplest way of getting over the difficulty. It will be possible for a person to put in his application to be registered, and pending consideration of it he can start business, but until the application has been considered, he cannot be subject to any penalty.
    Sir Herbert Williams: I thank my right hon. Friend for the very satisfactory way he has solved this problem.
    Amendment agreed to.
    Mr. Stanley: I beg to move, in page 5, line 12, to leave out from "merchant," to the end of line 14.
    This Amendment deals with a point which, I think, was raised by the hon. Member for South-West Bethnal Green (Sir P. Harris) who was afraid that under the provisions of the Bill as it then stood the Cotton Industry Board would, of their own initiative, be able to come to the conclusion that a man had ceased to be a merchant, and could delete the entry of his name in the register. The hon. Baronet was afraid that there might be cases where this might prove invidious to the merchant, especially in view of the fact that there was no arbitration provided. The result of the proposed Amendment is that it will only be possible for the board to strike a merchant off the register under this particular procedure if they are desired to do so by the person concerned. It will be appreciated that there are powers under Clause 11to strike off the register a person who has not carried out the conditions under which he registers. One of those conditions would be the payment of the registration fee. If a man has ceased to carry on business, he, presumably, would not pay his fee, and as soon as that fee is not paid it will be possible to strike his name off the register. Under Clause 11, how-

    1545
    ever, there is the safeguard of arbitration if the person struck off feels aggrieved.
    Amendment agreed to.

    CLAUSE 8—(Provisions as to redundancy schemes.)
    Mr. Stanley: I beg to move, in page 7, line 4, after "relates," to insert:
    "and it appears to the board that the purpose or principal purpose for which the mill is used or appropriated is the carrying on of business in that section of the industry."
    This Amendment also carries out a promise that I made to look into a matter that was raised in Committee. In the Bill, as drafted, we made it possible for the redundancy board in one section of the industry to buy machinery belonging to another section of the industry if it was in the same mill as the machinery they were already buying for their own redundancy schemes. We did that be cause it was clear in theory, and has been proved in practice under the Cotton Spinning Act, that if you wanted to buy up a spinning mill which might have some small proportion of weaving machinery as well it was very convenient if the Board administering the spinning redundancy scheme had power to purchase the weaving machinery. It was generally accepted in the Committee that this was a wise provision and that there ought to be powers of this kind, but it was pointed out that, as they stood in the Bill, the powers given are rather wide. For instance, the Spinning Redundancy Board would be able to go into a mill where there was only 10 per cent. of spindles and 90 per cent. of looms and buy them both, although that was never intended. The Amendment is to make it plain that this power to buy any other form of machinery applies only where the principal purpose for which the mill is used is that of doing the business of the section concerned with the particular redundancy scheme.
    Amendment agreed to.
    Mr. Stanley: I beg to move, in page 7, line 28, at the end, to insert:
    "(2) The purchasing powers of the board administering a redundancy scheme shall not be exercisable after the expiration of the period of three years beginning with the day on which the scheme comes into operation, but the Board of Trade, at any time during that period, may by order extend it by such period not exceeding two years as may be specified in the order, if the result of a poll of owners of mills to which the scheme
    1546
    applies, taken in accordance with the pro visions of the scheme, shows that the majority prescribed by the scheme is in favour of the extension."
    This Amendment deals with the period during which under a redundancy scheme the board can exercise purchasing powers. Under the Bill as originally drafted there was no limit of the period during which they could purchase this redundant machinery. It was the hon. Member for Willesden, East (Mr. Hammersley) who pointed out, as he pointed out again on the new Clause this afternoon, that it is very important if you have a redundancy scheme that there should be some incentive to people to offer their mills for scrapping at once, and that you should not give them the inducement to hang on to their mills in the hope that trade is going to improve and that if it does not improve, some time or other in the future, they will be able to turn the mill over to the Redundancy Board. The hon. Member's Amendment in Committee was that there should be a limit of three years for the exercising of this power, but I was not prepared to accept it. I offered, how ever, on the Report stage to bring for ward an Amendment, and what the Amendment does is to lay it down that the normal period for the exercise of these purchasing powers shall be limited to three years, but that the Board of Trade may, by order, extend it after that period for another two years, provided that it does so after a poll has been taken of the owners of mills in that scheme, and a prescribed majority is in favour.
    Mr. Hammersley: I think the Amendment satisfactorily meets the case put forward in Committee. It leaves to the Board of Trade the responsibility of taking a ballot. I hope that as time goes on the Board of Trade will consider whether the majority of 66⅔ per cent. is really adequate. Perhaps later on when the Act is in force it will be brought to bear on those responsible that 66⅔ per cent. does leave a very substantial minority in the industry. I think that 75 per cent. would be better.
    Amendment agreed to.
    4.58 p.m.
    Mr. Rhys Davies: I beg to move, in page 8, line 5, to leave out "may," and to insert "shall."
    My hon. Friend the Member for Farnworth (Mr. Tomlinson) is attending a

    1547
    Conference in Stockholm and, therefore, is not able to move this Amendment which stands in his name. I wish he had been here to undertake the task which I am trying to perform. Hon. Members who were on the Standing Committee will agree that my hon. Friend helped very materially to fashion this Measure.
    So far to-day, the Bill has had a smooth passage because the right hon. Gentleman has been able to placate almost everybody. The merchants, ex porters, mill owners, financiers, bankers, almost everybody had been placated before he came to the House to-day with this Bill, except one section of the industry—the textile workers. It is typical of this Government that it always helps its friends first. It sees that they are always satisfied. The numerous Amendments that appear on the Order Paper in the name of the right hon. Gentleman favour the several other sections of the industry—employers, capitalists and financiers. Those sections came in force to the right hon. Gentleman and made a thunderous noise. In Committee they made such a noise as was never heard before. The right hon. Gentleman has bowed to the storm in every case except the one with which I am dealing.
    Mr. Stanley: In the only really import ant Amendment we have discussed so far, the hon. Gentleman was one of the people who urged me to do exactly what I have done.
    Mr. Davies: I became part of that storm myself; and anything I can do to make the life of this Government difficult will of course be done. We have come to a really important matter as far as the textile operatives are concerned. Indeed, we would not be doing our duty on these Benches if we did not raise this very vital point with which I am now about to deal. If hon. Members will turn to Clause 8 they will see that it is headed "Provisions as to redundancy schemes," and reads as follows:
    "A redundancy scheme may contain pro visions empowering the board administering the scheme, subject to any restrictions … to acquire by agreement such plant in a cotton mill … and empowering the board to dismantle and break up any plant or other property acquired by them."
    These are naturally very important powers to give to any authority. I speak with a
    1548
    little feeling on this point, because I have seen textile mills in my own Division dismantled and pulled down, and in some small Lancashire villages, when you dismantle one or two textile mills you strike a blow at the social life of the community at the same time. A textile mill of some size in a Lancashire village is as important to the community and their social amenities as is the colliery to a mining village in any other part of the country.
    When the board administering this scheme decides on redundancy it will compensate almost everybody except the workpeople. The workpeople displaced by the destruction of a textile mill and its plant must fall on to Unemployment insurance, Unemployment assistance, or Poor Law relief. There is not a penny for them in this Bill at all, unless the board voluntarily decide otherwise. The wording of the Clause is that usually adopted by this Government. Wherever the capitalists—the farmers and the other people who are their bosom friends—are concerned, the Government "shall" do certain things and they metaphorically fling about millions of money to those friends; but when you come to workpeople in the textile industry who fall out of work in consequence of rationalisation the word "may" is inserted in the Bill. It is astonishing to find how many "shalls" there are in other Clauses of this Bill; but when you come to the question of compensation for displaced operatives, the board "may" consider; and after they have considered they need not do anything unless they wish. The Amendment that I am proposing is to compel this authority to consider the problem of compensation for displaced operatives; and there will of course be displaced operatives.
    This Bill is a first-class illustration of rationalisation. There is too much plant; some of it is not working at all and has been kept idle for months on end. I have been told on good authority that 60,000 looms are to be scrapped soon. I do not know whether some of this machinery will be sent to the Far East for the manufacture of the very commodities that we used to manufacture in Lancashire and thereby destroy our trade in those countries. According to the report of the Joint Committee of Cotton Trade Organisations the number of looms in place in 1938 was

    1549
    485,000, and the estimated number required for full-time production was only 320,000; a surplus in that case of 165,000 looms. I understand that there are, roughly, four looms per weaver, and in some cases six looms. If the House will calculate 165,000 redundant looms at four per weaver, they will realise the tragedy that must fall on many households in Lancashire consequent upon the passing of this Bill. I am sorry that the hon. Gentleman the Member for South Croydon (Sir H. Williams) is not here because he seems to be the spokesman of all the violent anti-labour elements in this House. I wish he were in his place to hear me say that.
    Mr. Petherick: Is it not the case that my hon. Friend the Member for South Croydon (Sir H. Williams) reads every word which the hon. Member says in the Official Report?
    Mr. Davies: It is necessary that I should tell the House what is the basis of our claim. We are not claiming any thing new; this is not a new principle. Parliament has accepted this principle on more than one occasion in previous Measures that it has passed. In the Rail ways Act, 1921, the Third Schedule reads:
    "Every existing officer or servant whose office or situation is abolished or who shall relinquish his office … shall be entitled to be paid compensation for such pecuniary loss."
    A great deal of money was paid out in compensation in that connection. I can not understand why something is not done in this case. Compensation to displaced workpeople is being paid under other Acts of Parliament in this country in other industries that are not as essential to the community as the production of cotton textile goods for export purposes. I am glad that the right hon. Gentleman the Leader of the London Labour party is here because he assisted a great deal in enthroning this principle in law. The London Passenger Transport Board is a classical example of this. The Fourth Schedule of the Electricity Supply Act, 1926, deals with compensation for deprivation of employment on account of the coming into force of that Measure, and compensation is paid if a person has suffered loss of employment or diminution of salary, wages or emoluments otherwise than on grounds of misconduct, in capacity or superannuation. We do not
    1550
    mind the disabilities mentioned provided we can get the principle enshrined in this Clause. The London Passenger Trans port Act, 1933, deals with staff and superannuation, and Section 73 makes provision for transfer and compensation rights of officers and servants solely or mainly occupied in transport under takings. The Local Government Act, 1929, and the Coal Act, 1938, also made almost similar provisions. As stated, this Government see to it that nothing untoward financially happens to any of its own friends especially in agriculture and shipping; they are invariably compensated by subsidies or in some other way. Consequently, we are entitled to call the attention of the House of Commons not only to the tragedy that has already befallen Lancashire textile operatives, but which will fall upon others when this Bill comes into force. Unless we can deal with redundancy, consequent upon the passing of this Measure, I do not see much use of the Measure at all.
    I come now to something more concrete. I was asked upstairs how much the operatives ought to get. I have case after case here where workpeople have received hundreds of pounds under other Acts of Parliament; and why should not these operatives? When I am told that the textile industry of Lancashire will not be able to bear any of this financial responsibility, I would reply in this way. It is true that the Lancashire textile industry as a whole is depressed, but there are firms manufacturing for the home trade still doing well. In any case, the whole basis of this redundancy scheme is that the owner of the machinery which is scrapped will be compensated, and we see no reason why human beings that are regarded as redundant should not be compensated from exactly the same fund in exactly the same way.
    That, in brief, is our case, and I do not know whether the right hon. Gentle man can speak with authority on behalf of anybody in reply to my statement. I have travelled a little and studied Fascist regimes abroad; and the way it deals with industry abroad especially in Italy. We have now set up in this industry, for good or ill, a system of control, very much on the Fascist plan, and the industry, in effect, decides what it wants this Parliament to do. When all that is decided, this Parliament puts its seal upon that industrial controlling authority. in

    1551
    handling these industrial problems and the rationalisation which must ensue from this Measure we ought, I repeat, to have regard to the calamity that will befall some of the operatives consequent upon the closing down of some of these mills and weaving sheds.
    I hope that I have said enough to convince at least hon. Members from the county of Lancashire of all parties of the desirability of something being done. They know the case as well as I do, and perhaps some of them know it better. The one thing that has always struck me about the people of Lancashire has been their patience with Government. When agriculture, steel, or coal suffer depression, plenty of voices roar like thunder and the Government metaphorically bring buckets full of money to hand out especially to shipping and agriculture. The cotton textile industry was once the first export industry in the whole of these isles; it is now the most depressed of all our industries. From being the first ex porting industry it has fallen to second place; and, in spite of all that, the Lancashire people are very patient in not having made more demands for assistance upon the Government. This, however, is a demand on behalf of the operatives, and I trust that the House will be good enough to listen to the appeal we are making and support us in the Division Lobby.
    5.15 p.m.
    Mr. Silverman: I beg to second the Amendment.
    I was hoping that some hon. Member opposite would take the opportunity of giving us any reasons why the Amendment should not be accepted. I do not mean the right hon. Gentleman, because I quite realise that he wants to hear the Debate before making his reply. But in the Committee upstairs there was no reluctance on the part of hon. Members opposite to jump into the breach and tell us why these men should not receive compensation, and why it should be left a permissive and not a compulsory obligation, in the preparation of this redundancy scheme, to provide this compensation. I do not know whether we are to attribute their reluctance to express their views this afternoon to a change of mind. I do not know whether they are going to support the proposal or whether
    1552
    they think, now that we are debating the matter on the Floor of the House instead of in the comparative seclusion of a Committee Room, that discretion is the better part of valour, and propose to say nothing about it but rely on the compact majority which they can secure in the Division Lobby.
    But if they are silent at any rate we need not be, and we must not be. Nobody has suffered more from the chaotic condition of this industry than the workers in it. The story has been told many times before and I do not propose to tell it again at any length, but let us remember that in the industry, as it is now being run, the average wage of a weaver, who is a skilled operative, is 30s. per week, if he is lucky, if the four looms by which he stands are fully employed over the whole 48 hours. Very few of them are as lucky as that. Seventy-five per cent. will have one of his looms idle for the whole week, 50 per cent. will have two looms idle for the whole week and some proportion of them will have as many as three looms idle for the whole week. The way in which the workers are remunerated in this industry is that they are paid in proportion not to the number of hours they spend in the mill but to the number of looms which are working full time. It is perfectly possible, and it happens in numberless instances, for a man who goes to his mill for 48 hours in the week to come home with a wage of 20s., 15s. and even 10s. In a great many cases he brings home less wages for a 48-hour week than he would have got from the public assistance committee or unemployment insurance. That, of course, is not peculiar in itself. It is a form of piece rates, and if the work is not produced obviously the remuneration cannot be paid.
    But there is this difference, that because the man technically is fully employed in the mill for the whole of the time and his wages are as low as I have described, he cannot get any assistance by way of public relief or unemployment insurance or from the Unemployment Assistance Board. He cannot have his wages eked out by the public assistance committee be cause it is a principle of the Poor Law that if a man is employed you shall not supplement his wages by Poor Law relief. He cannot get anything under unemployment legislation for the same reason; he, technically, is not unemployed, so that he gets neither relief nor unemployment

    1553
    assistance. There is no other class of workers in this country who are under that disability, but in Lancashire thousands of men come under it. My own constituency has an unemployment percentage which varies between 20 and 25, but on the top of that there is this 40 to 50 per cent. of additional workers, who are employed but are receiving less than they would receive if they were not employed at all. In my own constituency you get a proportion of the workers, amounting to 70 per cent., who are forced to subsist either on public relief, unemployment assistance, or on wages which are less than public relief or unemployment assistance.
    What remedy for that does this Measure propose? It proposes, and I do not con test its wisdom, to rationalise the industry in this way, that some of these necessarily idle looms shall be scrapped. I hope that one result of it may be in the long run, certainly not immediately, that this sporadic and casual kind of employment, with the penury which it produces, will gradually disappear. But how will it disappear? It will disappear by removing out of the industry some looms and by removing out of the industry some workers. These proposals to which we are giving legislative effect, putting the seal or the rubber stamp of the Imperial Parliament on the decision of the local industrial Parliament in this respect, do not propose to deal in any way with providing those workers who are removed from the industry with any other means of livelihood. If, in deed, men are to be removed from the industry, and it is impossible to conceive of this legislation working satisfactorily unless some men cease to be employed—one of the advantages for Lancashire if it succeeds, is that Lancashire's eggs will not be so exclusively in one basket as in the past—this legislation provides no alternative, no other basket, and neither does it provide any compensation for the loss of such livelihood as they now have.
    What possible justification can there be for compelling an industry to be reconstructed, for cutting it down, for turning men compulsorily out of the industry, for taking away their opportunity of exercising the only skilled trade they know, and giving them no compensation whatever? What is to happen to them? After all, that is a practical question. People say "What about the cost? If you make
    1554
    compensation compulsory you must in crease the cost, and if you make the cost too high it will break the scheme? "My reply is that we are not proposing to increase the cost; the cost is there in your scheme. The question is, who is to bear the cost, whether any part of the cost of the excluded workers is to be borne by those who remain in the industry, by those who benefit by getting the others away; or whether those who are cut away are to be left to bear the whole burden themselves? It is not a question of in-creasing the cost but of sharing the burden. That is what we are asking should be compulsory. We are asking that the benefit which is going to be conferred on some shall not be exclusively at the cost of others, that those who remain in and share in the benefits which are to accrue from the operation of the scheme shall bear some proportion of the loss which it necessarily will impose.
    If you do not do that what is to happen to the people? I asked that question in Committee, and the reply I got was that there is always unemployment insurance. One hon. Member suggested that that is what the Unemployment Insurance Fund was created for. That is not the case. The Unemployment Insurance Fund was created to deal with limited recurrent periods of unemployment; it was never intended to deal with a situation of this kind, where you are compelling people to go out of the industry altogether and to seek their livelihood elsewhere. That is not what the unemployment insurance scheme was for. In all the chain of legislation to which my hon. Friend has referred, the principle has been accepted that if you take away a man's office you shall compensate him for the loss of that office, and if you take away a man's livelihood you shall compensate him for the loss of that livelihood. I should attach far less importance to this proposal than I do if I saw any sign from the Government that they proposed to create new industries to take the place of this old one. If they were to go to my constituents and say, "We recognise that you will not be allowed to continue in the future to earn your living at this trade. It is good for the trade and for the country and for your colleagues that you should no longer be employed at it. We will take the responsibility of planting new industries, giving you a new means of livelihood, teaching you a new trade

    1555
    and your livelihood shall not be less. "If they were doing that I should attach less importance than I do to the proposals that are now made. But in the absence of that, how can hon. Members opposite justify taking away the livelihood of these men without providing any compensation to them? It cannot be justified, and no hon. Member opposite has attempted to do so.
    Hon. Members opposite may say that provision is made for compensation because the Clause states that a redundancy scheme may provide for it. That is no answer. Here we have an industry which has come along the path it is now treading slowly and with reluctant steps. They will examine with the most meticulous care every proposal for a redundancy scheme that is put for ward. It was suggested in Committee by those who opposed the proposal that the necessity of providing compensation would be used to bring the balance down against a redundancy scheme when otherwise the balance might swing the other way. That was given as a reason for not making compensation compulsory, but I say that it is an overwhelming reason for making it compulsory. If you leave people to decide for themselves, they will always find good reasons for not doing some thing if they do not want to do it, but once it is decided that they shall do it and it is made obligatory, then it is remarkable with what speed and facility the obstacles are overcome and a work able scheme produced. If redundancy schemes are desired, you will get them even if compensation has to be provided, and if the schemes are not desired, you will not get them, whether compensation has to be provided or not. I say that the House dare not take the responsibility of passing legislation which, if it is to succeed, must inevitably have the con sequence of depriving large numbers of people of the only skilled trade they know, without saying to them at the same time that, in any scheme for that purpose, provision shall be made for some measure of moderate compensation.
    5.32 p.m.
    Mr. Petherick: The hon. Member for Nelson and Colne (Mr. Silverman) suggested, at the beginning of his speech, that the reason no hon. Member on this side rose to support the Government in
    1556
    this matter was that we were frightened of our constituents. As a matter of fact, I have supported the Government on this issue on other occasions, both in the Committee and on other Bills in the House.
    Mr. Silverman: I am sure the hon. Member does not wish to misrepresent me. I do not think I said anything about any body's constituents, except my own.
    Mr. Petherick: The hon. Member certainly suggested that we were afraid of our constituents, and that, consequently, we refrained—
    Mr. Silverman: Will the hon. Member allow me to tell him again that I said no such thing?
    Mr. Petherick: I am glad to hear that, but I hope the hon. Member will read his remarks in the Official Report to morrow. Whether or not he said it, however, I should like to say that some of us have not been in the least afraid of supporting the Government on similar issues in the case of other Bills, and for very much the same reasons as those for which we support the Government on this occasion. I do not suppose that any hon. Member on this side of the House wishes to withhold compensation, wherever it is possible to give it, in the case of any men who are displaced as a result of redundancy schemes. My right hon. Friend the President of the Board of Trade and many other hon. Members have made that quite clear. The reason I did not rise to speak before was that this matter was discussed exhaustively in the Committee, although I do not in the least take exception to the hon. Member raising it again; but I do not want to repeat the rather long speech on the subject which I made in the Committee. On that occasion, I submitted certain figures as to the possible cost of making this Clause mandatory, and those figures have not yet been controverted. I think it is very likely that the figures I gave were exaggerated, but hon. Members opposite who take the view that this provision should be made mandatory ought, in support of their case, to give some indication of the probable cost, for it seems to me that the cost of paying compensation on the basis suggested by some hon. Members in the Committee would be so gigantic that it would result in there being no redundancy schemes. If hon. Members opposite advocate a certain course,

    1557
    it is only right that they should make it clear that the cost would not be greater than the schemes could bear.
    Mr. Gordon Macdonald: If it were shown that the schemes could bear it, would the hon. Member support the insertion of "shall" instead of "may"?
    Mr. Petherick: I should be glad to hear what the figures are, and I would then use my judgment on the matter, but so far, I have not heard any figures given. I hope that before the matter is taken to a Division, we shall hear some accurate estimate of what the cost would be likely to be.
    Mr. Burke: Can the hon. Member tell us exactly how many mills are likely to be closed down and how many operatives likely to be displaced? If he does that, we may be able to give him a forecast of the cost.
    Mr. Petherick: I gave a number of figures in Committee, and they have not been controverted. Therefore, it seems to me that, although we are wholly in favour of paying compensation—and under the Bill as it is, compensation can be paid where possible—it would be un wise to make the provision mandatory for the reason that it would, In fact, result in there being no redundancy schemes at all. If hon. Members who advocate making the provision mandatory are unwilling to give figures showing that the industry can bear a scheme of compensation all along the line—
    Mr. Silverman: When the hon. Member refers to the industry, whom does he include in it? Are not the workpeople themselves part of the industry? Are they to bear the cost which the rest of the industry will not bear?
    Mr. Petherick: I think everybody is involved indirectly, of course, in these redundancy schemes, but I think an accurate forecast of the cost ought to be given, for otherwise we are working in the dark. I consider it would be wrong to give to the unfortunate workpeople concerned the impression that they are being wrongly treated in this respect be cause of the provision not being made mandatory. The hon. Member for Nelson and Colne has made out a case which will read extraordinarily well in his constituency, but I do not think it is right to lead the workers up the garden
    1558
    and cause them to believe that under this Bill, if the proposals of hon. Members opposite were carried out, the firms in the industry could stand the amount that would be involved.
    5.40 p.m.
    Mr. G. Macdonald: I had not the privilege of being a member of the Standing Committee which dealt with this Bill, but I can say that I have read every word that was said in the Committee on a similar Amendment to this one. We have no desire to lead the workers up the garden. We should not suggest the insertion of the word "shall" in place of "may" if we thought that this could not be done. We should not raise hopes on the part of the displaced cotton workers that they would get compensation if we knew that it was not possible for that to be done. Sooner or later, the House will have to realise that the workers in industry are as important as the capital in industry. At all times there is in the House a readiness to agree to compensation being given to the persons who invest capital in industries, and I have never heard it suggested by any hon. Member opposite that it would not be possible to provide compensation for those who have invested money in an industry; but whenever it is suggested that the workers who will be displaced should be given compensation, there is some doubt cast upon the possibility of providing that compensation. I am certain that the President of the Board of Trade would never agree that, where it is possible to pay compensation either to those who invest money in an industry or those who invest their labour in it, the whole compensation should be paid to those who invest money, and that it should then be said that we cannot afford to pay compensation to those who invest their labour.
    I have much sympathy with the President of the Board of Trade on this issue. I know that throughout the negotiations the word "may" was understood by both sides to be the word that would be inserted in the Bill. I do not think the unions representing the cotton workers ever suggested the insertion of "shall" in the early stages. They were so anxious to get an agreed Measure that they withheld that suggestion. I shall understand it if the right hon. Gentleman, when he replies later, says that since it

    1559
    is an agreed Measure and since the workers in the industry agreed to the word "may" in the early stages, it is now rather late for us to run the risk of wrecking the Bill by insisting on the word "shall" being included.
    Mr. Fleming: The hon. Member has had experience of colliery schemes. Can he tell us of any colliery scheme, when there was an amalgamation and some colliers were displaced, where compensation was given to the workmen?
    Mr. Macdonald: I will come to that matter later. I fully appreciate the difficulty of the President of the Board of Trade. I know that he will be bound to tell us that he has carried on with this Bill on the understanding that we would be satisfied with the word "may." It was during the Committee stage that we proposed, for the first time, the substitution of "shall" for "may." If we insert the word "shall" to-night, I know that we shall run the danger of destroying the Bill. I recognise the difficulty, but we cannot allow this opportunity to pass without emphasising what we believe to be the right thing, namely, that where a Measure displaces labour, some compensation shall be paid to the workpeople, and furthermore, that where a Measure provides compensation for those who invest money in the industry, it is quite unjustifiable that the same Measure shall not provide compensation to the labour that is displaced.
    I happen to live in a mining area where there are also a few cotton mills, and I have seen this thing working for years. Provision is made all the time for the people who provide the essential capital of industry. We do not quarrel with that, for under private enterprise, somebody has to find the capital. But we know also that labour is just as essential. Our great case is this. This Bill makes compensation mandatory with regard to one section of the industry, and then, when it comes to the workers, the word "may" is inserted. The hon. Member for Penryn and Falmouth (Mr. Petherick) spoke about our leading the workers up the garden. What will the word "may" do? Will it not lead to many expectations? The inclusion of that word suggests the possibility that compensation can be paid. I ask the President of the
    1560
    Board of Trade whether it is possible for him, between now and the last stage of the Bill in another place, to do something to get agreement on this matter. We do not want to destroy this Bill. The cotton workers of Lancashire have sacrificed too much already in order to get the Bill to be parties to its destruction now. Is it possible for the right hon. Gentleman to tell us that he will make one further endeavour to get all those involved in the negotiations to accept the insertion of the word "shall"? I want to make it clear that the cotton workers have no desire to destroy the Bill, and if they thought that the inclusion of the word "shall" would destroy the Bill, they would wish that word to be withheld from the Bill. But at the same time, we are anxious that something should be done to safeguard the interests of the workers who will be displaced.
    Mr. Fleming: Will the hon. Gentleman reply to the point which I put to him?
    Mr. Macdonald: Certainly. Reference was made by my hon. Friend the Member for Westhougton (Mr. Rhys Davies) to what we tried to do in connection with the 1938 Measure and what we failed to do. We made the same case then as regards the mining industry and we met with the same opposition, and we have not got such a scheme inside the mining industry.
    5.45 p.m.
    Mr. Burke: In supporting the Amend-I should like first to reply to the hon. Member for Penryn and Falmouth (Mr. Petherick). He told us that no one in this House wished to withhold compensation if it could be paid. That argument" has been advanced over and over again. It is advanced every time we ask for any payment to members of the working class. But when public opinion decides that it must be done, somehow or other the money is always found. We have been told recently that there is no money to grant an addition to Old Age pensions, but everybody knows that public opinion will, before very long, compel that money to be found. In this case, the money can be found in the cotton industry for these people, if the Government wish it to be found.
    The right hon. Gentleman may tell us that this matter was agreed upon by the sponsors of the Bill. I am not concerned,

    1561
    and I hope the House will not be concerned with what the sponsors of the Measure may have agreed about privately outside. This House has a right to say for itself what shall go into this Bill and if the Government desire this word to go in, there is no need to be bothered by any commitments which may have been made by anybody outside the House. The question has, certainly, been discussed in Committee upstairs. There we were asked about the probable cost. We cannot say what the probable cost will be, because we do not know how many people are likely to be displaced. But I can tell hon. Members that if we put in "shall" instead of "may" it is likely to reduce the cost of the redundancy schemes be cause, if it is known that, before a scheme can be put into operation, so much will have to be provided for displaced operatives, those concerned may think twice about recklessly closing down mills and causing unnecessary hardship. I think this Amendment would provide a very fine brake upon any attempts to carry through redundancy schemes without full consideration.
    Let me put another view. We cannot deal with the finance situation, but I would like the House to consider the human side of this question. The hon. Member for Penryn and Falmouth in very perfect English and in very cold terms told us that this thing could not be done and that by our proposal we were only seeking to "lead the people up the garden." We feel very keenly about this matter. We are not talking, and certainly I am not talking, just for the sake of "leading the people up the garden." When I go home to my constituency I will meet an entirely different set of circum stances from those which will be met by the hon. Member, or by the hon. and gallant Member for Coventry (Captain Strickland) who has pushed and fought for his own particular interests in the rayon industry.
    Captain Strickland: Does the hon. Member suggest that they are my own personal interests?
    Mr. Burke: No, I do not mean the hon. and gallant Member's personal interests. What I mean is that he has put his own particular point of view for the rayon industry and has fought for it. I am trying to put my point of view for people
    1562
    in whom I am as much interested as the hon. and gallant Member is interested in those for whom he speaks. I hope that, having gained so many concessions for those for whom he has spoken, he will be with us now, in trying to get some concession for the people for whom I am speaking. When I go home, I will meet four unemployed persons for every one that the hon. and gallant Gentleman or the hon. Member for Penryn and Falmouth will meet. There is no part of the country where unemployment has had such a bad effect as in the North East of Lancashire. The striking feature of the Lancashire cotton towns to-day is abject poverty. They have gone through years of depression. They have had to face, not merely the ordinary unemployment which we all know about, but that other kind of unemployment, that under-employment, which people in many parts of the country do not understand. That kind of employment is never referred to in the statistics which are given to us by the Minister of Labour when he has to tell us that the figures have gone up or down, or when he is explaining the figures away. He never talks about that type of unemployment because it is not revealed in the statistics.
    Sir H. Williams: If the hon. Member studies the monthly statistics published by the Ministry of Labour he will find that they include an element—speaking from memory I think the number is about 200,000—consisting of those who are working what is called organised short-time.
    Mr. Burke: The hon. Member is one of those people of whom, unfortunately, there are millions in this country who just do not understand, who are not even beginning to understand the problem with which I am dealing. I am not talking about people who are working short-time. I am talking about people who are working full-time, who are putting in a 48 hour week at full trade union rates and who are getting less than they would get on the dole. Let me give the hon. Member a specific case. It is the case of a man with a wife and four children. He works a full 48-hour week and his average wage is 27s. 5d. for that week. He is not entitled to go to the relieving officer and ask for any supplement. Under Part II of the 1934 Act, he is debarred. If the

    1563
    relieving officer is good enough he may get round the Act in some way. In this case he has done so and has given this man a food ticket value 5s., so that his income now, for all the weeks that he is on that system, will be 32s. 5d. If that man had been unemployed he would have had 35s. a week, but for putting in a full week, at the full trade union rate, he loses 2s. 7d. If that were a solitary case, or one of a few cases, one might say that there was not much to be done for those people, but I can give other cases.
    Mr. Hammersley: I am sure the hon. Member does not want to give a wrong impression to the House. He will agree that the circumstances which he has de tailed do not refer to the cotton trade as a whole, but only to one section of it.
    Mr. Burke: That case refers to the weaving section of the industry, but the weaving section of the industry is the largest section and employs hundreds of thousands of people. But I will go from the weaving section of the industry to the spinning section, about which the hon. Member knows something, and I will give another case. Here is a case which has been before the card room workers' union. It is the case of a woman whose normal wage is 28s. a week. She received an injury to her hand and came up for compensation. It was discovered that her average weekly wage during her last period of employment had been us. 6d. and her compensation was fixed at the rate of 8s. 6d. These facts have been recorded in the Press and are well known. If hon. Members consult the "Manchester Guardian" of 4th May, they will find there an account of an investigation conducted by Mr. E. M. Gray of the Manchester School of Economics in which he examined 17,600 cards of weavers in a number of towns. He discovered that under-employment affected 60 per cent. of those 17,600 workers. In no week over a long period were less than 40 per cent. of those people suffering from under-employment.
    What it means is that these people, for months and years past, week in and week out, have been weighed down with worry and sinking into debt. They have not been able to get sufficient food. They had to go round the cheapest stores for their food; they have to look for second-hand clothes and they have exhausted
    1564
    their savings. Some of them, in better days, put their savings into these mills. That was before Mr. James White came along and bled Lancashire white. Those people are not responsible for the present state of affairs. Hon. Members opposite may say that they are not responsible either and I agree that the main cause has been the loss of markets. But there is some responsibility due to the employers. The people for whom I plead never exported abroad the machinery which has taken our trade from us. The people for whom I plead have not sent their money out to be invested in China and India and elsewhere. There is more British capital invested in China than there is capital belonging to any other country. Those people have just had to suffer.
    Now that the House has an opportunity of saying, "Because of the state of the organisation it may be that you will have to go out of the industry altogether," it is the duty of the House, not to tell us what might have happened at the joint committee, not to tell us what the trade union representatives may have said, but to meet the case which is being made for the worker. Just as the House has made concessions in other directions, just as the joint committee have been forced to agree to things which they did not want, so the House and the Government if they want to do so, can say on this occasion, "We shall not allow this to be permissive and as we have compelled you to pay for scrapped material, so also you shall pay for scrapped humanity."
    Mr. Fleming: The hon. Member knows that the representatives of the trade; unions did, after long consideration, agree that the word in the Clause should be "may." Is he asking the House now to reject the advice of the trade union leaders?
    Mr. Burke: Yes, I am. I am saying that the joint committee put this forward along with many other things which the House in its wisdom has rejected. The House is the final arbiter and while we may be guided by what has been agreed to outside, we have rejected other decisions of the joint committees and I say we ought to reject this one. The hon. and learned Member knows that the joint committee has accepted certain things, not because they wanted those things but in order to compromise. This word "may"

    1565
    has been accepted by way of compromise. We say that that compromise is unjustified and we ask the House to say that it is not necessary for the Lancashire operatives to be asked to make this sacrifice.
    6.0 p.m.
    Mr. Stanley: This Debate has been characterised by very deep and genuine feeling and there has been only one point on which an intervention was made which I thought unnecessary. That was an intervention by the hon. Member for Nelson and Colne (Mr. Silverman) who, because none of my hon. Friends on this side at that time rose to speak in the Debate, expressed the view that they were acting on the principle that discretion was better than valour and that they were afraid to express on the Floor of the House opinions which they had expressed in the Committee. I think that is an un fair suggestion and that my hon. Friends on this side refrained from speaking because they, like hon. Members in other parts of the House, are anxious that this Bill shall pass, and realise that we have a tremendous lot of work before us. They wanted no doubt to listen to what I had to say, reserving to themselves the right, if they thought I was not stating as they would wish the arguments in which they believed, to supplement them later. I do not think any hon. Member will feel that there is any fear on the part of hon. Members to maintain the opinions which they expressed upstairs and which are on record.
    Mr. Silverman: I did not want to be unfair to anybody. I said perfectly clearly that no doubt they would be con tent to express their opinions where they will be equally on record, in the Division Lobby, at the end of the Debate.
    Mr. Stanley: I think we can well leave it there. Every hon. Member realises the position exactly. The hon. Member who moved this Amendment and who, I am sorry, is at the moment out of the House, did so in a speech of great power. He began by a great declamation about the capitalist system and the actions of hon. Members who sit on this side on behalf of their friends in the capitalist classes. He said that the Government and their supporters never thought of doing any thing for the working class. He rather spoilt the effect of that argument by citing a long list of instances where com-
    1566
    pensation has been inserted in various Acts, and it is interesting to note that all those Acts were passed by Governments which were supported by hon. Members on this side. The fact that he was able to cite a number of cases in which this compulsory compensation has been inserted in Acts of Parliament passed by this Government or their predecessors which were supported by my hon. Friends, is a sign that we do desire, where it is possible and practicable, that this compensation should be paid to the workers in industry under conditions of this kind.
    In the examples which he cited—the Railways Bill and the Electricity Bill, for instance—there are two clear distinctions-between them and the machinery in the Bill which we are now discussing. There is, first, the distinction that industries like railways and electricity are not exporting industries, but quasi-monopolistic industries in which the argument of costs does not loom so great. There is the further important distinction that these were industries where the compulsion was ordered by Parliament and laid down by Parliament and had to go through; it is very different in this Bill, where all that is laid down by Parliament is the machinery whereby the redundancy schemes can be put into effect if those in the section desire that it should be, and where if, for some reason or another, members of a section do not think that a redundancy scheme would be advantageous to the section, it is left open to them not to have a scheme, and not, therefore, to deal with redundancy.
    I have been told from several hon. Members who spoke from the other side what I was going to say in my speech, and I do not intend to disappoint them. The hon. Member for Ince (Mr. G. Macdonald) in his remarkable speech said I was going to say, and that I was entitled to say, that the word "may" instead of "shall" was not the invention of the Board of Trade of the Government, but that it was in the scheme originally put up to them by the Joint Committee, and that on that Joint Committee served members representing the trade unions concerned in the industry. I am going to put up that argument, and I believe I am justified in doing it. I will not put it in the way it was argued by the hon. Member for Burnley (Mr. Burke), on the ground that something

    1567
    put forward by the Joint Committee is sacrosanct, and that because it has been put forward by the consent—no doubt the compromise consent—of all on that Committee, Parliament has no right to criticise or to alter a word. That has never been the line I have taken in the discussions on this Bill. What I have said is that we want to know the reason which moved these representatives of the trade unions concerned, gentlemen who are just as intimate as hon. Members who have spoken with the conditions that exist in Lancashire and who, to say the least, are just as anxious as hon. Gentlemen who have spoken to improve those conditions wherever they can, and who can point to just as good a record as any hon. Gentleman who has spoken in improving those conditions.
    Why was it that they were prepared to assent to this compromise and to agree to the word "may" being inserted in the Bill? Is not the reason clearly that they saw that in the type of scheme which we have accepted for this Bill the insertion of the word "shall" would do no good to the parties concerned, but might, in fact, cause them a great amount of injury; and that, although by accepting this Amendment a scheme will have to contain this condition for compensation, you do not under the machinery of the Bill make it obligatory to put for ward a scheme at all; and you run the risk, therefore, if you put this extra obligation upon those who are to put forward a scheme, that the schemes will not be brought forward. It has been admitted by all that that evil will not be remedied. The hon. Gentleman in very eloquent terms drew attention to a great evil in Lancashire, of which I agree many people are only too ignorant. That is? the condition of under-employment which prevails in some of the sections there. It is to meet that problem of under-employment that redundancy schemes are put forward. Do you really benefit the great mass of the people for whom you speak if you put into a scheme an obligation which may prevent the scheme ever being put forward, which may prevent a remedy ever being taken, and which may lead to the continuation of the sort of circumstances which the hon. Gentleman deplored?
    Mr. Burke: The right hon. Gentleman is suggesting that the employés, rather
    1568
    than wreck the Bill, made the sacrifice by agreeing to the word "may" instead of "shall." In that way he is suggesting that the employers would not make that kind of sacrifice and that it was the workers who had to face up to the alteration of the word rather than wreck the scheme.
    Mr. Stanley: I do not think that is a fair comparison. I will restate my argument. My argument is that the workers' representatives on the Joint Committee agreed to the introduction of the word "may." Why? Because, I think, they believed that the word "shall" would not be enforceable, and that because it would not be enforceable, it would not be to the benefit of the workers. That was the dilemma which I put to the House, that if you put in the word "shall" and the people concerned in the scheme thought that word imposed an additional financial obligation upon those who had to pay the levy, it would in their minds destroy any possibility of a scheme at all. In every section they will have to examine the problem of redundancy, how much is likely to have to be spent, how many firms there will be to bear that burden, and whether it is a financial obligation which is possible for the section to bear. Obviously any extra in any particular section that is added has to come into consideration and may be enough to turn the scale between the section accepting or rejecting it. There was some talk between hon. Gentlemen on both sides of the House about leading the workers up the garden, and the hon. Gentleman the Member for Ince was rather afraid that even the insertion of the word "may" would lead the workers up the garden, for it was put in with the intention of nothing of the kind being done. I cannot believe that the workers' representatives, who must be aware of the minds of the others who sat on the Joint Committee, and who must have discussed this matter with them, would have agreed to this compromise if they believed that all the time the other members of the Committee had no intention of making it a reality and that it was simply put in as some sort of eyewash.
    Mr. G. Macdonald: It was not my intention to give that impression.
    Mr. Stanley: The hon. Gentleman seemed to be afraid that that might turn

    1569
    out to be the case. I cannot believe that the workers' representatives would have agreed to it unless they thought the other people concerned were sincere and that they meant "may" to mean some thing and to mean all that hon. Gentle men opposite want it to mean in the scheme where it is practicable. It is my belief that that is the spirit in which the Joint Committee put it forward and that that is the way the sections will operate it and in which the schemes will be scrutinised as they come up through the machinery which is provided in the Bill. I believe that hon. Gentlemen in all parts of the House desire that wherever it is possible in this sort of machinery—new and regrettable because it is machinery which only comes in an industry which to some extent has declined from former prosperity—when people are displaced, compensation is contemplated. I do not believe that to make it obligatory would be a benefit to the workers or that it would result in any more schemes dealing with compensation. I believe, on the other hand, that there would be fewer schemes dealing with redundancy. I believe that under the permissive powers in the Bill as it now stands the promotors of schemes in the sections and the members of the sections will make an honest attempt to provide this compensation as and where it is practicable.
    6.15 p.m.
    Mr. E. Smith: I speak here on behalf of a large number of people who during the past 20 years have taken a strong stand in favour of this principle. It is a principle for which I have stood uncompromisingly ever since I had experience of the effects of redundancy and of unemployment. I have stood for it in trade union conferences and conferences in all parts of the country when our movement was not taking the stand upon it which some of us thought it should have taken. We passed through dark days because of the non-acceptance of that principle. With the development of industry in this country as a result of mechanisation productivity has increased to such an extent that the output per man or woman employed now is greater than ever it was in the world's history, is, relatively speaking, greater than in any other part of the world, and in these conditions we are bound to plead for the acceptance of this principle. In addition
    1570
    to that I speak on behalf of my hon. Friend the Member for Farnworth (Mr. Tomlinson), who has spent the whole of his life in this industry and who knows what went on behind the scenes and what occurred to make the trade unions agree to this compromise.
    The President of the Board of Trade told us that though this principle had already been accepted it was in the cases of quasi-monopolistic industries, and that here we were dealing with an export trade. The logic of that is that this principle will never be applied to those whose lives are invested in the export trade, but only to those engaged in the home industries; but we on this side are not pre pared to accept any such differentiation. He was quite right when he pointed out that the trade unions had agreed to this Bill as it now is, but what were they up against? They were up against having to reach an agreement with the representatives of all interests in the cotton industry, and he knows the difficulties that he himself had to contend with be hind the scenes in trying to placate the whole of those interests, even with the great power which his position as President of the Board of Trade gives him and with this Government with its enormous majority behind him. There fore, I say it is not fair to emphasise the fact that the trade unions have given way in this matter.
    In regard to the question of "shall" or "may" I had a bitter experience of how we were let down in the engineering trade in 1922. I am not critical of those who were responsible for negotiating the agreement of 1922, but our hearts have been burning with indignation ever since at the way we were dealt with then. We had been locked out for six months and were forced round the conference table and forced into those so-called negotiations. One of the clauses in the agreement stated that the employers "may" do certain things, and we have been engaged in a ten years' legal battle trying to prove in the courts that the word "may" should be read in the same way as "shall." Having had that experience, on no consideration can we on this side agree to the word "may" remaining in the Bill, and the only logical step for us to take is to support the Amendment.
    During the next few weeks there will be published in this country a book which

    1571
    I hope will be read by every hon. and right hon. Member. We are living in a democratic State, and if that means any thing it means that we should set a better example to the world than do certain other countries. It is true that as a result of negotiations the Joint Committee have agreed to the Bill as it is, but surely the decision of Parliament overrides that of any Joint Committee or any industry. On a fundamental principle of this character this House, if it claims to re present the people of this country, ought to override any negotiations which have taken place outside. No matter what has occurred outside, we of this party must stand for this principle. I have had the experience over several periods of signing on at the Employment Exchange along with thousands of others. The people that belong to me are as good as any people that belong to any hon. or right hon. Member in this House, but they are no better than anybody else's people, whether they be Englishmen, Scotsmen, Irishmen or Welshmen. Surely after the developments we have had in this country we ought to be setting an example to the world and this House ought to stand for the adoption of this principle: that seeing that most of our men and women are pre pared to accept employment, to run after employment, if reasonable conditions and wages are offered to them, if employment cannot be found for them they ought to be decently maintained.
    Here we have a Bill which proposes to reorganise the whole of the cotton industry. When it becomes an Act of Parliament a large number of mills will automatically close down. We are not speaking critically of that, because we believe we have arrived at a period of development within the present social system when that reorganisation must take place, when increased efficiency must be brought about in order that we may hold our own in the world's markets and improve our export trade. But when the mills are closed down what will happen? If two mills close down the directors will be automatically compensated. [Hon. Members: "No."] Generally speaking, in all cases where there has been re-organisation the directors of any undertaking which has been closed down have either been compensated directly or have been given shares in the efficient undertaking which is allowed to remain.
    Sir Henry Fildes: Can the hon. Member give one case where it has happened?
    Mr. Smith: I would have armed myself with examples if I had known that my statement would be challenged.
    Sir H. Fildes: I know of 50 cases where it has not happened.
    Mr. Smith: Well, all right; but every body who is versed in industrial affairs knows that what I am saying is a fact. I do not mind my statement being challenged, only I have made it a practice to fortify myself with documentary evidence to prove anything I say and the reason why I did not do it this afternoon was that I never expected that the statement would be challenged. Everybody knows that it has happened in most re-organisation schemes, and the hon. Member is only trying to side-track me when he interrupts me.
    My final point is this: We on this side are here only because we have reflected throughout the ages the aspirations, the principles and the ideas of the common people of this country. As our people have become more and more politically conscious they have refused to stand for the humiliating treatment which they have suffered so long. As I walk through Knightsbridge I see how the parasitical section of this country lives, and then I go back to the cotton areas and see how the people live who have made this country great, the people who have built up its export trade and the people who will protect this country if it becomes involved in a certain situation. We should not be doing our duty this evening if we did not put this point of view before the House, and did not remind our party that when we get into power it will be no use saying that we are not prepared to translate into concrete reality the ideas we have put forward from this side. We say that because of our experience of certain people who misled the people of this country, and let the country down, but eventually found their way on to the Treasury Bench. It is no use saying one thing on the platform and saying some thing else here. It is no use denouncing vested interests on the platform and then coming here and being influenced by the flattery of those same vested interests in this House.

    1573
    When an opportunity like this comes along we must, if we are to be worthy of the people of this country, take a stand for the principles we have professed. We have to give our people some hope and retain their confidence, and we can only do that by standing up for the principles on which we have come to the House. Here we have an opportunity of translating those principles into concrete realities, and we ought not to be making excuses for not taking advantage of the opportunity. Although this proposal has been rejected to-day by the President of the Board of Trade we are convinced that it is only a matter of time before it will be accepted by the House.
    Sir H. Williams: I would like to make a brief observation in reply to the eloquent speech to which we have just listened. It was what I might describe as the standard speech of the hon. Member for Stoke-on-Trent (Mr. E. Smith) on any occasion, but he made the statement that under the Bill all those capitalists whom he was denouncing would get compensation. There is not one provision in the Bill whereby any capitalist is compulsorily compensated.
    Mr. E. Smith: I know that the hon. Member for South Croydon (Sir H. Williams) is smart, and that he always takes points up, but I hope that he will not misrepresent what I said. I said that generally speaking when any director is displaced in industry as a result of re organisation an arrangement was made to compensate him.
    Sir H. Williams: But we are discussing the Bill. [An HON. MEMBER: "We are supposed to be."] The hon. Member's speech was in respect of an Amendment to the Bill. The hon. Gentleman sitting next to him made the same mistake. The only provisions of the Bill whereby a capitalist is compensated are those cases where they want to sell machinery in order that that machinery might be destroyed.
    Mr. Silverman: It is certainly voluntary whether a scheme is adopted or not, but once a scheme has been accepted by the requisite majority and adopted by the trade, then it must be operated; and under the operation of that redundancy scheme looms are to be scrapped. They are taken and bought and the owner of them is compensated. That is the point of the dis-
    1574
    tinction that we are making between the scrapping of machinery with full compensation and the scrapping of the labourer with none.
    Sir H. Williams: I am sorry that the hon. Member, who sat in the Committee upstairs, has not taken the trouble to read the Bill. The powers under a redundancy scheme are to be acquired by agreement, and at no stage in the Bill are those compulsory provisions. The speech of the hon. Member for Ince (Mr. G. Macdonald) and the eloquent speech of the hon. Member for Stoke-on-Trent had not the faintest relation to the Bill.
    Mr. Silverman: Your speech has not.
    6.33 p.m.
    Mr. Tinker: In the mining industry we know about amalgamations. I can say from my own experience that when amalgamations take place directors are found positions on the central governing body of the firms concerned.
    Sir H. Fildes: I understood that the hon. Member was describing the conditions that obtain in the cotton industry.
    Mr. Tinker: I have in mind the general application of this principle. We know from experience of amalgamations that all the interests concerned on the financial and management sides are found positions. That is why we have taken the opportunity of trying to impress upon the House the unfairness to the-workmen's side in this Measure. I know the difficulties. There has been an under standing between the workmen's representatives and the employers to get an agreed Bill, but we bring this principle before the House, even though we recognise that we cannot get it carried in view of that agreement, because we know we should not be doing our duty unless we impressed upon the House how we felt and unless we brought forward the worker's point of view.
    We must all recognise that there are two sides to the industry. If somebody is to be squeezed out and the employers side can be recompensed, surely it is only fair to give the workers' side some recompense. It may be that the employers' side say that there is the Unemployment Fund. I agree that, as a last resort, there is that fund for the workers, but is that sufficient? Is the miserable pittance given to a man who is out of work

    1575
    for a long period because of these amalgamations sufficient recompense? We could not allow this opportunity to pass this evening without giving some sign of our feelings on the matter. When these agreements are made I trust that recognition will be given to both sides of the industry, and although we cannot succeed to-night in impressing that upon the House, I hope that hon. Members will have in mind, when these amalgamations take place, the fact that there is another side which ought to be considered.
    6.36 p.m.
    Mr. Watson: I would like to support this Amendment before we go to a Division upon it. I supported my hon. Friends' Amendment in Standing Committee. What has struck me as peculiar this evening is that the forces which gave the President of the Board of Trade most trouble in Committee have been placated, whereas the side that almost consistently supported him loyally in his efforts to get the Bill through the Committee stage are now turned down absolutely. The right hon. Gentleman turns down absolutely our plea that compensation for the employés should be obligatory. He has been able, during the period that has elapsed between the Committee stage and to-night, to placate very powerful forces that gave him trouble on the first seven Clauses of his Measure. As a matter of fact, until this question came before the Committee there was no unity on the Government side with regard to the Bill. Those on the Government side paid no attention to the fact that this was an agreed Measure, and the right hon. Gentleman had to appeal again and again to his own side on the ground that it was an agreed Measure. He has been able to satisfy the rayon interests which gave him trouble in Committee, but when we come forward with a modest request that the employés should be as much entitled
    to compensation as the employers, he turns down the claim of the workers.
    I shall not contest the point that was put forward by the hon. Member for South Croydon (Sir H. Williams). He was perfectly correct in saying that it was agreed that a certain amount of machinery would be scrapped and that compensation would be paid. There is no doubt about the compensation being paid in respect of the machinery, but the employés only "may" be compensated. It will depend upon the scheme. It may end in some employés being compensated and others not being compensated. You may have in the industry in future a great deal of trouble on the differentiation meted out to certain sections of the industry. It is most unfair that the employés should be placed in a position inferior to the employers.
    I cannot understand why the workers' representatives on the Joint Committee agreed to a Measure of this kind. My hon. Friend the Member for Stoke-on-Trent (Mr. E. Smith) said that this was an agreed Bill, but not this Bill that we hold in our hands this afternoon. This is not the Bill that was agreed upon by the Joint Committee. That Bill was amended in Committee and there are yet to be moved by the President of the Board of Trade whole pages of Amendments which will alter the Bill still further. The Bill that it is proposed should leave the House to-night is not the Bill that was agreed to in the Joint Committee. The President of the Board of Trade would be equally justified in accepting this Amendment and putting in the word "shall" as in accepting Amendments to placate the rayon interests on the other side.
    Question put, "That the word' may stand part of the Bill."
    The House divided: Ayes, 178; Noes, 116.

    Division No. 221.]

    AYES.

    [6.40 p.m.

    Acland-Troyte, Lt.-Col. G. J.

    Boyce, H. Leslie

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Adams, S. V. T. (Leeds, W.)

    Braithwaite, Major A. N. (Buckrose)

    Chapman, A. (Rutherglen)

    Albery, Sir Irving

    Braithwaite, J. Gurney (Holderness)

    Chapman, Sir S. (Edinburgh, S.)

    Alien, Col. J. Sandeman (B'knhead)

    Brocklebank, Sir Edmund

    Chorlton, A. E. L.

    Aske, Sir R. W.

    Brooke, H. (Lewisham, W.)

    Christie, J. A.

    Astor, Viscountess (Plymouth, Sutton)

    Brown, Rt. Hon. E. (Leith)

    Clarke, Colonel R. S. (E. Grinstead)

    Balfour, G. (Hampstead)

    Brown, Brig.-Gen. H. C. (Newbury)

    Clarry, Sir Reginald

    Balniel, Lord

    Browne, A. C. (Belfast, W.)

    Clydesdale, Marquess of

    Beit, Sir A. L.

    Bull, B. B.

    Cobb, Captain E. C. (Preston)

    Bennett, Sir E. N.

    Burton, Col. H. W.

    Cook, Sir T. R. A. M. (Norfolk N.)

    Blair, Sir R.

    Campbell, Sir E. T.

    Cooke, J. D. (Hammersmith, S.)

    Bossom, A. C.

    Cary, R. A.

    Cox, H. B. Trevor

    Bower, Comdr. R. T.

    Cazalet, Thelma (Islington, E.)

    Croft, Brig.-Gen. Sir H. Page

    Cross, R. H.

    Jennings, R.

    Samuel, M. R. A.

    Crossley, A. C.

    Jones, Sir G. W. H. (S'k N'w'gt'n)

    Sandeman, Sir N. S.

    Crowder, J. F. E

    Keeling, E. H.

    Schuster, Sir G. E.

    Cruddas, Col. B.

    Kellett, Major E. O.

    Shaw, Captain W. T. (Forfar)

    Davidson, Viscountess

    Kerr, Colonel C. I. (Montrose)

    Smith, Sir R. W. (Aberdeen)

    Denman, Hon. R. D.

    Keyes, Admiral of the Fleet Sir R.

    Smithers, Sir W.

    Denville, Alfred

    Knox, Major-General Sir A. W. F.

    Snadden, W. McN.

    Despencer-Robertson, Major J. A. F.

    Lambert, Rt. Hon. G.

    Somervell, Rt. Hon. Sir Donald

    Dodd, J. S.

    Leighton, Major B. E. P.

    Southby, Commander Sir A. R. J.

    Doland, G. F.

    Levy, T.

    Spears, Brigadier-General E. L.

    Donner, P. W.

    Lipson, D. L.

    Spens. W. P.

    Dorman-Smith, Col. Rt. Hon. Sir R. H.

    Loftus, P. C.

    Stanley, Rt. Hon. Oliver (W'm 'I'd)

    Drewe, C.

    M'Connell, Sir J.

    Stewart, J. Henderson (Fife, E.)

    Dugdale, Captain T. L.

    McEwen, Capt. J. H. F.

    Strauss, H. G. (Norwich)

    Dunglass, Lord

    McKie, J. H.

    Strickland, Captain W. F.

    Eastwood, J. F.

    Macmillan, H. (Stockton-on-Tees)

    Stuart, Lord C. Crichton- (N'thw'h)

    Eckersley P. T.

    Manningham-Buller, Sir M.

    Stuart, Hon. J. (Moray and Nairn)

    Edmondson, Major Sir J.

    Margesson, Capt. Rt. Hon. H. D. R.

    Sutcliffe, H.

    Elliot, Rt. Hon. W. E.

    Maxwell, Hon. S. A.

    Taylor, C. S. (Eastbourne)

    Emery, J. F.

    Mellor, Sir J. S. P. (Tamworth)

    Thomas, J. P. L.

    Emmott, C. E. G. C.

    Mills, Major J. D. (New Forest)

    Thomson, Sir J. D. W.

    Entwistle, Sir C. F.

    Mitchell, Sir W. Lane (Streatham)

    Thorneycroft, G. E. P.

    Evans, Colonel A. (Cardiff, S.)

    Moreing, A. C.

    Titchfield, Marquess of

    Everard, Sir William Lindsay

    Morgan, R. H. (Worcester, Stourbridge)

    Touche, G. C.

    Fildes, Sir H.

    Morris-Jones, Sir Henry

    Tree, A. R. L. F.

    Findlay, Sir E.

    Morrison, G. A. (Scottish Univ's.)

    Tryon, Major Rt. Hon. G. C.

    Flaming, E. L.

    Munro, p.

    Tufnell, Lieut.-Commander R. L.

    Fremantle, Sir F. E.

    Nicholson, G. (Farnham)

    Wallace, Capt. Rt. Hon. Euan

    Gibson, Sir C. G. (Pudsey and Otley)

    Nicolson, Hon. H. G.

    Ward, Lieut.-Col. Sir A. L. (Hull)

    Graham, Captain A. C. (Wirral)

    O'Connor, Sir Terence J.

    Waterhouse, Captain C.

    Grant-Ferris, Flight-Lieutenant R.

    Orr-Ewing, I. L.

    Wayland, Sir W. A.

    Granville, E. L.

    Petherick, M.

    Webbe, Sir W. Harold

    Gridley, Sir A. B.

    Pickthorn, K. W. M.

    Wells, Sir Sydney

    Grigg, Sir E. W. M.

    Pilkington, R.

    Whiteley, Major J. P. (Buckingham)

    Grimston, R. V.

    Ponsonby, Col. C. E.

    Williams, H. G. (Croydon, S.)

    Gritten, W. G. Howard

    Porritt, R. W.

    Willoughby de Eresby, Lord

    Guest, Lieut. Colonel H. (Drake)

    Radford, E. A.

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Hacking, Rt. Hon. Sir D. H.

    Raikes, H. V. A. M.

    Windsor-Clive, Lieut.-Colonel G.

    Hammersley, S. S.

    Ramsbotham, Rt. Hon. H.

    wise, A. R.

    Hannah, I. C.

    Reed, A. C. (Exeter)

    Womersley, Sir W. J.

    Heilgers, Captain F. F. A.

    Remer, J. R.

    Wood, Hon. C I C.

    Hely-Hutchinson, M. R.

    Rickards, G. W. (Skipton)

    Wragg, H.

    Hepburn, P. G. T. Buchan-

    Ropner, Colonel L.

    York, C.

    Hoare Rt. Hon. Sir S.

    Rosbotham, Sir T.

    Holmes, J. S.

    Rowlands, G.

    TELLERS FOR THE AYES.—

    Howitt, Dr. A. B.

    Royds, Admiral Sir P. M. R.

    Mr. Furness and Lieut.-Colonel Harvie Watt.

    Hudson, Capt. A. U. M. (Hack., N.)

    Ruggles-Brise, Colonel Sir E. A.

    Jarvis, Sir J. J.

    Russell, S. H. M. (Darwen)

    NOES.

    Adams, D. M, (Poplar, S.)

    Garro Jones, G. M.

    McGovern, J.

    Adamson, Jennie L. (Dartford)

    George, Major G. Lloyd (Pembroke)

    Mainwaring, W. H.

    Alexander, Rt. Hon. A. V. (H'lsbr.)

    George, Megan Lloyd (Anglesey)

    Marshall, F.

    Amman, C. G.

    Green, W. H. (Deptford)

    Mathers, G.

    Banfield, J. W.

    Greenwood, Rt. Hon. A.

    Maxton, J.

    Barnes, A. J.

    Grenfell, D. R.

    Messer, F.

    Barr, J.

    Griffith, F. Kingsley (M"ddl'sbro, W.)

    Montague, F.

    Bonn, Rt. Hon. W. W.

    Griffiths, G. A. (Hemsworth)

    Morrison, Rt. Hon. H. (Hackney, S.)

    Benson, G.

    Griffiths, J. (Llanelly)

    Naylor, T. E.

    Bevan, A.

    Groves, T. E.

    Noel-Baker, P. J.

    Broad, F. A.

    Guest, Dr. L. H. (Islington, N.)

    Oliver, G. H.

    Brown, G. (Mansfield)

    Hall, G. H. (Aberdare)

    Paling, W.

    Buchanan, G.

    Hall, J. H. (Whitechapel)

    Parker, J.

    Burke, W. A.

    Hardie, Agnes

    Parkinson, J. A.

    Charleton, H. C.

    Harris, Sir P. A.

    Pearson, A.

    Cluse, W. S.

    Hayday, A.

    Price, M. P.

    Clynes, Rt. Hon. J. R.

    Henderson, J. (Ardwick)

    Pritt. D. N.

    Cocks, F. S.

    Henderson, T. (Tradeston)

    Quibell, D. J. K.

    Collindridge, F.

    Hills, A. (Pontefract)

    Ridley, G.

    Cripps, Hon. Sir Stafford

    Hopkin, D.

    Riley, B.

    Daggar. G.

    Isaacs, G. A.

    Ritson, J.

    Dalton, H.

    Jagger, J.

    Salter, Dr. A. (Bermondsey)

    Davies, R. J. (Westhoughton)

    Jenkins, A. (Pontypool)

    Sanders, W. S

    Davies, S. O. (Merthyr)

    John, W.

    Sexton. T. M.

    Dobbie, W.

    Jones, A. C. (Shipley)

    Shinwell, E.

    Dunn, E. (Rother Valley)

    Kennedy, Rt. Hon. T.

    Silverman, S. S.

    Edward., Sir C. (Bedwellty)

    Lansbury, Rt. Hon. G.

    Simpson, F. B.

    Edwards, N. (Caerphilly)

    Lathan, G.

    Smith, Ben (Rotherhithe)

    Evans, D. O. (Cardigan)

    Lee, F.

    Smith, E. (Stoke)

    Foot, D. M.

    Leslie, J. R.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Frankel, D.

    Macdonald, G. (Ince)

    Smith, T. (Normanton)

    Gallacher, W.

    McEntee, V. La T.

    Sorensen, R. W.

    Gardner, B. W.

    McGhce, H. G.

    Stephen, C.

    1578

    1579

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Viant, S. P.

    Wilmot, John

    Stokes, R. R.

    Walker, J.

    Woods, G. S. (Finsbury)

    Strauss G. R. (Lambeth, N.)

    Watkins, F. C.

    Young,. Sir R. (Newton)

    Taylor, R. J. (Morpeth)

    Watson, W. McL.

    Thorne, W.

    White, H. Graham

    TELLERS FOR THE NOES.—

    Thurtle, E.

    Whiteley, W. (Blaydon)

    Mr. Adamson and Mr. Anderson,

    Tinker, J. J.

    Williams, T. (Don Valley)

    6.48 p.m.
    Mr. Stanley: I beg to move, in page 8, line 7, to leave out from "to," to the end of line 10, and to insert:
    "persons of any class specified in the scheme who, having been employed in or about a mill to which the scheme applies, have lost that employment, if the loss of employment appears to that board to be ascribable to the opera-lion of the scheme."
    This Amendment is to meet a point which was raised by the hon. Member for Nelson and Colne (Mr. Silverman) during the Committee stage. He pointed out that the provision with regard to compensation in the Bill as drafted only applied to a worker who was employed at the actual time when the mill was purchased for scrapping, and that there was a possibility, to put it no higher, of some sort of collusion which might deprive the worker of his right to compensation—that, when the owner of the mill had agreed to sell the mill for scrapping, he might dismiss the workers then and a week or 10 days later sell the mill, thus avoiding any obligation to pay compensation. I promised at the time to look into the point and see whether I could find any wording which would get over that difficulty. As a result I have put down this Amendment, which would make it possible for the board administering the scheme to look into the whole circum stances of the case and pay compensation if they thought that the loss of employment was ascribable to the operation of the scheme, without being bound by the fact that the worker must be in employment at the actual moment when the mill was sold.
    6.50 p.m.
    Mr. Silverman: I am grateful to the right hon. Gentleman for this Amendment, and agree that it goes a long way towards meeting the point which he has outlined. I am not quite sure that the wording is happy, but I do not want to raise any point about that. There is, how ever, another possibility, to which I think I referred in Committee, which has nothing to do with any kind of collusion. I am thinking of the case of the man who, owing to the peculiar conditions of em-
    1580
    ployment in the industry, might not actually be employed on the date on which the scheme takes effect. While that might not be used for the purposes of any un worthy action by the employer, or any attempt on his part to back out of his liability, it might just happen, without any ulterior motive, but quite genuinely and legitimately, that the worker was not employed, and that, owing to the conditions of the industry, it would nevertheless be unfair to exclude him from any compensation to which he might other wise have been entitled merely because on a particular date there happened not to be any work for his loom to do. I am not sure that the Amendment meets that case, because the fact that he was not employed on the operative date would have nothing at all to do with the scheme, but would be due to the general conditions in that particular mill and in the industry at that time. His con tract may not in fact have been terminated. Nevertheless, if the result of the scheme were to be that the man was never to be employed again, and if the scheme was one in which compensation was provided for, it would not be equitable that he should get no benefit at all. It might perhaps have been better if we had put down an Amendment to cover that point, or an Amendment to the right hon. Gentleman's Amendment. I do not want to oppose the present Amendment, because I think it meets the point which the right hon. Gentleman has described, but I would ask him whether, between this and another stage, he would consider what has been said and see whether this further case could not be met also.
    6.53 p.m.
    Mr. Stanley: I will certainly look into the point, though I must say that at the first glance I should have thought it was met. I should have thought that the case of the man who just happens to be stood off for the one day on which the transaction goes through could probably say that the total loss of his employment was ascribable to the operation of the

    1581
    scheme. That is my personal view, but I will certainly look into the point.
    Amendment agreed to.
    Mr. Stanley: I beg to move, in page 8, line 40, at the end, to insert:
    "(4) An order under the proviso to the last preceding sub-section shall be laid before Parliament as soon as may be after it has been made, and shall not take effect unless and until it has been approved by a Resolution of each House of Parliament."
    Some attention was drawn to the pro vision of this Clause which, while limiting the period during which a redundancy scheme might be submitted, at the same time gives the Board of Trade power to extend that period to a final period which is three times as long as the period originally laid down. I think it is quite right that, in a Bill of this kind, which we hope will last for a considerable time, there should be a certain amount of flexibility, but I agree that it is perhaps too great an executive power to give to the Board of Trade to turn a term of five 3'ears finally into a term of 15 years. The Amendment, therefore, makes it certain that, if the Board of Trade wishes by order to extend the period of five years, the order must be laid before Parliament and must receive an affirmative Resolution of both Houses of Parliament.
    Amendment agreed to.

    CLAUSE 9.—(Provisions as to price schemes.)
    Amendments made:
    In page 9, line 25, leave out "products," and insert "any product."
    In line 26, leave out "products," and insert "a product."—[Mr. Stanley.]
    Mr. Stanley: I beg to move, in page 9, line 29, to leave out "prices," and to insert:
    "price (hereinafter referred to as' the normal minimum price')."
    This Amendment, the Amendment in page 9, line 34, to leave out "charges," and to insert:
    "charge (hereinafter referred to as' the normal minimum charge'),"
    and the Amendment in page 10, line 16, to leave out "permitted price or charge," and to insert:
    "amount determined in accordance with the provisions of Part I of the Schedule (Limitations on, and special exemptions from, determination of normal minimum price or
    1582
    charge under a price scheme) to this Act (hereinafter referred to as 'the maximum limit'),"
    are really drafting in character, but they are introductory to the whole new system of price fixing which is contained in the Third Schedule. I think it would be very much for the convenience of the House if we postponed the discussion of this new system of price fixing till we get to the new Schedule, which is really the operative part. That will enable us to confine our discussion on Clause 9 to the question of conditions, and it will have the advantage that, when we reach the Schedule, we shall be able to discuss at the same time, not only the question of fixing the normal minimum price, but also the provisions that are being made for what we call the super-efficient producer. I think, therefore, that it will be for the convenience of the House if I postpone my remarks on this change in the system until we reach the new Schedule.
    Amendment agreed to.
    Further Amendment made: In page 9, line 29, leave out "such products," and insert "that product."—[Mr. Stanley..]
    6.58 p.m.
    Mr. Cross: I beg to move, in page 9, line 31, to leave out from "scheme," to the end of line 33.
    This Amendment is consequential upon the later Amendment to which my right hon. Friend has just referred, as is also the Amendment to paragraph (c) (ii), in page 9, line 39, to leave out from "scheme" to the end of line 3 on page 10. I am entirely in the hands of the House, but I think it would be much more convenient, in view of the fact that the later Amendments are of considerable substance, to take them together, and it seems to me, therefore, that it would make for a better discussion if we were now to pass these two small Amendments formally, and take the discussion at a later point.
    Amendment agreed to.
    Further Amendments made:
    In page 9, line 34, leave out "charges," and insert:
    "charge (hereinafter referred to as 'the normal minimum charge')."
    In line 36, leave out "such products" and insert "that product."
    In line 39, leave out from "scheme," to the end of line 3 on page 10.—[Mr. Cross.]
    Mr. Cross: I beg to move, in page 10, line 16, to leave out "permitted price or charge," and to insert:
    "amount determined in accordance with the provisions of Part I of the Schedule (Limitations on, and special exemptions from, determination of normal minimum price or charge under a price scheme) to this Act (hereinafter referred to as 'the maximum limit')."
    7.0 p.m.
    Sir C. Entwistle: This raises the question of the determination of costs in the scheme.
    Mr. Cross: I do not know whether my hon. Friend followed my right hon. Friend's suggestion that we should take all questions of price on the Third Schedule.
    Sir C. Entwistle: I am perfectly willing to do that as long as my hon. Friend knows what is the point I want to raise. Paragraph (d) lays it down that the sectional board can reduce the price list without the consent of the Cotton Industry Board, but, if it raises the price list, the authority of the Cotton Industry Board is required. The point that I want to raise is this. When the Cotton Industry Board have made a determination of costs for the purpose of approving the price list, there seems to be no pro vision either in this Amendment or in the subsequent provisions for having that determination reviewed if there is an alteration in the conditions which form the basis of that determination, such as a change in wage rates, a change in the cost of raw materials, and so on. I should like to ask whether the Minister's Amendments will be considered from that point of view, because I think it very desirable that that power of revision should be in the hands of the board. If my hon. Friend tells me I had better raise that at a later period, having indicated what it is, I shall be glad to do so.
    Mr. Cross: I do not know whether my hon. Friend will feel it necessary to mention the matter again. I know it is a point which my right hon. Friend has in mind and to which he proposes to give consideration with a view, possibly, to making Amendments, if practicable, in another place.
    Sir C. Entwistle: I will not raise it again, having obtained that assurance. I
    1584
    have raised it now because I thought this the only place where I could properly do so.
    Amendment agreed to.
    7.3 p.m.
    Mr. Cross: I beg to move, in page 10,. line 16, at the end, to insert:
    "and also to consider, in the light of any recommendation made to them by the Export Development Committee, the extent to which, if they consented to that determination, they would in the first instance exercise in relation thereto the powers conferred on them by the provisions of the scheme having effect by virtue of the next following paragraph."
    This arises out of an undertaking given by my right hon. Friend in Committee to move an Amendment which would make it plain that a recommendation of the Export Development Committee on price concessions shall be made available before the price-fixing scheme is brought into effect. It was represented that, in considering the normal minimum prices, the Board should have regard to the ex tent to which they propose to consent to various derogations from those prices. It was also thought desirable that the announcement of the concession prices should be made simultaneously with the fixing of the price, because it might other wise occur that a new price is made above the price that had existed in the past, and the consequence of the fixing of that price would be to lose markets overseas and by the time the concessions had been published it would be too late to recover those markets. It is evident that those two things should be done simultaneously. The Amendment requires the Board, before consenting to any price determination, to have regard to any recommendations of the Export Development Committee and, in particular, to consider what derogation from the minimum prices they would be allowing at the outset.
    Amendment agreed to.
    Mr. Cross: I beg to move, in page 10, line 16, at the end, to insert:
    "(e) may contain provisions empowering the board administering the scheme to make a determination whereby—

    (i) any product in relation to which a normal minimum price is determined under the scheme may be sold on any one occasion at a price less than the normal minimum price but not less than the price specified in the determination. or

    (ii) any product in relation to which a normal minimum charge is so determined may be subjected to the relevant process

    1585
    on any one occasion for a charge less than the normal minimum charge but not less than the charge specified in the determination.

    if the quantity of the product sold or subjected to the process on that occasion is not less than such quantity as that board may specify in the determination, and may also contain provisions requiring that board to have regard, in making any such determination, to the saving in costs to a person selling the product or carrying out the process, as the case may be, which is likely to be effected by reason of that quantity of the product being sold or dealt with by him on one occasion."
    This Amendment also arises out of an undertaking given in Committee to consider whether we might change certain terms employed in the Bill which were too wide and would be better more precisely denned. The terms in question related to "circumstances, including the amount of business done, as may be specified in the scheme." That is an extremely wide expression. The purpose of the Amendment is to provide reductions in price for large orders in relation to the lower costs which result from large orders. I think this is a matter of general agreement amongst the interests affected.
    7.5 p.m.
    Sir C. Entwistle: I think my hon. Friend will agree that the Clause is really a substitution for the words as they stand in the Bill from line 39 on page 9 to line 3 on page 10, which we have already omitted. The Bill as it was before this Amendment was proposed said that the sectional board can fix the minimum charges, terms and conditions on which alone such products may be subjected to that process,
    "and authorising or requiring the determination as aforesaid of different prices or charges according to such circumstances (including the amount of business done on the particular occasion) as may be specified in the scheme."
    The sectional board could fix different prices where the circumstances, including the amount of business done, were specified in the scheme. It was thought in Committee that that discretion or power given to the sectional board was made too wide and that it must be further particularised. That particularisation is what is in the present Amendment. But the alteration from the normal minimum price now given by this Amendment is only for a reduction of the price in the event of large bulk orders. There is no provision for an increase where the orders
    1586
    are small and where the cost of production would be different because of the smaller order, and it would, therefore, be possible for people to sell their goods under smaller orders at a loss, although the normal minimum price might provide for a reasonable basis of profit. That is not an unimportant point, because one of the troubles in the industry has been that in the scramble for business manufacturers have had to take very small orders, and it was the very smallness of the order that made it uneconomic, whereas if the order had been of a reasonable size a lower price could have been obtained.
    This Amendment gives power to grade the price down in the event of a large bulk order, but it still leaves no opportunity to grade it up so as to encourage people to take small orders at a price which is only economic on the basis of orders of normal size. Under the Amendment as it stands, the sectional board might be driven to put the normal mini mum price on the basis of small orders, and under the Clause they would be able to grade down, and, as they could not grade up, in many cases the temptation would be for the minimum price list to be based on the smallest possible orders. That is a very undesirable thing.
    Mr. Hammersley: Where does my hon. Friend derive his knowledge that in the event of the normal economic price being fixed on a maximum limit there is any restriction on any seller putting up his price for a small order if he thinks fit?
    Sir C. Entwistle: I quite see that but it is very desirable, surely, to say, when you have a price list fixing a minimum price, that they cannot take less than a price for small orders, because you want to prevent the industry being run on un economic lines. Therefore, it is right that you should have your minimum below which they cannot sell according to the size of the order. The whole purpose of the Amendment is that there shall be a lower determined price list, in the event of large orders. Surely it would be logical to have an increase, if required, in the price list so as to discourage the taking of small orders. If a provision like this is not inserted to allow for grading up as well as down, the temptation will be for the normal minimum price to be determined on the basis of a cost of production which applies only to the smallest

    1587
    orders that are being obtained. That would be very undesirable, first of all because it is called a normal minimum price and, secondly, it is undesirable that your standard minimum price should be based on the practice of small orders, which one of the purposes of the Bill is to discourage, and, therefore, it is better to have your normal minimum price based on the cost of production of a quantity which is an average quantity and not an exceptionally small one.
    I think this is a necessary provision if you are to obtain the flexibility that is required to work this price scheme in practice. As I understand it, the practice of a price scheme will be to have a price list which will be graded according to quantity. This Amendment provides for a lower price in the event of bulk quantities. I only want to make sure that there will be the necessary flexibility both ways simply for the purpose of discouraging small orders. I understand that the point has been raised by the industry with officials of the Board of Trade. The Clause only appeared on Tuesday. There has been very little time to examine it from a practical point of view, and it was impossible to frame any Amendment to carry out a purpose which, I think, is desirable. I am only asking whether my hon. Friend will consider the point with a view to a necessary Amendment being introduced in another place.
    7.15 p.m.
    Mr. Dodd: I think the House will have some difficulty in understanding the effect on the Clause of the many Amendments which are proposed, but these Amendments, taken in conjunction with the Schedules, which are to be considered later, represent a very valiant effort on the part of my right hon. Friend to meet the points of view put forward by members of the Committee upstairs. While the effect may be clear to those who were on the Committee, there is one phrase which, I think, wants a little clarification. That is the phrase, "on any one occasion at a price" in paragraph (e, i). I can understand what the proposal means in respect of a concession being allowed on a particular order at a particular time; but suppose an order of a similar character comes along afterwards, could that concession be repeated? I think there is substance in the point that my
    1588
    hon. Friend the Member for Bolton (Sir C. Entwistle) has made. In the sectional schemes latitude must be given upwards, as well as downwards. When it is a question of jobbing orders for small quantities, there is a case for increasing, and not decreasing, the price, for these very small orders are not economic. There are a number of other points which I wanted to raise, but which would be better raised on the Schedule. I think that the Clause, as now drafted, with the Amendment, taken in conjunction with the Schedule, is a masterpiece of drafting; and I congratulate the drafting staff on having incorporated an amazing number of suggestions which were put upstairs.
    7.19 p.m.
    Sir H. Williams: I appreciate the point made by my hon. Friend the Member for Bolton (Sir C. Entwistle), but we have to contemplate the very large order, which, because of its magnitude, represents a lower cost of production, and, therefore, can be sold more cheaply. It is often the case that when a manufacturer is asked for a small quantity the buyer is ready to pay a higher price. I should have thought that normal commercial practice would have covered this matter entirely. You must make the scheme as simple as possible if you are not going to destroy it. I hope my right hon. Friend will think twice or three times before introducing a new element of con trolled prices, which would involve the whole industry in great difficulties.
    7.21 p.m.
    Mr. Silverman: The hon. Member for Oldham (Mr. Dodd) said that, no doubt, those of us who were on the Committee would understand this. I confess, quite frankly, that I do not understand it. I think it is a mental impossibility for any body, no matter how long he spent on the Committee, to take a long, complicated Clause, such as Clause 9, to add to it or subtract from it 21 Amendments, occupying a page and a-half of the Order Paper, and then to have any adequate picture of what the Government are really asking the House to do. Would it not have been possible to include somewhere in an Explanatory Memorandum or a White Paper the Clause as the Government would like to have it in its final form, so that we could decide whether

    1589
    we wished to have it or not? I am unable to understand the cumulative effect of 21 Amendments on a Clause which was sufficiently complicated before.
    Mr. Maxton: Has the hon. Member not seen a statement issued by the trade?
    Mr. Silverman: I have had a great many statements issued by the trade.
    Mr. Maxton: I found on the bench beside me a statement issued by the Joint Committee of Cotton Trade Organisations, which makes the thing seem to me to be very simple.
    Mr. Silverman: I think the hon. Member will find that it is not so simple as he thinks. I, personally, have been very grateful for the assistance which all of us have had from people outside on the matter. They have been very helpful, and I appreciate their help; but the Government are responsible for this Measure, and not people outside. It may be that that explanation makes this very simple, but the Government has no responsibility for it. It is unfair to ask the House to deal step by step with a long and complicated series of Amendments of this kind, when it is impossible to understand what the effect would be unless the matter is dealt with in some compendious way.
    7.24 p.m.
    Sir H. Fildes: I would ask the right hon. Gentleman in charge of the Bill to reject the suggestion of the hon. Member for Bolton (Sir C. Entwistle), for this reason. It is very well known that in the cotton trade travellers are sent abroad, and prospective customers give a trial order to see whether a firm's quality is up to that of its competitors. If you are going to discourage these trial orders, out of which it is hoped to get big business, it will be a great mistake. I welcome the changed attitude in the House towards this Bill. The President of the Board of Trade has succeeded in making the lion, the tiger, the leopard and the Iamb lie down together, and if ever he goes into the entertainment world, provided that he can repeat these performances, he is assured of a livelihood. I hope he will stand firm in this matter, and not add another complication to this already very complicated, and, in my opinion, totally undesirable Measure.
    7.26 p.m.
    Mr. Cross: The hon. Member for Nelson and Colne (Mr. Silverman) fears very
    1590
    great complication as a result of these Amendments. I can assure him that, to some extent, the issue we are on now is a simple one, and there are only two more issues, I think, which need be raised on this Clause. The matters arising on the Schedule are, I think, a great deal clearer. My hon. Friend the Member for Oldham (Mr. Dodd) asked whether the phrase "on any one occasion" meant that these discounts could be given on more than one occasion. I am in formed that this precise terminology was employed by the draftsmen for convenience of reference to "that occasion" in line 11, and in order to avoid the situation in which the producer might be bulking a number of small orders and might get the discount as for a large-order. There is not a possibility of get ting this discount for repeat orders. My hon. Friend the Member for Bolton (Sir C. Entwistle) conjectured that the normal minimum price would be fixed, if I under stood him rightly, on the basis of small orders.
    Sir C. Entwistle: No, I said that it was very desirable that it should be based on an average-sized order, but that in that case there should be a grading up and down; otherwise there would be a temptation to fix it on a small order, which was undesirable.
    Mr. Cross: I misunderstood my hon. Friend. I understood that he was suspicious that the normal price would not be based on a small order. I want to point out that if we were to make an Amendment on the lines he desires we should have yet one more minimum price, and we have a lot already. We shall be unduly complicating the Bill if we add further minimum prices. More over, it would be not at all easy to draft such a provision. I was further discouraged from accepting the suggestion by the fact that the representatives of the merchants were extremely hostile to a provision of this kind. They argue—and the hon. Member for Dumfries (Sir H. Fildes) used some of their arguments—that the trial order is one of the most important orders to be placed, as it is sometimes the beginning of big orders at later stages. By introducing this Amendment we have gone some way in the direction which the hon. Member for Bolton desires, because, by encouraging large

    1591
    orders through giving discounts, we should tend to discourage the number of small orders which are placed in the industry. In view of all those considerations, I could not encourage my hon. Friend to think that my right hon. Friend would really be willing to consider yet again making an Amendment in the Bill such as he suggests.
    Amendment agreed to. Further Amendments made:
    In page 10, line 22, leave out "the products in question," and insert "pro ducts of the industry."
    In line 24, leave out "products," and insert "a product."
    In line 26, leave out "such products," and insert "that product."
    In line 29, leave out from the beginning, to "or," in line 30, and insert:
    a price less than the price for the time being determined in relation to that product by the board administering the scheme, but not less than the price specified by the Cotton Industry Board."
    In line 32, leave out "such products," and insert "that product."
    In line 33, leave out "processes," and insert "any particular process."
    In line 33, leave out from "of," to the end of line 35, and insert:
    "a charge less than the charge for the time being determined in relation to that process by the board administering the scheme, but not less than the charge specified by the Cotton Industry Board."
    In line 36, after "down," insert:
    "in accordance with the following provisions of this Section."—[Mr. Cross.]
    Mr. Cross: I beg to move, in page 11, line 2, at the end, to insert:
    "(f) may contain provisions for securing, with respect to any product of the industry being a product of any such description as may be specified in the scheme, that no per son registered under the scheme shall sell that product, or subject it to any specified process, under any contract which does not contain such terms as may be specified in the scheme in relation to that product or which contains any term inconsistent with, or repugnant to, the terms so specified."
    This Amendment, together with two other Amendments on the Paper, namely, in Clause 9, page n, line 22, at the end, to insert a new Sub-section (3), and in Clause 12, page 15, line 40, at the end, to insert a new paragraph (c), relate to contracts and to the terms which may be
    1592
    laid down in a scheme which must be inserted in contracts. These Amendments are the outcome of consultation with the various interests affected. The first Amendment says that the terms of a con tract may be specified in a price scheme. At one time we thought the best plan would be to attach to a price scheme a standard contract, but eventually we abandoned that idea, because it appeared that it would be necessary in any one price scheme to attach several contracts to the scheme, and, moreover, that we could never be confident that we had inserted all the different terms that would be required in those contracts. We there fore resorted to this method, which is to lay it down that the terms of a contract may be stated in the scheme. These would be terms relating to such things as the necessity of adding the cost of packing or of transport of an article which was being sold and such things as putting down the conditions of payment, all of which are things which would otherwise provide an opportunity for a seller to get round the terms of a price scheme, and further terms, for instance, regarding de livery date. By only inserting the terms in the scheme, we leave scope for the addition of further terms in a contract, provided in the words of this Amendment, that those further terms are not "inconsistent with, or repugnant to, the terms "which are specified in the scheme.
    The third Amendment, namely, that in Clause 12, says that the merchants are to be consulted by the bodies submitting the scheme as to the terms relating to contracts which they may mention in that scheme. The merchants themselves were anxious that this consultation should take place. The representatives of the Industry were entirely willing, and it is clearly desirable that the merchants should have the opportunity of expressing their opinions on these matters. The second Amendment, in Clause 9, page 11, line 22, concerns terms of resale, which is a very difficult problem. There are two main considerations which I think we should bear in mind in this connection. The first is that if resale is not covered, it would become impossible to have a price scheme. A spinner or manufacturer can easily set up a merchanting subsidiary which would in fact be himself in another guise, and he could sell to that subsidiary his yarn or cloth and then sell it again free of all restrictions. The second con-

    1593
    sideration to remember in connection with this is that the merchants are very insistent that they should be allowed to retain their complete freedom to carry on their business in the ordinary way, and they advance very good reasons for that desire. For instance, if the goods they have bought have missed their market, they must be at liberty to cut their losses, while, on the other hand, they hope to make a larger margin on goods which are more successful. The same difficulty does not arise when we are dealing with yarn or with grey cloth, and we have consequently provided in the Amendment for a spinner or a weaver to be able under a scheme to sell his yarn or his grey cloth on condition that it is not resold in this country at a price below the price that has been fixed in the scheme.
    When we come to finished cloth, as I have already indicated, quite apart from the question of the desirability of fixing a price at which the merchants may resell that cloth, it is not, I think, practicable to control the price of resale. But that carries us one stage further. It means that the manufacturing concern which is doing its own merchanting would not be controlled except in so far as in selling its product it is directly covered by a price scheme. The Joint Committee of Cotton Trade organisations were agree able to the merchants not having their price of resale covered, but they were very reluctant that the vertical combine should have a similar freedom. But we came to the conclusion that we could not distinguish between them. In this case we have persons both of whom are performing the same function. They are both dealing with a similar product, and there seems to be no method of distinguishing between them, and even if there were, it would be inequitable. This is a matter which we have examined with the very greatest care. There has been ample consultation with all the interests affected, and I bring forward these Amendments with the recommendation that they are, I think, in all the circum stances the best possible solution.
    7.42 p.m.
    Mr. Hammersley: As the Parliamentary Secretary explained, the latter part of Sub-section (3) of the Clause will to a great extent mean that the merchants will be outside the scope of the operations of the Bill. It means, moreover, that
    1594
    the vertical combines that sell their own products will also be taken outside the scope of the Bill. It may be necessary that as this industry develops from the highly specialised condition in which it was a few years ago to a smaller and more integrated industry, we have to deal, as it were, with the position of the large people, and there will be scant room, I think, for the little men and women who are so dear to the heart of the hon. Member for Evesham (Mr. De la Bère).
    743 P.m.
    Sir P. Harris: I want to congratulate the draftsmen, from one point of view, on their ingenuity. But I must thank my stars that I am not in the cotton trade. It seems to me that before one could embark on any section of the trade one would have to be a skilled interpreter of what will be this very complicated Act of Parliament, and of this Clause in particular. This Clause is practically a Chinese puzzle, and I do not pretend to understand the repercussions of the Clause on the price of cotton goods and yarn. I feel that I must say that I do not take any responsibility for it. I do not know whether the whole Committee feel satisfied or understand the implications of the Clause. Frankly, I am not clear, but I accept the assurance that the trade as a whole and the various interests have been consulted and are satisfied. It may be that they do not quite understand the fullest implications of the Clause, but hope that its complexity will provide ample loopholes through which they will be able to find their way if they ultimately come across difficulties as the result of the passing of a Clause which is three pages in length, with four or five Sub-sections, and I do not know how many paragraphs lettered (a), (b), (c), (d), and so on.
    Amendment agreed to.
    Mr. Cross: I beg to move, in page 11, line 22, at the end, to insert:
    "(2) The conditions subject to which any permission may be granted by the Cotton Industry Board in relation to any product in pursuance of the provisions of a scheme having effect by virtue of paragraph (e)of the preceding Sub-section shall be such conditions (if any) as appear to that board to be necessary for all or any of the following purposes, that is to say—

    (a) for securing that the quantity of that product which, on any one occasion, is sold

    1595
    or subjected to the relevant process by a person registered under the scheme, at a price or for a charge less than the price or charge for the time being determined in relation to that product by the board ad ministering the scheme, is not less than that specified by the Cotton Industry Board;

    (b) for securing that the goods to which the permission relates are sufficiently identifiable and, where the permission is ex pressed to be granted in relation to the goods as being ingredients of any particular product, that they are in fact used as ingredients of that product;

    (c)for securing, in the case of a per mission expressed to be granted for the purpose of maintaining or increasing the consumption of a product in a particular area, that goods to which the permission relates or goods of any specified description manufactured there from, as the case may be, are in fact consigned to that area; and

    (d)for regulating the prices at which goods to which the permission relates may be sold on any occasion. after they have been sold or subjected to the relevant process by a person registered under the scheme."

    Although this Amendment is rather long and looks formidable, I can assure the hon. Member for South-West Bethnal Green (Sir P. Harris) that it is quite simple in essence. It relates to the conditions under which goods which are subject to price concessions may be sold. Under the Bill as originally drafted only the word "conditions" appears. That, clearly, was too wide. Under it almost anything under the sun might have been done. We were at pains to define more closely what we had in mind, and I think I can say in regard to the Amendment which I am now asking the House to accept that there has been the fullest agreement among all the interests affected.
    The position is, that spinners, weavers and finishers in case of price concessions have to make some sacrifice in price, and it is, therefore, only reasonable that the merchant who particularly desires them to produce goods at a low price should him self undertake not to make more than some limited sum. That is provided for in paragraph (d). Further, when we are concerned with these low-priced orders, it is clearly desirable that as far as possible the order should be of a certain substantial size, because there is economy in production in producing large quantities of goods. For that reason we have taken power here that the size of the order may
    1596
    be governed. That occurs in paragraph (a). Paragraph (b) relates to the identification of grey cloths. When the industrialist is making these cloths at a low price, it is generally right and proper that he should be assured that they go to the markets for which they are intended. In order the better to keep track of these cloths, power is taken for them to be specially marked. If these marked cloths turn up in some markets where cloths can be sold at the normal price, and it is found that they are being sold at these low, cut prices, then it will be known that in some way or other they have missed the market for which they were intended, and that is something that ought to be investigated.
    Mr. S. O. Davies: With what consequences?
    Mr. Cross: There are very serious con sequences to the merchant if he can be shown to have been guilty of a mal practice, as in Clause 11. There is a further assurance that it is proper the industrialist should enjoy as to the goods reaching their destination, and that is a (type of documentary assurance which may be provided by means of a bill of lading or in some other way. In this connection the merchants' representatives showed themselves willing to give the fullest assurance possible in order to convince the Cotton Industry Board, and through the Cotton Industry Board the industrialists, that the goods do in fact reach the markets for which they are intended.
    Mr. Charles Brown: This does not surely mean that the merchant has to keep track of the shirt until it reaches the back of the wearer?
    Mr. Cross: We are thinking of piece goods here. Amendment agreed to.
    Mr. Cross: I beg to move, in page 11, line 22, at the end, to insert:
    "(3) The terms of contracts specified in a price scheme shall not include any term the effect of which would be to restrict or regulate any sale of goods after they have been sold or subjected to a process by a person registered under the scheme:
    Provided that the terms so specified in a scheme containing provisions for the determination of prices in connection with the sale, by persons registered under the scheme, of any product of spinning, doubling or weaving which has not been subjected to

    1597
    any process of finishing, may include terms designed to secure that the price at which that product is sold in the United Kingdom on any occasion after the sale thereof by a person so registered is not less than the price for the time being determined under the scheme, being the price which would have been applicable to the sale of that product on that occasion if the seller were the person so registered."
    This Amendment relates to geographical disability.
    7.50 p.m.
    Mr. Petherick: I beg to move, as an Amendment to the proposed Amendment, to leave out lines 4 to 11.
    Speaking as a layman—when I say "a layman" I mean one who has not taken orders from the Joint Committee, the trade unions or anybody else—I am be coming rather confused as this Bill makes its progress. Unless one is conversant with all the inner workings of the trade, it is difficult to explain an Amendment like the one I now propose. As I under stand the new Sub-section it means that goods that are being bought by the merchants are the merchant's own, and he can sell them to anybody he likes and under any conditions he likes; but the proviso which I seek to delete is added, which implies that the Sub-section does not apply to spun yarn or unfinished cloth. The object of the Sub-section, as I understand it, is to put a stop to speculative purchases. I would point out that speculative purchases could be dealt with in another way. Another object of the Sub-section, as I understand it, is to pre vent evasion by sales to fictitious firms. If I understand the proviso aright, if a merchant has bought his goods under a price-fixing scheme, if they are then to be controlled, that is extremely dangerous for the interests concerned.
    It seems to me that a provision such as this will interfere with perfectly legitimate business. There is a great deal of trade done by taking orders at the moment when the market is suitable. That applies in the cotton trade as in many other trades. If this sub-section goes through as drafted, a very large number of orders which are being placed and snapped up will not be placed in the future. That introduces undesirable rigidity. If that contention be correct, that will obviously destroy the incentive which is the main motive of the Bill. It will lead to what we have always feared this Bill will lead to, and that is a sort
    1598
    of hum-drum procedure of the B2 class. A great deal of business is only possible if the merchants can buy at prices which will allow them to resell at certain prices. If the resale is subject to fluctuating prices, then business is impracticable and orders are lost. Suppose a merchant has to resell at a fixed price and the buyer to whom it is proposed to resell goes into bankruptcy, or trade conditions change, or tariffs are put up against him; the merchant is not allowed to cut his loss, because the price is fixed, consequently, these goods become completely unsaleable unless a change is made in the fixed price.
    Mr. Dodd: I cannot see that the hon. Member has followed the Clause as now amended. The merchant's price is not controlled. He has liberty of action. If he wants to raise or lower his price of the finished article he is perfectly en titled to do so. That is my under standing.
    Mr. Petherick: Not in the case of the proviso. As I understand, it the Clause affects only spinners, weavers and finishers.
    Mr. Cross: Yarn, or grey cloth.
    Mr. Petherick: It would be better to give the merchant complete control over the finished article. Manufacturers would be deterred under the Clause as it stands. Many goods are manufactured for retailing at special prices, and they would be unsaleable if the price is advanced, because the market might disappear. If a merchant has bought goods at a certain price for resale and he has a loan against those goods in order to enable him to finance them, he would be in a very unfortunate position if a price was fixed at which he could not possibly resell. For these reasons, I think it would be better to leave the sub-section as it stands without the proviso, and I would ask the Parliamentary Secretary to look into the matter and see whether it is not possible to give complete authority to merchants who have bought goods to resell as if they were their own and they were unrestricted.
    Sir H. Williams: I beg to second the Amendment.
    Mr. Hammersley: I hope the Parliamentary Secretary will not agree to the

    1599
    Amendment. It would completely nullify the working of any price scheme. We have already taken from the ambit of price schemes the operations of merchants dealing with finished goods. The effect of this Amendment would be to take out of the price scheme merchants who purchase yarn or grey cloth. The Amendment would completely prevent the operations of price schemes and would wreck the Bill.
    7.58 p.m.
    Mr. Cross: My hon. Friend the Member for Penryn and Falmouth (Mr. Petherick) was mistaken when he thought that this provision has been inserted for the purpose of stopping speculation. The proviso is necessary in order to enable price fixing to occur. It is absolutely essential that we should govern the conditions of re sale. If resale is not covered, the scheme could easily be wrecked by a producer setting up subsidiaries in order to market his products. He could sell to himself as a yarn agent. The manufacturer could set himself up as a merchant in a separate capacity and do exactly the same thing as far as grey cloth is concerned.
    Mr. Mainwaring: Surely, British capitalists would not do that.
    Mr. Cross: I will not enter into that. We had better stick to our yam and grey cloth. The merchant has his full liberty where the finished cloth is concerned. If you give complete freedom to the merchant, as my hon. Friend suggests, in regard to yarn or grey cloth, you must give the same freedom to the manufacturer or the spinner when he is handling the product which he himself has made. If you do that you will open the door wide to evasion. I agree with my hon. Friend as to the desirability of freedom as a general proposition, but in this matter we have to compromise to a small extent. The finished cloth is subject to changes of fashions and to errors of one kind and another, which make it absolutely necessary that the merchant should be in a position to cut his losses and get rid of it, but where grey cloth or yarn is concerned, the same conditions do not apply. One can imagine extreme cases where they do, but they do not apply in the same way in the ordinary course of business, and it has consequently been necessary to cover them by this proviso, which
    1600
    is absolutely essential if we are to avoid the evasion of price schemes.
    Mr. Petherick: I beg to ask leave to withdraw my Amendment.
    Amendment to the proposed Amendment, by leave, withdrawn.
    Proposed words there inserted in the Bill.
    8.1 p.m.
    Mr. Cross: I beg to move, in page 11, line 22, at the end to insert:
    "(4) A price scheme may provide that any determination by the board administering the scheme of the normal minimum price or normal minimum charge in connection with the sale of any particular product or the subjection of any particular product to any particular process shall, in relation to

    (a) the sale of that product by persons manufacturing it in any such area in the United Kingdom as may be specified in the scheme, or

    (b) the subjection of that product to that process within such an area in the United Kingdom as may be so specified, have effect as if the price or charge specified in the determination were reduced to such extent as may be specified in the scheme."

    This is the Amendment to which I was referring when I said that the Amendment was concerned with the geographical disability of Northern Ireland. The latter Amendment was one we had taken in connection with the earlier one under discussion.
    Amendment agreed to.
    Further Amendment made: In page 11, line 22, at the end, insert:
    "(5) The provisions of Part II of the Schedule (Limitations on, and special exemptions from, determination of normal minimum price or charge under a price scheme) to this Act shall have effect for the purpose of authorising the sale of any product or the subjection of any product to any process at a price or for a charge less than the normal minimum price or charge determined in relation thereto under a price scheme."—[Mr. Cross.]

    CLAUSE 12.—(Initial poll in relation to a sectional scheme.)
    Amendments made:
    In page 15, line 37, leave out and."
    In line 40, at the end, insert:
    "and—
    (c) in the case of a price scheme: specifying terms of contracts for the sale of pro ducts or the subjection of products to processes, that adequate consultation with respect to the specified terms has taken place between the body or bodies submitting the scheme and any such body as appears

    1601
    to the Cotton Industry Board to be representative of the interests of merchants."—[Mr. Cross.]

    CLAUSE 13.—(Proceedings if poll favourable.)
    Mr. Cross: I beg to move, in page 18, line 36, at the end, to insert:
    "(3) If, at the time when a price scheme is under consideration by the Cotton Industry Board, any representation which they are required to take into consideration before transmitting the scheme to the Board of Trade is made to them to the effect that, if the scheme were then in force, the operation thereof would have the result that persons required to be registered there under who carry on business in the industy at a place in the United Kingdom outside the area within which the majority of the persons required to be so registered carry on business in the industry, would be under a disability in respect of their so carrying on business by reason of matters arising on account of the distance of that place from that area, it shall be the duty of the Cotton Industry Board to inquire into the question whether the operation of the scheme; would have that result, and to report specially to the Board of Trade their decision on that inquiry; and, if they decide that the operation of the scheme would have that result they shall specify in the report the modifications (if any) which they think ought to be made in the scheme for the purpose of avoiding the said result."
    This Amendment also relates to geographical disability.
    Amendment agreed to.

    CLAUSE 14.—(Consideration of sectional schemes by Cotton Industry Advisory Committee.)
    Mr. Cross: I beg to move, in page 19, line 31, to leave out "of a width of thirty-six inches."
    This Amendment and the next three Amendments all deal with the same point. In the course of the proceedings on the Committee stage my hon. and gallant Friend the Member for Coventry (Captain Strickland) moved an Amendment to alter 36 inches, which was the figure given in the Bill, to 42 inches, and in the case of 54 inches to make alterations of from 50 to 56 inches. On that occasion my right hon. Friend replied that these widths had been suggested by the woollen industry and the Amendment was not pressed. Subsequently, however, we heard from the woollen and worsted industry that they would like to have a tolerance of one inch each way. The Joint Committee have agreed to that, and I can see no good reason why we should not make this alteration in the Bill.
    Amendment agreed to.
    Further Amendments made: In page 19, line 32, after "yarn," insert:
    "being fabrics of a width not less than thirty-five inches nor more than thirty-seven inches."
    In line 32, leave out "of a width of fifty-four inches." In line 33, after "woven," insert:
    "being linings of a width not less than fifty-three inches nor more than fifty-five inches."—[Mr. Cross.]

    CLAUSE 15.—(The Rayon Committee.)
    Mr. Cross: I beg to move, in page 20, line 24, to leave out from "say," to "selling," in line 26, and to insert:

    "(a) the business of manufacturing rayon fibre;

    (b) the business of spinning yarn from staple rayon fibre or weaving, fabrics from rayon yarn;

    (c)the business of finishing yarn spun from staple rayon fibre or fabrics woven from rayon yarn; and

    (d)the business of."

    My hon. Friend the Member for East Willesden (Mr. Hammersley), in the course of the Committee stage, moved an Amendment to this Clause to provide for two representatives of staple fibre spinners on the Rayon Committee when it is set up. This Amendment was accepted by the Committee and my hon. Friend did not raise the question of whether staple fibre spinners should be added to the list of interests who were to be consulted as to the desirability of setting up the committee. I think that the House will agree that, if the staple fibre spinners are to be added to the committee, there is a good deal to be said for consulting them as to-whether the committee should be set up or not. To constitute this particularly-small body of staple fibre spinners as a separate section to be consulted would, I think, be unreasonable, and would, moreover, be inconsistent with the attitude that my right hon. Friend has adopted towards all the interests concerned with this Rayon Committee. In these circumstances, he came to the conclusion that it would be best that the spinners should be grouped for the purpose of consultation with the weavers, and this Amendment, as drafted, gives effect to that decision.
    Mr. Rhys Davies: I take it that in this connection we have the authority of the

    1603
    Joint Committee of the Cotton Trade Organisations that they agree to these new provisions?
    Mr. Cross: Yes, Sir. I am informed that they are not opposed to them.
    Amendment agreed to.
    Mr. Cross: I beg to move, in page 20, line 33, to leave out from "may," to the end of the Sub-section, and to insert:
    "constitute a committee in accordance with the following provisions of this section."
    This Amendment and the following five Amendments, that is, to the end of Clause 15, all deal with the same point, and I think it would be for the convenience of the Committee if we could take them together. The last four Amendments are all consequential. As the Clause stands at present, the Rayon Committee is to be set up by the Board of Trade when the Cotton Industry Advisory Committee are satisfied that the majority of persons in all the four sections, the producers, the weavers, the finishers and the merchants, desire that the committee should be set up. This provision in the Bill was adopted by my right hon. Friend as a compromise to meet the conflicting views of the cotton industry and of the rayon producers. The rayon producers were very well represented on the Committee stage by a number of my hon. Friends, who never ceased to urge that the committee should be established. The cotton interests, however, in the meantime stood by the Clause. I think that we have at last found a means of reconciliation between these two opposing forces. The rayon interests, I understand, attach consider able importance to the Amendment which is now upon the Paper, and the Joint Committee of Cotton Trade Organisations are prepared to agree to it. I might be permitted to express the hope that, in view of this measure of agreement between those two forces, it may be a contribution to fruitful collaboration between those two bodies who have such common interests.
    8.10 p.m.
    Mr. Rhys Davies: It is not for me, on behalf of my hon. Friends, to say any thing at all about the quarrels of the two capitalist factions on this Bill, because that is what they are. We have had great enjoyment indeed in seeing the fight proceeding between these two sections.
    1604
    I am a little disturbed, however, at the absolute silence of the hon. Member for Dumfries (Sir H. Fildes) in our proceedings this evening after his eloquence in Committee upstairs. I quite understand the compromise, but I cannot understand why the right hon. Gentleman accepts the principle of this committee, and then says in the same sentence that he will not call the committee together until 12 months have expired from the date of the operation of the Act. I should have imagined that, once he had accepted the principle of setting up a committee in this form, the problem of a period would not arise as a problem for him to decide at all. The hon. Gentleman opposite smiles, but I can see through it all right away, and I think I had better leave it at that.
    8.12 p.m.
    Sir H. Williams: I would like to congratulate the Parliamentary Secretary to the Board of Trade and his Chief and all concerned upon having found a solution of what was evidently a very difficult problem. Those of us who are connected with neither industry found it a little difficult to discover why one industry was desirous of having a committee whose powers were not, superficially at any rate, very great, and another industry bitterly opposed to such a committee. It really was a very strange battle in which not only the capitalists were concerned on both sides, but the two industries as a whole were fighting one another, work people and employers alike, and we should not be misled by a little prejudice which the hon. Gentleman the Member for Westhoughton (Mr. R. Davies) likes to drag in. However, they have come to this ingenious compromise. A year can go by and nothing happen, but, on the other hand, those concerned know that at the end of the year Parliament, on the initiative of the President of the Board of Trade, can submit a motion which, if carried, will cause all concerned to constitute the committee.
    We are giving to the President of the Board of Trade a big stick which he may or may not find necessary to use, but both sides have made concessions and for the first time they have seen eye to eye. That is, I hope, an indication that what has really been a stupid quarrel between two industries is coming to an end. It is a policy of appeasement. [Interruption.] I am very greatly surprised

    1605
    that the party opposite has ceased to be the party of peace and is now proclaiming itself as the party of war. At all events, I hope that there is going to be friendship between these two interests whose real purpose should be to co-operate in the national interest and not to quarrel. The fact that this Amendment is accept able to both sides is an indication of a better spirit, and my right hon. Friend the President of the Board of Trade and those who advise him are to be cordially congratulated upon having found a settlement of what was obviously a very bitter dispute.
    Amendment agreed to.
    Further Amendments made:
    In page 20, line 35, at the end, insert:
    "(2) If, upon a motion made in each House of Parliament on behalf of His Majesty's Government at any time after the expiration of the period of one year beginning at the commencement of this Act, that House resolves that a committee should be constituted in accordance with the next following Sub-section, the Board of Trade shall constitute a committee accordingly, notwithstanding that no recommendation has been made to them under the preceding Sub-section."
    In line 36, at the beginning, insert:
    "The committee constituted under this Section (hereinafter referred to as 'the Rayon Committee') shall consist of 10 members appointed by the Board of Trade; and."
    In page 21, line 24, after "twelve," insert "of this Act."
    In page 22, line 10, leave out from beginning, to "for," in line 11, and insert "The Board of Trade may by order make provision."
    In line 13, leave out "that Board," and insert "the Cotton Industry Board."—[Mr. Cross.]

    CLAUSE 16.—(Consideration of sectional schemes by Board of Trade and sub mission to Parliament.)
    Amendment made: In page 22, line 18, leave out "report," and insert:
    "reports made to them in connection there with under the preceding provisions of this Act."—[Mr. Stanley.]
    8.16 p.m.
    Mr. Stanley: I beg to move, in page 23, line 28, to leave out "sectional," and to insert "redundancy."
    This Amendment and all the other Amendments to the Clause, with the exception of one, deal with the same point. As the Bill passed its Second Reading the
    1606
    provision with regard to the approval of Parliament to both redundancy and price schemes was the same; they were both the subject of a negative Resolution of the House. When we came to discuss the matter in Committee it was clear that the Committee as a whole desired two things: (1) that the House of Commons should have ample opportunity of expressing its approval or disapproval of redundancy and price schemes, and (2), that it was desirous, especially in regard to price schemes, that combined with this control there should be the maximum of speed. A number of suggestions were made and as a result I have put the Amendments on the Order Paper. Their effect is to divide the two types of schemes. As far as redundancy schemes are concerned they are left to an affirmative Resolution from the House, instead of to a negative Resolution.
    With regard to price schemes, where there is a case for the utmost speed, we have adopted the same procedure as for Orders under the Import Duties Advisory Act, that is to say, the Order is laid by the Board of Trade, and as soon as the Order is laid it comes into effect, and unless it is confirmed within 28 Parliamentary days after the Order is laid, it lapses. That suggestion was made in Committee, and I think it commends itself to hon. Members, who feel that in that way the House of Commons will retain control over price-fixing schemes and yet there will be no avoidable delay.
    Mr. Rhys Davies: I think the right hon. Gentleman has got out of a rather serious difficulty by the proposal he is now making. So far as we understand the Measure and its application to the industry, speed is very nearly the essence of success, and for that reason we shall support the Amendment.
    Amendment agreed to.
    Further Amendments made:
    In page 23, line 36, at the end, insert:
    "and if each House of Parliament resolves that the scheme should have effect, the Board of Trade shall make an order confirming the scheme in the terms of the draft."
    Leave out lines 37 to 43, and insert:
    "(6) Subject to the preceding provisions of this Act, the Board of Trade may make an order confirming a price scheme in the terms in which the scheme has been approved by the Board of Trade; but the order shall be

    1607
    laid before Parliament as soon as may be after it is made, and shall cease to have effect at the expiration of the period of twenty-eight days beginning with the date on which it is made, unless, before the expiration of that period, it has been approved by a resolution passed by each House of Parliament, without prejudice, however to the validity of anything previously done under the order."
    In page 24, line 5, at the end, insert:
    "(7) The Board of Trade shall, at tie same time as any order confirming a price scheme is laid before Parliament, lay before Parliament a copy of the report made in relation to the scheme by the Cotton Industry Advisory Committee, a copy of the report of the Cotton Industry Board on the poll taken in relation to the scheme before the trans mission thereof to the Board of Trade and, if a poll has been taken under this Section in relation to that scheme, a copy of the report of the Cotton Industry Board on that poll."
    In line 5, at the end, insert:
    "(8) If it appears to the Board of Trade—

    (a)in the case of a redundancy scheme, that any of the cotton mills plant in which the board administering the scheme could lawfully acquire if the scheme were in force, is situate in Northern Ireland; or

    (b)in the case of a price scheme, that any of the persons who, if the scheme were in force, would be required to be registered there under carries on in Northern Ireland business in the section of the industry to which the scheme relates,

    the Board shall, before laying a draft of the scheme before Parliament or making an order confirming the scheme, as the case may be, consult the Minister of Commerce for Northern Ireland."
    In line 6, leave out from the beginning to "shall" in line 7, and insert:
    "So much of this Section as provides that proceedings on a sectional scheme shall be discontinued or that an order confirming such a scheme shall cease to have effect."—[Mr. Stanley.]

    CLAUSE 18—(Power of Cotton Industry Board to perform services.)
    8.20 p.m.
    Mr. E. Smith: I beg to move, in page 25, line 38, at the end, to insert:
    "(b) to establish a fund to assist the ex port trade by the imposition of a levy, subject to such conditions as may be deemed proper on persons entered in the general register."
    I am sorry that there are not more Members present because this is a very important Amendment. It is only a matter of time before the House will have to adopt the principle contained in this Amendment, and I should have liked
    1608
    more hon. Members to have been present to listen to the reasons we shall give, because I am convinced that if the President of the Board of Trade cannot accept the Amendment hon. Members who sup port the Government will vote against us. It is a pity that that should be the position, because our case is so reason able and so urgent, in view of the world situation, that I am convinced that if hon. Members were present and could hear the reasons we propose to give they would support us. Let me make it clear at once that my friends and I stand for a policy of economic co-operation. We believe that sooner or later the world will have to organise itself, or those parts of the world which are prepared to associate together for the benefit of humanity, and will have to work towards the goal which is the only goal ultimately for humanity, and that is economic co-operation.
    While these are our principles and our policy, we realise that there is an economic war going on, and that this economic war is having a very serious detrimental effect on industrial nations such as ours. Therefore, we are forced to think in the direction which we are going by this Amendment. While these are our ideals and principles, and while we are doing all we can to make towards economic co-operation, meantime we have to live. In addition to that, some of as, and especially the younger section of the movement to which we belong, realise that we have had a legacy handed down to us as the result of the sacrifices made by our forefathers. We have built up relatively high standards in this country, and unless we do something to maintain them now we shall not be able to maintain them in the future. Therefore, while we speak as Socialists, and most trade unionists are Socialists, until we reach the stage when the world is ripe for Socialism we have to live.
    For example, most of the miners' representatives are Socialists, yet at the same time in their day-to-day work they have to negotiate conditions in the pit and in regard to prices, and the same thing obtains in the engineering industry. While we are Socialists we have in our everyday work to negotiate improved conditions and prices, and we have to take world affairs as they are to-day. If we are agreed upon that it brings us to this,

    1609
    that while we stand for world co-operation and do not compromise the fundamentals of our principles, we realise that the world is as it is and not as we would like it to be.
    An economic war is going on. It takes many forms—tariffs, restrictions, quotas, subsidies, industrial pools, the ruthless suppression of the people's aspirations and liberty, and in some countries, slave labour. We have to consider our export trade against this background, and we have to consider whether we are going to hold our own in future. If the House accepts this as a correct picture of world affairs—it is not exaggerated and if any thing, it is an under-statement of the situation—then we need to legislate against that background. In these days, in particular, it is idle to talk about remedies in the sweet by and by, when we have this very serious situation clouding the industrial position at the present time. Britain is a relatvely small country. We have a huge industrial population which depends for its livelihood upon the maintenance of our export trade. The success and prosperity of the railways, the distributive trades and the transport industry ultimately depend upon the maintenance of our export trade. There fore, it is of the utmost importance that we should show determination to maintain, and where possible to increase, the export trade, and in my view, we shall be able to do this only by adopting the principle embodied in this Amendment.
    I should like to give the House a few facts. In 1912, the exports of cotton yarn from this country amounted to 244,000,000 lbs., whereas in 1938 they had gone down to 123,000,000 lbs. In 1912, the percent age of production for the export trade was 86 per cent., and by 1938 it had gone down to 51 per cent. In 1912, cotton piece goods exported amounted to 6,913,000,000 square yards, and in 1938, 1,386,000,000 square yards. It is against that background that we have to consider the position, and we are more concerned about the people who are suffering from it than about anybody else. We do not want to give anybody an excuse for coming here in future and proposing a reduction in wages or a reduction in the, social services, which we want to maintain and improve in order to set an example to the world. We shall not be able to do these things unless we main
    1610
    tain the export trade, and it is for that reason that we move this Amendment. As is known by anybody who has any thing to do with industry, industrial productivity in this country has enormously increased as a result of mechanisation and a greater exploitation of human energy. Let me give the House an idea of what has happened. In 1912, the number of people employed in the cotton industry was 711,000, and in 1938 it was 365,000. In 1938, unemployment in the cotton industry amounted to 26.7 per cent. I will put it another way. Taking 100 as the index figure, we get the following result, which shows the seriousness of the position in the cotton industry. In 1923, 100; in 1929, 109; in 1933, 85.2, and in 1938, 56.8; or a reduction in productivity between 1923 and 1938 of 50 percent.
    I am not a pessimist. Our people are virile and will adapt themselves to any set of circumstances in order to hold their own in the world. Some of the people who have been talking about this country in the way in which they have in a certain part of the world will get a rude shock if they attempt to do to this country what they have done to certain other parts of the world. We have to deal with the industrial situation in the same way as we have dealt with the international situation, and just as we have been forced to rearm in order to deal with the inter national political situation, so we must introduce new methods in order to deal with the international situation on the economic plane. It is because we realise that, that we shall press this Amendment to a Division. It is only a matter of time before we shall be on the other side of the House, and we shall have to adopt this principle, and although the President of the Board of Trade may not accept the principle this evening, it is only a matter of time before he will come to the House and recommend it. I will give a little more evidence to indicate the serious position. I will quote from the trade notes of the "Manchester Guardian" of 27th June, 1939. There it was stated:
    "In the five-month period of this year as compared with 1938, both the United Kingdom and Japan have lost about 20,000,000 square yards of trade. As compared, however, with the corresponding period of 1937, the United Kingdom has lost 236,000,000 square yards, while Japan has lost only 154,000,000 square yards."
    What is happening is that production in Japan is being carried on on the basis of

    1611
    slave labour. Moreover, the people of that country and other countries cannot struggle to achieve their aspirations as we have done in this country. It is a question of our determining that we will not be driven down to the standards that prevail elsewhere. We want the Government to take steps to bring about economic re armament in order that we may meet those countries in the economic field in the same way as we are doing in other fields. When those countries are prepared to meet round a table at Geneva, or in an international conference, in order to discuss the situation, we shall be prepared to do so. It is because those countries are adopting new methods of increasing their export trade, such as direct and indirect subsidies, that we propose the adoption of the principle embodied in the Amendment.
    I want to make it quite clear that we are not satisfied with this Bill. As a matter of fact, we are not satisfied with the Government. While we are here, we do our duty, and we may safely claim that during the past few years, in particular, hon. Members on this side have done their duty by the country in trying from day to day to ginger up the Government in order that their legislation should be improved on the lines on which the people of the country desire. In spite of the imperfections of the Bill, we realise it is a step in the right direction, but it will not bring the results which every one desires unless the Government accept this Amendment, so that they can be provided with an instrument which will enable the Ex port Development Committee to have something with which to bargain and so be able to meet the competition which they will have to meet in certain parts of the world. The Bill provides for an Ex port Development Committee and that is a step in the right direction but a committee without power will be of no use and that committee must have an instrument if it is to carry out its ideas.
    If hon. Members examine Clause 4, particularly Sub-sections (1) and (5), they will see the necessity for adopting the principle which we propose in this Amendment. Anyone who is acquainted with industry, and particularly those hon. Members who run industries, know that one of the most important things at the present time is not merely to hold our own
    1612
    in the world's markets, but to increase our production considerably. Increased production has an important bearing upon cost. If certain fixed capital can be utilised day and night, then, automatic ally, overhead charges are reduced. The more you use your fixed capital, the more you reduce costs, and this, in the end, benefits the people of the country and benefits our export trade.
    There are two methods of dealing with the cotton industry. One of the most important steps to be taken, if the cotton industry is to be placed in a stronger position, is to bring about a fairer distribution of wealth. I take a very strong stand upon this. If there was a fairer distribution of wealth in this country, the wives and children of our workers would be able to buy more cotton goods, more jerseys and stocking and articles of that description. In our industrial areas, it is a tragedy to see scores of ill-clad boys and girls going along the streets. If there was a fairer distribution of wealth the mothers of those children would see to it that they were provided with more clothing and that would be a step in the right direction.
    I know that I have to keep within the limits of the Amendment, and I will not go further into that general question. We believe that a considerable increase in our export trade is necessary and that this Bill will assist in that direction. But now that the nation is about to give legislative sanction to the re-organisation of the industry the nation has a right to demand that the industry should contribute, in proportion to the improvement which will be brought about by this Bill, to the general pool, in order that the economic position of the nation may be improved. A few weeks ago a deputation from certain municipalities and other bodies waited upon the right hon. Gentleman and proposed a subsidy to the cotton industry. It may be that we shall ultimately come to that point, but I am becoming concerned about all these subsidies. This is the position in which I find myself. I was engaged in an industry in which com petition is probably as keen as in any industry in the world. Increasing com petition affects our conditions and our piecework prices, but there is no sign of any subsidy for engineering. We see all these other subsidies being agreed to by the Government, but there is nothing for

    1613
    us and we know where all these subsidies have to come from.
    I do not want to be misunderstood. I believe that the principle of subsidy has, within limits, to be carried out. At the same time subsidy alone cannot bring about a situation which will give satisfaction for any length of time, and when an industry asks for a subsidy the first question put to it should be, "What are you prepared to do with regard to your own industry?" The Amendment proposes that the cotton industry should levy itself in order to subsidise its export trade. We believe that would go a long way towards improving the whole market and protecting the price level. One of the finest economists which this party has ever produced was the late William Graham. He had a great economic understanding and he did not content himself with talking about what might be done in the sweet by-and-by. He translated his principles into economic reality whenever he had the opportunity, and he stood for the principle which is contained in this Amendment. That man burned himself out in work. While certain other people associated with him got all the limelight, he carried on the work behind the scenes, as far as the opportunities which our party had at that time allowed. One of his main contentions was that this country had arrived at a stage when we ought to introduce legislation to deal with the price level in this country, having made allowance for international fluctuations which are bound to affect internal prices. He held that, as far as prices could be stabilised internally, it was to the interest of all that that should be done.
    This Bill will assist in guaranteeing profits in those mills which cater for the home market. It would not be fair to the rest of the industry that those profits should be stabilised and in some cases increased at the expense of the internal consumer, and as legislative sanction is now to be given to the re-organisation of the industry, those who cater for the home market should be prepared to con tribute to a pool, in order to assist the export trade which has to face difficult competition throughout the world. If the country and the industry adopted this principle it would give us bargaining power. When the representatives of the industry or of the Board of Trade, attended international conferences they
    1614
    would be able to say to the representatives of other countries, "We have been forced to adopt these measures but if you are prepared to support a policy of economic co-operation, we will gladly take from you the articles which you can pro vide us with, and in return supply you with the products of our highly industrialised country."
    We want to work towards that policy of economic co-operation, having regard to the serious economic situation which exists to-day as a result of the fact that certain countries have driven their people down to slave labour. It is because we are determined ourselves not to go down to that level that we want to reorganise industry in this country, so as to maintain our relatively high standards of living and also our industrial position.
    8.45 p.m.
    Mr. G. Macdonald: I beg to second the Amendment.
    What is vitally needed in the cotton industry is an improvement in the export trade. The mining industry has gone through an experience similar to that which the cotton industry is going through now. We found that the export trade was falling year by year and that its decline endangered the whole industry. I could understand arguments against a levy of this kind, if it could be shown that the industry was unable to afford it. My information is that there are certain sections of the cotton industry, the home sections, which are doing fairly well, and that if only they would bear more of the burden we could bring about a substantial improvement in the export trade. Like the home trade, the export is largely a matter of price. We have lost our trade largely because other cotton manufacturing countries have displaced us in certain markets be cause they could sell cheaper than we were able to. If we do not do some thing soon we shall have lost still more, if not all, of our export trade, and that to Lancashire will be a very serious, thing.
    I agree that a declaration of economic war is never wise if it can be avoided. I can see this Amendment being interpreted in some countries as such a declaration. If they do think that they may fight back, and ultimately we may not gain much. But I am certain that the idea of appeasement in the economic

    1615
    world is not to be carried too far. We have seen the results in the political world. I appreciate the attempts made by the Government to show other countries that we are anxious for peace, but at the same time it is well to let our competitors know where we stand, and I cannot think of any more effective way of doing it than by accepting this Amendment. I know that both sides of the industry are not opposed to it, though the employers' side may be. The right hon. Gentleman may tell us that this was not put before the industry, but I know that the workers' side of the industry is very anxious to get this if possible. We in the inland areas of the coal industry have begged the Minister for Mines times out of number to agree to something of this kind, but he has refused. We feel that this is essential if anything is to be done in regard to our foreign trade, and knowing what that means in the cotton industry I beg to support the Amendment.
    8.48 p.m.
    Mr. Burke: I should like to support the Amendment. There is a feeling that this Bill will make it much better for people in the home trade while putting, those competing in the export trade at a considerable disadvantage. The Bill is an indication of the failure of what was a great industry to stand the strain of post-war competitive capitalism. It is also an indication of the failure to realise the need to adapt itself to a different set of circumstances. One of the things in the Bill that has appealed to us is the Export Development Committee. That committee must get to work as early as possible and something must be done to see that the export trade is not neglected under this Measure. I am apprehensive that while there are a number of orders going about for Army contracts, producers will be tempted to concentrate on them, as they did in the last War, to the detriment of the export trade.
    Let me remind the House that the position of our trade in relation to Japanese trade grows steadily worse. The first five months of this year we have aver aged 118,000,000 square yards a month, while the Japanese export has been 180,000,000. In other words, every month their export has been 50 per cent. more than ours. That has been going on for a long while, and to-day the cotton
    1616
    trade finds itself in the position it was in 1850. Some new methods will have to be devised. We look upon this Bill not as an end in itself bat only as a beginning, and the part with which we want to see a beginning made is the Export Development Committee. The right hon. Gentleman will know there is a suspicion that the export trade may not benefit as much as it should under this Bill, and that there is also growing up in Lancashire a demand for a subsidy, and we would like to hear what he has to say. I believe he has met a deputation representing some 4,000,000 people in Lancashire—mayors and councillors of local authorities connected with the cotton trade. They have put before him the idea of a subsidy. I do not know what the cost would be, but I do know that money has been given to other industries that did not do as much as the cotton industry to place this country where it is to-day. I have seen a figure of about £ 6,000,000 for a subsidy for the cotton industry—not a very great figure in terms of what has been given elsewhere, but I am informed it would reduce the prices of a Burnley printer by something like three quarters. In the world as it is, when Governments stand behind their traders in the export markets, we cannot expect that even under this Bill the industry can fight alone. It will want further assistance from the Government, and that may well be given in the nature of a subsidy.
    8.53 P.m.
    Mr. Silverman: A little earlier I was taken seriously to task, if not rebuked, by the right hon. Gentleman for suggesting that people who had opposed in Committee an Amendment might think discretion the better part of valour and take no part in the discussion in the House. I think I am entitled to say now that not one of them has had a single word to say during this Debate, and I shall be interested when we look at the Division List to-morrow to see how many were discreet there, too. On this Amendment we had a keen though short Debate in Committee. Where are the hon. Members who opposed it then? We are concerned now with a Measure for improving the export trade. It may be that this Amendment is well designed to facilitate that. It may be that it is a bad one and it ought not to be accepted. But I am entitled to point out that there is scarcely

    1617
    anybody present with any interest in it at all. On the other side of the House I do not see one Lancashire Member except the Minister himself.
    Captain Cobb: I am here.
    Mr. Silverman: I apologise to the hon. and gallant Member, and I shall apologise to him again if he takes any part in this discussion. In Committee the hon. and gallant Member for Accrington (Major Procter) took part in the discussion and opposed an Amendment on these lines and we Divided upon it.
    Mr. Stanley: Will the hon. Member say how many of his friends were there to Divide upon it?
    Mr. Silverman: I will first tell the right hon. Gentleman what I wanted to say and then I will answer him.
    Mr. Stanley: Shall I tell the hon. Member? There were four of them.
    Mr. Silverman: The point I was putting was that one of the right hon. Gentle man's colleagues took part in the Debate in Committee to oppose this proposal but did not carry his opinion so far as to vote against it, and to-night he is not here at all. As to the point the right hon. Gentleman has just made, it is true that Members of my own party were present to the number of only four in the Committee, but all four of them voted for the Amendment, and they were the only Members who did so.
    Mr. Stanley: Again I must point out that an hon. Member of his party was there who spoke rather against the Amendment and did not vote at all.
    Mr. Silverman: I think the right hon. Gentleman is completely mistaken in suggesting that anybody spoke against it. It is true that one of the four made a speech in which he was rather opposed to an export subsidy, but he pointed out what I rose in order to point out, that such a fund as this could be used to assist the export trade in a variety of other ways than by subsidy, and I think the right hon. Gentleman is mistaken in suggesting that the hon. Member voted against the Amendment. I think he voted for it. Well, who was it?
    Mr. Deputy-Spearker (Colonel Clifton Brown): I think the hon. Member is devoting too much time to that point,
    1618
    and that he ought to get back to the Amendment.
    Mr. Silverman: I rose only to make the point I have made, and to put one other point. In a Bill which is designed primarily to assist the export trade in this industry and is calling upon people for levies for that purpose it is anomalous not to call upon them to contribute to some fund which could be used for the common benefit of the industry abroad. No adequate reason was given by anyone who took part in the Debate in Committee why the Amendment should not be accepted, and no reason, adequate or otherwise, has been given to the House, because there is no one present to offer a reason except the right hon. Gentleman and we ought to hear his reason now.
    9.0 p.m.
    Mr. Tinker: I wish to support the Amendment and to say that coal and cotton are working together in this matter. Coal and cotton have made Lancashire famous. Cotton is now suffering and an attempt at re-organisation is taking place to improve the trade. Clause 18 is a step forward such as would not have been contemplated in this House at one time. I remember the old Free Trade tradition, which was that nothing should be done to bolster up trade. When we attempted to get a similar provision put into the Coal Industry Bill the Liberal party were the means of defeating it, because they had the old idea of unrestricted Free Trade, and the Labour party had to forego what they wanted, although they believed in it. I think that everybody agrees now that the old idea of Free Trade has gone by the board and that something else will have to be done, and Clause 18 deals with that situation, only it does not go far enough in my opinion. It proposes to allow the Cotton Industry Board:
    "To conduct, and to promote or encourage by financial assistance or otherwise, research and experiments in matters relating to the manufacture of products of the industry,"
    for the purpose of getting overseas trade. With that object a fund is to be got together. What we are asking is that a fund should be established so that if prices in the overseas market have to be balanced there will be a fund ready to hand. In order to get orders from over seas travellers will have to be sent out, I expect. I do not know whether they are sent out under a collective head or as

    1619
    representing individual firms. If they are sent out individually it will be a big drag on each firm. If they are sent out under a collective head there will have to be a general fund to meet their expenses. As they are setting out to do something to get back the export trade we argue that the soundest method is to have a general fund for the purpose of regulating what ever prices have to be regulated in order to get that export trade.
    What will happen if that is not done? Some sections of the cotton industry may be able to get the home market and others may be dependent on overseas trade. Those dependent on overseas trade will be cut out, because of foreign competition from countries which, under present circumstances, undersell this country. We in this country, and especially we on the Labour Benches, pride ourselves on up holding decent conditions for our workers, and with the exception, possibly, of the United States, no country maintains the same standards as ours. Therefore, it will be very difficult to maintain our prices in overseas markets, and we say there must be a fund to assist our exporters to get that foreign trade. If it is so essential to get that foreign trade we say that all those engaged in the industry in the country should contribute to that fund, because it is not right that the burden should be borne by one section only of the industry. If it is left to that section to bear all the loss the result will be that employers will be saying, "We cannot sell our goods if we have to pay these wages and if we are to keep the works going lower wages will have to be accepted." Indeed, eventually the mills may have to close down.
    We are trying to organise the cotton industry in such a way that we shall establish it in a better position in the world's markets and give to the workers the rate of pay to which they are en titled. We cannot keep both those points going unless we can establish a fund to help the overseas trade. There cannot be any objection from the other side of the House to that proposal. Once hon. Members have accepted the principle that something must be done to organise the industry on those lines, it is not too much to ask them to take another step forward so as to give to the cotton industry a fund that will produce equality all round in every part of the industry.
    1620
    I, therefore, hope with my colleagues that we shall be able to do something better than we have done for the coal industry. It would put the cotton industry in the right way to establish itself in the markets of the world.
    9.7 p.m.
    Sir H. Fildes: I should like to bring the discussion back to the cotton trade. We have to recognise that whatever has happened in that trade there has been a greater consumption of raw material in 1938 than there has ever been in the history of the world. We have not received our share because we have the dearest stall in the markets of the world. If we carry the Amendment, we shall place another burden on our competitive ability. The rate of wages paid in India is such, and the duty put upon the entry of goods in India is such, that if our weavers in Britain wove the cloth for nothing, you could not get underneath the tariff wall that is against you in India. It is better that we should be honest with ourselves and recognise that the people who are cotton's biggest customers are the poorest people on the face of the earth, but that they cannot afford to pay for our product and for a standard of civilisation that embraces Little wood's pools, football matches, cinemas and a thousand-and-one things of a similar character.
    Mr. Silverman: Is the hon. Gentleman recommending a counsel of despair? Is he suggesting that we should cut down completely, or, on the other hand, that we should reduce our costs proportionate to those that he is describing?
    Sir H. Fildes: I am trying to bring to the notice of hon. Members the hard facts of the situation. We have already inflicted upon the cotton trade by the passage of the Coal Act a charge of £1,250,000 a year on our decreased production. The last proposal that has been advocated by my hon. Friends is that on top of these things our very poor customers in India and Africa should provide holidays with pay. You cannot do all these things unless you are prepared to recognise that your export trade is gone. Compared with 1913 the trade is paying 110 per cent. more for spinning and 80 per cent. more for weaving and a further 80 per cent. for bleaching. If there is to be prosperity in the cotton trade remember that 5s. 6d. in the £

    1621
    has to go to the revenue, and that if anybody makes £100,000, 13s. 4d. in the £ must go to the State. Let us see what is the result of this Measure before we place upon the industry additional burdens which will have a very deleterious effect upon trade and upon our competitive ability. No matter how sym pathetic the President of the Board of Trade may be towards this Amendment, I trust that he will face the hard fact that to accept the Amendment will be putting us further in the mire and further restricting our competitive ability to re gain our export trade.
    9.12 p.m.
    Mr. Stanley: To start with, although it is perhaps irrelevant, I must apologise to the hon. Member for Nelson and Come (Mr. Silverman) or rather to the hon. Member for South East Ham (Mr. Barnes), whose name I took in vain. I see that he was one of the gallant four who voted for the Amendment. The Amendment raises a very important point. I am going to follow the example of the hon. Gentleman who raised it in confining myself, as he said he was doing, strictly to the terms of the Amendment. I must confess straight away that the theoretical argument which he put for ward in its favour does not shock me in the least, nor is it one with which upon general grounds I quarrel. I think that my hon. Friend the Parliamentary Secretary and my hon. Friend the Secretary to the Department of Overseas Trade have not been backward in saying in public that there is great necessity for new methods in the export trade, and we have been encouraging industry to organise for export and particularly to get together and agree to charge lower prices, in order to try to capture a particular export market or to resist some particular competition from which they are suffering. I am not in the least shocked by the theory he propounded, although, as I have had reason to express before, I do not know whether to be gratified or alarmed that I very often find myself in agreement with him on ideas about the economic future of this country.
    After all, we have to consider not a general economic thesis but a particular Amendment to a particular Bill dealing with a particular industry, and it is with the circumstances of that industry and of
    1622
    this Amendment that I propose to deal to-day. The hon. Member made a very-eloquent reference to the number of people and boys and girls who are walking about without stockings, and he desired that they should be more fully clad. I cannot think that the best way of doing that is to impose an extra duty upon the stockings they will buy in order that you might sell more stockings more cheaply to India or West Africa.
    Mr. E. Smith: That is not usual with the President of the Board of Trade and not fair. I made it clear that I was of the opinion that by the adoption of this principle the bulk output of the industry would be increased, that prices would be reduced and that it would have a beneficial effect upon prices internally.
    Mr. Stanley: I consider that that is extremely optimistic. Although there are arguments in some cases for the adoption of methods of this kind, we must face the reality, and the reality is that, while we may stimulate sales at home in order to maintain our share of the export market and keep people in employment, to expect at the same time, by a levy of this kind, both to reduce prices in the export market and to reduce prices in the home market, despite the levy, is an optimism which none of us is entitled to share.
    It is only fair that in the first place I should put certain facts before the House. I am sure nobody will deny that to introduce into the Bill at this moment an uncontrolled power—because that is what it amounts to—on the part of the Cotton Industry Board to make a levy on the whole trade, with no limit to its extent, for the purpose of supporting the home market, would be a departure of the first magnitude. This matter was discussed for a considerable time during the preparation of the scheme, and it was finally dropped from the proposed Bill because it aroused such intense controversy that it was felt that it would probably endanger the acceptance by Lancashire of the Bill as a whole. Of course, the House must make up its own mind on the matter, but certainly it would be a great breach of faith on my part towards the members of the industry in Lancashire to whom I gave a pledge, with which I think the House as a whole agreed, that I would introduce this Bill if I was assured of the support of the

    1623
    majority of the trade, if I were to re-introduce into the Bill a proposal which had been dropped before they voted on it because it aroused so much controversy and might have defeated the object of the Bill. As far as my personal position is concerned, hon. Members must see that it would be quite impossible for me to accept the proposal.
    My second point is with regard to the Amendment itself. It is quite dear that if we were to adopt a policy of this kind, which everyone would agree, although it may be necessary in some cases, is fraught with danger, presenting very dangerous possibilities in the home market—if this power were to be given at all, it must be very closely safeguarded. But this Amendment creates no safe guards whatsoever. Although there are limits to what the Board can raise for purposes of research, although the price laid down in a price-fixing scheme has to go through innumerable tests and has to receive the assent of the House, here, in connection with the most important matter of all, namely, the possibility of the imposition of a large cash levy on a section of the industry, with no Parliamentary limit, no check, and no reference to Parliament, either as to the question of its imposition or of its amount, a proposal is being made with which, I think, nobody would agree.
    I would point out, with regard to this particular industry, the very great practical difficulties which you encounter when you try to deal with the export trade by way of a subsidy. That is what this is; it is a subsidy of the same type as, for instance, the Germans give to the Opel motor car. One hon. Member made reference to a deputation which I received from a number of Lancashire authorities to discuss this point. I had a very long meeting with them, because I thought it was a matter of such importance that I should like to take the discussion in real detail, and not just deal with it with a few generalities. I should hesitate here to go over all the ground that I was able to go over with them in confidence, because I do not think it would be of any advantage publicly to discuss beforehand any difficulties that might arise for our trade in any particular market; but the general point that people must have in mind when they are discussing whether in
    1624
    a particular industry a proposition of this kind is likely to be of advantage to the export trade, is the possibility that the subsidising of exports will be met by countervailing measures in the country to which the exports are sent.
    When that is borne in mind, one is struck immediately by the fact that, in the case of the cotton industry, there is hardly any country, except the African countries, where, owing to the quota system this proposal really would not help, since we already have a high quota where that is possible—there is hardly any other country to which we send our cotton goods where they have not a home industry of their own, and where, there fore, they are not only empowered, but bound to protect their home industry against any increase of subsidised com petition from this country. Take the case of India, the loss of whose market has been the severest blow to our cotton trade. The great loss of our market in India has not been from our competitors. We have, of course, lost something to Japan, but Japan's exports to India are now on a quota level. The great cause of our loss has been the Indian industry itself. Recently I concluded, after long negotiations, a trade agreement with India, and in that trade agreement, although I am sorry to say many industries in this country failed to get what they considered they should have got, and some indeed suffered losses as compared with their present position, I was nevertheless able to secure for the Lancashire cotton industry a substantial reduction in duties. How long do hon. Members think that reduction in duties would be allowed to stand if we put, on the top of that, the subsidisation of our exports in order to increase our competitive power as regards the Indian industry as a whole? They would be entitled to take, and no doubt immediately would take, countervailing measures to counteract an export subsidy of that kind.
    It seems to me that, before it would be possible for the House to consider such an Amendment in this particular case and in this particular industry, it would be essential that the Export Development Committee set up under the Bill should be functioning, should be surveying the possibilities of the export trade, and should see how far the provisions that are made in the Bill will help. The line

    1625
    that we have laid down in the Bill is not the same as, but perhaps, in principle, is not very different from, this Amendment. It recognises in certain cases the necessity for a difference of level as between home and export prices, and it makes provision for the keeping of home prices at a fully remunerative level, if that is possible, and for concessions from the minimum price in order to send goods into a particular market. We must first of all see how that scheme is going to work. Then let these people, whose main interest will be the export trade of the cotton and rayon industries, study this sort of problem, and even this sort of remedy, not from the point of view of generalities, not from a theoretical point of view, but by taking markets one by one and saying with regard to each: Is this proposal going to help us there? What will be the result if we adopt it?
    Then, when they have considered all these things, not theoretically, but as practical men, when they have surveyed the possibilities of increasing exports, we shall be in a position, with their report and their knowledge before us, to come to a decision on whatsoever additional assistance they may recommend for the export trade. I hope the hon. Member will not think that I am not treating seriously an Amendment which raises a question of very great interest. I have given as fully as I can the reasons why T believe that this particular Amendment, in these particular circumstances, in this particular industry, would not be of ad vantage to the export trade and might indeed be detrimental.
    9.26 p.m.
    Sir P. Harris: I think the right hon. Gentleman's statement is a complete answer to the proposal from a practical point of view. I quite appreciate and recognise that the Amendment is put forward as a constructive contribution to the difficult problem of recapturing our export trade, but I think the right hon. Gentleman is right. We have had in Nazi Germany experiments of this kind which have been used with great skill on many occasions but, in spite of those ingenious experiments, the German ex port trade is not increasing and competition is not coming from that country. It would be dangerous at a time like this to adopt this ingenious experiment. It is bound to lead to special duties.
    1626
    Canada, for instance, has always been very suspicious of any kind of subsidy. We had some difficulty with woollen goods because of depreciated exchanges and it led to very bad blood. This applies also to Australia, and certainly to India. I think it would be wise not to press the Amendment to a Division. If it is pressed, I shall have to support the Government.
    9.28 p.m.
    Mr. Rhys Davies: I think my hon. Friend the Member for Stoke (Mr. E. Smith) has performed a very good piece of service in raising this very important issue. Some of us who represent Lancashire seats, with cotton mills in our divisions, are sometimes in despair and will turn to almost anything in the hope of improving the situation, and we may sometimes turn to wrong remedies. It might help to satisfy my hon. Friends if the Minister would say whether the board mentioned in the Clause has it in its power to report upon an issue such as this. It seems to me that, if the Export Development Committee is entitled to watch the progress of our exports and to report to the right hon. Gentleman as to what are the conflicting interests in the export market, it might have an opportunity to look round and see what is actually happening in the world in that connection, and then I suppose we could have a Debate on the Board of Trade Vote to find out exactly what is happening.
    9.29 p.m.
    Mr. Stanley: Of course, one of the purposes for which the Cotton Industry Board is set up is to represent to me, and to the country, the views of the cotton industry, and it will be entitled to make any representations. In addition, Clause 30 imposes on it the duty of preparing a report, which is laid before Parliament, and one of the things they would have to report on would be their relations with the Export Development Committee. No doubt, the report would contain accounts of their meetings with that committee and any suggestions that it put forward.
    Mr. Shinwell: Suppose that at any time a particular section of the Cotton Industry Board desired the imposition of a levy, not of general but of special application, perhaps applicable to a certain section of the export trade, are they vested with

    1627
    power within the Bill to take action with out making representations to the Minister, or must they make representations before any action is taken?
    Mr. Stanley: Certainly they can only make representations, otherwise there
    would not be any necessity for the Amendment. The point of the Amendment is that there
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 73; Noes, 168.

    Division No. 222.]

    AYES.

    [9.34 p.m.

    Adams, D. M. (Poplar, S.)

    Gibson, R. (Greenock)

    Parkinson, J. A.

    Adamson, W. M.

    Greenwood, Rt. Hon. A.

    Pearson, A.

    Ammon, C. G.

    Grenfell, D. R.

    Price, M. P.

    Anderson, F. (Whitehaven)

    Griffiths, G. A. (Hemsworth)

    Pritt, D. N.

    Banfield, J. W.

    Griffiths, J. (Llanelly)

    Quibell, D. J. K.

    Batey, J.

    Groves, T. E.

    Ridley, G.

    Benson, G.

    Guest, Dr. L. H. (Islington, N.)

    Riley, B

    Bevan, A.

    Hayday, A.

    Ritson, J.

    Brown, C. (Mansfield)

    Henderson, J. (Ardwick)

    Sexton, T. M.

    Buchanan, G.

    Henderson, T. (Tradeston)

    Shinwell, E.

    Burke, W. A.

    Hills, A. (Pontefract)

    Silverman, S. S.

    Charleton, H. C.

    Jagger, J.

    Smith, E. (Stoke)

    Cluse, W. S.

    Jenkins, A. (Pontypool)

    Sorensen, R. W.

    Cooks, F. S.

    John, W.

    Stephen, C.

    Collindridge, F.

    Johnston, Rt. Hon. T.

    Stewart, W. J.(H'ght'n-le'Sp'ng)

    Daggar, G.

    Lee, F.

    Summerskill, Dr. Edith

    Davies, S. O, (Merthyr)

    Leslie, J. R.

    Taylor, R. J. (Morpeth)

    Day, H.

    Macdonald, G. (Ince)

    Tinker, J. J.

    Dobbie, W.

    McEntee, V. La T.

    Viant, S. P.

    Dunn, E. (Rother Valley)

    McGovern, J.

    Walkden, A. G.

    Edwards, Sir C. (Badwellty)

    Mainwaring, W. H.

    Watson, W. McL.

    Edwards, N. (Caerphilly)

    Marshall, F.

    Wilmot, John

    Fletcher, Ll.-Comdr, R. T. H.

    Maxton, J.

    Windsor, W. (Hull, C.)

    Gallacher, W.

    Milner, Major J.

    Gardner, B. W.

    Oliver, G. H.

    TELLERS FOR THE AYES.—

    Mr. Whiteley and Mr. Mathers.

    NOES.

    Acland-Troyte, Lt.-Col. G. J.

    Entwistle, Sir C. F.

    Lancaster, Lieut.-Colonel C, G.

    Adams, S. V. T. (Leeds, W.)

    Erskine-Hill, A. G.

    Leighton, Major B, E. P.

    Albery, Sir Irving

    Evans. D. O. (Cardigan)

    Lennox-Boyd, A. T. L.

    Alexander, Brig.-Gen. Sir W.

    Everard, Sir William Lindsay

    Levy, T.

    Allen, Col. J. Sandeman (B'knhead)

    Fildes, Sir H.

    Lipson, D. L.

    Aske, Sir R. W.

    Findlay, Sir E.

    Llewellin, Colonel J. J.

    Balfour, G. (Hampstead)

    Fleming, E. L.

    Locker-Lampson, Comdr. O. S.

    Balfour, Capt. H. H. (Isle of Thanet)

    Foot, D. M.

    Loftus, P. C.

    Bossom, A. C.

    Fox, Sir G. W. G.

    Mabane, W. (Huddersfield)

    Bower, Comdr. R. T.

    Fremantle, Sir F. E.

    MacAndrew, Colonel Sir C. G.

    Boyce, H. Leslie

    Furness, S. N.

    M'Connell, Sir J.

    Braithwaite, J. Gurney (Holderness)

    George, Megan Lloyd (Anglesey)

    McEwen, Capt. J. H. F.

    Brooke, H. (Lewisham, W.)

    Gledhill, G.

    McKie, J. H.

    Brown, Rt. Hon. E. (Leith)

    Goldie, N. B.

    MacLaren, A.

    Browne, A. C. (Belfast, W.)

    Grant-Ferris, Flight-Lieutenant R.

    Maclay, Hon. J. P.

    Bull, B. B.

    Granville, E. L.

    Makins, Brigadier-General Sir Ernest

    Burton, Col. H. W.

    Gridley, Sir A. B.

    Margesson, Capt. Rt. Hon. H. D. R.

    Campbell, Sir E. T.

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Marsden, Commander A.

    Carver, Major W. H.

    Gritten, W. G. Howard

    Medlicott, F.

    Cary, R. A.

    Gunston, Capt. Sir D. W.

    Mellor, Sir J. S. P. (Tamworth)

    Chapman, A. (Rutherglen)

    Hacking, Rt. Hon. Sir D. H.

    Mitcheson, Sir G. G.

    Clarke, Colonel R. S. (E. Grinstead)

    Hannah, I. C

    Moore, Lieut.-Col. Sir T. C. R.

    Clarry, Sir Reginald

    Hannon, Sir P. J. H.

    Moreing, A. C.

    Clydesdale, Marquess of

    Harris, Sir P. A.

    Morgan, R. H. (Worcester, Stourbridge)

    Cobb, Captain E. C. (Preston)

    Heilgers, Captain F. F. A.

    Morris-Jones, Sir Henry

    Cook, Sir T. R. A. M. (Norfolk, N.)

    Hely-Hutchinson, M. R.

    Morrison, G. A. (Scottish Univ's.)

    Courthope, Col. Rt. Hon. Sir G. L.

    Hepburn, P. G. T. Buchan-

    Munro, P.

    Cox, H. B. Trevor

    Hogg, Hon. Q. McG.

    Nall, Sir J.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Holmes, J. S.

    Neven-Spence, Major B. H. H.

    Cross, R. H.

    Howitt, Dr. A. B.

    Orr-Ewing, I. L.

    Crowder, J. F. E.

    Hudson. Cant. A. U. M. (Hack., N.)

    Petherick, M.

    Cruddas, Col. B.

    Hulbert, Squadron-Leader N. J.

    Procter, Major H. A.

    Denman, Hon. R. D.

    Hunter, T.

    Radford, E. A.

    Dodd, J. S.

    Hutchinson, G. C.

    Raikes, H. V. A. M.

    Donner, P. W.

    Inskip, Rt. Hon. Sir T. W. H.

    Ramsbotham, Rt. Hon. H.

    Dugdale, Captain T. L.

    Jarvis, Sir J. J.

    Rankin, Sir R.

    Duncan, J. A. L.

    Jennings, R.

    Reed, A. C. (Exeter)

    Dunglass, Lord

    Jones, Sir G. W. H. (S'k N'w'gtn)

    Reed, Sir H. s. (Aylesbury)

    Eastwood, J. F.

    Keeling, E. H.

    Remer, J. R.

    Eckersley, P. T.

    Kerr, Colonel C. I. (Montrose)

    Rickards, G. W. (Skipton)

    Emery, J. F.

    Kerr, Sir John Graham (Sco'sh Univs.)

    Roberts, W. (Cumberland, N.)

    Rosbotham, Sir T.

    Spens. W. P.

    Ward, Lieut.-Col. Sir A. L. (Hull)

    Rowlands, G.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Waterhouse, Captain C.

    Royds, Admiral Sir P. M. R.

    Stewart, J. Henderson (Fite, E.)

    Watt, Lt.-Col. G. S. Harvie

    Ruggles-Brise, Colonel Sir E. A.

    Strauss, H. G. (Norwich)

    Wells, Sir Sydney

    Russell, S. H. M. (Darwen)

    Strickland, Captain W. F.

    White, H. Graham

    Salmon, Sir I.

    Sueter, Rear-Admiral Sir M F.

    Williams, Sir H. G. (Croydon, S.)

    Samuel, M. R. A.

    Sutcliffe, H.

    Windsor-Clive, Lieut.-Colonel G.

    Selley, H. R.

    Tate, Mavis C.

    Wise, A. R.

    Shaw, Captain W. T. (Forfar)

    Taylor, C. S. (Eastbourne)

    Womersley, Sir W. J.

    Smith, Bracowell (Dulwich)

    Thomas, J. P. L.

    Wragg, H.

    Smith, Sir R. W. (Aberdeen)

    Thomson, Sir J. D. W.

    Wright, Wing-Commander J. A. C.

    Smithers, Sir W.

    Thorneycroft, G. E. P.

    York, C.

    Snadden, W. McN.

    Thornton-Kemsley, C. N.

    Somervell, Rt. Hon. Sir Donald

    Tryon, Major Rt. Hon. G. C.

    TELLERS FOR THE NOES.—

    Somerville, Sir A. A. (Windsor)

    Tufnell, Lieut.-Commander R. L.

    Major Sir James Edmondson and Mr. Grimston.

    Southby, Commander Sir A. R. J.

    Wallace, Capt. Rt. Hon. Euan

    Question, "That the Schedule be read a Second time," put, and agreed to.

    CLAUSE 19.—(Fees and contributions payable to Cotton Industry Board by the industry.)
    9.41 p.m.
    Mr. Stanley: I beg to move, in page 27, line 11, after "person," to insert "as."
    This Amendment goes with the next two Amendments, and, with the permission of the House, I will deal with them together. The Amendments are consequential on an alteration we have made. We have now provided that a man may register before he has actually started to carry on business. We have laid down certain provisions as to how the fees for registration are to be calculated. They are based on the assumption that the particular firm may be already doing business. We have now to provide for the case of a man registered before starting to do business, and these Amendments provide that the fee shall not be higher than the appropriate rate for a man actually carrying on business.
    Amendment agreed to. Further Amendments made:
    In page 27, line 12, leave out from "industry," to "a," in line 14.
    In line 18, after "exceeding," insert:
    "in the case of a person carrying on business by way of any of the activities specified in the first column of the Fourth Schedule to. this Act."—[Mr. Stanley.]
    9.43 p.m.
    Mr. Stanley: I beg to move, in page 27, line 41, to leave out "publish," and to insert "give notice of."
    This Amendment and the following Amendments to Clause 19 deal with the same point. They are intended to meet the difficulty of firms who are interested in other textile products as well as cotton—linen, wool and silk. It often happens that a firm dealing in, say, wool and cotton, or silk and cotton, already makes
    1630
    contributions to research work carried out by an institution in the wool or silk trade. It is felt that if they had to pay the full levy for research into the cotton industry it might affect their ability or willingness to give such assistance as they are already giving to research in other branches of the textile industry. The Joint Committee is not anxious that the levying of these funds for research in the cotton industry should be at the expense of research already carried out in other branches of the textile industry, and, I think, with a very broad-minded view, they immediately agreed to deal with this difficulty.
    The way in which it is dealt with in this Amendment is that a firm of that nature can set against the amount which would be due under the first category any amount which they are paying to wards research in the other branch of the textile industry in which they are interested This is, of course, limited. They can only set so much as would be chargeable to them under the first category. They can only, therefore, set against their expenditure on research else where what they would be called upon to contribute for research under this Bill. I think the Committee will agree that a provision which enables these people to carry on with their contributions to re search in the other industry in which they are interested is a wise one.
    Amendment agreed to.
    Further Amendments made:
    In page 28, line 5, at the end, insert:
    "and the notice, given under the last pre ceding Sub-section, of the determination of the rate of any such contribution shall include a statement showing the proportions respectively in which the rate is levied for the purposes of defraying service expenses of the first category, service expenses of the second category and service expenses of the third. category."
    In line 13, at the end, insert:
    "(7) If, at the time when the appropriate contribution payable in respect of any year accrues due from any person—

    (a) he is carrying on business in the United Kingdom in the linen textile industry, the woollen and worsted industry, or the silk industry, as well as in the cotton industry; and

    (b) he has, since the end of the month of January of the preceding year, paid any sum by way of contribution to an association approved by the Board of Trade, being an association the purpose or main purpose of which is to conduct research into matters affecting the linen textile industry, the woollen and worsted industry, the silk industry and the cotton industry, as the case may be,

    the amount payable by him by way of the appropriate contribution in respect of that year shall be reduced by the amount of the sum so paid by him to that association:
    Provided that the amount payable by any person by way of the appropriate contribution in respect of any year shall not, by virtue of this Sub-section, be reduced by more than the amount which, apart from this Sub-section, would have been so payable by him in respect of that year if the rate of the contribution had been levied for the purpose only of defraying service expenses of the first category."—[Mr. Stanley.]

    CLAUSE 20.—(Exchequer contributions towards certain expenses of Cotton Industry Board.)
    Mr. Stanley: I beg to move, in page 28, line 24, to leave out Sub-section (2).
    This Sub-section requires the Board of Trade to lay before Parliament a statement of the Exchequer contribution to wards the service expenses of the Cotton Industry Board, but it has been pointed out to me that this information has any how to be included in the appropriation account, and laid before Parliament in that form. Therefore, it is unnecessary to make this special provision here.
    Amendment agreed to.

    CLAUSE 21.—(Exchequer assistance to boards administering redundancy schemes.)
    Mr. Stanley: I beg to move, in page 29, line 15, to leave out Sub-section (2), and to insert:
    "(2) If each House of Parliament, after a draft of an order has been laid before it under the preceding Sub-section resolves that the order should have effect, the Board of Trade shall make an order in the terms of the draft."
    1632
    This Amendment is not exactly con sequential, but follows naturally on an Amendment which the House passed on Clause 16. We there decided that orders approving redundancy schemes must receive the assent of the House by affirmative Resolution instead of by negative Resolution, and we bring this Clause, which deals with the assistance that is to be given to redundancy schemes, into line with that other decision.
    Amendment agreed to.

    CLAUSE 22.—(Form, publication, validity and commencement of orders con firming sectional schemes.)
    9.39 p.m.
    Mr. Cross: I beg to move, in page 30, line 16, to leave out "such an order has been made," and to insert:
    "making an order which confirms a sectional scheme or amends a price scheme."
    This is a consequential Amendment.
    Amendment agreed to.
    Further Amendments made:
    In page 30, line 23, after "order," insert:
    "as is mentioned in the last preceding Sub section."
    In line 31, leave out the fourth "the," and insert "any."—[Mr. Cross.]

    CLAUSE 24.—(Power to enter and inspect premises.)
    Mr. Cross: I beg to move, in page 32, line 37, after "take," to insert "such."
    It has been represented to us that under the Clause as drafted it would be open to anyone inspecting mill premises to take samples of anything that he might find in the mill, and that clearly goes far beyond the intention of the Bill. More over, it can occur that a producer will be engaged on some new fabric that does not come under a price scheme, and it would be undesirable that inspectors should have the right of removing samples of that kind or of any kind not affected by a scheme. The Amendment makes it clear that samples will be required to be in connection with a scheme.
    Amendment agreed to.
    Further Amendment made: In page 32, line 38, at the end, insert:
    "as he may reasonably require for those purposes."—[Mr. Cross.]

    CLAUSE 25.—(Restrictions on disclosure of information.)
    Amendment made: In page 32, line 41, after "under," insert "or by virtue of."—[Mr. Cross.]
    Mr. Cross: I beg to move, in page 33, line 13, after "business," to insert:
    "(including information contained in a voting paper)."
    This arises out of an assurance given by my right hon. Friend on the Committee stage. The purpose of the Amendment is to secure the secrecy of information on sectional schemes. My hon. Friend the Member for Penryn and Falmouth (Mr. Petherick) moved in Committee an Amendment to secure this end, and withdrew it on my right hon. Friend giving an undertaking that he would put down an Amendment himself, an under taking which is hereby fulfilled.
    Amendment agreed to.

    CLAUSE 27.—(Special provisions as to persons engaged in certain businesses.)
    Mr. Cross: I beg to move, in page 34, line 41, after "cloth," to insert "surgical dressings."
    It has been represented to us, after discussion with all the interests concerned, that it is desirable that we should add to paragraph (a) of this Clause the words "surgical dressings," and to paragraph (b)the words "rubber hoses," and in addition we take a similar power to that which exists under paragraph (a) to empower the Cotton Industry Board, with the approval of the Board of Trade, to add other articles partly made of rubber. These Amendments have been agreed with all the interests concerned.
    Amendment agreed to.
    Further Amendment made:
    In page 35, line 5, after "tyres," insert:
    "rubber hoses or such other articles made partly of rubber as the Cotton Industry Board, with the approval of the Board of Trade, may from time to time designate for the said purposes."—[Mr. Cross.]
    9.53 p.m.
    Mr. Stanley: I beg to move, in page 35, line 33, at the end, to insert:
    "(4) Without prejudice to the preceding provisions of this Section, no determination of the board administering a price scheme shall apply to any sale of goods suitable for use in the manufacture of any of the commodities mentioned in paragraph (a) of Sub-section (1) of this Section, or the manufacture of tyres,
    1634
    rubber hoses or any other articles for the time being designated by the Cotton Industry Board in pursuance of paragraph (6) of that Sub-section, to a person whose business consists of or includes such manufacture, being a sale which is subject to the express condition that the purchaser must not use the goods otherwise than in the course of such manufacture as aforesaid."
    This Amendment is put down to deal with a rather difficult case which was raised by the hon. Member for East Willesden (Mr. Hammersley) on the Committee stage. One of the matters which gave us the greatest difficulty in drafting is the case of the mill which is supplying goods entirely for the purpose of the manufacture of those commodities which are inserted under this Clause. Hon. Members will appreciate that they are products which do not come into com petition in any way with the normal products of the industry as they go straight into these exempted manufactures. The difficulty, of course, arises in the case where a firm is making products, some of which go into this special market and some of which go into the general pool and compete with the ordinary products of the Lancashire industry. The difficulty that we have had has been to decide how to define that firm's activities and to deal with its two different sections. The original proposal of the joint committee was that the only people who should be exempted under this sort of provision were the associated firms of firms already exempted in the earlier part of Clause 27, but although that is the sort of thing which is all right to lay down as a general principle, when it came to a matter of drafting we found it completely impossible to carry out. It was almost impossible to lay down an exact definition of what constitutes an associated firm, and whatever interpretation one introduced it would be very difficult to prevent colourless imitations being carried out for the purpose of evading the Clause.
    As a result of the difficulty of drafting on different lines, in the Bill we laid it down that any firm that sold two-thirds of its total product in this specialised way, would be exempt under this Clause, but the hon. Member for East Willesden in Committee made certain observations which pointed to the unfairness of a definition like that. He pointed out that where you had a firm 66 ⅔ of whose product was going in this particular way and

    1635
    33 ⅓ going into general competition, it would be exempted altogether, while another firm alongside, doing half and half, would not share in the exemption at all. You would, therefore, have a tremendous change brought about by quite a small difference in the proportion of the products of the firm. Finally, this difference by proportion would probably inure to the benefit of the larger concern, which would be able to devote a larger part of its capacity to the specialised working, and it would severely hit the smaller firm which does not perhaps get such regularised orders as would enable the proportion at the end of the year to be as much as 66⅔ per cent. Therefore, a substantial case was made out that the definition we had adopted would lead to hardship.
    Frankly, if we were unable, as we have been unable up to now, to discover any means of satisfactorily dealing with the associated company by definition in a Bill of this kind, the only way possible to remove the injustice caused by the division according to proportion is on the lines of the Amendment that I now move. The Amendment exempts the manufacturer under Clause 27 in so far as the actual product that he sells is sold for these specialised purposes, and as long as there is a pledge that the product will be used for that purpose, and no other. Therefore, instead of, as under the old provision, the man who only produced 50 per cent. for this specialised production getting no protection at all under this scheme, and being treated as though he were 100 per cent. on the competitive side of the industry; if he produces 50 per cent. he will be liable to come into the price-fixing scheme, and to the extent that he is 50 per cent. competitive in the industry, but not in the other, he will be liable for the obligations under the Bill. It may be said that this opens the door rather too wide. I do not want to do anything more than remove injustice. I certainly do not want to open the door too wide and enable certain Lancashire products to escape the net of the particular scheme, and I shall be ready to listen to any suggestion which may be made which will deal with the difficulties raised in Committee and will avoid the charge that we are opening the door too wide and allowing too much to escape.
    9.59 p.m.
    Mr. Dodd: I was partly responsible for this suggestion in Committee, along with my hon. Friend the Member for East Willesden (Mr. Hammersley). The matter was put to my right hon. Friend without very much notice, and he gave an undertaking that he would consider it before the Report stage, which he has been good enough to do. I produced the case of two concerns side by side, where the difference between the proportion of the actual product was small and yet one firm might be exempted and the other not exempted. I have been running through what was said in Committee, and I think that what I intended was a little misunderstood by my right hon. Friend. What I did want to put was that there should be no injustice as between one firm and another; but I did not go so far as to say whether it should be exemption or non-exemption The Amendment was tabled in Committee in such a form that it led to exemption, but I did say in speaking on the Amendment that I did not vouch for the actual wording and that it would fit into the Bill, but pointed out that it was brought for-ward for the purpose of raising a discussion.
    We must be very careful before we say that these people should be exempted. It might be wiser not to exempt them, but to do the reverse and bring 1hem all in. What I meant to emphasise was that it was unfair that some should be out and some should be in. My point was that they should all be out or they should all be in. There is a good deal to be said for having them all in. When we consider that the sections of the industry connected with this Clause are supplying the most successful concerns in the industry, such as the sewing thread people, the tyre manufacturers and the Lancashire cloth manufacturers, there is a case for further consideration. I know that before the Bill was introduced these interests had been consulted and they claimed exemption. They were exempt themselves and they also claimed that the people who supplied them should have exemption. That was granted in the Bill to the extent of 66⅔ of their pro ducts, but that was changed during the Committee stage, so that all of them are exempt.

    1637
    I am wondering whether my right hon. Friend, who has been very generous to us in Committee to-day, and has tried very hard to meet us, would reconsider this matter. I should be glad to know that we are not exempting people when it might be wiser to say that they should all come in. It has been put to me from one interest only to-day that while they are exempt themselves they recognise it might be fairer to have a controlled price for what they might be using in their concern, as their competitors are doing. There is a rather different feeling on this question from what there was two or three months ago. Would my right hon. Friend be good enough to give further consideration to the matter before the Bill is completed in another place, to see whether anything can be done to meet all parties?
    Mr. Stanley: I hope my hon. Friend will make it quite plain that the Amendment that I am now proposing is the exact Amendment for which he asks.
    Mr. Dodd: Yes, Sir.
    Mr. Stanley: The hon. Member said:
    "I am not suggesting for a moment that the mill should be completely exempted, but only exempted in respect of the particular part of the mill in the same category as a mill doing the same trade."—[OFFICIAL REPORT (Standing Committee C), 13th June, 1939, col. 560.]
    I am giving the hon. Member exactly the Amendment that he wanted, but I gather now that he does not want it.
    Mr. Dodd: That really is the case, and I am prepared to admit it. In the Committee stage it is very difficult to assess the points that arise. What I was trying to emphasise was that it was unfair to have one out and one in. The Amendment is in the form which I desired at that time, but I may have altered my views in the meantime. We need to be very careful. I am not partial to the one or the other. It may be right to have them all in or to have them all out; but I want to be satisfied that we are doing the fairest thing, whether we have them all in or all out.
    10.4 p.m.
    Sir C. Entwistle: I am very glad that my right hon. Friend has said that he will be willing to reconsider this matter. It is a very difficult and complicated question. I have a concern in my con-
    1638
    stituency that would on the face of it benefit under this Amendment, if you can call it a benefit to say that they shall be exempt from any price scheme. They supply goods to firms who are manufacturing sewing thread or the various commodities which are exempted, but they do not want to be excluded from the price scheme; in fact, they want to know why they are to be prevented from having the benefit which the price scheme might confer upon them in respect of these very goods which will now be exempted if the Amendment is passed, being the ingredients of the exempted commodities in this Clause. The difficulty has arisen in this way. The exemption which was agreed to between the cotton trade and these particular industries that manufacture these products was, as the President of the Board of Trade said, only the exemption of those firms who manufactured these particular commodities in their finished state, or their subsidiary or associated companies who manufacture the ingredients for these particular products.
    The President of the Board of Trade told us that the difficulty arose in de fining associated or subsidiary companies. There is a definition of them in the Companies Act, and I understand that they will be satisfied with that definition. I have not gone into that point and I cannot really say, but apparently, because of the difficulty of arriving at a satisfactory definition of associated companies, the door was opened wider in the Clause than in the original proposals of the joint committee which were agreed to by the people who wanted the exemption. The door having been opened a little wider than the original proposal, it was seen that by widening it so as to include all people, two-thirds of whose turnover was in respect of these products, there might be an injustice between people making two-thirds or more, and those making less, and in order to meet the injustice we have now thrown the door completely open.
    The result will be that there will be excluded from this price scheme the manufacture of commodities which are certainly part of the cotton trade, and which it would be very undesirable should be excluded. Under this Amendment any product which is to be utilised for the manufacture of the definite exempted products is exempted if it is sold to a person who manufactures, either in whole

    1639
    or in part, the particular commodities which are exempted. Suppose a firm is supplying yarn or cloth to another firm which is partly making these definite exempted products and partly products which are normally competitive with the cotton industry, such part of the yarn and cloth used for these purposes and exempted from the price scheme could be sold at any price however low. Yarn and cloth could be sold for other purposes and you would, in fact, get evasion of the price scheme with regard to commodities intended to be covered by the scheme.
    There are further dangers. There is also power given to the Cotton Industry Board, with the approval of the Board of Trade, to extend the list of commodities that are defined in this Clause, and naturally there will be great pressure to have that list extended. You might easily, as a result of this Amendment, have the door opened extremely wide. I submit to the President of the Board of Trade that the safer plan would be to adopt the suggestion of my hon. Friend the Member for Oldham (Mr. Dodd) and go back to the position of closing the door rather than opening it wider. I beg of my right hon. Friend to keep the exemption of these commodities on the basis of those firms who are actually manufacturing sewing thread or tyres, and so on, or their associated or subsidiary companies. Unless we can get the exemption related in some way to these original proposals there is great danger of exempting people who arc intended to be covered by the enabling provisions of this Bill. This problem is extremely difficult to under stand and difficult to explain, but it is a matter about which the Joint Committee are very anxious. I hope that the pro visions will not be widened but contracted in order to obtain equality without the risk of the dangers which will follow from the Amendment in its present form.
    10.11 p.m.
    Mr. Silverman: The right hon. Gentle man the President of the Board of Trade is being given very poor credit for his attempt to meet his critics in Committee, and I am afraid that I am on the same side. The question of the value or the validity of this Clause is its legal machinery. The object is to exempt from these provisions persons using their products in a particular way, as long as what is sold to them is sold subject to the ex-
    1640
    pressed condition that the purchaser must not use the goods otherwise than in the particular source of manufacture. I wish to point out the extreme difficulty of enforcing any such condition. How will you know that the condition of the exempted sale is broken, or to what extent it is broken; and if you know that it has been broken, what follows? If the pro duct has been used and the condition on which it was enabled to be bought at a certain price, probably less than the mini mum price, has not been observed, who has the right to decide what penalty should follow? It is extremely difficult, if you have a Clause of this kind, to make it workable. I cannot see how it can be made workable.
    Mr. Stanley: It is quite plain. If it were not used for the purpose, it would not have the benefit of this Sub-section, and therefore, if it were sold, as presumably, it had been, below the fixed mini mum price, it would be a contravention of the price scheme and subject to the normal penalties.
    Mr. Silverman: It is possible that I have not understood it. I thought it was a question of selling it for manufacture at a later stage, and that it was the original vendor who was exempted, and not the user of the cloth or yam. If that is right, the man who buys the article, subject to the condition that it shall only be used in this way, commits no offence, as I see it, and I do not see how you could follow the substance right through and keep track of what he bought and what actually became of it in the long run, or enforce the conditions.
    10.15 p.m.
    Sir Joseph Nall: The important point is that internal transactions of a combination should not be interfered with; they should be excluded; but outside transactions should be included. I do not think it should be impossible to distinguish between these two cases. As I understand the position, they do not want to interfere with internal transactions carried out by the same combination, including subsidiaries, but that they do not want that exemption to apply to transactions which may take place in what may be the surplus of their production which they may at any time put upon the market. I would suggest to the right hon. Gentleman that he might meet that point in another place.
    10.16 p.m.
    Mr. Radford: I hope the right hon. Gentleman will withdraw the Amendment and look further into it to see what its effects will be, before the Bill goes to another place. One of the main objects of the Bill is to prevent the selling at less than cost, except where it is necessary in order to meet foreign competition. The Amendment says:
    "Without prejudice to the preceding pro visions of this Section, no determination of the board administering a price scheme shall apply to any sale of goods suitable for use in the manufacture of any of the commodities mentioned in paragraph (a)of Sub-section (1) of this Section, or the manufacture of tyres, rubber hoses or any other articles…."
    The result would be that price schemes relating to cotton yarns, some of which are suitable for this purpose, or to cotton cloths, some of which are also suitable for this purpose, would once more be outside any price schemes which may be de signed by the industry, and we should be thrown back into the old evil period of dog lights, yarn against yarn, cloth against cloth, and the cutting of prices. It would make confusion worse con founded. There would be war between the spinners of yarn which are going to be sold to sewing cotton manufacturers, there would be war in the supply of cotton cloth which was going to be used by tyre makers; it would upset entirely the price schemes in which these producers were concerned, and the only result would be that the manufacturers of these finished articles would be securing their materials at less than a reason able and equitable price. I hope the Minister will take the appropriate steps to enable this matter to be more fully considered before the Bill finally becomes law.
    10.18 p.m.
    Mr. Stanley: I have already indicated that I am perfectly willing to reconsider the matter, but I only hope that in another place my courtesy will not be quite so unfortunate as it has been to-night. I must point out that when this particular Amendment was proposed in Committee only one speech was made, and that was in favour of it, and that the hon. Member who has spoken for the Joint Committee did not at that time see the dangers to which he has referred this evening.
    Sir C. Entwistle: That does not quite represent what I said. I said that the Clause as it stood opened the door a little wider than the original proposal. That was accepted, there was no criticism; but with this Amendment the door is opened much more, and if this is the only way of producing equality we had better go back to the original proposal.
    Mr. Stanley: I want to point out only that the Amendment is practically the same as that which was proposed in Committee by the hon. Member for Oldham (Mr. Dodd).
    Sir C. Entwistle: But not supported by me.
    Mr. Stanley: I only wish the hon. Member had then said that he had these objections. I confess that I thought I was trying to meet the grievances which were agreed to by the Committee as a whole.
    Sir C. Entwistle: The points raised by the hon. Members for East Willesden (Mr. Hammersley) and Oldham (Mr. Dodd) were not on an Amendment on the Order Paper, but on the Question, "That the Clause stand part of the Bill." They were sprung on us by surprise, so that it was hardly possible for the Joint Committee or anybody else to raise the objections that are now being raised when we see the proposal in concrete form.
    Mr. Stanley: My hon. Friend the Member for Oldham (Mr. Dodd) moved an Amendment which was on the Paper, the effect of which was to insert:
    "regardless of the total quantity of products of the industry manufactured by him."
    I am not complaining. I am merely explaining to the House that I thought I was meeting a unanimous desire that was expressed by the Committee. If there is serious complaint about the new Amendment and its effect, naturally it is some thing which has to be taken seriously and looked into. On the other hand, although I promise to look into it, I am not too optimistic about the prospect of solving the problem on the lines on which my hon. Friend rather airily desired me to do so, for he will realise that it was only because, after a good deal of consultation with the Joint Committee, we were un able to solve the problem, that we put in the provision that was originally in the Bill. Therefore, to think that in the few

    1643
    days between this stage and the time when the Bill is dealt with in another place we shall be able suddenly to find a solution which we have not been able to find so far may be slightly too optimistic. What I have to consider is whether, if we find the other thing impossible, the Amendment does not produce greater difficulties than the Clause as it originally stood. Therefore, if we cannot find a way of dealing with things on the lines originally proposed, it might be better to go back to the Clause as it was in the beginning. Certainly, I will look into the matter between now and the time when the Bill is taken in another place with a view to trying to find a solution.
    Amendment agreed to.

    CLAUSE 29.—(Liability of directors, etc., of bodies corporate for offences.)
    10.23 P.m.
    Mr. Cross: I beg to move, in page 36, line 16, to leave out "negligence," and to insert "reckless neglect of duty."
    This is a drafting Amendment. The words which it is proposed to insert are in accordance with the most recent drafting practice.
    10.24 p.m.
    Mr. Silverman: I do not quite follow the hon. Gentleman when he says that this is a drafting Amendment. Certainly, it is no such thing, if by drafting Amendment is meant something that alters the words without altering the sub stance, in order better to carry out what was formerly intended. The Amendment makes a substantial change. The sort of change it suggests is the kind of difference that is always recognised between negligence in the driving of a motor car that results in death but is not criminal, and negligence that is. The Clause provides for an offence. People who, by their negligence, allow things to be known which ought not be known, commit an offence. By this Amendment, you would lay an extra burden upon the prosecution seeking to convict somebody of that offence. It would no longer be necessary only to say that somebody was careless and that his carelessness resulted in the disclosure of information which ought never to have been disclosed. The prosecution would have to go much further than that and prove not merely carelessness but reckless carelessness, which has a quite
    1644
    well-defined and well-accepted meaning. In other words, you have to prove a much higher degree of carelessness if you use the words "reckless neglect of duty," than if you use the word "negligence. The effect of this Amendment so far from being merely drafting, would be to in crease the difficulties of those whose duty it will be to see that no such disclosure takes place. I doubt very much whether the House would like to see those difficulties increased. I take it that the hon. Gentleman himself does not want to make those duties any more difficult, and there fore I hope he will not press this Amendment.
    Captain Strickland: For the guidance of the House we would like to know whether the hon. Member in referring to the Clause dealing with the offence of giving away information, is himself acting with negligence or with reckless neglect of duty. The point I think is a very obvious one. The Clause refers to a case in which "an offence under this Act" has been committed and there may be negligence in which there is no criminal in tent as opposed to wilful neglect involving a premeditated offence against the Act.
    Mr. Silverman: I do not think I have been negligent, let alone guilty of reckless neglect of duty. I referred to one thing only, though no doubt the Clause covers other matters as well. The Clause provides that where an offence is proved to have been committed with the consent or connivance of, or to be attributable to any negligence on the part of any director, manager, secretary or other officer, then he, as well as the body corporate, shall be deemed guilty of that offence. I suggest that by substituting the proposed words you are increasing the burden on those whose duty it will be to see that the Clause is carried out.
    Amendment agreed to.

    CLAUSE 34.—(Definition and classification of the cotton industry.)
    10.28 p.m.
    Mr. Cross: I beg to move, in page 37, line 26, to leave out "forming an integral part of" and to insert:
    "which forms part of or is situate in the same cotton mill as."
    Certain processes are exempted under this Amendment and the next Amend-

    1645
    ment but one, from the definitions of "spinning" and "doubling," when those processes are performed on machinery which, in the words of the Bill, "forms an integral part of" the plant used by other industries. Those words are too restrictive, and would exclude those processes only where there was a physical connection between the machinery on which they were per formed, and the other machinery. The words which we propose to insert in place of "forming an integral part of" would exempt such processes when they are carried out on machinery which is situated in the same mills as the plant used by the other industries.
    Amendment agreed to.
    Mr. Cross: I beg to move, in page 37, line 39, to leave out "unless the process," and to insert:
    "except so far as the treatment of yarn in the manner mentioned in this paragraph."
    The doubling processes defined in this Clause are carried out by a number of industries besides the cotton industry. As the Clause is drafted only a limited number of the ancillary processes of doubling are exempted processes. The joint committee in consultation with the other industries concerned, have agreed that all processes ancillary to doubling, when carried out by industries other than the cotton industry, shall be excepted, and this Amendment gives effect to that agreement.
    Amendment agreed to.
    Further Amendment made: In page 38, line 1, leave out "forming an integral part of," and insert:
    "which forms part of, or is situate in the same cotton mill as."—[Mr. Cross.]
    10.30 p.m.
    Mr. Sexton: I beg to move, in page 39, line 38, after "finishing," to insert:
    "and that the packeting of surgical cloths and the labelling of such cloths to indicate that they are intended for surgical and therapeutic purposes, or for the purposes of personal hygiene, shall not be deemed to be making-up or packing."
    As the right hon. Gentleman has already accepted the additional words "surgical dressings" in Clause 27, I am hoping that he is going to stand up and say that this proposal is consequential, because that is a word which I find usually causes Amendments to pass through. I just want to draw his attention to these pro ducts. I said they are non-competitive
    1646
    with the products which come under the Bill, and the Amendment is to ensure that the packeting and labelling of those pro ducts shall not come under the activities mentioned in Sub-section (2) of this Clause. Perhaps the words are not the best possible, but I am hoping that the right hon. Gentleman will give some assurance.
    Mr. W. Joseph Stewart: I beg to second the Amendment.
    Mr. Cross: As the hon. Member anticipated, the precise words are not accept able, but the idea which they convey is acceptable, and I would suggest that he should withdraw this Amendment. The same remark applies to the next following Amendment. Perhaps he will leave it to my right hon. Friend to see that an Amendment having the same effect but in acceptable words is moved in another place.
    Mr. Sexton: I shall be glad to with draw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 36.—(Application to Scotland and Northern Ireland.)
    10.33 p.m.
    Mr. Cross: I beg to move, in page 43, line 3, at the end, to insert:
    "(c) in the Sixth Schedule for the reference to Sub-section (1) of Section thirty-three of the Bankruptcy Act, 1914. there shall be substituted a reference to Sub-section (1) of Section one hundred and eighteen of the Bankruptcy (Scotland) Act, 1913."
    This Amendment and the next are necessary to enable this Bill to apply to Northern Ireland and Scotland.
    Amendment agreed to.
    Further Amendment made: In page 43, line 33, at the end, insert:
    "(c) in the Sixth Schedule for the reference to Sub-section (1) of Section thirty-three of the Bankruptcy Act, 1914, there shall be substituted a reference to Sub-section (1) of Section one of the Preferential Payments in Bankruptcy Act (Northern Ireland), 1933: and for the references to Section seventy-eight and Sub-section (1) of Section two hundred and sixty-four of the Companies Act, 1929, there shall be substituted respectively, references to Section seventy-six and Sub-section (1) of Section two hundred and thirty-four of the Companies Act (Northern Ireland), 1932."—[Mr. Cross.]

  NEW SCHEDULE.
    LIMITATIONS ON, AND SPECIAL EXEMPTIONS FROM, DETERMINATION OF NORMAL MINIMUM PRICE OR CHARGE UNDER A PRICE SCHEME.

      Part I.
      Maximum Limit of Normal Minimum Price or Charge.
      (1)The maximum limit, in relation to any determination under a price scheme, of a normal minimum price or charge in connection with the sale of any product or the subjection of any product to any process, shall be determined in accordance with the following provisions of this Part of this Schedule.
      (2)The Cotton Industry Board shall select from among the undertakings engaged in the section of the industry to which the scheme relates, in manufacturing the relevant product or subjecting that product to the relevant process, a group of undertakings which appear to that board to be the most efficient of all the undertakings so engaged.
      (3)In relation to each of the undertakings so selected, the Cotton Industry Board shall ascertain the sum equal to the aggregate of the following amounts, that is to say—

      (a) the cost to the person carrying on that undertaking of manufacturing the relevant quantity of the relevant product or subjecting the relevant quantity of that product to the relevant process;

      (b)such amount as may, in relation to plant of the type used for the purposes of that undertaking in manufacturing the relevant product or subjecting it to the relevant process, be specified in the scheme as the amount allowable for depreciation of plant by reason of the manufacture of the relevant quantity of the relevant product or the subjection of the relevant quantity of that product to the relevant process; and

      (c)such amount as may be specified in the scheme as the amount allowable for profit in respect of the manufacture of the relevant quantity of the relevant product or the subjection of the relevant quantity of that product to the relevant process;

      and the average of the sums ascertained under this paragraph shall be the maximum limit.
      4. The amount computed in respect of cost in relation to any undertaking under sub-paragraph (a) of the last preceding paragraph shall be computed—

      (a)by reference to the operation of the undertaking over such past period as the Cotton Industry Board think proper; and

      (b)on the assumption that the under taking was carried on on every day of the week except holidays, for the number of hours customary in the section of the industry to which the scheme relates.

      Part II.
      Authorisation of Price or Charge less than Normal Minimum Price or Charge.
      1. The Cotton Industry Board, whenever a determination under a price scheme of the normal minimum price or charge in connection with the sale of any product or the subjection of any product to any process takes effect, shall publish, in such manner as they think best adapted for informing persons affected, the average of the aggregates of the amounts ascertained in accordance with sub-paragraphs (a) and (b) of paragraph 3 of Part I of this Schedule in connection with the giving of that consent; and the average so Dub-
      1648
      lished is hereafter in this Part of this Schedule referred to as "the average allowance for cost and depreciation."
      2.Upon application in that behalf made to the Cotton Industry Board by any person registered under the scheme, that board shall determine, in accordance with the following provisions of this Part of this Schedule, the special allowance for cost and depreciation appropriate to that person in respect of the relevant product.
      3.The special allowance for cost and depreciation appropriate to any person in respect of the relevant product shall be the sum equal to the aggregate of the following amounts, that is to say—

      (a) the amount which the Cotton Industry Board determine to represent the cost to the said person of manufacturing the relevant quantity of the relevant product, or of subjecting the relevant quantity of that product to the relevant process; and

      (b) such amount as may, in relation to plant of the type used by the said person in manufacturing the relevant product or subjecting it to the relevant process, be specified in the scheme as the amount allowable for depreciation of plant by reason of the manufacture of the relevant quantity of that product or the subjection of the relevant quantity thereof to the relevant process.

      4. The amount computed in respect of cost in relation to any person under sub-paragraph (a) of the last preceding paragraph shall be computed—

      (a) by reference to the operation of his undertaking over such past period as the Cotton Industry Board think proper; and

      (b) (if the remuneration of operatives employed for the purposes of that under taking in that period was paid at rates less than those customary in the section of the industry to which the scheme relates) on the assumption that the said remuneration was paid at the rates customary in that section of the industry.

      5. If the special allowance for cost and depreciation in respect of the relevant product determined in relation to any person in accordance with the last preceding paragraph is less than the average allowance for cost and depreciation in respect of that product, he may, so long as the normal minimum price or charge remains unchanged, sell the relevant product, or subject it to the relevant process, at a price or for a charge which is less than the normal minimum price or charge, but which does not fall short thereof by more than the first-mentioned difference:
      Provided that a person shall not by virtue of this paragraph be authorised to sell the relevant product or subject it to any process at a price or for a charge the amount whereof is less than the special allowance for cost and depreciation for the time being determined in his case in respect of that product.
      6. Whenever the Cotton Industry Board make a determination of the special allowance for cost and depreciation appropriate to any person in respect of the relevant product they shall notify to that person the amount which, for the purposes of that determination, they

      1649
      have determined in respect of cost under sub-paragraph (a) of paragraph 3 of this Part of this Schedule; and if within the period of seven days beginning with the date of the notification, that person gives notice in writing to the Cotton Industry Board that he desires that the question whether the said amount has been properly determined should be referred to arbitration, the matter in dispute on that question shall be referred to the arbitration of a single arbitrator agreed upon between the said person and the Cotton Industry Board or, in default of agreement, appointed by the Board of Trade and the arbitrator may, by his award, vary the said amount, and in that event the determination of the special allowance for cost and depreciation shall be varied accordingly.
      7.A determination by the Cotton Industry Board of the special allowance appropriate to any person in respect of the relevant product shall not have effect until the expiration of the period within which a notice that he de sires a reference to arbitration may be given by that person under the last preceding paragraph or, if such a notice is duly given, until the arbitrator has issued his award on the reference.
      8.As soon as may be after a determination o the special allowance for cost and depreciation appropriate to any person in respect of the relevant product has taken effect, the Cotton Industry Board shall notify the determination to the board administering the scheme.

      Part III.
      Interpretation.
      In this Schedule—

      (a)the expression "the relevant product" means the product in relation to which the normal minimum price or charge is deter mined;

      (b)the expression "the relevant process" means the process in relation to which the normal minimum price or charge is deter mined; and

      (c)the expression "the relevant quantity" means the quantity of the relevant product by reference to which the amount of the normal minimum price or charge is expressed.—[Mr. Stanley.]

      Brought up, and read the First time.
      10.34 p.m.
      Mr. Stanley: I beg to move, "That the Schedule be read a Second time."
      In dealing with this subject we are dealing with what everyone on the Committee will acknowledge proved much the most difficult part of the Bill. It was a question on which we spent a considerable amount of time, and when the time in the Committee came to an end, although certain lines of thought were emerging, we had come to no definite conclusion. The point raised here is the definition of the price which can be determined under a price-fixing scheme. The scheme in the Joint Committee's original proposals was
      1650
      on a totally different basis. They then proceeded on the idea that it would be possible to have, under the price-fixing scheme, a minimum price which could be kept secret, that each one would be able to sell his products as high as possible but the price level would be underpinned by this minimum price which it would be possible to keep secret. In that belief they introduced in their original proposal a formula for finding this minimum price which certainly entirely excluded profit and I think probably, on an accurate reading of the words, also excluded depreciation; but during the discussions which followed the publication of the Bill it became plain to the Joint Committee, and it satisfied me, too, that the original basis on which they proceeded was quite impossible, that, in fact, there was no possibility of having a minimum price fixed which would be kept secret, and that the almost inevitable tendency would be for the minimum price to become a maxi mum price. Once a customer knew that they were not allowed to sell below a certain price, almost inevitably he would force them down to sell at that price.
      It is clear, if that view of what would happen was right—and I believe that on the whole it was right—that the original basis for finding that minimum was entirely inadequate, because if this minimum price was to become for Lancashire's industry the maximum price, it was impossible to contemplate a maximum price which included nothing for depreciation and nothing for profit. The outlook for an industry which during the whole life time of this Bill had to conduct itself on such a bleak basis as that would indeed have been a lamentable one. It was generally recognised in the Committee that if we were to adopt that view of what would happen, that is, that in all probability the minimum price would become the maximum price, we must find some new definition which would allow in the mini mum price a fair return for depreciation and for profits.
      Although it was easy to come to these general decisions we found it was not at all easy to translate them into actual practice. I did produce to the Committee a new Clause which tried to meet this point. In that new Clause I proceeded on the basis of regulations in which there would be laid down some formula which would define the ratio of depreciation and profit

      1651
      which it would be possible to charge. We discussed the matter a good deal in Committee. I took the perhaps rather un usual course, but a course which I think was acceptable to the Committee, of deliberately putting down a new Clause, which I said before we started to discuss it I should withdraw at the end, in order that I might have on this very difficult subject the opinions of Members of the Committee and be in a position to frame the final proposal in the light of what they had said. It fairly emerges from the discussions on that Clause in Committee that the Committee felt that on such an important matter as profits and depreciation Parliament must have some say in, at any rate, the fixing of the maxi mum rate which could be charged.
      As I said, I proposed in this new Clause to deal with the matter by way of regulation which would lay down some formula defining how the depreciation was to be calculated and how profit was to be calculated and what the maximum rate was to be. When I came to look more closely into it I found the task of devising any general formula which would cover all sections of the industry was really quite impossible. The variations, the sort of ratio of machinery to working costs, or, indeed, the ratio of working capital to costs, differs so immensely in every section that a formula which would have been perfectly all right for one section would have been wholly inapplicable to another, and a formula which would have been high enough to embrace all the sections would have produced in some of them the most ludicrous and quite un acceptable results. I was, therefore, forced back to the conclusion that it was impossible to deal with this on a basis general to the industry as a whole, and that we should have to deal with it section by section in the light of the difficulties of each section.
      The scheme therefore that I propose in this new Schedule, following on the Amendment that we have already made to Clause 9, is as follows: There should be no formula laying down how maxi mum depreciation or maximum profit should be arrived at. Instead of that, in the actual price-fixing scheme the promoters of the scheme in the section should state the actual limit of depreciation and of profit that they propose. It will not be expressed in the form of a ratio but
      1652
      in the form of the actual figure, whether that is ½d. per pound or per yard or so much per spindle. It will be an actual maximum depreciation or profit. That scheme has to run the gauntlet of all, the inquiries under the Bill. It has to go to the Cotton Industry Board and has to be examined by representatives of all the other sections. It has to go to the Cotton Industry Advisory Committee and to the Board of Trade. Finally this scheme, with all those figures set out in it, has to be approved by an affirmative Resolution of the House of Commons. In that way, far better than by any theoretical discussion of a formula, we shall get the actual presentation of the figures, the sub mission of them to all the other sections and competing industries and finally to Parliament itself. I believe that that will provide the best safeguard for depreciation and profit according to the needs of any particular section. That is what Part I of the Schedule lays down.
      That is the scheme, and the reference to it is in the sub-paragraphs of paragraph 3. Under the scheme the sort of idea will be, first of all that the scheme goes out with a maximum, let us say, of ½ d. per pound of yarn for depreciation and ½ d. per pound of yarn for profit. It runs the gauntlet and is finally approved by Parliament. That fixes the maximum figure. The price-fixing board which is running the price-fixing scheme has to fix the minimum price, which it submits to the Cotton Industry Board, whose duty it is to ascertain whether the scheme is within the limits of the Bill. Part I of the Schedule sets out what they have to do in order to arrive at that result. They have first of all to select from the firms in the particular section to which the price relates a group of the most efficient undertakings. Then, in relation to each of those undertakings, they ascertain the actual cost of production of each unit. They add to that the maximum amount specified in the scheme for depreciation and for profit, and they take the average of those sums. They then have to be certain that the actual price fixed by the price-fixing board is below the sum thus arrived at.
      Hon. Members will notice one provision that we have made with regard to hours of work. In fact, that is the same provision as appeared in the original Bill, Under Part II of this new Schedule we

      1653
      develop the idea, which was very strongly pressed in the Committee and which I think met with general approval. It was that what we called the super-efficient producer—the man who, because of his skill, was able to produce at a lower cost than any of his competitors—should have some opportunity of proving that that was the case and of being allowed to take advantage of his extra efficiency. It would also, of course, act as a check upon the level fixed under the price scheme, and ensure that some people did not show abnormally high costs.
      Part II sets out the machinery by which this super-efficient producer can obtain his price relief. As set out here, it looks terribly complicated, but it really means no more than that, having ascertained the appropriate amounts in the price fixing scheme for cost of production and for depreciation on his particular type of plant, then, allowing exactly the same ratio for depreciation, if he can prove that his cost of production is lower than the average cost of production of the group selected under Part I, he is allowed to revise his price below the minimum price by the amount by which his cost of production is below the average cost of production under Part I. [Hon Members: "Hear, hear!"] I do not know whether the hon. Gentleman's cheer is one of encouragement or of understanding. He has the advantage of having had a long explanation of the scheme, and, if, with that advantage, he does not now under stand it, I have no hope for those who have not had that advantage. Hon. Members will be interested in seeing, at the bottom of page 1886 of the Amendment Paper, that when we are computing the production costs of this super-efficient producer we make special provision with regard to wages, in order to ensure that he shall not gain any advantage if the wages he pays are lower than those customary in the trade.
      It is, of course, at any time open to the Price Board to reduce the minimum price, and here a danger has been represented to us. The super-efficient producer makes his application, it is granted, and he is entitled to sell at a price below the minimum price which has been fixed. The Price Board then, in order not to have this competition cutting into them, reduce their minimum price to this man's level. He is then able to make another
      1654
      application and again to show that his costs of production are lower than the average selected, and is allowed again to sell below the minimum price. The minimum price thus follows him down, and you have a vicious spiral which, if' continued, would bring prices down to ruinous levels. Nobody would suggest that it would be wise or prudent to allow that to occur, and, therefore, we put in a definite stop below which the super-efficient producer cannot reduce his prices and avail himself of this procedure. That stop is put at the level of his cost of production plus the full depreciation allow able under the scheme. We feel that to sell below that figure can be of no advantage to the super-efficient producer him self, and can only tend to bring down the industry with him to a level which is wholly unprofitable.
      The only other point to which I need call attention is that, if the applicant for this privilege based on his efficiency of production is aggrieved by a contrary decision of the Cotton Industry Board, he can appeal to an arbitrator, and the arbitrator may vary the award of the Cotton Industry Board. I am afraid I sit down without any hope that I have made this simple provision plain to the House but, although the language is extremely complicated, I think the general principles are probably fairly plain to Members as a whole and, from all the investigations that I have made so far, I think they commend themselves to those who joined in the discussion on the point in Committee and appreciated the very great difficulties.
      Mr. Burke: On page 1886 the wording is different from the wording as we had it in the original drafting. Can we have an assurance that this means that no relief in price will be given if the standard rates of pay, that is to say the recognised trade union rates, are not being paid?
      10.51 p.m.
      Mr. Levy: I was one of those who criticised the Clause that my right hon. Friend put forward. I appreciated the difficulty and how impossible it would be under such a Clause to get anywhere at all with regard to this price scheme. Although at the time the Clause was withdrawn my right hon. Friend did not know how he would find a solution, I want to congratulate him and his advisers on finding a solution to this very difficult

      1655
      intricate, complicated problem;. It is one in which you have a ceiling and a floor and an intermediate price, and I feel that, if there is any solution to be found, the method that they have adopted is the only conceivable one that is likely to be of benefit. The President of the Board of Trade has certainly been very ingenious in devising it and I wish it all success, and I am sure it will have it.
      10.53 p.m.
      Sir G. Entwistle: I should like to add my praise to the President and his officials, and also to the Parliamentary draftsmen, for the way in which the Schedule has been drawn. It really looked as if the problem was insoluble, at any rate from the point of view of being expressed in an Act of Parliament, but on all sides I think there will be general agreement that the task has been admirably performed. There are two points of small detail which I shall be grateful if the President could consider. Is he satisfied with the definition now in the Clause or might it need a word of alteration in another place? Paragraph 3 (a) says:
      "The cost to the person carrying on that undertaking of manufacturing the relevant quantity."
      I am not sure that the word "manufacturing" is sufficiently wide to cover the prime cost of production. If my right hon. Friend is satisfied that it is sufficiently wide, well and good, but would it include such costs as the expenses of salesmen in selling the produce? Would it include the cost of sampling, or even some necessary research? Does it include what would be regarded as essential overhead costs? That that is intended I have no doubt. But I wonder whether it would not be better to have a wider term, such as "cost of production" or, as I would prefer, "cost of manufacturing, including costs incidental to the manufacture." Such words as that would make it quite clear that those incidental costs are to be included.
      The other point I want to raise is a similar point, as to whether the words "depreciation of plant" are sufficiently wide. I should have thought that it would have been better to have left simply the word "depreciation." If you are to say what is depreciation, I would prefer the words "depreciation of assets," or
      1656
      "depreciation of fixed assets." I doubt whether "plant" would include buildings, and it is important that there should be provision for depreciation of buildings, both for obsolescence and other purposes. There may be other things which do not come strictly within the word "plant" but ought to be included. As long as the word "depreciation" is capable of being construed in the way it is normally construed for commercial purposes, that is all I am asking for. I should be grateful if my right hon. Friend would consider whether these words are satisfactory for the purposes desired.
      10.57 p.m.
      Mr. Rhys Davies: I wish to say a word in relation to the point raised by my hon. Friend the Member for Burnley (Mr. Burke). When we discussed this problem upstairs we talked about conditions of employment. Certainly, they will enter into any price-fixing scheme as much as rates of wages. The Lancashire textile industry is the one industry which has been immune from the introduction of the two-shift system up to recently. We should regard any price-fixing scheme that would lend itself to the extension of the two-shift system in the industry as a very serious blow to the standards of life of the people. I should like to say a word concerning the tilt of the right hon. Gentle man about my understanding. I will pay him this tribute in return. I wish my mind was as alert as his, but if I were supplied with as many memoranda as he I could make myself almost as intelligible as he has been.
      10.58 p.m.
      Mr. Hammersley: This is the most ingenious part of a very complicated Bill. As the fixing of prices is perhaps the most important factor in any industry, and as we had such a long discussion on this matter upstairs and found it so difficult to come to a solution, I should like to say a word of praise for the right hon. Gentleman and his Department, who have found a solution which has com mended itself to the House as a whole and will react to the benefit of the industry.
      10.59 p.m.
      Mr. E. Smith: I should like to join with other hon. Members in expressing satisfaction at the method adopted by the President of the Board of Trade in finding a solution to this difficult problem.

      1657
      Members of the House will agree that he had a very difficult task, and he must have given a great deal of attention to it since the Committee's proceedings terminated to have been able to deal with it in so able a way. It gives me satisfaction to know that in Part II the operatives' conditions have been dealt with. But I would like to ask whether the President of the Board of Trade can give an assurance that this will be operated on the basis of the best possible conditions as to wages and piecework prices. The right hon. Gentleman stated, and as I listened to him I could agree, that the only satisfactory way of dealing with this problem was that they should dispense with any formulas, and in my view, after giving some consideration to the problem, the right hon. Gentleman has dealt with it in the best possible way.
      He went on to say that the board will have regard to the limit of profit and of depreciation. I understand that the board will deal with these matters, but who will fix the standard of valuation of depreciations? Is it to be done in consultation with the Board of Trade officials? In my view, a good deal of the success of the scheme will depend upon the maximum amount of agreement that can be arrived at in the industry, and especially in the sections, upon the valuation of depreciation. The next point is with regard to cost of production. Those hon. Members who are well informed on industrial affairs will agree that there may be a great difference between overhead charges in one factory and those in another, and, therefore, I think it is most important that in the regulations that are to be introduced by the right hon. Gentleman the board, when they are considering the important questions of overhead charges, costs of production, and valuation of depreciation, should come to their decisions only in consultation with the specialists who are employed by the Board of Trade to deal with these matters.
      11.3 p.m.
      Mr. F. Anderson: I will put a hypothetical case. In Lancashire a large number of automatic looms have been introduced, and some organisations have come to agreements, while others have not yet done so, especially where the two-
      1658
      shift system has been put into operation. In the event of, say, a two—shift system having been put into operation, what method will be adopted to arrive at what is called a reasonable or fixed price for the selling of that commodity? As is generally known, the ordinary power loom can produce cloth A, and the automatic loom also can produce cloth A. What will be the position in arriving at the efficiency price for the super-efficient loom? Is it going to be that the power looms are to be judged on their own merits, and the automatic looms that are producing similar cloths all the way through also on their own merits? Or what will be the method adopted as a whole in regard to what are called the super-efficient looms or the automatic looms? As the right hon. Gentleman is perhaps aware, the position so far as automatic looms are concerned, is gradually shifting to a greater efficiency in production from the standpoint of mass-produced goods. What is going to be done in those circumstances?
      There is one further point. As the right hon. Gentleman knows, a number of industries have been established in the Special Areas that may come under the Cotton Industry Board. In making any calculations as to what is going to be done so far as those industries are concerned having regard to the fact that they are relieved from rates, Income Tax, and so on, what will be their position as far as depreciation is concerned in making the calculations under the super-efficiency scheme that has been mentioned?
      11.6 p.m.
      Mr. Dodd: To those of us who were in Committee upstairs it is with no little astonishment that we find nothing but praise from all quarters of the House in regard to this particular matter. The amount of time that we took in discussing it in Committee was only exceeded by the time that was taken in discussing the question of "may" or "shall." Whilst there was a vast diversity of opinion upstairs, there seems to be much less diversity of opinion here. I think my right hon. Friend has shown infinite patience in listening to everything that was said upstairs and in succeeding in incorporating it into a single Schedule such as this. I support the Clause with this Schedule, but there are one or two things to which I should like my right hon. Friend to give further consideration.

      1659
      There is, first, the point that was raised by my hon. Friend the Senior Member for Bolton (Sir C. Entwistle) with regard to costs—the costs of the person carrying on the undertaking, manufacturing the relevant quantity, etc. What are costs? We ought to have the widest possible scope for defining what costs will be. Some firms advertise, while others do not. Some people find it suits them to advertise, and others find that it does not. There are a dozen different ways of incurring costs. In the first part of the Schedule the word "profit" occurs. Profit is a very difficult word to define, and I am wondering whether if we used some such phrase as "return of a reasonable amount on the capital involved" it might not be a better way than to use the word "profit." I do not, however, press that point.
      With regard to the so—called super-efficient concern, I am sorry that my right hon. Friend has not accepted my point of view. I am in a minority and have been all the way through, but I am glad to say that I have got a few recruits since I started in regard to the so-called efficient concern. I have contended all the way through that the so-called super-efficient concern has the right to come down on appeal below the other people if he can demonstrate that his costs are lower, and I have further contended that the other people in that section should not be permitted to come down to that same costs level until they have demonstrated that they have reduced their costs to an equivalent amount. I do not want to enter into a discussion of that matter at this time, but I had hoped that there was a chance of that view being incorporated or, at any rate, that it might have been left open to be introduced at a later date, if need be. I view this with a great deal of concern because right through from the Second Reading my aim has been to increase the efficiency of the industry within the county and to encourage the renewal and replacement of plant as far as possible. As the hour is late and we are dealing with far and away the most complicated Clause and Schedules in the whole Bill, I will not say anything further, except that the President of the Board of Trade and his advisers have done a remarkably fine piece of work in putting on to paper
      1660
      in a form of words what was said and urged upstairs.
      11.9 p.m.
      Sir H. Fildes: I join in the chorus of congratulations in respect of the cleverness of the President of the Board of Trade and the Parliamentary Secretary, but I must say that never before in my time has there been legislation of this character introducd in the present circumstances. The story from the beginning has been that Lancashire was clamouring for this Bill and this Schedule, and today is the first time that we have really seen the Bill. How can Lancashire have had an opportunity of discussing it? If my right hon. Friend the President of the Board of Trade is fair and stands by the pledge of the Prime Minister, he will, before he goes any further, give Lancashire an opportunity of expressing its opinion upon this Measure. It is without parallel in the legislation of this country to attempt, as is envisaged in this Schedule, to state what should be profit and what should be depreciation. We are going to pass this Bill without having had an opportunity of going into these things. This is a betrayal of Lancashire. There is no justification or authority for proceeding further with this Measure. In view of this Schedule, I appeal to my right hon. Friend, now that he has made up his mind on what is desirable to be incorporated in this Bill, to submit it to Lancashire and to take an independent ballot. If there is a majority in favour of this wretched Bill, I shall have no more to say, but if not, he should take his defeat like a man and enable this trade, which has gone on so well for so many years without interference, to carry on.
      11.12 p.m.
      Mr. Stanley: I do not think that I need follow the hon. Member for Dumfries (Sir H. Fildes) into his wider researches, although I confess that I was a little surprised and disappointed, when, after starting his speech so successfully by warmly congratulating me, he ended by making quite plain that what he congratulated me upon was, in his mind, a betrayal of Lancashire. The hon. Member for Burnley (Mr. Burke) asked a question with regard to the drafting of the sentence at the bottom of page 1886 of the Paper. I think he is under a misapprehension. There has been no change

      1661
      in the drafting, although I understand that the possibility was discussed of some change being made in another place to make it plain that what we have in mind is not so much the rate as the total remuneration which a man receives. There has been no change in that so far, and if the hon. Gentleman will have a word with me before the Bill is considered in another place with regard to this point, I will certainly consider it.
      One of my hon. Friends raised two points, one of which was whether our definition of the costs of production was wide enough to cover certain costs which he thinks should be included, such as research. I will look into the matter, and will certainly consider his suggestion of using the word "incidental" as regards the definition of depreciation of plant. It is certain that it does not cover a building or fixed assets of that kind. My hon. Friend will realise that full maintenance and repairs for buildings will be allowable under the costs of production, but depreciation of plant is all that is allowed for in the depreciation, just as I understand that it is only depreciation of plant that is allowed for under the Income Tax law. Although a factory building will be subject to a charge for repairs and maintenance, nothing is allowed for maintenance.
      The hon. Member for Stoke (Mr. E. Smith) raised the question of the basis of valuation. I think he will realise that so far as the scheme itself is concerned it will be unnecessary to lay down a basis of valuation. The scheme will lay down the actual amount which is to be allowed for depreciation. With regard to the cost of production, there are wide variations, and for that reason this is not to be judged on the case of one firm alone, but on a group of firms. In regard to his further question, he will find in paragraph (4) a provision that the assumption is that the undertaking was carried on for the number of hours customary in the section of the trade to which the scheme relates. I understand it cannot be said that in any section of the industry the customary hours are a two—shift or three—shift system, and, that being so, it will be on the assumption of the customary hours worked in that particular section.
      The hon. Member for Oldham (Mr. Dodd) raised an interesting point which he said he did not want to pursue, and,
      1662
      therefore, at this late hour I will not pursue it, but I cannot contemplate laying it down in an Act of Parliament that the Price Board shall be forbidden from going below a certain price. That is not a principle which we can fairly adopt. We must allow them to be free to choose a price which they consider to be satisfactory. In conclusion I should like to express my appreciation of the compliments which have been paid by hon. Members in all quarters of the House to my officials and to the draftsmen who have been responsible for the preparation of this extremely complicated piece of drafting.
      11.19 p.m.
      Mr. Petherick: I beg to move, as an Amendment to the proposed Schedule, in line 108, at the end, to insert:
      "8. The decision of the Cotton Industry Board on an application made by any person registered under the scheme for the determination by that Board in accordance with the preceding provisions of this Part of this Schedule of the special allowance for cost and depreciation appropriate to that person in respect of the relevant product shall be notified to that person not later than seven days after the submission to the Cotton Industry Board of such particulars in regard to the application as may reasonably be required by that Board for the purpose of arriving at such decision."
      The orchestra during the course of the afternoon and evening has been fairly harmonious. I must say that the efforts of one or two crooners I did not entirely approve, it may be that my conservative ear is not attuned to this modern music. I do not think anybody really except the leader of the orchestra, and possibly the composer, can understand it. If it does not benefit the cotton industry it will at least benefit the paper industry particularly the new Schedule which is to be added to the Bill. I wish to say only a few sentences in support of my Amendment. As I understand the new Schedule, if a person wishes to sell at under the fixed price, and can confirm to certain conditions which are laid down very elaborately and extremely well in the Schedule, he may in those circumstances be allowed to do so. A decision as to whether he may sell at under the price fixed or not should be given extremely quickly. As everybody knows, sales in the cotton trade may easily be lost to a foreign competing firm unless an

      1663
      offer is accepted very quickly. Therefore, it is essential that a decision should be given at the earliest possible moment by the body to which the appeal is made. The Amendment lays down that the decision has to be given by the Cotton Industry Board within seven days, and I hope my right hon. Friend will be able to accept it.
      11.21 p.m.
      Sir. H. Williams: I beg to second the Amendment.
      I support the Amendment because I think that a decision should be given promptly, although I am not in complete agreement with the period mentioned in the Amendment. It might be that the period of seven days would raise certain difficulties at Christmas time, Easter, Whitsun, and the end of July, for example, and during the periods of the customary holidays. Nevertheless, it is vital that from time to time, if trade is to continue without interferences, these decisions sthould be given without undue delay. I second the Amendment in the hope that my right hon. Friend will Le able to give some undertaking that he will look into this matter for the purpose of seeing whether in another place appropriate words can be introduced for a reasonably mandatory instruction that those concerned, when they commence their duties, shall not hold up decisions in a manner that is unreasonable.
      11.22 p.m.
      Mr. Cross: I fully agree with my hon. Friend the Member for Penryn and Fal-mouth (Mr. Petherick) as to the need for speedy action in giving these decisions, but it does not follow from that that I think an Amendment of this kind is either necessary or desirable. The time that may be required to come to a decision on these points must depend upon, and vary with, the circumstances of different cases, and indeed, as to putting in any time limit at all, I think the Cotton Industry Board could always, without any difficulty, delay a decision simply by asking for further information. On these grounds alone, I suggest to my hon. Friend that a time—limit is not a desirable way of dealing with this point. It would be impossible to say that any information for which they asked was not reasonably required, and the moment they found themselves a little behind the statutory
      1664
      time limit within which they had to give their decision, they could easily evade the provision. I would further submit to my hon. Friend that, on general grounds, it is very undesirable that the Cotton Industry Board should be required to come to a decision within a specified time when they would be acting in what would be a semi—judicial manner. The question is one which will have to be settled by the three independent members of the Board, and those three independent members are to be appointed by the Board of Trade, who will be conscious of the very definite functions, including this function, which they have to perform, and I feel we should do best to rely upon my right hon. Friend's Department to appoint persons who would not unduly delay their decision.
      Amendment negatived.
      Schedule added to the Bill.

      FIRST SCHEDULE—(Constitution and Procedure of the Cotton Industry Board.)
      11.25 p.m.
      Mr. Burke: I beg to move, in page 44, line 6, to leave out "fifteen," and to insert "seventeen."
      This Amendment and the following two Amendments cover the same point. On the Cotton Industry Board there are representatives drawn from all sections. Provision is made for the inclusion of one operative spinner, one operative weaver and one operative finisher in a Board of 15 members. Having regard to the tremendous number of operative spinners and weavers, we think they are entitled to more representation. The argument may be used that we are asking for sectional representation and that this is a Board to represent the whole industry. But of all the bodies to be set up under this Bill—and there are six or seven of them now—this is the only one on which we have any representation for the employés, and all those bodies are composed of people drawn from various sections. In the Committee upstairs we had a great fight between the rayon section and the cotton section, and the rayon section got many concessions and increased representation. If it is right to increase the representation of one section, I do not think there can be any sound argument against giving the mass of the people in the industry, the 350,000 persons who are doing

      1665
      the work of the industry, the representation to which they are entitled, and we ask that their representation of two should be increased by 100 per cent. It is certainly a sectional claim, but this is a very wide section. It is a human claim—the claim of the people who will be vitally affected. It may be said that they can speak now, but what will be the effective power of two votes on a board of 15 members—a board which may have to decide to close down mills in which their fellow-workers are engaged? They will have no real power to save the livelihood of their own people or to prevent, for instance, the closing down of the only mill in a village. From the wide human point of view, we ask the House to give the workpeople more adequate representation than the Bill allows them at the present time.
      Mr. E. Smith: I beg to second the Amendment.
      11.29 p.m.
      Mr. Cross: The hon. Member who moved the Amendment will be as conscious as I am that the balance of forces in the Cotton Industry Board has been arrived at after long negotiation among various interests to be represented, each of which, as I conceive it, would like a greater share of representation than it has got. I should be very reluctant, as I think we should all be, at this stage, to upset that balance of force by any change whatever, either subtracting from or adding to the representation of any of the interests on that Board. I believe that if we were to do that we should start the Cotton Industry Board with a sense of grievance against the particular interests which had had their strength augmented, and with a sense that others had been left at a disadvantage which they had been entitled to expect would not occur. One of the most important tasks that has fallen to me and others associated with this Bill during the time in which it was passing through Committee upstairs has been to try to reconcile conflicting claims to representation on bodies set up under the Bill where the conflicting claims had not been reconciled before the Bill came to the House. I thought we had completed that task, and I trust that we have. If the hon. Member gets his Amendment carried then we shall have to begin all over again on the Cotton Industry Board. A change of the kind which the hon. Member sug-
      1666
      gests is not one which would be accepted readily by the others.
      Mr. Burke: Is it not a fact that the others have already had changes made? We are coming in last.
      Mr. Cross: Not on the Cotton Industry Board. The hon. Member is thinking of other committees where claims for representation had not been reconciled before the Bill reached this House. I would suggest to the hon. Member and the House that the present representation for the operatives should enable them to voice adequately the labour aspect of any problems which might arise. That is all that is possible on a Board of this nature, where, of necessity, every single interest is bound to be represented by a minority. I trust that the hon. Members opposite will not feel it necessary to press this Amendment.
      11.33 P.m.
      Mr. Maxton: I have waited here most of the day because of my interest in this Amendment. I had hoped that something more would have been forthcoming from the spokesman of the Government than has proved to be the case. It seems to me a terrible commentary on the negotiations which have been proceeding to arrive at this, which is going to confer tremendous benefits on the capital that is invested in Lancashire cotton. The representative of the Board of Trade tells us seriously that it would upset the whole working of the thing, that the 13 master employers would wreck the whole machine if two other representatives were conceded to the hundreds of thousands of people who spend their daily lives in the industry. I think it is a shocking attitude on the part of the cotton employers of Lancashire if what the hon. Gentleman says is true, that to give adequate labour representation on this important Board in this important industry would mean that the employers would at once be up in arms against it. That gives a picture of the relationships in the cotton industry in Lancashire which does not seem to hold out much hope for a happy or prosperous industry in the future. I shall certainty vote with my hon. Friends if they press this to a Division.
      11.35 p.m.
      Mr. Mainwaring: I think it was wrong of the Parliamentary Secretary to confuse the interests of the operatives with

      1667
      all the other interests in this industry. However the interests of the 13 representatives of the employers may be distinguished from one another they have one common interest, that of being opposed to the operatives. [Hon. Members: "No"] Of course they have. The argument just put to us was that the employers' representatives would combine to destroy the Bill if the operatives were given a larger representation. They have a common interest, that of exploiting labour, and that is why they would combine. They would destroy this or any other Bill if they thought that their interests as employers were endangered by increasing labour representation. I say that the human interests of 350,000 persons working in this industry are of more importance than the interests of capital, and it would be unjustifiable on our part to let this occasion pass without a strong protest against the basis of representation which has been embodied in the Bill.
      11.37 p.m.
      Major Procter: I rise again to point out the grave dereliction of duty on the part of the trade union leaders who negotiated for the interests of the employés in this matter. The Parliamentary Labour Party are now endeavouring to correct their errors during the negotiations, when on three occasions, in order to get this Bill through, the interests of the men and women whom they represented were grossly betrayed.
      Mr. Deputy Speaker (Colonel Clifton Brown): The hon. and gallant Member is going right outside the terms of the Amendment.
      Major Procter: I was pointing out that this is the third betrayal of the workers, and I was trying within the limits of order to mention the three points. As that has been ruled out of order I must confine myself to this point, and say that it is no good the political representatives of the Labour movement endeavouring in this House to undo the mischief which the trade union leaders have done.
      Mr. Maxton: Why not?
      Mr. Deputy-Speaker: That is the very point on which I stopped the hon. and gallant Member before. He cannot pursue that line of argument.
      Major Procter: The complaint is that the workers have too few representatives on this Board, and I am endeavouring to show that the political section of the Labour movement are trying to increase their representation. That being so, am I not in order in trying to show the futility of their action, in view of the fact that those who are conversant with the industry and were the direct representatives of the workers in it agreed to accept the present arrangement?
      Mr. Mainwaring: What are we here for?
      Major Procter: Heaven only knows. It was for the reason I have given that I mentioned it as an illustration, because we in the constituency know how this can be used against us.
      Mr. Deputy-Speaker: The hon. Member's constituents really do not come under consideration in this Amendment.
      Major Procter: It will be a pity, seeing that the masters and the trade union leaders have agreed to sacrifice the interests of the workers in the three instances I have mentioned, if hon. Members opposite press this Amendment. It was a grave mistake that the leaders did not insist upon having greater representation.
      Mr. Maxton: Vote for the Amendment.
      11.42 p.m.
      Mr. Rhys Davies: After that brilliant oration, I would intervene only for a moment to clarity the position as it was left by the hon. Gentleman who said he was very sorry to intervene at this late hour. I do not see how he could do otherwise, because he has lot been here. We regard this proposal as of first-class importance. We are setting up an industrial Parliament for the textile industry of Lancashire. The powers contained in the Bill will literally be enormous. It is very nearly a form of industrial organisation copied in part from the Fascist conception of the management of industry. Be that as it may, this Parliament of citizens is giving to the textile industry what is virtually a parliament of its own. See what we do: we put the industry under the control of 15 persons, three of them independent gentlemen. Certainly, they will not be working-class representatives, especially if this Government appoints them. There

      1669
      are nine persons representing the employers' side. That will be 12. There will be three representatives from working-class organisations. An hon. Member shakes his head, but he does so more in ignorance. [An HON. MEMBER: "There is nothing in it.] If I had £10,000 as a water engineer I would not say there was nothing in my head. Let me take up the point mentioned by the Parliamentary Secretary; he is very much afraid of up-setting the balance of representation. It is because the balance is already upset that we want to change it. It is 12 men against three; we do not even ask for 50 per cent. increase. We want to increase the three to five, and still leave 12 representatives of the employers, of finance and banking. Surely the people who are employed in the textile industry can contribute something effective to the rebuilding of the industry.
      Major Procter: Why did the trade union leaders agree to three when they really required five?
      Mr. Davies: The hon. and gallant Gentleman professes ignorance, but he knows the reason. If the trade unions in Lancashire could have got six under any agreement, they would have been pleased. It was because they could not get any more that they accepted three.
      Major Procter: Is it clearly understood now that the price of the Bill was that the workers should be inadequately represented?
      Mr. Davies: The hon. and gallant Gentleman must not think me quite as simple as I look. I repeat that the essence of this proposal is to increase the workers' representation on the Board—a very important body; and, in spite of what has been said about the inadequacy of this sort of representation, we are determined to show the workers of Lancashire who are their friends by pressing the proposal to a Division.
      11.47 p.m.
      Mr. Silverman Mr. Silverman rose
      Hon. Members: Divide.
      Mr. Silverman: I hope I may have the indulgence of those Members of the House who have condescended to come in at a quarter to twelve, seeing that I have been here all day. I rise only to enter my
      1670
      emphatic protest against the attitude of the hon. and gallant Member for Accrington (Major Procter) this evening. All day the House has been making a long, difficult, complicated and desperate last effort to save the Lancashire cotton industry. We have not all been in agreement on everything. There is to be no Division on the Third Reading. A good many Amendments have been the subject of discussion, and on two or three of them Divisions have taken place when we could not agree; but all of us with any pretence of interest in or even a modicum of knowledge of this desperate problem have been trying to make the best we could of the Measure. Where has the hon. and gallant Gentleman been?
      Major Procter: I have been at the House of Commons all day.
      Mr. Silverman: I am glad to hear that he has been at the House of Commons, but certainly he has not been here. We have not had the benefit of his advice or assistance, and neither side in the Divisions has had the benefit of his vote. But at the last moment he thinks fit to come in and intervene to make a thoroughly vicious, unjustified and mean attack on the trade union representatives who have been doing what they could in the difficult circumstances to protect the interests of those whom it is their job to protect. It is not right that the hon. and gallant Gentleman's only intervention in the debate on this difficult problem, this cumbersome machinery, this complicated attempt to deal with a difficult situation, should be an intervention at midnight, after being absent throughout the day, to make an attack which he knows to be thoroughly and completely unjustified on the representatives of the workers in the industry.
      11.50 p.m.
      Sir H. Fildes: Any decisions that are come to by the cotton trade organisations so far as the employers' side of the industry is concerned must be honoured by the industry as a whole, and the Bill provides drastic penalties if the employers do not do that. Labour still retains its right to negotiate wages with absolute freedom. The two cases are quite different. In the one case the employing class are bound in a very stringent way, with heavy penalties, while Labour is confined to giving the best advice it can.
      Question put, "That the word 'fifteen' stand part of the Bill."

      Division No. 223.]

      AYES:

      [11.52 p.m.

      Acland-Troyte, Lt.-Col G. J.

      Fremantle, Sir F. E.

      Morris-Jones, Sir Henry

      Adams, S. V. T. (Leeds, W.)

      Furness, S. N.

      Morrison, G. A. (Scottish Univ's.)

      Albery, Sir Irving

      Gledhill, G.

      Munro, P.

      Alexander, Brig.-Gen, Sir W.

      Goldie, N. B.

      Neven-Spencs, Major B. H. H.

      Allen, Col. J. Sandeman (B'knhead)

      Grant-Ferris, Flight-Lieutenant R.

      Radford, E. A.

      Aske, Sir R. W.

      Greene, W. P. C. (Worcester)

      Ramsbotham, Rt. Hon. H.

      Balfour, G. (Hampstead)

      Grimston, R. V.

      Reed, A. C. (Exeter)

      Balfour, Capt. H. H. (Isle of Thanet)

      Gritten, W. G. Howard

      Reed, Sir H. S. (Aylesbury)

      Beamish, Rear-Admiral T. P. H.

      Gunston, Capt. Sir D. W.

      Rowlands, G.

      Bird, Sir R. B.

      Hacking, Rt. Hon. Sir D. H.

      Royds, Admiral Sir P.M. R.

      Bossom, A. C.

      Hammersley, S. S.

      Ruggles-Brise, Colonel Sir E. A.

      Bower, Comdr. R. T.

      Hannah, I. C.

      Russell, S. H. M. (Darwen)

      Boyce, H. Leslie

      Hannon, Sir P. J. H.

      Samuel, M. R. A.

      Braithwaite, J. Gurney (Holderness)

      Hellgers, Captain F. F. A.

      Selley, H. R.

      Brooke, H. (Lewisham, W.)

      Heneage, Lieut.-Colonel A. P.

      Simon, Rt. Hon. Sir J. A.

      Browne, A. C. (Belfast, W.)

      Hepburn, P. G. T. Buchan-

      Smithers, Sir W.

      Bull, B. B.

      Hogg, Hon. Q. McG.

      Somervell, Rt. Hon. Sir Donald

      Campbell, Sir E. T.

      Helmes, J. S.

      Southby, Commander Sir A. R. J.

      Cary, R. A.

      Horsbrugh, Florence

      Spens, W. P.

      Chapman, A. (Ruthergien)

      Howitt, Dr. A. B.

      Stanley, Rt. Hon. Oliver (W'm'ld)

      Clarke, Colonel R. S. (E. Grinstead)

      Hudson, Capt. A. U. M (Hack., N.)

      Stewart, J. Henderson (Fife. E.)

      Clarry, Sir Reginald

      Hudson, Rt. Hon. R. S. (Southport)

      Strauss, H. G. (Norwich)

      Clydesdale, Marquess of

      Hulbert, Squadron-Leader N. J.

      Strickland, Captain W. F.

      Cobb, Captain E. C. (Preston)

      Hunter, T.

      Sutcliffe, H.

      Colman, N. C. D.

      Hutchinson, G. C.

      Thomas, J. P. L.

      Colville, Rt. Hon. John

      Jarvis, Sir J. J.

      Thomson, Sir J. D. W.

      Cook, Sir T. R. A. M. (Norfolk, N.)

      Jennings, R.

      Thorneycroft, G. E. P.

      Cooper, Rt. Hon. T. M. (E'burgh, W.)

      Kerr, Sir John Graham (Sco'sh Univs.)

      Tufnell, Lieut.-Commander R. L.

      Courthope, Col. Rt. Hon. Sir G. L.

      Levy, T.

      Walker-Smith, Sir J.

      Cox, H. B. Trevor

      Lipson, D. L.

      Ward, Lieut.-Col. Sir A. L. (Hull)

      Cross, R. H.

      Llewellin, Colonel J. J

      Waterhouse, Captain C.

      Cruddas, Col. B.

      Locker-Lampson, Comdr. O. S.

      Watt, Lt.-Col. G. S. Harvie

      Donner, P. W.

      Loftus. P. C.

      Wells, Sir Sydney

      Dugdale, Captain T. L.

      Lyons, A. M.

      Williams, Sir H. G. (Croydon, S.)

      Duncan, J. A. L.

      M'Connell, Sir J.

      Wise, A. R.

      Eastwood, J. F.

      McCorquodale, M. S.

      Womersley, Sir W. J.

      Eckersley, P. T.

      MacDonald, Sir Murdoch (Inverness)

      Wragg, H.

      Emery, J. F.

      McEwen, Capt. J. H. F.

      Wright, Wing-Commander J. A. C.

      Entwistle, Sir C. F.

      McKie, J. H.

      York, C.

      Erskine-Hill, A. G.

      Margesson, Capt. Rt. Hon. H. D. R.

      Fildes, Sir H.

      Marsden, Commander A.

      TELLERS FOR THE AYES.—

      Findlay, Sir E.

      Medlicott, F.

      Lieut.-Colonel Kerr and Major

      Fleming, E. L.

      Mellor, Sir J. S. P. (Tamworth)

      Sir James Edmondson.

      Fox, Sir G. W. G.

      Morgan, R. H. (Worcester, Stourbridge)

      NOES.

      Adamson, Jennie L. (Dartford)

      Griffith, F. Kingsley (M'ddl'sbro, W.)

      Parkinson, J. A.

      Alexander, Rt. Hon. A. V. (H'lsbr.)

      Griffiths, J. (Llanelly)

      Price, M. P.

      Ammon, C. G.

      Groves, T. E.

      Pritt, D. N.

      Anderson, F. (Whitehaven)

      Guest, Dr. L. H. (Islington, N.)

      Procter, Major H. A.

      Barr, J.

      Hall, G. H. (Aberdare)

      Ridley, G.

      Benn, Rt. Hon. W. W.

      Hall, J. H. (Whitechapel)

      Ritson, J.

      Benson, G.

      Hayday, A.

      Roberts, W. (Cumberland, N.)

      Bevan, A.

      Henderson, J. (Ardwick)

      Sexton. T. M.

      Burke, W. A.

      Hills, A. (Pontefract)

      Silverman, S. S.

      Charleton, H. C.

      Isaacs, G. A.

      Simpson, F. B.

      Cooks, F. S.

      Jagger, J.

      Smith, E. (Stoke)

      Collindridge, F.

      Jenkins, A. (Pontypool)

      Sorenson, R. W.

      Daggar, G.

      John, W.

      Stephen, C.

      Dalton, H.

      Jones, A. C. (Shipley)

      Stewart, W. J. (H'ght'n-le-Sp'ng)

      Davies, R. J. (Westhoughton)

      Lathan, G.

      Taylor, R. J. (Morpeth)

      Davies, S.O. (Merthyr)

      Macdonald, G. (Ince)

      Tinker, J. J.

      Dobble, W.

      McEntee, V. La T.

      Watson, W. McL.

      Dunn, E. (Rother Valley)

      McGovern, J.

      Whiteley, W. (Blaydon)

      Edwards, Sir C. (Bedwellty)

      Mainwaring, W. H.

      Wilmot, John

      Edwards, N. (Caerphilly)

      Marshall, F.

      Windsor, W. (Hull, C.)

      Foot, D. M.

      Maxton, J.

      Young, Sir R. (Newton)

      George, Megan Lloyd (Anglesey)

      Messer, F.

      Gibson, R. (Greenock)

      Noel-Baker, P. J.

      TELLERS FOR THE NOES.—

      Greenwood, Rt. Hon. A.

      Paling, W.

      Mr. Mathers and Mr. Adamson.

      Grenfell, D. R.

      Parker, J.

      The House divided: Ayes, 127; Noes, 71.
      11.58 p.m.
      Mr. Cross: I beg to move, in page 45, line 22, at the end, to insert:
      "3. The Board of Trade shall so exercise their powers under the last preceding paragraph as to secure—

      (a) that among the members appointed in accordance with sub-paragraphs (a), (c), (e), (f), and (g) of that paragraph there are included persons appearing to the Board of Trade to have special knowledge of the business of spinning yarn from staple rayon fibre, weaving rayon yarn or finishing fabrics woven from rayon yarn; and

      (b) that of the two members appointed in accordance with sub-paragraph (i) and (j) of that paragraph one is a person appearing to the Board of Trade to have special knowledge of the business of selling as a merchant fabrics woven from rayon yarn."

      In view of the Amendments which we have made on this Stage regarding the Export Development Committee it is necessary to secure that the Cotton Indus-try Board includes industrialists and merchants with a knowledge of rayon. This Amendment meets this necesssity by providing that amongst the members appointed, after consultation with bodies representing persons engaged in spinning, weaving and finishing, there are included persons having a knowledge of the rayon business, and that of the two merchants' representatives one shall have knowledge of rayon fabric.
      Amendment agreed to.
      Further Amendment made: In page 45, line, 37, leave out "such person," and insert:
      "member of the Board appointed thereto as being an independent person."—[Mr. Cross.]
      12 m.
      Mr. Cross: I beg to move, in page 45, line 42, to leave out paragraph 6 and to insert:
      " 6. A person who has been a member of the Board appointed thereto as being an independent person shall not, during the period of five years beginning with the date on which he ceases on any occasion to be such a member, carry on business in the industry or as a merchant, or be a director, officer or servant of any undertaking carried on wholly or in part for the purpose of doing anything which by virtue of this Act is to be treated as part of the industry, or for the purpose of the business of a merchant; and if any person contravenes the provisions of this paragraph, he shall be liable on summary conviction to a fine not exceeding one hundred pounds and to a further fine not exceeding twenty pounds for every day on which the contravention continues."
      1674
      During the Committee Stage the hon. Member for South Croydon (Sir H. Williams) raised the point that an Amendment moved by my right hon. Friend to prevent independent members of the Board from acquiring any financial or commercial interest in the cotton trade during the five years following the date of ceasing to hold office, left the position uncertain as to what would occur or what action could be taken in the event of such persons infringing that provision. This Amendment makes that an offence punishable by a fine of £100 and a fine of£20 for every day the contravention continues. In view of that penalty, it is necessary to be more specific as to what is prohibited and we have therefore limited the new paragraph to prohibiting an independent member of the Board from taking office or employment in the cotton trade during the period of five years, as distinct from merely acquiring a financial or commercial interest which would be likely to affect him in the discharge of his duty.
      Amendment agreed to.
      Mr. Cross: I beg to move, in page 4b, line 17, at the end, to insert:
      "(a) functions in connection with the taking of any poll."
      This Amendment provides that the taking of any poll is to be carried out by the three independent members. This is a further precaution against the voting in particular cases becoming known.
      Amendment agreed to.
      Further Amendments made:
      In page 46, line 25, leave out "and."
      In line 27, at the end, insert:
      "and (d) functions under subsection (3) of section thirteen, or under section (Amendment of price schemes in relation to persons carrying on business in certain parts of the United Kingdom) of this Act."—[Mr. Cross.]

      FOURTH SCHEDULE.—(Maximum Amounts of Registration Fees payable to Cotton Industry Board.)
      Amendment made: In page 53, line 27, leave out "of the application", and insert "on which the applicant is registered."—[Mr. Cross.]
      Mr. Cross: I beg to move, in page 54, line 26, column 2, to leave out from the beginning, to "or," in line 39, and to insert:

      1675
      "One two-thousandth of the total sum which has, in the preceding calendar year, become payable to the applicant or the person registered, as the case may be, by way of charges made by him, in the course of the business of finishing, to the persons with whom he has dealt in the course of such business."
      This and the following Amendments to the Fourth Schedule change the basis of the maximum amount which can be charged in respect of registration fees for the activities of finishing, making-up and packing. Where a finisher is processing his own goods, it is on the basis of the charges which would have been made if the goods had belonged to someone else. Difficulty arose in connection with making these calculations on a wages basis, in the case of firms engaged in making products other than those covered by the Bill. For instance, in the case of a Northern Irish firm it might occur that the same man was paid wages in respect of both cotton and linen and a similar case could occur in connection with making-up and packing. No such difficulty occurs in ascertaining the amount of business done and the calculation, we suggest, should therefore be made upon that basis instead of on a wages basis. The Joint Committee agreed to the Amendment and the rate which appears in the Amendment was suggested after consulting the various interests.
      Amendment agreed to.
      Further Amendments made:
      In page 54, line 42, column 2, leave out from the beginning to "or," in line 9, page 55, and insert:
      "One two-thousandth of the total sum which has, in the preceding calendar year, become payable to the applicant or the person registered, as the case may be, by way of charges made by him, in the course of the business of making-up and packing, to persons with whom he has dealt in the course of such business."
      In page 55, line 11,at the end, insert:
      "If in any calendar year a person has, in the course of business carried on by him by way of finishing, done anything to products being his own property, there shall, for the purposes of this Schedule, be deemed to have become payable to him in that year, by way of charges for the doing of that thing, such sum as might reasonably be expected to have become so payable if it had been done by him to products being the property of some other person."—[Mr. Cross.]

      SIXTH SCHEDULE.—(Provisions for Exchequer Assistance to Boards Administering Redundancy Schemes.)
      Mr. Cross: I beg to move, in page 57, line 21, to leave out "first" and to insert "initial.".
      All the Amendments to this Schedule, with the exception of the third, provide that the accounting period of all the redundancy schemes are to coincide. The object is to reduce to a minimum the number of journeys which the Government auditors will have to make in connection with the auditing of the accounts.
      Amendment agreed to.
      Further Amendment made: In page 57, line 22, leave out "subsequent accounting period," and insert:
      "ordinary accounting period subsequent to the first-mentioned period."—[Mr. Cross.]
      Mr. Cross: I beg to move, in page 58, line 1, to leave out "one month," and to insert "two months."
      This Amendment provides a period of two months instead of one month between the end of the accounting period and the submission of the accounts of the redundancy schemes to the Board of Trade. This is in connection with the Amendment which I have just explained, and means that the accountancy work for the redundancy schemes in the different sections will probably all be done by the same staff.
      Amendment agreed to.
      Further Amendments made:
      In page 58, line 1, leave out "each accounting period," and insert:
      "the initial accounting period and of each ordinary accounting period subsequent to the first-mentioned period."
      In line 4, after "that," insert "accounting."
      In page 62, line 1, leave out from "means," to the end of line 5, and insert:
      "the initial accounting period or any ordinary accounting period;

      (c) the expression 'initial accounting period' means the period beginning with the day on which the scheme comes into operation and ending with the first ordinary accounting period which ends later than three months after the beginning of the said day;

      (d) the expression 'ordinary accounting period' means the period of six months be ginning with any first day of April or first day of October; and."—[Mr. Cross.]

      Motion made and Question proposed, "That the Bill be now read the Third time."
      12.9 a.m.
      Mr. Rhys Davies: I do not think the House of Commons should allow the Bill to pass through its final stage without saying a word of congratulation to the right hon. Gentleman and his deputy for the excellent manner in which they have piloted it through. I am sure I express the general opinion, even of those who disagree with some of the things that the Board of Trade does in the Bill. I have followed the Bill from the beginning and have taken a very keen interest in it. The one thing that has struck me about the Lancashire textile industry is that for over a century it never bothered Parliament at all. It went on its sweet way, capturing markets in every part of the world without assistance from Government. At long last, its trade gone from many markets, it has begun to think of what the Government might do. The main trouble was that the people engaged in this industry were always supposed to be so independent that you could not get them together to do anything to help themselves. Parliament has done one thing. Through the Board of Trade and the right hon. Gentleman and his Department, it has got the Lancashire textile employers in particular to come together to see whether, by joint action and Parliamentary effort, they can recover some of the trade that has been lost in the markets of the world. I think that I may say on behalf of the party to which I belong—because the workers of Lancashire have suffered as much as any working folk owing to the contraction of their staple industry—that if this Bill does anything to bring about a higher standard of living in the villages of Lancashire, where cotton mills used to hum and work at full blast, those who have taken the slightest part in shaping this Measure will be happy indeed.
      Mr. Cross: I should like to express the gratitude of my right hon. Friend and myself to the hon. Member for Westhoughton (Mr. Rhys Davies) for the very kind and appreciative things he has said about us. I should not like, and the House would not wish me, to allow this occasion to go by without expressing congratulations, in which I think we would all feel willing to join, to the Joint Committee upon
      1678
      reaching what to them must be a stage in which they are nearing the completion of the monumental work on which they have spent years of effort. I want on my part also to express to them our gratitude for the spirit of give and take which they have exhibited on a number of very difficult occasions which has not always been reflected in the Committee upstairs or on the Report stage in this House. It has, perhaps, been rather more give than take. But, on the other hand, one ought to add to that the fact that the rayon interests and the Opposition and other interests have also shown themselves ready to give. They have not taken up a rigid opposition, and they have shown a spirit of compromise. This spirit of good will has extraordinarily facilitated the very difficult work—and it has been a very great deal of work—we have had to do in getting this Bill to its present stage.
      I would also have the temerity to express the appreciation of myself and my right hon. Friend for the very kind and helpful interest which Members of all parties have taken in a really constructive, effort to make this Bill a better Bill. It must seldom occur that so much constructive effort is drawn from so many different quarters, and indeed from every quarter of the House, as has been the case on this occasion, and they have not all been by any means Lancashire Members. We must not also exclude the fact that those who have voiced the views of the Opposition and of the rayon interests have done some very important work in reconciling conflicting interests. In the early stages of the Bill, perhaps, it did not look as though that was going to happen. We are all thankful that, now that we have reached the end of the Bill in this House, many of those conflicting interests have been reconciled.
      I am sure that hon. Members who do not sit for Lancashire seats will forgive me when I say that to many of us Lancashire Members this Bill means a great deal, because a great many of our hopes for our constituents are centred upon the use which may be made of this Measure. This Bill is a great and a new experiment, and it leaves this House with the earnest hope of us all that it may bring some relief to what is, perhaps, the most sorely depressed industrial section of the people of this country. I know that I shall carry with me all those who know them when I

      1679
      say that they are a people who have earned the profound respect of all who have been associated with them for the extraordinarily brave and uncomplaining fortitude with which they have faced a long period of great adversity.
      12.15 a.m.
      Mr. Hammersley: Before we pass the final stage of the Bill to which the people of Lancashire are looking with great hope, I would like to add to what has come from the Front benches a word of hope that the Bill will be successful in retrieving some of Lancashire's lost fortunes.

  GAS UNDERTAKINGS ACTS, 1920 TO 1934.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Whitehaven United Gas Company, Limited, which was presented on the 15th day of June and published, be approved with the following modification:
  Clause 4, page 2, line 45, leave out 'July,' and insert 'October.' "
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Mayor, Aldermen and Burgesses of the Borough of Mansfield, which was presented on the 13th day of June and published, be approved, subject to the following modifications:
  Clause 4, page 2, line 41, leave out borough of Mansfield, 'and insert' existing limits ';
  Clause 5, page 2, line 46, leave out 'existing limits,' and insert 'borough of Mansfield." [Mr. Cross.]

  COAST PROTECTION BILL.
  Order for Consideration of Lords Amendments read.
  Lords Amendments considered accordingly.

  FIRST SCHEDULE.—(Procedure with respect to the making and approval of Orders under Section One.)
  Lords Amendment: In page 7, line 20, leave out paragraphs 4, 5, 6 and 7, and insert:

  "4. After a draft order has been settled by the Board, the Board shall publish the draft in such manner as they think best adapted for informing persons affected, together with a notice that the draft order as so settled is to be laid before Parliament for approval in accordance with the subsequent provisions of this Part of this Schedule unless within such period, not being less than thirty days, as may be stated in the notice, a memorial is presented to the Board by some person having an interest, right or privilege conferred on him by any local or private Act which would be affected by the order, specifying the interest, right or privilege claimed and praying that the order shall not become law without confirmation by Parliament in accordance with Part II of this Schedule.

  5. If no such memorial has been presented within the said period, or if every, such memorial has been withdrawn, the Board may- cause the draft order as so settled to be laid before both Houses of Parliament, and if both Houses by resolution approve the draft, the Board may make the order and the order on being so made shall be of full force and effect.

  6. If any such memorial has been presented as aforesaid and has not been withdrawn, the Board may make the order, but any order so made shall be provisional only and shall have no effect unless and until confirmed by Parliament.

  Part II

    PROVISIONAL ORDERS.
    1. The Board may submit to Parliament for confirmation any Provisional Order made by them in pursuance of this Schedule."
    Mr. Holmes: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    12.19 a.m.
    Mr. Dingle Foot: I do not rise to oppose the Amendment but to call attention to what the Amendment involves. As the Bill originally left this House, it provided that when an Order was laid before Parliament it should not be made unless both Houses by Resolution approved the draft, either without any modification or addition or with modifications or additions to which both Houses agreed. As the Bill was approved by this House, the two Houses had power to amend these orders, but as a result of the Lords Amendment now proposed, the two Houses will be deprived of that power to amend, and we shall have either to accept or reject the orders as they stand. We

    1681
    are to be deprived of a very important power. I very much regret that this change should have been made in another place and that it should have been accepted. If the words had been passed in the form in which they left the House, it would, I think, have been an exceedingly useful and valuable precedent. I do not blame the promoter of the Bill. I think the change has come from another source—in other words, from a Government Department, and as the representative of that Department is here, we are entitled to protest against this change being made. This is another deliberate attempt to limit the power of this House over the making of orders—in many cases, orders of the highest importance. My hands are tied now. For obvious reasons, I cannot oppose the Amendment, but I do not think it ought to leave the House without some protest being made.
    Mr. Wedgwood Benn: Is the representative of the Board of Trade going to tell us whether, in fact, we were deprived of the opportunity of amending these orders, which is a valuable power, by the action of the Government?
    12.22 a.m.
    Mr. Cross: I am under the impression that the hon. Member for Dundee (Mr. Foot) is right—although I have not been following this Bill in detail in recent times—in saying that the suggestion came from the Board of Trade that this procedure should be changed in the way that he indicated. The view taken by my Department is that the proper course in cases in which either House is unwilling to approve of a draft order in
    1682
    the form laid before it, is for the draft order to be rejected on the ground that it requires modification in some specified manner, and therefore, if the Minister in charge is prepared to accept the modification, it is easy for him to make his explanation in the House and, after withdrawing the draft or allowing its rejection, to lay a fresh draft, incorporating the agreed modifications, on the following day. That is at all events some explanation of the attitude taken up by the Board of Trade in this matter. I could have wished that the hon. Member had given me notice that he intended to raise this point in order that I might better have familiarised myself with the matter he has in mind.

  LONDON GOVERNMENT BILL [Lords].
  Read a Second time.
  Bill committed to a Committee of the whole House for Tuesday next.—[Mr. Ammon.]
  The remaining Orders were read, and postponed.
  It being after Half-past Eleven of the Clock upon Thursday Evening, Mr. Speaker adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Twenty-three Minutes after Twelve o'Clock.

HOUSING.
  WALES.
  WALES.
  LANCASHIRE.
  LANCASHIRE.
  WATER SUPPLY AND SEWERAGE, WALES.
  WATER SUPPLY AND SEWERAGE, WALES.
  FOSTER MOTHERS.
  FOSTER MOTHERS.
  MINISTRY OF HEALTH (ANNUAL REPORT).
  MINISTRY OF HEALTH (ANNUAL REPORT).
  TOWN PLANNING, EDALE.
  TOWN PLANNING, EDALE.
  POPULATION AND RATES, RHONDDA.
  POPULATION AND RATES, RHONDDA.
CIVIL DEFENCE.
  CAMPS.
  CAMPS.
  GAS RESPIRATORS.
  GAS RESPIRATORS.
  THAMES-SIDE AREAS.
  THAMES-SIDE AREAS.
  STEEL SHELTERS.
  STEEL SHELTERS.
  PRACTICE BLACKOUTS.
  PRACTICE BLACKOUTS.
  PUBLIC TRANSPORT SERVICE (WOMEN).
  PUBLIC TRANSPORT SERVICE (WOMEN).
  TELEPHONE SERVICE, SCOTLAND.
  TELEPHONE SERVICE, SCOTLAND.
AGRICULTURE.
  GRASSLAND (PLOUGHING-UP GRANT).
  GRASSLAND (PLOUGHING-UP GRANT).
  WOOL (PRICE INSURANCE).
  WOOL (PRICE INSURANCE).
  SMALLHOLDINGS, WEST RIDING.
  SMALLHOLDINGS, WEST RIDING.
  SHEEP (STATISTICS).
  SHEEP (STATISTICS).
  MILK (SPECIAL AREAS).
  MILK (SPECIAL AREAS).
  WOMEN'S LAND ARMY.
  WOMEN'S LAND ARMY.
  MUTTON AND LAMB PRICES.
  MUTTON AND LAMB PRICES.
  FISHING INDUSTRY.
  FISHING INDUSTRY.
MILITARY TRAINING.
  INDUSTRIAL ASSURANCE.
  INDUSTRIAL ASSURANCE.
  SEASONAL WORKERS.
  SEASONAL WORKERS.
  NAVY AND AIR FORCE REQUIREMENTS.
  NAVY AND AIR FORCE REQUIREMENTS.
  POSTPONED LIABILITY TO SERVE.
  POSTPONED LIABILITY TO SERVE.
  INCOME TAX.
  INCOME TAX.
  MAGISTRATES' CLERKS (PENSIONS).
  MAGISTRATES' CLERKS (PENSIONS).
  MULTIPLE SHOPS (PROFITS).
  MULTIPLE SHOPS (PROFITS).
  POLICE (EIRE CITIZENS).
  POLICE (EIRE CITIZENS).
  REFUGEES.
  REFUGEES.
  RONEO FACTORY, ROMFORD.
  RONEO FACTORY, ROMFORD.
  INTERNATIONAL SITUATION.
  INTERNATIONAL SITUATION.
  CLOSED AND IMPROVED SCHOOLS.
  CLOSED AND IMPROVED SCHOOLS.
EDUCATION.
  NEW SCHOOL BUILDINGS (COST).
  NEW SCHOOL BUILDINGS (COST).
  SCHOOL HOLIDAYS AND HOLIDAYS WITH PAY.
  SCHOOL HOLIDAYS AND HOLIDAYS WITH PAY.
MERCANTILE MARINE.
  KARA SEA TRADE.
  KARA SEA TRADE.
  LAID-UP TONNAGE, RIVER CLYDE.
  LAID-UP TONNAGE, RIVER CLYDE.
  HORSES (IMPORTS).
  HORSES (IMPORTS).
BRITISH ARMY.
  CATTERICK CAMP.
  CATTERICK CAMP.
  WEST INDIES (SUGAR STOCKS).
  WEST INDIES (SUGAR STOCKS).
  PALESTINE.
  PALESTINE.
  ROYAL NAVY (HIS MAJESTY'S SHIP "MEDWAY").
  ROYAL NAVY (HIS MAJESTY'S SHIP "MEDWAY").
UNEMPLOYMENT.
  ASSISTANCE (MEN UNDER 30).
  ASSISTANCE (MEN UNDER 30).
  INSURED WORKERS (STATISTICS).
  INSURED WORKERS (STATISTICS).
  NEW FACTORY, MAESTEG.
  NEW FACTORY, MAESTEG.
  IRISH REPUBLICAN ARMY.
  IRISH REPUBLICAN ARMY.
  SCHOOL CAMPS, SOUTH WALES.
  SCHOOL CAMPS, SOUTH WALES.

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
The Viscount Wimborne—Sat first in Parliament after the death of his father.

SUNDERLAND CORPORATION BILL.
Read 3a, with the Amendments.
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords I beg to move that the Amendment, in page 2, line 41, after "and," insert "the deposited," be made.
Moved, That the proposed Amendment be made.—(The Earl of Onslow.)
On Question, Motion agreed to.
Bill passed, and returned to the Commons.

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT RUNCIMAN OF DOXFORD): My Lords, I beg to move the Motion standing on the Paper in the name of my noble friend Lord Stanhope.
Moved, That Standing Order No. XXXIX be considered in order to its being dispensed with for the purpose of passing the Ministry of Supply Bill through its remaining stages.—(Viscount Runciman of Doxford.)
On Question, Motion agreed to, and ordered accordingly.

WHITEHAVEN GAS ORDER, 1939.
VISCOUNT BRIDPORT: My Lords, on behalf of my noble friend Lord Templemore, I beg to move that the Special Order, as reported from the Special Orders Committee on Thursday last, be approved, with a modification.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved, with a modification.—(Viscount Bridport.)
On Question, Motion agreed to.

MANSFIELD GAS ORDER, 1939.
VISCOUNT BRIDPORT: My Lords, on behalf of my noble friend Lord Templemore, I beg to move that the Special Order, as reported from the Special Orders Committee on Thursday last, be approved, with modifications.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved, with modifications.—(Viscount Bridport.)
On Question, Motion agreed to.

ST. HELENS CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
SOUTHEND-ON-SEA CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (YORK WATER) BILL.
Read 3a (according to Order), and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (NEWHAVEN AND SEAFORD WATER) BILL.
Read 3a (according to Order), and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (CORSHAM WATER) BILL.
Read 3a (according to Order), and passed.

PUBLIC TRUSTEE (GENERAL DEPOSIT FUND) BILL.
Order of the Day for the Second Reading read.
3.9 p.m.
THE LORD CHANCELLOR (LORD MAUGHAM): My Lords, this Bill is of an

1071
unusual character, and at first sight it looks rather alarming. It comes from another place, and the Examiner of Petitions for Private Bills in that place reported that the Standing Orders applicable to the Bill had been complied with. It is a hybrid Bill and was considered by a Select Committee of members of another place. The usual formalities were gone through. In fact no Petitions were presented against the Bill, the Preamble was proved, and a Report in favour of the Bill was presented. I mention that because your Lordships will see that the Bill as it comes before the House contains more than two pages of recital of circumstances which have led to the presentation of the measure. Of course that statement of facts has already been considered in evidence elsewhere and has been approved. I should add that the Third Reading, in another place, on June 13 was unopposed. If your Lordships have the print of the Bill in your hands, you will observe that the recital relates mainly to two somewhat singular facts which arise out of the administration of the Public Trustee Department under the Public Trustee Act, 1906. Your Lordships will be aware that the Public Trustee may be a trustee by himself of a number of trusts or he may be a trustee in association with others. I should like to begin by saying that this Bill relates to cases where he is the sole trustee, because thus alone was it possible for him to do the various things which are sought to be validated by this Bill.
The Public Trustee is remunerated by fees, and the fees go into the Exchequer. The costs of administering what is now a vast Department are provided out of Parliamentary funds, and Parliament makes in that way some not very large profit out of the administration of the Department. Under the Act of 1906 provision was made, not unnaturally, that separate accounts should be kept for every trust, and there are a very large number of trusts. Altogether during the years with which we are concerned there have been over 100,000 such trusts, some of them relating to small sums and some relating to much larger sums. The matters with which we are concerned here really substantially relate only to comparatively small trusts on the whole. Your Lordships will appreciate that the Public Trustee, every now and then, has
1072
to pay sums of interest to beneficiaries from trust funds, he has sometimes to invest such funds or to make new investments, and sometimes he has to distribute the whole, or part, of the fund, and pro tanto that trust then comes to an end. It was found as his business increased that he generally had in hand a pretty large sum consisting of a number of cash balances relating to all these trusts which, as I have already said, were very numerous.
Your Lordships will at once appreciate that if he had with complete strictness complied with his duty and kept the funds relating to every one of these trusts quite separate, when he had a small sum relating to some particular trust in hand for a few weeks or at most a few months, he could do nothing with that money at all. You cannot make money by investing a sum of, say, £100 for six weeks. It is true that he would get some small sum out of the investments if dividends were payable during that time, but on the other hand there is the cost of investment. You buy at a figure which is higher than that which you get when you sell unless there has been a fluctuation during the weeks you hold the investment, and it would not be found a remunerative transaction. The only thing that the ordinary trustee does is to put the money on deposit, and there again he has to give so many days' notice—I think fourteen—before he can get the money out again. Accordingly, in March, 1918, which is already a long time ago, the Public Trustee thought, in the interests of all these trusts, that he should form with regard to the various sums of that character—that is, nothing like the whole of the trust funds he has, but simply those funds awaiting distribution or disposal in the way I have mentioned—what I may call an omnibus trust fund. That total fund was of a substantial character, amounting to a good many thousands of pounds.
With regard to these funds—and here he did something which I must admit at once was a technical breach of trust—he invested a large part of them in investments, and as regards the balance, the smaller part, he placed it on deposit, with the result that the sums he invested, which he had invested in 5 per cent. war loan stock, gave him a return of 5 per cent., and on the sums on deposit he got

1073
2 per cent. Your Lordships will note that as this related to a large number of funds he kept on having to pay out of that omnibus fund, so far as it was invested or placed on deposit, the sums which had to be paid from separate trusts, and at the same time other sums were coming in in respect of other trusts, so that really the transaction rather resembled a water cistern into which water is continually coming from a number of sources and at the other end is going out as required for the purposes for which water is used. You could not say, with regard to the fund with which we are dealing, that any particular part of it belonged to any particular trust because they were all mixed up together in that way.
The result was twofold. In the first place, the Public Trustee ran the risk of the value of the securities going down, because he had to pay definite sums out to his beneficiaries and if the securities diminished in value the Treasury would have ultimately to make good the loss. The other consideration is this—and this I think justified, from the moral point of view, at any rate, what the Public Trustee did—the beneficiaries got substantially more, a great deal more, in the way of interest than they could possibly have got had he strictly complied with his duties and kept the separate trust funds entirely separate and been precluded from earning the 5 per cent. interest which, as a matter of fact, he earned on the greater part of his funds. The result was that from March 15, 1918, to a later date mentioned in the Bill, he made a sum of £28,178 15s. 4d. not in interest, but by reason of the fact that in 1932, as your Lordships will see if you turn to the top of page 2 of the Bill, there was an appreciation of his investments to that extent. That sum was treated by the Public Trustee, with the consent of the Treasury, as fees earned by the Public Trustee in respect of dealings with the fund, and, therefore, it had gone into the Treasury and went there as long ago as the year 1932. After that the Public Trustee made some other investments, and those investments were not subject to any further realisation until the year 1936, and in July, 1936—that is three years ago—he received, as you will see in the second recital on page 2, by way of appreciation on these funds, a profit or gain of £117,569.
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That having been made, the matter was brought to the attention, I think, of certain people who were investigating public accounts. They raised some objection to the propriety of the arrangement because there was no way of distributing the £117,569 between this great number of trust funds, and it was thought undesirable to continue the practice. Therefore I can tell your Lordships at once that since 1936—I may protect myself from any blame or merit by saying that it was before my time—nothing of the sort has been done. The omnibus fund has been partly deposited in banks, and partly paid into the Post Office Savings Bank, with the result that there can be neither appreciation nor depreciation, and the whole of the interest, subject to deduction for fees, has been given to the various benefactions. That being so, it was thought by the Treasury and others that it was very desirable to put this matter right, and to pay into the Treasury the remaining funds which existed, as I have told your Lordships, as the result of the appreciation of certain securities during the years in question relating to a very large number of trust funds.
I should like to add that as soon as I heard of this proposal, I investigated as far as I could the question whether it was possible for any of the beneficiaries interested in those trust funds in any practical measure, by any proceeding known at any rate to me—and it would, of course, be a proceeding in Chancery with regard to which I can claim to have some knowledge—to recover any part of the funds, and after considerable thought I came to the conclusion that it was really quite impracticable to achieve such a result. Your Lordships will observe in the first place that it would be practically impossible to find out how much of the balance due in respect of any particular fund had been applied to it in the form of any investment in the securities I have mentioned; nor could you tell exactly when it went in and when it came out. In any case, a claim in respect of any particular trust would be really of a small character and could not, I think, be sufficient to result in a sum which, having regard to the enormous cost of any such proceeding, could by any possibility result in anything being paid to the beneficiaries.

1075
And, of course, your Lordships will remember that the claimant in question has received a rate of interest on his money which he could never have obtained had the money been treated separately. The average of the separate sums concerned would perhaps be between £500 and £600, held for not more than six weeks, and the amount claimable would be negligible, especially when you bear in mind that the Public Trustee would be entitled to claim the necessary expenses notionally attributable to the separation of that portion of the fund which any claimant had if he could show what that portion was. Then you have to remember that during the period in which a particular claimant would be interested it might be that the securities which were then invested for the omnibus fund would show losses, although, in fact, there have been substantial gains considered over the whole period with which I am dealing. As the average period was six weeks, it would be quite impossible, as I think, to make any claim at all. Having so satisfied myself, I am fortified in my views by the circumstance that when the matter was being considered by the Select Committee—and it was very carefully considered—no Petition was lodged by any private interests against the Bill, and no claim has ever been made by any beneficiary to be paid any amount in respect of the profits which have been made by reason of an appreciation of the fund. In those circumstances the position, I think, may be said to be this. There has been what I would describe as a technical breach of trust. It is technical because it is a breach of trust committed in the interests of beneficiaries, and it is a pure accident that there has been this profit. Had there been a loss Parliament would have had to provide for it. On the other hand, as I say, nobody has any real prospect of ever recovering any portion of the fund in question.
We propose by Clause (1) of the Bill that these dealings by the Public Trustee with the trust moneys aforesaid—the dealings being those stated in the Preamble—shall be deemed always to have been lawful, and by subsection (2) it is provided that the sum of £117,000 odd which I have mentioned, together with any interest accrued to the Public Trustee in
1076
respect of it, shall be paid into the Exchequer. By subsection (3) it is provided that the Public Trustee may continue to maintain the said general fund and to include therein such trust moneys as he thinks fit, being moneys awaiting investment or distribution and to deal with that fund and the interest received in the manner in which, stated shortly, he has dealt with it since the beginning of August, 1936, and not otherwise. I would remind your Lordships that the way in which he has dealt with it is by placing it on deposit in certain banks or in the Post Office Savings Bank so that the accidental windfall we are dealing with here never again will be the subject of a Bill to be brought before your Lordships.
The only other thing I have to mention is that since 1936 the Public Trustee has credited interest to the various beneficiaries after a deduction for expenses which is set out in a rather elaborate formula which you will find on page 2 in paragraph (a) and on page 3 in paragraph (b). The formula is one which is a little difficult to follow and in order that your Lordships may know exactly what is the substance of it I should perhaps tell your Lordships that the formula works in this way. It deals with the highest exact multiple of one quarter per cent. in one case and of one sixteenth per cent. in another. Suppose the fund was £100 and the total income accruing in respect of the assets in any one year represented interest at the rate of £3 18s. 2d. per cent. on the whole fund. One quarter per cent. below that rate is £3 13s. 2d. per cent. and the highest exact multiple of one quarter per cent. below £3 13s. 2d. per £100 is £3 10s. That is accordingly the rate at which interest was credited to the various trusts. A rate of £3 10s. per cent. was very much more than could be obtained on deposit.
Since 1936 there has been some slight alteration. Supposing again the fund is £100, if the total income accruing in respect of the assets of the fund in any one year since August, 1936—that is since the Public Trustee gave up investing in Government securities—represented interest at the rate of £2 3s. per £100, then interest at the rate of £2 2s. 6d. per cent. per annum (that being the highest exact multiple of one sixteenth per cent. below

1077
£2 3s.) would be credited to the several funds. The balance between the total interest sum and the amount credited to the various trusts, which is quite small, is not in fact sufficient to pay the Public Trustee for the cost of administering this portion of the omnibus fund. I have told your Lordships the facts of this rather singular case, and I hope I have made it clear, but I know the matter is somewhat complicated and if any of your Lordships want any further explanation I shall be very happy to supply it as far as I can. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3.35 p.m.
LORD STRABOLGI: My Lords, I do not rise to ask for any further explanations or further elucidation because I must most respectfully congratulate the noble and learned Lord on his very clear explanation of a rather complicated matter. I want, however, to make one or two observations about this Bill and the circumstances which have made its introduction necessary. I have a kind of family interest in the Public Trustee because my late father-in-law was one of those who in another place initiated the legislation which, after the most bitter opposition from the Party which the noble and learned Lord on the Woolsack adorns, passed into law. It was denounced as State Socialism of the worst order. It was said these unfortunate people would be put in charge of the Public Trustee, that their money would be frittered away by incompetent civil servants, and worse. The Public Trustee began in a very small way, as your Lordships are aware, but the work has now grown enormously and has been of the greatest benefit. One result of the manipulations of the small deposits in the hands of the Public Trustee is this very pleasant windfall for the Treasury of £117,000 odd, which windfall the Treasury does not deserve. What really has happened, if I may attempt to paraphrase the very technical and interesting account given by the Lord Chancellor, is that the Public Trustee has acted as a banker for these small trust accounts and in so doing has made a large profit.
I should have thought that it would have been in the public interest, for reasons which I will explain briefly in a moment, to have attempted to find some
1078
way of paying some bonus or dividend to these wards or beneficiaries, in order further to commend the whole organisation of the Public Trustee to the general public. I know there are practical difficulties, but I should not have thought they were insuperable. However, the Government have decided otherwise and there it is. But I want to take this opportunity of saying in your Lordships' House, which is the most public place in the world, that the work of the Public Trustee has been of very great benefit, and that it ought to be more widely known. I myself always recommend any relatives or friends of mine with trusts to establish to go to the Public Trustee. I have had a good deal of experience of the work of the Public Trustee, and I know that he is most helpful. The smaller the estate, the more careful he is. I would rather have such affairs in the hands of the Public Trustee than in the hands of the most capable firm of lawyers in the country, with every respect for the head of the legal profession who now sits on the Woolsack. I saw recently that the Law Society had attempted to compute the sums lost through fraudulent solicitors in the last four or five years. Speaking from memory, I think it came to over £500,000. If that money had been in the hands of the Public Trustee nothing would have been lost but the windfall under this Bill would have been greater.
I would like to express the hope that the Government themselves will take some step to make the work of the Public Trustee better known for the benefit of all concerned. As I say, although the office is staffed by civil servants their attitude to poor wards is most sympathetic and helpful. In fact the office of the Public Trustee is an excellent example of State Socialism. I am sorry its future operations are to be restricted to deposits in banks and the Post Office Savings Bank. Why should not the Public Trustee continue to invest in gilt-edged securities and so improve the assets of his wards as he did prior to 1936? I do not see why similar results should not be looked for in the future. My Party has not offered any opposition to the Bill, and I offer no opposition, but have taken this opportunity of making the remarks that I felt it my duty to make.
3.40 p.m.
LORD MANCROFT: My Lords, the noble Lord opposite has dealt closely with

1079
the clauses of the Bill, and I have no doubt that he has studied all its details carefully and fully understands it. I think he was quite justified in saying that we were much obliged to the noble and learned Lord Chancellor for explaining the clauses of this Bill. The Lord Chancellor was also quite justified in describing it as a complicated Bill. I am very glad that this Bill has been introduced. The noble and learned Lord on the Woolsack has mentioned the Public Accounts Committee. I remember quite well the points which the noble and learned Lord Chancellor set forth being brought up before us. I think I was privileged to be the Chairman—if not I was certainly a member—of the Public Accounts Committee. It puzzled us how to deal with these numerous ragged, small accounts. The problem came to our notice when the Public Trustee was before us, and I formed the opinion that sooner or later we should have to have a Bill to regularise the position. This is that Bill; I am glad it has been brought in. This has been a difficult problem to handle, because breaches of trust, however slight, are always to be avoided if possible. They should never be condoned, and if a breach of trust has been made in the smallest degree it should at once be put right if possible; and this Bill puts breaches of trust right.
Here are a large number of ragged, small accounts which have quite unexpectedly, by the skilful way in which the Public Trustee officials have handled the matter, shown a good profit. It would be impossible to divide up the benefit to the individual persons who might be claimants. As for giving a dividend to the wards, it sounds all right but it is not possible. The most that one person could get on the average would be shillings and pence. I do not suppose that the majority of the possible beneficiaries could obtain the benefit of a cab fare, if these sums were divided up, as they should be, meticulously and legally. Therefore the best way out of the whole difficulty is for the Treasury to take the money which has been so unexpectedly earned. No one at all would be hurt thereby.
But this also must be remembered: that if, when these moneys were accumulated a loss had been made by the investments or by the handlings of the Public
1080
Trustee, the Treasury would have had to make the loss good. It was therefore only fair—I felt this at the time, though I cannot speak for my colleagues, when the matter came before the Public Accounts Committee—that the money which had been unexpectedly earned should go back to the Treasury. I felt that that was so because if there had been a loss the Treasury would have had to pay. I am therefore very glad that this Bill has been introduced.
It is not often that I agree with the views of my noble friend, Lord Strabolgi, opposite, but I think he was perfectly right in drawing attention to the benefit of the Public Trustee. In the other House, when I had the privilege of being a member, I saw the accounts of the Public Trustee year after year before the Public Accounts Committee. For many years the office made no profit; for many years it made a loss. That is right, I think; I am speaking without looking the figures up. Then it gradually made a profit. It has been gradually put into the position that it does not cost the State anything and indeed may have earned money for the State, though not much. There is no doubt, however, that it has conferred incalculable benefits on a certain class of persons. It may well be called a protector of the poor. The more we can induce the small person in a provincial town, for example, the widow or the small tradesman, who does not understand having a trust, to go to the Public Trustee, the better. In the long run it is cheaper for them, whatever small fees they have to pay—and the fees are not very great. I have great pleasure in supporting this Bill, and I am very glad it has been introduced.
VISCOUNT BERTIE OF THAME: My Lords, I speak without any documentary evidence, but I think the Post Office only accepts deposits which are less than £500; and I should like to know why the Public Trustee should be treated as a privileged depositor.
3.45 p.m.
THE LORD CHANCELLOR: My Lord, in regard to that question, I do not know the answer. I do not think there is a privilege but I think there are special circumstances in which the Post Office are willing to accept quite large sums on deposit, as for example from a Department, or an institution such as

1081
the Public Trustee. I do not, however, speak with real knowledge and I will find out for the benefit of the noble Lord before the matter comes before the House again. In regard to what my noble friend Lord Strabolgi said, I gladly agree with him in his encomiums on the Public Trustee and the way in which his office has been administered. If it is to be said that the Public Trustee Act was a measure of State Socialism, I would observe that if State Socialism never does anything more obnoxious to the public feeling than the Act of 1906 did, we shall all sleep quite happily in our beds in the future. In other words, I think that is a measure, however you describe it, which was greatly for the benefit of a large class of the community. But I would say that I cannot think that Lord Strabolgi's recollection of the way in which the Bill was passed into law can be quite accurate. My information is that the two persons who were really responsible for this Bill being passed, Lord Halsbury in this House, who occupied, as your Lordships know, the position of Lord Chancellor for so many years, and Sir Edward Carson in the House of Commons—
LORD MANCROFT: Was it not Colonel Howard Vincent?
THE LORD CHANCELLOR: That is the information I have received from a source which I know to be accurate. I have only to add that I also welcome the observations of Lord Mancroft. I was not aware at the moment that he was a member of the Public Accounts Committee which dealt with this matter when it came before that Committee, and this curious windfall was discovered to have caused some difficulty and the opinion was expressed that these ragged accounts, if they may be so described, should be cleared up. I am glad to find that he agrees with the view, which is that of the Government, that this Bill represents the proper way of dealing with a rather curious problem.
On Question, Bill read 2a, and committed.

HALL-MARKING OF FOREIGN PLATE BILL.
House in Committee (according to Order): Bill reported without amendment.
MARRIAGE BILL.
Read 3a (according to Order) with the Amendments, and passed, and returned to the Commons.
WHEAT (AMENDMENT) BILL.
Read 3a (according to Order) with the Amendments, and passed, and returned to the Commons.

CIVIL DEFENCE BILL.
Order of the Day for the Third Reading read.
3.51 p.m.
THE UNDER-SECRETARY OF STATE FOR WAR (THE EARL OF MUNSTER): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(The Earl of Munster.)
LORD STRABOLGI: My Lords, I have one or two questions to put to the Government on this Bill, and I understand that I am in order in doing so before the Government Amendments are moved. If that is so, I would like very briefly to put to the noble Earl, Lord Munster, the questions of which I have given him some short notice. I am glad to see that one suggestion which we have been pressing has been carried out by the Government—namely, this morning there reached me in the ordinary post Public Information Leaflet No. 1, on Civil Defence, which describes some of the contents of this Bill and tells the ordinary citizen what he should do if war comes. We have been asking for simple leaflets to be issued, and we thank the Government for that, but I am sorry that they have not carried out my suggestion that the leaflets should be illustrated. I even went so far as to suggest that a portrait of the noble Earl should appear, to give confidence to the lieges.
There are one or two things in the leaflet which are disturbing. To begin with, fire precautions. It describes the devasting effect of incendiary bombs and explains that water is the best way to put out fire started by incendiary bombs, but it goes on to state that water thrown on a bomb causes an explosion, and the burning thermite, I think it is called, is thrown in all directions. The last direction says you may be able to smother

1083
with sand or dry earth where dealing with the danger of thermite bombs, which develop a burning temperature of 3,000 degrees Fahrenheit, I believe, and are hard to put out, and which it is stated may be dropped in very large quantities. May I ask the Government, through the noble Earl, whether they are doing anything to produce a small, cheap, portable, chemical extinguisher for these bombs? It cannot be beyond the resources of this country to produce a chemical fire extinguisher. I suggest that there should be storage of these in large quantities, and that they might be distributed when an emergency comes. Perhaps they might even encourage the householder to buy them as well. I have taken some technical advice, and I am told that you can develop chemical fire extinguishers to deal with this type of bomb. That is the first suggestion which I venture to put to the noble Earl.
The second suggestion deals with evacuation. Quoting the part of Section 5, which bears on what I venture to say to your Lordships, it describes the arrangements for evacuating children, expectant mothers, blind persons and others, from London and other great cities. Then it goes on to say:
"Those who have already made, or are making arrangements to send their children away to relations or friends must remember that while the Government evacuation scheme is in progress, ordinary railway and road services will necessarily be drastically reduced and subject to alterations at short notice."
This is a very serious matter. The London County Council Schools in London are organised for evacuation, and I understand for the most part by way of special railway trains; but there are in London a great many private schools, and although they can apply, I understand, to the London County Council for inclusion, there are many cases, where hundreds of children are concerned, where no arrangements for evacuation have been made. In certain cases, parents have been told this, and have said: "In that case we will take care of our own children and get them away in our own motor cars." Now we are told that the roads will not be available, and if that is so there are thousands of young children who will not be able to be evacuated unless this matter is dealt with.
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I have therefore a suggestion to make to the Government, and it is this. You should encourage private people to evacuate children, invalids and elderly people by private means, if they can do it. That should be, I think, the Government policy. Now, when you have some great occasion such as a royal procession or the trooping of the colour, people who are entitled to attend are given special labels to put on their motor cars, for the information of the police. I would suggest that special labels should be prepared for people engaged in privately evacuating children, invalids and elderly people, so that they may be able to pass along the roads. It is only a matter of preparation and organisation, and there will be tremendous dissatisfaction with the Government if these thousands of children and invalids, who could be taken out of danger by private means, cannot be moved because of the lack of a little preliminary organisation of this sort. I do not want to paint too gloomy a picture, but I must take the occasion to warn Lord Munster and his colleagues, that if there are found to be grave deficiencies of this kind when trouble comes, the populace may deal with them very drastically indeed. They will be held responsible, and I would not give very much for their future political careers if they fail in these grave matters. I mention those two particular matters, which I think deserve particular attention—namely, the better means of extinguishing incendiary bombs and better organisation, apart from the excellent plans of the London County Council, for evacuation.
3.59 p.m.
LORD PHILLIMORE: My Lords, it might be convenient if I rose at this moment to ask the noble Earl whether he has any further information to give us as to the point which was raised by me on the Committee stage of this Bill. During that stage, the noble Earl in charge of the Bill said:
"Certainly I am prepared to ask my right honourable friend to consider the question of compensation again…."
Furthermore, since the Committee stage was taken I find that a question was asked in another place, and that the Minister for Health replied:
"Consideration is being given to this matter in connection with the wider question of compensation for war damage, and I

1085
would refer my honourable friend to the statement made by the Chancellor of the Exchequer on June 20."
I need not go into all the arguments I raised in Committee, but this point is clearly one of great importance, though it may be confined in the main to those people who live in the reception areas, and it is highly desirable that they should have cause to feel that justice would be done to them in so far as damage resulted from the exercise of their hospitality towards the evacuees. If not, I cannot help feeling that a considerable amount of bad blood would be created, and the scheme would to that extent suffer. I should be glad to know whether the noble Earl can now give us any further information, and also whether he has consulted with his legal advisers as to the effect of the ordinary policy terms on this question.
4.1 p.m.
THE EARL OF MUNSTER: My Lords, I rise to reply to the questions which have been addressed to me by the noble Lord opposite and my noble friend Lord Phillimore, and I refrain from delivering at the same time a further speech, which perhaps is customary in another place on the Third Reading of a Bill. As regards the question of fire extinguishers, if my recollection serves me correctly, I recall that a similar question was raised, I think by the noble Lord, during the Second Reading debate on the Air-Raid Precautions Bill two years ago. I understand that the situation has not really altered a great deal since that time. There are private firms who are undertaking scientific research into the question whether some suitable fire extinguisher can be found for putting out a fire which might be caused by an incendiary bomb. There is, of course, a disadvantage, which I think will come to the minds of many noble Lords. The modern fire extinguisher which it is customary to find in private houses and in Government and local authority buildings is one which requires continual examination and periodical inspections to see that it has not deteriorated and that the force of the liquid inside is up to the standard required for putting out a fire. I am informed that if these fire extinguishers were stored in large numbers by the local authorities, or by the Government Departments, there would be very considerable
1086
expense continually recurring in seeing that the extinguishers were in a condition for immediate use.
I understand that this question has been examined with great care and I am advised that the best means of putting out a fire caused by an incendiary bomb is undoubtedly water. But the whole question is discussed in Air-Raid Precautions Handbook No. 9 dealing with incendiary bombs and fire precautions. It explains on page 17 the disadvantages of chemical extinguishers in meeting the situation caused by an incendiary bomb, and it states:
"Many chemical extinguishers are excellent for the purpose for which they have been designed, but would have certain disadvantages in meeting the situation caused by an incendiary bomb.
The average soda acid extinguisher is of the 2-gallon type, and this would in many cases be insufficient to deal both with the bomb and the resultant fire. In thick smoke it would be necessary to keep close to the ground (see Chapter IV), which would make an extinguisher difficult to handle. Moreover, it would be dangerous to use some of the extinguishers designed for special purposes. For example, carbon tetrachloride, which is used in some, might generate phosgene in contact with the burning magnesium."
That, I think, will give the public some indication that these extinguishers are not really up to standard for use with any degree of success to put out a fire which might be caused by an incendiary bomb. Nevertheless, as I have said, we are still making inquiries into this matter, and I understand that private firms are also taking the question up, but up to the present time no suitable fire extinguisher has been found for the purposes which the noble Lord mentioned.
VISCOUNT ELIBANK: May I ask my noble friend whether he is aware of a printed paper which has been issued under the aegis of the Privy Council? I have received a copy this morning, and in that paper it is stated that the worst thing to do to put out an incendiary bomb is to use water, and that you ought to use either earth or sand in order to extinguish it.
THE EARL OF MUNSTER: I thought I made it clear that these fire extinguishers are not the best means of putting out fires caused by incendiary bombs, and in fact water is the best method.
VISCOUNT ELIBANK: This paper says that water is not the best method, but the worst method, and that you ought to use sand or earth.
LORD TEYNHAM: I have this document by me and perhaps it might clear up the matter if I say that it states that if one uses a special hand pump with a nozzle, so that it produces a spray, it is then quite serviceable and quite good for putting out a fire.
THE EARL OF MUNSTER: That is perfectly true. I was really talking about fires which resulted from the explosion of an incendiary bomb after it had set fire to a building. I thought it was common knowledge that one of the best methods of extinguishing a fire caused by an incendiary bomb was as soon as possible to throw sand or earth on the place where the bomb has exploded. That does put out incendiary bombs, and it has been proved, I think, again and again in answer to Questions asked in another place and also in this House. But when a fire caused by this intense heat has started, water is undoubtedly the best means of extinguishing it.
I pass from that to the question raised by the noble Lord opposite, dealing with the evacuation of children in private schools, and the suggestion that he made that some ticket should be pasted on to the windscreen or the lamp of a motor car is one which, of course, I will take up with the appropriate Department. My noble friend Lord Phillimore also raised the question of evacuation, and here I would appeal to him and to other noble Lords, who at an earlier stage of the discussions on this Bill have raised the whole question of evacuation of the civil population from vulnerable areas to reception areas. I know perfectly well that this scheme of evacuation is causing, perhaps wrongly, serious concern in the minds of noble Lords, and I suggest that the best method of dealing with this very large question would be for some noble Lord to put down a Question for full discussion at some date before the Adjournment. I am not in a position to-day to give the noble Lord any further reply to the question which he asked concerning compensation for damage. He quoted a reply which was given by my
1088
right honourable friend the Minister of Health on June 29 last, and I am not in a position to give him any further answer on that point.
As regards the question of policy holders, and whether their policies cover them in the event of a fire on their premises at a time when they are being used by people who have been evacuated from the vulnerable areas, I am not in a position to give the noble Lord information from the fire insurance companies, but on inquiring from my own agents as to whether my own fire policy covered that very point, I was informed that it undoubtedly did, and that the undertakers were prepared to cover it. I would, lastly, mention once again the question of evacuation. It has, as noble Lords know, been actively considered again and again by His Majesty's Government. I have the clearest recollection that last September the evacuation scheme which was undertaken by the London County Council worked with great success, and I have no reason to suppose that any future scheme which would be involved would not work equally satisfactorily. But I would suggest, for the convenience of noble Lords as a whole, that it might be useful if some noble Lord put down a Question so that the House could have a full statement from His Majesty's Government on this matter.
VISCOUNT MERSEY: My Lords, it does not seem to be quite clear, from the Instruction which my noble friend has just read, whether the words "road services will be reduced" imply only, as I understand, that the ordinary services, such as the Green Line 'buses, will be diminished, or whether the actual user of the roads will be in any way curtailed—that is to say, that certain roads will be closed or only certain classes of cars allowed to use them. It would be a good thing if that were made clear, although to my mind it is clear from the Instruction.
THE EARL OF MUNSTER: My Lords, I am not in a position to add anything further to this Instruction, but if it is so clear to the noble Viscount's mind it must be equally clear to every other noble Lord in the House.
On Question, Bill read 3a, with the Amendments.
Clause 8 [Powers of local authorities to construct underground car-parks suitable for use as air-raid shelters]:
4.12 p.m.
THE EARL OF MUNSTER THE EARL OF MUNSTER moved to insert at the end of subsection (1):
"Provided that in exercising their powers under this section the local authority shall, so far as is reasonably consistent with the interests of civil defence, have regard to the amenities of any protected square or land held inalienably by the National Trust."
The noble Earl said: My Lords, the Amendment which I now move is designed to meet the Amendment which was moved on the Report stage by my noble friend Lord Radnor, who was supported by the noble Marquess, Lord Salisbury. I still maintain that the Bill gave adequate safeguards, but it appears to be the wish of noble Lords that we should include this proviso which I now formally beg to move.
Amendment moved—
Page 9, line 21, at end insert the said proviso.—(The Earl of Munster.)
THE MARQUESS OF SALISBURY: My Lords, I rise only to express, on behalf of my noble friend Lord Radnor and other noble Lords, our very great feeling of obligation to the noble Earl for his concession in this respect. I am sure it is a matter of great importance, and I feel very much gratified that my noble friend has taken the view that the wishes of your Lordships ought to be fulfilled.
THE EARL OF CRAWFORD: My Lords, I am very glad that this Amendment should be made. I do, however, regret that it has been drafted to meet two illustrations which were given by noble Lords during the debate. One was Charterhouse Square, and the other was another square in London. This is now only applying to protected squares or land held inalienably by the National Trust, which is already in the Bill. I greatly regret that the protection of amenity is only to be limited to a few open spaces in London.
THE MARQUESS OF SALISBURY: The Amendment, as I understand it, does not apply only to London—it applies generally throughout the country.
THE EARL OF CRAWFORD: My Lords, I can only speak again with the permission of the House, but the noble Marquess
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below the Gangway told us that Lady Salisbury sent him to Smithfield to get a leg of mutton, and he noticed how beautiful Charterhouse Square was and came back and drew your Lordships' attention to it. Charterhouse Square, under the Bill, is protected, and so are other squares in London, but no attention is paid to the amenities of Britain except to this limited extent. I regret it, that is all.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, I do not see why we should not protect squares in other places—for example, in Edinburgh, where there are some beautiful squares that deserve to be protected. They are just as much entitled to be protected as are the squares in London. The noble Earl, Lord Crawford, has raised a very important point, and as this Bill, having been amended, will have to go back to another place, I should like to ask the noble Earl, Lord Munster, whether he will undertake that this point will be considered before the Bill comes back to us.
LORD TEYNHAM: My Lords, I would like to suggest that if Clauses 7 and 8 are loaded with too many safeguards it may be impossible to construct these air-raid shelters and car parks, which are undoubtedly very much needed for the defence of the civilian population. I am perfectly prepared to accept this Amendment as it stands on the Paper.
THE EARL OF MUNSTER: My Lords, by leave of the House, I should like to say that if this Amendment does not meet the wishes of the noble Lords, I am perfectly prepared to withdraw it. But I understand it meets the points that Lord Radnor raised. He has written to me informing me that it covers the points he was anxious about, and we have just heard from my noble friend Lord Salisbury that it covers the points he had in mind also.
THE LORD CHANCELLOR: My Lords, I do not quite understand why it is suggested that Scotland is not included. I may be wrong, but I rather think Scotland comes within this clause. I am sure my noble friend in charge of the Bill agrees with me that a beautiful square in Edinburgh is just as worthy of protection as one in London.
On Question, Amendment agreed to.
Clause 58 [Special provision as to supply of water for extinguishing fires]:
4.21 p.m.
THE EARL OF MUNSTER: My Lords, there is a drafting Amendment to this clause.
Amendment moved—
Page 59, line 39, leave out ("air-raids") and insert ("hostile attacks").—(The Earl of Munster.)
On Question, Amendment agreed to.
Clause 66:
Extension of borrowing powers of trustees, &c.
66.—(1) The provision of air-raid shelter shall be deemed to be an improvement authorised by the Settled Land Act, 1925, and mentioned in Part II of the Third Schedule to that Act.
(2) Any liquidator, trustee in bankruptcy or receiver shall, in addition to any other powers in that behalf, have the like powers in relation to the provision of air-raid shelter as are conferred on trustees by subsection (1) of this section.
THE EARL OF MUNSTER THE EARL OF MUNSTER moved to leave out subsection (2) and insert the following new subsections:
"(2) Any liquidator, trustee in bankruptcy, receiver, committee or other person acting in a fiduciary capacity who is, as such, the occupier of any factory premises, the owner of any mine or the owner of any commercial building or of any building or block of buildings to which Section thirty of this Act applies shall, for the purpose of providing air-raid shelter or complying with any obligation imposed on him by or under any of the provisions of this Act, have power (in addition to any other powers enabling him in that behalf)—

(a) to utilize any moneys in his hands in his capacity as liquidator, trustee, receiver, committee or otherwise as aforesaid;

(b) to raise money by the sale or mortgage of any property vested in him or under his control in that capacity,

and any money reasonably expended by him for the said purpose shall be treated as part of his expenses incurred in that capacity and shall be allowed in account accordingly.
(3) Where the owner of any commercial building or any such building or block of buildings as aforesaid is a mortgagee, he shall be entitled to add to his security any money reasonably expended by him for the purpose of providing air-raid shelter in connection with the building or block or of complying with any obligation imposed on him by or under this Act as owner of the building or block."
The noble Earl said: My Lords, you will recall that during the Report stage I moved a new clause which now is Clause 66, and at the same time I informed the House that I should be adding to subsection (2) something which would not in
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any way alter the meaning of the original five lines which appear in the Bill at the present time. The House will recall that I gave an explanation of this clause on the Report stage, and therefore it is not necessary for me to weary your Lordships with a long explanation of these new subsections. I beg to move.
Amendment moved—
Page 64, line 30, leave out subsection (2) and insert the said new subsections.—(The Earl of Munster.)
On Question, Amendment agreed to.
Clause 81 [Exemption of certain works from building by-laws, etc.]:
THE EARL OF MUNSTER: My Lords, the next Amendment in my name is drafting. I beg to move.
Amendment moved—
Page 73, line 41, after ("by") insert ("or under").—(The Earl of Munster.)
On Question, Amendment agreed to.
Clause 90:
Other provisions as to interpretation.
90.—(1) In this Act, except where the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:—
"Owner," in relation to factory premises or a commercial building, means—
Provided that, where any estate or interest in any factory premises or commercial building is the subject of a mortgage and the mortgagee is in possession, that estate or interest shall be deemed for the purposes of this definition to be vested in the mortgagee.
THE EARL OF MUNSTER THE EARL OF MUNSTER moved to leave out the proviso at the end of the definition of "owner" and insert:
"Provided that, where the estate or interest of any person who, under the preceding provisions of this definition would be the owner of any commercial building, is the subject of a mortgage, and either the mortgagee is in possession or the rents and profits are being received by a receiver appointed by or on the application of the mortgagee, that estate or interest shall be deemed for the puposes of this definition to be vested in the mortgagee."
The noble Earl said: My Lords, I think this Amendment is one which makes the words more simple than they read as they now appear in the Bill.
Amendment moved—
Page 82, leave out lines 18 to 22, and insert the said new proviso.—(The Earl of Munster.)
On Question, Amendment agreed to.
Clause 91 [Application to Scotland]:
THE EARL OF MUNSTER THE EARL OF MUNSTER moved, after subsection (23), to insert the following new subsection:
"(24) In Section sixty-six for subsection (3) there shall be substituted the following subsection:—
(3) Where a heritable creditor in possession is for the purposes of this Act the owner of any commercial building or any such building or block of buildings as aforesaid, it shall be competent for the local authority to make, on his application, a charging order in his favour charging and burdening the building or block of buildings with an annuity to repay to him any money reasonably expended by him for the purpose of providing air-raid shelter in connection with the building or block or complying with any obligation imposed on him by or under this Act as owner of the building or block in like manner as they may make a charging order in favour of an owner under Section twenty-one of the Housing (Scotland) Act, 1925, and the provisions of Sections twenty-one and twenty-two of that Act shall apply accordingly subject to the following and any other necessary modifications:—
An annuity constituted a charge by a charging order made under this subsection shall rank pari passu with the heritable security in virtue of which the heritable creditor is in possession of the building or block."
The noble Earl said: My Lords, this subsection is inserted to provide the application to Scotland of subsection (3) of Clause 66 which your Lordships decided to amend during the previous stage of our discussions. I beg to move.
Amendment moved—
Page 93, line 42, at end insert the said new subsection.—(The Earl of Munster.)
On Question, Amendment agreed to.
4.23 p.m.
THE EARL OF MUNSTER: My Lords, I beg to move that this Bill do pass.
Moved, That the Bill do pass.—(The Earl of Munster.)
LORD STRABOLGI: My Lords, I apologise for addressing you again on this matter, but it is an important subject. I want to return to the charge about the meaning of the Government's language in the leaflet with regard to road services. The noble Viscount, Lord Mersey, reads the passage which is meant for millions of the inhabitants of these islands in one way, and I read it in a different way. There may be considerable stoppages on the roads by Government authority. What we want to know is what is going to happen about these roads. I think
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it is important that people should know, because trouble may come suddenly, and it is in the interests of the defence of London and other large cities that children and invalids should be evacuated from them. How are these people to be moved if the roads are to be closed? I think the public have a right to know. I should be obliged if the noble Earl would give some explanation, or, if he is not in a position to do so now, perhaps he would take an opportunity of doing so. If necessary I could put down a question at some future time, and he could reply. I think we ought to have a little more information on this quite important matter.
THE EARL OF MUNSTER: My Lords, I fear I am not in a position to reply to the question which the noble Lord has raised. The matter is one which I should imagine concerns the Ministry of Transport. Nevertheless the whole subject is one which comes under the general term evacuation, and I did suggest in the course of replying to the remarks that were made on Third Reading of this Bill that the whole matter of evacuation should come up for discussion in your Lordships' House upon a Motion raised by some noble Lord. Perhaps the noble Lord opposite would himself see his way to put down a question so that the whole matter can be discussed. The question of motor transport on the roads in time of evacuation is one to which the Government naturally have given serious consideration, and I think it would serve the purpose of your Lordships if the whole matter was discussed at some early date.
On Question, Bill passed, and returned to the Commons.

MINISTRY OF SUPPLY BILL.
Amendments reported (according to Order).
Clause 2:
General powers of Minister.
2.—(1) Subject to the provisions of this subsection, the Minister shall have power—
Provided that the powers of the Minister under this subsection shall not be exercised in relation to the supply to any other Government Department of any articles required by that Department for the purpose of the discharge of its functions, unless the powers of that Department in relation to the supply of

1095
those articles are for the time being transferred to or made exercisable by the Minister under the next following section of this Act.
4.26 p.m.
THE MINISTER FOR THE CO-ORDINATION OF DEFENCE (LORD CHATFIELD)THE MINISTER FOR THE CO-ORDINATION OF DEFENCE (LORD CHATFIELD) moved to add to subsection (1):
"and, without prejudice to any powers transferred or made exercisable as aforesaid, the powers of the Minister under this subsection of manufacturing or otherwise producing articles shall not be exercised after the expiration of a period of three years beginning with the date of the passing of this Act, except in respect of such classes of articles as His Majesty may specify by Order in Council made not earlier than the commencement of the last six months of that period."
The noble Lord said: My Lords, this Amendment standing in my name is in fact very similar to the Amendment moved by the noble Lord, Lord Gain-ford, whom we all regret is not present here to-day to hear what further action is being taken upon the matter that he raised. Lord Gainford's Amendment has also been put down again by him for this stage of the Bill, and is supported by the noble Viscount, Lord Samuel. The Amendment that I am now moving provides that the Minister's power of "manufacturing or otherwise producing" shall lapse after three years, with two exceptions. These exceptions are as follows. In the first place, at the end of the three years from the date of the passing of this Bill, powers of manufacturing, etc. possessed by other Government Departments will have then been transferred to the Minister under Clause 3—that is to say, powers such as the War Office have to manufacture guns at Woolwich Arsenal. These powers will not lapse at the end of the three years, but will be unlimited in duration. That is the effect of the words at the beginning of the Amendment "without prejudice to any powers transferred." Since the powers already exist, there is no reason why they should lapse, and indeed the noble Lord's own Amendment expressly saves them from lapsing.
Secondly, at any time after the middle of the third year, an Order in Council may be made continuing the Minister's power of manufacturing any articles specified in the Order, but under Clause 6 this Order is subject to Parliamentary approval. Either House can refuse to
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affirm it, but, if it is approved by both Houses, the Minister will have powers of manufacturing the limited classes of articles specified in the Order. The Amendment expressly provides that the Order shall not be made until towards the end of the three years, in order to ensure that Parliament will have another opportunity of reviewing the matter in the light of the situation at that time. I have endeavoured in consultation with my right honourable friend the Minister of Supply Designate to meet the feeling of your Lordships on this matter as expressed on the Committee stage. In view of this explanation I trust that the Amendment may be regarded as substantially meeting the points raised in Committee on Lord Gainford's Amendment, and will be accepted by your Lordships. I beg to move.
Amendment moved—
Page 3, line 4, at end insert the said words.—(Lord Chatfield.)
VISCOUNT SAMUEL: My Lords, you will be aware that Lord Gainford's absence to-day is due to the fact that he was seized with a sudden indisposition on Tuesday in the precincts of this House, but your Lordships will be glad to learn that it is not a serious matter, and that he is now well on the way to recovery.
NOBLE LORDS: Hear, hear.
VISCOUNT SAMUEL: He has requested me to speak on his behalf on this occasion. The Amendment moved by the noble Lord does meet the points which were raised on Lord Gainford's Amendment whilst at the same time avoiding certain possible objections to the Amendment in the form in which it originally stood that were pointed out by the representative of the Government on that occasion. I understand that the Federation of British Industries, at whose instance this matter was originally raised, are advised that the Amendment, as now proposed, sufficiently meets the point which they had in view. In those circumstances, unless any noble Lord who previously took an interest in the matter thinks otherwise, I should propose not to move the Amendment which stands in my name as well as that of my noble friend Lord Gainford.
LORD STRABOLGI: My Lords, on behalf of my noble friends I wish to express the gratification we feel at hearing the good news about the health of the noble

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Lord, Lord Gainford. We are bound to resist this Amendment, for the reasons given by my noble friend Lord Snell on the previous stage of the Bill. We think it is highly desirable, if the Government should be successful in manufacturing, that that should be continued, because it will prevent profiteering by private individuals. We tremble to think of Orders in Council, at the mercy of your Lordships' House, to prevent this desirable practice. I do not know the views of the noble and gallant Lord, Lord Chatfield, on this subject, except, of course, that as a member of the Government he is bound to support this Amendment. What would he say if it was proposed to stop the construction of warships in the Royal dockyards which have been of immense benefit to the State? I think he would resist it at once. We may find, as a result of future experiments, that we shall be able to manufacture articles advantageously in Government factories, but that at the end of three years that will have to be dropped. My Party are bound to resist the Amendment, and we shall do our utmost in another place to defeat it.
THE EARL OF CRAWFORD: My Lords, it is very optimistic to think that the Government can manufacture more cheaply than private people.
LORD STRABOLGI: They do in the Royal dockyards.
THE EARL OF CRAWFORD: That certainly does not apply in other interests like railways, in regard to which the Government have from time to time exercised their ingenuity at the serious expense of the taxpayer. The first two lines of the Amendment as explained by the noble and gallant Lord on the Front Bench meet the very point which the noble Lord opposite has just raised. I would like to ask—perhaps the noble and learned Lord the Lord Chancellor can tell me—why the words "as aforesaid" are put in. It seems to me they refer to the present clause, and not to an Act of Parliament 100 years old or a custom 500 years old which authorises the Army to make its own munitions. After the first two lines the subsection is limited for three years subject to certain conditions.
The powers limited are those of "manufacturing or otherwise producing articles," but the subsection deals with
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other processes than manufacturing or otherwise producing. The subsection authorises the Government to store, to transport, to exchange, sell or dispose of articles, to buy articles with a view to exchange for other articles, and
"to do all such things (including the erection of buildings and the execution of works) as appear to the Minister necessary…"
The time limit is only in phrase limited to manufacturing or otherwise producing articles. Are the other powers conferred to be continued, and not to be subject to the three years limitation? I should have thought that the whole of the subsection should be limited to three years, with the safeguard which is referred to in the last words of the Amendment that by Order in Council the powers of the subsection might be prolonged six months at a time. Otherwise it seems to me there is a very serious ambiguity. I quite understand that after you have stopped manufacturing goods you must continue to store and transport goods for the purpose of liquidation, but why should not liquidation take place within the ensuing six months, or if it is not completed then within other periods which His Majesty by Order in Council may determine? There is an ambiguity which I would very much like to be cleared up, especially in so far as paragraph (c) is concerned—namely, the erection of buildings which ex hypothesi must be a new act and not the continuance of an old act.
THE LORD CHANCELLOR: My Lords, the words "without prejudice to any powers transferred or made exercisable as aforesaid" mean that the only thing to be limited as a result of the introduction of the Amendment are the powers to manufacture or otherwise produce articles. Accordingly there will be still power for the Minister on whom powers are conferred to buy or otherwise acquire articles and
"to do such things (including the erection of buildings and the execution of works) as appear to the Minister necessary or expedient"—
THE EARL OF CRAWFORD: "For the"—
THE LORD CHANCELLOR: "for the exercise of the foregoing powers." That is, powers of manufacturing or otherwise producing shall not be exercised beyond the period of three years except by

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Order in Council. It is quite clear. I do not understand that criticism on the last occasion went beyond the powers of manufacturing or otherwise producing articles. Those are the matters dealt with by the Amendment which the noble and gallant Lord in charge of the Bill has moved.
VISCOUNT MERSEY: May I ask, would the Minister have power to sell otherwise than for disposing of the surplus at the end of the period?
THE LORD CHANCELLOR: He would not sell unless he knew he did not want them. In other words the Amendment does not affect the right to sell articles but only the right to manufacture or produce the articles.
On Question, Amendment agreed to.
4.39 p.m.
Then, Standing Order No. XXXIX having been dispensed with:
LORD CHATFIELD: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Chatfield.)
LORD STRABOLGI: My Lords, I want to say a few words only with reference to what fell from the noble Earl, Lord Crawford. He will remember very well, as a former First Commissioner of Works, that just after the War the Office of Works built excellent houses, cheaply and well, when there was a tremendous shortage of houses. There was the usual cry of Socialism and this admirable service was dropped. Lord Melchett, who was one of the greatest individualists that our generation of politicians has produced—the first Lord Melchett himself—as a fierce anti-Socialist always said what an admirable Department it was and what a great pity it was that it had to be dropped. That is what I am afraid of, and that is why we object to this Amendment.
4.40 p.m.
LORD CHATFIELD: My Lords, on the occasion of the Second Reading your Lordships' House was very pressed for time, and a great many questions were asked by noble Lords who contributed to the debate which I did not have an opportunity at the time to answer. Also on the Committee stage several points were raised into which I promised to inquire
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further and to give a reply at a later stage. I should like to detain your Lordships rather unusually long on the Third Reading by answering certain of those points, and at the same time dealing with certain other matters of importance which have been raised.
In the first place I owe an explanation to the noble Viscount, Lord Bertie, in that when the noble Viscount at the Committee stage moved an Amendment, I said that the Law Officers had been consulted about the Amendment which he had proposed. That was an Amendment to Clause 4 (2) to insert the words "or wilfully fail to disclose any material fact." I was in fact mistaken in thinking that the Law Officers had been consulted, and in the circumstances I of course took steps to consult them subsequently to ascertain their opinion. I think I should give the House their opinion, which is as follows:
"'Untrue representations' covers a case where the falsity arises from a wilful concealment coupled with the circumstances and any statements in fact made. The form of words proposed by the noble Viscount in Committee might cover a wider range, but the case of wilful non-disclosure is covered to the extent set out above, and this is the extent to which we think it right to go in the clause."
In order to make the position clear, the foregoing statement expands what I said, but the Law Officers agree that my earlier statement in reply to the noble Viscount was accurate.
The noble Lord, Lord Addison, in his speech on the Second Reading, also raised the question that he thought that the functions of the Minister of Supply should be extended to cover a very wide volume of materials, such as ferrous and non-ferrous metals, and other supplies which are required by all producing Departments and by all the major industries. He added that common user should be extended to such things as scientific instruments. Power is being taken by Clause 2 of the Bill to accumulate stocks of material as necessary both for the purpose of manufacturing supplies for the Services and for the maintenance of civil industry in emergency. There is no doubt that immediate consideration will be given to the question of accumulating supplies, both of ferrous and non-ferrous metals and of other materials that may be needed. Already there have been purchases of reserves on a substantial scale, and control in these matters will be at

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once concentrated in the Ministry of Supply. As regards common user articles, it is the intention immediately on the formation of the Ministry to survey the whole field of common user articles in detail, and full consideration will be given to the question of transferring to the Ministry the supply duties concerning other common user articles.
The noble Lord, Lord Mancroft, in Committee asked from what body or bodies arbitrators are to be chosen. I informed my noble friend that I would confirm at a later stage the correctness of the reply which I then gave him as to the composition of the panel. It is the intention that the panel of arbitrators, as I then said, should be drawn from a very wide field, and that it should include representatives of industry and other persons who would be appropriate. The suggestion that was originally made by some members of the other House was that the panel should be drawn from nominees of the President of the Law Society, the President of the Institute of Civil Engineers and the President of the Institute of Chartered Accountants, and it was because that field was not considered sufficiently wide that an undertaking was given that the Minister would select arbitrators from the widest possible field, including lawyers, civil engineers, surveyors, accountants, representatives of other professional bodies, and, above all, representatives of industry. That, I think the noble Lord will remember, bears out what I said more briefly on the previous occasion.
LORD MANCROFT: I am much obliged to the noble and gallant Lord.
LORD CHATFIELD: The noble Lord, Lord Strabolgi, asked why both the Chairman and the Deputy Chairman are to be lawyers. I think he thought that if he or I were Minister of Supply we should probably designate admirals rather than lawyers for that duty! I might explain that this question arose really, as I think I said at the time, from an idea in another place that the Chairman might be nominated or selected by the panel, and this suggestion was discussed to some considerable extent. Considerable pressure was applied from some quarters for the Chairman to be nominated by the Minister, and pressure was applied by the representatives of the industry for an independent choice.
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A compromise was made on the appointment by the Minister of a Chairman and Deputy Chairman who should be competent to form a completely unbiased judgment as to the suitability of arbitrators selected from the panel. It was felt that this object would be best achieved by the Minister appointing as Chairman and Deputy Chairman,
"persons of legal and impartial experience, able to prevent the miscarriage of justice by seeing that the right member is selected to do the right thing."
I am there quoting from the OFFICIAL REPORT of another place. The noble Lord, Lord Askwith, asked that the members of the panel should not be appointed for more than a certain number of years, and I promised sympathetically to consider with my right honourable friend the Minister of Supply Designate whether that could be arranged. It has been arranged, and my right honourable friend and I are prepared to agree that members of the panel should be appointed for a limited period, for a certain number of years; and steps will be taken administratively to effect this.
There is one other point of some importance about which I feel I ought to detain your Lordships for a short time. That is the important problem of finance; the compensation and the grants, and how they are going to be applied. It was originally in Clause 12 of the Bill, which is now of course Clause 13. The noble Lord, Lord Barnby, drew attention to what he considered an ambiguity regarding the recovery of expenditure over and above the amount of the 27½ per cent.; that is to say, as regards the contribution of the Contracts Departments towards the remaining 72½ per cent. In the first place the noble Lord mentioned the percentage, believed to be 50 per cent. of recovery, and that rather confused me, because I did not know that there was anything about 50 per cent. in the Bill at all, and I asked if I might answer him at a later stage. Actually, of course, there is no mention of 50 per cent.; he was quoting a figure mentioned in reference to another Bill. The Explanatory Memorandum to this Bill actually makes no remark at all about this matter.
As regards the contributions which are to be made towards the balance of expenditure incurred in order to ensure the due functioning of the essential plant under this Bill, I might perhaps put two

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points. First, there is the grant to be paid under the Bill equivalent to the standard rate of Income Tax on reasonable capital expenditure incurred by the contractor in complying with the Minister's requirements. This is an amount equal to the standard rate of Income Tax, and amounts to 27½ per cent of the capital expenditure incurred. It should be noted that no grant is paid on non-capital expenditure because non-capital expenditure is permissible as a deduction for Income Tax purposes and for Armaments Profits Duty, and, therefore, receives consideration under normal Income Tax law, and will receive consideration under the law relating to Armaments Profits Duty.
Secondly, as regards the balance of 72½ per cent. it has been decided that, for a period of two years, Contracts Departments in making contracts may include in prices additional contributions towards all the expenditure incurred by contractors in complying with the Minister's directions. In so far as the grants are grants towards capital expenditure they will be taken in diminution of capital expenditure, and will not be brought into revenue account at all. Hence, as regards this particular expenditure, no question of Income Tax or Armaments Profits Tax arises. In so far as the payments made by Government Departments are grants to non-capital expenditure they are in repayment of expenses incurred by firms, and to the extent, therefore, that non-capital expenditure made by firms is recouped by these grants, the ordinary revenues of a firm will be left unimpaired by the Minister's requirements, and will be liable to taxation in ordinary course as concerns the part of revenue which becomes profit.
It is, nevertheless, true to say that none of the payments made by the Government in respect of expenditure to secure the due functioning of essential plant will be liable, under this Bill, either to Income Tax or to Armaments Profits Duty. I might give one example of the manner in which this tax will work out. There are two things which have to be decided. First, the liability to tax which is based on the total receipts by a firm under armament contracts exceeding, your Lordships will remember, £200,000. That has no relation whatever to profit but is merely a
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determining factor as to liability, and I think it will be possible to earmark the contracts in respect of expenditure to secure the due functioning of plant in such a way that they shall not come into the calculation of the minimum amount of receipts which brings a firm within the range of the Armaments Profits Duty. As regards profits which ultimately govern the amount of tax which is leviable, that is entirely a different matter and depends on the balance of revenues after payment of the necessary expenses of the firm. What the Government in effect do in contrbiuting towards such expenditure met from revenue is to swell both revenue and expenditure, leaving the net sum unchanged. That, my Lords, I think explains the somewhat complicated problems which are raised by the financial clauses and which I thought it was perhaps as well to have on some record in answer to the noble Lord who raised this matter.
VISCOUNT BERTIE OF THAME: My Lords, I am very much obliged to my noble and gallant friend for having considered the question I raised in Committee and for having read out the Law Officers' finding, which of course I unreservedly accept.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

STANDING ORDERS COMMITTEE.
4.54 p.m.
THE EARL OF LUCAN: My Lords, on behalf of the Lord Chairman I beg to move the Motion standing in his name.
Moved, That the Viscount Hailsham be named of the Committee in the place of the Earl of Airlie (resigned).—(The Earl of Lucan.)
On Question, Motion agreed to.

MINQUIERS REEF.
LORD PORTSEA LORD PORTSEA had given Notice that he would ask if His Majesty's Government could give any information as to the position as regards the Minquiers Reef (in Jersey waters), and as to the building of a house thereon by a French subject; and move for Papers. The noble Lord said: My Lords, in view of information which has been sent me, and also a request, I shall, with your Lordships' permission, postpone this Question to another day, no date mentioned.

NEWFOUNDLAND AND THE CHANNEL ISLANDS: NAVAL RECRUITING.
4.56 p.m.
LORD PORTSEA LORD PORTSEA asked His Majesty's Government what facilities there may be for recruiting men and boys of the Norman Islands and of Newfoundland for His Majesty's Navy and if such facilities are to be extended. The noble Lord said: My Lords, this double Question relates to two parts of the Empire which are far distant from each other. The ocean divides them, a waste of seas, but at the same time they are very closely connected, for the connection between these isles and Newfoundland has been going on since the days of Sir Walter Raleigh. In those days, and even in my youth, the passage from Newfoundland if it did not last more than fifty days was considered to be a very quick passage. Now, as your Lordships are aware, it takes half that number of hours. Newfoundland is passing through a very distressful period, and it is, as you are aware, the oldest Colony belonging to this country. The men there earn their livelihood from their earliest days in deep sea fishing, and I am credibly informed that during the War they made some of the finest seamen who came to the assistance of the Mother Country. I am informed that it is not easy for boys and men to join the Navy, although they wish to do so and, as they are all sailors, such a proceeding would relieve the distress in that country.
A good deal of what I have said applies also to the Norman Islands. The men there are, of course, better known to your Lordships than those of Newfoundland. You have in your Lordships' House distinguished sailors, and you all know of Carteret, Saumarez, Dumarez, Tupper and O. de B. Brock, who have led fleets of this country. Both officers and men are recruited in comparatively large numbers from the islands, and almost invariably they have distinguished themselves. At this moment, however, having visited the islands recently, I can find no recruiting facilities for men, and particularly for boys, and I should wish to be told that the path for boys and men to join the Navy is to be made speedier and easier.
4.59 p.m.
LORD CHATFIELD: My Lords, I have been asked to answer this Question raised by Lord Portsea, and I was, I confess, in a little difficulty to know which were the Norman Islands he referred to, because actually there are three or four Norman Islands in the world, one actually just North of Newfoundland.
LORD PORTSEA: One is old and the other is new.
LORD CHATFIELD: I was not sure whether the old or the new was being referred to. I quite understand now that the islands he referred to are the islands which are more commonly called by us the Channel Islands. As regards the Channel Islands, I am informed that the situation is this: There are actually no recruiting offices for the Royal Navy in the Channel Islands, but a recruiting officer from Southampton spends a few days there once a quarter, and due publicity is given to his visit. A special recruiting campaign has been organised in connection with the visit of His Majesty's ship "Jersey" to St. Helier this week, and these facilities are considered adequate to meet the case. But of course there is no obstacle to men from the Channel, or Norman, Islands making their own way to this country for the purpose of joining the Navy.
Newfoundland, however, is somewhat different, though there also there is no recruiting office for the Royal Navy; but arrangements are made for prospective recruits to be examined and entered when one of His Majesty's ships visits St. John's, which occurs at not unduly long intervals. The possibility, however, of extending the facilities of recruitment in Newfoundland is being examined. I should like to agree most heartily with the noble Lord as regards the great efficiency as seamen of those men from Newfoundland, which, as he says, was so thoroughly well proved in the last War. There is, of course, in this case also, no objection to men finding their own way, but I admit it is difficult for them to do that. The whole matter is under consideration, and I hope that it may be possible to provide greater facilities for men from Newfoundland to join the Navy if and when they wish to do so.
House adjourned at two minutes past five o'clock.